ALLSTATE LIFE OF NEW YORK VARIABLE ANNUITY ACCOUNT II, 485APOS, 1995-07-12

ALLSTATE LIFE OF NEW YORK VARIABLE ANNUITY ACCOUNT II
485APOS, 1995-07-12

Previous: DREYFUS OHIO MUNICIPAL MONEY MARKET FUND INC, 485B24E, 1995-07-12

Next: DEFINED ASSET FUNDS MUNICIPAL INVT TR FD INTERM TERM SER 174, 485BPOS, 1995-07-12

<PAGE>

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 12, 1995

FILE NO.: 33-35445
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

------------------------

FORM N-4

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

POST-EFFECTIVE AMENDMENT NO. 8 /X/

AND/OR

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940

AMENDMENT NO. 9 /X/

------------------------

ALLSTATE LIFE OF NEW YORK VARIABLE ANNUITY ACCOUNT II
(EXACT NAME OF REGISTRANT)
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
(NAME OF DEPOSITOR)
MICHAEL J. VELOTTA
VICE PRESIDENT, SECRETARY AND GENERAL COUNSEL
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
ONE ALLSTATE DRIVE
P.O. BOX 9095
FARMINGVILLE, NEW YORK 11738
516/451-5300
(NAME AND COMPLETE ADDRESS OF AGENT FOR SERVICE)

COPIES TO:

<TABLE>
<S> <C>
MARK J. MACKEY, ESQ. CHRISTINE A. EDWARDS, ESQ.
ROUTIER, MACKEY & JOHNSON, P.C. DEAN WITTER REYNOLDS, INC.
1700 K STREET, N.W. SUITE 1003 TWO WORLD TRADE CENTER
WASHINGTON, D.C. 20006 NEW YORK, NEW YORK 10048
</TABLE>

------------------------

Statement Pursuant to Rule 24f-2

Pursuant to Rule 24f-2 under the Investment Company Act of 1940, the
Registrant hereby states that, pursuant to paragraph(b)(1), it filed its Rule
24f-2 Notice for the fiscal year ending December 31, 1994 on February 28, 1995.

------------------------

IT IS PROPOSED THAT THIS FILING WILL BECOME EFFECTIVE
(CHECK APPROPRIATE BOX)

___ immediately upon filing pursuant to paragraph (b) of Rule 485

___ on (date) pursuant to paragraph (b) of Rule 485
___ 60 days after filing pursuant to paragraph (a)(i) of Rule 485

_X_ on October 5, 1995 pursuant to paragraph (a)(i) of Rule 485

If appropriate, check the following box:
___ this post-effective amendment designates a new effective date for a
previously filed post-effective amendment

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
CROSS REFERENCE SHEET

Showing Location in Part A (Prospectus) and Part B of Registration Statement of
Information Required by Form N-4

<TABLE>
<CAPTION>
ITEM OF FORM N-4
PROSPECTUS CAPTION
- -------------------- ----------------------------------------------
<S> <C> <C> <C> <C>
1. Cover Page.......................................................... Cover Page
2. Definitions......................................................... Glossary
3. Synopsis............................................................ Introduction; Summary of Separate Account
Expenses
4. Condensed Financials
(a) Chart....................................................
Condensed Financial Statements
(b) MM Yield.................................................
Not Applicable
(c) Location of Others.......................................
Previously Filed with Registration Statement
5. General
(a) Depositor................................................
Allstate Life Insurance Co. of New York
(b) Registrant...............................................
The Variable Account
(c) Portfolio Company........................................
Dean Witter Variable Investment Series
(d) Fund Prospectus..........................................
Dean Witter Variable Investment Series
(e) Voting Rights............................................
Voting Rights
(f) Administrators...........................................
Charges & Other Deductions
Contract Maintenance Charge
6. Deductions & Expenses............................................... Charges & Other Deductions
(a) General..................................................
Charges & Other Deductions
(b) Sales Load %.............................................
Early Withdrawal Charge
(c) Special Purchase Plans...................................
N/A
(d) Commissions..............................................
Sales Commission
(e) Expenses -- Registrant...................................
Charges & Other Deductions
(f) Fund Expenses............................................
Dean Witter Variable Investment Series
Expenses
(g) Organizational Expenses..................................
N/A
7. Contracts
(a) Persons with Rights......................................
The Contracts; Benefits; Income Payments;
Voting Rights; Assignments; Beneficiaries;
Contract Owners
(b) (i) Allocation of Purchase Payments............... Allocation of Purchase Payments
(ii) Transfers..................................... Transfers
(iii) Exchanges..................................... N/A
(c) Changes..................................................
Modification
(d) Inquiries................................................
Customer Inquiries
8. Annuity Period...................................................... Income Payments
(a) Material Factors.........................................
Amount of Variable Annuity Income Payments
(b) Dates....................................................
Payout Start Date
(c) Frequency, duration & level..............................
Amount of Variable Annuity Income Payments
(d) AIR......................................................
Amount of Variable Annuity Income Payments
(e) Minimum..................................................
Amount of Variable Annuity Income Payments
(f) -- Change Options........................................
Transfers
-- Transfer..............................................
--
9. Death Benefit....................................................... Death Benefits
</TABLE>

<PAGE>
<TABLE>
<CAPTION>
ITEM OF FORM N-4
PROSPECTUS CAPTION
- -------------------- ----------------------------------------------
<S> <C> <C> <C> <C>
10. Purchases & Contract Value
(a) Purchases................................................
Purchase of the Contract: Crediting of
Purchase Payments
(b) Valuation................................................
Value of Variable Account Accumulation Units
(c) Daily Calculation........................................
Value of Variable Account Accumulation Units;
Allocation of Purchase Payments
(d) Underwriter..............................................
Dean Witter Reynolds Inc.
11. Redemptions
(a) -- By Owners.............................................
Surrender & Withdrawals
(b) -- By Annuitant..........................................
Income Plans
(c) Texas ORP................................................
Not Applicable
(d) Lapse....................................................
Not Applicable
(e) Free Look................................................
Introduction
12. Taxes............................................................... Federal Tax Matters
13. Legal Proceedings................................................... N/A
14. SAI Contents........................................................ SAI Table of Contents
15. Cover Page.......................................................... Cover Page
16. Table of Contents................................................... Table of Contents
17. General Information & History
(a) Depositor's Name.........................................
Allstate Life Insurance Company of New York
(b) Assets of Sub-Account....................................
The Variable Account
(c) Control of Depositor.....................................
Allstate Life Insurance Company of New York
18. Services
(a) Fees & Expenses of Registrant............................
Contract Maintenance Charge
(b) Management Contracts.....................................
Contract Maintenance Charge; Sales Commissions
(c) Custodian................................................
SAI: Safekeeping of the Variable Account's
Assets
Independent Public Accountant............................
SAI: Experts
(d) Assets of Registrant.....................................
SAI: Safekeeping of the Variable Account
Assets
(e) Affiliated Persons.......................................
N/A
(f) Principal Underwriter....................................
Dean Witter Reynolds Inc.
19. Purchase of Securities Being Offered
(a) Offering.................................................
SAI: Purchase of Contracts
(b) Sales load...............................................
SAI: Sales Commissions
20. Underwriters
(a) Principal Underwriter....................................
SAI: Dean Witter Reynolds Inc.
(b) Continuous offering......................................
SAI: Purchase of Contracts
(c) Commissions..............................................
SAI: Sales Commissions; Dean Witter Reynolds
Inc.
(d) Unaffiliated Underwriters................................
N/A
21. Calculation of Performance Data..................................... SAI: Performance Data
22. Annuity Payments.................................................... SAI: Income Payments
23. Financial Statements
(a) Financial Statements of Registrant.......................
SAI: Allstate Life of New York Variable
Annuity Account II Financial Statements
(b) Financial Statements of Depositor........................
SAI: Allstate Life Insurance Company of New
York Financial Statements
24a. Financial Statements................................................ Part C. Financial Statements
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ITEM OF FORM N-4
PROSPECTUS CAPTION
- -------------------- ----------------------------------------------
<S> <C> <C> <C> <C>
24b. Exhibits............................................................ Part C. Exhibits
25. Directors and Officers.............................................. Part C. Directors & Officers of Depositor
26. Persons Controlled By or Under Common Control
with Depositor or Registrant........................................ Part C. Persons Controlled by or Under Common
Control with Depositor or Registrant
27. Number of Contract Owners........................................... Part C. Number of Contract Owners
28. Indemnification..................................................... Part C. Indemnification
29a. Relationship of Principal Underwriter to Other
Investment Companies................................................ Part C. Relationship of Principal Underwriter
to Other Investment Companies
29b. Principal Underwriters.............................................. Part C. Principal Underwriters
29c. Compensation of Underwriter......................................... Part C. Compensation of Dean Witter
30. Location of Accounts and Records.................................... Part C. Location of Accounts and Records
31. Management Services................................................. Part C. Management Services
32. Undertakings........................................................ Part C. Undertakings
</TABLE>
<PAGE>
ALLSTATE LIFE OF NEW YORK VARIABLE ANNUITY ACCOUNT II

ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
ONE ALLSTATE DRIVE
P.O. BOX 9095
FARMINGVILLE, NEW YORK 11738

INDIVIDUAL VARIABLE ANNUITY CONTRACTS

DISTRIBUTED BY

DEAN WITTER REYNOLDS INC.
TWO WORLD TRADE CENTER
NEW YORK, NEW YORK 10048
-------------------

This Prospectus describes the individual Flexible Premium Deferred Variable
Annuity Contract ("Contract") offered by Allstate Life Insurance Company of New
York ("Company"), a wholly owned subsidiary of Allstate Insurance Company. Dean
Witter Reynolds Inc. ("Dean Witter") is the principal underwriter and
distributor of the Contracts.
The Contract has the flexibility to allow you to shape an annuity to fit
your particular needs. It is primarily designed to aid you in long-term
financial planning and can be used for retirement planning regardless of whether
the plan qualifies for special federal income tax treatment.

This Prospectus is a concise statement of the relevant information about the
Allstate Life of New York Variable Annuity Account II ("Variable Account") which
you should know before making a decision to purchase the Contract. This
Prospectus generally describes only the variable portion of the Contract. For a
brief summary of the fixed portion of the Contract, see "The Fixed Account" on
page 22.

The Variable Account invests exclusively in shares of the Dean Witter
Variable Investment Series (the "Fund"), a mutual fund managed by Dean Witter
InterCapital Inc., a wholly-owned subsidiary of Dean Witter Discover & Co.

The Company has prepared and filed a Statement of Additional Information
dated October , 1995 with the U.S. Securities and Exchange Commission. If you
wish to receive the Statement of Additional Information, you may obtain a free
copy by calling or writing the Company at the address below. For your
convenience, an order form for the Statement of Additional Information may be
found on page 29 of this Prospectus. Before ordering, you may wish to review the
Table of Contents of the Statement of Additional Information on page 27 of this
Prospectus. The Statement of Additional Information has been incorporated by
reference into this Prospectus.

ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
ONE ALLSTATE DRIVE
P.O. BOX 9095
FARMINGVILLE, NEW YORK 11738

THIS PROSPECTUS IS VALID ONLY WHEN ACCOMPANIED
OR PRECEDED BY A CURRENT PROSPECTUS FOR THE
DEAN WITTER VARIABLE INVESTMENT SERIES

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION, NOR HAS THE 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 OCTOBER , 1995.

<PAGE>
THE CONTRACTS ARE AVAILABLE ONLY IN NEW YORK

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
SUMMARY OF SEPARATE ACCOUNT EXPENSES.............. 7
CONDENSED FINANCIAL INFORMATION................... 9
PERFORMANCE DATA.................................. 10
FINANCIAL STATEMENTS.............................. 10
ALLSTATE LIFE INSURANCE COMPANY OF
NEW YORK AND THE VARIABLE ACCOUNT................ 11
Allstate Life Insurance Company of New York... 11
Dean Witter Reynolds Inc...................... 11
The Variable Account.......................... 11
The Dean Witter Variable Investment Series.... 12
THE CONTRACTS..................................... 13
Purchase of the Contracts..................... 13
Crediting of Initial Purchase Payments........ 14
Allocation of Purchase Payments............... 14
Value of Variable Account Accumulation
Units........................................ 14
Transfers..................................... 15
Surrender and Withdrawals..................... 15
Default....................................... 16
CHARGES AND OTHER DEDUCTIONS...................... 16
Deductions from Purchase Payments............. 16
Early Withdrawal Charge....................... 16
Contract Maintenance Charge................... 17
Administrative Expense Charge................. 17
Mortality and Expense Risk Charge............. 17
Taxes......................................... 18
Dean Witter Variable Investment Series
("Fund") Expenses............................ 18
BENEFITS UNDER THE CONTRACT....................... 18
Death Benefits Prior to the Payout Start
Date......................................... 18
Death Benefits After the Payout Start Date.... 20

<CAPTION>
PAGE
-----
<S> <C>
INCOME PAYMENTS................................... 20
Payout Start Date............................. 20
Amount of Variable Annuity Income Payments.... 20
Income Plans.................................. 21
THE FIXED ACCOUNT................................. 22
General Description........................... 22
Transfers, Surrenders, and Withdrawals........ 22
GENERAL MATTERS................................... 23
Owner......................................... 23
Beneficiary................................... 23
Delay of Payments............................. 23
Assignments................................... 23
Modification.................................. 23
Customer Inquiries............................ 24
FEDERAL TAX MATTERS............................... 24
Introduction.................................. 24
Taxation of Annuities in General.............. 24
Tax Deferral................................ 24
Non-Natural Owners.......................... 24
Diversification Requirements................ 24
Investor Control............................ 24
Taxation of Partial and Full Withdrawals.... 25
Taxation of Annuity Payments................ 25
Taxation of Annuity Death Benefits.......... 25
Penalty Tax on Premature Distributions...... 25
Aggregation of Annuity Contracts............ 25
Tax Qualified Contracts....................... 25
Restrictions Under Section 403(b) Plans..... 26
Income Tax Withholding........................ 26
VOTING RIGHTS..................................... 26
SALES COMMISSION.................................. 26
STATEMENT OF ADDITIONAL INFORMATION: TABLE OF
CONTENTS......................................... 27
ORDER FORM........................................ 29
</TABLE>

2
<PAGE>
GLOSSARY

ACCUMULATION UNIT--An accounting unit used to calculate the Cash Value in
the Variable Account prior to the Payout Start Date. Each Sub-Account of the
Variable Account has its own distinct Accumulation Unit value.

AGE--Age on last birthday.

ANNUITANT--Includes Annuitant and any Joint Annuitant. A natural person(s)
whose life determines the duration of annuity payments involving life
contingencies.

ANNUITY UNIT--An accounting unit used to calculate Variable Annuity
payments. Each Sub-Account has a distinct Annuity Unit value.

AUTOMATIC ADDITIONS--Additional Purchase Payments of $25 or more which are
made automatically from the Owner's bank account or Dean Witter Active
Assets-TM- Account.

BENEFICIARY--The person(s) designated in the Contract who, after the death
of any Owner, or last surviving Annuitant may elect to receive the Death Benefit
or continue the Contract as described in "Benefits Under the Contract" on page
18.

COMPANY--The issuer of the Contract, Allstate Life Insurance Company of New
York, which is a subsidiary of Allstate Insurance Company.

CONTRACT--The Flexible Premium Deferred Variable Annuity Contract known as
the "Allstate Life of New York Variable Annuity Account II" that is described in
this prospectus.

CONTRACT ANNIVERSARY--An anniversary of the date that the Contract was
issued to the Owner.

CASH VALUE--The sum of the value of all Accumulation Units for the Fixed
Account.

CONTRACT YEAR--The year commencing on either the Issue Date or a Contract
Anniversary.

DATE OF DEATH--The Date that an Owner and/or Annuitant dies causing a Death
Benefit to be due.

DEATH BENEFIT--Prior to the Payout Start Date, the amount payable on the
death of the Owner or Annuitant.

DEATH BENEFIT ANNIVERSARY--Every sixth Contract Anniversary. For example,
the 6th, 12th and 18th Contract Anniversaries are the first three Death Benefit
Anniversaries.

DOLLAR COST AVERAGING--A method to transfer $100 or more of the Cash Value
in the Money Market Sub-Account automatically to the other Sub-Accounts on a
monthly basis.

DUE PROOF OF DEATH--One of the following:

(a)A copy of a certified death certificate.

(b)A copy of a certified decree of a court of competent jurisdiction as
to the finding of death.

(c)Any other proof satisfactory to the Company.

EARLY WITHDRAWAL CHARGE--The charge that may be assessed by the Company on
full or partial withdrawals of the Purchase Payments in excess of the Withdrawal
Amount Without Early Withdrawal Charge.

ENHANCED DEATH BENEFIT--An additional Death Benefit option which can be
selected at the time the Contract is purchased.

FIXED ACCOUNT--All of the assets of the Company that are not in separate
accounts. Contributions made to the Fixed Account are invested in the general
account of the Company.

FIXED ANNUITY--An annuity with payments having a guaranteed amount.

GUARANTEE PERIOD--The period of time for which a credited rate on an
allocation or transfer to the Fixed Account is guaranteed.

INCOME PAYMENTS--A series of periodic annuity payments made by the Company
to the Owner or Beneficiary.

INVESTMENT ALTERNATIVE--The Fixed Account and the eleven Sub-Accounts of the
Variable Account constitute the twelve Investment Alternatives.

3
<PAGE>
JOINT ANNUITANT--The person, along with the Annuitant, whose life determines
the duration of annuity payments under a joint and last survivor annuity.

NET INVESTMENT FACTOR--The factor for a particular Sub-Account used to
determine the value of an Accumulation Unit and Annuity Unit in any Valuation
Period.

NON-QUALIFIED CONTRACTS--Contracts that do not qualify for special federal
income tax treatment.

OWNER--The person or persons designated as the Owner(s) in the Contract.

PAYOUT START DATE--The date Income Payments are to begin under the Contract.

PORTFOLIOS--The mutual fund portfolios of The Dean Witter Variable
Investment Series. The Dean Witter Variable Investment Series has eleven
separate portfolios: the Money Market Portfolio, the Quality Income Plus
Portfolio, the High Yield Portfolio, the Utilities Portfolio, the Dividend
Growth Portfolio, the Capital Growth Portfolio, the Global Dividend Growth
Portfolio, the European Growth Portfolio, the Pacific Growth Portfolio, the
Equity Portfolio and the Managed Assets Portfolio.

PURCHASE PAYMENTS--The premiums paid by the Owner to the Company.

QUALIFIED CONTRACTS--Contracts issued under plans that qualify for special
federal income tax treatment.

REQUIRED MINIMUM DISTRIBUTION--For Qualified Contracts, partial withdrawals
equal to the IRS Required Minimum Distribution may be taken from the Cash Value
and sent to the Owner or deposited in the Owner's bank account or Dean Witter
Active Assets-TM- Account.

SETTLEMENT VALUE--The Cash Value less any applicable Early Withdrawal
Charges and premium tax. The Settlement Value will be calculated at the end of
the valuation period coinciding with a request for payment.

SUB-ACCOUNT--A sub-division of the Variable Account. Each Sub-Account
invests exclusively in shares of a specified Portfolio.

SYSTEMATIC WITHDRAWALS--Partial withdrawals of $100 or more may be taken
from the Cash Value and sent to the Owner or deposited in the Owner's bank
account or Dean Witter Active Assets-TM- Account or sent directly to the Owner.

VALUATION DATE--Each day that the New York Stock Exchange is open for
business, except for days in which there is an insufficient degree of trading in
the Variable Account's portfolio securities that the value of Accumulation or
Annuity Units might not be materially affected by changes in the value of the
portfolio securities. The Valuation Date does not include such Federal and
non-Federal holidays as are observed by the New York Stock Exchange.

VALUATION PERIOD--The period between successive Valuation Dates, commencing
at the close of business of each Valuation Date and ending at the close of
business of the next succeeding Valuation Date.

VARIABLE ACCOUNT--Allstate Life of New York Variable Annuity Account II, a
separate investment account established by the Company to receive and invest the
Purchase Payments paid under the Contracts.

VARIABLE ANNUITY--An annuity with payments that have no predetermined or
guaranteed dollar amounts. The payments will vary in amounts depending upon the
investment experience of one or more of the Portfolios.

WITHDRAWAL AMOUNT WITHOUT EARLY WITHDRAWAL CHARGE--A portion of the Cash
Value which may be withdrawn during the course of the Contract year without
incurring an Early Withdrawal Charge, i.e., 15% of all Purchase Payments made.

4
<PAGE>
INTRODUCTION
- --------------------------------------------------------------------------------

1. WHAT IS THE PURPOSE OF THE CONTRACT?

The Contracts described in this Prospectus seek to allow you to accumulate
funds and to receive annuity payments ("Income Payments"), when desired, at
rates which depend upon the return achieved from the types of investment chosen.
THERE IS NO ASSURANCE THAT THIS GOAL WILL BE ACHIEVED. In attempting to achieve
this goal, the Owner can allocate Purchase Payments to one or more of the
Variable Account Portfolios.

Because Income Payments and Cash Values invested in the Variable Account
depend on the investment experience of the selected Portfolios, the Owner bears
the entire investment risk for amounts allocated to the Variable Account. See
"Value of Variable Account Accumulation Units," page 14 and "Amount of Variable
Annuity Income Payments," page 20.

2. HOW DO I PURCHASE A CONTRACT?

You may purchase the Contract from Dean Witter, the Company's authorized
sales representative. The first Purchase Payment must be at least $4,000 (for
Qualified Contracts, $1,000). Presently, the Company will accept an initial
Purchase Payment of at least $1,000, but reserves the right to increase the
minimum initial Purchase Payment amount to $4,000. See "Purchase of the
Contracts," page 13.
On your application, you will allocate your Purchase Payment among the
Investment Alternatives. All allocations must be in whole percents from 0% to
100% and must total 100%. Purchase payments may be allocated in amounts of no
less than $100. Allocations may be changed by notifying the Company in writing.
See "Allocation of Purchase Payments," page 14.

3. WHAT TYPES OF INVESTMENTS UNDERLIE THE VARIABLE ACCOUNT?

The Variable Account invests exclusively in shares of the Dean Witter
Variable Investment Series (the "Fund"), a mutual fund managed by Dean Witter
InterCapital, Inc. a wholly owned subsidiary of Dean Witter Discover & Co. The
Fund has eleven Portfolios: the Money Market Portfolio, the Quality Income Plus
Portfolio, the High Yield Portfolio, the Utilities Portfolio, the Dividend
Growth Portfolio, the Capital Growth Portfolio, the Global Dividend Growth
Portfolio, the European Growth Portfolio, the Pacific Growth Portfolio, the
Equity Portfolio and the Managed Assets Portfolio. The assets of each Portfolio
are held separately from the other Portfolios and each has distinct investment
objectives and policies which are described in the accompanying Prospectus for
the Fund. In addition to the Variable Account, Owners can also allocate all or
part of their Purchase Payments to the Fixed Account. See "The Fixed Account" on
page 22.

4. CAN I TRANSFER AMOUNTS AMONG THE INVESTMENT ALTERNATIVES?

Transfers must be at least $100 or the entire amount in the Investment
Alternative, whichever is less. Transfers to any Guarantee Period of the Fixed
Account must be at least $500. Dollar Cost Averaging automatically moves funds
on a monthly basis from the Money Market Sub-Account to other Sub-Accounts of
your choice. Certain transfers may be restricted. See "Transfers," page 15.

5. CAN I GET MY MONEY IF I NEED IT?

All or part of the Cash Value can be withdrawn before the earliest of the
Payout Start Date, the death of any Owner or the death of the last surviving
Annuitant. No Early Withdrawal Charges will be deducted on amounts up to the
annual Withdrawal Amount Without Early Withdrawal Charge, i.e., 15% of all
Purchase Payments made. Amounts withdrawn in excess of the Withdrawal Amount
Without Early Withdrawal Charge may be subject to an Early Withdrawal Charge of
0% to 6% depending on how long the withdrawn Purchase Payments have been
invested in the Contract. THE COMPANY GUARANTEES THAT THE AGGREGATE

5
<PAGE>

EARLY WITHDRAWAL CHARGES WILL NEVER EXCEED 6% OF THE PURCHASE PAYMENTS.
Withdrawals and surrenders may be subject to income tax and a 10% tax penalty.
In addition, federal and state income tax may be withheld from withdrawal and
surrender amounts. Additional restrictions may apply to Qualified Contracts. See
"Surrender and Withdrawals," page 15, and "Taxation of Annuities in General,"
page 24.

6. WHAT ARE THE CHARGES AND DEDUCTIONS UNDER THE CONTRACT?

To meet its Death Benefit obligations and to pay expenses not covered by the
Contract Maintenance Charge, the Company deducts a Mortality and Expense Risk
Charge of 1.25% and an Administrative Expense Charge of .10%. For Contracts with
the optional Enhanced Death Benefit Provision, an additional Mortality and
Expense Risk Charge of .13% is assessed bringing the total charges for contracts
with the Enhanced Death Benefit Provision to a Mortality and Expense Risk Charge
of 1.38% and an Administrative Expense Risk Charge of .10%. See "Mortality and
Expense Risk Charge," page 17 and "Administrative Expense Charge," page 17.
Annually, the Company deducts $30 for maintaining the Contract. See "Contract
Maintenance Charge," page 17. The Company may also deduct Early Withdrawal
Charges. See "Early Withdrawal Charge," page 16. Additional deductions may be
made for certain taxes. See "Taxes," page 18.

7. DOES THE CONTRACT PAY ANY GUARANTEED DEATH BENEFITS?

The Contracts provide that if the Owner(s) or the last surviving Annuitant
dies prior to the Payout Start Date, a Death Benefit may be paid to the new
Owner or Beneficiary. If requested to be paid in a lump sum within 60 days from
the Date of Death, the Death Benefit will be the greatest of (1) the sum of all
Purchase Payments less any amounts deducted in connection with partial
withdrawals including any Early Withdrawal Charges and premium tax; or (2) the
Cash Value on the date we receive Due Proof of Death; or (3) the Cash Value on
the most recent Death Benefit Anniversary less any amounts deducted in
connection with partial withdrawals, including any Early Withdrawal Charges and
premium tax deducted from the Cash Value, since that anniversary. For Contracts
with the optional Enhanced Death Benefit provision, the Death Benefit will be
the greatest of (1) through (3) above, or (4) the Enhanced Death Benefit. If the
Enhanced Death Benefit option is selected, it applies only at the death of the
Owner. It does not apply to the death of the Annuitant if different from the
Owner. See "Death Benefits Prior to the Payout Start Date," page 18, for a full
description of Death Benefit options.

Prior to the Payout Start Date the Beneficiary has 60 days from the Date of
Death of the Owner(s) or Annuitant(s) to either elect an income plan or to take
a lump sum payment. Death Benefits after the Payout Start Date, if any, will
depend on the income plan chosen. See "Benefits Under the Contract" page 18.

8. IS THERE A FREE-LOOK PROVISION?

The Owner(s) may cancel the Contract anytime within 10 days after receipt of
the Contract and receive a full refund of Purchase Payments allocated to the
Fixed Account. Unless a refund of Purchase Payments is required by State or
Federal law, Purchase Payments allocated to the Variable Account will be
returned after an adjustment to reflect investment gain or loss, less any
applicable Contract expenses, that occurred from the date of allocation through
the date of cancellation.

6
<PAGE>
SUMMARY OF SEPARATE ACCOUNT EXPENSES
- --------------------------------------------------------------------------------
OWNER TRANSACTION EXPENSES (ALL SUB-ACCOUNTS)

<TABLE>
<S> <C>
The following fee table illustrates all expenses and fees that the Owner will incur. The expenses
and fees set forth in the table are based on charges under the Contracts and on the expenses of
the separate account and the underlying fund for the fiscal year ended December 31, 1994.

Sales Load Imposed on Purchases (as a percentage of Purchase Payments)................. None

EARLY WITHDRAWAL CHARGE (AS A PERCENTAGE OF PURCHASE PAYMENTS)......................... *
</TABLE>

<TABLE>
<CAPTION>
NUMBER OF COMPLETE CONTRACT YEARS SINCE PURCHASE PAYMENT BEING WITHDRAWN APPLICABLE SALES
WAS MADE CHARGE PERCENTAGE
-----------------
<S> <C>
0 years........................................................................................ 6%
1 year......................................................................................... 5%
2 years........................................................................................ 4%
3 years........................................................................................ 3%
4 years........................................................................................ 2%
5 years........................................................................................ 1%
6 years or more................................................................................ 0%
</TABLE>

<TABLE>
<S> <C>
Exchange Fee......................................................................... None
Annual Contract Fee.................................................................. $30
</TABLE>

SEPARATE ACCOUNT ANNUAL EXPENSES (AS A PERCENTAGE OF AVERAGE ACCOUNT VALUE)

<TABLE>
<S> <C>
Mortality and Expense Risk Charge.................................................... 1.38%**
Administrative Expense Charge........................................................ .10%
Total Separate Account Annual Expenses............................................... 1.48%**
</TABLE>

*There are no Early Withdrawal Charges on amounts up to the Withdrawal Amount
Without Early Withdrawal Charge.

**For Contracts without an Enhanced Death Benefit provision, the Mortality and
Expence Risk Charge is 1.25% resulting in total Separate Account Annual
Expenses of 1.35%.

DEAN WITTER VARIABLE INVESTMENT SERIES ("FUND") EXPENSES (AS A PERCENTAGE OF
FUND AVERAGE ASSETS)

<TABLE>
<CAPTION>
MANAGEMENT OTHER TOTAL FUND
PORTFOLIO FEES EXPENSES*** ANNUAL EXPENSES
- --------------------------------------------------------------------- ---------------- ------------- ---------------
<S> <C> <C> <C>
Money Market......................................................... .50 % .052% .552%
Quality Income Plus.................................................. .50 %**** .040% .540%
High Yield........................................................... .50 % .091% .591%
Utilities............................................................ .65 %**** .029% .679%
Dividend Growth...................................................... .625%**** .027% .652%
Capital Growth....................................................... .65 % .116% .766%
Global Dividend Growth............................................... .75 % .121% .871%
European Growth...................................................... 1.00 % .16 % 1.160%
Pacific Growth....................................................... 1.00 % .005% 1.005%
Equity............................................................... .50 % .066% .566%
Managed Assets....................................................... .50 % .043% .543%
</TABLE>

***For the year ended December 31, 1994.

****This percentage is applicable to Portfolio net assets of up to $500 million.
For net assets which exceed $500 million in the Quality Income Plus,
Utilities and Dividend Growth Portfolios, the management fee will be .45%,
.55% and .50%, respectively.

7
<PAGE>
EXAMPLE

You (the Owner) would pay the following expenses on a $1,000 investment,
assuming a 5% annual return under the following circumstances:

If you surrender your Contract at the end of the applicable time period (or
if you annuitize for a specified period of less than 120 months):

<TABLE>
<CAPTION>
(WITH ENHANCED DEATH BENEFIT PROVISION**) 1 YEAR 3 YEARS 5 YEARS
---------- ---------- ----------
<S> <C> <C> <C>
Money Market Sub-Account............................................................. $64 $90 $120
Quality Income Plus Sub-Account...................................................... $63 $90 $119
High Yield Sub-Account............................................................... $64 $92 $122
Utilities Sub-Account................................................................ $65 $94 $127
Dividend Growth Sub-Account.......................................................... $65 $94 $125
Capital Growth Sub-Account........................................................... $66 $97 $131
European Growth Sub-Account.......................................................... $70 $109 $151
Equity Sub-Account................................................................... $64 $91 $121
Managed Assets Sub-Account........................................................... $63 $90 $120
Pacific Growth Sub-Account........................................................... $68 $104 $143
Global Dividend Growth Sub-Account................................................... $67 $100 $136

<CAPTION>
(WITH ENHANCED DEATH BENEFIT PROVISION**) 10 YEARS
----------
<S> <C>
Money Market Sub-Account............................................................. $240
Quality Income Plus Sub-Account...................................................... $239
High Yield Sub-Account............................................................... $244
Utilities Sub-Account................................................................ $253
Dividend Growth Sub-Account.......................................................... $251
Capital Growth Sub-Account........................................................... $262
European Growth Sub-Account.......................................................... $302
Equity Sub-Account................................................................... $242
Managed Assets Sub-Account........................................................... $239
Pacific Growth Sub-Account........................................................... $287
Global Dividend Growth Sub-Account................................................... $273
</TABLE>

<TABLE>
<CAPTION>
(WITHOUT ENHANCED DEATH BENEFIT PROVISION***) 1 YEAR 3 YEARS 5 YEARS
---------- ---------- ----------
<S> <C> <C> <C>
Money Market Sub-Account............................................................. $62 $86 $113
Quality Income Plus Sub-Account...................................................... $62 $86 $113
High Yield Sub-Account............................................................... $63 $88 $115
Utilities Sub-Account................................................................ $64 $90 $120
Dividend Growth Sub-Account.......................................................... $63 $90 $118
Capital Growth Sub-Account........................................................... $64 $93 $124
European Growth Sub-Account.......................................................... $68 $105 $145
Equity Sub-Account................................................................... $62 $87 $114
Managed Assets Sub-Account........................................................... $62 $86 $113
Pacific Growth Sub-Account........................................................... $67 $100 $137
Global Dividend Growth Sub-Account................................................... $65 $96 $130

<CAPTION>
(WITHOUT ENHANCED DEATH BENEFIT PROVISION***) 10 YEARS
----------
<S> <C>
Money Market Sub-Account............................................................. $226
Quality Income Plus Sub-Account...................................................... $225
High Yield Sub-Account............................................................... $230
Utilities Sub-Account................................................................ $240
Dividend Growth Sub-Account.......................................................... $237
Capital Growth Sub-Account........................................................... $249
European Growth Sub-Account.......................................................... $289
Equity Sub-Account................................................................... $228
Managed Assets Sub-Account........................................................... $225
Pacific Growth Sub-Account........................................................... $274
Global Dividend Growth Sub-Account................................................... $260
</TABLE>

If you do not surrender your Contract or if you annuitize* for a specified
period of 120 months or more, at the end of the applicable time period:

<TABLE>
<CAPTION>
(WITH ENHANCED DEATH BENEFIT PROVISION**) 1 YEAR 3 YEARS 5 YEARS
---------- ---------- ----------
<S> <C> <C> <C>
Money Market Sub-Account............................................................. $21 $65 $112
Quality Income Plus Sub-Account...................................................... $21 $65 $111
High Yield Sub-Account............................................................... $21 $66 $114
Utilities Sub-Account................................................................ $22 $69 $118
Dividend Growth Sub-Account.......................................................... $22 $68 $117
Capital Growth Sub-Account........................................................... $23 $72 $123
European Growth Sub-Account.......................................................... $27 $83 $143
Equity Sub-Account................................................................... $21 $65 $112
Managed Assets Sub-Account........................................................... $21 $65 $111
Pacific Growth Sub-Account........................................................... $26 $79 $135
Global Dividend Growth Sub-Account................................................... $24 $75 $128

<TABLE>
<CAPTION>
(WITHOUT ENHANCED DEATH BENEFIT PROVISION***) 1 YEAR 3 YEARS 5 YEARS
---------- ---------- ----------
<S> <C> <C> <C>
Money Market Sub-Account............................................................. $20 $61 $105
Quality Income Plus Sub-Account...................................................... $20 $61 $104
High Yield Sub-Account............................................................... $20 $62 $107
Utilities Sub-Account................................................................ $21 $65 $111
Dividend Growth Sub-Account.......................................................... $21 $64 $110
Capital Growth Sub-Account........................................................... $22 $68 $116
European Growth Sub-Account.......................................................... $26 $80 $136
Equity Sub-Account................................................................... $20 $61 $105
Managed Assets Sub-Account........................................................... $20 $61 $104
Pacific Growth Sub-Account........................................................... $24 $75 $128
Global Dividend Growth Sub-Account................................................... $23 $71 $121

The above example should not be considered a representation of past or
future expense or performance. Actual expenses of a Sub-Account may be greater
or lesser than those shown. The purpose of the example is to assist you in
understanding the various costs and expenses that you will bear directly or
indirectly.

*Early Withdrawal Charges may be deducted from the Cash Value before it is
applied to an income plan with a specified period of less than 120 months.

**Total Separate Account Annual Expenses of 1.48%

***Total Separate Account Annual Expenses of 1.35%

8
<PAGE>
CONDENSED FINANCIAL INFORMATION
- --------------------------------------------------------------------------------

ACCUMULATION UNIT VALUES AND NUMBER
OF ACCUMULATION UNITS OUTSTANDING FOR
EACH SUB-ACCOUNT SINCE INCEPTION*

<TABLE>
<CAPTION>
FOR THE YEARS BEGINNING JANUARY
1 AND ENDING DECEMBER 31,
1991 1992 1993 1994
--------- --------- ---------- ----------
<S> <C> <C> <C> <C>
MONEY MARKET SUB-ACCOUNT
Accumulation Unit Value, Beginning of Period......................... $10.452 $10.549 $10.765 $10.913
Accumulation Unit Value, End of Period............................... $10.549 $10.765 $10.913 $11.178
Number of Units Outstanding, End of Period........................... 70,118 402,184 396,727 1,084,005
QUALITY INCOME PLUS SUB-ACCOUNT
Accumulation Unit Value, Beginning of Period......................... $11.509 $12.163 $12.993 $14.487
Accumulation Unit Value, End of Period............................... $12.163 $12.993 $14.487 $13.344
Number of Units Outstanding, End of Period........................... 64,174 524,450 2,173,013 2,144,417
HIGH YIELD SUB-ACCOUNT
Accumulation Unit Value, Beginning of Period......................... $13.028 $13.982 $16.336 $20.022
Accumulation Unit Value, End of Period............................... $13.982 $16.336 $20.022 $19.264
Number of Units Outstanding, End of Period........................... 1,622 15,225 159,150 239,258
UTILITIES SUB-ACCOUNT
Accumulation Unit Value, Beginning of Period......................... $11.382 $12.454 $13.840 $15.798
Accumulation Unit Value, End of Period............................... $12.454 $13.840 $15.798 $14.180
Number of Units Outstanding, End of Period........................... 36,552 404,297 1,563,593 1,409,729
DIVIDEND GROWTH SUB-ACCOUNT
Accumulation Unit Value, Beginning of Period......................... $13.135 $13.911 $14.844 $16.746
Accumulation Unit Value, End of Period............................... $13.911 $14.844 $16.746 $15.981
Number of Units Outstanding, End of Period........................... 78,758 512,298 1,676,673 2,186,642
EQUITY SUB-ACCOUNT
Accumulation Unit Value, Beginning of Period......................... $14.658 $16.799 $16.599 $19.604
Accumulation Unit Value, End of Period............................... $16.799 $16.599 $19.604 $18.392
Number of Units Outstanding, End of Period........................... 9,016 63,933 346,339 515,289
MANAGED ASSETS SUB-ACCOUNT
Accumulation Unit Value, Beginning of Period......................... $12.437 $13.266 $14.035 $15.286
Accumulation Unit Value, End of Period............................... $13.266 $14.035 $15.286 $15.675
Number of Units Outstanding, End of Period........................... 14,159 547,208 1,529,877 1,862,227
CAPITAL GROWTH SUB-ACCOUNT
Accumulation Unit Value, Beginning of Period......................... $10.930 $12.697 $12.731 $11.682
Accumulation Unit Value, End of Period............................... $12.697 $12.731 $11.682 $11.379
Number of Units Outstanding, End of Period........................... 26,084 143,626 231,320 227,347
EUROPEAN GROWTH SUB-ACCOUNT
Accumulation Unit Value, Beginning of Period......................... $9.805 $10.020 $10.280 $14.290
Accumulation Unit Value, End of Period............................... $10.020 $10.280 $14.290 $15.278
Number of Units Outstanding, End of Period........................... 3,234 54,287 291,085 549,696
GLOBAL DIVIDEND GROWTH SUB-ACCOUNT -- -- --
Accumulation Unit Value, Beginning of Period......................... -- -- -- $10.000
Accumulation Unit Value, End of Period............................... -- -- -- $9.912
Number of Units Outstanding, End of Period........................... -- -- -- 676,049
PACIFIC GROWTH SUB-ACCOUNT -- -- --
Accumulation Unit Value, Beginning of Period......................... -- -- -- $10.000
Accumulation Unit Value, End of Period............................... -- -- -- $9.221
Number of Units Outstanding, End of Period........................... -- -- -- 426,544
</TABLE>

* All Sub-Accounts commenced operations on September 24, 1991, except for the
Global Dividend Growth and Pacific Growth Sub- Accounts. The Global Dividend
Growth and Pacific Growth Sub-Accounts commenced operations on February 23,
1994.

9
<PAGE>
PERFORMANCE DATA
- --------------------------------------------------------------------------------

From time to time the Variable Account may publish advertisements containing
performance data relating to its Sub-Accounts. The performance data for the
Sub-Accounts (other than for the Money Market Sub-Account) will always be
accompanied by total return quotations for the most recent one, five and ten
year periods, or for a period from inception to date if the Sub-Account has not
been available for one of the prescribed periods. The total return quotations
for each period will be the average annual rates of return required for an
initial Purchase Payment of $1,000 to equal the amount Owners would receive on a
withdrawal of the Purchase Payment, after reflection of all recurring and
nonrecurring charges.

Performance figures used by the Variable Account are based on actual
historical performance of its Sub-Accounts for specified periods, and the
figures are not intended to indicate future performance. More detailed
information on the computation is set forth in the Statement of Additional
Information.

FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------

The financial statements of Allstate Life Insurance Company of New York and
the Allstate Life of New York Variable Annuity Account II may be found in the
Statement of Additional Information, which is incorporated by reference into
this Prospectus and which is available upon request. (See Order Form on page
29.)

10
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
AND THE VARIABLE ACCOUNT
- --------------------------------------------------------------------------------

ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK

The Company is the issuer of the Contract. Incorporated in 1967 as a stock
life insurance company under the laws of New York, the Allstate Life Insurance
Company of New York ("Company") has done business since 1984 as "Allstate Life
Insurance Company of New York". From 1967 to 1978 the Company was known as
"Financial Insurance Company" and from 1978 to 1984 the Company was known as "PM
Life Insurance Company". The Company sells annuities and individual 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 ("Allstate") which is a stock 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").

DEAN WITTER REYNOLDS INC.

Dean Witter Reynolds Inc. ("Dean Witter") is the principal underwriter of
the Contract. Dean Witter is a wholly-owned subsidiary of Dean Witter, Discover
& Co. ("Dean Witter Discover"). Dean Witter is located at Two World Trade
Center, New York, New York. Dean Witter is a member of the New York Stock
Exchange and the National Association of Securities Dealers, Inc.

Dean Witter Discover's subsidiary, Dean Witter InterCapital, Inc.
("InterCapital"), is the investment manager of the Dean Witter Variable
Investment Series. InterCapital is registered with the Securities and Exchange
Commission as an investment adviser. As compensation for investment management,
the Fund pays InterCapital a monthly advisory fee at an annual rate of 0.5% of
the daily net assets of each of the Money Market Portfolio, the High Yield
Portfolio, the Equity Portfolio and the Managed Assets Portfolio; at an annual
rate of 0.50% of the daily net assets of the Quality Income Plus Portfolio up to
$500 million and 0.45% of the daily net assets of that Portfolio exceeding $500
million; at an annual rate of 0.65% of the daily net assets of the Utilities
Portfolio and the Capital Growth Portfolio; at an annual rate of 0.65% of the
daily net assets of the Utilities Portfolio up to $500 million and 0.55% of the
daily net assets of that Portfolio exceeding $500 million; at an annual rate of
0.625% of the daily net assets of the Dividend Growth Portfolio, up to $500
million and 0.50% of the daily net assets of that Portfolio exceeding $500
million; at an annual rate of 0.75% of the daily net assets of the Global
Dividend Growth Portfolio and; at the annual rate of 1.0% of the daily net
assets of the European Growth Portfolio and the Pacific Growth Portfolio. These
expenses are more fully described in the Fund's Prospectus attached to this
Prospectus.

THE VARIABLE ACCOUNT

Established on May 18, 1990, the Variable Account is a unit investment trust
registered with the Securities and Exchange Commission under the Investment
Company Act of 1940, but such registration does not signify that the Commission
supervises the management or investment practices or policies of the Variable
Account. The investment performance of the Variable Account is entirely
independent of both the investment performance of the Company's general account
and the performance of any other separate account.

The assets of the Variable Account are held separately from the other assets
of the Company. They are not chargeable with liabilities incurred in the
Company's other business operations. Accordingly, the income, capital gains and
capital losses, realized or unrealized, incurred on the assets of the Variable
Account are credited to or charged against the assets of the Variable Account,
without regard to the income, capital gains or capital losses

11
<PAGE>
arising out of any other business the Company may conduct.

The Variable Account has been divided into eleven Sub-Accounts, each of
which invests solely in its corresponding Portfolio of the Dean Witter Variable
Investment Series. Additional Sub-Accounts may be added at the discretion of the
Company.

THE DEAN WITTER VARIABLE INVESTMENT SERIES

The Variable Account will invest exclusively in the Dean Witter Variable
Investment Series (the "Fund"). Shares of the Fund are also offered to separate
accounts of the Company which fund other variable annuity contracts. Shares of
the Fund are also offered to separate accounts of a life insurance company
affiliated with the Company which fund variable annuity contracts. Shares of the
Fund may also be offered to separate accounts of certain non-affiliated life
insurance companies which fund variable life insurance contracts. It is
conceivable that in the future it may become disadvantageous for both variable
life and variable annuity contract separate accounts to invest in the same
underlying Fund. Although neither the Company nor the Fund currently foresees
any such disadvantage, the Fund's Board of Trustees intends to monitor events in
order to identify any material irreconcilable conflict between the interests of
variable annuity contract owners and variable life contract owners and to
determine what action, if any, should be taken in response thereto.

Investors in the High Yield Portfolio should carefully consider the relative
risks of investing in high yield securities, which are commonly known as junk
bonds. Bonds of this type are considered to be speculative with regard to the
payment of interest and return of principal. Investors in the High Yield
Portfolio should also be cognizant of the fact that such securities are not
generally meant for short-term investing and should assess the risks associated
with an investment in the High Yield Portfolio.

Shares of the Portfolios of the Fund are not deposits, or obligations of, or
guaranteed or endorsed by any bank and the shares are not federally insured by
the Federal Deposit Insurance Corporation, the Federal Reserve Board or any
other agency.

The Fund has eleven portfolios: the Money Market Portfolio, the Quality
Income Plus Portfolio, the High Yield Portfolio, the Utilities Portfolio, the
Dividend Growth Portfolio, the Capital Growth Portfolio, the Global Dividend
Growth Portfolio, the European Growth Portfolio, the Pacific Growth Portfolio,
the Equity Portfolio and the Managed Assets Portfolio. Each Portfolio has
different investment objectives and policies and operates as a separate
investment fund.

The Money Market Portfolio seeks high current income, preservation of
capital, and liquidity by investing in certain money market instruments,
principally U.S. government securities, bank obligations, and high grade
commercial paper.

The Quality Income Plus Portfolio seeks, as its primary objective, to earn a
high level of current income and, as a secondary objective, capital
appreciation, but only when consistent with its primary objective, by investing
primarily in debt securities issued by the U.S. Government, its agencies and
instrumentalities, including zero coupon securities and in fixed-income
securities rated A or higher by Moody's Investors Service, Inc. ("Moody's") or
Standard & Poor's Corporation ("Standard & Poor's") or non-rated securities of
comparable quality, and by writing covered call and put options against such
securities.

The High Yield Portfolio seeks as its objective, to earn a high level of
current income by investing in a professionally managed diversified portfolio
consisting principally of fixed-income securities rated Baa or lower by Moody's
or BBB or lower by Standard & Poor's or non-rated securities of comparable
quality, which are commonly known as junk bonds, and, as a secondary objective,
capital

12
<PAGE>
appreciation when consistent with its primary objective.

The Utilities Portfolio seeks to provide current income and long-term growth
of income and capital by investing primarily in equity and fixed-income
securities of companies engaged in the public utilities industry.

The Dividend Growth Portfolio seeks to provide reasonable current income and
long-term growth of income and capital by investing primarily in common stock of
companies with a record of paying dividends and the potential for increasing
dividends.

The Capital Growth Portfolio seeks to provide long-term capital growth by
investing principally in common stocks.

The Global Dividend Growth Portfolio seeks to provide reasonable current
income and long-term growth of income and capital by investing primarily in
common stock of companies, issued by issuers worldwide, with a record of paying
dividends and the potential for increasing dividends.

The European Growth Portfolio seeks to maximize the capital appreciation on
its investments by investing primarily in securities issued by issuers located
in Europe.

The Pacific Growth Portfolio seeks to maximize the capital appreciation of
its investments by investing primarily in securities issued by issuers located
in Asia, Australia and New Zealand.

The Equity Portfolio seeks, as its primary objective, growth of capital
through investments in common stock of companies believed by the Investment
Manager to have potential for superior growth and, as a secondary objective,
income when consistent with its primary objective.

The Managed Assets Portfolio seeks a high total investment return through a
fully managed investment policy utilizing equity securities, fixed-income
securities rated Baa or higher by Moody's or BBB or higher by Standard & Poor's
(or non-rated securities of comparable quality), and money market securities,
and covered call and put options.

All dividends and capital gains distributions from the Portfolios are
automatically reinvested in shares of the distributing Portfolio at their net
asset value.

THERE IS NO ASSURANCE THAT ANY OF THE PORTFOLIOS WILL ATTAIN THEIR
RESPECTIVE STATED OBJECTIVES. Additional information concerning the investment
objectives and policies of the Portfolios can be found in the current prospectus
for the Fund accompanying this Prospectus.

THE PROSPECTUS OF THE FUND SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS
MADE CONCERNING THE ALLOCATION OF PURCHASE PAYMENTS TO A PARTICULAR PORTFOLIO.

THE CONTRACTS
- --------------------------------------------------------------------------------

PURCHASE OF THE CONTRACTS

The Contracts may be purchased through sales representatives of Dean Witter.
The first Purchase Payment must be at least $4,000 unless the Contract is a
Qualified Contract, in which case the first Purchase Payment must be at least
$1,000. Presently, the Company will accept an initial Purchase Payment of at
least $1,000, but reserves the right to increase the minimum initial Purchase
Payment amount to $4,000. All subsequent Purchase Payments must be $25 or more
and may be made at any time prior to the Payout Start Date. Additional Purchase
Payments may also be made from your bank account or your Dean Witter Active
Assets-TM- Account through Automatic Additions. Please consult with your Dean
Witter Account Executive for detailed information about Automatic Additions. The
Automatic Additions program is not

13
<PAGE>
available for Qualified Contracts issued pursuant to a Dean Witter Custodial
Account.

The Company reserves the right to underwrite or reject future additions.

CREDITING OF INITIAL PURCHASE PAYMENTS

A Purchase Payment accompanied by complete information will be credited to
the Contract within two business days of receipt by the Company at its home
office. If the information is not complete, the Company will credit the Purchase
Payments to the Contract within five business days or return it at that time
unless the applicant specifically consents to the Company holding the Purchase
Payment until the information is complete. The Company reserves the right to
reject any proposed purchase of the Contract. Subsequent Purchase Payments will
be credited to the Contract at the close of the Valuation Period in which the
Purchase Payment is received.

ALLOCATION OF PURCHASE PAYMENTS

On the application the Owner instructs the Company how to allocate the
Purchase Payment among the twelve Investment Alternatives. Purchase Payments may
be allocated in whole percents, from 0% to 100%, to any Investment Alternative
so long as the total allocation equals 100%. Purchase Payments may also be
allocated in amounts of no less than $100. Unless the Owner notifies the Company
otherwise, subsequent Purchase Payments are allocated according to the original
instructions.

Each Purchase Payment will be credited to the Contract as Variable Account
Accumulation Units equal to the amount of the Purchase Payment allocated to each
Sub-Account divided by the Accumulation Unit value for that Sub-Account next
computed after the Purchase Payment is credited to the Contract. For example, if
a $10,000 Purchase Payment is credited to the Contract when the Accumulation
Unit value equals $10, then 1,000 Accumulation Units would be credited to the
Contract. The Variable Account, in turn, purchases shares of the corresponding
Portfolio (see "Value of Variable Account Accumulation Units," page 14).

For a brief summary of how Purchase Payments allocated to the Fixed Account
are credited to the Contract, see "The Fixed Account" on page 22.

VALUE OF VARIABLE ACCOUNT ACCUMULATION UNITS

The Accumulation Units in each Sub-Account of the Variable Account are
valued separately. The value of Accumulation Units may change each Valuation
Period according to the investment performance of the shares purchased by each
Sub-Account and the deduction of certain expenses and charges.

A Valuation Period is the period between successive Valuation Dates. It
begins at the close of business of each Valuation Date and ends at the close of
business of the next succeeding Valuation Date. A Valuation Date is each day
that the New York Stock Exchange is open for business except for any day in
which there is an insufficient degree of trading in the Variable Account's
portfolio securities that the value of Accumulation or Annuity Units might not
be materially affected by changes in the value of the portfolio securities.
Valuation Dates do not include such Federal and non-Federal holidays as are
observed by the New York Stock Exchange. The New York Stock Exchange currently
observes the following holidays: New Year's Day (January 1); President's Day
(the third Monday in February); Good Friday (the Friday before Easter); Memorial
Day (the last Monday in May); Independence Day (July 4); Labor Day (the first
Monday in September); Thanksgiving Day (the fourth Thursday in November); and
Christmas Day (December 25).

The value of an Accumulation Unit in a Sub-Account for any Valuation Period
equals the value of the Accumulation Unit as of the immediately preceding
Valuation Period, multiplied by the Net Investment Factor for that Sub-Account
for the current Valuation Period. The Net Investment Factor is a number
representing the change on successive Valuation Dates in value of Sub-Account
assets due to investment income, realized or unrealized capital

14
<PAGE>
gains or loss, deductions for taxes, if any, and deductions for the Mortality
and Expense Risk Charge and Administrative Expense Charge.

TRANSFERS

Transfers must be at least $100 or the total amount in the Investment
Alternative, whichever is less. Transfers to any Guarantee Period of the Fixed
Account must be at least $500. Currently, there is no charge for transfers among
the twelve Investment Alternatives. The Company, however, reserves the right to
assess a $25.00 charge on all transfers in excess of 12 per Contract Year. The
Company will notify Owners at least 30 days prior to imposing the transfer
charge.

Transfers out of any Sub-Account before the Payout Start Date may be made at
any time.

After the Payout Start Date, transfers among Sub-Accounts of the Variable
Account, or from the Variable Account to the Fixed Account may be made only once
every six months and may not be made during the first six months following the
Payout Start Date.

Transfers may be made pursuant to telephone instructions if the Owner
authorizes telephone transfers at the time of purchase, or subsequently on a
form provided by the Company. Telephone transfer requests will be accepted by
the Company if received at 516/752-5306 by 4:00 p.m., Eastern Time. Telephone
transfer requests received at any other telephone number or after 4:00 p.m.,
Eastern Time will not be accepted by the Company. Telephone transfer requests
received before 4:00 p.m., Eastern Time are effected at the next computed value.
Otherwise, transfer requests must be in writing, on a form provided by the
Company.

Transfers may also be made automatically through Dollar Cost Averaging prior
to the Payout Start Date. Dollar Cost Averaging permits the Owner to transfer a
specified amount every month from the Money Market Sub-Account to any other Sub-
Account. Transfers made through Dollar Cost Averaging must be $100 or more.
Dollar Cost Averaging cannot be used to transfer amounts to the Fixed Account.
Please consult with your Dean Witter Account Executive for detailed information
about Dollar Cost Averaging.

Transfers from Sub-Accounts of the Variable Account will be made based on
the Accumulation Unit values next computed after the Company receives the
transfer request at its home office.

For transfers involving the Fixed Account, see page 22.

SURRENDER AND WITHDRAWALS

The Owner may withdraw all or part of the Cash Value at anytime prior to the
earlier of the death of the last surviving Annuitant, death of any Owner or the
Payout Start Date. The amount available for withdrawal is the Cash Value next
computed after the Company receives the request for a withdrawal at its home
office, less any Early Withdrawal Charges, Contract Maintenance Charges or any
remaining charge for premium taxes. Withdrawals from the Variable Account will
be paid within seven days of receipt of the request, subject to postponement in
certain circumstances. See "Delay of Payments," page 23. For withdrawals from
the Fixed Account, see page 22.

The minimum partial withdrawal is $500. If the Cash Value after a partial
withdrawal would be less than $500, then the Company will treat the request as
one for a total surrender of the Contract and the entire Cash Value, less any
charges and premium taxes, will be paid out.

Partial withdrawals may also be taken automatically through monthly
Systematic Withdrawals. Systematic Withdrawals of $100 or more may be requested
at any time prior to the Payout Start Date. Please consult with your Dean Witter
Account Executive for detailed information about Systematic Withdrawals.

For Qualified Contracts, the Company will, at the request of the Owner,
automatically calculate and withdraw the IRS Required Minimum Distribution.
Please consult with your Dean Witter

15
<PAGE>
Account Executive for detailed information about the Required Minimum
Distribution program.

Withdrawals and surrenders may be subject to income tax and a 10% tax
penalty. This tax and penalty is explained in "Federal Tax Matters" on page 24.

The full Contract Maintenance Charge will be deducted at the time of total
surrender should the surrender occur on any date other than a Contract
Anniversary. The total amount paid at surrender may be more or less than the
total Purchase Payments due to prior withdrawals, any deductions, and investment
performance.

To complete the partial withdrawals, the Company will cancel Accumulation
Units in an amount equal to the withdrawal and any applicable Early Withdrawal
Charge and premium taxes. The Owner must name the Investment Alternative from
which the withdrawal is to be made. If none is named, then the withdrawal
request is incomplete and cannot be honored.

DEFAULT

So long as the Cash Value is not reduced to zero or a withdrawal does not
reduce it to less than $500, the Contract will stay in force until the Payout
Start Date even if no Purchase Payments are made after the first Purchase
Payment.

CHARGES AND OTHER DEDUCTIONS
- --------------------------------------------------------------------------------

DEDUCTIONS FROM PURCHASE PAYMENTS

No deductions are currently made from Purchase Payments. Therefore the full
amount of every Purchase Payment is invested in the Investment Alternative(s) to
increase the potential for investment gain.

EARLY WITHDRAWAL CHARGE (CONTINGENT DEFERRED SALES CHARGE)

The Owner may withdraw the Cash Value at any time before the earliest of the
Payout Start Date, the death of any Owner or the last surviving Annuitant's
death.

There are no Early Withdrawal Charges on amounts up to the Withdrawal Amount
Without Early Withdrawal Charge. A Withdrawal Amount Without Early Withdrawal
Charge will be available in each Contract Year. The annual Withdrawal Amount
Without Early Withdrawal Charge is 15% of all Purchase Payments. Amounts
withdrawn in excess of the Withdrawal Amount Without Early Withdrawal Charge,
may be subject to an Early Withdrawal Charge. Any Withdrawal Amount Without
Early Withdrawal Charge not withdrawn in a Contract Year does not increase the
Withdrawal Amount Without Early Withdrawal Charge in later Contract Years. Early
Withdrawal Charges, if applicable, will be deducted from the amount paid.

In certain cases, distributions required by federal tax law (see the
Statement of Additional Information for "IRS Required Distribution at Death
Rules") may be subject to an Early Withdrawal Charge. Early Withdrawal Charges
may be deducted from the Cash Value before it is applied to an Income Plan with
a specified period of less than 120 months.

Withdrawal Amounts Without Early Withdrawal Charge and other partial
withdrawals will be allocated on a first in, first out basis to Purchase
Payments. For purposes of calculating the amount of the Early Withdrawal Charge,
withdrawals are assumed to come from Purchase Payments first, beginning with the
oldest payment. Unless the Company is instructed otherwise, for partial
withdrawals, the Early Withdrawal Charge will be deducted from the amount paid,
rather than from the remaining Cash Value. Once all Purchase Payments have been
withdrawn, additional withdrawals will not be assessed an Early Withdrawal
Charge.

16
<PAGE>
Early Withdrawal Charges will be applied to amounts withdrawn in excess of a
Withdrawal Amount Without Early Withdrawal Charge as set forth below:

<TABLE>
<CAPTION>
COMPLETE CONTRACT APPLICABLE
YEARS SINCE PURCHASE WITHDRAWAL
PAYMENT BEING CHARGE
WITHDRAWN WAS MADE PERCENTAGE
- ---------------------- -----------------------------
<S> <C>
0 years............... 6%
1 year................ 5%
2 years............... 4%
3 years............... 3%
4 years............... 2%
5 years............... 1%
6 years or more....... 0%
</TABLE>

THE CUMULATIVE TOTAL OF ALL EARLY WITHDRAWAL CHARGES IS GUARANTEED NEVER TO
EXCEED 6% OF AN OWNER'S PURCHASE PAYMENTS.

Early Withdrawal Charges will be used to pay sales commissions and other
promotional or distribution expenses associated with the marketing of the
Contracts. The Company does not anticipate that the Early Withdrawal Charges
will cover all distribution expenses in connection with the Contract.

In addition, federal and state income tax may be withheld from withdrawal
and surrender amounts. Certain surrenders may also be subject to a federal tax
penalty. See "Federal Tax Matters," page 24.

CONTRACT MAINTENANCE CHARGE

A Contract Maintenance Charge is deducted annually from the Cash Value to
reimburse the Company for its actual costs in maintaining each Contract and the
Variable Account. THE COMPANY GUARANTEES THAT THE AMOUNT OF THIS CHARGE WILL NOT
EXCEED $30 PER CONTRACT YEAR OVER THE LIFE OF THE CONTRACT. Maintenance costs
include but are not limited to expenses incurred in billing and collecting
Purchase Payments; keeping records; processing death claims and cash surrenders;
policy changes and proxy statements; calculating Accumulation Unit and Annuity
Unit values; and issuing reports to Owners and regulatory agencies. The Company
does not expect to realize a profit from this charge.

On each Contract Anniversary, the Contract Maintenance Charge will be
deducted from the Investment Alternatives in the same proportion that the
Owner's interest in each bears to the total Cash Value. After the Payout Start
Date, a pro rata share of the annual Contract Maintenance Charge will be
deducted from each Income Payment. For example, 1/12 of the $30 or $2.50 will be
deducted if there are twelve Income Payments during the Contract Year. The
Contract Maintenance Charge will be deducted from the amount paid on a total
surrender.

Prior to October 3, 1993, Vantage Computer Systems, Inc. was under contract
with the Company to provide Contract recordkeeping services. As of October 4,
1993, the Company provides all Contract recordkeeping services.

ADMINISTRATIVE EXPENSE CHARGE

The Company will deduct an Administrative Expense Charge which is equal, on
an annual basis to .10% of the daily net assets in the Variable Account. This
charge is designed to cover actual administrative expenses which exceed the
revenues from the Contract Maintenance Charge. The Company does not intend to
profit from this charge. The Company reserves the right to increase this charge
in the future. The Company believes that the Administrative Expense Charge and
Contract Maintenance Charge have been set at a level that will recover no more
than the actual costs associated with administering the Contract. There is no
necessary relationship between the amount of administrative charge imposed on a
given Contract and the amount of expenses that may be attributable to that
Contract.

MORTALITY AND EXPENSE RISK CHARGE

A Mortality and Expense Risk Charge will be deducted daily at a rate equal
on an annual basis of 1.25% of the daily net assets in the Variable Account. The
Company estimates that .85% is attributed to the assumption of mortality risks
and .40% is
attrib-

17
<PAGE>
uted to the assumption of expense risks. THE COMPANY GUARANTEES THAT THE AMOUNT
OF THIS CHARGE WILL NOT INCREASE OVER THE LIFE OF THE CONTRACT.

If the Mortality and Expense Risk Charge is insufficient to cover the
Company's mortality costs and excess expenses, the Company will bear the loss.
If the Charge is more than sufficient, the Company will retain the balance as
profit. The Company currently expects a profit from this charge. Any such
profit, as well as any other profit realized by the Company and held in its
general account, (which supports insurance and annuity obligations), would be
available for any proper corporate purpose, including, but not limited to,
payment of distribution expenses.

For Contracts with the Enhanced Death Benefit provision, the Mortality and
Expense Risk Charge will be deducted daily, at a rate equal on an annual basis,
to 1.38% of the daily net assets in the Variable Account. The assessment of the
additional .13% for the Enhanced Death Benefit is attributed to the assumption
of additional mortality risks. (See pages 18-20 for a full description of Death
Benefit options.)

The mortality risk arises from the Company's guarantee to cover all death
benefits and to make Income Payments in accordance with the Income Payment
Tables, thus, relieving the Annuitants of the risk of outliving funds
accumulated for retirement.

The expense risk arises from the possibility that the Contract Maintenance
and Early Withdrawal Charges, both of which are guaranteed not to increase, will
be insufficient to cover actual administrative expenses.

TAXES

The Company will deduct state premium taxes or other taxes relative to the
Contract (collectively referred to as "premium taxes") either at the Payout
Start Date, or when a total withdrawal occurs. The Company reserves the right to
deduct premium taxes from the Purchase Payments. Currently, no deductions are
made because New York does not charge premium taxes on annuities.

At the Payout Start Date, the charge for premium taxes will be deducted from
each Investment Alternative in the proportion that the Owner's interest in the
Investment Alternative bears to the total Cash Value.

DEAN WITTER VARIABLE INVESTMENT SERIES ("FUND") EXPENSES

A complete description of the expenses and deductions from the Portfolios is
found in the Fund's prospectus which is attached to this prospectus.

BENEFITS UNDER THE CONTRACT
- --------------------------------------------------------------------------------

DEATH BENEFITS PRIOR TO THE PAYOUT START DATE

If any Owner or the last surviving Annuitant dies prior to the Payout Start
Date, and a Death Benefit is elected, it will be paid to the new Owner or
Beneficiary. If requested to be paid in a lump sum within 60 days from the Date
of Death, the Death Benefit will be the greatest of: (a) the sum of all Purchase
Payments less any amounts deducted in connection with partial withdrawals
including any applicable Early Withdrawal Charges or premium taxes; or (b) the
Cash Value on the date we receive Due Proof of Death, or (c) the Cash Value on
the most recent Death Benefit Anniversary less any amounts deducted in
connection with partial withdrawals, including any applicable Early Withdrawal
Charges and premium taxes deducted from the Cash Value since that anniversary.
The Death Benefit Anniversary is every sixth Contract Anniversary. For example,
the 6th, 12th and 18th Contract Anniversaries are the first three Death Benefit
Anniversaries.

If the Enhanced Death Benefit option is selected, it applies only at the
death of the Owner. It

18
<PAGE>

does not apply to the death of the Annuitant if different from the Owner. For
Contracts with the optional Enhanced Death Benefit provision, the Death Benefit
will be the greater of (a) through (c) above, or (d) the Enhanced Death Benefit.
The Enhanced Death Benefit on the date of issue is equal to the initial purchase
payment. On each Contract Anniversary, but not beyond the Contract Anniversary
preceding all owner(s)' 75th birthday(s), the Enhanced Death Benefit will be
recalculated as follows:

The Enhanced Death Benefit as of the prior Contract Anniversary multiplied
by 1.05 which results in an increase of 5% annually.

Further, for all ages, the Enhanced Death Benefit will be adjusted on each
Contract Anniversary, or upon receipt of a death claim, as follows:

The Enhanced Death Benefit will be reduced by the percentage of any Cash
Value withdrawn since the prior Contract Anniversary.

Any additional purchase payments since the prior Contract Anniversary will
be added.

The Enhanced Death Benefit will never be greater than the maximum death benefit
allowed by any non-forfeiture laws which govern the Contract.

The Enhanced Death Benefit provision is subject to state approval and may
not be available as of the date of this prospectus. Please consult your Dean
Witter Account Executive for current information.

The Company will not settle any death claim until it receives Due Proof of
Death. If an Owner dies prior to the Payout Start Date the new Owner will be the
surviving Owner, if any, otherwise the new Owner will be the Beneficiary.
Generally, this new Owner has the following options:

1. The new Owner may elect, within 60
days of the date of death, to receive the Death Benefit in a lump sum;

2. The new Owner may elect, within 60
days of the date of death, to receive the Settlement Value (the Settlement
Value is the Cash Value less any applicable Early Withdrawal Charges and
premium tax on the date payment is requested) payable within five years of
the date of death.

3. The new Owner may elect to apply the
Settlement Value to one of the income plans. Payments 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.

4. If the new Owner is the spouse of the
deceased Owner, the new Owner may elect one of the above options or may
continue the Contract.

If the new Owner who is not the spouse of the deceased Owner does not make
one of these elections, the Settlement Value will be paid in a lump sum to the
new Owner five years after the date of death.

If the new Owner is a non-natural person, then the new Owner must receive
the Death Benefit in a lump sum, and the options listed above are not available.

If any Annuitant dies who is not also an Owner, the Owner must elect an
applicable option listed below. If the option selected is 1(a) or 1(b)(ii)
below, the new Annuitant will be the youngest Owner, unless the Owner names a
different Annuitant.

1. If the Owner is a natural person:

a. The Owner may choose to
continue the Contract as if the death had not occurred; or

b. If the Company receives due proof
of death within 180 days of the date of the Annuitant's death, then the
Owner may alternatively choose to:

i.Receive the Death Benefit in a
lump sum; or

ii.Apply the Death Benefit to an
income plan which must begin within

19
<PAGE>

one year of the date of death and must be for a period equal to or
less than the life expectancy of the Owner.

2. If the Owner is a non-natural person:
The Owner must receive the Death Benefit in a lump sum.

If the last Surviving Annuitant, not also an Owner, dies prior to the Payout
Start Date then the Death Benefit will be paid to the Owner in a lump sum, and
the options listed above are not available.

The value of the Death Benefit will be determined at the end of the
Valuation Period during which the Company receives a complete request for
payment of the Death Benefit, which includes Due Proof of Death.

DEATH BENEFITS AFTER THE PAYOUT START DATE

If the Annuitant and Joint Annuitant, if applicable, die after the Payout
Start Date, the Company will pay the Death Benefit, if any, contained in the
particular income plan.

If an Owner, who is not the Annuitant, dies after the Payout Start Date,
payments will continue to be made under the particular income plan. The
Beneficiary will be the recipient of such payments.

INCOME PAYMENTS
- --------------------------------------------------------------------------------

PAYOUT START DATE

The Payout Start Date is the day that Income Payments will start under 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 (a) at least a month after the Issue
Date; (b) the first day of a calendar month; and (c) no later than the first day
of the calendar month after the Annuitant reaches age 85, or the 10th
anniversary date, if later.

Unless the Owner notifies the Company in writing otherwise, the Payout Start
Date will be: for Non-Qualified Contracts, the later of the first day of the
calendar month after the Annuitant reaches age 85 or the 10th anniversary date;
for Qualified Contracts, April first of the calendar year following the year in
which the Annuitant reaches age 70 1/2.

AMOUNT OF VARIABLE ANNUITY INCOME PAYMENTS

The amount of Variable Annuity Income Payments depends upon the investment
experience of the Portfolios selected by the Owner, any premium taxes, the age
and sex of the Annuitant(s), and the income plan chosen. The Company guarantees
that the Income Payments will not be affected by (1) actual mortality experience
and (2) the amount of the Company's administration expenses.

The Contracts offered by this Prospectus contain 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
these Contracts. For qualified plans, where it is appropriate, a unisex
endorsement is available.

The sum of Income Payments made may be more or less than the total Purchase
Payments made because (a) Variable Annuity Income Payments vary with the
investment results of the underlying Portfolios; (b) the Owner bears the
investment risk with respect to all amounts allocated to the Variable Account;
(c) Annuitants may die before the actuarially expected Date of Death, and (d)
Early Withdrawal Charges may be applicable. As such, the total amount of Income
Payments cannot be predicted.

20
<PAGE>
The duration of the income plan may 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.

If the actual net investment experience is less than the assumed investment
rate, then the dollar amount of the Income Payments will decrease. The dollar
amount of the Income Payments will stay level if the net investment experience
equals the assumed investment rate and the dollar amount of the Income Payments
will increase if the net investment experience exceeds the assumed investment
rate. For purposes of the Variable Annuity Income Payments, the assumed
investment rate is found in the Contract.

If no payments have been received for three full years and if the Cash Value
to be applied to an income plan is less than $2,000, or if the monthly payments
determined under the Income Plan are less than $20, the Company may pay the Cash
Value in a lump sum or change the payment frequency to an interval which results
in Income Payments of at least $20.

INCOME PLANS

The Owner may elect a completely Fixed Annuity, a completely Variable
Annuity or a combination Fixed and Variable Annuity. 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. Subsequent
changes will not be permitted. 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. Premium taxes may be assessed. The income plans include:

INCOME PLAN 1--LIFE WITH PAYMENTS GUARANTEED FOR 120 MONTHS

Monthly payments will be made for as long as the Annuitant lives. If the
Annuitant dies before 120 monthly payments have been made, the remainder of the
120 guaranteed monthly payments will be paid to the Owner, or if deceased, to
the surviving Beneficiary.

INCOME PLAN 2--JOINT AND LAST SURVIVOR

Monthly payments beginning on the Payout Start Date will be made for as long
as either the Annuitant or Joint Annuitant is living. It is possible under this
option that only one monthly payment will be made if the Annuitant and Joint
Annuitant both die before the second payment is made, or only two monthly
payments will be made if they both die before the third payment, and so forth.

INCOME PLAN 3--PAYMENTS FOR A SPECIFIED PERIOD

Monthly payments beginning on the Payout Start Date will be made for a
specified period. An Early Withdrawal Charge may apply if the specified period
is less than 120 months. Payments under this option do not depend on the
continuation of the Annuitant's life. If the Owner dies before the end of the
specified period, the remaining payments will be paid to the surviving
Beneficiary. The Mortality and Expense Risk Charge is deducted from the Variable
Account even though the Company does not bear any mortality risk. If Income Plan
3 is chosen and the proceeds are derived from the Variable Account, the Owner or
Beneficiary may surrender the Contract at any time by notifying the Company in
writing.

In the event that an income plan is not selected, the Company will make
Income Payments in accordance with Income Plan 1. At the Company's discretion,
other income plans may be available upon request. The Company uses sex-distinct
annuity tables. However, the Company reserves the right to use Income Payment
tables which do not distinguish on the basis of sex.

21
<PAGE>
THE FIXED ACCOUNT
- --------------------------------------------------------------------------------

CONTRIBUTIONS UNDER THE FIXED PORTION OF THE ANNUITY CONTRACT AND TRANSFERS
TO THE FIXED PORTION BECOME PART OF THE GENERAL ACCOUNT OF THE COMPANY, WHICH
SUPPORTS INSURANCE AND ANNUITY OBLIGATIONS. BECAUSE OF EXEMPTIVE AND
EXCLUSIONARY PROVISIONS, INTERESTS IN THE GENERAL ACCOUNT HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 ("1933 ACT"), NOR IS THE GENERAL
ACCOUNT REGISTERED AS AN INVESTMENT COMPANY UNDER THE INVESTMENT COMPANY ACT OF
1940 ("1940 ACT"). ACCORDINGLY, NEITHER THE GENERAL ACCOUNT NOR ANY INTERESTS
THEREIN ARE GENERALLY SUBJECT TO THE PROVISIONS OF THE 1933 OR 1940 ACTS AND THE
COMPANY HAS BEEN ADVISED THAT THE STAFF OF THE SECURITIES AND EXCHANGE
COMMISSION HAS NOT REVIEWED THE DISCLOSURES IN THIS PROSPECTUS WHICH RELATE TO
THE FIXED PORTION. DISCLOSURES REGARDING THE FIXED PORTION OF THE ANNUITY
CONTRACT AND THE GENERAL ACCOUNT, HOWEVER, MAY BE SUBJECT TO CERTAIN GENERALLY
APPLICABLE PROVISIONS OF THE FEDERAL SECURITIES LAWS RELATING TO THE ACCURACY
AND COMPLETENESS OF STATEMENTS MADE IN PROSPECTUSES.

GENERAL DESCRIPTION

Contributions made to the Fixed Account are invested in the general account
of the Company. The general account is made up of all of the general assets of
the Company, other than those in the Variable Account and any other segregated
asset account. Instead of the Owner bearing the investment risk as is the case
for amounts in the Variable Account, the Company bears the full investment risk
for all amounts contributed to the general account. The Company has sole
discretion to invest the assets of the general account, subject to applicable
law. The Company guarantees that the amounts allocated to the Fixed Account will
be credited interest at a net effective interest rate of at least the minimum
guaranteed rate found in the Contract. (This interest rate is net of separate
account asset based charges of 1.35% or 1.48% if the Enhanced Death Benefit has
been selected). Currently the amount of interest credited in excess of the
guaranteed rate will vary periodically in the sole discretion of the Company.
Any interest held in the general account does not entitle an Owner to share in
the investment experience of the general account.

Money deposited in the Fixed Account earns interest at the current rate in
effect at the time of allocation or transfer for the Guarantee Period. After the
Guarantee Period, a renewal rate will be declared. Subsequent renewal dates will
be on anniversaries of the first renewal date. On or about each renewal date,
the Company will notify the Owner of the interest rate(s) for the Contract Year
then starting. This interest rate will be guaranteed by the Company for a full
year and will not be less than the guaranteed rate found in the contract. The
Company may declare more than one interest rate for different monies based upon
the date of allocation or transfer to the Fixed Account and based upon the
Guarantee Period.

The Company will offer a one year Guarantee Period. Additional Guarantee
Periods are offered at the sole discretion of the Company. The Company currently
offers a 6 year Guarantee Period.

ANY INTEREST CREDITED TO AMOUNTS ALLOCATED TO THE FIXED ACCOUNT IN EXCESS OF
THE GUARANTEED RATE FOUND IN THE CONTRACT WILL BE DETERMINED IN THE SOLE
DISCRETION OF THE COMPANY.

TRANSFERS, SURRENDERS, AND WITHDRAWALS

Amounts may be transferred from the Sub-Accounts of the Variable Account to
the Fixed Account, and prior to the Payout Start Date amounts may also be
transferred from the Fixed Account to Sub-Accounts of the Variable Account.

The maximum amount in any Contract Year which may be transferred from the
Fixed Account to the Variable Account or between Guarantee Periods of the Fixed
Account is limited to the greater of (1) 25% of the value in the Fixed Account
as of the most recent Contract Anniversary; if 25% of the value as of the most
recent Contract Anniversary is greater than zero but less than $1,000, then up
to $1,000 may be

22
<PAGE>
transferred; or (2) 25% of the sum of all Purchase Payments and transfers to the
Fixed Account as of the most recent Contract Anniversary.

If the first renewal interest rate is less than the current rate that was in
effect at the time money was allocated or transferred to the Fixed Account, the
transfer restriction for that money and the accumulated interest thereon will be
waived during the 60-day period following the first renewal date.

After the Payout Start Date no transfers may be made from the Fixed Account.
Transfers from the Variable Account to the Fixed Account may not be made for six
months after the Payout Start Date and may be made thereafter only once every
six months.

Surrenders and withdrawals from the Fixed Account may be delayed for up to
six months. After the Payout Start Date no surrenders or withdrawals may be made
from the Fixed Account.

GENERAL MATTERS
- --------------------------------------------------------------------------------

OWNER
The Owner has the sole right to exercise all rights and privileges under the
Contract, except as otherwise provided in the Contract.

Generally, an Owner who is not a natural person is required to include in
income each year any increase in the Cash Value to the extent the increase is
attributable to contributions made after February 28, 1986.

BENEFICIARY

Subject to the terms of any irrevocable Beneficiary, the Owner may change
the Beneficiary while the Annuitant is living by notifying the Company in
writing. Any change will be effective at the time it is signed by the Owner,
whether or not the Annuitant is living when the change is received by the
Company. The Company will not, however, be liable as to any payment or
settlements made prior to receiving the written notice.

Unless otherwise provided in the Beneficiary designation, the rights of any
Beneficiary predeceasing the Annuitant will revert to the Owner or the Owner's
estate. Multiple Beneficiaries may be named. Unless otherwise provided in the
Beneficiary designation, if more than one Beneficiary survives the Annuitant,
the surviving Beneficiaries will share equally in any amounts due.

DELAY OF PAYMENTS

Payment of any amounts due from the Variable Account under the Contract will
occur within seven days, unless:

1. The New York Stock Exchange is
closed for other than usual weekends or holidays, or trading on the Exchange
is otherwise restricted;

2. An emergency exists as defined by the
Securities and Exchange Commission; or

3. The Securities and Exchange
Commission permits delay for the protection of the Owners.

For payment or transfers from the Fixed Account, see page 22.

ASSIGNMENTS

The Owner may not assign an interest in a Contract as collateral or security
for a loan. Otherwise, the Owner may assign benefits under the Contract prior to
the Payout Start Date. No Beneficiary may assign benefits under the Contract
until they are due. No assignment will bind the Company unless it is signed by
the Owner and filed with the Company. The Company is not responsible for the
validity of an assignment.

MODIFICATION

The Company may not modify the Contract without the consent of the Owner
except to make the

23
<PAGE>
Contract meet the requirements of the Investment Company Act of 1940, or to make
the Contract comply with any changes in the Internal Revenue Code or required by
the Code or by any other applicable law.

CUSTOMER INQUIRIES

The Owners 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
consequences of ownership or receipt of distributions under an annuity contract
depend 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 ANNUITIES IN GENERAL

TAX DEFERRAL

Generally, an annuity contract owner is not taxed on increases in the
Contract Value until a distribution occurs. This rule applies only where (1) the
Owner is a natural person, (2) the investments of the Variable Account are
"adequately diversified" in accordance with Treasury Department ("Treasury")
regulations and (3) the Company, instead of the annuity owner, is considered the
owner of the Variable Account assets for federal income tax purposes.

NON-NATURAL OWNERS

As a general rule, annuity contracts owned by nonnatural persons are not
treated as annuity contracts 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 several exceptions to the general rule for
Contracts owned by non-natural persons which are discussed in the Statement of
Additional Information.

DIVERSIFICATION REQUIREMENTS

For a contract to be treated as an annuity for federal income tax purposes,
the investments in the Variable Account must be "adequately diversified" in
accordance with the standards provided in the Treasury regulations. If the
investments in the Variable Account are not adequately diversified, then the
Contract will not be treated as an annuity contract for federal income tax
purposes and the Contract Owner will be taxed on the excess of the Contract
Value over the investment in the Contract. Although the Company does not have
control over the Fund or its investments, the Company expects the Fund to meet
the diversification requirements.

INVESTOR CONTROL

In connection with the issuance of the regulations on the adequate
diversification standards, Treasury announced that the regulations do not
provide guidance concerning the extent to which Contract Owners may direct their
investments among Sub-Accounts of a Variable Account. The Internal Revenue
Service has previously stated in published rulings that a variable Contract
Owner will be considered the Owner of separate account assets if the Owner
possesses incidents of ownership in those assets such as the ability to exercise
investment control over the assets. At the time the diversification regulations
were issued, Treasury announced that guidance would be issued in the future
regarding the extent that Owners could direct their investments among
Sub-Accounts without being treated as Owners of the underlying assets of the
Variable Account. It is possible that Treasury's position, when announced, may
adversely affect the tax treatment of existing Contracts. The Company,
therefore, reserves the right to modify the Contract as
neces-

24
<PAGE>
sary to attempt to prevent the Contract Owner from being considered the federal
tax owner of the assets of the Variable Account.

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 before the withdrawal
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 difference 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 withdrawal 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 variable annuity payments, the amount
excluded from taxable income is determined by dividing the investment in the
Contract by the total number of expected payments. In the case of fixed annuity
payments, the amount excluded from income is determined by multiplying the
payment by the ratio of the investment in the Contract (adjusted for any refund
feature or period certain) to the total expected value of annuity payments for
the term of the Contract.

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
distribution 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 after 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 under certain Qualified Contracts. Please see the Statement of
Additional Information for a discussion of other situations in which the penalty
tax may not apply.

AGGREGATION OF ANNUITY CONTRACTS

All non-qualified annuity contracts issued by the Company (or its
affiliates) to the same Owner during any calendar year will be aggregated and
treated as one annuity Contract for purposes of determining the taxable amount
of a distribution.

TAX QUALIFIED CONTRACTS

Annuity contracts may be used as investments with certain tax qualified
plans such as: (1) Individual Retirement Annuities under Section 408(b) of the
Code; (2) Simplified Employee Pension Plans under Section 408(k) of the Code;
(3) Tax Sheltered Annuities under Section 403(b) of the Code; (4) Corporate and
Self Employed Pension and Profit Sharing Plans; and (5) State and Local
Government and Tax-Exempt Organization Deferred Compensation Plans. In the case
of certain tax qualified plans, the terms of the plans may govern the right to
benefits, regardless of the terms of the Contract.

25
<PAGE>
RESTRICTIONS UNDER SECTION 403(B) PLANS

Section 403(b) of the Code provides for tax-deferred retirement savings
plans for employees of certain non-profit and educational organizations. In
accordance with the requirements of Section 403(b), any annuity contract used
for a 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 on the
account of hardship).

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.

VOTING RIGHTS
- --------------------------------------------------------------------------------

The Owner or anyone with a voting interest in the Sub-Account of the
Variable Account may instruct the Company on how to vote at shareholder meetings
of the Fund. The Company will solicit and cast each vote according to the
procedures set up by the Fund and to the extent required by law. The Company
reserves the right to vote the eligible shares in its own right, if subsequently
permitted by the Investment Company Act of 1940, its regulations or
interpretations thereof.

Before the Payout Start Date, the Owner holds the voting interest in the
Sub-Account. (The number of votes for the Owner will be determined by dividing
the Cash Value attributable to a Sub-Account by the net asset value per share of
the applicable eligible Portfolio.)

After the Payout Start Date, the person receiving Income Payments has the
voting interest. After the Payout Start Date, the votes decrease as Income
Payments are made and as the reserves for the Contract decrease. That person's
number of votes will be determined by dividing the reserve for such Contract
allocated to the applicable Sub-Account by the net asset value per share of the
corresponding eligible Portfolio.

SALES COMMISSION
- --------------------------------------------------------------------------------

From its profits the Company may pay a maximum sales commission of 6.0% of
Purchase Payments and an annual sales administration expense allowance of up to
0.125% of the average net assets of the Fixed Account to Dean Witter Reynolds
Inc., the principal underwriter of the Contracts.

26
<PAGE>

STATEMENT OF ADDITIONAL INFORMATION

TABLE OF CONTENTS

<TABLE>
<S> <C>
PAGE
-----
The Contract....................................................................... 3
Purchase of Contracts.......................................................... 3
Value of Variable Account Accumulation Units................................... 3
Performance Data............................................................... 4
Transfers...................................................................... 6
Tax-free Exchanges (1035 Exchanges, Rollovers and Transfers.................... 6
Income Payments.................................................................... 7
Amount of Variable Annuity Income Payments..................................... 7
General Matters.................................................................... 8
Recordkeeping Services....................................................... 8
Additions, Deletions or Substitutions of Investments......................... 8
Reinvestment................................................................. 9
Incontestability............................................................... 9
Settlements.................................................................... 9
Safekeeping of the Variable Account's Assets................................... 9
Experts........................................................................ 9
Legal Matters.................................................................. 9
Federal Tax Matters................................................................ 10
Introduction................................................................... 10
Taxation of Allstate Life Insurance Company of New York........................ 10
Exceptions to the Non-Natural Owner Rule....................................... 10
Penalty Tax on Premature Distributions......................................... 11
IRS Requried Distribution at Death Rules....................................... 11
Qualified Plans................................................................ 11
Types of Qualified Plans....................................................... 12
Individual Retirement Annuities............................................ 12
Simplified Employee Pension Plans.......................................... 12
Tax Sheltered Annuities.................................................... 12
Corporate & Self-Employed & Pension & Profit Savings Plans................. 12
State & Local Government & Tax-Exempt Organization Deferred Compensation
Plans..................................................................... 12
Voting Rights...................................................................... 13
Sales Commissions.................................................................. 13
Financial Statements............................................................... 14
</TABLE>

27
<PAGE>
(This Page Left intentionally Blank)

28
<PAGE>
ORDER FORM

/ / Please send me a copy of the most recent Statement of Additional Information
for the Allstate Life of New York Variable Annuity Account II.

<TABLE>
<S> <C>
(Date) (Name)
(Street Address)
(City) (State) (Zip Code)
</TABLE>

Send to: Allstate Life Insurance Company of New York
Post Office Box 9095
Farmingville, New York 11738

Attention: VA Customer Service Unit

29
<PAGE>
REGISTRATION NO. 33-35445

STATEMENT OF ADDITIONAL INFORMATION
ALLSTATE LIFE OF NEW YORK VARIABLE ANNUITY ACCOUNT II
OF
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
P.O. BOX 2898
HUNTINGTON STATION, NEW YORK 11746

INDIVIDUAL VARIABLE ANNUITY CONTRACTS
DISTRIBUTED BY

DEAN WITTER REYNOLDS INC.
TWO WORLD TRADE CENTER
NEW YORK, NEW YORK 10048

--------------------

This Statement of Additional Information supplements the information in the
Prospectus for the individual Flexible Premium Deferred Variable Annuity
Contract ("Contract") offered by Allstate Life Insurance Company of New York
("Company"), a subsidiary of Allstate Insurance Company. The Contract is
primarily designed to aid individuals in long-term financial planning and it can
be used for retirement planning regardless of whether the plan qualifies for
special federal income tax treatment.

THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND SHOULD BE READ
ONLY IN CONJUNCTION WITH THE PROSPECTUS FOR THE CONTRACT.

You may obtain a copy of the Prospectus from Dean Witter Reynolds Inc.
("Dean Witter"), the principal underwriter and distributor of the Contract, by
calling or writing Dean Witter at the address listed above.

The Prospectus, dated October, 1995, has been filed with the United
States Securities and Exchange Commission.

Dated October, 1995

<PAGE>

TABLE OF CONTENTS

Page
----

The Contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Purchase of Contracts. . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Value of Variable Account Accumulation Units . . . . . . . . . . . . . . . . 3
Performance Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Transfers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Tax-free Exchanges (1035 Exchanges, Rollovers and Transfers) . . . . . . . . 6
Income Payments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Amount of Variable Annuity Income Payments . . . . . . . . . . . . . . . . . 7
General Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Recordkeeping Services. . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Additions, Deletions or Substitutions of Investments. . . . . . . . . . . . 8
Reinvestment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Incontestability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Settlements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Safekeeping of the Variable Account's Assets . . . . . . . . . . . . . . . . 9
Experts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Legal Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Federal Tax Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10
Taxation of Allstate Life Insurance Company of New York. . . . . . . . . . .10
Exceptions to the Non-Natural Owner Rule . . . . . . . . . . . . . . . . . .10
Penalty Tax on Premature Distributions . . . . . . . . . . . . . . . . . . .11
IRS Required Distribution at Death Rules . . . . . . . . . . . . . . . . . .11
Qualified Plans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11
Types of Qualified Plans . . . . . . . . . . . . . . . . . . . . . . . . . .12
Individual Retirement Annuities. . . . . . . . . . . . . . . . . . . . .12
Simplified Employee Pension Plans. . . . . . . . . . . . . . . . . . . .12
Tax Sheltered Annuities. . . . . . . . . . . . . . . . . . . . . . . . .12
Corporate & Self-Employed & Pension & Profit Savings Plan. . . . . . . .12
State & Local Government & Tax-Exempt Organization Deferred
Compensation Plans . . . . . . . . . . . . . . . . . . . . . . . . . .12
Voting Rights. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13
Sales Commissions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13
Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14

<PAGE>

THE CONTRACT

PURCHASE OF CONTRACTS

The Contracts are offered to the public through brokers licensed under the
federal securities laws and state insurance laws. The offering of the Contracts
is continuous and the Company does not anticipate discontinuing the offering of
the Contracts. However, the Company reserves the right to discontinue the
offering of the Contracts.

VALUE OF VARIABLE ACCOUNT ACCUMULATION UNITS

The value of Variable Account Accumulation Units will vary in accordance
with investment experience of the Portfolio in which the Sub-Account invests.
The number of such Accumulation Units credited to a Contract will not, however,
change as a result of any fluctuations in the Accumulation Unit value.

The Accumulation Units in each Sub-Account of the Variable Account are
valued separately. The value of Accumulation Units in any Valuation Period will
depend upon the investment performance of the shares purchased by each Sub-
Account in a particular Portfolio.

The value of an Accumulation Unit in a Sub-Account for any Valuation Period
equals the value of such unit as of the immediately preceding Valuation Period,
multiplied by the "Net Investment Factor" for that Sub-Account for the current
Valuation Period. The Net Investment Factor for each Sub-Account for any
Valuation Period is determined by dividing (A) by (B) and subtracting (C),
where:

(A) is the sum of:

(1) the net asset value per share of the Portfolio(s) underlying the
Sub-Account determined at the end of the current valuation
period; plus,

(2) the per share amount of any dividend or capital gain
distributions made by the Portfolio(s) underlying the Sub-Account
during the current Valuation Period.

(B) is the net asset value per share of the Portfolio(s) underlying the
Sub-Account determined as of the end of the immediately preceding
valuation period.

(C) is the annualized Mortality and Expense Risk and Administrative
Expense Charges divided by 365 and then multiplied by the number of
calendar days in the current valuation period.

<PAGE>

PERFORMANCE DATA

A Sub-Account's "average annual total return" represents an annualization
of the Sub-Account's total return over a particular period and is computed by
finding the annual percentage rate which will result in the ending redeemable
value of a hypothetical $1,000 Purchase Payment made at the beginning of a one,
five or ten year period, or for a period from the date of commencement of the
Sub-Account's operations, if shorter than any of the foregoing. The formula for
computing the average annual total return involves a percentage obtained by
dividing the ending redeemable value, including deductions for any Early
Withdrawal Charges or Contract Maintenance Charges imposed on the Contracts by
the Variable Account, by the initial hypothetical $1,000 Purchase Payment,
taking the "n"th root of the quotient (where "n" is the number of years in the
period) and subtracting 1 from the result.

The Early Withdrawal Charges assessed upon redemption are computed as
follows: The Withdrawal Amount Without Early Withdrawal Charge is not assessed
an Early Withdrawal Charge. Early Withdrawal Charges are charged on the amount
of redemption equal to the Purchase Payment, reduced by the Withdrawal Amount
Without Early Withdrawal Charge, if any. The remaining amount of the
redemption, if any, is not assessed an Early Withdrawal Charge. The Early
Withdrawal Charge Schedule specifies rates based on the Contract Year in which
the Purchase Payment was made. One rate is specified for Purchase Payments made
in the current Contract Year, another rate for Purchase Payments made in the
prior Contract Year, another rate for Purchase Payments made in the second prior
Contract Year, and so on until a rate for Purchase Payments made in the sixth
prior Contract Year or prior to it is reached. For a one year total return
calculation the second rate, (i.e., the rate for Purchase Payments made in the
prior Contract Year), is assessed. The Contract Maintenance Charge ($30 per
contract) used in the total return calculation is prorated using the following
method: The total amount of annual Contract fees collected during the year is
divided by the total average net assets of all the Sub-Accounts. The resulting
percentage is then multiplied by the ending Cash Value.

The Money Market, High Yield, Equity, Quality Income Plus, Managed Assets,
Utilities, Dividend Growth, Capital Growth and European Growth Sub-Accounts
commenced operations on September 24, 1991. The average annual total return of
the Money Market, High Yield, Equity, Quality Income Plus, Managed Assets,
Utilities, Dividend Growth, Capital Growth and European Growth Sub-Accounts for
the period from commencement of the Sub-Accounts' operations through December
31, 1994 was 1.30% for the Money Market Sub-Account, 12.10% for the High Yield
Sub-Account, 6.50% for the Equity Sub-Account, 3.90% for the Quality Income Plus
Sub-Account, 6.65% for the Managed Assets Sub-Account, 6.26% for the Utilities
Sub-Account, 5.48% for the Dividend Growth Sub-Account, 0.45% for the Capital
Growth Sub-Account, 13.94% for the European Growth Sub-Account, -7.01% for the
Global Dividend Growth Sub-Account, and -14.98% for the Pacific Growth Sub-
Account. The average annual

<PAGE>

total return of the Money Market, High Yield, Equity, Quality Income Plus,
Managed Assets, Utilities, Dividend Growth, Capital Growth and European Growth
Sub-Accounts for the one year period ending December 31, 1994 is as follows:
Money Market -1.85%, High Yield -8.06%, Equity -10.46%, Quality Income Plus -
12.16%, Managed Assets -1.72%, Utilities -14.51%, Dividend Growth -8.84%,
Capital Growth -6.87% and European Growth 2.64%.

In addition, the Variable Account may advertise the total return over
different periods of time by means of aggregate, average, year-by-year or other
types of total return figures. Such calculations would not reflect deductions
for Early Withdrawal Charges or Contract Maintenance charges which may be
imposed on the Contracts by the Variable Account which, if reflected, would
reduce the performance quoted. The formula for computing such total return
quotations involves a percent unit change calculation. This calculation is the
Accumulation Unit value at the end of the defined period divided by the
Accumulation Unit value at the beginning of such period minus 1. The periods
included in such advertisements are "year-to-date" (prior calendar year end to
the day of the advertisement); "year to most recent quarter" (prior calendar
year end to the end of the most recent quarter); "the prior calendar year"; and
inception (commencement of the Sub-Account's operation) to date (day of the
advertisement).

As an example, on March 31, 1995, the advertisement would contain the
following aggregate total return figures: "Year-to-Date": (December 31, 1994 to
March 31, 1995) is 1.07% for the Money Market Sub-Account, 3.86% for the High
Yield Sub-Account, 6.02% for the Equity Sub-Account, 5.74% for the Quality
Income Plus Sub-Account, 1.30% for the Managed Assets Sub-Account, 5.01% for the
Utilities Sub-Account, 9.53% for the Dividend Growth Sub-Account, 9.97% for the
Capital Growth Sub-Account, 4.43% for the European Growth Sub-Account, 5.02% for
the Global Dividend Growth Sub-Account and -3.76% for the Pacific Growth Sub-
Account. "Year to Most Recent Quarter": (same as Year-to-Date); "Inception to
Date": for the Money Market, High Yield, Quality Income Plus, Equity, Managed
Assets, Utilities, Dividend Growth, Capital Growth, European Growth, Pacific
Growth and Global Dividend Growth Sub-Accounts (September 24, 1991 to March 31,
1995) is 8.10%, 53.57%, 22.59%, 33.02%, 27.67%, 30.81%, 33.27%, 14.49%, 62.71%,
- -11.26% and 4.10% respectively; "The Prior Calendar Year": (December 31, 1993 to
December 31, 1994) is 2.43% for the Money Market Sub-Account, -3.79% for the
High Yield Sub-Account, -7.89% for the Quality Income Plus Sub-Account, -6.19%
for the Equity Sub-Account, 2.55% for the Managed Assets Sub-Account, -10.24%
for the Utilities Sub-Account, -4.57% for the Dividend Growth Sub-Account, -
2.60% for the Capital Growth Sub-Account and 6.91% for the European Growth Sub-
Account.

The Variable Account may also advertise the performance of the Sub-Accounts
relative to certain performance rankings and indexes compiled by independent
organizations, such as: (a) Lipper Analytical Services, Inc.; (b) the Standard
& Poor's 500 Composite Stock Price Index ("S & P 500"); and, (c) A.M. Best
Company.

<PAGE>

TRANSFERS

The Owner may transfer amounts from one investment alternative to another
prior to the Payout Start Date. Transfers are subject to the following
restrictions:

1. The minimum amount that may be transferred from an investment
alternative is $100; if the total amount in an investment alternative
is less than $100, the entire amount may be transferred.

2. The minimum transfer to any Guarantee Period of the Fixed Account is
$500.

3. The maximum amount in any Contract Year which may be transferred from
the Fixed Account to the Variable Account or between Guarantee Periods
is limited to the greater of (1) 25% of the value in the Fixed
Account as of the most recent Contract Anniversary; if 25% of the
value as of the most recent Contract Anniversary is greater than zero
but less than $1,000, then up to $1,000 may be transferred; or (2) 25%
of the sum of all Purchase Payments and transfers to the Fixed
Account as of the most recent Contract Anniversary.

4. If the first renewal interest rate is less than the current rate that
was in effect at the time money was allocated or transferred to the
Fixed Account, the 25% transfer restriction for that money will be
waived during the 60 day period following the first renewal date.

TAX-FREE EXCHANGES (1035 EXCHANGES, ROLLOVERS AND TRANSFERS)

The Company accepts Purchase Payments which are the proceeds of a Contract
in a transaction qualifying for a tax-free exchange under Section 1035 of the
Internal Revenue Code. Except as required by federal law in calculating the
basis of the Contract, the Company does not differentiate between Section 1035
Purchase Payments and non-Section 1035 Purchase Payments.

The Company also accepts "rollovers" from Contracts qualifying as tax-
sheltered annuities (TSAs), individual retirement annuities or accounts, (IRAs),
or any other Qualified Contract which is eligible to "rollover" into an IRA.
The Company differentiates between Non-Qualified Contracts and TSAs and IRAs to
the extent necessary to comply with federal tax laws. For example, the Company
restricts the assignment, transfer or pledge of TSAs and IRAs so the Contracts
will continue to qualify for special tax treatment. An Owner contemplating any
such exchange, rollover or transfer of a Contract should contact a competent tax
adviser with respect to the potential effects of such a transaction.

<PAGE>

INCOME PAYMENTS

AMOUNT OF VARIABLE ANNUITY INCOME PAYMENTS

The amount of the first Income Payment is calculated by applying the
Contract Value allocated to each Sub-Account less any applicable premium tax
charge deducted at this time, to the income payment tables in the Contract.
The first Variable Annuity Income Payment is divided by the Sub-Account's
then current Annuity Unit Value to determine the number of Annuity Units upon
which later Income Payments will be based. Variable Annuity Income Payments
after the first will be equal to the sum of the number of Annuity Units
determined in this manner for each Sub-Account times the then current Annuity
Unit Value for each respective Sub-Account.

The value of an Annuity Unit in each Sub-Account of the Variable Account
is set at $10. Annuity Units in each Sub-Account are valued separately and
Annuity Unit Values will depend upon the investment experience of the
particular Portfolios in which the Sub-Account invests. The value of the
Annuity Unit for each Sub-Account at the end of any Valuation Period is
calculated by: (a) multiplying the prior value by the Sub-Account's Net
Investment Factor during the period; and then (b) dividing the product by
the sum of 1.0 plus the assumed investment rate for the period. The assumed
investment rate adjusts for the interest rate assumed in the annuity tables
used to determine the dollar amount of the first Variable Annuity Income
Payment, and is an effective annual rate of 4.0%.

Currently, the amount of the first Income Payment paid under an Annuity
Option is determined using 4% interest and the 1971 Individual Annuity
Mortality Table with the following age adjustment (The revised Contract is
based on the 1983A Individual Annuity Mortality Table.) An annuitant's age at
his or her last birthday on or prior to the Income Starting Date will be set
back one year each six full years between January 1, 1971 and the Income
Starting Date (except in the case of Contracts based on the 1983A Table). Due
to judicial or legislative developments regarding the use of tables which do
not differentiate on the basis of sex, in some cases different annuity tables
may be used.

7
<PAGE>
GENERAL MATTERS

RECORDKEEPING SERVICES

In 1993, the Company paid $29,213.58 to Vantage for its services. The
basis for the fee was an annual fee of $16 per policy, plus out of pocket
expenses and fees for enhancements. In 1992 the Company paid $16,550 to Vantage
for its services. The basis for the fee was an annual fee of $11 per policy,
plus out of pocket expenses and fees for enhancements.

As of October 4, 1993, the Company performs all Contract recordkeeping
services.

ADDITIONS, DELETIONS OR SUBSTITUTIONS OF INVESTMENTS

The Company retains the right, subject to any applicable law, to make
additions to, deletions the from or substitutions for the Portfolio shares held
by any Sub-Account of the Variable Account. The Company reserves the right to
eliminate the shares of any of the Portfolios and to substitute shares of
another Portfolio of the Fund, or of another open-end, registered investment
company, if the shares of the Portfolio are no longer available for investment,
or if, in the Company's judgment, investment in any Portfolio would become
inappropriate in view of the purposes of the Variable Account. Substitutions of
shares attributable to an Owner's interest in a Sub-Account will not be made
until the Owner has been notified of the change, and until the Securities and
Exchange Commission has approved the change, to the extent such notification and
approval is required by the Investment Company Act of 1940. Nothing contained
in this Statement of Additional Information shall prevent the Variable Account
from purchasing other securities for other series or classes of contracts, or
from effecting a conversion between series or classes of contracts on the basis
of requests made by Owners.

The Company may also establish additional Sub-Accounts of the Variable
Account. Each additional Sub-Account would purchase shares in a new Portfolio
of the Fund or in another mutual fund. New Sub-Accounts may be established
when, in the sole discretion of the Company, marketing needs or investment
conditions warrant. Any new Sub-Accounts will be made available to existing
Owners on a basis to be determined by the Company. The Company may also
eliminate one or more Sub-Accounts if, in its sole discretion, marketing, tax or
investment conditions so warrant.

In the event of any such substitution or change, the Company may, by
appropriate endorsement, make such changes in the Contract as may be necessary
or appropriate to reflect such substitution or change. If deemed to be in the
best interests of persons having voting rights under the policies, the Variable
Account may be operated as a management company under the Investment Company Act
of 1940 or it may be deregistered under such Act in the event such registration
is no longer required.

<PAGE>

REINVESTMENT

All dividends and capital gains distributions from the Portfolios are
automatically reinvested in shares of the distributing Portfolio at their net
asset value.

INCONTESTABILITY

The Contract will not be contested after it is issued.

SETTLEMENTS

The Contract must be returned to the Company prior to any settlement. Due
proof of the Owner(s) or the Annuitant's (and any Joint Annuitant's) death must
be received prior to settlement of a death claim.

SAFEKEEPING OF THE VARIABLE ACCOUNT'S ASSETS

The Company holds title to the assets of the Variable Account. The assets
are kept physically segregated and held separate and apart from the Company's
general corporate assets. Records are maintained of all purchases and
redemptions of the Portfolio shares held by each of the Sub-Accounts.

The Dean Witter Variable Investment Series ("Fund") does not issue
certificates and, therefore, the Company holds the Account's assets in open
account in lieu of stock certificates. See the Fund's Prospectus for a more
complete description of the Fund's custodian.

EXPERTS

The financial statements of the Variable Account and the financial
statements and financial schedules of the Company appearing in this Statement of
Additional Information (which is incorporated by reference in the prospectus of
Allstate Life of New York Variable Annuity Account II of Allstate Life Insurance
Company of New York) have been audited by Deloitte & Touche LLP, Two
Prudential Plaza, 180 North Stetson Avenue, Chicago, Illinois 60601-6779,
independent auditors, as stated in their reports appearing herein and are
included in reliance upon the reports of such firm and upon their authority as
experts in accounting and auditing.

LEGAL MATTERS

Legal advice regarding certain matters relating to the federal securities
laws applicable to the issue and sale of the Contracts has been provided by
Routier, Mackey & Johnson, P.C., of Washington, D.C.. All matters of New York
law pertaining to the Contracts, including the validity of the Contracts and the
Company's right to issue such Contracts under New York insurance law, have been
passed upon by Michael J. Velotta, General Counsel of Allstate Life Insurance
Company of New York.

<PAGE>

FEDERAL TAX MATTERS

INTRODUCTION

TAXATION OF ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK

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.
Since the Variable Account is not an entity separate from the Company, and its
operations form a part of the Company, it will not be taxed separately as a
"regulated Investment Company" under Subchapter M of the Code. Investment
income and realized capital gains are automatically applied to increase reserves
under the contract. Under existing federal income tax law, the Company believes
that the Variable Account investment income and realized net capital gains will
not be taxed to the extent that such income and gains are applied to increase
the reserves under the contract.

Accordingly, the Company does not anticipate that it will incur any federal
income tax liability attributable to the Variable Account, and therefore the
Company does not intend to make provisions for any such taxes. However, if
changes in the federal tax laws or interpretations thereof result in the Company
being taxed on income or gains attributable to the Variable Account, then the
Company may impose a charge against the Variable Account (with respect to some
or all contracts) in order to set aside provisions to pay such taxes.

EXCEPTIONS TO THE NON-NATURAL OWNER RULE

There are several exceptions to the general rule that contracts held by a
non-natural owner are not treated as annuity contracts for federal income tax
purposes. Contracts will generally be treated as held by a natural person if
the nominal owner is a trust or other entity which holds the contract as agent
for a natural person. However, this special exception will not apply in the
case of an employer who is the nominal owner of an annuity contract under a non-
qualified deferred compensation arrangement for its employees. Other exceptions
to the non-natural owner rule are: (1) contracts acquired by an estate of a
decedent by reason of the death of the decedent; (2) certain qualified
contracts; (3) contracts purchased by employers upon the termination of certain
qualified plans; (4) certain contracts used in connection with structured
settlement agreements, and (5) contracts purchased with a single premium when
the annuity

<PAGE>

starting date is no later than a year from purchase of the annuity and
substantially equal periodic payments are made, not less frequently than
annually, during the annuity period.

PENALTY TAX ON PREMATURE DISTRIBUTIONS

There is a 10% penalty tax on the taxable amount of any payment received
from a non-qualified annuity contract unless: (1) made after the owner reaches
59 1/2; (2) attributable to the owner's disability; (3) attributable to
investment before August 14, 1982, including earnings on pre-August 14, 1982
investment; (4) made from certain qualified contracts; (5) made after the death
of the owner; (6) made under an immediate annuity contract; (7) made from an
annuity purchased and held by an employer upon the termination of a qualified
retirement plan; (8) made under a qualified funding asset; (9) made as part of a
series of substantially equal periodic payments (not less frequently than
annually) for the life of or life expectancy of the owner or the joint lives of
joint life expectancies of the owner and designated beneficiary. Similar rules
apply in the case of qualified contracts.

IRS REQUIRED DISTRIBUTION AT DEATH RULES

In order to be considered an annuity contract for federal income tax
purposes, an annuity contract must provide: (1) if any owner dies on or after
the annuity start date but before the entire interest in the contract has been
distributed, 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 entire
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
distributions 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 non-natural person, then the annuitant will be treated as the
owner for purposes of applying the distribution at death rules. In addition, a
change in the annuitant on a contract owned by a non-natural person will be
treated as the death of the owner.

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
distribution rules, excess distributions and in other circumstances. Owners and
participants 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.

<PAGE>

TYPES OF QUALIFIED PLANS

INDIVIDUAL RETIREMENT ANNUITIES

Section 408 of the Code permits eligible individuals to contribute to an
individual retirement program known as an Individual Retirement Annuity.
Individual Retirement Annuities are subject to limitations on the amount that
can be contributed and on the time when distributions may commence. Certain
distributions from other types of qualified plans may be "rolled over" on a tax-
deferred 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 employees to their individual retirement annuities.

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 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 in the case 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.

<PAGE>

VOTING RIGHTS

The number of votes which a person has the right to instruct will be
calculated separately for each Sub-Account. That number will be determined by
applying his/her percentage interest, if any, in a particular Sub-Account to the
total number of votes attributable to the Sub-Account.

The number of votes of the Portfolio which an Owner has a right to instruct
will be determined as of the date coincident with the date established by that
Portfolio for determining shareholders eligible to vote at the meeting of the
Fund. Voting instructions will be solicited by written communication prior to
such meeting in accordance with procedures established by the Fund.

Fund shares as to which no timely instructions are received will be voted
in proportion to the voting instructions which are received with respect to all
Contracts participating in that Sub-Account. Voting instructions to abstain on
any item to be voted upon will be applied on a pro rata basis to reduce the
votes eligible to be cast.

Each person having a voting interest in a Sub-Account will receive proxy
material, reports and other materials relating to the appropriate Portfolio.

SALES COMMISSIONS

The Company pays Dean Witter for its underwriting and general agent's
services a sales commission of up to 6.0% of the Purchase Payments and sales
administration expense allowance of up to 0.125% of the average net assets of
the Fixed Account. These commissions are intended to cover Dean Witter's
expenses in distributing and selling the Contracts.

Under the Underwriting Agreement and Managing General Agent's Agreement
between Dean Witter and the Company, Dean Witter is responsible for paying costs
and expenses associated with licensing its agents, paying agent's commissions,
printing, mailing and distributing the Prospectus to prospective purchasers; and
preparing, printing and distributing sales literature. In the event the
commissions fail to adequately compensate Dean Witter for these expenses, Dean
Witter will pay these expenses from its own funds.

<PAGE>

[DELOITTE & TOUCHE LLP LETTERHEAD]

INDEPENDENT AUDITORS' REPORT

TO THE BOARD OF DIRECTORS AND SHAREHOLDER OF
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK:

We have audited the accompanying Statement of Net Assets of Allstate Life of New
York Variable Annuity Account II (the "Account") as of December 31, 1994, and
the related Statement of Operations for the year then ended and Changes in Net
Assets for each of the two years in the period ended December 31, 1994 of the
Money Market, High Yield, Equity, Quality Income Plus, Managed Assets, Dividend
Growth, Utilities, European Growth, Capital Growth, Global Dividend Growth and
Pacific Growth portfolios that comprise the Account. These financial statements
are the responsibility of the Account's management. Our responsibility is to
express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures
included confirmation of securities owned at December 31, 1994. 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 the Account as of December 31, 1994, and the
results of operations for the year then ended and the changes in net assets for
each of the two years in the period ended December 31, 1994 of each of the
portfolios comprising the Account, in conformity with generally accepted
accounting principles.

/s/ Deloitte & Touche LLP

February 24, 1995

- ---------------
DELOITTE TOUCHE
TOHMATSU
INTERNATIONAL
- ---------------

<PAGE>

ALLSTATE LIFE OF NEW YORK VARIABLE ANNUITY ACCOUNT II
STATEMENT OF NET ASSETS
DECEMBER 31, 1994

($ and shares in thousands)

<TABLE>
<CAPTION>
ASSETS
<S> <C>
Investments in the Dean Witter Variable Investment Series
Money Market Portfolio
12,122 shares (cost $12,122) $ 12,122
High Yield Portfolio
748 shares (cost $5,150) 4,611
Equity Portfolio
492 shares (cost $10,263) 9,481
Quality Income Plus Portfolio
3,030 shares (cost $32,447) 28,628
Managed Assets Portfolio
2,345 shares (cost $29,165) 29,203
Dividend Growth Portfolio
2,915 shares (cost $35,116) 34,960
Utilities Portfolio
1,678 shares (cost $21,866) 19,999
European Growth Portfolio
577 shares (cost $7,788) 8,401
Capital Growth Portfolio
225 shares (cost $2,609) 2,588
Global Dividend Growth Portfolio
683 shares (cost $6,818) 6,704
Pacific Growth Portfolio
425 shares (cost $4,106) 3,935
------------

Total assets 160,632

LIABILITIES
Payable to Allstate Life Insurance Company of New York --
Accrued contract maintenance charges 68
------------

NET ASSETS
For variable annuity contracts $ 160,564
------------
------------
</TABLE>

See notes to financial statements.

<PAGE>

ALLSTATE LIFE OF NEW YORK VARIABLE ANNUITY ACCOUNT II
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1994

<TABLE>
<CAPTION>
QUALITY
MONEY HIGH INCOME MANAGED DIVIDEND
($ in thousands) MARKET YIELD EQUITY PLUS ASSETS GROWTH
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividend income $ 371 $ 495 $ 748 $ 2,679 $ 1,508 $ 1,006
Less charges from
Allstate Life of New York:
Mortality and expense risk (116) (52) (108) (384) (333) (413)
Administrative expense (10) (4) (9) (31) (27) (33)
----------- ----------- ----------- ----------- ----------- -----------

Net investment income (loss) 245 439 631 2,264 1,148 560
----------- ----------- ----------- ----------- ----------- -----------

REALIZED AND UNREALIZED GAINS
(LOSSES) ON INVESTMENTS:
Realized gains (losses) from
sales of investments:
Proceeds from sales 6,132 477 911 5,344 3,132 1,903
Cost of investments sold (6,132) (501) (972) (5,863) (3,077) (1,855)
----------- ----------- ----------- ----------- ----------- -----------

Net realized gains (losses) (24) (61) (519) 55 48
----------- ----------- ----------- ----------- ----------- -----------

Net change in unrealized
appreciation/depreciation (620) (1,134) (4,391) (521) (2,139)
----------- ----------- ----------- ----------- ----------- -----------

Net gains (losses) on investments (644) (1,195) (4,910) (466) (2,091)
----------- ----------- ----------- ----------- ----------- -----------

NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM OPERATIONS $ 245 $ (205) $ (564) $ (2,646) $ 682 $ (1,531)
----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- -----------

GLOBAL
EUROPEAN CAPITAL DIVIDEND PACIFIC
($ in thousands) UTILITIES GROWTH GROWTH GROWTH GROWTH
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO TOTAL
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividend income $ 1,056 $ 286 $ 30 $ 74 $ 14 $ 8,267
Less charges from
Allstate Life of New York:
Mortality and expense risk (278) (89) (32) (43) (29) (1,877)
Administrative expense (22) (7) (3) (3) (2) (151)
----------- ----------- ----------- ----------- ----------- -----------

Net investment income (loss) 756 190 (5) 28 (17) 6,239
----------- ----------- ----------- ----------- ----------- -----------

REALIZED AND UNREALIZED GAINS
(LOSSES) ON INVESTMENTS:
Realized gains (losses) from
sales of investments:
Proceeds from sales 4,904 1,210 841 793 531 26,178
Cost of investments sold (5,164) (1,122) (850) (822) (571) (26,929)
----------- ----------- ----------- ----------- ----------- -----------

Net realized gains (losses) (260) 88 (9) (29) (40) (751)
----------- ----------- ----------- ----------- ----------- -----------

Net change in unrealized
appreciation/depreciation (3,049) 79 (55) (114) (171) (12,115)
----------- ----------- ----------- ----------- ----------- -----------

Net gains (losses) on investments (3,309) 167 (64) (143) (211) (12,866)
----------- ----------- ----------- ----------- ----------- -----------

NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM OPERATIONS $ (2,553) $ 357 $ (69) $ (115) $ (228) $ (6,627)
----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- -----------
</TABLE>

See notes to financial statements.

<PAGE>

ALLSTATE LIFE OF NEW YORK VARIABLE ANNUITY ACCOUNT II
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED DECEMBER 31, 1994

<TABLE>
<CAPTION>
QUALITY
MONEY HIGH INCOME MANAGED DIVIDEND
($ in thousands) MARKET YIELD EQUITY PLUS ASSETS GROWTH
except value per unit) PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
FROM OPERATIONS:
Additions (deductions):
Net investment income (loss) $ 245 $ 439 $ 631 $ 2,264 $ 1,148 $ 560
Net realized gains (losses) (24) (61) (519) 55 48
Net change in unrealized
appreciation/depreciation (620) (1,134) (4,391) (521) (2,139)
----------- ----------- ----------- ----------- ----------- -----------

245 (205) (564) (2,646) 682 (1,531)
----------- ----------- ----------- ----------- ----------- -----------
FROM CAPITAL TRANSACTIONS:
Additions (deductions):
Deposits 9,340 1,278 3,095 5,420 6,483 8,631
Benefit payments (24) (124) (195) (110) (322) (340)
Payments on termination (1,155) (127) (166) (978) (702) (773)
Deduction for contract
maintenance charges (6) (3) (7) (20) (24) (28)
Transfers among portfolios and
with the Fixed Account, net (612) 603 524 (4,530) (312) 909
----------- ----------- ----------- ----------- ----------- -----------

7,543 1,627 3,251 (218) 5,123 8,399
----------- ----------- ----------- ----------- ----------- -----------

Increase (decrease) in net assets 7,788 1,422 2,687 (2,864) 5,805 6,868

Net assets, beginning of period 4,329 3,187 6,790 31,480 23,386 28,077
----------- ----------- ----------- ----------- ----------- -----------
Net assets, end of period $ 12,117 $ 4,609 $ 9,477 $ 28,616 $ 29,191 $ 34,945
----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- -----------

NET ASSET VALUE PER UNIT,
END OF PERIOD $ 11.18 $ 19.26 $ 18.39 $ 13.34 $ 15.68 $ 15.98
----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- -----------

EUROPEAN CAPITAL GLOBAL PACIFIC
UTILITIES GROWTH GROWTH DIVIDEND GROWTH
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO TOTAL
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
FROM OPERATIONS:
Additions (deductions):
Net investment income (loss) $ 756 $ 190 $ (5) $ 28 $ (17) $ 6,239
Net realized gains (losses) (260) 88 (9) (29) (40) (751)
Net change in unrealized
appreciation/depreciation (3,049) 79 (55) (114) (171) (12,115)
----------- ----------- ----------- ----------- ----------- -----------

(2,553) 357 (69) (115) (228) (6,627)
----------- ----------- ----------- ----------- ----------- -----------

FROM CAPITAL TRANSACTIONS:
Additions (deductions):
Deposits 2,912 3,024 460 4,286 2,476 47,405
Benefit payments (242) (19) (27) (55) (1,458)
Payments on termination (717) (86) (68) (100) (56) (4,928)
Deduction for contract
maintenance charges (17) (6) (2) (4) (3) (120)
Transfers among portfolios and
with the Fixed Account, net (4,094) 968 (409) 2,689 1,744 (2,520)
----------- ----------- ----------- ----------- ----------- -----------

(2,158) 3,881 (46) 6,816 4,161 38,379
----------- ----------- ----------- ----------- ----------- -----------

Increase (decrease) in net assets (4,711) 4,238 (115) 6,701 3,933 31,752
----------- ----------- ----------- ----------- ----------- -----------

Net assets, beginning of period 24,701 4,160 2,702 128,812
----------- ----------- ----------- ----------- ----------- -----------

Net assets, end of period $ 19,990 $ 8,398 $ 2,587 $ 6,701 $ 3,933 $ 160,564
----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- -----------

NET ASSET VALUE PER UNIT,
END OF PERIOD $ 14.18 $ 15.28 $ 11.38 $ 9.91 $ 9.22
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------

</TABLE>

See notes to financial statements.

<PAGE>

ALLSTATE LIFE OF NEW YORK VARIABLE ANNUITY ACCOUNT II
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED DECEMBER 31, 1993

QUALITY
MONEY HIGH INCOME MANAGED
($ in thousands MARKET YIELD EQUITY PLUS ASSETS
except value per unit) PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
FROM OPERATIONS:
Additions (deductions):
Net investment income (loss) $ 58 $ 160 $ 123 $ 891 $ 745
Net realized gains (losses) 1 7 9 12
Net change in unrealized
appreciation/depreciation 91 330 478 442
----------- ----------- ----------- ----------- -----------

58 252 460 1,378 1,199
----------- ----------- ----------- ----------- -----------
FROM CAPITAL TRANSACTIONS:
Additions (deductions):
Deposits 5,740 2,350 4,759 22,834 13,094
Benefit payments (228) (19) (8) (3) (28)
Payments on termination (605) (26) (20) (264) (198)
Deduction for contract
maintenance charges (2) (1) (3) (13) (13)
Transfers among portfolios and
with the Fixed Account, net (4,961) 382 541 737 1,656
----------- ----------- ----------- ----------- -----------

(56) 2,686 5,269 23,291 14,511
----------- ----------- ----------- ----------- -----------

Increase in net assets 2 2,938 5,729 24,669 15,710

Net assets, beginning of period 4,327 249 1,061 6,811 7,676
----------- ----------- ----------- ----------- -----------

Net assets, end of period $ 4,329 $ 3,187 $ 6,790 $ 31,480 $ 23,386
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------

NET ASSET VALUE PER UNIT,
END OF PERIOD $ 10.91 $ 20.02 $ 19.60 $ 14.49 $ 15.29
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------

DIVIDEND EUROPEAN CAPITAL
($ in thousands GROWTH UTILITIES GROWTH GROWTH
except value per unit) PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO TOTAL
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
FROM OPERATIONS:
Additions (deductions):
Net investment income (loss) $ 260 $ 346 $ 4 $ (13) $ 2,574
Net realized gains (losses) 24 24 5 (30) 52
Net change in unrealized
appreciation/depreciation 1,676 743 549 (98) 4,211
----------- ----------- ----------- ----------- -----------

1,960 1,113 558 (141) 6,837
----------- ----------- ----------- ----------- -----------
FROM CAPITAL TRANSACTIONS:
Additions (deductions):
Deposits 18,531 18,411 2,466 1,716 89,901
Benefit payments (426) (411) (3) (1,126)
Payments on termination (390) (350) (6) (129) (1,988)
Deduction for contract
maintenance charges (14) (11) (2) (2) (61)
Transfers among portfolios and
with the Fixed Account, net 815 356 589 (570) (455)
----------- ----------- ----------- ----------- -----------

18,516 17,995 3,044 1,015 86,271
----------- ----------- ----------- ----------- -----------

Increase in net assets 20,476 19,108 3,602 874 93,108

Net assets, beginning of period 7,601 5,593 558 1,828 35,704
----------- ----------- ----------- ----------- -----------

Net assets, end of period $ 28,077 $ 24,701 $ 4,160 $ 2,702 $ 128,812
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------

NET ASSET VALUE PER UNIT,
END OF PERIOD $ 16.75 $ 15.80 $ 14.29 $ 11.68
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------

</TABLE>

See notes to financial statements.

<PAGE>

ALLSTATE LIFE OF NEW YORK VARIABLE ANNUITY ACCOUNT II
NOTES TO FINANCIAL STATEMENTS
TWO YEARS ENDED DECEMBER 31, 1994

1. ORGANIZATION

Allstate Life of New York Variable Annuity Account II (the "Account"),
a unit investment trust registered with the Securities and Exchange
Commission under the Investment Company Act of 1940, is a separate account
of Allstate Life Insurance Company of New York ("ALNY"), which is wholly
owned by Allstate Life Insurance Company ("Allstate Life"), a wholly-owned
subsidiary of Allstate Insurance Company ("Allstate"), which is wholly
owned by the Allstate Corporation (the "Corporation"). In November 1994,
Sears, Roebuck and Co. ("Sears") announced it intends to distribute in a
tax-free dividend to its stockholders its 80.2% ownership interest of the
Corporation (the "Distribution"). The Distribution is expected to occur in
mid-1995, but is subject to market conditions, final approval by the Sears
Board of Directors, required regulatory approvals and a favorable tax
ruling or opinion on the tax-free nature of the Distribution.

ALNY writes certain annuity contracts, the proceeds of which are
invested at the discretion of the contractholder. Contractholders
primarily invest in units of the portfolios comprising the Account but may
also invest in the general account of ALNY ("Fixed Account"). The Account,
in turn, invests solely in shares of the portfolios of the Dean Witter
Variable Investment Series ("Fund"). ALNY provides administrative and
insurance services to the Account for a fee.

Dean Witter Reynolds, Inc. ("Dean Witter") is the sole distributor of
ALNY's flexible premium deferred variable annuity contracts and certain
single and flexible premium annuities and is the investment manager of the
Fund. Dean Witter receives investment management fees from the Fund.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

VALUATION OF INVESTMENTS

Investments consist of shares in the portfolios of the Fund, and are
stated at fair value based on quoted market prices.

RECOGNITION OF INVESTMENT INCOME

Investment income consists of dividends declared by the portfolios of
the Fund, and is recognized on the date of record.

REALIZED GAINS AND LOSSES

Realized gains and losses on the sale of shares by the Account are
computed on a weighted average cost ("cost") basis.

CONTRACTHOLDER ACCOUNT ACTIVITY

Account activity is reflected in individual contractholder accounts on
a daily basis.

A fixed annual contract maintenance charge of $30 is deducted from
each contract by ALNY for each year or portion of year a contract is in
effect, as reimbursement for expenses related to the maintenance of each
contract and the Account. The amount of this charge is guaranteed not to
increase over the life of the contract.

<PAGE>

ALLSTATE LIFE OF NEW YORK VARIABLE ANNUITY ACCOUNT II
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
TWO YEARS ENDED DECEMBER 31, 1994

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

FEDERAL INCOME TAXES

Investment income and realized gains and losses on investments of the
Account are reported to contractholders who are responsible for the related
income taxes based on their particular tax status. Accordingly, no
provision for income taxes has been recorded.

3. MORTALITY AND EXPENSE CHARGES

ALNY assumes mortality and expense risks related to the operations of
the Account and deducts charges daily at a rate equal, on an annual basis, to
1.25% of the daily net assets of the Account. ALNY guarantees that the amount
of this charge will not increase over the life of the contract.

4. ADMINISTRATIVE EXPENSE CHARGE

ALNY deducts administrative expense charges daily at a rate equal, on
an annual basis, to .10% of the daily net assets of the Account. This charge is
designed to cover actual administrative expenses which exceed the contract
maintenance charge.

<PAGE>

ALLSTATE LIFE OF NEW YORK VARIABLE ANNUITY ACCOUNT II
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
TWO YEARS ENDED DECEMBER 31, 1994

5. UNITS ISSUED AND REDEEMED

Units issued and redeemed by the Account during 1994 were as follows:
<TABLE>
<CAPTION>

Quality
Money High Income Managed Dividend
Market Yield Equity Plus Assets Growth Utilities
(units in thousands) Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio
----------- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Units outstanding, December 31, 1993 397 159 346 2,173 1,530 1,677 1,564

Unit activity during 1994:
Issued 1,084 96 198 392 520 611 203
Redeemed (397) (16) (29) (420) (188) (101) (357)
----------- ----------- ----------- ---------- ----------- ----------- -----------

Units outstanding, December 31, 1994 1,084 239 515 2,145 1,862 2,187 1,410
----------- ----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- ----------- -----------

Global
European Capital Dividend Pacific
Growth Growth Growth Growth
(units in thousands) Portfolio Portfolio Portfolio Portfolio
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Units outstanding, December 31, 1993 291 231

Unit activity during 1994:
Issued 316 57 720 462
Redeemed (57) (61) (44) (35)
----------- ----------- ----------- -----------

Units outstanding, December 31, 1994 550 227 676 427
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
</TABLE>

Units redeemed includes units deducted for accrued contract maintenance charges.

<PAGE>

[DELOITTE & TOUCHE LLP LETTERHEAD]

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 (an affiliate of Sears, Roebuck and Co.) as
of December 31, 1994 and 1993, and the related Statements of Income, Shareholder
Equity and Cash Flows for each of the three years in the period ended December
31, 1994. 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, 1994 and 1993, and the results of its operations and its cash
flows for each of the three years in the period ended December 31, 1994 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.

As discussed in Note 3 to the financial statements, in 1993 the Company changed
its method of accounting for investments in fixed income securities, and in 1992
the Company changed its method of accounting for postretirement benefits other
than pensions and postemployment benefits.

/s/ Deloitte & Touche LLP

February 24, 1995

- ---------------
DELOITTE TOUCHE
TOHMATSU
INTERNATIONAL
- ---------------

22
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
STATEMENTS OF FINANCIAL POSITION

<TABLE>
<CAPTION>
December 31
---------- ----------
1994 1993
---------- ----------
($ in thousands)
<S> <C> <C>
ASSETS
Investments
Fixed income securities
Held to maturity, at amortized cost
(fair value $583,000 and $664,663) . . . . . . . . . . . . . . . $ 601,359 $ 573,995
Available for sale, at fair value (amortized
cost $468,518 and $420,440). . . . . . . . . . . . . . . . . . . 457,018 461,680
Mortgage Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86,435 86,664
Policy Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,500 18,367
Short-term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,212 49,243
---------- ----------
Total Investments. . . . . . . . . . . . . . . . . . . . . . 1,172,524 1,189,949
Deferred policy acquisition costs . . . . . . . . . . . . . . . . . . . . . 50,699 40,775
Accrued investment income . . . . . . . . . . . . . . . . . . . . . . . . . 16,518 16,416
Reinsurance recoverable . . . . . . . . . . . . . . . . . . . . . . . . . . 10,365 9,770
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,443
Cash. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,763 2,457
Other assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,763 5,662
Separate Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 175,918 145,866
---------- ----------
Total assets . . . . . . . . . . . . . . . . . . . . . . . . $1,449,993 $1,410,895
---------- ----------
---------- ----------

LIABILITIES
Reserve for life insurance policy benefits. . . . . . . . . . . . . . . . . $ 626,316 $ 555,651
Contractholder funds. . . . . . . . . . . . . . . . . . . . . . . . . . . . 483,812 507,117
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,934
Other liabilities and accrued expenses. . . . . . . . . . . . . . . . . . . 13,304 19,434
Net payable to affiliates . . . . . . . . . . . . . . . . . . . . . . . . . 1,402 13,591
Separate Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 175,918 145,866
---------- ----------
Total liabilities. . . . . . . . . . . . . . . . . . . . . . $1,300,752 $1,247,593
---------- ----------

SHAREHOLDER EQUITY
Common stock, $25 par, 80,000 shares authorized, issued and
outstanding. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,000 2,000
Additional capital paid-in. . . . . . . . . . . . . . . . . . . . . . . . . 45,787 45,787
Unrealized net capital (losses) gains . . . . . . . . . . . . . . . . . . . (6,891) 25,391
Retained income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108,345 90,124
---------- ----------
Total shareholder equity . . . . . . . . . . . . . . . . . . 149,241 163,302
---------- ----------
Total liabilities and shareholder equity . . . . . . . . . . $1,449,993 $1,410,895
---------- ----------
---------- ----------

</TABLE>

See notes to financial statements.

<PAGE>

ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
STATEMENTS OF INCOME
<TABLE>
<CAPTION>

Year Ended December 31,
--------- --------- ---------
1994 1993 1992
--------- --------- ---------
($ in thousands)
<S> <C> <C> <C>
Revenues
Premium income . . . . . . . . . . . . . . . $ 70,070 $ 110,051 $ 103,790
Contract charges . . . . . . . . . . . . . . 18,490 16,862 14,837
Investment income, less investment
expense . . . . . . . . . . . . . . . . 96,911 95,956 83,582
Realized capital gains and losses. . . . . . 778 4,576 1,681
--------- --------- ---------
186,249 227,445 203,890
--------- --------- ---------

Costs and expenses
Provision for policy benefits. . . . . . . . 137,434 175,676 160,500
Policy acquisition costs (including
amortization of $3,875, $10,319 and
$6,182) and other operating expenses . . . 20,205 31,894 24,111
Early retirement program . . . . . . . . . . 1,210
--------- --------- ---------
158,849 207,570 184,611
--------- --------- ---------
Income before income taxes . . . . . . . . . . . 27,400 19,875 19,279
Income tax expense . . . . . . . . . . . . . . . 9,179 6,712 6,431
--------- --------- ---------
Income before cumulative effect of change
in accounting. . . . . . . . . . . . . . . . 18,221 13,163 12,848
Cumulative effect of change in accounting for
postretirement benefits other than pensions,
net of tax benefit of $321 . . . . . . . . . (623)
--------- --------- ---------
Net Income . . . . . . . . . . . . . . . . . . . $ 18,221 $ 13,163 $ 12,225
--------- --------- ---------
--------- --------- ---------
</TABLE>

See notes to financial statements.

24
<PAGE>

ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
STATEMENTS OF SHAREHOLDER EQUITY
<TABLE>
<CAPTION>

Unrealized
net
Additional capital
Common capital gains Retained
stock paid-in (losses) income Total
--------- --------- --------- --------- ---------
($ in thousands)
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1991 . . . . . . $ 2,000 $ 45,787 $ -- $ 64,736 $ 112,523
Net income . . . . . . . . . . . . 12,225 12,225
--------- --------- --------- --------- ---------

Balance, December 31, 1992 . . . . . . 2,000 45,787 -- 76,961 124,748
Net income . . . . . . . . . . . . 13,163 13,163
Change in unrealized net capital
gains and losses . . . . . . . . 25,391 25,391
--------- --------- --------- --------- ---------

Balance, December 31, 1993 . . . . . . 2,000 45,787 25,391 90,124 163,302
Net income . . . . . . . . . . . . 18,221 18,221
Change in unrealized net capital
gains and losses . . . . . . . . (32,282) (32,282)
--------- --------- --------- --------- ---------

Balance, December 31, 1994 . . . . . . $ 2,000 $ 45,787 $ (6,891) $ 108,345 $ 149,241
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
</TABLE>
See notes to financial statements.

25
<PAGE>

ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
STATEMENTS OF CASH FLOW
<TABLE>
<CAPTION>

Year Ended December 31,
-------- -------- --------
1994 1993 1992
-------- -------- --------
($ in thousands)
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income . . . . . . . . . . . . . . . . . . . $ 18,221 $ 13,163 $ 12,225
Adjustments to reconcile net income to net
cash provided by operating activities:
Realized capital gains and losses. . . . . (778) (4,576) (1,681)
Depreciation, amortization and other
noncash items . . . . . . . . . . . . . (18,969) (14,618) (4,196)
Increase in reserve for policy benefits and
contractholder funds . . . . . . . . . . 87,975 133,418 72,820
Increase in deferred policy acquisition
costs. . . . . . . . . . . . . . . . . . (6,850) (2,396) (3,401)
Increase in accrued investment income. . . (102) (114) (2,783)
Change in deferred income taxes. . . . . . (5,993) 7,564 (6,942)
Changes in other operating assets and
liabilities. . . . . . . . . . . . . . . (18,082) (3,609) 3,740
-------- -------- --------
Net cash from operating activities . . 55,422 128,832 69,782
-------- -------- --------

CASH FROM INVESTING ACTIVITIES:
Proceeds from sales
Fixed income securities available for sale . . 49,903
Fixed income securities. . . . . . . . . . . . 46,496 87,776
Investment collections
Fixed income securities available for sale . . 54,796
Fixed income securities held to maturity . . . 17,186
Fixed income securities. . . . . . . . . . . . 153,518 76,428
Mortgage loans . . . . . . . . . . . . . . . . 9,744 2,382 640
Investment purchases. . . . . . . . . . . . . . . .
Fixed income securities available for sale . . (137,684)
Fixed income securities held to maturity . . . (38,709)
Fixed income securities. . . . . . . . . . . . (282,979) (370,652)
Mortgage loans . . . . . . . . . . . . . . . . (10,132) (15,642)
Net change in short-term investments. . . . . . . . 41,528 4,254 31,841
Net change in policy loans. . . . . . . . . . . . . (2,133) 84 (2,284)
-------- -------- --------
Net cash from investing activities . . . (15,501) (91,887) (176,251)
-------- -------- --------

CASH FLOWS FROM FINANCING ACTIVITIES:
Payments received under investment contracts. . . . 27,786 57,121 107,680
Interest credited to investment contracts . . . . . 21,261 20,986 38,551
Payments on maturity of investment contracts and
other charges . . . . . . . . . . . . . . . . . . (89,662) (115,375) (42,936)
-------- -------- --------
Net cash from financing activities . . . (40,615) (37,268) 103,295
-------- -------- --------
Net decrease in cash . . . . . . . . . . . . . . . . . (694) (323) (3,174)
Cash at beginning of year. . . . . . . . . . . . . . . 2,457 2,780 5,954
-------- -------- --------
Cash at end of year. . . . . . . . . . . . . . . . . . $ 1,763 $ 2,457 $ 2,780
-------- -------- --------
-------- -------- --------
</TABLE>

See notes to financial statements.

26
<PAGE>

ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK

NOTES TO FINANCIAL STATEMENTS

THREE YEARS ENDED DECEMBER 31, 1994
($ IN THOUSANDS)

1. BASIS OF PRESENTATION

Allstate Life Insurance Company of New York (the "Company") is wholly
owned by a wholly-owned subsidiary ("Parent") of Allstate Insurance Company
("Allstate"), a wholly-owned subsidiary of The Allstate Corporation (the
"Corporation"). In November 1994, Sears, Roebuck and Co. ("Sears") announced it
intends to distribute in a tax-free dividend to its stockholders its 80.2%
ownership interest of the Corporation (the "Distribution"). The Distribution is
expected to occur in mid-1995, but is subject to market conditions, final
approval by the Sears Board of Directors, required regulatory approvals and a
favorable tax ruling or opinion on the tax-free nature of the Distribution.

Certain reclassifications have been made to the prior year financial
statements to conform to the presentation for the current year.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

INVESTMENTS

Fixed income securities include bonds and mortgage-backed securities.
Fixed income securities which the Company has both the ability and positive
intent to hold to maturity ("held to maturity") are carried at amortized cost.
Fixed income securities which may be sold prior to their contractual maturity
("available for sale") are carried at fair value. The difference between
amortized cost and fair value, net of certain deferred acquisition costs and
deferred income taxes, is reflected as a separate component of shareholder
equity. Provisions are made to write down the carrying value of fixed income
securities for declines in value that are other than temporary. Such writedowns
are included in realized capital gains and losses.

Mortgage loans are carried at the outstanding principal balance, net of
unamortized premium or discount and valuation reserves. Valuation reserves are
based on the estimated uncollectible amounts, considering the cash flows and
estimated fair value of the underlying collateral, borrower financial strength
and other factors. For loans that are in the process of foreclosure or in-
substance foreclosed, provisions are made for the excess of the loan balance
over the estimated value of the collateral, establishing a new cost basis.

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 securities is determined on
the effective yield method based on the anticipated repayment of principal.
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.

27
<PAGE>

ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

THREE YEARS ENDED DECEMBER 31, 1994
($ IN THOUSANDS)

DERIVATIVES

Gains and losses on open futures and forward contracts designated as
hedges for anticipatory purchases or sales represent carrying value, and are
deferred as other liabilities and accrued expenses. Once the anticipated
transactions have been completed, the deferred gains or losses are considered
part of the cost basis of the hedged asset and recognized in investment income
over the lives of the hedged assets or included in the recognition of gain or
loss from disposition of the assets. Gains and losses on early terminations of
contracts that modify the characteristics of a designated asset are included in
the cost basis of the asset and are amortized as a yield adjustment over its
remaining term.

Commitments to extend mortgage loans have only off-balance-sheet risk.
There is no impact on the financial statements until the agreements are
executed.

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 rates. The principal assets and liabilities giving rise to such differences
are insurance reserves and deferred policy acquisition costs. Deferred income
taxes also arise from unrealized capital gains or losses on fixed income
securities carried at fair value.

LIFE INSURANCE ACCOUNTING

The Company writes traditional life, accident and disability insurance.
The Company also writes long-duration insurance contracts with terms that are
not fixed and guaranteed and single premium life insurance contracts, which are
considered universal life-type contracts. The Company also sells long-duration
contracts that do not involve significant risk of policyholder mortality or
morbidity (principally single and flexible premium annuities, structured
settlement annuities and supplemental contracts when sold without life
contingencies) which are considered investment contracts. Limited payment
contracts (policies with premiums paid over a period shorter than the contract
period), primarily consist of structured settlement annuities and supplemental
contracts when sold with life contingencies.

TRADITIONAL LIFE, ACCIDENT AND DISABILITY INSURANCE

Premiums for traditional life insurance are recognized as revenue when
due. Accident and disability insurance premiums are earned on a pro rata basis
over the policy period. Gross premium in excess of the net premium on limited
payment contracts are deferred and recognized over the contract period.

The reserve for life insurance policy benefits, which relates to
traditional life, structured settlement annuities with life contingencies,
accident and disability insurance, is computed on the basis of assumptions as to
future investment yields, mortality, morbidity,

28
<PAGE>

ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

THREE YEARS ENDED DECEMBER 31, 1994
($ IN THOUSANDS)

terminations and expenses. These assumptions, which for traditional life are
applied using the net level premium method, include provisions for adverse
deviation and generally vary by such characteristics as plan, year of issue and
policy duration. Reserve interest rates ranged from 4.0% to 9.5% during 1994.
Policy benefit reserves for accident insurance include claim reserves and
unearned premium.

UNIVERSAL LIFE-TYPE CONTRACTS

Revenues on universal life-type contracts include contract charges and
fees and are recognized when assessed against the policyholder account balance.
Non-level front-end contract charges are deferred and recognized as revenue over
the contract term.

Reserves for universal life-type contracts are established using the
retrospective deposit method. Under this method, liabilities are equal to the
account balance that accrues to the benefit of the policyholder.

INVESTMENT CONTRACTS

Revenues on investment contracts include contract charges and fees for
contract administration and surrenders. These revenues are recognized when
assessed against the contract balance. Payments received under investment
contracts are recorded as interest-bearing liabilities.

CONTRACTHOLDER FUNDS

Contractholder funds are reserves for universal life-type and investment
contracts. Reserves for these contracts are equal to the account balance that
accrues to the benefit of the contractholder. Credited interest rates on
contractholder funds ranged from 3.0% to 6.8% for those contracts with fixed
interest rates and from 3.6% to 8.5% for those with flexible rates during 1994.
Interest credited on contractholder funds are included in the provision for
policy benefits.

DEFERRED POLICY ACQUISITION COSTS

Certain costs of acquiring insurance business, principally agents' and
brokers' compensation, certain underwriting costs and direct mail solicitation
expenses, are deferred and amortized to income. For traditional life, limited
payment contracts and accident and disability policies, these costs are
amortized in proportion to estimated revenues on such business. For universal
life-type 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 result in adjustments to the amortization
of these costs. To the extent that unrealized gains or losses on available for
sale securities would result in an adjustment of deferred policy acquisition
costs had those gains or losses actually been realized, the related unamortized
deferred policy acquisition costs are recorded as a reduction of the unrealized
gain or loss included in shareholder equity.

29
<PAGE>

ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

THREE YEARS ENDED DECEMBER 31, 1994
($ IN THOUSANDS)

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 and Allstate Life of
New York Variable Annuity Account II ("Separate Accounts"), unit investment
trusts registered with the Securities and Exchange Commission. The assets and
liabilities of the Separate Accounts are carried at fair value. Investment
income and gains and losses of the Separate Accounts accrue directly to the
contractholders and are, therefore, not included in the accompanying statements
of income. Revenues to the Company from the Separate Accounts consist of
contract maintenance charges, administrative fees, and mortality and expense
risk charges.

PENDING ACCOUNTING STANDARDS

In May 1993, the Financial Accounting Standards Board ("FASB") issued
Statement of Accounting Standards ("SFAS") No. 114, "Accounting by Creditors for
Impairment of a Loan" which requires that impaired loans be measured based on
the present value of expected future cash flows discounted at the loan's
effective interest rate. In October 1994, the FASB issued SFAS No. 118,
"Accounting by Creditors for Impairment of a Loan--Income Recognition and
Disclosure" which amends SFAS No. 114 to allow a creditor to use existing
methods for recognizing interest income on an impaired loan. These statements
will be adopted in 1995. The impact on net income and financial position of
adopting these statements will not be material.

3. ACCOUNTING CHANGES

Effective December 31, 1993, the Company adopted SFAS No. 115, "Accounting
for Certain Investments in Debt and Equity Securities." SFAS No. 115 requires
that investments classified as available for sale be carried at fair value.
Previously, fixed income securities classified as available for sale were
carried at the lower of amortized cost or fair value, determined in the
aggregate. Unrealized holding gains and losses are reflected as a separate
component of shareholder equity, net of deferred income taxes and certain
deferred policy acquisition costs. The net effect of adoption of this statement
increased shareholder equity at December 31, 1993 by $25,391 and did not have a
material impact on net income.

Effective January 1, 1992, the Company adopted SFAS No. 106, "Employers'
Accounting for Postretirement Benefits Other than Pensions," and SFAS No. 112,
"Employers' Accounting for Postemployment Benefits," for all postretirement
benefit plans by immediately recognizing the transition amounts. The Company
previously expensed the cost of these benefits, which consist of health care and
life insurance, as claims were paid. The cumulative effect as of January 1, 1992
of adopting these statements was $944. This amount was partially offset by
income tax benefits of $321, resulting in a one-time charge against 1992
earnings of $623. Application of these statements during 1992 reduced net income
before cumulative effect of change in accounting by $50.

30
<PAGE>

ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

THREE YEARS ENDED DECEMBER 31, 1994
($ IN THOUSANDS)

4. RELATED PARTY TRANSACTIONS

The Company has a number of arrangements for services and products with
affiliates and other parties. The principal arrangements are described below.

BUSINESS OPERATIONS AND REINSURANCE

The Company utilizes services and business facilities owned, or leased,
and operated by Allstate in conducting its business activities. The Company
reimburses Allstate for the operating expenses incurred by Allstate. The cost to
the Company is determined by various allocation methods and is primarily related
to the level of the services provided.

The Company cedes certain business to the Parent. Premiums and policy
benefits ceded under such reinsurance agreements totaled $1,181 and $1,877 in
1994, $4,109 and $1,288 in 1993, and $3,445 and $1,427 in 1992. Included in the
reinsurance recoverable at December 31, 1994 and 1993 are amounts due from the
Parent of $1,120 and $1,188, respectively.

INSURANCE

Allstate purchased $7,568, $24,778 and $36,988 of structured settlement
annuities from the Company in 1994, 1993 and 1992, respectively. Included in
premium income are $1,221, $7,170 and $4,282, for 1994, 1993 and 1992,
respectively, for the amounts related to structured settlement annuities with
life contingencies.

DEAN WITTER

Dean Witter Reynolds, Inc. ("Dean Witter") is the primary distributor of
the Company's single and flexible premium annuities. Dean Witter is also the
distributor of flexible premium deferred variable annuity contracts and the
investment manager for the Dean Witter Variable Investment Series, the fund in
which the assets of the Separate Accounts are invested.

5. INCOME TAXES

The Corporation and its domestic subsidiaries (the "Allstate Group") join
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 are parties
to a federal income tax allocation agreement (the "Tax Sharing Agreement"). As a
member of the Sears Tax Group, the Company is jointly and severally liable for
the consolidated income tax liability of the Sears Tax Group.

Under the Tax Sharing Agreement, the Company will pay to or receive from
the Allstate Group the amount, if any, by which the Allstate Group's federal
income tax liability is affected by virtue of inclusion of the Company in the
consolidated federal income tax return. Effectively, this results 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,
investment tax credits or similar items which might not be immediately
recognizable

31
<PAGE>

ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

THREE YEARS ENDED DECEMBER 31, 1994
($ IN THOUSANDS)

in a separate return, are allocated according to the Tax Sharing Agreement and
reflected in the Company's provision to the extent that such items reduce the
Sears Tax Group's federal tax liability.

Payments under the Tax Sharing Agreement generally are to be paid on each
date on which a quarterly payment of estimated federal income tax is due, with
any final settlement made after the consolidated return is filed. When a refund
is received from the Internal Revenue Service as the result of any carryback,
payment will be made to the members of the Sears Tax Group within 15 days after
receipt of the refund.

In anticipation of the Distribution (see Note 1), 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 Allstate Group's federal income tax liability and taxes
payable to or recoverable from the Sears Group.

After the Distribution, the Allstate Group will no longer be included in
the Sears Tax Group. The Company does not expect the impact of separation from
the Sears Tax Group to be significant.

32
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

THREE YEARS ENDED DECEMBER 31, 1994
($ IN THOUSANDS)

The components of the deferred income tax assets and liabilities at
December 31, 1994 and 1993 are as follows:
<TABLE>
<CAPTION>
1994 1993
---------- ----------
<S> <C> <C>
Deferred assets
Reserve for policy benefits . . . . . . . . . . . . . . . $ 21,447 $ 18,395
Basis of investments. . . . . . . . . . . . . . . . . . . 1,708
Loss on disposal of discontinued operations . . . . . . . 317 381
Reserve for postretirement benefits . . . . . . . . . . . 446 326
Unrealized loss on fixed income securities
available for sale. . . . . . . . . . . . . . . . . . . 3,711
Other assets. . . . . . . . . . . . . . . . . . . . . . . 2,463 481
---------- ----------
Total deferred assets . . . . . . . . . . . . . . . 30,092 19,583
---------- ----------

Deferred liabilities
Unrealized gains on fixed income securities
available for sale. . . . . . . . . . . . . . . . . . . -- (13,673)
Policy acquisition costs. . . . . . . . . . . . . . . . . (12,116) (9,437)
Basis of investments. . . . . . . . . . . . . . . . . . . (2,000)
Prepaid commission expense. . . . . . . . . . . . . . . . (520) (370)
Other liabilities . . . . . . . . . . . . . . . . . . . . (13) (37)
---------- ----------
Total deferred liabilities. . . . . . . . . . . . . (12,649) (25,517)
---------- ----------
Net deferred asset (liability). . . . . . . . . . . $ 17,443 $ (5,934)
---------- ----------
---------- ----------
</TABLE>

The Company has not established a valuation reserve as it is more likely
than not that the Company will produce sufficient taxable income in the future
to realize the deferred tax asset.

The components of income tax expense are as follows:
<TABLE>
<CAPTION>
Year Ended December 31,
----------------------------------------
1994 1993 1992
---------- ---------- ----------
<S> <C> <C> <C>
Current. . . . . . . . . . . . . . . . . . . . . . $ 15,172 $ 12,821 $ 13,052
Deferred . . . . . . . . . . . . . . . . . . . . . (5,993) (6,109) (6,621)
---------- ---------- ----------
Total income tax expense . . . . . . . . . . $ 9,179 $ 6,712 $ 6,431
---------- ---------- ----------
---------- ---------- ----------
</TABLE>

The Company paid income taxes of $27,682, $13,079 and $10,708 in 1994, 1993
and 1992, respectively to the Parent under the Tax Sharing Agreement. The
Company had an income tax payable to the Parent of $141 and $12,650 at
December 31, 1994 and 1993, respectively.

33
<PAGE>

ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

THREE YEARS ENDED DECEMBER 31, 1994
($ IN THOUSANDS)

6. INVESTMENTS

FAIR VALUES

The amortized cost, estimated fair value and gross unrealized gains and
losses for fixed income securities, which are designated as held to maturity and
carried at amortized cost, are as follows:
<TABLE>
<CAPTION>

Gross Unrealized
Amortized --------------------- Fair
DECEMBER 31, 1994 Cost Gains Losses Value
- ----------------- --------- --------- --------- ---------
<S> <C> <C> <C> <C>
U.S. Government and agencies . . . . . . $ 267,521 $ 5,203 $ 24,723 $ 248,001
Other corporate bonds. . . . . . . . . . 328,194 8,462 7,377 329,279
Mortgage-backed securities . . . . . . . 5,644 92 16 5,720
--------- --------- --------- ---------
Totals . . . . . . . . . . . . . . $ 601,359 $ 13,757 $ 32,116 583,000
--------- --------- --------- ---------
--------- --------- --------- ---------

<CAPTION>
Gross Unrealized
Amortized --------------------- Fair
DECEMBER 31, 1993 Cost Gains Losses Value
- ----------------- --------- --------- --------- ---------
<S> <C> <C> <C> <C>
U.S. Government and agencies . . . . . . $ 228,256 $ 38,157 $ 2,561 $ 263,852
Other corporate bonds. . . . . . . . . . 336,822 54,662 195 391,289
Mortgage-backed securities . . . . . . . 8,917 605 9,522
--------- --------- --------- ---------
Totals . . . . . . . . . . . . . . $ 573,995 $ 93,424 $ 2,756 $ 664,663
--------- --------- --------- ---------
--------- --------- --------- ---------
</TABLE>

The amortized cost, fair value and gross unrealized gains and losses for
fixed income securities, which are designated as available for sale and carried
at fair value, are as follows:

<TABLE>
<CAPTION>
Gross Unrealized
Amortized --------------------- Fair
DECEMBER 31, 1994 Cost Gains Losses Value
- ----------------- --------- --------- --------- ---------
<S> <C> <C> <C> <C>
U.S. Government and agencies . . . . . . $ 28,621 $ 299 $ 825 $ 28,095
State and Municipal. . . . . . . . . . . 33,939 303 1,024 33,218
Other corporate bonds. . . . . . . . . . 221,740 3,871 6,748 218,863
Mortgage-backed securities . . . . . . . 184,218 1,188 8,564 176,842
--------- --------- --------- ---------
Totals . . . . . . . . . . . . . . $ 468,518 $ 5,661 $ 17,161 $ 457,018
--------- --------- --------- ---------
--------- --------- --------- ---------
<CAPTION>

Gross Unrealized
Amortized --------------------- Fair
DECEMBER 31, 1993 Cost Gains Losses Value
- ----------------- --------- --------- --------- ---------
<S> <C> <C> <C> <C>
U.S. Government and agencies . . . . . . $ 24,083 $ 5,334 $ 3 $ 29,414
State and Municipal. . . . . . . . . . . 18,189 1,519 19,708
Other corporate bonds. . . . . . . . . . 179,570 22,443 41 201,972
Mortgage-backed securities . . . . . . . 198,598 12,226 238 210,586
--------- --------- --------- ---------
Totals . . . . . . . . . . . . . . $ 420,440 $ 41,522 $ 282 $ 461,680
--------- --------- --------- ---------
--------- --------- --------- ---------
</TABLE>

34
<PAGE>

ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

THREE YEARS ENDED DECEMBER 31, 1994
($ IN THOUSANDS)

SCHEDULED MATURITIES

The scheduled maturities for fixed income securities at December 31, 1994
are as follows:

<TABLE>
<CAPTION>
Amortized Cost Fair Value
------------------------- -------------------------
Held to Available Held to Available
Maturity for Sale Maturity for Sale
---------- ---------- ---------- ---------
<S> <C> <C> <C> <C>
Due in one year or less. . . . . . . . $ 624 $ 3,034 $ 638 $ 3,067
Due after one year
through five years . . . . . . . . . 29,653 71,791 29,999 71,149
Due after five years
through ten years. . . . . . . . . . 53,957 74,156 54,689 72,689
Due after ten years. . . . . . . . . . 511,481 135,319 491,954 133,271
---------- ---------- ---------- ----------
595,715 284,300 577,280 280,176

Mortgage-backed securities. . . 5,644 184,218 5,720 176,842
---------- ---------- ---------- ----------
Totals. . . . . . . . . . $ 601,359 $ 468,518 $ 583,000 $ 457,018
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
</TABLE>

Actual maturities may differ from those scheduled as a result of
prepayments by the issuers.

UNREALIZED NET CAPITAL GAINS AND LOSSES

Unrealized net capital gains and losses on fixed income securities
available for sale included in shareholder equity at December 31, 1994 are as
follows:

<TABLE>
<CAPTION>
Amortized Fair Unrealized Net
Cost Value Gains/(Losses)
---------- ---------- --------------
<S> <C> <C> <C>
Fixed income securities available for sale . . . $ 468,518 $ 457,018 $ (11,500)
Deferred income taxes. . . . . . . . . . . . . . 3,711
Deferred policy acquisition costs. . . . . . . . 898
-----------
Total. . . . . . . . . . . . . . . . . . . $ (6,891)
-----------
-----------
</TABLE>

The change in unrealized net capital gains and losses for fixed income
securities is as follows:

Year Ended
December 31,
----------------------------

1994 1993
---------- ----------
<S> <C> <C>
Fixed income securities available for sale . . . . . . . . . . $ (52,740) $ 41,240
Deferred policy acquisition costs. . . . . . . . . . . . . . . 3,076 (2,178)
Deferred income taxes. . . . . . . . . . . . . . . . . . . . . 17,382 (13,671)
---------- ----------
Change in unrealized net capital gains and losses. . . . $ (32,282) $ 25,391
---------- ----------
---------- ----------
</TABLE>

35
<PAGE>

ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

THREE YEARS ENDED DECEMBER 31, 1994
($ IN THOUSANDS)

INVESTMENT INCOME

Investment income by type of investment is as follows:

Year Ended December 31,
----------------------------------------
1994 1993 1992
---------- ---------- ----------
<S> <C> <C> <C>
Fixed income securities. . . . . . . . . . . . $ 88,149 $ 87,524 $ 72,710
Mortgage loans . . . . . . . . . . . . . . . . 8,092 7,435 7,302
Policy loans . . . . . . . . . . . . . . . . . 1,153 1,017 874
Short-term . . . . . . . . . . . . . . . . . . 1,093 1,385 3,864
---------- ---------- ----------
Investment income, before expense. . . . . . . 98,487 97,361 84,750
Investment expense . . . . . . . . . . . . . . 1,576 1,405 1,168
---------- ---------- ----------
Investment income, less investment expense . . $ 96,911 $ 95,956 $ 83,582
---------- ---------- ----------
---------- ---------- ----------
</TABLE>

REALIZED CAPITAL GAINS AND LOSSES

Realized capital gains and losses on investments are as follows:

<TABLE>
<CAPTION>
Year Ended December 31,
----------------------------------------
1994 1993 1992
---------- ---------- ----------
<S> <C> <C> <C>
Fixed income securities. . . . . . . . . . . . $ 1,568 $ 5,645 $ 3,558
Other investments. . . . . . . . . . . . . . . (790) (1,069) (1,877)
---------- ---------- ----------
Realized gains . . . . . . . . . . . . . 778 4,576 1,681
Income taxes . . . . . . . . . . . . . . 272 1,602 572
---------- ---------- ----------
Realized gains, net of tax . . . . . . . $ 506 $ 2,974 $ 1,109
---------- ---------- ----------
---------- ---------- ----------
</TABLE>

Gross gains of $1,743, $1,780 and $1,429 and gross losses of $973, $30 and
$1,289 were realized on sales of fixed income securities, excluding calls,
during 1994, 1993 and 1992, respectively.

INVESTMENT LOSS PROVISIONS AND VALUATION RESERVES

The pretax income effect of provisions for investment losses, principally
provisions for other than temporary declines in value of fixed income securities
and valuation reserves on mortgage loans and real estate, was $627, $1,200 and
$2,759 in 1994, 1993 and 1992, respectively.

Valuation reserves on mortgage loans were $1,179 and $2,297 at
December 31, 1994 and 1993, respectively.

36
<PAGE>

ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

THREE YEARS ENDED DECEMBER 31, 1994
($ IN THOUSANDS)

INVESTMENT CONCENTRATION AND OTHER INVESTMENT INFORMATION

The company maintains a diversified portfolio of municipal bonds. The
largest concentrations in the portfolio are presented below. Holdings in no
other state exceed 5.0% of the carrying value of the state and municipal bond
portfolio at December 31, 1994.

Ohio . . . . . . . . . . . . . . . . . 26.9% 36.8%
California . . . . . . . . . . . . . . 23.0
Illinois . . . . . . . . . . . . . . . 22.0 39.6
Maryland . . . . . . . . . . . . . . . 9.0
New York . . . . . . . . . . . . . . . 6.1 11.0
Maine. . . . . . . . . . . . . . . . . 5.9
</TABLE>

The Company's mortgage loans are collaterialized primarily by a variety
of commercial real estate property types, located throughout the United States.
Substantially all of the commercial mortgage loans are non-recourse to the
borrower. The three states with the largest portion of the commercial mortgage
loan portfolio are as listed below. Holdings in no other state exceed 5.0% of
the portfolio at December 31, 1994.

(% of commercial mortgage portfolio carrying value)

California . . . . . . . . . . . . . . 58.5% 51.6%
Illinois . . . . . . . . . . . . . . . 16.3 18.4
New York . . . . . . . . . . . . . . . 10.9 11.3
</TABLE>

The types of properties collaterializing the mortgage loans are as
follows:

(% of commercial mortgage portfolio carrying value)

<TABLE>
<CAPTION>
1994 1993
------ ------
<S> <C> <C>
Warehouse. . . . . . . . . . . . . . . 36.8% 43.6%
Retail . . . . . . . . . . . . . . . . 31.4 20.7
Office . . . . . . . . . . . . . . . . 19.3 22.9
Industrial . . . . . . . . . . . . . . 7.1 8.3
Apartment. . . . . . . . . . . . . . . 4.4 4.5
Other. . . . . . . . . . . . . . . . . 1.0
------ ------
100.0% 100.0%
------ ------
------ ------
</TABLE>

At December 31, 1994, fixed income securities with a carrying value of
$1,604 were on deposit with regulatory authorities as required by law.

37
<PAGE>

ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

THREE YEARS ENDED DECEMBER 31, 1994
($ IN THOUSANDS)

7. BENEFIT PLANS

PENSION PLANS

Pension plans sponsored by Allstate are in effect covering all 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. Allstate's
funding policy for the pension plans is to make annual contributions in
accordance with accepted actuarial cost methods. The costs included in income
were $344, $340 and $366 for the pension plans in 1994, 1993 and 1992,
respectively.

PROFIT SHARING FUND

Employees of the Company are also eligible to become members of The
Savings and Profit Sharing Fund of Sears Employees. The costs to the Company
were $123, $176 and $57 in 1994, 1993 and 1992, respectively. As described in
Note 1, in November 1994, Sears announced its decision to distribute in 1995,
its 80.2% ownership of the Corporation as a tax-free dividend to Sears common
shareholders. In contemplation of the Distribution, The Savings and Profit
Sharing Fund of Sears Employees will be split into two plans to provide a
separate plan for the employees of the Corporation.

POSTRETIREMENT BENEFITS OTHER THAN PENSIONS

Allstate provides certain health care and life insurance benefits for
retired employees. Generally, qualified employees may become eligible for these
benefits if they retire in accordance with Allstate's established retirement
policy and are continuously insured under Allstate's group plans or other
approved plans for 10 or more years prior to retirement. Allstate shares the
cost of the retiree medical benefits with retirees based on years of service,
with the Company's share being subject to a 5% limit on annual medical cost
inflation after retirement. Allstate's postretirement benefit plans currently
are not funded. Allstate has the right to modify or terminate these plans.

EARLY RETIREMENT PROGRAM

During the fourth quarter of 1994, the Corporation offered a voluntary
early retirement incentive package to approximately 700 employees. The package
offered one year of salary continuation and related benefits during the salary
continuation period, and an enhanced retirement benefit. Approximately 600
eligible employees have accepted the offer. The Company's portion of the total
cost of the program was charged to 1994 income.

38
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

THREE YEARS ENDED DECEMBER 31, 1994
($ IN THOUSANDS)

8. STATUTORY FINANCIAL INFORMATION

The accompanying financial statements have been prepared on the basis of
generally accepted accounting principles which vary from statutory accounting
principles prescribed or permitted by regulatory authorities. The following
tables reconcile net income and shareholder equity as reported herein in
conformity with generally accepted accounting principles with statutory net
income and statutory capital and surplus, determined in accordance with
principles prescribed or permitted by insurance regulatory authorities:

<TABLE>
<CAPTION>
Net income
Year Ended December 31,
--------------------------------------------------
1994 1993 1992
---------- ---------- ----------
<S> <C> <C> <C>
Balance per generally accepted
accounting principles. . . . . . . . . . . . . . . . . . . $ 18,221 $ 13,163 $ 12,225
Deferred policy acquisition costs . . . . . . . . . . . . (6,849) (2,397) (4,041)
Deferred income taxes . . . . . . . . . . . . . . . . . . (8,337) (6,074) (6,983)
Non-admitted assets and
statutory reserves. . . . . . . . . . . . . . . . . . . 6,900 20,157 17,722
Other postretirement and
postemployment benefits . . . . . . . . . . . . . . . . 105 (54) 979
Other . . . . . . . . . . . . . . . . . . . . . . . . . . 901 1,236 1,138
---------- ---------- ----------
Balance per statutory accounting principles. . . . . . . . . $ 10,941 $ 26,031 $ 21,040
---------- ---------- ----------
---------- ---------- ----------
</TABLE>

<TABLE>
<CAPTION>
Shareholder Equity
at December 31,
------------------------------
1994 1993
---------- ----------
<S> <C> <C>
Balance per generally accepted accounting principles . . . . . . . . . . . . . . $ 149,241 $ 163,302
Deferred policy acquisition costs . . . . . . . . . . . . . . . . . . . . . . (50,699) (40,775)
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . (17,443) 5,934
Fixed income securities . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,500 (41,240)
Non-admitted assets and statutory reserves. . . . . . . . . . . . . . . . . . 31,074 19,947
Other postretirement and postemployment benefits. . . . . . . . . . . . . . . 1,036 931
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106 1,519
---------- ----------
Balance per statutory accounting principles. . . . . . . . . . . . . . . . . . . $ 124,815 $ 109,618
---------- ----------
---------- ----------

</TABLE>

The ability of the Company to pay dividends is dependent, in part, on
business conditions, income, cash requirements of the Company and other relevant
factors and is subject to New York Insurance Regulations. 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 distribution is subject to the Superintendent's disapproval.

9. FINANCIAL INSTRUMENTS

In the normal course of business, the Company invests in various financial
assets, incurs various financial liabilities and enters into agreements
involving off-balance-sheet

39
<PAGE>

ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

THREE YEARS ENDED DECEMBER 31, 1994
($ IN THOUSANDS)

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. As a number
of the Company's significant assets, including deferred policy acquisition costs
and deferred income taxes, and liabilities, including traditional and universal
life-type life insurance reserves, are not considered financial instruments, the
disclosures below do not reflect the fair value of the Company as a whole.

FINANCIAL ASSETS

<TABLE>
<CAPTION>
Carrying Fair
At December 31, 1994 Value Value
-------------------- ------------ ------------
<S> <C> <C>
Fixed income securities. . . . . . . . . . $ 1,058,377 $ 1,040,018
Mortgage loans . . . . . . . . . . . . . . 86,435 80,785
Short-term investments . . . . . . . . . . 7,212 7,212
Policy loans . . . . . . . . . . . . . . . 20,500 20,500
Accrued investment income. . . . . . . . . 16,518 16,518
Cash . . . . . . . . . . . . . . . . . . . 1,763 1,763
Other. . . . . . . . . . . . . . . . . . . 4,763 4,763
Separate Accounts. . . . . . . . . . . . . 175,918 175,918

</TABLE>

Carrying Fair
At December 31, 1993 Value Value
-------------------- ------------ ------------
<S> <C> <C>
Fixed income securities. . . . . . . . . . $ 1,035,675 $ 1,126,343
Mortgage loans . . . . . . . . . . . . . . 86,664 85,622
Short-term investments . . . . . . . . . . 49,243 49,243
Policy loans . . . . . . . . . . . . . . . 18,367 18,367
Accrued investment income. . . . . . . . . 16,416 16,416
Cash . . . . . . . . . . . . . . . . . . . 2,457 2,457
Other. . . . . . . . . . . . . . . . . . . 5,662 5,662
Separate Accounts. . . . . . . . . . . . . 145,866 145,866

</TABLE>

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 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 fair
value of policy loans is estimated at book value since the loan may be repaid at
any time, and the interest rate earned is higher than the current risk-free
rate. Accrued investment income and other financial assets are valued at their
carrying value as they are short-term in nature. Assets of the Separate Accounts
are carried in the statements of financial position at fair value.

40
<PAGE>

ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

THREE YEARS ENDED DECEMBER 31, 1994
($ IN THOUSANDS)

FINANCIAL LIABILITIES

The Company had the following financial liabilities:

<TABLE>
<CAPTION>
Carrying
At December 31, 1994 Value Fair Value
-------------------- ------------- -------------
<S> <C> <C>
Contractholder funds related to
investment contracts. . . . . . . . . . $ 368,780 $ 362,221
Other . . . . . . . . . . . . . . . . . . 7,725 7,725
Separate Accounts . . . . . . . . . . . . 175,918 175,918

</TABLE>

<TABLE>
<CAPTION>
Carrying
At December 31, 1993 Value Fair Value
-------------------- ------------- -------------
<S> <C> <C>
Contractholder funds related to
investment contracts. . . . . . . . . . $ 409,982 $ 436,539
Other . . . . . . . . . . . . . . . . . . 6,330 6,330
Separate Accounts . . . . . . . . . . . . 145,866 145,866

</TABLE>

The fair value of contractholder funds related to 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 charge. The fair
value of immediate annuities and annuities without life contingencies with fixed
terms are estimated using discounted cash flow calculations based on interest
rates currently offered for contracts with similar terms and duration. Other
financial liabilities are generally valued at their carrying value due to their
short-term nature. Separate Accounts liabilities are carried at the fair value
of the underlying assets.

DERIVATIVE FINANCIAL INSTRUMENTS

The Company uses derivative financial instruments to reduce its exposure to
market and interest rate risk, as well as to improve asset/liability management.
The Company does not hold or issue these instruments for trading purposes. The
Company does not require collateral or other security to support financial
futures contracts. The Company had the following financial instruments with off-
balance-sheet risk:

<TABLE>
<CAPTION>
Contract
or
Notional Carrying
At December 31, 1994 Amount Fair Value Value
--------------------- ------------- ------------ -----------
<S> <C> <C> <C>
Financial futures
contracts . . . . . . . . $ 20,700 $ (65) $ (65)
Mortgage loan
commitments . . . . . . . 3,075 31 N/A

</TABLE>

41
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

THREE YEARS ENDED DECEMBER 31, 1994
($ IN THOUSANDS)

<TABLE>
<CAPTION>
Contract
or
Notional Carrying
At December 31, 1993 Amount Fair Value Value
-------------------- -------- ---------- --------
<S> <C> <C> <C>
Financial futures
contracts . . . . . . . $ 8,300 $ (8) $ (8)
Mortgage loan
commitments . . . . . . 3,100 31 N/A
</TABLE>

Financial futures contracts 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
asset/liability management, the Company generally utilizes futures contracts to
hedge its market or interest rate risk related to anticipatory investment
purchases and sales. Hedges of anticipatory transactions pertain to identified
transactions which are probable to occur and are generally completed within
ninety days. Futures contracts require deposit on margin at the time the
contracts are entered. Cash settlements are made on a daily basis for market
movements in the contract positions.

Commitments to extend new mortgage loans are agreements to lend to a borrower
as long as there is no violation of any condition established in the contract.
Risk arises from the possible movement in interest rates. Commitments generally
have fixed expiration dates or other termination clauses. The Company evaluates
each borrower's creditworthiness on a case-by-case basis. Mortgage loans are
collateralized by the underlying real estate. Commitments to extend new mortgage
loans are valued based on estimates of fees charged by other institutions to
make similar commitments to similar borrowers.

42
<PAGE>

ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK

SCHEDULE IV--REINSURANCE
($ IN THOUSANDS)

YEAR ENDED DECEMBER 31, 1994

<TABLE>
<CAPTION>
Gross Net
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>

YEAR ENDED DECEMBER 31, 1993
<TABLE>
<CAPTION>
Gross Net
amount Ceded amount
---------- ---------- ----------
<S> <C> <C> <C>
Life insurance in force. . . . . . . . . . $6,853,083 $1,746,724 $5,106,359
---------- ---------- ----------
---------- ---------- ----------
Premiums and contract charges:
Life and annuities . . . . . . . 128,816 4,122 124,694
Accident and health . . . . . . . . . . 3,026 807 2,219
---------- ---------- ----------

$ 131,842 $ 4,929 $ 126,913
---------- ---------- ----------
---------- ---------- ----------
</TABLE>

YEAR ENDED DECEMBER 31, 1992
<TABLE>
<CAPTION>
Gross Net
amount Ceded amount
---------- ---------- ----------
<S> <C> <C> <C>
Life insurance in force. . . . . . . . . . $6,310,554 $1,481,600 $4,828,954
---------- ---------- ----------
---------- ---------- ----------
Premiums and contract charges:
Life and annuities . . . . . . . . . 119,827 3,460 116,367
Accident and health . . . . . . . . . . 3,431 1,171 2,260
---------- ---------- ----------

$ 123,258 $ 4,631 $ 118,627
---------- ---------- ----------
---------- ---------- ----------
</TABLE>

43
<PAGE>

ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK

SCHEDULE V--VALUATION AND QUALIFYING ACCOUNTS
($ IN THOUSANDS)
<TABLE>
<CAPTION>

Balance at Charged to Balance
Beginning Costs and at end
Description of Period Expenses Deductions of Period
- ----------- ----------- ---------- ---------- ---------
<S> <C> <C> <C> <C>
Year Ended December 31, 1994
Allowance for estimated losses
on mortgage loans . . . . . . $ 2,297 $ 667 $ 1,785 $ 1,179
Year Ended December 31, 1993
Allowance for estimated losses
on mortgage loans . . . . . . $ 2,531 $ 1,225 $ 1,459 $ 2,297
Year Ended December 31, 1992
Allowance for estimated losses
on mortgage loans and real
estate. . . . . . . . . . . . $ 200 $ 2,576 $ 245 $ 2,531
</TABLE>

44
<PAGE>

Registration No. 33-35445

PART C

OTHER INFORMATION

24A. FINANCIAL STATEMENTS

PART B: Allstate Life Insurance Company of New York Financial
Schedules and Allstate Life of New York Variable Annuity Account II
Financial Schedules*

24B. EXHIBITS

The following exhibits:

The following exhibits, which were previously filed with Registrant's
Registration Statement dated December 7, 1990, correspond to those required by
paragraph (b) of item 24 as to exhibits in Form N-4:

(1) Resolution of the Board of Directors of Allstate Life Insurance
Company of New York authorizing establishment of the Variable Annuity
Account II.

(2) Not Applicable.

(3) (a) Distribution Agreement.
(b) Managing General Agent's Agreement.

(4) Form of Contract.**

(5) Form of application for a Contract.

(6) (a) Certificate of Incorporation of Allstate Life Insurance
Company of New York.
(b) By-laws of Allstate Life Insurance Company of New York.

(7) Not applicable.

(8) Record Keeping and Administrative Services Agreement.

(9) Opinion of Robert S. Seiler, Senior Vice President, Secretary and
General Counsel of Allstate Life Insurance Company of New York.

(10) (a) Consent of Accountants.*
(b) Consent of Attorneys.

(11) Not applicable.

(12) Agreement to Purchase Shares.

(13) Performance Data

(27) Financial Data Schedule

Powers of Attorney.

_________________________
* Filed herewith.

** Contract Amendment and Enhanced Death Benefit Rider filed herewith.
<PAGE>

25. DIRECTORS AND OFFICERS OF THE DEPOSITOR

Name and Principal Position and Office With Depositor
Business Address of the Trust
- ---------------- ------------

Louis G. Lower, II* Chairman of the Board of Directors and President
Michael J. Velotta* Director, Vice President, Secretary and
General Counsel
Peter H. Heckman* Director and Vice President
James J. Brazda** Director and Chief Administrative Officer
Marcia D. Alazraki* Director
Catherine S. Brune* Director
Joseph F. Carlino* Director
Michael J. Donoghue* Director
Cleveland Johnson, Jr.* Director
Phillip E. Lawson* Director
Joseph P. McFadden* Director
John R. Raben, Jr.* Director
Sally A. Slacke* Director
Myron J. Resnick* Treasurer
Mark A. Bishop* Assistant Treasurer
Barbara S. Brown* Assistant Treasurer
David M. Crew* Assistant Treasurer
Dorothy E. Even* Assistant Vice President
Anthony D. Frook* Assistant Treasurer
Judith P. Greffin* Assistant Vice President
Stephanie L. Holowach* Assistant Treasurer
Peter S. Horos* Assistant Treasurer
Thomas C. Jensen* Assistant Treasurer
Robert T. Jostes* Assistant Treasurer
Margarita E. Kellen* Assistant Vice President
Emma M. Kalaidjian* Assistant Secretary
Paul N. Kierig* Assistant Secretary and Assistant General Counsel
Kenneth S. Klimala* Assistant Treasurer
Paul R. Knachel* Assistant Treasurer
Steven M. Laude* Assistant Treasurer
John H. Lohr* Assistant Treasurer
Mary J. McGinn* Assistant Secretary
Barry S. Paul* Assistant Vice President and Controller
John F. Podjasek, Jr.* Assistant Treasurer
Gary D. Riggs* Assistant Treasurer
Robert N. Roeters* Assistant Vice President
Theodore A. Schnell* Assistant Vice President
Mark D. Senkpiel* Assistant Treasurer
C. Nelson Strom* Assistant Vice President and Corporate Actuary
Richard E. Student* Assistant Treasurer
William F. Wein* Assistant Treasurer
Peter D. Wells* Assistant Treasurer
Patricia W. Wilson* Assistant Treasurer

* Principal business address is 3100 Sanders Road, Northbrook, IL 60062
** Principal business address is P.O. Box 9095, Farmingville, NY 11738

26. Persons Controlled by or Under Common Control with Depositor or Registrant
See 10-K Commission File # 1-11840, The Allstate Corporation.

27. NUMBER OF CONTRACT OWNERS
As of December 31, 1994 there were in force 397 qualified and 4086 non-
qualified contracts. The Registrant began operations on September 24, 1991.

28. INDEMNIFICATION

The Managing General Agent's Agreement (Exhibit 3(b)) has a provision in
which Allstate Life Insurance Company of New York agrees to indemnify Dean
Witter Reynolds as Underwriter for certain damages and expenses that may be
caused by actions, statements or omissions by Allstate Life Insurance Company of
New York. The Agreement to Purchase Shares contains a similar provision in
paragraph 16 of Exhibit 12.

<PAGE>

Insofar as indemnification for liability arising out of the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than payment by the registrant of expenses incurred by a
director, officer or controlling person of the registrant in the successful
defense of any action, suit, or proceeding) is asserted 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.

29a. RELATIONSHIP OF PRINCIPAL UNDERWRITER TO OTHER INVESTMENT COMPANIES
Dean Witter Distributors Inc. is the principal underwriter for the following
investment companies:

Active Assets Money Trust
Active Assets Tax-Free Trust
Active Assets California Tax-Free Trust
Active Assets Government Securities Trust
Dean Witter Liquid Asset Fund Inc.
Dean Witter Tax-Free Daily Income Trust
Dean Witter California Tax-Free Daily Income Trust
Dean Witter U.S. Government Money Market Trust
Dean Witter American Value Fund
Dean Witter World Wide Investment Trust
Dean Witter Dividend Growth Securities Inc.
Dean Witter Natural Resource Development Securities Inc.
Dean Witter Capital Growth Securities
Dean Witter Developing Growth Securities Trust
Dean Witter Convertible Securities Trust
Dean Witter Federal Securities Trust
Dean Witter U.S. Government Securities Trust
Dean Witter High Yield Securities Inc.
Dean Witter New York Tax-Free Income Fund
Dean Witter Tax-Exempt Securities Trust
Dean Witter California Tax-Free Income Fund
Dean Witter Managed Assets Trust
Dean Witter Limited Term Municipal Trust
Dean Witter Value-Added Market Series
Dean Witter World Wide Income Trust
Dean Witter Utilities Fund
Dean Witter Strategist Fund
Dean Witter New York Municipal Money Market Trust
Dean Witter Intermediate Income Growth Securities
Dean Witter European Growth Fund Inc.
Dean Witter Developing Growth Securities Trust
Dean Witter Global Short-Term Income Fund Inc.
Dean Witter Precious Metal & Minerals Trust
Dean Witter Pacific Growth Fund Inc.
Dean Witter Multi-State Municipal Series Trust
Dean Witter Premier Income Trust
Dean Witter Short-Term U.S. Treasury Trust
Dean Witter Variable Investment Series
Dean Witter Global Utilities Fund
Dean Witter High Income Securities
Dean Witter National Municipal Trust
Dean Witter International Small Cap Fund
Dean Witter Mid-Cap Growth Fund
Dean Witter Global Asset Allocation Fund
Dean Witter Balanced Growth Fund
Dean Witter Balanced Income Fund
Dean Witter Diversified Income Trust
Dean Witter Health Sciences Trust
Dean Witter Retirement Series
Dean Witter Global Dividend Growth Securities
Dean Witter Short-Term Bond Fund

<PAGE>

Prime Income Trust
TCW/DW Core Equity Trust
TCW/DW North American Government Income Trust
TCW/DW Latin American Growth Fund
TCW/DW Income and Growth Fund
TCW/DW Small Cap Growth Fund
TCW/DW Balanced Fund
TWC/DW North American Intermediate Income Trust
TWC/DW Total Return Trust

29b. PRINCIPAL UNDERWRITER

Name and Principal Business Positions and Offices
Address of Each Such Person with Underwriter
- -------------------------------------------------------------------------------
DEAN WITTER REYNOLDS INC. UNDERWRITER
("DEAN WITTER")

Philip J. Purcell Chairman, Chief Executive Officer
and Director

Richard M. DeMartini President, Chief Operating Officer
of Dean Witter Capital and Director

James F. Higgins President, Chief Operating Officer
of Dean Witter Financial and
Director

Christine A. Edwards Executive Vice President, Secretary,
General Counsel and Director

Charles A. Fiumefreddo Executive Vice President
and Director

Thomas C. Schneider Executive Vice President Chief
Financial Officer and Director

Fredrick K. Kubler Senior Vice President,
Assistant Secretary and
Chief Compliance Officer

Michael T. Gregg Vice President and
Assistant Secretary

Marilyn Cranney Assistant Secretary

Sheldon Curtis Assistant Secretary

The principal address of Dean Witter is Two World Trade Center,
New York, New York 10048.

<PAGE>

INTERCAPITAL DIVISION OF DWR

Name and principal Position with the
business address of InterCapital Division
each such person of DWR
- ------------------ ---------------------

Charles A. Fiumefreddo Chairman, Chief
Executive Officer
and Director

Phillip J. Purcell Director

Richard M. DeMartini Director

James F. Higgins Director

Thomas C. Schneider Executive Vice President,
Chief Financial Officer and
Director

Christine A. Edwards Director

Roberts M. Scanlan President and Chief
Operating Officer

David A. Hughey Executive Vice President
and Chief Administrative
Officer

Mark Bavoso Senior Vice President

Edmund C. Puckhaber Executive Vice President

John Van Heuvelen Executive Vice President

Sheldon Curtis Senior Vice President,
General Counsel and Secretary

Peter M. Avelar Senior Vice President

Thomas H. Connelly Senior Vice President

Edward Gaylor Senior Vice President

Rajesh K. Gupta Senior Vice President

Kenton J. Hinchliffe Senior Vice President

Kevin Hurley Senior Vice President

John B. Kemp, III Senior Vice President

Anita Kolleeny Senior Vice President

Jonathan R. Page Senior Vice President

Ira Ross Senior Vice President

Rochelle G. Siegel Senior Vice President

Paul D. Vance Senior Vice President

Elizabeth A. Vetell Senior Vice President

James F. Willison Senior Vice President

Ronald Worobel Senior Vice President

<PAGE>

Thomas F. Caloia First Vice President and
Assistant Treasurer

Barry Fink First Vice President

Michael Interrante First Vice President and
Controller

Robert Zimmerman First Vice President

Joan Allman Vice President

Joseph Arcieri Vice President

Terrence P. Brennan, II Vice President

Steven Brophy Vice President

Douglas Brown Vice President

Thoman Chronert Vice President

Rosalie Clough Vice President

B. Catherine Connelly Vice President

Marilyn K. Cranney Vice President and Assistant
Secretary

Patricia A. Cuddy Cive President

Salvatore DeSteno Vice President

Frank J. DeVito Vice President

Dwight Doolan Vice President

Bruce Dunn Vice President

Jeffrey D. Geffen Vice President

Deborah Genovese Vice President

Peter W. Gurman Vice President

Russell Harper Vice President

John Hechtlinger Vice President

David Hoffman Vice President

David Johnson Vice President

Christopher Jones Vice President

Stanley Kapica Vice President

Konrad J. Krill Vice President

Lawrence S. Lafer Vice President and Assistant
Secretary

Thomas Lawlor Vice President

Lou Anne D. McInnis Vice President and Assistant
Secretary

Sharon K. Milligan Vice President

James Nash Vice President

<PAGE>

Richard Norris Vice President

Hugh Rose Vice President

Ruth Rossi Vice President and Assistant
Secretary

Carl F. Sadler Vice President

Rafael Scolari Vice President

Diane Lisa Sobin Vice President

Kathleen Stromberg Vice President

Vinh Q. Tran Vice President

Alice Weiss Vice President

Jayne M. Wolff Vice President

Marianne Zalys Vice President

<PAGE>

29c. COMPENSATION OF DEAN WITTER

The following commissions and other compensation were received by each
principal underwriter, directly or indirectly, from the Registrant during the
Registrant's last fiscal year:

(1) (2) (3) (4) (5)
Net Compensation
Underwriting or
Discounts Redemption
Name of and or Brokerage
Principal Commissions Annuitization Commissions Compensation
- --------- ----------- ------------- ----------- ------------

Dean Witter $2,503,971
Reynolds Inc.

30. LOCATION OF ACCOUNTS AND RECORDS

James J. Brazda
Allstate Life Insurance Company of New York
P.O. Box 9095
Farmingville, New York 11738

31. MANAGEMENT SERVICES

None

32. UNDERTAKINGS

The Registrant promises to file a post-effective amendment to this
Registration Statement as frequently as is necessary to ensure that the audited
financial statements in the Registration Statement are never more than 16 months
old for so long as payments under the variable annuity contracts may be
accepted. Registrant furthermore agrees to include either as part of any
application to purchase a contract offered by the prospectus, a space that an
applicant can check to request a statement of Additional Information or a post
card or similar written communication affixed to or included in the Prospectus
that the applicant can remove to send for a Statement of Additional Information.
Finally the Registrant agrees to deliver any Statement of Additional Information
and any Financial Statements required to be made available under this Form N-4
promptly upon written or oral request.

33. REPRESENTATIONS PURSUANT TO SECTION 403(b) OF THE INTERNAL REVENUE CODE

The Company represents that it is relying upon a November 28, 1988
Securities and Exchange Commission no-action letter issued to the American
Council of Life Insurance ("ACLI") and that the provisions of paragraphs 1-4 of
the no-action letter have been complied with.

<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, (the "Act") and
the Investment Company Act of 1940, the registrant, Allstate Life of New York
Variable Annuity Account II, has duly caused this Post-Effective Amendment to
the 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 tenth day of July,
1995.

ALLSTATE LIFE OF NEW YORK VARIABLE ANNUITY ACCOUNT II
(REGISTRANT)
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
(DEPOSITOR)

(SEAL)
Attest /s/ Paul N. Kierig By: /s/ Michael J. Velotta
--------------------------------- ------------------------------
Paul N. Kierig Michael J. Velotta
Assistant Secretary and Vice President, Secretary and
Assistant General Counsel General Counsel

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, this Post-Effective Amendment to the
Registration Statement has been signed below by the following Directors and
Officers of Allstate Life Insurance Company of New York on this tenth day of
July, 1995.

*/LOUIS G. LOWER, II Chairman of the Board and President
- -------------------- (Principal Executive Officer)
Louis G. Lower, II

/s/ Michael J. Velotta
- ---------------------- Director, Vice President, Secretary and
Michael J. Velotta General Counsel

*/JAMES J. BRAZDA Director and Chief Administrative Officer
- -----------------
James J. Brazda

*/PETER H. HECKMAN Director and Vice President
- ------------------
Peter H. Heckman

*/MARCIA D. ALAZRAKI Director */PHILLIP E. LAWSON Director
- -------------------- -------------------
Marcia D. Alazraki Phillip E. Lawson

*/CATHERINE S. BRUNE Director */JOSEPH MCFADDEN Director
- -------------------- -----------------
Catherine S. Brune Joseph McFadden

*/JOSEPH F. CARLINO Director */JOHN R. RABEN, JR. Director
- ------------------- --------------------
Joseph F. Carlino John R. Raben, Jr.

*/MICHAEL J. DONOGHUE Director */SALLY A. SLACKE Director
- --------------------- -----------------
Michael J. Donoghue Sally A. Slacke

*/CLEVELAND JOHNSON, JR. Director
- ------------------------
Cleveland Johnson, Jr.

*/ By Michael J. Velotta, pursuant to Power of Attorney

<PAGE>
Exhibit No. (4)

Form of Contract
(Contract Amendment and
Enhanced Death Benefit Rider)

<PAGE>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
HEREIN CALLED ("WE OR US")

AMENDATORY ENDORSEMENT

I. The third and fourth paragraphs in the Owner provision on page 4 of your
Contract are deleted and replaced by the following:

You may change the owner or beneficiary at any time. If you are a natural
person, you may change the annuitant prior to the Payout Start Date. Once
we have received a satisfactory written request for an owner, beneficiary
or annuitant 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. We are not responsible for
the tax consequences of an owner, beneficiary or annuitant change.

II. The fourth paragraph in the Death of Owner or Annuitant provision on page 7
of your Contract is deleted and replaced by the following:

If any annuitant dies who is not also an owner, the owner must elect an
applicable option listed below. If the option selected is 1(a) or 1(b)(ii)
below, the new annuitant will be the youngest owner, unless the owner names
a different annuitant.

1. IF THE OWNER IS A NATURAL PERSON:

a. The owner may choose to continue this Contract as if the death had
not occurred; or

b. If we receive due proof of death within 180 days of the date of
the annuitant's death, then the owner may alternatively choose to:

i. Receive the Death Benefit in a lump sum; or

ii. Apply the Death Benefit to an Income Plan which must begin within
one year of the date of death and must be for a period equal to or
less than the life expectancy of the owner.

2. IF THE OWNER IS A NON-NATURAL PERSON:

The owner must receive the Death Benefit in a lump sum.

<PAGE>

III. The following provision is added to the Withdrawal Amount without Early
Withdrawal Charge provision on page 6 of your Contract:

Withdrawal charges will be waived on partial withdrawals taken to satisfy
qualified plan required minimum distribution rules as described in the
Internal Revenue Code. This waiver is permitted only for withdrawals which
satisfy distributions resulting from this Contract.

Except as amended, the Contract remains unchanged.

/s/ Michael J. Velotta /s/ Louis G. Lower, II

Michael J. Velotta Louis G. Lower, II
Secretary President

<PAGE>

ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK

ENHANCED DEATH BENEFIT RIDER

This rider was issued because you selected the Enhanced Death Benefit for the
death of any owner at the time you applied for this annuity. Unlike your
current DEATH BENEFIT GUARANTEE, the Enhanced Death Benefit does not apply to
the death of the annuitant if the annuitant is different than the owner. The
Death Benefit and Mortality and Expense Risk Charge provisions of your Contract
are modified as follows:

I. The Death Benefit will be the greater of the values stated in the Death
Benefit provision on page 7 of your Contract, or the value of the Enhanced
Death Benefit.

The Enhanced Death Benefit is:

A. On the date of issue, the Enhanced Death Benefit is equal to the
initial purchase payment.

B. On each contract anniversary, but not beyond the contract anniversary
preceding all owner(s)' 75th birthday(s), the Enhanced Death Benefit
will be recalculated as follows:

- The Enhanced Death Benefit as of the PRIOR contract anniversary
multiplied by 1.05 which results in an increase of 5% annually.

C. Further, FOR ALL AGES, the Enhanced Death Benefit will be adjusted on
each contract anniversary, or upon receipt of a death claim, as
follows:

- The Enhanced Death Benefit will be reduced by the percentage of
any Account Value withdrawn since the prior contract anniversary.

- Any additional purchase payments since the prior contract
anniversary will be added.

The Enhanced Death Benefit will never be greater than the maximum death
benefit allowed by any non-forfeiture laws which govern this Contract.

<PAGE>

II. The annualized mortality and expense risk charge of 1.25% stated on page 6
of your Contract is changed. The annualized mortality and expense risk
charge will never be greater than 1.38%.

Except as amended, the Contract remains unchanged.

/s/ Michael J. Velotta /s/ Louis G. Lower, II

Michael J. Velotta Louis G. Lower, II
Secretary President

<PAGE>

Exhibit (10)(a)

Consent of Accountants

<PAGE>

INDEPENDENT AUDITORS' CONSENT

We consent to the use in this Post-Effective Amendment No. 8 to Registration
Statement No. 33-35445 of our report dated February 24, 1995 accompanying the
financial statements of Allstate Life of New York Variable Annuity Account II
and our report dated February 24, 1995 accompanying the financial statements and
financial statement schedules of Allstate Life Insurance Company of New York
contained in the Statement of Additional Information (which is incorporated by
reference in the Prospectus of Allstate Life of New York Variable Annuity
Account II of Allstate Life Insurance Company of New York) which is part of such
Registration Statement, and to the reference to us under the heading "Experts"
in such Statement of Additional Information.

/s/ Deloitte & Touche, LLP

Chicago, Illinois

July 10, 1995

<PAGE>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the Allstate
Life of New York Variable Annuity Account II (ALNYVAII*) Stmt. of Net Assets,
12/31/94; ALNYVAII Stmt. of Operations year Ended 12/31/94; ALNYVAII Stmts. of
changes in Net Assets years Ended 12/31/94 and 12/31/93; and ALNYVAII Notes to
Financial Stmts., Two years Ended 12/31/94.
</LEGEND>
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 167,450
<INVESTMENTS-AT-VALUE> 160,632
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 160,632
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 68
<TOTAL-LIABILITIES> 68
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 11,322
<SHARES-COMMON-PRIOR> 8,368
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 0
<DIVIDEND-INCOME> 8,267
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> (2,028)
<NET-INVESTMENT-INCOME> 6,239
<REALIZED-GAINS-CURRENT> (751)
<APPREC-INCREASE-CURRENT> (12,115)
<NET-CHANGE-FROM-OPS> (6,627)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 0
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>