ALLSTATE LIFE OF NEW YORK VARIABLE ANNUITY ACCOUNT II, N-4, 2000-11-17

ALLSTATE LIFE OF NEW YORK VARIABLE ANNUITY ACCOUNT II
N-4, 2000-11-17

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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON November 17, 2000
--------------------------------------------------------------------------
FILE NOS. 333-______
811-6117

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM N-4

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /X/

AND/OR

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY
ACT OF 1940

AMENDMENT NO. 21 /X/

ALLSTATE LIFE OF NEW YORK VARIABLE ANNUITY ACCOUNT II
(Exact Name of Registrant)

ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
(Name of Depositor)

ONE ALLSTATE DRIVE

P.O. BOX 9095
FARMINGVILLE, NEW YORK 11738
(Address and Telephone Number of Depositor's Principal Offices)

MICHAEL J. VELOTTA
VICE PRESIDENT, SECRETARY AND GENERAL COUNSEL
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
3100 SANDERS ROAD
NORTHBROOK, ILLINOIS 60062
847/402-2400

(Name, Complete Address and Telephone Number of Agent for Service)

COPIES TO:

ANGELA M. KING, ESQUIRE DANIEL J. FITZPATRICK, ESQUIRE
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK DEAN WITTER REYNOLDS INC.
3100 SANDERS ROAD TWO WORLD TRADE CENTER
SUITE J5B NEW YORK, NEW YORK 10048
NORTHBROOK, ILLINOIS 60062

Approximate date of proposed public offering: As soon as practicable after the
effective date of the registration statement.

The registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the registration shall become effective on such
date as the Commission, acting pursuant to Section 8(a), may determine.

Title of Securities Being Registered: Units of interest in the Allstate Life of
New York Variable Annuity Account II

<PAGE>

ALLSTATE VARIABLE ANNUITY 3

ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
CUSTOMER SERVICE, P.O. BOX 94038
PALATINE, IL 60094-4038
TELEPHONE NUMBER: 1-800-256-9392 PROSPECTUS DATED FEBRUARY __, 2001

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

Allstate Life Insurance Company of New York ("Allstate New York") is offering
the Allstate Variable Annuity 3, an individual flexible premium deferred
variable annuity contract ("Contract"). This prospectus contains information
about the Contract that you should know before investing. Please keep it for
future reference.

The Contract offers 36 investment alternatives ("investment alternatives"). The
investment alternatives include 4 fixed account options ("Fixed Account
Options") and 32 variable sub-accounts ("Variable Sub-Accounts") of the
Allstae Life of New York Variable Annuity Account II ("Variable Account"). Each
Variable Sub-Account invests exclusively in shares of portfolios ("Portfolios")
of the following mutual funds ("Funds"):

- MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES (CLASS Y
SHARES)

- THE UNIVERSAL INSTITUTIONAL FUNDS, INC.

- VAN KAMPEN LIFE INVESTMENT TRUST

- AIM VARIABLE INSURANCE FUNDS

- ALLIANCE VARIABLE PRODUCTS SERIES FUND (CLASS B SHARES)

- PUTNAM VARIABLE TRUST (CLASS IB SHARES)

We (Allstate New York) have filed a Statement of Additional Information, dated
February __, 2001, with the Securities and Exchange Commission ("SEC "). It
contains more information about the Contract and is incorporated herein by
reference, which means that it is legally a part of this prospectus. Its table
of contents appears on page A-1 of this prospectus. For a free copy, please
write or call us at the address or telephone number above, or go to the SEC's
Web site (http://www.sec.gov). You can find other information and documents
about us, including documents that are legally a part of this prospectus, at the
SEC's Web site.

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

THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR
IMPORTANT DISAPPROVED THE SECURITIES DESCRIBED IN THIS PROSPECTUS, NOR
NOTICES HAS IT PASSED ON THE ACCURACY OR THE ADEQUACY OF THIS
PROSPECTUS. ANY ONE WHO TELLS YOU OTHERWISE IS COMMITTING A
FEDERAL CRIME.

INVESTMENT IN THE CONTRACTS INVOLVES INVESTMENT RISKS,
INCLUDING POSSIBLE LOSS OF PRINCIPAL.

THE CONTRACTS ARE AVAILABLE ONLY IN NEW YORK.

<PAGE>

TABLE OF CONTENTS
-------------------------------------------------------------------

PAGE
----------------------------------------------------------------------------

OVERVIEW

------------------------------------------------------------------------
Important Terms
------------------------------------------------------------------------
The Contract at a Glance
------------------------------------------------------------------------
How the Contract Works
------------------------------------------------------------------------
Expense Table
------------------------------------------------------------------------
Financial Information
------------------------------------------------------------------------
CONTRACT FEATURES
------------------------------------------------------------------------
The Contract
------------------------------------------------------------------------
Purchase of Contracts
------------------------------------------------------------------------
Contract Value
------------------------------------------------------------------------
Investment Alternatives

------------------------------------------------------------------------
The Variable Sub-Accounts
------------------------------------------------------------------------
The Fixed Account Options
------------------------------------------------------------------------
Transfers
------------------------------------------------------------------------
Expenses
------------------------------------------------------------------------
Access to Your Money
------------------------------------------------------------------------

Income Payments
------------------------------------------------------------------------
Death Benefits
------------------------------------------------------------------------
OTHER INFORMATION
------------------------------------------------------------------------
More Information:
------------------------------------------------------------------------
Allstate New York
------------------------------------------------------------------------
The Variable Account
------------------------------------------------------------------------
The Portfolios
------------------------------------------------------------------------
The Contract
------------------------------------------------------------------------
Qualified Plans
------------------------------------------------------------------------
Legal Matters
------------------------------------------------------------------------
Taxes
------------------------------------------------------------------------
Performance Information
------------------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION TABLE OF CONTENTS A-1
----------------------------------------------------------------------------
IMPORTANT TERMS
-------------------------------------------------------------------

This prospectus uses a number of important terms that you may not be familiar
with. The index below identifies the page that describes each term. The first
use of each term in this prospectus appears in highlights.

PAGE
------------------------------------------------------------------------

Accumulation Phase
------------------------------------------------------------------------
Accumulation Unit
------------------------------------------------------------------------
Accumulation Unit Value
------------------------------------------------------------------------
Allstate New York ("We")
------------------------------------------------------------------------
Annuitant
------------------------------------------------------------------------
Automatic Additions Program
------------------------------------------------------------------------
Automatic Portfolio Rebalancing Program
------------------------------------------------------------------------
Beneficiary
------------------------------------------------------------------------
Cancellation Period
------------------------------------------------------------------------
*Contract
------------------------------------------------------------------------
Contract Anniversary
------------------------------------------------------------------------
Contract Owner ("You")
------------------------------------------------------------------------
Contract Value
------------------------------------------------------------------------
Contract Year
------------------------------------------------------------------------
Death Benefit Anniversary
------------------------------------------------------------------------
Dollar Cost Averaging Fixed Account Options
------------------------------------------------------------------------
Dollar Cost Averaging Program
------------------------------------------------------------------------
Due Proof of Death
------------------------------------------------------------------------
Fixed Account Options
------------------------------------------------------------------------
Funds
------------------------------------------------------------------------
Income Plans
------------------------------------------------------------------------
Investment Alternatives
------------------------------------------------------------------------
Issue Date
------------------------------------------------------------------------
Payout Phase
------------------------------------------------------------------------
Payout Start Date
------------------------------------------------------------------------
Performance Death Benefit Option
------------------------------------------------------------------------
Portfolios
------------------------------------------------------------------------
Preferred Withdrawal Amount
------------------------------------------------------------------------

Qualified Contracts
------------------------------------------------------------------------
Right to Cancel
------------------------------------------------------------------------
SEC
------------------------------------------------------------------------
Settlement Value
------------------------------------------------------------------------
Systematic Withdrawal Program
------------------------------------------------------------------------
Valuation Date
------------------------------------------------------------------------
Variable Account
------------------------------------------------------------------------
Variable Sub-Account
------------------------------------------------------------------------

*The Contract is available only as a group Contract. We will issue you a
certificate that represents your ownership and that summarizes the provisions of
the group Contract. References to "Contract" in this prospectus include
certificates, unless the context requires otherwise.

<PAGE>

THE CONTRACT AT A GLANCE
-------------------------------------------------------------------

The following is a snapshot of the Contract. Please read the remainder of this
prospectus for more information.

<S> <C>
FLEXIBLE PAYMENTS You can purchase a Contract
with an initial purchase payment of
$1,000 or more. You can add to your
Contract as often and as much as you
like, but each payment must be at
least $100. You must maintain a
minimum account size of $500.

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

RIGHT TO CANCEL You may cancel your Contract within 10
days of receipt (pursuant to New York law, 60
days if you are exchanging another contract
for the Contract described in this prospectus)
("Cancellation Period"). Upon cancellation, we
will return your purchase payments adjusted, to
the extent state and federal law permit, to
reflect the investment experience of any amounts
allocated to the Variable Account.
------------------------------------------------------------------------------------

EXPENSES You will bear the following expenses:

- Total Variable Account annual
fees equal to 1.35% of average
daily net assets (1.48% if you
select the Performance Death
Benefit
Option)

- Annual contract maintenance charge of
$35 (waived in certain cases)

- Withdrawal charges ranging from
0% to 6% of purchase payment(s)
withdrawn (with certain exceptions)

- Transfer fee of $25 after the 12th
transfer in any Contract Year
(fee currently waived)

- State premium tax (New York currently
does not impose one).

In addition, each Portfolio pays
expenses that you will bear indirectly
if you invest in a Variable Sub-Account.

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

INVESTMENT ALTERNATIVES The Contract offers 36 investment alternatives including:

- 4 Fixed Account Options (which credit
interest at rates we guarantee)

- 32 Variable Sub-Accounts investing in
Portfolios offering professional money management by
these investment advisers:

- A I M ADVISORS, INC.
- ALLIANCE CAPITAL MANAGEMENT, L.P.
- MILLER ANDERSON & SHERRERD, LLP
- MORGAN STANLEY DEAN WITTER ADVISORS INC.
- MORGAN STANLEY ASSET MANAGEMENT
- PUTNAM INVESTMENT MANAGEMENT, INC.
- VAN KAMPEN ASSET MANAGEMENT INC.

To find out current rates being paid on
the Fixed Account Options, or to find out
how the Variable Sub-Accounts have performed,
call us at 1-800-256-9392.

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

SPECIAL SERVICES For your convenience, we offer these special services:

- AUTOMATIC ADDITIONS PROGRAM
- AUTOMATIC PORTFOLIO REBALANCING PROGRAM
- DOLLAR COST AVERAGING PROGRAM
- SYSTEMATIC WITHDRAWAL PROGRAM
------------------------------------------------------------------------------------

INCOME PAYMENTS You can choose fixed amount income payments,
variable amount income payments or a combination
of the two. You can receive your income payments
in one of the following ways:

- life income with guaranteed payments
- joint and survivor life income
- guaranteed payments for a specified period
------------------------------------------------------------------------------------

DEATH BENEFITS If you or the Annuitant dies before the Payout
Start Date, we will pay the death benefit described
in the Contract. We also offer a Performance Death
Benefit Option.

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

TRANSFERS Before the Payout Start Date, you may transfer your
Contract value ("Contract Value")among the investment
alternatives, with certain restrictions. Transfers
must be at least $100 or the total amount in the
investment alternative, whichever is less. Transfers to
an Guarantee Period of the Standard Fixed Account Option
must be at least $500.

We do not currently impose a fee upon transfers.
However, we reserve the right to charge $25 per
transfer after the 12th transfer in each
"Contract Year," which we measure from the date we
issue your Contract or a Contract anniversary ("Contract
Anniversary").
-----------------------------------------------------------------------------------

WITHDRAWALS You may withdraw some or all of your Contract
Value at any time during the Accumulation Phase
and under limited circumstances during the Payout
Phase. In general, you must withdraw at least $500
at a time or the total amount in the investment
alternative, if less ($1,000 for withdrawals made
during the Payout Phase). A 10% federal tax
penalty may apply if you make a withdrawal before
you are 59 1/2 years old. A withdrawal charge also
may apply.

</TABLE>

<PAGE>

HOW THE CONTRACT WORKS
-------------------------------------------------------------------

The Contract basically works in two ways.

First, the Contract can help you (we assume you are the "Contract Owner") save
for retirement because you can invest in up to 36 investment alternatives and
pay no federal income taxes on any earnings until you withdraw them. You do this
during what we call the "Accumulation Phase" of the Contract. The Accumulation
Phase begins on the date we issue your Contract (we call that date the "Issue
Date") and continues until the Payout Start Date, which is the date we apply
your money to provide income payments. During the Accumulation Phase you may
allocate your purchase payments to any combination of the Variable Sub-Accounts
and/or the Fixed Account Options. If you invest in any of the Fixed Account
Options you will earn a fixed rate of interest that we declare periodically. If
you invest in any of the Variable Sub-Accounts your investment return will vary
up or down depending on the performance of the corresponding Portfolios.

Second, the Contract can help you plan for retirement because you can use it to
receive retirement income for life, and/or for a pre-set number of years, by
selecting one of the income payment options (we call these "Income Plans")
described on page __. You receive income payments during what we call the
"Payout Phase" of the Contract, which begins on the Payout Start Date and
continues until we make the last payment required by the Income Plan you select.
During the Payout Phase, if you select a fixed amount income payment option, we
guarantee the amount of your payments, which will remain fixed. If you select a
variable amount income payment option, based on one or more of the Variable
Sub-Accounts, the amount of your payments will vary up or down depending on the
performance of the corresponding Portfolios. The amount of money you accumulate
under your Contract during the Accumulation Phase and apply to an Income Plan
will determine the amount of your income payments during the Payout Phase.

The timeline below illustrates how you might use your Contract.

ISSUE PAYOUT START
DATE ACCUMULATION PHASE DATE PAYOUT PHASE

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

<S> <C> <C> <C> <C>
You buy You save for You elect to receive You can receive Or you can receive
a Contract retirement payments or receive income payments income payments for
a lump sum payment for a set period payments for life

</TABLE>

As the Contract owner you exercise all of the rights and privileges provided by
the Contract. If you die, any surviving Contract owner or, if there is none, the
Beneficiary, will exercise the rights and privileges provided by the Contract.
See "The Contract." In addition, if you die before the Payout Start Date, we
will pay a death benefit to any surviving Contract owner or, if there is none,
to your Beneficiary. See "Death Benefits."

Please call us at 1-800-256-9392 if you have any question about how the Contract
works.

<PAGE>

EXPENSE TABLE
-------------------------------------------------------------------

The table below lists the expenses that you will bear directly or indirectly
when you buy a Contract. The table and the examples that follow do not reflect
premium taxes because New York currently does not impose premium taxes on
annuities. For more information about Variable Account expenses, see "Expenses,"
below. For more information about Portfolio management fees, please refer to the
accompanying prospectuses for the Funds.

CONTRACT OWNER TRANSACTION EXPENSES
Withdrawal Charge (as a percentage of purchase payments withdrawn)*

Number of Complete Years Since We Received the Purchase Payment Being Withdrawn:
0 1 2 3 4 5 6+
------------------------------------------------------------------------------
Applicable Charge: 6% 5% 5% 4% 3% 2% 0%
------------------------------------------------------------------------------
Annual Contract Maintenance Charge $35**
------------------------------------------------------------------------------
Transfer Fee $25***
------------------------------------------------------------------------------

*During each Contract Year you may withdraw up to 15% of the aggregate amount
of purchase payments as of the beginning of the Contract Year without
incurring a withdrawal charge.

**If your Contract Value equals or exceeds $40,000, we will waive the charge
for the remaining time your Contract is in force.

***Applies solely to the thirteenth and all subsequent transfers within a
Contract Year excluding transfers due to dollar cost averaging and automatic
portfolio rebalancing. We are currently waiving the transfer fee.

VARIABLE ACCOUNT ANNUAL EXPENSES
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSET VALUE
DEDUCTED FROM EACH VARIABLE SUB-ACCOUNT)

Without the Performance Death Benefit Option

Mortality and Expense Risk Charge 1.25%
----------------------------------------------------------------------
Administrative Expense Charge 0.10%
----------------------------------------------------------------------
Total Variable Account Annual Expenses 1.35%
----------------------------------------------------------------------

With the Performance Death Benefit Option

Mortality and Expense Risk Charge 1.38%
----------------------------------------------------------------------
Administrative Expense Charge 0.10%
----------------------------------------------------------------------
Total Variable Account Annual Expenses 1.48%
----------------------------------------------------------------------
PORTFOLIO ANNUAL EXPENSES (AFTER VOLUNTARY REDUCTIONS AND REIMBURSEMENTS)
(AS A PERCENTAGE OF PORTFOLIO AVERAGE DAILY NET ASSETS) (1)

Management Rule 12b-1 Other Total Portfolio
Portfolio Fees Fees Expenses Annual Expenses

---------------------------------------------------------------------------------------------------------------------------------
MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT
SERIES
(CLASS Y SHARES)(2)

<S> <C> <C> <C> <C>
Money Market 0.50% 0.25% 0.02% 0.77%
---------------------------------------------------------------------------------------------------------------------------------
Quality Income Plus 0.50% 0.25% 0.02% 0.77%
---------------------------------------------------------------------------------------------------------------------------------
Short-Term Bond 0.45% 0.25% 0.17% 0.87%
---------------------------------------------------------------------------------------------------------------------------------
High Yield 0.50% 0.25% 0.03% 0.78%
---------------------------------------------------------------------------------------------------------------------------------
Utilities 0.64% 0.25% 0.03% 0.92%
---------------------------------------------------------------------------------------------------------------------------------
Income Builder 0.75% 0.25% 0.06% 1.06%
---------------------------------------------------------------------------------------------------------------------------------
Dividend Growth 0.51% 0.25% 0.01% 0.77%
---------------------------------------------------------------------------------------------------------------------------------
Aggressive Equity 0.42% 0.25% 0.10% 0.77%
---------------------------------------------------------------------------------------------------------------------------------
Capital Growth 0.65% 0.25% 0.07% 0.97%
---------------------------------------------------------------------------------------------------------------------------------
Global Dividend Growth 0.75% 0.25% 0.08% 1.08%
---------------------------------------------------------------------------------------------------------------------------------
European Growth 0.95% 0.25% 0.09% 1.29%
---------------------------------------------------------------------------------------------------------------------------------
Pacific Growth 0.95% 0.25% 0.47% 1.67%
---------------------------------------------------------------------------------------------------------------------------------
Equity 0.49% 0.25% 0.02% 0.76%
---------------------------------------------------------------------------------------------------------------------------------
S&P 500 Index(3) 0.39% 0.25% 0.09% 0.73%
---------------------------------------------------------------------------------------------------------------------------------
Competitive Edge "Best Ideas" 0.44% 0.25% 0.12% 0.81%
---------------------------------------------------------------------------------------------------------------------------------
Strategist 0.50% 0.25% 0.02% 0.77%
---------------------------------------------------------------------------------------------------------------------------------
Information(4) 0.75% 0.25% 0.02% 1.02%
---------------------------------------------------------------------------------------------------------------------------------

THE UNIVERSAL INSTITUTIONAL FUNDS, INC.(5)
Emerging Markets Equity 0.42% -- 1.37% 1.79%
---------------------------------------------------------------------------------------------------------------------------------
Equity Growth 0.29% -- 0.56% 0.85%
---------------------------------------------------------------------------------------------------------------------------------
International Magnum 0.29% -- 0.87% 1.16%
---------------------------------------------------------------------------------------------------------------------------------
Mid-Cap Value 0.43% -- 0.62% 1.05%
---------------------------------------------------------------------------------------------------------------------------------
U.S. Real Estate 0.00% -- 1.10% 1.10%
---------------------------------------------------------------------------------------------------------------------------------
VAN KAMPEN LIFE INVESTMENT TRUST(6)
Emerging Growth 0.67% -- 0.18% 0.85%
---------------------------------------------------------------------------------------------------------------------------------
AIM VARIABLE INSURANCE FUNDS
AIM V.I. Capital Appreciation Fund 0.62% -- 0.11% 0.73%
---------------------------------------------------------------------------------------------------------------------------------
AIM V.I. Growth Fund 0.63% -- 0.10% 0.73%
---------------------------------------------------------------------------------------------------------------------------------
AIM V.I. Value Fund 0.61% -- 0.15% 0.76%
---------------------------------------------------------------------------------------------------------------------------------
ALLIANCE VARIABLE PRODUCTS SERIES FUND (Class B shares) (7)
Growth Portfolio 0.75% 0.25% 0.12% 1.12%
---------------------------------------------------------------------------------------------------------------------------------
Growth and Income Portfolio 0.63% 0.25% 0.09% 0.97%
---------------------------------------------------------------------------------------------------------------------------------
Premier Growth Portfolio 1.00% 0.25% 0.04% 1.29%
---------------------------------------------------------------------------------------------------------------------------------
PUTNAM VARIABLE TRUST (CLASS IB SHARES) (8)
Putnam VT Growth and Income Fund 0.46% 0.15% 0.04% 0.65%
---------------------------------------------------------------------------------------------------------------------------------
Putnam VT International Growth Fund 0.80% 0.15% 0.22% 1.17%
---------------------------------------------------------------------------------------------------------------------------------
Putnam VT Voyager Fund 0.53% 0.15% 0.04% 0.72%
---------------------------------------------------------------------------------------------------------------------------------
</TABLE>

(1) Figures shown in the Table are for the year ended December 31, 1999, unless
otherwise noted. Figures for the Information Portfolio, which commenced
operations on November 6, 2000 are based on estimates for the Portfolio's
current fiscal year.

(2) Class Y of the Morgan Stanley Dean Witter Variable Investment Series has a
distribution plan or "Rule 12b-1" plan as described in that Fund's
prospectus. Because no Class Y shares were issued as of December 31, 1999,
figures (other than "12b-1 fees") are based on the expenses of the Fund's
Class X shares for the fiscal year ended December 31, 1999, plus Class Y's
maximum annual Rule 12b-1 fee of 0.25%.

(3) Morgan Stanley Dean Witter Advisors Inc. has permanently undertaken to
assume all expenses of the S&P 500 Index Portfolio (except for brokerage
fees) and to waive the compensation provided in its management agreement
with the Fund to the extent that such expenses and compensation on an
annualized basis exceed .050% of the daily net assets of the S&P 500 Index
Portfolio.

(4) Prior to November 6, 2000, the Information Portfolio had not commenced
operations. Morgan Stanley Dean Witter Advisors Inc. has agreed to assume
all operating expenses (except for brokerage and 12b-1 fees) and waive the
compensation provided in its management agreement with the Fund until such
time as the Portfolio has $50 million in net assets or until April 15,
2001, whichever occurs first.

(5) Morgan Stanley Asset Management has voluntarily agreed to a reduction in its
management fees and to reimburse the Portfolios for which it acts as
investment adviser for certain expenses of the Portfolios. The adviser may
terminate this voluntary waiver at any time. Absent such reductions, the
management fees, other expenses, and total annual Portfolio expenses would
have been as follows:

Total
Annual

Management Other Portfolio
Fees Expenses Expenses

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

<S> <C> <C> <C>
Emerging Markets Equity 1.25% 1.37% 2.62%
-----------------------------------------------------------------------------------------------------------------------------
Equity Growth 0.55% 0.56% 1.11%
-----------------------------------------------------------------------------------------------------------------------------
International Magnum 0.80% 0.87% 1.67%
-----------------------------------------------------------------------------------------------------------------------------
Mid-Cap Value 0.75% 0.62% 1.37%
-----------------------------------------------------------------------------------------------------------------------------
U.S. Real Estate 0.80% 1.10% 1.90%
-----------------------------------------------------------------------------------------------------------------------------

</TABLE>

(6) Van Kampen Asset Management Inc. has voluntarily agreed to a reduction in
its management fees and to reimburse the Emerging Growth Portfolio for which
it acts as investment adviser if such fees would cause "Total Portfolio
Annual Expenses" to exceed the amount set forth in the table above. Absent
such reductions, the management fees, other expenses, and total annual
Portfolio expenses would have been 0.70%, 0.18%, and 0.88%, respectively.

(7) Class B of the Alliance Variable Products Series Fund has a distribution
plan or "Rule 12b-1 plan" as described in that Fund's prospectus. The Class
B shares were first issued on July 14, 1999.

(8) Figures shown in the table include amounts paid through expense offset and
brokerage service arrangements.

<PAGE>

EXAMPLE 1

The example below shows the dollar amount of expenses that you would bear
directly or indirectly if you:

- invested $1,000 in a Variable Sub-Account,

- earned a 5% annual return on your investment,

- surrendered your Contract or you began receiving income payments for a
specified period of less than 120 months at the end of each time period, and

- elected the Performance Death Benefit Option.

THE EXAMPLE ASSUMES THAT ANY PORTFOLIO EXPENSE WAIVERS OR REIMBURSEMENT
ARRANGEMENTS DESCRIBED IN THE FOOTNOTES ABOVE ARE IN EFFECT FOR THE TIME PERIODS
PRESENTED BELOW. THE EXAMPLE DOES NOT INCLUDE ANY TAXES OR TAX PENALTIES YOU MAY
BE REQUIRED TO PAY IF YOU SURRENDER YOUR CONTRACT. THE EXAMPLE DOES NOT INCLUDE
DEDUCTIONS FOR PREMIUM TAXES BECAUSE NEW YORK DOES NOT CHARGE PREMIUM TAXES ON
ANNUITIES.

Variable Sub-Account 1 Year 3 Years 5 Years 10 Years

-------------------------------------------------------------------------------------------------------
AIM VARIABLE INSURANCE FUNDS
<S> <C> <C> <C> <C>
AIM V.I. Capital Appreciation $ $ $ $
-------------------------------------------------------------------------------------------------------
AIM V.I. Growth $ $ $ $
-------------------------------------------------------------------------------------------------------
AIM V.I. Value $ $ $ $
-------------------------------------------------------------------------------------------------------
ALLIANCE VARIABLE PRODUCTS SERIES FUNDS
Alliance Growth $ $ $ $
-------------------------------------------------------------------------------------------------------
Alliance Growth and Income $ $ $ $
-------------------------------------------------------------------------------------------------------
Alliance Premier Growth $ $ $ $
-------------------------------------------------------------------------------------------------------
MORGAN STANLEY DEAN WITTER V.I.S
Money Market $ $ $ $
-------------------------------------------------------------------------------------------------------
Quality Income Plus $ $ $ $
-------------------------------------------------------------------------------------------------------
Short-Term Bond $ $ $ $
-------------------------------------------------------------------------------------------------------
High Yield $ $ $ $
-------------------------------------------------------------------------------------------------------
Utilities $ $ $ $
-------------------------------------------------------------------------------------------------------
Income Builder $ $ $ $
-------------------------------------------------------------------------------------------------------
Dividend Growth $ $ $ $
-------------------------------------------------------------------------------------------------------
Capital Growth $ $ $ $
-------------------------------------------------------------------------------------------------------
Global Dividend Growth $ $ $ $
-------------------------------------------------------------------------------------------------------
European Growth $ $ $ $
-------------------------------------------------------------------------------------------------------
Pacific Growth $ $ $ $
-------------------------------------------------------------------------------------------------------
Equity $ $ $ $
-------------------------------------------------------------------------------------------------------
S&P 500 Index $ $ $ $
-------------------------------------------------------------------------------------------------------
Competitive Edge "Best Ideas" $ $ $ $
-------------------------------------------------------------------------------------------------------
Strategist $ $ $ $
-------------------------------------------------------------------------------------------------------
Aggressive Equity $ $ $ $
-------------------------------------------------------------------------------------------------------
Information
--------------------------------------------------------------------------------------------------------

THE UNIVERSAL INSTITUTIONAL FUNDS, INC.
U.S. Real Estate $ $ $ $
-------------------------------------------------------------------------------------------------------
International Magnum $ $ $ $
-------------------------------------------------------------------------------------------------------
Equity Growth $ $ $ $
-------------------------------------------------------------------------------------------------------
Emerging Markets Equity $ $ $ $
-------------------------------------------------------------------------------------------------------
Mid-Cap Value $ $ $ $
-------------------------------------------------------------------------------------------------------
PUTNAM VARIABLE TRUST
Putnam VT Growth and Income $ $ $ $
-------------------------------------------------------------------------------------------------------
Putnam VT International Growth $ $ $ $
-------------------------------------------------------------------------------------------------------
Putnam VT Voyager $ $ $ $
-------------------------------------------------------------------------------------------------------
VAN KAMPEN LIFE INVESTMENT TRUST
Emerging Growth $ $ $ $
-------------------------------------------------------------------------------------------------------

EXAMPLE 2

Same assumptions as Example 1 above, except that you decided not to surrender
your Contract, or you began receiving income payments (for at least 120 months
if under an Income Plan with a specified period), at the end of each period.

Variable Sub-Account 1 Year 3 Years 5 Years 10 Years

-------------------------------------------------------------------------------------------------------
AIM VARIABLE INSURANCE FUNDS

AIM V.I. Capital Appreciation $ $ $ $
-------------------------------------------------------------------------------------------------------
AIM V.I. Growth $ $ $ $
-------------------------------------------------------------------------------------------------------
AIM V.I. Value $ $ $ $
-------------------------------------------------------------------------------------------------------
ALLIANCE VARIABLE PRODUCTS SERIES FUNDS
Alliance Growth $ $ $ $
-------------------------------------------------------------------------------------------------------
Alliance Growth and Income $ $ $ $
-------------------------------------------------------------------------------------------------------
Alliance Premier Growth $ $ $ $
-------------------------------------------------------------------------------------------------------
MORGAN STANLEY DEAN WITTER V.I.S
Money Market $ $ $ $
-------------------------------------------------------------------------------------------------------
Quality Income Plus $ $ $ $
-------------------------------------------------------------------------------------------------------
Short-Term Bond $ $ $ $
-------------------------------------------------------------------------------------------------------
High Yield $ $ $ $
-------------------------------------------------------------------------------------------------------
Utilities $ $ $ $
-------------------------------------------------------------------------------------------------------
Income Builder $ $ $ $
-------------------------------------------------------------------------------------------------------
Dividend Growth $ $ $ $
-------------------------------------------------------------------------------------------------------
Capital Growth $ $ $ $
-------------------------------------------------------------------------------------------------------
Global Dividend Growth $ $ $ $
-------------------------------------------------------------------------------------------------------
European Growth $ $ $ $
-------------------------------------------------------------------------------------------------------
Pacific Growth $ $ $ $
-------------------------------------------------------------------------------------------------------
Equity $ $ $ $
-------------------------------------------------------------------------------------------------------
S&P 500 Index $ $ $ $
-------------------------------------------------------------------------------------------------------
Competitive Edge "Best Ideas" $ $ $ $
-------------------------------------------------------------------------------------------------------
Strategist $ $ $ $
-------------------------------------------------------------------------------------------------------
Aggressive Equity $ $ $ $
-------------------------------------------------------------------------------------------------------
Information
--------------------------------------------------------------------------------------------------------

PLEASE REMEMBER THAT YOU ARE LOOKING AT EXAMPLES AND NOT A REPRESENTATION OF
PAST OR FUTURE EXPENSES. THE EXAMPLES ASSUME THAT ANY PORTFOLIO EXPENSE WAIVERS
OR REIMBURSEMENT ARRANGEMENTS DESCRIBED IN THE FOOTNOTES ON PAGES ___ - ___ ARE
IN EFFECT FOR THE TIME PERIODS PRESENTED ABOVE. YOUR ACTUAL EXPENSES MAY BE
LOWER OR GREATER THAN THOSE SHOWN ABOVE. SIMILARLY, YOUR RATE OF RETURN MAY BE
LOWER OR GREATER THAN 5%, WHICH IS NOT GUARANTEED. THE ABOVE EXAMPLES ASSUME THE
ELECTION OF THE PERFORMANCE DEATH BENEFIT OPTION, WITH A MORTALITY AND EXPENSE
RISK CHARGE OF 1.38%. IF THAT OPTION WERE NOT ELECTED, THE EXPENSE FIGURES SHOWN
ABOVE WOULD BE SLIGHTLY LOWER. TO REFLECT THE CONTRACT MAINTENANCE CHARGE IN THE
EXAMPLES, WE ESTIMATED AN EQUIVALENT PERCENTAGE CHARGE, BASED ON AN ASSUMED
AVERAGE CONTRACT SIZE OF $45,000.

<PAGE>

FINANCIAL INFORMATION
-------------------------------------------------------------------

To measure the value of your investment in the Variable Sub-Accounts during the
Accumulation Phase we use a unit of measure we call the "Accumulation Unit."
Each Variable Sub-Account has a separate value for its Accumulation Units we
call the "Accumulation Unit Value." Accumulation Unit Value is analogous to, but
not the same as, the share price of a mutual fund.

There are no Accumulation Unit Values to report because the Contracts were first
offered as of the date of this prospectus. The financial statements of the
Variable Account and Allstate New York appear in the Statement of Additional
Information.

<PAGE>

THE CONTRACT
-------------------------------------------------------------------

CONTRACT OWNER
The Allstate Variable Annuity 3 is a contract between you, the Contract owner,
and Allstate New York, a life insurance company. As the Contract owner, you may
exercise all of the rights and privileges provided to you by the Contract. That
means it is up to you to select or change (to the extent permitted):

- the investment alternatives during the Accumulation and Payout Phases,

- the amount and timing of your purchase payments and withdrawals,

- the programs you want to use to invest or withdraw money,

- the income payment plan you want to use to receive retirement income,

- the Annuitant (either yourself or someone else) on whose life the income
payments will be based,

- the Beneficiary or Beneficiaries who will receive the benefits that the
Contract provides when the last surviving Contract owner dies, and

- any other rights that the Contract provides.

If you die, any surviving Contract owner or, if none, the Beneficiary, will
exercise the rights and privileges provided to them by the Contract. The
Contract cannot be jointly owned by both a non-natural person and a natural
person. The maximum issue age of any Contract owner on the Issue Date for the
Contract without any rider is 90. If the Contract is owned by a non-natural
person, the maximum issue age of the Annuitant is 80.

If you select the Performance Death Benefit Option, the maximum age of any
Contract owner (or Annuitant, if the Contract owner is not a natural person) on
the date we issue the Contract rider is 80.

You can use the Contract with or without a qualified plan. A "qualified plan" is
a retirement savings plan, such as an IRA or tax-sheltered annuity, that meets
the requirements of the Internal Revenue Code. Qualified plans may limit or
modify your rights and privileges under the Contract. We use the term "Qualified
Contract" to refer to a Contract used with a qualified plan. See "Qualified
Plans" on page __.

ANNUITANT

The Annuitant is the individual whose life determines the amount and duration of
income payments (other than under Income Plans with guaranteed payments for a
specified period). The Annuitant must be a natural person.

You initially designate an Annuitant in your application. You may not designate
an Annuitant who is more than 80 years old at the time of designation. If the
Contract owner is a natural person, you may change the Annuitant at any time
prior to the Payout Start Date. Once we receive your change request, any change
will be effective at the time you sign the written notice. We are not liable for
any payment we make or other action we take before receiving any written request
from you. Before the Payout Start Date, you may designate a joint Annuitant, who
is a second person on whose life income payments depend. If the Annuitant dies
prior to the Payout Start Date, the new Annuitant will be the youngest Contract
owner, otherwise, the youngest Beneficiary, unless the Contract owner names a
different Annuitant.

BENEFICIARY

The Beneficiary is the person who may elect to receive the death benefit or
become the new Contract owner if the sole surviving Contract owner dies before
the Payout Start Date. If the sole surviving Contract owner dies after the
Payout Start Date, the Beneficiary will receive any guaranteed income payments
scheduled to continue.

You may name one or more Beneficiaries when you apply for a Contract. You may
change or add Beneficiaries at any time by writing to us, unless you have
designated an irrevocable Beneficiary. We will provide a change of Beneficiary
form to be signed and filed with us. Any change will be effective at the time
you sign the written notice, whether or not the Annuitant is living when we
receive the notice. Until we receive your written notice to change a
Beneficiary, we are entitled to rely on the most recent Beneficiary information
in our files. We will not be liable as to any payment or settlement made prior
to receiving the written notice. Accordingly, if you wish to change your
Beneficiary, you should deliver your written notice to us promptly.

If you did not name a Beneficiary or, if the named Beneficiary is no longer
living and there are no other surviving Beneficiaries, the new Beneficiary will
be:

- your spouse, if he or she is still alive, otherwise

- your surviving children equally, or if you have no surviving children,

- your estate.

If more than one Beneficiary survives you, (or the Annuitant, if the Contract
owner is not a natural person) we will divide the death benefit among your
Beneficiaries according to your most recent written instructions. If you have
not given us written instructions, we will pay the death benefit in equal
amounts to the surviving Beneficiaries.

MODIFICATION OF THE CONTRACT
Only an Allstate New York officer may approve a change in or waive any provision
of the Contract. Any change or waiver must be in writing. None of our agents has
the authority to change or waive the provisions of the Contract. We may not
change the terms of the Contract without your consent, except to conform the
Contract to applicable law or changes in the law. If a provision of the Contract
is inconsistent with state law, we will follow state law.

ASSIGNMENT

We will not honor an assignment of an interest in a Contract as collateral or
security for a loan. However, you may assign periodic income payments under the
Contract prior to the Payout Start Date. No Beneficiary may assign benefits
under the Contract until they are payable to the Beneficiary. We will not be
bound by any assignment until the assignor signs it and files it with us. We are
not responsible for the validity of any assignment. Federal law prohibits or
restricts the assignment of benefits under many types of retirement plans and
the terms of such plans may themselves contain restrictions on assignments. An
assignment may also result in taxes or tax penalties. YOU SHOULD CONSULT WITH AN
ATTORNEY BEFORE TRYING TO ASSIGN YOUR CONTRACT.

PURCHASES

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MINIMUM PURCHASE PAYMENTS
Your initial purchase payment must be at least $1,000. We may increase or
decrease this minimum in the future. You may make additional purchase payments
of at least $100 at any time prior to the Payout Start Date. We reserve the
right to lower the minimum and limit the maximum amount of purchase payments we
will accept. We also reserve the right to reject any application.

AUTOMATIC ADDITIONS PROGRAM
You may make subsequent purchase payments of at least $25 by automatically
transferring amounts from your bank account or your Morgan Stanley Dean Witter
Active Assets-TM- Account. Please consult your Morgan Stanley Dean Witter
Financial Advisor for details.

<PAGE>

ALLOCATION OF PURCHASE PAYMENTS
At the time you apply for a Contract, you must decide how to allocate your
purchase payments among the investment alternatives. The allocation you specify
on your application will be effective immediately. All allocations must be in
whole percentages that total 100% or in whole dollars. The minimum you may
allocate to any investment alternative is $100. The minimum amount that you may
allocate to the Guarantee Periods is $500. You can change your allocations by
notifying us in writing.

We will allocate your purchase payments to the investment alternatives according
to your most recent instructions on file with us. Unless you notify us in
writing otherwise, we will allocate subsequent purchase payments according to
the allocation for the previous purchase payment. We will effect any change in
allocation instructions at the time we receive written notice of the change in
good order.

We will credit the initial purchase payment that accompanies your completed
application to your Contract within 2 business days after we receive the payment
at our headquarters. If your application is incomplete, we will ask you to
complete your application within 5 business days. If you do so, we will credit
your initial purchase payment to your Contract within that 5 business day
period. If you do not, we will return your purchase payment at the end of the 5
business day period unless you expressly allow us to hold it until you complete
the application. We will credit subsequent purchase payments to the Contract on
the business day that we receive the purchase payment at our headquarters.

We use the term "business day" to refer to each day Monday through Friday that
the New York Stock Exchange is open for business. We also refer to these days as
"Valuation Dates." If we receive your purchase payment after 4 p.m. Eastern Time
(3 p.m. Central Time) on any Valuation Date, we will credit your purchase
payment using the Accumulation Unit Values computed on the next Valuation Date.

RIGHT TO CANCEL
You may cancel the Contract within the Cancellation Period, which is the 10-day
period after you receive the Contract (pursuant to New York law, 60 days if you
are exchanging another contract for the Contract described in this prospectus).
You may return it by delivering it or mailing it to us. If you exercise this
"Right To Cancel," the Contract terminates and we will pay you the full amount
of your purchase payments allocated to the Fixed Account Options. We also will
return your purchase payments allocated to the Variable Account after an
adjustment, to the extent state or federal law permits, to reflect the
investment gain or loss that occurred from the date of allocation through the
date of cancellation. If your Contract is qualified under Section 408 of the
Internal Revenue Code, we will refund the greater of any purchase payments or
the Contract Value.

<PAGE>

CONTRACT VALUE
-------------------------------------------------------------------

On the Issue Date, the Contract Value is equal to the initial purchase payment.
Thereafter, your Contract Value at any time during the Accumulation Phase is
equal to the sum of the value of your Accumulation Units in the Variable
Sub-Accounts you have selected, plus the value of your investment in the Fixed
Account Options.

ACCUMULATION UNITS
To determine the number of Accumulation Units of each Variable Sub-Account to
allocate to your Contract, we divide (i) the amount of the purchase payment or
transfer you have allocated to a Variable Sub-Account by (ii) the Accumulation
Unit Value of that Variable Sub-Account next computed after we receive your
payment or transfer. For example, if we receive a $10,000 purchase payment
allocated to a Variable Sub-Account when the Accumulation Unit Value for the
Sub-Account is $10, we would credit 1,000 Accumulation Units of that Variable
Sub-Account to your Contract. Withdrawals and transfers from a Variable
Sub-Account would, of course, reduce the number of Accumulation Units of that
Sub-Account allocated to your Contract.

ACCUMULATION UNIT VALUE
As a general matter, the Accumulation Unit Value for each Variable Sub-Account
will rise or fall to reflect:

- changes in the share price of the Portfolio in which the Variable Sub-Account
invests, and

- the deduction of amounts reflecting the mortality and expense risk charge,
administrative expense charge, and any provision for taxes that have accrued
since we last calculated the Accumulation Unit Value.

We determine contract maintenance charges, withdrawal charges and transfer fees
(currently waived) separately for each Contract. They do not affect Accumulation
Unit Value. Instead, we obtain payment of those charges and fees by redeeming
Accumulation Units. For details on how we calculate Accumulation Unit Value,
please refer to the Statement of Additional Information.

We determine a separate Accumulation Unit Value for each Variable Sub-Account on
each Valuation Date. We also determine a separate set of Accumulation Unit
Values that reflect the cost of the Performance Death Benefit Option.

YOU SHOULD REFER TO THE PROSPECTUSES FOR THE FUNDS THAT ACCOMPANY THIS
PROSPECTUS FOR A DESCRIPTION OF HOW THE ASSETS OF EACH PORTFOLIO ARE VALUED,
SINCE THAT DETERMINATION DIRECTLY BEARS ON THE ACCUMULATION UNIT VALUE OF THE
CORRESPONDING VARIABLE SUB-ACCOUNT AND, THEREFORE, YOUR CONTRACT VALUE.

<PAGE>

INVESTMENT ALTERNATIVES: THE VARIABLE SUB-ACCOUNTS
-------------------------------------------------------------------

You may allocate your purchase payments to up to 32 Variable Sub-Accounts. Each
Variable Sub-Account invests in the shares of a corresponding Portfolio. Each
Portfolio has its own investment objective(s) and policies. We briefly describe
the Portfolios below.

For more complete information about each Portfolio, including the investment
objective(s), expenses and risks associated with the Portfolio, please refer to
the accompanying prospectuses for the Funds. You should carefully review the
Fund prospectuses before allocating amounts to the Variable Sub-Accounts.

PORTFOLIO: EACH PORTFOLIO SEEKS: Investment Adviser
------------------------------------------- ---------------------------------------------
<S> <C> <C>
AIM VARIABLE INSURANCE FUNDS*
AIM V.I. Capital Appreciation Fund Growth of capital A I M Advisors,
AIM V.I. Growth Fund Growth of capital Inc.
AIM V.I. Value Fund Long-term growth of capital

ALLIANCE VARIABLE PRODUCTS SERIES FUND
Growth Portfolio Long-term growth of capital; Alliance Capital
current income is incidental Management, L.P.
to the Portfolio's objective
Growth and Income Portfolio Reasonable current income and
reasonable opportunity
for appreciation
Premier Growth Portfolio Growth of capital by pursuing
aggressive investment policies

MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES
Money Market Portfolio High current income, Morgan Stanley Dean
preservation of capital, Witter Advisors Inc.
and liquidity
Quality Income Plus Portfolio High current income and,
as a secondary
objective, capital
appreciation when
consistent with its
primary objective
Short-Term Bond Portfolio High current income consistent
with preservation of capital
High Yield Portfolio High current income and, as a
secondary objective,
capital appreciation
when consistent with its
primary objective
Utilities Portfolio Current income and long term growth
of income and capital
Income Builder Portfolio Reasonable income and, as a secondary
objective, growth of capital
Dividend Growth Portfolio Reasonable current income and long-term
growth of income and capital
Capital Growth Portfolio Long-term capital growth
Global Dividend Growth Portfolio Reasonable current income and long-term
growth of income and capital
European Growth Portfolio To maximize the capital appreciation
on its investments

Pacific Growth Portfolio To maximize the capital appreciation on its
investments
Aggressive Equity Portfolio Capital Growth
Equity Portfolio Growth of capital and, as a secondary
objective, income when consistent with its
primary objective.
S&P 500 Index Investment results that, before expenses,
correspond to the total return of the
Standard and Poor's 500 Composite Stock
Price Index
Competitive Edge "Best Ideas" Portfolio Long-term capital growth
Strategist Portfolio High total investment return
Information Portfolio Long-term capital appreciation

THE UNIVERSAL INSTITUTIONAL FUNDS, INC.
Equity Growth Portfolio Long-term capital appreciation Morgan Stanley Asset Management
U.S. Real Estate Portfolio Above-average current income and long-term
capital appreciation
International Magnum Portfolio Long-term capital appreciation
Emerging Markets Equity Portfolio Long-term capital appreciation

Mid-Cap Value Portfolio Above-average total return Miller
over a market cycle of three Anderson &
to five years Sherrerd, LLP

PUTNAM VARIABLE TRUST Putnam Investment Management, Inc.
Putnam VT Growth and Income Fund Capital growth and current income
Putnam VT International Growth Fund Capital growth
Putnam VT Voyager Fund Capital appreciation

VAN KAMPEN LIFE INVESTMENT TRUST VanKampen Asset Management Inc.
Emerging Growth Portfolio Capital appreciation

</TABLE>

* A Portfolio's investment objective may be changed by the Fund's Board of
Trustees without shareholder approval.

AMOUNTS YOU ALLOCATE TO VARIABLE SUB-ACCOUNTS MAY GROW IN VALUE, DECLINE IN
VALUE, OR GROW LESS THAN YOU EXPECT, DEPENDING ON THE INVESTMENT PERFORMANCE OF
THE PORTFOLIOS IN WHICH THOSE VARIABLE SUB-ACCOUNTS INVEST. YOU BEAR THE
INVESTMENT RISK THAT THE PORTFOLIOS MIGHT NOT MEET THEIR INVESTMENT OBJECTIVES.
SHARES OF THE PORTFOLIOS ARE NOT DEPOSITS, OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY ANY BANK AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY.

<PAGE>

INVESTMENT ALTERNATIVES: THE FIXED ACCOUNT OPTIONS
-------------------------------------------------------------------

You may allocate all or a portion of your purchase payments to the Fixed Account
Options. You may choose from among 4 Fixed Account Options including 3 dollar
cost averaging options ("Dollar Cost Averaging Fixed Account Options") and the
option to invest in one or more Guarantee Periods of the Standard Fixed Account
Option. Allstate New York is currently limiting the availability of the 6 and 12
Month Dollar Cost Averaging Fixed Account Options. We may offer them in the
future at our sole discretion. Please consult with your Morgan Stanley Dean
Witter Financial Advisor for current information. The Fixed Account supports our
insurance and annuity obligations. The Fixed Account consists of our general
assets other than those in segregated asset accounts. We have sole discretion to
invest the assets of the Fixed Account, subject to applicable law. Any money you
allocate to a Fixed Account Option does not entitle you to share in the
investment experience of the Fixed Account.

Allstate New York reserves the right to delete or add Fixed Account Options.

DOLLAR COST AVERAGING FIXED ACCOUNT OPTIONS

BASIC DOLLAR COST AVERAGING OPTION. You may establish a Dollar Cost Averaging
Program, as described on page __, by allocating purchase payments to the Basic
Dollar Cost Averaging Option. Purchase payments that you allocate to the Basic
Dollar Cost Averaging Option will earn interest for a 1 year period at the
current rate in effect at the time of allocation. We will credit interest daily
at a rate that will compound over the year to the annual interest rate we
guaranteed at the time of allocation. Rates may be different than those
available for the Guarantee Periods described below. After the one year period,
we will declare a renewal rate which we guarantee for a full year. Subsequent
renewal dates will be every twelve months for each purchase payment. Renewal
rates will not be less than the minimum guaranteed rate found in the Contract.

You may not transfer funds from other investment alternatives to the Basic
Dollar Cost Averaging Option.

6 AND 12 MONTH DOLLAR COST AVERAGING OPTIONS. You also may establish a Dollar
Cost Averaging Program by allocating purchase payments to the Fixed Account
either for 6 months (the "6 Month Dollar Cost Averaging Option") or for 12
months (the "12 Month Dollar Cost Averaging Option"). Your purchase payments
will earn interest for the period you select at the current rates in effect at
the time of allocation. Rates may differ from those available for the Guarantee
Periods described below. However, the crediting rates for the 6 and 12 Month
Dollar Cost Averaging Options will never be less than the minimum guaranteed
rate found in the Contract.

You must transfer all of your money out of the 6 or 12 Month Dollar Cost
Averaging Options to the Variable Sub-Accounts in equal monthly installments. If
we do not receive an allocation from you within one month of the date of
payment, the payment plus associated interest will be transferred to the Money
Market Variable Sub-Account in equal monthly installments using the longest
transfer period being offered at the time the purchase payment is made. If you
discontinue a 6 or 12 Month Dollar Cost Averaging Option prior to last scheduled
transfer, we will transfer any remaining money immediately to the Money Market
Variable Sub-Account, unless you request a different Variable Sub-Account.

You may not transfer funds from other investment alternatives to the 6 or 12
Month Dollar Cost Averaging Options.

Transfers out of the Dollar Cost Averaging Fixed Account Options do not count
towards the 12 transfers you can make without paying a transfer fee.

We may declare more than one interest rate for different monies based upon the
date of allocation to the Dollar Cost Averaging Fixed Account Options. For
current interest rate information, please contact your Morgan Stanley Dean
Witter Financial Advisor or our customer support unit at 1-800-256-9392.

STANDARD FIXED ACCOUNT OPTION
You may allocate purchase payments or transfers to one or more Guarantee Periods
of the Standard Fixed Account Option. Each payment or transfer allocated to a
Guarantee Period earns interest at a specified rate that we guarantee for a
period of years. We currently offer a 6 year Guarantee Period. In the future we
may offer Guarantee Periods of different lengths or stop offering some Guarantee
Periods.

INTEREST RATES. We will tell you what interest rates and Guarantee Periods we
are offering at a particular time. We will not change the interest rate that we
credit to a particular allocation until the end of the relevant Guarantee
Period. We may declare different interest rates for Guarantee Periods of the
same length that begin at different times.

We have no specific formula for determining the rate of interest that we will
declare initially or in the future. We will set those interest rates based on
investment returns available at the time of the determination. In addition, we
may consider various other factors in determining interest rates including
regulatory and tax requirements, our sales commission and administrative
expenses, general economic trends, and competitive factors. We determine the
interest rates to be declared in our sole discretion. We can neither predict nor
guarantee what those rates will be in the future. For current interest rate
information, please contact your Morgan Stanley Dean Witter Financial Advisor or
our customer support unit at 1-800-256-9392. The interest rate will never be
less than the minimum guaranteed rate stated in the Contract.

After the Guarantee Period, we will declare a renewal rate. 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.

INVESTMENT ALTERNATIVES: TRANSFERS
-------------------------------------------------------------------

TRANSFERS DURING THE ACCUMULATION PHASE
During the Accumulation Phase, you may transfer the Contract Value among the
investment alternatives. You may not transfer Contract Value into any of the
Dollar Cost Averaging Fixed Account Options. You may request transfers in
writing on a form that we provide or by telephone according to the procedure
described below. The minimum amount that you may transfer is $100 or the total
amount in the investment alternative, whichever is less. Transfers to any
Guarantee Period of the Standard Fixed Account Option must be at least $500. We
currently do not assess, but reserve the right to assess, a $25 charge on each
transfer in excess of 12 per Contract Year. We will notify you at least 30 days
before we begin imposing the transfer charge. We treat transfers to or from more
than one Portfolio on the same day as one transfer. Transfers out of the Dollar
Cost Averaging Fixed Account Options do not count towards the 12 free transfers
you can make without paying a transfer fee. We reserve the right to waive any
transfer fees and restrictions.

We limit the amount you may transfer from the Standard Fixed Account Option to
the Variable Account or between Guarantee Periods of the Standard Fixed Account
Option in any Contract Year to the greater of:

1. 25% of the aggregate value in the Standard Fixed Account Option as of the
most recent Contract Anniversary (if the amount is less than $1,000, then up to
$1,000 may be transferred); or

2. 25% of the sum of all purchase payments and transfers allocated to the
Standard Fixed Account Option as of the most recent Contract Anniversary.

These restrictions do not apply to transfers pursuant to dollar cost averaging.
If the first renewal interest rate is less than the rate that was in effect at
the time money was allocated or transferred to the Standard Fixed Account
Option, we will waive the transfer restriction for that money and the
accumulated interest thereon during the 60-day period following the first
renewal date.

We will process transfer requests that we receive before 4:00 p.m. Eastern Time
(3:00 p.m. Central Time) on any Valuation Date using the Accumulation Unit
Values for that Date. We will process requests received after 4:00 p.m. Eastern
Time on any Valuation Date using the Accumulation Unit Values for the next
Valuation Date. The Contract permits us to defer transfers from the Fixed
Account Options for up to 6 months from the date we receive your request. If we
decide to postpone transfers for 10 days or more, we will pay interest as
required by applicable law. Any interest would be payable from the date we
receive the transfer request to the date we make the transfer.

LIMITATIONS ON EXCESSIVE TRANSFERS
We reserve the right to limit transfers among the Variable Sub-Accounts if we
determine, in our sole discretion, that transfers by one or more Contract owners
would be to the disadvantage of other Contract owners. We may limit transfers by
taking such steps as:

- imposing a minimum time period between each transfer,

- refusing to accept transfer requests of an agent acting under a power of
attorney on behalf of more than one Contract owner, or

- limiting the dollar amount that a Contract owner may transfer among the
Variable Sub-Accounts and the Fixed Account Options at any one time.

We may apply the restrictions in any manner reasonably designed to prevent
transfers that we consider disadvantageous to other Contract owners.

TRANSFERS DURING THE PAYOUT PHASE
During the Payout Phase, you may make transfers among the Variable Sub-Accounts
so as to change the relative weighting of the Variable Sub-Accounts on which
your variable amount income payments will be based. In addition, you will have a
limited ability to make transfers from the Variable Sub-Accounts to increase the
proportion of your income payments consisting of fixed amount income payments.
You may not, however, convert any portion of your right to receive fixed amount
income payments into variable amount income payments.

You may not make any transfers for the first 6 months after the Payout Start
Date. Thereafter, you may make transfers among the Variable Sub-Accounts or make
transfers from the Variable Sub-Accounts to increase the proportion of your
income payments consisting of fixed amount income payments. Your transfers must
be at least 6 months apart.

TELEPHONE TRANSFERS
You may make transfers by telephone by calling 1-800-256-9392 if you have on
file a completed authorization form. The cut off time for telephone transfer
requests is 4:00 p.m. Eastern Time (3:00 p.m. Central Time). In the event that
the New York Stock Exchange closes early, i.e., before 4:00 p.m. Eastern Time,
or in the event that the Exchange closes early for a period of time but then
reopens for trading on the same day, we will process telephone transfer requests
as of the close of the Exchange on that particular day. We will not accept
telephone requests received at any telephone number other than the number that
appears in this paragraph or received after the close of trading on the
Exchange.

We may suspend, modify or terminate the telephone transfer privilege at any time
without notice.

We use procedures that we believe provide reasonable assurance that the
telephone transfers are genuine. For example, we tape telephone conversations
with persons purporting to authorize transfers and request identifying
information. Accordingly, we disclaim any liability for losses resulting from
allegedly unauthorized telephone transfers. However, if we do not take
reasonable steps to help ensure that a telephone authorization is valid, we may
be liable for such losses.

DOLLAR COST AVERAGING PROGRAM
Through our Dollar Cost Averaging Program, you may automatically transfer a set
amount every month (or other intervals we may offer) during the Accumulation
Phase from any Variable Sub-Account or the Dollar Cost Averaging Fixed Account
Options to any Variable Sub-Account. Transfers made through dollar cost
averaging must be $100 or more.

We will not charge a transfer fee for transfers made under this Program, nor
will such transfers count against the 12 transfers you can make each Contract
Year without paying a transfer fee.

The theory of dollar cost averaging is that if purchases of equal dollar amounts
are made at fluctuating prices, the aggregate average cost per unit will be less
than the average of the unit prices on the same purchase dates. However,
participation in this Program does not assure you of a greater profit from your
purchases under the Program nor will it prevent or necessarily reduce losses in
a declining market. Call or write us for information on how to enroll.

AUTOMATIC PORTFOLIO REBALANCING PROGRAM
Once you have allocated your money among the Variable Sub-Accounts, the
performance of each Sub-Account may cause a shift in the percentage you
allocated to each Sub-Account. If you select our Automatic Portfolio Rebalancing
Program, we will automatically rebalance the Contract Value in each Variable
Sub-Account and return it to the desired percentage allocations. We will not
include money you allocate to the Fixed Account Options in the Automatic
Portfolio Rebalancing Program.

We will rebalance your account each quarter (or other intervals that we may
offer) according to your instructions. We will transfer amounts among the
Variable Sub-Accounts to achieve the percentage allocations you specify. You can
change your allocations at any time by contacting us in writing or by telephone.
The new allocation will be effective with the first rebalancing that occurs
after we receive your requests. We are not responsible for rebalancing that
occurs prior to receipt of your request.

Example:

Assume that you want your initial purchase payment split among 2 Variable
Sub-Accounts. You want 40% to be in the High Yield Variable Sub-Account and
60% to be in the Equity Growth Variable Sub-Account. Over the next 2 months
the bond market does very well while the stock market performs poorly. At
the end of the first quarter, the High Yield Variable Sub-Account now
represents 50% of your holdings because of its increase in value. If you
choose to have your holdings rebalanced quarterly, on the first day of the
next quarter, we would sell some of your units in the High Yield Variable
Sub-Account and use the money to buy more units in the Equity Growth
Variable Sub-Account so that the percentage allocations would again be 40%
and 60% respectively.

The Automatic Portfolio Rebalancing Program is available only during the
Accumulation Phase. The transfers made under the Program do not count towards
the 12 transfers you can make each Contract Year without paying a transfer fee,
and are not subject to a transfer fee.

Portfolio rebalancing is consistent with maintaining your allocation of
investments among market segments, although it is accomplished by reducing your
Contract Value allocated to the better performing segments.

EXPENSES

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

As a Contract owner, you will bear, directly or indirectly, the charges and
expenses described below.

CONTRACT MAINTENANCE CHARGE
During the Accumulation Phase, on each Contract Anniversary, we will deduct a
$35 contract maintenance charge from your Contract Value. The charge will be
deducted on a pro-rata basis from each Variable Sub-Account in the proportion
that your investment in each bears to your Contract Value. We also will deduct a
full contract maintenance charge if you withdraw your entire Contract Value.
During the Payout Phase, we will deduct the charge proportionately from each
variable income payment. We will waive the charge for the remaining time your
contract is in force if the Contract Value is $40,000 or more on or after the
Issue Date.

The charge is to compensate us for the cost of administering the Contracts and
the Variable Account. Maintenance costs include expenses we incur in billing and
collecting purchase payments; keeping records; processing death claims, cash
withdrawals, and policy changes; proxy statements; calculating Accumulation Unit
Values and income payments; and issuing reports to Contract owners and
regulatory agencies. We cannot increase the charge.

MORTALITY AND EXPENSE RISK CHARGE
We deduct a mortality and expense risk charge daily at an annual rate of 1.25%
of the average daily net assets you have invested in the Variable Sub-Accounts
(1.38% if you select the Performance Death Benefit Option). The mortality and
expense risk charge is for all the insurance benefits available with your
Contract (including our guarantee of annuity rates and the death benefits), for
certain expenses of the Contract, and for assuming the risk (expense risk) that
the current charges will not be sufficient in the future to cover the cost of
administering the Contract. If the charges under the Contract are not
sufficient, then we will bear the loss. We charge an additional amount for the
Performance Death Benefit Option to compensate us for the additional risk that
we accept by providing this Option.

We will not increase the mortality and expense risk charge for the life of the
Contract. We assess the mortality and expense risk charge during both the
Accumulation Phase and the Payout Phase.

ADMINISTRATIVE EXPENSE CHARGE
We deduct an administrative expense charge daily at an annual rate of 0.10% of
the average daily net assets you have invested in the Variable Sub-Accounts. We
will not increase the administrative expense charge for the life of the
Contract. We intend this charge to cover actual administrative expenses that
exceed the revenues from the contract maintenance charge. There is no necessary
relationship between the amount of administrative charge imposed on a given
Contract and the amount of expenses that may be attributed to that Contract. We
assess this charge each day during the Accumulation Phase and the Payout Phase.

TRANSFER FEE
We do not currently impose a fee upon transfers among the investment
alternatives. However, we reserve the right to charge $25 per transfer after the
12th transfer in each Contract Year. We will not charge a transfer fee on
transfers that are part of a Dollar Cost Averaging or Automatic Portfolio
Rebalancing Program.

WITHDRAWAL CHARGE
We may assess a withdrawal charge of up to 6% of the purchase payment(s) you
withdraw. This charge declines to 0% after the expiration of 6 years from the
day we receive the purchase payment being withdrawn. A schedule showing how the
withdrawal charge declines over the 6-year period is shown on page __. During
each Contract Year, you can withdraw up to 15% of the aggregate amount of your
purchase payments as of the beginning of the Contract Year, without paying the
charge. Unused portions of this Preferred Withdrawal Amount are not carried
forward to future Contract Years.

We will deduct withdrawal charges, if applicable, from the amount paid, unless
you instruct otherwise. For purposes of the withdrawal charge, we will treat
withdrawals as coming from the oldest purchase payments first. However, for
federal income tax purposes, please note that withdrawals are considered to have
come first from earnings, which means you pay taxes on the earnings portion of
your withdrawal.

We do not apply a withdrawal charge in the following situations:

- on the Payout Start Date (a withdrawal charge may apply if you elect to
receive income payments for a specified period of less than 120 months); and

- the death of the Contract owner or Annuitant (unless the Settlement Value is
used); or

- withdrawals taken to satisfy IRS minimum distribution rules for the Contract.
This waiver does not apply to Contracts owned by an Individual Retirement
Account.

We use the amounts obtained from the withdrawal charge to pay sales commissions
and other promotional or distribution expenses associated with marketing the
Contracts. To the extent that the withdrawal charge does not cover all sales
commissions and other promotional or distribution expenses, we may use any of
our corporate assets, including potential profit which may arise from the
mortality and expense risk charge or any other charges or fee described above,
to make up any difference.

Withdrawals also may be subject to tax penalties or income tax. You should
consult your own tax counsel or other tax advisers regarding any withdrawals.

PREMIUM TAXES
Currently, we do not make deductions for premium taxes under the Contract
because New York does not charge premium taxes on annuities. We may deduct taxes
that may be imposed in the future from the purchase payments or the Contract
Value when the tax is incurred or at a later time.

DEDUCTION FOR VARIABLE ACCOUNT INCOME TAXES
We are not currently making a provision for taxes. In the future, however, we
may make a provision for taxes if we determine, in our sole discretion, that we
will incur a tax as a result of the operation of the Variable Account. We will
deduct for any taxes we incur as a result of the operation of the Variable
Account, whether or not we previously made a provision for taxes and whether or
not it was sufficient. Our status under the Internal Revenue Code is briefly
described in the Statement of Additional Information.

OTHER EXPENSES
Each Portfolio deducts advisory fees and other expenses from its assets. You
indirectly bear the charges and expenses of the Portfolios whose shares are held
by the Variable Sub-Accounts. These fees and expenses are described in the
accompanying prospectuses for the Funds. For a summary of current estimates of
those charges and expenses, see pages __ - __ above. We may receive compensation
from the investment advisers or administrators of the Portfolios for
administrative services we provide to the Portfolios.

ACCESS TO YOUR MONEY
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You can withdraw some or all of your Contract Value at any time during the
Accumulation Phase. Withdrawals also are available under limited circumstances
on or after the Payout Start Date. See "Income Plans" on page __.

You can withdraw money from the Variable Account and/or the Fixed Account
Options. The amount payable upon withdrawal is the Contract Value (or portion
thereof) next computed after we receive the request for a withdrawal at our
headquarters, less any withdrawal charges, contract maintenance charges, income
tax withholding, penalty tax, and any premium taxes. To complete a partial
withdrawal from the Variable Account, we will cancel Accumulation Units in an
amount equal to the withdrawal and any applicable charges and taxes. We will pay
withdrawals from the Variable Account within 7 days of receipt of the request,
subject to postponement in certain circumstances.

Withdrawals also may be subject to income tax and a 10% penalty tax, as
described below.

You must name the investment alternative from which you are taking the
withdrawal. If none is named, then the withdrawal request is incomplete and
cannot be honored. In general, you must withdraw at least $500 at a time. You
may also withdraw a lesser amount if you are withdrawing your entire interest in
a Variable Sub-Account.

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.

POSTPONEMENT OF PAYMENTS
We may postpone the payment of any amounts due from the Variable Account under
the Contract if:

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 SEC; or

3. The SEC permits delay for your protection.

In addition, we may delay payments or transfers from the Fixed Account Options
for up to 6 months or shorter period if required by law. If we delay payment or
transfer for 10 days or more, we will pay interest as required by applicable
law. Any interest would be payable from the date we receive the withdrawal
request to the date we make the payment or transfer.

SYSTEMATIC WITHDRAWAL PROGRAM
You may choose to receive systematic withdrawal payments on a monthly basis at
any time prior to the Payout Start Date. The minimum amount of each systematic
withdrawal is $100. We will deposit systematic withdrawal payments into the
Contract owner's bank account or Morgan Stanley Dean Witter Active Assets-TM-
Account. Please consult with your Morgan Stanley Dean Witter Financial Advisor
for details.

Depending on fluctuations in the value of the Variable Sub-Accounts and the
value of the Fixed Account Options, systematic withdrawals may reduce or even
exhaust the Contract Value. Income taxes may apply to systematic withdrawals.
Please consult your tax advisor before taking any withdrawal.

We may modify or suspend the Systematic Withdrawal Program and charge a
processing fee for the service. If we modify or suspend the Systematic
Withdrawal Program, existing systematic withdrawal payments will not be
affected.

MINIMUM CONTRACT VALUE
If your request for a partial withdrawal would reduce your Contract Value to
less than $500, we may treat it as a request to withdraw your entire Contract
Value. Your Contract will terminate if you withdraw all of your Contract Value.
We will, however, ask you to confirm your withdrawal request before terminating
your Contract. If we terminate your Contract, we will distribute to you its
Contract Value, less any applicable charges and taxes.

INCOME PAYMENTS
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PAYOUT START DATE
The Payout Start Date is the day that we apply your Contract Value, less
applicable taxes, to an Income Plan. The Payout Start Date must be:

- at least 30 days after the Issue Date; and

- no later than the first day of the calendar month after the Annuitant's
90th Birthday.

You may change the Payout Start Date at any time by notifying us in writing of
the change at least 30 days before the scheduled Payout Start Date. Absent a
change, we will use the Payout Start Date stated in your Contract.

INCOME PLANS
An "Income Plan" is a series of payments on a scheduled basis to you or to
another person designated by you. You may choose and change your choice of
Income Plan until 30 days before the Payout Start Date. If you do not select an
Income Plan, we will make income payments in accordance with Income Plan 1 with
guaranteed payments for 10 years. After the Payout Start Date, you may not make
withdrawals (except as described below) or change your choice of Income Plan.

Three Income Plans are available under the Contract. Each is available to
provide:

- fixed amount income payments;

- variable amount income payments; or

- a combination of the two.

The three Income Plans are:

INCOME PLAN 1 -- LIFE INCOME WITH GUARANTEED PAYMENTS. Under this plan, we make
periodic income payments for at least as long as the Annuitant lives. If the
Annuitant dies before we have made all of the guaranteed income payments, we
will continue to pay the remainder of the guaranteed income payments as required
by the Contract.

INCOME PLAN 2 -- JOINT AND SURVIVOR LIFE INCOME. Under this plan, we make
periodic income payments for as long as either the Annuitant or the joint
Annuitant is alive.

INCOME PLAN 3 -- GUARANTEED PAYMENTS FOR A SPECIFIED PERIOD. Under this plan, we
make periodic income payments for the period you have chosen. These payments do
not depend on the Annuitant's life. A withdrawal charge may apply if the
specified period is less than 10 years. We will deduct the mortality and expense
risk charge from the assets of the Variable Account supporting this Income Plan
even though we may not bear any mortality risk.

The length of any guaranteed payment period under your selected Income Plan
generally will affect the dollar amounts of each income payment. As a general
rule, longer guaranteed periods result in lower income payments, all other
things being equal. For example, if choose an Income Plan with payments that
depend on the life of the Annuitant but with no minimum specified period for
guaranteed payments, the income payments generally will be greater than the
income payments made under the same Income Plan with a minimum specified period
for guaranteed payments.

We may make other Income Plans available including ones that you and we agree
upon. You may obtain information about them by writing or calling us.

If you choose Income Plan 1 or 2, or, if available, another Income Plan with
payments that continue for the life of the Annuitant or joint Annuitant, we may
require proof of age and sex of the Annuitant or joint Annuitant before starting
income payments, and proof that the Annuitant or joint Annuitant is still alive
before we make each payment. Please note that under such Income Plans, if you
elect to take no minimum guaranteed payments, it is possible that the payee
could receive only 1 income payment if the Annuitant and any joint Annuitant
both die before the second income payment, or only 2 income payments if they die
before the third income payment, and so on.

Generally, you may not make withdrawals after the Payout Start Date. One
exception to this rule applies if you are receiving income payments that do not
depend on the life of the Annuitant (such as under Income Plan 3). In that case
you may terminate all or part of the Variable Account portion of the income
payments at any time and receive a lump sum equal to the present value of the
remaining variable payments associated with the amount withdrawn. To determine
the present value of any remaining variable amount income payments being
withdrawn, we use a discount rate equal to the assumed annual investment rate
that we use to compute such variable income payments. The minimum amount you may
withdraw under this feature is $1,000. A withdrawal charge may apply.

You must apply at least the Contract Value in the Fixed Account Options on the
Payout Start Date to fixed amount income payments. If you wish to apply any
portion of your Fixed Account Options balance to provide variable amount income
payments, you should plan ahead and transfer that amount to the Variable
Sub-Accounts prior to the Payout Start Date. If you do not tell us how to
allocate your Contract Value among fixed and variable amount income payments, we
will apply your Contract Value in the Variable Account to variable amount income
payments and your Contract Value in the Fixed Account Options to fixed amount
income payments.

We will apply your Contract Value, less applicable taxes, to your Income Plan on
the Payout Start Date. If the amount available to apply under an Income Plan is
less than $2,000, or not enough to provide an initial payment of at least $20,
and state law permits, we may:

- terminate the Contract and pay you the Contract Value, less any applicable
taxes, in a lump sum instead of the periodic payments you have chosen, or

- reduce the frequency of your payments so that each payment will be at least
$20.

VARIABLE AMOUNT INCOME PAYMENTS
The amount of your variable amount income payments depends upon the investment
results of the Variable Sub-Accounts you select, the premium taxes you pay, the
age and sex of the Annuitant, and the Income Plan you choose. We guarantee that
the payments will not be affected by (a) actual mortality experience and (b) the
amount of our administration expenses.

We cannot predict the total amount of your variable amount income payments. Your
variable amount income payments may be more or less than your total purchase
payments because (a) variable amount income payments vary with the investment
results of the underlying Portfolios, and (b) the Annuitant could live longer or
shorter than we expect based on the tables we use.

In calculating the amount of the periodic payments in the annuity tables in the
Contract, we assumed an annual investment rate of 3%. If the actual net
investment return of the Variable Sub-Accounts you choose is less than this
assumed investment rate, then the dollar amount of your variable amount income
payments will decrease. The dollar amount of your variable amount income
payments will increase, however, if the actual net investment return exceeds the
assumed investment rate. The dollar amount of the variable amount income
payments stays level if the net investment return equals the assumed investment
rate. Please refer to the Statement of Additional Information for more detailed
information as to how we determine variable amount income payments. We reserve
the right to make other annual investment rates available under the Contract.

FIXED AMOUNT INCOME PAYMENTS
We guarantee income payment amounts derived from any Fixed Account Option for
the duration of the Income Plan. We calculate the fixed amount income payments
by:

1. deducting any applicable premium tax; and

2. applying the resulting amount to the greater of (a) the appropriate value
from the income payment table in your Contract or (b) such other value as we
are offering at that time.

We may defer making fixed amount income payments for a period of up to 6 months
or such shorter time state law may require. If we defer payments for 10 days or
more, we will pay interest as required by law from the date we receive the
withdrawal request to the date we make payment.

CERTAIN EMPLOYEE BENEFIT PLANS
The Contracts offered by this prospectus contain income payment tables that
provide for different payments to men and women of the same age. We reserve the
right to use income payment tables that do not distinguish on the basis of sex
to the extent permitted by law. In certain employment-related situations,
employers are required by law to use the same income payment tables for men and
women. Accordingly, if the Contract is to be used in connection with an
employment-related retirement or benefit plan and we do not offer unisex annuity
tables in your state, you should consult with legal counsel as to whether the
purchase of a Contract is appropriate.

<PAGE>

DEATH BENEFITS
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We will pay a death benefit if, prior to the Payout Start Date:

1. any Contract owner dies, or

2. the Annuitant dies, if the Contract owner is not a natural person.

We will pay the death benefit to the new Contract owner as determined
immediately after the death. The new Contract owner would be the surviving
Contract owner(s) or, if none, the Beneficiary(ies). In the case of the death of
the Annuitant, we will pay the death benefit to the current Contract owner.

A request for payment of the death benefit must include "Due Proof of Death." We
will accept the following documentation as Due Proof of Death:

- a certified copy of a death certificate,

- a certified copy of a decree of a court of competent jurisdiction as to the
finding of death, or

- any other proof acceptable to us.

DEATH BENEFIT AMOUNT
Prior to the Payout Start Date, the death benefit is equal to the greatest of:

1. the Contract Value as of the date we determine the death benefit, or

2. the sum of all purchase payments made less any amounts deducted in connection
with partial withdrawals (including any withdrawal charges or applicable
premium taxes), or

3. the Contract Value on the most recent Death Benefit Anniversary prior to the
date we determine the death benefit, plus any purchase payments and less any
amounts deducted in connection with any partial withdrawals since that Death
Benefit Anniversary.

A "Death Benefit Anniversary" is every 6th Contract Anniversary beginning with
the 6th Contract Anniversary. For example, the 6th, 12th and 18th Contract
Anniversaries are the first three Death Benefit Anniversaries.

We will determine the value of the death benefit as of the end of the Valuation
Date on which we receive a complete request for payment of the death benefit. If
we receive a request after 4:00 p.m. Eastern Time (3:00 p.m. Central Time) on a
Valuation Date, we will process the request as of the end of the following
Valuation Date.

PERFORMANCE DEATH BENEFIT OPTION
The Performance Death Benefit Option is an optional benefit that you may elect.
If the Contract owner is a natural person, this option applies only on the death
of the Contract owner. If the Contract owner is not a natural person, this
option applies only on the death of the Annuitant. For Contracts with the
Performance Death Benefit Option, the death benefit will be the greater of (1)
through (3) above, or the Performance Death Benefit Option. If you select the
Performance Death Benefit Option, the maximum age of any Contract owner (or
Annuitant, if the Contract owner is not a natural person) on the date we issue
the Contract is age 80.

The Performance Death Benefit on the date we issue the rider for this option
("Rider Date") is equal to the Contract Value. On each Contract Anniversary, we
will recalculate your Performance Death Benefit to equal the greater of your
Contract Value on that date, or the most recently calculated Performance Death
Benefit. We also will recalculate your Performance Death Benefit whenever you
make an additional purchase payment or a partial withdrawal. Additional purchase
payments will increase the Performance Death Benefit dollar-for-dollar.
Withdrawals will reduce the Performance Death Benefit by an amount equal to: (i)
the Performance Death Benefit immediately before the withdrawal, multiplied by
(ii) the ratio of the withdrawal amount to the Contract Value just before the
withdrawal. In the absence of any withdrawals or purchase payments, the
Performance Death Benefit will be the greatest of the Contract Value on the
Rider Date and all Contract Anniversary Contract Values on or before the date we
calculate the death benefit.

We will recalculate the Performance Death Benefit as described above until the
oldest Contract owner (the Annuitant, if the owner is not a natural person)
attains age 85. After age 85, we will recalculate the Performance Death Benefit
only to reflect additional purchase payments and withdrawals.

DEATH BENEFIT PAYMENTS
If the new Contract owner is a natural person, the new Contract owner may elect
to:

1. receive the death benefit in a lump sum, or

2. apply the death benefit to an Income Plan. Payments from the Income Plan must
begin within 1 year of the date of death and must be payable throughout:

- the life of the new Contract owner; or

- for a guaranteed number of payments from 5 to 30 years, but not to exceed
the life expectancy of the new Contract owner.

Options 1 and 2 above are only available if the new Contract owner elects one of
these options within 180 days of the date of death. Otherwise, the new Contract
owner will receive the Settlement Value. The "Settlement Value" is the Contract
Value, less any applicable withdrawal charge, contract maintenance charge and
premium tax. The Settlement Value paid will be the Settlement Value next
computed on or after the requested distribution date for payment, or on the
mandatory distribution date of 5 years after the date of your death, whichever
is earlier. We are currently waiving the 180 day limit, but we reserve the right
to enforce the limitation in the future. The new Contract owner may make a
single withdrawal of any amount within one year of the date of death without
paying a withdrawal charge. If the new Contract owner is under age 59-1/2, a 10%
tax penalty may apply to withdrawals under the Contract.

In any event, the entire value of the Contract must be distributed within 5
years after the date of the death unless an Income Plan is elected or a
surviving spouse continues the Contract in accordance with the provisions
described below.

If the sole new Contract owner is your spouse, within 180 days after the date of
your death, he or she may elect one of the options listed above or may continue
the Contract in the Accumulation Phase as if the death had not occurred. The
Contract may only be continued once. On the date the Contract is continued, the
Contract Value will equal the amount of the death benefit as determined as of
the Valuation Date on which we received Due Proof of Death (the next Valuation
Date, if we receive Due Proof of Death after 4:00 p.m. Eastern Time). If the
surviving spouse continues the Contract in the Accumulation Phase, the surviving
spouse may make a single withdrawal of any amount within one year of the date of
death without incurring a withdrawal charge. If the surviving spouse is under
age 59-1/2, a 10% tax penalty may apply to withdrawals under the Contract.

If the new Contract owner is a corporation, trust, or other non-natural person,
then the new Contract owner may elect, within 180 days of your death, to receive
the death benefit in lump sum or may elect to receive the Settlement Value in a
lump sum within 5 years of death. We are currently waiving the 180 day limit,
but we reserve the right to enforce the limitation in the future.

MORE INFORMATION
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ALLSTATE NEW YORK

Allstate New York is the issuer of the Contract. Allstate New York is a stock
life insurance company organized under the laws of the State of New York.
Allstate New York was incorporated in 1967 ans was known as "Financial Life
Insurance Company" from 1967 to 1978. From 1978 to 1984, Allstate New York was
known as "PM Life Insurance Company." Since 1984 the company has been known as
"Allstate Life Insurance Company of New York."

Our home office is located in Farmingville, New York. Our customer service
office is located in Palatine, Illinois.

Allstate New York is a wholly owned subsidiary of Allstate Life Insurance
Company ("Allstate Life"), an Illinois stock life insurance company. Allstate
Life is a wholly owned subsidiary of Allstate Insurance Company, an Illinois
stock property-liability insurance company. All of the outstanding capital stock
of Allstate Insurance Company is owned by The Allstate Corporation.

Several independent rating agencies regularly evaluate life insurers'
claims-paying ability, quality of investments, and overall stability. A.M. Best
Company assigns A+ (Superior) to Allstate New York. Standard & Poor's Insurance
Rating Services assigns an AA+ (Very Strong) financial strength rating and
Moody's assigns an Aa2 (Excellent)financial strength rating to Allstate New
York. We may from time to time advertise these ratings in our sales literature.

THE VARIABLE ACCOUNT
Allstate New York established the Allstate Life of New York Variable Annuity
Account II on May 18, 1990. We have registered the Variable Account with the SEC
as a unit investment trust. The SEC does not supervise the management of the
Variable Account or Allstate New York.

We own the assets of the Variable Account. The Variable Account is a segregated
asset account under New York law. That means we account for the Variable
Account's income, gains, and losses separately from the results of our other
operations. It also means that only the assets of the Variable Account that are
in excess of the reserves and other Contract liabilities with respect to the
Variable Account are subject to liabilities relating to our other operations.
Our obligations arising under the Contracts are general corporate obligations of
Allstate New York.

The Variable Account consists of multiple Variable Sub-Accounts, 32 of which are
available under the Contract. We may add new Variable Sub-Accounts or eliminate
one or more of them, if we believe marketing, tax, or investment conditions so
warrant. We do not guarantee the investment performance of the Variable Account,
its Sub-Accounts or the Portfolios. We may use the Variable Account to fund our
other annuity contracts. We will account separately for each type of annuity
contract funded by the Variable Account.

THE PORTFOLIOS
DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS. We automatically reinvest all
dividends and capital gains distributions from the Portfolios in shares of the
distributing Portfolio at their net asset value.

VOTING PRIVILEGES. As a general matter, you do not have a direct right to vote
the shares of the Portfolios held by the Variable Sub-Accounts to which you have
allocated your Contract Value. Under current law, however, you are entitled to
give us instructions on how to vote those shares on certain matters. Based on
our present view of the law, we will vote the shares of the Portfolios that we
hold directly or indirectly through the Variable Account in accordance with
instructions that we receive from Contract owners entitled to give such
instructions.

As a general rule, before the Payout Start Date, the Contract owner or anyone
with a voting interest is the person entitled to give voting instructions. The
number of shares that a person has a right to instruct will be determined by
dividing the Contract Value allocated to the applicable Variable Sub-Account by
the net asset value per share of the corresponding Portfolio as of the record
date of the meeting. After the Payout Start Date the person receiving income
payments has the voting interest. The payee's number of votes will be determined
by dividing the reserves for such Contract allocated to the applicable Variable
Sub-Account by the net asset value per share of the corresponding Portfolio as
of the record date of the meeting. The votes decrease as income payments are
made and as the reserves for the Contract decrease.

We will vote shares attributable to Contracts for which we have not received
instructions, as well as shares attributable to us, in the same proportion as we
vote shares for which we have received instructions, unless we determine that we
may vote such shares in our own discretion. We will apply voting instructions to
abstain on any item to be voted upon on a pro rata basis to reduce the votes
eligible to be cast.

We reserve the right to vote Portfolio shares as we see fit without regard to
voting instructions to the extent permitted by law. If we disregard voting
instructions, we will include a summary of that action and our reasons for that
action in the next semi-annual financial report we send to you.

CHANGES IN PORTFOLIOS. We reserve the right, subject to any applicable law, to
make additions to, deletions from or substitutions for the Portfolio shares held
by any Variable Sub-Account. If the shares of any of the Portfolios are no
longer available for investment by the Variable Account or if, in our judgment,
further investment in such shares is no longer desirable in view of the purposes
of the Contract, we may eliminate that Portfolio and substitute shares of
another eligible investment fund. Any substitution of securities will comply
with the requirements of the Investment Company Act of 1940. We also may add new
Variable Sub-Accounts that invest in additional mutual funds. We will notify you
in advance of any change.

CONFLICTS OF INTEREST. Certain of the Portfolios sell their shares to separate
accounts underlying both variable life insurance and variable annuity contracts.
It is conceivable that in the future it may be unfavorable for variable life
insurance separate accounts and variable annuity separate accounts to invest in
the same Portfolio. The boards of directors or trustees of these Portfolios
monitor for possible conflicts among separate accounts buying shares of the
Portfolios. Conflicts could develop for a variety of reasons. For example,
differences in treatment under tax and other laws or the failure by a separate
account to comply with such laws could cause a conflict. To eliminate a
conflict, a Portfolio's board of directors or trustees may require a separate
account to withdraw its participation in a Portfolio. A Portfolio's net asset
value could decrease if it had to sell investment securities to pay redemption
proceeds to a separate account withdrawing because of a conflict.

THE CONTRACT
The Contracts are distributed exclusively by their principal underwriter, Dean
Witter Reynolds Inc. ("Dean Witter"). Dean Witter, a wholly owned subsidiary of
Morgan Stanley Dean Witter & Co., is located at Two World Trade Center, New
York, New York 10048. Dean Witter is a member of the New York Stock Exchange and
the National Association of Securities Dealers. We may pay up to a maximum sales
commission of 6.0% of purchase payments and an annual sales administration
expense of up to 0.20% of the average net assets of the Fixed Account Options to
Dean Witter. In addition, Dean Witter may pay annually to its representatives,
from its profits, a persistency bonus that will take into account, among other
things, the length of time purchase payments have been held under the Contract
and Contract Value.

ADMINISTRATION. We have primary responsibility for all administration of the
Contracts and the Variable Account. We provide the following administrative
services, among others:

- issuance of the Contracts;

- maintenance of Contract owner records;

- Contract owner services;

- calculation of unit values;

- maintenance of the Variable Account; and

- preparation of Contract owner reports.

We will send you Contract statements at least annually prior to the Payout Start
Date. You should notify us promptly in writing of any address change. You should
read your statements and confirmations carefully and verify their accuracy. You
should contact us promptly if you have a question about a periodic statement. We
will investigate all complaints and make any necessary adjustments
retroactively, but you must notify us of a potential error within a reasonable
time after the date of the questioned statement. If you wait too long, we will
make the adjustment as of the date that we receive notice of the potential
error.

We also will provide you with additional periodic and other reports, information
and prospectuses as may be required by federal securities laws.

QUALIFIED PLANS
If you use the Contract with a qualified plan, the plan may impose different or
additional conditions or limitations on withdrawals, waivers of withdrawal
charges, death benefits, Payout Start Dates, income payments, and other Contract
features. In addition, adverse tax consequences may result if qualified plan
limits on distributions and other conditions are not met. Please consult your
qualified plan administrator for more information.

LEGAL MATTERS
Freedman, Levy, Kroll & Simonds, Washington, D.C., has advised Allstate New York
on certain federal securities law matters. All matters of New York law
pertaining to the Contracts, including the validity of the Contracts and
Allstate New York's right to issue such Contracts under New York insurance law,
have been passed upon by Michael J. Velotta, General Counsel of Allstate New
York.

<PAGE>

TAXES

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THE FOLLOWING DISCUSSION IS GENERAL AND IS NOT INTENDED AS TAX ADVICE.
ALLSTATE NEW YORK 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 your individual circumstances.
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, you are not taxed on increases in the Contract Value
until a distribution occurs. This rule applies only where:

1. the Contract owner is a natural person,

2. the investments of the Variable Account are "adequately diversified"
according to Treasury Department regulations, and

3. Allstate New York 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 non-natural
persons such as corporations, trusts, or other entities are not treated as
annuity contracts for federal income tax purposes. The income on such contracts
is taxed as ordinary income received or accrued by the owner during the taxable
year. Please see the Statement of Additional Information for a discussion of
several exceptions to the general rule for Contracts owned by non-natural
persons.

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" consistent with standards under Treasury Department
regulations. If the investments in the Variable Account are not adequately
diversified, the Contract will not be treated as an annuity contract for federal
income tax purposes. As a result, the income on the Contract will be taxed as
ordinary income received or accrued by the Contract owner during the taxable
year. Although Allstate New York does not have control over the Portfolios or
their investments, we expect the Portfolios to meet the diversification
requirements.

OWNERSHIP TREATMENT. The IRS has stated that you will be considered the owner of
Variable Account assets if you possess 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, the Treasury Department announced
that the regulations do not provide guidance concerning circumstances in which
investor control of separate account investments may cause an investor to be
treated as the owner of the separate account. The Treasury Department also
stated that future guidance would be issued regarding the extent that owners
could direct sub-account investments without being treated as owners of the
underlying assets of the separate account.

Your rights under the Contract are different than those described by the IRS in
rulings in which it found that contract owners were not owners of separate
account assets. For example, you have the choice to allocate premiums and
Contract Values among more investment alternatives. Also, you may be able to
transfer among investment alternatives more frequently than in such rulings.
These differences could result in you being treated as the owner of the Variable
Account. If this occurs, income and gain from the Variable Account assets would
be includible in your gross income. Allstate New York does not know what
standards will be set forth in any regulations or rulings which the Treasury
Department may issue. It is possible that future standards announced by the
Treasury Department could adversely affect the tax treatment of your Contract.
We reserve the right to modify the Contract as necessary to attempt to prevent
you from being considered the federal tax owner of the assets of the Variable
Account. However, we make no guarantee that such modification to the Contract
will be successful.

TAXATION OF PARTIAL AND FULL WITHDRAWALS. If you make a partial withdrawal under
a non-Qualified Contract, amounts received are taxable to the extent the
Contract Value, without regard to surrender charges, exceeds the investment in
the Contract. The investment in the Contract is the gross premium paid for the
Contract minus any amounts previously received from the Contract if such amounts
were properly excluded from your gross income. If you make 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 (i.e., nondeductible
IRA contributions, after tax contributions to qualified plans) bears to the
Contract Value, is excluded from your income. If you make 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.

"Nonqualified distributions" from Roth IRAs are treated as made from
contributions first and are included in gross income only to the extent that
distributions exceed contributions. "Qualified distributions" from Roth IRAs are
not included in gross income. "Qualified distributions" are any distributions
made more than 5 taxable years after the taxable year of the first contribution
to any Roth IRA and which are:

- made on or after the date the individual attains age 59 1/2,

- made to a Beneficiary after the Contract owner's death,

- attributable to the Contract owner being disabled, or

- for a first time home purchase (first time home purchases are subject to a
lifetime limit of $10,000).

If you transfer a non-Qualified Contract without full and adequate consideration
to a person other than your spouse (or to a former spouse incident to a
divorce), you will be taxed on the difference between the Contract Value and the
investment in the Contract at the time of transfer. Except for certain Qualified
Contracts, any amount you receive 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 annuity
payments received from a non-Qualified Contract provides for the return of your
investment in the Contract in equal tax-free amounts over the payment period.
The balance of each payment received is taxable. For 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. If you elect 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. The annuity payments will be fully taxable
after the total amount of the investment in the Contract is excluded using these
ratios. If you die, and annuity payments cease before the total amount of the
investment in the Contract is recovered, the unrecovered amount will be allowed
as a deduction for your last taxable year.

TAXATION OF ANNUITY DEATH BENEFITS. Death of a Contract owner, or death of the
Annuitant if the Contract is owned by a non-natural person, will cause a
distribution of death benefits from a Contract. Generally, such amounts are
included 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. Please see the Statement of Additional
Information for more detail on distribution at death requirements.

PENALTY TAX ON PREMATURE DISTRIBUTIONS. A 10% penalty tax applies to the taxable
amount of any premature distribution from a non-Qualified Contract. The penalty
tax generally applies to any distribution made prior to the date you attain age
59 1/2. However, no penalty tax is incurred on distributions:

1. made on or after the date the Contract owner attains age 59 1/2;

2. made as a result of the Contract owner's death or disability;

3. made in substantially equal periodic payments over the Contract owner's life
or life expectancy,

4. made under an immediate annuity, or

5. attributable to investment in the Contract before August 14, 1982.

You should consult a competent tax advisor to determine if any other exceptions
to the penalty apply to your situation. Similar exceptions may apply to
distributions from Qualified Contracts.

AGGREGATION OF ANNUITY CONTRACTS. All non-qualified deferred annuity contracts
issued by Allstate New York (or its affiliates) to the same Contract 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
The income on qualified plan and IRA investments is tax deferred and variable
annuities held by such plans does not receive any additional tax deferral. You
should review the annuity features, including all benefits and expenses, prior
to purchasing a variable annuity in a qualified plan or IRA.

Contracts may be used as investments with certain qualified plans such as:

- Individual Retirement Annuities or Accounts (IRAs) under Section 408 of the
Internal Revenue Code ("Code");

- Roth IRAs under Section 408A of the Code;

- Simplified Employee Pension Plans under Section 408(k) of the Code;

- Savings Incentive Match Plans for Employees (SIMPLE) Plans under Section
408(p) of the Code;

- Tax Sheltered Annuities under Section 403(b) of the Code;

- Corporate and Self Employed Pension and Profit Sharing Plans; and

- State and Local Government and Tax-Exempt Organization Deferred Compensation
Plans.

Allstate New York reserves the right to limit the availability of the Contract
for use with any of the qualified plans listed above.

In the case of certain qualified plans, the terms of the plans may govern the
right to benefits, regardless of the terms of the Contract.

RESTRICTIONS UNDER SECTION 403(b) Plans. Section 403(b) of the Code provides
tax-deferred retirement savings plans for employees of certain non-profit and
educational organizations. Under Section 403(b), any Contract used for a 403(b)
plan must provide that distributions attributable to salary reduction
contributions made after December 31, 1988, and all earnings on salary reduction
contributions, may be made only:

1. on or after the date of employee

- attains age 59 1/2,

- separates from service,

- dies,

- becomes disabled, or

2. on account of hardship (earnings on salary reduction contributions may not be
distributed on the account of hardship).

These limitations do not apply to withdrawals where Allstate New York is
directed to transfer some or all of the Contract Value to another 403(b) plan.

INCOME TAX WITHHOLDING
Allstate New York is required to withhold federal income tax at a rate of 20% on
all "eligible rollover distributions" unless you elect to make a "direct
rollover" of such amounts to an IRA or eligible retirement plan. 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 over the life (joint lives) of the participant (and
beneficiary).

Allstate New York may be required to withhold federal and state income taxes on
any distributions from non-Qualified Contracts or Qualified Contracts that are
not eligible rollover distributions, unless you notify us of your election to
not have taxes withheld.

<PAGE>

PERFORMANCE INFORMATION
-------------------------------------------------------------------

We may advertise the performance of the Variable Sub-Accounts, including yield
and total return information. Yield refers to the income generated by an
investment in a Variable Sub-Account over a specified period. Total return
represents the change, over a specified period of time, in the value of an
investment in a Variable Sub-Account after reinvesting all income distributions.

All performance advertisements will include, as applicable, standardized yield
and total return figures that reflect the deduction of insurance charges, the
contract maintenance charge, and withdrawal charge. Performance advertisements
also may include total return figures that reflect the deduction of insurance
charges, but not the contract maintenance or withdrawal charges. The deduction
of such charges would reduce the performance shown. Performance advertisements
may include aggregate, average, year-by-year, or other types of total return
figures.

Performance information for periods prior to the inception date of the Variable
Sub-Accounts will be based on the historical performance of the corresponding
Portfolios for the periods beginning with the inception dates of the Portfolios
and adjusted to reflect current Contract expenses. You should not interpret
these figures to reflect actual historical performance of the Variable Account.

We may include in advertising and sales materials tax deferred compounding
charts and other hypothetical illustrations that compare currently taxable and
tax deferred investment programs based on selected tax brackets. Our
advertisements also may compare the performance of our Variable Sub-Accounts
with: (a) certain unmanaged market indices, including but not limited to the Dow
Jones Industrial Average, the Standard & Poor's 500, and the Shearson Lehman
Bond Index; and/or (b) other management investment companies with investment
objectives similar to the underlying funds being compared. In addition, our
advertisements may include the performance ranking assigned by various
publications, including the Wall Street Journal, Forbes, Fortune, Money,
Barron's, Business Week, USA Today, and statistical services, including Lipper
Analytical Services Mutual Fund Survey, Lipper Annuity and Closed End Survey,
the Variable Annuity Research Data Survey, and SEI.

<PAGE>

STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS
-------------------------------------------------------------------

DESCRIPTION Page
----------------------------------------------------------------------------
<S> <C>
Additions, Deletions or Substitutions of Investments 2

----------------------------------------------------------------------------
The Contract 3
Purchases 3
Tax-free Exchanges (1035 Exchanges, Rollovers and Transfers) 3

----------------------------------------------------------------------------
Performance Information 4

----------------------------------------------------------------------------
Calculation of Accumulation Unit Values 12

----------------------------------------------------------------------------
Calculation of Variable Amount Income Payments 13

----------------------------------------------------------------------------
General Matters 14
Incontestability 14
Settlements 14
Safekeeping of the Variable Account's Assets 14
Premium Taxes 14
Tax Reserves 14

----------------------------------------------------------------------------
Federal Tax Matters 15

----------------------------------------------------------------------------
Experts 18

----------------------------------------------------------------------------
Financial Statements 18

----------------------------------------------------------------------------
</TABLE>

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

THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION IN WHICH
SUCH OFFERING MAY NOT LAWFULLY BE MADE. WE DO NOT AUTHORIZE ANYONE TO PROVIDE
ANY INFORMATION OR REPRESENTATIONS REGARDING THE OFFERING DESCRIBED IN THIS
PROSPECTUS OTHER THAN AS CONTAINED IN THIS PROSPECTUS.

A-1

ALLSTATE VARIABLE ANNUITY 3 <C>
<S> <C>
Allstate Life Insurance Company of New York Statement of Additional Information
Allstate Life of New York dated February __, 2001
Variable Annuity Account II
One Allstate Drive
Farmingville, NY 11738
1 (800) 256 - 9392
</TABLE>

This Statement of Additional Information supplements the information in the
prospectus for the Allstate Variable Annuity 3 that we offer. This Statement of
Additional Information is not a prospectus. You should read it with the
prospectus, dated February __, 2001. You may obtain a prospectus by calling or
writing your Morgan Stanley Dean Witter Financial Advisor.

Except as otherwise noted, this Statement of Additional Information uses the
same defined terms as the prospectus for the Allstate Variable Annuity 3 that we
offer.

<PAGE>

TABLE OF CONTENTS

Description Page

Additions, Deletions or Substitutions of Investments 2
The Contract 3
Purchases 3
Tax-free Exchanges (1035 Exchanges, Rollovers and Transfers) 3
Performance Information 4
Calculation of Accumulation Unit Values 12
Calculation of Variable Amount Income Payments 13
General Matters 14
Incontestability 14
Settlements 14
Safekeeping of the Variable Account's Assets 14
Premium Taxes 14
Tax Reserves 14
Federal Tax Matters 15
Experts 18
Financial Statements 18

<PAGE>

ADDITIONS, DELETIONS OR SUBSTITUTIONS OF INVESTMENTS
-------------------------------------------------------------------------------

We may add, delete, or substitute the Portfolio shares held by any Variable
Sub-Account to the extent the law permits. We may substitute shares of any
Portfolio with those of another Portfolio of the same or different mutual fund
if the shares of the Portfolio are no longer available for investment, or if we
believe investment in any Portfolio would become inappropriate in view of the
purposes of the Variable Account.

We will not substitute shares attributable to a Contract owner's interest in a
Variable Sub-Account until we have notified the Contract owner of the change,
and until the Securities and Exchange Commission has approved the change, to the
extent such notification and approval are required by law. 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 Contract owners.

We also may establish additional Variable Sub-Accounts or series of Variable
Sub-Accounts. Each additional Variable Sub-Account would purchase shares in a
new Portfolio of the same or different mutual fund. We may establish new
Variable Sub-Accounts when we believe marketing needs or investment conditions
warrant. We determine the basis on which we will offer any new Variable
Sub-Accounts in conjunction with the Contract to existing Contract owners. We
may eliminate one or more Variable Sub-Accounts if, in our sole discretion,
marketing, tax or investment conditions so warrant.

We may, by appropriate endorsement, change the Contract as we believe necessary
or appropriate to reflect any substitution or change in the Portfolios. If we
believe the best interests of persons having voting rights under the Contracts
would be served, we may operate the Variable Account as a management company
under the Investment Company Act of 1940 or we may withdraw its registration
under such Act if such registration is no longer required.

<PAGE>

THE CONTRACT
--------------------------------------------------------------------------------

The Contract is primarily designed to aid individuals in long-term financial
planning. You can use it for retirement planning regardless of whether the
retirement plan qualifies for special federal income tax treatment.

PURCHASES

Dean Witter Reynolds Inc., is the principal underwriter and distributor of the
Contracts. The offering of the Contracts is continuous. We do not anticipate
discontinuing the offering of the Contracts, but we reserve the right to do so
at any time.

TAX-FREE EXCHANGES (1035 EXCHANGES, ROLLOVERS AND TRANSFERS) We accept purchase
payments that are the proceeds of a Contract in a transaction qualifying for a
tax-free exchange under Section 1035 of the Internal Revenue Code ("Code").
Except as required by federal law in calculating the basis of the Contract, we
do not differentiate between Section 1035 purchase payments and non-Section 1035
purchase payments.

We also accept "rollovers" and transfers from Contracts qualifying as
tax-sheltered annuities ("TSAs"), individual retirement annuities or accounts
("IRAs"), or any other Qualified Contract that is eligible to "rollover" into an
IRA. We differentiate among non-Qualified Contracts, TSAs, IRAs and other
Qualified Contracts to the extent necessary to comply with federal tax laws. For
example, we restrict the assignment, transfer, or pledge of TSAs and IRAs so the
Contracts will continue to qualify for special tax treatment. A Contract 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>

PERFORMANCE INFORMATION
------------------------------------------------------------------------------

From time to time we may advertise the "standardized," "non-standardized," and
"adjusted historical" total returns of the Variable Sub-Accounts, as described
below. Please remember that past performance is not an estimate or guarantee of
future performance and does not necessarily represent the actual experience of
amounts invested by a particular Contract owner. Also, please note that the
performance figures shown do not reflect any applicable taxes.

STANDARDIZED TOTAL RETURNS
A Variable Sub-Account's standardized total return represents the average annual
total return of that Sub-Account over a particular period. We compute
standardized total return by finding the annual percentage rate that, when
compounded annually, will accumulate a hypothetical $1,000 purchase payment to
the redeemable value at the end of the one, five or ten year period, or for a
period from the date of commencement of the Variable Sub-Account's operations,
if shorter than any of the foregoing.

We use the following formula prescribed by the SEC for computing standardized
total return:

1000(1 + T)^n = ERV

where:

T = average annual total return
ERV = ending redeemable value of a hypothetical $1,000 payment
made at the beginning of 1, 5, or 10 year periods or
shorter period
n = number of years in the period
$1000 = hypothetical $1,000 investment

When factoring in the withdrawal charge assessed upon redemption, we exclude the
Preferred Withdrawal Amount, which is the amount you can withdraw from the
Contract without paying a withdrawal charge. We also use the withdrawal charge
that would apply upon redemption at the end of each period. Thus, for example,
when factoring in the withdrawal charge for a one year standardized total return
calculation, we would use the withdrawal charge that applies to a withdrawal of
a purchase payment made one year prior.

When factoring in the contract maintenance charge, we pro rate the charge by
dividing (i) the contract maintenance charge by (ii) an assumed average contract
size of $45,000. We then multiply the resulting percentage by a hypothetical
$1,000 investment.

The standardized total returns for the Variable Sub-Accounts available under the
Contract for the periods ended December 31, 2000, are set out below. No
standardized total returns are shown for Money Market Variable Sub-Account.

The Allstate Variable Annuity 3 Contracts had not yet been first offered to the
public as of the date of this Statement of Additional Information. Accordingly,
performance figures for Variable Sub-Accounts prior to those dates reflect the
historical performance of the Variable Sub-Accounts, adjusted to reflect the
current level of charges that apply to the Variable Sub-Accounts under the
Allstate Variable Annuity 3 Contracts as well as the withdrawal and contract
maintenance charges described above.

<PAGE>

The existing Variable Sub-Accounts commenced operations on the following dates:

AIM VARIABLE INSURANCE FUNDS:
--------------------------------------------------------------------------------
Variable Sub-Account Date

Capital Appreciation May 1, 2000
Growth May 1, 2000
Value May 1, 2000

ALLIANCE VARIABLE PRODUCTS SERIES FUND:
--------------------------------------------------------------------------------
Variable Sub-Account Date

Growth May 1, 2000
Growth and Income May 1, 2000
Premier Growth May 1, 2000

MORGAN STANLEY DEAN WITTER VARIABLE INVESTMENT SERIES:
--------------------------------------------------------------------------------
Variable Sub-Account Date:

Aggressive Equity* May 3, 1999
Capital Growth* September 24, 1991
Competitive Edge ("Best Ideas")* May 18, 1998
Dividend Growth* September 24, 1991
Equity* September 24, 1991
European Growth* September 24, 1991
Global Dividend Growth* February 24, 1994
High Yield* September 24, 1991
Income Builder* January 21, 1997
Information November 6, 2000
Pacific Growth* February 24, 1994
Quality Income Plus* September 24, 1991
S&P 500 Index* May 18, 1998
Short-Term Bond* May 3, 1999
Strategist* September 24, 1991
Utilities* September 24, 1991

PUTNAM VARIABLE TRUST:
--------------------------------------------------------------------------------
Variable Sub-Account Date

Growth and Income May 1, 2000
International Growth May 1, 2000
Voyager May 1, 2000

THE UNIVERSAL INSTITUTIONAL FUND, INC.:
--------------------------------------------------------------------------------
Variable Sub-Account Date:

Emerging Markets Equity March 16, 1998
Equity Growth March 16, 1998
International Magnum March 16, 1998
Mid-Cap Value May 1, 2000
U.S. Real Estate May 18, 1998

VAN KAMPEN LIFE INVESTMENT TRUST:
--------------------------------------------------------------------------------
Variable Sub-Account Date:

Emerging Growth March 16, 1998

* The Portfolios' Class Y shares ("12b-1 class") corresponding to these Variable
Sub-Accounts were first offered on May 1, 2000. For periods prior to May 1,
2000, the performance shown is based on the historical performance of the
Portfolios' Class X shares ("non-12b-1 class"), adjusted to reflect the current
expenses of the Portfolios' 12b-1 class.

<PAGE>
(WITHOUT THE PERFORMANCE DEATH BENEFIT OPTION)
<TABLE>
<CAPTION>

10 Years or
Variable Sub-Account One Year Five Years Since Inception
<S> <C> <C> <C>

AIM Capital Appreciation N/A N/A %*
AIM Growth N/A N/A %*
AIM Value N/A N/A %*
Alliance Growth N/A N/A %*
Alliance Growth and Income N/A N/A %*
Alliance Premier Growth N/A N/A %*
MSDW Aggressive Equity** % N/A %
MSDW Capital Growth* * % % %
MSDW Competitive Edge** % N/A %
MSDW Dividend Growth* * % % %
MSDW Equity** % % %
MSDW European Growth** % % %
MSDW Global Dividend Growth** % % %
MSDW High Yield** % % %
MSDW Income Builder** % N/A %
MSDW Information N/A N/A %*
MSDW Pacific Growth** % % %
MSDW Quality Income Plus** % % %
MSDW S & P 500 Index** % N/A %
MSDW Short Term Bond** % N/A %
MSDW Strategist** % % %
MSDW Utilities** % % %
Putnam Growth and Income N/A N/A %*
Putnam International Growth N/A N/A %*
Putnam Voyager N/A N/A %*
Emerging Markets Equity % N/A %
Equity Growth % N/A %
International Magnum % N/A %
Mid-Cap Value N/A N/A %*
U.S. Real Estate % N/A %
Van Kampen Emerging Growth % N/A %
</TABLE>

* The performance shown is not annualized.

** The performance shown for the Variable Sub-Account based on the underlying
Portfolio's 12b-1 class is based on the performance of the non 12b-1 class, as
described in the table at the beginning of this section.

(WITH THE PERFORMANCE DEATH BENEFIT OPTION)

<TABLE>
<CAPTION>
10 Years or
Variable Sub-Account One Year Five Years Since Inception
<S> <C> <C> <C>

</TABLE>

* The performance shown is not annualized.

<PAGE>
NON-STANDARDIZED TOTAL RETURNS

From time to time, we may also quote rates of return that reflect changes in the
values of each Variable Sub-Account's accumulation units. We may quote these
"non-standardized total returns" on an annualized, cumulative, year-by-year, or
other basis. These rates of return take into account asset-based charges, such
as the mortality and expense risk charge and administration charge. However,
these rates of return do not reflect withdrawal charges, contract maintenance
charges, or any taxes. Such charges, if reflected, would reduce the performance
shown.

Annualized returns reflect the rate of return that, when compounded annually,
would equal the cumulative rate of return for the period shown. We compute
annualized returns according to the following formula:

Annualized Return = (1+r) 1/n-1 where r = cumulative rate of return for the
period shown, and n = number of years in the period.

The method of computing annualized rates of return is similar to that for
computing standardized performance, described above, except that rather than
using a hypothetical $1,000 investment and the ending redeemable value thereof,
we use the changes in value of an accumulation unit.

Cumulative rates of return reflect the cumulative change in the value of an
accumulation unit over the period shown. Year-by-year rates of return reflect
the change in the value of an accumulation unit during the course of each year
shown. We compute these returns by dividing the accumulation unit value at the
end of each period shown by the accumulation unit value at the beginning of that
period, and subtracting one. We compute other total returns on a similar basis.

We may quote non-standardized total returns for 1, 3, 5 and 10 year periods, or
period since the inception of the Variable Sub-Account's operations, as well as
other periods, such as "year-to-date" (prior calendar year end to the day stated
in the advertisement); "year to most recent quarter" (prior calendar year end to
end of most recent quarter); the prior calendar year; and the "n" most recent
calendar years.

The non-standardized average annual total returns for the Variable Sub-Accounts
for the periods ended December 31, 2000 are set out below. No non-standardized
total returns are shown for the Money Market Variable Sub-Account. The inception
date of each Variable Sub-Account appears under "Standardized Total Returns"
above.

The Allstate Variable Annuity 3 Contracts had not yet been first offered to the
public as of the date of this Statement of Additional Information. Accordingly,
performance figures for Variable Sub-Accounts prior to those dates reflect the
historical performance of the Variable Sub-Accounts, adjusted to reflect the
current level of charges that apply to the Variable Sub-Accounts under the
Allstate Variable Annuity 3 Contracts, excluding the withdrawal charge but
including the contract maintenance charges.

(WITHOUT THE PERFORMANCE DEATH BENEFIT OPTION)

<TABLE>
<CAPTION>
10 Years or
Variable Sub-Account One Year Five Years Since Inception
<S> <C> <C> <C>

* The performance shown is not annualized.

<PAGE>

(WITH THE PERFORMANCE DEATH BENEFIT OPTION)

<TABLE>
<CAPTION>
10 Years or
Variable Sub-Account One Year Five Years Since Inception
<S> <C> <C> <C>

</TABLE>

* The performance shown is not annualized.

ADJUSTED HISTORICAL TOTAL RETURNS
We may advertise the total return for periods prior to the date that the
Variable Sub-Accounts commenced operations. We will calculate such "adjusted
historical total returns" using the historical performance of the underlying
Portfolios and adjusting such performance to reflect the current level of
charges that apply to the Variable Sub-Accounts under the Contract [as well as
the contract maintenance charge, and the withdrawal charge].

The adjusted historical total returns for the Variable Sub-Accounts for the
periods ended December 31, 2000 are set out below. No adjusted historical total
returns are shown for the Money Market Variable Sub-Account.

The following list provides the inception date for the Portfolio corresponding
to each of the Variable Sub-Accounts included in the tables.

<PAGE>

Inception Date of
Variable Sub-Account Corresponding Portfolio
- -------------------- -----------------------

AIM V.I. Capital Appreciation May 5, 1993
AIM V.I. Growth May 5, 1993
AIM V.I. Value May 5, 1993
Alliance Growth* September 15, 1994
Alliance Growth and Income* January 14, 1991
Alliance Premier Growth* July 14, 1999
MSDW Aggressive Equity** May 1, 1999
MSDW Capital Growth* * March 1, 1991
MSDW Competitive Edge ("Best Ideas")** May 18, 1998
MSDW Dividend Growth* * March 1, 1990
MSDW Equity** March 9, 1984
MSDW European Growth** March 1, 1991
MSDW Global Dividend Growth** February 24, 1994
MSDW High Yield** March 9, 1984
MSDW Income Builder** January 21, 1997
MSDW Information November 6, 2000
MSDW Pacific Growth** February 22, 1994
MSDW Quality Income Plus** March 1, 1987
MSDW S & P 500 Index** May 18, 1998
MSDW Short Term Bond** May 2, 1999
MSDW Strategist** March 1, 1987
MSDW Utilities** March 1, 1990
Putnam VT Growth and Income*** February 1, 1988
Putnam VT International Growth*** January 2, 1997
Putnam VT Voyager*** February 1, 1988
Emerging Markets Equity October 1, 1996
Equity Growth January 2, 1997
International Magnum January 2, 1997
Mid-Cap Value January 2, 1997
U.S. Real Estate March 4, 1997
Van Kampen Emerging Growth July 3, 1995

* The Portfolios' Class B shares (12b-1 class") corresponding to the Alliance
Growth and Alliance Growth and Income Variable Sub-Accounts were first offered
on June 1, 1999. For periods prior to these dates, the performance shown is
based on the historical performance of the Portfolios' Class A shares
("non-12b-1 class"), adjusted to reflect the current expenses of the Portfolios'
12b-1 class. The inception dates for the Portfolios' are as shown above.

** The Portfolios' Class Y shares ("12b-1 class") corresponding to these
Variable Sub-Accounts were first offered on May 1, 2000. For periods prior to
May 1, 2000, the performance shown is based on the historical performance of the
Portfolios' Class X shares ("non-12b-1 class"), adjusted to reflect the current
expenses of the Portfolios' 12b-1 class. The inception dates for the Portfolios
are shown above.

*** The Portfolios' Class IB shares ("12b-1 Class") corresponding to the Putnam
VT Growth and Income, International Growth, and Voyager Variable Sub-Accounts
were first offered on April 6, 1998, April 6, 1998, and April 30, 1998
respectively. For periods prior to these dates, the performance shown is based
on the historical performance of the Portfolios' Class 1A shares ("non 12b-1
class"), adjusted to reflect the current expenses of the Portfolios' 12b-1
class. The inception dates for the Portfolios are as shown above.

9
<PAGE>

(WITHOUT THE PERFORMANCE DEATH BENEFIT OPTION)
<TABLE>
<CAPTION>
10 Years or
Variable Sub-Account One Year Five Years Since Inception+
<S> <C> <C> <C>

AIM Capital Appreciation % % %
AIM Growth % % %
AIM Value % % %
Alliance Growth* % % %
Alliance Growth and Income* % % %
Alliance Premier Growth* % N/A %
MSDW Aggressive Equity* % N/A %
MSDW Capital Growth* % % %
MSDW Competitive Edge* % N/A %
MSDW Dividend Growth* % % %
MSDW Equity* % % %
MSDW European Growth* % % %
MSDW Global Dividend Growth* % % %
MSDW High Yield* % % %
MSDW Income Builder* % N/A %
MSDW Information N/A N/A %**
MSDW Pacific Growth* % % %
MSDW Quality Income Plus* % % %
MSDW S & P 500 Index* % N/A %
MSDW Short Term Bond* % N/A %
MSDW Strategist* % % %
MSDW Utilities* % % %
Putnam Growth and Income* % % %
Putnam International Growth* % N/A %
Putnam Voyager* % % %
Emerging Markets Equity % N/A %
Equity Growth % N/A %
International Magnum % N/A %
Mid-Cap Value % N/A %
U.S. Real Estate % N/A %
Van Kampen Emerging Growth % % %

</TABLE>

+Please refer to the table at the beginning of this section for the inception
dates of the Portfolios.

*The performance shown for the Portfolios' 12b-1 class
is based on the performance of the non 12b-1 class, as described in the table at
the beginning of this section.

** Performance shown is not annualized.

<PAGE>
(WITH THE PERFORMANCE DEATH BENEFIT OPTION)
<TABLE>
<CAPTION>

10 Years or
Variable Sub-Account One Year Five Years Since Inception
<S> <C> <C> <C>

</TABLE>

+Please refer to the table at the beginning of this section for the inception
dates of the Portfolios.

*The performance shown for the Portfolios' 12b-1 class is based on the
performance of the non 12b-1 class, as described in the table at the beginning
of this section.

** Performance shown is not annualized.

<PAGE>

CALCULATION OF ACCUMULATION UNIT VALUES
--------------------------------------------------------------------------------

The value of Accumulation Units will change each Valuation Period according to
the investment performance of the Portfolio shares purchased by each Variable
Sub-Account and the deduction of certain expenses and charges. A "Valuation
Period" is the period from the end of one Valuation Date and continues to the
end of the next Valuation Date. A Valuation Date ends at the close of regular
trading on the New York Stock Exchange (currently 3:00 p.m. Central Time).

The Accumulation Unit Value of a Variable Sub-Account for any Valuation Period
equals the Accumulation Unit Value as of the immediately preceding Valuation
Period, multiplied by the Net Investment Factor (described below) for that
Variable Sub-Account for the current Valuation Period.

NET INVESTMENT FACTOR
The Net Investment Factor for a Valuation Period is a number representing the
change, since the last Valuation Period, in the value of Variable Sub-Account
assets per Accumulation Unit due to investment income, realized or unrealized
capital gain or loss, deductions for taxes, if any, and deductions for the
mortality and expense risk charge and administrative expense charge. We
determine the Net Investment Factor for each Variable Sub-Account for any
Valuation Period by dividing (A) by (B) and subtracting (C) from the result,
where:

(A) is the sum of:

(1) the net asset value per share of the Portfolio underlying the
Variable 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 underlying the Variable Sub-Account during the
current Valuation Period;

(B) is the net asset value per share of the Portfolio underlying the
Variable Sub-Account determined as of the end of the immediately
preceding Valuation Period; and

(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>

CALCULATION OF VARIABLE INCOME PAYMENTS
--------------------------------------------------------------------------------

We calculate the amount of the first variable income payment under an Income
Plan by applying the Contract Value allocated to each Variable Sub-Account less
any applicable premium tax charge deducted at the time, to the income payment
tables in the Contract. We divide the amount of the first variable annuity
income payment by the Variable Sub-Account's then current Annuity Unit value to
determine the number of annuity units ("Annuity Units") upon which later income
payments will be based. To determine income payments after the first, we simply
multiply the number of Annuity Units determined in this manner for each Variable
Sub-Account by the then current Annuity Unit value ("Annuity Unit Value") for
that Variable Sub-Account.

CALCULATION OF ANNUITY UNIT VALUES
Annuity Units in each Variable Sub-Account are valued separately and Annuity
Unit Values will depend upon the investment experience of the particular
Portfolio in which the Variable Sub-Account invests. We calculate the Annuity
Unit Value for each Variable Sub-Account at the end of any Valuation Period by:

o multiplying the Annuity Unit Value at the end of the immediately preceding
Valuation Period by the Variable Sub-Account's Net Investment Factor
(described in the preceding section) for the Period; and then

o dividing the product by the sum of 1.0 plus the assumed investment rate for
the Valuation Period.

The assumed investment rate adjusts for the interest rate assumed in the income
payment tables used to determine the dollar amount of the first variable income
payment, and is at an effective annual rate which is disclosed in the Contract.

We determine the amount of the first variable income payment paid under an
Income Plan using the income payment tables set out in the Contracts. The
Contracts include tables that differentiate on the basis of sex, except in
states that require the use of unisex tables.

<PAGE>

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

INCONTESTABILITY
We will not contest the Contract after we issue it.

SETTLEMENTS
The Contract must be returned to us prior to any settlement. We must receive due
proof of the Contract owner(s) death (or Annuitant's death if there is a
non-natural Contract owner) before we will settle a death claim.

SAFEKEEPING OF THE VARIABLE ACCOUNT'S ASSETS
We hold title to the assets of the Variable Account. We keep the assets
physically segregated and separate and apart from our general corporate assets.
We maintain records of all purchases and redemptions of the Portfolio shares
held by each of the Variable Sub-Accounts.

The Portfolios do not issue stock certificates. Therefore, we hold the Variable
Account's assets in open account in lieu of stock certificates. See the
Portfolios' prospectuses for a more complete description of the custodian of the
Portfolios.

PREMIUM TAXES
Applicable premium tax rates depend on the Contract owner's state of residency
and the insurance laws and our status in those states where premium taxes are
incurred. Premium tax rates may be changed by legislation, administrative
interpretations, or judicial acts.

TAX RESERVES
We do not establish capital gains tax reserves for any Variable Sub-Account nor
do we deduct charges for tax reserves because we believe that capital gains
attributable to the Variable Account will not be taxable. However, we reserve
the right to deduct charges to establish tax reserves for potential taxes on
realized or unrealized capital gains.

<PAGE>

FEDERAL TAX MATTERS
-------------------------------------------------------------------------------

THE FOLLOWING DISCUSSION IS GENERAL AND IS NOT INTENDED AS TAX ADVICE. WE MAKE
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 ALLSTATE NEW YORK LIFE INSURANCE COMPANY
Allstate New York is taxed as a life insurance company under Part I of
Subchapter L of the Internal Revenue Code. Since the Variable Account is not an
entity separate from Allstate New York, and its operations form a part of
Allstate New York, it will not be taxed separately as a "Regulated Investment
Company" under Subchapter M of the Code. Investment income and realized capital
gains of the Variable Account are automatically applied to increase reserves
under the contract. Under existing federal income tax law, Allstate New York
believes that the Variable Account investment income and capital gains will not
be taxed to the extent that such income and gains are applied to increase the
reserves under the contract. Accordingly, Allstate New York does not anticipate
that it will incur any federal income tax liability attributable to the Variable
Account, and therefore Allstate New York does not intend to make provisions for
any such taxes. If Allstate New York is taxed on investment income or capital
gains of the Variable Account, then Allstate New York may impose a charge
against the Variable Account in order to make provision for such taxes.

EXCEPTIONS TO THE NON-NATURAL OWNER RULE
There are several exceptions to the general rule that annuity 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 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.

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.

<PAGE>

QUALIFIED PLANS
-------------------------------------------------------------------------------

The 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. Contract 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.

INDIVIDUAL RETIREMENT ANNUITIES
Section 408 of the Code permits eligible individuals to contribute to an
individual retirement program known as an Individual Retirement Annuity (IRA).
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. An IRA generally may
not provide life insurance, but it may provide a death benefit that equals the
greater of the premiums paid and the Contract's Cash Value. The Contract
provides a death benefit that in certain circumstances may exceed the greater of
the payments and the Contract Value. It is possible that the death benefit could
be viewed as violating the prohibition on investment in life insurance contracts
with the result that the Contract would not be viewed as satisfying the
requirements of an IRA.

ROTH INDIVIDUAL RETIREMENT ANNUITIES
Section 408A of the Code permits eligible individuals to make nondeductible
contributions to an individual retirement program known as a Roth Individual
Retirement Annuity. Roth Individual Retirement Annuities are subject to
limitations on the amount that can be contributed and on the time when
distributions may commence. "Qualified distributions" from Roth Individual
Retirement Annuities are not includible in gross income. "Qualified
distributions" are any distributions made more than five taxable years after the
taxable year of the first contribution to the Roth Individual Retirement
Annuity, and which are made on or after the date the individual attains age 59
1/2, made to a beneficiary after the owner's death, attributable to the owner
being disabled or for a first time home purchase (first time home purchases are
subject to a lifetime limit of $10,000). "Nonqualified distributions" are
treated as made from contributions first and are includible in gross income to
the extent such distributions exceed the contributions made to the Roth
Individual Retirement Annuity. The taxable portion of a "nonqualified
distribution" may be subject to the 10% penalty tax on premature distributions.
Subject to certain limitations, a traditional Individual Retirement Account or
Annuity may be converted or "rolled over" to a Roth Individual Retirement
Annuity. The taxable portion of a conversion or rollover distribution is
includible in gross income, but is exempted from the 10% penalty tax on
premature distributions.

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. Employers intending to use
the Contract in connection with such plans should seek competent advice. In
particular, employers should consider that an IRA generally may not provide life
insurance, but it may provide a death benefit that equals the greater of the
premiums paid and the contract's cash value. The Contract provides a death
benefit that in certain circumstances may exceed the greater of the payments and
the Contract Value.

<PAGE>

SAVINGS INCENTIVE MATCH PLANS FOR EMPLOYEES (SIMPLE PLANS)
Sections 408(p) and 401(k) of the Code allow employers with 100 or fewer
employees to establish SIMPLE retirement plans for their employees. SIMPLE plans
may be structured as a SIMPLE retirement account using an employee's IRA to hold
the assets or as a Section 401(k) qualified cash or deferred arrangement. In
general, a SIMPLE plan consists of a salary deferral program for eligible
employees and matching or nonelective contributions made by employers. Employers
intending to use the Contract in conjunction with SIMPLE plans should seek
competent tax and legal advice.

TAX SHELTERED ANNUITIES
Section 403(b) of the Code permits public school employees and employees of
certain types of tax-exempt organizations (specified in Section 501(c)(3) of the
Code) to have their employers 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
on or after the date the employee attains age 59 1/2, separates from service,
dies, becomes disabled or on the account of hardship (earnings on salary
reduction contributions may not be distributed for hardship). These limitations
do not apply to withdrawals where Allstate New York is directed to transfer some
or all of the Contract Value to another 403(b) plan.

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. To the extent the Contracts are used in connection with an
eligible plan, employees are considered general creditors of the employer and
the employer as owner of the contract has the sole right to the proceeds of the
contract. Generally, under the non-natural owner rules, such Contracts are not
treated as annuity contracts for federal income tax purposes. Under these plans,
contributions made for the benefit of the employees will not be includible in
the employees' gross income until distributed from the plan. However, under a
Section 457 plan all the compensation deferred under the plan must remain solely
the property of the employer, subject only to the claims of the employer's
general creditors, until such time as made available to the employee or a
beneficiary.

<PAGE>

EXPERTS
-------------------------------------------------------------------------------

The financial statements and related financial statement schedules of Allstate
New York as of December 31, 1999 and for each of the three years in the period
ended December 31, 1999 and the related financial statement schedules that
appear in this Statement of Additional Information have been audited by Deloitte
& Touche LLP, independent auditors, as stated in their report appearing herein,
and are included in reliance upon the report of such firm given upon their
authority as experts in accounting and auditing.

The financial statements of the Variable Account as of December 31, 1999 and for
each of the periods in the two year period then that appear in this Statement of
Additional Information have been audited by Deloitte & Touche LLP, independent
auditors, as stated in their report appearing herein, and are included in
reliance upon the report of such firm given upon their authority as experts in
accounting and auditing.

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

The financial statements of the Variable Account as of December 31, 1999 and for
each of the periods in the two year period then ended, the financial statements
of Allstate New York as of December 31, 1999 and 1998 and for each of the three
years in the period ended December 31, 1999 and related financial statement
schedules and the accompanying Independent Auditors' Report appear in the pages
that follow. The financial statements of the Variable Account and Allstate New
York as of and for the periods ended September 30, 2000 also appear on the pages
that follow and are unaudited. The financial statements of Allstate New York
included herein should be considered only as bearing upon the ability of
Allstate New York to meet its obligations under the Contracts.

<PAGE>
PART C

OTHER INFORMATION

24. FINANCIAL STATEMENTS AND EXHIBITS

(a) FINANCIAL STATEMENTS

Allstate Life Insurance Company of New York Financial Statements and
Financial Statement Schedules and Allstate Life of New York Variable Annuity
Account II Financial Statements are included in Part B of this Registration
Statement.

(b) EXHIBITS

The following exhibits, correspond to those required by paragraph (b) of
item 24 as to exhibits in Form N-4:

(1) Form of Resolution of the Board of Directors of Allstate Life Insurance
Company of New York authorizing establishment of the Variable Annuity
Account II (Incorporated herein by reference to Post-Effective Amendment
No. 10 to Registrant's Form N-4 Registration Statement (File No. 033-35445)
dated December 31, 1996).

(2) Not Applicable

(3) General Agent's Agreement (Incorporated herein by reference to
Post-effective Amendment No. 14 to Registrant's Form N-4 Registration
Statement (File No. 033-35445) dated April 17, 1998).

(4)(a) Form of Contract for the Allstate Variable Annuity 3

(4)(b) Form of Performance Death Benefit Rider for the Allstate Variable
Annuity 3

(5) Form of Application for the Allstate Variable Annuity 3

(6)(a) Restated Certificate of Incorporation of Allstate Life Insurance Company
of New York (Incorporated herein by reference to Depositor's Form 10-K
annual report dated March 30, 1999).

(6)(b) Amended By-laws of Allstate Life Insurance Company of New York
(Incorporated herein by reference to Depositor's Form 10-K annual report
dated March 30, 1999).

(7) Not applicable

(8) Form of Participation Agreements

(a) Morgan Stanley Dean Witter Variable Investment Series (Incorporated
herein by reference to Post-Effective Amendment No. 9 to Registrant's
Form N-4 Registration Statement (File No. 033-35445) dated April 30,
1996).

(b) The Universal Institutional Funds, Inc. (Incorporated herein by
reference to Post-Effective Amendment No. 16 to Registrant's Form N-4
Registration Statement (File No. 033-35445) dated May 1, 2000).

(c) AIM Variable Insurance Funds (Incorporated herein by reference to
Post-Effective Amendment No. 16 to Registrant's Form N-4 Registration
Statement (File No. 033-35445) dated May 1, 2000).

(d) Alliance Variable Products Series Fund (Incorporated herein by
reference to Post-Effective Amendment No. 16 to Registrant's Form N-4
Registration Statement (File No. 033-35445) dated May 1, 2000).

(e) Putnam Variable Trust (Incorporated herein by reference to
Post-Effective Amendment No. 16 to Registrant's Form N-4 Registration
Statement (File No. 033-35445) dated May 1, 2000).

(f) Van Kampen Life Investment Trust (Incorporated herein by reference to
Post-Effective Amendment No. 16 to Registrant's Form N-4 Registration
Statement (File No. 033-35445) dated May 1, 2000).

(9) Opinion and Consent of General Counsel*

(10)(a) Independent Auditors' Consent*

(10)(b) Consent of Freedman, Levy, Kroll & Simonds*

(11) Not Applicable

(12) Not Applicable

(13) Performance Data Calculations*

(14) Not Applicable

(99)(a) Power of Attorney for Kevin R. Slawin (Incorporated herein by reference
to Post-Effective Amendment No. 10 to Registrant's Form N-4 Registration
Statement (File No. 033-35445) dated December 31, 1996).

(99)(b) Powers of Attorney for Thomas J. Wilson, II, Marcia D. Alazraki,
Cleveland Johnson, Jr., John R. Raben, Jr. and Sally A. Slacke
(Incorporated herein by reference to Post-Effective Amendment No. 15 to
Registrant's Form N-4 Registration Statement (File No. 033-35445) dated
April 30, 1999).

(99)(c) Powers of Attorney for Samuel H. Pilch, Marla G. Friedman, Kenneth R.
O'Brien, Patricia W. Wilson, and Vincent A. Fusco (Incorporated herein by
reference to Post-Effective Amendment No. 16 to Registrant's Form N-4
Registration Statement (File No. 033-35445) dated May 1, 2000).

(99)(d) Powers of Attorney for Margaret G. Dyer, John C. Lounds, J. Kevin
McCarthy and Steven C. Verney (Incorporated herein by reference to
Pre-Effective Amendment No. 1 to Registrant's Form N-4 Registration
Statement (File No. 333-38176) dated August 30, 2000).

* To be filed by pre-effective amendment.

<PAGE>

25. DIRECTORS AND OFFICERS OF THE DEPOSITOR

<TABLE>
<CAPTION>
<S> <C>
NAME AND PRINCIPAL POSITION AND OFFICE WITH
BUSINESS ADDRESS DEPOSITOR OF THE ACCOUNT
--------------------------------------------------------------------------------
Thomas J. Wilson, II Director, Chairman of the Board and President
Michael J. Velotta Director, Vice President, Secretary and General Counsel
Marcia D. Alazraki Director
Margaret G. Dyer Director
Marla G. Friedman Director and Vice President
Vincent A. Fusco Director and Chief Operations Officer
Karen C. Gardner Vice President
John R. Hunter Vice President
Cleveland Johnson, Jr. Director
John C. Lounds Director
J. Kevin McCarthy Director
Kenneth R. O'Brien Director
Samuel H. Pilch Controller
John R. Raben, Jr. Director
Leonard G. Sherman Vice President
Sally A. Slacke Director
Kevin R. Slawin Vice President
Casey J. Sylla Chief Investment Officer
Steven C. Verney Director
Patricia W. Wilson Director and Assistant Vice President
James P. Zils Treasurer
Richard L. Baker Assistant Vice President
D. Steven Boger Assistant Vice President
James J. Brazda Chief Administrative Officer
Patricia A. Coffey Assistant Vice President
Dorothy E. Even Assistant Vice President
Judith P. Greffin Assistant Vice President
Keith A. Hauschildt Assistant Vice President
Ronald A. Johnson Assistant Vice President
Charles D. Mires Assistant Vice President
Barry S. Paul Assistant Vice President and Assistant Treasurer
Timothy N. Vander Pas Assistant Vice President
David A. Walsh Assistant Vice President
Joanne M. Derrig Assistant Secretary and Assistant General Counsel
Paul N. Kierig Assistant Secretary
Susan L. Lees Assistant Secretary
Mary J. McGinn Assistant Secretary
Ralph A. Bergholtz Assistant Treasurer
Mark A. Bishop Assistant Treasurer
Robert B. Bodett Assistant Treasurer
Barbara S. Brown Assistant Treasurer
Rhonda Hoops Assistant Treasurer
Peter S. Horos Assistant Treasurer
Thomas C. Jensen Assistant Treasurer
David L. Kocourek Assistant Treasurer
Daniel C. Leimbach Assistant Treasurer
Beth K. Marder Assistant Treasurer
Jeffrey A. Mazer Assistant Treasurer
Ronald A. Mendel Assistant Treasurer
Stephen J. Stone Assistant Treasurer
R. Steven Taylor Assistant Treasurer
Louise J. Walton Assistant Treasurer
Jerry D. Zinkula Assistant Treasurer
Errol Cramer Corporate Actuary
</TABLE>

*The principal business address of Mr. Fusco is One Allstate Drive,
Farmingville, New York 11738. The principal business address of Ms. Alazraki is
1675 Broadway, New York, New York 10019. The principal business address of Mr.
Johnson is 47 Doral Lane, Bay Shore, New York 11706. The principal business
address of Mr. O'Brien is 165 E. Loines Avenue, Merrick, New York 11566. The
principal business address of Mr. Raben is 60 Wall Street, 15th Floor, New York,
New York 10260. The principal business address of Ms. Slacke is 8 John Way,
Islandia, New York 11788. The principal business address of the other foregoing
officers and directors is 3100 Sanders Road, Northbrook, Illinois 60062.

26. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH DEPOSITOR OR REGISTRANT

Incorporated herein by reference to Annual Report on Form 10-K, filed by the
Allstate Corporation on March 29, 2000, File No. 1-11840).

27. NUMBER OF CONTRACT OWNERS

As of the date of the filing of this Registration Statement, the offering of the
Allstate Variable Annuity 3 Contract had not commenced.

28. INDEMNIFICATION

[The General Agent's Agreement (Exhibit 3) 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.]

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 by such director, officer
or controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of is 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.

29. PRINCIPAL UNDERWRITERS

(a) Registrant's principal underwriter, Dean Witter Reynolds Inc., is also the
principal underwriter for the following affiliated investment companies:

Northbrook Variable Annuity Account
Northbrook Variable Annuity Account II
Northbrook Life Variable Life Separate Account A
Allstate Life of New York Variable Annuity Account

(b) The directors and principal officers of the principal underwriter are:

<TABLE>
<CAPTION>
<S> <C>
Name and Principal Business Positions and Offices
Address* of Each Such Person with Underwriter
- -------------------------------------------------------------------------------

Philip J. Purcell Chairman and Chief Executive Officer
Richard M. DeMartini Director, President and Chief Operating Officer,
Dean Witter Capital
James F. Higgins Director, President and Chief Operating Officer,
Dean Witter Financial
Stephen R. Miller Director and Senior Executive Vice President
Mitchell M. Merin Director and Executive Vice President and Chief
Administrative Officer
Michael H. Stone Executive Vice President, General Counsel and Secretary
Raymond J. Drop Director and Executive Vice President
Frederick J. Frohne Executive Vice President
E. Davisson Hardman, Jr. Executive Vice President
Jeremiah A. Mullins Executive Vice President
John H. Schaefer Director and Executive Vice President
Thomas C. Schneider Director and Executive Vice President
Robert B. Sculthorpe Executive Vice President
William B. Smith Executive Vice President
Ronald T. Carman Senior Vice President, Associate General Counsel
and Assistant Secretary
Paul J. Dubow Senior Vice President and Deputy General Counsel
Alexander C. Frank Senior Vice President and Treasurer
Michael T. Gregg Senior Vice President, Deputy General Counsel
and Assistant Secretary
Kelly McNamara Corley Senior Vice President and Director of Governmental
Affairs
Charles F. Vadala, Jr. Senior Vice President and Chief Financial Officer
Anthony Basile Senior Vice President
Michael T. Cunningham Senior Vice President
Mary E. Curran Senior Vice President
Lorena J. Kern Senior Vice President
George R. Ross Senior Vice President
Debra M. Aaron Vice President
Darlene R. Lockhart Vice President
Harvey B. Mogenson Vice President
Kevin Mooney Vice President
Saul Rosen Vice President
Frank G. Skubic Vice President
Eileen S. Wallace Vice President
Michael D. Browne Assistant Secretary
Marilyn K. Cranney Assistant Secretary
Sabrina Hurley Assistant Secretary
Joyce L. Kramer Assistant Secretary
Bruce F. Alonso Director
Donald G. Kempf, Jr. Director
John J. Mack Director
Alan A. Schroder Director
Robert G. Scott Director
</TABLE>

* The principal business address of the above-named individuals is Two World
Trade Center, New York, New York 10048.

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.

<S> <C> <C> <C> <C>
(1) (2) (3) (4) (5)
Net

Name of Principal Underwriting Compensation on Brokerage
Underwriter Discounts and Redemption Commissions Compensation
Commissions
-----------------------------------------------------------------------------------------------------------
Dean Witter
Reynolds Inc. 2,775,723.92

</TABLE>

30. LOCATION OF ACCOUNTS AND RECORDS

The Depositor, Allstate Life Insurance Company of New York, is located at One
Allstate Drive, P.O. Box 9095, Farmingville, New York 11738. The Principal
Underwriter, Dean Witter Reynolds Inc., is located at Two World Trade Center,
New York, New York 10048.

Each company maintains those accounts and records required to be maintained
pursuant to Section 31(a) of the Investment Company Act and the rules
promulgated thereunder.

31. MANAGEMENT SERVICES

[None]

32. UNDERTAKINGS

The Registrant undertakes to file a post-effective amendment to the 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 toll-free number than an
applicant can call 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.

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.

REPRESENTATION REGARDING CONTRACT EXPENSES

Allstate Life Insurance Company of New York represents that the fees and charges
deducted under the Contracts described in this Registration Statement, in the
aggregate, are reasonable in relation to the services rendered, the expenses
expected to be incurred, and the risks assumed by Allstate Life Insurance
Company of New York under the Contracts. Allstate Life Insurance Company of New
York bases its representation on its assessment of all the facts and
circumstances, including such relevant factors as: the nature and extent of such
services, expenses and risks; the need for Allstate Life of New York to earn a
profit; the degree to which the Contracts include innovative features; and the
regulatory standards for exemptive relief under the Investment Company Act of
1940 used prior to October 1996, including the range of industry practice. This
representation applies to all Contracts sold pursuant to this Registration
Statement, including those sold on the terms specifically described in the
prospectus(es) contained herein, or any variations therein, based on
supplements, endorsements, or riders to any Contracts or prospectus(es), or
otherwise.

<PAGE>

SIGNATURES

As required by the Securities Act of 1933 and the Investment Company Act of
1940, the Registrant, Allstate Life of New York Variable Annuity Account II, has
caused the Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, all in the Township of Northfield, State of Illinois,
on the 17th day of November, 2000.

ALLSTATE LIFE OF NEW YORK

VARIABLE ANNUITY ACCOUNT II

(REGISTRANT)

BY: ALLSTATE LIFE INSURANCE COMPANY

OF NEW YORK

(DEPOSITOR)

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

As required by the Securities Act of 1933, this Registration Statement has been
duly signed below by the following Directors and Officers of Allstate Life
Insurance Company of New York on the 17th day of Novembert, 2000.

*/THOMAS J. WILSON, II President and Director
Thomas J. Wilson, II (Principal Executive Officer)

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

*/KEVIN R. SLAWIN Vice President
Kevin R. Slawin (Principal Financial Officer)

*/SAMUEL H. PILCH Controller
Samuel H. Pilch (Principal Accounting Officer)

*/MARCIA D. ALAZRAKI Director
Marcia D. Alazraki

*/MARGARET G. DYER Director
Margaret G. Dyer

*/MARLA G. FRIEDMAN Director and Vice President
Marla G. Friedman

*/VINCENT A. FUSCO Director and Chief Operations
Vincent A. Fusco Officer

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

*/JOHN C. LOUNDS Director
John C. Lounds

*/J. KEVIN MCCARTHY Director
J. Kevin McCarthy

*/KENNETH R. O'BRIEN Director
Kenneth R. O'Brien

*/JOHN R. RABEN, JR. Director
John R. Raben, Jr.

*/SALLY A. SLACKE Director
Sally A. Slacke

*/STEVEN C. VERNEY Director
Steven C. Verney

*/PATRICIA W. WILSON Director and Vice President
Patricia W. Wilson

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

<PAGE>

EXHIBIT INDEX

Exhibit Description

Exhibit (4)(a) Form of Contract for the Allstate Variable Annuity 3
(4)(b) Form of Performance Death Benefit Rider for the Allstate
Variable Annuity 3
Exhibit (5) Form of Application for the Allstate Variable Annuity 3
Exhibit (9) Opinion of General Counsel Re: Legality*
Exhibit (10)(a) Independent Auditors' Consent*
(10)(b) Consent of Freedman, Levy, Kroll & Simonds*
Exhibit (13) Performance Data Calculations*

* To be filed by Pre-Effective Amendment.