<PAGE>
PAGE 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X
Pre-Effective Amendment No.
Post-Effective Amendment No. 3 (File No. 33-40779)
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY
ACT OF 1940 X
Amendment No. 3 (File No. 812-7731)
IDS LIFE ACCOUNT SBS (formerly IDS Life Account SLB)
(Exact Name of Registrant)
IDS Life Insurance Company
(Name of Depositor)
IDS Tower 10, Minneapolis, MN 55440-0010
(Address of Depositor's Principal Executive Offices) (Zip Code)
Depositor's Telephone Number, including Area Code (612) 671-3678
Mary Ellyn Minenko, IDS Tower 10, Minneapolis, MN 55440-0010
(Name and Address of Agent for Service)
It is proposed that this filing will become effective.
immediately upon filing pursuant to paragraph (b) of Rule 486
X on April 29, 1994, pursuant to paragraph (b) of Rule 486
60 days after filing pursuant to paragraph (a) of Rule 486
on (date) pursuant to paragraph (a) of Rule 486
The Registrant has registered an indefinite number or securities
under the Securities Act of 1933 pursuant to Section 24f-2 of the
Investment Company Act of 1940. Registrant's Rule 24f-2 notice for
its most recent fiscal year ended was filed on or about February
25, 1994.
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CROSS REFERENCE SHEET
Cross reference sheet showing location in the prospectus of the
information called for by the items enumerated in Part A and B of
Form N-4.
Negative answers omitted from prospectus are so indicated.
<TABLE><CAPTION>
PART A PART B
Page Number(s) in
Page Number(s) Statement of
Item No. in Prospectus Item No. Additional Information
<S> <C> <S> <C>
1 3 15 38
2 4-5 16 39
3(a) 11 17(a) NA
(b) 5-11 (b) NA
(c) 6*,15*
4(a) 12
(b) 13-14 18(a) NA
(c) 13 (b) NA
(c) 43
5(a) 3,6,15 (d) NA
(b) 5,6,15-16 (e) NA
(c) 16-19 (f) 43
(d) 3,19
(e) 10,34-35 19(a) 6*,15*
(f) NA (b) 23-24*
6(a) 7-8,10-11,22-25 20(a) 43
(b) 5,23-25 (b) 43
(c) 24 (c) 43
(d) NA (d) NA
(e) 19
(f) NA 21(a) 40
(b) 40-41
7(a) 4,5,19
(b) 5,7,15-16,21-22 22 NA
(c) 16
(d) 3 23(a) 44-55
8(a) 9,29 (b) 56-72
(b) 5,20
(c) 29-30
(d) 9,29
(e) 31
(f) NA
9(a) 9,27-29
(b) 9,27-29
10(a) 6-7,19-21,29,34
(b) 29,34
(c) 34
(d) 15
11(a) 8,25-27
(b) NA
(c) 26-27
(d) NA
(e) 15
12(a) 10,31-33
(b) 6
(c) NA
13 NA
14 37
*Designates page number in the prospectus, which is hereby
incorporated by reference in this Statement of Additional
Information.
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Symphony Annuity
Prospectus/April 29, 1994
This prospectus describes an individual flexible premium deferred
annuity contract (Annuity) offered by IDS Life Insurance Company
(IDS Life). The Annuity is a deferred annuity contract in which
purchase payments are accumulated on a fixed and/or variable basis
and which pays retirement benefits to the owner. It is available
for qualified and non-qualified retirement plans.
IDS Life Account SBS Individual Flexible Premium Deferred
Combination Fixed and Variable Annuity Contract
Sold by:
IDS Life Insurance Company
IDS Tower 10
Minneapolis, MN 55440-0010
Telephone: (800) 422-3542
THIS PROSPECTUS IS VALID ONLY WHEN ACCOMPANIED OR PRECEDED BY THE
PROSPECTUS OF SMITH BARNEY SHEARSON SERIES FUND (THE FUND). BOTH
PROSPECTUSES SHOULD BE RETAINED FOR FUTURE REFERENCE.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
IDS LIFE INSURANCE COMPANY IS NOT A BANK, AND THE SECURITIES IT
OFFERS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY ANY BANK NOR ARE THEY INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER
AGENCY.
A Statement of Additional Information (SAI) dated April 29, 1994,
as amended and supplemented from time to time and incorporated
herein by reference, has been filed with the Securities and
Exchange Commission (SEC) and is available without charge by
contacting IDS Life at the telephone number or address shown above.
The Table of Contents of the SAI appears on page [24] of this
prospectus.
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PAGE 4
Definitions
Some terms used in this prospectus:
Accumulation Unit -- A measure of the value of your investment in
each of the subaccounts. Prior to the retirement date, these units
are used to calculate the value of your Annuity.
Annuitant -- The person on whose life annuity payments depend.
Calculation of annuity retirement payments depends on the
annuitant's age.
Contract Value -- The total value of your Annuity before any
applicable surrender charge and any contract charge have been
deducted.
Contract Year -- A period of 12 months, starting on the effective
date of your Annuity and on each anniversary of the effective date.
Fixed Account -- An additional account into which you may choose to
allocate purchase payments and which is included in your contract
value. Purchase payments allocated to the Fixed Account will earn
interest at a rate guaranteed by IDS Life which will change from
time to time.
Owner (You, Your) -- The person or party owning the Annuity.
Payment Year -- Each contract year in which you make a purchase
payment and each succeeding year measured from the end of the
contract year during which you made such a payment. For example,
if you make an initial purchase payment of $15,000 and then make a
subsequent purchase payment of $10,000 during the fourth contract
year, the sixth contract year will be the sixth payment year with
respect to your initial purchase payment and the third payment year
with respect to your subsequent purchase payment.
Portfolios -- The Money Market Portfolio, Intermediate High Grade
Portfolio, Diversified Strategic Income Portfolio, Equity Income
Portfolio, Equity Index Portfolio, Growth & Income Portfolio,
Appreciation Portfolio, Total Return Portfolio, International
Equity Portfolio, and Emerging Growth Portfolio.
You may choose to allocate your purchase payments to one or more of
the subaccounts investing in shares of one of these Portfolios,
each of which is a series of an open-end investment company
registered under the Investment Company Act of 1940, as amended
(1940 Act).
Purchase Payments -- Payments made to IDS Life for an Annuity.
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Retirement Date -- The date on which retirement payments begin.
Surrender Charge -- A deferred sales charge that may be applied if
you surrender your Annuity.
Surrender Value -- The total value of your Annuity after any
applicable surrender charge and any contract charge have been
deducted.
Valuation Date -- Any normal business day, Monday through Friday,
except for the following holidays: New Year's Day, Presidents'
Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day.
Variable Account -- IDS Life Account SBS, a separate account of IDS
Life. Pursuant to the laws of the state of Minnesota, assets
attributable to the Variable Account are held by IDS Life in one or
more subaccounts. Each subaccount invests in a corresponding
Portfolio of the Fund. The Money Market subaccount invests in
shares of the Money Market Portfolio; the Intermediate High Grade
subaccount invests in shares of the Intermediate High Grade
Portfolio; the Diversified Strategic Income subaccount invests in
shares of the Diversified Strategic Income Portfolio; the Equity
Income subaccount invests in shares of the Equity Income Portfolio;
the Equity Index subaccount invests in shares of the Equity Index
Portfolio; the Growth & Income subaccount invests in shares of the
Growth & Income Portfolio; the Appreciation subaccount invests in
shares of the Appreciation Portfolio; the Total Return subaccount
invests in shares of the Total Return Portfolio; the International
Equity subaccount invests in shares of the International Equity
Portfolio; and the Emerging Growth subaccount invests in shares of
the Emerging Growth Portfolio.
Summary of Contents
About the Annuity
Purpose of the Annuity -- The Annuity allows you to invest in any
or all of the ten subaccounts of the Variable Account as well as in
the Fixed Account. Retirement payments are paid on a fixed basis
(page 9).
You may return your Annuity and receive a full refund of the
contract value (including charges) within 10 days after the Annuity
is delivered to you. The contract value returned may be greater or
less than your purchase payment. However, if applicable state law
so requires, or if you purchased the Annuity as an Individual
Retirement Annuity (IRA), your purchase payment will be refunded in
full (page 9).
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Who Issues the Annuity -- IDS Life, a subsidiary of IDS Financial
Corporation (IDS), issues the Annuity (page 9).
About the Variable Account and the Portfolios
Subaccounts Available for Investment -- There are ten separate
subaccounts of the Variable Account available for investment in
addition to the Fixed Account (page 10).
The Variable Account is registered as a single unit investment
trust under the 1940 Act (page 10).
Investment Goals and Policies of the Portfolios -- Each Portfolio
has a different investment goal. The Money Market Portfolio
invests in high quality short-term money market instruments. The
Intermediate High Grade Portfolio invests in high-quality
intermediate-term U.S. government securities and corporate bonds of
U.S. issuers. The Diversified Strategic Income Portfolio invests
primarily in three types of fixed-income securities -- U.S.
government and mortgage securities, foreign government bonds and
corporate bonds rated below investment grade. The Equity Income
Portfolio invests primarily in dividend-paying common stocks,
concentrating in securities of companies in the utility industry.
The Equity Index Portfolio invests in the common stocks of the
companies represented in Standard & Poor's 500 Composite Stock
Price Index (S&P 500). The Growth & Income Portfolio invests in
dividend-paying equity securities meeting certain specified
investment criteria. The Appreciation Portfolio invests primarily
in equity securities. The Total Return Portfolio invests primarily
in a diversified portfolio of dividend-paying common stocks. The
International Equity Portfolio invests at least 65 percent of its
assets in a diversified portfolio of equity securities of
established non-U.S. issuers. The Emerging Growth Portfolio
invests at least 65 percent of its total assets in common stocks of
small- and medium-sized companies, both domestic and foreign, in
the early stages of their life cycle (page 10).
Using the Annuity
Buying the Annuity -- You may obtain an application for the Annuity
from your Smith Barney Shearson Financial Consultant. Applications
are subject to acceptance at IDS Life's home office in Minneapolis
(page 12).
IRAs and Other Qualified Plans -- The Annuity is available for
IRAs, Tax-sheltered Annuities (TSAs) under 403(b) plans, 401(k)
plans and other qualified plans as well as for non-qualified
retirement plans (page 12).
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Purchase Payments -- You must make an initial lump sum purchase
payment to your Annuity and you may make additional purchase
payments to your Annuity. The initial purchase payment must be at
least $5,000 for non-qualified Annuities and at least $500 for
qualified Annuities. After making the initial purchase payment,
you may make additional payments of at least $500 for non-qualified
Annuities and at least $50 for qualified Annuities. Additional
purchase payments can be mailed directly to IDS Life. IDS Life
reserves the right to limit total purchase payments for your
Annuity to $1,000,000 and to change the limits on purchase payment
amounts (page 12).
Your purchase payments will be allocated to the Fixed Account
and/or to the subaccount(s) you choose. For non-qualified
Annuities, the minimum value of your investment in a subaccount or
in the Fixed Account is $500. This $500 minimum value does not
apply to qualified Annuities (page 13).
Transferring Your Money Between Accounts -- Until the retirement
date, you can give us written or telephone instructions to
redistribute your investment among the ten subaccounts of the
Variable Account. There are some restrictions on transferring to
or from the Fixed Account. Transfers must be for at least $500 or,
if less, your entire balance in the subaccount unless you establish
automated transfers of contract values (page 13).
You may establish automated transfers of contract values between
the subaccounts and/or the Fixed Account. The minimum automated
transfer amount is $100. This service is subject to restrictions
(page 13).
Contract Charges and Charges Against the Variable Account -- IDS
Life charges your Annuity $30 per year for administrative services
(page 14).
IDS Life charges the subaccounts of the Variable Account a daily
asset charge at an effective annual rate of 0.25 percent of the
daily net asset value of the subaccounts for administrative and
operating expenses related to the subaccounts (page 14).
IDS Life charges the subaccounts of the Variable Account a daily
mortality and expense risk fee at an effective annual rate of 1.25
percent of the daily net asset value of the subaccounts (page 14).
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PAGE 8
A surrender charge applies if you make a full or partial surrender
of your contract value during the first six payment years following
a purchase payment. The surrender charge starts at 6 percent of a
purchase payment in the first payment year and is reduced by 1
percent each payment year thereafter. There is no surrender charge
after six payment years. In addition, there is no surrender charge
when contract values are applied to retirement payment plans or for
a death benefit. After the first contract year, you may surrender
up to 10 percent of your contract value without incurring a
surrender charge. There is no surrender charge imposed on contract
earnings, as defined herein (page 14).
The above charges will not increase during the term of the Annuity.
For some sales, certain administrative and surrender charges may be
reduced or eliminated altogether (page 16).
Certain state and local governments impose premium taxes (page 16).
Surrendering Your Annuity -- You may surrender all or part of your
Annuity's value at any time before the retirement date. You will
pay income tax on the taxable part of your surrender and you may
have to pay tax penalties if you surrender all or part of your
Annuity before reaching age 59-1/2. In addition, surrenders from
certain qualified Annuities may be subject to 20 percent income tax
withholding (page 16).
The Internal Revenue Code of 1986, as amended (the Code) imposes
restrictions on your right to receive a distribution from a TSA
(page 16).
You may establish systematic withdrawals of up to 10 percent of the
contract value at the beginning of the contract year. Systematic
withdrawals may be made in one of three ways (page 16).
A partial surrender must be for at least $500. You cannot make a
surrender that would reduce the value of your investment in a
subaccount or in the Fixed Account to less than $500 unless the
value of your investment in a subaccount or in the Fixed Account is
fully withdrawn (page 17).
IDS Life may ask you to return the Annuity if you make a complete
surrender (page 17).
Payment usually will be mailed within seven days after IDS Life
receives your surrender request (page 17).
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Payment in Case of Death before Retirement Payments Begin -- Prior
to the retirement date, if you or the annuitant die before the
initial fifth contract anniversary, the beneficiary will be paid
the greater of: 1) the contract value; or 2) the amount of purchase
payments (minus any surrenders). If you or the annuitant die on or
after the initial fifth contract anniversary, and each subsequent
fifth contract anniversary, the beneficiary will be paid the
greater of: 1) the contract value; or 2) a minimum guaranteed death
benefit which equals: a) the death benefit calculated as of the
previous fifth contract anniversary; plus b) any purchase payments
made since the previous fifth contract anniversary; minus c) any
surrenders since the previous fifth contract anniversary (page 17).
Beneficiaries will receive payment in a single lump sum or may
request that payments be made under one of the retirement payment
plans IDS Life offers (page 18).
Settlement Value of Your Annuity -- The amount available on the
retirement date to apply to a retirement payment plan equals the
then current contract value (page 18).
IDS Life calculates retirement payments due based on the contract
value on the retirement date. Payments are made on a fixed basis
(page 19).
Payout Options at Retirement -- At retirement, you may choose one
of five payment plans or make other arrangements. If you do not
choose one of the five payment plans, IDS Life will make payments
under Plan B with 120 monthly payments guaranteed (page 19).
If you purchased your Annuity for a qualified plan, the payment
schedule must meet the requirements of that plan (page 19).
If monthly payments would be less than $50, IDS Life reserves the
right to reduce the frequency of the retirement payments or to pay
the contract value in one lump sum payment (page 20).
If you or the annuitant die after retirement payments begin, any
amount payable will be as provided in the retirement payment plan
in effect (page 20).
Changing Ownership -- You may change ownership of your Annuity by
filing a change of ownership form with IDS Life. Certain
restrictions apply concerning transfer of ownership of a qualified
plan, and certain transfers of non-qualified Annuities may have
adverse federal income tax consequences (page 20).
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PAGE 10
Federal Tax Information -- According to current interpretations of
federal income tax law, there is no federal income tax on any
increase in the Annuity's value until payments are made. Consult
your tax adviser (page 20).
If you surrender your Annuity or if retirement payments begin, you
will be taxed on the amount that exceeds your investment in the
Annuity. Under certain circumstances, there also may be a 10
percent IRS penalty tax on the taxable part of payments. In
addition, distributions from certain qualified Annuities may be
subject to 20 percent income tax withholding (page 21).
Additional Information about the Annuity
Accumulation Units -- When your purchase payments are allocated to
a subaccount, they will be converted into accumulation units. The
accumulation unit value increases or decreases with the performance
of the relevant Portfolio (page 22).
About the Portfolios -- As Annuity owner, you have voting rights in
the Fund and the Portfolios. IDS Life may, in its discretion,
substitute investments in shares of the Portfolios with shares of
other registered investment companies under certain conditions
(page 22).
Information on the Fixed Account of the Annuity -- The Annuity also
allows you to allocate purchase payments to a Fixed Account where
they will earn interest at a rate guaranteed by IDS Life, which
will change from time to time. Subject to restrictions, you may
transfer contract values from the Fixed Account to the subaccounts
and you may establish automated transfers of contract values
between the Fixed Account and the subaccounts. Automated transfers
from the Fixed Account may not exceed an amount that, if continued,
would deplete the Fixed Account within 12 months. This prospectus
applies only to the variable features of the Annuity. Information
about the Fixed Account is found on page 23.
Annuity Expenses
The following information is presented to help you understand the
various costs and expenses that you bear directly or indirectly as
the owner of an Annuity. The information shows the expenses of the
Variable Account as well as the expenses of the underlying
Portfolios. For more information about surrender charges, see
page 14.
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Annual Contract Charges
__________________________________________________
Payment
Surrender Charge Year Percentage
(Contingent Deferred 1 6%
Sales Charge as a 2 5
percentage of purchase 3 4
payments) 4 3
5 2
6 1
7 and later 0
Annual Contract Administrative Charge $30
Annual Variable Account Charges
__________________________________________________________
Variable Account Administrative Charge
(as a percentage of daily net asset value).......... 0.25%
Mortality and Expense Risk Fee
(as a percentage of daily net asset value).......... 1.25%
__________________________________________________________
Total Variable Account Annual Expenses* 1.50%
*Premium taxes imposed by some state and local governments may be
applicable. They are not reflected.
Annual Operating Expenses of the Portfolios
(as a percentage of average daily net assets)
</TABLE>
<TABLE><CAPTION>
______________________________________________________________________________________________________________________________
Intermedi- Diversified
Money ate High Strategic Equity Equity Growth Total International Emerging
Market Grade Income Income Index & Income Appreciation Return Equity Growth
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Management Fees .50% .60% .65% .65% .60% .65% .75% .75% 1.05% .95%
Other Expenses .25 .25 .35 .35 .40 .35 .25 .25** .25** .25**
______________________________________________________________________________________________________________________________
Total Operating
Expenses of
Portfolios .75 .85 1.00 1.00 1.00 1.00 1.00 1.00 1.30 1.20
Example***
You would pay the following expenses on a $1,000 investment, assuming (1) 5-percent annual return and (2) surrender at the end
of each time period:
1 year $ 83.69 $ 84.71 $ 86.23 $ 86.23 $ 86.23 $ 86.23 $ 86.23 $ 86.23 $ 89.28 $ 88.26
3 years $113.22 $116.35 $121.06 $121.06 $121.06 $121.06 $121.06 $121.06 $130.47 $127.33
5 years $145.76 $151.18 $159.27 $159.27 $159.27 $159.27 $159.27 $159.27 $175.46 $170.07
10 years $271.64 $283.27 $300.73 $300.73 $300.73 $300.73 $300.73 $300.73 $323.52 $323.88
You would pay the following expenses on the same investment assuming no surrender:
1 year $ 23.69 $ 24.71 $ 26.23 $ 26.23 $ 26.23 $ 26.23 $ 26.23 $ 26.23 $ 29.28 $ 28.26
3 years $ 73.22 $ 76.35 $ 81.06 $ 81.06 $ 81.06 $ 81.06 $ 81.06 $ 81.06 $ 90.47 $ 87.33
5 years $125.76 $131.18 $139.27 $139.27 $139.27 $139.27 $139.27 $139.27 $155.46 $150.07
10 years $271.64 $283.27 $300.73 $300.73 $300.73 $300.73 $300.73 $300.73 $323.52 $323.88
This example should not be considered a representation of past or future expenses. Actual expenses may be more or less than
those shown. Actual expenses may be more or less than those shown.
**Other expenses are based on estimated amounts expected to be charged to the Portfolio for the current fiscal year.
***In this example, the $30 annual contract administrative charge is approximated as a .086 percent charge based on the
expected average Annuity size.
</TABLE> <PAGE>
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Condensed Financial Information (Unaudited)
The tables below give per-unit information about the financial
history of each subaccount.
<TABLE><CAPTION>
Period from
Year ended Year ended Oct. 16 to
Dec. 31, 1993 Dec. 31, 1992 Dec. 31, 1991
<S> <C> <C> <C>
Subaccount AMO (Investing in shares of Money Market Portfolio)*
Accumulation unit value at beginning of period............................ $1.02 $1.00 $1.00
Accumulation unit value at end of period.................................. $1.02 $1.02 $1.00
Number of accumulation units outstanding at end of period (000 omitted)... 3,175 2,061 828
Ratio of operating expense to average net assets.......................... 1.50% 1.50% 1.50%
Simple yield.............................................................. 0.72% 0.78% 2.00%
Compound yield............................................................ 0.72% 0.78% 2.02%
Subaccount AIH (Investing in shares of Intermediate High Grade Portfolio)*
Accumulation unit value at beginning of period............................ $1.06 $1.02 $1.00
Accumulation unit value at end of period.................................. $1.13 $1.06 $1.02
Number of accumulation units outstanding at end of period (000 omitted)... 8,070 3,417 682
Ratio of operating expense to average net assets.......................... 1.50% 1.50% 1.50%
Subaccount ADS (Investing in shares of Diversified Strategic Income Portfolio)*
Accumulation unit value at beginning of period............................ $1.01 $1.01 $1.00
Accumulation unit value at end of period.................................. $1.12 $1.01 $1.01
Number of accumulation units outstanding at end of period (000 omitted)... 36,618 19,768 3,869
Ratio of operating expense to average net assets.......................... 1.50% 1.50% 1.50%
Subaccount AEM (Investing in shares of Equity Income Portfolio)*
Accumulation unit value at beginning of period............................ $1.12 $1.02 $1.00
Accumulation unit value at end of period.................................. $1.22 $1.12 $1.02
Number of accumulation units outstanding at end of period (000 omitted)... 48,057 23,184 3,835
Ratio of operating expense to average net assets.......................... 1.50% 1.50% 1.50%
Subaccount AEX (Investing in shares of Equity Index Portfolio)*
Accumulation unit value at beginning of period............................ $1.11 $1.06 $1.00
Accumulation unit value at end of period.................................. $1.19 $1.11 $1.06
Number of accumulation units outstanding at end of period (000 omitted)... 6,454 3,748 636
Ratio of operating expense to average net assets.......................... 1.50% 1.50% 1.50%
Subaccount AGI (Investing in shares of Growth & Income Portfolio)*
Accumulation unit value at beginning of period............................ $1.08 $1.01 $1.00
Accumulation unit value at end of period.................................. $1.16 $1.08 $1.01
Number of accumulation units outstanding at end of period (000 omitted)... 20,774 10,136 1,881
Ratio of operating expense to average net assets.......................... 1.50% 1.50% 1.50%
Subaccount AAP (Investing in shares of Appreciation Portfolio)*
Accumulation unit value at beginning of period............................ $1.09 $1.05 $1.00
Accumulation unit value at end of period.................................. $1.15 $1.09 $1.05
Number of accumulation units outstanding at end of period (000 omitted)... 65,534 48,842 10,929
Ratio of operating expense to average net assets.......................... 1.50% 1.50% 1.50%
Subaccount ATR (Investing in shares of Total Return Portfolio)**
Accumulation unit value at beginning of period............................ $1.00 N/A N/A
Accumulation unit value at end of period.................................. $1.03 N/A N/A
Number of accumulation units outstanding at end of period (000 omitted)... 2,486 N/A N/A
Ratio of operating expense to average net assets.......................... 1.50% N/A N/A
Subaccount AIE (Investing in shares of International Equity Portfolio)**
Accumulation unit value at beginning of period............................ $1.00 N/A N/A
Accumulation unit value at end of period.................................. $1.04 N/A N/A
Number of accumulation units outstanding at end of period (000 omitted)... 5,528 N/A N/A
Ratio of operating expense to average net assets.......................... 1.50% N/A N/A
Subaccount AEG (Investing in shares of Emerging Growth Portfolio)**
Accumulation unit value at beginning of period............................ $1.00 N/A N/A
Accumulation unit value at end of period.................................. $1.04 N/A N/A
Number of accumulation units outstanding at end of period (000 omitted)... 2,022 N/A N/A
Ratio of operating expense to average net assets.......................... 1.50% N/A N/A
*Operations commenced on Oct. 16, 1991.
**Operations commenced on Dec. 2, 1993.
/TABLE
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Financial Statements
Complete financial statements of the Variable Account (comprising,
respectively, the AMO, AIH, ADS, AEM, AEX, AGI, AAP, ATR, AEG and
AIE subaccounts) including audited individual and combined
statements of net assets as of Dec. 31, 1993, and the related
statements of operations for the year then ended, and the related
statements of changes in net assets for each of the two years in
the period then ended, except for the ATR, AEG and AIE subaccounts
which are for the period December 2, 1993 (commencement of
operations) to December 31, 1993, are presented in the SAI dated
April 29, 1994. The audited consolidated financial statements of
IDS Life Insurance Company including audited consolidated balance
sheets as of Dec. 31, 1993, and 1992, and audited related
consolidated statements of income and cash flows for each of the
three years in the period ended Dec. 31, 1993 also are presented in
the SAI.
Performance Information
Yield
Performance information for the subaccounts of the Variable
Account, including the simple yield and effective yield for the
Money Market subaccount, and yield and average annual total return
for the remaining subaccounts, may appear from time to time in
advertisements or sales literature.
The simple yield of the Money Market subaccount is based on income
received by a hypothetical investment over a given seven-day period
(less expenses accrued during the period); and then "annualized" by
assuming that the seven-day yield would be received for 52 weeks
and is stated in terms of an annual percentage return on the
investment. The effective yield of the Money Market subaccount is
calculated in a manner similar to that used to calculate simple
yield. However, when annualized, the income earned by the
investment is assumed to be reinvested. The effective yield will
be slightly higher than the simple yield due to the compounding
effect of this assumed reinvestment.
Yield quotations for the remaining subaccounts will be based on all
investment income per accumulation unit earned during a given
30-day period, less expenses accrued during the period (net
investment income). Yield quotations are computed by dividing this
net investment income by the value of an accumulation unit on the
last day of the period.
Total Return
Average annual total return quotations will be expressed in terms
of the average annual compounded rate of return of a hypothetical
investment in an Annuity over a period of one, five and 10 years
(or, if less, up to the life of the subaccount). The total return
quotations will reflect the deduction of all applicable charges
including the contract administrative charge, the Variable Account
administrative charge and the mortality and expense risk fee.
Total return quotations will be made that reflect the deduction of <PAGE>
PAGE 14
the applicable surrender charge (assuming a surrender at the end of
the illustrated period). A subaccount also may use aggregate total
return figures for various periods, representing the cumulative
change in the value of an investment in the subaccount for the
specific period (again reflecting changes in a subaccount's
accumulation unit value) and assuming reinvestment of investment
earnings. Aggregate total returns may be shown by means of
schedules, charts or graphs. Additional total return quotations
may be made that do not reflect a surrender charge deduction
(assuming no surrender at the end of the illustrated period).
Performance information reflects only the performance of a
hypothetical investment in the subaccount during the particular
time period on which the calculations are based. Performance
information should be considered in light of the investment
objectives and policies, characteristics and quality of the
Portfolio of the Fund in which the subaccount invests, and the
market conditions during the given time period and is not intended
to indicate future performance. Advertised yields and total return
figures for the subaccounts include all charges attributable to the
Annuity which have the effect of decreasing the advertised
performance of a subaccount. For this reason, performance
information for a subaccount should not be compared to that for
mutual funds that sell their shares directly to the public. See
the SAI for a description of the methods used to determine yield
and total return information for the subaccounts.
About the Annuity
Purpose of the Annuity
The goal of the Annuity is to allow you, the owner, to build up
funds for retirement. You do this by investing in any one or more
of ten subaccounts of the Variable Account or in the Fixed Account.
Each subaccount invests only in shares of a single Portfolio. You
can direct payments to go to anyone, but you will still be taxed on
the income as owner. You can choose from a variety of retirement
payment plans.
The Annuity is a variable annuity. A variable annuity differs from
a fixed annuity in that during the accumulation period, the
contract value may vary from day to day. You assume the risk of
gain or loss according to the performance of your investment.
There is no guarantee that your Annuity's value at the retirement
date will equal or exceed the total of your purchase payments.
Read this prospectus carefully to decide if a variable annuity will
help meet your retirement goals. You also must read the
accompanying separate prospectus for the Fund describing the
Portfolios to help you decide on the best investments for your
needs. Keep these prospectuses for future reference.
<PAGE>
PAGE 15
You may return your Annuity and receive a full refund of the
contract value (including charges) within 10 days after it is
delivered to you. Return it to your Smith Barney Shearson
Financial Consultant or mail it to IDS Life's home office at the
address on the cover page of this prospectus. No fees or charges
will be deducted, but you bear the investment risk from the time
your purchase payment is applied until your Financial Consultant or
IDS Life receives the Annuity you return. The contract value
returned may be greater or less than your purchase payment.
However, if applicable state law so requires, or if you purchased
the annuity for your IRA, your purchase payment will be refunded in
full.
Who Issues the Annuity
IDS Life issues the Annuity. IDS Life is a wholly owned subsidiary
of IDS, which itself is a wholly owned subsidiary of the American
Express Company (American Express). American Express is a
financial services company principally engaged through subsidiaries
(in addition to IDS) in travel related services, international
banking services, financial services and portfolio management
advice.
IDS Life is a stock life insurance company organized in 1957 under
the laws of the State of Minnesota. Its home office is at IDS
Tower 10, Minneapolis, MN 55440-0010. IDS Life conducts a
conventional life insurance business in the District of Columbia
and all states except New York.
About the Variable Account and the Portfolios
Subaccounts Available for Investment
You may choose to invest your purchase payments in any or all of
ten subaccounts or in the Fixed Account. Each of the subaccounts
invests only in a single Portfolio:
o The Money Market subaccount invests in shares of the Money Market
Portfolio;
o The Intermediate High Grade subaccount invests in shares of the
Intermediate High Grade Portfolio;
o The Diversified Strategic Income subaccount invests in shares of
the Diversified Strategic Income Portfolio;
o The Equity Income subaccount invests in shares of the Equity
Income Portfolio;
o The Equity Index subaccount invests in shares of the Equity Index
Portfolio;
o The Growth & Income subaccount invests in shares of the Growth &
Income Portfolio;
<PAGE>
PAGE 16
o The Appreciation subaccount invests in shares of the Appreciation
Portfolio;
o The Total Return subaccount invests in shares of the Total Return
Portfolio;
o The International Equity subaccount invests in shares of the
International Equity Portfolio; and
o The Emerging Growth subaccount invests in the shares of the
Emerging Growth Portfolio.
Income, capital gains and capital losses of each subaccount are
credited or charged to that subaccount alone. No subaccount will
be charged with liabilities or expenses of any other subaccount or
of IDS Life's general business.
The Variable Account was established on May 9, 1991 under Minnesota
law. On Nov. 3, 1993 the name of the Variable Account was changed
from IDS Life Account SLB to IDS Life Account SBS. The Variable
Account is registered as a single unit investment trust under the
1940 Act. The Variable Account meets the definition of a separate
account under the federal securities laws. This registration does
not involve any supervision by the SEC of IDS Life's management or
investment practices and policies.
The Internal Revenue Service (IRS) has issued final regulations
relating to the diversification requirements under section 817(h)
of the Code. Each Portfolio intends to comply with those
diversification requirements. See the Fund's prospectus for
further tax information regarding the Portfolios.
The U.S. Treasury and the IRS have indicated they may provide
additional guidance concerning circumstances in which investment
control by an Annuity owner would cause that owner to be taxed on
his or her share of the income of the Variable Account. It is not
clear, at this time, what the additional guidance will be and the
timing of further action is unknown. IDS Life reserves the right
to modify the Annuity, as necessary, to prevent the owner from
being currently taxed as the owner of the underlying assets of the
Variable Account for federal income tax purposes.
IDS Life intends to comply with all U.S. Treasury guidance to
insure that the Annuity continues to qualify as an annuity for
federal income tax purposes.
Investment Goals and Policies of the Portfolios
There is one money market Portfolio, two fixed-income Portfolios
and seven equity Portfolios. The investment goals of the
Portfolios are as follows:
<PAGE>
PAGE 17
The Money Market Portfolio's goal is maximum current income to the
extent consistent with the preservation of capital and the
maintenance of liquidity. In seeking to achieve its goal, the
Portfolio will invest in short-term money market instruments deemed
to present minimal credit risks and considered to be "Eligible
Securities" as defined by the SEC.
The Intermediate High Grade Portfolio's goal is to provide as high
a level of current income as is consistent with the protection of
capital. In seeking to achieve its goal, the Portfolio will
invest, under normal market conditions, substantially all, but not
less than 65 percent, of its assets in U.S. government securities
and in high grade corporate bonds of U.S. issuers (i.e., bonds
rated within the two highest rating categories by Moody's Investors
Service, Inc. or Standard & Poor's Corporation or, if not rated,
bonds believed to be of comparable quality).
The Diversified Strategic Income Portfolio's goal is high current
income. In seeking to achieve its goal, the Portfolio will
allocate and reallocate its assets primarily among three types of
fixed-income securities -- U.S. government and mortgage related
securities, foreign government bonds and corporate bonds rated
below investment grade (commonly known as junk bonds). See the
section of the Fund's prospectus entitled "Medium-, Lower- and
Unrated Securities" for further information on these bonds.
The Equity Income Portfolio's primary goal is current income.
Long-term capital appreciation is a secondary goal. In seeking to
achieve its goals, the Portfolio will invest principally in
dividend-paying common stocks of companies whose prospects for
dividend growth and capital appreciation are considered favorable,
concentrating its investments in the utility industry.
The Equity Index Portfolio's goal is to provide investment results
that, before deduction of operating expenses, match the price and
yield performance of U.S. publicly traded common stocks, as
measured by the S&P 500. Once the Portfolio reaches a sufficient
asset size, it will seek to achieve its goal by owning all 500
stocks in the S&P 500 in proportion to their actual market
capitalization weightings.
The Growth & Income Portfolio's goal is income and long-term
capital growth. In seeking to achieve its goal, the Portfolio will
invest in income-producing equity securities, including dividend
paying common stocks, securities that are convertible into common
stocks and warrants meeting certain specified investment criteria.
The Appreciation Portfolio's goal is long-term appreciation of
capital. In seeking to achieve its goal, the Portfolio will invest
primarily in equity and equity-related securities that are believed
to afford attractive opportunities for appreciation.
<PAGE>
PAGE 18
The Total Return Portfolio's goal is to provide shareholders with
total return, consisting of long-term capital appreciation and
income. In seeking to achieve its goal, the Portfolio will
primarily invest in a diversified portfolio of dividend-paying
common stocks.
The International Equity Portfolio's goal is to provide a total
return on its assets from growth of capital and income. In seeking
to achieve its goal, under normal market conditions the Portfolio
will invest at least 65% of its assets in a diversified portfolio
of equity securities of established non-United States issuers.
The Emerging Growth Portfolio's goal is to provide capital
appreciation. In seeking to achieve its goal, the Portfolio will
invest at least 65% of its total assets in common stocks of small-
and medium-sized companies, both domestic and foreign, in the early
stages of their life cycle, that its investment adviser believes
have the potential to become major enterprises.
IDS Life does not guarantee that the Portfolios will meet their
investment goals. Whether they achieve their goals depends on a
number of factors including their managements' ability to manage
the risks of changing economic conditions.
The organizations that perform services for the Portfolios are:
Name Service
PanAgora Asset Management Inc. Investment Adviser to the Equity
Index Portfolio
Smith, Barney Advisers, Inc. Investment Adviser to the
International Equity Portfolio
Smith Barney Shearson Asset Investment Adviser to the
Management Division of Smith, Appreciation Portfolio and
Barney Advisers, Inc. and the Total Return Portfolio
Greenwich Street Advisors Investment Adviser to the Money
Market Portfolio, the
Intermediate High Grade
Portfolio, the Diversified
Strategic Income Portfolio, the
Equity Income Portfolio and the
Growth & Income Portfolio
American Capital Asset Investment Adviser to the
Management, Inc. Emerging Growth Portfolio
<PAGE>
PAGE 19
Smith Barney Global Capital Sub-Investment Adviser to the
Management, Inc. (SBGCM) Diversified Strategic Income
Portfolio
The Boston Company Advisors, Inc. Administrator to each Portfolio
Smith Barney Shearson, Inc. Distributor
Boston Safe Deposit and Trust Custodian
Company
The Shareholder Services Group, Transfer and Dividend Paying
Inc., a subsidiary of First Agent
Data Corporation
Detailed information about each Portfolio, including the risks
related to investing in each Portfolio, is in the separate
prospectus for the Fund. Be sure to read it carefully. There are
deductions from, and fees and expenses paid out of, the assets of
the Fund that are described in its prospectus.
Using the Annuity
Buying the Annuity
Your Smith Barney Shearson Financial Consultant will help you
prepare your application, which will be sent with your purchase
payment to IDS Life's home office in Minneapolis. If your
application is complete, IDS Life will apply your payment not later
than two days after it is received. If IDS Life cannot accept your
application within five days, it will be declined and your payment
will be returned to you. When IDS Life accepts your application,
an Annuity contract will be sent to you.
When you apply for the Annuity, you can select the Fixed Account
and/or the subaccount(s) in which you wish to invest and the
amounts to be allocated to each. You also select how you wish to
make purchase payments. Your purchase payments will be allocated
to the Fixed Account and/or the subaccount(s) according to your
election as of the next close of business after your application is
accepted or your payment is received, whichever is later.
IDS Life reserves the right to impose a maximum issue age for
non-qualified Annuities of age 75 and a maximum issue age for
qualified Annuities of age 65.
Ownership -- As owner, you have all rights and may receive all
benefits under the Annuity. The Annuity can be owned in joint
tenancy only in spousal situations.
<PAGE>
PAGE 20
Retirement Date -- A retirement date is established when you apply
for the Annuity. If you need to change it, send written
instructions to IDS Life's home office at least 30 days before you
wish the change to become effective.
For non-qualified Annuities, the retirement date cannot be later
than the annuitant's 85th birthday or 10 years after issue,
whichever is later.
If you are buying this Annuity to fund a Section 401(k) plan,
custodial or trusteed plan, IRA, TSA or Section 457 plan, to avoid
penalty taxes, retirement payments generally must not begin earlier
than the date the annuitant turns 59-1/2 or later than April 1 of
the year following the calendar year in which he or she reaches age
70-1/2. However, in no case can the retirement date be later than
the annuitant's 85th birthday or 10 years after issue, whichever is
later.
Naming a Beneficiary -- You may name a beneficiary under your
Annuity. If the annuitant dies before the retirement date and
there is no beneficiary, then you are the beneficiary. If you die
before the retirement date and there is no beneficiary, then your
estate will be the beneficiary.
IRAs and Other Qualified Plans
The Annuity may be bought for a retirement plan qualified under
Sections 401, 403, 408 or 457 of the Code. These plans include:
o IRAs and Simplified Employee Pension plans (SEPs);
o Custodial and trusteed pension and profit sharing plans;
o Section 401(k) plans;
o TSAs; and
o Section 457 plans.
Your purchase of the Annuity for a qualified plan will be subject
to applicable federal law and any rules of the plan itself.
Purchase Payments
Amount of Purchase Payments -- You must make an initial lump sum
purchase payment to your Annuity and you may make additional
purchase payments to your Annuity. The initial purchase payment
must be at least $5,000 for non-qualified Annuities and at least
$500 for qualified Annuities. After making the initial purchase
payment, you may make additional payments of at least $500 for
non-qualified Annuities and at least $50 for qualified Annuities.
In Washington, additional purchase payments for a non-qualified <PAGE>
PAGE 21
contract may be made until age 80 and additional payments for a
tax-qualified contract may be made until age 65. Additional
purchase payments can be mailed directly to IDS Life. IDS Life
reserves the right to limit total purchase payments to your Annuity
to $1,000,000 and to change the limits on purchase payment amounts.
Qualified Plans -- If you invest in the Annuity for a qualified
plan, that plan's limits on annual contributions also will apply.
Allocating your Purchase Payments -- Your purchase payment(s) will
be allocated to the Fixed Account and/or the subaccount(s) you have
selected at IDS Life's next close of business, currently the same
as the close of the New York Stock Exchange (NYSE), after IDS Life
accepts your application or receives your payment, whichever is
later. For non-qualified Annuities, the minimum value of your
investment in a subaccount or in the Fixed Account is $500. This
$500 minimum does not apply to qualified Annuities.
Transferring Your Money Between Accounts
Prior to retirement, you may make unlimited transfers of your money
from one subaccount to another by making a written request. There
are some restrictions on transferring to or from the Fixed Account
as discussed in the section called "Information on the Fixed
Account of the Annuity." IDS Life will make the transfer at its
next close of business. There is no charge for transfers.
However, unless the transfer is an automated transfer described
below, IDS Life does require that your transfer be for:
o at least $500; or
o your entire balance in that subaccount, if less.
Automated Transfers -- You may establish automated transfers of
contract values between the subaccounts and/or the Fixed Account
through a one-time written request or other method acceptable to
IDS Life. The minimum automated transfer amount is $100. Such
transfers may be made on a monthly, quarterly, semi-annual or
annual basis. You may start or stop this service at any time, but
you must give IDS Life 30 days' notice to change any automated
transfer instructions that are currently in place. Automated
transfers are subject to all of the other Annuity provisions and
terms, including provisions relating to the transfer of money
between subaccounts.
For information on restrictions on automated transfers of contract
values between the Fixed Account and the subaccounts see the
section called "Information on the Fixed Account of the Annuity."
Before transferring any part of your contract value, you should
consider the risks involved in switching investments. IDS Life
may, in its sole discretion, suspend or modify transfer privileges
at any time.
<PAGE>
PAGE 22
Telephone Transfers -- You also may request a transfer by
telephone. IDS Life has the authority to honor any telephone
requests believed to be authentic and will use reasonable
procedures to confirm that they are. This includes asking
identifying questions and tape recording calls. As long as the
procedures are followed, neither IDS Life nor its affiliates will
be liable for any loss resulting from fraudulent requests. If IDS
Life receives your transfer request before its close of business
(normally 3 p.m. Central time), it will be processed that day.
Calls received after its close of business will be processed the
next business day. At times when the volume of telephone requests
is unusually high, IDS Life will take special measures to seek to
ensure that your call is answered as promptly as possible. A
telephone transfer request will not be allowed within 30 days of a
phoned-in address change.
You may request that telephone transfers not be authorized from
your account by writing IDS Life.
Contract Charges and Charges Against the Variable Account
Contract Administrative Charge -- IDS Life charges your Annuity an
administrative fee of $30 each year. This charge is for
establishing and maintaining your records. IDS Life deducts it
from the contract value on each contract anniversary. If you fully
surrender your Annuity, IDS Life will deduct a reduced contract
administrative charge that is prorated based on the number of days
from your last contract anniversary to the date of full surrender.
The contract administrative charge cannot be increased and does not
apply after a retirement payment plan begins. IDS Life does not
expect to profit from the contract administrative charge.
Variable Account Administrative Charge -- This charge is deducted
daily from the subaccounts of the Variable Account. The charge
equals an effective annual rate of 0.25 percent of the daily net
asset value of the subaccounts and is paid to IDS Life. It covers
certain administrative and operating expenses of the subaccounts
incurred by IDS Life such as accounting, legal and data processing
fees, and expenses involved in the preparation and distribution of
reports and prospectuses. The Variable Account administrative
charge cannot be increased and does not apply after a retirement
payment plan begins. IDS Life does not expect to profit from the
Variable Account administrative charge.
Mortality and Expense Risk Fee -- This charge is deducted daily
from the subaccounts of the Variable Account. The charge equals an
effective annual rate of 1.25 percent of the daily net asset value
of the subaccounts and is paid to IDS Life. It covers IDS Life's
annuity mortality risk and expense risk. IDS Life estimates that
approximately two-thirds of this fee is for assumption of the
mortality risk, and one-third is for assumption of the expense
risk.
<PAGE>
PAGE 23
The mortality risk arises from IDS Life's guarantee to make
retirement payments according to the terms of the Annuity no matter
how long a specific annuitant lives and no matter how long the
entire group of IDS Life annuitants live. If, as a group, IDS Life
annuitants outlive the life expectancy that has been assumed in the
actuarial tables, IDS Life must take money from its general assets
to meet its obligations. If, as a group, IDS Life annuitants do
not live as long as expected, IDS Life could profit from the
mortality risk fee.
The expense risk is the risk that the contract administrative
charge and Variable Account administrative charge, which cannot be
increased, will not cover IDS Life's expenses. Any deficit would
have to be made up from IDS Life's general assets. IDS Life could
profit from the expense risk fee if the annual administrative
charges exceed expenses.
Although IDS Life does not expect to profit from the administrative
charges, IDS Life does expect to profit from the mortality and
expense risk fee. Any profit realized by IDS Life from this fee
would be available to it for any proper corporate purpose,
including, among other things, payment of distribution (selling)
expenses. IDS Life does not expect that the surrender charge,
which is discussed in the following paragraphs, will cover sales
and distribution expenses incurred by IDS Life in connection with
the Annuity.
Surrender Charges -- If you surrender part or all of your Annuity,
you may be subject to a surrender charge. A surrender charge
applies if all or part of the contract value is surrendered during
the first six payment years following a purchase payment. The
surrender charge starts at 6 percent of a purchase payment in the
first payment year and is reduced by 1 percent each payment year
thereafter. This means that there is no surrender charge after six
payment years. In addition, there is no surrender charge when
contract values are applied to a retirement payment plan or for a
death benefit. The surrender charge is used to help defray
expenses incurred in the sale of the Annuity including commissions
and other promotional or distribution expenses associated with the
printing and distribution of prospectuses and sales material.
After the first contract year, you may surrender up to 10 percent
of the contract value on your prior contract anniversary in one or
more surrenders each contract year without incurring a surrender
charge. The 10 percent withdrawal provision is subject to other
Annuity provisions and terms including those on partial surrenders.
In addition, there is no surrender charge on contract earnings,
which equal:
1) the contract value; minus
<PAGE>
PAGE 24
2) the sum of all purchase payments received that have not been
previously surrendered; minus
3) the amount of the 10 percent free withdrawal, if applicable.
For purposes of determining the amount of any surrender charge,
surrenders will be deemed to be taken first from any applicable 10
percent free withdrawal amount; next from purchase payments (on a
first in-first out basis); and finally from contract earnings (in
excess of any 10 percent free withdrawal amount).
Surrender Charge Calculation -- The following example illustrates
how the surrender charge is calculated:
Assumptions:
<TABLE><CAPTION>
______________________________________________________________________________________________
<S> <C>
Initial purchase payment at Annuity issue date of April 29, 1994 ..................... $10,000
Subsequent purchase payment on July 1, 1997 .......................................... 20,000
Account value on contract anniversary, April 29, 1997 ................................ 40,000
Account value on October 12, 1997 .................................................... 42,000
______________________________________________________________________________________________
Full Surrender on October 12, 1997:
Basis of Rate of Dollar Amount
Charge Surrender Charge of Charge Explanation of Charge
$ 4,000 None $ 0 10% of prior contract anniversary contract value surrendered free
$10,000 2% $ 200 Payment made in contract year 1; surrendered at payment year 5 rate
$20,000 5% $1,000 Payment made in contract year 4; surrendered at payment year 2 rate
$ 8,000 None $0 No charge on contract earnings
Total Surrender Charge: $1,200
Partial Surrender of $15,000 on October 12, 1997:
Basis of Rate of Dollar Amount of
Charge Surrender Charge Charge Explanation of Charge
$ 4,000 None $ 0 10% of prior contract anniversary contract value surrendered free
$10,000 2% $200 Payment made in contract year 1; surrendered at payment year 5 rate
$ 1,000 5% $ 50 Payment made in contract year 1; surrendered at payment year 2 rate
Total Surrender Charge: $250
</TABLE>
Surrender Charge on Partial Surrender -- The surrender charge is
deducted from the contract value remaining after the owner is paid
the partial surrender amount requested. For example, if the owner
requested a partial surrender net check amount of $1,000 and the
surrender charge rate that applied to that amount were 5 percent,
the owner would receive the $1,000 requested and the surrender
charge amount would be $52.63 for a total withdrawal of $1,052.63.
Possible Reduction in Charges -- In some cases, IDS Life may expect
to incur lower sales and administrative expenses or perform fewer
services. In those cases, IDS Life may, in its discretion, reduce
or eliminate certain administrative and surrender charges.
However, IDS Life expects this to occur infrequently, if at all.
<PAGE>
PAGE 25
Premium Taxes -- Certain state and local governments impose premium
taxes. These taxes currently range in an amount of up to 3.5
percent and depend on your state of residence or the state in which
the Annuity was sold. The deduction for premium taxes usually is
not made until you surrender your Annuity or retirement payments
begin.
Surrendering Your Annuity
As owner, you may surrender all or part of your Annuity's value at
any time before the retirement date by making a written request.
You may have to pay surrender charges as previously explained.
Also, if you fully surrender your Annuity, a prorated portion of
the contract administrative charge based on the number of days from
your last contract anniversary to the date of full surrender will
be deducted at the time of surrender. No surrenders may be made
after the retirement date.
You may have to pay a 10 percent IRS penalty tax for surrenders
made before you reach age 59-1/2 and 20 percent income tax
withholding may apply to surrenders from certain qualified
Annuities. In addition, certain restrictions may apply to
participants in TSA plans. See the section called "Tax-Sheltered
Annuities."
Tax-Sheltered Annuities -- The Code imposes certain restrictions on
an owner's right to receive early distributions attributable to
salary reduction contributions from an annuity purchased for a
retirement plan qualified under Section 403(b) as a TSA.
Distributions attributable to salary reduction contributions made
after Dec. 31, 1988, plus the earnings on them or to transfers or
rollovers of such amounts from other contracts, may be made from
the TSA only if the owner has attained age 59-1/2, has become
disabled as defined in the Code, has separated from the service of
the employer that purchased the annuity or has died. Additionally,
if the owner should encounter a financial hardship (within the
meaning of the Code), he or she may receive a distribution of all
contract values attributable to salary reduction contributions made
after Dec. 31, 1988, but not of the earnings on them.
These restrictions do not apply to transfers or exchanges of
contract values within the annuity or to another registered
variable annuity contract or investment vehicle available through
the employer.
Even though a distribution may be permitted under these rules
(e.g., for hardship or after separation from service), it may
nonetheless be subject to a 10 percent IRS penalty tax (in addition
to income tax) as a premature distribution and to 20 percent income
tax withholding. See the section called "Federal Tax Information."
<PAGE>
PAGE 26
In addition, for certain types of contributions under a Section
403(b) annuity to be excluded from taxable income, the employer
must comply with certain nondiscrimination requirements. You
should consult your employer to determine whether the
nondiscrimination rules apply to you.
Systematic Withdrawals -- IDS Life allows you to establish
systematic withdrawals of contract values through a one-time
written request or other method acceptable to IDS Life. Amounts of
up to 10 percent of the contract value at the beginning of the
contract year may be withdrawn. The minimum systematic withdrawal
amount from the contract is $100, and such withdrawals can be made
on a monthly, quarterly, semiannual or annual basis. You may
designate systematic withdrawals be made from the Annuity in one of
the following ways:
o withdrawing a specific total dollar amount prorated from all
subaccounts and/or the Fixed Account in which you have a
balance (if no other choice is made, amounts will be withdrawn
under this method);
o withdrawing a specific total dollar amount and also specifying
which percentage of that total amount will be withdrawn from
all subaccounts and/or the Fixed Account in which you have a
balance; or
o withdrawing only the interest credited to the Fixed Account
over the systematic withdrawal period.
The minimum contract value required to begin systematic withdrawals
is $5,000. You may start or stop this service at any time, but
must give IDS Life 30 days' notice to change any systematic
withdrawal instructions that are currently in place. IDS Life will
not deduct surrender charges for first-year systematic withdrawals
of amounts up to 10 percent of the initial purchase payment.
Systematic withdrawals may result in income taxes, withholding
taxes and penalty taxes being applied to all or a portion of the
amount withdrawn. You should consult your tax adviser regarding
the tax consequences of systematic withdrawals.
Partial Surrenders -- The minimum amount you may surrender is $500.
You cannot make a partial surrender if it would reduce the value of
your investment in a subaccount or in the Fixed Account to less
than $500 unless the value of your investment in a subaccount or in
the Fixed Account is fully withdrawn.
If you have a balance in more than one subaccount and/or in the
Fixed Account and request a partial surrender, IDS Life will
withdraw money from all the subaccounts and/or the Fixed Account in
the same proportion as your value in each subaccount or in the
Fixed Account bears to your total contract value, unless you
request otherwise.
<PAGE>
PAGE 27
A partial surrender request not exceeding $40,000 may be made by
telephone. IDS Life has the authority to honor any telephone
requests believed to be authentic and will use reasonable
procedures to confirm that they are. This includes asking
identifying questions and tape recording calls. As long as the
procedures are followed, neither IDS Life nor its affiliates will
be liable for any loss resulting from fraudulent requests. At
times when the volume of telephone requests is unusually high, IDS
Life will take special measures to ensure that your call is
answered as promptly as possible. A telephone surrender request
will not be allowed within 30 days of a phoned-in address change.
You may request that telephone withdrawals not be authorized from
your account by writing IDS Life.
Total Surrenders -- IDS Life will compute the value of your Annuity
at the close of business, currently the same as the close of the
NYSE, after receipt of your request for a complete surrender. IDS
Life may ask you to return the Annuity.
Receiving Payment -- Payment will be mailed within seven days after
IDS Life receives your request. However, IDS Life may postpone
payment if:
o the surrender value includes a purchase payment check that has
not cleared;
o the NYSE is closed, except for normal holiday and weekend
closings;
o trading on the NYSE is restricted according to the rules of the
SEC;
o an emergency, as defined by the rules of the SEC, makes it
impracticable for the Portfolios to sell securities or to value the
Portfolios' net assets; or
o the SEC permits a delay in payment for the protection of owners.
Payment in Case of Death before Retirement Payments Begin
Prior to the retirement date, if you or the annuitant die before
the initial fifth contract anniversary, IDS Life will pay the
beneficiary the greater of:
1) the contract value; or
2) the amount of purchase payments (minus any surrenders).
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On or after the initial fifth contract anniversary, and each
subsequent fifth contract anniversary, IDS Life will pay the
beneficiary the greater of:
1) the contract value; or
2) a minimum guaranteed death benefit which equals:
a) the death benefit calculated as of the previous fifth
contract anniversary; plus
b) any purchase payments made since the previous fifth contract
anniversary; minus
c) any surrenders since the previous fifth contract anniversary.
Contract value is determined as of the date IDS Life receives proof
of death.
If Your Spouse is Sole Beneficiary or Co-owner -- If you, as owner
or co-owner, die before the retirement date and your spouse is the
only beneficiary or co-owner of the Annuity, your spouse may keep
the Annuity as owner. To do this, within 60 days after IDS Life
receives proof of death, it must receive written instructions from
your spouse to keep the Annuity in force.
Section 401(k) Plans, TSAs, Section 457 Plans, Custodial and
Trusteed Plans, and IRAs -- If you buy the Annuity under a Section
401(k) plan, Section 457 plan, custodial or trusteed plan or as an
IRA or TSA, you die before reaching age 70-1/2 or such other date
as provided in the Code, and your spouse is the only beneficiary,
your spouse may keep the Annuity in force until the date on which
you would have reached age 70-1/2. To do this, within 60 days
after IDS Life receives proof of death, it must receive written
instructions from your spouse to keep the Annuity in force.
Paying the Beneficiary -- Unless you have given IDS Life other
written instructions, IDS Life will pay the beneficiary in a
single lump sum payment. The beneficiary may elect to receive this
payment at any time within 5 years after the date of death.
Payments made from certain qualified Annuities to a surviving
spouse instead of being directly rolled over to an IRA may be
subject to 20 percent income tax withholding. See the section
called "Federal Tax Information." IDS Life may make payments under
any retirement payment plan available under this Annuity if:
o the beneficiary asks IDS Life in writing within 60 days after IDS
Life receives proof of death;
o payments begin no later than one year after death; and
o the payment period does not extend beyond the beneficiary's life
or life expectancy in accordance with applicable provisions of the
Code.
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When paying the contract value to the beneficiary, IDS Life will
determine the Annuity's value at the next close of the NYSE after
IDS Life's death claim requirements are fulfilled. Interest, at a
rate no less than that required by applicable law, is paid from the
date of death. IDS Life will mail payment to the beneficiary
within seven days after all death claim requirements are fulfilled.
Settlement Value of Your Annuity
The amount available on the retirement date to provide payments
under a retirement payment plan is the current value of your
investment, called the contract value. Because Portfolio
investments (other than those in the Money Market Portfolio)
fluctuate in value each day, there can be no guarantee that the
contract value will exceed, or even equal, the amount of your
purchase payments. You will receive quarterly statements showing
your contract value and any other information required by
applicable law at least annually.
On your retirement date, the contract value is applied to IDS
Life's current fixed annuity settlement rates table, which will be
at least as favorable as the fixed annuity settlement rates table
contained in the Annuity. IDS Life then calculates lifetime
annuity payments according to the retirement payment plan you
choose.
A unisex table of settlement rates will apply, except when the
Annuity is being used to fund an IRA or a non-qualified plan. The
laws of Montana and Massachusetts require the use of unisex
settlement rates on all annuities.
Payout Options at Retirement
As the owner of the Annuity, you have the right to decide how
retirement payments are to be made. You may select one of the
retirement payment plans outlined below, or you and IDS Life may
mutually agree on other payment arrangements. Annuity payments
will be made on a fixed basis. A fixed annuity is one with
payments that are guaranteed by IDS Life as to dollar amount.
Fixed annuity payments after the first payment will never be less
than the first payment.
Retirement Payment Plans -- You may choose any one of these payment
plans by giving IDS Life written instructions at least 30 days
before the retirement date:
o Plan A - Life Annuity - No Refund -- Monthly payments are made
until the annuitant's death. Payments end with the last monthly
payment before the annuitant's death; no further payments will be
made. You should understand that if the annuitant dies after only
the first monthly payment, no further payments will be made.
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o Plan B - Life Annuity with 5, 10 or 15 Years Certain -- Monthly
payments are made until the annuitant's death. However, payments
are guaranteed for 5, 10 or 15 years. If the annuitant dies before
all guaranteed payments have been made, IDS Life will continue
making those guaranteed payments to you, if living; if not, to your
beneficiary; or, if no beneficiary is named, to your estate.
o Plan C - Life Annuity - Installment Refund -- Monthly payments
are made until the annuitant's death. However, payments are
guaranteed to continue for at least the number of months determined
by dividing the contract value at the time of retirement by the
amount of the monthly payment. If the annuitant dies before all
guaranteed payments have been made, IDS Life will continue making
those guaranteed payments to you, if living; if not, to your
beneficiary; or, if no beneficiary is named, to your estate.
o Plan D - Joint and Last Survivor Life Annuity - No Refund --
Monthly payments are made while both the annuitant and a joint
annuitant are living. If either annuitant dies, monthly payments
continue at the full amount until the death of the surviving
annuitant. Payments end with the death of the second annuitant,
and no further payments will be made. You should understand that
if both the annuitant and the joint annuitant die after only the
first monthly payment, no further payments will be made.
o Plan E - Period Certain Annuity -- Monthly payments are made for
a period of years. The period of years may be no less than 10
years and no more than 30 years. Even if the annuitant lives
beyond the period of years selected, no further payments will be
made. However, if the annuitant dies before the end of the period
selected, IDS Life will continue making monthly payments to you, if
living; if not, to your beneficiary; or, if no beneficiary is
named, to your estate.
Restrictions for Some Qualified Plans -- If your annuity was
purchased in connection with a Section 401(k) plan, custodial or
trusteed plan, Section 457 plan, or as an IRA or TSA, you must
select a payment plan (in accordance with the applicable provisions
of the Code) that provides for payments:
o over the life of the annuitant;
o over the joint lives of the annuitant and beneficiary;
o for a period not exceeding the life expectancy of the annuitant;
or
o for a period not exceeding the joint life expectancies of the
annuitant and beneficiary.
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If IDS Life Does Not Receive Instructions -- You must give IDS Life
written instructions for paying retirement benefits at least 30
days before the retirement date. If you do not, IDS Life will make
payments under Plan B, with 120 monthly payments guaranteed.
If Monthly Payments Would be Less than $50 -- IDS Life will
calculate your contract value at the retirement date. If the
calculations show that monthly payments would be less than $50, IDS
Life reserves the right to change the frequency of the retirement
payments or to pay the contract value in one lump sum.
Death After Retirement Payments Begin -- If you or the annuitant
die after retirement payments begin, any amount payable to the
beneficiary will be made as provided in the retirement payment plan
in effect.
Changing Ownership
You may change ownership of your Annuity at any time by filing a
change of ownership form with IDS Life at its home office. No
change of ownership will be binding upon IDS Life until the change
is received and recorded. IDS Life takes no responsibility for the
validity of the change.
If you have a qualified plan, the Annuity may not be sold,
assigned, transferred, discounted or pledged as collateral for a
loan or as security for the performance of an obligation or for any
other purpose to any person other than IDS Life. However, if the
owner is a trust or custodian, or an employer acting in a similar
capacity, ownership of an Annuity may be transferred to the
annuitant.
The value of any part of a non-qualified Annuity assigned or
pledged is taxed like a cash withdrawal to the extent allocable to
investment in the Annuity after Aug. 13, 1982.
Transfer of a non-qualified Annuity to another person without
adequate consideration is considered a gift and the transfer may be
considered a surrender of the Annuity for federal income tax
purposes. The income on the Annuity will be taxed to the
transferor (original owner), who may be subject to a 10 percent IRS
penalty tax for early withdrawal. The transferee's (new owner's)
investment in the Annuity will be the value of the Annuity at the
time of the transfer. Consult with your tax adviser before taking
any action.
Federal Tax Information
Under current law, there is no liability for federal income tax on
any increase in the Annuity's value until payments are made, except
as discussed above in "Changing Ownership." However, since federal
tax consequences cannot always be anticipated, you should consult a
tax adviser if you have any questions about the taxation of your
Annuity.
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You are not taxed on your investment in the Annuity. Your
investment in the Annuity generally includes purchase payments made
into the Annuity with after-tax dollars. If the investment in the
Annuity was made by you or on your behalf with pre-tax dollars as
part of a qualified retirement plan, such amounts are not
considered to be part of your investment in the Annuity and will be
taxed when paid to you.
If you surrender part or all of your Annuity before the date on
which retirement payments begin, you will be taxed on the payments
that you receive to the extent that the value of your Annuity
exceeds your investment in the Annuity and you may have to pay an
IRS penalty tax for early withdrawal.
If payments begin under a non-qualified Annuity, a portion of each
payment will be subject to tax and a portion of each payment will
be considered a return of part of your investment in the Annuity
and will not be taxed. All amounts received after your investment
in the Annuity is recovered will be subject to tax. If payments
begin under a qualified Annuity, for example an IRA, TSA, or
Section 401(k) plan, all of the payments generally will be subject
to taxation except to the extent that the contributions were made
with after-tax dollars.
Unlike life insurance proceeds, the death benefit under your
Annuity is not tax exempt. The gain, if any, is taxable as
ordinary income to the beneficiary in the year(s) he or she
receives the payments.
Federal tax law requires that all non-qualified deferred annuities
issued by the same company to the same owner during a calendar year
be treated as a single, unified contract. The amount of income
included and taxed in a distribution (or a transaction deemed a
distribution under federal tax law) taken from any one of such
annuities is determined by aggregating all such annuities.
The income earned on an annuity held by such entities as
corporations, partnerships or trusts generally will be treated as
ordinary income received during that year.
You may have to pay a 10 percent IRS penalty tax on any amount
includable in your ordinary income. This penalty will not apply to
any amount received:
o after you reach age 59-1/2;
o because of your death;
o because you become disabled (as defined in the Code);
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PAGE 33
o if the distribution is part of a series of substantially equal
periodic payments made at least annually, over your life or life
expectancy (or joint lives or life expectancies of you and your
designated beneficiary); or
o if it is allocable to an investment before Aug. 14, 1982 (except
for Annuities in qualified plans).
These are the major exceptions to the 10 percent IRS penalty tax.
Additional exceptions may apply depending upon whether your Annuity
is qualified. For qualified Annuities, other penalties apply if
you surrender an Annuity bought under your plan before the plan
specifies that payments can be made under the plan.
In general, if you receive all or part of the Contract value from a
qualified Annuity (except an IRA), mandatory 20 percent income tax
withholding will be imposed at the time the payment is made. In
addition, federal income tax and the 10 percent IRS penalty tax for
early withdrawals may apply to amounts properly includable in
income. This mandatory 20 percent income tax withholding will not
be imposed if:
o instead of receiving the payment, you elect to have the
payment rolled over directly to an IRA or another eligible
plan;
o the payment is one of a series of substantially equal periodic
payments, made at least annually, over your life or life
expectancy (or joint lives or life expectancies of you and
your designated beneficiary) or made over a period of 10 years
or more; or
o the payment is a minimum distribution required under the Code.
These are the major exceptions to the mandatory 20 percent income
tax withholding. Payments made to a surviving spouse instead of
being directly rolled over to an IRA may be subject to 20 percent
income tax withholding. For taxable distributions that are not
subject to the mandatory 20 percent withholding, federal income tax
will be withheld from the taxable part of your distribution unless
you elect otherwise. State withholding also may be imposed on
taxable distributions.
You will receive a tax statement for any year in which you receive
a taxable distribution from your Annuity.
Our discussion of federal tax laws is based on our understanding of
these laws as they are currently interpreted. Either federal tax
laws or current interpretations of them may change. You are urged
to consult your tax adviser regarding your specific circumstances.
<PAGE>
PAGE 34
Additional Information about the Annuity
Accumulation Units
When your purchase payments are allocated to the subaccount(s) you
have chosen, they will be converted into accumulation units. The
number of accumulation units to be credited to your Annuity is
determined by dividing the purchase payment by the accumulation
unit value.
Accumulation Unit Value -- The accumulation unit value for each
subaccount was originally set at $1. IDS Life determines the
current accumulation unit value by taking the last accumulation
unit value for that subaccount and multiplying it by the current
net investment factor.
Net Investment Factor -- The net investment factor is determined
by:
o adding the Portfolio's net asset value per share and the per
share amount of any current dividend or capital gain distribution
made by the Portfolio and held in the subaccount;
o dividing that sum by the last net asset value per share; and
o subtracting the percentage factor representing the mortality and
expense risk fee and Variable Account administrative charge from
the result.
Because the net investment factor may be greater or less than one,
the accumulation unit value may increase or decrease. You bear
this investment risk.
About the Portfolios
Voting Rights -- As the Annuity owner, you have voting rights in
the Fund and the Portfolios, the shares of which are held by the
subaccounts in which you have invested. IDS Life will vote the
shares of each Portfolio in which you have a beneficial interest
according to the instructions received from you. The number of
votes you have is determined by applying your percentage interest
in the subaccount to the total number of votes allowed to the
subaccount.
IDS Life calculates votes separately for each subaccount, and will
do this not more than 60 days before a meeting of beneficial owners
of the Portfolios. Owners with an interest in the matter or
matters being considered will receive notice of these meetings,
proxy materials and a statement of the number of votes to which
they are entitled.
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PAGE 35
If you do not give IDS Life voting instructions, it will vote your
shares in the same proportion as the votes for which it has
received instructions. IDS Life also will vote the shares for
which it has voting rights in the same proportion as the votes for
which it has received instructions. See the prospectus for the
Fund for a detailed description of voting rights in the Fund.
Substitution of Investments -- If shares of any Portfolio of the
Fund should not be available for purchase by the appropriate
subaccount or if, in the judgment of IDS Life's management, further
investment in such shares is no longer appropriate in view of the
purposes of the subaccount, shares of another registered, open-end
management investment company may be substituted for Portfolio
shares held in the subaccounts. If deemed by IDS Life to be in the
best interest of persons having voting rights under the Annuity,
the Variable Account may be operated as a management company under
the 1940 Act or it may be deregistered under such Act in the event
such registration is no longer required. In the event of any such
substitution or change, IDS Life, without the consent or approval
of the owners, may amend the Annuity and take whatever action is
necessary and appropriate. However, no such substitution or change
will be made without any necessary approval of the SEC and state
insurance departments. IDS Life will notify owners of any
substitution or change.
Information on the Fixed Account of the Annuity
In addition to the ten subaccounts of the Variable Account
described in this prospectus, the Annuity has a Fixed Account
available for allocation of purchase payments. Generally, the
information in the section called "Using the Annuity" applies in a
like manner to the Fixed Account. However, there are some
differences.
Fixed annuity cash values increase based on interest rates that may
change from time to time but are guaranteed by IDS Life. Interest
is credited and compounded daily to yield an effective annual
interest rate. The minimum guaranteed interest rate is 4 percent.
Purchase payments and transfers to the Fixed Account become part of
the general account of IDS Life. In contrast, purchase payments
and transfers to the subaccounts of the Variable Account go into a
segregated asset account; they are not mingled with IDS Life's main
portfolio of investments that support fixed annuity obligations.
The gains achieved or losses suffered by the segregated asset
account have no effect on the Fixed Account.
The Annuity allows you to transfer contract values between the
Fixed Account and the subaccounts, but such transfers are
restricted as follows:
1. You may transfer contract values from the Fixed Account to the
subaccount(s) or from the subaccount(s) to the Fixed Account up to
six times per contract year, subject to restrictions #2 and #3
below.<PAGE>
PAGE 36
2. If a transfer is made from the Fixed Account to the
subaccount(s), no subsequent transfer from any subaccount back to
the Fixed Account may be made for six months from the last transfer
date from the Fixed Account.
3. Except for automated transfers of contract values, transfers
must be at least $500 or your entire balance in the Fixed Account,
if less.
IDS Life may, in its sole discretion, suspend or modify these
transfer privileges at any time.
The Annuity allows you to make automated transfers of contract
values between the Fixed Account and the subaccounts, but such
transfers may not exceed an amount that, if continued, would
deplete the Fixed Account within 12 months. The minimum automated
transfer amount is $100. Such transfers may be made on a monthly,
quarterly, semiannual or annual basis. The limit on transfers
between the Fixed Account and subaccounts to six times per year may
be waived if the automated transfer of contract values service is
in effect. You may start or stop this service at any time, but you
must give IDS Life 30 days' notice to change any automated transfer
instructions that are currently in place. Automated transfers are
subject to all of the other Annuity provisions and terms.
If you make any type of transfer from the Fixed Account, you may
not transfer contract values from any subaccount back to the Fixed
Account for six months from the last transfer date from the Fixed
Account.
The mortality and expense risk charge and the Variable Account
administrative charge do not apply to values allocated to the Fixed
Account. However, the other charges described in this prospectus
do apply to the Fixed Account.
Because of exemptive and exclusionary provisions, interests in IDS
Life's general account have not been registered under the
Securities Act of 1933, as amended (1933 Act), nor is the general
account registered as an investment company under the 1940 Act.
Accordingly, neither the general account of IDS Life nor any
interests therein are generally subject to the provisions of the
1933 or 1940 Acts, and IDS Life has been advised that the staff of
the SEC has not reviewed the disclosures in this prospectus that
relate to the Fixed Account. Disclosures regarding the Fixed
Account of the Annuity and the general account of IDS Life,
however, may be subject to certain generally applicable provisions
of the federal securities laws relating to the accuracy and
completeness of statements made in prospectuses.
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Table of Contents of the SAI
Page
Performance Information...................................... 3
Rating Agencies.............................................. 5
Principal Underwriter........................................ 6
Independent Auditors......................................... 6
Mortality and Expense Risk Fee............................... 6
Prospectus................................................... 6
Financial Statements -- IDS Life Account SBS................. 7
-- IDS Life Insurance Company........... 14
___________________________________________________________________
If you would like to receive a copy of the SAI for:
IDS Life Account SBS
Individual Flexible Premium Deferred Combination Fixed and Variable
Annuity
Please return this request to:
IDS Life Insurance Company
Unit 829
P.O. Box 499
Minneapolis, MN 55440-0499
Your name___________________________________________
Address_____________________________________________
City_________________________ State______ Zip_______
<PAGE>
PAGE 38
STATEMENT OF ADDITIONAL INFORMATION
for
SYMPHONY ANNUITY
IDS LIFE ACCOUNT SBS
April 29, 1994
IDS Life Account SBS is a separate account established and
maintained by IDS Life Insurance Company (IDS Life).
This Statement of Additional Information (SAI), dated April 29,
1994, is not a prospectus. It should be read together with the
Account's prospectus, dated April 29, 1994, which may be obtained
from your Smith Barney Shearson Financial Consultant, or by writing
or calling IDS Life Annuity Service at the address or telephone
number below.
IDS Life Insurance Company
Unit 829
P.O. Box 499
Minneapolis, MN 55440-0499
(612) 671-3575
<PAGE>
PAGE 39
TABLE OF CONTENTS
Performance Information........................................p. 3
Rating Agencies................................................p. 5
Principal Underwriter..........................................p. 6
Independent Auditors...........................................p. 6
Mortality and Expense Risk Fee.................................p. 6
Prospectus.....................................................p. 6
Financial Statements
- IDS Life Account SBS...............................p. 7
- IDS Life Insurance Company.........................p.14
<PAGE>
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PERFORMANCE INFORMATION
Calculation of Yield for the Money-Market Subaccount
Simple yield for the Money-Market subaccount will be based on the:
(a) change in the value of a hypothetical investment (exclusive of
capital changes) at the beginning of a seven-day period for which
yield is to be quoted; (b) subtracting a pro rata share of
subaccount expenses accrued over the seven-day period; (c) dividing
the difference by the value of the account at the beginning of the
period to obtain the base period return; and (d) annualizing the
results (i.e., multiplying the base period return by 365/7).
Calculation of effective yield begins with the same base period
return used in the calculation of yield, which is then annualized
to reflect compounding according to the following formula:
365/7
Effective Yield = [(Base Period Return + 1) ]-1
On Dec. 31, 1993, the Account's simple yield was 0.72 percent and
it's effective yield was 0.72 percent.
Calculation of Yield for Non-Money-Market Subaccounts
For a subaccount other than the Money-Market subaccount, quotations
of yield will be based on all investment income earned during a
particular 30-day period, less expenses accrued during the period
(net investment income) and will be computed by dividing net
investment income per accumulation unit by the value of an
accumulation unit on the last day of the period, according to the
following formula:
YIELD = 2[(a-b + 1)6 - 1]
cd
where: a = dividends and investment income earned during the
period.
b = expenses accrued for the period (net of
reimbursements).
c = the average daily number of accumulation units
outstanding during the period that were entitled to
receive dividends.
d = the maximum offering price per accumulation unit on
the last day of the period.
Yield on the subaccount is earned from the increase in the net
asset value of shares of the Fund in which the subaccount invests
and from dividends declared and paid by the Fund, which are
automatically invested in shares of the Fund.
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PAGE 41
Calculation of Average Annual Total Return
Quotations of average annual total return for a subaccount will be
expressed in terms of the average annual compounded rate of return
of a hypothetical investment in the Annuity contract over a period
of one, five and 10 years (or, if less, up to the life of the
subaccount), calculated according to the following formula:
P(1+T)n = ERV
where: P = a hypothetical initial payment of $1,000.
T = average annual total return.
n = number of years.
ERV = Ending Redeemable Value of a hypothetical $1,000
payment made at the beginning of the one-, five-, or
ten-year (or other) period at the end of the one-,
five-, or ten-year (or other) period (or fractional
portion thereof).
Subaccount total return figures reflect the deduction of the
contract administrative charge, Variable Account administrative
charge and mortality and expense risk fee. Performance figures
will be shown with the deduction of the applicable surrender
charge; in addition, performance figures may be shown without the
deduction of a surrender charge. The Securities and Exchange
Commission (SEC) requires that an assumption be made that the
contract owner surrenders the entire contract at the end of the
one, five and ten year periods (or, if less, up to the life of the
subaccount) for which performance is required to be calculated.
Aggregate Total Return
Aggregate total return represents the cumulative change in the net
asset value of shares of the Fund in which the subaccount invests
over a specified period of time and is computed by the following
formula:
ERV - P
P
where: P = a hypothetical initial payment of $1,000.
ERV = Ending Redeemable Value of a hypothetical $1,000
payment made at the beginning of the one-, five-, or
ten-year (or other) period at the end of the one-,
five-, or ten-year (or other) period (or fractional
portion thereof).
Performance of the subaccounts may be quoted or compared to
rankings, yields, or returns as published or prepared by
independent rating or statistical services or publishers or
publications such as Barron's, Business Week, Forbes, Fortune,
Institutional Investor, Investor's Daily, Kiplinger's Personal
Finance, Money, Morningstar Mutual Fund Values, Mutual Fund
Forecaster, The New York Times, Stanger's Investment Advisor, USA
Today, U.S. News & World Report and The Wall Street Journal.
<PAGE>
PAGE 42
RATING AGENCIES
The following chart provides information on the relevance of
ratings* given to IDS Life by independent rating agencies that
evaluate the financial soundness of insurance companies. IDS Life
has one of the most liquid and highest quality balance sheets of
the largest insurance companies in the industry.**
Rating agency Rating Relevance of Rating
A.M. Best A+ Reflects A. M. Best's opinion
(Superior) regarding IDS Life's strong
distribution network, favorable
overall balance sheet profile,
consistently improving profitability,
adequate level of capitalization and
asset/liability management expertise.
Duff & Phelps AAA Reflects Duff & Phelps' opinion
regarding IDS Life's consistently
excellent profitability record,
stable operating leverage, leadership
position in chosen markets and
effective use of asset/liability
management techniques.
Moody's Aa2 Reflects Moody's opinion regarding
IDS Life's leadership position in
financial planning, strong
asset/liability management and good
capitalization. IDS Life has a
strong market focus and it greatly
emphasizes quality service.
A.M. Best rates over 1,600 insurance companies on a 15 level scale
with letters ranging from A++ to F to "NA" ratings based on a
company's financial strength and claims-paying ability.
Duff & Phelps rates over 125 companies for claims-paying ability
with 19 rating categories from AAA to CCC-.
Moody's rates over 80 companies for financial strength with 19
rating categories ranging from Aaa to C.
* Ratings relate to IDS Life's ability to fulfill its obligations
under its contracts and not to the management or performance of the
separate accounts.
** Measured by comparing the 15 largest life insurance companies'
investments in below investment grade (junk) bonds, mortgages and
real estate as a percentage of those companies' total assets.
<PAGE>
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PRINCIPAL UNDERWRITER
The principal underwriter for the Account is IDS Life, which offers
the variable annuity on a continuous basis.
Surrender charges received by IDS Life for 1993, 1992 and 1991
aggregated $4,408,562, $3,649,836 and $3,264,084, respectively.
Commissions paid to IDS Life for 1993, 1992 and 1991 aggregated
$16,783,495, $10,334,092 and $5,205,239, respectively. The
surrender charges were applied toward payment of commissions.
INDEPENDENT AUDITORS
The financial statements of IDS Life Account SBS and of IDS Life
appearing in this SAI have been audited by Ernst & Young,
independent auditors, to the extent indicated in their reports
thereon appearing elsewhere herein. Such financial statements have
been included herein in reliance upon such reports given upon the
authority of such firm as experts in accounting and auditing.
MORTALITY AND EXPENSE RISK FEE
IDS Life has represented to the SEC that:
IDS Life has reviewed publicly available information regarding
products of other companies. Based upon this review, IDS Life has
concluded that the mortality and expense risk fee is within the
range of charges determined by industry practice and that the level
of the mortality and expense risk charge is reasonable in relation
to the risks assumed by IDS Life under the Annuities. IDS Life
will maintain at its principal office, and make available on
request of the SEC or its staff, a memorandum setting forth in
detail the variable products analyzed and the methodology, and
results of, its comparative review.
IDS Life has concluded that there is a reasonable likelihood that
the proposed distribution financing arrangements made with respect
to the Annuities will benefit the Variable Account and investors in
the Annuities. The basis for such conclusion is set forth in a
memorandum which will be made available to the Commission or its
staff on request.
PROSPECTUS
The prospectus dated April 29, 1994, is hereby incorporated in this
SAI by reference.
<PAGE>
PAGE 44
Annual Financial Information
___________________________________________________________________
Report of Independent Auditors
The Board of Directors IDS Life Insurance Company
We have audited the accompanying individual and combined statements
of net assets of the segregated asset subaccounts of IDS Life
Account SBS (comprising, respectively, the AMO, AIH, ADS, AEM, AEX,
AGI, AAP, ATR, AEG and AIE subaccounts) as of December 31, 1993,
and the related statements of operations for the year then ended
and the statements of changes in net assets for each of the two
years in the period then ended, except for the ATR, AEG and AIE
subaccounts which are for the period December 2, 1993 (commencement
of operations) to December 31, 1993. These financial statements
are the responsibility of the management of IDS Life Insurance
Company. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. Our
procedures included confirmation by the underlying affiliated
mutual fund of securities owned at December 31, 1993. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the individual and combined
financial position of the segregated asset subaccounts of IDS Life
Account SBS at December 31, 1993 and the individual and combined
results of their operations and the changes in their net assets for
the periods described in the first paragraph, in conformity with
generally accepted accounting principles.
ERNST & YOUNG
Minneapolis, Minnesota
March 18, 1994
<PAGE>
PAGE 45
<TABLE><CAPTION>
IDS Life Account SBS
________________________________________________________________________________________________________________________
Statements of Net Assets Dec. 31, 1993
__________________Segregated Asset Subaccounts___________________________
Assets AMO AIH ADS AEM AEX AGI
________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C>
Investments in shares of mutual fund
portfolios, at market value:
Shearson Series Fund Money Market Portfolio -
3,250,110 shares at net asset value of
$1.00 per share (cost $3,250,113) $3,250,090 $ - $ - $ - $ - $ -
Shearson Series Fund Intermediate High Grade
Portfolio - 851,262 shares at net asset value of
$10.69 per share (cost $8,911,683) - 9,099,996 - - - -
Shearson Series Fund Diversified Strategic Income
Portfolio - 4,077,158 shares at net asset value
of $10.08 per share (cost $40,586,926) - - 41,097,753 - - -
Shearson Series Fund Equity Income Portfolio -
5,071,817 shares at net asset value of $11.55
per share (cost $56,313,060) - - - 58,578,905 - -
Shearson Series Fund Equity Index Portfolio -
644,946 shares at net asset value of $11.90
per share (cost $7,140,081) - - - - 7,674,863 -
Shearson Series Fund Growth & Income Portfolio -
2,122,960 shares at net asset value of $11.37
per share (cost $22,593,233) - - - - - 24,138,049
Shearson Series Fund Appreciation Portfolio -
6,410,799 shares at net asset value of $11.80
per share (cost $68,473,830) - - - - - -
Shearson Series Fund Total Return Portfolio -
248,445 shares at net asset value of $10.30
per share (cost $2,522,446) - - - - - -
Shearson Series Fund Emerging Growth Portfolio -
202,086 shares at net asset value of $10.41
per share (cost $2,041,727) - - - - - -
Shearson Series Fund International Equity Portfolio -
552,458 shares at net asset value of $10.05
per share (cost $5,527,086) - - - - - -
________________________________________________________________________________________________________________________
3,250,090 9,099,996 41,097,753 58,578,905 7,674,863 24,138,049
________________________________________________________________________________________________________________________
Accounts receivable from IDS Life 4,138 - - - - -
Accounts receivable from IDS Life for contract
purchase payments 174,914 173,954 154,968 18,747 13,715 81,143
________________________________________________________________________________________________________________________
Total assets 3,429,142 9,273,950 41,252,721 58,597,652 7,688,578 24,219,192
________________________________________________________________________________________________________________________
<PAGE>
PAGE 46
IDS Life Account SBS
________________________________________________________________________________________________
Statements of Net Assets Dec. 31, 1993
Combined
__________________Segregated Asset Subaccounts_________ Variable
Assets ATR AEG AIE Account
________________________________________________________________________________________________
Investments in shares of mutual fund
portfolios, at market value:
Shearson Series Fund Money Market Portfolio -
3,250,110 shares at net asset value of
$1.00 per share (cost $3,250,113) $ - $ - $ - $3,250,090
Shearson Series Fund Intermediate High Grade
Portfolio - 851,262 shares at net asset value of
$10.69 per share (cost $8,911,683) - - - 9,099,996
Shearson Series Fund Diversified Strategic Income
Portfolio - 4,077,158 shares at net asset value
of $10.08 per share (cost $40,586,926) - - - 41,097,753
Shearson Series Fund Equity Income Portfolio -
5,071,817 shares at net asset value of $11.55
per share (cost $56,313,060) - - - 58,578,905
Shearson Series Fund Equity Index Portfolio -
644,946 shares at net asset value of $11.90
per share (cost $7,140,081) - - - 7,674,863
Shearson Series Fund Growth & Income Portfolio -
2,122,960 shares at net asset value of $11.37
per share (cost $22,593,233) - - - 24,138,049
Shearson Series Fund Appreciation Portfolio -
6,410,799 shares at net asset value of $11.80
per share (cost $68,473,830) - - - 75,647,430
Shearson Series Fund Total Return Portfolio -
248,445 shares at net asset value of $10.30
per share (cost $2,522,446) 2,558,985 - - 2,558,985
Shearson Series Fund Emerging Growth Portfolio -
202,086 shares at net asset value of $10.41
per share (cost $2,041,727) - 2,103,720 - 2,103,720
Shearson Series Fund International Equity Portfolio -
552,458 shares at net asset value of $10.05
per share (cost $5,527,086) - - 5,552,202 5,552,202
________________________________________________________________________________________________
2,558,985 2,103,720 5,552,202 229,701,993
________________________________________________________________________________________________
Accounts receivable from IDS Life - - - 4,138
Accounts receivable from IDS Life for contract
purchase payments 319,295 103,265 535,565 1,795,625
________________________________________________________________________________________________
Total assets 2,878,280 2,206,985 6,087,767 231,501,756
________________________________________________________________________________________________
<PAGE>
PAGE 47
Liabilities
________________________________________________________________________________________________________________________
Payable to IDS Life for:
Mortality and expense risk fee 3,002 9,125 42,029 62,547 7,948 25,172
Administrative charge 600 1,825 8,406 12,509 1,590 5,034
Payable to mutual fund portfolios for investments
purchased 174,914 173,954 154,968 18,747 13,715 81,143
________________________________________________________________________________________________________________________
Total liabilities 178,516 184,904 205,403 93,803 23,253 111,349
________________________________________________________________________________________________________________________
Net assets applicable to contracts in accumulation
period $3,250,626 $9,089,046 $41,047,318 $58,503,849 $7,665,325 $24,107,843
________________________________________________________________________________________________________________________
Accumulation units outstanding 3,174,577 8,069,531 36,617,992 48,057,398 6,454,223 20,774,138
________________________________________________________________________________________________________________________
Net asset value per accumulation unit $1.02 $1.13 $1.12 $1.22 $1.19 $1.16
________________________________________________________________________________________________________________________
See accompanying notes to financial statements.
Liabilities
____________________________________________________________________________________________________________
Payable to IDS Life for:
Mortality and expense risk fee 79,814 928 712 2,355 233,632
Administrative charge 15,963 186 142 471 46,726
Payable to mutual fund portfolios for investments
purchased 220,059 319,295 103,265 535,565 1,795,625
____________________________________________________________________________________________________________
Total liabilities 315,836 320,409 104,119 538,391 2,075,983
____________________________________________________________________________________________________________
Net assets applicable to contracts in accumulation
period $75,551,653 $2,557,871 $2,102,866 $5,549,376 $229,425,773
____________________________________________________________________________________________________________
Accumulation units outstanding 65,534,486 2,486,207 2,022,327 5,528,223
____________________________________________________________________________________________________________
Net asset value per accumulation unit $1.15 $1.03 $1.04 $1.00
____________________________________________________________________________________________________________
See accompanying notes to financial statements.
<PAGE>
PAGE 48
IDS Life Account SBS
_________________________________________________________________________________________________________________
Statements of Operations Year ended Dec. 31, 1993
____________________________________Segregated Asset Subaccounts___________________________
AMO AIH ADS AEM AEX AGI
_________________________________________________________________________________________________________________
Investment income (loss):
Dividend income from mutual fund portfolios $55,484 $233,837 $2,064,490 $1,870,749 $125,947 $465,606
_________________________________________________________________________________________________________________
Expenses:
Mortality and expense risk fee (Note 3) 29,611 75,583 361,076 567,288 73,373 215,737
Administrative charge (Note 4) 5,922 15,117 72,215 113,458 14,675 43,147
_________________________________________________________________________________________________________________
Total expenses 35,533 90,700 433,291 680,746 88,048 258,884
_________________________________________________________________________________________________________________
Investment income (loss) - net 19,951 143,137 1,631,199 1,190,003 37,899 206,722
_________________________________________________________________________________________________________________
Realized and Unrealized Gain (Loss) on Investments - net
_________________________________________________________________________________________________________________
Realized gain (loss) on sales of investments in
mutual fund portfolios:
Proceeds from sales 2,738,458 560,425 2,036,985 2,466,973 741,508 626,481
Cost of investments sold 2,738,458 544,777 2,041,224 2,322,590 691,321 594,795
_________________________________________________________________________________________________________________
Net realized gain (loss) on investments - 15,648 (4,239) 144,383 50,187 31,686
Net change in unrealized appreciation or
depreciation of investments (23) 155,298 1,196,241 1,025,747 294,375 1,096,595
_________________________________________________________________________________________________________________
Net gain (loss) on investments (23) 170,946 1,192,002 1,170,130 344,562 1,128,281
_________________________________________________________________________________________________________________
Net increase in net assets resulting
from operations $19,928 $314,083 $2,823,201 $2,360,133 $382,461 $1,335,003
_________________________________________________________________________________________________________________
*For the period from Dec. 2, 1993 (commencement of operations) to Dec. 31, 1993.
See accompanying notes to financial statements.
<PAGE>
PAGE 49
IDS Life Account SBS
_______________________________________________________________________________________________________________
Statements of Operations Year ended Dec. 31, 1993
Combined
________________________Segregated Asset Subaccounts_________________________ Variable
AAP ATR* AEG* AIE* Account
_______________________________________________________________________________________________________________
Investment income (loss):
Dividend income from mutual fund portfolios $576,927 $ - $ - $ - $5,393,040
_______________________________________________________________________________________________________________
Expenses:
Mortality and expense risk fee (Note 3) 819,098 929 712 2,355 2,145,762
Administrative charge (Note 4) 163,819 186 142 471 429,152
_______________________________________________________________________________________________________________
Total expenses 982,917 1,115 854 2,826 2,574,914
_______________________________________________________________________________________________________________
Investment income (loss) - net (405,990) (1,115) (854) (2,826) 2,818,126
_______________________________________________________________________________________________________________
Realized and Unrealized Gain (Loss) on Investments - net
_______________________________________________________________________________________________________________
Realized gain (loss) on sales of investments in
mutual fund portfolios:
Proceeds from sales 3,269,388 - - - 12,440,218
Cost of investments sold 3,031,186 - - - 11,964,351
_______________________________________________________________________________________________________________
Net realized gain (loss) on investments 238,202 - - - 475,867
Net change in unrealized appreciation or
depreciation of investments 3,759,636 36,539 61,993 25,116 7,651,517
_______________________________________________________________________________________________________________
Net gain (loss) on investments 3,997,838 36,539 61,993 25,116 8,127,384
_______________________________________________________________________________________________________________
Net increase in net assets resulting
from operations $3,591,848 $35,424 $61,139 $22,290 $10,945,510
_______________________________________________________________________________________________________________
*For the period from Dec. 2, 1993 (commencement of operations) to Dec. 31, 1993.
See accompanying notes to financial statements.
<PAGE>
PAGE 50
IDS Life Account SBS
___________________________________________________________________________________________________________________________
Statements of Changes in Net Assets Year ended Dec. 31, 1993
____________________________________Segregated Asset Subaccounts______________________________________
Operations AMO AIH ADS AEM AEX AGI
____________________________________________________________________________________________________________________________
Investment income (loss) - net $19,951 $143,137 $1,631,199 $1,190,003 $37,899 $206,722
Net realized gain (loss) on investments - 15,648 (4,239) 144,383 50,187 31,686
Net change in unrealized appreciation
or depreciation of investments (23) 155,298 1,196,241 1,025,747 294,375 1,096,595
____________________________________________________________________________________________________________________________
Net increase in net assets resulting
from operations 19,928 314,083 2,823,201 2,360,133 382,461 1,335,003
____________________________________________________________________________________________________________________________
Contract Transactions
____________________________________________________________________________________________________________________________
Variable annuity contract purchase payments 3,361,709 5,159,525 18,650,770 30,097,769 2,593,988 10,385,984
Net transfers** (2,038,140) 278,004 1,348,170 2,000,528 723,433 1,995,616
Contract terminations (185,780) (249,182) (1,332,847) (1,381,338) (72,424) (461,484)
Death benefits - (30,331) (403,787) (522,821) (134,337) (91,834)
____________________________________________________________________________________________________________________________
Increase from contract transactions 1,137,789 5,158,016 18,262,306 30,194,138 3,110,660 11,828,282
____________________________________________________________________________________________________________________________
Net assets at beginning of year 2,092,909 3,616,947 19,961,811 25,949,578 4,172,204 10,944,558
____________________________________________________________________________________________________________________________
Net assets at end of year $3,250,626 $9,089,046 $41,047,318 $58,503,849 $7,665,325 $24,107,843
____________________________________________________________________________________________________________________________
Accumulation Unit Activity
____________________________________________________________________________________________________________________________
Units outstanding at beginning of year 2,060,900 3,416,510 19,767,996 23,184,394 3,748,296 10,135,690
Contract purchase payments 3,296,206 4,652,891 17,244,867 24,818,355 2,252,106 9,334,349
Net transfers** (1,999,981) 248,465 1,224,068 1,630,039 631,522 1,797,594
Contract terminations (182,548) (221,517) (1,246,290) (1,151,771) (62,702) (410,090)
Death benefits - (26,818) (372,649) (423,619) (114,999) (83,405)
____________________________________________________________________________________________________________________________
Units outstanding at end of year 3,174,577 8,069,531 36,617,992 48,057,398 6,454,223 20,774,138
____________________________________________________________________________________________________________________________
*For the period from Dec. 2, 1993 (commencement of operations) to Dec. 31, 1993.
**Includes transfer activity from (to) other subaccounts and transfers from (to) IDS Life's Fixed Account.
See accompanying notes to financial statements.
<PAGE>
PAGE 51
IDS Life Account SBS
________________________________________________________________________________________________________________
Statements of Changes in Net Assets Year ended Dec. 31, 1993
Combined
__________________Segregated Asset Subaccounts__________________________ Variable
Operations AAP ATR* AEG* AIE* Account
________________________________________________________________________________________________________________
Investment income (loss) - net ($405,990) ($1,115) ($854) ($2,826) $2,818,126
Net realized gain (loss) on investments 238,202 - - - 475,867
Net change in unrealized appreciation
or depreciation of investments 3,759,636 36,539 61,993 25,116 7,651,517
________________________________________________________________________________________________________________
Net increase in net assets resulting
from operations 3,591,848 35,424 61,139 22,290 10,945,510
________________________________________________________________________________________________________________
Contract Transactions
________________________________________________________________________________________________________________
Variable annuity contract purchase payments 18,505,051 1,660,532 1,021,278 2,932,625 94,369,231
Net transfers** 1,866,331 861,848 1,020,595 2,594,536 10,650,921
Contract terminations (1,584,592) 67 (146) (75) (5,267,801)
Death benefits (229,819) - - - (1,412,929)
________________________________________________________________________________________________________________
Increase from contract transactions 18,556,971 2,522,447 2,041,727 5,527,086 98,339,422
________________________________________________________________________________________________________________
Net assets at beginning of year 53,402,834 - - - 120,140,841
________________________________________________________________________________________________________________
Net assets at end of year $75,551,653 $2,557,871 $2,102,866 $5,549,376 $229,425,773
________________________________________________________________________________________________________________
Accumulation Unit Activity
________________________________________________________________________________________________________________
Units outstanding at beginning of year 48,842,290 - - -
Contract purchase payments 16,622,412 1,636,694 1,011,027 2,932,154
Net transfers** 1,694,075 849,633 1,011,446 2,596,333
Contract terminations (1,417,245) (120) (146) (264)
Death benefits (207,046) - - -
________________________________________________________________________________________________________________
Units outstanding at end of year 65,534,486 2,486,207 2,022,327 5,528,223
________________________________________________________________________________________________________________
*For the period from Dec. 2, 1993 (commencement of operations) to Dec. 31, 1993.
**Includes transfer activity from (to) other subaccounts and transfers from (to) IDS Life's Fixed Account.
See accompanying notes to financial statements.<PAGE>
PAGE 52
IDS Life Account SBS
___________________________________________________________________________________________________________________________________
Statements of Changes in Net Assets Year Ended Dec. 31, 1992
Combined
______________________________Segregated Asset Subaccounts____________________________ Variable
Operations AMO AIH ADS AEM AEX AGI AAP Account
___________________________________________________________________________________________________________________________________
Investment income
(loss)-net............... $26,744 $73,813 $717,784 $479,160 ($16,482) $103,768 ($521,033) $863,754
Net realized gain (loss)
on investments........... - 2,770 (8,635) 18,634 2,940 5,795 19,069 40,573
Net change in unrealized
appreciation or depreciation
of investments........... - 23,242 (714,615) 1,198,865 208,065 417,372 2,895,497 4,028,426
___________________________________________________________________________________________________________________________________
Net increase (decrease)
in net assets resulting
from operations.......... 26,744 99,825 (5,466) 1,696,659 194,523 526,935 2,393,533 4,932,753
___________________________________________________________________________________________________________________________________
Contract Transactions
___________________________________________________________________________________________________________________________________
Variable annuity contract
purchase payments........ 4,368,947 2,827,850 15,917,822 19,449,936 3,036,615 7,672,182 37,838,478 91,111,830
Net transfers*............. (2,995,053) 22,210 605,979 1,160,417 282,351 947,964 1,977,578 2,001,445
Contract terminations:
Surrender benefits......... (137,484) (29,405) (459,553) (196,216) (14,711) (49,758) (242,265) (1,129,392)
Death benefits............. - - (8,365) (61,223) - (54,000) (47,852) (171,440)
___________________________________________________________________________________________________________________________________
Increase from contract
transactions............. 1,236,410 2,820,655 16,055,883 20,352,914 3,304,255 8,516,388 39,525,939 91,812,444
___________________________________________________________________________________________________________________________________
Net assets at beginning
of year.................. 829,755 696,467 3,911,394 3,900,005 673,426 1,901,235 11,483,362 23,395,644
___________________________________________________________________________________________________________________________________
Net assets at
end of year................ $2,092,909 $3,616,947 $19,961,811 $25,949,578 $4,172,204 $10,944,558 $53,402,834 $120,140,841
___________________________________________________________________________________________________________________________________
Accumulation Unit Activity
___________________________________________________________________________________________________________________________________
Units outstanding at
beginning of year........ 827,842 682,267 3,869,433 3,835,471 636,073 1,880,847 10,929,009
Contract purchase payments. 4,335,347 2,734,395 15,760,161 18,492,849 2,862,977 7,441,152 36,316,596
Net transfers*............. (2,966,618) 27,511 599,953 1,094,706 262,615 911,955 1,870,898
Contract terminations:
Surrender benefits......... (135,671) (27,663) (453,268) (183,933) (13,369) (48,254) (230,434)
Death benefits............. - - (8,283) (54,699) - (50,010) (43,779)
___________________________________________________________________________________________________________________________________
Units outstanding at
end of year.............. 2,060,900 3,416,510 19,767,996 23,184,394 3,748,296 10,135,690 48,842,290
___________________________________________________________________________________________________________________________________
*Includes transfer activity from (to) other subaccounts and transfers from (to) IDS Life's Fixed Account.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
PAGE 53
Notes to Financial Statements
___________________________________________________________________
1. Organization
IDS Life Account SBS (the Variable Account), formerly IDS Life
Account SLB, was established on May 9, 1991 as a single unit
investment trust of IDS Life Insurance Company (IDS Life ) under
the Investment Company Act of 1940, as amended (the "1940 Act").
Operations of the Variable Account commenced on Oct. 16, 1991.
The Variable Account is comprised of various subaccounts. Each
subaccount invests exclusively in shares of ten portfolios of the
Smith Barney Shearson Series Fund. The assets of each subaccount
of the Variable Account are not chargeable with liabilities arising
out of the business conducted by any other Subaccount, Account or
by IDS Life. Purchase payments are allocated to any or all ten
subaccounts or in the Fixed Account. The purchase payments
allocated to the subaccounts are then invested in shares of the
specific portfolio(s) selected.
Smith Barney Shearson Series Fund (the mutual fund) is registered
under the 1940 Act as a diversified, open-end management investment
company. The mutual fund currently offers a selection of ten
Portfolios. Purchase payments allocated to the Money Market (AMO)
subaccount invest in shares of the Money Market Portfolio, the
Intermediate High Grade (AIH) subaccount invests in shares of the
Intermediate High Grade Portfolio; the Diversified Strategic Income
(ADS) subaccount invests in shares of the Diversified Strategic
Income Portfolio; the Equity Income (AEM) subaccount invests in
shares of the Equity Income Portfolio; the Equity Index (AEX)
subaccount invests in shares of the Equity Index Portfolio; the
Growth & Income (AGI) subaccount invests in shares of the Growth &
Income Portfolio; the Appreciation (AAP) subaccount invests in
shares of the Appreciation Portfolio; the Total Return (ATR)
subaccount invests in shares of the Total Return Portfolio; the
Emerging Growth (AEG) subaccount invests in shares of the Emerging
Growth Portfolio; and the International Equity (AIE) subaccount
invests in shares of the International Equity Portfolio.
IDS Life serves as manager, investment adviser and distributor for
the Variable Account. Smith Barney Shearson serves as distributor
for the Fund. Greenwich Street Advisors serves as investment
adviser to the Money Market Portfolio, the Intermediate High Grade
Portfolio, the Diversified Strategic Income Portfolio, the Equity
Income Portfolio and the Growth & Income Portfolio. PanAgora Asset
Management Inc. serves as investment adviser to the Equity Index
Portfolio. Smith Barney Shearson Asset Management Division of
Smith Barney Advisers, Inc. serves as investment adviser to the
Appreciation Portfolio and Total Return Portfolio. Smith Barney
Advisers, Inc. serves as investment adviser to the International
Equity Portfolio. American Capital Asset Management, Inc. serves
as investment adviser to the Emerging Growth Portfolio. Smith
Barney Global Capital Management, Inc. serves as sub-investment
adviser to the Diversified Strategic Income Portfolio. The Boston
Company Advisors, Inc. serves as administrator to each Portfolio.
Boston Safe Deposit and Trust Company serves as the custodian for
the Portfolios.<PAGE>
PAGE 54
____________________________________________________________
2.Summary of Significant Accounting Policies
Investments in the Mutual Fund
Investments in shares of the Portfolio(s) of the Fund are stated at
market value which is the net asset value per share as determined
by the respective portfolio. Investment transactions are accounted
for on the date the shares are purchased and sold. The cost of
investments sold and redeemed is determined on the average cost
method. Dividend distributions received from the portfolios are
reinvested, net of any expense payable to IDS Life, in additional
shares of the portfolios and are recorded as income by the
subaccounts on the ex-dividend date.
Unrealized appreciation or depreciation of investments in the
accompanying financial statements represents the subaccounts' share
of the portfolios' undistributed net investment income,
undistributed realized gain or loss and the unrealized appreciation
or depreciation on their investment securities.
Federal Income Taxes IDS Life is taxed as a life insurance company.
The Variable Account is treated as part of IDS Life for federal
income tax purposes. Under existing federal income tax law, no
income taxes are payable with respect to any investment income of
the Variable Account.
____________________________________________________________
3. Mortality and Expense Risk Fee
IDS Life makes guarantees to the Variable Account that possible
future adverse changes in administrative expenses and mortality
experience of the annuitants will not affect the Variable Account.
The mortality and expense risk fee paid to IDS Life is deducted
daily and is equal, on an annual basis, to 1.25 percent of the
daily net asset value of each subaccount.
____________________________________________________________
4. Variable Account Administrative Charge
IDS Life deducts a daily charge equal, on an annual basis, to 0.25
percent of the daily net asset value of each subaccount. It covers
certain administrative and operating expenses of the subaccounts
incurred by IDS Life such as accounting, legal and data processing
fees, and expenses involved in the preparation and distribution of
reports and prospectuses.
____________________________________________________________
5. Contract Administrative Charge
IDS Life deducts an administrative charge of $30 per year on each
certificate anniversary. This charge reimburses IDS Life for
expenses incurred in establishing and maintaining the Annuity
records. This charge cannot be increased and does not apply after a
retirement payment plan begins. IDS Life does not expect to profit
from this charge.
____________________________________________________________
6. Surrender Charge
IDS Life will use a surrender charge to help it recover certain
expenses relating to the sale of the Annuity. The surrender charge
will be deducted for surrenders during the first six payment years
following a purchase payment. Charges by IDS Life for surrenders<PAGE>
PAGE 55
are not available on an individual segregated asset account basis.
Charges for all segregated asset accounts amount to $4,408,562 in
1993 and $3,649,836 in 1992. Such charges are not an expense of
the subaccounts or Variable Account. They are deducted from
contract surrender benefits paid by IDS Life.
____________________________________________________________
7. Investment Transactions
The subaccounts' purchases of portfolio shares (net of charges),
including reinvestment of dividend distributions, were as follows:
<TABLE><CAPTION>
Year ended Dec. 31,
Subaccount Investment 1993 1992
_____________________________________________________________________________
<S> <C> <C> <C>
AMO Money Market Portfolio $3,893,353 $4,331,654
AIH Intermediate High Grade Portfolio 5,868,198 3,186,369
ADS Diversified Strategic Income Portfolio 21,955,954 17,221,844
AEM Equity Income Portfolio 33,894,292 21,623,325
AEX Equity Index Portfolio 3,893,966 3,532,159
AGI Growth & Income Portfolio 12,678,307 8,911,858
AAP Appreciation Portfolio 21,450,062 39,809,172
*ATR Total Return Portfolio 2,522,446 -
*AEG Emerging Growth Portfolio 2,041,727 -
*AIE International Equity Portfolio 5,527,086 -
_____________________________________________________________________________
$113,725,391 $98,616,381
_____________________________________________________________________________
*Commenced operations on Dec. 2, 1993.
</TABLE>
<PAGE>
PAGE 56
IDS Life Financial Information
The financial statements shown below are those of the insurance
company and not those of IDS Life Account SBS. They are included
in the prospectus for the purpose of informing investors as to the
financial condition of the insurance company and its ability to
carry out its obligations under the variable annuity contracts.
IDS Life Insurance Company
<TABLE><CAPTION>
Consolidated Balance Sheets Dec. 31, 1993 Dec. 31, 1992
Assets (Thousands)
______________________________________________________________________________________________________________________________
<S> <C> <C>
Investments
Fixed maturities (Fair value: 1993, $20,425,979; 1992, $17,896,374) $19,392,424 $17,185,879
Mortgage loans on real estate (Fair value: 1993, $2,125,686; 1992, $1,785,970) 2,055,450 1,688,490
Policy loans 350,501 320,016
Other investments 56,307 51,955
______________________________________________________________________________________________________________________________
Total investments 21,854,682 19,246,340
______________________________________________________________________________________________________________________________
Cash and cash equivalents 146,281 73,563
Receivables:
Reinsurance 55,298 -
Amounts due from brokers 5,719 20,202
Other accounts receivable 21,459 20,095
Premiums due 1,329 1,361
______________________________________________________________________________________________________________________________
Total receivables 83,805 41,658
______________________________________________________________________________________________________________________________
Accrued investment income 307,177 285,120
Deferred policy acquisition costs 1,652,384 1,440,875
Other assets 21,730 18,672
Assets held in segregated asset accounts, primarily common stocks at market 8,991,694 6,189,545
______________________________________________________________________________________________________________________________
Total assets $33,057,753 $27,295,773
______________________________________________________________________________________________________________________________
Liabilities and Stockholder's Equity
______________________________________________________________________________________________________________________________
Liabilities:
Fixed annuities - future policy benefits $18,492,135 $16,342,419
Universal life-type insurance - future policy benefits 2,753,455 2,567,687
Traditional life-type insurance - future policy benefits 210,205 210,886
Disability income, health and long-term care insurance - future policy benefits 185,272 104,896
Policy claims and other policyholders' funds 44,516 49,899
Deferred federal income taxes 43,620 87,913
Amounts due to brokers 351,486 258,654
Other liabilities 292,024 235,509
Liabilities related to segregated asset accounts 8,991,694 6,189,545
______________________________________________________________________________________________________________________________
Total liabilities 31,364,407 26,047,408
______________________________________________________________________________________________________________________________
Stockholder's equity:
Capital stock, $30 per value per share; 100,000 shares authorized, issued and outstanding 3,000 3,000
Additional paid-in capital 222,000 22,000
Net unrealized appreciation on equity securities 114 214
Retained earnings 1,468,232 1,223,151
______________________________________________________________________________________________________________________________
Total stockholder's equity 1,693,346 1,248,365
______________________________________________________________________________________________________________________________
Total liabilities and stockholder's equity $33,057,753 $27,295,773
Commitments and contingencies (Note 6)
______________________________________________________________________________________________________________________________
See accompanying notes to consolidated financial statements.
<PAGE>
PAGE 57
Consolidated Statements of Income Years ended Dec. 31,
1993 1992 1991
(Thousands)
__________________________________________________________________________________________________________________________________
Revenues:
Premiums
Traditional life insurance $ 48,137 $ 49,719 $ 49,706
Disability income and long-term care insurance 79,108 64,660 52,632
__________________________________________________________________________________________________________________________________
127,245 114,379 102,338
Policyholder and contractholder charges 184,205 156,368 137,202
Management and other fees 120,139 84,591 61,142
Net investment income 1,783,219 1,616,821 1,422,866
Net loss on investments (6,737) (3,710) (5,837)
__________________________________________________________________________________________________________________________________
Total revenues 2,208,071 1,968,449 1,717,711
__________________________________________________________________________________________________________________________________
Benefits and expenses:
Death and other benefits - traditional life insurance 32,136 34,139 30,170
Death and other benefits - universal life-type insurance
and investment contracts 49,692 42,174 38,529
Death and other benefits - disability income, health and
long-term care insurance 13,148 10,701 8,242
Decrease in liabilities for future policy benefits -
traditional life insurance (4,513) (5,788) (6,425)
Increase in liabilities for future policy benefits -
disability income, health and long-term care insurance 32,528 27,172 19,700
Interest credited on universal life-type insurance and investment contracts 1,218,647 1,188,379 1,098,281
Amortization of deferred policy acquisition costs 211,733 140,159 116,078
Other insurance and operating expenses 241,974 215,692 153,669
__________________________________________________________________________________________________________________________________
Total benefits and expenses 1,795,345 1,652,628 1,458,244
__________________________________________________________________________________________________________________________________
Income before income taxes 412,726 315,821 259,467
Income taxes 142,647 104,651 77,430
__________________________________________________________________________________________________________________________________
Net income $ 270,079 $ 211,170 $ 182,037
__________________________________________________________________________________________________________________________________
See accompanying notes to consolidated financial statements.
<PAGE>
PAGE 58
Consolidated Statements of Cash Flows Years ended Dec. 31,
1993 1992 1991
(Thousands)
__________________________________________________________________________________________________________________________________
Cash flows from operating activities:
Net income $ 270,079 $ 211,170 $ 182,037
Adjustments to reconcile net income to net cash provided by operating activities:
Issuance - policy loans, excluding universal life-type insurance (35,886) (32,881) (29,309)
Repayment - policy loans, excluding universal life-type insurance 29,557 26,750 19,928
Change in reinsurance receivable (55,298) - -
Change in other accounts receivable (1,364) (4,772) (1,558)
Change in accrued investment income (22,057) (15,853) (26,022)
Change in deferred policy acquisition costs, net (211,509) (229,252) (175,442)
Change in liabilities for future policy benefits for traditional life, disability
income, health and long-term care insurance 79,695 21,384 13,275
Change in policy claims and other policyholders' funds (5,383) (1,347) 11,801
Change in deferred federal income taxes (44,237) (30,385) (29,207)
Change in other liabilities 56,515 88,997 45,323
Amortization of premium (accretion of discount), net (27,438) (4,289) 19,726
Net loss on investments 6,737 3,710 5,837
Premiums related to universal life-type insurance 397,883 312,621 264,504
Surrenders and death benefits related to universal life-type insurance (255,133) (166,162) (109,307)
Interest credited to account balances related to universal life-type insurance 156,885 161,873 160,585
Policyholder and contractholder charges, non-cash (115,140) (100,975) (96,211)
Other, net (1,907) (10,647) 2,258
__________________________________________________________________________________________________________________________________
Net cash provided by operating activities $ 221,999 $ 229,942 $ 258,218
__________________________________________________________________________________________________________________________________
Cash flows from investing activities:
Acquisition of investments, excluding policy loans $(7,102,546) $(7,001,348) $(5,518,481)
Maturities, sinking fund payments and calls of investments, excluding policy loans 3,931,819 2,700,479 838,589
Sale of investments, excluding policy loans 613,571 1,073,950 2,274,401
Change in amounts due from brokers 14,483 289,335 (134,312)
Change in amounts due to brokers 92,832 42,182 72,382
__________________________________________________________________________________________________________________________________
Net cash used in investing activities (2,449,841) (2,895,402) (2,467,421)
__________________________________________________________________________________________________________________________________
Cash flows from financing activities:
Considerations received related to investment contracts 2,843,668 2,821,069 2,316,333
Surrenders and death benefits related to investment contracts (1,765,869) (1,168,633) (871,808)
Interest credited to account balances related to investment contracts 1,071,917 1,026,506 937,696
Issuance - universal life-type insurance policy loans (70,304) (72,007) (76,010)
Repayment - universal life-type insurance policy loans 46,148 40,351 31,860
Capital contribution from parent 200,000 - -
Cash dividend to parent (25,000) (20,000) (20,000)
__________________________________________________________________________________________________________________________________
Net cash provided by financing activities 2,300,560 2,627,286 2,318,071
__________________________________________________________________________________________________________________________________
Net increase (decrease) in cash and cash equivalents 72,718 (38,174) 108,868
Cash and cash equivalents at beginning of year 73,563 111,737 2,869
__________________________________________________________________________________________________________________________________
Cash and cash equivalents at end of year $ 146,281 $ 73,563 $ 111,737
__________________________________________________________________________________________________________________________________
See accompanying notes to consolidated financial statements.
/TABLE
<PAGE>
PAGE 59
Notes to Consolidated Financial Statements ($ Thousands)
Dec. 31, 1993, 1992, 1991
1. Summary of significant accounting policies
Nature of business
IDS Life Insurance Company (the Company) is engaged in the
insurance and annuity business. The Company sells various forms of
fixed and variable individual life insurance, group life insurance,
individual and group disability income insurance, long-term care
insurance, and single and installment premium fixed and variable
annuities.
Basis of presentation
The Company is a wholly owned subsidiary of IDS Financial
Corporation (IDS), which is a wholly owned subsidiary of American
Express Company. The accompanying consolidated financial
statements include the accounts of the Company and its wholly owned
subsidiaries, IDS Life Insurance Company of New York and American
Enterprise Life Insurance Company. All material intercompany
accounts and transactions have been eliminated in consolidation.
The accompanying consolidated financial statements have been
prepared in conformity with generally accepted accounting
principles which vary in certain respects from reporting practices
prescribed or permitted by state insurance regulatory authorities.
Also, the consolidated financial statements are presented on a
historical cost basis without adjustment of the net assets
attributable to the 1984 acquisition of IDS by American Express
Company.
Investments
Investments in fixed maturities are carried at cost, adjusted where
appropriate for amortization of premiums and accretion of
discounts. Mortgage loans on real estate are carried principally
at the unpaid principal balances of the related loans. Policy
loans are carried at the aggregate of the unpaid loan balances
which do not exceed the cash surrender values of the related
policies. Other investments include interest rate caps, real
estate and equity securities. When evidence indicates a decline,
which is other than temporary, in the underlying value or earning
power of individual investments, such investments are written down
to the estimated realizable value by a charge to income. Equity
securities are carried at market value and the related net
unrealized appreciation or depreciation is reported as a credit or
charge to stockholder's equity.
The Company has the ability and the intent to recover the costs of
these investments by holding them for the foreseeable future. The
ability to hold investments to scheduled maturity dates is
dependent on, among other things, annuity contract owners
maintaining their annuity contracts in force.
The Company will implement, effective January 1, 1994, Statement of
Financial Accounting Standards No. 115, "Accounting for Certain
Investments in Debt and Equity Securities." Under the new rules,
debt securities that the Company has both the positive intent and
ability to hold to maturity will be carried at amortized cost.
Debt securities that the Company does not have the positive intent <PAGE>
PAGE 60
1. Summary of significant accounting policies (continued)
and ability to hold to maturity and all marketable equity
securities will be classified as available-for-sale and carried at
fair value. Unrealized gains and losses on securities classified
as available-for-sale will be carried as a separate component of
stockholder's equity. The effect of the new rules will be to
increase stockholder's equity by approximately $181 million, net of
taxes, as of January 1, 1994, but the new rules will have no
material impact on the Company's results of operations.
Realized investment gain or loss is determined on an identified
cost basis.
Interest rate cap contracts are purchased to reduce the Company's
exposure to rising interest rates which would increase the cost of
future policy benefits for interest sensitive products. Costs
are amortized over the lives of the agreements and benefits are
recognized when realized.
Prepayments are anticipated on certain investments in
mortgage-backed securities in determining the constant effective
yield used to recognize interest income. Prepayment estimates
are based on information received from brokers who deal in
mortgage-backed securities.
Statement of cash flows
The Company considers investments with a maturity at the date of
their acquisition of three months or less to be cash equivalents.
These securities are carried principally at amortized cost which
approximates fair value.
Supplementary information to the consolidated statement of cash
flows for the years ended Dec. 31 is summarized as follows:
1993 1992 1991
___________________________________________________________________
Cash paid during the year for:
Income taxes $188,204 $140,445 $111,809
Interest on borrowings 2,661 1,265 108
___________________________________________________________________
Recognition of profits on annuity contracts and insurance policies
The Company issues single premium deferred annuity contracts that
provide for a service fee (surrender charge) at annually decreasing
rates upon withdrawal of the annuity accumulation value by the
contract owner. No sales fee is deducted from the contract
considerations received on these contracts ("no load" annuities).
Single premium deferred annuities issued prior to 1980 had a sales
fee and no surrender charge. All of the Company's single premium
deferred annuity contracts provide for crediting the contract
owners' accumulations at specified rates of interest. Such rates
are revised by the Company from time to time based on changes in
the market investment yield rates for fixed-income securities.
<PAGE>
PAGE 61
1. Summary of significant accounting policies (continued)
Profits on single premium deferred annuities and installment
annuities are recognized by the Company over the lives of the
contracts and represent the excess of investment income earned
from investment of contract considerations over interest credited
to contract owners and other expenses.
The retrospective deposit method is used in accounting for
universal life-type insurance. This method recognizes profits over
the lives of the policies in proportion to the estimated gross
profits expected to be realized.
Premiums on traditional life, disability income, health and
long-term care insurance policies are recognized as revenue when
collected or due, and related benefits and expenses are associated
with premium revenue in a manner that results in recognition of
profits over the lives of the insurance policies. This association
is accomplished by means of the provision for future policy
benefits and the deferral and subsequent amortization of policy
acquisition costs.
Deferred policy acquisition costs
The costs of acquiring new business, principally sales
compensation, policy issue costs, underwriting and certain sales
expenses, have been deferred on insurance and annuity contracts.
The deferred acquisition costs for single premium deferred
annuities and installment annuities are amortized based upon
surrender charge revenue and a portion of the excess of investment
income earned from investment of the contract considerations over
the interest credited to contract owners. The costs for universal
life-type insurance are amortized over the lives of the policies as
a percentage of the estimated gross profits expected to be
realized on the policies. For traditional life, disability income,
health and long-term care insurance policies, the costs are
amortized over an appropriate period in proportion to premium
revenue.
Liabilities for future policy benefits
Liabilities for universal life-type insurance, single premium
deferred annuities and installment annuities are accumulation
values.
Liabilities for fixed annuities in a benefit status are based on
the Progressive Annuity Table with interest at 5 percent, the 1971
Individual Annuity Table with interest at 7 percent or 8.25
percent, or the 1983a Table with various interest rates ranging
from 5.5 percent to 9.5 percent, depending on year of issue.
Liabilities for future benefits on traditional life insurance have
been computed principally by the net level premium method, based on
anticipated rates of mortality (approximating the 1965-1970 Select
and Ultimate Basic Table for policies issued after 1980 and the
1955-1960 Select and Ultimate Basic Table for policies issued prior
to 1981), policy persistency derived from Company experience data
(first year rates ranging from approximately 70 percent to 90
percent and increasing rates thereafter), and estimated future
investment yields of 4 percent for policies issued before 1974 and
<PAGE>
PAGE 62
1. Summary of significant accounting policies (continued)
5.25 percent for policies issued from 1974 to 1980. Cash value
plans issued in 1980 and later assume future investment rates that
grade from 9.5 percent to 5 percent over 20 years. Term insurance
issued from 1981 to 1984 assumes an 8 percent level investment rate
and term insurance issued after 1984 assumes investment rates that
grade from 10 percent to 6 percent over 20 years.
Liabilities for future disability income policy benefits have been
computed principally by the net level premium method, based on the
1964 Commissioners Disability Table with the 1958 Commissioners
Standard Ordinary Mortality Table at 3 percent interest for 1980
and prior, 8 percent interest for persons disabled from 1981 to
1991 and 6 percent interest for persons disabled after 1991.
Liabilities for future benefits on long-term care insurance have
been computed principally by the net level premium method, using
morbidity rates based on the 1985 National Nursing Home Survey and
mortality rates based on the 1983a Table. The interest rate basis
is 9.5 percent grading to 7 percent over ten years for policies
issued from 1989 to 1992, 7.75 percent grading to 7 percent over
four years for policies issued after 1992, 8 percent for claims
incurred in 1989 to 1991 and 6 percent for claims incurred after
1991.
At Dec. 31, 1993 and 1992, the carrying amount and fair value of
fixed annuities future policy benefits, after excluding life
insurance-related contracts carried at $913,127 and $834,909, were
$17,579,008 and $15,507,510, and $16,881,747 and $14,867,066,
respectively. The fair value is net of policy loans of $59,132 and
$51,394 at Dec. 31, 1993 and 1992, respectively. The fair value of
these benefits is based on the status of the annuities at Dec. 31,
1993 and 1992. The fair value of deferred annuities is estimated
as the carrying amount less any surrender charges and related
loans. The fair value for annuities in non-life contingent payout
status is estimated as the present value of projected benefit
payments at the rate appropriate for contracts issued in 1993 and
1992.
Reinsurance
The maximum amount of life insurance risk retained by the Company
on any one life is $750 of life and waiver of premium benefits plus
$50 of accidental death benefits. The maximum amount of disability
income risk retained by the Company on any one life is $6 of
monthly benefit for benefit periods longer than three years. The
excesses are reinsured with other life insurance companies on a
yearly renewable term basis. Graded premium whole life policies
and long term care are primarily reinsured on a coinsurance basis.
In 1993 the Company adopted Statement of Financial Accounting
Standards (SFAS) No. 113, "Accounting and Reporting for Reinsurance
of Short-Duration and Long-Duration Contracts." Under SFAS No.
113, amounts paid or deemed to have been paid for reinsurance
contracts are recorded as reinsurance receivables. Prior to 1993,
these amounts were recorded as a reduction of the liability for
future insurance policy benefits. The cost of reinsurance is
accounted for over the period covered by the reinsurance contract.
<PAGE>
PAGE 63
1. Summary of significant accounting policies (continued)
Federal income taxes
The Company's taxable income is included in the consolidated
federal income tax return of American Express Company. The Company
provides for income taxes on a separate return basis, except that,
under an agreement between IDS and American Express Company, tax
benefit is recognized for losses to the extent they can be used on
the consolidated tax return. It is the policy of IDS and its
subsidiaries that IDS will reimburse a subsidiary for any tax
benefit.
Included in other liabilities at Dec. 31, 1993 and 1992 are $14,709
and $18,181, respectively, payable to IDS for federal income taxes.
Segregated asset account business
The segregated asset account assets and liabilities represent funds
held for the exclusive benefit of the variable annuity and variable
life insurance contract owners. The Company receives investment
management and mortality and expense assurance fees from the
variable annuity and variable life insurance mutual funds and
segregated asset accounts. The Company also deducts a monthly cost
of insurance charge and receives a minimum death benefit guarantee
fee and issue and administrative fee from the variable life
insurance segregated asset accounts.
The Company makes contractual mortality assurances to the variable
annuity contract owners that the net assets of the segregated asset
accounts will not be affected by future variations in the actual
life expectancy experience of the annuitants and the beneficiaries
from the mortality assumptions implicit in the annuity contracts.
The Company makes periodic fund transfers to, or withdrawals from,
the segregated asset accounts for such actuarial adjustments for
variable annuities that are in the benefit payment period. The
Company guarantees, for the variable life insurance policyholders,
the cost of the contractual insurance rate and that the death
benefit will never be less than the death benefit at the date of
issuance.
At Dec. 31, 1993 and 1992 the fair value of liabilities related to
segregated asset accounts was $8,305,209 and $5,727,402,
respectively. The fair value of these liabilities at Dec. 31, 1993
and 1992 is estimated as the carrying amount less variable
insurance contracts carried at $346,276 and $226,946, respectively,
and surrender charges, if applicable.
Reclassification
Certain 1992 and 1991 amounts have been reclassified to conform to
the 1993 presentation.
2. Investments
Market values of investments in fixed maturities represent quoted
market prices and estimated fair values when quoted prices are not
available. Estimated fair values are determined by established
procedures involving, among other things, review of market indices,
price levels of current offerings of comparable issues, price
estimates and market data from independent brokers and financial
files. <PAGE>
PAGE 64
2. Investments (continued)
Net gain (loss) on investments for the years ended Dec. 31 is
summarized as follows:
<TABLE><CAPTION>
1993 1992 1991
________________________________________________________________________________________________
<S> <C> <C> <C>
Fixed maturities $ 5,460 $ 14,474 $ 22,750
Mortgage loans (11,422) (5,004) (1,064)
Other investments (6,606) (8,265) (5,695)
(12,568) 1,205 15,991
Net (increase) decrease in allowance for losses 5,831 (4,915) (21,828)
$ (6,737) $ (3,710) $ (5,837)
________________________________________________________________________________________________
Changes in net unrealized appreciation
(depreciation) of investments for the years
ended Dec. 31 are summarized as follows:
1993 1992 1991
________________________________________________________________________________________________
Fixed maturities $323,060 $(128,683) $861,355
Equity securities (156) 300 418
________________________________________________________________________________________________
Fair values of and gross unrealized gains
and losses on investments in fixed maturities
carried at amortized cost at Dec. 31 are as follows:
Gross Gross
Amortized Unrealized Unrealized Fair
1993 Cost Gains Losses Value
________________________________________________________________________________________________
U.S. Government agency obligations $ 63,532 $ 3,546 $ 1,377 $ 65,701
State and municipal obligations 11,072 2,380 - 13,452
Corporate bonds and obligations 9,362,074 768,747 45,706 10,085,115
Mortgage-backed securities 9,978,523 341,067 57,879 10,261,711
19,415,201 1,115,740 104,962 20,425,979
Less allowance for losses 22,777 - 22,777 -
$19,392,424 $1,115,740 $ 82,185 $20,425,979
________________________________________________________________________________________________
Gross Gross
Amortized Unrealized Unrealized Fair
1992 Cost Gains Losses Value
________________________________________________________________________________________________
U.S. Government agency obligations $ 36,753 $ 3,658 $ 4 $ 40,407
State and municipal obligations 11,234 1,542 - 12,776
Corporate bonds and obligations 7,688,190 431,781 104,707 8,015,264
Mortgage-backed securities 9,487,601 377,539 37,213 9,827,927
17,223,778 814,520 141,924 17,896,374
Less allowance for losses 37,899 - 37,899 -
$17,185,879 $ 814,520 $104,025 $17,896,374
________________________________________________________________________________________________
The amortized cost and fair value of investments in fixed maturities at Dec. 31, 1993 by
contractual maturity are shown below. Expected maturities will differ from contractual
maturities because borrowers may have the right to call or prepay obligations with or without
call or prepayment penalties.
Amortized Fair
Cost Value
________________________________________________________________________________________________
Due in one year or less $ 89,160 $ 90,928
Due from one to five years 1,430,756 1,532,298
Due from five to ten years 5,488,955 5,924,580
Due in more than ten years 2,427,807 2,616,462
Mortgage-backed securities 9,978,523 10,261,711
$19,415,201 $20,425,979
________________________________________________________________________________________________
</TABLE>
<PAGE>
PAGE 65
2. Investments (continued)
Proceeds from sales of investments in fixed maturities during 1993
and 1992 were $482,523 and $996,619, respectively. During 1993 and
1992, gross gains of $48,499 and $94,915, respectively, and gross
losses of $43,039 and $80,441, respectively, were realized on those
sales.
At Dec. 31, 1993, the amount of net unrealized appreciation on
equity securities included $160 of gross unrealized appreciation,
$nil of gross unrealized depreciation and deferred tax credits of
$46. At Dec. 31, 1992, the amount of net unrealized appreciation
on equity securities included $328 of gross unrealized
appreciation, $12 of gross unrealized depreciation and deferred tax
credits of $102. The fair value of equity securities was $1,900
and $2,005 at Dec. 31, 1993 and 1992, respectively.
Included in other investments at Dec. 31, 1993 are interest rate
caps at amortized cost of $26,923 with a fair value of $14,201.
These interest rate caps carry a notional amount of $4,400,000 and
expire on various dates from 1994 to 1998.
At Dec. 31, 1993, bonds carried at $4,184 were on deposit with
various states as required by law.
Net investment income for the years ended Dec. 31 is summarized as
follows:
<TABLE><CAPTION>
1993 1992 1991
______________________________________________________________________________________
<S> <C> <C> <C>
Interest on fixed maturities $1,589,802 $1,449,234 $1,279,317
Interest on mortgage loans 175,063 148,693 122,723
Other investment income 29,345 24,281 20,005
Interest on cash equivalents 2,137 5,363 8,729
1,796,347 1,627,571 1,430,774
Less investment expenses 13,128 10,750 7,908
______________________________________________________________________________________
$1,783,219 $1,616,821 $1,422,866
______________________________________________________________________________________
</TABLE>
At Dec. 31, 1993, investments in fixed maturities comprised 89
percent of the Company's total invested assets. These securities
are rated by Moody's and Standard & Poor's (S&P), except for
approximately $2.1 billion which is rated by IDS internal analysts
using criteria similar to Moody's and S&P. A summary of
investments in fixed maturities by rating on Dec. 31 is as follows:
<TABLE><CAPTION>
Dec. 31, Dec. 31,
Rating 1993 1992
________________________________________________________________________
<S> <C> <C>
Aaa/AAA $ 9,959,884 $ 9,480,345
Aa/AA 258,659 219,370
Aa/A 160,638 109,806
A/A 2,021,177 1,735,750
A/BBB 654,949 447,592
Baa/BBB 3,936,366 3,352,192
Baa/BB 717,606 392,361
Below investment grade 1,705,922 1,486,362
________________________________________________________________________
$19,415,201 $17,223,778
________________________________________________________________________
</TABLE>
<PAGE>
PAGE 66
2. Investments (continued)
At Dec. 31, 1993, 99 percent of the securities rated Aaa/AAA are
GNMA, FNMA and FHLMC mortgage-backed securities. No holdings of
any other issuer are greater than 1 percent of the Company's total
investments in fixed maturities.
At Dec. 31, 1993, approximately 9.4 percent of the Company's
invested assets were mortgage loans on real estate. Summaries of
mortgage loans by region of the United States and by type of real
estate at Dec. 31, 1993 and 1992 are as follows:
<TABLE><CAPTION>
Dec. 31, 1993 Dec. 31, 1992
On Balance Commitments On Balance Commitments
Region Sheet to Purchase Sheet to Purchase
______________________________________________________________________________________
<S> <C> <C> <C> <C>
East North Central $ 552,150 $ 20,933 $ 484,808 $ 21,728
West North Central 361,704 16,746 357,388 14,327
South Atlantic 452,679 52,440 320,593 32,022
Middle Atlantic 260,239 41,090 188,294 56,816
New England 155,214 17,620 114,170 24,677
Pacific 120,378 15,492 89,636 5,148
West South Central 43,948 525 46,296 716
East South Central 73,748 - 83,994 10,085
Mountain 70,410 14,594 26,906 8,882
______________________________________________________________________________________
2,090,470 179,440 1,712,085 174,401
Less allowance for losses 35,020 - 23,595 -
______________________________________________________________________________________
$2,055,450 $179,440 $1,688,490 $174,401
______________________________________________________________________________________
Dec. 31, 1993 Dec. 31, 1992
On Balance Commitments On Balance Commitments
Property type Sheet to Purchase Sheet to Purchase
______________________________________________________________________________________
Apartments $ 744,788 $ 79,153 $ 541,855 $ 70,198
Department/retail stores 624,651 65,402 504,331 74,671
Office buildings 234,042 15,583 327,216 12,950
Industrial buildings 217,648 9,279 203,361 15,150
Nursing/retirement homes 83,768 917 56,431 716
Hotels/motels 33,138 - 34,631 716
Medical buildings 30,429 5,954 23,006 -
Residential 78 - 6,618 -
Other 121,928 3,152 14,636 -
______________________________________________________________________________________
2,090,470 179,440 1,712,085 174,401
Less allowance for losses 35,020 - 23,595 -
______________________________________________________________________________________
$2,055,450 $179,440 $1,688,490 $174,401
______________________________________________________________________________________
</TABLE>
Mortgage loan fundings are restricted by state insurance regulatory
authorities to 80 percent or less of the market value of the real
estate at the time of origination of the loan. The Company holds
the mortgage document, which gives the right to take possession of
the property if the borrower fails to perform according to the
terms of the agreement. The fair value of the mortgage loans is
determined by a discounted cash flow analysis using mortgage
interest rates currently offered for mortgages of similar
maturities. Commitments to purchase mortgages are made in the
ordinary course of business. The fair value of the mortgage
commitments is $nil.
<PAGE>
PAGE 67
3. Income taxes
The Company qualifies as a life insurance company for federal
income tax purposes. As such, the Company is subject to the
Internal Revenue Code provisions applicable to life insurance
companies.
Income tax expense consists of the following:
<TABLE><CAPTION>
1993 1992 1991
_______________________________________________________________________________
<S> <C> <C> <C>
Federal income taxes:
Current $180,558 $130,998 $104,292
Deferred (44,237) (30,385) (29,207)
_______________________________________________________________________________
136,321 100,613 75,085
State income taxes-Current 6,326 4,038 2,345
_______________________________________________________________________________
Income tax expense $142,647 $104,651 $ 77,430
_______________________________________________________________________________
</TABLE>
Increases (decreases) to the federal tax provision applicable to
pre-tax income based on the statutory rate are attributable to:
<TABLE><CAPTION>
1993 1992 1991
_________________________________________________________________________________________________________
Provision Rate Provision Rate Provision Rate
_________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C>
Federal income taxes based on
the statutory rate $144,454 35.0% $107,379 34.0% $88,219 34.0%
Increases (decreases) are attributable to:
Tax-excluded interest and dividend income (11,002) (2.7) (8,209) (2.6) (9,496) (3.7)
Other, net 2,869 0.7 1,443 0.4 (3,638) (1.4)
_________________________________________________________________________________________________________
Federal income taxes $136,321 33.0% $100,613 31.8% $75,085 28.9%
_________________________________________________________________________________________________________
</TABLE>
A portion of life insurance company income earned prior to 1984 was
not subject to current taxation but was accumulated, for tax
purposes, in a "policyholders' surplus account." At Dec. 31, 1993,
the Company had a policyholders' surplus account balance of
$19,032. The policyholders' surplus account is only taxable if
dividends to the stockholder exceed the stockholder's surplus
account or if the Company is liquidated. Deferred income taxes of
$6,661 have not been established because no distributions of such
amounts are contemplated.
Significant components of the Company's deferred tax assets and
liabilities as of Dec. 31 are as follows:
<TABLE><CAPTION>
Deferred tax assets: 1993 1992
______________________________________________________________________________________
<S> <C> <C>
Policy reserves $453,436 $356,712
Life insurance guarantee fund assessment reserve 35,000 21,794
______________________________________________________________________________________
Total deferred tax assets 488,436 378,506
______________________________________________________________________________________
Deferred tax liabilities:
______________________________________________________________________________________
Deferred policy acquisition costs 509,868 446,579
Investments 10,105 2,435
Other 12,083 17,405
______________________________________________________________________________________
Total deferred tax liabilities 532,056 466,419
______________________________________________________________________________________
Net deferred tax liabilities $ 43,620 $ 87,913
______________________________________________________________________________________
/TABLE
<PAGE>
PAGE 68
4. Stockholder's equity
Retained earnings available for distribution as dividends to parent
are limited to the Company's surplus as determined in accordance
with accounting practices prescribed by state insurance regulatory
authorities. Statutory unassigned surplus aggregated $922,246 as
of Dec. 31, 1993 and $685,103 as of Dec. 31, 1992 (see Note 3 with
respect to the income tax effect of certain distributions). In
addition, any dividend distributions in 1994 in excess of
approximately $259,063 would require approval of the Department of
Commerce of the State of Minnesota.
Statutory net income for 1993, 1992 and 1991 and stockholder's
equity as of Dec. 31, 1993, 1992 and 1991 are summarized as
follows:
<TABLE><CAPTION>
1993 1992 1991
___________________________________________________________________________________
<S> <C> <C> <C>
Statutory net income $ 275,015 $180,296 $200,704
Statutory stockholder's equity 1,157,022 714,942 551,939
___________________________________________________________________________________
</TABLE>
Dividends paid to IDS were $25,000 in 1993, $20,000 in 1992 and
$20,000 in 1991.
5. Related party transactions
The Company has loaned funds or agreed to loan funds to IDS under
two separate loan agreements. The balance of the first loan was
$75,000 and $nil at Dec. 31, 1993 and 1992, respectively. This
loan can be increased to a maximum of $100,000 and pays interest at
a rate equal to the preceding month's effective new money rate for
the Company's permanent investments. It is collateralized by
equities valued at $96,790 at Dec. 31, 1993. The second loan was
used to fund the construction of the IDS Operations Center. This
loan had an outstanding balance of $84,588 and $85,278 at Dec. 31,
1993 and 1992, respectively. The loan is secured by a first lien
on the IDS Operations Center property and has an interest rate of
9.89 percent. The Company also has a loan to an affiliate which
was used to fund construction of the IDS Learning Center. At Dec.
31, 1993 and 1992, the balance outstanding was $22,573 and $22,755,
respectively. The loan is secured by a first lien on the IDS
Learning Center property and has an interest rate of 9.82 percent.
Interest income on the above loans totaled $11,116, $10,711 and
$14,783 in 1993, 1992 and 1991, respectively.
The Company purchased a five year secured note from an affiliated
company which had an outstanding balance of $27,222 and $31,111 at
Dec. 31, 1993 and 1992, respectively. The note bears a market
interest rate, revised semi-annually, which at Dec. 31, 1993 was
8.42 percent.
The Company has a reinsurance agreement whereby it assumed 100
percent of a block of single premium life insurance business from
an affiliated company. The accompanying consolidated balance sheet
at Dec. 31, 1993 and 1992 includes $759,714 and $746,060,
respectively, of future policy benefits related to this agreement.
<PAGE>
PAGE 69
5. Related party transactions (continued)
The accompanying consolidated statement of income includes revenue
from policyholder charges of $21, $109 and $243, and expenses of
$4,931, $5,897 and $6,445 related to this agreement for 1993, 1992
and 1991, respectively.
The Company has a reinsurance agreement to cede 50 percent of its
long-term care insurance business to an affiliated company. The
accompanying consolidated balance sheet at Dec. 31, 1993 includes
$44,086 of reinsurance receivables related to this agreement.
Liabilities for future policy benefits were reduced by $27,028 at
Dec. 31, 1992 for the effect of this agreement. Premiums ceded
amounted to $16,230, $12,499 and $6,365 and reinsurance recovered
from reinsurers amounted to $404, $250 and $187 for the years ended
Dec. 31, 1993, 1992 and 1991, respectively.
The Company participates in the retirement plan of IDS which covers
all permanent employees age 21 and over who have met certain
employment requirements. The benefits are based on the number of
years the employee participates in the plan, their final average
monthly salary, the level of social security benefits the employee
is eligible for and the level of vesting the employee has earned in
the plan. IDS' policy is to fund retirement plan costs accrued
subject to ERISA and federal income tax considerations. The
Company's share of the total net periodic pension cost was $nil in
1993, 1992 and 1991.
The Company also participates in defined contribution pension plans
of IDS which cover all employees who have met certain employment
requirements. Company contributions to the plans are a percent of
either each employee's eligible compensation or basic
contributions. Costs of these plans charged to operations in 1993,
1992 and 1991 were $2,008, $1,826 and $1,682, respectively.
The Company participates in defined benefit health care plans of
IDS that provide health care and life insurance benefits to retired
employees and retired financial planners. The plans include
participant contributions and service-related eligibility
requirements. Upon retirement, such employees are considered to
have been employees of IDS. IDS expenses these benefits and
allocates the expenses to its subsidiaries. Accordingly, costs of
such benefits to the Company are included in employee compensation
and benefits and cannot be identified on a separate company basis.
Charges by IDS for use of joint facilities and other services
aggregated $243,346, $204,675 and $174,500 for 1993, 1992 and 1991,
respectively. Certain of these costs are included in deferred
policy acquisition costs. In addition, the Company rents its home
office space from IDS on an annual renewable basis. Such rentals
aggregated $4,513, $4,074 and $3,469 for 1993, 1992 and 1991,
respectively.
Certain commission and marketing services expenses are allocated to
the Company by its affiliates. The expenses for 1993, 1992 and
1991 were $127,000, $110,064 and $95,367, respectively. Certain of
the costs assessed to the Company are included in deferred policy
acquisition costs.
<PAGE>
PAGE 70
6. Commitments and contingencies
At Dec. 31, 1993 and 1992, traditional life insurance and universal
life-type insurance in force aggregated $46,125,515 and
$40,904,345, respectively, of which $3,038,426 and $2,937,590 were
reinsured at the respective year ends. The Company also reinsures
a portion of the risks assumed under disability income policies.
Under the agreements, premiums ceded to reinsurers amounted to
$28,276, $24,222 and $16,908 and reinsurance recovered from
reinsurers amounted to $3,345, $6,766 and $6,447 for the years
ended Dec. 31, 1993, 1992 and 1991.
Reinsurance contracts do not relieve the Company from its primary
obligation to policyholders.
The Company is a defendant in various lawsuits, none of which, in
the opinion of the Company counsel, will result in a material
liability.
The Company received the revenue agent's report for the tax years
1984 through 1986 in February 1992, and has settled on all agreed
audit issues. The Company will protest the remaining open issues
and, while the outcome of the appeal is not known at this time,
management does not believe there will be any material impact as a
result of this audit.
7. Lines of credit
The Company has available lines of credit with two banks
aggregating $75,000 at 45 to 80 basis points over the banks' cost
of funds or equal to the prime rate, depending on which line of
credit agreement is used. Borrowings outstanding under these
agreements were $1,519 and $nil at Dec. 31, 1993 and 1992,
respectively.
8. Segment information
The Company's operations consist of two business segments; first,
individual and group life insurance, disability income, health and
long-term care insurance, and second, annuity products designed for
individuals, pension plans, small businesses and employer-sponsored
groups. The consolidated statement of income for the years ended
Dec. 31, 1993, 1992 and 1991 and total assets at Dec. 31, 1993,
1992 and 1991 by segment are summarized as follows:
<PAGE>
PAGE 71
8. Segment information (continued)
<TABLE><CAPTION>
1993 1992 1991
___________________________________________________________________________________________________________
<S> <C> <C> <C>
Net investment income:
Life, disability income, health and long-term care insurance $ 250,224 $ 246,676 $ 233,828
Annuities 1,532,995 1,370,145 1,189,038
___________________________________________________________________________________________________________
$ 1,783,219 $ 1,616,821 $ 1,422,866
___________________________________________________________________________________________________________
Premiums and other considerations:
Life, disability income and long-term care insurance $ 281,284 $ 250,386 $ 220,754
Annuities 143,876 104,952 79,928
___________________________________________________________________________________________________________
$ 425,160 $ 355,338 $ 300,682
___________________________________________________________________________________________________________
Income before income taxes:
Life, disability income, health and long-term care insurance $ 104,127 $ 96,215 $ 90,050
Annuities 315,336 223,316 175,254
Net loss on investments (6,737) (3,710) (5,837)
___________________________________________________________________________________________________________
$ 412,726 $ 315,821 $ 259,467
___________________________________________________________________________________________________________
Total assets:
Life, disability income, health and long-term care insurance $ 4,810,145 $ 4,093,778 $ 3,670,197
Annuities 28,247,608 23,201,995 18,888,612
___________________________________________________________________________________________________________
$33,057,753 $27,295,773 $22,558,809
___________________________________________________________________________________________________________
</TABLE>
Allocations of net investment income and certain general expenses
are based on various assumptions and estimates.
Assets are not individually identifiable by segment and have been
allocated principally based on the amount of future policy benefits
by segment.
Capital expenditures and depreciation expense are not material, and
consequently, are not reported.
<PAGE>
PAGE 72
Annual Financial Information
Report of Independent Auditors
The Board of Directors
IDS Life Insurance Company
We have audited the accompanying consolidated balance sheets of IDS
Life Insurance Company (a wholly owned subsidiary of IDS Financial
Corporation) as of December 31, 1993 and 1992, and the related
consolidated statements of income and cash flows for each of the
three years in the period ended December 31, 1993. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the consolidated financial
position of IDS Life Insurance Company at December 31, 1993 and
1992, and the consolidated results of its operations and its cash
flows for each of the three years in the period ended December 31,
1993, in conformity with generally accepted accounting principles.
ERNST & YOUNG
February 3, 1994
Minneapolis, Minnesota
<PAGE>
PAGE 73
PART C.
Item 24. Financial Statements and Exhibits
(a) Financial Statements included in Part B of this Registration
Statement:
IDS Life Account SBS:
Report of Independent Auditors dated March 18, 1994.
Statements of Net Assets at Dec. 31, 1993.
Statements of Operations for the year ended Dec. 31,
1993.
Statements of Changes in Net Assets for the years ended
Dec. 31, 1993 and 1992.
Notes to Financial Statements.
IDS Life Insurance Company:
Consolidated Balance Sheets at Dec. 31, 1993 and
Dec. 31, 1992.
Consolidated Statements of Income for the years ended
Dec. 31, 1993, 1992 and 1991.
Consolidated Statements of Cash Flows for the years ended
Dec. 31, 1993, 1992 and 1991.
Notes to Consolidated Financial Statements.
Report of Independent Auditors dated February 3, 1994.
Exhibits to Financial Statements included in Part C:
Financial Statement Schedules:
Report of Independent Auditors dated February 3, 1994.
Schedule I - Consolidated Summary of Investments
Other than Investments in Related
Parties
Schedule V - Supplementary Insurance Information
Schedule VI - Reinsurance
Schedule VIII - Valuation and Qualifying Accounts
Schedule IX - Short-Term Borrowings
All other schedules to the consolidated financial statements
required by Article 7 of Regulation S-X are not required under
the related instructions or are inapplicable and, therefore,
have been omitted.
(b) Exhibits:
1. Copy of Resolution of the Board of Directors of IDS Life
Insurance Company establishing IDS Life Account SLB on May 9,
1991, is filed electronically herewith.
2. Not applicable.
<PAGE>
PAGE 74
3. Form of Distribution Agreement between IDS Life Insurance
Company and Shearson Lehman Brothers, Inc., is filed
electronically herewith.
4.1 Copy of Flexible Premium Deferred Variable Annuity Contract
(No. 30377) filed as Exhibit 4 to Registrant's Pre-Effective
Amendment No. 1 to Registration Statement No. 33-40779, is
herein incorporated by reference.
5. Copy of Flexible Premium Deferred Variable Annuity Application
(No. 34613), is filed electronically herewith.
6.1 Copy of Certificate of Incorporation of IDS Life, dated
July 24, 1957, is filed electronically herewith.
6.2 Copy of Amended By-Laws of IDS Life, is filed electronically
herewith.
7. Not applicable.
8. Not applicable.
9. Opinion of Counsel as to the legality of the securities
registered was filed with Registrant's Rule 24f-2 Notice on or
about February 25, 1994.
10. Consent of Independent Auditors, is filed electronically
herewith.
11. Financial Statement Schedules and Report of Independent
Auditors, are filed electronically herewith.
12. Not applicable.
13. Copy of schedule for computation of each performance quotation
provided in the Registration Statement in response to Item 24,
is filed electronically herewith.
14. Power of Attorney to sign Amendments to this Registration
Statement, dated March 31, 1994, is filed electronically
herewith.
<PAGE>
PAGE 75
<TABLE><CAPTION>
Item 25. Directors and Officers of the Depositor
Positions and
Name Principal Business Address Offices with Depositor
<S> <C> <C>
Timothy V. Bechtold IDS Tower 10 Vice President-Insurance
Minneapolis, MN 55440 Product Development
David J. Berry IDS Tower 10 Vice President
Minneapolis, MN 55440
Alan R. Dakay IDS Tower 10 Vice President-
Minneapolis, MN 55440 Institutional Insurance
Marketing
Louis C. Fornetti IDS Tower 10 Director
Minneapolis, MN 55440
Morris Goodwin Jr. IDS Tower 10 Vice President and Treasurer
Minneapolis, MN 55440
Lorraine R. Hart IDS Tower 10 Vice President-Investments
Minneapolis, MN 55440
David R. Hubers IDS Tower 10 Director
Minneapolis, MN 55440
Roger P. Husemoller IDS Tower 10 Vice President-
Minneapolis, MN 55440 Intercorporate Insurance
Operations
Richard W. Kling IDS Tower 10 Director and President
Minneapolis, MN 55440
Paul F. Kolkman IDS Tower 10 Director and Executive
Minneapolis, MN 55440 Vice President
Ryan R. Larson IDS Tower 10 Vice President-
Minneapolis, MN 55440 Annuity Product
Development
Peter A. Lefferts IDS Tower 10 Director and Executive
Minneapolis, MN 55440 Vice President-
Marketing
Janis E. Miller IDS Tower 10 Director and Executive
Minneapolis, MN 55440 Vice President-
Variable Assets
James A. Mitchell IDS Tower 10 Director, Chairman of
Minneapolis, MN 55440 the Board and Chief
Executive Officer
Barry J. Murphy IDS Tower 10 Director and Executive
Minneapolis, MN 55440 Vice President-
Client Service
<PAGE>
PAGE 76
Item 25. Directors and Officers of the Depositor (cont'd)
Mary O. Neal IDS Tower 10 Vice President-
Minneapolis, MN 55440 Sales Support
James R. Palmer IDS Tower 10 Vice President-Taxes
Minneapolis, MN 55440
F. Dale Simmons IDS Tower 10 Vice President-
Minneapolis, MN 55440 Real Estate
Loan Management
William A. Stoltzmann IDS Tower 10 Vice President, General
Minneapolis, MN 55440 Counsel and Secretary
Melinda S. Urion IDS Tower 10 Director, Executive
Minneapolis, MN 55440 Vice President and
Controller
</TABLE>
Item 26. Persons Controlled by or Under Common Control with the
Depositor or Registrant
IDS Life Insurance Company is a wholly owned subsidiary
of IDS Financial Corporation. IDS Financial Corporation
is a wholly owned subsidiary of American Express Company
(American Express).
The following list includes the names of major
subsidiaries of American Express.
Jurisdiction
Name of Subsidiary of Incorporation
I. Travel Related Services
American Express Travel Related
Services Company, Inc. New York
II. International Banking Services
American Express Bank Ltd. Connecticut
III. Investment Services
Lehman Brothers Inc. Delaware
IV. Companies engaged in Investors
Diversified Financial Services
American Enterprise Investment Services Inc. Minnesota
American Enterprise Life Insurance Company Indiana
American Express Minnesota Foundation Minnesota
American Express Service Corporation Delaware
American Partners Life Insurance Company Minnesota
<PAGE>
PAGE 77
Item 26. Persons Controlled by or Under Common Control with the
Depositor or Registrant (Continued)
Jurisdiction
Name of Subsidiary of Incorporation
IDS Advisory Group Inc. Minnesota
IDS Aircraft Services Corporation Minnesota
IDS Cable Corporation Minnesota
IDS Cable II Corporation Minnesota
IDS Capital Holdings Inc. Minnesota
IDS Certificate Company Delaware
IDS Deposit Corp. Utah
IDS Financial Corporation Delaware
IDS Financial Services Inc. Delaware
IDS Fund Management Limited U.K.
IDS Futures Corporation Minnesota
IDS Futures III Corporation Minnesota
IDS Insurance Agency of Alabama Inc. Alabama
IDS Insurance Agency of Arkansas Inc. Arkansas
IDS Insurance Agency of Massachusetts Inc. Massachusetts
IDS Insurance Agency of Mississippi Inc. Mississippi
IDS Insurance Agency of Nevada Inc. Nevada
IDS Insurance Agency of New Mexico Inc. New Mexico
IDS Insurance Agency of North Carolina Inc. North Carolina
IDS Insurance Agency of Ohio Inc. Ohio
IDS Insurance Agency of Texas Inc. Texas
IDS Insurance Agency of Utah Inc. Utah
IDS Insurance Agency of Wyoming Inc. Wyoming
IDS International, Inc. Delaware
IDS Life Insurance Company Minnesota
IDS Life Insurance Company of New York New York
IDS Management Corporation Minnesota
IDS Partnership Services Corporation Minnesota
IDS Plan Services of California, Inc. Minnesota
IDS Property Casualty Insurance Company Wisconsin
IDS Real Estate Services, Inc. Delaware
IDS Realty Corporation Minnesota
IDS Sales Support Inc. Minnesota
IDS Securities Corporation Delaware
IDS Trust Company Minnesota
Investors Syndicate Development Corp. Nevada
Item 27. Number of Contractowners
On March 31, 1994, there were 1,568 contract owners of
qualified contracts. There were 6,487 owners of
non-qualified contracts.
Item 28. Indemnification
The By-Laws of the depositor provide that it shall
indemnify any person who was or is a party or is
threatened to be made a party, by reason of the fact that
he is or was a director, officer, employee or agent of
this Corporation, or is or was serving at the direction
of the Corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture,
trust or other enterprise, to any threatened, pending or
completed action, suit or proceeding, wherever brought, <PAGE>
PAGE 78
to the fullest extent permitted by the laws of the State
of Minnesota, as now existing or hereafter amended,
provided that this Article shall not indemnify or protect
any such director, officer, employee or agent against any
liability to the Corporation or its security holders to
which he would otherwise be subject by reason of willful
misfeasance, bad faith, or gross negligence, in the
performance of his duties or by reason of his reckless
disregard of his obligations and duties.
Insofar as indemnification for liability arising under the
Securities Act of 1933 may be permitted to director, officers and
controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that in
the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer
or controlling person of the registrant in the successful defense
of any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities
being registered, the registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such
issue.
Item 29. Principal Underwriters
(a) IDS Life is the principal underwriter for IDS Life
Accounts F, IZ, JZ, G, H and N, IDS Life Variable
Annuity Fund A, IDS Life Variable Annuity Fund B,
IDS Life Account RE, IDS Life Account MGA and IDS
Life Account SBS.
(b) This table is the same as our response to Item 25 of
this Registration Statement.
(c)
<TABLE><CAPTION>
Name of Net Underwriting
Principal Discounts and Compensation on Brokerage
Underwriter Commissions Redemption Commissions Compensation
<S> <C> <C> <C> <C>
IDS Life None $4,408,562 None None
</TABLE>
Item 30. Location of Accounts and Records
IDS Life Insurance Company
IDS Tower 10
Minneapolis, MN
Item 31. Management Services
Not applicable.
<PAGE>
PAGE 79
Item 32. Undertakings
(a) Registrant undertakes that it will file a
post-effective amendment to this registration
statement as frequently as is necessary to ensure
that the audited financial statements in the
registration statement are never more than 16 months
old for so long as payments under the variable
annuity contracts may be accepted.
(b) Registrant undertakes that it will include either
(1) as part of any application to purchase a
contract offered by the prospectus, a space that an
applicant can check to request a Statement of
Additional Information, or (2) a post card or
similar written communication affixed to or included
the prospectus that the applicant can remove to send
for a Statement of Additional Information.
(c) Registrant undertakes to deliver any Statement of
Additional Information and any financial statements
required to be made available under this Form
promptly upon written or oral request to IDS Life
Contract Owner Service at the address or phone
number listed in the prospectus.
(d) Registrant represents that it is relying upon the
no-action assurance given to the American Council of
Life Insurance (pub. avail. Nov. 28, 1989).
Further, Registrant represents that it has complied
with the provisions of paragraphs (1) - (4) of that
no-action letter.
<PAGE>
PAGE 80
SIGNATURES
As required by the Securities Act of 1933 and the Investment
Company Act of 1940, IDS Life Insurance Company, on behalf of the
Registrant, certifies that it meets the requirements for
effectiveness of this Amendment to its Registration Statement
pursuant to Rule 486(b) under the Securities Act of 1933 and has
duly caused this Registration Statement to be signed on its behalf
in the City of Minneapolis, and State of Minnesota, on the 27th day
of April, 1994.
IDS LIFE ACCOUNT SBS
(Registrant)
By IDS Life Insurance Company
(Sponsor)
By /s/ James A. Mitchell*
James A. Mitchell
As required by the Securities Act of 1933, this Registration
Statement has been signed by the following persons in the
capacities indicated on the 27th day of April, 1994.
Signature Title
/s/ James A. Mitchell* Chairman of the Board
James A. Mitchell and Chief Executive
Officer
/s/ Richard W. Kling* Director and President
Richard W. Kling
/s/ Louis C. Fornetti* Director
Louis C. Fornetti
/s/ David R. Hubers* Director
David R. Hubers
/s/ Paul F. Kolkman* Director and Executive Vice
Paul F. Kolkman President
/s/ Peter A. Lefferts* Director and Executive Vice
Peter A. Lefferts President, Marketing
/s/ Janis E. Miller* Director and Executive Vice
Janis E. Miller President, Variable Assets
/s/ Barry J. Murphy* Director and Executive Vice
Barry J. Murphy President, Client Service
<PAGE>
PAGE 81
Signature Title
/s/ Stuart A. Sedlacek* Director and Executive Vice
Stuart A. Sedlacek President, Assured Assets
/s/ Melinda S. Urion* Director, Exective Vice
Melinda S. Urion President and Controller
* Signed pursuant to Power of Attorney, dated March 31, 1994 filed
as Exhibit 14 to Registration Statement No. 33-40770 Post-Effective
Amendment No. 3 for IDS Life Account SBS by:
Mary Ellyn Minenko
<PAGE>
PAGE 82
CONTENTS OF POST-EFFECTIVE AMENDMENT NO. 3
This Registration Statement is comprised of the following papers
and documents:
The Cover Page.
Cross-reference sheet.
Part A.
The prospectus.
Part B.
Statement of Additional Information.
Financial Statements.
Part C.
Other Information.
The signatures.
Exhibits.
<PAGE>
PAGE 1
EXHIBIT INDEX
Exhibit (b)(1) Copy of Resolution of the Board of Directors of
IDS Life establishing IDS Life Account SLB
dated May 9, 1991
Exhibit (b)(3) Form of Distribution Agreement between IDS Life
and Shearson Lehman Brothers, Inc
Exhibit (b)(5) Copy of Flexible Premium Deferred Variable
Annuity Application
Exhibit (b)(6.1) Copy of Certificate of Incorporation of IDS
Life dated July 24, 1957
Exhibit (b)(6.2) Copy of Amended By-Laws of IDS Life
Exhibit (b)(10) Consent of Independent Auditors
Exhibit (b)(11) Financial Statement Schedules and Report of
Independent Auditors
Exhibit (b)(13) Copy of schedule for computation of each
performance quotation
Exhibit (b)(14) Power of Attorney, dated March 31, 1994
<PAGE>
<PAGE>
PAGE 1
CONSENT IN WRITING IN LIEU
OF MEETING OF BOARD OF DIRECTORS
TO THE SECRETARY OF
IDS LIFE INSURANCE COMPANY
By this consent in writing in lieu of a meeting of the Board of
Directors of IDS Life Insurance Company, a Minnesota corporation,
we the Directors of said Corporation do hereby consent to and
authorize the adoption of the following resolution to be effective
immediately upon receipt by the Secretary of the Corporation:
WHEREAS, This Board of Directors has determined that it is
desirable for the Corporation to develop a new flexible
premium deferred combination fixed and variable annuity
contract to be issued by the Corporation and sold through the
Shearson Lehman Brothers financial consultants, Now,
therefore, be it
RESOLVED, that IDS Life Account SLB, comprised of one or more
subaccounts, is hereby established as a separate account in
accordance with Section 61A.14, Minnesota Statutes;
RESOLVED FURTHER, That the proper officers of the Corporation
are hereby authorized and directed to establish such
subaccounts within such separate account as they determine to
be appropriate;
RESOLVED FURTHER, That the proper officers of the Corporation
are hereby authorized and directed, as they may deem
appropriate from time to time and in accordance with
applicable laws and regulations to: establish further any
subaccounts; change the designation of the separate account to
another designation; and deregister the separate account;
RESOLVED FURTHER, That the proper officers of the Corporation
are hereby authorized and directed to accomplish all filings,
registrations, and applications for exemptive relief necessary
to carry the foregoing into effect.
/s/ David R. Hubers /s/ Richard W. Kling
David R. Hubers Richard W. Kling
/s/ Paul F. Kolkman /s/ Christopher R. Kudrna
Paul F. Kolkman Christopher R. Kudrna
/s/ James A. Mitchell /s/ ReBecca K. Roloff
James A. Mitchell ReBecca K. Roloff
/s/ William A. Smith /s/ Jeffrey E. Stiefler
William A. Smith Jeffrey E. Stiefler
<PAGE>
PAGE 2
Received by the Secretary
May 9 , 1991
/s/ William A. Stoltzmann
William A. Stoltzmann
<PAGE>
<PAGE>
PAGE 1
VARIABLE ANNUITY CERTIFICATE DISTRIBUTION AGREEMENT
This Agreement is between IDS Life Insurance Company ("IDS Life"),
a Minnesota corporation, and Shearson Lehman Brothers Inc.
("Shearson")1, a Delaware corporation, and is entered into in
consideration of the promises and the mutual agreements herein
contained.
WITNESSETH THAT:
1. Appointment. IDS Life hereby appoints Shearson to
solicit and procure applications for variable annuities
to be issued by IDS Life to residents of all
jurisdictions of the United States except the State of
New York. As used herein, the term "variable annuity"
refers to individual flexible premium deferred variable
annuity (Symphony Variable Annuity) issued by IDS Life.
This appointment is not exclusive, as IDS Life will
continue to solicit business through its own sales force.
Similarly, Shearson will be under no obligation to submit
to IDS Life applications procured by it through its
Financial Consultants for variable annuities that are not
governed by this Agreement.
2. Payment of Commissions. IDS Life will compensate
Shearson for its activities hereunder solely on the basis
of commissions, which will be determined in accordance
with the SCHEDULE OF COMMISSIONS attached as Addendum 2
to this Agreement. This Schedule may be changed from
time to time by IDS Life, but only with respect to
applications taken after the date of such change.
Shearson agrees that it will hold IDS Life harmless from
any claim for commissions or other sales compensation by
any other person arising out of the sale of any variable
annuity under this Agreement. No agreement that Shearson
makes with any of its Financial Consultants will create
any liability on the part of IDS Life. Commissions on
individual variable annuity sales will become payable
upon the acceptance of an application and the issuance of
a variable annuity. Except for variable annuities which
are to be issued in an exchange under Section 1035 of the
Internal Revenue Code of 1986, as amended ("Code"),
Shearson will be authorized to deduct from certificate
purchase payments payable to IDS Life the amount of any
commission accruing to Shearson when and if a variable
annuity is issued. Commissions on any variable annuity
issued pursuant to an exchange under Code Section 1035
will be paid monthly to Shearson by IDS Life. If IDS
Life declines to issue a variable annuity, it will return
the purchase payment to the client, will reverse
commissions payable to Shearson, and will deduct the
reversed commissions from any amount thereafter becoming
due to Shearson. If any variable annuity
1Including its subsidiaries and affiliates (please see Addendum 1)<PAGE>
PAGE 2
owner exercises a right under a "free look" option and
cancels the variable annuity, IDS Life will deduct any
commission already paid with respect to such variable
annuity from any amounts thereafter becoming due to
Shearson.
3. Contract Application and Issuance. Each variable annuity
application taken by a Shearson Financial Consultant will
be promptly forwarded to Shearson, together with the
purchase payment and any required forms. Shearson will
conduct a review to determine the suitability of the sale
and that the sale follows established IDS Life procedures
regarding forms, applications and other such matters of
administration. After Shearson has conducted its review,
it will forward all relevant material to IDS Life's home
office, whereupon IDS Life will conduct its own review of
the application. IDS Life will be under no obligation to
accept any application which, in its sole discretion with
or without reason, it determines to be unacceptable to
it. Upon issuance, each variable annuity sold through
Shearson will be mailed directly from IDS Life to
Shearson for personal delivery to the variable annuity
owner by the Shearson Financial Consultant.
4. Representations. Shearson agrees that its Financial
Consultants will fully explain the terms and conditions
of the variable annuity and related variable annuities
and will not make untrue statements, interpretations or
misrepresentations, nor omit or evade material facts
concerning the variable annuity and variable annuities
which prospects should know. Shearson is not authorized
and is expressly forbidden to incur any indebtedness or
liability or make, alter or discharge any variable
annuity, waive any forfeiture or make any guarantee on
behalf of IDS Life. Shearson will not use any sales
literature or other written materials unless they have
been approved in writing by IDS Life. IDS Life will
furnish to Shearson reasonable supplies of sales
literature which it has developed after consultation with
Shearson.
5. Licensing and Indemnification. No person associated with
Shearson will offer or sell an IDS Life variable annuity
unless that person is duly licensed as a variable annuity
agent for IDS Life under applicable state law.
Qualification and licensing will be the sole
responsibility of Shearson, but IDS Life will make such
appointments as requested by Shearson and otherwise fully
cooperate with Shearson. Shearson assumes full
responsibility for the supervision of its associated
persons and all of their activities relating to the IDS
Life variable annuity and related variable annuities.
Further, Shearson agrees to indemnify and hold IDS Life
harmless from any and all expenses, losses, damages, or
liabilities which may arise from <PAGE>
PAGE 3
any unauthorized acts or transactions of Shearson or any
of its associated persons. Shearson and IDS Life agree
that if any legal action is brought against either party
hereto, or both parties jointly, by reason of any alleged
act, fault or failure of either Shearson or IDS Life
under this Agreement, Shearson and IDS Life will jointly
defend such action. If the legal action is resolved by a
court of proper jurisdiction and either Shearson or IDS
Life is found to be solely liable, the party found liable
shall assume all legal expenses, fees, penalties and
attorneys' fees. If joint liability is found, Shearson
and IDS Life will apportion such fees and expenses
between them as they may agree.
6. In-force Variable Annuities. Shearson will use its best
efforts, both while this Agreement is in effect and
following its termination, to continue in force all IDS
Life variable annuities placed in force through Shearson
while this Agreement was in effect; provided, however,
that in any given case a Shearson Financial Consultant
will be free to recommend a contract exchange to his or
her client if it is determined in good faith that the
exchange would clearly be in the best interests of the
client.
7. Termination of Agreement. This Agreement may be
terminated at any time by mutual agreement of the parties
hereto, or by thirty (30) days' written notice given by
either party to the other.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the day of , 1993.
SHEARSON LEHMAN BROTHERS INC.
By:
Its:
IDS LIFE INSURANCE COMPANY
By:
Its:
<PAGE>
PAGE 4
Addendum 1
SHEARSON LEHMAN BROTHERS INC. SUBSIDIARIES AND AFFILIATES
Foster Marshall Inc.
The Robinson-Humphrey Company, Inc.
Shearson Financial Services of Arizona
Shearson Financial Services of Arkansas
Shearson Financial Services of Florida
Shearson Financial Services of Illinois
Shearson Financial Services of Indiana
Shearson Financial Services of Maine
Shearson Financial Services of Montana
Shearson Financial Services of Nevada
Shearson Financial Services of New Jersey
Shearson Financial Services of Oklahoma
Shearson Financial Services of Texas
Shearson Insurance Agency of Massachusetts Inc.
<PAGE>
PAGE 5
Addendum 2
SCHEDULE OF COMMISSIONS
1. Commissions on Individual Variable Annuity Sales. 4.5 percent
of the purchase payments made to all variable annuities will be
paid by IDS Life to Shearson as commissions for all variable
annuities issued.
2. "Free Look." Commissions will be reversed on variable
annuities where the "free look" provision is exercised.
3. Year-end commission. .30 percent of the total contract value
of all variable annuities in force on December 31 of each year.
<PAGE>
<PAGE>
PAGE 1
<TABLE><CAPTION>
IDS Life Insurance Company Variable
IDS Tower 10 Annuity Application
Minneapolis, Minnesota 55440
1. Full Name of Annuitant (First, Middle Initial, Last) 8. Will the annuity applied for replace any existing
or annuity?
Yes No
2. Address (Street Address or P.O. Box, City, State, Zip)
(If yes, send applicable replacement requirements)
9. Check the applicable plan:
Non-Qualified Annuity
Phone Number Individual Retirement Account
Tax-Qualified (list type)
( ) If IRA:
3. Sex 4. Date of Birth 5. Social Security Number Regular Amount for previous year $
M Amount for current year $
F Rollover IRA
6. Beneficiary (Primary) Relationship Trustee to Trustee transfer from:
Contingent Beneficiary (if any) Relationship 10. Contract Provisions:
Settlement Age
Single Purchase Payment $
7. Full Name of Contract Owner* *Payment Allocation
(If other than Annuitant or if Joint Spousal Ownership) % Money Market % Equity Index
*For joint spousal owners, insert information about both % Intermediate High % Growth and Income
Social Security Numbers. Circle the Social Security Grade % Appreciation
Number to be used for tax-reporting purposes. % Diversified Strategic % Fixed Account
Income % Other
% Equity Income % Other
*Must be whole numbers, and, for non-qualified
annuities, must result in at least $500 allocated
to any variable subaccount or to the fixed
account.
Address (Street Address or P.O. Box, City, State, Zip) 11. Remarks, Explanations and Special Instructions
(Including special mailing instructions)
Relationship to Annuitant
Social Security Number Date of Birth
It is Agreed That:
1. All statements and answers given above are true and complete to the best of my/our knowledge.
2. Only if an officer of IDS Life Insurance Company can modify any annuity contract or waive any requirement in this
application.
3. If joint spousal owners are names, ownership will be in joint tenancy with right of survivorship unless specified
otherwise in Item 11 above.
4. I/we hereby acknowledge receipt of current prospectuses for the variable annuity and any funds involved.
5. I/we understand that earnings and values, when based on the investment experience of a variable fund, portfolio, account
or subaccount, are not guaranteed and may both increase and decrease.
Signatures
<S> <C>
X X
Location - Location - City/State Signature of Proposed Annuitant Signature of Contract Owner
(if other than proposed annuitant)
X X
Date Signature of Licensed Agent Signature of Joint Contract Owner (if any)
</TABLE>
<PAGE>
<PAGE>
PAGE 1
CERTIFICATE OF INCORPORATION
OF
IDS LIFE INSURANCE COMPANY
We, the undersigned, for the purpose of forming an insurance
corporation under and pursuant to the provisions of the Minnesota
Statutes, Chapter 300 relating thereto, and of any amendments
thereof, do hereby associate ourselves as a body corporate and do
hereby adopt the following Articles of Incorporation:
ARTICLE I
The name of this Corporation shall be IDS Life Insurance
Company.
ARTICLE II
The purposes of and general nature of its business shall be:
(a) To engage in the general business of a life
insurance company, and to effect all forms, types,
variations and combinations of life insurance,
endowment or annuity contracts or policies, on a
group or individual basis, for the payment of money
in a single sum or in installments upon the
contingencies of death, disability of survivorship.
To provide in such policies or contracts
supplemental thereto, for additional benefits in the
event of the death of the insured by accidental
means, total and permanent disability of the
insured, or specific dismemberment of disablement
suffered by the insured.
(b) To engage in the general business of an accident and
health insurance company, for the purpose of
effecting insurance against loss of damage by the
sickness, bodily injury or death by accident of the
assured or his dependents, on a group or individual
basis; to effect all forms, types, variations and
combinations of policies or contracts of insurance
providing for indemnities in the event of death,
sickness or disability.
(c) To effect contracts of reinsurance or co-insurance
of any individual or group risk underwritten by this
Corporation, to reinsure risks of this Corporation
or any part thereof with any other company or to
reinsure the whole of or any portion of the risks of
any other company.
(d) To effect all other contracts of insurance
authorized by clauses (4) and (5)(a) of subdivision
1 of Section 60.29 of Minnesota Statutes.
<PAGE>
PAGE 2
(e) To have one or more offices and to conduct business
in this state or elsewhere.
(f) To acquire, hold and dispose of shares of stock,
notes, bonds or other evidences of indebtedness or
securities of any other corporation or corporations.
(g) To transact all business and to do all other things
necessary or incidental to the forgoing purposes.
ARTICLE III
The duration of this Corporation shall be perpetual.
ARTICLE IV
The principal place of transacting the business of this
Corporation shall be the City of Minneapolis, State of Minnesota.
ARTICLE V
The capital stock of this Corporation shall consist of One
Hundred Thousand (100,000) shares of stock with a par value of
Thirty Dollars ($30.00) per share. The amount of stated capital of
this Corporation shall be Three Million Dollars ($3,000,000).
ARTICLE VI
(1) The general management of this Corporation shall be
vested in a Board of Directors.
(2) The names of post office addresses of the members of the
first Board of Directors are respectively as follows:
Joseph M. Fitzsimmons 800 Investors Building
Minneapolis 2, Minnesota
John W. McCartin 800 Investors Building
Minneapolis 2, Minnesota
Virgil D. Sullivan 800 Investors Building
Minneapolis 2, Minnesota
A. Edward Archibald 800 Investors Building
Minneapolis 2, Minnesota
Harold E. Miller, M.D. 1531 Medical Arts Building
Minneapolis 2, Minnesota
Said named Directors shall serve as such until the first
annual meeting of the shareholders of the Corporation and until
their successors have been duly elected and qualified.
<PAGE>
PAGE 3
ARTICLE VII
The first Board of Directors of this Corporation shall have
full power and authority to make and adopt By-Laws for the
government of this Corporation and its affairs as they may deem
advisable or necessary and as shall not be inconsistent with the
provisions of these Articles. They By-Laws may be amended or
altered by the shareholders at any regular or special meeting
called therefor.
ARTICLE VIII
These Articles of Incorporation may be amended by the
affirmative vote of the holders of a majority of the voting power
of the capital stock.
ARTICLE IX
The first meeting of the Corporation shall be a meeting of the
Incorporators and Subscribers to the capital stock of the
Corporation. Three days' written notice of such meeting shall be
given unless there is a written Waiver of Notice.
ARTICLE X
The names and post office addresses of the Incorporators are
as follows:
Lloyd J. Muehlberg 800 Investors Building
Minneapolis 2, Minnesota
Joseph F. Grinnell 800 Investors Building
Minneapolis 2, Minnesota
Edward M. Burke 800 Investors Building
Minneapolis 2, Minnesota
<PAGE>
PAGE 4
IN TESTIMONY WHEREOF we have set our hands this 23rd day of July,
1957.
IN PRESENCE OF: Lloyd J. Muehlberg
M. Gould Joseph F. Grinnell
D. Fairchild Edward M. Burke
State of Minnesota
>SS
County of Hennepin
On this 23rd day of July, 1957, before me, a Notary Public,
personally appeared Lloyd J. Muehlberg, Joseph F. Grinnell, and
Edward M. Burke, to me know to be the persons names in and who
executed the foregoing instrument, and they acknowledged to me that
they executed the same as their free act and deed and for the uses
and purposes therein expressed.
(Notarial seal) Helen M. Bochnak
Helen M. Bochnak
Notary Public
Hennepin County, Minn.
My Commission Expired
Nov. 12, 1958
APPROVAL OF COMMISSIONER OF INSURANCE
The foregoing Certificate of Incorporation of Investors
Syndicate Life Insurance and Annuity Company is hereby approved
this 24th day of July, 1957.
Cyril C. Sheehan
Commissioner of Insurance
State of Minnesota
J.O.M.
<PAGE>
<PAGE>
PAGE 1
AMENDED BY-LAWS OF
IDS LIFE INSURANCE COMPANY
ARTICLE I
OFFICES
Section 1. The principal place of transacting the business of
this Corporation shall be in the City of Minneapolis, State of
Minnesota.
Section 2. The Corporation may also have offices at such
other places, within or without the State, as the Board of
Directors may from time to time determine or the business of the
Corporation may require.
ARTICLE II
STOCKHOLDER'S MEETINGS
Section 1. All meetings of the stockholders for the election
of Directors shall be held at the principal office of the
corporation in the City of Minneapolis, Minnesota. Meetings of
stockholders for any other purpose may be held at such place,
within or without the State of Minnesota, and at such time as may
be designated in the call and notice thereof.
Section 2. The annual meeting of stockholders for the
election of Directors and the transaction of such other business as
may properly come before the meeting shall be held on the Wednesday
following the first Tuesday on or after the nineteenth day of April
in each year, at 10:30 o'clock A.M. Election of Directors shall be
plurality vote.
Section 3. In the even the stockholders shall fail to hold an
annual meeting at the time specified therefore in Section 2 of this
Article, or the Directors are not elected thereat, Directors may be
elected at a special meeting held for that purpose upon call and
notice as hereinafter provided for a special meeting of
stockholders.
Section 4. Special meetings of stockholders may be called for
any purpose or purposes at any time by the President, the
Secretary, the Board of Directors, any two or more members of the
Board of Directors or in the matter hereinafter provided by one or
more stockholders holding not less than one-tenth of the issued and
outstanding stock entitled to vote. Upon request in writing by
registered mail or delivered in person to the President, any Vice
President, or Secretary, by any person or persons entitled to call
a meeting of stockholders to be held at such time and place as such
officer shall fix, not less than ten or more than sixty days after
the receipt of such request. Any such request shall state the
purpose or purposes of the proposed meeting.
<PAGE>
PAGE 2
Section 5. Written notice of each meeting of stockholders,
stating the time and place, and in case of a special meeting the
purpose thereof, shall be served upon or mailed to each stockholder
of record entitled to vote thereat at such address as appears on
the stock register of the Corporation, at least ten days before
such meeting.
Section 6. Notice of the time, place and purpose of any
meeting of shareholders, whether required by statute, by the
Articles of Incorporation or by these By-Laws, may be waived in
writing by any stockholder. Such waiver may be given before or
after the meeting, and shall be filed with the Secretary or entered
upon the records of the meeting.
Section 7. Business transacted at all special meetings shall
be confined to the objects stated in the call.
Section 8. The presence, at any meeting of stockholders, in
person or by proxy of the holders of a majority of the stock
entitled to vote thereat shall constitute a quorum for the
transaction of business, except as otherwise provided by statute.
If, however, a quorum shall not be present at any meeting of the
stockholders, the stockholders present in person or by proxy shall
have power to adjourn the meeting from time to time, until a quorum
shall be present. If any meeting of stockholders be adjourned to
another time or place, whether for lack of quorum or otherwise, no
notice as to such adjourned meeting need to be given other than by
an announcement, giving the time and place thereof, at the meeting
at which the adjournment is taken. At such adjourned meeting at
which a quorum shall be present, any business may be transacted
which might have been transacted at the meeting as originally
noticed. The stockholders present at a duly called or held meeting
at which a quorum is present may continue to transact business
until final adjournment, notwithstanding the withdrawal of enough
stockholders to leave less than a quorum.
Section 9. At each meeting of the stockholders, every
stockholder of record at the date fixed by the Board of Directors
as the record date for the determination of the person entitled to
vote at a meeting of stockholders, or, of no date has been fixed,
then at the date of the meeting, shall be entitled at such meeting
to one vote for each share having voting power standing in his name
on the books of the Corporation. A stockholder may cast his vote
or votes in person or by proxy. The appointment of a proxy shall
be in writing filed with the Secretary at or before the meeting.
<PAGE>
PAGE 3
ARTICLE III
BOARD OF DIRECTORS
Section 1. The number of directors which shall constitute the
whole Board shall not be less than three nor more than fourteen, as
the stockholders may from time to time determine. The President of
the Corporation shall be a Director. Directors shall be elected at
the annual meeting of the stockholders of the Corporation, except
that if the number of directors is increased at any time other than
at an annual meeting of stockholders, an additional Director or
Directors to fill the places on the Board created by any such
increase may be elected at a special meeting of stockholders called
for that purpose. Each Director shall be elected to serve until
the next annual meeting of the stockholders and until his successor
shall be elected and shall qualify.
Section 2. Vacancies in the Board of Directors, not to exceed
one-third of the members of the Board in any one year, shall be
filled by the remaining members of the Board, though less than a
quorum, and each person so elected shall be a Director until his
successor is elected by the stockholders who may make such election
at their next annual meeting or at any special meeting called for
that purpose. A vacancy in the Board of Directors, which cannot be
filled by the remaining members of the Board, shall be filled by
the stockholders at any special meeting called for that purpose.
Section 3. The Board of Directors shall have the general
management, control and supervision of all business and affairs of
the Corporation, and shall fix and change, as it may from time to
time determine, by majority vote, the compensation to be paid
Directors, officers and agents of the Corporation, and do all such
lawful acts and things as are not by statue or by the Articles of
Incorporation or by the By-Laws directed or required to be
exercised or done by the stockholders.
ARTICLE IV
EXECUTIVE COMMITTEE
Section 1. The Board of Directors may, by affirmative action
of the entire Board, designate two or more of their number, one of
which shall be the President, to constitute an Executive Committee,
which, to the extent determined by affirmative action of the entire
Board, shall have and exercise the authority of the Board in the
management of the business of the Corporation. Any such Executive
Committee shall act only in the interval between meetings of the
Board, and shall be subject at all times to the control and
direction of the Board. The Executive Committee shall keep regular
minutes of its proceedings and report the same to the Board.
<PAGE>
PAGE 4
ARTICLE V
MEETINGS OF THE BOARD OF DIRECTORS
Section 1. The annual meeting of the Board of Directors of
the Corporation shall be held at its principal office in the City
of Minneapolis, Minnesota, as soon as practicable after the final
adjournment of the annual meeting of the stockholders in each year,
and no notice of such meeting shall be necessary to the newly
elected Directors in order to legally constitute the meeting
provided a quorum shall be present; except, however, that such
meeting may be held at such other place, whether in this state or
elsewhere, as a majority of the Board of Directors may have
previously determined.
Section 2. Regular meetings of the Board of Directors may be
held without notice at such time and place either within or without
the State of Minnesota, as shall from time to time have been
previously determined by the Board.
Section 3. Special meetings of the Board may be called by the
President on two days notice to each Director, either personally or
by mail or telegram; special meetings shall be called by the
President or Secretary in like manner and on like notice on the
written request of two Directors. Any Directors, may in writing,
either before or after the meeting, waive notice thereof; and,
without notice, any Director by his attendance at and participation
in the action taken at the meeting shall be deemed to have waived
notice.
Section 4. At all meetings of the Board of Directors, a
majority of the Directors shall be necessary and sufficient to
constitute a quorum for the transaction of business; and the acts
of a majority of the Directors present at a meeting at which a
quorum is present shall be the acts of the Board of Directors. If
a quorum shall not be present at any meeting of Directors, the
Directors present thereat may adjourn the meeting from time to
time, until a quorum shall be present. No notice of an adjourned
meeting, whether for lack of quorum or otherwise, need be given
other than by announcement, giving the time and place thereof, at
the meeting at which the adjournment is taken.
Section 5. Any action, which might be taken at a meeting of
the Board of Directors, may be taken without a meeting if done in
writing signed by all of the Directors.
<PAGE>
PAGE 5
ARTICLE VI
NOTICES
Section 1. Whenever under the provisions of statutes or of
the Articles of Incorporation or of the By-Laws, notice is required
to be given to any Directors or stockholder, it shall not be
construed to mean personal notice, but such notice may be given in
writing by depositing the same in a post office or letter box, in a
postpaid sealed wrapper, addressed to such Director or stockholder
at such address as appears on the stock register or books of this
Corporation, or, in default of address appearing in the stock
register of the Corporation or any known address, to such Director
or stockholder at the Main Post Office in the City of Minneapolis,
Minnesota, and such notice shall be deemed to be given at the time
when the same shall thus be mailed.
ARTICLE VII
OFFICERS
Section 1. The officers of the Corporation shall be a
Chairman of the Board, a President, one or more Vice Presidents
(the number thereof to be determined by the Board of Directors), a
Treasurer, a Secretary, a Medical Director, and such Assistant
Treasurers, Assistant Secretaries, and such other officers as the
Board of Directors may deem necessary. All officers of the
Corporation shall exercise such powers and perform such duties as
shall be set forth in these By-Laws and as shall be determined from
time to time by the Board of Directors or by the President. Any
two of the offices, except those of President and Vice President,
Treasurer and Assistant Treasurer, and Secretary and Assistant
Secretary may be held by the same person.
Section 2. The Board of Directors, at its annual meeting,
shall elect a Chairman of the Board, a President, a Secretary, a
Treasurer, a Medical Director and such Executive Vice Presidents or
Senior Vice Presidents as the Board shall determine. Only the
Chairman of the Board and the President need be a member of the
Board. The President, or his designee, may appoint any other
officers permitted by Section 1 of this Article.
Section 3. The officers of the Corporation shall, except in
the event of death, resignation, or removal by the Board of
Directors, hold office until their successors are chosen and
qualify in their stead. Any officer elected by the Board of
Directors may be removed at any time by the Board of Directors with
or without cause; such removal, however, shall be without prejudice
to the contract rights, if any, of the person so removed. When a
vacancy for any reason occurs among the officers, the Board of
Directors shall have the power to elect a successor to fill such
vacancy for the unexpired term.
<PAGE>
PAGE 6
Section 4. Chairman of the Board. The Chairman of the Board
shall preside at all meetings of the stockholders and of the Board
of Directors, and will perform such other duties as are assigned to
him by the Board of Directors.
Section 5. President. The President shall be the chief
executive officer of the Corporation. He shall have general and
active supervision and direction over the business affairs of the
Corporation and over its several officers, subject to the control
of the Board of Directors whose policies he shall execute. He
shall see that all lawful orders and resolutions of the Board of
Directors and of the Executive Committee are carried into effect
and he shall make or cause to be made timely and appropriate
reports to the Board of Directors of all matters which in the
interest of the Corporation are required to be brought to their
notice. He shall be a member of the Executive Committee and shall
preside at its meetings and he shall ex officio be a member of all
standing committees or other committees as may be from time to time
constituted or appointed by the Board of Directors.
Section 6. Secretary. The Secretary shall attend all
meetings of the Board of Directors and of the stockholders and
record their proceedings in a book to be kept for that purpose, and
shall perform like duties for the Executive Committee when
required. In case the Secretary shall be absent from any meeting,
the Chairman of the meeting may appoint a temporary secretary to
act at such meeting. The Secretary shall give, or cause to be
given, notice of all meetings of the stockholders and special
meetings of the Board of Directors. He shall have the custody of
the stock register, minute books and the seal of the Corporation,
and shall make such reports and perform such other duties as are
incident to this office or are properly required of him by the
Board of Directors.
Section 7. Treasurer. The Treasurer, unless otherwise
ordered by the Board of Directors, shall have the custody of all
the funds and securities of the Corporation, and shall deposit all
monies and valuables in the name of and to the credit of the
Corporation in such banks or depositories as the Board of Directors
may designate, and shall keep regular books of account, and shall
have custody of the books and records incident to his office and
such as the Board of Directors may direct, and he shall have such
other powers and shall perform such other duties as are incident to
his office or which are properly required of him by the Board of
Directors.
Section 8. Medical Director. The Medical Director shall,
under the direction of the Board of Directors, appoint all medical
examiners for this Corporation and shall have such other powers and
shall perform such other duties as are incident to his office or
which are properly required of him by the Board of Directors. In
his absence or inability to act, an assistant, designated by the
Executive Committee, may act for and in his stead.
Section 9. The powers and duties of all other officers shall
be such as are usual in like corporations under the direction and
control of the Board of Directors.
<PAGE>
PAGE 7
ARTICLE VIII
CLOSING OF TRANSFER BOOKS
AND FIXING OF RECORD DATE
Section 1. The Board of Directors may fix a time, not less
than twenty nor more than forty days preceding the date of any
meeting of stockholders, as a record date for the determination of
the stockholders entitled to notice of and to vote at such meeting,
and in such case by stockholders of record on the date so fixed, or
their legal representatives, shall be entitled to notice of and to
vote at such meeting, notwithstanding any transfer of any shares on
the books of the Corporation after any record date so fixed. The
Board of Directors may close the books of the Corporation against
transfers of shares during the whole or any part of such period.
Section 2. The Board of Directors may fix a time not
exceeding forty days preceding the date fixed for the payment of
any dividend or distribution, or the date for the allotment of
rights, or, subject to contract rights with respect thereto, the
date when any change or conversion or exchange of shares shall be
made or go into effect, as a record date for the determination of
the stockholders entitled to receive payment of any such dividend,
distribution or allotment of rights or to exercise rights in
respect to any such change, conversion or exchange of shares, and
in such case only stockholders of record on the date so fixed shall
be entitled to receive payment of such dividend, distribution or
allotment of rights or to exercise such rights of change,
conversion or exchange of shares, as the case may be,
notwithstanding any transfer of any shares on the books of the
Corporation after any record date fixed as aforesaid. The Board of
Directors may close the books of the Corporation against the
transfer of shares during the whole or any part of such period.
ARTICLE IX
MISCELLANEOUS
Section 1. The Corporation shall be entitled to treat the
holder of record of any share or shares of stock as the holder in
fact thereof, and, accordingly, shall not be found to recognize any
equitable or other claim to or interest in such share on the part
of any other person, whether or not it shall have express or other
notice thereof, except as expressly provided by the laws of the
State of Minnesota.
Section 2. The Corporation shall indemnify any person who was
or is a party or is threatened to be made a party, by reason of the
fact that he is or was a Manager of Variable Annuity Funds A and B,
director, officer, employee or agent of this Corporation, or is or
was serving at the direction of the Corporation as a Manager of
Variable Annuity Funds A and B, director, officer, employee or
agent of another corporation, partnership, joint venture, trust or
other enterprise, to any threatened, pending or completed action,
suit or proceeding, wherever brought, to the fullest extent
permitted by the laws of the State of Minnesota, as now existing or
<PAGE>
PAGE 8
hereafter amended, provided that this Article shall not indemnify
or protect any such Manager of Variable Annuity Funds A and B,
director, officer, employee or agent against any liability to the
Corporation or its security holders to which he would otherwise be
subject by reason of willful misfeasance, bad faith, or gross
negligence, in the performance of his duties or by reason of his
reckless disregard of his obligations and duties.
ARTICLE X
LOST STOCK CERTIFICATES
Section 1. The Board of Directors may direct a new
certificate or certificates to be issued in place of any
certificate or certificates theretofore issued by the Corporation
alleged to have been destroyed or lost upon the making of an
affidavit of that fact by the person claiming the certificate of
stock to be lost or destroyed, and the Board of Directors, when
authorizing such issue of a new certificate or certificates, may,
in its discretion and as a condition precedent to the issuance
thereof, require the owner of such lost or destroyed certificate or
certificates, or his legal representative, to advertise the same in
such manner as it shall require and/or give the Corporation a bond
in such sum as it may direct, to indemnify the Corporation against
any claim arising from the issue of such new certificate.
ARTICLE XI
POLICIES, CONTRACTS AND CONVEYANCES
Section 1. Subject to the provisions of Section 2 of this
Article, the President or any Vice President may with the Secretary
or any Assistant Secretary, sign, cause the corporate seal to be
affixed thereto when necessary, acknowledge and deliver all
conveyances, contracts, deeds, notes, mortgages, satisfactions,
leases, assignments, licenses, transfers, powers of attorney,
certificates for shares of stock, and all other similar and
dissimilar instruments.
The Board of Directors may by resolution authorize any officer or
officers alone or with another officer or officers, to sign or
counter-sign, cause the corporate seal to be affixed thereto when
necessary, acknowledge and deliver any written instrument, or class
of written instruments, for and on behalf of this Corporation.
Section 2. All insurance, annuity or endowment policies or
contracts issued by this Corporation and all reinsurance agreements
of this Corporation shall be signed by the President or a Vice
President and the Secretary or an Assistant Secretary. The
signature of any of said officers, on the foregoing or any other
instrument may be a facsimile signature, if the same is
countersigned by an officer or employee duly authorized by the
Board of Directors or Executive Committee of this Corporation to
counter-sign the same.
<PAGE>
PAGE 9
Section 3. All checks, demands for money, and notes of the
Corporation shall be signed by such officer or officers or such
other person or persons as may from time to time be authorized by
the Board of Directors.
ARTICLE XII
AMENDMENTS OF BY-LAWS
Section 1. These By-Laws may be altered at any regular
meeting of the stockholders, or at any special meeting of the
stockholders at which a quorum is present or represented, provided
notice of the proposed alteration is contained in the notice of
such meeting, by the affirmative vote of the holders of a majority
of the shares issued and outstanding and entitled to vote at such
meeting and present or represented thereat.
<PAGE>
<PAGE>
Consent of Independent Auditors
We consent to the reference to our firm under the caption
"Independent Auditors" and to the use of our reports dated
February 3, 1994 on the consolidated financial statements and
financial statement schedules of IDS Life Insurance Company and our
report dated March 18, 1994 on the financial statements of IDS Life
Account SBS for Variable Annuities to be offered by IDS Life
Insurance Company, in Post-Effective Amendment No. 3 to the
Registration Statement (Form N-4 No. 33-40779) being filed under
the Securities Act of 1933 and the Investment Company Act of 1940.
Ernst & Young
Minneapolis, Minnesota
April 27, 1994
<PAGE>
<PAGE>
PAGE 1
Report of Independent Auditors
The Board of Directors
IDS Life Insurance Company
We have audited the consolidated financial statements of IDS Life
Insurance Company as of December 31, 1993 and 1992, and for each of
the three years in the period ended December 31, 1993, and have
issued our report thereon dated February 3, 1994 (included
elsewhere in this Registration Statement).
Our audits also included the financial statement schedules I, V,
VI, VIII and IX included elsewhere in this Registration Statement.
These schedules are the responsibility of the Company's management.
Our responsibility is to express an opinion based on our audits.
In our opinion, the financial statement schedules referred to
above, when considered in relation to the basic financial
statements taken as a whole, present fairly, in all material
respects, the information set forth therein.
Ernst & Young
Minneapolis, Minnesota
February 3, 1994
<PAGE>
PAGE 2
<TABLE>
<CAPTION>
IDS LIFE INSURANCE COMPANY
SCHEDULE I - CONSOLIDATED SUMMARY OF INVESTMENTS
OTHER THAN INVESTMENTS IN RELATED PARTIES ($ thousands)
AS OF DECEMBER 31, 1993
________________________________________________________________________________________
Column A Column B Column C Column D
Type of Investment Cost Value Amount at which
shown in the
balance sheet
________________________________________________________________________________________
<S> <C> <C> <C>
Fixed maturities:
Bonds:
United States Government and
government agencies and
authorities (a) $ 5,591,309 $ 5,737,439 $ 5,591,309
States, municipalities and
polictical subdivisions 11,072 13,452 11,072
All other corporate bonds 13,790,043 14,675,088 13,790,043
____________ _____________ ______________
Total fixed maturities 19,392,424 20,425,979 19,392,424
Mortgage loans on real estate 2,055,450 XXXXXXXXX 2,055,450
Policy loans 350,501 XXXXXXXXX 350,501
Other investments 56,307 XXXXXXXXX 56,307
____________ ______________ ______________
Total investment $ 21,854,682 $ XXXXXXXXX $ 21,854,682
____________ ______________ ______________
(a) - Includes mortgage-backed securities with a cost and market value of $5,527,777 and $5,671,783 respectively.
</TABLE>
<PAGE>
PAGE 3
IDS LIFE INSURANCE COMPANY
SCHEDULE V - SUPPLEMENTARY INSURANCE INFORMATION ($ thousands)
FOR THE YEAR ENDED DECEMBER 31, 1991
<TABLE><CAPTION>
Column A Column B Column C Column D Column E Column F
Segment Deferred Future Unearned Other policy Premium
policy policy premiums claims and revenue
acquisition benefits benefits
cost losses, payable
claims and
loss expenses
<S> <C> <C> <C> <C> <C>
Annuities $ 693,184 $13,663,477 $ - $ 30,041 $ -
Life, DI,
Long-Term Care and
Health Insurance 518,439 2,654,915 - 21,205 102,338
Total $1,211,623 $16,318,392 $ - $ 51,246 $102,338
</TABLE>
<TABLE>
<CAPTION>
Column A Column G Column H Column I Column J Column K
Segment Net Benefits, Amortization Other Premiums
investment claims, of deferred operating written
income losses and policy expenses
settlement acquisition
expenses costs
<S> <C> <C> <C> <C> <C>
Annuities $1,189,038 $ 1,639 $ 63,821 $ 66,068 $ N/A
Life, DI,
Long-Term Care and
Health Insurance 233,828 88,577 52,257 87,601 N/A
Total $1,422,866 $90,216 $116,078 $ 153,669 N/A
</TABLE>
IDS LIFE INSURANCE COMPANY
SCHEDULE V - SUPPLEMENTARY INSURANCE INFORMATION ($ thousands)
FOR THE YEAR ENDED DECEMBER 31, 1992
<TABLE>
<CAPTION>
Column A Column B Column C Column D Column E Column F
Segment Deferred Future Unearned Other policy Premium
policy policy premiums claims and revenue
acquisition benefits benefits
cost losses, payable
claims and
loss expenses
<S> <C> <C> <C> <C> <C>
Annuities $ 860,027 $16,342,419 $ - $ 28,705 $ -
Life, DI,
Long-Term Care and
Health Insurance 580,848 2,883,469 - 21,194 114,379
Total $1,440,875 $19,225,888 $ - $ 49,899 $114,379
</TABLE>
<TABLE>
<CAPTION>
Column A Column G Column H Column I Column J Column K
Segment Net Benefits, Amortization Other Premiums
investment claims, of deferred operating written
income losses and policy expenses
settlement acquisition
expenses costs
<S> <C> <C> <C> <C> <C>
Annuities $1,370,145 $ 1,870 $ 81,706 $ 100,928 $ N/A
Life, DI,
Long-Term Care and
Health Insurance 246,676 106,528 58,453 114,764 N/A
Total $1,616,821 $108.398 $140,159 $ 215,692 N/A
</TABLE>
<PAGE>
PAGE 4
IDS LIFE INSURANCE COMPANY
SCHEDULE V - SUPPLEMENTARY INSURANCE INFORMATION ($ thousands)
FOR THE YEAR ENDED DECEMBER 31, 1993
<TABLE>
<CAPTION>
Column A Column B Column C Column D Column E Column F
Segment Deferred Future Unearned Other policy Premium
policy policy premiums claims and revenue
acquisition benefits benefits
cost losses, payable
claims and
loss expenses
<S> <C> <C> <C> <C> <C>
Annuities $1,008,378 $18,492,135 $ - $ 21,508 $ -
Life, DI,
Long-Term Care and
Health Insurance 644,006 3,148,932 - 23,008 127,245
Total $1,652,384 $21,641,067 $ - $ 44,516 $127,245
</TABLE>
<TABLE>
<CAPTION>
Column A Column G Column H Column I Column J Column K
Segment Net Benefits, Amortization Other Premiums
investment claims, of deferred operating written
income losses and policy expenses
settlement acquisition
expenses costs
<S> <C> <C> <C> <C> <C>
Annuities $1,532,995 $ 3,656 $139,602 $ 122,999 $ N/A
Life, DI,
Long-Term Care and
Health Insurance 250,224 119,335 72,131 118,975 N/A
Total $1,783,219 $122,991 $211,733 $ 241,974 N/A
</TABLE>
<PAGE>
PAGE 5
IDS LIFE INSURANCE COMPANY
SCHEDULE VI - REINSURANCE ($ thousands)
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
<TABLE>
<CAPTION>
____________________________________________________________________________________________________________________
Column A Column B Column C Column D Column E Column F
Gross amount Ceded to other Assumed from Net % of amount
companies other companies Amount assumed to net
____________________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C>
For the year ended
December 31, 1993
Life insurance in force $ 44,188,493 $ 3,038,426 $ 2,015,382 $ 43,165,449 4.67%
____________________________________________________________________________________________________________________
Premiums:
Life insurance $ 51,764 $ 3,627 $ -- $ 48,137 0.00%
DI & health insurance 96,250 17,142 -- 79,108 0.00%
____________________________________________________________________________________________________________________
Total premiums $ 148,014 $ 20,769 $ -- $ 127,245 0.00%
____________________________________________________________________________________________________________________
For the year ended
December 31, 1992
Life insurance in force $ 38,888,963 $ 2,937,590 $ 2,015,382 $ 37,966,755 5.31%
____________________________________________________________________________________________________________________
Premiums:
Life insurance $ 53,238 $ 3,849 $ 330 $ 49,719 0.66%
DI & health insurance 78,347 13,687 -- 64,660 0.00%
____________________________________________________________________________________________________________________
Total premiums $ 131,585 $ 17,536 $ 330 $ 114,379 0.29%
____________________________________________________________________________________________________________________
For the year ended
December 31, 1991
Life insurance in force $ 34,596,113 $ 2,902,381 $ 2,020,900 $ 33,714,632 5.99%
_____________________________________________________________________________________________________________________
Premiums:
Life insurance $ 53,223 $ 3,902 $ 385 $ 49,706 0.77%
DI & health insurance 59,844 7,212 -- 52,632 0.00%
____________________________________________________________________________________________________________________
Total premiums $ 113,067 $ 11,114 $ 385 $ 102,338 0.38%
____________________________________________________________________________________________________________________
</TABLE>
<PAGE>
PAGE 6
IDS LIFE INSURANCE COMPANY
SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS ($ thousands)
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
<TABLE>
<CAPTION>
____________________________________________________________________________________________________________________
Column A Column B Column C Column D Column E
Additions
--------------
Balance at Charged to
Description Beginning Charged to Other Accounts- Deductions- Balance at End
of Period Costs & Expenses Describe * Describe ** of Period
____________________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C>
For the year ended
December 31, 1993
- ------------------------------
Reserve for Mortgage Loans $23,595 $13,635 $0 $2,210 $35,020
Reserve for Fixed Maturities $37,899 ($15,122) $0 $22,777
Reserve for Other Investments $12,834 ($4,344) $0 ($2,210) $10,700
For the year ended
December 31, 1992
- -------------------------------
Reserve for Mortgage Loans $16,131 $8,440 $0 $976 $23,595
Reserve for Fixed Maturities $45,100 ($7,601) $400 $0 $37,899
Reserve for Other Investments $7,782 $4,076 $0 ($976) $12,834
For the year ended
December 31, 1991
- ------------------------------
Reserve for Mortgage Loans $12,655 $6,860 $0 $3,384 $16,131
Reserve for Fixed Maturities $26,096 $19,004 $0 $0 $45,100
Reserve for Other Investments $8,434 ($4,036) $0 ($3,384) $7,782
____________________________________________________________________________________________________________________
* Cash received on bond previously written down
** Transfer between reserve accounts
</TABLE>
<PAGE>
PAGE 7
IDS LIFE INSURANCE COMPANY
SCHEDULE IX - SHORT-TERM BORROWINGS ($ thousands)
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
<TABLE>
<CAPTION>
_______________________________________________________________________________________________________
Column A Column B Column C Column D Column E Column F
Maximum Average Weighted
Weighted amount amount average
Category of aggregate Balance average outstanding outstanding interest rate
short-term borrowing at end interest during the during the during the
of period rate period period period
_______________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C>
1993
Line of Credit $1,519 N/A $22,700 $1,297 3.70%
1992
Line of Credit $ 0 N/A $20,000 $ 825 5.45%
1991
Line of Credit $ 0 N/A $32,725 $1,483 7.28%
_______________________________________________________________________________________________________
</TABLE>
<PAGE>
<PAGE>
PAGE 1
IDS Life Subaccount SLB
Performance Calculations
NON-MONEY MARKET SUBACCOUNTS
TOTAL RETURN
The total return is the percentage change between the initial
investment at the beginning of the period and the total value of
the investment at the end of the period.
Total Return = Ending Total Value - Initial Investment
Initial Investment
The ending total value includes income and capital gains
distributions treated as reinvested. It also reflects deductions
for the contract administrative charge, variable account
administrative charge and the mortality and expense risk charge.
AVERAGE ANNUAL TOTAL RETURN
The average annual total return of a subaccount reflects the
average annual compounded rate of return of a hypothetical
investment over a period of one, five and ten years (or, if less,
up to the life of the subaccount), calculated according to the
following formula:
P(1+T)n = ERV
where: P = a hypothetical initial payment of $1,000.
T = average annual total return
n = number of years.
ERV = ending redeemable value of a hypothetical $1,000
payment made at the beginning of the one, five
or ten year periods (or fractional portion
thereof).
The average annual total return without surrender charge reflects
the deduction of the contract administrative charge, variable
account administrative charge and mortality and expense risk
charge.
The average annual total return with surrender charge reflects the
above deductions and assumes the contract owner surrenders the
entire contract at the end of one, five and ten year periods.
<PAGE>
<PAGE>
PAGE 1
IDS LIFE INSURANCE COMPANY
DIRECTORS POWER OF ATTORNEY
City of Minneapolis
State of Minnesota
Each of the undersigned, as directors of the below listed unit
investment trusts that previously have filed registration
statements and amendments thereto pursuant to the requirements of
the Securities Act of 1933 and the Investment Company Act of 1940
with the Securities and Exchange Commission:
<TABLE><CAPTION>
1933 Act 1940 Act
Reg. Number Reg. Number
<S> <C> <C>
IDS Life Accounts F, IZ, JZ, G, H and N
IDS Life Flexible Annuity 33-4173 811-3217
IDS Life Accounts F, IZ, JZ, G, H and N
IDS Life Variable and Combination
Retirement Annuities 2-73114 811-3217
IDS Life Accounts F, IZ, JZ, G, H and N
IDS Life Employee Benefit Annuity 33-52518 811-3217
IDS Life Accounts F, IZ, JZ, G, H and N
IDS Life Group Variable Annuity Contract 33-47302 811-3217
IDS Life Insurance Company
IDS Life Group Variable Annuity Contract
(Fixed Account) 33-48701 N/A
IDS Life Insurance Company
IDS Life Market Value Annuity 33-28976 N/A
IDS Life Insurance Company
IDS Life Preferred Choice Annuity 33-50968 N/A
IDS Life Variable Life Separate Account
Flexible Premium Variable Life Insurance Policy 33-11165 811-4298
IDS Life Variable Life Separate Account
IDS Life Single Premium Variable Life 2-97637 811-4298
IDS Life Variable Account for Smith Barney Shearson
LifeVest Single Premium Variable Life 33-5210 811-4652
IDS Life Account SBS
IDS Life Symphony Annuity 33-40779 812-7731
IDS Life Account RE
IDS Life Real Estate Variable Annuity 33-13375 N/A
IDS Life Variable Annuity Fund A 2-29081 811-1653
IDS Life Variable Annuity Fund B 2-47430 811-1674
</TABLE>
hereby constitutes and appoints William A. Stoltzmann, Mary Ellyn
Minenko and Colleen Curran or either one of them, as her or his
attorney-in-fact and agent, to sign for her or him in her or his
name, place and stead any and all filings, applications (including
applications for exemptive relief), periodic reports, registration
statements (with all exhibits and other documents required or
desirable in connection therewith) other documents, and amendments
thereto and to file such filings, applications, periodic reports,
registration statements other documents, and amendments thereto
with the Securities and Exchange Commission, and any necessary
states, and grants to any or all of them the full power and
authority to do and perform each and every act required or
necessary in connection therewith.
<PAGE>
PAGE 2
Dated the 31st day of March, 1994.
/s/ Louis C. Fornetti /s/ Janis E. Miller
Louis C. Fornetti Janis E. Miller
/s/ David R. Hubers /s/ James A. Mitchell
David R. Hubers James A. Mitchell
/s/ Richard W. Kling /s/ Barry J. Murphy
Richard W. Kling Barry J. Murphy
/s/ Paul F. Kolkman /s/ Stuart A. Sedlacek
Paul F. Kolkman Stuart A. Sedlacek
/s/ Peter A. Lefferts /s/ Melinda S. Urion
Peter A. Lefferts Melinda S. Urion
<PAGE>
