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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. 4 (File No. 33-40779)
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY
ACT OF 1940 X
Amendment No. 4 (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)
Approximate Date of Proposed Public Offering
It is proposed that this filing will become effective (check
appropriate box)
immediately upon filing pursuant to paragraph (b) of Rule 485
X on May 1, 1995 pursuant to paragraph (b) of Rule 485
60 days after filing pursuant to paragraph (a)(i) of Rule 485
on (date) pursuant to paragraph (a)(i) of Rule 485
75 days after filing pursuant to paragraph (a)(ii)
on (date) pursuant to paragraph (a)(ii) of rule 485
If appropriate, check the following box:
this post-effective amendment designates a new effective date
for a previously filed post-effective amendment.
Calculation of Registration Fee Under the Securities Act of 1933
DECLARATION REQUIRED BY RULE 24f-2(a)(1)
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
28, 1995.
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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
Section Section in Statement of
Item No. in Prospectus Item No. Additional Information
<C> <C> <C> <C>
1 Cover 15 Cover
2 Definitions 16 Table of Contents
3(a) Annuity and Certificate Expense 17(a) NA
(b) About the Annuity (b) NA
(c) Who Issues the Annuity*
4(a) Condensed Financial Information
(b) Performance Information 18(a) NA
(c) Financial Statements (b) NA
(c) Independent Auditors
5(a) Who Issues the Annuity (d) NA
(b) About the Annuity (e) NA
(c) About the Variable Account, Portfolios and Funds (f) NA
(d) Cover
(e) Voting rights 19(a) About the Annuity
(f) NA
20(a) Principal Underwriter
6(a) Certificate Charges and Charges Against the Variable (b) Principal Underwriter
Account Annuity and Certificate Expenses (c) NA
(b) Surrender Charge (d) NA
(c) Calculation
(d) Surrendering Your Certificate 21(a) Performance Information
(e) Investment Goals and Policies of the Portfolio and (b) Performance Information
and Funds
(f) NA 22
7(a) Buying the Certificate 23(a) Financial Statements
(b) About the Variable Account, Portfolios and the Funds; (b) Financial Statements
Transfering Your Money Between Accounts
(c) About the Variable Account, Portfolios and Funds;
Subaccounts Available for Investment
(d) Cover
8(a) Payout Options at Retirement
(b) Retirement Date
(c) Payout Options at Retirement
(d) Payout Options at Retirement
(e) Payout Options at Retirement
(f) Changing Ownership
9(a) Payment in Case of Death
(b) Payment in Case of Death
10(a) Buying the Certificate
(b) Settlement Value of Your Certificate
(c) Additional Information About the Annuity and
Certificate
(d) Who Issues the Annuity
11(a) Surrendering Your Certificate; Surrender Charges
(b) NA
(c) Receiving Payment When You Request a Surrender
(d) NA
(e) Ten Day Free Look
12(a) Taxes
(b) About the Variable Account, Portfolios and Funds
(c) Federal Tax Information
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13 NA
14 Table of contents of the Statement of Additional
Information
</TABLE>
*Designates page number in the prospectus, which is hereby
incorporated by reference in this Statement of Additional
Information.
<PAGE>
PAGE 4
Symphony Annuity
Prospectus/May 1, 1995
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
PROSPECTUSES FOR SMITH BARNEY SERIES FUND, IDS LIFE CAPITAL
RESOURCE FUND, IDS LIFE SPECIAL INCOME FUND, INC. AND IDS LIFE
MANAGED FUND, INC. ALL 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 FINANCIAL INSTITUTION, AND THE
SECURITIES IT OFFERS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR
GUARANTEED OR ENDORSED BY ANY FINANCIAL INSTITUTION 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 May 1, 1995, 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 29 of this
prospectus.
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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 and Funds -- 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, Emerging Growth Portfolio
(collectively, the Portfolios), Capital Resource Fund, Special
Income Fund, and Managed Fund (collectively, the Funds).
You may choose to allocate your purchase payments to one or more of
the subaccounts investing in shares of one of these Portfolios or
Funds, each of which is an open-end investment company or 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.
Retirement Date -- The date on which retirement payments begin.
Surrender Charge -- A deferred sales charge that may be applied if
you surrender your Annuity.
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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 or 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; the Emerging Growth subaccount invests in shares of the
Emerging Growth Portfolio; the Capital Resource subaccount invests
in shares of the Capital Resource Fund; the Special Income
subaccount invests in shares of the Special Income Fund; and the
Managed subaccount invests in shares of the Managed Fund.
Summary of Contents
About the Annuity
Purpose of the Annuity -- The Annuity allows you to invest in any
or all of the thirteen subaccounts of the Variable Account as well
as in the Fixed Account. Retirement payments are paid on a fixed
basis (page 13).
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 13).
Who Issues the Annuity -- IDS Life, a subsidiary of American
Express Financial Corporation, issues the Annuity (page 13).
About the Variable Account and the Portfolios
Subaccounts Available for Investment -- There are thirteen separate
subaccounts of the Variable Account available for investment in
addition to the Fixed Account (page 14).
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The Variable Account is registered as a single unit investment
trust under the 1940 Act (page 14).
Investment Goals and Policies of the Portfolios and Funds -- Each
Portfolio and Fund 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. The Capital
Resource Fund invests primarily in U.S. common stocks listed on
national securities exchanges and other securities convertible into
common stock, diversified over many different companies in a
variety of industries. The Special Income Fund invests primarily
in high-quality, lower-risk corporate bonds issued by many
different companies in a variety of industries, and in government
bonds. The Managed Fund invests primarily in U.S. common stocks
listed on national securities exchanges, securities convertible
into common stock, warrants, fixed income securities (primarily
high-quality corporate bonds) and money market instruments (page
15).
Using the Annuity
Buying the Annuity -- Applications are subject to acceptance at IDS
Life's home office in Minneapolis (page 17).
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 17).
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
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PAGE 8
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 18).
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 18).
Transferring Your Money Between Accounts -- Until the retirement
date, you can give us written or telephone instructions to
redistribute your investment among the thirteen 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 18).
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 18).
Contract Charges and Charges Against the Variable Account -- IDS
Life charges your Annuity $30 per year for administrative services
(page 19).
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 19).
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 19).
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 19).
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 20).
Certain state and local governments impose premium taxes (page 21).
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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 21).
The Internal Revenue Code of 1986, as amended (the Code) imposes
restrictions on your right to receive a distribution from a TSA
(page 21).
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 21).
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 22).
IDS Life may ask you to return the Annuity if you make a complete
surrender (page 22).
Payment usually will be mailed within seven days after IDS Life
receives your surrender request (page 22).
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 22).
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 23).
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 23).
IDS Life calculates retirement payments due based on the contract
value on the retirement date. Payments are made on a fixed basis
(page 24).
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 24). <PAGE>
PAGE 10
If you purchased your Annuity for a qualified plan, the payment
schedule must meet the requirements of that plan (page 24).
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 25).
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 25).
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 25).
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 advisor (page 25).
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 25).
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 or Fund (page 27).
About the Portfolios and Funds -- As Annuity owner, you have voting
rights in the Smith Barney Series Fund and its Portfolios and in
the Funds. IDS Life may, in its discretion, substitute investments
in shares of the Portfolios and Funds with shares of other
registered investment companies under certain conditions (page 27).
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 28.
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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 and Funds. For more information about surrender
charges, see page 19.
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 and Funds
(as a percentage of average daily net assets)
<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 .30 .19 .40 .28 .13 .25 .25 .25
______________________________________________________________________________________________________________________________
Total Operating
Expenses of
Portfolios # .75% .85% .95% .84% 1.00% .93% .88% 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 $ 85.70 $ 84.61 $ 86.23 $ 85.51 $ 85.01 $ 86.23 $ 89.28 $ 88.26
3 years $113.22 $116.35 $119.00 $115.74 $121.06 $118.41 $116.93 $121.06 $130.47 $127.33
5 years $145.76 $151.18 $154.93 $149.51 $159.27 $153.95 $151.49 $159.27 $175.46 $170.07
10 years $271.64 $283.27 $287.13 $276.38 $300.73 $285.18 $280.31 $300.73 $323.52 $323.88
<PAGE>
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You would pay the following expenses on the same investment assuming no surrender or selection of a retirement payment plan at the
end of each time period:
1 year $ 23.69 $ 24.71 $ 25.70 $ 24.61 $ 26.23 $ 25.51 $ 25.01 $ 26.23 $ 29.28 $ 28.26
3 years $ 73.22 $ 76.35 $ 79.00 $ 75.74 $ 81.06 $ 78.41 $ 76.93 $ 81.06 $ 90.47 $ 87.33
5 years $125.76 $131.18 $134.93 $129.51 $139.27 $133.95 $131.49 $139.27 $155.46 $150.07
10 years $271.64 $283.27 $287.13 $276.38 $300.73 $285.18 $280.31 $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.
**In this example, the $30 annual contract administrative charge is approximated as a .086 percent charge based on the
average Annuity size.
Capital Special
Resource Income Managed
Management Fees .64% .64% .64%
Other Expenses .04% .04% .04%
________________________________________________
Total Operating
Expenses of
Funds # .68% .68% .68%
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:
01 year $ 84.23 $ 84.23 $ 84.23
3 years $125.69 $125.69 $125.69
5 years $156.76 $156.76 $156.76
10 years $262.34 $262.34 $262.34
You would pay the following expenses on the same investment assuming no surrender or selection of a retirement payment plan at the
end of each time period.
1 year $ 23.23 $ 23.23 $ 23.23
3 years $ 71.56 $ 71.56 $ 71.56
5 years $122.52 $122.52 $122.52
10 years $262.34 $262.34 $262.34
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.
**In this example, the $30 annual contract administrative charge is approximated as a .086 percent charge based on the
expected average Annuity size.
# Annualized operating expenses of underlying mutual funds at Dec. 31, 1994.
</TABLE>
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 Year ended Oct. 16 to
Dec. 31, 1994 Dec. 31, 1993 Dec. 31, 1992 Dec. 31, 1991
<S> <C> <C> <C> <C>
Subaccount AMO (Investing in shares of Money Market
Portfolio)*
Accumulation unit value at beginning of period...... $1.02 $1.02 $1.00 $1.00
Accumulation unit value at end of period............ $1.04 $1.02 $1.02 $1.00
Number of accumulation units outstanding at end of
period (000 omitted)................................ 6,298 3,175 2,061 828
Ratio of operating expense to average net assets.... 1.50% 1.50% 1.50% 1.50%
Simple yield........................................ 2.14% 0.72% 0.78% 2.00%
Compound yield...................................... 2.16% 0.72% 0.78% 2.02%
Subaccount AIH (Investing in shares of Intermediate
High Grade Portfolio)*
Accumulation unit value at beginning of period...... $1.13 $1.06 $1.02 $1.00
Accumulation unit value at end of period............ $1.08 $1.13 $1.06 $1.02
Number of accumulation units outstanding at end of
period (000 omitted)................................ 11,655 8,070 3,417 682
Ratio of operating expense to average net assets.... 1.50% 1.50% 1.50% 1.50%<PAGE>
PAGE 13
Year ended Year ended Year ended Year ended
Subaccount ADS (Investing in shares of Diversified Dec. 31, 1994 Dec. 31, 1993 Dec. 31, 1992 Dec. 31, 1991
Strategic Income Portfolio)*
Accumulation unit value at beginning of period....... $1.12 $1.01 $1.01 $1.00
Accumulation unit value at end of period............. $1.07 $1.12 $1.01 $1.01
Number of accumulation units outstanding at end of
period (000 omitted)................................. 48,740 36,618 19,768 3,869
Ratio of operating expense to average net assets..... 1.50% 1.50% 1.50% 1.50%
Subaccount AEM (Investing in shares of Equity Income
Portfolio)*
Accumulation unit value at beginning of period...... $1.22 $1.12 $1.02 $1.00
Accumulation unit value at end of period............ $1.08 $1.22 $1.12 $1.02
Number of accumulation units outstanding at end of
period (000 omitted)................................ 39,594 48,057 23,184 3,835
Ratio of operating expense to average net assets.... 1.50% 1.50% 1.50% 1.50%
Subaccount AEX (Investing in shares of Equity Index
Portfolio)*
Accumulation unit value at beginning of period...... $1.19 $1.11 $1.06 $1.00
Accumulation unit value at end of period............ $1.18 $1.19 $1.11 $1.06
Number of accumulation units outstanding at end of
period (000 omitted)................................ 7,552 6,454 3,748 636
Ratio of operating expense to average net assets.... 1.50% 1.50% 1.50% 1.50%
Subaccount AGI (Investing in shares of Growth &
Income Portfolio)*
Accumulation unit value at beginning of period...... $1.16 $1.08 $1.01 $1.00
Accumulation unit value at end of period............ $1.11 $1.16 $1.08 $1.01
Number of accumulation units outstanding at end of
period (000 omitted)................................ 25,102 20,774 10,136 1,881
Ratio of operating expense to average net assets.... 1.50% 1.50% 1.50% 1.50%
Subaccount AAP (Investing in shares of Appreciation
Portfolio)*
Accumulation unit value at beginning of period...... $1.15 $1.09 $1.05 $1.00
Accumulation unit value at end of period............ $1.12 $1.15 $1.09 $1.05
Number of accumulation units outstanding at end of
period (000 omitted)................................ 68,920 65,534 48,842 10,929
Ratio of operating expense to average net assets.... 1.50% 1.50% 1.50% 1.50%
Subaccount ATR (Investing in shares of Total Return
Portfolio)**
Accumulation unit value at beginning of period...... $1.03 $1.00 N/A N/A
Accumulation unit value at end of period............ $1.09 $1.03 N/A N/A
Number of accumulation units outstanding at end of
period (000 omitted)................................ 18,918 2,486 N/A N/A
Ratio of operating expense to average net assets.... 1.50% 1.50% N/A N/A
Subaccount AIE (Investing in shares of International
Equity Portfolio)**
Accumulation unit value at beginning of period...... $1.04 $1.00 -- --
Accumulation unit value at end of period............ $0.91 $1.04 -- --
Number of accumulation units outstanding at end of
period (000 omitted)................................ 29.353 5,528 -- --
Ratio of operating expense to average net assets.... 1.50% 1.50% -- --
Subaccount AEG (Investing in shares of Emerging
Growth Portfolio)**
Accumulation unit value at beginning of period...... $1.04 $1.00 -- --
Accumulation unit value at end of period............ $0.96 $1.04 -- --
Number of accumulation units outstanding at end of
period (000 omitted)................................ 11,353 2,022 -- --
Ratio of operating expense to average net assets.... 1.50% 1.50% -- --
Subaccount ACR (Investing in shares of Capital
Resource Fund)***
Accumulation value at beginning of period........... $1.00 -- -- --
Accumulation unit value at end of period............ $0.99 -- -- --
Number of accumulation units outstanding at end of
period (000) omitted)............................... 560 -- -- --
Ratio of expense to average net assets.............. 1.50% -- -- --
<PAGE>
PAGE 14
Year ended Year ended Year ended Year ended
Subaccount ASI (Investing in shares of Special Dec. 31, 1994 Dec. 31, 1993 Dec. 31, 1992 Dec. 31, 1991
Income Fund)***
Accumulation value at beginning of period........... $1.00 -- -- --
Accumulation unit value at end of period............ $0.99 -- -- --
Number of accumulation units outstanding at end of
period (000) omitted)............................... 351 -- -- --
Ratio of expense to average net assets.............. 1.50% -- -- --
Subaccount AMG (Investing in shares of Managed
Fund)***
Accumulation value at beginning of period........... $1.00 -- -- --
Accumulation unit value at end of period............ $0.97 -- -- --
Number of accumulation units outstanding at end of
period (000) omitted)............................... 298 -- -- --
Ratio of expense to average net assets.............. 1.50% -- -- --
*Operations commenced on Oct. 16, 1991.
**Operations commenced on Dec. 2, 1993.
***Operations commenced on Oct. 3, 1994.
</TABLE>
Financial Statements
Complete financial statements of the Variable Account including
audited individual and combined statements of net assets as of Dec.
31, 1994, and the related statements of operations for the year
then ended, and the related statements of changes in net assets for
each of the three years in the period then ended, except for the
ATR, AEG and AIE subaccounts which are for the year ended Dec. 31,
1994 and the period Dec. 2, 1993 (commencement of operations) to
Dec. 31, 1993, and the ACR, ASI, and AMG subaccounts which are for
the period Oct. 3, 1994 (commencement of operations) to Dec. 31,
1994, are presented in the SAI dated May 1, 1995. The audited
consolidated financial statements of IDS Life Insurance Company
including audited consolidated balance sheets as of Dec. 31, 1994,
and 1993, and audited related consolidated statements of income and
cash flows for each of the three years in the period ended Dec. 31,
1994 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 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 are based on all
investment income per accumulation unit earned during a given
30-day period, less expenses accrued during the period (net <PAGE>
PAGE 15
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 average
annual 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. Quotations will be made that reflect the
deduction of the applicable surrender charge (assuming a surrender
at the end of the illustrated period). Additional average annual
total return quotations may be made that do not reflect a surrender
charge deduction (assuming no 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.
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 thirteen subaccounts of the Variable Account or in the Fixed
Account. Each subaccount invests only in shares of a single
Portfolio or Fund. 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.
<PAGE>
PAGE 16
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 prospectuses describing the Portfolios and
the Funds to help you decide on the best investments for your
needs. Keep these prospectuses for future reference.
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 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 American Express Financial Corporation, which itself is a wholly
owned subsidiary of the American Express Company. American Express
Company is a financial services company principally engaged through
subsidiaries (in addition to American Express Financial
Corporation) 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 and Funds
Subaccounts Available for Investment
You may choose to invest your purchase payments in any or all of
thirteen subaccounts or in the Fixed Account. Each subaccount
invests in shares of one of the following Portfolios or Funds:
o The Money Market subaccount (AMO) invests in shares of the
Money Market Portfolio;
o The Intermediate High Grade subaccount (AIH) invests in
shares of the Intermediate High Grade Portfolio;
o The Diversified Strategic Income subaccount (ADS) invests in
shares of the Diversified Strategic Income Portfolio;
o The Equity Income subaccount (AEM) invests in shares of the
Equity Income Portfolio;
<PAGE>
PAGE 17
o The Equity Index subaccount (AEX) invests in shares of the
Equity Index Portfolio;
o The Growth & Income subaccount (AGI) invests in shares of the
Growth & Income Portfolio;
o The Appreciation subaccount (AAP) invests in shares of the
Appreciation Portfolio;
o The Total Return (ATR) subaccount invests in shares of the
Total Return Portfolio;
o The International Equity subaccount (AIE) invests in shares
of the International Equity Portfolio;
o The Emerging Growth subaccount (AEG) invests in the shares of
the Emerging Growth Portfolio;
o The Capital Resource subaccount (ACR) invests in shares of
the Capital Resource Fund;
o The Special Income subaccount (ASI) invests in shares of the
Special Income Fund; and
o The Managed subaccount (AMG) invests in shares of the Managed
Fund.
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. All obligations arising under the
Annuities are general obligations of IDS Life.
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 and Fund intends to comply with those
diversification requirements. See the accompanying prospectuses
for further tax information regarding the Portfolios and Funds.
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.
<PAGE>
PAGE 18
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 and Funds
The investment goals of the Portfolios and Funds are as follows:
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 Smith Barney Series 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.
<PAGE>
PAGE 19
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.
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.
The Capital Resource Fund's goal is capital appreciation. In
seeking to achieve its goal, the Fund will invest primarily in U.S.
common stocks listed on national securities exchanges and other
securities convertible into common stock, diversified over many
different companies in a variety of industries.
The Special Income Fund's goal is to provide a high level of
current income while conserving the value of the investment for the
longest period of time. In seeking to achieve its goal, the Fund
will invest primarily in high-quality, lower-risk corporate bonds
issued by many different companies in a variety of industries, and
in government bonds.
The Managed Fund's goal is maximum total investment return. In
seeking to achieve its goal, the Fund will invest primarily in U.S.
common stocks listed on national securities exchanges, securities
convertible into common stock, warrants, fixed income securities
(primarily high-quality corporate bonds) and money market
instruments. The Fund invests in many different companies in a
variety of industries.
IDS Life does not guarantee that the Portfolios and Funds 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 and
Funds are:
<PAGE>
PAGE 20
Name Service
American Capital Asset Investment Adviser to the
Management, Inc. Emerging Growth Portfolio
American Express Financial Investment Advisor to Capital
Corporation Resource, Special Income
and Managed Funds
IDS Life Insurance Company Investment Manager of
Capital Resource, Special Income
and Managed Funds
Smith Barney Global Capital Sub-Investment Adviser to the
Management, Inc. Diversified Strategic Income
Portfolio
Smith Barney Mutual Funds Investment Adviser to the Money
Management, Inc. Market Portfolio, the
Intermediate High Grade
Portfolio, the Diversified
Strategic Income Portfolio, the
Equity Income Portfolio, the
Growth & Income Portfolio, the
Appreciation Portfolio, the
Total Return Portfolio and the
International Equity Portfolio
and Administrator to each
Portfolio
Travelers Investment Management Investment Adviser to the Equity
Company Index Portfolio
Boston Safe Deposit and Trust Custodian
Company
The Shareholder Services Group, Transfer and Dividend Paying
Inc., a subsidiary of First Agent
Data Corporation
Smith Barney Inc. Distributor
Detailed information about each Portfolio and Fund, including the
risks related to investing in them is in the separate prospectuses.
Be sure to read them carefully. There are deductions from, and
fees and expenses paid out of, the assets of the Portfolios and
Funds that are described in these prospectuses.
Using the Annuity
Buying the Annuity
Your Smith Barney 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
<PAGE>
PAGE 21
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.
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;
<PAGE>
PAGE 22
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
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
<PAGE>
PAGE 23
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.
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
<PAGE>
PAGE 24
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.
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.
<PAGE>
PAGE 25
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
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:
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______________________________________________________________________________________________
<S> <C> <C> <C> <C>
Initial purchase payment at Annuity issue date of May 1, 1995 ........................ $10,000
Subsequent purchase payment on July 1, 1998 .......................................... 20,000
Account value on contract anniversary, May 1, 1999 ................................... 40,000
Account value on October 12, 1999 .................................................... 42,000
______________________________________________________________________________________________
Full Surrender on October 12, 1999:
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, 1999:
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 4; 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.
<PAGE>
PAGE 26
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.
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 the Dec. 31, 1988 value, or 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 27
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 advisor 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 28
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 and Funds to sell securities
or to value the Portfolios' or Funds' 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).
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
<PAGE>
PAGE 29
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, and 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.
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.
<PAGE>
PAGE 30
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 or Fund
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 the annuity contract as approved by
Massachusetts require the use of unisex settlement rates.
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.
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.
<PAGE>
PAGE 31
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.
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. <PAGE>
PAGE 32
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 advisor 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 advisor if you have any questions about the taxation of your
Annuity.
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.
<PAGE>
PAGE 33
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);
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
<PAGE>
PAGE 34
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 advisor regarding your specific circumstances.
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 or Fund's net asset value per share
and the per share amount of any current dividend or capital
gain distribution made by the Portfolio or Fund and held in
the subaccount;
<PAGE>
PAGE 35
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.
Distribution of the contracts
IDS Life, a registered broker/dealer is the sole distributor of the
contract. IDS Life pays total commissions of up to 7.0% of the
total purchase payments received on the contracts.
From time to time IDS Life may pay or permit other promotional
incentives, in cash or credit or other compensation.
About the Portfolios and Funds
Voting Rights -- As the Annuity owner, you have voting rights in
the Smith Barney Series Fund and its Portfolios and in the Funds,
the shares of which are held by the subaccounts in which you have
invested. IDS Life will vote the shares of each Portfolio or Fund
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 and Funds. 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.
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 accompanying
prospectuses for a detailed description of voting rights in the
Portfolios and Funds.
Substitution of Investments -- If shares of any Portfolio or Funds
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 or Fund 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
<PAGE>
PAGE 36
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 thirteen 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.
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,
<PAGE>
PAGE 37
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 the prospectuses.
<PAGE>
PAGE 38
Table of Contents of the SAI
Page
Performance Information..........................................3
Rating Agencies..................................................5
Principal Underwriter............................................5
Independent Auditors.............................................5
Mortality and Expense Risk Fee...................................5
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 458
Minneapolis, MN 55440-0499
Your name___________________________________________
Address_____________________________________________
City_________________________ State______ Zip_______
<PAGE>
PAGE 39
STATEMENT OF ADDITIONAL INFORMATION
for
SYMPHONY ANNUITY
IDS LIFE ACCOUNT SBS
May 1, 1995
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 May 1, 1995,
is not a prospectus. It should be read together with the Account's
prospectus, dated May 1, 1995, which may be obtained from your
Smith Barney 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 458
Minneapolis, MN 55440-0499
1-800-422-3542
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PAGE 40
TABLE OF CONTENTS
Performance Information........................................p. 3
Rating Agencies................................................p. 5
Principal Underwriter..........................................p. 5
Independent Auditors...........................................p. 5
Mortality and Expense Risk Fee.................................p. 5
Prospectus.....................................................p. 6
Financial Statements
- IDS Life Account SBS...............................p. 7
- IDS Life Insurance Company.........................p.14
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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 subaccount 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, 1994, the Account's simple yield was 2.14% and its
effective yield was 2.16%.
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 portfolio or fund in which the
subaccount invests and from dividends declared and paid by the
fund, which are automatically invested in shares of the portfolio
or fund.
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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
value of an investment over a specific period of time (reflecting
change in a subaccount's accumulation unit value) 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, Stranger's Investment Advisor, USA
Today, U.S. News & World Report and The Wall Street Journal.
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RATING AGENCIES
The following chart reflects the ratings given to IDS Life
Insurance Company by independent rating agencies. These agencies
evaluate the financial soundness and claims-paying ability of
insurance companies based on a number of different factors. This
information does not relate to the management or performance of the
variable subaccounts. This information relates only to the fixed
account and reflects IDS Life's ability to make annuity payouts and
to pay death benefits and other distributions from the annuity.
Rating agency Rating
A.M. Best A+
(Superior)
Duff & Phelps AAA
Moody's Aa2
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 1994, 1993 and 1992
aggregated $6,969,493, $4,408,562, and $3,649,836, respectively.
Commissions paid to IDS Life for 1994, 1993 and 1992 aggregated
$17,331,801, $16,783,495 and $10,334,092, respectively. The
surrender charges were applied toward payment of commissions.
INDEPENDENT AUDITORS
The financial statements of IDS Life Account SBS including the
statements of net assets as of Dec. 31, 1994, 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, and the consolidated financial statements of
IDS Life Insurance Company as of Dec. 31, 1994 and for each of the
three years in the period then ended, appearing in this SAI, have
been audited by Ernst & Young LLP, independent auditors, as stated
in their reports appearing herein.
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
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PAGE 44
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 May 1, 1995, is hereby incorporated in this
SAI by reference.
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<TABLE>
<CAPTION>
IDS Life Account SBS
________________________________________________________________________________________________________________________
Statements of Net Assets Dec. 31, 1994
__________________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:
Smith Barney Series Fund Money Market Portfolio -
6,586,819 shares at net asset value of
$1.00 per share (cost $6,586,826) $6,586,820 $ - $ - $ - $ - $ -
Smith Barney Series Fund Intermediate High Grade
Portfolio - 1,299,465 shares at net asset value of
$9.66 per share (cost $13,383,086) - 12,552,836 - - - -
Smith Barney Series Fund Diversified Strategic Income
Portfolio - 5,700,313 shares at net asset value
of $9.18 per share (cost $56,095,504) - - 52,328,871 - - -
Smith Barney Series Fund Equity Income Portfolio -
4,325,281 shares at net asset value of $9.86
per share (cost $47,627,772) - - - 42,647,270 - -
Smith Barney Series Fund Equity Index Portfolio -
763,132 shares at net asset value of $11.69
per share (cost $8,442,288) - - - - 8,921,013 -
Smith Barney Series Fund Growth & Income Portfolio -
2,587,146 shares at net asset value of $10.74
per share (cost $27,795,534) - - - - - 27,785,945
Smith Barney Series Fund Appreciation Portfolio -
6,719,186 shares at net asset value of $11.54
per share (cost $72,576,528) - - - - - -
Smith Barney Series Fund Total Return Portfolio -
1,922,656 shares at net asset value of $10.78
per share (cost $20,705,558) - - - - - -
Smith Barney Series Fund Emerging Growth Portfolio -
1,128,525 shares at net asset value of $9.63,
per share (cost $11,416,119) - - - - - -
Smith Barney Series Fund International Equity Portfolio -
2,901,711 shares at net asset value of $9.21
per share (cost $28,341,943) - - - - - -
IDS Life Capital Resource Fund -
24,355 shares at net asset value of $22.78
per share (cost $561,384) - - - - - -
IDS Life Special Income Fund, Inc -
32,830 shares at net asset value of $10.63
per share (cost $351,665) - - - - - -
IDS Life Managed Fund, Inc. -
22,332 shares at net asset value of $12.97
per share (cost $296,045) - - - - - -
6,586,820 12,552,836 52,328,871 42,647,270 8,921,013 27,785,945
_______________________________________________________________________________________________________________________
Dividends receivable - - - - - -
Accounts receivable from mutual fund portfolios
for share redemptions 19 228 10,464 14,585 4,157 -
Accounts receivable from IDS Life for contract
purchase payments - - - - - 7,120
_______________________________________________________________________________________________________________________
Total assets 6,586,839 12,553,064 52,339,335 42,661,855 8,925,170 27,793,065
_______________________________________________________________________________________________________________________
</TABLE>
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<TABLE>
<CAPTION>
IDS Life Account SBS
_________________________________________________________________________________
Statements of Net Assets Dec. 31, 1994
__________________Segregated Asset Subaccounts___________
Assets AAP ATR AEG
_________________________________________________________________________________
<S> <C> <C> <C>
Investments in shares of mutual fund
portfolios, at market value:
Smith Barney Series Fund Money Market Portfolio -
6,586,819 shares at net asset value of
$1.00 per share (cost $6,586,826) $ - $ - $ -
Smith Barney Series Fund Intermediate High Grade
Portfolio - 1,299,465 shares at net asset value of
$9.66 per share (cost $13,383,086) - - -
Smith Barney Series Fund Diversified Strategic Income
Portfolio - 5,700,313 shares at net asset value
of $9.18 per share (cost $56,095,504) - - -
Smith Barney Series Fund Equity Income Portfolio -
4,325,281 shares at net asset value of $9.86
per share (cost $47,627,772) - - -
Smith Barney Series Fund Equity Index Portfolio -
763,132 shares at net asset value of $11.69
per share (cost $8,442,288) - - -
Smith Barney Series Fund Growth & Income Portfolio -
2,587,146 shares at net asset value of $10.74
per share (cost $27,795,534) - - -
Smith Barney Series Fund Appreciation Portfolio -
6,719,186 shares at net asset value of $11.54
per share (cost $72,576,528) 77,539,406 - -
Smith Barney Series Fund Total Return Portfolio -
1,922,656 shares at net asset value of $10.78
per share (cost $20,705,558) - 20,726,236 -
Smith Barney Series Fund Emerging Growth Portfolio -
1,128,525 shares at net asset value of $9.63
per share (cost $11,416,119) - - 10,867,692
Smith Barney Series Fund International Equity Portfolio -
2,901,711 shares at net asset value of $9.21
per share (cost $28,341,943) - - -
IDS Life Capital Resource Fund -
24,355 shares at net asset value of $22.78
per share (cost $561,384) - - -
IDS Life Special Income Fund, Inc -
32,830 shares at net asset value of $10.63
per share (cost $351,665) - - -
IDS Life Managed Fund, Inc. -
22,332 shares at net asset value of $12.97
per share (cost $296,045) - - -
77,539,406 20,726,236 10,867,692
________________________________________________________________________________
Dividends receivable - - -
Accounts receivable from mutual fund portfolios
for share redemptions 69,864 34,015 -
Accounts receivable from IDS Life for contract
purchase payments - - 6,515
________________________________________________________________________________
Total assets 77,609,270 20,760,251 10,874,207
________________________________________________________________________________
</TABLE>
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<TABLE>
<CAPTION>
Liabilities AMO AIH ADS AEM AEX AGI
________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C>
Payable to IDS Life for:
Mortality and expense risk fee 6,988 12,977 54,162 43,848 9,141 28,575
Administrative charge 1,398 2,595 10,832 8,770 1,828 5,715
Contract terminations 19 228 10,464 14,585 4,157 -
Payable to mutual fund portfolios for investments
purchased - - - - - 7,120
________________________________________________________________________________________________________________________
Total liabilities 8,405 15,800 75,458 67,203 15,126 41,410
________________________________________________________________________________________________________________________
Net assets applicable to contracts in accumulation
period $ 6,578,434 $12,537,264 $52,263,877 $42,594,652 $8,910,044 $27,751,655
________________________________________________________________________________________________________________________
Accumulation units outstanding 6,298,015 11,654,538 48,739,883 39,594,399 7,551,590 25,101,785
________________________________________________________________________________________________________________________
Net asset value per accumulation unit $1.04 $1.08 $1.07 $1.08 $1.18 $1.11
________________________________________________________________________________________________________________________
See accompanying notes to financial statements.
Liabilities AAP ATR AEG
__________________________________________________________________________________
Payable to IDS Life for:
Mortality and expense risk fee 79,832 21,087 11,007
Administrative charge 15,966 4,217 2,201
Contract terminations 69,864 34,015 -
Payable to mutual fund portfolios for investments
purchased - - 6,515
__________________________________________________________________________________
Total liabilities 165,662 59,319 19,723
__________________________________________________________________________________
Net assets applicable to contracts in accumulation
period $77,443,608 $20,700,932 $10,854,484
__________________________________________________________________________________
Accumulation units outstanding 68,920,135 18,917,974 11,352,545
Net asset value per accumulation unit $1.12 $1.09 $0.96
__________________________________________________________________________________
See accompanying notes to financial statements.
</TABLE>
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<TABLE>
<CAPTION>
IDS Life Account SBS
____________________________________________________________________________________________________________
Statements of Net Assets Dec. 31, 1994
Combined
__________________Segregated Asset Subaccounts_________ Variable
Assets AIE ACR ASI AMG Account
<S> <C> <C> <C> <C> <C>
Investments in shares of mutual fund
portfolios, at market value:
Smith Barney Series Fund Money Market Portfolio -
6,586,819 shares at net asset value of
$1.00 per share (cost $6,586,826) $ - $ - $ - $ - $ 6,586,820
Smith Barney Series Fund Intermediate High Grade
Portfolio - 1,299,465 shares at net asset value of
$9.66 per share (cost $13,383,086) - - - - 12,552,836
Smith Barney Series Fund Diversified Strategic Income
Portfolio - 5,700,313 shares at net asset value
of $9.18 per share (cost $56,095,504) - - - - 52,328,871
Smith Barney Series Fund Equity Income Portfolio -
4,325,281 shares at net asset value of $9.86
per share (cost $47,627,772) - - - - 42,647,270
Smith Barney Series Fund Equity Index Portfolio -
763,132 shares at net asset value of $11.69
per share (cost $8,442,288) - - - - 8,921,013
Smith Barney Series Fund Growth & Income Portfolio -
2,587,146 shares at net asset value of $10.74
per share (cost $27,795,534) - - - - 27,785,945
Smith Barney Series Fund Appreciation Portfolio -
6,719,186 shares at net asset value of $11.54
per share (cost $72,576,528) - - - - 77,539,406
Smith Barney Series Fund Total Return Portfolio -
1,922,656 shares at net asset value of $10.78
per share (cost $20,705,558) - - - - 20,726,236
Smith Barney Series Fund Emerging Growth Portfolio -
1,128,525 shares at net asset value of $9.63
per share (cost $11,416,119) - - - - 10,867,692
Smith Barney Series Fund International Equity Portfolio -
2,901,711 shares at net asset value of $9.21
per share (cost $28,341,943) 26,724,762 - - - 26,724,762
IDS Life Capital Resource Fund -
24,355 shares at net asset value of $22.78
per share (cost $561,384) - 555,282 - - 555,282
IDS Life Special Income Fund, Inc -
32,830 shares at net asset value of $10.63
per share (cost $351,665) - - 349,020 - 349,020
IDS Life Managed Fund, Inc. -
22,332 shares at net asset value of $12.97
per share (cost $296,045) - - - 289,614 289,614
26,724,762 555,282 349,020 289,614 287,874,767
Dividends receivable - - 2,309 - 2,309
Accounts receivable from mutual fund portfolios
for share redemptions 30,010 - - - 163,342
Accounts receivable from IDS Life for contract
purchase payments - 17 4,000 31 17,683
Total assets 26,754,772 555,299 355,329 289,645 288,058,101
Liabilities
______________________________________________________________________________________________________________
Payable to IDS Life for:
Mortality and expense risk fee 27,279 526 354 263 296,039
Administrative charge 5,456 105 71 52 59,206
Contract terminations 30,010 - 24 - 163,366
Payable to mutual fund portfolios for investments
purchased - 17 5,804 31 19,487
______________________________________________________________________________________________________________
Total liabilities 62,745 648 6,253 346 538,098
______________________________________________________________________________________________________________
Net assets applicable to contracts in accumulation
period $26,692,027 $554,651 $349,076 $289,299 $287,520,003
______________________________________________________________________________________________________________
Accumulation units outstanding 29,352,810 560,252 351,059 297,773
______________________________________________________________________________________________________________
Net asset value per accumulation unit $0.91 $0.99 $0.99 $ 0.97
See accompanying notes to financial statements.
</TABLE>
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<TABLE>
<CAPTION>
IDS Life Account SBS
_________________________________________________________________________________________________________________
Statements of Operations Year ended Dec. 31, 1994
____________________________Segregated Asset Subaccounts___________________________
AMO AIH ADS AEM AEX AGI AAP
_________________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C> <C>
Investment income (loss):
Dividend income from mutual
fund portfolios $ 220,082 $ 797,624 $3,227,679 $2,367,888 $ 191,249 $ 625,767 $ 862,348
_________________________________________________________________________________________________________________
Expenses:
Mortality and expense risk
fee (Note 3) 75,595 143,956 624,940 598,840 103,384 331,665 969,450
Administrative charge (Note 4) 15,119 28,791 124,988 119,768 20,677 66,333 193,890
_________________________________________________________________________________________________________________
Total expenses 90,714 172,747 749,928 718,608 124,061 397,998 1,163,340
_________________________________________________________________________________________________________________
Investment income
(loss) - net 129,368 624,877 2,477,751 1,649,280 67,188 227,769 (300,992)
_________________________________________________________________________________________________________________
Realized and Unrealized Gain (Loss) on Investments - net
_________________________________________________________________________________________________________________
Realized gain (loss) on sales of investments in
mutual fund portfolios:
Proceeds from sales 6,397,342 1,765,035 5,633,273 13,612,480 1,252,106 2,650,347 7,551,271
Cost of investments sold 6,397,359 1,847,885 5,925,522 14,460,289 1,288,400 2,575,184 6,951,514
_________________________________________________________________________________________________________________
Net realized gain (loss)
on investments (17) (82,850) (292,249) (847,809) (36,294) 75,163 599,757
Net change in unrealized
appreciation or depreciation
of investments 17 (1,018,563) (4,277,460) (7,246,347) (56,057) (1,554,405) (2,210,722)
_________________________________________________________________________________________________________________
Net gain (loss) on
investments - (1,101,413) (4,569,709) (8,094,156) (92,351) (1,479,242) (1,610,965)
_________________________________________________________________________________________________________________
Net increase (decrease) in net assets
resulting from operations $ 129,368 $ (476,536)$(2,091,958) $(6,444,876)$ (25,163) $(1,251,473)$(1,911,957)
_________________________________________________________________________________________________________________
See accompanying notes to financial statements.
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IDS Life Account SBS
________________________________________________________________________________________________________
Statements of Operations Year ended Dec. 31, 1994
Combined
______________Segregated Asset Subaccounts__________________ Variable
ATR AEG AIE ACR* ASI* AMG* Account
________________________________________________________________________________________________________
Investment income (loss):
Dividend income from mutual
fund portfolios $390,381 $ 850 $ - $ 1,603 $ 4,141 $ 1,968 $ 8,691,600
________________________________________________________________________________________________________
Expenses:
Mortality and expense
risk fee (Note 3) 166,224 106,574 265,531 1,183 578 469 3,388,389
Administrative charge
(Note 4) 33,245 21,315 53,106 237 115 94 677,678
________________________________________________________________________________________________________
Total expenses 199,469 127,889 318,637 1,420 693 563 4,066,067
________________________________________________________________________________________________________
Investment income
(loss) - net 190,912 (127,039) (318,637) 183 3,448 1,425 4,625,533
________________________________________________________________________________________________________
Realized and Unrealized Gain (Loss) on Investments - net
_________________________________________________________________________________________________________
Realized gain (loss) on sales
of investments in mutual
fund portfolios:
Proceeds from sales 997,318 1,097,952 1,502,163 48,565 85 - 42,507,937
Cost of investments sold 982,938 1,162,006 1,544,039 49,497 85 - 43,184,718
________________________________________________________________________________________________________
Net realized gain (loss)
on investments 14,380 (64,054) (41,876) (932) - - (676,781)
Net change in unrealized
appreciation or depreciation
of investments (15,861) (610,420) (1,642,297) (6,102) (2,645) (6,431) (18,647,293)
_________________________________________________________________________________________________________
Net gain (loss)
on investments (1,481) (674,474) (1,684,173) (7,034) (2,645) (6,431) (19,324,074)
_________________________________________________________________________________________________________
Net increase (decrease) in net assets
resulting from operations $189,431 $ (801,513) $(2,002,810) $(6,851) $ 803 $(5,006) $(14,698,541)
_________________________________________________________________________________________________________
*For the period from Oct. 3, 1994 (commencement of operations) to Dec. 31, 1994.
See accompanying notes to financial statements.
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IDS Life Account SBS
_____________________________________________________________________________________________________________________
Statements of Changes in Net Assets Year ended Dec. 31, 1994
____________________________________Segregated Asset Subaccounts_____________________________
Operations AMO AIH ADS AEM AEX AGI AAP
_____________________________________________________________________________________________________________________
Investment income
(loss) - net $ 129,368 $ 624,877 $ 2,477,751 $ 1,649,280 $ 67,188 $ 227,769 $ (300,992)
Net realized gain
(loss) on investments (17) (82,850) (292,249) (847,809) (36,294) 75,163 599,757
Net change in unrealized
appreciation or
depreciation of
investments 17 (1,018,563) (4,277,460) (7,246,347) (56,057) (1,554,405) (2,210,722)
______________________________________________________________________________________________________________________
Net increase (decrease) in
net assets resulting
from operations 129,368 (476,536) (2,091,958) (6,444,876) (25,163) (1,251,473) (1,911,957)
_____________________________________________________________________________________________________________________
Contract Transactions
_____________________________________________________________________________________________________________________
Variable annuity contract
purchase payments 7,102,136 4,617,893 17,802,908 4,475,650 1,612,596 5,552,631 10,131,780
Net transfers** (3,547,831) 25,172 (620,504) (10,778,013) 161,025 1,026,641 (2,090,735)
Contract terminations (331,616) (378,193) (2,594,006) (2,270,631) (428,119) (1,171,693) (3,706,698)
Death benefits (24,249) (340,118) (1,279,881) (891,327) (75,620) (512,294) (530,435)
_____________________________________________________________________________________________________________________
Increase (decrease) from
contract transactions 3,198,440 3,924,754 13,308,517 (9,464,321) 1,269,882 4,895,285 3,803,912
_____________________________________________________________________________________________________________________
Net assets at beginning
of year 3,250,626 9,089,046 41,047,318 58,503,849 7,665,325 24,107,843 75,551,653
_____________________________________________________________________________________________________________________
Net assets at end
of year $ 6,578,434 $12,537,264 $52,263,877 $42,594,652 $8,910,044 $27,751,655 $77,443,608
_____________________________________________________________________________________________________________________
Accumulation Unit Activity
_____________________________________________________________________________________________________________________
Units outstanding at
beginning of year 3,174,577 8,069,531 36,617,992 48,057,398 6,454,223 20,774,138 65,534,486
Contract purchase
payments 6,907,611 4,236,797 16,313,884 3,979,665 1,380,475 4,913,919 8,900,345
Net transfers** (3,439,719) 9,442 (612,635) (9,559,252) 138,021 907,332 (1,801,645)
Contract terminations (321,002) (347,394) (2,389,555) (2,073,141) (358,132) (1,042,927) (3,253,367)
Death benefits (23,452) (313,838) (1,189,803) (810,271) (62,997) (450,677) (459,684)
_____________________________________________________________________________________________________________________
Units outstanding at
end of year 6,298,015 11,654,538 48,739,883 39,594,399 7,551,590 25,101,785 68,920,135
_____________________________________________________________________________________________________________________
*For the period from Oct. 3, 1994 (commencement of operations) to Dec. 31, 1994.
**Includes transfer activity from (to) other subaccounts and transfers from (to) IDS Life's Fixed Account.
See accompanying notes to financial statements.
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PAGE 52
IDS Life Account SBS
________________________________________________________________________________________________________________
Statements of Changes in Net Assets Year ended Dec. 31, 1994
Combined
__________________Segregated Asset Subaccounts__________________________ Variable
Operations ATR AEG AIE ACR* ASI* AMG* Account
________________________________________________________________________________________________________________
Investment income
(loss) - net $ 109,912 $ (127,039) $ (318,637) $ 183 $ 3,448 $ 1,425 $ 4,625,533
Net realized gain
(loss) on investments 14,380 (64,054) (41,876) (932) - - (676,781)
Net change in unrealized
appreciation or
depreciation of
investments (15,861) (610,420) (1,642,297) (6,102) (2,645) (6,431) (18,647,293)
________________________________________________________________________________________________________________
Net increase (decrease)
in net assets resulting
from operations 189,431 (801,513) (2,002,810) (6,851) 803 (5,006) (14,698,541)
________________________________________________________________________________________________________________
Contract Transactions
________________________________________________________________________________________________________________
Variable annuity contract
purchase payments 9,512,012 5,754,368 13,182,419 70,812 34,752 20,338 79,870,295
Net transfers** 9,105,068 4,214,283 10,707,881 495,949 313,574 273,967 9,286,477
Contract terminations (326,718) (376,663) (549,136) (5,259) (53) - (12,138,785)
Death benefits (336,732) (38,857) (195,703) - - - (4,225,216)
________________________________________________________________________________________________________________
Increase (decrease) from
contract transactions 17,953,630 9,553,131 23,145,461 561,502 348,273 294,305 72,792,771
________________________________________________________________________________________________________________
Net assets at beginning
of year 2,557,871 2,102,866 5,549,376 - - - 229,425,773
________________________________________________________________________________________________________________
Net assets at end
of year $20,700,932 $10,854,484 $26,692,027 $554,651 $349,076 $289,299 $287,520,003
________________________________________________________________________________________________________________
Accumulation Unit Activity
________________________________________________________________________________________________________________
Units outstanding at
beginning of year 2,486,207 2,022,327 5,528,223 - - -
Contract purchase
payments 8,672,359 5,660,587 13,608,941 71,032 34,921 20,545
Net transfers** 8,362,861 4,100,190 10,991,839 494,635 316,192 277,228
Contract terminations (297,328) (390,430) (575,640) (5,415) (54) -
Death benefits (306,125) (40,129) (200,553) - - -
________________________________________________________________________________________________________________
Units outstanding at
end of year 18,917,974 11,352,545 29,352,810 560,252 351,059 297,773
________________________________________________________________________________________________________________
*For the period from Oct. 3, 1994 (commencement of operations) to Dec. 31, 1994.
**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
<TABLE>
<CAPTION>
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
____________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C>
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.
</TABLE>
<PAGE>
PAGE 54
<TABLE>
<CAPTION>
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
________________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C>
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.
</TABLE>
<PAGE>
PAGE 55
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
(collectively, the Portfolios) of the Smith Barney Series Fund (the
mutual fund) or three funds of the IDS Life Retirement Annuity
Mutual Funds (collectively, the Funds). 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 thirteen subaccounts or in the Fixed
Account. The purchase payments allocated to the subaccounts are
then invested in shares of the specific Portfolio(s) or Fund(s)
selected.
The Smith Barney 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 Capital Resource Fund, Inc. and IDS Life Special Income
Fund, Inc. commenced operations Oct. 13, 1981. IDS Life Managed
Fund, Inc. commenced operations April 30, 1986. These mutual funds
are registered undert he Investment Company Act of 1940 as
diversified, open-end management investment companies. Purchase
payments allocated to the Capital Resource (ACR) subaccount invest
in shares of IDS Life Capital Resource Fund; the Special Income
(ASI) subaccount invests in shares of IDS Life Special Income Fund;
and the Managed (AMG) subaccount invests in shares of IDS Life
Managed Fund.
<PAGE>
PAGE 56
IDS Life serves as investment manager and distributor for the
Variable Account and for the Funds. Smith Barney Inc. serves as
distributor for the muutal fund. Smith Barney Mutual Funds
Management Inc. serves as investment adviser to the Money Market
Portfolio, the Intermediate High Grade Portfolio, the Diversified
Strategic Income Portfolio, the Equity Income Portfolio, the Growth
& Income Portfolio, Appreciation Portfolio, Total Return Portfolio
and the International Equity Portfolio. Travelers Investment
Management Comapny serves as investment adviser to the Equity Index
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. Smith Barney Mutual
Funds Management Inc. serves as administrator to each Portfolio.
Boston Safe Deposit and Trust Company serves as the custodian for
the Portfolios and the Funds.
___________________________________________________________________
2.Summary of Significant Accounting Policies
Investments in the Mutual Fund
Investments in shares of the Portfolio(s) of the mutual fund or in
shares of the Funds 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.
<PAGE>
PAGE 57
___________________________________________________________________
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
are not available on an individual segregated asset account basis.
Charges for all segregated asset accounts amount to $6,969,493 in
1994, $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 1994 1993 1992
<S> <C> <C> <C> <C>
AMO Money Market Portfolio $ 9,734,072 $ 3,893,353 $ 4,331,654
AIH Intermediate High Grade Portfolio 6,319,288 5,868,198 3,186,369
ADS Diversified Strategic Income Portfolio 21,434,100 21,955,954 17,221,844
AEM Equity Income Portfolio 5,775,001 33,894,292 21,623,325
AEX Equity Index Portfolio 2,590,607 3,893,966 3,532,159
AGI Growth & Income Portfolio 7,777,485 12,678,307 8,911,858
AAP Appreciation Portfolio 11,054,212 21,450,062 39,809,172
*ATR Total Return Portfolio 19,166,050 2,522,446 -
*AEG Emerging Growth Portfolio 10,536,398 2,041,727 -
*AIE International Equity Portfolio 24,358,896 5,527,086 -
**ACR Capital Resource Fund 610,696 - -
**ASI Special Income Fund 351,750 - -
**AMG Managed Fund 296,045 - -
$120,004,600 $113,725,391 $98,616,381
_____________________________________________________________________________________________
* Commenced operations on Dec. 2, 1993.
**Commenced operations on Oct. 3, 1994.
</TABLE>
<PAGE>
PAGE 58
IDS Life Account SBS
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, AIE, ACR, ASI and AMG subaccounts) as of
December 31, 1994, and the related statements of operations for the
year then ended, except for the ACR, ASI and AMG subaccounts which
are for the period October 3, 1994 (commencement of operations) to
December 31, 1994 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 periods December 2, 1993
(commencement of operations) to December 31, 1993 and for the year
ended December 31, 1994 and the ACR, ASI and AMG subaccounts which
are for the period October 3, 1994 (commencement of operations) to
December 31, 1994. 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, 1994. An audit also includes
assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, 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, 1994 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 LLP
Minneapolis, Minnesota
March 17, 1995<PAGE>
PAGE 59
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
<PAGE>
PAGE 60
IDS LIFE INSURANCE COMPANY
CONSOLIDATED BALANCE SHEETS
December 31,
<TABLE>
<CAPTION>
ASSETS 1994 1993
(thousands)
<S> <C> <C>
Investments:
Fixed maturities:
Held to maturity, at amortized cost (Fair value:
1994, $10,694,800) $11,269,861 $ -
Available for sale, at fair value (Amortized cost:
1994, $8,459,128) 8,017,555 -
Investment securities, at amortized cost (Fair value:
1993, $20,425,979) - 19,392,424
19,287,416 19,392,424
Mortgage loans on real estate
(Fair value: 1994, $2,342,520; 1993, $2,125,686) 2,400,514 2,055,450
Policy loans 381,912 350,501
Other investments 51,795 56,307
Total investments 22,121,637 21,854,682
Cash and cash equivalents 267,774 146,281
Receivables:
Reinsurance 80,304 55,298
Amounts due from brokers 7,933 5,719
Other accounts receivable 49,745 21,459
Premiums due 1,594 1,329
Total receivables 139,576 83,805
Accrued investment income 317,510 307,177
Deferred policy acquisition costs 1,865,324 1,652,384
Deferred income taxes 124,061 -
Other assets 30,426 21,730
Assets held in segregated asset
accounts, primarily common stocks
at market 10,881,235 8,991,694
Total assets $35,747,543 $33,057,753
======== ========
See accompanying notes to consolidated financial statements.
<PAGE>
PAGE 61
IDS LIFE INSURANCE COMPANY
CONSOLIDATED BALANCE SHEETS (continued)
December 31,
LIABILITIES AND STOCKHOLDER'S EQUITY 1994 1993
(thousands)
Liabilities:
Future policy benefits:
Fixed annuities $19,361,979 $18,492,135
Universal life-type insurance 2,896,100 2,753,455
Traditional life insurance 206,754 210,205
Disability income, health and
long-term care insurance 244,077 185,272
Policy claims and other
policyholders' funds 50,068 44,516
Deferred income taxes - 43,620
Amounts due to brokers 226,737 351,486
Other liabilities 291,902 292,024
Liabilities related to segregated
asset accounts 10,881,235 8,991,694
Total liabilities 34,158,852 31,364,407
Stockholder's equity:
Capital stock, $30 par value per share;
100,000 shares authorized, issued and outstanding 3,000 3,000
Additional paid-in capital 222,000 222,000
Net unrealized gain (loss) on investments (275,708) 114
Retained earnings 1,639,399 1,468,232
Total stockholder's equity 1,588,691 1,693,346
Total liabilities and stockholder's equity $35,747,543 $33,057,753
======== ========
Commitments and contingencies (Note 6)
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
PAGE 62
<TABLE>
<CAPTION>
IDS LIFE INSURANCE COMPANY
CONSOLIDATED STATEMENTS OF INCOME
Years ended December 31,
1994 1993 1992
(thousands)
<S> <C> <C> <C>
Revenues:
Premiums:
Traditional life insurance $ 48,184 $ 48,137 $ 49,719
Disability income and
long-term care insurance 96,456 79,108 64,660
Total premiums 144,640 127,245 114,379
Policyholder and contractholder
charges 219,936 184,205 156,368
Management and other fees 164,169 120,139 84,591
Net investment income 1,781,873 1,783,219 1,616,821
Net loss on investments (4,282) (6,737) (3,710)
Total revenues 2,306,336 2,208,071 1,968,449
Benefits and expenses:
Death and other benefits:
Traditional life insurance 28,263 32,136 34,139
Universal life-type insurance
and investment contracts 52,027 49,692 42,174
Disability income, health and
long-term care insurance 13,393 13,148 10,701
Increase (decrease) in liabilities for
future policy benefits:
Traditional life insurance (3,229) (4,513) (5,788)
Disability income, health and
long-term care insurance 37,912 32,528 27,172
Interest credited on universal life-type
insurance and investment contracts 1,174,985 1,218,647 1,188,379
Amortization of deferred policy
acquisition costs 280,372 211,733 140,159
Other insurance and operating expenses 210,101 241,974 215,692
Total benefits and expenses 1,793,824 1,795,345 1,652,628
Income before income taxes 512,512 412,726 315,821
Income taxes 176,343 142,647 104,651
Net income $ 336,169 $ 270,079 $ 211,170
======= ======= =======
See accompanying notes to consolidated financial statements.
<PAGE>
PAGE 63
IDS LIFE INSURANCE COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years ended December 31,
1994 1993 1992
(thousands)
Cash flows from operating activities:
Net income $ 336,169 $ 270,079 $ 211,170
Adjustments to reconcile net income to
net cash provided by operating activities:
Policy loans, excluding universal
life-type insurance:
Issuance (37,110) (35,886) (32,881)
Repayment 33,384 29,557 26,750
Change in reinsurance receivable (25,006) (55,298) -
Change in other accounts receivable (28,286) (1,364) (4,772)
Change in accrued investment income (10,333) (22,057) (15,853)
Change in deferred policy acquisition
costs, net (192,768) (211,509) (229,252)
Change in liabilities for future policy
benefits for traditional life,
disability income, health and
long-term care insurance 55,354 79,695 21,384
Change in policy claims and other
policyholders' funds 5,552 (5,383) (1,347)
Change in deferred income taxes (19,176) (44,237) (30,385)
Change in other liabilities (122) 56,515 88,997
Amortization of premium
(accretion of discount), net 30,921 (27,438) (4,289)
Net loss on investments 4,282 6,737 3,710
Activity related to universal
life-type insurance:
Premiums 409,035 397,883 312,621
Surrenders and death benefits (290,427) (255,133) (166,162)
Interest credited to account
balances 150,955 156,885 161,873
Policyholder and contractholder
charges, non-cash (126,918) (115,140) (100,975)
Other, net (8,974) (1,907) (10,647)
Net cash provided by operating
activities $ 286,532 $ 221,999 $ 229,942
See accompanying notes to consolidated financial statements.
<PAGE>
PAGE 64
IDS LIFE INSURANCE COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
Years ended December 31,
1994 1993 1992
(thousands)
Cash flows from investing activities:
Fixed maturities held to maturity:
Purchases $ (879,740) $ - $ -
Maturities, sinking fund payments and calls 1,651,762 - -
Sales 58,001 - -
Fixed maturities available for sale:
Purchases (2,763,278) - -
Maturities, sinking fund payments and calls 1,234,401 - -
Sales 374,564 - -
Fixed maturities:
Purchases - (6,548,852) (6,590,279)
Maturities, sinking fund payments and calls - 3,934,055 2,696,239
Sales - 487,983 1,011,093
Other investments, excluding policy loans:
Purchases (634,807) (553,694) (411,069)
Sales 243,862 123,352 67,097
Change in amounts due from brokers (2,214) 14,483 289,335
Change in amounts due to brokers (124,749) 92,832 42,182
Net cash used in investing activities (842,198) (2,449,841) (2,895,402)
Cash flows from financing activities:
Activity related to investment contracts:
Considerations received 3,157,778 2,843,668 2,821,069
Surrenders and death benefits (3,311,965) (1,765,869) (1,168,633)
Interest credited to account balances 1,024,031 1,071,917 1,026,506
Universal life-type insurance policy loans:
Issuance (78,239) (70,304) (72,007)
Repayment 50,554 46,148 40,351
Capital contribution from parent - 200,000 -
Cash dividend to parent (165,000) (25,000) (20,000)
Net cash provided by financing activities 677,159 2,300,560 2,627,286
Net increase (decrease) in cash and
cash equivalents 121,493 72,718 (38,174)
Cash and cash equivalents at
beginning of year 146,281 73,563 111,737
Cash and cash equivalents at
end of year $ 267,774 $ 146,281 $ 73,563
======== ======== ========
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
PAGE 65
IDS LIFE INSURANCE COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
($ thousands)
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 American Express
Financial Corporation (formerly IDS Financial Corporation), 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, American Enterprise Life Insurance
Company and American Partners 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.
Investments
As of January 1, 1994, the Company adopted Statement of Financial
Accounting Standards (SFAS) No. 115, "Accounting for Certain
Investments in Debt and Equity Securities." Under SFAS No. 115,
fixed maturities that the Company has both the positive intent and
the ability to hold to maturity are classified as held to maturity
and carried at amortized cost. All other fixed maturities and all
marketable equity securities are classified as available for sale
and carried at fair value. Unrealized gains and losses on
securities classified as available for sale are carried as a
separate component of stockholder's equity. The effect of adopting
SFAS No. 115 was to increase stockholder's equity by approximately
$181 million, net of tax, as of January 1, 1994, but the adoption
had no impact on the Company's net income.
Management determines the appropriate classification of fixed
maturities at the time of purchase and reevaluates the
classification at each balance sheet date.
<PAGE>
PAGE 66
1. Summary of significant accounting policies (continued)
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 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 fair 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.
Realized investment gain or loss is determined on an identified
cost basis.
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 December 31 is summarized as follows:
1994 1993 1992
Cash paid during the year for:
Income taxes $226,365 $188,204 $140,445
Interest on borrowings 1,553 2,661 1,265
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).
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 67
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
<PAGE>
PAGE 68
1. Summary of significant accounting policies (continued)
1955-1960 Select and Ultimate Basic Table for policies issued prior
to 1981) and the 1975-1980 Select and Ultimate Basic Table for term
insurance policies issued after 1984, 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 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, term insurance issued
from 1985-1993 assumes investment rates that grade from 10 percent
to 6 percent over 20 years and term insurance issued after 1993
assumes investment rates that grade from 8.7 percent to 6.57
percent over 7 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, 7.7 percent interest for persons disabled in 1992 and 6
percent interest for persons disabled after 1992.
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, 7.7 percent for claims incurred in 1992
and 6.7 percent for claims incurred after 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.
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 American Express Financial Corporation
and American Express Company, tax benefit is recognized for losses
<PAGE>
PAGE 69
1. Summary of significant accounting policies (continued)
to the extent they can be used on the consolidated tax return. It
is the policy of American Express Financial Corporation and its
subsidiaries that American Express Financial Corporation will
reimburse a subsidiary for any tax benefit.
Included in other receivables at December 31, 1994 is $22,034
receivable from American Express Financial Corporation for federal
income taxes. Included in other liabilities at December 31, 1993
is $14,709 payable to American Express Financial Corporation 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 contractual insurance rate and that the death benefit will
never be less than the death benefit at the date of issuance.
Reclassification
Certain 1993 and 1992 amounts have been reclassified to conform to
the 1994 presentation.
2. Investments
Fair values of investments in fixed maturities represent quoted
market prices and estimated values when quoted prices are not
available. Estimated values are determined by established
procedures involving, among other things, preview of market
indices, price levels of current offerings of comparable issues,
price estimates and market data from independent brokers and
financial files.
<PAGE>
PAGE 70
2. Investments (continued)
Net gain (loss) on investments for the years ended December 31 is
summarized as follows:
1994 1993 1992
Fixed maturities $(1,575) $ 20,583 $ 22,075
Mortgage loans (3,013) (25,056) (13,444)
Other investments 306 (2,264) (12,341)
$(4,282) $ (6,737) $ (3,710)
===== ===== =====
Changes in net unrealized appreciation (depreciation) of
investments for the years ended December 31 are summarized as
follows:
1994 1993 1992
Fixed maturities:
Held to maturity $(1,329,740) $ -- $ --
Available for sale (720,449) -- --
Investment securities -- 323,060 (128,683)
Equity securities (2,917) (156) 300
The amortized cost, gross unrealized gains and losses and fair
values of investments in fixed maturities and equity securities at
December 31, 1994 are as follows:
<TABLE>
<CAPTION>
Gross Gross
Amortized Unrealized Unrealized Fair
Held to maturity Cost Gains Losses Value
<S> <C> <C> <C> <C>
U.S. Government
agency obligations $ 21,500 $ 43 $ 4,372 $ 17,171
State and municipal
obligations 9,687 132 -- 9,819
Corporate bonds
and obligations 8,806,707 100,468 459,568 8,447,607
Mortgage-backed
securities 2,431,967 10,630 222,394 2,220,203
$11,269,861 $111,273 $686,334 $10,694,800
======== ======= ======= ========
Gross Gross
Amortized Unrealized Unrealized Fair
Available for sale Cost Gains Losses Value
U.S. Government
agency obligations $ 128,093 $ 756 $ 1,517 $ 127,332
State and municipal
obligations 11,008 702 -- 11,710
Corporate bonds
and obligations 1,142,321 24,166 7,478 1,159,009
Mortgage-backed
securities 7,177,706 9,514 467,716 6,719,504
Total fixed maturities 8,459,128 35,138 476,711 8,017,555
Equity securities 4,663 -- 2,757 1,906
$8,463,791 $35,138 $479,468 $8,019,461
======= ======= ======= =======
</TABLE>
<PAGE>
PAGE 71
2. Investments (continued)
The change in net unrealized gain (loss) on available for sale
securities included as a separate component of stockholder's equity
was $(275,822) in 1994.
The amortized cost, gross unrealized gains and losses and fair
values of investments in fixed maturities carried at amortized cost
at December 31, 1993 are as follows:
<TABLE>
<CAPTION>
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
<S> <C> <C> <C> <C>
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 9,339,297 768,747 22,929 10,085,115
Mortgage-backed
securities 9,978,523 341,067 57,879 10,261,711
$19,392,424 $1,115,740 $ 82,185 $20,425,979
======== ======== ======== ========
</TABLE>
At December 31, 1993, net unrealized appreciation on equity
securities included $160 of gross unrealized appreciation, $nil of
gross unrealized depreciation and deferred tax credits of $46. The
fair value of equity securities was $1,900 at December 31, 1993.
The amortized cost and fair value of investments in fixed
maturities at December 31, 1994 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
Held to maturity Cost Value
Due in one year or less $ 108,056 $ 109,228
Due from one to five years 1,412,335 1,423,394
Due from five to ten years 5,467,826 5,245,742
Due in more than ten years 1,849,677 1,696,233
Mortgage-backed securities 2,431,967 2,220,203
$11,269,861 $10,694,800
======== ========
Amortized Fair
Available for sale Cost Value
Due from one to five years $ 757,160 $ 756,842
Due from five to ten years 433,717 449,057
Due in more than ten years 90,545 92,152
Mortgage-backed securities 7,177,706 6,719,504
$8,459,128 $8,017,555
======= =======
<PAGE>
PAGE 72
2. Investments (continued)
During the year ended December 31, 1994, fixed maturities
classified as held to maturity were sold with proceeds of $58,001
and gross realized gains and losses on such sales were $226 and
$3,515, respectively. The sale of these fixed maturities was due
to credit deterioration.
In addition, fixed maturities available for sale were sold during
1994 with proceeds of $374,564 and gross realized gains and losses
on such sales were $1,861 and $7,602, respectively.
Proceeds from sales of investments in fixed maturities during 1993
were $487,983. During 1993, gross gains of $48,499 and gross
losses of $43,039, respectively, were realized on those sales.
At December 31, 1994, bonds carried at $6,536 were on deposit with
various states as required by law.
Net investment income for the years ended December 31 is summarized
as follows:
1994 1993 1992
Interest on fixed maturities $1,556,756 $1,589,802 $1,449,234
Interest on mortgage loans 196,521 175,063 148,693
Other investment income 38,366 29,345 24,281
Interest on cash equivalents 6,872 2,137 5,363
1,798,515 1,796,347 1,627,571
Less investment expenses 16,642 13,128 10,750
$1,781,873 $1,783,219 $1,616,821
======= ======= =======
At December 31, 1994, investments in fixed maturities comprised 87
percent of the Company's total invested assets. These securities
are rated by Moody's and Standard & Poor's (S&P), except for
securities carried at cost approximately $1.7 billion which are
rated by American Express Financial Corporation internal analysts
using criteria similar to Moody's and S&P. A summary of
investments in fixed maturities, at amortized cost, by rating on
December 31 is as follows:
Rating 1994 1993
Aaa/AAA $ 9,708,047 $ 9,959,884
Aa/AA 242,914 258,659
Aa/A 119,952 160,638
A/A 2,567,947 2,021,177
A/BBB 725,755 654,949
Baa/BBB 3,849,188 3,936,366
Baa/BB 796,063 717,606
Below investment grade 1,719,123 1,683,145
$19,728,989 $19,392,424
======== ========
<PAGE>
PAGE 73
2. Investments (continued)
At December 31, 1994, 97 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 December 31, 1994, approximately 10.9 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 December 31, 1994 and 1993 are as follows:
<TABLE>
<CAPTION>
December 31, 1994 December 31, 1993
On Balance Commitments On Balance Commitments
Region Sheet to Purchase Sheet to Purchase
<S> <C> <C> <C> <C>
East North Central $ 581,142 $ 62,291 $ 552,150 $ 20,933
West North Central 257,996 7,590 361,704 16,746
South Atlantic 597,896 63,010 452,679 52,440
Middle Atlantic 408,940 34,478 260,239 41,090
New England 209,867 23,087 155,214 17,620
Pacific 138,900 -- 120,378 15,492
West South Central 50,854 -- 43,948 525
East South Central 67,503 -- 73,748 --
Mountain 122,668 18,750 70,410 14,594
2,435,766 209,206 2,090,470 179,440
Less allowance for losses 35,252 -- 35,020 --
$2,400,514 $209,206 $2,055,450 $179,440
======= ======= ======= =======
December 31, 1994 December 31, 1993
On Balance Commitments On Balance Commitments
Property type Sheet to Purchase Sheet to Purchase
Apartments $ 904,012 $ 56,964 $ 744,788 $ 79,153
Department/retail stores 802,522 88,325 624,651 65,402
Office buildings 321,761 21,691 234,042 15,583
Industrial buildings 232,962 18,827 217,648 9,279
Nursing/retirement homes 89,304 4,649 83,768 917
Hotels/motels 32,666 -- 33,138 --
Medical buildings 36,490 15,651 30,429 5,954
Residential 20 -- 78 --
Other 16,029 3,099 121,928 3,152
2,435,766 209,206 2,090,470 179,440
Less allowance for losses 35,252 -- 35,020 --
$2,400,514 $209,206 $2,055,450 $179,440
======= ======= ======= =======
</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 74
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:
1994 1993 1992
Federal income taxes:
Current $186,508 $180,558 $130,998
Deferred (19,175) (44,237) (30,385)
167,333 136,321 100,613
State income taxes-current 9,010 6,326 4,038
Income tax expense $176,343 $142,647 $104,651
====== ====== ======
Increases (decreases) to the federal tax provision applicable to
pretax income based on the statutory rate are attributable to:
<TABLE>
<CAPTION>
1994 1993 1992
Provision Rate Provision Rate Provision Rate
<S> <C> <C> <C> <C> <C> <C>
Federal income
taxes based on
the statutory rate $179,379 35.0% $144,454 35.0% $107,379 34.0%
Increases (decreases)
are attributable to:
Tax-excluded interest
and dividend income (9,939) (2.0) (11,002) (2.7) (8,209) (2.6)
Other, net (2,107) (0.4) 2,869 0.7 1,443 0.4
Federal income taxes $167,333 32.6% $136,321 33.0% $100,613 31.8%
====== === ====== === ====== ===
</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 December 31,
1994, 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.
<PAGE>
PAGE 75
3. Income taxes (continued)
Significant components of the Company's deferred tax assets and
liabilities as of December 31 are as follows:
1994 1993
Deferred tax assets:
Policy reserves $533,433 $453,436
Investments 116,736 --
Life insurance guarantee
fund assessment reserve 32,235 35,000
Total deferred tax assets 682,404 488,436
Deferred tax liabilities:
Deferred policy acquisition costs 553,722 509,868
Investments -- 10,151
Other 4,621 12,037
Total deferred tax
liabilities 558,343 532,056
Net deferred tax assets (liabilities) $124,061 $(43,620)
====== ======
The Company is required to establish a "valuation allowance" for
any portion of the deferred tax assets that management believes
will not be realized. In the opinion of management, it is more
likely than not that the Company will realize the benefit of the
deferred tax assets, and, therefore, no such valuation allowance
has been established.
4. Stockholder's equity
Retained earnings available for distribution as dividends to the
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
$1,020,981 as of December 31, 1994 and $922,246 as of December 31,
1993 (see Note 3 with respect to the income tax effect of certain
distributions). In addition, any dividend distributions in 1995 in
excess of approximately $288,601 would require approval of the
Department of Commerce of the State of Minnesota.
Statutory net income for 1994, 1993 and 1992 and capital and
surplus as of December 31, 1994, 1993 and 1992 are summarized as
follows:
1994 1993 1992
Statutory net income $ 294,699 $ 275,015 $180,296
Statutory capital and surplus 1,261,958 1,157,022 714,942
Dividends paid to American Express Financial Corporation were
$165,000 in 1994, $25,000 in 1993 and $20,000 in 1992.
<PAGE>
PAGE 76
5. Related party transactions
The Company has loaned funds to American Express Financial
Corporation under three loan agreements. The balance of the first
loan was $40,000 and $75,000 at December 31, 1994 and 1993,
respectively. This loan can be increased to a maximum of $75,000
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 $110,034 at December 31,
1994. The second loan was used to fund the construction of the IDS
Operations Center. This loan was paid off during 1994 and had an
outstanding balance of $84,588 at December 31, 1993. The loan was
secured by a first lien on the IDS Operations Center property and
had an interest rate of 9.89 percent. The Company also had a loan
to an affiliate which was used to fund construction of the IDS
Learning Center. This loan was sold to the parent during 1994 and
the balance outstanding was $22,573 at December 31, 1993. The loan
was secured by a first lien on the IDS Learning Center property and
had an interest rate of 9.82 percent. Interest income on the above
loans totaled $2,894, $11,116 and $10,711 in 1994, 1993 and 1992,
respectively.
The Company purchased a five year secured note from an affiliated
company which had an outstanding balance of $23,333 and $27,222 at
December 31, 1994 and 1993, respectively. The note bears a fixed
rate of 8.42 percent. Interest income on the above note totaled
$2,278, $2,605 and $2,278 in 1994, 1993 and 1992, respectively.
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 December 31, 1994 and 1993 includes $765,366 and $759,714,
respectively, of future policy benefits related to this agreement.
The accompanying consolidated statement of income includes revenue
from policyholder charges of $8, $21 and $109, and expenses of
$6,912, $4,931 and $5,897 related to this agreement for 1994, 1993
and 1992, 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 December 31, 1994 and
1993 includes $65,123 and $44,086, respectively, of reinsurance
receivables related to this agreement. Premiums ceded amounted to
$20,360, $16,230 and $12,499 and reinsurance recovered from
reinsurers amounted to $62, $404 and $250 for the years ended
December 31, 1994, 1993 and 1992, respectively.
The Company participates in the retirement plan of American Express
Financial Corporation which covers all permanent employees age 21
and over who have met certain employment requirements. The
benefits are based on years of service and the employee's monthly
average of basic annual salary rates in effect on January 1 or such
other date at determined by American Express Financial Corporation
<PAGE>
PAGE 77
5. Related party transactions (continued)
of the highest five consecutive annual salaries of the last 10
years. American Express Financial Corporation's 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 1994, 1993 and 1992.
The Company also participates in defined contribution pension plans
of American Express Financial Corporation 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 1994, 1993 and 1992 were $957, $2,008 and
$1,826, respectively.
The Company participates in defined benefit health care plans of
American Express Financial Corporation that provide health care and
life insurance benefits to retired employees and retired financial
advisors. The plans include participant contributions and service
related eligibility requirements. Upon retirement, such employees
are considered to have been employees of American Express Financial
Corporation. American Express Financial Corporation 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. At December 31, 1994, the total
accumulated post retirement benefit obligation, determined in
accordance with SFAS 106 and based on an assumed interest rate of
8.75 percent and a health care cost trend rate of 7 percent, has
been recorded as a liability by American Express Financial
Corporation.
Charges by American Express Financial Corporation for use of joint
facilities, marketing services and other services aggregated
$335,183, $243,346 and $204,675 for 1994, 1993 and 1992,
respectively. Certain of these costs are included in deferred
policy acquisition costs. In addition, the Company rents its home
office space from American Express Financial Corporation on an
annual renewable basis. Such rentals aggregated $965, $4,513 and
$4,074 for 1994, 1993 and 1992, respectively.
6. Commitments and contingencies
At December 31, 1994 and 1993, traditional life insurance and
universal life-type insurance in force aggregated $52,666,567 and
$46,125,515, respectively, of which $3,246,608 and $3,038,426 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
$29,489, $28,276 and $24,222 and reinsurance recovered from
reinsurers amounted to $5,505, $3,345 and $6,766 for the years
ended December 31, 1994, 1993 and 1992.
<PAGE>
PAGE 78
6. Commitments and contingencies (continued)
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 settled all remaining IRS audit issues for the tax
years 1984 through 1986 in September of 1994. There was no
material impact as a result of this audit. Also, the IRS is
currently auditing the Company's 1987 through 1989 tax years.
Management does not believe there will be a material impact as a
result of this audit.
7. Lines of credit
The Company has available lines of credit with three banks
aggregating $100,000 at 40 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 $nil and $1,519 at December 31, 1994 and 1993,
respectively.
8. Derivative financial instruments
The Company enters into transactions involving derivative
financial instruments to manage its exposure to interest rate risk,
including hedging specific transactions. The Company manages risks
associated with these instruments as described below. The Company
does not hold derivative instruments for trading purposes.
Market risk is the possibility that the value of the derivative
financial instruments will change due to fluctuations in a factor
from which the instrument derives its value, primarily an interest
rate. The Company is not impacted by market risk related to
derivatives held for non-trading purposes beyond that inherent in
cash market transactions. Derivatives held for purposes other than
trading are largely used to manage risk and, therefore, the cash
flow and income effects of the derivatives are inverse to the
effects of the underlying transactions.
Credit risk is the possibility that the counterparty will not
fulfill the terms of the contract. The Company monitors credit
exposure related to derivative financial instruments through
established approval procedures, including setting concentration
limits by counterparty and industry, and requiring collateral,
where appropriate. A vast majority of the Company's counterparties
are rated A or better by Moody's and Standard & Poor's.
<PAGE>
PAGE 79
8. Derivative financial instruments (continued)
The notional or contract amount of a derivative financial
instrument is generally used to calculate the cash flows that are
received or paid over the life of the agreement. Notional amounts
are not recorded on the balance sheet. Notional amounts far exceed
the related credit exposure.
Credit exposure related to interest rate caps is measured by the
replacement cost of the contracts. The replacement cost
represents the fair value of the instruments. Financial futures
contracts are settled in cash daily.
<TABLE>
<CAPTION>
National Carrying Total Credit
Assets Amount Value Fair Value Exposure
<S> <C> <C> <C> <C>
Financial futures contracts $ 159,800 $ 2,072 $ 2,072 $ -
Interest rate caps 4,400,000 29,054 42,365 42,365
$4,559,800 $31,126 $44,437 $42,365
======= ===== ===== =====
</TABLE>
The fair values of derivative financial instruments are based on
market values, dealer quotes or pricing models. The financial
futures contracts expire in 1995. The interest rate caps expire on
various dates from 1995 to 1999.
Financial futures contracts and interest rate caps are used
principally to manage the Company's exposure to rising interest
rates. These instruments are used primarily to protect the margin
between interest rate earned on investments and the interest rate
credited to related annuity contract holders.
Changes in the fair value of financial futures contracts are
accounted for as adjustments to the carrying amount of the hedged
investments and amortized over the remaining lives of such
investments. The cost of interest rate caps is amortized to
interest expense over the life of the contracts and payments
received as a result of these agreements are recorded as a
reduction of interest expense when realized. The amortized cost of
interest rate cap contracts is included in other investments.
9. Fair values of financial instruments
The Company is required to disclose fair value information for most
on- and off-balance sheet financial instruments for which it is
practical to estimate that value. Certain financial instruments
such as life insurance obligations, receivables and all
non-financial instruments, such as deferred acquisition costs are
excluded from required disclosure. Off-balance sheet intangible
assets, such as the value of the field force, are also excluded.
Management believes the value of excluded assets is significant.
The fair value of the Company, therefore, cannot be estimated by
aggregating the amounts presented.
<PAGE>
PAGE 80
9. Fair values of financial instruments (continued)
<TABLE>
<CAPTION>
1994 1993
Carrying Fair Carrying Fair
Financial Assets Value Value Value Value
<S> <C> <C> <C> <C>
Investments:
Fixed maturities (Note 2):
Held to maturity $11,269,861 $10,694,800 $ -- $ --
Available for sale 8,017,555 8,017,555 -- --
Investment securities -- -- 19,392,424 20,425,979
Mortgage loans on
real estate (Note 2) 2,400,514 2,342,520 2,055,450 2,125,686
Other:
Equity securities (Note 2) 1,906 1,906 1,900 1,900
Derivative financial
instruments (Note 8) 31,126 44,437 26,923 14,201
Cash and
cash equivalents (Note 1) 267,774 267,774 146,281 146,281
Assets held in segregated
asset accounts (Note 1) 10,881,235 10,881,235 8,991,694 8,991,694
Financial Liabilities
Future policy benefits
for fixed annuities 18,325,870 17,651,897 17,519,876 16,881,747
Liabilities related to
segregated asset accounts 10,398,861 9,943,672 8,645,418 8,305,209
</TABLE>
At December 31, 1994 and 1993, the carrying amount and fair value
of future policy benefits for fixed annuities exclude life
insurance-related contracts carried at $971,897 and $913,127,
respectively, and policy loans of $64,212 and $59,132,
respectively. The fair value of these benefits is based on the
status of the annuities at December 31, 1994 and 1993. The fair
value of deferred annuities is estimated as the carrying amount
less any applicable 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 1994 and 1993.
At December 31, 1994 and 1993 the fair value of liabilities related
to segregated asset accounts is estimated as the carrying amount
less variable insurance contracts carried at $482,374 and $346,276,
respectively, and surrender charges, if applicable.
10. 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
December 31, 1994, 1993 and 1992 and total assets at December 31,
1994, 1993 and 1992 by segment are summarized as follows:
<PAGE>
PAGE 81
<TABLE>
<CAPTION>
1994 1993 1992
<S> <C> <C> <C>
Net investment income:
Life, disability income,
health and long-term
care insurance $ 247,047 $ 250,224 $ 246,676
Annuities 1,534,826 1,532,995 1,370,145
$1,781,873 $1,783,219 $1,616,821
======= ======= =======
Premiums, charges
and fees:
Life, disability income,
health and long-term
care insurance $335,375 $281,284 $250,386
Annuities 193,370 143,876 104,952
$528,745 $425,160 $355,338
====== ====== ======
Income before income taxes:
Life, disability income,
health and long-term
care insurance $122,677 $104,127 $ 96,215
Annuities 394,117 315,336 223,316
Net loss
on investments (4,282) (6,737) (3,710)
$512,512 $412,726 $315,821
====== ====== ======
Total assets:
Life, disability income,
health and long-term
care insurance $ 5,269,188 $ 4,810,145 $ 4,093,778
Annuities 30,478,355 28,247,608 23,201,995
$35,747,543 $33,057,753 $27,295,773
========= ======== ========
</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 82
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 American
Express Financial Corporation) as of December 31, 1994 and 1993 and
the related consolidated statements of income and cash flows for
each of the three years in the period ended December 31, 1994.
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 consolidated financial statements referred to
above present fairly, in all material respects, the consolidated
financial position of IDS Life Insurance Company at December 31,
1994 and 1993, and the consolidated results of its operations and
its cash flows for each of the three years in the period ended
December 31, 1994, in conformity with generally accepted accounting
principles.
As discussed in Note 1 to the consolidated financial statements,
the Company changes its method of accounting for certain
investments in debt and equity securities in 1994.
Ernst & Young LLP
Minneapolis, Minnesota
February 3, 1995
<PAGE>
PAGE 83
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 17, 1995.
Statements of Net Assets at Dec. 31, 1994.
Statements of Operations for the year ended Dec. 31,
1994.
Statements of Changes in Net Assets for the years ended
Dec. 31, 1994 and 1993.
Notes to Financial Statements.
IDS Life Insurance Company:
Consolidated Balance Sheets at Dec. 31, 1994 and
Dec. 31, 1993.
Consolidated Statements of Income for the years ended
Dec. 31, 1994, 1993 and 1992.
Consolidated Statements of Cash Flows for the years
ended Dec. 31, 1994, 1993 and 1992.
Notes to Consolidated Financial Statements.
Report of Independent Auditors dated February 3, 1995.
(b) Exhibits:
1.1 Copy of Consent in Writing in Lieu of a Meeting of the Board
of Directors of IDS Life Insurance Company establishing IDS
Life Account SLB on May 9, 1991, is filed electronically
herewith.
1.2 Copy of Consent in Writing in Lieu of a Meeting of the Board
of Directors of IDS Life Insurance Company Account SLB
establishing three additional subaccounts on May 9, 1991, is
filed electronically herewith.
2. Not applicable.
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.
<PAGE>
PAGE 84
6.1 Copy of Certificate of Incorporation of IDS Life dated July
24, 1957, filed electronically as Exhibit 6.1 to Post-
Effective Amendment No. 3 to Registration Statement No. 33-
40779/812-7731, is hereby incorporated by reference.
6.2 Copy of Amended By-Laws of IDS Life, filed electronically as
Exhibit 6.2 to Post-Effective Amendmend No. 3 to Registration
Statement No. 33-40779/812-7731, is hereby incorporated by
reference.
7. Not applicable.
8. Not applicable.
9. Opinion of Counsel and consent to its use as to the legality
of the securities being registered, is filed electronically
herewith.
10. Consent of Independent Auditors, is filed electronically
herewith.
11. Financial Statement Schedules and Report of Independent
Auditors, is filed electronically herewith.
Financial Statement Schedules:
Report of Independent Auditors dated February 3, 1995.
Schedule I - Consolidated Summary of Investments
Other than Investments in Related
Parties
Schedule III - Supplementary Insurance Information
Schedule IV - Reinsurance
Schedule V - Valuation and Qualifying Accounts
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.
12. Not applicable.
13. Copy of schedule for computation of each performance
quotation, is filed electronically herewith.
14. Financial Data Schedule, is filed electronically herewith.
15. Power of Attorney, dated March 31, 1994, filed electronically
as Exhibit 14 to Post-Effective Amendment No. 3 to
Registration Statement No. 33-40779/812-7731, is hereby
incorporated by reference.
<PAGE>
PAGE 85
<TABLE><CAPTION>
Item 25. Directors and Officers of the Depositor (IDS Life Insurance Company)
Positions and
Name Principal Business Address Offices with Depositor
<S> <C> <C>
Timothy V. Bechtold IDS Tower 10 Vice President-Risk
Minneapolis, MN 55440 Management Products
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
Robert M. Elconin IDS Tower 10 Vice President
Minneapolis, MN 55440
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
James M. Jensen IDS Tower 10 Vice President-Insurance
Minneapolis, MN 55440 Product Development
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 86
Item 25. Directors and Officers of the Depositor (IDS Life Insurance Company (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
Stuart A. Sedlacek IDS Tower 10 Director and Executive
Minneapolis, MN 55440 Vice President-Assured
Assets
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 American Express Financial Corporation. American
Express 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. Companies engaged in Investors
Diversified Financial Services
American Centurion Life Insurance Company New York
American Enterprise Investment Services Inc. Minnesota
American Enterprise Life Insurance Company Indiana
American Express Financial Advisors Inc. Delaware
American Express Financial Corporation Delaware
American Express Minnesota Foundation Minnesota
American Express Service Corporation Delaware
American Express Tax and Business Services Inc. Minnesota
<PAGE>
PAGE 87
Item 26. Persons Controlled by or Under Common Control with the
Depositor or Registrant (Continued)
Jurisdiction
Name of Subsidiary of Incorporation
American Express Trust Company Minnesota
American Partners Life Insurance Company Arizona
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 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
Investors Syndicate Development Corp. Nevada
Item 27. Number of Contractowners
On March 31, 1995, there were 1,658 contract owners of
qualified contracts. There were 7,380 owners of
non-qualified contracts.
Item 28. Indemnification
The By-Laws of the depositor provide that 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
<PAGE>
PAGE 88
proceeding, wherever brought, 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 of 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.
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 $6,969,493 None None
</TABLE>
Item 30. Location of Accounts and Records
IDS Life Insurance Company
IDS Tower 10
Minneapolis, MN
<PAGE>
PAGE 89
Item 31. Management Services
Not applicable.
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 90
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 485(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, 1995.
IDS LIFE ACCOUNT SBS
(Registrant)
By IDS Life Insurance Company
(Sponsor)
By /s/ Richard W. Kling*
Richard W. Kling
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, 1995.
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 91
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
electronically as Exhibit 14 to Registration Statement No. 33-40770
Post-Effective Amendment No. 3 for IDS Life Account SBS by:
/s/ Mary Ellyn Minenko
Mary Ellyn Minenko
<PAGE>
PAGE 92
CONTENTS OF POST-EFFECTIVE AMENDMENT NO. 4
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.
<PAGE>
PAGE 1
EXHIBIT INDEX
Exhibit 1.1 Copy of Consent in Writing in Lieu of a Meeting of
the Board of Directors establishing IDS Life Account
SLB.
Exhibit 1.2 Copy of Consent in Writing in Lieu of a Meeting of
the Board of Directors establishing three additional
subaccounts.
Exhibit 3 Form of Distribution Agreement.
Exhibit 5 Copy of Flexible Premium Deferred Variable Annuity
Application.
Exhibit 9 Opinion of Counsel and consent.
Exhibit 10 Consent of Independent Auditors.
Exhibit 11 Financial Statement Schedules and Report of
Independent Auditors.
Exhibit 13 Copy of schedule for computation of each performance
quotation.
Exhibit 14 Financial Data Schedules:
IDS Life Account SBS
IDS Life Insurance Company
<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
Received by the Secretary
May 9 , 1991
/s/ William A. Stoltzmann
William A. Stoltzmann
<PAGE>
PAGE 1
TO THE SECRETARY OF
IDS LIFE INSURANCE COMPANY
By a Consent in Writing in Lieu of a Meeting received by the
Secretary on May 9, 1991, the Board of Directors of IDS Life
Insurance Company:
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, 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...
As Executive Vice President of Marketing and Products of IDS Life
Insurance Company, I hereby establish, in accordance with the above
resolutions and pursuant to authority granted by the Board of
Directors of IDS Life Insurance Company, the following three
additional subaccounts within the separate account:
The Total Return subaccount, to invest in shares of the Smith
Barney Shearson Total Return Portfolio;
The International Equity subaccount, to invest in shares of
the Smith Barney Shearson International Equity Portfolio; and
The Emerging Growth subaccount, to invest in shares of the
Smith Barney Shearson Emerging Growth Portfolio.
Further, in accordance with the above resolutions and pursuant to
authority granted by the Board of Directors of IDS Life Insurance
Company, I hereby change the designation of IDS Life Account SLB to
IDS Life Account SBS.
In accordance with the above resolutions and pursuant to authority
granted by the Board of Directors of IDS Life Insurance Company,
the Unit Investment Trust comprised of IDS Life Account SLB and
consisting of seven subaccounts is hereby reconstituted as IDS Life
Account SBS consisting of ten subaccounts.
/s/ Richard W. Kling Received by the Secretary
Richard W. Kling November 3, 1993
/s/ William A. Stoltzmann
William A. Stoltzmann
<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 any unauthorized acts or
transactions of Shearson or any of its associated
persons. Shearson and IDS Life agree that if any legal
<PAGE>
PAGE 3
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.
APPLICATION
<PAGE>
PAGE 1
<TABLE>
<CAPTION>
IDS Life Insurance Company Variable
IDS Tower 10 Annuity Application
Minneapolis, Minnesota 55440
<S> <C> <C> <C> <C>
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
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 1
August 29, 1991
Board of Directors
IDS Life Insurance Company
IDS Tower 10
Minneapolis, Minnesota 55440
Gentlemen:
As General Counsel of IDS Life Insurance Company ("Company"), I am
familiar with its legal affairs and with IDS Life Account SLB,
which is a separate account of the Company established by the
Company's Board of Directors pursuant to Section 61A.14 of the
Minnesota Statutes. I am also familiar with the Registration
Statement on Form N-4 and Pre-Effective Amendment No. 1 thereto
(File No. 33-40779), filed by the Company on behalf of the Account
with the Securities and Exchange commission with respect to IDS
Life Account SLB pursuant to Individual Flexible Premium Deferred
Annuity Contracts ("Contracts").
I have made such examination of law and examined such documents and
records as in my judgement are necessary and appropriate to enable
me to express the following opinions. I am of the opinion that:
1. The Company is duly incorporated, validly existing and in good
standing under the laws of the State of Minnesota, and is duly
licensed or qualified to do business in each other
jurisdiction wherein the business transacted by it requires
such licensing or qualification. The Company has all
corporate powers required to carry on its business as now
conducted and to issue the Contracts.
2. IDS Life Account SLB is a separate account of the Company,
duly established and validly existing pursuant to Minnesota
law.
3. The Contracts, when issued, offered and sold in accordance
with the Prospectus contained in the aforesaid Registration
Statement and, upon compliance with local law, will be legal
and binding obligations of the Company in accordance with
their terms.
4. There is no limitation as to the interests in the Account that
may be issued.
There is no material pending or threatened litigation, claims or
assessments (including any unasserted claims or assessments)
against the Company.
<PAGE>
PAGE 2
August 29, 1991
Please be advised you are correct in your understanding that I will
advised you are correct in your understanding that I will advise
and consult with you concerning questions of disclosure and the
applicable requirements of Statements of Financial Accounting
Standards No. 5 if, and when, in the course of performing legal
services for the Company or the Account with respect to a matter
recognized by me to involve an unasserted claim or assessment that
may require financial statement disclosure or consider disclosure
of any such possible claim or assessment in your financial
statements. You may furnish a copy of this letter to your
independent accountants.
I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Sincerely,
/s/ William A. Stoltzmann
William A. Stoltzmann
Vice President, General Counsel & Secretary
WAS/JDS/rdt
<PAGE>
PAGE 1
Consent of Independent Auditors
We consent to the use of our reports dated February 3, 1995 on the
consolidated financial statements and financial statement schedules
of IDS Life Insurance Company and our report dated March 17, 1995
on the financial statements of IDS Life Account SBS in Post-
Effective Amendment No. 4 to the Registration Statement (Form N-4
No. 33-40779) being filed under the Securities Act of 1993 and the
Investment Company Act of 1940.
Ernst & Young LLP
Minneapolis, Minnesota
April 26, 1995
<PAGE>
PAGE 1
<TABLE>
<CAPTION>
IDS LIFE INSURANCE COMPANY
SCHEDULE I - CONSOLIDATED SUMMARY OF INVESTMENTS
OTHER THAN INVESTMENTS IN RELATED PARTIES ($ thousands)
AS OF DECEMBER 31, 1994
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:
Held to maturity:
United States Government and
government agencies and
authorities (a) $ 1,301,547 $ 1,177,730 $ 1,301,547
States, municipalities and
polictical subdivisions 9,687 9,819 9,687
All other corporate bonds 9,958,627 9,507,251 9,958,627
Total held to maturity 11,269,861 10,694,800 11,269,861
Available for sale:
United States Government and
government agencies and
authorities (b) 3,783,176 3,514,514 3,514,514
States, municipalities and
polictical subdivisions 11,008 11,710 11,710
All other corporate bonds 4,664,944 4,491,331 4,491,331
Total available for sale 8,459,128 8,017,555 8,017,555
Mortgage loans on real estate 2,400,514 XXXXXXXXX 2,400,514
Policy loans 381,912 XXXXXXXXX 381,912
Other investments 51,795 XXXXXXXXX 51,795
Total investments $22,563,210 $ XXXXXXXXX $22,121,637
(a) - Includes mortgage-backed securities with a cost and market value of $1,280,047 and $1,160,559, respectively.
(b) - Includes mortgage-backed securities with a cost and market value of $3,655,083 and $3,387,182, respectively.
</TABLE>
<PAGE>
PAGE 2
<TABLE>
<CAPTION>
IDS LIFE INSURANCE COMPANY
SCHEDULE III - SUPPLEMENTARY INSURANCE INFORMATION ($ thousands)
FOR THE YEAR ENDED DECEMBER 31, 1994
Column A Column B Column C Column D Column E Column F Column G
Segment Deferred Future Unearned Other policy Premium Net
policy policy premiums claims and revenue investment
acquisition benefits, benefits income
cost losses, payable
claims and
loss
expenses
_____________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C>
Annuities $1,150,585 $19,361,979 $ - $23,888 $ - $1,534,826
Life, DI,
Long-term Care and
Health Insurance 714,739 3,346,931 - 26,180 144,640 247,047
_____________________________________________________________________________________________________________________________
Total $1,865,324 $22,708,910 $ - $50,068 $144,640 $1,781,873
_____________________________________________________________________________________________________________________________
Column H Column I Column J Column K
Benefits, Amortization Other Premiums
claims, of deferred operating written
losses and policy expenses
settlement acquisition
expenses costs
_____________________________________________________________________________________________________________________________
Annuities $ (5,762) $ 194,060 $131,515 N/A
Life, DI,
Long-term Care and
Health Insurance 134,128 86,312 78,586 N/A
_____________________________________________________________________________________________________________________________
Total $ 128,366 $ 280,372 $210,101 N/A
_____________________________________________________________________________________________________________________________
</TABLE>
<PAGE>
PAGE 3
<TABLE>
<CAPTION>
IDS LIFE INSURANCE COMPANY
SCHEDULE III - SUPPLEMENTARY INSURANCE INFORMATION ($ thousands)
FOR THE YEAR ENDED DECEMBER 31, 1993
Column A Column B Column C Column D Column E Column F Column G
Segment Deferred Future Unearned Other policy Premium Net
policy policy premiums claims and revenue investment
acquisition benefits, benefits income
cost losses, payable
claims and
loss
expenses
_____________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C>
Annuities $1,008,378 $18,492,135 $ - $21,508 $ - $1,532,995
Life, DI,
Long-term Care and
Health Insurance 644,006 3,148,932 - 23,008 127,245 250,22
_____________________________________________________________________________________________________________________________
Total $1,652,384 $21,641,067 $ - $44,516 $127,245 $1,783,219
_____________________________________________________________________________________________________________________________
Column H Column I Column J Column K
Benefits, Amortization Other Premiums
claims, of deferred operating written
losses and policy expenses
settlement acquisition
expenses costs
_____________________________________________________________________________________________________________________________
Annuities $ 3,656 $ 139,602 $122,999 N/A
Life, DI,
Long-term Care and
Health Insurance 119,335 72,131 118,975 N/A
_____________________________________________________________________________________________________________________________
Total $ 122,991 $ 211,733 $241,974 N/A
_____________________________________________________________________________________________________________________________
</TABLE>
<PAGE>
PAGE 4
<TABLE>
<CAPTION>
IDS LIFE INSURANCE COMPANY
SCHEDULE III - SUPPLEMENTARY INSURANCE INFORMATION ($ thousands)
FOR THE YEAR ENDED DECEMBER 31, 1992
Column A Column B Column C Column D Column E Column F Column G
Segment Deferred Future Unearned Other policy Premium Net
policy policy premiums claims and revenue investment
acquisition benefits, benefits income
cost losses, payable
claims and
loss
expenses
_____________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C>
Annuities $ 860,027 $16,342,419 $ - $28,705 $ - $1,370,145
Life, DI,
Long-term Care and
Health Insurance 580,848 2,883,469 - 21,194 114,379 246,676
_____________________________________________________________________________________________________________________________
Total $1,440,875 $19,225,888 $ - $49,899 $114,379 $1,616,821
_____________________________________________________________________________________________________________________________
Column H Column I Column J Column K
Benefits, Amortization Other Premiums
claims, of deferred operating written
losses and policy expenses
settlement acquisition
expenses costs
_____________________________________________________________________________________________________________________________
Annuities $ 1,870 $ 81,706 $100,928 N/A
Life, DI,
Long-term Care and
Health Insurance 106,528 58,453 114,764 N/A
_____________________________________________________________________________________________________________________________
Total $ 108,398 $ 140,159 $215,692 N/A
_____________________________________________________________________________________________________________________________
</TABLE>
<PAGE>
PAGE 5
<TABLE>
<CAPTION>
IDS LIFE INSURANCE COMPANY
SCHEDULE IV - REINSURANCE ($ thousands)
FOR THE YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
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, 1994
Life insurance in force $50,814,651 $3,246,608 $1,851,916 $49,419,959 3.75%
______________________________________________________________________________________________________________
Premiums:
Life insurance $ 51,219 $ 3,354 $ 319 $ 48,184 0.66%
DI & health insurance 114,049 17,593 -- 96,456 0.00%
Total premiums $ 165,268 $ 20,947 $ 319 $ 144,640 0.22%
______________________________________________________________________________________________________________
For the year ended
December 31, 1993
Life insurance in force $44,188,493 $3,038,426 $1,937,022 $43,087,089 4.50%
______________________________________________________________________________________________________________
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%
______________________________________________________________________________________________________________
</TABLE>
<PAGE>
PAGE 6
<TABLE>
<CAPTION>
IDS LIFE INSURANCE COMPANY
SCHEDULE V - VALUATION AND QUALIFYING ACCOUNTS ($ thousands)
FOR THE YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
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, 1994
- -----------------------------
Reserve for Mortgage Loans $35,020 $232 $ 0 $ 0 $35,252
Reserve for Fixed Maturities $22,777 ($16,777) $ 0 $6,000 $ 0
Reserve for Other Investments $10,700 ($3,185) $ 0 $ 0 $ 7,515
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
* Cash received on bond previously written down.
** 1994 amount represents a direct writedown of the related investments in fixed maturities. 1993 and 1992 amounts represent
transfers between reserve accounts.
</TABLE>
<PAGE>
PAGE 7
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, 1994 and 1993, and for each of
the three years in the period ended December 31, 1994, and have
issued our report thereon dated February 3, 1995 (included
elsewhere in this Registration Statement).
Our audits also included the financial statements schedules I, III,
IV and V 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 LLP
Minneapolis, Minnesota
February 3, 1995
<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.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK> 0000875131
<NAME> IDS Life Account SBS
<CURRENCY> U.S. DOLLAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1994
<PERIOD-END> DEC-31-1994
<PERIOD-TYPE> YEAR
<EXCHANGE-RATE> 1
<INVESTMENTS-AT-COST> 294180252
<INVESTMENTS-AT-VALUE> 287874767
<RECEIVABLES> 183334
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 288058101
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 538098
<TOTAL-LIABILITIES> 538098
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 268692758
<SHARES-COMMON-PRIOR> 198719102
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 287520003
<DIVIDEND-INCOME> 8691600
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> (4066067)
<NET-INVESTMENT-INCOME> 4625533
<REALIZED-GAINS-CURRENT> (676781)
<APPREC-INCREASE-CURRENT> (18647293)
<NET-CHANGE-FROM-OPS> (14698541)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 100298821
<NUMBER-OF-SHARES-REDEEMED> (30325165)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 58094230
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (4066067)
<AVERAGE-NET-ASSETS> 258472888
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 7
<CIK> 0000875131
<NAME> IDS Life Insurance Company
<MULTIPLIER> 1000
<CURRENCY> U.S. DOLLAR
<FISCAL-YEAR-END> DEC-31-1993 DEC-31-1994
<PERIOD-START> JAN-01-1993 JAN-01-1994
<PERIOD-END> DEC-31-1993 DEC-31-1994
<PERIOD-TYPE> YEAR YEAR
<EXCHANGE-RATE> 1 1
<DEBT-HELD-FOR-SALE> 0 8017555
<DEBT-CARRYING-VALUE> 19392424 11269861
<DEBT-MARKET-VALUE> 20425979 10694800
<EQUITIES> 1900 1906
<MORTGAGE> 2055450 2400514
<REAL-ESTATE> 27484 20835
<TOTAL-INVEST> 21854682 22121637
<CASH> 146281 267774
<RECOVER-REINSURE> 1293 1110
<DEFERRED-ACQUISITION> 1652384 1865324
<TOTAL-ASSETS> 33057753 35747543
<POLICY-LOSSES> 21641067 22708910
<UNEARNED-PREMIUMS> 0 0
<POLICY-OTHER> 0 0
<POLICY-HOLDER-FUNDS> 44516 50068
<NOTES-PAYABLE> 0 0
<COMMON> 3000 3000
0 0
0 0
<OTHER-SE> 1690346 1585691
<TOTAL-LIABILITY-AND-EQUITY>33057753 35747543
127245 144640
<INVESTMENT-INCOME> 1783219 1781873
<INVESTMENT-GAINS> (6737) (4282)
<OTHER-INCOME> 304344 384105
<BENEFITS> 1341638 1303351
<UNDERWRITING-AMORTIZATION> 211733 280372
<UNDERWRITING-OTHER> 241974 210101
<INCOME-PRETAX> 412726 512512
<INCOME-TAX> 142647 176343
<INCOME-CONTINUING> 270079 336169
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 270079 336169
<EPS-PRIMARY> 0 0
<EPS-DILUTED> 0 0
<RESERVE-OPEN> 18004 20636
<PROVISION-CURRENT> 94976 93683
<PROVISION-PRIOR> 0 0
<PAYMENTS-CURRENT> 92344 91091
<PAYMENTS-PRIOR> 0 0
<RESERVE-CLOSE> 20636 23228
<CUMULATIVE-DEFICIENCY> 0 0
</TABLE>
