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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No.
Post-Effective Amendment No. 5 (File No. 33-40779)
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY
ACT OF 1940
Amendment No. 5 (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 April 29, 1996 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.
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
20, 1996.
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<TABLE>
<CAPTION>
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.
PART A PART B
<C> <C> <C> <C>
Section Section in Statement of
Item No. in Prospectus Item No. Additional Information
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
*Designates page number in the prospectus, which is hereby
incorporated by reference in this Statement of Additional
Information.
</TABLE>
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Symphony Annuity
Prospectus/April 29, 1996
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 nonqualified 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, AND IDS LIFE MANAGED
FUND. 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 April 29, 1996,
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.<PAGE>
PAGE 6
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).<PAGE>
PAGE 7
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 related securities,
foreign government securities and corporate securities 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 income producing 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 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 nonqualified
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 nonqualified Annuities and at least $500 for
qualified Annuities. After making the initial purchase payment,
you may make additional payments of at least $500 for nonqualified
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 nonqualified
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).<PAGE>
PAGE 9
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 22).
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).
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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).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 nonqualified 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,<PAGE>
PAGE 11
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.
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.
<TABLE>
<CAPTION>
Annual Operating Expenses of the Portfolios and Funds
(as a percentage of average daily net assets)
Intermedi- Diversified Interna-
Money ate High Strategic Equity Equity Growth Total tional 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% .75% .75% .75% 1.05% .95%
Other Expenses .25 .26 .25 .30 .40 .33 .22 .25 .38 .25
Total Operating
Expenses of
Portfolios # .75% .86% .90% .95% 1.00% .98% .97% 1.00% 1.43% 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:
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 year $ 83.54 $ 84.63 $ 85.03 $ 85.53 $ 86.02 $ 85.82 $ 85.72 $ 86.02 $ 90.25 $ 87.99
3 years 112.53 115.80 116.99 118.47 119.95 119.36 119.06 119.95 132.55 125.84
5 years 144.15 149.61 151.58 154.05 156.50 155.52 155.03 156.50 177.32 166.26
10 years 265.69 276.58 280.50 285.38 290.23 288.29 287.32 290.23 330.77 309.34<PAGE>
PAGE 12
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 $ 23.54 $ 24.63 $ 25.03 $ 25.53 $ 26.02 $ 25.82 $ 25.72 $ 26.02 $ 30.25 $ 27.99
3 years 72.53 75.80 76.99 78.47 79.95 79.36 79.06 79.95 92.55 85.84
5 years 124.15 129.61 131.58 134.05 136.50 135.52 135.03 136.50 157.32 146.26
10 years 265.69 276.58 280.50 285.38 290.23 288.29 287.32 290.23 330.77 309.34
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 .068 percent charge based on the
average Annuity size.
# Annualized operating expenses of underlying portfolios at Dec. 31, 1995.
Capital Special
Resource Income Managed
<S> <C> <C> <C>
Management Fees .63% .63% .62%
Other Expenses .04 .04 .03
Total Operating
Expenses of
Funds # .67% .67% .65%
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:
<S> <C> <C> <C>
1 year $ 82.75 $ 82.75 $ 82.55
3 years 110.14 110.14 109.54
5 years 140.15 140.15 139.15
10 years 257.69 257.69 255.68
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 $ 22.75 $ 22.75 $ 22.55
3 years 70.14 70.14 69.54
5 years 120.15 120.15 119.15
10 years 257.69 257.69 255.68
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 .068 percent charge based on the
expected average Annuity size.
# Annualized operating expenses of underlying mutual funds at Dec. 31, 1995.
Condensed Financial Information (Unaudited)
The tables below give per-unit information about the financial
history of each subaccount.
Period from
Year ended Year ended Year ended Year ended Oct. 16 to
Dec.31, 1995 Dec.31, 1994 Dec.31, 1993 Dec.31, 1992 Dec. 31, 1991
<S> <C> <C> <C> <C> <C>
Subaccount AMO (Investing in shares of Money Market
Portfolio)*
Accumulation unit value at beginning of period...... $1.04 $1.02 $1.02 $1.00 $1.00
Accumulation unit value at end of period............ $1.08 $1.04 $1.02 $1.02 $1.00
Number of accumulation units outstanding at end of
period (000 omitted)................................ 4,822 6,298 3,175 2,061 828
Ratio of operating expense to average net assets.... 1.50% 1.50% 1.50% 1.50% 1.50%
Simple yield........................................ 2.75% 2.14% 0.72% 0.78% 2.00%
Compound yield...................................... 2.79% 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...... $1.08 $1.13 $1.06 $1.02 $1.00
Accumulation unit value at end of period............ $1.25 $1.08 $1.13 $1.06 $1.02
Number of accumulation units outstanding at end of
period (000 omitted)................................ 11,659 11,655 8,070 3,417 682
Ratio of operating expense to average net assets.... 1.50% 1.50% 1.50% 1.50% 1.50%
<PAGE>
PAGE 13
Year ended Year ended Year ended Year ended Year ended
Dec. 31, 1995 Dec. 31, 1994 Dec. 31, 1993 Dec. 31, 1992 Dec. 31, 1991
<S> <C> <C> <C> <C> <C>
Subaccount ADS (Investing in shares of Diversified
Strategic Income Portfolio)*
Accumulation unit value at beginning of period....... $1.07 $1.12 $1.01 $1.01 $1.00
Accumulation unit value at end of period............. $1.23 $1.07 $1.12 $1.01 $1.01
Number of accumulation units outstanding at end of
period (000 omitted)................................. 45,720 48,740 36,618 19,768 3,869
Ratio of operating expense to average net assets..... 1.50% 1.50% 1.50% 1.50% 1.50%
Subaccount AEM (Investing in shares of Equity Income
Portfolio)*
Accumulation unit value at beginning of period...... $1.08 $1.22 $1.12 $1.02 $1.00
Accumulation unit value at end of period............ $1.41 $1.08 $1.22 $1.12 $1.02
Number of accumulation units outstanding at end of
period (000 omitted)................................ 35,868 39,594 48,057 23,184 3,835
Ratio of operating expense to average net assets.... 1.50% 1.50% 1.50% 1.50% 1.50%
Subaccount AEX (Investing in shares of Equity Index
Portfolio)*
Accumulation unit value at beginning of period...... $1.18 $1.19 $1.11 $1.06 $1.00
Accumulation unit value at end of period............ $1.58 $1.18 $1.19 $1.11 $1.06
Number of accumulation units outstanding at end of
period (000 omitted)................................ 8,552 7,552 6,454 3,748 636
Ratio of operating expense to average net assets.... 1.50% 1.50% 1.50% 1.50% 1.50%
Subaccount AGI (Investing in shares of Growth &
Income Portfolio)*
Accumulation unit value at beginning of period...... $1.11 $1.16 $1.08 $1.01 $1.00
Accumulation unit value at end of period............ $1.42 $1.11 $1.16 $1.08 $1.01
Number of accumulation units outstanding at end of
period (000 omitted)................................ 23,037 25,102 20,774 10,136 1,881
Ratio of operating expense to average net assets.... 1.50% 1.50% 1.50% 1.50% 1.50%
Subaccount AAP (Investing in shares of Appreciation
Portfolio)*
Accumulation unit value at beginning of period...... $1.12 $1.15 $1.09 $1.05 $1.00
Accumulation unit value at end of period............ $1.43 $1.12 $1.15 $1.09 $1.05
Number of accumulation units outstanding at end of
period (000 omitted)................................ 63,015 68,920 65,534 48,842 10,929
Ratio of operating expense to average net assets.... 1.50% 1.50% 1.50% 1.50% 1.50%
Subaccount ATR (Investing in shares of Total Return
Portfolio)**
Accumulation unit value at beginning of period...... $1.09 $1.03 $1.00 N/A N/A
Accumulation unit value at end of period............ $1.35 $1.09 $1.03 N/A N/A
Number of accumulation units outstanding at end of
period (000 omitted)................................ 20,934 18,918 2,486 N/A N/A
Ratio of operating expense to average net assets.... 1.50% 1.50% 1.50% N/A N/A
Subaccount AIE (Investing in shares of International
Equity Portfolio)**
Accumulation unit value at beginning of period...... $0.91 $1.04 $1.00 -- --
Accumulation unit value at end of period............ $0.97 $0.91 $1.04 -- --
Number of accumulation units outstanding at end of
period (000 omitted)................................ 28,243 29,353 5,528 -- --
Ratio of operating expense to average net assets.... 1.50% 1.50% 1.50% -- --
Subaccount AEG (Investing in shares of Emerging
Growth Portfolio)**
Accumulation unit value at beginning of period...... $0.96 $1.04 $1.00 -- --
Accumulation unit value at end of period............ $1.35 $0.96 $1.04 -- --
Number of accumulation units outstanding at end of
period (000 omitted)................................ 12,247 11,353 2,022 -- --
Ratio of operating expense to average net assets.... 1.50% 1.50% 1.50% -- --
Subaccount ACR (Investing in shares of Capital
Resource Fund)***
Accumulation value at beginning of period........... $0.99 $1.00 -- -- --
Accumulation unit value at end of period............ $1.25 $0.99 -- -- --
Number of accumulation units outstanding at end of
period (000) omitted)............................... 519 560 -- -- --
Ratio of expense to average net assets.............. 1.50% 1.50% -- -- --
<PAGE>
PAGE 14
Year ended Year ended Year ended Year ended Year ended
Dec. 31, 1995 Dec. 31, 1994 Dec. 31, 1993 Dec. 31, 1992 Dec. 31, 1991
Subaccount ASI (Investing in shares of Special
Income Fund)***
Accumulation value at beginning of period........... $0.99 $1.00 -- -- --
Accumulation unit value at end of period............ $1.20 $0.99 -- -- --
Number of accumulation units outstanding at end of
period (000) omitted)............................... 722 351 -- -- --
Ratio of expense to average net assets.............. 1.50% 1.50% -- -- --
Subaccount AMG (Investing in shares of Managed
Fund)***
Accumulation value at beginning of period........... $0.97 $1.00 -- -- --
Accumulation unit value at end of period............ $1.19 $0.97 -- -- --
Number of accumulation units outstanding at end of
period (000) omitted)............................... 716 298 -- -- --
Ratio of expense to average net assets.............. 1.50% 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, 1995, and the related statements of operations for the year
then ended, and the related statements of changes in net assets for
each of the two years in the period then ended, except for the
ACR, ASI, and AMG subaccounts which are for the period Oct. 3, 1994
(commencement of operations) to Dec. 31, 1995, are presented in the
SAI dated April 29, 1996. The audited consolidated financial
statements of IDS Life Insurance Company including consolidated
balance sheets as of Dec. 31, 1995, and 1994, and related
consolidated statements of income, stockholder's equity and cash
flows for each of the three years in the period ended Dec. 31, 1995
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). The calculation assumes reinvestment of
investment earnings and reflects the deduction of all applicable
charges, including the contract administrative charge, mortality
and expense fee, variable account administrative charge and
surrender charge, assuming a surrender at the end of the
illustrated period. Optional total return quotations may be made
that do not reflect a surrender charge deduction (assuming no
surrender). 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 <PAGE>
PAGE 16
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.
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;
<PAGE>
PAGE 17
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;
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.
<PAGE>
PAGE 18
The U.S. Treasury and the IRS have indicated they may provide
additional guidance concerning circumstances in which investment
control by an Annuity owner would cause that owner to be taxed on
his or her share of the income of the Variable Account. It is not
clear, at this time, what the additional guidance will be and the
timing of further action is unknown. IDS Life reserves the right
to modify the Annuity, as necessary, to prevent the owner from
being currently taxed as the owner of the underlying assets of the
Variable Account for federal income tax purposes.
IDS Life intends to comply with all U.S. Treasury guidance to
insure that the Annuity continues to qualify as an annuity for
federal income tax purposes.
Investment Goals and Policies of the Portfolios 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 at least 25% of its assets in the utility industry.
<PAGE>
PAGE 19
The Equity Index Portfolio's goal is to provide investment results
that, before deduction of operating expenses, match the price and
yield performance of U.S. publicly traded common stocks, as
measured by the S&P 500. Once the Portfolio reaches a sufficient
asset size, it will seek to achieve its goal by owning all 500
stocks in the S&P 500 in proportion to their actual market
capitalization weightings.
The Growth & Income Portfolio's goal is income and long-term
capital growth. In seeking to achieve its goal, the Portfolio will
invest in income-producing equity securities, including dividend
paying common stocks, securities that are convertible into common
stocks and warrants meeting certain specified investment criteria.
The Appreciation Portfolio's goal is long-term appreciation of
capital. In seeking to achieve its goal, the Portfolio will invest
primarily in equity and equity-related securities that are believed
to afford attractive opportunities for appreciation.
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 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, securities convertible into common stock, warrants,
<PAGE>
PAGE 20
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:
Name Service
Van Kampen American Capital Investment Adviser to the
Asset 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
Davis Skaggs Investment Investment Advisor to the
Management Total Return Portfolio
PNC Bank, National Association Custodian
First Data Investor Services Transfer and Dividend Paying
Group, Inc., formerly The Agent
Shareholder Services Group, Inc.
Smith Barney Inc. Distributor
<PAGE>
PAGE 21
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 no later than two days
after it is received. If IDS Life cannot accept your application
within five days, it will be declined and your payment will be
returned to you. When IDS Life accepts your application, an
Annuity contract will be sent to you.
When you apply for the Annuity, you can select the Fixed Account
and/or the subaccount(s) in which you wish to invest and the
amounts to be allocated to each. You also select how you wish to
make purchase payments. Your purchase payments will be allocated
to the Fixed Account and/or the subaccount(s) according to your
election as of the next close of business after your application is
accepted or your payment is received, whichever is later.
IDS Life reserves the right to impose a maximum issue age for
nonqualified 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 nonqualified 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 <PAGE>
PAGE 22
before the retirement date and there is no beneficiary, then your
estate will be the beneficiary.
IRAs and Other Qualified Plans
The Annuity may be bought for a retirement plan qualified under
Sections 401, 403, 408 or 457 of the Code. These plans include:
o IRAs and Simplified Employee Pension plans (SEPs);
o Custodial and trusteed pension and profit sharing plans;
o Section 401(k) plans;
o TSAs; and
o Section 457 plans.
Your purchase of the Annuity for a qualified plan will be subject
to applicable federal law and any rules of the plan itself.
Purchase Payments
Amount of Purchase Payments -- You must make an initial lump sum
purchase payment to your Annuity and you may make additional
purchase payments to your Annuity. The initial purchase payment
must be at least $5,000 for nonqualified 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. <PAGE>
PAGE 23
However, unless the transfer is an automated transfer described
below, IDS Life does require that your transfer be for:
o at least $500; or
o your entire balance in that subaccount, if less.
Automated Transfers -- You may establish automated transfers of
contract values between the subaccounts and/or the Fixed Account
through a one-time written request or other method acceptable to
IDS Life. The minimum automated transfer amount is $100. Such
transfers may be made on a monthly, quarterly, semi-annual or
annual basis. You may start or stop this service at any time, but
you must give IDS Life 30 days' notice to change any automated
transfer instructions that are currently in place. Automated
transfers are subject to all of the other Annuity provisions and
terms, including provisions relating to the transfer of money
between subaccounts.
For information on restrictions on automated transfers of contract
values between the Fixed Account and the subaccounts see the
section called "Information on the Fixed Account of the Annuity."
Before transferring any part of your contract value, you should
consider the risks involved in switching investments. IDS Life
may, in its sole discretion, suspend or modify transfer privileges
at any time.
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
<PAGE>
PAGE 24
administrative charge that is prorated based on the number of days
from your last contract anniversary to the date of full surrender.
The contract administrative charge cannot be increased and does not
apply after a retirement payment plan begins. IDS Life does not
expect to profit from the contract administrative charge.
Variable Account Administrative Charge -- This charge is deducted
daily from the subaccounts of the Variable Account. The charge
equals an effective annual rate of 0.25 percent of the daily net
asset value of the subaccounts and is paid to IDS Life. It covers
certain administrative and operating expenses of the subaccounts
incurred by IDS Life such as accounting, legal and data processing
fees, and expenses involved in the preparation and distribution of
reports and prospectuses. The Variable Account administrative
charge cannot be increased and does not apply after a retirement
payment plan begins. IDS Life does not expect to profit from the
Variable Account administrative charge.
Mortality and Expense Risk Fee -- This charge is deducted daily
from the subaccounts of the Variable Account. The charge equals an
effective annual rate of 1.25 percent of the daily net asset value
of the subaccounts and is paid to IDS Life. It covers IDS Life's
annuity mortality risk and expense risk. IDS Life estimates that
approximately two-thirds of this fee is for assumption of the
mortality risk, and one-third is for assumption of the expense
risk.
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<PAGE>
PAGE 25
applies if all or part of the contract value is surrendered during
the first six payment years following a purchase payment. The
surrender charge starts at 6 percent of a purchase payment in the
first payment year and is reduced by 1 percent each payment year
thereafter. This means that there is no surrender charge after six
payment years. In addition, there is no surrender charge when
contract values are applied to a retirement payment plan or for a
death benefit. The surrender charge is used to help defray
expenses incurred in the sale of the Annuity including commissions
and other promotional or distribution expenses associated with the
printing and distribution of prospectuses and sales material.
After the first contract year, you may surrender up to 10 percent
of the contract value on your prior contract anniversary in one or
more surrenders each contract year without incurring a surrender
charge. The 10 percent withdrawal provision is subject to other
Annuity provisions and terms including those on partial surrenders.
In addition, there is no surrender charge on contract earnings,
which equal:
1) the contract value; minus
2) the sum of all purchase payments received that have not been
previously surrendered; minus
3) the amount of the 10 percent free withdrawal, if applicable.
For purposes of determining the amount of any surrender charge,
surrenders will be deemed to be taken first from any applicable 10
percent free withdrawal amount; next from purchase payments (on a
first in-first out basis); and finally from contract earnings (in
excess of any 10 percent free withdrawal amount).
Surrender Charge Calculation -- The following example illustrates
how the surrender charge is calculated:
Assumptions:
<TABLE>
<CAPTION>
<S> <C>
______________________________________________________________________________________________
Initial purchase payment at Annuity issue date of April 29, 1996...................... $10,000
Subsequent purchase payment on July 1, 1999 .......................................... 20,000
Account value on contract anniversary, April 29, 2000................................. 40,000
Account value on October 12, 2000 .................................................... 42,000
______________________________________________________________________________________________
Full Surrender on October 12, 2000:
Basis of Rate of Dollar Amount
Charge Surrender Charge of Charge Explanation of Charge
<S> <C> <C> <C>
$ 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, 2000:
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>
<PAGE>
PAGE 26
Surrender Charge on Partial Surrender -- The surrender charge is
deducted from the contract value remaining after the owner is paid
the partial surrender amount requested. For example, if the owner
requested a partial surrender net check amount of $1,000 and the
surrender charge rate that applied to that amount were 5 percent,
the owner would receive the $1,000 requested and the surrender
charge amount would be $52.63 for a total withdrawal of $1,052.63.
Possible Reduction in Charges -- In some cases, IDS Life may expect
to incur lower sales and administrative expenses or perform fewer
services. In those cases, IDS Life may, in its discretion, reduce
or eliminate certain administrative and surrender charges.
However, IDS Life expects this to occur infrequently, if at all.
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.
<PAGE>
PAGE 27
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."
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.
<PAGE>
PAGE 28
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.
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.
<PAGE>
PAGE 29
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
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.
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<PAGE>
PAGE 30
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.
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 nonqualified 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.
<PAGE>
PAGE 31
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.
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.
<PAGE>
PAGE 32
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.
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 nonqualified Annuity assigned or pledged
is taxed like a cash withdrawal to the extent allocable to
investment in the Annuity after Aug. 13, 1982.
<PAGE>
PAGE 33
Transfer of a nonqualified 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.
If payments begin under a nonqualified 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 nonqualified 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.
<PAGE>
PAGE 34
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
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.
<PAGE>
PAGE 35
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;
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.
<PAGE>
PAGE 36
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
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.
<PAGE>
PAGE 37
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,
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.
<PAGE>
PAGE 38
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.
Table of Contents of the SAI
Page
Performance Information..........................................
Rating Agencies..................................................
Principal Underwriter............................................
Independent Auditors.............................................
Mortality and Expense Risk Fee...................................
Prospectus.......................................................
Financial Statements
-- IDS Life Account SBS.....................................
-- IDS Life Insurance Company...............................
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
April 29, 1996
IDS Life Account SBS is a separate account established and
maintained by IDS Life Insurance Company (IDS Life).
This Statement of Additional Information (SAI), dated April 29,
1996, is not a prospectus. It should be read together with the
Account's prospectus, dated April 29, 1996, 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
<PAGE>
PAGE 40
TABLE OF CONTENTS
Performance Information........................................p.
Rating Agencies................................................p.
Principal Underwriter..........................................p.
Independent Auditors...........................................p.
Mortality and Expense Risk Fee.................................p.
Prospectus.....................................................p.
Financial Statements
- IDS Life Account SBS...............................p.
- IDS Life Insurance Company.........................p.
<PAGE>
PAGE 41
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, 1995, the Account's simple yield was 2.75% and its
effective yield was 2.79%.
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:
6
YIELD = 2 [(a-b + 1) - 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.
<PAGE>
PAGE 42
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).
Subaccount total return figures reflect the deduction of the
contract administrative charge and mortality and expense risk fee.
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, <PAGE>
PAGE 43
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.
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 1995, 1994 and 1993
aggregated $10,125,726, $6,969,493, and $4,408,562, respectively.
Commissions paid to IDS Life for 1995, 1994 and 1993 aggregated
$9,019,184, $17,331,801 and $16,783,495, 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, 1995, 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 at Dec. 31, 1995 and 1994 and for each
of the three years in the period ended Dec. 31, 1995, appearing in
this SAI, have been audited by Ernst & Young LLP, independent
auditors, as stated in their reports appearing herein.
<PAGE>
PAGE 44
MORTALITY AND EXPENSE RISK FEE
IDS Life has represented to the SEC that:
IDS Life has reviewed publicly available information regarding
products of other companies. Based upon this review, IDS Life has
concluded that the mortality and expense risk fee is within the
range of charges determined by industry practice and that the level
of the mortality and expense risk charge is reasonable in relation
to the risks assumed by IDS Life under the Annuities. IDS Life
will maintain at its principal office, and make available on
request of the SEC or its staff, a memorandum setting forth in
detail the variable products analyzed and the methodology, and
results of, its comparative review.
IDS Life has concluded that there is a reasonable likelihood that
the proposed distribution financing arrangements made with respect
to the Annuities will benefit the Variable Account and investors in
the Annuities. The basis for such conclusion is set forth in a
memorandum which will be made available to the Commission or its
staff on request.
PROSPECTUS
The prospectus dated April 29, 1996, is hereby incorporated in this
SAI by reference.
<PAGE>
PAGE 45
<TABLE>
<CAPTION>
IDS Life Account SBS
________________________________________________________________________________________________________________________
Statements of Net Assets Dec. 31, 1995
__________________Segregated Asset Subaccounts___________________________
Assets AMO AIH ADS AEM AEX AGI
________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C>
Investments in shares of mutual fund
portfolios and the Funds, at market value:
Smith Barney Series Fund Money Market Portfolio -
5,231,878 shares at net asset value of
$1.00 per share (cost $5,231,866) $5,231,865 $ - $ - $ - $ - $ -
Smith Barney Series Fund Intermediate High Grade
Portfolio - 1,374,412 shares at net asset value of
$10.59 per share (cost $14,089,860) - 14,555,021 - - - -
Smith Barney Series Fund Diversified Strategic Income
Portfolio - 5,612,359 shares at net asset value
of $10.00 per share (cost $55,112,173) - - 56,123,587 - - -
Smith Barney Series Fund Equity Income Portfolio -
4,086,376 shares at net asset value of $12.35
per share (cost $44,918,764) - - - 50,466,746 - -
Smith Barney Series Fund Equity Index Portfolio -
867,552 shares at net asset value of $15.58
per share (cost $10,215,164) - - - - 13,516,463 -
Smith Barney Series Fund Growth & Income Portfolio -
2,389,771 shares at net asset value of $13.73
per share (cost $26,004,627) - - - - - 32,811,552
Smith Barney Series Fund Appreciation Portfolio -
6,254,320 shares at net asset value of $14.39
per share (cost $68,392,401) - - - - - -
Smith Barney Series Fund Total Return Portfolio -
2,214,803 shares at net asset value of $12.74
per share (cost $24,318,824) - - - - - -
Smith Barney Series Fund Emerging Growth Portfolio -
1,198,692 shares at net asset value of $13.76
per share (cost $12,503,109) - - - - - -
Smith Barney Series Fund International Equity Portfolio -
2,762,162 shares at net asset value of $9.98
per share (cost $26,917,412) - - - - - -
IDS Life Capital Resource Fund -
25,054 shares at net asset value of $25.85
per share (cost $600,150) - - - - - -
IDS Life Special Income Fund, Inc -
72,036 shares at net asset value of $12.01
per share (cost $811,253) - - - - - -
IDS Life Managed Fund, Inc. -
54,361 shares at net asset value of $15.67
per share (cost $741,470) - - - - - -
5,231,865 14,555,021 56,123,587 50,466,746 13,516,463 32,811,552
_______________________________________________________________________________________________________________________
Dividends receivable - - - - - -
Accounts receivable from IDS Life for contract
purchase payments - - - - 6,162 -
Accounts receivable from mutual fund portfolios
and the Funds for share redemption 16,657 12,779 33,718 12,039 - 8,587
_______________________________________________________________________________________________________________________
Total assets 5,248,522 14,567,800 56,157,305 50,478,785 13,522,625 32,820,139
_______________________________________________________________________________________________________________________
</TABLE>
<PAGE>
PAGE 46
<TABLE>
<CAPTION>
IDS Life Account SBS
_______________________________________________________________________________
Statements of Net Assets Dec. 31, 1995
____________________Segregated Asset Subaccounts_______
Assets AAP ATR AEG
_______________________________________________________________________________
<S> <C> <C> <C>
Investments in shares of mutual fund
portfolios and the Funds, at market value:
Smith Barney Series Fund Money Market Portfolio -
5,231,878 shares at net asset value of
$1.00 per share (cost $5,231,866) $ - $ - $ -
Smith Barney Series Fund Intermediate High Grade
Portfolio - 1,374,412 shares at net asset value of
$10.59 per share (cost $14,089,860) - - -
Smith Barney Series Fund Diversified Strategic Income
Portfolio - 5,612,359 shares at net asset value
of $10.00 per share (cost $55,112,173) - - -
Smith Barney Series Fund Equity Income Portfolio -
4,086,376 shares at net asset value of $12.35
per share (cost $44,918,764) - - -
Smith Barney Series Fund Equity Index Portfolio -
867,552 shares at net asset value of $15.58
per share (cost $10,215,164) - - -
Smith Barney Series Fund Growth & Income Portfolio -
2,389,771 shares at net asset value of $13.73
per share (cost $26,004,627) - - -
Smith Barney Series Fund Appreciation Portfolio -
6,254,320 shares at net asset value of $14.39
per share (cost $68,392,401) 89,999,658 -
Smith Barney Series Fund Total Return Portfolio -
2,214,803 shares at net asset value of $12.74
per share (cost $24,318,824) - 28,216,590 -
Smith Barney Series Fund Emerging Growth Portfolio -
1,198,692 shares at net asset value of $13.76
per share (cost $12,503,109) - - 16,493,997
Smith Barney Series Fund International Equity Portfolio -
2,762,162 shares at net asset value of $9.98
per share (cost $26,917,412) - - -
IDS Life Capital Resource Fund -
25,054 shares at net asset value of $25.85
per share (cost $600,150) - - -
IDS Life Special Income Fund, Inc -
72,036 shares at net asset value of $12.01
per share (cost $811,253) - - -
IDS Life Managed Fund, Inc. -
54,361 shares at net asset value of $15.67
per share (cost $741,470) - - -
89,999,658 28,216,590 16,493,997
________________________________________________________________________________
Dividends receivable - - -
Accounts receivable from IDS Life for contract
purchase payment - - 6,515
Accounts receivable from mutual fund portfolios
and the Funds for share redemptions 134,676 8,921 1,685
________________________________________________________________________________
Total assets 90,134,334 28,225,511 16,502,197
________________________________________________________________________________
</TABLE>
<PAGE>
PAGE 47
<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 5,399 14,535 55,813 50,127 13,285 32,666
Administrative charge 1,080 2,907 11,163 10,025 2,657 6,533
Contract terminations 16,657 12,779 33,718 12,039 - 8,587
Payable to mutual fund portfolios and the Funds
for investments purchased - - - - 6,162 -
________________________________________________________________________________________________________________________
Total liabilities 23,136 30,221 100,694 72,191 22,104 47,786
________________________________________________________________________________________________________________________
Net assets applicable to contracts in accumulation
period $5,225,386 $14,537,579 $56,056,611 $50,406,594 $13,500,521 $32,772,353
________________________________________________________________________________________________________________________
Accumulation units outstanding 4,821,643 11,659,231 45,719,901 35,868,058 8,551,551 23,036,571
________________________________________________________________________________________________________________________
Net asset value per accumulation unit $1.08 $1.25 $1.23 $1.41 $1.58 $1.42
________________________________________________________________________________________________________________________
See accompanying notes to financial statements.
Liabilities AAP ATR AEG AIE
______________________________________________________________________________________________
Payable to IDS Life for:
Mortality and expense risk fee 89,710 27,862 16,231 27,299
Administrative charge 17,942 5,573 3,246 5,460
Contract terminations 134,676 8,921 1,685 15,841
Payable to mutual fund portfolios and the Funds
for investments purchased - - 6,515 -
______________________________________________________________________________________________
Total liabilities 242,328 42,356 27,677 48,600
______________________________________________________________________________________________
Net assets applicable to contracts in accumulation
period $89,892,006 $28,183,155 $16,474,520 $27,533,505
______________________________________________________________________________________________
Accumulation units outstanding 63,014,889 20,934,365 12,246,999 28,243,415
Net asset value per accumulation unit $1.43 $1.35 $1.35 $0.97
______________________________________________________________________________________________
See accompanying notes to financial statements.
</TABLE>
<PAGE>
PAGE 48
<TABLE>
<CAPTION>
IDS Life Account SBS
______________________________________________________________________________________________________________
Statements of Net Assets Dec. 31, 1995
Combined
__________________Segregated Asset Subaccounts_________ Variable
Assets AIE ACR ASI AMG Account
<S> <C> <C> <C> <C> <C>
Investments in shares of mutual fund
portfolios and the Funds, at market value:
Smith Barney Series Fund Money Market Portfolio -
5,231,878 shares at net asset value of
$1.00 per share (cost $5,231,866) $ -$ - $ - $ - $ 5,231,865
Smith Barney Series Fund Intermediate High Grade
Portfolio - 1,374,412 shares at net asset value of
$10.59 per share (cost $14,089,860) - - - - 14,555,021
Smith Barney Series Fund Diversified Strategic Income
Portfolio - 5,612,359 shares at net asset value
of $10.00 per share (cost $55,112,173) - - - - 56,123,587
Smith Barney Series Fund Equity Income Portfolio -
4,086,376 shares at net asset value of $12.35
per share (cost $44,918,764) - - - - 50,466,746
Smith Barney Series Fund Equity Index Portfolio -
867,552 shares at net asset value of $15.58
per share (cost $10,215,164) - - - - 13,516,463
Smith Barney Series Fund Growth & Income Portfolio -
2,389,771 shares at net asset value of $13.73
per share (cost $26,004,627) - - - - 32,811,552
Smith Barney Series Fund Appreciation Portfolio -
6,254,320 shares at net asset value of $14.39
per share (cost $68,392,401) - - - - 89,999,658
Smith Barney Series Fund Total Return Portfolio -
2,214,803 shares at net asset value of $12.74
per share (cost $24,318,824) - - - - 28,216,590
Smith Barney Series Fund Emerging Growth Portfolio -
1,198,692 shares at net asset value of $13.76
per share (cost $12,503,109) - - - - 16,493,997
Smith Barney Series Fund International Equity Portfolio -
2,762,162 shares at net asset value of $9.98
per share (cost $26,917,412) 27,566,264 - - - 27,566,264
IDS Life Capital Resource Fund -
25,054 shares at net asset value of $25.85
per share (cost $600,150) - 647,662 - - 647,662
IDS Life Special Income Fund, Inc -
72,036 shares at net asset value of $12.01
per share (cost $811,253) - - 865,400 - 865,400
IDS Life Managed Fund, Inc. -
54,361 shares at net asset value of $15.67
per share (cost $741,470) - - - 852,004 852,004
27,566,264 647,662 865,400 852,004 337,346,809
Dividends receivable - - 4,751 - 4,751
Accounts receivable from IDS Life for contract
purchase payments - - - - 12,677
Accounts receivable from mutual fund portfolios
and the Funds for share redemptions 15,841 4,043 - 250 249,196
Total assets 27,582,105 651,705 870,151 852,254 337,613,433
</TABLE>
<PAGE>
PAGE 49
<TABLE>
<CAPTION>
Dec. 31, 1995
Combined
Liabilities ____Segregated Asset Subaccounts___ Variable
ACR ASI AMG Account
_______________________________________________________________________________________________
<S> <C> <C> <C> <C>
Payable to IDS Life for:
Mortality and expense risk fee 660 823 838 335,248
Administrative charge 132 164 168 67,050
Contract terminations 4,043 - 250 249,196
Payable to mutual fund portfolios and the Funds
for investments purchased - 3,764 - 16,441
_______________________________________________________________________________________________
Total liabilities 4,835 4,751 1,256 667,935
_______________________________________________________________________________________________
Net assets applicable to contracts in accumulation
period $646,870 $865,400 $850,998 $336,945,498
_______________________________________________________________________________________________
Accumulation units outstanding 518,671 722,212 716,245
__________________________________________________________________________________
Net asset value per accumulation unit $1.25 $1.20 $1.19
__________________________________________________________________________________
See accompanying notes to financial statements.
</TABLE>
<PAGE>
PAGE 50
<TABLE>
<CAPTION>
IDS Life Account SBS
_________________________________________________________________________________________________________________
Statements of Operations Year ended Dec. 31, 1995
____________________________Segregated Asset Subaccounts___________________________
AMO AIH ADS AEM AEX AGI AAP
_________________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C> <C>
Investment income (loss):
Dividend income from mutual
fund portfolios and the Funds$ 294,718 $ 981,884 $3,436,842 $2,635,942 $ 186,287 $ 655,890 $ 2,685,340
_________________________________________________________________________________________________________________
Expenses:
Mortality and expense risk
fee (Note 3) 71,052 174,928 678,405 584,739 138,378 381,405 1,065,658
Administrative charge (Note 4) 14,210 34,986 135,681 116,948 27,676 76,281 213,132
_________________________________________________________________________________________________________________
Total expenses 85,262 209,914 814,086 701,687 166,054 457,686 1,278,790
_________________________________________________________________________________________________________________
Investment income
(loss) - net 209,456 771,970 2,622,756 1,934,255 20,233 198,204 1,406,550
_________________________________________________________________________________________________________________
Realized and Unrealized Gain (Loss) on Investments - net
_________________________________________________________________________________________________________________
Realized gain (loss) on sales of investments in
mutual fund portfolios and the Funds:
Proceeds from sales 5,806,925 2,146,304 6,794,129 7,318,783 1,777,881 4,658,917 11,411,626
Cost of investments sold 5,806,930 2,155,215 6,953,335 7,362,446 1,494,430 4,064,946 9,467,845
_________________________________________________________________________________________________________________
Net realized gain (loss)
on investments (5) (8,911) (159,206) (43,663) 283,451 593,971 1,943,781
Net change in unrealized
appreciation or depreciation
of investments 5 1,295,411 4,778,047 10,528,484 2,822,574 6,816,514 16,644,379
_________________________________________________________________________________________________________________
Net gain on investments - 1,286,500 4,618,841 10,484,821 3,106,025 7,410,485 18,588,160
_________________________________________________________________________________________________________________
Net increase in net assets
resulting from operations $ 209,456 $2,058,470 $7,241,597 $12,419,076 $3,126,258 $7,608,689 $19,994,710
_________________________________________________________________________________________________________________
See accompanying notes to financial statements.
</TABLE>
<PAGE>
PAGE 51
<TABLE>
<CAPTION>
IDS Life Account SBS
________________________________________________________________________________________________________
Statements of Operations Year ended Dec. 31, 1995
Combined
______________Segregated Asset Subaccounts__________________ Variable
ATR AEG AIE ACR ASI AMG Account
________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C> <C>
Investment income (loss):
Dividend income from mutual
fund portfolios and
the Funds $1,378,084 $ - $ 104,320 $ 74,016 $37,943 $ 18,784 $12,490,050
________________________________________________________________________________________________________
Expenses:
Mortality and expense
risk fee (Note 3) 319,803 169,943 335,437 8,589 6,012 8,341 3,942,690
Administrative charge
(Note 4) 63,961 33,989 67,087 1,718 1,202 1,668 788,539
________________________________________________________________________________________________________
Total expenses 383,764 203,932 402,524 10,307 7,214 10,009 4,731,229
________________________________________________________________________________________________________
Investment income
(loss) - net 994,320 (203,932) (298,204) 63,709 30,729 8,775 7,758,821
________________________________________________________________________________________________________
Realized and Unrealized Gain (Loss) on Investments - net
_________________________________________________________________________________________________________
Realized gain (loss) on sales
of investments in mutual
fund portfolios and the Funds:
Proceeds from sales 2,862,293 1,656,626 4,254,659 394,213 21,338 69,136 49,172,830
Cost of investments sold 2,563,682 1,445,222 4,382,750 359,899 20,244 64,422 46,141,366
________________________________________________________________________________________________________
Net realized gain (loss)
on investments 298,611 211,404 (128,091) 34,314 1,094 4,714 3,031,464
Net change in unrealized
appreciation or depreciation
of investments 3,877,088 4,539,315 2,266,033 53,984 56,792 116,965 53,795,591
_________________________________________________________________________________________________________
Net gain on investments 4,175,699 4,750,719 2,137,942 88,298 57,886 121,679 56,827,055
_________________________________________________________________________________________________________
Net increase in net assets
resulting from operations $5,170,019 $4,546,787 $1,839,738 $152,007 $88,615 $130,454 $64,585,876
_________________________________________________________________________________________________________
See accompanying notes to financial statements.
</TABLE>
<PAGE>
PAGE 52
<TABLE>
<CAPTION>
IDS Life Account SBS
___________________________________________________________________________________________________________________________
Statements of Changes in Net Assets Year ended Dec. 31, 1995
____________________________________Segregated Asset Subaccounts______________________________________
Operations AMO AIH ADS AEM AEX AGI
____________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C>
Investment income (loss) - net $ 209,456 $ 771,970 $ 2,622,756 $ 1,934,255 $ 20,233 $ 198,204
Net realized gain (loss) on investments (5) (8,911) (159,206) (43,663) 283,451 593,971
Net change in unrealized appreciation
or depreciation of investments 5 1,295,411 4,778,047 10,528,484 2,822,574 6,816,514
____________________________________________________________________________________________________________________________
Net increase in net assets resulting
from operations 209,456 2,058,470 7,241,597 12,419,076 3,126,258 7,608,689
____________________________________________________________________________________________________________________________
Contract Transactions
____________________________________________________________________________________________________________________________
Variable annuity contract purchase payments 217,680 322,885 319,704 243,226 341,729 214,357
Net transfers* (485,240) 772,678 186,043 (683,735) 1,992,082 77,327
Surrender benefits and contract charges (1,104,891) (879,625) (3,375,238) (3,566,457) (803,543) (2,444,670)
Death benefits (190,053) (274,093) (579,372) (600,168) (66,049) (435,005)
____________________________________________________________________________________________________________________________
Increase (decrease) from
contract transactions (1,562,504) (58,155) (3,448,863) (4,607,134) 1,464,219 (2,587,991)
____________________________________________________________________________________________________________________________
Net assets at beginning of year 6,578,434 12,537,264 52,263,877 42,594,652 8,910,044 27,751,655
____________________________________________________________________________________________________________________________
Net assets at end of year $ 5,225,386 $14,537,579 $56,056,611 $50,406,594 $13,500,521 $32,772,353
____________________________________________________________________________________________________________________________
Accumulation Unit Activity
____________________________________________________________________________________________________________________________
Units outstanding at beginning of year 6,298,015 11,654,538 48,739,883 39,594,399 7,551,590 25,101,785
Contract purchase payments 206,731 290,180 276,598 205,092 255,791 169,357
Net transfers* (471,891) 708,366 153,395 (544,881) 1,376,042 26,612
Surrender benefits and contract charges (1,032,709) (754,851) (2,938,873) (2,898,070) (585,479) (1,923,434)
Death benefits (178,503) (239,002) (511,102) (488,482) (46,393) (337,749)
____________________________________________________________________________________________________________________________
Units outstanding at end of year 4,821,643 11,659,231 45,719,901 35,868,058 8,551,551 23,036,571
____________________________________________________________________________________________________________________________
*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
__________________Segregated Asset Subaccounts____________
Operations AAP ATR AEG AIE
________________________________________________________________________________________________
<S> <C> <C> <C> <C>
Investment income (loss) - net $ 1,406,550 $ 994,320 $ (203,932) $ (298,204)
Net realized gain (loss) on investments 1,943,781 298,611 211,404 (128,091)
Net change in unrealized appreciation
or depreciation of investments 16,644,379 3,877,088 4,539,315 2,266,033
________________________________________________________________________________________________
Net increase in net assets resulting
from operations 19,994,710 5,170,019 4,546,787 1,839,738
________________________________________________________________________________________________
Contract Transactions
________________________________________________________________________________________________
Variable annuity contract purchase payments 792,050 443,940 112,616 428,544
Net transfers* 284,101 4,239,331 1,834,956 1,016,372
Surrender benefits and contract charges (7,642,199) (2,124,340) (794,861) (2,143,581)
Death benefits (980,264) (246,727) (79,462) (299,595)
________________________________________________________________________________________________
Increase (decrease) from
contract transactions (7,546,312) 2,312,204 1,073,249 (998,260)
________________________________________________________________________________________________
Net assets at beginning of year 77,443,608 20,700,932 10,854,484 26,692,027
________________________________________________________________________________________________
Net assets at end of year $89,892,006 $28,183,155 $16,474,520 $27,533,505
________________________________________________________________________________________________
Accumulation Unit Activity
________________________________________________________________________________________________
Units outstanding at beginning of year 68,920,135 18,917,974 11,352,545 29,352,810
Contract purchase payments 619,900 364,886 98,468 458,847
Net transfers* 161,806 3,534,093 1,566,936 1,041,615
Surrender benefits and contract charges (5,933,172) (1,691,001) (706,192) (2,295,789)
Death benefits (753,780) (191,587) (64,758) (314,068)
________________________________________________________________________________________________
Units outstanding at end of year 63,014,889 20,934,365 12,246,999 28,243,415
________________________________________________________________________________________________
*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, 1995
Combined
__Segregated Asset Subaccounts__ Variable
Operations ACR ASI AMG Account
_____________________________________________________________________
<S> <C> <C> <C> <C>
Investment income
(loss) - net $ 63,709 $ 30,729 $ 8,775 $ 7,758,821
Net realized gain
(loss) on investments 34,314 1,094 4,714 3,031,464
Net change in unrealized
appreciation or
depreciation of
investments 53,984 56,792 116,965 53,795,591
_____________________________________________________________________
Net increase
in net assets resulting
from operations 152,007 88,615 130,454 64,585,876
_____________________________________________________________________
Contract Transactions
_____________________________________________________________________
Variable annuity contract
purchase payments 15,627 1,481 151,237 3,605,076
Net transfers* 261,486 434,031 352,700 10,282,132
Surrender benefits and
contract charges (326,447) (7,803) (72,692) (25,286,347)
Death benefits (10,454) - - (3,761,242)
_____________________________________________________________________
Increase (decrease) from
contract transactions (59,788) 427,709 431,245 (15,160,381)
_____________________________________________________________________
Net assets at beginning
of year 554,651 349,076 289,299 287,520,003
_____________________________________________________________________
Net assets at end
of year $ 646,870 $865,400 $850,998 $336,945,498
_____________________________________________________________________
Accumulation Unit Activity
_____________________________________________________________________
Units outstanding at
beginning of year 560,252 351,059 297,773
Contract purchase
payments 14,923 1,325 150,106
Net transfers* 244,044 376,773 334,142
Surrender benefits
and contract charges (291,008) (6,945) (65,776)
Death benefits (9,540) - -
_____________________________________________________________________
Units outstanding at
end of year 518,671 722,212 716,245
_____________________________________________________________________
*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
<TABLE>
<CAPTION>
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
_____________________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C> <C>
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 transctions 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.
</TABLE>
<PAGE>
PAGE 56
<TABLE>
<CAPTION>
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
________________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C> <C>
Investment income
(loss) - net $ 190,912 $ (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 57
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 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 of IDS Life. 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 under the 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 58
___________________________________________________________________
1. Organization (continued)
IDS Life serves as investment manager and distributor for the
Variable Account and for the Funds. American Express Financial
Corporation serves as investment advisor to the Funds. Smith
Barney Inc. serves as distributor for the mutual 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, the Appreciation
Portfolio, the Total Return Portfolio and the International Equity
Portfolio. Travelers Investment Management Company serves as
investment adviser to the Equity Index Portfolio. Van Kampen
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. PHC
Bank, National Association serves as custodian for the Portfolios.
American Express Trust Company serves as custodian and Morgan
Stanley Trust Company serves as subcustodian for 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 or
fund. 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 or the Funds are
reinvested, net of any expense payable to IDS Life, in additional
shares of the Portfolios or the Funds 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' or the Funds' 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.
<PAGE>
PAGE 59
___________________________________________________________________
3. Mortality and Expense Risk Fee
IDS Life makes guarantees to the Variable Account that possible
future adverse changes in administrative expenses and mortality
experience of the annuitants will not affect the Variable Account.
The mortality and expense risk fee paid to IDS Life is deducted
daily and is equal, on an annual basis, to 1.25 percent of the
daily net asset value of each subaccount.
___________________________________________________________________
4. Variable Account Administrative Charge
IDS Life deducts a daily charge equal, on an annual basis, to 0.25
percent of the daily net asset value of each subaccount. It covers
certain administrative and operating expenses of the subaccounts
incurred by IDS Life such as accounting, legal and data processing
fees and expenses involved in the preparation and distribution of
reports and prospectuses.
___________________________________________________________________
5. Contract Administrative Charge
IDS Life deducts an administrative charge of $30 per year on each
certificate anniversary. This charge reimburses IDS Life for
expenses incurred in establishing and maintaining the Annuity
records. This charge cannot be increased and does not apply after a
retirement payment plan begins. IDS Life does not expect to profit
from this charge.
___________________________________________________________________
6. Surrender Charge
IDS Life will use a surrender charge to help it recover certain
expenses relating to the sale of the Annuity. The surrender charge
will be deducted for surrenders during the first six payment years
following a purchase payment. Charges by IDS Life for surrenders
are not available on an individual segregated asset account basis.
Charges for all segregated asset accounts amount to $10,125,762 in
1995, $6,969,493 in 1994 and $4,408,562 in 1993. Such charges are
not an expense of the subaccounts or Variable Account. They are
deducted from contract surrender benefits paid by IDS Life.
<PAGE>
PAGE 60
___________________________________________________________________
7. Investment Transactions
The subaccounts' purchases of Portfolio or Fund shares (net of
charges), including reinvestment of dividend distributions, were as
follows:
<TABLE>
<CAPTION>
Year ended Dec. 31,
Subaccount Investment 1995 1994
<S> <C> <C> <C>
AMO Money Market Portfolio $ 4,451,970 $ 9,734,072
AIH Intermediate High Grade Portfolio 2,861,990 6,319,288
ADS Diversified Strategic Income Portfolio 5,970,004 21,434,100
AEM Equity Income Portfolio 4,653,438 5,775,001
AEX Equity Index Portfolio 3,267,306 2,590,607
AGI Growth & Income Portfolio 2,274,039 7,777,485
AAP Appreciation Portfolio 5,283,718 11,054,212
ATR Total Return Portfolio 6,176,948 19,166,050
AEG Emerging Growth Portfolio 2,532,212 10,536,398
AIE International Equity Portfolio 2,958,219 24,358,896
*ACR Capital Resource Fund 398,665 610,696
*ASI Special Income Fund 479,832 351,750
*AMG Managed Fund 509,847 296,045
$41,818,188 $120,004,600
____________________________________________________________________________________
*Commenced operations on Oct. 3, 1994.
</TABLE>
<PAGE>
PAGE 61
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, 1995, and the related statements of operations for the
year then ended and the statements of changes in net assets for
each of the two years in the period then ended, except for the ACR,
ASI and AMG subaccounts which are for the period October 3, 1994
(commencement of operations) to December 31, 1995. 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 of securities owned at December 31, 1995
with the affiliated mutual fund manager and the portfolio
administrator. 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, 1995 and the individual and combined
results of their operations and the changes in their net assets for
the periods described above, in conformity with generally accepted
accounting principles.
ERNST & YOUNG LLP
Minneapolis, Minnesota
March 15, 1996
<PAGE>
PAGE 62
IDS Life Financial Information
The financial statements shown below are those of the insurance
company and not those of any other entity. 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 its variable contracts.
<TABLE>
<CAPTION>
IDS LIFE INSURANCE COMPANY
CONSOLIDATED BALANCE SHEETS
Dec. 31, Dec. 31,
ASSETS 1995 1994
(thousands)
<S> <C> <C>
Investments:
Fixed maturities:
Held to maturity, at amortized cost (Fair value:
1995, $11,878,377; 1994 $10,694,800) $11,257,591 $11,269,861
Available for sale, at fair value (Amortized cost:
1995, $10,146,136; 1994 $8,459,128) 10,516,212 8,017,555
Mortgage loans on real estate
(Fair value: 1995, $3,184,666; 1994, $2,342,520) 2,945,495 2,400,514
Policy loans 424,019 381,912
Other investments 146,894 51,795
Total investments 25,290,211 22,121,637
Cash and cash equivalents 72,147 267,774
Receivables:
Reinsurance 114,387 80,304
Amounts due from brokers - 7,933
Other accounts receivable 33,667 49,745
Premiums due 5,441 1,594
Total receivables 153,495 139,576
Accrued investment income 348,008 317,510
Deferred policy acquisition costs 2,025,725 1,865,324
Deferred income taxes - 124,061
Other assets 36,410 30,426
Separate account assets 14,974,082 10,881,235
Total assets $42,900,078 $35,747,543
========== ==========
<PAGE>
PAGE 63
IDS LIFE INSURANCE COMPANY
CONSOLIDATED BALANCE SHEETS (continued)
Dec. 31, Dec. 31,
LIABILITIES AND STOCKHOLDER'S EQUITY 1995 1994
(thousands)
Liabilities:
Fixed annuities--future policy benefits $21,404,836 $19,361,979
Universal life-type insurance--future policy benefits 3,076,847 2,896,100
Traditional life insurance--future policy benefits 209,249 206,754
Disability income, health and long-term care
insurance--future policy benefits 327,157 244,077
Policy claims and other policyholders' funds 56,323 50,068
Deferred income taxes 112,904 -
Amounts due to brokers 121,618 226,737
Other liabilities 285,354 291,902
Separate account liabilities 14,974,082 10,881,235
Total liabilities 40,568,370 34,158,852
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 278,814 222,000
Net unrealized gain (loss) on investments 230,129 (275,708)
Retained earnings 1,819,765 1,639,399
Total stockholder's equity 2,331,708 1,588,691
Total liabilities and stockholder's equity $42,900,078 $35,747,543
========== ==========
Commitments and contingencies (Note 6)
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
PAGE 64
<TABLE>
<CAPTION>
IDS LIFE INSURANCE COMPANY
CONSOLIDATED STATEMENTS OF INCOME
Years ended Dec. 31,
1995 1994 1993
(thousands)
<S> <C> <C> <C>
Revenues:
Premiums:
Traditional life insurance $ 50,193 $ 48,184 $ 48,137
Disability income and long-term care insurance 111,337 96,456 79,108
Total premiums 161,530 144,640 127,245
Policyholder and contractholder charges 256,454 219,936 184,205
Management and other fees 215,581 164,169 120,139
Net investment income 1,907,309 1,781,873 1,783,219
Net realized loss on investments (4,898) (4,282) (6,737)
Total revenues 2,535,976 2,306,336 2,208,071
Benefits and expenses:
Death and other benefits - Traditional life
insurance 29,528 28,263 32,136
Death and other benefits - Universal life-type
insurance and investment contracts 71,691 52,027 49,692
Death and other benefits - Disability income,
health and long-term care insurance 16,259 13,393 13,148
Increase (decrease) in liabilities for future
policy benefits:
Traditional life insurance (1,315) (3,229) (4,513)
Disability income, health and
long-term care insurance 51,279 37,912 32,528
Interest credited on universal life-type
insurance and investment contracts 1,315,989 1,174,985 1,218,647
Amortization of deferred policy acquisition costs 280,121 280,372 211,733
Other insurance and operating expenses 211,642 210,101 241,974
Total benefits and expenses 1,975,194 1,793,824 1,795,345
Income before income taxes 560,782 512,512 412,726
Income taxes 195,842 176,343 142,647
Net income $ 364,940 $ 336,169 $ 270,079
========= ========= =========
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
PAGE 65
<TABLE>
<CAPTION>
IDS LIFE INSURANCE COMPANY
CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY
Three years ended December 31, 1995 (thousands)
Additional Net Unrealized
Capital Paid-In Gain (Loss) on Retained
Stock Capital Investments Earnings Total
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1992 $3,000 $ 22,000 $ 214 $1,223,151 $1,248,365
Net income 270,079 270,079
Change in net unrealized
gain (loss) on investments - - (100) - (100)
Capital contribution from parent - 200,000 - - 200,000
Cash dividends - - - (25,000) (25,000)
Balance, December 31, 1993 3,000 222,000 114 1,468,230 1,693,344
Net income - - - 336,169 336,169
Change in net unrealized
gain (loss) on investments - - (275,822) - (275,822)
Cash dividends - - - (165,000) (165,000)
Balance, December 31, 1994 3,000 222,000 (275,708) 1,639,399 1,588,691
Net income - - - 364,940 364,940
Change in net unrealized
gain (loss) on investments - - 505,837 - 505,837
Capital contribution from parent - 56,814 - - 56,814
Loss on reinsurance transaction
with affiliate - - - (4,574) (4,574)
Cash dividends - - - (180,000) (180,000)
Balance, December 31, 1995 $3,000 $278,814 $230,129 $1,819,765 $2,331,708
====== ======== ======== ========== ==========
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
PAGE 66
<TABLE>
<CAPTION>
IDS LIFE INSURANCE COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years ended Dec. 31,
1995 1994 1993
(thousands)
<S> <C> <C> <C>
Cash flows from operating activities:
Net income $ 364,940 $ 336,169 $ 270,079
Adjustments to reconcile net income to
net cash provided by operating activities:
Policy loan issuances, excluding universal
life-type insurance: (46,011) (37,110) (35,886)
Policy loan repayments, excluding universal
life-type insurance 36,416 33,384 29,557
Change in reinsurance receivable (34,083) (25,006) (55,298)
Change in other accounts receivable 16,078 (28,286) (1,364)
Change in accrued investment income (30,498) (10,333) (22,057)
Change in deferred policy acquisition costs, net (196,963) (192,768) (211,509)
Change in liabilities for future policy
benefits for traditional life, disability income,
health and long-term care insurance 85,575 55,354 79,695
Change in policy claims and other policyholders' funds 6,255 5,552 (5,383)
Change in deferred income taxes (33,810) (19,176) (44,237)
Change in other liabilities (6,548) (122) 56,515
Amortization of premium (accretion
of discount), net (22,528) 30,921 (27,438)
Net loss on investments 4,898 4,282 6,737
Premiums related to universal life--type insurance 465,631 409,035 397,883
Surrenders and death benefits related to
universal life--type insurance (306,600) (290,427) (255,133)
Interest credited to account balances related
to universal life--type insurance 162,222 150,955 156,885
Policyholder and contractholder charges, non-cash (140,506) (126,918) (115,140)
Other, net 2 (8,974) (1,907)
Net cash provided by operating activities $ 324,470 $ 286,532 $ 221,999
<PAGE>
PAGE 67
IDS LIFE INSURANCE COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
Years ended Dec. 31,
1995 1994 1993
(thousands)
Cash flows from investing activities:
Fixed maturities held to maturity:
Purchases $(1,007,208) $ (879,740) $ -
Maturities, sinking fund payments and calls 538,219 1,651,762 -
Sales 332,154 58,001 -
Fixed maturities available for sale:
Purchases (2,452,181) (2,763,278) -
Maturities, sinking fund payments and calls 861,545 1,234,401 -
Sales 136,825 374,564 -
Fixed maturities:
Purchases - - (6,548,852)
Maturities, sinking fund payments and calls - - 3,934,055
Sales - - 487,983
Other investments, excluding policy loans:
Purchases (823,131) (634,807) (553,694)
Sales 160,521 243,862 123,352
Change in amounts due from brokers 7,933 (2,214) 14,483
Change in amounts due to brokers (105,119) (124,749) 92,832
Net cash used in investing activities (2,350,442) (842,198) (2,449,841)
Cash flows from financing activities:
Activity related to investment contracts:
Considerations received 3,723,894 3,157,778 2,843,668
Surrenders and death benefits (2,834,804) (3,311,965) (1,765,869)
Interest credited to account balances 1,153,767 1,024,031 1,071,917
Policy loans issuances, universal
life-type insurance (84,700) (78,239) (70,304)
Policy loan repayments, universal
life-type insurance 52,188 50,554 46,148
Capital contribution from parent - - 200,000
Cash dividend to parent (180,000) (165,000) (25,000)
Net cash provided by financing activities 1,830,345 677,159 2,300,560
Net (decrease) increase in cash and
cash equivalents (195,627) 121,493 72,718
Cash and cash equivalents at
beginning of year 267,774 146,281 73,563
Cash and cash equivalents at
end of year $ 72,147 $ 267,774 $ 146,281
========== ========== ==========
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
PAGE 68
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 a stock life insurance
company organized under the laws of the State of Minnesota. The
Company is a wholly owned subsidiary of American Express Financial
Corporation, which is a wholly owned subsidiary of American Express
Company. The Company serves residents of all states except New
York. IDS Life Insurance Company of New York is a wholly owned
subsidiary of the Company and serves New York State residents. The
Company also wholly owns American Enterprise Life Insurance
Company, American Centurion Life Assurance Company (ACLAC), and
American Partners Life Insurance Company.
The Company's principal products are deferred annuities and
universal life insurance, which are issued primarily to
individuals. It offers single premium and annual premium deferred
annuities on both a fixed and variable dollar basis. Immediate
annuities are offered as well. The Company's insurance products
include universal life (fixed and variable), whole life, single
premium life and term products (including waiver of premium and
accidental death benefits). The Company also markets disability
income and long-term care insurance.
The Company's principal annuity product in terms of amount in force
is the fixed deferred annuity. The annuity contract guarantees a
minimum interest rate during the accumulation period (the time
before annuity payments begin), although the Company normally pays
a higher rate reflective of current market rates. The fixed
annuity provides for a surrender charge during the first seven to
ten years after a purchase payment is made. The Company has also
adopted a practice whereby the higher current rate is guaranteed
for a specified period. The Company also offers a variable annuity
product under the name Flexible Annuity. This is a fixed/variable
annuity offering the purchasers a choice among mutual funds with
portfolios of equities, bonds, managed assets and/or short-term
securities, and the Company's general account, as the underlying
investment vehicles. With respect to funds applied to the variable
portion of the annuity, the purchaser, rather than the Company,
assumes the investment risks and receives the rewards inherent in
the ownership of the underlying investment. The Flexible Annuity
provides for a surrender charge during the first six years after a
purchase payment is made.
The Company's principal insurance product is the flexible-premium,
adjustable-benefit universal life insurance policy. In this type
of insurance policy, each premium payment accumulates interest in
a cash value account. The policyholder has access to the cash
<PAGE>
PAGE 69
1. Summary of significant accounting policies (continued)
surrender value in whole or in part after the first year. The size
of the cash value of the fund can also be controlled by the
policyholder by increasing or decreasing premiums, subject only to
maintaining a required minimum to keep the policy in force.
Monthly deductions from the cash value of the policy are made for
the cost of insurance, expense charges and any policy riders.
Basis of presentation
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, American Centurion Life Assurance 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.
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
Investments
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.
Management determines the appropriate classification of fixed
maturities at the time of purchase and reevaluates the
classification at each balance sheet date.
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, equity securities and real
estate investments. When evidence indicates a decline, which is
other than temporary, in the underlying value or earning power of<PAGE>
PAGE 70
1. Summary of significant accounting policies (continued)
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 Dec. 31 is summarized as follows:
<TABLE>
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
Cash paid during the year for:
Income taxes $191,011 $226,365 $188,204
Interest on borrowings 5,524 1,553 2,661
</TABLE>
Recognition of profits on fixed 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.
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.
<PAGE>
PAGE 71
1. Summary of significant accounting policies (continued)
The retrospective deposit method is used in accounting for
universal life-type insurance. This method recognizes profits over
the lives of the policies in proportion to the estimated gross
profits expected to be realized.
Premiums on traditional life, disability income, health and long-
term care insurance policies are recognized as revenue when
collected or due, and related benefits and expenses are associated
with premium revenue in a manner that results in recognition of
profits over the lives of the insurance policies. This association
is accomplished by means of the provision for future policy
benefits and the deferral and subsequent amortization of policy
acquisition costs.
Deferred policy acquisition costs
The costs of acquiring new business, principally sales
compensation, policy issue costs, underwriting and certain sales
expenses, have been deferred on insurance and annuity contracts.
The deferred acquisition costs for single premium deferred
annuities and installment annuities are amortized based upon
surrender charge revenue and a portion of the excess of investment
income earned from investment of the contract considerations over
the interest credited to contract owners. The costs for universal
life-type insurance are amortized over the lives of the policies as
a percentage of the estimated gross profits expected to be realized
on the policies. For traditional life, disability income, health
and long-term care insurance policies, the costs are amortized over
an appropriate period in proportion to premium revenue.
Liabilities for future policy benefits
Liabilities for universal life-type insurance, single premium
deferred annuities and installment annuities are accumulation
values.
Liabilities for fixed annuities in a benefit status are based on
the Progressive Annuity Table with interest at 5 percent, the 1971
Individual Annuity Table with interest at 7 percent or 8.25
percent, or the 1983a Table with various interest rates ranging
from 5.5 percent to 9.5 percent, depending on year of issue.
Liabilities for future benefits on traditional life insurance have
been computed principally by the net level premium method, based on
anticipated rates of mortality (approximating the 1965-1970 Select
and Ultimate Basic Table for policies issued after 1980 and the
1955-1960 Select and Ultimate Basic Table for policies issued prior
to 1981 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<PAGE>
PAGE 72
1. Summary of significant accounting policies (continued)
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 percent to 6.5 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 persons
disabled in 1980 and prior, 8 percent interest for persons disabled
from 1981 to 1991, 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 percent for claims incurred in 1992 and
6 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 and long-
term care policies 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
to the extent they can be used on the consolidated tax return. It
is the policy of American Express Financial Corporation to
reimburse a subsidiary for any tax benefit.
<PAGE>
PAGE 73
1. Summary of significant accounting policies (continued)
Included in other liabilities at Dec. 31, 1995 is $13,415 payable
to American Express Financial Corporation for federal income taxes.
Included in other receivables at Dec. 31, 1994 is $22,034
receivable from American Express Financial Corporation for federal
income taxes.
Separate account business
The separate 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
separate 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
separate accounts.
The Company makes contractual mortality assurances to the variable
annuity contract owners that the net assets of the separate
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 separate 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.
Accounting changes
The Financial Accounting Standards Board's (FASB) SFAS No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-
Lived Assets to Be Disposed Of," is effective January 1, 1996. The
new rule is not expected to have a material impact on the Company's
results of operations or financial condition.
The Company's adoption of SFAS No. 114 as of January 1, 1995 is
discussed in Note 2.
The Company adopted SFAS No. 115, "Accounting for Certain
Investments in Debt and Equity Securities." The effect of adopting
the new rule 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.
Reclassification
Certain 1994 and 1993 amounts have been reclassified to conform to
the 1995 presentation.<PAGE>
PAGE 74
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, review of market indices,
price levels of current offerings of comparable issues, price
estimates and market data from independent brokers and financial
files.
Net realized gain (loss) on investments for the years ended Dec. 31
is summarized as follows:
1995 1994 1993
Fixed maturities $ 9,973 $(1,575) $ 20,583
Mortgage loans (13,259) (3,013) (25,056)
Other investments (1,612) 306 (2,264)
$ (4,898) $(4,282) $ (6,737)
Changes in net unrealized appreciation (depreciation) of
investments for the years ended Dec. 31 are summarized as follows:
1995 1994 1993
Fixed maturities:
Held to maturity $1,195,847 $(1,329,740) $ --
Available for sale 811,649 (720,449) --
Investment securities -- -- 323,060
Equity securities 3,118 (2,917) (156)
The amortized cost, gross unrealized gains and losses and fair
values of investments in fixed maturities and equity securities at
Dec. 31, 1995 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 $ 64,523 $ 3,919 $ -- $ 68,442
State and municipal obligations 11,936 362 32 12,266
Corporate bonds and obligations 8,921,431 620,327 36,786 9,504,972
Mortgage-backed securities 2,259,701 42,684 9,688 2,292,697
$11,257,591 $667,292 $46,506 $11,878,377
Gross Gross
Amortized Unrealized Unrealized Fair
Available for sale Cost Gains Losses Value
U.S. Government agency
obligations $ 84,082 $ 3,248 $ 50 $ 87,280
State and municipal obligations 11,020 1,476 -- 12,496
Corporate bonds and obligations 2,514,308 186,596 3,451 2,697,453
Mortgage-backed securities 7,536,726 206,288 24,031 7,718,983
Total fixed maturities 10,146,136 397,608 27,532 10,516,212
Equity securities 3,156 361 -- 3,517
$10,149,292 $397,969 $27,532 $10,519,729
</TABLE>
<PAGE>
PAGE 75
2. Investments (continued)
The amortized cost, gross unrealized gains and losses and fair
values of investments in fixed maturities and equity securities at
Dec. 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>
The amortized cost and fair value of investments in fixed
maturities at Dec. 31, 1995 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 $ 268,363 $ 272,808
Due from one to five years 1,692,030 1,783,047
Due from five to ten years 5,467,302 5,833,309
Due in more than ten years 1,570,195 1,696,516
Mortgage-backed securities 2,259,701 2,292,697
$11,257,591 $11,878,377
Amortized Fair
Available for sale Cost Value
Due in one year or less $ 118,996 $ 120,019
Due from one to five years 849,800 913,175
Due from five to ten years 1,301,191 1,397,237
Due in more than ten years 339,423 366,798
Mortgage-backed securities 7,536,726 7,718,983
$10,146,136 $10,516,212
<PAGE>
PAGE 76
2. Investments (continued)
During the year ended Dec. 31, 1995, fixed maturities classified as
held to maturity were sold with proceeds of $332,154 and gross
realized gains and losses on such sales were $14,366 and $15,720,
respectively. The sale of these fixed maturities was due to
significant deterioration in the issuers' creditworthiness. As a
result of adopting the FASB Special Report, "A Guide to
Implementation of Statement 115 on Accounting for Certain
Investments in Debt and Equity Securities," the Company
reclassified securities with a book value of $91,760 and net
unrealized gains of $881 from held to maturity to available for
sale in December 1995.
In addition, fixed maturities available for sale were sold during
1995 with proceeds of $136,825 and gross realized gains and losses
on such sales were $nil and $5,781, respectively.
During the year ended Dec. 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
significant deterioration in the issuers' creditworthiness.
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.
At Dec. 31, 1995, bonds carried at $12,761 were on deposit with
various states as required by law.
Net investment income for the years ended Dec. 31 is summarized as
follows:
<TABLE>
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
Interest on fixed maturities $1,656,136 $1,556,756 $1,589,802
Interest on mortgage loans 232,827 196,521 175,063
Other investment income 35,936 38,366 29,345
Interest on cash equivalents 5,363 6,872 2,137
1,930,262 1,798,515 1,796,347
Less investment expenses 22,953 16,642 13,128
$1,907,309 $1,781,873 $1,783,219
</TABLE>
At Dec. 31, 1995, investments in fixed maturities comprised 86
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 approximately $2.3 billion which are rated by
American Express Financial Corporation internal analysts using <PAGE>
PAGE 77
2. Investments (continued)
criteria similar to Moody's and S&P. A summary of investments in
fixed maturities, at amortized cost, by rating on Dec. 31 is as
follows:
Rating 1995 1994
Aaa/AAA $ 9,907,664 $ 9,708,047
Aaa/AA 3,112 --
Aa/AA 279,403 242,914
Aa/A 154,846 119,952
A/A 3,104,122 2,567,947
A/BBB 871,782 725,755
Baa/BBB 4,417,654 3,849,188
Baa/BB 657,633 796,063
Below investment grade 2,007,511 1,719,123
$21,403,727 $19,728,989
At Dec. 31, 1995, 95 percent of the securities rated Aaa/AAA are
GNMA, FNMA and FHLMC mortgage-backed securities. No holdings of
any other issuer are greater than 1 percent of the Company's total
investments in fixed maturities.
At Dec. 31, 1995, approximately 11.6 percent of the Company's
invested assets were mortgage loans on real estate. Summaries of
mortgage loans by region of the United States and by type of real
estate at Dec. 31, 1995 and 1994 are as follows:
<TABLE>
<CAPTION>
Dec. 31, 1995 Dec. 31, 1994
On Balance Commitments On Balance Commitments
Region Sheet to Purchase Sheet to Purchase
<S> <C> <C> <C> <C>
East North Central $ 720,185 $ 67,206 $ 581,142 $ 62,291
West North Central 303,113 34,411 257,996 7,590
South Atlantic 732,529 111,967 597,896 63,010
Middle Atlantic 508,634 37,079 408,940 34,478
New England 244,816 40,452 209,867 23,087
Pacific 168,272 23,161 138,900 --
West South Central 61,860 27,978 50,854 --
East South Central 58,462 10,122 67,503 --
Mountain 184,964 16,774 122,668 18,750
2,982,835 369,150 2,435,766 209,206
Less allowance
for losses 37,340 -- 35,252 --
$2,945,495 $369,150 $2,400,514 $209,206
<PAGE>
PAGE 78
2. Investments (continued)
Dec. 31, 1995 Dec. 31, 1994
On Balance Commitments On Balance Commitments
Property type Sheet to Purchase Sheet to Purchase
Apartments $1,038,446 $ 84,978 $ 904,012 $ 56,964
Department/retail stores 985,660 134,538 802,522 88,325
Office buildings 464,381 62,664 321,761 21,691
Industrial buildings 255,469 22,721 232,962 18,827
Nursing/retirement homes 80,864 4,378 89,304 4,649
Mixed Use 53,169 -- -- --
Hotels/motels 31,335 48,816 32,666 --
Medical buildings 57,772 2,495 36,490 15,651
Other 15,739 8,560 16,049 3,099
2,982,835 369,150 2,435,766 209,206
Less allowance
for losses 37,340 -- 35,252 --
$2,945,495 $369,150 $2,400,514 $209,206
</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.
As of January 1, 1995, the Company adopted Statement of Financial
Accounting Standards No. 114, "Accounting by Creditors for
Impairment of a Loan" (SFAS No. 114), as amended by Statement of
Financial Accounting Standards No. 118, "Accounting by Creditors
for Impairment of a Loan - Income Recognition and Disclosures".
The adoption of the new rules did not have a material impact on the
Company's results of operations or financial condition.
SFAS No. 114 applies to all loans except for smaller-balance
homogeneous loans, that are collectively evaluated for impairment.
Impairment is measured as the excess of the loan's recorded
investment over its present value of expected principal and
interest payments discounted at the loan's effective interest rate,
or the fair value of collateral. The amount of the impairment is
recorded as a reserve for investment losses.
Based on management's judgment as to the ultimate collectibility of
principal, interest payments received are either recognized as
income or applied to the recorded investment in the loan until it
has been recovered. Once the recorded investment has been
recovered, any additional payments are recognized as interest
income.
<PAGE>
PAGE 79
2. Investments (continued)
The reserve for investment losses is maintained at a level that
management believes is adequate to absorb estimated credit losses
in the portfolio. The level of the reserve account is determined
based on several factors, including historical experience, expected
future principal and interest payments, estimated collateral
values, and current and anticipated economic and political
conditions. Management regularly evaluates the adequacy of the
reserve for investment losses.
At Dec. 31, 1995, the Company's recorded investment in impaired
loans was $83,874 with a reserve of $19,307. During the year, the
average recorded investment in impaired loans was $74,567.
The Company recognized $5,014 of interest income related to
impaired loans for the year ended Dec. 31, 1995.
The following table presents changes in the reserve for investment
losses related to all loans:
1995
Balance, January 1 $35,252
Provision for investment losses 15,900
Sales of related loans (6,600)
Loan payoffs (5,300)
Other (1,912)
Balance, Dec. 31 $37,340
At Dec. 31, 1995, the Company had commitments to purchase real
estate investments for $54,897. Commitments to purchase real
estate investments are made in the ordinary course of
business. The fair value of these commitments is $nil.
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:
1995 1994 1993
Federal income taxes:
Current $218,040 $186,508 $180,558
Deferred (33,810) (19,175) (44,237)
184,230 167,333 136,321
State income taxes-current 11,612 9,010 6,326
Income tax expense $195,842 $176,343 $142,647<PAGE>
PAGE 80
3. Income taxes (continued)
Increases (decreases) to the federal tax provision applicable to
pretax income based on the statutory rate are attributable to:
<TABLE>
<CAPTION>
1995 1994 1993
Provision Rate Provision Rate Provision Rate
<S> <C> <C> <C> <C> <C> <C>
Federal income
taxes based on
the statutory rate $196,274 35.0% $179,379 35.0% $144,454 35.0%
Increases (decreases)
are attributable to:
Tax-excluded interest
and dividend income (8,524) (1.5) (9,939) (2.0) (11,002) (2.7)
Other, net (3,520) (0.6) (2,107) (0.4) 2,869 0.7
Federal income taxes $184,230 32.9% $167,333 32.6% $136,321 33.0%
</TABLE>
A portion of life insurance company income earned prior to 1984 was
not subject to current taxation but was accumulated, for tax
purposes, in a policyholders' surplus account. At Dec. 31, 1995,
the Company had a policyholders' surplus account balance of
$20,114. The policyholder's surplus account balance increased in
1995 due to the acquisition of ACLAC. 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 $7,040 have not been established because
no distributions of such amounts are contemplated.
Significant components of the Company's deferred tax assets and
liabilities as of Dec. 31 are as follows:
1995 1994
Deferred tax assets:
Policy reserves $ 600,176 $533,433
Investments -- 116,736
Life insurance guarantee
fund assessment reserve 26,785 32,235
Total deferred tax assets 626,961 682,404
Deferred tax liabilities:
Derred policy acquisition costs 590,762 553,722
Investments 146,805 --
Other 2,298 4,621
Total deferred tax
liabilities 739,865 558,343
Net deferred tax assets
(liabilities) $(112,904) $124,061
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.<PAGE>
PAGE 81
4. Stockholder's equity
During 1995, the Company received a $39,700 capital contribution
from its parent, American Express Financial Corporation, in the
form of investments in fixed maturities and mortgage loans. In
addition, effective January 1, 1995, the Company began
consolidating the financial results of ACLAC. This change
reflected the transfer of ownership of ACLAC from Amex Life
Assurance Company (Amex Life), a former affiliate, to the Company
prior to the sale of Amex Life to an unaffiliated third party on
October 2, 1995. This transfer of ownership to the Company has
been reflected as a capital contribution of $17,114 in the
accompanying financial statements. The effect of this change in
reporting entity was not significant and prior periods have not
been restated.
As discussed in Note 5, the Company entered into a reinsurance
agreement with Amex Life during 1995. As a result of this
transaction, a loss of $4,574 was realized and reported as a
direct charge to retained earnings.
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 $1,103,993 as of Dec. 31, 1995 and $1,020,981 as of Dec.
31, 1994 (see Note 3 with respect to the income tax effect of
certain distributions). In addition, any dividend distributions in
1996 in excess of approximately $290,988 would require approval of
the Department of Commerce of the State of Minnesota.
Statutory net income for the years ended Dec. 31 and capital and
surplus as of Dec. 31 are summarized as follows:
1995 1994 1993
Statutory net income $ 326,799 $ 294,699 $ 275,015
Statutory capital and surplus 1,398,649 1,261,958 1,157,022
Dividends paid to American Express Financial Corporation were
$180,000 in 1995, $165,000 in 1994, and $25,000 in 1993.
5. Related party transactions
The Company has loaned funds to American Express Financial
Corporation under two loan agreements. The balance of the first
loan was $25,800 and $40,000 at Dec. 31, 1995 and 1994,
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 $122,978 at Dec. 31,
1995. The second loan was used to fund the construction of the IDS
Operations Center. This loan was paid off during 1994. The loan <PAGE>
PAGE 82
5. Related party transactions (continued)
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 American Express
Financial Corporation during 1994. 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
$1,371, $2,894 and $11,116 in 1995, 1994 and 1993, respectively.
The Company purchased a five year secured note from an affiliated
company which had an outstanding balance of $19,444 and $23,333 at
Dec. 31, 1995 and 1994, respectively. The note bears a fixed rate
of 8.42 percent. Interest income on the above note totaled $1,937,
$2,278 and $2,605 in 1995, 1994 and 1993, respectively.
The Company has a reinsurance agreement whereby it assumed 100
percent of a block of single premium life insurance business from
Amex Life. The accompanying consolidated balance sheets at Dec.
31, 1995 and 1994 include $764,663 and $765,366, respectively, of
future policy benefits related to this agreement.
The Company has a reinsurance agreement to cede 50 percent of its
long-term care insurance business to Amex Life. The accompanying
consolidated balance sheets at Dec. 31, 1995 and 1994 include
$95,484 and $65,123, respectively, of reinsurance receivables
related to this agreement. Premiums ceded amounted to $25,553,
$20,360 and $16,230 and reinsurance recovered from reinsurers
amounted to $760, $62 and $404 for the years ended Dec. 31, 1995,
1994 and 1993, respectively.
The Company has a reinsurance agreement to assume deferred annuity
contracts from Amex Life. At October 1, 1995 a $803,618 block of
deferred annuities and $28,327 of deferred policy acquisition costs
were transferred to the Company. The accompanying consolidated
balance sheet at Dec. 31, 1995 includes $828,298 of future policy
benefits related to this agreement.
Until July 1, 1995 the Company participated in the IDS Retirement
Plan of American Express Financial Corporation which covered all
permanent employees age 21 and over who had met certain employment
requirements. Effective July 1, 1995, the IDS Retirement Plan was
merged with American Express Company's American Express Retirement
Plan, which simultaneously was amended to include a cash balance
formula and a lump sum distribution option. Employer contributions
to the plan are based on participants' age, years of service
and total compensation for the year. Funding of retirement costs
for this plan complies with the applicable minimum funding
requirements specified by ERISA. The Company's share of the total
net periodic pension cost was $nil in 1995, 1994 and 1993.
<PAGE>
PAGE 83
5. Related party transactions (continued)
The Company also participates in defined contribution pension plans
of American Express Company 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 1995, 1994 and 1993 were $815, $957 and $2,008, 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 Dec. 31, 1995 and 1994, the total
accumulated post retirement benefit obligation 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
$377,139, $335,183, and $243,346 for 1995, 1994 and 1993,
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.
6. Commitments and contingencies
At Dec. 31, 1995 and 1994, traditional life insurance and universal
life-type insurance in force aggregated $59,683,532 and
$52,666,567, respectively, of which $3,771,204 and $3,246,608
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 $29,146, $29,489 and $28,276 and reinsurance recovered
from reinsurers amounted to $5,756, $5,505, and $3,345 for the
years ended Dec. 31, 1995, 1994 and 1993.
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 Company counsel, will result in a material
liability.
The IRS has completed its audit of the Company's 1987 through 1989
tax years. The Company is currently contesting one issue at the
IRS Appeals Level. Management does not believe there will be a
material impact as a result of this audit.<PAGE>
PAGE 84
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 at Dec. 31, 1995 and 1994, 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.
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.<PAGE>
PAGE 85
8. Derivative financial instruments (continued)
<TABLE>
<CAPTION>
Notional Carrying Fair Total Credit
Dec. 31, 1995 Amount Value Value Exposure
<S> <C> <C> <C> <C>
Assets:
Interest rate caps $5,100,000 $26,680 $ 8,366 $ 8,366
Dec. 31, 1994
Assets:
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 expired in 1995. The interest rate caps expire
on various dates from 1996 to 2000.
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 rates earned on investments and the interest rates
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 discloses fair value information for most on- and
off-balance sheet financial instruments for which it is practical
to estimate that value. Fair values of life insurance obligations,
receivables and all non-financial instruments, such as deferred
acquisition costs are excluded. 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 86
9. Fair values of financial instruments (continued)
<TABLE>
<CAPTION>
1995 1994
Carrying Fair Carrying Fair
Financial Assets Value Value Value Value
<S> <C> <C> <C> <C>
Investments:
Fixed maturities (Note 2):
Held to maturity $11,257,591 $11,878,377 $11,269,861 $10,694,800
Available for sale 10,516,212 10,516,212 8,017,555 8,017,555
Mortgage loans on
real estate (Note 2) 2,945,495 3,184,666 2,400,514 2,342,520
Other:
Equity securities (Note 2) 3,517 3,517 1,906 1,906
Derivative financial
instruments (Note 8) 26,680 8,366 31,126 44,437
Other 52,182 52,182 -- --
Cash and cash
equivalents (Note 1) 72,147 72,147 267,774 267,774
Separate account assets
(Note 1) 14,974,082 14,974,082 10,881,235 10,881,235
Financial Liabilities
Future policy benefits
for fixed annuities 20,259,265 19,603,114 18,325,870 17,651,897
Separate account
liabilities 14,208,619 13,665,636 10,398,861 9,943,672
</TABLE>
At Dec. 31, 1995 and 1994, the carrying amount and fair value of
future policy benefits for fixed annuities exclude life
insurance-related contracts carried at $1,070,598 and $971,897,
respectively, and policy loans of $74,973 and $64,212,
respectively. The fair value of these benefits is based on the
status of the annuities at Dec. 31, 1995 and 1994. 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 rates appropriate
for contracts issued in 1995 and 1994.
At Dec. 31, 1995 and 1994, the fair value of liabilities related to
separate accounts is estimated as the carrying amount less any
applicable surrender charges and less variable insurance contracts
carried at $765,463 and $482,374, respectively.
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 condensed statements of income for the <PAGE>
PAGE 87
10. Segment information (continued)
years ended Dec. 31, 1995, 1994 and 1993 and total assets at Dec.
31, 1995, 1994 and 1993 by segment are summarized as follows:
<TABLE>
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
Net investment income:
Life, disability income, health
and long-term care insurance $ 256,242 $ 247,047 $ 250,224
Annuities 1,651,067 1,534,826 1,532,995
$ 1,907,309 $ 1,781,873 $ 1,783,219
Premiums, charges and fees:
Life, disability income, health
and long-term care insurance $ 384,008 $ 335,375 $ 287,713
Annuities 249,557 193,370 143,876
$ 633,565 $ 528,745 $ 431,589
Income before income taxes:
Life, disability income, health
and long-term care insurance $ 125,402 $ 122,677 $ 104,127
Annuities 440,278 394,117 315,336
Net loss on investments (4,898) (4,282) (6,737)
$ 560,782 $ 512,512 $ 412,726
Total assets:
Life, disability income, health
and long-term care insurance $ 6,195,870 $ 5,269,188 $ 4,810,145
Annuities 36,704,208 30,478,355 28,247,608
$42,900,078 $35,747,543 $33,057,753
</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 88
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, 1995 and 1994,
and the related consolidated statements of income, stockholder's
equity and cash flows for each of the three years in the period
ended December 31, 1995. These financial statements are the
responsibility of the Company's management. Our responsibility is
to express an opinion on these financial statements based on our
audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the consolidated financial
position of IDS Life Insurance Company at December 31, 1995 and
1994, and the consolidated results of its operations and its cash
flows for each of the three years in the period ended December 31,
1995, in conformity with generally accepted accounting principles.
As discussed in Note 1 to the consolidated financial statements,
the Company changed its method of accounting for certain
investments in debt and equity securities in 1994.
Ernst & Young LLP
February 2, 1996
Minneapolis, Minnesota
<PAGE>
PAGE 89
PART C.
Item 24. Financial Statements and Exhibits
(a) Financial Statements included in Part B of this Registration
Statement:
IDS Life Account SBS:
Statements of Net Assets at Dec. 31, 1995.
Statements of Operations for the year ended Dec. 31,
1995.
Statements of Changes in Net Assets for the years ended
Dec. 31, 1995 and 1994.
Notes to Financial Statements.
Report of Independent Auditors dated March 15, 1996.
IDS Life Insurance Company:
Consolidated Balance Sheets at Dec. 31, 1995 and
Dec. 31, 1994.
Consolidated Statements of Income for the years ended
Dec. 31, 1995, 1994 and 1993.
Consolidated Statements of Stockholder's Equity for the
years ended Dec. 31, 1995, 1994 and 1993.
Consolidated Statements of Cash Flows for the years ended
Dec. 31, 1995, 1994 and 1993.
Notes to Consolidated Financial Statements.
Report of Independent Auditors dated Feb. 2, 1996.
(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, filed electronically as
Exhibit 1.1 to Registrant's Post-Effective Amendment No. 4 to
Registration Statement No. 33-40779 is herein incorporated by
reference.
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,
filed electronically as Exhibit 1.2 to Registrant's Post-
Effective Amendment No. 4 to Registration Statement No. 33-
40779 is herein incorporated by reference.
2. Not applicable.
3. Form of Distribution Agreement between IDS Life Insurance
Company and Shearson Lehman Brothers, Inc., filed
electronically as Exhibit 3 to Registrant's Post-Effective
Amendment No. 4 to Registration Statement No. 33-40779 is
herein incorporated by reference.
<PAGE>
PAGE 90
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), filed electronically as Exhibit 5 to Registrant's
Post-Effective Amendment No. 4 to Registration Statement No.
33-40779 is herein incorporated by reference.
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 with Registrant's
most recent 24f-2 notice.
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:
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
Report of Independent Auditors dated February 2, 1996.
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.
<PAGE>
PAGE 91
13. Copy of schedule for computation of each performance
quotation, filed electronically as Exhibit 13 to Registrant's
Post-Effective Amendment No. 4 to Registration Statement 33-
40779 is hereby incorporated by reference.
14. Financial Data Schedule is filed electronically herewith.
15. Power of Attorney, dated April 1, 1996 is filed electronically
herewith.
<TABLE>
<CAPTION>
Item 25. Directors and Officers of the Depositor (IDS Life
Insurance Company)
<S> <C> <C>
Positions and
Name Principal Business Address Offices with Depositor
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
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
Janis E. Miller IDS Tower 10 Director and Executive
Minneapolis, MN 55440 Vice President-
Variable Assets
<PAGE>
PAGE 92
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
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
Item 25. Directors and Officers of the Depositor (IDS Life Insurance Company (cont'd)
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
<PAGE>
PAGE 93
III. Companies engaged in Investors Diversified Financial Services
American Centurion Life Assurance 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 Insurance Agency of Nevada Inc. Nevada
American Express Minnesota Foundation Minnesota
American Express Service Corporation Delaware
American Express Tax and Business Services Inc. Minnesota
American Express Trust Company Minnesota
American Partners Life Insurance Company Arizona
AMEX Assurance Company Illinois
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
Item 26. Persons Controlled by or Under Common Control with the
Depositor or Registrant (Continued)
Jurisdiction
Name of Subsidiary of Incorporation
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 Ltd. Mississippi
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
<PAGE>
PAGE 94
Item 27. Number of Contractowners
On March 31, 1996, there were 1,513 contract owners of
qualified contracts. There were 6,856 owners of
nonqualified 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
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, N, KZ, LZ and MZ, IDS Life
Variable Annuity Fund A, IDS Life Variable Annuity<PAGE>
PAGE 95
Fund B, IDS Life Account SBS, IDS Life Variable Life
Separate Account and IDS Life Variable Account for
Smith Barney.
(b) This table is the same as our response to Item 25 of
this Registration Statement.
<TABLE>
<CAPTION>
(c)
Name of Net Underwriting
Principal Discounts and Compensation on Brokerage
Underwriter Commissions Redemption Commissions Compensation
<S> <C> <C> <C> <C>
IDS Life None $10,125,762 None None
</TABLE>
Item 30. Location of Accounts and Records
IDS Life Insurance Company
IDS Tower 10
Minneapolis, MN
Item 31. Management Services
Not applicable.
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 96
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 22nd day
of April, 1996.
IDS LIFE ACCOUNT SBS
(Registrant)
By IDS Life Insurance Company
(Sponsor)
By /s/ Richard W. Kling*
President
As required by the Securities Act of 1933, this Registration
Statement has been signed by the following persons in the
capacities indicated on the 22nd day of April, 1996.
Signature Title
/s/ James A. Mitchell* Director, Chairman of the
James A. Mitchell Board and Chief Executive
Officer
/s/ Richard W. Kling* Director and President
Richard W. Kling
/s/ David R. Hubers* Director
David R. Hubers
/s/ Paul F. Kolkman* Director and Executive Vice
Paul F. Kolkman President
/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 97
/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 April 1, 1996 filed
electronically herewith by:
Mary Ellyn Minenko
<PAGE>
PAGE 98
CONTENTS OF POST-EFFECTIVE AMENDMENT NO. 5
This Registration Statement is comprised of the following papers
and documents:
The Cover Page.
Cross-reference sheet.
Part A.
The prospectus.
Part B.
Statement of Additional Information.
Financial Statements.
Part C.
Other Information.
The signatures.
Exhibits.
<PAGE>
PAGE 1
IDS Life Account SBS
Registration No. 33-40779/812-7731
EXHIBIT INDEX
10. Consent of Independent Auditors
11. Financial Statement Schedules and Report of
Independent Auditors
14. Financial Data Schedules:
IDS Life Account SBS
IDS Life Insurance Company
15. Power of Attorney
<PAGE>
PAGE 1
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption
"Independent Auditors" and to the use of our reports dated February
2, 1996 on the consolidated financial statements and schedules of
IDS Life Insurance Company and our report dated March 15, 1996 on
the financial statements of IDS Life Account SBS in Post Effective
Amendment No. 5 to the Registration Statement (Form N-4 No. 33-
40779) for the registration of the IDS Life Account SBS to be
offered by IDS Life Insurance Company.
Ernst & Young LLP
Minneapolis, Minnesota
April 22, 1996
<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, 1995
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) $ 1,237,093 $ 1,253,115 $ 1,237,093
States, municipalities and
political subdivisions 11,936 12,266 11,936
All other corporate bonds 10,008,562 10,612,996 10,008,562
Total held to maturity 11,257,591 11,878,377 11,257,591
Available for sale:
United States Government and
government agencies and
authorities (b) 4,092,563 4,176,080 4,176,080
States, municipalities and
political subdivisions 11,020 12,496 12,496
All other corporate bonds 6,042,553 6,327,636 6,327,636
Total available for sale 10,146,136 10,516,212 10,516,212
Mortgage loans on real estate 2,945,495 XXXXXXXXX 2,945,495
Policy loans 424,019 XXXXXXXXX 424,019
Other investments 146,894 XXXXXXXXX 146,894
Total investments $24,920,135 $ XXXXXXXXX $25,290,211
(a) - Includes mortgage-backed securities with a cost and market value of $1,172,570 and
$1,184,673, respectively.
(b) - Includes mortgage-backed securities with a cost and market value of $4,008,481 and
$4,088,800, respectively.
</TABLE>
<PAGE>
PAGE 2
<TABLE>
<CAPTION>
IDS LIFE INSURANCE COMPANY
SCHEDULE III - SUPPLEMENTARY INSURANCE INFORMATION ($ thousands)
FOR THE YEAR ENDED DECEMBER 31, 1995
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 $1,227,169 $21,404,836 $ - $28,191 $ - $1,651,067
Life, DI,
Long-term Care and
Health Insurance 798,556 3,613,253 - 28,132 161,530 256,242
Total $2,025,725 $25,018,089 $ - $56,323 $161,530 $1,907,309
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 $ 2,693 $ 189,626 $166,191 N/A
Life, DI,
Long-term Care and
Health Insurance 164,749 90,495 45,451 N/A
Total $ 167,442 $ 280,121 $211,642 N/A
</TABLE>
<PAGE>
PAGE 3
<TABLE>
<CAPTION>
IDS LIFE INSURANCE COMPANY
SCHEDULE III - SUPPLEMENTARY INSURANCE INFORMATION ($ 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 $210,101 N/A
</TABLE>
<PAGE>
PAGE 4
<TABLE>
<CAPTION>
IDS LIFE INSURANCE COMPANY
SCHEDULE III - SUPPLEMENTARY INSURANCE INFORMATION ($ thousands)
FOR THE YEAR ENDED DECEMBER 31, 1993
Column A Column B Column C Column D Column E Column F
Segment Deferred Future Unearned Other policy Premium
policy policy premiums claims and revenue
acquisition benefits, benefits
cost losses, payable
claims and
loss
expenses
<S> <C> <C> <C> <C> <C>
Annuities $1,008,378 $18,492,135 $ - $ 21,508 $ -
Life, DI,
Long-term Care and
Health Insurance 644,006 3,148,932 - 23,008 127,245
Total $1,652,384 $21,641,067 $ - $ 44,516 $127,245
Column G Column H Column I Column J Column K
Net Benefits, Amortization Other Premiums
investment claims, of deferred operating written
income losses and policy expenses
settlement acquisition
expenses costs
Annuities $1,532,995 $ 3,656 $139,602 $122,999 N/A
Life, DI,
Long-term Care and
Health Insurance 250,224 119,335 72,131 118,975 N/A
Total $1,783,219 $ 122,991 $211,733 $241,974 N/A
</TABLE>
<PAGE>
PAGE 5
<TABLE>
<CAPTION>
IDS LIFE INSURANCE COMPANY
SCHEDULE IV - REINSURANCE ($ thousands)
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
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, 1995
Life insurance in force $57,895,180 $3,771,204 $1,788,352 $55,912,328 3.20%
Premiums:
Life insurance $ 53,089 $ 2,648 $ (248) $ 50,193 -0.49%
DI & health insurance 137,016 25,679 -- 111,337 0.00%
Total premiums $ 190,105 $ 28,327 $ (248) $ 161,530 -0.15%
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%
</TABLE>
<PAGE>
PAGE 6
<TABLE>
<CAPTION>
IDS LIFE INSURANCE COMPANY
SCHEDULE V - VALUATION AND QUALIFYING ACCOUNTS ($ thousands)
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
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, 1995
- -------------------------
Reserve for Mortgage Loans $35,252 $ 1,088 $0 ($1,000) $37,340
Reserve for Other Investments $ 7,515 ($ 2,802) $0 $ 0 $ 4,713
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
* 1995 amount represents a reserve on mortgage loans which were transferred from an affiliate. 1994 amount represents
a direct writedown of the related investments in fixed maturities. 1993 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, 1995 and 1994, and for each of
the three years in the period ended December 31, 1995, and have
issued our report thereon dated February 2, 1996 (included
elsewhere in this Registration Statement).
Our audits also included the financial statement schedules listed
in Item 24(b) of 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 2, 1996
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK>
<NAME> IDS Life Account SBS
<SERIES>
<NAME>
<NUMBER>
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<PERIOD-TYPE> YEAR
<EXCHANGE-RATE> 1
<INVESTMENTS-AT-COST> 289857073
<INVESTMENTS-AT-VALUE> 337346809
<RECEIVABLES> 266624
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 337613433
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 667935
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 256053751
<SHARES-COMMON-PRIOR> 268692758
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTIONS-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 336945868
<DIVIDEND-INCOME> 12490050
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> (4731229)
<NET-INVESTMENT-INCOME> 7758821
<REALIZED-GAINS-CURRENT> 3031464
<APPREC-INCREASE-CURRENT> 53795591
<NET-CHANGE-FROM-OPS> 64585876
<EQUALIZATION> 0
<DISTRIBUTION-OF-INCOME> 0
<DISTRIBUTION-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 12636028
<NUMBER-OF-SHARES-REDEEMDED> (25275035)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 49425495
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<PAGE>
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (4731229)
<AVERAGE-NET-ASSETS> 312232751
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC>
<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
<PAGE>
<ARTICLE> 7
<CIK> 0000768836
<NAME> IDS Life Insurance Company
<MULTIPLIER> 1000
<CURRENCY> U.S. DOLLAR
<FISCAL-YEAR-END> DEC-31-1994 DEC-31-1995
<PERIOD-START> JAN-01-1994 JAN-01-1995
<PERIOD-END> DEC-31-1994 DEC-31-1995
<PERIOD-TYPE> YEAR YEAR
<EXCHANGE-RATE> 1 1
[DEBT-HELD-FOR-SALE] 8017555 10516212
[DEBT-CARRYING-VALUE] 11269861 11257591
[DEBT-MARKET-VALUE] 10694800 11878377
[EQUITIES] 1906 3517
[MORTGAGE] 2400514 2945495
[REAL-ESTATE] 20835 28796
[TOTAL-INVEST] 22121637 25290211
[CASH] 267774 72147
[RECOVER-REINSURE] 1110 1849
[DEFERRED-ACQUISITION] 1865324 2025725
[TOTAL-ASSETS] 35747543 42900078
[POLICY-LOSSES] 22708910 25018089
[UNEARNED-PREMIUMS] 0 0
[POLICY-OTHER] 0 0
[POLICY-HOLDER-FUNDS] 50068 56323
[NOTES-PAYABLE] 0 0
[COMMON] 3000 3000
[PREFERRED-MANDATORY] 0 0
[PREFERRED] 0 0
[OTHER-SE] 1585691 2328708
[TOTAL-LIABILITY-AND-EQUITY] 35747543 42900078
[PREMIUMS] 144640 161530
[INVESTMENT-INCOME] 1781873 1907309
[INVESTMENT-GAINS] (4282) (4898)
[OTHER-INCOME] 384105 472035
[BENEFITS] 1303351 1483431
[UNDERWRITING-AMORTIZATION] 280372 280121
[UNDERWRITING-OTHER] 210101 211642
[INCOME-PRETAX] 512512 560782
[INCOME-TAX] 176343 195842
[INCOME-CONTINUING] 336169 364940
[DISCONTINUED] 0 0
[EXTRAORDINARY] 0 0
[CHANGES] 0 0
[NET-INCOME] 336169 364940
[EPS-PRIMARY] 0 0
[EPS-DILUTED] 0 0
[RESERVE-OPEN] 20636 23228
[PROVISION-CURRENT] 93683 117478
[PROVISION-PRIOR] 0 0
[PAYMENTS-CURRENT] 91091 116514
[PAYMENTS-PRIOR] 0 0
[RESERVE-CLOSE] 23228 24192
[CUMULATIVE-DEFICIENCY] 0 0
</TABLE>
<PAGE>
PAGE 1
IDS LIFE INSURANCE COMPANY
POWER OF ATTORNEY
City of Minneapolis
State of Minnesota
Each of the undersigned, as directors of the below listed unit
investment trusts that previously have filed registration
statements and amendments thereto pursuant to the requirements of
the Securities Act of 1933 and the Investment Company Act of 1940
with the Securities and Exchange Commission:
<TABLE>
<CAPTION>
1933 Act 1940 Act
Reg. Number Reg. Number
<S> <C> <C>
IDS Life Variable Account 10
IDS Life Flexible Portfolio Annuity 33-62407 811-07355
IDS Life Accounts F, IZ, JZ, G, H, N, KZ, LZ and MZ
IDS Life Flexible Annuity 33-4173 811-3217
IDS Life Accounts F, IZ, JZ, G, H, N, KZ, LZ and MZ
IDS Life Variable and Combination
Retirement Annuities 2-73114 811-3217
IDS Life Accounts F, IZ, JZ, G, H, N, KZ, LZ and MZ
IDS Life Employee Benefit Annuity 33-52518 811-3217
IDS Life Accounts F, IZ, JZ, G, H, N, KZ, LZ and MZ
IDS Life Group Variable Annuity Contract 33-47302 811-3217
IDS Life Insurance Company
IDS Life Group Variable Annuity Contract
(Fixed Account) 33-48701 N/A
IDS Life Insurance Company
IDS Life Single Payment Market Value Annuity 33-28976 N/A
IDS Life Insurance Company
IDS Life Flexible Payment Market Value Annuity 33-50968 N/A
IDS Life Variable Life Separate Account
Flexible Premium Variable Life Insurance Policy 33-11165 811-4298
IDS Life Variable Life Separate Account
IDS Life Single Premium Variable Life 2-97637 811-4298
IDS Life Variable Account for Smith Barney
LifeVest Single Premium Variable Life 33-5210 811-4652
IDS Life Account SBS
IDS Life Symphony Annuity 33-40779 812-7731
IDS Life Account RE
IDS Life Real Estate Variable Annuity 33-13375 N/A
IDS Life Variable Annuity Fund A 2-29081 811-1653
IDS Life Variable Annuity Fund B 2-47430 811-1674
</TABLE>
hereby constitutes and appoints William A. Stoltzmann, Mary Ellyn
Minenko, Eileen J. Newhouse and Timothy S. Meehan or any one of
them, as her or his attorney-in-fact and agent, to sign for her or
him in her or his name, place and stead any and all filings,
applications (including applications for exemptive relief),
periodic reports, registration statements (with all exhibits and
other documents required or desirable in connection therewith)
other documents, and amendments thereto and to file such filings,<PAGE>
PAGE 2
applications, periodic reports, registration statements other
documents, and amendments thereto with the Securities and Exchange
Commission, and any necessary states, and grants to any or all of
them the full power and authority to do and perform each and every
act required or necessary in connection therewith.
Dated the 1st day of April, 1996.
/s/ David R. Hubers March 21, 1996
David R. Hubers
Director
/s/ Richard W. Kling March 21, 1996
Richard W. Kling
Director and President
/s/ Paul F. Kolkman March 21, 1996
Paul F. Kolkman
Director and Executive Vice
President
/s/ Janis E. Miller March 25, 1996
Janis E. Miller
Director and Executive Vice
President, Variable Assets
/s/ James A. Mitchell March 25, 1996
James A. Mitchell
Director, Chairman of the
Board and Chief Executive Officer
/s/ Barry J. Murphy April 1, 1996
Barry J. Murphy
Director and Executive Vice
President, Client Service
/s/ Stuart A. Sedlacek March 27, 1996
Stuart A. Sedlacek
Director and Executive Vice
President, Assured Assets
/s/ Melinda S. Urion March 29, 1996
Melinda S. Urion
Director, Executive Vice
President and Controller
