SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Post-Effective Amendment No. 8 (File No. 33-45776) [x]
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and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 9 (File No. 811-6560) [x]
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(Check appropriate box or boxes)
IDS LIFE OF NEW YORK ACCOUNT SBS
(formerly IDS Life of New York Account SLB)
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(Exact Name of Registrant)
IDS Life Insurance Company of New York
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(Name of Depositor)
20 Madison Avenue Extension, Albany, New York 12203
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(Address of Depositor's Principal Executive Offices) (Zip Code)
Depositor's Telephone Number, including Area Code (612) 671-4085
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Colin M. Lancaster, IDS Tower 10, Minneapolis, MN 55440-0010
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(Name and Address of Agent for Service)
It is proposed that this filing will become effective (check appropriate box)
[ ] immediately upon filing pursuant to paragraph (b) of Rule 485
[x] on May 1, 1998 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
If appropriate, check the following box:
[ ] this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
<PAGE>
CROSS REFERENCE SHEET
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 the prospectus and Statement of Additional
Information are so indicated.
<PAGE>
PART A
Item No. Section in Prospectus
1 Cover
2 Definitions
3 (a) Annuity and Certificate Expense
(b) About the Annuity
4 (a) Condensed Financial Information
(b) Performance Information
(c) Financial Statements
5 (a) Who Issues the Annuity
(b) About the Annuity
(c) About the Variable Account, Portfolios and Funds
(d) Cover
(e) Voting rights
(f) NA
(g) NA
6 (a) Certificate Charges and Charges Against the Variable Account
Annuity and Certificate Expenses
(b) Surrender Charge
(c) Calculation
(d) Surrendering Your Certificate
(e) Investment Goals and Policies of the Portfolio and Funds
(f) NA
7 (a) Buying the Certificate
(b) About the Variable Account, Portfolios and the Funds;
Transferring Your Money Between Accounts
(c) About the Variable Account, Portfolios and Funds; Subaccounts
Available for Investment
(d) Cover
8 (a) Payout Options
(b) Retirement Date
(c) Payout Options
(d) Payout Options
(e) Payout Options
(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
13 NA
14 Table of contents of the Statement of Additional Information
<PAGE>
PART B
Item No. Section in Statement of Additional Information
15 (a) Cover
(b) NA
16 Table of Contents
17 (a) NA
(b) NA
(c) Who Issues the Annuity*
18 (a) NA
(b) NA
(c) Independent Auditors
(d) NA
(e) NA
(f) NA
19 (a) Distribution of the Certificates*
(b) Certificate charges*
20 (a) Principal Underwriter
(b) Principal Underwriter
(c) NA
(d) NA
21 (a) Performance Information
(b) Performance Information
22
23 (a) Financial Statements
(b) Financial Statements
*Designates section in the prospectus, which is hereby incorporated by reference
in this Statement of Additional Information.
<PAGE>
Symphony Annuity
Prospectus/May 1, 1998
This prospectus describes interests in a master group flexible premium deferred
annuity (Annuity) and related certificates (Certificates) offered by IDS Life
Insurance Company of New York (IDS Life of New York). Individuals eligible to
participate in the Annuity include members of the general public. Participation
in the Annuity will be accounted for separately by the issuance of a Certificate
showing your interest in the Annuity. The Annuity is a deferred group annuity in
which purchase payments are accumulated on a fixed and/or variable basis and
which pays retirement benefits to the Certificate owner. The Annuity and related
Certificates are available for qualified and nonqualified retirement plans.
IDS Life of New York Account SBS
Group Flexible Premium Deferred Combination Fixed and Variable Annuity
Sold by:
IDS Life Insurance Company of New York
20 Madison Avenue Extension
P.O. Box 5144
Albany, NY 12205
Telephone: 800-336-3646
This prospectus contains the information about the variable accounts that you
should know before investing. Refer to "About the Variable Account, the
Portfolios and the Funds" in this prospectus.
This prospectus is valid only when accompanied or preceded by the prospectuses
of Greenwich Street Series Fund and the IDS Life Retirement Annuity Mutual
Funds. Please read these documents carefully and keep them 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 of New York is not a bank or financial institution, and the securities
it offers are not deposits or obligations of, backed or guaranteed or endorsed
by any bank or financial institution nor are they insured by the Federal Deposit
Insurance Corporation, the Federal Reserve Board or any other agency.
<PAGE>
A Statement of Additional Information (SAI) filed with the Securities and
Exchange Commission (SEC) is available without charge by contacting IDS Life of
New York at the telephone number or address shown above.
The Table of Contents of the SAI appears on page __ of this prospectus.
<PAGE>
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 Certificate.
Annuitant -- The person on whose life annuity payments depend. Calculation of
annuity retirement payments depends on the annuitant's age.
Certificate Value -- The total value of your Certificate before any applicable
surrender charge and any certificate charge have been deducted.
Certificate Year -- A period of 12 months, starting on the effective date of
your Certificate 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 certificate value. Purchase
payments allocated to the Fixed Account will earn interest at a rate guaranteed
by IDS Life of New York which will change from time to time.
Owner (You, Your) -- The person or party owning the Certificate.
Payment Year -- Each certificate year in which you make a purchase payment and
each succeeding year measured from the end of the certificate 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
certificate year, the sixth certificate 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 and Emerging Growth Portfolio
(collectively, the Portfolios), IDS Life Special Income Fund, IDS Life Capital
Resource Fund, and IDS Life 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 a series of an open-end investment company
registered under the Investment Company Act of 1940, as amended (1940 Act).
Purchase Payments -- Payments made to IDS Life of New York for purchase of a
Certificate.
<PAGE>
Retirement Date -- The date on which retirement payments begin.
Surrender Charge -- A deferred sales charge that may be applied if you surrender
your Certificate.
Surrender Value -- The total value of your Certificate after any applicable
surrender charge and any certificate charge have been deducted.
Valuation Date -- Any normal business day, Monday through Friday, except for the
following holidays: New Year's Day, Martin Luther King Jr. Day, Presidents' Day,
Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day.
Variable Account -- IDS Life of New York Account SBS, a separate account of IDS
Life of New York. Pursuant to the laws of the state of New York, assets
attributable to the Variable Account are held by IDS Life of New York in one or
more subaccounts. Each subaccount invests in a corresponding Portfolio or Fund.
The New York Money Market subaccount invests in shares of the Money Market
Portfolio; the New York Intermediate High Grade subaccount invests in shares of
the Intermediate High Grade Portfolio; the New York Diversified Strategic Income
subaccount invests in shares of the Diversified Strategic Income Portfolio; the
New York Equity Income subaccount invests in shares of the Equity Income
Portfolio; the New York Equity Index subaccount invests in shares of the Equity
Index Portfolio; the New York Growth & Income subaccount invests in shares of
the Growth & Income Portfolio; the New York Appreciation subaccount invests in
shares of the Appreciation Portfolio; the New York Total Return subaccount
invests in shares of the Total Return Portfolio; the New York International
Equity subaccount invests in shares of the International Equity Portfolio; the
New York Emerging Growth subaccount invests in shares of the Emerging Growth
Portfolio; the New York Capital Resource subaccount invests in shares of the IDS
Life Capital Resource Fund; the New York Special Income subaccount invests in
shares of the IDS Life Special Income Fund; and the New York Managed subaccount
invests in shares of the IDS Life 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 ).
An Annuity or Certificate may be returned within 20 days after its delivery for
a full refund of the purchase payment (page ).
Who Issues the Annuity -- IDS Life of New York, a subsidiary of IDS Life
Insurance Company (IDS Life), issues the Annuity (page ).
<PAGE>
About the Variable Account of the Portfolios and Funds
Subaccounts Available for Investment -- There are thirteen separate subaccounts
of the Variable Account available for investment in addition to the Fixed
Account (page ).
The Variable Account is registered as a single unit investment trust under
the 1940 Act (page ).
Investment Goals and Policies of the Portfolios and Funds -- Each Portfolio and
Fund has a different investment policy. 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
dividend-paying equity securities meeting certain specified investment criteria.
The Appreciation Portfolio invests primarily in equity securities. The Total
Return Portfolio invests primarily in a diversified portfolio of dividend-paying
common stocks. The International Equity Portfolio invests at least 65 percent of
its assets in a diversified portfolio of equity securities of established
non-U.S. issuers. The Emerging Growth Portfolio invests at least 65 percent of
its total assets in common stocks of small and medium-sized companies, both
domestic and foreign, considered to be emerging growth companies. The IDS Life
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 IDS Life 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 IDS Life
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 ).
Using the Annuity and Certificates
Buying the Certificate -- Applications are subject to acceptance at IDS Life of
New York's home office in Albany (page ).
IRAs and Other Qualified Plans -- Certificates may be issued in connection with
IRAs, Tax-sheltered Annuities (TSAs) under 403(b) plans, 401(k) plans and other
qualified plans as well as in connection with nonqualified retirement plans
(page ).
<PAGE>
Purchase Payments -- You must make an initial lump sum purchase payment for the
Certificate and you may make additional purchase payments. The initial purchase
payment must be at least $5,000 for nonqualified Certificates and at least $500
for qualified Certificates. After making the initial purchase payment, you may
make additional payments of at least $500 for nonqualified Certificates and at
least $50 for qualified Certificates. Additional purchase payments can be mailed
directly to IDS Life of New York. The maximum total purchase payments for your
Certificate is $1,000,000. IDS Life of New York reserves the right to increase
this maximum amount on a uniform basis for all Certificate owners in a class
(page ).
Your purchase payments also may be allocated to the Fixed Account and/or to the
subaccount(s) you choose. For nonqualified Certificates, 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 Certificates (page ).
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 certificate values (page ).
You may establish automated transfers of certificate values between the
subaccounts and/or the Fixed Account. The minimum automated transfer amount is
$100. This service is subject to restrictions (page 16).
Certificate Charges and Charges Against the Variable Account -- IDS Life of New
York charges your Certificate $30 per year for administrative services (page ).
IDS Life of New York 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 ).
IDS Life of New York 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 ).
A surrender charge applies if you make a full or partial surrender of your
certificate 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 certificate values are applied to a retirement payment
plan or for a death benefit. After the first certificate year, each year you may
surrender up to 10 percent of your certificate value on your prior certificate
anniversary without incurring a surrender charge. There also is no surrender
charge after the first certificate year on certificate earnings, as defined
herein (page ).
<PAGE>
The above charges will not increase during the term of the Certificate. For some
sales, certain administrative and surrender charges may be reduced or eliminated
altogether (page ).
Surrendering Your Certificate -- You may surrender all or part of your
Certificate's value at any time before the retirement date. You will pay income
tax on the taxable part of your surrender and a 10 percent IRS penalty tax may
apply. In addition, income tax withholding at the rate of 20 percent may be
imposed on surrenders from Certificates purchased under certain qualified plans
(page ).
The Internal Revenue Code of 1986, as amended (the Code) imposes restrictions on
your right to receive a distribution from a TSA (page ).
You may establish systematic withdrawals of up to 10 percent of the certificate
value at the beginning of the certificate year. Systematic withdrawals may be
made in one of three ways (page ).
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 ).
IDS Life of New York may ask you to return the Certificate if you make a
complete surrender (page ).
Payment usually will be mailed within seven days after IDS Life of New York
receives your surrender request (page ).
Payment in Case of Death before Retirement Payments Begin -- Prior to the
retirement date, if you or the annuitant die before the initial fifth
certificate anniversary, the beneficiary will be paid the greater of: 1) the
certificate value; or 2) the amount of purchase payments (minus any surrenders).
On or after the initial fifth certificate anniversary, and each subsequent fifth
certificate anniversary, the beneficiary will be paid the greater of: 1) the
certificate value; or 2) a minimum guaranteed death benefit which equals: a) the
death benefit calculated as of the previous fifth certificate anniversary; plus
b) any purchase payments made since the previous fifth certificate anniversary;
minus c) any surrenders since the previous fifth certificate anniversary (page
).
In most cases, your spouse may keep the Certificate in force (page ).
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 of New York
offers (page ).
Settlement Value of Your Certificate -- The amount available on the retirement
date to apply to a retirement payment plan equals the then current certificate
value (page ).
<PAGE>
IDS Life of New York calculates retirement payments due based on the certificate
value on the retirement date. Payments are made on a fixed basis (page ).
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 of New York will make payments under Plan B with 120
monthly payments guaranteed (page ).
If you purchased your Certificate in connection with a qualified plan, the
payment schedule must meet the requirements of that plan (page ).
If monthly payments would be less than $50, IDS Life of New York reserves the
right to reduce the frequency of the retirement payments or to pay the
certificate value in one lump sum payment (page ).
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 ).
Changing Ownership -- You may change ownership of your Certificate by filing a
change of ownership form with IDS Life of New York. Certain restrictions apply
concerning transfer of ownership of a qualified Certificate, and certain
transfers of nonqualified Certificates may have adverse federal income tax
consequences (page ).
Federal Tax Information -- According to current interpretations of federal
income tax law, there is no federal income tax on any increase in the
Certificate's value until payments are made. Consult your tax advisor (page ).
If you surrender your Certificate or if retirement payments begin, you will be
taxed on the amount that exceeds your investment in the Certificate. Under
certain circumstances, if you surrender all or part of your Certificate or if
retirement payments begin before you reach age 59-1/2, a 10 percent IRS penalty
tax may apply. In addition, 20 percent income tax withholding may be imposed on
distributions from Certificates purchased to fund qualified plans including
401(k) plans and TSAs (but not IRAs) (page ).
Additional Information about the Annuity and Certificates
Accumulation Units -- When your purchase payments are allocated to a subaccount,
they will be converted into accumulation units. The accumulation unit value
increases or decreases with the performance of the relevant Portfolio (page ).
About the Portfolios and Funds -- As Certificate owner, you have voting rights
in the Greenwich Street Series Fund and its Portfolios and in the Funds. IDS
Life of New York may, in its discretion, substitute investments in shares of the
Portfolios and Funds with shares of other registered investment companies under
certain conditions (page ).
<PAGE>
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 of New York, which will change from time to
time. Subject to restrictions, you may transfer certificate values from the
Fixed Account to the subaccounts and you may establish automated transfers of
certificate values between the Fixed Account and the subaccounts. Automated
transfers from the Fixed Account may not exceed an amount that, if continued,
would deplete the Fixed Account within 12 months. This prospectus applies only
to the variable features of the Annuity. Information about the Fixed Account is
found on page .
Annuity and Certificate 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 a Certificate.
The information shows the expenses of the Variable Account as well as the
expenses of the underlying Portfolios and Funds. For more information about
charges, see page __.
Annual Certificate Charges
- --------------------------- -------------------------- ------------------------
Surrender Charge Payment 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 Certificate 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%
<PAGE>
<TABLE>
<CAPTION>
Annual Operating Expenses of the Portfolios and Funds
(as a percentage of average daily net assets)
Inter- Diversified Inter-
Money mediate Strategic Equity Equity Growth Total national Emerging
Market High Grade Income Income Index & Income AppreciationReturn Equity Growth
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Management fees .50% .60% .65% .65% .21% .64% .75% .75% 1.05% .95%
Other Expenses .70 .35 .13 .12 .55 .12 .05 .04 .26 .31
==============================================================================================
Total Operating 1.20% .95% .78% .77% .76% .77% .80% .79% 1.31% 1.26%
Expenses of
Portfolios #
==============================================================================================
</TABLE>
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:
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 year $ 88.12 $ 85.55 $ 83.81 $ 83.71 $83.61 83.71 $ 84.02 $ 83.91 $ 89.24 $ 83.73
3 years 126.21 118.55 113.32 113.01 112.70 113.01 113.94 113.63 129.56 128.04
5 years 166.87 154.17 145.46 144.94 144.43 144.94 146.48 145.97 172.41 169.90
10 years 310.53 288.56 268.22 267.19 266.16 267.19 270.28 269.25 321.32 316.43
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 period:
1 year $ 28.12 $ 25.55 $ 23.81 $ 23.71 $ 23.61 $ 23.71 $ 24.02 $ 23.91 $ 29.24 $ 28.73
3 years 86.21 78.55 73.32 73.01 72.70 73.01 73.94 73.63 89.56 88.04
5 years 146.87 134.17 125.46 124.94 124.43 124.94 126.48 125.97 152.41 149.90
10 years 310.53 285.56 268.22 267.19 266.16 267.19 270.28 269.25 321.32 316.43
</TABLE>
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 certificate administrative charge is
approximated as a .043 percent charge based on the average Certificate size.
# Annualized operating expenses of underlying portfolios at Dec. 31, 1997.
<PAGE>
IDS Life IDS Life
Capital Special IDS Life
Resource Income Managed
- ---------------------------------------------------------
Management fees 0.60% 0.60% 0.59%
Other Expenses 0.07 0.07 0.05
==================================
Total Operating 0.67% 0.67% 0.64%
Expenses of Funds #
==================================
Example*
You would pay the following expenses on a $1,000 investment, assuming (1)
5-percent annual return and (2) surrender at the end of each time period:
1 year $ 82.68 $ 82.68 $ 82.38
3 years 109.93 109.93 109.00
5 years 139.78 139.78 138.23
10 years 256.85 256.85 253.72
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 $ 22.68 $ 22.68 $ 22.38
3 years 69.93 69.93 69.00
5 years 119.78 119.78 118.23
10 years 256.85 256.85 253.72
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 certificate administrative charge is
approximated as a .043 percent charge based on the average Certificate size.
# Annualized operating expenses of underlying
Mutual Funds at Dec. 31, 1997.
<PAGE>
<TABLE>
<CAPTION>
Condensed Financial Information (Unaudited)
The following table gives per-unit information about the financial history of
each subaccount.
Year ended Dec. 31,
1997 1996 1995 1994 1993
Subaccount BMO (Investing in shares of Money Market Portfolio)*
<S> <C> <C> <C> <C> <C>
Accumulation unit $1.10 $1.07 $1.03 $1.01 $1.00
value at beginning
of period
Accumulation unit value $1.13 $1.10 $1.07 $1.03 $1.01
at end of period
Number of accumulation 460 343 395 539 450
units outstanding at end
of period (000 omitted)
Ratio of operating 1.50% 1.50% 1.50% 1.50% 1.50%
expense to average
net assets
Simple yield 3.05% 2.52% 2.75% 2.14% .70%
Compound yield 3.09% 2.55% 2.79% 2.16% .70%
Subaccount BIH (Investing in shares of Intermediate High Grade Portfolio)*
Accumulation unit $1.14 $1.14 $0.98 $1.03 $1.00
value at beginning
of period
Accumulation unit value $1.22 $1.14 $1.14 $0.98 $1.03
at end of period
Number of accumulation 1,684 1,324 1,390 734 733
units outstanding at end
of period (000 omitted)
Ratio of operating 1.50% 1.50% 1.50% 1.50% 1.50%
expense to average
net assets
Subaccount BDS (Investing in shares of Diversified Strategic Income Portfolio)*
Accumulation unit $1.28 $1.16 $1.02 $1.06 $1.00
value at beginning
of period
Accumulation unit value $1.36 $1.28 $1.16 $1.02 $1.06
at end of period
Number of accumulation 1,841 2,397 2,704 2,866 2,055
units outstanding at end
of period (000 omitted)
Ratio of operating 1.50% 1.50% 1.50% 1.50% 1.50%
expense to average
net assets
Subaccount BEM (Investing in shares of Equity Income Portfolio)*
Accumulation unit $1.23 $1.18 $0.90 $1.02 $1.00
value at beginning
of period
Accumulation unit value $1.50 $1.23 $1.18 $0.90 $1.02
at end of period
Number of accumulation 1,115 1,410 1,677 1,926 1,561
units outstanding at end
of period (000 omitted)
Ratio of operating 1.50% 1.50% 1.50% 1.50% 1.50%
expense to average
net assets
Subaccount BEX (Investing in shares of Equity Index Porfolio)*
Accumulation unit $1.64 $1.37 $1.02 $1.03 $1.00
value at beginning
of period
Accumulation unit value $2.14 $1.64 $1.37 $1.02 $1.03
at end of period
Number of accumulation 1,247 1,208 1,249 1,274 1,128
units outstanding at end
of period (000 omitted)
Ratio of operating 1.50% 1.50% 1.50% 1.50% 1.50%
expense to average
net assets
Subaccount BGI (Investing in shares of Growth and Income Porfolio)*
Accumulation unit $1.52 $1.29 $1.00 $1.05 $1.00
value at beginning
of period
Accumulation unit value $1.84 $1.52 $1.29 $1.00 $1.05
at end of period
Number of accumulation 1,709 1,764 1,819 1,820 1,335
units outstanding at end
of period (000 omitted)
Ration of operating 1.50% 1.50% 1.50% 1.50% 1.50%
expense to average
net assets
Subaccount BAP (Investing in shares of Appreciation Portfolio)*
Accumulation unit $1.51 $1.28 $1.01 $1.03 $1.00
value at beginning
of period
Accumulation unit value $1.88 $1.51 $1.28 $1.01 $1.03
at end of period
Number of accumulation 3,082 3,249 3,536 3,267 2,093
units outstanding at end
of period (000 omitted)
Ratio of operating 1.50% 1.50% 1.50% 1.50% 1.50%
expense to average
net assets
Subaccount BTR (Investing in shares of Total Return Portfolio)**
Accumulation unit $1.66 $1.34 $1.09 $1.03 $1.00
value at beginning
of period
Accumulation unit value $1.91 $1.66 $1.34 $1.09 $1.03
at end of period
Number of accumulation 1,430 1,396 1,401 975 211
units outstanding at end
of period (000 omitted)
Ratio of operating 1.50% 1.50% 1.50% 1.50% 1.50%
expense to average
net assets
Subaccount BIE (Investing in shares of International Equity Portofolio)**
Accumulation unit $1.16 $0.97 $0.91 $1.00 $1.00
value at beginning
of period
Accumulation unit value $1.12 $1.16 $0.97 $0.91 $1.00
at end of period
Number of accumulation 1,227 1,430 1,467 1,872 315
units outstanding at end
of period (000 omitted)
Ration of operating 1.50% 1.50% 1.50% 1.50% 1.50%
expense to average
net assets
Subaccount BEG (Investing in shares of Emerging Growth Portfolio)**
Accumulation unit $1.55 $1.33 $0.95 $1.04 $1.00
value at beginning
of period
Accumulation unit value $1.85 $1.55 $1.33 $0.95 $1.04
at end of period
Number of accumulation 582 635 727 706 148
units outstanding at end
of period (000 omitted)
Ratio of operating 1.50% 1.50% 1.50% 1.50% 1.50%
expense to average
net assets
Subaccount BCR (Investing in shares of IDS Life Capital Resource Fund)***
Accumulation unit $1.20 $1.13 $1.01 $1.00 --
value at beginning
of period
Accumulation unit value $1.47 $1.20 $1.13 $1.01 --
at end of period
Number of accumulation 13 13 0 0 --
units outstanding at end
of period (000 omitted)
Ratio of operating 1.50% 1.50% 1.50% 1.50% --
expense to average
net assets
Subaccount BSI (Investing in shares of IDS Life Special Income Fund)***
Accumulation unit $1.09 $1.12 $0.99 $1.00 --
value at beginning
of period
Accumulation unit value $1.12 $1.09 $1.12 $0.99 --
at end of period
Number of accumulation 13 0 0 0 --
units outstanding at end
of period (000 omitted)
Ratio of operating 1.50% 1.50% 1.50% 1.50% --
expense to average
net assets
Subaccount BMG (Investing in shares of IDS Life Managed Fund)***
Accumulation unit $1.39 $1.21 $0.99 $1.00 --
value at beginning
of period
Accumulation unit value $1.64 $1.39 $1.21 $0.99 --
at end of period
Number of accumulation 0 12 0 0 --
units outstanding at end
of period (000 omitted)
Ratio of operating 1.50% 1.50% 1.50% 1.50% --
expense to average
net assets
* Operations commenced on March 15, 1993.
** Operations commenced on Dec.2, 1993.
***Operations commenced on Nov. 28, 1994. BCR, BSI, and BMG had no activity in
1995. BSI had no activity in 1996.
</TABLE>
<PAGE>
Financial Statements
Complete financial statements of the Variable Account including audited
individual and combined statements of net assets as of Dec. 31, 1997, 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, are
presented in the SAI dated May 1, 1998. The audited financial statements of IDS
Life Insurance Company of New York including balance sheets as of Dec. 31, 1997,
and 1996, and related statements of income, stockholder's equity and cash flows
for each of the three years in the period ended Dec. 31, 1997 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 New York 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 New York 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 New York
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 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 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.
Average Annual 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 a Certificate
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 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
<PAGE>
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 aggregate 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 Certificate 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 Certificate owner, to build up
funds for retirement. You do this by investing in any one or more of thirteen
subaccounts of the Variable Account or in the Fixed Account. Each subaccount
invests only in shares of a single Portfolio or Fund. You can direct payments to
go to anyone, but you will still be taxed on the income as owner. You can choose
from a variety of retirement payment plans.
The Annuity is a variable annuity. A variable annuity differs from a fixed
annuity in that during the accumulation period, the certificate 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 Certificate'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.
<PAGE>
An Annuity or Certificate may be returned within 20 days after its delivery for
a full refund of the purchase payment. Return it to your Smith Barney Financial
Consultant or mail it to IDS Life of New York's home office at the address on
the cover page of this prospectus. No fees or charges will be deducted.
Who Issues the Annuity
IDS Life Insurance Company of New York issues the Annuity. IDS Life of New York
is a wholly-owned subsidiary of IDS Life, which itself is a wholly-owned
subsidiary of American Express Financial Corporation. American Express Financial
Corporation 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 of New York is a stock life insurance company organized in 1972 under
the laws of the State of New York. Its home office is at 20 Madison Avenue
Extension, Albany, New York and its mailing address is P.O. Box 5144, Albany, NY
12205. IDS Life of New York is licensed in New York and North Dakota and it
conducts a conventional life insurance business in the State of New York.
Smith Barney Inc., a Delaware corporation, is the principal underwriter of the
Variable Account. Its home office is 388 Greenwich Street, New York, New York
10013. Smith Barney Inc. is a wholly-owned subsidiary of Smith Barney (Holdings)
and an indirect wholly-owned subsidiary of Travelers Group Inc. Travelers Group
Inc. is a diversified financial services holding company principally engaged in
the business of providing investment, including asset management, consumer
finances and insurance services.
About the Variable Account, the Portfolios and the 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 of the subaccounts invests only in a
single Portfolio or Fund:
o The New York Money Market subaccount (BMO) invests in shares of the
Money Market Portfolio;
o The New York Intermediate High Grade subaccount (BIH) invests in
shares of the Intermediate High Grade Portfolio;
o The New York Diversified Strategic Income subaccount (BDS) invests in
shares of the Diversified Strategic Income Portfolio;
o The New York Equity Income subaccount (BEM) invests in shares of the
Equity Income Portfolio;
<PAGE>
o The New York Equity Index subaccount (BEX) invests in shares of the
Equity Index Portfolio;
o The New York Growth & Income subaccount (BGI) invests in shares of the
Growth & Income Portfolio;
o The New York Appreciation subaccount (BAP) invests in shares of the
Appreciation Portfolio;
o The New York Total Return subaccount (BTR) invests in shares of the
Total Return Portfolio;
o The New York International Equity subaccount (BIE) invests in shares
of the International Equity Portfolio; and
o The New York Emerging Growth subaccount (BEG) invests in the shares of
the Emerging Growth Portfolio.
o The New York Capital Resource subaccount (BCR) invests in shares of the
IDS Life Capital Resource Fund.
o The New York Special Income subaccount (BSI) invests in shares of the
IDS Life Special Income Fund.
o The New York Managed subaccount (BMG) invests in shares of the IDS Life
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 of New York's general
business. All obligations arising under the certificates are general obligations
of IDS Life of New York.
The Variable Account was established on October 8, 1991 under New York law. On
Oct. 14, 1993 the name of the Variable Account was changed from IDS Life of New
York Account SLB to IDS Life of New York 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
of New York'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>
The U.S. Treasury and the IRS have been developing a revenue ruling concerning
investment control. The ruling may address the number of subaccounts offered
under an annuity and the number of exchanges among the subaccounts that would be
allowed before an Annuity or Certificate owner would be considered to have
investment control and thus would be currently taxed on the income earned on the
underlying portfolio assets. This issue is still being studied by the IRS and
the timing of further action is unknown. IDS Life of New York reserves the right
to modify the Annuity and related Certificates, as necessary, to prevent the
Annuity or Certificate owner from being currently taxed as the owner of the
underlying assets of the Variable Account for federal income tax purposes.
IDS Life of New York 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 Ratings Group 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 securities and corporate
securities rated below investment grade (commonly known as junk bonds). See the
section of the Greenwich Street 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 percent of its assets in the utility industry.
<PAGE>
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 percent 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 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, that its
investment adviser believes have the potential to become major enterprises.
The IDS Life 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 IDS Life 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 IDS Life 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, fixed income securities
(primarily high-quality corporate bonds) and money market instruments. The Fund
invests in many different companies in a variety of industries.
<PAGE>
There is no 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 listed
below:
<TABLE>
<CAPTION>
Name Service
<S> <C>
Van Kampen American Capital Asset Management, Inc. Investment Adviser to the Emerging Growth Portfolio
American Express Financial Corporation Investment Advisor to IDS Life Capital Resource,
IDS Life Special Income and IDS Life Managed Funds
IDS Life Insurance Company Investment Manager to IDS Life Capital Resource,
IDS Life Special Income and IDS Life Managed Funds
Smith Barney Global Capital Management, Inc. Sub-Investment Adviser to the Diversified Strategic
Income Portfolio
Mutual Management Corp. (MMC) 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
and Administrator to each Portfolio
Travelers Investment Management Company Investment Adviser to the Equity Index Portfolio
Davis Skaggs Investment Management, a division of MMC Investment Adviser to the Total Return Portfolio
PNC Bank, National Association Custodian to all Portfolios except International
Equity Portfolio and Diversified Strategic Income
Portfolio
The Chase Manhattan Bank Custodian to International Equity Portfolio and
Diversified Strategic Income Portfolio
American Express Trust Company Custodian to the Funds
Morgan Stanley Trust Company Subcustodian to the Funds
First Data Investor Services Group, Inc. Transfer and Dividend paying Agent
Smith Barney Inc. Distributor
</TABLE>
<PAGE>
Detailed information about each Portfolio and Fund, including the risks related
to investing in them is in the separate prospectuses. For prospectuses, please
refer to the accompanying prospectuses or contact your Smith Barney financial
consultant or IDS Life Insurance Company of New York at 800-336-3646. You should
read the Portfolio and Fund prospectuses and consider carefully, and on a
continuing basis, which Portfolio or Fund, or combination of them is best suited
to your long-term investment needs. There is no assurance that the investment
objectives of the Portfolios and Funds will be attained nor is there any
guarantee that the certificate value will equal or exceed the total purchase
payments made. Some Portfolios and Funds may involve more risk than others --
please monitor your investments accordingly. There are deductions from, and fees
and expenses paid out of, the assets of the Portfolios and Funds that are
described in these prospectuses.
All funds are available to serve as the underlying investment for variable
annuities, and some funds are available to serve as the underlying investment
for variable annuities and variable life insurance contracts and qualified
plans. It is conceivable that in the future it may be disadvantageous for
variable annuity separate accounts, variable life insurance separate accounts
and/or qualified plans to invest in the available funds simultaneously. Although
IDS Life of New York and the funds do not currently foresee any such
disadvantages, the boards of directors or trustees of the appropriate funds will
monitor events in order to identify any material conflicts between such contract
owners, policyowners and qualified plans to determine what action, if any,
should be taken in response to a conflict. If a board were to conclude that
separate funds should be established for variable life insurance, variable
annuities and qualified plan separate accounts, the variable contract holders
would not bear any expenses associated with establishing separate funds. Please
refer to the fund prospectuses for risk disclosure regarding mixed and shared
funding.
Using the Annuity and Certificate
Buying the Certificate
Your Smith Barney Financial Consultant will help you prepare your application,
which will be sent with your purchase payment to IDS Life of New York's home
office in Albany. If your application is complete, IDS Life of New York will
apply your payment as of the next close of business after it is received at IDS
Life of New York's home office. If IDS Life of New York cannot accept your
application within five business days, it will be declined and your payment will
be returned to you.
When IDS Life of New York accepts your application, a Certificate will be sent
to you. Please remember that investment performance, expenses and deduction of
certain charges affect accumulation unit value.
<PAGE>
When you apply for the Certificate, 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 payment
is received at IDS Life of New York's home office in Albany.
IDS Life of New York reserves the right to impose a maximum issue age for
nonqualified Certificates of age 75 and a maximum issue age for qualified
Certificates of age 65.
Ownership -- As owner, you have all rights and may receive all benefits under
the Certificate. The Certificate can be owned in joint tenancy only in spousal
situations.
Retirement Date -- A retirement date is established when you apply for the
Certificate. If you need to change it, send written instructions to IDS Life of
New York's home office at least 30 days before you wish the change to become
effective.
For nonqualified Certificates, 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 Certificate to fund a Section 401(k) plan, custodial or
trusteed plan, IRA or TSA plan, to avoid penalty taxes retirement payments
generally must be:
o on or after the annuitant turns 59 1/2; and
o for IRAs, by April 1 of the year following the calendar year when the
annuitant reaches age 70 1/2; or
o for all other qualified Annuities, by April 1 of the year which the
annuitant reaches age 70 1/2 or the calendar year when the annuitant
retires.
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 Certificate. If
the annuitant dies before the retirement date and there is no beneficiary, then
you will be the beneficiary. If you die before the retirement date and there is
no beneficiary, then your estate will be the beneficiary.
IRAs and Other Qualified Plans
The Certificate may be bought in connection with a retirement plan qualified
under Sections 401, 403 or 408 of the Code. These plans include:
o IRAs and Simplified Employee Pension plans (SEPs);
o Custodial and trusteed pension and profit sharing plans;
<PAGE>
o Section 401(k) plans; and
o Section 403(b) plans (TSAs).
Your purchase of the Certificate in connection with 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 for the Certificate and you may make additional purchase payments for
the Certificate. The initial purchase payment must be at least $5,000 for
nonqualified Certificates and at least $500 for qualified Certificates. After
making the initial purchase payment, you may make additional payments of at
least $500 for nonqualified Certificates and at least $50 for qualified
Certificates. Additional purchase payments can be mailed directly to IDS Life of
New York. The maximum total purchase payments for your Certificate in the first
and later years is $1,000,000. IDS Life of New York reserves the right to
increase this maximum amount on a uniform basis for all Certificate owners in a
class.
Qualified Plans -- If you invest in the Certificate in connection with a
qualified plan, that plan's limits on annual contributions also will apply.
Allocating your Purchase Payments -- Your purchase payment(s) also may be
allocated to the Fixed Account and/or the subaccount(s) you have selected as of
IDS Life of New York's next close of business currently the same as the close of
the New York Stock Exchange (NYSE), after IDS Life of New York receives and
accepts your payment at its home office in Albany. For nonqualified
Certificates, the minimum value of your investment in a subaccount or in the
Fixed Account is $500. This $500 minimum does not apply to qualified
Certificates.
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 of New York will
process the transfer request at its next close of business after we receive it.
There is no charge for transfers. However, unless the transfer is an automated
transfer described below, IDS Life of New York does require that your transfer
be for:
o at least $500; or
o your entire balance in that subaccount, if less.
<PAGE>
Automated Transfers -- You may establish automated transfers of certificate
values between the subaccounts and/or the Fixed Account through a one-time
written request or other method acceptable to IDS Life of New York. 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 of New York 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 certificate 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 certificate value, you should consider the
risks involved in switching investments. IDS Life of New York may, in its sole
discretion and subject to regulatory approval, suspend or modify these transfer
privileges at any time.
Telephone Transfers -- You also may request a transfer by telephone. IDS Life of
New York 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 of New York 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 of New York 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 of New York.
Certificate Charges and Charges Against the Variable Account
Certificate Administrative Charge -- IDS Life of New York charges your
Certificate an administrative fee of $30 each year. This charge is for
establishing and maintaining your records. IDS Life of New York deducts it from
the certificate value on each certificate anniversary. If you fully surrender
your Certificate, IDS Life of New York will deduct a reduced certificate
administrative charge that is prorated based on the number of days from your
last certificate anniversary to the date of full surrender. The certificate
administrative charge cannot be increased and does not apply after a retirement
payment plan begins.
<PAGE>
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 of New York.
It covers certain administrative and operating expenses of the subaccounts
incurred by IDS Life of New York 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.
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 of New York. It covers IDS Life of New York's annuity mortality risk
and expense risk. IDS Life of New York 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 of New York's guarantee to pay a death
benefit and guarantee to make retirement payments according to the terms of the
Certificate no matter how long a specific annuitant lives and no matter how long
the entire group of IDS Life of New York annuitants live. If, as a group, IDS
Life of New York annuitants outlive the life expectancy that has been assumed in
the actuarial tables, IDS Life of New York must take money from its general
assets to meet its obligations. If, as a group, IDS Life of New York annuitants
do not live as long as expected, IDS Life of New York could profit from the
mortality risk fee.
The expense risk is the risk that the certificate administrative charge and
Variable Account administrative charge, which cannot be increased, will not
cover IDS Life of New York's expenses. Any deficit would have to be made up from
IDS Life of New York's general assets. Any profit realized by IDS Life of New
York from the mortality and expense risk fee would be available to it for any
proper corporate purpose, including, among other things, payment of distribution
(selling) expenses. IDS Life of New York does not expect that the surrender
charge, which is discussed in the following paragraphs, will cover sales and
distribution expenses incurred by IDS Life of New York in connection with the
Certificates.
Surrender Charges -- If you surrender part or all of your Certificate, you may
be subject to a surrender charge. A surrender charge applies if all or part of
the certificate 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 certificate 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 Certificates
including commissions and other promotional or distribution expenses associated
with the printing
<PAGE>
and distribution of prospectuses and sales material. After the first certificate
year, you may surrender up to 10 percent of your prior certificate anniversary
value in one or more surrenders each certificate year without incurring a
surrender charge. The 10 percent free withdrawal provision is subject to other
Annuity provisions and terms including those on partial surrenders.
In addition, after the first certificate year there is no surrender charge on
certificate earnings, which equal:
1) the certificate value at the time of surrender; 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 certificate earnings (in excess of any 10 percent free
withdrawal amount); and finally from purchase payments (on a first in-first out
basis).
Surrender Charge Calculation -- The following example illustrates how the
surrender charge is calculated:
Assumptions:
- -----------------------------------------------------------------------------
Initial purchase payment at Certificate issue date of May 1, 1998.....$10,000
Subsequent purchase payment on July 1, 2001............................20,000
Account value on Certificate anniversary on April 29, 2002.............40,000
Account value on October 12, 2002......................................42,000
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
Full Surrender on October 12, 2002:
<S> <C> <C> <C>
- ------------------ ----------------- ----------------- -------------------------------------------------------------
Basis of Rate of Dollar Amount
Charge Surrender Charge of Charge Explanation of Charge
$ 4,000 None $ 0 10% of prior certificate anniversary contract value
surrendered free
$ 8,000 None $ 0 No charge on certificate earnings
$ 10,000 2% $ 200 Payment made in certificate year 1; surrendered at payment
year 5 rate
$ 20,000 5% $ 1,000 Payment made in certificate year 4; surrendered at payment
year 2 rate
- ------------------ ----------------- ----------------- -------------------------------------------------------------
Total Surrender Charge: $ 1,200
==================================== ================= =============================================================
<PAGE>
Partial Surrender of $25,000 on October 12, 2002:
- ------------------ ----------------- ----------------- -------------------------------------------------------------
Basis of Rate of Dollar Amount
Charge Surrender Charge of Charge Explanation of Charge
$ 4,000 None $ 0 10% of prior certificate anniversary contract value
surrendered free
$ 8,000 None $ 0 No charge on certificate earnings
$ 10,000 2% $ 200 Payment made in certificate year 1; surrendered at payment
year 5 rate
$ 3,000 5% $ 150 Payment made in certificate year 4; surrendered at payment
year 2 rate
- ------------------ ----------------- ----------------- -------------------------------------------------------------
Total Surrender Charge: $ 350
==================================== ================= =============================================================
</TABLE>
Surrender Charge on Partial Surrender -- The surrender charge is deducted from
the certificate 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 of New York may expect
to incur lower sales and administrative expenses or perform fewer services. In
those cases, IDS Life of New York may, in its discretion, reduce or eliminate
certain administrative and surrender charges. However, IDS Life of New York
expects this to occur infrequently, if at all.
Surrendering Your Certificate
As owner, you may surrender all or part of your Certificate'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 Certificate, a prorated portion of the certificate
administrative charge based on the number of days from your last certificate
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. In addition, if you purchased the Certificate in connection
with a qualified plan such as a 401(k) plan or a TSA (but not an IRA) and the
amount surrendered is paid to you instead of being directly rolled over to an
IRA or another eligible qualified plan, 20 percent income tax withholding may be
imposed. See the section called "Federal Tax Information." Finally, 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 a Certificate purchased in connection with a retirement plan
qualified under Section 403(b) as a TSA.
<PAGE>
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 Certificate 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 certificate
values attributable to salary reduction contributions made after Dec. 31, 1988,
but not of the earnings on them. These restrictions do not apply to the Dec. 31,
1988 value or to transfers or exchanges of contract values within the
Certificate 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 of New York allows you to establish systematic
withdrawals of certificate values through a one-time written request or other
method acceptable to IDS Life of New York. Amounts of up to 10 percent of the
certificate value at the beginning of the certificate year may be withdrawn. The
minimum systematic withdrawal amount from the certificate 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 certificate value required to begin systematic withdrawals is
$5,000. You may start or stop this service at any time, but must give IDS Life
of New York 30 days' notice to change any systematic withdrawal instructions
that are currently in place. IDS Life of New York will not deduct surrender
charges for first-year systematic withdrawals of amounts up to 10 percent of the
initial purchase payment.
<PAGE>
Systematic withdrawals may result in income taxes, withholding taxes and penalty
taxes being applied to all or a portion of the amount withdrawn. You should
consult your tax advisor regarding the tax consequences of systematic
withdrawals.
Partial Surrenders -- The minimum amount you may surrender is $500. You cannot
make a partial surrender if it would reduce the value of your investment in a
subaccount or in the Fixed Account to less than $500 unless the value of your
investment in a subaccount or in the Fixed Account is fully withdrawn.
If you have a balance in more than one subaccount and/or in the Fixed Account
and request a partial surrender, IDS Life of New York 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 certificate
value, unless you request otherwise.
A partial surrender request not exceeding $40,000 may be made by telephone. IDS
Life of New York 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 of New York 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 of New York 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 of New York.
Total Surrenders -- IDS Life of New York will compute the value of your
Certificate at the next close of business, currently the same as the close of
the NYSE, after receipt of your request for a complete surrender. IDS Life of
New York may ask you to return the Certificate.
Receiving Payment -- Payment will be mailed within seven days after IDS Life of
New York receives your request. However, IDS Life of New York 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
<PAGE>
o the SEC permits a delay in payment for the protection of owners.
NOTE: You will be charged a fee if you request express mail delivery of
your surrender check.
Payment in Case of Death before Retirement Payments Begin
Prior to the retirement date, if you or the annuitant die before the initial
fifth certificate anniversary, IDS Life of New York will pay the beneficiary the
greater of:
1) the certificate value; or
2) the amount of purchase payments (minus any surrenders).
On or after the initial fifth certificate anniversary, and each subsequent fifth
certificate anniversary, IDS Life of New York will pay the beneficiary the
greater of:
1) the certificate value; or
2) a minimum guaranteed death benefit which equals:
a) the death benefit calculated as of the previous fifth certificate
anniversary; plus
b) any purchase payments made since the previous fifth certificate
anniversary; minus
c) any surrenders since the previous fifth certificate anniversary.
If Your Spouse is Sole Beneficiary -- If you, as owner of the Certificate, die
before the retirement date and your spouse is the only beneficiary of the
Certificate, your spouse may keep the Certificate as owner and annuitant. To do
this, within 60 days after IDS Life of New York receives proof of death, it must
receive written instructions from your spouse to keep the Certificate in force.
Section 401(k) Plans, TSAs, Custodial and Trusteed Plans, and IRAs -- If you buy
the Certificate in connection with a Section 401(k) plan, custodial or trusteed
plan or as an IRA or TSA and you die before reaching age 70-1/2 and your spouse
is the only beneficiary, your spouse may keep the Certificate in force until the
date on which you would have reached age 70-1/2 or any other date permitted by
the Code. To do this, within 60 days after IDS Life of New York receives proof
of death, it must receive written instructions from your spouse to keep the
Certificate in force.
Paying the Beneficiary -- Unless you have given IDS Life of New York other
written instructions, IDS Life of New York will pay the beneficiary in a single
lump sum payment. The beneficiary may elect to receive payment any time within 5
years after the date of death. Payments made from a Certificate purchased to
fund certain qualified plans
<PAGE>
to a surviving spouse instead of being directly rolled over into an IRA may be
subject to 20 percent income tax withholding. See the section called "Federal
Tax Information." IDS Life of New York may make payments under any retirement
payment plan available under this Annuity if:
o the beneficiary asks IDS Life of New York in writing within 60 days
after IDS Life of New York receives proof of death;
o payments begin no later than one year after death or other date as
permitted by the Code; 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 certificate value to the beneficiary, IDS Life of New York will
determine the Certificate's value at the next close of the NYSE after IDS Life
of New York's death claim requirements are fulfilled. Interest, if any, is paid
at a rate no less than that required by applicable law. IDS Life of New York
will mail payment to the beneficiary within seven days after all death claim
requirements are fulfilled.
Settlement Value of Your Certificate
The amount available on the retirement date to provide payments under a
retirement payment plan is the current value of your investment, called the
certificate 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 certificate value will exceed, or even equal, the amount of
your purchase payments. You will receive quarterly statements showing your
certificate value and any other information required by applicable law at least
annually.
On your retirement date, the certificate value is applied to IDS Life of New
York's current fixed table of settlement rates, which will be at least as
favorable as that contained in the Certificate.
IDS Life of New York then calculates lifetime annuity payments according to the
retirement payment plan you choose.
A unisex table of settlement rates will apply, except when the Certificate is
used to fund an IRA or a nonqualified plan.
Payout Options at Retirement
As the owner of the Certificate, 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 of New York may mutually agree on other
payment arrangements. Annuity
<PAGE>
payments will be made on a fixed basis. A fixed annuity is one with payments
that are guaranteed by IDS Life of New York as to dollar amount. Fixed annuity
payments after the first payment will never be more or less than the first
payment.
Retirement Payment Plans -- You may choose any one of these payment plans by
giving IDS Life of New York 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 of New York 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
certificate 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 of New York 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 that you elect. 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 of New York will continue making monthly payments to you, if
living; if not, to your beneficiary; or, if no beneficiary is named, to
your estate.
<PAGE>
Restrictions for Some Qualified Plans -- If your Certificate was purchased in
connection with a Section 401(k) plan, custodial or trusteed plan, or as a TSA
or an IRA, 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 of New York Does Not Receive Instructions -- You must give IDS Life
of New York written instructions for paying retirement benefits at least 30 days
before the retirement date. If you do not, IDS Life of New York will make
payments under Plan B, with 120 monthly payments guaranteed.
If Monthly Payments Would be Less than $50 -- IDS Life of New York will
calculate your certificate value at the retirement date. If the calculations
show that monthly payments would be less than $50, IDS Life of New York reserves
the right to change the frequency of the retirement payments or to pay the
certificate value in one lump sum.
Death After Retirement Payments Begin -- If you or the annuitant die after
retirement payments begin, any amount payable, as provided in the retirement
payment plan in effect, will be continued to the beneficiary, if living; if not,
the owner, if living; if not, the owner's estate.
Changing Ownership
You may change ownership of your Certificate at any time by filing a change of
ownership on a form approved by IDS Life of New York and sent to our home
office. No change of ownership will be binding upon IDS Life of New York until
the change is received and recorded. IDS Life of New York takes no
responsibility for the validity of the change.
If you have a qualified plan, the Certificate 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 of New York. However, if the owner is a trust or custodian, or an
employer acting in a similar capacity, ownership of a Certificate may be
transferred to the annuitant.
The value of any part of a nonqualified Certificate assigned or pledged is taxed
like a cash withdrawal to the extent allocable to investment in the Certificate.
<PAGE>
Transfer of a nonqualified Certificate to another person without adequate
consideration is considered a gift and the transfer may be considered a
surrender of the Certificate for federal income tax purposes. The income on the
Certificate 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 Certificate will be the value of the Certificate 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 Certificate'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 Certificate.
You are not taxed on your investment in the Certificate. Your investment
generally includes purchase payments made into the Certificate with after-tax
dollars. If the investment in the Certificate 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 Certificate and will be
taxed when paid to you.
If you surrender part or all of your Certificate 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 Certificate exceeds your investment. In
addition, you may have to pay a 10 percent IRS penalty tax for early withdrawal
and, for surrenders from Certificates purchased to fund qualified plans and
TSAs, 20 percent income tax withholding may be imposed.
If payments begin under a nonqualified Certificate, 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 Certificate and will not be taxed. All amounts
received after your investment is recovered will be subject to tax. If payments
begin under a qualified Certificate, 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 Certificate 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 contracts 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 contracts is determined by aggregating all such contracts.
<PAGE>
The income earned on a Certificate 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
Certificates in qualified plans).
These are the major exceptions to the 10 percent IRS penalty tax. Additional
exceptions may apply depending upon whether your Certificate is qualified. For
qualified Certificates, other penalties apply if you surrender a Certificate
before the plan specifies that payments can be made under the plan.
In general if you receive all or a portion of the value of a Certificate you
purchased to fund a qualified plan such as a 401(k) plan or TSA (but not 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 qualified 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
<PAGE>
subject to the mandatory 20 percent withholding, federal income tax will be
withheld from the taxable part of your distribution unless you elect otherwise.
State withholding also may be imposed on taxable distributions.
You will receive a 1099 tax information form for any year in which you receive a
taxable distribution from your Certificate according to our records.
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 and Certificates
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 Certificate 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 of New York 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 current 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 Certificates
Smith Barney Inc. is the principal underwriter of the Certificate. IDS Life of
New York pays total commissions of up to 7.0% of the total purchase payments
received on the Certificates.
<PAGE>
About the Portfolios and Funds
Voting Rights -- As the Certificate owner, you have voting rights in the
Greenwich Street Series Fund and the Portfolios and in the Funds, the shares of
which are held by the subaccounts in which you have invested. IDS Life of New
York will vote the shares of each Portfolio and Funds 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 of New York 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 of New York voting instructions, it will vote your
shares in the same proportion as the votes for which it has received
instructions. IDS Life of New York 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.
However, no such substitution or change will be made without any necessary
approval of the SEC and state insurance department. IDS Life of New York 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 and Certificate" applies in a like manner to the Fixed Account.
However, there are some differences.
<PAGE>
The Fixed Account operates like a traditional annuity. Fixed annuity cash values
increase based on interest rates that may change from time to time but are
guaranteed by IDS Life of New York. 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 of New York. 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 of New York'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 certificate values between the Fixed Account
and the subaccounts, but such transfers are restricted as follows:
1. You may transfer certificate values from the Fixed Account to the
subaccount(s) or from the subaccount(s) to the Fixed Account up to six
times per certificate 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 certificate values, transfers must be
for at least $500 or your entire balance in the Fixed Account, if less.
IDS Life of New York may, in its sole discretion and subject to regulatory
approval, suspend or modify these transfer privileges at any time.
The Annuity allows you to make automated transfers of certificate 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 certificate values service is in effect. You may start or
stop this service at any time, but you must give IDS Life of New York 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
certificate 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>
Because of exemptive and exclusionary provisions, interests in IDS Life of New
York'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 of New York nor any interests therein are generally subject to the
provisions of the 1933 or 1940 Acts, and IDS Life of New York 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 of New York, 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.
Year 2000
The Year 2000 issue is the result of computer programs having been written using
two digits rather than four to define a year. Any programs that have
time-sensitive software may recognize a date using "00" as the year 1900 rather
that 2000. This could result in the failure of major systems or miscalculations,
which could have a material impact on the operations of the Variable Account.
The Variable Account has no computer systems of its own but is dependent upon
the systems maintained by AEFC and certain other third parties.
A comprehensive review of AEFC's computer systems and business processes has
been conducted to identify the major systems that could be affected by the Year
2000 issue. Steps are being taken to resolve any potential problems including
modification to existing software and the purchase of new software. These
measures are scheduled to be completed and tested on a timely basis. AEFC's goal
is to complete internal remediation and testing of each system by the end of
1998 and to continue compliance efforts through 1999. The Year 2000 issue
readiness of unaffiliated investment managers and other third parties whose
system failures could have an impact on the Variable Account operations
currently us being evaluated. The potential materiality of any such impact is
not known at this time.
<PAGE>
Table of Contents of the SAI
Page
Performance Information................................................
Rating Agencies........................................................
Principal Underwriter..................................................
Independent Auditors...................................................
Prospectus.............................................................
Financial Statements
IDS Life of New York Account SBS
IDS Life Insurance Company of New York
- -----------------------------------------------------------------------
If you would like to receive a copy of the SAI for:
Symphony Annuity
(IDS Life of New York Account SBS)
please return this request to:
IDS Life Insurance Company of New York
P.O. Box 5144
Albany, New York 12205
Your name__________________________________________________________
Address____________________________________________________________
City_________________________ State______ Zip______________________
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
for
SYMPHONY ANNUITY
IDS LIFE OF NEW YORK ACCOUNT SBS
May 1, 1998
IDS Life of New York Account SBS is a separate account established and
maintained by IDS Life Insurance Company of New York (IDS Life of New York).
This Statement of Additional Information (SAI), dated May 1, 1998, is not a
prospectus. It should be read together with the Account's prospectus, dated May
1, 1998, which may be obtained from your Smith Barney Financial Consultant, or
by writing or calling IDS Life of New York Annuity Service at the address or
telephone number below.
IDS Life Insurance Company of New York
20 Madison Avenue Extension
Albany, NY 12205
800-336-3446
<PAGE>
TABLE OF CONTENTS
Performance Information..................................................3
Rating Agencies..........................................................5
Principal Underwriter....................................................5
Independent Auditors.....................................................5
Prospectus...............................................................6
Financial Statements
- IDS Life of New York Account SBS
- IDS Life Insurance Company of New York
<PAGE>
PERFORMANCE INFORMATION
Calculation of Yield for the New York Money Market Subaccount
Simple yield for the New York 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:
Effective Yield = [(Base Period Return + 1) x (365/7)] - 1
Annualized yield based on seven-day period ended Dec. 31, 1997, the Account's
simple yield was 3.05% and its effective yield was 3.09%.
Calculation of Yield for the Non Money Market Subaccounts
For a subaccount other than the Money Market subaccount, quotations of yield
will be based on all investment income earned during a particular 30-day period,
less expenses accrued during the period (net investment income) and will be
computed by dividing net investment income per accumulation unit by the value of
an accumulation unit on the last day of the period, according to the following
formula:
YIELD = 2 [(a-b + 1)6 - 1]
cd
where: a = dividends and investment income earned during the period.
b = expenses accrued for the period (net of reimbursements).
c = the average daily number of accumulation units outstanding
during the period that were entitled to receive dividends.
d = the maximum offering price per accumulation unit on the last
day of the period.
Yield on the subaccount is earned from the increase in the net asset value of
shares of the portfolio or fund in which the subaccount invests and from
dividends declared and paid by the fund, which are automatically invested in
shares of the portfolio or fund.
<PAGE>
Calculation of Average Annual Total Return
Quotations of average annual total return for any subaccount will be expressed
in terms of the average annual compounded rate of return of a hypothetical
investment in the certificate over a period of one, five and ten years (or, if
less, up to the life of the subaccount), calculated according to the following
formula:
P(1+T)n = ERV
where: P = a hypothetical initial payment of $1,000.
T = average annual total return.
n = number of years.
ERV = Ending Redeemable Value of a hypothetical $1,000 payment
made at the beginning of the one-, five or ten-year (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 certificate
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 owner surrenders
the entire certificate 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, Variable Account administrative charge, and mortality and
expense risk fee.
Performance of the accounts may be quoted or compared to rankings, yields, or
returns or used in variable annuity accumulation or settlement illustration as
published or prepared by independent rating or statistical services or
publishers or publications such as The Bank Rate Monitor National Index,
Barron's, Business Week, CDA Technologies, Donoghue's Money Market Fund Report,
Financial Services Week, Financial Times, Financial World, Forbes, Fortune,
Global Investor, Institutional Investor, Investor's Daily, Kiplinger's Personal
Finance, Lipper Analytical Services, Money, Morningstar, Mutual Fund Forecaster,
Newsweek, The New York Times, Personal Investor, Stanger Report, Sylvia Porter's
Personal Finance, USA Today, U.S. News and World Report, The Wall Street Journal
and Wiesenberger Investment Companies Service.
<PAGE>
RATING AGENCIES
The following chart reflects the ratings given to IDS Life Insurance Company of
New York 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 of New York's ability to make annuity
payouts and to pay death benefits and other distributions from the certificate.
Rating agency Rating
A.M. Best A+
(Superior)
Duff & Phelps AAA
Moody's Aa2
PRINCIPAL UNDERWRITER
The principal underwriter for the Account is Smith Barney Inc., which offers the
variable annuity on a continuous basis.
Surrender charges received by IDS Life of New York for 1997, 1996 and 1995
aggregated $688,445, $551,374, and $464,724, respectively. Commissions paid by
IDS Life of New York for 1997, 1996 and 1995 aggregated $1,067,783, $1,036,511,
and $681,615, respectively. The surrender charges were applied toward payment of
commissions.
INDEPENDENT AUDITORS
The financial statements of IDS Life of New York Account SBS including the
statements of net assets as of Dec. 31, 1997, 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, and the financial statements
of IDS Life Insurance Company of New York (a wholly-owned subsidiary of IDS Life
Insurance Company) at Dec. 31, 1997 and 1996 and for each of the three years in
the period ended Dec. 31, 1997, appearing in this SAI, have been audited by
Ernst & Young LLP, independent auditors, as stated in their reports appearing
herein.
PROSPECTUS
The prospectus dated May 1, 1998, is hereby incorporated in this SAI by
reference.
<PAGE>
IDS Life of New York Account SBS
Annual Financial Information
Report of Independent Auditors
The Board of Directors
IDS Life Insurance Company of New York
We have audited the accompanying individual and combined statements of net
assets of the segregated asset subaccounts of IDS Life of New York Account SBS
(comprised of subaccounts BMO, BIH, BDS, BEM, BEX, BGI, BAP, BTR, BEG, BIE, BCR,
BSI and BMG) as of December 31, 1997, 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. These financial statements are the
responsibility of the management of IDS Life Insurance Company of New York. 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, 1997 with the affiliated and
unaffiliated mutual fund managers. 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 of New York Account SBS at December 31,
1997 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 13, 1998
<PAGE>
<TABLE>
<CAPTION>
IDS Life of New York Account SBS
- ------------------------------------------------------------------------------------------------------------------------------------
Statements of Net Assets Dec. 31, 1997
Segregated Asset Subaccount
------------------------------------------------------------------------------
Assets BMO BIH BDS BEM BEX
- ------------------------------------------------------------------------------------------------------------------------------------
Investments in shares of mutual funds,
at market value:
Smith Barney Series Fund Money Market Portfolio
521,786 shares at net asset value
<S> <C> <C> <C> <C> <C>
of $1.00 per share (cost $521,783) $ 521,786 $ - $ - $ - $ -
Smith Barney Series Fund Intermediate High Grade Portfolio
189,648 shares at net asset value
of $10.89 per share (cost $1,959,222) - 2,065,265 - - -
Smith Barney Series Fund Diversified Strategic Income Portfolio
230,029 shares at net asset value
of $10.89 per share (cost $2,310,742) - - 2,505,015 - -
Smith Barney Series Fund Equity Income Portfolio
109,466 shares at net asset value
of $15.31 per share (cost $1,266,161) - - - 1,675,920 -
Smith Barney Series Fund Equity Index Portfolio
113,267 shares at net asset value
of $23.55 per share (cost $1,465,108) - - - - 2,667,435
Smith Barney Series Fund Growth & Income Portfolio
169,949 shares at net asset value
of $18.54 per share (cost $2,082,682) - - - - -
Smith Barney Series Fund Appreciation Portfolio
308,959 shares at net asset value
of $18.73 per share (cost $4,002,640) - - - - -
Smith Barney Series Fund Total Return Portfolio
154,889 shares at net asset value
of $17.62 per share (cost $1,964,037) - - - - -
Smith Barney Series Fund Emerging Growth Portfolio
63,840 shares at net asset value
of $16.87 per share (cost $777,720) - - - - -
Smith Barney Series Fund International Equity Portfolio
116,710 shares at net asset value
of $11.78 per share (cost $1,174,447) - - - - -
IDS Life Capital Resource Fund
660 shares at net asset value
of $28.58 per share (cost $17,478) - - - - -
IDS Life Special Income Fund
1,202 shares at net asset value
of $11.80 per share (cost $14,394) - - - - -
IDS Life Managed Fund, Inc.
0 shares at net asset value
of $0 per share (cost $0 ) - - - - -
- ------------------------------------------------------------------------------------------------------------------------------------
521,786 2,065,265 2,505,015 1,675,920 2,667,435
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends receivable - - - - -
- ------------------------------------------------------------------------------------------------------------------------------------
Total assets 521,786 2,065,265 2,505,015 1,675,920 2,667,435
- ------------------------------------------------------------------------------------------------------------------------------------
Liabilities
- ------------------------------------------------------------------------------------------------------------------------------------
Payable to IDS Life of New York for:
Mortality and expense risk fee 550 2,331 2,829 1,901 3,031
Administrative charge 110 466 566 380 606
Payable to mutual funds for investments
purchased - - - - -
- ------------------------------------------------------------------------------------------------------------------------------------
Total liabilities 660 2,797 3,395 2,281 3,637
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to contracts in
accumulation period $521,126 $2,062,468 $2,501,620 $1,673,639 $2,663,798
- ------------------------------------------------------------------------------------------------------------------------------------
Accumulation units outstanding 460,369 1,683,871 1,841,311 1,115,107 1,246,827
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value per accumulation unit $1.13 $1.22 $1.36 $1.50 $2.14
- ------------------------------------------------------------------------------------------------------------------------------------
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
IDS Life of New York Account SBS
- ------------------------------------------------------------------------------------------------------------------------------------
Statements of Net Assets - continued Dec. 31, 1997
Segregated Asset Subaccount
-------------------------------------------------------------------------------
Assets BGI BAP BTR BEG BIE
- ------------------------------------------------------------------------------------------------------------------------------------
Investments in shares of mutual funds,
at market value:
Smith Barney Series Fund Money Market Portfolio
521,786 shares at net asset value
<S> <C> <C> <C> <C> <C>
of $1.00 per share (cost $521,783) $ - $ - $ - $ - $ -
Smith Barney Series Fund Intermediate High Grade Portfolio
189,648 shares at net asset value
of $10.89 per share (cost $1,959,222) - - - - -
Smith Barney Series Fund Diversified Strategic Income Portfolio
230,029 shares at net asset value
of $10.89 per share (cost $2,310,742) - - - - -
Smith Barney Series Fund Equity Income Portfolio
109,466 shares at net asset value
of $15.31 per share (cost $1,266,161) - - - - -
Smith Barney Series Fund Equity Index Portfolio
113,267 shares at net asset value
of $23.55 per share (cost $1,465,108) - - - - -
Smith Barney Series Fund Growth & Income Portfolio
169,949 shares at net asset value
of $18.54 per share (cost $2,082,682) 3,150,849 - - - -
Smith Barney Series Fund Appreciation Portfolio
308,959 shares at net asset value
of $18.73 per share (cost $4,002,640) - 5,786,801 - - -
Smith Barney Series Fund Total Return Portfolio
154,889 shares at net asset value
of $17.62 per share (cost $1,964,037) - - 2,729,151 - -
Smith Barney Series Fund Emerging Growth Portfolio
63,840 shares at net asset value
of $16.87 per share (cost $777,720) - - - 1,076,988 -
Smith Barney Series Fund International Equity Portfolio
116,710 shares at net asset value
of $11.78 per share (cost $1,174,447) - - - - 1,374,841
IDS Life Capital Resource Fund
660 shares at net asset value
of $28.58 per share (cost $17,478) - - - - -
IDS Life Special Income Fund
1,202 shares at net asset value
of $11.80 per share (cost $14,394) - - - - -
IDS Life Managed Fund, Inc.
0 shares at net asset value
of $0 per share (cost $0) - - - - -
- ------------------------------------------------------------------------------------------------------------------------------------
3,150,849 5,786,801 2,729,151 1,076,988 1,374,841
- ------------------------------------------------------------------------------------------------------------------------------------
Dividends receivable - - - - -
- ------------------------------------------------------------------------------------------------------------------------------------
Total assets 3,150,849 5,786,801 2,729,151 1,076,988 1,374,841
- ------------------------------------------------------------------------------------------------------------------------------------
Liabilities
- ------------------------------------------------------------------------------------------------------------------------------------
Payable to IDS Life of New York for:
Mortality and expense risk fee 3,570 6,540 3,076 1,276 1,567
Administrative charge 714 1,308 615 255 314
Payable to mutual funds for investments
purchased - - - - -
- ------------------------------------------------------------------------------------------------------------------------------------
Total liabilities 4,284 7,848 3,691 1,531 1,881
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to contracts in
accumulation period $3,146,565 $5,778,953 $2,725,460 $1,075,457 $1,372,960
- ------------------------------------------------------------------------------------------------------------------------------------
Accumulation units outstanding 1,708,537 3,081,905 1,430,157 581,926 1,226,952
- ------------------------------------------------------------------------------------------------------------------------------------
Net asset value per accumulation unit $1.84 $1.88 $1.91 $1.85 $1.12
- ------------------------------------------------------------------------------------------------------------------------------------
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
IDS Life of New York Account SBS
- --------------------------------------------------------------------------------------------------------------------------
Statements of Net Assets - continued Dec. 31, 1997
Segregated Asset Subaccount
------------------------------------------------ Combined
Assets BCR BSI BMG Variable
Account
- --------------------------------------------------------------------------------------------------------------------------
Investments in shares of mutual funds,
at market value:
Smith Barney Series Fund Money Market Portfolio
521,786 shares at net asset value
<S> <C> <C> <C> <C>
of $1.00 per share (cost $521,783) $ - $ - $ - $ 521,786
Smith Barney Series Fund Intermediate High Grade Portfolio
189,648 shares at net asset value
of $10.89 per share (cost $1,959,222) - - - 2,065,265
Smith Barney Series Fund Diversified Strategic Income Portfolio
230,029 shares at net asset value
of $10.89 per share (cost $2,310,742) - - - 2,505,015
Smith Barney Series Fund Equity Income Portfolio
109,466 shares at net asset value
of $15.31 per share (cost $1,266,161) - - - 1,675,920
Smith Barney Series Fund Equity Index Portfolio
113,267 shares at net asset value
of $23.55 per share (cost $1,465,108) - - - 2,667,435
Smith Barney Series Fund Growth & Income Portfolio
169,949 shares at net asset value
of $18.54 per share (cost $2,082,682) - - - 3,150,849
Smith Barney Series Fund Appreciation Portfolio
308,959 shares at net asset value
of $18.73 per share (cost $4,002,640) - - - 5,786,801
Smith Barney Series Fund Total Return Portfolio
154,889 shares at net asset value
of $17.62 per share (cost $1,964,037) - - - 2,729,151
Smith Barney Series Fund Emerging Growth Portfolio
63,840 shares at net asset value
of $16.87 per share (cost $777,720) - - - 1,076,988
Smith Barney Series Fund International Equity Portfolio
116,710 shares at net asset value
of $11.78 per share (cost $1,174,447) - - - 1,374,841
IDS Life Capital Resource Fund
660 shares at net asset value
of $28.58 per share (cost $17,478) 18,861 - - 18,861
IDS Life Special Income Fund
1,202 shares at net asset value
of $11.80 per share (cost $14,394) - 14,181 - 14,181
IDS Life Managed Fund, Inc.
0 shares at net asset value
of $0 per share (cost $0 ) - - - -
- --------------------------------------------------------------------------------------------------------------------------
18,861 14,181 - 23,587,093
- --------------------------------------------------------------------------------------------------------------------------
Dividends receivable - 88 - 88
- --------------------------------------------------------------------------------------------------------------------------
Total assets 18,861 14,269 - 23,587,181
- --------------------------------------------------------------------------------------------------------------------------
Liabilities
- --------------------------------------------------------------------------------------------------------------------------
Payable to IDS Life of New York for:
Mortality and expense risk fee 22 16 - 26,709
Administrative charge 4 3 - 5,341
Payable to mutual funds for investments
purchased - 69 - 69
- --------------------------------------------------------------------------------------------------------------------------
Total liabilities 26 88 - 32,119
- --------------------------------------------------------------------------------------------------------------------------
Net assets applicable to contracts in
accumulation period $ 18,835 $ 14,181 $ - $ 23,555,062
- --------------------------------------------------------------------------------------------------------------------------
Accumulation units outstanding 12,843 12,690 -
- -----------------------------------------------------------------------------------------------------------
Net asset value per accumulation unit $1.47 $1.12 $1.64
- -----------------------------------------------------------------------------------------------------------
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
IDS Life of New York Account SBS
- ------------------------------------------------------------------------------------------------------------------------------------
Statements of Operations For the year ended Dec. 31, 1997
Segregated Asset Subaccount
----------------------------------------------------------------------------
BMO BIH BDS BEM BEX
Investment income
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Dividend income from mutual funds $ 18,090 $ 130,958 $ 207,570 $ 78,205 $ 72,267
- ------------------------------------------------------------------------------------------------------------------------------------
Expenses:
Mortality and expense risk fee 5,156 23,793 33,861 20,027 29,994
Administrative charge 1,031 4,759 6,772 4,005 5,999
- ------------------------------------------------------------------------------------------------------------------------------------
Total expenses 6,187 28,552 40,633 24,032 35,993
- ------------------------------------------------------------------------------------------------------------------------------------
Investment income (loss) - net 11,903 102,406 166,937 54,173 36,274
- ------------------------------------------------------------------------------------------------------------------------------------
Realized and unrealized gain (loss) on investments - net
- ------------------------------------------------------------------------------------------------------------------------------------
Realized gain (loss) on sales of investments in mutual funds:
Proceeds from sales 169,750 74,487 800,246 483,366 160,565
Cost of investments sold 169,749 70,269 712,327 405,603 89,390
- ------------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on investments 1 4,218 87,919 77,763 71,175
- ------------------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or
depreciation of investments 5 28,961 (91,948) 171,680 495,233
- ------------------------------------------------------------------------------------------------------------------------------------
Net gain (loss) on investments 6 33,179 (4,029) 249,443 566,408
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations $ 11,909 $ 135,585 $ 162,908 $ 303,616 $ 602,682
- ------------------------------------------------------------------------------------------------------------------------------------
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
IDS Life of New York Account SBS
- -----------------------------------------------------------------------------------------------------------------------------------
Statements of Operations - continued For the year ended Dec. 31, 1997
Segregated Asset Subaccount
----------------------------------------------------------------------------
BGI BAP BTR BEG BIE
Investment income
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Dividend income from mutual funds $ 251,153 $ 369,021 $ 109,947 $ 125,149 $ 3,017
- -----------------------------------------------------------------------------------------------------------------------------------
Expenses:
Mortality and expense risk fee 37,199 68,442 30,936 13,509 19,966
Administrative charge 7,440 13,688 6,187 2,702 3,993
- -----------------------------------------------------------------------------------------------------------------------------------
Total expenses 44,639 82,130 37,123 16,211 23,959
- -----------------------------------------------------------------------------------------------------------------------------------
Investment income (loss) - net 206,514 286,891 72,824 108,938 (20,942)
- -----------------------------------------------------------------------------------------------------------------------------------
Realized and unrealized gain (loss) on investments - net
- -----------------------------------------------------------------------------------------------------------------------------------
Realized gain (loss) on sales of investments in mutual funds:
Proceeds from sales 283,507 614,833 468,379 240,089 334,804
Cost of investments sold 178,987 422,010 338,579 163,331 275,851
- -----------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on investments 104,520 192,823 129,800 76,758 58,953
- -----------------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or
depreciation of investments 248,869 698,471 141,461 13,116 (91,306)
- -----------------------------------------------------------------------------------------------------------------------------------
Net gain (loss) on investments 353,389 891,294 271,261 89,874 (32,353)
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations $ 559,903 $ 1,178,185 $ 344,085 $ 198,812 $ (53,295)
- -----------------------------------------------------------------------------------------------------------------------------------
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
IDS Life of New York Account SBS
- -------------------------------------------------------------------------------------------------------------------------
Statements of Operations - continued For the year ended Dec. 31, 1997
Segregated Asset Subaccount
------------------------------------------ Combined
BCR BSI BMG Variable
Investment income Account
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Dividend income from mutual funds $ 515 $ 651 $ 107 $ 1,366,650
- --------------------------------------------------------------------------------------------------------------------------
Expenses:
Mortality and expense risk fee 219 62 95 283,259
Administrative charge 44 12 19 56,651
- --------------------------------------------------------------------------------------------------------------------------
Total expenses 263 74 114 339,910
- --------------------------------------------------------------------------------------------------------------------------
Investment income (loss) - net 252 577 (7) 1,026,740
- --------------------------------------------------------------------------------------------------------------------------
Realized and unrealized gain (loss) on investments - net
- --------------------------------------------------------------------------------------------------------------------------
Realized gain (loss) on sales of investments in mutual funds:
Proceeds from sales 116 - 16,667 3,646,809
Cost of investments sold 119 - 16,230 2,842,445
- --------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on investments (3) - 437 804,364
- --------------------------------------------------------------------------------------------------------------------------
Net change in unrealized appreciation or
depreciation of investments 3,186 (213) (477) 1,617,038
- --------------------------------------------------------------------------------------------------------------------------
Net gain (loss) on investments 3,183 (213) (40) 2,421,402
- --------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations $ 3,435 $ 364 $ (47) $ 3,448,142
- --------------------------------------------------------------------------------------------------------------------------
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
IDS Life of New York Account SBS
- ------------------------------------------------------------------------------------------------------------------------------------
Statements of Changes in Net Assets For the year ended Dec. 31, 1997
Segregated Asset Subaccount
---------------------------------------------------------------------------
Operations BMO BIH BDS BEM BEX
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investment income (loss) - net $ 11,903 $ 102,406 $ 166,937 $ 54,173 $ 36,274
Net realized gain (loss) on investments 1 4,218 87,919 77,763 71,175
Net change in unrealized appreciation or
depreciation of investments 5 28,961 (91,948) 171,680 495,233
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations 11,909 135,585 162,908 303,616 602,682
- ------------------------------------------------------------------------------------------------------------------------------------
Contract Transactions
- ------------------------------------------------------------------------------------------------------------------------------------
Contract purchase payments - - 9,250 1,002 -
Net transfers* 246,033 435,930 (310,923) 1,886 157,307
Surrender benefits and contract charges (113,729) (24,048) (416,699) (366,749) (82,032)
Death benefits - - - (5,232) -
- ------------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) from contract transactions 132,304 411,882 (718,372) (369,093) 75,275
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets at beginning of year 376,913 1,515,001 3,057,084 1,739,116 1,985,841
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets at end of year $ 521,126 $ 2,062,468 $ 2,501,620 $ 1,673,639 $ 2,663,798
- ------------------------------------------------------------------------------------------------------------------------------------
Accumulation Unit Activity
- ------------------------------------------------------------------------------------------------------------------------------------
Units outstanding at beginning of year 342,709 1,324,173 2,397,158 1,409,996 1,208,198
Contract purchase payments - - 7,154 844 -
Net transfers* 219,667 380,530 (239,465) (1,885) 78,081
Surrender benefits and contract charges (102,007) (20,832) (323,536) (289,677) (39,452)
Death benefits - - - (4,171) -
- ------------------------------------------------------------------------------------------------------------------------------------
Units outstanding at end of year 460,369 1,683,871 1,841,311 1,115,107 1,246,827
- ------------------------------------------------------------------------------------------------------------------------------------
*Includes transfer activity from (to) other subaccounts and transfers from (to)
IDS Life of New York's fixed account.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
IDS Life of New York Account SBS
- ------------------------------------------------------------------------------------------------------------------------------------
Statements of Changes in Net Assets - continued For the year ended Dec. 31, 1997
Segregated Asset Subaccount
------------------------------------------------------------------------------
Operations BGI BAP BTR BEG BIE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investment income (loss) - net $ 206,514 $ 286,891 $ 72,824 $ 108,938 $ (20,942)
Net realized gain (loss) on investments 104,520 192,823 129,800 76,758 58,953
Net change in unrealized appreciation or
depreciation of investments 248,869 698,471 141,461 13,116 (91,306)
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations 559,903 1,178,185 344,085 198,812 (53,295)
- ------------------------------------------------------------------------------------------------------------------------------------
Contract Transactions
- ------------------------------------------------------------------------------------------------------------------------------------
Contract purchase payments 8,487 18,728 39,268 1,494 1,501
Net transfers* 92,265 183,845 421,173 32,472 (53,403)
Surrender benefits and contract charges (196,957) (487,735) (389,946) (140,652) (182,784)
Death benefits - (7,124) - - -
- ------------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) from contract transactions (96,205) (292,286) 70,495 (106,686) (234,686)
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets at beginning of year 2,682,867 4,893,054 2,310,880 983,331 1,660,941
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets at end of year $ 3,146,565 $ 5,778,953 $ 2,725,460 $ 1,075,457 $ 1,372,960
- ------------------------------------------------------------------------------------------------------------------------------------
Accumulation Unit Activity
- ------------------------------------------------------------------------------------------------------------------------------------
Units outstanding at beginning of year 1,764,354 3,249,343 1,395,812 635,093 1,430,246
Contract purchase payments 4,896 10,959 22,336 931 1,252
Net transfers* 54,490 109,188 241,847 30,057 (47,765)
Surrender benefits and contract charges (115,203) (283,107) (229,838) (84,155) (156,781)
Death benefits - (4,478) - - -
- ------------------------------------------------------------------------------------------------------------------------------------
Units outstanding at end of year 1,708,537 3,081,905 1,430,157 581,926 1,226,952
- ------------------------------------------------------------------------------------------------------------------------------------
*Includes transfer activity from (to) other subaccounts and transfers from (to)
IDS Life of New York's fixed account.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
IDS Life of New York Account SBS
- -------------------------------------------------------------------------------------------------------------------------
Statements of Changes in Net Assets - continued For the year ended Dec. 31, 1997
Segregated Asset Subaccount
---------------------------------------------- Combined
Operations BCR BSI BMG Variable
Account
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Investment income (loss) - net $ 252 $ 577 $ (7) $ 1,026,740
Net realized gain (loss) on investments (3) - 437 804,364
Net change in unrealized appreciation or
depreciation of investments 3,186 (213) (477) 1,617,038
- --------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations 3,435 364 (47) 3,448,142
- --------------------------------------------------------------------------------------------------------------------------
Contract Transactions
- --------------------------------------------------------------------------------------------------------------------------
Contract purchase payments - - - 79,730
Net transfers* - 13,817 (16,634) 1,203,768
Surrender benefits and contract charges (2) - (2) (2,401,335)
Death benefits - - - (12,356)
- --------------------------------------------------------------------------------------------------------------------------
Increase (decrease) from contract transactions (2) 13,817 (16,636) (1,130,193)
- --------------------------------------------------------------------------------------------------------------------------
Net assets at beginning of year 15,402 0 16,683 21,237,113
- --------------------------------------------------------------------------------------------------------------------------
Net assets at end of year $ 18,835 $ 14,181 $ - $ 23,555,062
- --------------------------------------------------------------------------------------------------------------------------
Accumulation Unit Activity
- -----------------------------------------------------------------------------------------------------------
Units outstanding at beginning of year 12,845 - 12,010
Contract purchase payments - - -
Net transfers* - 12,690 (12,008)
Surrender benefits and contract charges (2) - (2)
Death benefits - - -
- -----------------------------------------------------------------------------------------------------------
Units outstanding at end of year 12,843 12,690 -
- -----------------------------------------------------------------------------------------------------------
*Includes transfer activity from (to) other subaccounts and transfers from (to)
IDS Life of New York's fixed account.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
IDS Life of New York Account SBS
- ------------------------------------------------------------------------------------------------------------------------------------
Statements of Changes in Net Assets* For the year ended Dec. 31, 1996
Segregated Asset Subaccount
------------------------------------------------------------------------------------------------
Operations BMO BIH BDS BEM BEX BGI BAP
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Investment income (loss) - net $ 12,505 $ (11,839) $ (6,694) $ (17,501) $ 36,047 $ (34,771) $ 326,083
Net realized gain (loss) on investments 2 5,009 40,222 39,821 42,379 77,440 201,938
Net change in unrealized appreciation
or depreciation of investments (2) 10,148 250,197 52,896 258,634 376,808 252,993
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations 12,505 3,318 283,725 75,216 337,060 419,477 781,014
- ------------------------------------------------------------------------------------------------------------------------------------
Contract Transactions
- ------------------------------------------------------------------------------------------------------------------------------------
Contract purchase payments - 320 6,665 - 319 79,541 158,409
Net transfers** (34,126) 24,317 278,066 (122,361) (29,084) (9,054) (53,766)
Surrender benefits and contract charges (22,104) (87,647) (657,405) (166,322) (34,973) (142,793) (473,742)
Death benefits - (11,367) - (28,226) - (7,388) (31,371)
- ------------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) from
contract transactions (56,230) (74,377) (372,674) (316,909) (63,738) (79,694) (400,470)
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets at beginning of year 420,638 1,586,060 3,146,033 1,980,809 1,712,519 2,343,084 4,512,510
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets at end of year $ 376,913 $ 1,515,001 $ 3,057,084 $ 1,739,116 $ 1,985,841 $ 2,682,867 $ 4,893,054
- ------------------------------------------------------------------------------------------------------------------------------------
Accumulation Unit Activity
- ------------------------------------------------------------------------------------------------------------------------------------
Units outstanding at beginning of year 394,848 1,390,013 2,704,108 1,676,729 1,248,903 1,818,942 3,535,742
Contract purchase payments - 286 5,527 - 222 56,769 115,144
Net transfers** (31,937) 21,344 234,161 (103,771) (18,397) (5,546) (42,451)
Surrender benefits and contract charges (20,202) (77,535) (546,638) (138,973) (22,530) (100,952) (336,324)
Death benefits - (9,935) - (23,989) - (4,859) (22,768)
- ------------------------------------------------------------------------------------------------------------------------------------
Units outstanding at end of year 342,709 1,324,173 2,397,158 1,409,996 1,208,198 1,764,354 3,249,343
- ------------------------------------------------------------------------------------------------------------------------------------
*Subaccount BSI had no activity in the year ended Dec. 31, 1996.
**Includes transfer activity from (to) other subaccounts and transfers from (to)
IDS Life of New York's fixed account.
See accompanying notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
IDS Life of New York Account SBS
- ------------------------------------------------------------------------------------------------------------------------------------
Statements of Changes in Net Assets* - continued For the year ended Dec. 31, 1996
Segregated Asset Subaccount
--------------------------------------------------------------------------- Combined
Operations BTR BEG BIE BCR BMG Variable
Account
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Investment income (loss) - net $ 4,569 $ 6,845 $ (19,863) $ 2,208 $ 1,206 $ 298,795
Net realized gain (loss) on investments 27,683 136,067 52,782 - (1) 623,342
Net change in unrealized appreciation
or depreciation of investments 410,364 23,695 259,814 (1,803) 477 1,894,221
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
from operations 442,616 166,607 292,733 405 1,682 2,816,358
- ------------------------------------------------------------------------------------------------------------------------------------
Contract Transactions
- ------------------------------------------------------------------------------------------------------------------------------------
Contract purchase payments 2,515 128,416 77,745 - - 453,930
Net transfers** 81,480 (56,936) 85,992 15,000 15,003 194,531
Surrender benefits and contract charges (93,019) (224,036) (209,771) (3) (2) (2,111,817)
Death benefits - - (9,983) - - (88,335)
- ------------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) from
contract transactions (9,024) (152,556) (56,017) 14,997 15,001 (1,551,691)
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets at beginning of year 1,877,288 969,280 1,424,225 - - 19,972,446
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets at end of year $ 2,310,880 $ 983,331 $ 1,660,941 $ 15,402 $ 16,683 $ 21,237,113
- ------------------------------------------------------------------------------------------------------------------------------------
Accumulation Unit Activity
- --------------------------------------------------------------------------------------------------------------------------------
Units outstanding at beginning of year 1,401,048 726,609 1,466,940 - -
Contract purchase payments 1,742 83,146 70,256 - -
Net transfers** 56,398 (32,999) 92,196 12,847 12,012
Surrender benefits and contract charges (63,376) (141,663) (189,737) (2) (2)
Death benefits - - (9,409) - -
- --------------------------------------------------------------------------------------------------------------------------------
Units outstanding at end of year 1,395,812 635,093 1,430,246 12,845 12,010
- --------------------------------------------------------------------------------------------------------------------------------
*Subaccount BSI had no activity in the year ended Dec. 31, 1996.
**Includes transfer activity from (to) other subaccounts and transfers from (to)
IDS Life of New York's fixed account.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
IDS Life of New York Account SBS
Notes to Financial Statements
- ------------------------------------------------------------------
1. Organization
IDS Life of New York Account SBS (the Variable Account) was established on Oct.
8, 1991 as a single unit investment trust of IDS Life Insurance Company of New
York (IDS Life of New York) under the Investment Company Act of 1940, as amended
(the "1940 Act"). Operations of the Variable Account commenced on March 15,
1993.
The Variable Account is comprised of various subaccounts. Each subaccount
invests exclusively in shares of ten portfolios (collectively, the Portfolios)
of the Greenwich Street Series Fund (the mutual fund) or three funds of the IDS
Life Retirement Annuity Mutual Funds (collectively, the Funds). The assets of
each subaccount of the Variable Account are not chargeable with liabilities
arising out of the business conducted by any other segregated asset accounts or
by IDS Life of New York.
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 (BMO) subaccount
invest in shares of the Money Market Portfolio, the Intermediate High Grade
(BIH) subaccount invests in shares of the Intermediate High Grade Portfolio; the
Diversified Strategic Income (BDS) subaccount invests in shares of the
Diversified Strategic Income Portfolio; the Equity Income (BEM) subaccount
invests in shares of the Equity Income Portfolio; the Equity Index (BEX)
subaccount invests in shares of the Equity Index Portfolio; the Growth & Income
(BGI) subaccount invests in shares of the Growth & Income Portfolio; the
Appreciation (BAP) subaccount invests in shares of the Appreciation Portfolio;
the Total Return (BTR) subaccount invests in shares of the Total Return
Portfolio; the Emerging Growth (BEG) subaccount invests in shares of the
Emerging Growth Portfolio; and the International Equity (BIE) subaccount invests
in shares of the International Equity Portfolio.
IDS Life Capital Resource Fund and IDS Life Special Income Fund 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 (BCR) subaccount invest in shares of IDS Life
Capital Resource Fund; the Special Income (BSI) subaccount invests in shares of
IDS Life Special Income Fund; and the Managed (BMG) subaccount invests in shares
of IDS Life Managed Fund.
IDS Life Insurance Company, parent company of IDS Life of New York, serves as
investment manager for the Funds. IDS Life of New York serves as issuer of the
contracts investing in the Variable Account. American Express Financial
Corporation serves as investment advisor to the Funds. Smith Barney Inc. serves
as distributor for the mutual fund. Mutual Management Corp. serves as investment
advisor 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 advisor to the Equity Index Portfolio.
Davis Skaggs Investment Management serves as investment advisor to the Total
Return Portfolio. Van Kampen American Capital Asset Management, Inc. serves as
investment advisor to the Emerging Growth Portfolio. Smith Barney Global Capital
Management, Inc. serves as sub-investment advisor to the Diversified Strategic
Income Portfolio. Mutual Management Corp. serves as administrator to each
Portfolio.
<PAGE>
- ------------------------------------------------------------------
2. Summary of Significant Accounting Policies
Investments in the Mutual Fund
Investments in shares of the Portfolios 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 and/or the Funds are reinvested 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
Funds' undistributed net investment income, undistributed realized gain or loss
and the unrealized appreciation or depreciation on their investment securities.
Use of Estimates
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 disclosures of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of increase and decrease in net assets from operations
during the period. Actual results could differ from those estimates.
Federal Income Taxes
IDS Life of New York is taxed as a life insurance company. The Variable Account
is treated as part of IDS Life of New York for federal income tax purposes.
Under existing federal income tax law, no income taxes are payable with respect
to any investment income of the Variable Account.
- ------------------------------------------------------------------
3. Mortality and Expense Risk Fee
IDS Life of New York 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 of New York is deducted daily and is equal, on an
annual basis, to 1.25 percent of the daily net asset value of each subaccount.
- ------------------------------------------------------------------
4. Administrative Charge
IDS Life of New York 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 of
New York such as accounting, legal and data processing fees, and expenses
involved in the preparation and distribution of reports and prospectuses.
<PAGE>
- ------------------------------------------------------------------
5. Contract Charge
IDS Life of New York deducts a contract charge of $30 per year on each
certificate anniversary. This charge reimburses IDS Life of New York 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 of New York does not expect to profit from this charge.
- ------------------------------------------------------------------
6. Surrender Charge
IDS Life of New York 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 of New York for surrenders are not identified on an
individual segregated asset account basis. Charges for all segregated asset
accounts amount to $688,445 in 1997 and $551,374 in 1996. Such charges are not
treated as a separate expense of the subaccounts or Variable Account. They are
ultimately deducted from contract surrender benefits paid by IDS Life of New
York.
<PAGE>
- ------------------------------------------------------------------
7. Investment Transactions
The subaccounts' purchases of Portfolio or Fund shares including reinvestment of
dividend distributions, were as follows:
Year ended Dec. 31,
Subaccount Investment 1997 1996
- -------------------------------------------------------------------------------
BMO Money Market Portfolio..................$ 314,123 $ 91,737
BIH Intermediate High Grade Portfolio....... 589,569 65,385
BDS Diversified Strategic Income Portfolio.. 248,185 424,099
BEM Equity Income Portfolio................. 168,423 60,466
BEX Equity Index Portfolio.................. 273,142 99,722
BGI Growth & Income Portfolio............... 394,565 183,364
BAP Appreciation Portfolio.................. 610,835 762,900
BTR Total Return Portfolio.................. 612,361 142,486
BEG Emerging Growth Portfolio............... 242,570 258,213
BIE International Equity Portfolio.......... 78,871 307,162
BCR IDS Life Capital Resource Fund.......... 372 17,252
BSI IDS Life Special Income Fund............ 14,394 --
BMG IDS Life Managed Fund, Inc.............. -- 17,617
- -------------------------------------------------------------------------------
Combined Variable Account...............$3,547,410 $2,430,403
- -------------------------------------------------------------------------------
- --------------------------------------------------------------------
8. Year 2000 Issue (Unaudited)
The Year 2000 issue is the result of computer programs having been written using
two digits rather than four to define a year. Any programs that have
time-sensitive software may recognize a date using "00" as the year 1900 rather
than 2000. This could result in the failure of major systems or miscalculations,
which could have a material impact on the operations of the Variable Account.
The Variable Account has no computer systems of its own but is dependent upon
the systems maintained by AEFC and certain other third parties.
A comprehensive review of AEFC's computer systems and business processes has
been conducted to identify the major systems that could be affected by the Year
2000 issue. Steps are being taken to resolve any potential problems including
modification to existing software and the purchase of new software. These
measures are scheduled to be completed and tested on a timely basis. AEFC's goal
is to complete internal remediation and testing of each system by the end of
1998 and to continue compliance efforts through 1999.
The Year 2000 readiness of other third parties whose system failures could have
an impact on Variable Account's operations is currently being evaluated. The
potential materiality of any such impact is not known at this time.
<PAGE>
<PAGE>
Report of Independent Auditors
The Board of Directors
IDS Life Insurance Company of New York
We have audited the accompanying balance sheets of IDS Life
Insurance Company of New York (a wholly owned subsidiary of IDS
Life Insurance Company) as of December 31, 1997 and 1996, and the
related statements of income, stockholder's equity and cash flows
for each of the three years in the period ended December 31, 1997.
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 financial position
of IDS Life Insurance Company of New York at December 31, 1997
and 1996, and the results of its operations and its cash flows
for each of the three years in the period ended December 31,
1997, in conformity with generally accepted accounting
principles.
Ernst & Young LLP
Minneapolis, Minnesota
February 5, 1998
<PAGE>
IDS LIFE INSURANCE COMPANY OF NEW YORK
- --------------------------------------------------------------------------
BALANCE SHEETS Dec. 31, 1997 Dec. 31, 1996
ASSETS (thousands)
- --------------------------------------------------------------------------
Investments:
Fixed maturities:
Held to maturity, at amortized cost (Fair value:
1997, $562,979; 1996, $604,635) $ 535,651 $ 585,812
Available for sale, at fair value (Fair value:
1996, $582,962; 1996, $590,608) 603,576 601,623
Mortgage loans on real estate 178,826 160,017
Policy loans 23,349 20,077
Other investments 970 1,374
- --------------------------------------------------------------------------
Total investments 1,342,372 1,368,903
- --------------------------------------------------------------------------
Accrued investment income 20,205 21,068
Deferred policy acquisition costs 126,614 119,183
Other assets 4,227 3,950
Separate account assets 1,236,759 950,018
- --------------------------------------------------------------------------
Total assets $2,730,177 $2,463,122
- --------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDER'S EQUITY
- --------------------------------------------------------------------------
Liabilities:
Future policy benefits:
Fixed annuities $964,483 $1,054,954
Universal life-type insurance 147,744 142,278
Traditional life, disability income
and long-term care insurance 50,469 45,338
Policy claims and other policyholders' funds 4,013 3,155
Deferred income taxes 11,445 9,046
Amounts due to brokers 29,054 3,007
Other liabilities 28,931 25,463
Separate account liabilities 1,236,759 950,018
- --------------------------------------------------------------------------
Total liabilities 2,472,898 2,233,259
- --------------------------------------------------------------------------
Stockholder's equity:
Capital stock, $10 par value per share;
200,000 shares authorized, issued and outstanding 2,000 2,000
Additional paid-in capital 49,000 49,000
Net unrealized gain on investments 13,175 6,937
Retained earnings 193,104 171,926
- --------------------------------------------------------------------------
Total stockholder's equity 257,279 229,863
- --------------------------------------------------------------------------
Total liabilities and stockholder's equity $2,730,177 $2,463,122
- --------------------------------------------------------------------------
See accompanying notes.
<PAGE>
- -------------------------------------------------------------------------------
STATEMENTS OF INCOME
Years ended Dec. 31,
1997 1996 1995
(thousands)
- -------------------------------------------------------------------------------
Revenues:
Traditional life, disability income
and long-term care insurance
premiums $ 12,376 $ 10,931 $ 9,280
Policyholder and contractholder charges 18,319 15,832 13,216
Mortality and expense risk fees 11,312 8,574 6,213
Net investment income 106,274 109,468 110,924
Net realized gains (losses) on investments 547 (1,424) 1,548
- -------------------------------------------------------------------------------
Total revenues 148,828 143,381 141,181
- -------------------------------------------------------------------------------
Benefits and expenses:
Death and other benefits:
Traditional life, disability income
and long-term care insurance 3,633 4,182 3,354
Universal life-type insurance
and investment contracts 3,852 4,409 4,548
Increase in liabilities for future
policy benefits for traditional life,
disability income and
long-term care insurance 3,979 2,324 1,958
Interest credited on universal life-type
insurance and investment contracts 62,294 65,099 68,630
Amortization of deferred policy
acquisition costs 17,201 16,071 13,085
Other insurance and operating expenses 10,220 8,972 7,474
- -------------------------------------------------------------------------------
Total benefits and expenses 101,179 101,057 99,049
- -------------------------------------------------------------------------------
Income before income taxes 47,649 42,324 42,132
Income taxes 16,471 14,640 14,745
- -------------------------------------------------------------------------------
Net income $ 31,178 $ 27,684 $ 27,387
- -------------------------------------------------------------------------------
See accompanying notes.
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF STOCKHOLDER'S EQUITY
Three years ended December 31, 1997
(thousands)
Additional Net Unrealized
Capital Paid-In Gains (Losses) Retained
Stock Capital on Investments Earnings Total
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1994 $2,000 $ 49,000 $ (12,369) $133,090 $171,721
Net income -- -- -- 27,387 27,387
Change in net unrealized
gains (losses) on investments -- -- 27,710 -- 27,710
Cash dividends -- -- -- (8,000) (8,000)
Loss on investment transfer
to parent -- -- -- (235) (235)
- ----------------------------------------------------------------------------------------
Balance, December 31, 1995 2,000 49,000 15,341 152,242 218,583
Net income -- -- -- 27,684 27,684
Change in net unrealized
gains (losses) on investments -- -- (8,404) -- (8,404)
Cash dividends -- -- -- (8,000) (8,000)
- ----------------------------------------------------------------------------------------
Balance, December 31, 1996 2,000 49,000 6,937 171,926 229,863
Net income -- -- -- 31,178 31,178
Change in net unrealized
gains (losses) on investments -- -- 6,238 -- 6,238
Cash dividends -- -- -- (10,000) (10,000)
- ----------------------------------------------------------------------------------------
Balance, December 31, 1997 $2,000 $49,000 $ 13,175 $193,104 $257,279
- ----------------------------------------------------------------------------------------
See accompanying notes.
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
STATEMENTS OF CASH FLOWS Years ended Dec. 31,
1997 1996 1995
(thousands)
- --------------------------------------------------------------------------------
Cash flows from operating activities:
Net income $31,178 $27,684 $27,387
Adjustments to reconcile net income to net
cash provided by operating activities:
Policy loan issuance, excluding universal
life-type insurance (3,073) (2,473) (2,093)
Policy loan repayment, excluding universal
life-type insurance 1,897 1,571 881
Change in accrued investment income 863 1,504 (1,055)
Change in deferred policy acquisition
costs, net (7,431) (9,087) (11,017)
Change in liabilities for future policy
benefits for traditional life, disability income
and long-term care insurance 5,131 2,861 1,931
Change in policy claims and other
policyholders' funds 858 (489) 427
Deferred income tax benefit (960) (2,095) (1,301)
Change in other liabilities 3,468 4,434 2,429
(Accretion of discount)
amortization of premium, net (352) (652) (480)
Net realized (gain) loss on investments (547) 1,424 (1,548)
Policyholder and contractholder
charges, non-cash (8,772) (7,831) (6,962)
Other, net (557) (1,781) (508)
- --------------------------------------------------------------------------------
Net cash provided by operating activities $21,703 $15,070 $ 8,091
- --------------------------------------------------------------------------------
Cash flows from investing activities:
Fixed maturities held to maturity:
Purchases $ -- $ -- $ (37,540)
Maturities, sinking fund payments and calls 36,511 39,082 34,216
Sales 12,616 14,465 28,905
Fixed maturities available for sale:
Purchases (101,818) (97,370) (133,503)
Maturities, sinking fund payments and calls 84,229 71,939 44,234
Sales 27,055 15,669 8,839
Other investments, excluding policy loans:
Purchases (33,243) (14,802) (1,939)
Sales 14,233 12,659 5,993
Change in amounts due from broker 995 -- --
Change in amounts due to broker 26,047 (6,993) 10,000
- --------------------------------------------------------------------------------
Net cash provided by (used in) investing
activities 66,625 34,649 (40,795)
- --------------------------------------------------------------------------------
Cash flows from financing activities:
Activity related to universal life-type insurance
and investment contracts:
Considerations received 112,732 131,011 159,431
Surrenders and death benefits (251,259) (236,689) (190,695)
Interest credited to account balances 62,294 65,099 68,630
Universal life-type insurance policy loans:
Issuance (4,848) (4,490) (4,870)
Repayment 2,753 3,350 2,946
Cash dividend to parent (10,000) (8,000) (8,000)
- --------------------------------------------------------------------------------
Net cash (used in) provided by financing
activities (88,328) (49,719) 27,442
- --------------------------------------------------------------------------------
Net (decrease) increase in cash and cash
equivalents -- -- (5,262)
Cash and cash equivalents at beginning of year -- -- 5,262
- --------------------------------------------------------------------------------
Cash and cash equivalents at end of year $ -- $ -- $ --
- --------------------------------------------------------------------------------
See accompanying notes.
<PAGE>
NOTES TO FINANCIAL STATEMENTS ($ thousands)
1. Summary of significant accounting policies
------------------------------------------
Nature of business
IDS Life Insurance Company of New York (the Company) is engaged in the
insurance and annuity business in the state of New York. The Company's
principal products are deferred annuities and universal life insurance
which are issued primarily to individuals. It offers single premium
and flexible 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.
Basis of presentation
The Company is a wholly owned subsidiary of IDS Life Insurance Company
(IDS Life), which is a wholly owned subsidiary of American Express
Financial Corporation (AEFC), which is a wholly owned subsidiary of
American Express Company. The accompanying financial statements have
been prepared in conformity with generally accepted accounting
principles which vary in certain respects from reporting practices
prescribed or permitted by the New York Department of Insurance as
reconciled in Note 11.
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 reported as a separate component
of stockholder's equity, net of deferred income taxes.
Realized investment gains or losses are 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.
Mortgage loans on real estate are carried at amortized cost less
allowances for mortgage loan losses. The estimated 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.
<PAGE>
1. Summary of significant accounting policies (continued)
------------------------------------------------------
Impairment of mortgage loans 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
in an allowance for mortgage loan losses. The allowance for mortgage
loan losses is maintained at a level that management believes is
adequate to absorb estimated losses in the portfolio. The level of the
allowance 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 allowance for mortgage loan losses.
The Company generally stops accruing interest on mortgage loans for
which interest payments are delinquent more than three months. 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.
The cost of interest rate caps is amortized to investment income over
the life of the contracts and payments received as a result of these
agreements are recorded as investment income when realized. The
amortized cost of interest rate caps is included in other investments.
Policy loans are carried at the aggregate of the unpaid loan balances
which do not exceed the cash surrender values of the related policies.
When evidence indicates a decline, which is other than temporary, in
the underlying value or earning power of individual investments, such
investments are written down to the fair value by a charge to income.
Statements 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 statements of cash flows for the years
ended December 31 is summarized as follows:
1997 1996 1995
---- ---- ----
Cash paid during the year for:
Income taxes $17,811 $15,247 $15,026
Interest on borrowings 1,026 777 742
Recognition of profits on annuity contracts and insurance policies
Profits on fixed deferred annuities are recognized by the Company over
the lives of the contracts, using primarily the interest method.
Profits represent the excess of investment income earned from
investment of contract considerations over interest credited to
contract owners and other expenses.
The retrospective deposit method is used in accounting for universal
life-type insurance. This method recognizes profits over the lives of
the policies in proportion to the estimated gross profits expected to
be realized.
<PAGE>
1. Summary of significant accounting policies (continued)
------------------------------------------------------
Premiums on traditional life, disability income and long-term care
insurance policies are recognized as revenue when 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.
Policyholder and contractholder charges include the monthly cost of
insurance charges and issue and administrative fees. These charges
also include the minimum death benefit guarantee fees received from the
variable life insurance separate accounts. Mortality and expense fees
are charged to the variable annuity and variable life insurance
separate accounts.
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 most single premium deferred
annuities and installment annuities are amortized in relation to
accumulation values and surrender charge revenue. The costs for
universal life-type insurance and certain installment annuities are
amortized as a percentage of the estimated gross profits expected to be
realized on the policies. For traditional life, disability income 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 and deferred annuities
are accumulation values.
Liabilities for fixed annuities in a benefit status are based on
mortality tables with various interest rates ranging from 5% to 9.5%,
depending on year of issue.
Liabilities for future benefits on traditional life insurance are based
on the net level premium method, using anticipated mortality, policy
persistency and interest earning rates. Anticipated mortality rates
are based on established industry mortality tables. Anticipated policy
persistency rates vary by policy form, issue age and policy duration
with persistency on cash value plans generally anticipated to be better
than persistency on term insurance plans. Anticipated interest rates
range from 4% to 10%, depending on policy form, issue year and policy
duration.
Liabilities for future disability income and long-term care policy
benefits include both policy reserves and claim reserves. Policy
reserves are based on the net level premium method, using anticipated
morbidity, mortality, policy persistency and interest earning rates.
Anticipated morbidity and mortality rates are based on established
industry morbidity and mortality tables. Anticipated policy
persistency rates vary by policy form, issue age, policy duration and,
for disability income policies, occupation class. Anticipated interest
rates for disability income and long-term care policy reserves are 3%
to 9.5% at policy issue and grade to ultimate rates of 5% to 7% over 4
to 10 years.
Claim reserves are calculated based on claim continuance tables and
anticipated interest earnings. Anticipated claim continuance rates are
based on a national survey. Anticipated interest rates for claim
reserves for both disability income and long-term care range from 6% to
8%.
<PAGE>
1. Summary of significant accounting policies (continued)
------------------------------------------------------
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. 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 AEFC 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 AEFC and its subsidiaries
that AEFC will reimburse subsidiaries for all tax benefits.
Included in other liabilities at December 31, 1997 and 1996 are $5,026
and $5,161, respectively, payable to IDS Life 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 mortality and expense
risk fees from the variable annuity 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. For variable life insurance, the Company
guarantees that the rates at which insurance charges and administrative
fees are deducted from contract funds will not exceed contractual
maximums. The Company also guarantees that the death benefit will
continue payable at the initial level regardless of investment
performance so long as minimum premium payments are made.
Reclassifications
Certain 1996 and 1995 amounts have been reclassified to conform to the
1997 presentation.
<PAGE>
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.
The amortized cost, gross unrealized gains and losses and fair value of
investments in fixed maturities at December 31, 1997 are as follows:
Gross Gross
Amortized Unrealized Unrealized Fair
Held to maturity Cost Gains Losses Value
---------------- ---- ----- ------ -----
U.S. Government agency
obligations $ 3,690 $ 253 $ -- $ 3,943
Corporate bonds and
obligations 476,108 27,361 444 503,025
Mortgage-backed securities 55,853 452 294 56,011
------- ------ --- -------
$535,651 $28,066 $738 $562,979
======= ====== === =======
Gross Gross
Amortized Unrealized Unrealized Fair
Available for sale Cost Gains Losses Value
------------------ ---- ----- ------ -----
State and municipal
obligations $ 104 $ 10 $ -- $ 114
Corporate bonds and
obligations 281,555 14,272 1,635 294,192
Mortgage-backed securities 301,303 8,253 286 309,270
------- ------ ----- -------
$582,962 $22,535 $1,921 $603,576
======= ====== ===== =======
The amortized cost, gross unrealized gains and losses and fair value of
investments in fixed maturities at December 31, 1996 are as follows:
Gross Gross
Amortized Unrealized Unrealized Fair
Held to maturity Cost Gains Losses Value
---------------- ---- ----- ------ -----
U.S. Government agency
obligations $ 4,498 $ 144 $ -- $ 4,642
Corporate bonds and
obligations 523,807 23,060 2,964 543,903
Mortgage-backed securities 57,507 409 1,826 56,090
------- ------ ----- -------
$585,812 $23,613 $4,790 $604,635
======= ====== ===== =======
Gross Gross
Amortized Unrealized Unrealized Fair
Available for sale Cost Gains Losses Value
------------------ --------- ---------- ---------- -----
State and municipal
obligations $ 105 $ 10 $ -- $ 115
Corporate bonds and
obligations 260,966 8,857 1,181 268,642
Mortgage-backed securities 329,537 5,788 2,459 332,866
------- ------ ----- -------
$590,608 $14,655 $3,640 $601,623
======= ====== ===== =======
<PAGE>
2. Investments (continued)
-----------------------
The amortized cost and fair value of investments in fixed maturities at
December 31, 1997 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 $18,376 $ 18,593
Due from one to five years 84,712 89,432
Due from five to ten years 309,104 325,967
Due in more than ten years 67,606 72,976
Mortgage-backed securities 55,853 56,011
------- -------
$535,651 $562,979
======= =======
Amortized Fair
Available for sale Cost Value
------------------ --------- -----
Due in one year or less $12,635 $ 12,747
Due from one to five years 39,808 42,497
Due from five to ten years 139,686 145,567
Due in more than ten years 89,530 93,495
Mortgage-backed securities 301,303 309,270
------- -------
$582,962 $603,576
======= =======
During the years ended December 31, 1997, 1996 and 1995, fixed
maturities classified as held to maturity were sold with amortized cost
of $12,737, $14,507 and $27,971, respectively. Net gains and losses on
these sales were not significant. The sale of these fixed maturities
was due to significant deterioration in the issuers' creditworthiness.
Fixed maturities available for sale were sold during 1997 with proceeds
of $27,055 and gross realized gains and losses of $461 and $309,
respectively. Fixed maturities available for sale were sold during
1996 with proceeds of $15,669 and gross realized gains and losses of
$28 and $1,541, respectively. Fixed maturities available for sale were
sold during 1995 with proceeds of $8,839 and gross realized gains and
losses of $nil and $74, respectively.
At December 31, 1997, bonds carried at $259 were on deposit with the
state of New York as required by law.
<PAGE>
2. Investments (continued)
-----------------------
At December 31, 1997, investments in fixed maturities comprised
85 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 $117 million which are rated by AEFC internal
analysts using criteria similar to Moody's and S&P. A summary of
investments in fixed maturities, at amortized cost, by rating on
December 31 is as follows:
Rating 1997 1996
--------- ---- ----
Aaa/AAA $ 367,242 $ 396,097
Aa/AA 9,685 13,996
Aa/A 13,646 10,197
A/A 162,275 196,542
A/BBB 81,463 62,488
Baa/BBB 343,519 336,706
Baa/BB 21,519 51,639
Below investment grade 119,264 108,755
--------- ---------
$1,118,613 $1,176,420
========= =========
At December 31, 1997, 96 percent of the securities rated Aaa/AAA are
GNMA, FNMA and FHLMC mortgage-backed securities. No holdings of any
other issuer are greater than one percent of the Company's total
investments in fixed maturities.
At December 31, 1997, approximately 13 percent of the Company's
investments were mortgage loans on real estate. Summaries of mortgage
loans by region of the United States and by type of real estate are as
follows:
December 31, 1997 December 31, 1996
----------------------- -----------------------
On Balance Commitments On Balance Commitments
Region Sheet to Purchase Sheet to Purchase
------ ----- ----------- ----- -----------
West North Central $ 27,833 $ -- $ 23,191 $1,342
East North Central 33,515 -- 33,430 1,708
South Atlantic 34,182 2,750 35,501 --
Middle Atlantic 24,485 -- 22,889 --
Pacific 9,873 -- 12,986 --
Mountain 32,864 6,417 15,425 --
New England 8,624 -- 8,805 --
East South Central 8,698 -- 8,825 --
West South Central 252 -- 265 --
------- ----- ------- -----
180,326 9,167 161,317 3,050
Less allowance for
losses 1,500 -- 1,300 --
------- ----- ------- -----
$178,826 $9,167 $160,017 $3,050
======= ===== ======= =====
December 31, 1997 December 31, 1996
---------------------- ------------------------
On Balance Commitments On Balance Commitments
Property type Sheet to Purchase Sheet to Purchase
-------------- ----- ----------- ----- -----------
Apartments $ 68,823 $ -- $ 70,292 $1,708
Department/retail 54,622 6,417 48,476 1,342
stores
Office buildings 25,042 1,650 18,684 --
Industrial buildings 17,975 1,100 11,956 --
Nursing/retirement 6,035 -- 6,477 --
Medical buildings 7,577 -- 5,167 --
Hotels/motels 252 -- 265 --
------- ----- ------- -----
180,326 9,167 161,317 3,050
Less allowance for
losses 1,500 -- 1,300 --
------- ----- ------- -----
$178,826 $9,167 $160,017 $3,050
======= ===== ======= =====
<PAGE>
2. Investments (continued)
-----------------------
Mortgage loan fundings are restricted by state insurance regulatory
authority 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 it 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.
At December 31, 1997 and 1996, the Company's recorded investment in
impaired loans was $1,299 and $1,327, with allowances of $300 and $300,
respectively. During 1997 and 1996, the average recorded investment in
impaired loans was $1,312 and $1,628, respectively.
The Company recognized $126 and $152 of interest income related to
impaired loans for the years ended December 31, 1997 and 1996,
respectively.
The following table presents changes in the allowance for investment
losses related to all loans:
1997 1996 1995
---- ---- ----
Balance, January 1 $1,300 $ 445 $445
Provision for investment losses 200 855 --
----- ----- ---
Balance, December 31 $1,500 $1,300 $445
===== ===== ===
Net investment income for the years ended December 31 is summarized as
follows:
1997 1996 1995
---- ---- ----
Interest on fixed maturities $ 92,007 $ 95,574 $ 97,092
Interest on mortgage loans 14,228 14,171 13,888
Other investment income 1,715 1,293 1,291
Interest on cash equivalents 91 67 186
------- ------- -------
108,041 111,105 112,457
Less investment expenses 1,767 1,637 1,533
------- ------- -------
$106,274 $109,468 $110,924
======= ======= =======
Net realized gains (losses) on investments for the years ended December
31 is summarized as follows:
1997 1996 1995
---- ---- ----
Fixed maturities $844 $ (572) $1,997
Mortgage loans (200) (855) (487)
Other investments (97) 3 38
---- ------ -----
$547 $(1,424) $1,548
=== ===== =====
Changes in net unrealized appreciation (depreciation) of investments
for the years ended December 31 are summarized as follows:
1997 1996 1995
---- ---- ----
Fixed maturities
available for sale 9,599 (13,215) 43,726
<PAGE>
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.
The income tax expense for the years ending December 31 consists of the
following:
1997 1996 1995
---- ---- ----
Federal income taxes:
Current $16,371 $15,735 $15,146
Deferred (960) (2,095) (1,301)
------ -------- --------
15,411 13,640 13,845
State income taxes-current 1,060 1,000 900
------ ------ ------
Income tax expense $16,471 $14,640 $14,745
====== ====== ======
Increases (decreases) to the federal tax provision applicable to pretax
income based on the statutory
rate are attributable to:
1997 1996 1995
-------------- -------------- -------------
Provision Rate Provision Rate Provision Rate
--------- ---- --------- ---- --------- ----
Federal income taxes based
on the statutory rate $16,677 35.0% $14,814 35.0% $14,746 35.0%
Increases (decreases)
are attributable to:
Tax-excluded interest
and dividend income (569) (1.2) (458) (1.1) (464) (1.1)
State tax, net benefit 689 1.4 650 1.5 585 1.4
Other, net (326) (0.6) (366) (0.8) (122) (0.3)
------ ---- ------ ---- ------ ----
Federal income taxes $16,471 34.6% $14,640 34.6% $14,745 35.0%
====== ==== ====== ==== ====== ====
A portion of life insurance company income earned prior to 1984 was not
subject to current taxation but was accumulated, for tax purposes, in a
"policyholders' surplus account." At December 31, 1997, the Company
had a policyholders' surplus account balance of $798. 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 $279 have not been established
because no distributions of such amounts are contemplated.
Significant components of the Company's deferred income tax assets and
liabilities as of December 31 are as follows:
1997 1996
Deferred income tax assets:
Policy reserves $28,922 $28,809
Other 5,467 4,018
----- -----
Total deferred income tax assets 34,389 32,827
Deferred income tax liabilities:
Deferred policy acquisition costs 36,594 35,302
Investments 9,240 6,571
------ -------
Total deferred income tax
liabilities 45,834 41,873
------ ------
Net deferred income tax liabilities $11,445 $9,046
====== =====
<PAGE>
3. Income taxes (continued)
------------------------
The Company is required to establish a valuation allowance for any
portion of the deferred income tax assets that management believes will
not be realized. In the opinion of management, it is more likely than
not that the Company will realize the benefit of the deferred tax
assets and, therefore, no such valuation allowance has been established.
4. Stockholder's equity
--------------------
Retained earnings available for distribution as dividends to the parent
are limited to the Company's surplus as determined in accordance with
accounting practices prescribed by the New York Department of
Insurance. All dividend distributions must be approved by the New York
Department of Insurance. Statutory unassigned surplus aggregated
$115,828 and $94,007 as of December 31, 1997 and 1996, respectively
(see Note 3 with respect to the income tax effect of certain
distributions and Note 11 for a reconciliation of net income and
stockholder's equity per the accompanying financial statements to
statutory net income and surplus).
5. Benefit plans
-------------
The Company participates in the American Express Company Retirement
Plan which covers all permanent employees age 21 and over who have met
certain employment requirements. 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 $39, $34 and
$33 in 1997, 1996 and 1995, respectively.
The Company has a "Sales Benefit Plan" which is an unfunded,
noncontributory retirement plan for all eligible financial advisors.
Total plan costs for 1997, 1996 and 1995, which are calculated on the
basis of commission earnings of the individual financial advisors, were
$1,965, $1,474 and $1,392, respectively. Such costs are included in
deferred policy acquisition costs.
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 1997,
1996 and 1995 were $312, $248 and $231, respectively.
The Company participates in defined benefit health care plans of AEFC
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 AEFC. AEFC 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.
<PAGE>
6. Incentive plan and related party operating expenses
---------------------------------------------------
The Company maintains a "Persistency Payment Plan." Under the terms of
this plan, financial advisors earn additional compensation based on the
volume and persistency of insurance sales. The total costs for the
plan for 1997, 1996 and 1995 were $1,490, $1,424 and $1,720,
respectively. Such costs are included in deferred policy acquisition
costs.
Charges by IDS Life and AEFC for the use of joint facilities, marketing
services and other services aggregated $11,589, $12,389 and $12,122 for
1997, 1996 and 1995, respectively. Certain of these costs are included
in deferred policy acquisition costs.
7. Commitments and contingencies
-----------------------------
At December 31, 1997 and 1996, traditional life insurance and universal
life-type insurance in force aggregated $4,513,251 and $4,053,561,
respectively, of which $220,798 and $203,963 were reinsured at the
respective year ends.
In addition, the Company has a stop loss reinsurance agreement with IDS
Life covering ordinary life benefits. IDS Life agrees to pay all death
benefits incurred each year which exceed 125 percent of normal claims,
where normal claims are defined in the agreement as .095 percent of the
mean retained life insurance in force. Premiums ceded to IDS Life
amounted to $115, $98 and $85 for the years ended December 31, 1997,
1996 and 1995, respectively. Claim recoveries under the terms of this
reinsurance agreement were $963, $861 and $1,426 in 1997, 1996 and
1995, respectively.
Premiums ceded to reinsurers other than IDS Life amounted to $1,583,
$747 and $667 for the years ended December 31, 1997, 1996 and 1995,
respectively. Reinsurance recovered from reinsurers other than IDS
Life amounted to $1,366, $66 and $576 for the years ended
December 31, 1997, 1996 and 1995.
Reinsurance contracts do not relieve the Company from its primary
obligations to policyholders.
The Company has an agreement to assume a block of extended term life
insurance business. The amount of insurance in force related to this
agreement was $303,263 and $345,943 at December 31, 1997 and 1996,
respectively. The accompanying statement of income includes premiums of
$nil for the years ended December 31, 1997, 1996 and 1995, and decreases
in liabilities for future policy benefits of $1,889, $2,010 and $2,039
related to this agreement for the years ended December 31, 1997, 1996 and
1995, respectively.
8. Lines of credit
---------------
The Company has an available line of credit with AEFC aggregating
$25,000. The line of credit is at 45 basis points over the Federal
Funds rate. A $20,000 line of credit with another bank expired on
June 30, 1997 and the Company did not seek renewal. Outstanding
borrowings under these agreements were $nil at December 31, 1997 and
1996.
9. 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 does not hold derivative
instruments for trading purposes. The Company manages risks associated
with these instruments as described below.
<PAGE>
9. Derivative financial instruments (continued)
--------------------------------------------
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 risk 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.
Credit risk related to interest rate caps is measured by replacement
cost of the contracts. The replacement cost represents the fair value
of the instruments.
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.
The Company's holdings of derivative financial instruments are as
follows:
Notional Carrying Fair Total Credit
December 31, 1997 Amount Amount Value Exposure
----------------- ------ ------ ----- --------
Assets:
Interest rate caps $200,000 $ 970 $ 62 $ 62
======= === == ==
December 31, 1996
-----------------
Assets:
Interest rate caps $250,000 $1,374 $832 $832
======= ===== === ===
The fair values of derivative financial instruments are based on market
values, dealer quotes or pricing models. The interest rate caps expire
on various dates through 2000.
Interest rate caps are used to manage the Company's exposure to
interest rate risk. 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.
10. Fair values of financial instruments
------------------------------------
The Company discloses fair value information for most on- and
off-balance sheet financial instruments for which it is practicable 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 and liabilities is significant.
The fair value of the Company, therefore, cannot be estimated by
aggregating the amounts presented.
<PAGE>
10. Fair values of financial instruments (continued)
------------------------------------------------
1997 1996
------------------ -----------------
Carrying Fair Carrying Fair
Financial Assets Amount Value Amount Value
---------------- ------ ----- ------ -----
Investments:
Fixed maturities (Note 2):
Held to maturity $ 535,651 $ 562,979 $585,812 $604,635
Available for sale 603,576 603,576 601,623 601,623
Mortgage loans on real estate 178,826 187,992 160,017 164,444
(Note 2)
Other:
Derivative financial 970 62 1,374 832
instruments (Note 9)
Separate accounts assets (Note 1) 1,236,759 1,236,759 950,018 950,018
Financial Liabilities
Future policy benefits for
fixed annuities 880,809 852,391 979,030 946,359
Separate account liabilities 1,136,408 1,086,565 880,160 838,492
At December 31, 1997 and 1996, the carrying amount and fair value of
future policy benefits for fixed annuities exclude life
insurance-related contracts carried at $78,853 and $72,252,
respectively, and policy loans of $4,821 and $3,672, respectively. The
fair value of these benefits is based on the status of the annuities at
December 31, 1997 and 1996. The fair value of deferred annuities is
estimated as the carrying amount less any surrender charges and related
loans. The fair value for annuities in non-life contingent payout
status is estimated as the present value of projected benefit payments
at rates appropriate for contracts issued in 1997 and 1996.
At December 31, 1997 and 1996, the fair value of liabilities related to
separate accounts is estimated as the carrying amount less applicable
surrender charges and less variable insurance contracts carried at
$100,351and $69,859, respectively.
<PAGE>
11. Statutory insurance accounting practices
----------------------------------------
Reconciliations of net income for 1997, 1996 and 1995 and stockholder's
equity at December 31, 1997 and 1996, as shown in the accompanying
financial statements, to that determined using statutory accounting
practices are as follows:
1997 1996 1995
---- ---- ----
Net income, per accompanying
financial statements $31,178 $27,684 $27,387
Deferred policy acquisition costs (7,432) (9,087) (11,017)
Adjustments of future policy
benefit liabilities (4,928) (9,683) (10,655)
Deferred income tax benefit (960) (2,095) (1,301)
Provision for losses on 296 877 --
investments
IMR gain/loss transfer and (119) 1,010 (331)
amortization
Adjustment to separate account 10,267 8,863 20,769
reserves
Other, net 430 116 948
------ ------ ------
Net income, on basis of
statutory accounting practices $28,732 $17,685 $25,800
====== ====== ======
Stockholder's equity, per accompanying
financial statements $257,279 $229,863
Deferred policy acquisition costs (126,614) (119,183)
Adjustments of future policy 9,452 13,458
benefit
liabilities
Deferred income taxes 11,445 9,046
Asset valuation reserve (16,698) (19,446)
Adjustments of separate account 53,456 43,189
liabilities
Adjustments of investments to
amortized cost (20,613) (11,016)
Premiums due, deferred and advance 1,237 1,149
Deferred revenue liability 1,941 1,342
Allowance for losses 1,645 1,349
Non-admitted assets (552) (634)
Interest maintenance reserve (1,551) (1,432)
Other, net (1,463) (281)
-------- --------
Stockholder's equity, on basis of
statutory accounting practices $168,963 $147,404
======= =======
<PAGE>
12. Year 2000 Issue (unaudited)
---------------------------
The Year 2000 issue is the result of computer programs having been
written using two digits rather than four to define a year. Any
programs that have time-sensitive software may recognize a date using "00"
as the year 1900 rather than 2000. This could result in the failure of
major systems or miscalculations, which could have a material impact on
the operations of the Company. All of the systems used by the Company are
maintained by AEFC and are utilized by multiple subsidiaries and
affiliates of AEFC. The Company's business is heavily dependent upon
AEFC's computer systems and has significant interactions with systems of
third parties.
A comprehensive review of AEFC's computer systems and business
processes, including those specific to the Company, has been
conducted to identify the major systems that could be affected by the
Year 2000 issue. Steps are being taken to resolve any potential
problems including modification to existing software and the purchase
of new software. These measures are scheduled to be completed and
tested on a timely basis. AEFC's goal is to complete internal remediation
and testing of each system by the end of 1998 and to continue compliance
efforts through 1999.
AEFC is evaluating the Year 2000 readiness of advisors and other third
parties whose system failures could have an impact on the Company's
operations. The potential materiality of any such impact is not known at
this time.
<PAGE>
PART C.
Item 24. Financial Statements and Exhibits
(a) Financial Statements included in Part B of this Registration Statement:
IDS Life of New York Account SBS:
Statements of Net Assets as of Dec. 31, 1997.
Statements of Operations for year ended Dec. 31, 1997.
Statements of Changes in Net Assets for the years ended
Dec. 31, 1997 and 1996.
Notes to Financial Statements.
Report of Independent Auditors dated March 13, 1998.
IDS Life Insurance Company of New York:
Balance Sheets as of Dec. 31, 1997 and Dec. 31, 1996.
Statements of Income for the years ended Dec. 31, 1997,
1996 and 1995.
Statements of Stockholder's Equity, for the years ended
Dec. 31, 1997, 1996 and 1995.
Statements of Cash Flows for the years ended Dec. 31, 1997,
1996 and 1995.
Notes to Financial Statements.
Report of Independent Auditors dated February 5, 1998.
Exhibit to Financial Statements included in Part C:
Financial Statement Schedules I, III, IV, and V as required by
Regulation S-X.
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 5, 1998.
All other schedules to the financial statements required by Article 7
of Regulation S-X are not required under the related instructions or
are inapplicable and, therefore, have been omitted.
(b) Exhibits:
1.1 Copy of Resolution of the Board of Directors of IDS Life Insurance
Company of New York establishing Account SLB on October 8, 1991, filed
electronically as Exhibit 1.1 to Post-Effective Amendment No. 5 to
Registration Statement No. 33-45776 is incorporated herein by
reference.
<PAGE>
1.2 Copy of Consent in Writing in Lieu of a Meeting of Resolution of the
Board of Directors of IDS Life Insurance Company of New York Account
SLB establishing three additional subaccounts on October 8, 1991, filed
electronically as Exhibit 1.2 to Post-Effective Amendment No. 5 to
Registration Statement No. 33-45776 is incorporated herein by
reference.
2. Not applicable.
3. Form of Distribution Agreement between IDS Life Insurance Company of
New York and Shearson Lehman Brothers Inc., the principal underwriter,
filed electronically as Exhibit 3 to Post-Effective Amendment No. 5
to Registration Statement No. 33-45776 is incorporated herein by
reference.
4.1 Revised form of Group Flexible Premium Deferred Combination Fixed and
Variable Annuity Contract (No. 39377 GP) filed electronically as
Exhibit 4.1 to Post-Effective Amendment No. 5 to Registration
Statement No. 33-45776 is incorporated herein by reference.
4.2 Copy of Group Deferred Variable Annuity Certificate (No. 39377) filed
electronically as Exhibit 4.2 to Post-Effective Amendment No. 5 to
Registration Statement No. 33-45776 is incorporated herein
by reference.
5.1 Revised form of Group Deferred Variable Annuity Application
(No. 38614 GP) filed electronically as Exhibit 5.1 to Post-Effective
Amendment No. 5 to Registration Statement No. 33-45776 is
incorporated herein by reference.
5.2 Copy of Variable Annuity Group Enrollment Application (No. 38614)
filed electronically as Exhibit 5.2 to Post-Effective Amendment
No. 5 to Registration Statement No. 33-45776 is incorporated
herein by reference.
6.1 Copy of the Revised Charter of IDS Life of New York, dated
April 1992, filed electronically as Exhibit 6.1 to Post-Effective
Amendment No. 4 to Registration Statement No. 33-45776/811-6560
is hereby incorporated by reference.
6.2 Copy of the Amended By-Laws of IDS Life of New York, dated May 1992,
filed electronically as Exhibit 6.1 to Post-Effective Amendment
No. 4 to Registration Statement No. 33-45776/811-6560
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, filed electronically herewith.
10. Consent of Independent Auditors, filed electronically herewith.
11. Financial Statement Schedules and Report of Independent Auditors, filed
electronically herewith.
12. Not applicable.
<PAGE>
13. Copy of schedule for computation of each performance quotation filed
electronically as Exhibit 13 to Post-Effective Amendment No. 5 to
Registration Statement No. 33-45776 is incorporated herein
by reference.
14. Financial Data Schedule, filed electronically herewith.
15. Power of Attorney to sign this Registration Statement dated March 26,
1997, filed electronically as Exhibit 15 to Post-Effective Amendment
No. 5 to Registration Statement No. 33-45776, is incorporated
herein by reference.
<TABLE>
<CAPTION>
Item 25. Directors and Officers of the Depositor (IDS Life Insurance Company of New York)
--------------------------------------------------------------------------------
Positions and Offices with Depositor
Name Principal Business Address
- ------------------------------------ ---------------------------------------- --------------------------------------
<S> <C> <C>
Mario Alaia 20 Madison Avenue Extension Claims Officer and Assistant
Albany, NY Secretary
Darrell C. Beckstrom IDS Tower 10 Underwriting Officer
Minneapolis, MN 55440
John C. Boeder 20 Madison Avenue Extension Director
Albany, NY
Eugene C. Chen 20 Madison Avenue Extension Chief Actuary
Albany, NY
Roger C. Corea 20 Madison Avenue Extension Director
Albany, NY
Charles A. Cuccinello 20 Madison Avenue Extension Director
Albany, NY
Darlene S. Farron 20 Madison Avenue Extension Treasurer
Albany, NY
Milton R. Fenster 20 Madison Avenue Extension Director
Albany, NY
Donna M. Gaglione 20 Madison Avenue Extension Secretary
Albany, NY
Robert R. Grew 20 Madison Avenue Extension Director
Albany, NY
Margaret M. Grogan, M.D. Bethlehem Terrace Apts. Medical Director
Slingerland, NY
Lorraine R. Hart IDS Tower 10 Investment Officer
Minneapolis, MN 55440
<PAGE>
Robert A. Hatton IDS Tower 10 Director, Vice President and Chief
Minneapolis, MN 55440 Operating Officer
Richard W. Kling IDS Tower 10 Director, Chairman of the Board and
Minneapolis, MN 55440 President
Edward Landes IDS Tower 10 Director
Minneapolis, MN 55440
Thomas V. Nicolosi Suite 220 Director
500 Mamaroneck Avenue
Harrison, NY 10528
Stephen P. Norman World Financial Center Director
New York, NY
Carl N. Platou IDS Tower 10 Director
Minneapolis, MN 55440
Gordon H. Ritz 404 WCCO Radio Bldg. Director
Minneapolis, MN
F. Dale Simmons IDS Tower 10 Vice President and Assistant
Minneapolis, MN 55440 Treasurer
Richard M. Starr 20 Madison Avenue Extension Director
Albany, NY
William A. Stoltzmann IDS Tower 10 Counsel and Assistant Secretary
Minneapolis, MN 55440
Michael R. Woodward 20 Madison Avenue Extension Director
Albany, NY
</TABLE>
Item 26. Persons Controlled by or Under Common Control with the
Depositor or Registrant
IDS Life Insurance Company of New York is a wholly-owned
subsidiary of IDS Life Insurance Company which 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.
<TABLE>
<CAPTION>
Jurisdiction of
Name of Subsidiary Incorporation
I. Travel Related Services
<S> <C>
American Express Travel Related Services Company, Inc. New York
<PAGE>
II. International Banking Services
American Express Bank Ltd. Connecticut
III. Companies engaged in Financial Services
Advisory Capital Strategies Group Inc. Minnesota
American Centurion Life Assurance Company New York
American Enterprise Investment Services Inc. Minnesota
American Enterprise Life Insurance Company Indiana
American Express Asset Management Group Inc. Minnesota
American Express Asset Management International Inc. Delaware
American Express Asset Management International (Japan) Ltd. Japan
American Express Asset Management Ltd. England
American Express Client Service Corporation Minnesota
American Express Corporation Delaware
American Express Financial Advisors Inc. Delaware
American Express Financial Corporation Minnesota
Delaware
American Express Insurance Agency of Arizona Inc. Arizona
American Express Insurance Agency of Idaho Inc. Idaho
American Express Insurance Agency of Nevada Inc. Nevada
American Express Insurance Agency of Oregon Inc. Oregon
American Express Minnesota Foundation Minnesota
American Express Property Casualty Insurance Agency of Kentucky Inc. Kentucky
American Express Property Casualty Insurance Agency of Maryland Inc. Maryland
American Express Property Casualty Insurance Agency of Pennsylvania Inc. Pennsylvania
American Express Trust Company Minnesota
American Partners Life Insurance Company Arizona
IDS Cable Corporation Minnesota
IDS Cable II Corporation Minnesota
IDS Capital Holdings Inc. Minnesota
IDS Certificate Company Delaware
IDS Futures 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 New Mexico Inc. New Mexico
IDS Insurance Agency of North Carolina Inc. North Carolina
IDS Insurance Agency of Utah Inc. Utah
IDS Insurance Agency of Wyoming Inc. Wyoming
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
North Dakota Public Employee Payment Company Minnesota
</TABLE>
Item 27. Number of Contractowners
On February 28, 1998, there were 76 contract owners of
qualified contracts. There were 350 owners of nonqualified
contracts.
<PAGE>
Item 28. Indemnification
The By-Laws of the depositor provide that to the extent
permitted and in the manner prescribed by law, the Corporation
shall indemnify any person made, or threatened to be made, a
party to any action, suit or proceeding, civil or criminal, by
reason of the fact that he, his testator or intestate, is or
was Director or Officer of the Corporation or of any other
corporation of any type or kind, domestic or foreign, which he
served in any capacity at the request of the Corporation,
against judgments, fines, amounts paid in settlement and
reasonable expenses (which the Corporation may advance),
including attorneys' fees, actually and necessarily incurred
as a result of such action, suit or proceeding, or any appeal
therein.
The foregoing right of indemnification shall not be exclusive
of any other right to which any such person may be entitled.
Neither the adoption of this provision nor any modification or
repeal hereof, or of any provision of any applicable law
shall, unless otherwise required by law, enlarge or diminish
any right of indemnification of a Director or Officer as it
existed at the time of accrual of the alleged cause of action
asserted in the threatened or pending action, suit or
proceeding in which the expenses were incurred or other amount
was paid.
The Board, in its discretion, may authorize the Corporation to
indemnify any person, other than a Director or Officer, for
expenses incurred or other amounts paid in any civil or
criminal action, suit or proceeding, to which such person was,
or was threatened to be, made a party by reason of the fact
that he, his testator or intestate, is or was an employee or
agent of the Corporation or of any other corporation of any
type or kind, domestic or foreign, which he served in any
capacity at the request of the Corporation, against judgments,
fines, amounts paid in settlement and reasonable expenses
(which the Corporation may advance), as a result of such
action, suit or proceeding, or any appeal therein.
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.
<PAGE>
Item 29. Principal Underwriters.
(a) Smith Barney Inc. currently acts as principal underwriter for
various investment companies and various series of unit
investment trusts.
Smith Barney Inc. is a wholly owned subsidiary of Smith Barney
Holdings Inc. ("Holdings") and an indirect wholly-owned
subsidiary of The Travelers Inc.
(b) The information required by this Item 29 with respect
to each director and officer of Smith Barney Inc. is
incorporated by reference to Schedule A of Form BD
filed by Smith Barney Inc. pursuant to the Securities
Exchange Act of 1934.
(c) Not applicable.
Item 30. Location of Accounts and Records
IDS Life Insurance Company of New York
20 Madison Avenue Extension
Albany, NY 12203
Item 31. Management Services
Not applicable.
Item 32. Undertakings
(a), (b) & (c) These undertakings were filed with Pre-Effective
Amendment No. 1 to Registration Statement
No. 33-45776/811-6560.
(d) The sponsoring insurance company represents that the
fees and charges deducted under the contract, in the
aggregate, are reasonable in relation to the services
rendered, the expenses expected to be incurred, and
the risks assumed by the insurance company.
<PAGE>
SIGNATURES
As required by the Securities Act of 1933 and the Investment Company Act of
1940, IDS Life Insurance Company of New York, 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 29th day of April,
1998.
IDS LIFE OF NEW YORK ACCOUNT SBS
(Registrant)
By IDS Life Insurance Company of New York
(Sponsor)
By /s/ Richard W. Kling*
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 29th day of
April, 1998.
Signature Title
/s/ Richard W. Kling* Director, Chairman of the
Richard W. Kling Board and President
/s/ John C. Boeder* Director
John C. Boeder
/s/ Roger C. Corea* Director
Roger C. Corea
/s/ Charles A. Cuccinello* Director
Charles A. Cuccinello
/s/ Milton R. Fenster* Director
Milton R. Fenster
/s/ Darlene S. Farron* Treasurer
Darlene S. Farron
/s/ Robert A. Hatton* Director, Vice President
Robert A. Hatton and Chief Operating Officer
/s/ Edward Landes* Director
Edward Landes
<PAGE>
Signature Title
/s/ Thomas V. Nicolosi* Director
Thomas V. Nicolosi
/s/ Stephen P. Norman* Director
Steven P. Norman
/s/ Carl Platou* Director
Carl Platou
/s/ Gordon H. Ritz* Director
Gordon H. Ritz
/s/ Richard M. Starr* Director
Richard M. Starr
/s/ Michael R. Woodward* Director
Michael R. Woodward
*Signed pursuant to Power of Attorney, dated March 26, 1997, filed
electronically as Exhibit 15 to Post-Effective Amendment No. 7 to Registration
Statement No. 33-45776 by:
- --------------------------
Colin M. Lancaster
<PAGE>
CONTENTS OF POST-EFFECTIVE AMENDMENT NO. 8
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.
IDS LIFE OF NEW YORK ACCOUNT SBS (Symphony - NY)
Registration No. 33-45776/811-6560
EXHIBIT INDEX
9. Opinion of Counsel.
10. Consent of Independent Auditors.
11. Financial Statement Schedules and Report of Independent Auditors.
14. Financial Data Schedules:
IDS Life of New York Account SBS
New York Life Insurance Company
April 29, 1998
IDS Life Insurance Company of New York
20 Madison Avenue Extension
Albany, NY 12203
RE: Registration Statement on Form N-4
File No.: 33-45776
Ladies and Gentlemen:
I am familiar with the establishment of the IDS Life of New York Account SBS
("Account"), which is a separate account of IDS Life Insurance Company of New
York ("Company") established by the Company's Board of Directors according to
applicable insurance law. I also am familiar with the above-referenced
Registration Statement filed by the Company on behalf of the Account with the
Securities and Exchange Commission.
I have made such examination of law and examined such documents and records as
in my judgment are necessary and appropriate to enable me to give the following
opinion:
1. The Company is duly incorporated, validly existing and in good standing
under applicable state law and is duly licensed or qualified to do business
in each jurisdiction where it transacts business. The Company has all
corporate powers required to carry on its business and to issue the
contracts.
2. The Account is a validly created and existing separate account of the
Company and is duly authorized to issue the securities registered.
3. The contracts issued by the Company during the past fiscal year, when
offered and sold in accordance with the prospectus contained in the
Registration Statement and in compliance with applicable law, were legally
issued and represent binding obligations of the Company in accordance with
their terms.
I hereby consent to the filing of this opinion as an exhibit to the Registration
Statement.
Sincerely,
Colin M. Lancaster
Associate Counsel
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 5, 1998 on the financial statements
and schedules of IDS Life Insurance Company of New York and our report dated
March 13, 1998 on the financial statements of IDS Life of New York Account SBS
in Post-Effective Amendment No. 8 to the Registration Statement (Form N-4, No.
33-45776) and related Prospectus for the registration of the IDS Life Account
SBS to be offered by IDS Life Insurance Company of New York.
Ernst & Young LLP
Minneapolis, Minnesota
April 27, 1998
<PAGE>
Report of Independent Auditors
The Board of Directors
IDS Life Insurance Company of New York
We have audited the financial statements of IDS Life Insurance Company of New
York (a wholly owned subsidiary of IDS Life Insurance Company) as of December
31, 1997 and 1996, and for each of the three years in the period ended December
31, 1997 and have issued our report thereon dated February 5, 1998 (included
elsewhere in this Registration Statement). Our audits also included the
financial statement schedules listed in the index to financial statement
schedules 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 5, 1998
<PAGE>
IDS LIFE INSURANCE COMPANY OF NEW YORK
SCHEDULE I - CONSOLIDATED SUMMARY OF INVESTMENTS
OTHER THAN INVESTMENTS IN RELATED PARTIES ($ thousands)
AS OF DECEMBER 31, 1997
- -----------------------------------------------------------------------------
Column A Column B Column C Column D
Type of Investment Cost Value Amount at which
shown in the
balance sheet
- -----------------------------------------------------------------------------
Fixed maturities:
Held to maturity:
United States Government and
government agencies and
authorities (a) $ 59,543 $ 59,954 $ 59,543
All other corporate bonds 476,108 503,025 476,108
---------- ----------- ----------------
Total held to maturity 535,651 562,979 535,651
Available for sale:
United States Government and
government agencies and
authorities (b) 293,815 301,506 301,506
States, municipalities and
political subdivisions 104 114 114
All other corporate bonds 289,043 301,956 301,956
---------- ----------- ----------------
Total available for sale 582,962 603,576 603,576
Mortgage loans on real estate 178,826 XXXXXXXXX 178,826
Policy loans 23,349 XXXXXXXXX 23,349
Other investments 970 XXXXXXXXX 970
---------- ----------------
Total investments $ 1,321,758 $XXXXXXXXX $ 1,342,372
========== ================
(a)- Includes mortgage-backed securities with a cost and market value of
$55,853 and $56,011, respectively.
(b)- Includes mortgage-backed securities with a cost and market value of
$293,815 and $301,506, respectively.
(c)- Includes mortgage-backed securities with a cost and market value
of $7,488 and $7,764, respectively.
<PAGE>
<TABLE>
<CAPTION>
IDS LIFE INSURANCE COMPANY OF NEW YORK
SCHEDULE III - SUPPLEMENTARY INSURANCE INFORMATION ($ thousands)
FOR THE YEAR ENDED DECEMBER 31, 1997
Column A Column B Column C Column D Column E Column F Column G Column H Column I Column J Column K
Segment Deferred Future Unearned Other Premium Net Benefits, Amortization Other Premiums
policy policy premiums policy revenue investment claims, of deferred operating written
acquisition benefits, claims income* losses and policy expenses*
cost losses, and settlement acquisition
claims and benefits expenses costs
loss payable
expenses
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Annuities $68,386 $964,483 $ - $ 1,848 $ - $ 89,268 $ 495 $ 12,266 $ 4,653 N/A
Life, DI and
Long-term Care
Insurance 58,228 198,213 - 2,165 12,376 17,006 10,969 4,935 5,567 N/A
- -------------------------------------------------------------------------------------------------------------------------
Total $126,614 $1,162,696 $ - $ 4,013 $12,376 $106,274 $11,464 $ 17,201 $10,220 N/A
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
*Allocations of net investment income and other operating expenses are based on
various assumptions and estimates.
<PAGE>
<TABLE>
<CAPTION>
IDS LIFE INSURANCE COMPANY OF NEW YORK
SCHEDULE III - SUPPLEMENTARY INSURANCE INFORMATION ($ thousands)
FOR THE YEAR ENDED DECEMBER 31, 1996
Column A Column B Column C Column D Column E Column F Column G Column H Column I Column J Column K
Segment Deferred Future Unearned Other Premium Net Benefits, Amortization Other Premiums
policy policy premiums policy revenue investment claims, of deferred operating written
acquisition benefits, claims income* losses and policy expenses*
cost losses, and settlement acquisition
claims and benefits expenses costs
loss payable
expenses
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Annuities $67,568 $1,054,954$ - $ 1,055 $ - $ 93,319 $ 80 $ 11,257 $ 3,923 N/A
Life, DI and
Long-term Care
Insurance 51,615 187,616 - 2,100 10,931 16,149 10,835 4,814 5,049 N/A
- -----------------------------------------------------------------------------------------------------------
Total $119,183 $1,242,570$ - $ 3,155 $10,931 $109,468 $10,915 $ 16,071 $ 8,972 N/A
- ------------------------------------------------------------------------------------------------------------
</TABLE>
*Allocations of net investment income and other operating expenses are based on
various assumptions and estimates.
<PAGE>
<TABLE>
<CAPTION>
IDS LIFE INSURANCE COMPANY OF NEW YORK
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 Column H Column I Column J Column K
Segment Deferred Future Unearned Other Premium Net Benefits, Amortization Other Premiums
policy policy premiums policy revenue investment claims, of deferred operating written
acquisition benefits, claims income* losses and policy expenses*
cost losses, and settlement acquisition
claims and benefits expenses costs
loss payable
expenses
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Annuities $ 65,283 $1,109,167$ - $ 2,222 $ - $ 95,323 $ 171 $ 9,138 $ 6,908 N/A
Life, DI and
Long-term Care
Insurance 44,517 178,952 - 1,422 9,280 15,601 9,689 3,947 566 N/A
- -----------------------------------------------------------------------------------------------------------------
Total $ 109,800 $1,288,119$ - $ 3,644 $ 9,280 $110,924 $ 9,860 $ 13,085 $ 7,474 N/A
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
*Allocations of net investment income and other operating expenses are based on
various assumptions and estimates.
<PAGE>
<TABLE>
<CAPTION>
IDS LIFE INSURANCE COMPANY OF NEW YORK
SCHEDULE IV - REINSURANCE ($ thousands)
FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
- ---------------------------------------------------------------------------------------------------
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, 1997
Life insurance in force $ 4,209,990 $ 220,798 $ 303,263 $ 4,292,455 7.07%
===================================================================================================
Premiums:
Life insurance & annuities $ 2,822 $ 346 $ -- $ 2,476 0.00%
DI & long-term care insurance 10,658 759 -- 9,899 0.00%
- ---------------------------------------------------------------------------------------------------
Total premiums $ 13,480 $ 1,105 $ 0 $ 12,375 0.00%
===================================================================================================
For the year ended
December 31, 1996
Life insurance in force $ 3,707,618 $ 203,963 $ 345,943 $ 3,849,598 8.99%
===================================================================================================
Premiums:
Life insurance & annuities $ 2,634 $ 222 $ -- $ 2,412 0.00%
DI & long-term care insurance 8,651 132 -- 8,519 0.00%
- ---------------------------------------------------------------------------------------------------
Total premiums $ 11,285 $ 354 $ 0 $ 10,931 0.00%
===================================================================================================
For the year ended
December 31, 1995
Life insurance in force $ 3,110,745 $ 163,462 $ 392,106 $ 3,339,389 11.74%
===================================================================================================
Premiums:
Life insurance & annuities $ 2,327 $ 185 $ -- $ 2,142 0.00%
DI & long-term care insurance 7,221 83 -- 7,138 0.00%
- ---------------------------------------------------------------------------------------------------
Total premiums $ 9,548 $ 268 $ 0 $ 9,280 0.00%
===================================================================================================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
IDS LIFE INSURANCE COMPANY OF NEW YORK
SCHEDULE V - VALUATION AND QUALIFYING ACCOUNTS ($ thousands)
FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
- -----------------------------------------------------------------------------------------------
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, 1997
- ---------------------------
Reserve for Mortgage Loans . $1,300 $ 200 $ 0 $ 0 $1,500
Reserve for Fixed Maturities $ 49 $ 96 $ 0 $ 0 $ 145
For the year ended
December 31, 1996
- ---------------------------
Reserve for Mortgage Loans . $ 445 $ 855 $ 0 $ 0 $1,300
Reserve for Fixed Maturities $ 26 $ 23 $ 0 $ 0 $ 49
For the year ended
December 31, 1995
- ---------------------------
Reserve for Mortgage Loans . $ 445 $ 0 $ 0 $ 0 $ 445
Reserve for Fixed Maturities $ 0 $ 26 $ 0 $ 0 $ 26
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLAR
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<EXCHANGE-RATE> 1
<INVESTMENTS-AT-COST> 17556414
<INVESTMENTS-AT-VALUE> 23587093
<RECEIVABLES> 88
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 23587181
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> (32119)
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 14402495
<SHARES-COMMON-PRIOR> 15181937
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 23555062
<DIVIDEND-INCOME> 1366650
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> (339910)
<NET-INVESTMENT-INCOME> 1026740
<REALIZED-GAINS-CURRENT> 804364
<APPREC-INCREASE-CURRENT> 1617038
<NET-CHANGE-FROM-OPS> 3448142
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1174922
<NUMBER-OF-SHARES-REDEEMED> (1954364)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 2317949
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> (339910)
<AVERAGE-NET-ASSETS> 22396088
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 7
<MULTIPLIER> 1000
<CURRENCY> U.S. DOLLAR
<S> <C>
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<PERIOD-TYPE> YEAR
<EXCHANGE-RATE> 1
<DEBT-HELD-FOR-SALE> 603576
<DEBT-CARRYING-VALUE> 535651
<DEBT-MARKET-VALUE> 562979
<EQUITIES> 0
<MORTGAGE> 178826
<REAL-ESTATE> 0
<TOTAL-INVEST> 1342372
<CASH> 0
<RECOVER-REINSURE> 9
<DEFERRED-ACQUISITION> 126614
<TOTAL-ASSETS> 2730177
<POLICY-LOSSES> 1162696
<UNEARNED-PREMIUMS> 0
<POLICY-OTHER> 0
<POLICY-HOLDER-FUNDS> 4013
<NOTES-PAYABLE> 0
<COMMON> 2000
0
0
<OTHER-SE> 255279
<TOTAL-LIABILITY-AND-EQUITY> 2730177
12376
<INVESTMENT-INCOME> 106274
<INVESTMENT-GAINS> 547
<OTHER-INCOME> 29631
<BENEFITS> 73758
<UNDERWRITING-AMORTIZATION> 17201
<UNDERWRITING-OTHER> 10220
<INCOME-PRETAX> 47649
<INCOME-TAX> 16471
<INCOME-CONTINUING> 31178
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 31178
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<RESERVE-OPEN> 1480
<PROVISION-CURRENT> 7485
<PROVISION-PRIOR> 0
<PAYMENTS-CURRENT> 7297
<PAYMENTS-PRIOR> 0
<RESERVE-CLOSE> 1668
<CUMULATIVE-DEFICIENCY> 0
</TABLE>
