<PAGE>
PAGE 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Post-Effective Amendment No. 3 (File No. 33-54471)
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT
OF 1940
Amendment No. 4 (File No. 811-7195)
AMERICAN ENTERPRISE VARIABLE ANNUITY ACCOUNT
___________________________________________________________________
(Exact Name of Registrant)
American Enterprise Life Insurance Company
___________________________________________________________________
(Name of Depositor)
80 South 8th Street, P.O. Box 534, Minneapolis, MN 55440-0534
(Address of Depositor's Principal Executive Offices) (Zip Code)
Depositor's Telephone Number, including Area Code (612) 671-3678
Mary Ellyn Minenko, IDS Tower 10, Minneapolis, MN 55440-0010
(Name and Address of Agent for Service)
Approximate Date of Proposed Public Offering
It is proposed that this filing will become effective (check
appropriate box)
immediately upon filing pursuant to paragraph (b) of Rule 485
X on May 1, 1996 pursuant to paragraph (b) of Rule 485
60 days after filing pursuant to paragraph (a)(i) of Rule 485
on (date) pursuant to paragraph (a)(i) of Rule 485
75 days after filing pursuant to paragraph (a)(ii)
on (date) pursuant to paragraph (a)(ii) of rule 485
If appropriate, check the following box:
this post-effective amendment designates a new effective date
for a previously filed post-effective amendment.
The Registrant has registered an indefinite number or amount of
securities under the Securities Act of 1933 pursuant to Section
24-f of the Investment Company Act of 1940. Registrant's Rule 24f-
2 Notice for its most recent fiscal year ended was filed on or
about February 23, 1996.
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PAGE 2
CROSS REFERENCE SHEET
<TABLE>
<CAPTION>
Cross reference sheet showing location in the prospectus and Statement of Additional
Information of the information called for by the items enumerated in Part A and B of
Form N-4.
Negative answers omitted from prospectus and Statement of Additional Information are
so indicated.
PART A PART B
Section in
Section Statement of
Item No. in Prospectus Item No. Additional Information
<C> <C> <C> <C>
1 Cover page 15 Cover page
2 Key terms 16 Table of contents
3(a) Expense summary 17(a) NA
(b) In brief (b) NA
(c) About American Enterprise Life*
4(a) Condensed financial
information 18(a) NA
(b) Performance information (b) NA
(c) Financial statements (c) Independent auditors
(d) NA
5(a) About American (e) NA
Enterprise Life (f) NA
(b) The variable account
(c) The funds 19(a) Making the most of your annuity*
(d) Cover page and the funds (b) NA
(e) Voting rights
(f) NA 20(a) Principal underwriter
(b) Principal underwriter
6(a) Charges (c) NA
(b) Expense summary (d) NA
(c) Other information on (d) NA
charges
(d) Distribution of 21(a) Performance information
contracts (b) Performance information
(e) NA
(f) NA 22 Calculating Annuity Payouts
7(a) Buying your annuity; 23(a) NA
Benefits in case of (b) NA
death; The annuity
payout period
(b) The variable account;
Transferring money between
accounts; Transfer policies
(c) The funds; Other information
on charges
(d) The funds
8(a) The annuity payout period
(b) Setting the retirement date
(c) Annuity payout plans
(d) The annuity payout period
(e) Annuity payout plans
(f) Death after annuity payouts
begin
9(a) Benefits in case of death
(b) Benefits in case of death
10(a) Buying your annuity;
Valuing your investment
(b) Valuing your investment
(c) Valuing your investment
(d) About American Enterprise
Life
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PAGE 3
11(a) Withdrawals from your contract
(b) NA
(c) Receiving payment when you
request a withdrawal
(d) If installment payments
(e) Ten-day free look
12(a) Taxes
(b) Key terms
(c) NA
13 NA
14 Table of contents of the
Statement of Additional Information
*Designates section in the prospectus, which is hereby incorporated by reference
in this Statement of Additional Information.
</TABLE>
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AEL Personal PortfolioSM
May 1, 1996
Variable Annuity Prospectus
The AEL Personal PortfolioSM is a flexible premium variable annuity
contract offered by American Enterprise Life Insurance Company
(American Enterprise Life) a subsidiary of IDS Life Insurance
Company (IDS Life), which is a subsidiary of American Express
Financial Corporation. Purchase payments may be allocated among
different accounts, providing variable and/or fixed returns and
payouts. The annuity is available for qualified and nonqualified
retirement plans.
American Enterprise Variable Annuity Account
Sold by: American Enterprise Life Insurance Company.
Administrative Office: 80 South Eighth Street, P.O. Box 534,
Minneapolis, MN 55440-0534. Telephone: 612-671-7700.
THIS PROSPECTUS CONTAINS THE INFORMATION ABOUT THE VARIABLE ACCOUNT
THAT YOU SHOULD KNOW BEFORE INVESTING. Refer to "The variable
account" in this prospectus.
THE PROSPECTUS IS ACCOMPANIED OR PRECEDED BY THE FOLLOWING
PROSPECTUSES: THE RETIREMENT ANNUITY MUTUAL FUND PROSPECTUS
(DESCRIBING IDS LIFE AGGRESSIVE GROWTH FUND, IDS LIFE INTERNATIONAL
EQUITY FUND, IDS LIFE CAPITAL RESOURCE FUND, IDS LIFE MANAGED FUND,
IDS LIFE SPECIAL INCOME FUND, AND IDS LIFE MONEYSHARE FUND); THE
OCC ACCUMULATION TRUST,FORMERLY KNOWN AS QUEST FOR VALUE
ACCUMULATION TRUST (DESCRIBING OCC ACCUMULATION TRUST MANAGED
PORTFOLIO AND OCC ACCUMULATION TRUST U.S. GOVERNMENT INCOME
PORTFOLIO); THE PUTNAM CAPITAL MANAGER TRUST (DESCRIBING PCM
DIVERSIFIED INCOME FUND, PCM GROWTH AND INCOME FUND, PCM HIGH YIELD
FUND AND PCM NEW OPPORTUNITIES FUND); AND GT GLOBAL VARIABLE
INVESTMENT FUNDS (DESCRIBING GT GLOBAL VARIABLE LATIN AMERICA FUND
AND GT GLOBAL VARIABLE NEW PACIFIC FUND). PLEASE KEEP THESE
PROSPECTUSES 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.
AMERICAN ENTERPRISE LIFE IS NOT A FINANCIAL INSTITUTION, AND THE
SECURITIES IT OFFERS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR
GUARANTEED OR ENDORSED BY ANY FINANCIAL INSTITUTION NOR ARE THEY
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD OR ANY OTHER AGENCY. INVESTMENTS IN THE ANNUITY
INVOLVE INVESTMENT RISK INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
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A Statement of Additional Information (SAI) dated May 1, 1996
(incorporated by reference into this prospectus) has been filed
with the Securities and Exchange Commission (SEC), and is available
without charge by contacting American Enterprise Life at the
telephone number above or by completing and sending the order form
on the last page of this prospectus. The table of contents of the
SAI is on the last page of this prospectus.
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Table of contents
Key terms.....................................................
The AEL Personal PortfolioSM in brief.........................
Expense summary...............................................
Financial statements..........................................
Performance information.......................................
The variable account..........................................
The funds.....................................................
IDS Life Aggressive Growth Fund..........................
IDS Life International Equity Fund.......................
IDS Life Capital Resource Fund...........................
IDS Life Managed Fund....................................
IDS Life Special Income Fund.............................
IDS Life Moneyshare Fund.................................
OCC Accumulation Trust Managed Portfolio.................
OCC Accumulation Trust U.S. Government Income Portfolio..
PCM Diversified Income Fund..............................
PCM Growth and Income Fund...............................
PCM High Yield Fund......................................
PCM New Opportunities Fund...............................
GT Global Variable Latin America Fund....................
GT Global Variable New Pacific Fund......................
The fixed account.............................................
Buying your annuity...........................................
The retirement date......................................
Beneficiary..............................................
How to make payments.....................................
Charges.......................................................
Contract administrative charge...........................
Variable account administrative charge...................
Mortality and expense risk fee...........................
Withdrawal charge........................................
Waiver of withdrawal charges.............................
Premium taxes............................................
Valuing your investment.......................................
Number of units..........................................
Accumulation unit value..................................
Net investment factor....................................
Factors that affect variable subaccount
accumulation units...................................
Making the most of your annuity...............................
Automated dollar-cost averaging..........................
Transferring money between subaccounts...................
Transfer policies........................................
Two ways to request a transfer or a withdrawal...........
Withdrawals from your contract................................
Withdrawal policies......................................
Receiving payment when you request a withdrawal..........
TSA-special withdrawal provisions.............................
Changing ownership............................................
Benefits in case of death.....................................
The annuity payout period.....................................
Annuity payout plans.....................................
Death after annuity payouts begin........................
Taxes.........................................................
Voting rights.................................................<PAGE>
PAGE 7
Substitution of investments...................................
Distribution of the contracts.................................
About American Enterprise Life................................
Regular and special reports...................................
Services................................................
Table of contents of the Statement of Additional
Information.............................................
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Key terms
These terms can help you understand details about your annuity.
Annuity - A contract purchased from an insurance company that
offers tax-deferred growth of the contract owner's investment until
earnings are withdrawn, and that can be tailored to meet the
specific needs of the individual during retirement.
Accumulation unit - A measure of the value of each variable
subaccount before annuity payouts begin.
Annuitant - The person on whose life or life expectancy the annuity
payouts are based.
Annuity payouts - An amount paid at regular intervals under one of
several plans available to the owner and/or any other payee. This
amount may be paid on a variable or fixed basis.
Annuity unit - A measure of the value of each variable subaccount
used to calculate the annuity payouts you receive.
Beneficiary - The person designated to receive annuity benefits in
case of the owner's or annuitant's death.
Close of business - When the New York Stock Exchange (NYSE) closes,
normally 3 p.m. Central time.
Code - Internal Revenue Code of 1986, as amended.
Contract value - The total value of your annuity before any
applicable withdrawal charge and any contract administrative charge
have been deducted.
Contract year - A period of 12 months, starting on the effective
date of your contract and on each anniversary of the effective
date.
Fixed account - An account to which you may allocate purchase
payments. Amounts allocated to this account earn interest at rates
that are declared periodically by American Enterprise Life.
Mutual funds (funds) - Fourteen mutual funds or portfolios, each
with a different investment objective. (See "The funds.") You may
allocate your purchase payments into variable subaccounts investing
in shares of any or all of these funds.
Owner (you, your) - The person who controls the annuity (decides on
investment allocations, transfers, payout options, etc.). Usually,
but not always, the owner is also the annuitant. The owner is
responsible for taxes, regardless of whether he or she receives the
annuity's benefits.
Purchase payments - Payments made to American Enterprise Life for
an annuity.
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Qualified annuity - An annuity purchased for a retirement plan that
is subject to applicable federal law and any rules of the plan
itself. These plans include:
o Individual Retirement Annuities (IRAs)
o Simplified Employee Pension Plans (SEPs)
o Section 401(k) plans
o Custodial and trusteed pension and profit-sharing plans
o Tax-Sheltered Annuities (TSAs)
o Section 457 plans.
Generally only lump sum payments (rollovers or transfers) will be
suitable for qualified annuity purchases (other than IRAs).
All other annuities are considered nonqualified annuities.
Retirement date - The date when annuity payouts are scheduled to
begin. This date is first established when you start your
contract. You can change it in the future.
Withdrawal charge - A deferred sales charge that may be applied if
you make a withdrawal from your annuity before the retirement date.
Withdrawal value - The amount you are entitled to receive if you
fully withdraw your annuity. It is the contract value minus any
applicable withdrawal charge and contract administrative charge.
Valuation date - Any normal business day, Monday through Friday,
that the NYSE is open. The value of each variable subaccount is
calculated at the close of business on each valuation date.
Variable account - Consists of fourteen separate subaccounts to
which you may allocate purchase payments; each invests in shares of
one mutual fund. (See "The variable account.") The value of your
investment in each variable subaccount changes with the performance
of the particular fund.
The AEL Personal PortfolioSM in brief
Purpose: The AEL Personal PortfolioSM is designed to allow you to
build up funds for retirement. You do this by making one or more
investments (purchase payments) that may earn returns that increase
the value of the annuity. Beginning at a specified future date
(the retirement date), the annuity provides lifetime or other forms
of payouts to you or to anyone you designate.
Ten-day free look: You may return your annuity to your agent or
our Minneapolis administrative office within 10 days after it is
delivered to you and receive a full refund of the contract value.
No charges will be deducted. However, you bear the investment risk
from the time of purchase until return of the contract; the refund
amount may be more or less than the payment you made. (Exceptions:
If the law so requires, all of your purchase payments will be
refunded.)
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Accounts: You may allocate your purchase payments among any or all
of:
o fourteen variable subaccounts of the variable account, each
of which invests in mutual funds with a particular investment
objective. The value of each variable subaccount varies with
the performance of the particular fund. We cannot guarantee
that the value at the retirement date will equal or exceed
the total of purchase payments allocated to the variable
subaccounts. (p.13)
o one fixed account, which earns interest at rates that are
adjusted periodically by American Enterprise Life. (p.17)
Buying the annuity: Your agent will help you complete and submit
an application. Applications are subject to acceptance at our
Minneapolis administrative office. You may buy a nonqualified
annuity or a qualified annuity including an IRA. Payment must be
made in a lump sum with the option of additional payments in the
future. In some states there are time limitations for making
additional payments.
o Minimum initial payment - $5,000 ($2,000 for qualified
annuities)
o Minimum additional payment - $500
o Maximum total payment(s) (without prior approval) -
$1,000,000
Transfers: Subject to certain restrictions you may redistribute
your money among accounts without charge at any time until annuity
payouts begin, and once per contract year among the variable
subaccounts thereafter. You may establish automated transfers
among the fixed account and variable subaccount(s). (p.27)
Withdrawals: You may withdraw all or part of your contract value
at any time before the retirement date. You also may establish
automated partial withdrawals. Withdrawals may be subject to
charges and tax penalties (including a 10% IRS penalty if
withdrawals are made prior to your reaching age 59 1/2) and may
have other tax consequences; also, certain restrictions apply.
(p.30)
Changing ownership: You may change ownership of a nonqualified
annuity by written instruction, however, such changes of
nonqualified annuities may have federal income tax consequences.
Certain restrictions apply concerning change of ownership of a
qualified annuity. (p.32)
Payment in case of death: If you or the annuitant dies before
annuity payouts begin, we will pay the beneficiary an amount at
least equal to the contract value. (p.33)
Annuity payouts: The contract value of your investment can be
applied to an annuity payout plan that begins on the retirement
date. You may choose from a variety of plans to make sure that
payouts continue as long as they are needed. If you purchased a
<PAGE>
PAGE 11
qualified annuity, the payout schedule must meet requirements of
the qualified plan. Payouts may be made on a fixed or variable
basis, or both. Total monthly payouts include amounts from each
variable subaccount and the fixed account. (p.34)
Taxes: Generally, your annuity grows tax-deferred until you fully
withdraw it or begin to receive payouts. (Under certain
circumstances, IRS penalty taxes may apply.) Even if you direct
payouts to someone else, you will still be taxed on the income if
you are the owner. (p.36)
Charges: Your AEL Personal PortfolioSM is subject to a $30 annual
contract administrative charge, a 0.25% variable account
administrative charge, a 1.25% mortality and expense risk fee, a
withdrawal charge and any premium taxes that may be imposed by
state or local governments. Premium taxes are deducted either from
your purchase payments or upon total withdrawal or when annuity
payments begin. (p.20)
Expense summary
The purpose of this summary is to help you understand the various
costs and expenses associated with the AEL Personal PortfolioSM.
You pay no sales charge when you purchase the AEL Personal
PortfolioSM. All costs that you bear directly or indirectly for
the variable subaccounts and underlying mutual funds are shown
below. Some expenses may vary as explained under "Contract
charges."
Direct charges. These are deducted directly from the contract
value. They include:
Withdrawal charge: The withdrawal charge starts at 7% of the
purchase payment in the first contract year of payment receipt and
decreases by 1% each contract year thereafter. There is no
withdrawal charge on earnings and on purchase payments we received
in any contract year six or more years prior to the contract year
of withdrawal.
Annual contract administrative charge: $30.
Indirect charges. The variable account pays these expenses out of
its assets. They are reflected in the variable subaccounts' daily
accumulation unit values and are not charged directly to your
account. They include:
Mortality and expense risk fee: 1.25% per year, deducted from the
subaccounts of the variable account as a percentage of the average
daily net assets of the underlying fund.
Variable account administrative charge: 0.25% per year, deducted
from the subaccounts of the variable account as a percentage of the
average daily net assets of the underlying fund.
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Operating expenses of underlying mutual funds: management fees and
other expenses deducted as a percentage of average net assets as
follows: *
<TABLE>
<CAPTION>
OCC***
IDS Life IDS Life IDS Life IDS Life Accumulation
Aggressive International Capital IDS Life Special IDS Life Trust Managed
Growth Equity Resource Managed Income Moneyshare Portfolio
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Management fees .64% .86% .63% .62% .63% .54% .80%
Other expenses .04 .09 .04 .03 .04 .05 .14
Total .68%** .95%** .67%** .65%** .67%** .59%** .94%
OCC
Accumulation
Trust U.S. Gov- PCM PCM GT Global GT Global
ernment Income Diversified Growth and PCM High PCM New Variable Variable
Portfolio Income Income Yield Opportunities Latin America New Pacific
(after expense
limitations)
Management fees .60% .70% .52% .70% .70% 1.00% 1.00%
Other expenses .40 .15 .05 .09 .14 .25 .25
Total 1.00% .85% .57% .79% .84% 1.25++ 1.25++
*Premium taxes imposed by some state and local governments are not reflected in this table.
**Annualized operating expenses of underlying mutual funds at Dec. 31, 1995.
***The annual expenses of the OCC Accumulation Trust Portfolios as of Dec. 31, 1995 have been restated to reflect new management
fee and expense limitation agreements in effect as of May 1, 1996. Effective May 1, 1996, the expenses of the Portfolios of the
OCC Accumulation Trust are contractually limited by OpCap Advisors so that their respective annualized operating do not exceed
1.25% of their respective average daily net assets. Furthermore, through April 30, 1997, the annualized operating expenses of
the Managed and U.S. Government Income Portfolios will be voluntary limited by OpCap Advisors so that annualized operating
expenses of these Portfolios do not exceed 1.00% of their respective average daily net assets. Without such voluntary expense
limitations, and taking into account the revised contractual provisions effective May 1, 1996 concerning management fees and
expense limitations, the Management Fees, Other Expenses and Total Portfolio Annual Expenses incurred for the fiscal year ended
Dec. 31, 1995 would have been .80%, .14% and .94%, respectively, for the Managed Portfolio and .60%, .65% and 1.25%,
respectively, for the U.S. Government Income Portfolio.
++Figures in the "Other Expenses" and "Total" columns are restated from the amounts you would have incurred in 1995 to reflect fee
and reimbursement or waiver arrangements. If there had been no reimbursement of expenses by LGT Asset Management and no expense
reductions, the actual expenses of each Fund, expressed as a percentage of net assets, with "Management fees" stated first, then
"Other expenses," followed by "Total," would have been as follows: GT Global Variable Latin America Fund, 1.00%, 0.69%, 1.69%;
and GT Global Variable New Pacific Fund, 1.00%, 0.61%, 1.61%.
</TABLE>
Example:*
<TABLE>
<CAPTION>
OCC
IDS Life IDS Life IDS Life IDS Life Accumulation
Aggressive International Capital IDS Life Special IDS Life Trust Managed
Growth Equity Resource Managed Income Moneyshare Portfolio
You would pay the following expenses on a $1,000 investment, assuming 5% annual return and full withdrawal at the end of each time
period:
<S> <C> <C> <C> <C> <C> <C> <C>
1 year $ 93.86 $ 96.53 $ 93.76 $ 93.56 $ 93.76 $ 92.97 $ 96.43
3 years 123.48 131.48 123.18 122.59 123.18 120.79 131.19
5 years 155.74 169.05 155.24 154.25 155.24 151.25 168.56
10 years 268.88 295.24 267.88 265.89 267.88 259.90 294.28
You would pay the following expenses on the same investment assuming no withdrawal or selection of an annuity payout plan at the
end of each time period:
1 year $ 23.86 $ 26.53 $ 23.76 $ 23.56 $ 23.76 $ 22.97 $ 63.43
3 years 73.48 81.48 73.18 72.59 73.18 70.79 81.19
5 years 125.74 139.05 125.24 124.25 125.24 121.25 138.56
10 years 268.88 295.24 267.88 265.89 267.88 259.90 294.28<PAGE>
PAGE 13
OCC
Accumulation
Trust U.S. Gov- PCM PCM GT Global GT Global
ernment Income Diversified Growth and PCM High PCM New Variable Variable
Portfolio Income Income Yield Opportunities Latin America New Pacific
You would pay the following expenses on a $1,000 investment, assuming 5% annual return and full withdrawal at the end of each time
period:
1 year $ 97.03 $ 95.55 $ 92.77 $ 94.95 $ 95.45 $ 99.48 $ 99.48
3 years 132.96 128.53 120.20 126.75 128.23 140.28 140.28
5 years 171.49 164.15 150.25 161.19 163.65 183.59 183.59
10 years 300.03 285.57 257.89 279.72 284.50 323.57 323.57
You would pay the following expenses on the same investment assuming no withdrawal or selection of an annuity payout plan at the
end of each time period:
1 year $ 27.03 $ 25.55 $ 22.77 $ 24.95 $ 25.45 $ 29.48 $ 29.48
3 years 82.96 78.53 70.20 76.75 78.23 90.28 90.28
5 years 141.49 134.15 120.25 131.19 133.65 153.59 153.29
10 years 300.03 285.57 257.89 279.72 284.60 323.57 323.57
</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 contract administrative charge is
approximated as a .170% charge based on the estimated average
contract size.
Financial statements
The SAI dated May 1, 1996, contains:
audited financial statements of the variable account including:
- - statements of net assets as of Dec. 31, 1995;
- - statements of operations for the period from Feb. 21, 1995
(commencement of operations) to Dec. 31, 1995; and
- - statements of changes in net assets for the period from Feb. 21,
1995 (commencement of operations) to Dec. 31, 1995.
audited financial statements of American Enterprise Life including:
- - balance sheets as of Dec. 31, 1995 and Dec. 31, 1994; and
- - related statements of income and cash flows for each of the three
years in the period ended Dec. 31, 1995.
Performance information
Performance information for the variable subaccounts may appear
from time to time in advertisements or sales literature. In all
cases, such information reflects the performance of a hypothetical
investment in a particular account during a particular time period.
<PAGE>
PAGE 14
The following performance figures are calculated on the basis of
historical performance of the funds. The performance figures
relating to these funds assume that the contract was in existence
prior to Jan. 12, 1995, which it was not. Beginning Jan. 12, 1995,
when these funds became available as investment options under the
contract, actual values are used for the calculations.
Calculations are performed as follows:
Simple yield - IDS Life Moneyshare Subaccount: Income over a given
seven-day period (not counting any change in the capital value of
the investment) is annualized (multiplied by 52) by assuming that
the same income is received for 52 weeks. This annual income is
then stated as an annual percentage return on the investment.
Compound yield - IDS Life Moneyshare Subaccount: Calculated like
simple yield, except that, when annualized, the income is assumed
to be reinvested. Compounding of reinvested returns increases the
yield as compared to a simple yield.
Yield - Special Income Subaccount: Net investment income (income
less expenses) per accumulation unit during a given 30-day period
is divided by the value of the unit on the last day of the period.
The result is converted to an annual percentage.
Average annual total return: Expressed as an average annual
compounded rate of return of a hypothetical investment over a
period of one, five and 10 years (or up to the life of the account
if it is less than 10 years old). This figure reflects deduction
of all applicable charges, including the contract administrative
charge, variable account administrative charge, mortality and
expense risk fee, and withdrawal charge, assuming a full withdrawal
at the end of the illustrated period. Optional average annual
total return quotations may be made that do not reflect a
withdrawal charge deduction (assuming no withdrawal).
Aggregate total return: Represents the cumulative change in the
value of an investment over a specified period of time (reflecting
change 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 withdrawal charge, assuming a withdrawal
at the end of the illustrated period. Optional total return
quotations may be made that do not reflect a withdrawal charge
deduction (assuming no withdrawal). Aggregate total return may be
shown by means of schedules, charts or graphs.
Performance information should be considered in light of the
investment objectives and policies, characteristics and quality of
the fund in which the subaccount invests, and the market conditions
during the given time period. Such information is not intended to
indicate future performance. Because advertised yields and total
return figures include all charges attributable to the annuity,
which has the effect of decreasing advertised performance,
subaccount performance should not be compared to that of mutual
<PAGE>
PAGE 15
funds that sell their shares directly to the public. (See the SAI
for a further description of methods used to determine yield and
total return for the subaccounts.)
If you would like additional information about actual performance,
contact American Enterprise Life at the address or telephone number
on the cover.
The variable account
Purchase payments can be allocated to any or all of the subaccounts
of the variable account that invest in shares of the following
funds:
Subaccount
IDS Life Aggressive Growth Fund EAG
IDS Life International Equity Fund EIE
IDS Life Capital Resource Fund ECR
IDS Life Managed Fund EMG
IDS Life Special Income Fund ESI
IDS Life Moneyshare Fund EMS
OCC Accumulation Trust Managed Portfolio EMD
OCC Accumulation Trust U.S. Government
Income Portfolio EUS
PCM Diversified Income Fund EDI
PCM Growth and Income Fund EGI
PCM High Yield Fund EHY
PCM New Opportunities Fund ENO
GT Global Variable Latin America Fund ELA
GT Global Variable New Pacific Fund EPA
Each variable subaccount meets the definition of a separate account
under federal securities laws. Income, capital gains and capital
losses of each subaccount are credited or charged to that
subaccount alone. No variable subaccount will be charged with
liabilities of any other variable account or of our general
business. All obligations arising under the contracts are general
obligations of IDS Life.
The variable account was established under Indiana law on July 15,
1987, and the subaccounts are registered together as a single unit
investment trust under the Investment Company Act of 1940 (the 1940
Act). This registration does not involve any supervision of our
management or investment practices and policies by the SEC. All
obligations arising under the contracts are general obligations of
American Enterprise Life.
The funds
IDS Life Aggressive Growth Fund
Objective: capital appreciation. Invests primarily in common stock
of small- and medium-size companies.
IDS Life International Equity Fund
Objective: capital appreciation. Invests primarily in common stock
of foreign issuers and foreign securities convertible into common
stock.<PAGE>
PAGE 16
IDS Life Capital Resource Fund
Objective: capital appreciation. Invests primarily in U.S. common
stocks and other securities convertible into common stock,
diversified over many different companies in a variety of
industries.
IDS Life Managed Fund
Objective: maximum total investment return. Invests primarily in
U.S. common stocks, securities convertible into common stock,
warrants, fixed income securities (primarily high-quality corporate
bonds) and money market instruments.
IDS Life Special Income Fund
Objective: to provide a high level of current income while
conserving the value of the investment for the longest time period.
Invests primarily in high-quality, lower-risk corporate bonds
issued by many different companies in a variety of industries, and
in government bonds.
IDS Life Moneyshare Fund
Objective: maximum current income consistent with liquidity and
conservation of capital. Invests in high-quality money market
securities with remaining maturities of 13 months or less. The
fund also will maintain a dollar-weighted average portfolio
maturity not exceeding 90 days. The fund attempts to maintain a
constant net asset value of $1 per share.
OCC Accumulation Trust Managed Portfolio
Objective: Growth of capital over time. Invests primarily in
common stocks, bonds and money market and cash equivalent
securities.
OCC Accumulation Trust U.S. Government Income Portfolio
Objective: to provide a high level of current income together with
protection of capital. Invests exclusively in debt obligations,
including mortgage-backed securities, issued or guaranteed by the
United States government, its agencies or instrumentalities.
PCM Diversified Income Fund
Objective: high current income consistent with capital
preservation. Invests in the following three sectors of the fixed
income securities markets: U.S. government sector, high yield
sector and international sector.
PCM Growth and Income Fund
Objective: capital growth and current income. Invests primarily in
common stocks that offer potential for capital growth, current
income, or both.
PCM High Yield Fund
Objective: high current income and, when consistent with this
objective, a secondary objective of capital growth. Invests
primarily in high-yielding, lower-rated fixed income securities,
constituting a portfolio which Putnam Investment Management, Inc.
("Putnam Management") believes does not involve undue risk to
income or principal.
<PAGE>
PAGE 17
PCM New Opportunities Fund
Objective: long-term capital appreciation. Invests principally in
common stocks of companies in sectors of the economy which Putnam
Management believes may possess above average long-term growth
potential.
GT Global Variable Latin America Fund
Objective: capital appreciation. Invests primarily in a broad
range of securities including common and preferred stock, rights,
warrants and securities convertible into common stock, as well as
bonds, notes, debentures or other forms of indebtedness of Latin
American issuers.
(If your annuity was purchased in California, you cannot allocate
payments to the subaccount that invests in this fund)
GT Global Variable New Pacific Fund
Objective: long-term growth of capital. Invests under normal
circumstances, at least 65% of its assets in equity securities of
issuers domiciled in Australia, Hong Kong, Indonesia, Malaysia, New
Zealand, the Philippines, Singapore, South Korea, Taiwan and
Thailand.
(If your annuity was purchased in California, you cannot allocate
payments to the subaccount that invests in this fund)
All funds are available to serve as the underlying investment for
variable annuities, and some funds also are available to serve as
the underlying investment for variable life insurance contracts.
It is conceivable that in the future it may be disadvantageous for
variable annuity separate accounts and variable life insurance
separate accounts to invest in the available funds simultaneously.
Although American Enterprise Life and the funds do not currently
foresee any such disadvantages either to variable annuity contract
owners or to variable life insurance policy owners, the boards of
directors or trustees of the appropriate funds will monitor events
in order to identify any material conflicts between such contract
owners and policy owners and 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 and variable annuity separate accounts, the variable
annuity contract holders would not bear any expenses associated
with establishing separate funds.
The Internal Revenue Service (IRS) has issued final regulations
relating to the diversification requirements under Section 817(h)
of the Code. Each mutual fund intends to comply with these
requirements.
The U.S. Treasury and the IRS have indicated they may provide
additional guidance concerning how many variable subaccounts may be
offered and how many exchanges among variable subaccounts may be
allowed before the owner is considered to have investment control,
and thus is currently taxed on income earned within variable
subaccount assets. We do not know at this time what the additional
guidance will be or when action will be taken. We reserve the
<PAGE>
PAGE 18
right to modify the contract, as necessary, to ensure that the
owner will not be subject to current taxation as the owner of the
variable subaccount assets.
We intend to comply with all federal tax laws to ensure that the
contract continues to qualify as an annuity for federal income tax
purposes. We reserve the right to modify the contract as necessary
to comply with any new tax laws.
IDS Life, IDS Tower 10, Minneapolis, MN 55440, is the investment
manager for each of the IDS Life funds. OpCap Advisors, One World
Financial Center, New York, NY 10281, is the investment manager for
the OCC Accumulation Trust portfolios. Putnam Investment
Management, Inc., One Post Office Square, Boston, MA 02109, is the
investment manager for the PCM funds. LGT Asset Management, 50
California Street, San Francisco, CA 94111, is the investment
manager for the GT Global Funds.
The investment managers cannot guarantee that the funds will meet
their investment objectives. Please read the prospectuses for the
funds for complete information on investment risks, deductions,
expenses and other facts you should know before investing. These
prospectuses are available by contacting American Enterprise Life
at the administrative office address or telephone number on the
front of this prospectus.
The fixed account
Purchase payments can also be allocated to the fixed account. The
value of the fixed account increases as interest is credited to the
account. Purchase payments and transfers to the fixed account
become part of the general account of American Enterprise Life, the
company's main portfolio of investments. Interest is credited and
compounded daily to produce an effective annual interest rate. We
may change the interest rates from time to time.
Because of exemptive and exclusionary provisions, interests in the
fixed account have not been registered under the Securities Act of
1933 (1933 Act), nor is the fixed account registered as an
investment company under the 1940 Act. Accordingly, neither the
fixed account nor any interests in it are generally subject to the
provisions of the 1933 or 1940 Acts, and we have 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, however, may be subject to certain generally
applicable provisions of the federal securities laws relating to
the accuracy and completeness of statements made in prospectuses.
Buying your annuity
Your agent will help you prepare and submit your application, and
send it along with your initial purchase payment to our Minneapolis
administrative office. As the owner, you have all rights and may
receive all benefits under the contract. The annuity can be owned
in joint tenancy only in spousal situations. You cannot buy an
annuity or be an annuitant if you are 86 or older. (In
Pennsylvania, the annuitant must be under age 80.)
<PAGE>
PAGE 19
When you apply, you can select:
o the subaccount(s) or fixed account in which you want to invest;
o how you want to make purchase payments;
o the date you want to start receiving annuity payouts (the
retirement date); and
o a beneficiary.
If your application is complete, we will process it and apply your
purchase payment to your subaccount(s) and fixed account within two
days after we receive it. If your application is accepted, we will
send you a contract. If we cannot accept your application within
five days, we will decline it and return your payment. We will
credit additional purchase payments to your account(s) at the next
close of business.
The retirement date
Annuity payouts will be scheduled to begin on the retirement date.
This date can be aligned with your actual retirement from a job, or
it can be a different future date, depending on your needs and
goals and on certain restrictions. You can also change the date,
provided you send us written instructions at least 30 days before
annuity payouts begin.
For nonqualified annuities, the retirement date must be:
o no earlier than the 60th day after the contract's effective
date; and
o no later than the annuitant's 85th birthday (or before the 10th
contract anniversary, if purchased after age 75).
o no later than the annuitant's 82nd birthday (or before the
eighth contract anniversary, if purchased after age 74) for
annuities purchased in Pennsylvania.
For qualified annuities, to avoid IRS penalty taxes, the retirement
date generally must be:
o on or after the annuitant reaches age 59 1/2;
o by April 1 of the year following the calendar year when the
annuitant reaches age 70 1/2.
If you are taking the minimum IRA or TSA distributions as required
by the Code from another tax-qualified investment, or in the form
of partial withdrawals from this annuity, annuity payouts can start
as late as the annuitant's 85th birthday or the 10th contract
anniversary. (In Pennsylvania, annuity payouts must start no later
than the annuitant's 82nd birthday or the eighth contract
anniversary.)
Beneficiary
If death benefits become payable before the retirement date, your
named beneficiary will receive all or part of the contract value.
If there is no named beneficiary, then you or your estate will be
the beneficiary. (See "Payment in case of death" for more about
beneficiaries.)
<PAGE>
PAGE 20
Minimum payment
If single payment:
Nonqualified: $5,000
Qualified: $2,000
Minimum additional purchase payment(s): $500
Maximum payment(s): $1,000,000 of cumulative payments without
prior approval
How to make payments
By letter
Send your check along with your name and account number to:
Regular mail:
American Enterprise Life Insurance Company
80 South Eighth Street
P.O. Box 534
Minneapolis, MN 55440-0534
Express mail:
American Enterprise Life Insurance Company
Attention: Unit 829
80 South Eighth Street
Minneapolis, MN 55402
Charges
Contract administrative charge
This fee is for establishing and maintaining your records. We
deduct $30 from the contract value on your contract anniversary at
the end of each contract year. We will waive this charge when the
contract value is $50,000 or more on the current contract
anniversary.
If you take a full withdrawal from your contract, the $30 annual
charge will be deducted at the time of withdrawal. The annual
charge cannot be increased and does not apply after annuity payouts
begin.
Variable account administrative charge
This charge is applied daily to the variable subaccounts and
reflected in the unit values of the subaccounts. Annually, it
totals 0.25% of their average daily net assets. It covers certain
administrative and operating expenses of the subaccounts 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.
<PAGE>
PAGE 21
Mortality and expense risk fee
This fee is to cover the mortality risk and expense risk and is
applied daily to the variable subaccounts and reflected in the unit
values of the subaccounts. The subaccounts pay this fee at the
time dividends are distributed from the funds in which they invest.
Annually the fee totals 1.25% of the subaccounts average daily net
assets. Approximately two-thirds of this amount is for our
assumption of mortality risk, and one-third is for our assumption
of expense risk. This fee does not apply to the fixed account.
Mortality risk arises because of our guarantee to make annuity
payouts according to the terms of the contract, no matter how long
a specific annuitant lives and no matter how long the entire group
of American Enterprise Life annuitants live. If, as a group,
American Enterprise Life annuitants outlive the life expectancy we
have assumed in our actuarial tables, then we must take money from
our general assets to meet our obligations. If, as a group,
American Enterprise Life annuitants do not live as long as
expected, we could profit from the mortality risk fee. Expense
risk arises because the contract administrative charge and variable
account administrative charge cannot be increased and may not cover
our expenses. Any deficit would have to be made up from our
general assets.
We do not plan to profit from the contract administrative charge or
the variable account administrative charge. However, we hope to
profit from the mortality and expense risk fee. We may use any
profits realized from this fee for any proper corporate purpose,
including, among others, payment of distribution (selling)
expenses. We do not expect that the withdrawal charge, discussed
in the following paragraphs, will cover sales and distribution
expenses.
Withdrawal charge
If you withdraw part or all of your contract, you may be subject to
a withdrawal charge. The withdrawal amount you request is
determined by drawing from your total contract value in the
following order:
1. First we withdraw up to 10% of your prior anniversary account
value not yet withdrawn this contract year. There is no withdrawal
charge on withdrawals totaling up to 10% of your prior anniversary
value each contract year.
2. Next we withdraw any contract earnings (contract value minus
all purchase payments received and not previously withdrawn) in
excess of the annual 10% free withdrawal amount. There is no
withdrawal charge on contract earnings.
3. Next, if necessary, we withdraw the old purchase payments,
starting with the first purchase payment made and not previously
withdrawn. There is no withdrawal charge on old payments that we
received in any contract year six or more years prior to the
contract year of withdrawal.
<PAGE>
PAGE 22
4. Finally, if necessary, we withdraw new purchase payments.
These are payments that we received during the contract year of
withdrawal and during the six immediately preceding contract years.
There is a withdrawal charge on new payments. We determine your
withdrawal charge by multiplying each of your new payments by the
applicable withdrawal charge percentage, and then summing the total
withdrawal charges.
The new payment withdrawal charge percentage depends on the number
of contract years since you made the payment(s).
Contract Years From Withdrawal Charge
Payment Receipt Percentage
1 7%
2 6%
3 5%
4 4%
5 3%
6 2%
7 1%
Thereafter 0%
Withdrawal charge calculation example
We determine your withdrawal charge by multiplying each of your new
payments by the applicable withdrawal charge percentage and then
summing the total withdrawal charges.
For example, the withdrawal charge on a total withdrawal request
for a contract with this history:
o The contract date is July 1, 1996 with a contract year of
July 1 through June 30 and with an anniversary date of July 1
each year
o We received these payments - $10,000 July 1, 1996, $8,000
Dec. 31, 2002 and $6,000 Feb. 20, 2004
o The owner withdraws the contract for its total withdrawal
value of $38,101 on Aug. 5, 2006 and had not made any other
withdrawals during that contract year
o The prior anniversary July 1, 2006 contract value was $38,488
is calculated this way:
Withdrawal Charge Explanation
$ 0 $3,848.80 is 10% of the prior anniversary
account value withdrawn without withdrawal
charge; and
0 $10,252.20 is contract earnings in excess
of the 10% free withdrawal amount withdrawn
without withdrawal charge; and
0 $10,000 July 1, 1996 payment is an old
payment withdrawn without withdrawal
charge; and
<PAGE>
PAGE 23
240 $8,000 Dec. 31, 2002 payment is a new
payment in its fifth contract year from
receipt, withdrawn with a 3% withdrawal
charge; and
240 $6,000 Feb. 20, 2004 payment is a new
payment in its fourth contract year from
receipt withdrawn with a 4% withdrawal
charge.
__________
$480
The withdrawal charge is calculated so that the total amount minus
any withdrawal charge equals the amount you request.
Waiver of withdrawal charges
There are no withdrawal charges for:
o withdrawals during the year totaling up to 10% of your prior
contract anniversary contract value; and
o contract earnings - if any - in excess of the annual 10% free
withdrawal amount; and
o contracts settled using an annuity payout plan; and
o death benefits.
If your contract includes a "Waiver of Withdrawal Charges" Annuity
Endorsement, we will waive withdrawal charges that are normally
assessed upon full or partial withdrawal if you provide proof
satisfactory to us that, as of the date you request the withdrawal,
you or the annuitant are confined to a hospital or nursing home and
have been for the prior 60 days.
To qualify, the nursing home must meet the following criteria:
o be licensed by an appropriate licensing agency to provide
nursing care; and
o provide 24-hour-a-day nursing services; and
o have a doctor available for emergency situations; and
o have a nurse on duty or on call at all times; and
o maintain clinical records; and
o have appropriate methods for administering drugs.
To the extent permitted by state law, this endorsement is included
in contracts issued when the owner and annuitant are under age 76
on the date that we issue the contract.
Possible group reductions: In some cases lower sales and
administrative expenses may be incurred due to the size of the
group, the average contribution and the use of group enrollment
procedures. In such cases, we may be able to reduce or eliminate
the contract administrative and withdrawal charges. However, we
expect this to occur infrequently.
Premium taxes
Certain state and local governments impose premium taxes that may
reach to 3.5%. These taxes are dependent upon the state of
residence or the state in which the contract was sold. In some <PAGE>
PAGE 24
cases, premium taxes are deducted from your purchase payments
before they are allocated. In other cases, the deduction is made
when you fully withdraw your contract or when annuity payouts
begin.
Valuing your investment
Here is how your fixed account and variable subaccounts are valued:
Fixed account: The amounts allocated to the fixed account are
valued directly in dollars and equal the sum of your purchase
payments and transfer amounts plus interest earned, less any
amounts withdrawn or transferred and any contract administrative
charge.
Variable subaccounts: Amounts allocated to the variable
subaccounts are converted into accumulation units. Each time you
make a purchase payment or transfer amounts into one of the
variable subaccounts, a certain number of accumulation units are
credited to your contract for that subaccount. Conversely, each
time you take a partial withdrawal, transfer amounts out of a
variable subaccount, or are assessed a contract administrative
charge, a certain number of accumulation units are subtracted from
your contract.
The accumulation units are the true measure of investment value in
each subaccount during the accumulation period. They are related
to, but not the same as, the net asset value of the underlying
fund.
The dollar value of each accumulation unit can rise or fall daily
depending on the performance of the underlying mutual fund and on
certain fund expenses. Here is how unit values are calculated:
Number of units
To calculate the number of accumulation units for a particular
subaccount, we divide your investment, after deduction of any
premium taxes, by the current accumulation unit value.
Accumulation unit value
The current accumulation unit value for each variable subaccount
equals the last value times the subaccount's current net investment
factor.
Net investment factor
o Determined each business day by adding the underlying mutual
fund's current net asset value per share plus per-share
amount of any current dividend or capital gain distribution;
then
o dividing that sum by the previous net asset value per share;
and
o subtracting the percentage factor representing the mortality
and expense risk fee and the variable account administrative
charge from the result.
<PAGE>
PAGE 25
Because the net asset value of the underlying mutual fund may
fluctuate, the accumulation unit value may increase or decrease.
You bear this investment risk in a variable subaccount.
Factors that affect variable subaccount accumulation units
Accumulation units may change in two ways; in number and in value.
Here are the factors that influence those changes:
The number of accumulation units you own may fluctuate due to:
o additional purchase payments allocated to the variable
subaccounts;
o transfers into or out of the variable subaccount(s);
o partial withdrawals;
o withdrawal charges; and/or
o contract administrative charges.
Accumulation unit values may fluctuate due to:
o changes in underlying mutual fund(s) net asset value;
o dividends distributed to the variable subaccount(s);
o capital gains or losses of underlying mutual funds;
o mutual fund operating expenses;
o mortality and expense risk fees; and/or
o variable account administrative charges.
Making the most of your annuity
Automated dollar-cost averaging*
You can use automated transfers to take advantage of dollar-cost
averaging (investing a fixed amount at regular intervals). For
example, you might have a set amount transferred monthly from a
relatively conservative variable subaccount to a more aggressive
one, or to several others.
This systematic approach can help you benefit from fluctuations in
accumulation unit values caused by fluctuations in the market
value(s) of the underlying mutual fund(s). Since you invest the
same amount each period, you automatically acquire more units when
the market value falls, fewer units when it rises. The potential
effect is to lower your average cost per unit. For specific
features contact your agent.
<PAGE>
PAGE 26
<TABLE>
<CAPTION>
How dollar-cost averaging works
Month Amount Accumulation Number of units
invested unit value purchased
<S> <C> <C> <C> <C>
By investing an Jan $100 $20 5.00
equal number of
dollars each month.... Feb 100 18 5.56
March 100 17 5.88
you automatically April 100 15 6.67
buy more units
when the per unit May 100 16 6.25
market price is low....
June 100 18 5.56
July 100 17 5.88
Aug 100 19 5.26
and fewer units Sept 100 21 4.76
when the per unit
market price is Oct 100 20 5.00
high.
</TABLE>
You have paid an average price of only $17.91 per unit over the 10
months, while the average market price actually was $18.10.
Dollar-cost averaging does not guarantee that any variable
subaccount will gain in value, nor will it protect against a
decline in value if market prices fall. However, if you can
continue to invest regularly throughout changing market conditions,
it can be an effective strategy to help meet your long term goals.
* Some restrictions may apply.
Transferring money between subaccounts
You may transfer money from any one subaccount, or the fixed
account, to another before the annuity payouts begin. Certain
restrictions apply to transfers involving the fixed account. If we
receive your request before the close of business, we will process
it that day. Requests received after the close of business will be
processed the next business day. There is no charge for transfers.
Before making a transfer, you should consider the risks involved in
switching investments.
We may suspend or modify transfer privileges at any time. The
right to transfer contract values between the subaccounts is
subject to modification if we determine, in our sole discretion,
that the exercise of that right by one or more contract owners is,
or would be, to the disadvantage of other contract owners. Any
modification could be applied to transfers to or from some or all
of the subaccounts. These modifications could include, but not be
limited to, the requirement of a minimum time period between each
transfer, not accepting transfer requests of an agent acting under
a power of attorney on behalf of more than one contract owner or
limiting the dollar amount that may be transferred between the
subaccounts and the fixed account by a contract owner at any one
time. We may apply these modifications or restrictions in any
manner reasonably designed to prevent any use of the transfer right
we consider to be to the disadvantage of other contract owners.
(For information on transfers after annuity payouts begin, see "The
annuity payout period.")
<PAGE>
PAGE 27
Transfer policies
o You may transfer contract values between the variable
subaccounts or from the subaccount(s) to the fixed account at
any time. However, if you have made a transfer from the
fixed account to the subaccount(s), you may not make a
transfer from any subaccount back to the fixed account for
six months following that transfer.
o You may transfer contract values from the fixed account to
the variable subaccount(s) on or within 30 days before or
after the contract anniversary (except for automated
transfers, which can be set up for transfer periods of your
choosing subject to certain minimums).
o If we receive your request on or within 30 days before or
after the contract anniversary date, the transfer from the
fixed account to the variable subaccount(s) will be effective
on the day we receive it.
o We will not accept requests for transfers from the fixed
account at any other time.
o Once annuity payouts begin no transfers may be made to or
from the fixed account, but transfers may be made once per
contract year among the variable subaccounts.
Two ways to request a transfer or a withdrawal
1 By letter
Send your name, account number, Social Security Number or Taxpayer
Identification Number and signed request for a transfer or
withdrawal to:
Regular mail:
American Enterprise Life Insurance Company
80 South Eighth Street
P.O. Box 534
Minneapolis, MN 55440-0534
Express mail:
American Enterprise Life Insurance Company
Attention: Unit 829
80 South Eighth Street
Minneapolis, MN 55402
Minimum amount
Mail transfers: $500 or entire variable subaccount or fixed
account balance
Mail withdrawals: $500 or entire variable subaccount or fixed
account balance
Maximum amount
Mail transfers: None (up to contract value)
Mail withdrawals: None (up to contract value)
<PAGE>
PAGE 28
2 By automated transfers and automated partial withdrawals
Your agent can help you set up automated transfers among your
accounts or partial withdrawals from the accounts.
You can start or stop this service by written request or other
method acceptable to American Enterprise Life. You must allow 30
days for American Enterprise Life to change any instructions that
are currently in place.
o Automated transfers may not exceed an amount that, if
continued, would deplete the fixed account or subaccount(s)
from which you are transferring within 24 months.
o Automated transfers and automated partial withdrawals are
subject to all of the contract provisions and terms,
including transfer of contract values between accounts.
Automated withdrawals may be restricted by applicable law
under some contracts.
o Automated partial withdrawals may result in IRS taxes and
penalties on all or part of the amount withdrawn.
Minimum amount
Automated transfers or withdrawals: $100 monthly/$250 quarterly
Maximum amount
Automated transfers or withdrawals: None (except for automated
transfers from the fixed
account)
Withdrawals from your contract
As owner, you may withdraw all or part of your contract at any time
before annuity payouts begin by sending a written request to
American Enterprise Life. For total withdrawals we will compute
the value of your contract at the close of business after we
receive your request. We may ask you to return the contract. You
may have to pay withdrawal charges (see "Withdrawal charge") and
IRS taxes and penalties (see "Taxes"). No withdrawals may be made
after annuity payouts begin.
Withdrawal policies
If you have a balance in more than one account and request a
partial withdrawal, we will withdraw money from all your accounts
in the same proportion as your value in each account correlates to
your total contract value, unless you request otherwise.
Receiving payment when you request a withdrawal
By regular or express mail:
o Payable to owner.
o Normally mailed to address of record within seven days after
receiving your request. However, we may postpone the payment
if:
<PAGE>
PAGE 29
-the withdrawal amount includes a purchase payment check that
has not cleared;
-the NYSE is closed, except for normal holiday and weekend
closings;
-trading on the NYSE is restricted, according to SEC rules;
-an emergency, as defined by SEC rules, makes it impractical
to sell securities or value the net assets of the accounts;
or
-the SEC permits us to delay payment for the protection of
security holders.
TSA-special withdrawal provisions
Participants in Tax-Sheltered Annuities (TSA): The Code imposes
certain restrictions on your right as owner to receive early
distributions from a TSA:
o Distributions attributable to transfers or rollovers of
salary reduction contributions made after Dec. 31, 1988, plus
the earnings on them, may be made from the TSA only if:
-you have attained age 59 1/2;
-you have become disabled as defined in the Code;
-you have separated from the service of the employer
who purchased the annuity; or
-the distribution is made to your beneficiary because
of your death.
o If you encounter a financial hardship (within the meaning of
the Code), you may receive a distribution of all contract
values attributable to salary reduction contributions made
after Dec. 31, 1988, but not the earnings on them.
o Even though a distribution may be permitted under the above
rules, it still may be subject to IRS taxes and penalties.
(See "Taxes.")
o The above restrictions on the right to receive a distribution
do not affect the availability of the amount credited to the
contract as of Dec. 31, 1988. The restrictions do not apply
to transfers or exchanges of contract value within the
annuity, or to another registered variable annuity contract
or investment vehicle available through the employer.
Changing ownership
You may change ownership of your nonqualified annuity at any time
by filing a change of ownership with us at our Minneapolis
administrative office. The change will become binding upon us when
we receive and record it. We will honor any change of ownership
request believed to be authentic and will use reasonable procedures
to confirm that it is. If these procedures are followed, we take
no responsibility for the validity of the change.
If you have a nonqualified annuity, you may lose your tax
advantages by transferring, assigning or pledging any part of it.
(See "Taxes.")
<PAGE>
PAGE 30
If you have a qualified annuity, you may not sell, assign,
transfer, discount or pledge your contract as collateral for a
loan, or as security for the performance of an obligation or for
any other purpose to any person except American Enterprise Life.
However, if the owner is a trust or custodian, or an employer
acting in a similar capacity, ownership of a contract may be
transferred to the annuitant.
Benefits in case of death
If you or the annuitant dies (or, for qualified annuities, if the
annuitant dies) before annuity payouts begin, we will pay the
beneficiary as follows:
For contracts where both the owner and annuitant were 75 or younger
on the date the contract was issued and if all withdrawals you have
made from this contract have been without withdrawal charges, the
beneficiary receives the greater of:
1. the contract value; or
2. the total purchase payments paid less any amounts withdrawn;
or
3. on or after the fifth contract anniversary, the death benefit
as of the most recent fifth contract anniversary adjusted by
adding any purchase payments made since that most recent
fifth contract anniversary and by subtracting any amounts
withdrawn since that most recent fifth contract anniversary.
For contracts where both the owner and annuitant were 75 or younger
on the date the contract was issued and you have made withdrawals
subject to withdrawal charges, the beneficiary receives the
contract value.
For contracts where either the owner or annuitant were 76 or older
on the date the contract was issued, the beneficiary receives the
contract value.
If your spouse is sole beneficiary under a nonqualified annuity and
you die before the retirement date, your spouse may keep the
annuity as owner. To do this your spouse must, within 60 days
after we receive proof of death, give us written instructions to
keep the contract in force.
Under a qualified annuity, if the annuitant dies before reaching
age 70 1/2 and before the retirement date, and the spouse is the
only beneficiary, the spouse may keep the annuity in force until
the date on which the annuitant would have reached age 70 1/2 or
such other date permitted by the Code. To do this, the spouse must
give us written instructions within 60 days after we receive proof
of death.
Payments: We will pay the beneficiary in a single sum unless you
have given us other written instructions, or the beneficiary may
receive payouts under any annuity payout plan available under this
contract if:<PAGE>
PAGE 31
o the beneficiary asks us in writing within 60 days after we
receive proof of death;
o payouts begin no later than one year after death; and
o the payout period does not extend beyond the beneficiary's life
or life expectancy.
When paying the beneficiary, we will determine the contract's value
at the next close of business after our death claim requirements
are fulfilled. Interest, if any, will be paid from the date of
death at a rate no less than required by law. We will mail payment
to the beneficiary within seven days after our death claim
requirements are fulfilled. (See "Taxes.")
The annuity payout period
As owner of the contract, you have the right to decide how and to
whom annuity payouts will be made starting at the retirement date.
You may select one of the annuity payout plans outlined below, or
we will mutually agree on other payout arrangements. The amount
available for payouts under the plan you select is the contract
value on your retirement date. No withdrawal charges are deducted
under the payout plans listed below.
You also decide whether annuity payouts are to be made on a fixed
or variable basis, or a combination of fixed and variable. Amounts
of fixed and variable payouts depend on:
o the annuity payout plan you select;
o the annuitant's age and, in most cases, sex;
o the annuity table in the contract; and
o the amounts you allocated to the account(s) at settlement.
In addition, for variable payouts only, amounts depend on the
investment performance of the subaccount(s) you select. These
payouts will vary from month to month because the performance of
the underlying mutual funds will fluctuate. (In the case of fixed
annuities, payouts remain the same from month to month.)
For information with respect to transfers between accounts after
annuity payouts begin, see "Transfer policies."
Annuity payout plans
You may choose any one of these annuity payout plans by giving us
written instructions at least 30 days before contract values are to
be used to purchase the payout plan:
o Plan A - Life annuity - no refund: Monthly payouts are made
until the annuitant's death. Payouts end with the last payout
before the annuitant's death; no further payouts will be made.
This means that if the annuitant dies after only one monthly payout
has been made, no more payouts will be made.
o Plan B - Life annuity with five, 10 or 15 years certain: Monthly
payouts are made for a guaranteed payout period of five, 10 or 15
years that the annuitant elects. This election will determine the
length of the payout period to the beneficiary if the annuitant
<PAGE>
PAGE 32
should die before the elected period has expired. The guaranteed
payout period is calculated from the retirement date. If the
annuitant outlives the elected guaranteed payout period, payouts
will continue until the annuitant's death.
o Plan C - Life annuity - installment refund: Monthly payouts are
made until the annuitant's death, with our guarantee that payouts
will continue for some period of time. Payouts will be made for at
least the number of months determined by dividing the amount
applied under this option by the first monthly payout, whether or
not the annuitant is living.
o Plan D - Joint and last survivor life annuity - no refund:
Monthly payouts are made to the annuitant and a joint annuitant
while both are living. If either annuitant dies, monthly payouts
continue at the full amount until the death of the surviving
annuitant. Payouts end with the death of the second annuitant.
o Plan E - Payouts for a specified period (available as a fixed
payout only): Monthly payouts are made for a specific payout
period of 10 to 30 years chosen by the annuitant. Payouts will be
made only for the number of years specified whether the annuitant
is living or not. Depending on the time period selected, it is
foreseeable that an annuitant can outlive the payout period
selected. In addition, a 10% IRS penalty tax could apply under
this payout plan. (See "Taxes.")
Restrictions for some qualified plans: If you purchased a
qualified annuity, you must select a payout plan that provides for
payouts:
o over the life of the annuitant;
o over the joint lives of the annuitant and a designated
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 a designated beneficiary.
If we do not receive instructions: You must give us written
instructions for the annuity payouts at least 30 days before the
annuitant's retirement date. If you do not, we will make payouts
under Plan B, with 120 monthly payouts guaranteed.
If monthly payouts would be less than $20: We will calculate the
amount of monthly payouts at the time the contract value is used to
purchase a payout plan. If the calculations show that monthly
payouts would be less than $20, we have the right to pay the
contract value to the owner in a lump sum or to change the
frequency of the payouts.
Death after annuity payouts begin
If you or the annuitant dies after annuity payouts begin, any
amount payable to the beneficiary will be provided in the annuity
payout plan in effect.
<PAGE>
PAGE 33
Taxes
Generally, under current law, any increase in your contract value
is taxable to you only when you receive a payout or withdrawal.
(However, see detailed discussion below.) Any portion of the
annuity payouts and any withdrawals you request that represent
ordinary income are normally taxable. You will receive a 1099 tax
information form for any year in which a taxable distribution was
made.
Annuity payouts under nonqualified annuities: A portion of each
payout will be ordinary income and subject to tax, and a portion of
each payout will be considered a return of part of your investment
and will not be taxed. All amounts received after your investment
in the annuity is fully recovered will be subject to tax.
Tax law requires that all nonqualified deferred annuity contracts
issued by the same company to the same owner during a calendar year
are to be taxed as a single, unified contract when distributions
are taken from any one of such contracts.
Annuity payouts under qualified annuities: Under a qualified
annuity, the entire payout generally will be includable as ordinary
income and subject to tax except to the extent that contributions
were made with after-tax dollars. If you or your employer invested
in your contract with pre-tax dollars as part of a qualified
retirement plan, such amounts are not considered to be part of your
investment in the contract and will be taxed when paid to you.
Withdrawals: If you withdraw part or all of your contract before
your annuity payouts begin, your withdrawal payment will be taxed
to the extent that the value of your contract immediately before
the withdrawal exceeds your investment. You also may have to pay a
10% IRS penalty for withdrawals before reaching age 59 1/2. For
qualified annuities, other penalties may apply if you make
withdrawals from your annuity before your plan specifies that you
can receive payouts.
Death benefits to beneficiaries: The death benefit under an
annuity is not tax-exempt. Any amount received by the beneficiary
that represents previously deferred earnings within the contract,
is taxable as ordinary income to the beneficiary in the year(s) he
or she receives the payments.
Annuities owned by corporations, partnerships or trusts: Any
annual increase in the value of annuities held by such entities
generally will be treated as ordinary income received during that
year. This provision is effective for purchase payments made after
Feb. 28, 1986. However, if the trust was set up for the benefit of
a natural person only, the income will continue to be tax-deferred.
Penalties: If you receive amounts from your contract before
reaching age 59 1/2, you may have to pay a 10% IRS penalty on the
amount includable in your ordinary income. However, this penalty
will not apply to any amount received by you or your beneficiary:
o because of your death;
<PAGE>
PAGE 34
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 beneficiary); or
o if it is allocable to an investment before Aug. 14, 1982 (except
for qualified annuities).
For a qualified annuity, other penalties or exceptions may apply if
you make withdrawals from your annuity before your plan specifies
that payouts can be made.
Withholding, generally: If you receive all or part of the contract
value from an annuity, withholding may be imposed against the
taxable income portion of the payment. Any withholding that is
done represents a prepayment of your tax due for the year. You
take credit for such amounts on the annual tax return that you
file.
If the payment is part of an annuity payout plan, the amount of
withholding generally is computed using payroll tables. You can
provide us with a statement of how many exemptions to use in
calculating the withholding. As long as you've provided us with a
valid Social Security Number or Taxpayer Identification Number, you
can elect not to have any withholding occur.
If the distribution is any other type of payment (such as a partial
or full withdrawal) withholding is computed using 10% of the
taxable portion. Similar to above, as long as you've provided us
with a valid Social Security Number or Taxpayer Identification
Number, you can elect not to have this withholding occur.
Some states also impose withholding requirements similar to the
federal withholding described above. If this should be the case,
any payment from which federal withholding is deducted may also
have state withholding deducted. The withholding requirements may
differ if payment is being made to a non-U.S. citizen or if the
payment is being delivered outside the United States.
Withholding from qualified annuities: If you receive directly all
or part of the contract value from a qualified annuity (except an
IRA), mandatory 20% income tax withholding generally will be
imposed at the time the payment is made. This mandatory
withholding is in place of the elective withholding discussed
above. This mandatory withholding will not be imposed if:
o instead of receiving the distribution check, you elect to
have the distribution rolled over directly to an IRA or
another eligible plan;
o the payment is one in a series of substantially equal
periodic payouts, made at least annually, over your life or
life expectancy (or the joint lives or life expectancies of
you and your designated beneficiary) or over a specified
period of 10 years or more; or
<PAGE>
PAGE 35
o the payment is a minimum distribution required under the
Code.
Payments made to a surviving spouse instead of being directly
rolled over to an IRA may also be subject to mandatory 20% income
tax withholding.
State withholding also may be imposed on taxable distributions.
Transfer of ownership of a nonqualified annuity: If you make such
a transfer without receiving adequate consideration, the transfer
is considered a gift, and also may be considered a withdrawal for
federal income tax purposes. If the gift is a currently taxable
event, the amount of deferred earnings at the time of the transfer
will be taxed to the original owner, who also may be subject to a
10% IRS penalty as discussed earlier. In this case, the new
owner's investment in the annuity will be the value of the annuity
at the time of the transfer.
Collateral assignment of a nonqualified annuity: If you
collaterally assign or pledge your contract, earnings on purchase
payments you made after Aug. 13, 1982 will be taxed to you like a
withdrawal.
Important: Our discussion of federal tax laws is based upon our
understanding of these laws as they are currently interpreted.
Federal tax laws or current interpretations of them may change.
For this reason and because tax consequences are complex and highly
individual and cannot always be anticipated, you should consult a
tax advisor if you have any questions about taxation of your
contract.
Tax qualification
The contract is intended to qualify as an annuity for federal
income tax purposes. To that end, the provisions of the contract
are to be interpreted to ensure or maintain such tax qualification,
notwithstanding any other provisions of the contract. We reserve
the right to amend the contract to reflect any clarifications that
may be needed or are appropriate to maintain such qualification or
to conform the contract to any applicable changes in the tax
qualification requirements. We will send you a copy of any such
amendments.
Voting rights
As contract owner with investments in the variable subaccount(s),
you may vote on important mutual fund policies until annuity
payouts begin. Once they begin, the person receiving them has
voting rights. We will vote fund shares according to the
instructions of the person with voting rights.
Before annuity payouts begin, the number of votes you have is
determined by applying your percentage interest in each variable
subaccount to the total number of votes allowed to the subaccount.
<PAGE>
PAGE 36
After annuity payouts begin, the number of votes you have is equal
to:
o the reserve held in each subaccount for your contract,
divided by
o the net asset value of one share of the applicable underlying
mutual fund.
As we make annuity payouts, the reserve for the contract decreases;
therefore, the number of votes also will decrease.
We calculate votes separately for each account. Notice of these
meetings, proxy materials and a statement of the number of votes
to which the voter is entitled, will be sent.
We will vote shares for which we have not received instructions in
the same proportion as the votes for which we have received
instructions. We also will vote the shares for which we have
voting rights in the same proportion as the votes for which we have
received instructions.
Substitution of investments
If shares of any fund should not be available for purchase by the
appropriate variable subaccount or if, in the judgment of American
Enterprise Life's Management, further investment in such shares is
no longer appropriate in view of the purposes of the subaccount,
investment in the subaccount may be discontinued or another
registered open-end management investment company may be
substituted for fund shares held in the subaccounts if American
Enterprise Life believes it would be in the best interest of
persons having voting rights under the contract. The variable
account may be operated as a management company under the 1940 Act
or it may be deregistered under this Act if the registration is no
longer required. In the event of any such substitution or change,
American Enterprise Life, without the consent or approval of the
owners, may amend the contract and take whatever action is
necessary and appropriate. However, no such substitution or change
will be made without the necessary approval of the SEC and state
insurance departments. American Enterprise Life will notify owners
of any substitution or change.
Distribution of the contracts
The contracts will be distributed by banks and financial
institutions either directly or through a network of third-party
marketers. American Express Financial Advisors Inc., the principal
underwriter for the variable account, will pay commissions for the
distribution of the contracts to the broker-dealers of the banks or
financial institutions or the broker-dealers of the third-party
marketers who have entered into distribution agreements with
American Express Financial Advisors. These commissions will not be
more than 7% of purchase payments received on the contracts.
From time to time, American Enterprise Life may pay or permit other
promotional incentives, in cash or credit or other compensation.
<PAGE>
PAGE 37
About American Enterprise Life
The AEL Personal PortfolioSM is issued by American Enterprise Life.
American Enterprise Life is a wholly owned subsidiary of IDS Life,
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
Company is a financial services company principally engaged through
subsidiaries (in addition to American Express Financial
Corporation) in travel related services, investment services and
international banking services.
American Enterprise Life is a stock life insurance company
organized in 1981 under the laws of the state of Indiana. Its
administrative office is located at 80 South Eighth Street,
Minneapolis, MN 55402. Its statutory address is 100 Capitol Center
South, 201 North Illinois Street, Indianapolis, IN 46204. American
Enterprise Life is licensed in the state of Indiana and it conducts
a conventional life insurance business.
American Express Financial Advisors Inc. is the principal
underwriter for the variable account. Its home office is IDS Tower
10, Minneapolis, MN 55440-0010. American Express Financial
Advisors is registered with the SEC under the Securities Exchange
Act of 1934 as a broker-dealer and is a member of the National
Association of Securities Dealers, Inc. American Express Financial
Advisors is a wholly owned subsidiary of American Express Financial
Corporation.
The American Express Financial Corporation family of companies
offers not only insurance and annuities, but also mutual funds,
investment certificates and a broad range of financial management
services.
Other subsidiaries provide investment management and related
services for pension, profit-sharing, employee savings and
endowment funds of businesses and institutions.
Regular and special reports
Services
To help you track and evaluate the performance of your annuity,
American Enterprise Life provides:
Quarterly statements showing the value of your investment.
Annual reports containing required information on the annuity and
its underlying investments.
<PAGE>
PAGE 38
Table of contents of the Statement of Additional Information
Performance information...............................
Calculating annuity payouts...........................
Rating agencies.......................................
Principal underwriter.................................
Independent auditors..................................
Mortality and expense risk fee........................
Saving for retirement.................................
Prospectus............................................
Financial statements -
American Enterprise Variable Annuity
Account..........................................
American Enterprise Life Insurance
Company..........................................
___________________________________________________________________
Please check the appropriate box to receive a copy of the Statement
of Additional Information for:
____ AEL Personal PortfolioSM
____ IDS Life Retirement Annuity Mutual Funds
____ The OCC Accumulation Trust
____ The Putnam Capital Manager Trust
____ GT Global Variable Investment Funds
Mail your request to:
American Enterprise Life Insurance Company
80 South Eighth Street
P.O. Box 534
Minneapolis, MN 55440-0534
American Enterprise Life will mail your request to:
Your name _____________________________________________________
Address _______________________________________________________
City __________________________ State ____________ Zip ________
<PAGE>
PAGE 39
STATEMENT OF ADDITIONAL INFORMATION
for
AEL PERSONAL PORTFOLIOSM
AMERICAN ENTERPRISE VARIABLE ANNUITY ACCOUNT
May 1, 1996
American Enterprise Variable Annuity Account is a separate account
established and maintained by American Enterprise Life Insurance
Company (American Enterprise Life).
This Statement of Additional Information (SAI), dated May 1, 1996,
is not a prospectus. It should be read together with the Account's
prospectus, dated May 1, 1996, which may be obtained from your
agent, or by writing or calling American Enterprise Life Insurance
Company at the address or telephone number below.
American Enterprise Life Insurance Company
Administrative Offices
80 South Eighth Street
P.O. Box 534
Minneapolis, MN 55440-0534
(612) 671-7700
<PAGE>
PAGE 40
TABLE OF CONTENTS
Performance Information......................................
Calculating Annuity Payouts..................................
Rating Agencies..............................................
Principal Underwriter........................................
Independent Auditors.........................................
Mortality and Expense Risk Fee...............................
Saving for Retirement........................................
Prospectus...................................................
Financial Statements
- American Enterprise Variable Annuity Account..........
- American Enterprise Life Insurance Company............
<PAGE>
PAGE 41
PERFORMANCE INFORMATION
The following performance figures are calculated on the basis of
historical performance of the funds. The performance figures
relating to these funds assume that the contract was in existence
prior to January 12, 1995, which it was not. Performance figures
are calculated on the basis of historical performance of the funds.
Before the subaccounts began investing in these funds, the figures
show what the subaccount performance would have been if these
subaccounts had existed during the illustrated periods. Once these
subaccounts began investing in these funds, actual values are used
for the calculations.
Calculation of Yield for the Subaccount investing in IDS Life
Moneyshare Fund.
Simple yield for the subaccount investing in the IDS Life
Moneyshare Fund 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).
The value of the hypothetical subaccount includes the amount of any
declared dividends, the value of any shares purchased with any
dividend paid during the period and any dividends declared for such
shares. The variable subaccount's yield does not include any
realized or unrealized gains or losses, nor does it include the
effect of any applicable surrender charge.
Calculation of compound 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:
Compound Yield = [(Base Period Return + 1) 365/7 ] -1
Annualized Yield based on Seven-Day Period ended
Dec. 31, 1995
Subaccount investing in: Simple Yield Compound Yield
IDS Life Moneyshare Fund 3.53% 3.59%
Calculation of Yield for the Subaccount investing in IDS Life
Special Income Fund.
For the subaccount investing in the IDS Life Special Income Fund
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
<PAGE>
PAGE 42
investment income per accumulation unit by the value of an
accumulation unit on the last day of the period, according to the
following formula:
YIELD = 2[(a-b + 1)6 - 1]
cd
where: a = dividends and investment income earned during the
period.
b = expenses accrued for the period (net of
reimbursements).
c = the average daily number of accumulation units
outstanding during the period that were entitled to
receive dividends.
d = the maximum offering price per accumulation unit on
the last day of the period.
Yield on the subaccount is earned from the increase in the net
asset value of shares of the fund in which the subaccount invests
and from dividends declared and paid by the fund, which are
automatically invested in shares of the fund.
Annualized yield based on 30-Day Period ended Dec. 31, 1995
Subaccount investing in: Yield
IDS Life Special Income 8.22%
Calculation of average annual total return
Quotations of average annual total return for a subaccount will be
expressed in terms of the average annual compounded rate of return
of a hypothetical investment in the annuity contract over a period
of one, five and 10 years (or, if less, up to the life of the
account), calculated according to the following formula:
P(1+T)n = ERV
where: P = a hypothetical initial payment of $1,000.
T = average annual total return.
n = number of years.
ERV = Ending Redeemable Value of a hypothetical $1,000
payment made at the beginning of the one, five, or
ten year (or other) period at the end of the one,
five, or ten year (or other) period (or fractional
portion thereof).
Subaccount total return figures reflect the deduction of the
contract administrative charge, variable account administrative
charge and mortality and expense risk fee. Performance figures
will be shown with the deduction of the applicable withdrawal
charge.
<PAGE>
PAGE 43
Average Annual total Return For Period Ended Dec. 31, 1995
<TABLE>
<CAPTION>
Average Annual Total Return with Withdrawal
Since
Subaccount investing in: 1 Year 5 Year 10 Year Inception
<S> <C> <C> <C> <C>
IDS LIFE
Aggressive Growth Fund (1/92)* 22.80% - % - % 8.79%
Capital Resource Fund (10/81) 18.96 13.26 11.99 -
International Equity Fund (1/92) 2.91 - - 7.09
Managed Fund (4/86) 15.38% 11.09% - % 9.73%
Moneyshare Fund (10/81) -4.01 1.89 4.12 -
Special Income Fund (10/81) 13.51 9.79 8.51 -
Since
1 Year 5 Year 10 Year Inception
OCC ACCUMULATION TRUST
Managed Portfolio (8/88) 36.52% - % - % 23.07%
GT GLOBAL
Variable Latin America Fund (2/93) -29.78 - - 3.30
Variable New Pacific Fund (2/93) -7.88 - - 0.18
PCM
Diversified Income Fund (9/93) 10.36 - - 3.04
Growth & Income Fund (2/88) 27.68 13.33 - 13.37
High Yield Fund (2/88) 9.56 17.21 - 11.03
New Opportunities Fund (5/94) 35.71 - - 25.97
Average Annual Total Return without Withdrawal
Since
Subaccount Investing in: 1 Year 5 Year 10 Year Inception
IDS Life
Aggressive Growth Fund (1/92)* 29.80% - % - % 9.57%
Capital Resource Fund (10/81) 25.96 13.62 11.99 -
International Equity Fund (1/92) 9.90 - - 7.90
Managed Fund (4/86) 22.38 11.48 - 9.73
Moneyshare Fund (10/81) 2.46 2.44 4.12 -
Special Income Fund (10/81) 20.51 10.20 8.51 -
OCC ACCUMULATION TRUST
Managed Portfolio (8/88) 43.52 - - 27.43
GT GLOBAL
Variable Latin America (2/93) -25.25 - - 4.91
Variable New Pacific Fund (2/93) -1.70 - - 1.79
PCM
Diversified Income Fund (9/93) 17.36 - - 4.99
Growth & Income Fund (2/88) 34.68 13.69 - 13.37
High Yield Fund (2/88) 16.56 17.53 - 11.03
New Opportunities Fund (5/94) 42.71 - - 29.03
*inception dates of the funds are shown in parentheses.
</TABLE>
Aggregate Total Return
Aggregate total return represents the cumulative change in value of
an investment for a given period (reflecting change in a
subaccount's accumulation unit value) and is computed by the
following formula:
ERV - P
P
<PAGE>
PAGE 44
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).
The Securities and Exchange Commission (SEC) requires that an
assumption be made that the contract owner withdraws the entire
contract at the end of the one, five and ten year periods (or, if
less, up to the life of the subaccount) for which performance is
required to be calculated. In addition, performance figures may be
shown without the deduction of a withdrawal charge.
Subaccount total return figures reflect the deduction of the
contract administrative charge and mortality and expense risk fee.
Performance of the subaccount may be quoted or compared to
rankings, yields, or returns as published or prepared by
independent rating or statistical services or publishers or
publications such as Barron's, Business Week, Forbes, Fortune,
Institutional Investor, Investor's Daily, Kiplinger's Personal
Finance, Money, Morningstar Mutual Fund Values, Mutual Fund
Forecaster, The New York Times, Stranger's Investment Advisor, USA
Today, U.S. News & World Report and The Wall Street Journal.
CALCULATING ANNUITY PAYOUTS
The Variable Account
The following calculations are done separately for each of the
subaccounts of the variable account. The separate monthly payouts,
added together, make up your total variable annuity payout.
Initial Payout: To compute your first monthly payment, we:
o determine the dollar value of your annuity as of the valuation
date seven days before the retirement date and then deduct any
applicable premium tax.
o apply the result to the annuity table contained in the contract
or another table at least as favorable. The annuity table shows
the amount of the first monthly payment for each $1,000 of value
which depends on factors built into the table, as described below.
Annuity Units: The value of your subaccount is then converted to
annuity units. To compute the number credited to you, we divide
the first monthly payment by the annuity unit value (see below) on
the valuation date on (or next day preceding) the seventh calendar
day before the retirement date. The number of units in your
subaccount is fixed. The value of the units fluctuates with the
performance of the underlying mutual fund.
<PAGE>
PAGE 45
Subsequent Payouts: To compute later payouts, we multiply:
o the annuity unit value on the valuation date on or immediately
preceding the seventh calendar day before the payout is due; by
o the fixed number of annuity units credited to you.
Annuity Table: The table shows the amount of the first monthly
payment for each $1,000 of contract value according to the age and,
when applicable, the sex of the annuitant. (Where required by law,
we will use a unisex table of settlement rates.) The table assumes
that the contract value is invested at the beginning of the annuity
payout period and earns a 5% rate of return, which is reinvested
and helps to support future payouts.
Annuity Unit Values: This value was originally set at $1 for each
subaccount. To calculate later value we multiply the last annuity
value by the product of:
o the net investment factor; and
o the neutralizing factor. The purpose of the neutralizing factor
is to offset the effect of the assumed investment rate built into
the annuity table. With an assumed investment rate of 5%, the
neutralizing factor is 0.999866 for a one day valuation period.
Net Investment Factor:
o Determined each business day by adding the underlying mutual
fund's current net asset value per share plus per share amount of
any current dividend or capital gain distribution; then
o dividing that sum by the previous net asset value per share; and
o subtracting the percentage factor representing the mortality and
expense risk fee from the result.
Because the net asset value of the underlying mutual fund may
fluctuate, the net investment factor may be greater or less than
one, and the accumulation unit value may increase or decrease. You
bear this investment risk in a variable subaccount.
The Fixed Account
Your fixed annuity payout amounts are guaranteed. Once calculated,
your payout will remain the same and never change. To calculate
your annuity payouts we:
o take the value of your fixed account at the retirement date or
the date you have selected to begin receiving your annuity payouts;
then
o using an annuity table we apply the value according to the
annuity payout plan you select; and
o the annuity payout table we use will be the one in effect at the
time you choose to begin your annuity payouts. The table will be
equal to or greater than the table in your contract.
<PAGE>
PAGE 46
RATING AGENCIES
The following chart reflects the ratings given to American
Enterprise Life 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 of the AEL Personal PortfolioSM. This
information relates only to the fixed account and reflects American
Enterprise Life's ability to make annuity payouts and to pay death
benefits and other distributions from the annuity.
Rating agency Rating
A.M. Best A+
(Superior)
Duff & Phelps AAA
Moody's Aa2
PRINCIPAL UNDERWRITER
The principal underwriter for the accounts is American Express
Financial Advisors Inc. which offers the variable contracts on a
continuous basis.
INDEPENDENT AUDITORS
The financial statements of American Enterprise Variable Annuity
Account including the statements of net assets as of Dec. 31, 1995,
and the related statements of operations and statements of changes
in net assets for the period from Feb. 21, 1995 (commencement of
operations) to Dec. 31, 1995 and the financial statements of
American Enterprise Life Insurance Company (a wholly owned
subsidiary of IDS Life Insurance Company) at Dec. 31, 1995 and 1994
and for each of the three years in the period ended Dec. 31, 1995,
appearing in this SAI, have been audited by Ernst & Young LLP,
independent auditors, as set forth in their reports thereon
appearing elsewhere herein.
MORTALITY AND EXPENSE RISK FEE
American Enterprise Life has represented to the SEC that:
American Enterprise Life has reviewed publicly available
information regarding products of other companies. Based upon this
review, American Enterprise Life has concluded that the mortality
and expense risk fee is within the range of charges determined by
industry practice. American Enterprise Life will maintain at its
administrative office, and make available on request of the SEC or
its staff, a memorandum setting forth in detail the variable
products analyzed and the methodology, and results of, its
comparative review.
<PAGE>
PAGE 47
American Enterprise Life has concluded that there is a reasonable
likelihood that the proposed distribution financing arrangements
made with respect to the contracts will benefit the variable
account and investors in the contracts. The basis for such
conclusion is set forth in a memorandum which will be made
available to the SEC or its staff on request.
SAVING FOR RETIREMENT
You may have to save more for retirement because the average person
lives 17 years in retirement. Social security and pensions will
not cover your expenses in retirement. Sixty cents of every
retirement dollar must come from your personal savings.
Sources: Social Security Administration, U.S. Department of
Health and Human Services.
PROSPECTUS
The prospectus dated May 1, 1996, is hereby incorporated in this
SAI by reference.
<PAGE>
PAGE 48
<TABLE>
<CAPTION>
American Enterprise Variable Annuity Account
________________________________________________________________________________________________________________________
Statements of Net Assets Dec. 31, 1995
__________________Segregated Asset Subaccounts___________________________
Assets ECR ESI EMS EMG EIE EAG _
<S> <C> <C> <C> <C> <C> <C>
Investments in shares of mutual funds,
at market value:
IDS Life Capital Resource Fund -
37,868 shares at net asset value of
$25.85 per share (cost $951,789) $ 978,916 $ - $ - $ - $ - $ -
IDS Life Special Income Fund, Inc. -
40,387 shares at net asset value of
$12.01 per share (cost $472,060) - 485,183 - - - -
IDS Life Moneyshare Fund, Inc. -
135,575 shares at net asset value
of $1.00 per share (cost $135,564) - - 135,564 - - -
IDS Life Managed Fund, Inc. -
44,341 shares at net asset value of $15.67
per share (cost $670,739) - - - 694,967 - -
IDS Life International Equity Fund -
19,648 shares at net asset value of $13.05
per share (cost $246,793) - - - - 256,379 -
IDS Life Aggressive Growth Fund -
40,331 shares at net asset value of $15.05
per share (cost $581,208) - - - - - 606,895
OCC Accumulation Trust Managed Portfolio -
18,934 shares at net asset value of $30.14
per share (cost $538,519) - - - - - -
OCC Accumulation Trust U.S. Government
Income Portfolio - 42,296 shares at net asset value
of $10.62 per share (cost $445,484) - - - - - -
GT Global Variable New Pacific Fund -
14,791 shares at net asset value of $13.92,
per share (cost $200,099) - - - - - -
GT Global Variable Latin America Fund -
24,059 shares at net asset value of $12.42
per share (cost $289,974) - - - - - -
PCM New Opportunities Fund -
61,350 shares at net asset value of $15.63
per share (cost $888,261) - - - - - -
PCM Growth and Income Fund -
68,386 shares at net asset value of $21.47
per share (cost $1,379,943) - - - - - -
PCM High Yield Fund-
44,293 shares at net asset value of $12.37
per share (cost $532,565) - - - - - -
PCM Diversified Income Fund -
62,615 shares at net asset value of $11.03
per share (cost $665,917) - - - - - -
978,916 485,183 135,564 694,967 256,379 606,895
_______________________________________________________________________________________________________________________
Dividends receivable - 2,436 597 - - -
Accounts receivable from American Enterprise
Life for contract purchase payments 25,569 1,804 - 32,558 21,110 2,876
Total assets 1,004,485 489,423 136,161 727,525 277,489 609,771
Liabilities .
Payable to American Enterprise Life for:
Mortality and expense risk fee 873 421 142 589 212 550
Issue and administrative fee 175 84 29 118 43 110
Payable to mutual funds for investments
purchased 25,569 3,735 426 32,558 21,120 2,892
Total liabilities 26,617 4,240 597 33,265 21,375 3,552
Net assets applicable to contracts
in accumulation period $ 977,868 $485,183 $135,564 $694,260 $256,114 $606,219
_______________________________________________________________________________________________________________________
Accumulation units outstanding 817,655 413,748 131,600 588,760 219,594 473,162
______________________________________________________________________________________________________________________
Net asset value per accumulation unit $ 1.20 $ 1.17 $ 1.03 $ 1.18 $ 1.17 $ 1.28
_______________________________________________________________________________________________________________________
See accompanying notes to financial statements.
</TABLE>
<PAGE>
PAGE 49
<TABLE>
<CAPTION>
American Enterprise Variable Annuity Account
_____________________________________________________________________________________________
Statements of Net Assets Dec. 31, 1995
__________________Segregated Asset Subaccounts_______________________
Assets EMD EUS EPA ELA _
<S> <C> <C> <C> <C>
Investments in shares of mutual funds,
at market value:
IDS Life Capital Resource Fund -
37,868 shares at net asset value of
$25.85 per share (cost $951,789) $ - $ - $ - $ -
IDS Life Special Income Fund, Inc. -
40,387 shares at net asset value of
$12.01 per share (cost $472,060) - - - -
IDS Life Moneyshare Fund, Inc. -
135,575 shares at net asset value
of $1.00 per share (cost $135,564) - - - -
IDS Life Managed Fund, Inc. -
44,341 shares at net asset value of $15.67
per share (cost $670,739) - - - -
IDS Life International Equity Fund -
19,648 shares at net asset value of $13.05
per share (cost $246,793) - - - -
IDS Life Aggressive Growth Fund -
40,331 shares at net asset value of $15.05
per share (cost $581,208) - - - -
OCC Accumulation Trust Managed Portfolio -
18,934 shares at net asset value of $30.14
per share (cost $538,519) 570,668 - - -
OCC Accumulation Trust U.S. Government
Income Portfolio - 42,296 shares at net asset value
of $10.62 per share (cost $445,484) - 449,153 - -
GT Global Variable New Pacific Fund -
14,791 shares at net asset value of $13.92
per share (cost $200,099) - - 205,895 -
GT Global Variable Latin America Fund -
24,059 shares at net asset value of $12.42
per share (cost $289,974) - - - 298,760
PCM New Opportunities Fund -
61,350 shares at net asset value of $15.63
per share (cost $888,261) - - - -
PCM Growth and Income Fund -
68,386 shares at net asset value of $21.47
per share (cost $1,379,943) - - - -
PCM High Yield Fund -
44,293 shares at net asset value of $12.37
per share (cost $532,565) - - - -
PCM Diversified Income Fund -
62,615 shares of net asset value of $11.03
per share (cost $665,917) - - - -
570,668 449,153 205,895 298,760
Dividends receivable - 794 - -
Accounts receivable from American Enterprise
Life for contract purchase payments 13,131 1,405 1,033 798
Total assets 583,799 451,352 206,928 299,558
Liabilities .
Payable to American Enterprise Life for:
Mortality and expense risk fee 497 414 182 282
Issue and administrative fee 99 83 37 56
Payable to mutual funds for investments
purchased 13,131 1,405 1,033 798
Total liabilities 13,727 1,902 1,252 1,136
_____________________________________________________________________________________________
Net assets applicable to contracts
in accumulation period $570,072 $449,450 $205,676 $298,422
_____________________________________________________________________________________________
Accumulation units outstanding 435,846 413,258 192,917 303,151
____________________________________________________________________________________________
Net asset value per accumulation unit $ 1.31 $ 1.09 $ 1.07 $ 0.98
_____________________________________________________________________________________________
See accompanying notes to financial statements.
</TABLE>
<PAGE>
PAGE 50
<TABLE>
<CAPTION>
American Enterprise Variable Annuity Account .
Statements of Net Assets Dec. 31, 1995
Combined
__________________Segregated Asset Subaccounts_________ Variable
Assets ENO EGI EHY EDI Account
<S> <C> <C> <C> <C> <C>
Investments in shares of mutual funds,
at market value:
IDS Life Capital Resource Fund -
37,868 shares at net asset value of
$25.85 per share (cost $951,789) $ - $ - $ - $ - $ 978,916
IDS Life Special Income Fund, Inc. -
40,387 shares at net asset value of
$12.01 per share (cost $472,060) - - - - 485,183
IDS Life Moneyshare Fund, Inc. -
135,575 shares at net asset value
of $1.00 per share (cost $135,564) - - - - 135,564
IDS Life Managed Fund, Inc. -
44,341 shares at net asset value of $15.67
per share (cost $670,739) - - - - 694,967
IDS Life International Equity Fund -
19,648 shares at net asset value of $13.05
per share (cost $246,793) - - - - 256,379
IDS Life Aggressive Growth Fund -
40,331 shares at net asset value of $15.05
per share (cost $581,208) - - - - 606,895
OCC Accumulation Trust Managed Portfolio -
18,934 shares at net asset value of $30.14
per share (cost $538,519) - - - - 570,668
OCC Accumulation Trust U.S. Government
Income Portfolio - 42,296 shares at net asset value
of $10.62 per share (cost $445,484) - - - - 449,153
GT Global Variable New Pacific Fund -
14,791 shares at net asset value of $13.92
per share (cost $200,099) - - - - 205,895
GT Global Variable Latin America Fund -
24,059 shares at net asset value of $12.42
per share (cost $289,974) - - - - 298,760
PCM New Opportunities Fund -
61,350 shares at net asset value of $15.63
per share (cost $888,261) 958,895 - - - 958,895
PCM Growth and Income Fund -
68,386 shares at net asset value of $21.47
per share (cost $1,379,943) - 1,468,244 - - 1,468,244
PCM High Yield Fund -
44,293 shares at net asset value of $12.37
per share (cost $532,565) - - 547,903 - 547,903
PCM Diversified Income Fund-
62,615 shares at net asset value of $11.03
per share (cost $665,917) - - - 690,643 690,643
958,895 1,468,244 547,903 690,643 8,348,065
Dividends receivable - - - - 3,827
Accounts receivable from American Enterprise
Life for contract purchase payments 23,235 3,575 1,803 1,803 130,700
Total assets 982,130 1,471,819 549,706 692,446 8,482,592
Liabilities .
Payable to American Enterprise Life for:
Mortality and expense risk fee 810 1,312 504 634 7,422
Issue and administrative fee 162 262 101 127 1,486
Payable to mutual funds for
investments purchased 23,235 3,575 1,803 1,803 133,083
Total liabilities 24,207 5,149 2,408 2,564 141,991
Net assets applicable to contracts in
accumulation period $957,923 $1,466,670 $547,298 $689,882 $8,340,601
Accumulation units outstanding 690,849 1,151,991 480,470 600,567
Net asset value per accumulation unit $ 1.39 $ 1.27 $ 1.14 $ 1.15
See accompanying notes to financial statements.
</TABLE>
<PAGE>
PAGE 51
<TABLE>
<CAPTION>
American Enterprise Variable Annuity Account
________________________________________________________________________________________
Statements of Operations For the period Feb. 21, 1995 (commencement
of operations) to Dec. 31, 1995
________________Segregated Asset Subaccounts________________
ECR ESI EMS EMG EIE EAG EMD _
<S> <C> <C> <C> <C> <C> <C> <C>
Investment income (loss):
Dividend income from mutual
funds $26,607 $ 7,816 $ 2,941 $ 4,837 $ 2,378 $ 1,295 $ -
__________________________________________________________________________________________
Expenses:
Mortality and expense risk
fee (Note 3) 2,888 1,265 705 1,881 710 1,834 1,671
Administrative charge (Note 4) 578 253 141 376 142 367 334
__________________________________________________________________________________________
Total expenses 3,466 1,518 846 2,257 852 2,201 2,005
__________________________________________________________________________________________
Investment income
(loss) - net 23,141 6,298 2,095 2,580 1,526 (906) (2,005)
__________________________________________________________________________________________
Realized and Unrealized Gain (Loss) on Investments - net
__________________________________________________________________________________________
Realized gain (loss) on sales of
investments in mutual funds:
Proceeds from sales 28,264 19,561 64,400 21,572 10,599 26,474 20,429
Cost of investments sold 27,170 19,158 64,400 20,704 10,277 25,425 18,860
__________________________________________________________________________________________
Net realized gain (loss)
on investments 1,094 403 - 868 322 1,049 1,569
Net change in unrealized
appreciation or depreciation
of investments 27,127 13,123 - 24,228 9,586 25,687 32,149
__________________________________________________________________________________________
Net gain on investments 28,221 13,526 - 25,096 9,908 26,736 33,718
__________________________________________________________________________________________
Net increase from operations $51,362 $19,824 $ 2,095 $27,676 $11,434 $25,830 $31,713
__________________________________________________________________________________________
See accompanying notes to financial statements.
</TABLE>
<PAGE>
PAGE 52
<TABLE>
<CAPTION>
American Enterprise Variable Annuity Account
_________________________________________________________________________________________________________
Statements of Operations For the period Feb. 21, 1995 (commencement
of operations) to Dec. 31, 1995
Combined
__Segregated Asset Subaccounts__ Variable
EUS EPA ELA ENO EGI EHY EDI Account
_________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Investment income (loss):
Dividend income from mutual
fund portfolios $ 8,584 $ 33 $ 3,436 $ 77 $ 1,692 $ 2,689 $ 1,516 $ 63,901
________________________________________________________________________________________________________
Expenses:
Mortality and expense risk
fee (Note 3) 1,372 614 796 2,346 3,599 1,575 1,834 23,090
Administrative charge
(Note 4) 274 123 159 469 720 315 367 4,618
________________________________________________________________________________________________________
Total expenses 1,646 737 955 2,815 4,319 1,890 2,201 27,708
________________________________________________________________________________________________________
Investment income
(loss) - net 6,938 (704) 2,481 (2,738) (2,627) 799 (685) 36,193
________________________________________________________________________________________________________
Realized and Unrealized Gain (Loss) on Investments - net
________________________________________________________________________________________________________
Realized gain (loss) on sales
of investments in mutual
fund portfolios:
Proceeds from sales 26,701 7,350 11,179 25,751 31,781 26,030 17,763 337,854
Cost of investments sold 26,547 7,192 11,264 24,257 30,224 25,607 17,491 328,576
________________________________________________________________________________________________________
Net realized gain (loss)
on investments 154 158 (85) 1,494 1,557 423 272 9,278
Net change in unrealized
appreciation or depreciation
of investments 3,669 5,796 8,786 70,635 88,301 15,338 24,726 349,151
________________________________________________________________________________________________________
Net gain on investments 3,823 5,954 8,701 72,129 89,858 15,761 24,998 358,429
________________________________________________________________________________________________________
Net increase from operations $10,761 $5,250 $11,182 $69,391 $87,231 $16,560 $24,313 $394,622
________________________________________________________________________________________________________
See accompanying notes to financial statements.
</TABLE>
<PAGE>
PAGE 53
<TABLE>
<CAPTION>
American Enterprise Variable Annuity Account
____________________________________________________________________________________________________________
Statements of Changes in Net Assets For the period Feb. 21, 1995 (commencement
of operations) to Dec. 31, 1995
Segregated Asset Subaccounts .
Operations ECR ESI EMS EMG EIE EAG EMD
____________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C> <C>
Investment income
(loss) - net $ 23,141 $ 6,298 $ 2,095 $ 2,580 $ 1,526 $ (906) $ (2,005)
Net realized gain
(loss) on investments 1,094 403 - 868 322 1,049 1,569
Net change in unrealized
appreciation or
depreciation of
investments 27,127 13,123 - 24,228 9,586 25,687 32,149
____________________________________________________________________________________________________________
Net increase from operations 51,362 19,824 2,095 27,676 11,434 25,830 31,713
___________________________________________________________________________________________________________
Contract Transactions
____________________________________________________________________________________________________________
Variable annuity contract
purchase payments 906,083 465,579 192,695 668,364 248,520 557,366 549,262
Net transfers* 26,610 445 (59,226) 816 665 27,715 3,794
Contract terminations:
Surrender benefits (Note 6) (6,187) (665) - (2,596) (4,505) (4,692) (14,697)
____________________________________________________________________________________________________________
Increase from
contract transactions 926,506 465,359 133,469 666,584 244,680 580,389 538,359
____________________________________________________________________________________________________________
Net assets at beginning
of period - - - - - - -
____________________________________________________________________________________________________________
Net assets at end
of period $977,868 $485,183 $135,564 $694,260 $256,114 $606,219 $570,072
____________________________________________________________________________________________________________
Accumulation Unit Activity
____________________________________________________________________________________________________________
Units outstanding at
beginning of period - - - - - - -
Contract purchase payments 800,247 413,918 189,518 590,321 223,000 454,945 444,358
Net transfers* 22,925 434 (57,918) 767 597 22,093 3,027
Contract terminations:
Surrender benefits (5,517) (604) - (2,328) (4,003) (3,876) (11,539)
____________________________________________________________________________________________________________
Units outstanding at
end of period 817,655 413,748 131,600 588,760 219,594 473,162 435,846
____________________________________________________________________________________________________________
* Includes transfer activity from (to) other Accounts and transfers from (to) American Enterprise Life for conversion
from (to) the fixed account.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
PAGE 54
<TABLE>
<CAPTION>
American Enterprise Variable Annuity Account
_____________________________________________________________________________________________________________________
Statements of Changes in Net Assets For the period Feb. 21, 1995 (commencement
of operations) to Dec. 31, 1995
______________________Segregated Asset Subaccounts_____________________________ Variable
Operations EUS EPA ELA ENO EGI EHY EDI Account
_____________________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Investment income
(loss) - net $ 6,938 $ (704) $ 2,481 $ (2,738) $ (2,627) $ 799 $ (685) $ 36,193
Net realized gain
(loss) on investments 154 158 (85) 1,494 1,557 423 272 9,278
Net change in unrealized
appreciation or
depreciation of
investments 3,669 5,796 8,786 70,635 88,301 15,338 24,726 349,151
_____________________________________________________________________________________________________________________
Net increase
from operations 10,761 5,250 11,182 69,391 87,231 16,560 24,313 394,622
_____________________________________________________________________________________________________________________
Contract Transactions
____________________________________________________________________________________________________________________
Variable annuity contract
purchase payments 439,825 201,104 288,402 887,679 1,410,722 555,962 667,230 8,038,793
Net transfers* 347 657 202 20,208 9,040 (24,548) 447 7,172
Contract terminations:
Surrender benefits
(Note 6) (1,483) (1,335) (1,364) (19,355) (40,323) (676) (2,108) (99,986)
_____________________________________________________________________________________________________________________
Increase from
contract transactions 438,689 200,426 287,240 888,532 1,379,439 530,738 665,569 7,945,979
_____________________________________________________________________________________________________________________
Net assets at beginning
of period - - - - - - - -
____________________________________________________________________________________________________________________
Net assets at end
of period $449,450 $205,676 $298,422 $957,923 $1,466,670 $547,298 $689,882 $8,340,601
_____________________________________________________________________________________________________________________
Accumulation Unit Activity
_____________________________________________________________________________________________________________________
Units outstanding at
beginning of period - - - - - - -
Contract purchase
payments 414,325 193,497 304,194 690,494 1,177,088 502,860 602,054
Net transfers* 340 627 212 15,447 7,402 (21,772) 430
Contract terminations:
Surrender benefits (1,407) (1,207) (1,255) (15,092) (32,499) (618) (1,917)
_______________________________________________________________________________________________________
Units outstanding at
end of period 413,258 192,917 303,151 690,849 1,151,991 480,470 600,567
_______________________________________________________________________________________________________
* Includes transfer activity from (to) other Accounts and transfers from (to) American Enterprise Life for conversion
from (to) the fixed account.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
PAGE 55
Notes to Financial Statements
___________________________________________________________________
1. Organization
American Enterprise Variable Annuity Account (the Account) was
established under Indiana law on July 15, 1987 and with the
subaccounts is registered together as a single unit investment
trust of American Enterprise Life Insurance Company (American
Enterprise Life) under the Investment Company Act of 1940, as
amended (the "1940 Act"). Operations of the Account commenced on
Feb. 21, 1995.
The Account is comprised of fourteen subaccounts. Each subaccount
invests exclusively in shares of six funds of the IDS Life
Retirement Annuity Mutual Funds (collectively, the IDS Life Funds),
or in shares of two portfolios of OCC Accumulation Trust
(collectively, the OCC Portfolios), or in shares of two funds of GT
Global (collectively, the GT Global Funds), or in shares of four
funds of Putnam Capital Manager Trust (collectively, Putnam Funds).
The assets of each subaccount of the Account are not chargeable
with liabilities arising out of the business conducted by any other
subaccount, account or by American Enterprise Life. Purchase
payments are allocated to any or all fourteen subaccounts or in the
fixed account. The purchase payments allocated to the subaccounts
are then invested in shares of the specific Portfolio or Fund
selected.
IDS Life Investment Series, Inc., formerly known as IDS Life
Capital Resource Fund, Inc., is a series mutual fund. It has three
series of stock representing three separate, diversified funds -
Capital Resource, International Equity and Aggressive Growth. IDS
Life Investment Series, Inc., IDS Life Special Income Fund, Inc.
and IDS Life Moneyshare Fund, Inc. commenced operations Oct. 13,
1981. IDS Life Managed Fund, Inc. commenced operations April 30,
1986. These mutual funds are registered under the 1940 Act as
diversified, open-end management investment companies. Purchase
payments allocated to Aggressive Growth (EAG) subaccount invest in
shares of IDS Life Aggressive Growth Fund; the International Equity
(EIE) subaccount invests in shares of IDS Life International Equity
Fund; the Capital Resource (ECR) subaccount invests in shares of
IDS Life Capital Resource Fund; the Managed (EMG) subaccount
invests in shares of IDS Life Managed Fund; the Special Income
(ESI) subaccount invests in shares of IDS Life Special Income Fund;
and the Moneyshare (EMS) subaccount invests in shares of IDS Life
Moneyshare Fund.
OCC Accumulation Trust was organized on May 12, 1994 as a
Massachusetts business trust and is registered under the 1940 Act
as a diversified, open-end management investment company. The
Managed Portfolio commenced operations on Sept. 16, 1994. The U.S.
Government Income Portfolio commenced operations on Jan. 3, 1995.
Purchase payments allocated to the Managed Portfolio (EMD)
subaccount invest in shares of the Quest for Value Managed
Portfolio and the U.S. Government Income (EUS) subaccount invests
in shares of the Quest for Value U.S. Government Income Portfolio.
<PAGE>
PAGE 56
___________________________________________________________________
1. Organization (continued)
Putnam Capital Manager was organized on Sept. 24, 1987 as a
Massachusetts business trust and is registered under the 1940 Act
as a diversified, open-end management investment company. The PCM
New Opportunities Fund commenced operations on May 2, 1994. The
PCM Growth and Income Fund and the PCM High Yield Fund commenced
operations on Feb. 1, 1988. The PCM Diversified Income Fund
commenced operations on Sept. 15, 1993. Purchase payments
allocated to the PCM New Opportunities (ENO) subaccount invest in
shares of the PCM New Opportunities Fund, THE PCM Growth and Income
(EGI) subaccount invests in shares of the PCM Growth and Income
Fund, the PCM High Yield (EHY) subaccount invests in shares of the
PCM High Yield Fund and the PCM Diversified Income (EDI) subaccount
invests in shares of the PCM Diversified Income Fund.
GT Global Variable Investment Series and GT Global Variable
Investment Trust were organized as Massachusetts business trusts
on May 26, 1992 and Sept. 17, 1992, respectively. They are
registered under the 1940 Act as open-end management investment
companies. GT Global Variable Latin America Fund commenced
operations on Feb. 10, 1993, is registered as a non-diversified
management investment company and is part of the GT Global Variable
Investment Trust. GT Global Variable New Pacific Fund commenced
operations on Feb. 10, 1993, is registered as a diversified
management investment company and is part of the GT Global Variable
Investment Series. Purchase payments allocated to the GT Global
Variable Latin America (ELA) subaccount invest in shares of the GT
Global Variable Latin America fund and the GT Global Variable New
Pacific (EPA) subaccount invests in shares of the GT Global
Variable New Pacific Fund.
American Enterprise Life issues the contracts which are distributed
by banks and financial institutions either directly or through a
network of third-party marketers. IDS Life Insurance Company,
parent company of American Enterprise Life, serves as investment
manager and distributor for the IDS Life Funds. American Express
Financial Corporation serves as investment advisor to the IDS Life
Funds.
OCC Distributors serves as exclusive distributor for the OCC
Portfolios. OpCap Advisors serves as investment manager for the
Portfolios. State Street Bank and Trust Company serves as
custodian for the Quest for Value Accumulation Trust.
LGT Asset Management serves as the distributor and the investment
manager for the G.T. Global Funds. State Street Bank and Trust
Company serves as custodian for the G.T. Global Funds.
Putnam Mutual Funds serves as distributor and prinicpal underwriter
for the Putnam Funds. Putnam Investment Management, Inc. serves as
the Putnam Funds investment manager. Putnam Fiduciary Trust
Company serves as the Putnam Funds custodian.
<PAGE>
PAGE 57
___________________________________________________________________
2. Summary of Significant Accounting Policies
Investments in the Mutual Fund
Investments in shares of the IDS Life Funds, the OCC Portfolios,
the G.T. Global Funds, or the Putnam Funds (collectively, the
Funds) are stated at market value which is the net asset value per
share as determined by the respective portfolio or fund.
Investment transactions are accounted for on the date the shares
are purchased and sold. The cost of investments sold and redeemed
is determined on the average cost method. Dividend distributions
received from the Portfolios or the Funds are reinvested, net of
any expenses payable to American Enterprise Life, in additional
shares of 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 Funds undistributed net investment income, undistributed
realized gain or loss and the unrealized appreciation or
depreciation on their investment securities.
Federal Income Taxes
American Enterprise Life is taxed as a life insurance company. The
Account is treated as part of American Enterprise Life for federal
income tax purposes. Under existing federal income tax law, no
income taxes are payable with respect to any investment income of
the Account.
___________________________________________________________________
3. Mortality and Expense Risk Fee
American Enterprise Life makes guarantees to the Account that
possible future adverse changes in administrative expenses and
mortality experience of the annuitants will not affect the Account.
The mortality and expense risk fee paid to American Enterprise
Life is applied daily to the subaccounts and reflected in the unit
values of the subaccounts. The subaccounts pay this fee at the time
dividends are distributed from the Funds in which they invest. It
is equal, on an annual basis, to 1.25 percent of the subaccounts
average daily net assets. This fee does not apply to the fixed
account.
___________________________________________________________________
4. Administrative Charge
American Enterprise Life deducts a daily charge equal, on an annual
basis, to 0.25 percent of the average daily net assets of each
subaccount. It covers certain administrative and operating
expenses of the subaccounts incurred by American Enterprise Life
such as accounting, legal and data processing fees, and expenses
involved in the preparation and distribution of reports and
prospectuses. This charge cannot be increased.
<PAGE>
PAGE 58
___________________________________________________________________
5. Contract Administrative Charge
American Enterprise Life deducts an administrative charge of $30
per year on each contract anniversary. This charge reimburses
American Enterprise Life for expenses incurred in establishing and
maintaining the annuity records. This charge will be waived when
the contract value is $50,000 or more on the current contract
anniversary.
The $30 annual charge will be deducted at the time of any full
surrender. This charge cannot be increased and does not apply
after annuity payouts begin. American Enterprise Life does not
expect to profit from this charge.
___________________________________________________________________
6. Surrender Charge
American Enterprise Life will use a surrender charge to help it
recover certain expenses relating to the sale of the annuity. The
surrender charge will be deducted for surrenders during the first
seven payment years following a purchase payment. Charges by
American Enterprise Life for surrenders are not available on an
individual segregated asset account basis. Charges for all
segregated asset accounts amount to $nil in 1995. Such charges are
not an expense of the subaccounts or Account. They are deducted
from contract surrender benefits paid by American Enterprise Life.
___________________________________________________________________
7. Investment Transactions
The subaccounts' purchases of Fund shares (net of charges),
including reinvestment of dividend distributions, were as follows:
<TABLE>
<CAPTION>
For the period
from Feb. 21, 1995
(commencement of
operations) to
Subaccount Investment Dec. 31, 1995
<S> <C> <C>
EAG IDS Life Aggressive Growth Fund $ 606,633
EIE IDS Life International Equity Fund 257,070
ECR IDS Life Capital Resource Fund 978,959
EMG IDS Life Managed Fund 691,443
ESI IDS Life Special Income Fund 491,218
EMS IDS Life Moneyshare Fund 199,964
EMD OCC Accumulation Trust Managed Portfolio 557,379
EUS OCC Accumulation Trust U.S. Government Portfolio 472,031
ENO Putnam New Opportunities Fund 912,517
EGI Putnam Growth and Income Fund 1,410,167
EHY Putnam High Yield Fund 558,172
EDI Putnam Diversified Income Fund 683,408
ELA GT Global Variable Latin America Fund 301,238
EPA GT Global Variable New Pacific Fund 207,291
$8,327,490
</TABLE>
<PAGE>
PAGE 59
American Enterprise Variable Annuity Account
Annual Financial Information
Report of Independent Auditors
The Board of Directors
American Enterprise Life Insurance Company
We have audited the individual and combined statements of net
assets of the segregated asset subaccounts of American Enterprise
Variable Annuity Account (comprising, respectively, the ECR, ESI,
EMS, EMG, EIE, EAG, EMD, EUS, EPA, ELA, ENO, EGI, EHY and EDI
subaccounts) as of December 31, 1995, and the related statements of
operations and the statements of changes in net assets for the
period from February 21, 1995 (commencement of operations) to
December 31, 1995. These financial statements are the
responsibility of the management of American Enterprise Life
Insurance Company. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. Our procedures
included confirmation of securities owned at December 31, 1995 with
the 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 American
Enterprise Variable Annuity Account at December 31, 1995 and the
individual and combined results of its operations and the changes
in its net assets for the period described above, in conformity
with generally accepted accounting principles.
ERNST & YOUNG LLP
Minneapolis, Minnesota
March 15, 1996
<PAGE>
PAGE 60
American Enterprise Life Financial Information
The financial statements shown below are those of the insurance
company and not those of any other entity. They are included in
the prospectus for the purpose of informing investors as to the
financial condition of the insurance company and its ability to
carry out its obligations under its variable contracts.
<TABLE>
<CAPTION>
American Enterprise Life Insurance Company
Balance Sheets
Dec. 31,
Assets 1995 1994
(thousands)
<S> <C> <C>
Investments:
Fixed maturities:
Held to maturity, at amortized cost (Fair value:
1995, $1,357,977; 1994, $1,040,663) $1,308,251 $1,130,752
Available for sale, at fair value (Amortized cost:
1995, $1,546,025; 1994, $1,186,545) 1,596,985 1,119,371
2,905,236 2,250,123
Mortgage loans on real estate
(Fair value: 1995, $419,557; 1994, $204,883) 393,020 219,445
Other investments 4,055 28
Total investments 3,302,311 2,469,596
Cash and cash equivalents 42,896 53,358
Accrued investment income 41,879 33,928
Deferred policy acquisition costs 170,574 137,648
Deferred income taxes -- 17,065
Other assets 4,817 691
Separate account assets 8,483 --
Total assets $3,570,960 $2,712,286
Liabilities and Stockholder's Equity
Liabilities:
Future policy benefits for fixed annuities $3,155,651 $2,480,122
Policy claims and other policyholders' funds 11,641 15,706
Amounts due to brokers 163 48,872
Securities sold under repurchase agreements 67,000 --
Deferred income taxes 24,177 --
Other liabilities 7,029 4,331
Separate account liabilities 8,483 --
Total liabilities 3,274,144 2,549,031
Stockholder's equity:
Capital stock, $100 par value per share;
100,000 shares authorized,
20,000 shares issued and outstanding 2,000 2,000
Additional paid--in capital 177,872 142,872
Net unrealized gain (loss) on investments 33,124 (43,689)
Retained earnings 83,820 62,072
Total stockholder's equity 296,816 163,255
Total liabilities and stockholder's equity $3,570,960 $2,712,286
Commitments and contingencies (Note 7)
See accompanying notes.
</TABLE>
<PAGE>
PAGE 61
<TABLE>
<CAPTION>
American Enterprise Life Insurance Company
Statements of Income
Years ended Dec. 31,
1995 1994 1993
(thousands)
<S> <C> <C> <C>
Revenues:
Net investment income $223,706 $162,201 $124,532
Contractholder charges 4,214 2,753 1,047
Net realized gain (loss) on investments (1,154) (1,190) 576
Total revenues 226,766 163,764 126,155
Benefits and expenses:
Interest credited on investment contracts 162,662 112,977 78,538
Amortization of deferred policy
acquisition costs 20,459 14,052 15,992
Other operating expenses 10,205 6,523 3,369
Total expenses 193,326 133,552 97,899
Income before income taxes 33,440 30,212 28,256
Income taxes 11,692 10,574 10,033
Net income $ 21,748 $ 19,638 $ 18,223
See accompanying notes.
</TABLE>
<PAGE>
PAGE 62
<TABLE>
<CAPTION>
American Enterprise Life Insurance Company
Statements of Cash Flows
Years ended Dec. 31,
1995 1994 1993
(thousands)
<S> <C> <C> <C>
Cash flows from operating activities:
Net income $ 21,748 $ 19,638 $ 18,223
Adjustments to reconcile net income to
net cash used in operating activities:
Change in accrued investment income (7,951) (8,543) (7,654)
Change in deferred policy acquisition
costs, net (32,926) (37,642) (36,800)
Change in other assets (4,126) (512) (43)
Change in policy claims and other
policyholders' funds (4,065) 1,270 1,792
Change in deferred income taxes (119) (3,925) 3,089
Change in other liabilities 2,698 872 (991)
Amortization of premium
(accretion of discount), net (2,321) 1,812 (3,327)
Net realized (gain) loss on investments 1,154 1,190 (576)
Net cash used in operating activities (25,908) (25,840) (26,287)
Cash flows from investing activities:
Fixed maturities held to maturity:
Purchases (252,583) (136,330) --
Maturities 25,754 84,514 --
Sales 33,849 1,469 --
Fixed maturities available for sale:
Purchases (485,250) (569,459) --
Maturities 85,629 64,116 --
Sales 57,576 54,755 --
Fixed maturites:
Purchases -- -- (1,066,094)
Maturities -- -- 231,446
Sales -- -- 302,122
Other investments:
Purchases (183,892) (192,488) (26,792)
Sales 5,543 112 22
Change in amounts due to brokers (48,709) 21,181 10,948
Net cash used in investing activities (762,083) (672,130) (548,348)
Cash flows from financing activities:
Activity related to investment contracts:
Considerations received 709,127 745,053 769,355
Surrenders and other benefits (196,260) (113,644) (336,316)
Interest credited to account balances 162,662 112,977 78,538
Change in securities sold under
repurchase agreements 67,000 (30,000) 15,000
Capital contribution from parent 35,000 35,000 50,000
Net cash provided by financing activities 777,529 749,386 576,577
Net (decrease) increase in cash and cash
equivalents (10,462) 51,416 1,942
Cash and cash equivalents at beginning
of year 53,358 1,942 --
Cash and cash equivalents at end of year $ 42,896 $ 53,358 $ 1,942
See accompanying notes.
</TABLE>
<PAGE>
PAGE 63
American Enterprise Life Insurance Company
Notes to Financial Statements ($ thousands)
1. Summary of significant accounting policies
Nature of business
American Enterprise Life Insurance Company (the Company) is
domiciled in Indiana and is licensed to transact insurance business
in 46 states at Dec. 31, 1995. The Company's principal product is
deferred annuities which are issued primarily to individuals. It
offers single premium and annual premium deferred annuities on both
a fixed and variable dollar basis. Immediate annuities are offered
as well.
The Company's principal annuity product in terms of amount in force
is the fixed deferred annuity. The annuity contract guarantees a
minimum interest rate during the accumulation period (the time
before annuity payments begin), although the Company normally pays
a higher rate reflective of current market rates. The fixed
annuity provides for a surrender charge during the first seven to
ten years after a purchase payment is made. The Company has also
adopted a practice whereby the higher current rate is guaranteed
for a specified period. The Company also offers a variable annuity
product under the name AEL Personal Porfolio Annuity. This is a
fixed/variable annuity offering the purchasers a choice among
mutual funds with portfolios of equities, bonds, managed assets
and/or short-term securities, and the Company's general account, as
the underlying investment vehicles. With respect to funds
applied to the variable portion of the annuity, the purchaser,
rather than the Company, assumes the investment risks and receives
the rewards inherent in the ownership of the underlying investment.
The AEL Personal Portfolio Annuity provides for a surrender charge
during the first six years after a purchase payment is made.
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. American Express Financial
Corporation 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 Indiana Department of Insurance (see Note 4).
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.
<PAGE>
PAGE 64
1. Summary of significant accounting policies (continued)
Investments
Fixed maturities that the Company has both the positive intent and
the ability to hold to maturity are classified as held to maturity
and carried at amortized cost. All other fixed maturities and all
marketable equity securities are classified as available for sale
and carried at fair value. Unrealized gains and losses on
securities classified as available for sale are carried as a
separate component of stockholder's equity.
Management determines the appropriate classification of fixed
maturities at the time of purchase and reevaluates the
classification at each balance sheet date.
Mortgage loans on real estate are carried principally at the unpaid
principal balances of the related loans. Other investments include
equity securities. When evidence indicates a decline, which is
other than temporary, in the underlying value or earning power of
individual investments, such investments are written down to the
fair value by a charge to income. Equity securities are carried at
market value and the related net unrealized appreciation or
depreciation is reported as a credit or charge to stockholder's
equity.
Realized investment gain or loss is determined on an identified
cost basis.
Prepayments are anticipated on certain investments in mortgage-
backed securities in determining the constant effective yield used
to recognize interest income. Prepayment estimates are based on
information received from brokers who deal in mortgage-backed
securities.
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 Dec. 31 is summarized as follows:
1995 1994 1993
Cash paid during the year for:
Income taxes $11,389 $14,750 $7,020
Interest on borrowings 979 669 238
Recognition of profits on fixed annuity contracts
The Company issues single premium deferred annuity contracts that
provide for a surrender charge at annually decreasing rates upon
withdrawal of the annuity accumulation value by the contract owner.
No front sales load is deducted from the contract considerations
received on these contracts ("no load" annuities). All of the
<PAGE>
PAGE 65
1. Summary of significant accounting policies (continued)
Company's single premium deferred annuity contracts provide for
crediting the contract owners' accumulations at specified rates of
interest. Such rates are revised by the Company from time to time
based on changes in the market investment yield rates for fixed-
income securities.
Profits on single premium deferred annuities and installment
annuities are recognized by the Company over the lives of the
contracts and represent the excess of investment income earned from
investment of contract considerations over interest credited to
contract owners and other expenses.
Deferred policy acquisition costs
The costs of acquiring new business, principally sales
compensation, policy issue costs, and certain sales expenses, have
been deferred on annuity contracts. These costs are amortized
based upon surrender charge revenue and a portion of the excess of
investment income earned from investment of the contract
considerations over the interest credited to contract owners.
Liabilities for future policy benefits
Liabilities for single premium deferred annuities and installment
annuities are accumulation values. Liabilities for fixed annuities
in a benefit status are based on the 1983a Table with various
interest rates ranging from 5.5 percent to 9.5 percent, depending
on year of issue.
Federal income taxes
The Company's taxable income is included in the consolidated
federal income tax return of American Express Company. The Company
provides for income taxes on a separate return basis, except that,
under an agreement between American Express Financial Corporation
and American Express Company, tax benefit is recognized for losses
to the extent they can be used on the consolidated tax return. It
is the policy of American Express Financial Corporation and its
subsidiaries that American Express Financial Corporation will
reimburse a subsidiary for any tax benefit.
Included in other liabilities at Dec. 31, 1995 and 1994 are $1,813
and $1,353, 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 investment
management and mortality and expense assurance fees from
the variable annuity and variable life insurance mutual funds and
separate accounts.
<PAGE>
PAGE 66
1. Summary of significant accounting policies (continued)
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.
Accounting changes
The Financial Accounting Standards Board's (FASB) SFAS No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-
Lived Assets to Be Disposed Of," is effective Jan. 1, 1996. The
new rule is not expected to have a material impact on the Company's
results of operations or financial condition.
The Company's adoption of SFAS No. 114 as of Jan. 1, 1995 is
discussed in Note 2.
The Company adopted SFAS No. 115, "Accounting for Certain
Investments in Debt and Equity Securities." The effect of adopting
the new rule was to increase stockholder's equity by approximately
$14 million, net of tax, as of Jan. 1, 1994, but the adoption
had no impact on the Company's net income.
Reclassification
Certain 1994 and 1993 amounts have been reclassified to conform to
the 1995 presentation.
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.
Changes in net unrealized appreciation (depreciation) of
investments for the years ended Dec. 31 are summarized as follows:
1995 1994 1993
Fixed maturities:
Held to maturity $139,815 $(132,842) $ --
Available for sale 118,134 (88,775) --
Investment securities -- -- 24,390
Net realized gain (loss) on investments for the years ended Dec. 31
is summarized as follows:
<PAGE>
PAGE 67
2. Investments (continued)
1995 1994 1993
Fixed maturities $(1,114) $(1,198) $568
Other investments (40) 8 8
$(1,154) $(1,190) $576
The amortized cost, gross unrealized gains and losses and fair
value of investments in fixed maturities and equity securities at
Dec. 31, 1995 are as follows:
<TABLE>
<CAPTION>
Gross Gross
Amortized Unrealized Unrealized Fair
Held to maturity Cost Gains Losses Value
<S> <C> <C> <C> <C>
U.S. Government agency
obligations $ 16,050 $ 570 $ -- $ 16,620
State and municipal
obligations 3,004 110 -- 3,114
Corporate bonds and
obligations 1,068,971 53,544 5,427 1,117,088
Mortgage-backed
securities 220,226 2,460 1,531 221,155
$1,308,251 $56,684 $6,958 $1,357,977
Available for sale
U.S. Government agency
obligations $ 543 $ 14 $ -- $ 557
State and municipal
obligation 999 25 -- 1,024
Corporate bonds and
obligations 520,978 26,751 436 547,293
Mortgage-backed
securities 1,023,505 26,731 2,125 1,048,111
Total fixed maturities 1,546,025 53,521 2,561 1,596,985
Equity securities 3 -- -- 3
$1,546,028 $53,521 $2,561 $1,596,988
</TABLE>
The change in net unrealized gain (loss) on available for sale
securities included as a separate component of stockholder's equity
was $76,813 in 1995.
The amortized cost, gross unrealized gains and losses and fair
value of investments in fixed maturities and equity securities at
Dec. 31, 1994 are as follows:
<TABLE>
<CAPTION>
Gross Gross
Amortized Unrealized Unrealized Fair
Held to maturity Cost Gains Losses Value
<S> <C> <C> <C> <C>
U.S. Government agency
obligations $ 2,030 $ -- $ 32 $ 1,998
State and municipal
obligations 3,004 41 -- 3,045
Corporate bonds and
obligations 886,477 4,270 66,886 823,861
Mortgage-backed securities 239,241 985 28,467 211,759
$1,130,752 $5,296 $95,385 $1,040,663
<PAGE>
PAGE 68
2. Investments (continued)
Available for sale
U.S. Government agency
obligations $ 25,440 $ -- $ 476 $ 24,964
State and municipal
obligations 999 22 -- 1,021
Corporate bonds and
obligations 259,144 1,050 4,953 255,250
Mortgage-backed securities 900,962 418 63,244 838,136
Total fixed maturities 1,186,545 1,499 68,673 1,119,371
Equity securities 67 -- 39 28
$1,186,612 $1,499 $68,712 $1,119,399
</TABLE>
The change in net unrealized gain (loss) on available for sale
securities included as a separate component of stockholder's equity
was $(43,695) in 1994.
The amortized cost and fair value of investments in fixed
maturities at Dec. 31, 1995 by contractual maturity are shown
below. Expected maturities will differ from contractual maturities
because borrowers may have the right to call or prepay obligations
with or without call or prepayment penalties.
Amortized Fair
Held to maturity Cost Value
Due in one year or less $ 4,746 $ 4,835
Due from one to five years 127,391 132,641
Due from five to ten years 748,370 783,865
Due in more than ten years 207,518 215,480
Mortgage-backed securities 220,226 221,156
$1,308,251 $1,357,977
Amortized Fair
Available for sale Cost Value
Due in one year or less $ 45,205 $ 45,513
Due from one to five years 165,582 172,879
Due from five to ten years 261,512 277,089
Due in more than ten years 50,222 53,394
Mortgage-backed securities 1,023,504 1,048,110
$1,546,025 $1,596,985
During the year ended Dec. 31, 1995, fixed maturities classified as
held to maturity were sold with proceeds of $33,849 and gross
realized gains and losses on such sales were $552 and $1,512,
respectively. The sale of these fixed maturities was due to
significant deterioration in the issuers' creditworthiness. As a
result of adopting the FASB Special Report, "A Guide to
Implementation of Statement 115 on Accounting for Certain
Investments in Debt and Equity Securities," the Company
reclassified securities with a book value of $14,031 and net
unrealized gains of $15 from held to maturity to available for sale
in December 1995.
In addition, fixed maturites available for sale were sold during
1995 with proceeds of $57,576 and gross realized gains and losses
on such sales were $nil and $646, respectively.
<PAGE>
PAGE 69
2. Investments (continued)
During the year ended Dec. 31, 1994, fixed maturities classified as
held to maturity were sold with proceeds of $1,469 and gross
realized gains and losses on such sales were $nil and $278,
respectively. The sale of these fixed maturities was due to
significant deterioration in the issuers' creditworthiness.
In addition, fixed maturites available for sale were sold during
1994 with proceeds of $54,755 and gross realized gains and losses
on such sales were $112 and $1,059, respectively.
At Dec. 31, 1995, bonds carried at $2,775 were on deposit with
various states as required by law.
Net investment income for the years ended Dec. 31 is summarized as
follows:
1995 1994 1993
Interest on fixed maturities $198,829 $151,599 $123,822
Interest on mortgage loans 24,969 9,202 858
Interest on cash equivalents 829 1,452 258
Other 921 824 210
225,548 163,077 125,148
Less investment expenses 1,842 876 616
$223,706 $162,201 $124,532
Securities are rated by Moody's and Standard & Poor's (S&P), except
for securities carried at approximately $85 million which are rated
by American Express Financial Corporation internal analysts using
criteria similar to Moody's and S&P. A summary of investments in
fixed maturities, at amortized cost, by rating on Dec. 31 is as
follows:
Rating 1995 1994
Aaa/AAA $1,246,755 $1,151,235
Aa/AA 39,055 27,882
Aa/A 18,076 23,030
A/A 435,957 299,856
A/BBB 148,713 125,633
Baa/BBB 671,896 419,369
Baa/BB 81,821 99,036
Below investment grade 212,003 171,256
$2,854,276 $2,317,297
At Dec. 31, 1995, approximately 92 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 Dec. 31, 1995, approximately 11.9 percent of the Company's
invested assets were mortgage loans on real estate. Summaries of
mortgage loans by region of the United States and by type of real
estate are as follows:
<PAGE>
PAGE 70
2. Investments (continued)
<TABLE>
<CAPTION>
Dec. 31, 1995 Dec. 31, 1994
On Balance Commitments On Balance Commitments
Region Sheet to Purchase Sheet to Purchase
<S> <C> <C> <C> <C>
East North Central $ 81,456 $ 7,485 $ 43,162 $17,349
West North Central 34,819 9,980 6,695 7,590
South Atlantic 82,442 25,781 52,611 10,301
Middle Atlantic 73,958 20,790 51,838 8,132
New England 30,481 13,306 19,538 7,590
Pacific 15,992 4,158 10,147 --
West South Central 6,649 832 4,996 --
East South Central 4,948 -- 5,029 --
Mountain 62,275 832 25,429 3,253
$393,020 $83,164 $219,445 $54,215
Dec. 31, 1995 Dec. 31, 1994
On Balance Commitments On Balance Commitments
Property type Sheet to Purchase Sheet to Purchase
Apartments $130,601 $14,554 $ 80,016 $13,554
Department/retail stores 138,378 34,097 78,486 21,686
Office buildings 59,601 9,980 26,559 10,843
Industrial buildings 31,259 9,148 21,837 4,879
Nursing/retirement homes 8,190 1,663 6,521 --
Mixed Use 5,317 -- -- --
Hotels/Motels 3,266 10,811 -- --
Other -- 416 -- --
Medical buildings 16,408 2,495 6,026 3,253
$393,020 $83,164 $219,445 $54,215
</TABLE>
Mortgage loan fundings are restricted by state insurance regulatory
authorities to 80 percent or less of the market value of the real
estate at the time of origination of the loan. The Company holds
the mortgage document, which gives the right to take possession of
the property if the borrower fails to perform according to the
terms of the agreement. The fair value of the mortgage loans is
determined by a discounted cash flow analysis using mortgage
interest rates currently offered for mortgages of similar
maturities. Commitments to purchase mortgages are made in the
ordinary course of business. The fair value of the mortgage
commitments is $nil.
As of Jan.1, 1995, the Company adopted Statement of Financial
Accounting Standards No. 114, "Accounting by Creditors for
Impairment of a Loan" (SFAS No. 114), as amended by Statement
of Financial Accounting Standards No. 118, "Accounting by Creditors
for Impairment of a Loan - Income Recognition and Disclosures".
The adoption of the new rules did not have a material impact on the
Company's results of operations or financial condition.
SFAS No. 114 applies to all loans except for smaller-balance
homogeneous loans, that are collectively evaluated for impairment.
Impairment is measured as the excess of the loan's recorded
investment over its present value of expected principal and
interest payments discounted at the loan's effective interest rate,
or the fair value of collateral. The amount of the impairment is
recorded as a reserve for investment losses.
<PAGE>
PAGE 71
2. Investments (continued)
Based on management's judgment as to the ultimate collectibility of
principal, interest payments received are either recognized as
income or applied to the recorded investment in the loan until it
has been recovered. Once the recorded investment has been
recovered, any additional payments are recognized as interest
income.
The reserve for investment losses is maintained at a level that
management believes is adequate to absorb estimated credit losses
in the portfolio. The level of the reserve account is determined
based on several factors, including historical experience,
expected future principal and interest payments, estimated
collateral values, and current and anticipated economic and
political conditions. Management regularly evaluates the
adequacy of the reserve for investment losses. The Company did not
have a reserve recorded at Dec. 31, 1995.
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 consists of the following:
1995 1994 1993
Federal income taxes:
Current $11,753 $14,454 $ 6,928
Deferred (119) (3,925) 3,089
11,634 10,529 10,017
State income taxes-current 58 45 16
Income tax expense $11,692 $10,574 $10,033
Increases (decreases) to the federal income tax provision
applicable to pretax income based on the statutory rate are
attributable to:
<TABLE>
<CAPTION>
1995 1994 1993
Provision Rate Provision Rate Provision Rate
<S> <C> <C> <C> <C> <C> <C>
Federal income
taxes based on the
statutory rate $11,704 35.0% $10,574 35.0% $ 9,889 35.0%
Increases (decreases)
are attributable to:
Deferred tax adjustment
due to rate increase -- -- -- -- 210 0.8
Tax-excluded interest (69) (0.2) (81) (0.3) (86) (0.3)
Other, net (1) (0.0) 36 0.1 4 --
Federal income taxes $11,634 34.8% $10,529 34.8% $10,017 35.5%
</TABLE>
<PAGE>
PAGE 72
3. Income taxes (continued)
Significant components of the Company's deferred tax assets and
liabilities as of Dec.31 are as follows:
1995 1994
Deferred tax assets:
Policy reserves $ 45,482 $34,732
Investments -- 20,491
Other 2,036 1,592
Total deferred tax assets 47,518 56,815
Deferred tax liabilities:
Deferred policy acquisition costs 50,350 39,750
Investments 21,345 --
Total deferred tax liabilities 71,695 39,750
Net deferred tax assets (liabilities) $(24,177) $17,065
The Company is required to establish a valuation allowance for any
portion of the deferred tax assets that management believes will
not be realized. In the opinion of management, it is more likely
than not that the Company will realize the benefit of the
deferred tax assets, and, therefore, no such valuation allowance
has been established.
4. Stockholder's equity
Retained earnings available for distribution as dividends to the
parent are limited to the Company's surplus as determined in
accordance with accounting practices prescribed by state
insurance regulatory authorities. Statutory unassigned surplus
aggregated $7,553 and $3,165 as of Dec.31, 1995 and 1994,
respectively.
Statutory net income and stockholder's equity as of Dec.31, are
summarized as follows:
1995 1994 1993
Statutory net income $ 15,499 $ 8,131 $ 10,855
Statutory stockholder's equity 187,425 148,037 112,907
5. Related party transactions
Charges by American Express Financial Corporation for use of joint
facilities and other services aggregated $10,380, $5,581 and $4,059
for 1995, 1994 and 1993, respectively. Certain of these costs are
included in deferred policy acquisition costs.
6. Lines of credit
The Company has available lines of credit with two banks of $30,000
at 45 to 80 basis points over each bank's cost of funds. There
were no borrowings outstanding under these agreements at Dec.31,
1995 or 1994.
<PAGE>
PAGE 73
7. Commitments and contingencies
The economy and other factors have caused an increase in the number
of insurance companies that are under regulatory supervision. This
circumstance has resulted in substantial assessments by state
guaranty associations to cover losses to policyholders of insolvent
or rehabilitated companies. The Company expects additional future
assessments related to past insolvencies and rehabilitations.
Management has estimated the impact of future assessments on the
Company's financial position and recorded a reserve for such future
assessments.
8. Derivative financial instruments
The Company enters into transactions involving derivative
financial instruments to manage its exposure to interest rate risk,
including hedging specific transactions. The Company manages risks
associated with these instruments as described below. The Company
does not hold derivative instruments for trading purposes.
Market risk is the possibility that the value of the derivative
financial instruments will change due to fluctuations in a factor
from which the instrument derives its value, primarily an interest
rate. The Company is not impacted by market risk related to
derivatives held for non-trading purposes beyond that inherent in
cash market transactions. Derivatives held for purposes other than
trading are largely used to manage risk and, therefore, the cash
flow and income effects of the derivatives are inverse to the
effects of the underlying transactions.
Credit risk is the possibility that the counterparty will not
fulfill the terms of the contract. The Company monitors credit
exposure related to derivative financial instruments
through established approval procedures, including setting
concentration limits by counterparty and industry, and requiring
collateral, where appropriate. A vast majority of the Company's
counterparties are rated A or better by Moody's and Standard &
Poor's.
The notional or contract amount of a derivative financial
instrument is generally used to calculate the cash flows that are
received or paid over the life of the agreement. Notional
amounts are not recorded on the balance sheet. Notional amounts
far exceed the related credit exposure.
Credit exposure related to interest rate caps is measured by
replacement cost of the contracts. The replacement cost represents
the fair value of the instruments.
Notional Carrying Fair Total Credit
Dec.31, 1995 Amount Value Value Exposure
Assets
Interest rate caps $400,000 $4,052 $1,574 $1,574
The fair values of derivative financial instruments are based on
market values, dealer quotes or pricing models. All interest rate
caps expire in the year 2000.
<PAGE>
PAGE 74
8. Derivative financial instruments (continued)
Interest rate caps are used to manage the Company's exposure to
rising interest rates. These instruments are used primarily to
protect the margin between interest rates earned on investments and
the interest rates credited to related annuity contract holders.
The cost of interest rate caps is amortized to interest expense
over the life of the contracts and payments received as a result of
these agreements are recorded as a reduction of interest expense
when realized. The amortized cost of interest rate cap contracts
is included in other investments.
9. Fair values of financial instruments
The Company discloses fair value information for most on- and off-
balance sheet financial instruments for which it is practical to
estimate that value. Fair value of life insurance obligations,
receivables and all non-financial instruments, such as deferred
acquisition costs are excluded. Off-balance sheet intangible
assets are also excluded. Management believes the value of
excluded assets is significant. The fair value of the Company,
therefore, cannot be estimated by aggregating the amounts
presented.
<TABLE>
<CAPTION>
1995 1994
Carrying Fair Carrying Fair
Financial Assets Value Value Value Value
<S> <C> <C> <C> <C>
Investments:
Fixed maturities
(Note 2):
Held to maturity $1,308,251 $1,357,977 $1,130,752 $1,040,663
Available for sale 1,596,985 1,596,985 1,119,371 1,119,371
Mortgage loans on real
estate (Note 2) 393,020 419,557 219,445 204,883
Equity securities
(Note 2) 3 3 28 28
Derivative financial
instruments (Note 8) 4,052 1,574 -- --
Cash and cash
equivalents (Note 1) 42,896 42,896 53,358 53,358
Separate account assets
(Note 1) 8,483 8,483 -- --
Financial Liabilities
Future policy benefits for
fixed annuities 3,149,087 2,997,716 2,474,920 2,347,665
Separate account
liabilities 8,483 8,075 -- --
</TABLE>
At Dec.31, 1995 and 1994, the carrying amount and fair value of
future policy benefits for fixed annuities exclude life insurance-
related contracts carried at $6,564 and $5,202, respectively. The
fair value of these benefits is based on the status of the
annuities at Dec.31, 1995 and 1994. The fair value of deferred
annuities is estimated as the carrying amount less applicable
surrender charges. The fair value for annuities in non-life
contingent payout status is estimated as the present value of
projected benefit payments at rates appropriate for contracts
issued in 1995 and 1994.
<PAGE>
PAGE 75
Report of Independent Auditors
The Board of Directors
American Enterprise Life Insurance Company
We have audited the accompanying balance sheets of American
Enterprise Life Insurance Company (a wholly owned subsidiary of IDS
Life Insurance Company) as of December 31, 1995 and 1994, and the
related statements of income and cash flows for each of the three
years in the period ended December 31, 1995. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of
American Enterprise Life Insurance Company at December 31, 1995 and
1994, and the results of its operations and its cash flows for each
of the three years in the period ended December 31, 1995, in
conformity with generally accepted accounting principles.
As discussed in Note 1 to the financial statements, the Company
changed its method of accounting for certain investments in debt
and equity securities in 1994.
Ernst & Young LLP
February 2, 1996
Minneapolis, Minnesota
<PAGE>
PAGE 76
PART C.
Item 24. Financial Statements and Exhibits
(a) Financial Statements included in Part B of this Registration
Statement:
Audited Financial Statements of the Variable Annuity Account
including:
Statements of net assets as of Dec. 31, 1995;
Statements of operations for the period from Feb 21, 1995
(commencement of operations) to Dec. 31, 1995;
Statements of changes in net assets for the period from Feb.
21, 1995 (commencement of operations) to Dec. 31, 1995; and
Notes to Financial Statements.
Report of Independent Auditors dated March 15, 1996.
Audited Financial Statements of American Enterprise Life
Insurance Company:
Balance sheets as of Dec. 31, 1995 and Dec. 31, 1994.
Related statements of income and cash flows for each of the
three years in the period ended Dec. 31, 1995.
Notes to Financial Statements.
Report of Independent Auditors dated February 2, 1996.
(b) Exhibits:
1. Resolution of the Executive Committee of the Board of
Directors of American Enterprise Life establishing the
American Enterprise Variable Annuity Account dated July 15,
1987, filed electronically as Exhibit 1 to the Initial
Registration Statement to Registration Statement No. 33-
54471, filed on or about July 5, 1994 is incorporated herein
by reference.
2. Not applicable.
3.1 Form of Variable Annuity and Life Insurance Distribution
Agreement, filed electronically as Exhibit 3.1 to Pre-
Effective Amendment No. 1 to Registration Statement No. 33-
54471 is incorporated herein by reference.
3.2 Form of Managing General Agent Agreement, filed
electronically as Exhibit 3.2 to Pre-Effective Amendment No.
1 to Registration Statement No. 33-54471 is incorporated
herein by reference.
4.1 Form of Deferred Annuity Contract (form 34560), filed
electronically as Exhibit 4.1 to the Initial Registration
Statement to Registration Statement No. 33-54471, filed on or
about July 5, 1994 is incorporated herein by reference.
4.2 Form of Tax-Qualified Endorsement (form 34563), filed
electronically as Exhibit 4.2 to the Initial Registration
Statement to Registration Statement No. 33-54471, filed on or
about July 5, 1994 is incorporated herein by reference.
<PAGE>
PAGE 77
4.3 Form of Annuity Endorsement (form 34562), filed
electronically as Exhibit 4.3 to the Initial Registration
Statement to Registration Statement No. 33-54471, filed on or
about July 5, 1994 is incorporated herein by reference.
5.1 Form of Application for American Enterprise Life Variable
Annuity (form 34561), filed electronically as Exhibit 5.1 to
the Initial Registration Statement to Registration Statement
No. 33-54471, filed on or about July 5, 1994 is incorporated
herein by reference.
6.1 Amendment and Restatement of Articles of Incorporation of
American Enterprise Life dated July 29, 1986, filed
electronically as Exhibit 6.1 to the Initial Registration
Statement to Registration Statement No. 33-54471, filed on or
about July 5, 1994 is incorporated herein by reference.
6.2 Amended By-Laws of American Enterprise Life, filed
electronically as Exhibit 6.2 to the Initial Registration
Statement to Registration Statement No. 33-54471, filed on or
about July 5, 1994 is incorporated herein by reference.
7. Not applicable.
8.1 Copy of Participation Agreement among (company) and GT Global
Variable Investment Trust and GT Global Variable Investment
Series and GT Global Financial Services, Inc., dated February
10, 1995 is filed electronically herewith.
8.2 Copy of Participation Agreement among Putnam Capital Manager
Trust, Putnam Mutual Funds Corp. and American Enterprise Life
Insurance Company, dated January 16, 1995, filed
electronically as Exhibit 8.2 to Post-Effective Amendment No.
2 to Registration Statement No. 33-54471 is incorporated
herein by reference.
8.3 Copy of Participation Agreement by and among Quest for Value
Accumulation Trust and (Insurance Company) and Quest for
Value Distributors, dated February 21, 1995, filed
electronically as Exhibit 8.3 to Post-Effective Amendment No.
2 to Registration Statement No. 33-54471 is incorporated
herein by reference.
9. Opinion of Counsel and consent to its use as to the legality
of the securities being registered was filed with
Registrant's most recent 24f-2 Notice on or about Feb. 23,
1996.
10. Consent of Independent Auditors is filed electronically
herewith.
11. Financial Statement Schedules and Report of Independent
Auditors is filed electronically herewith.
Financial Statement Schedules:
Schedule I Summary of Investments Other Than Investments
In Related Parties
Schedule V Valuation and Qualifying Accounts
Report of Independent Auditors dated February 2, 1996.<PAGE>
PAGE 78
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.
12. Not applicable.
13. Copy of schedule for computation of each performance
quotation provided in the Registration Statement in response
to Item 21, filed electronically as Exhibit 13 to the Initial
Registration Statement to Registration Statement No. 33-
54471, filed on or about July 5, 1994 is incorporated herein
by reference.
14. Financial Data Schedule is filed electronically herewith.
15. Power of Attorney to sign this Registration Statement dated
June 22, 1994, filed electronically as Exhibit 14.2 to the
Initial Registration Statement to Registration Statement No.
33-54471, filed on or about July 5, 1994 is incorporated
herein by reference.
Item 25. Directors and Officers of the Depositor (IDS Life
Insurance Company)
<TABLE>
<CAPTION>
Positions and
Name Principal Business Address Offices with Depositor
<S> <C> <C>
Timothy V. Bechtold IDS Tower 10 Vice President-Risk
Minneapolis, MN 55440 Management Products
David J. Berry IDS Tower 10 Vice President
Minneapolis, MN 55440
Alan R. Dakay IDS Tower 10 Vice President-
Minneapolis, MN 55440 Institutional Insurance
Marketing
Robert M. Elconin IDS Tower 10 Vice President
Minneapolis, MN 55440
Morris Goodwin Jr. IDS Tower 10 Vice President and Treasurer
Minneapolis, MN 55440
Lorraine R. Hart IDS Tower 10 Vice President-Investments
Minneapolis, MN 55440
David R. Hubers IDS Tower 10 Director
Minneapolis, MN 55440
James M. Jensen IDS Tower 10 Vice President-Insurance
Minneapolis, MN 55440 Product Development
Richard W. Kling IDS Tower 10 Director and President
Minneapolis, MN 55440
Paul F. Kolkman IDS Tower 10 Director and Executive
Minneapolis, MN 55440 Vice President<PAGE>
PAGE 79
Ryan R. Larson IDS Tower 10 Vice President
Minneapolis, MN 55440
Janis E. Miller IDS Tower 10 Director and Executive
Minneapolis, MN 55440 Vice President-
Variable Assets
James A. Mitchell IDS Tower 10 Director, Chairman of
Minneapolis, MN 55440 the Board and Chief
Executive Officer
Barry J. Murphy IDS Tower 10 Director and Executive
Minneapolis, MN 55440 Vice President-
Client Service
James R. Palmer IDS Tower 10 Vice President-Taxes
Minneapolis, MN 55440
Stuart A. Sedlacek IDS Tower 10 Director and Executive
Minneapolis, MN 55440 Vice President-Assured
Assets
F. Dale Simmons IDS Tower 10 Vice President-
Minneapolis, MN 55440 Real Estate
Loan Management
William A. Stoltzmann IDS Tower 10 Vice President, General
Minneapolis, MN 55440 Counsel and Secretary
Melinda S. Urion IDS Tower 10 Director, Executive
Minneapolis, MN 55440 Vice President and
Controller
</TABLE>
Item 26. Persons Controlled by or Under Common Control with the
Depositor or Registrant
American Express Life Insurance 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.
Jurisdiction
Name of Subsidiary of Incorporation
I. Travel Related Services
American Express Travel Related
Services Company, Inc. New York
II. International Banking Services
American Express Bank Ltd. Connecticut
<PAGE>
PAGE 80
III. Companies engaged in Investors Diversified Financial Services
American Centurion Life Assurance Company New York
American Enterprise Investment Services Inc. Minnesota
American Enterprise Life Insurance Company Indiana
American Express Financial Advisors Inc. Delaware
American Express Financial Corporation Delaware
American Express Insurance Agency of Nevada Inc. Nevada
American Express Minnesota Foundation Minnesota
American Express Service Corporation Delaware
American Express Tax and Business Services Inc. Minnesota
American Express Trust Company Minnesota
American Partners Life Insurance Company Arizona
AMEX Assurance Company Illinois
IDS Advisory Group Inc. Minnesota
IDS Aircraft Services Corporation Minnesota
IDS Cable Corporation Minnesota
IDS Cable II Corporation Minnesota
IDS Capital Holdings Inc. Minnesota
IDS Certificate Company Delaware
IDS Deposit Corp. Utah
IDS Fund Management Limited U.K.
IDS Futures Corporation Minnesota
IDS Futures III Corporation Minnesota
IDS Insurance Agency of Alabama Inc. Alabama
IDS Insurance Agency of Arkansas Inc. Arkansas
IDS Insurance Agency of Massachusetts Inc. Massachusetts
IDS Insurance Agency of Mississippi Ltd. Mississippi
IDS Insurance Agency of New Mexico Inc. New Mexico
IDS Insurance Agency of North Carolina Inc. North Carolina
IDS Insurance Agency of Ohio Inc. Ohio
IDS Insurance Agency of Texas Inc. Texas
IDS Insurance Agency of Utah Inc. Utah
IDS Insurance Agency of Wyoming Inc. Wyoming
IDS International, Inc. Delaware
Item 26. Persons Controlled by or Under Common Control with the
Depositor or Registrant (Continued)
Jurisdiction
Name of Subsidiary of Incorporation
IDS Life Insurance Company Minnesota
IDS Life Insurance Company of New York New York
IDS Management Corporation Minnesota
IDS Partnership Services Corporation Minnesota
IDS Plan Services of California, Inc. Minnesota
IDS Property Casualty Insurance Company Wisconsin
IDS Real Estate Services, Inc. Delaware
IDS Realty Corporation Minnesota
IDS Sales Support Inc. Minnesota
IDS Securities Corporation Delaware
Investors Syndicate Development Corp. Nevada
Item 27. Number of Contractowners
On March 31, 1996, there were 336 contract owners of
qualified contracts. There were 243 owners of non-
qualified contracts.<PAGE>
PAGE 81
Item 28. Indemnification
The By-Laws of the depositor provide that the Corporation
shall have the power to indemnify a director, officer,
agent or employee of the Corporation pursuant to the
provisions of applicable statues or pursuant to contract.
The Corporation may purchase and maintain insurance on
behalf of any director, officer, agent or employee of the
Corporation against any liability asserted against or
incurred by the director, officer, agent or employee in
such capacity or arising out of the director's,
officer's, agent's or employee's status as such, whether
or not the Corporation would have the power to indemnify
the director, officer, agent or employee against such
liability under the provisions of applicable law.
The By-Laws of the depositor provide that it shall
indemnify a director, officer, agent or employee of the
depositor pursuant to the provisions of applicable
statutes or pursuant to contract.
Insofar as indemnification for liability arising under
the Securities Act of 1933 may be permitted to director,
officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification
is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by
a director, officer or controlling person of the
registrant in the successful defense of any action, suit
or proceeding) is asserted by such director, officer or
controlling person in connection with the securities
being registered, the registrant will, unless in the
opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
Item 29. Principal Underwriters.
(a) American Express Financial Advisors acts as principal
underwriter for the following investment companies:
IDS Bond Fund, Inc.; IDS California Tax-Exempt Trust; IDS
Discovery Fund, Inc.; IDS Equity Select Fund, Inc.; IDS Extra
Income Fund, Inc.; IDS Federal Income Fund, Inc.; IDS Global
Series, Inc.; IDS Growth Fund, Inc.; IDS High Yield Tax-
Exempt Fund, Inc.; IDS International Fund, Inc.; IDS
Investment Series, Inc.; IDS Managed Retirement Fund, Inc.;
IDS Market Advantage Series, Inc.; IDS Money Market Series,
Inc.; IDS New Dimensions Fund, Inc.; IDS Precious Metals
Fund, Inc.; IDS Progressive Fund, Inc.; IDS Selective Fund,
Inc.; IDS Special Tax-Exempt Series Trust; IDS Stock Fund,
<PAGE>
PAGE 82
Inc.; IDS Strategy Fund, Inc.; IDS Tax-Exempt Bond Fund,
Inc.; IDS Tax-Free Money Fund, Inc.; IDS Utilities Income
Fund, Inc. and IDS Certificate Company.
(b) As to each director, officer or partner of the principal
underwriter:
Positions and
Name and Principal Position and Offices Offices with
Business Address with Underwriter Registrant
Ronald G. Abrahamson Vice President- None
IDS Tower 10 Service Quality and
Minneapolis, MN 55440 Reengineering
Douglas A. Alger Vice President-Total None
IDS Tower 10 Compensation
Minneapolis, MN 55440
Peter J. Anderson Senior Vice President- None
IDS Tower 10 Investments
Minneapolis, MN 55440
Ward D. Armstrong Vice President- None
IDS Tower 10 Sales and Marketing,
Minneapolis, MN 55440 IDS Institutional
Retirement Services
Joseph M. Barsky III Vice President-Senior None
IDS Tower 10 Portfolio Manager
Minneapolis, MN 55440
Robert C. Basten Vice President-Tax None
IDS Tower 10 and Business Services
Minneapolis, MN 55440
Timothy V. Bechtold Vice President-Risk None
IDS Tower 10 Management Products
Minneapolis, MN 55440
John D. Begley Group Vice President- None
Suite 100 Ohio/Indiana
7760 Olentangy River Rd.
Columbus, OH 43235
<PAGE>
PAGE 83
Item 29(b). As to each director, officer or partner of the
principal underwriter (American Express Financial Advisors):
(cont'd)
Positions and
Name and Principal Position and Offices Offices with
Business Address with Underwriter Registrant
Carl E. Beihl Vice President- None
IDS Tower 10 Strategic Technology
Minneapolis, MN 55440 Planning
Jack A. Benjamin Group Vice President- None
Suite 200 Greater Pennsylvania
3500 Market Street
Camp Hill, PA 17011
Alan F. Bignall Vice President- None
IDS Tower 10 Technology and
Minneapolis, MN 55440 Development
Brent L. Bisson Group Vice President- None
Ste 900 E. Westside Twr Los Angeles Metro
11835 West Olympic Blvd.
Los Angeles, CA 90064
John C. Boeder Vice President- None
IDS Tower 10 Mature Market Group
Minneapolis, MN 55440
Walter K. Booker Group Vice President- None
Suite 200 New Jersey
3500 Market Street
Camp Hill, NJ 17011
Bruce J. Bordelon Group Vice President- None
Galleria One Suite 1900 Gulf States
Galleria Blvd.
Metairie, LA 70001
Charles R. Branch Group Vice President- None
Suite 200 Northwest
West 111 North River Dr
Spokane, WA 99201
Karl J. Breyer Senior Vice President- None
IDS Tower 10 Corporate Affairs and
Minneapolis, MN 55440 Special Counsel
Daniel J. Candura Vice President- None
IDS Tower 10 Marketing Support
Minneapolis, MN 55440
Cynthia M. Carlson Vice President- None
IDS Tower 10 American Express
Minneapolis, MN 55440 Securities Services
<PAGE>
PAGE 84
Item 29(b). As to each director, officer or partner of the
principal underwriter (American Express Financial Advisors):
(cont'd)
Positions and
Name and Principal Position and Offices Offices with
Business Address with Underwriter Registrant
Orison Y. Chaffee III Vice President-Field None
IDS Tower 10 Real Estate
Minneapolis, MN 55440
James E. Choat Senior Vice President- None
IDS Tower 10 Field Management
Minneapolis, MN 55440
Kenneth J. Ciak Vice President and None
IDS Property Casualty General Manager-
1400 Lombardi Avenue IDS Property Casualty
Green Bay, WI 54304
Roger C. Corea Group Vice President- None
290 Woodcliff Drive Upstate New York
Fairport, NY 14450
Henry J. Cormier Group Vice President- None
Commerce Center One Connecticut
333 East River Drive
East Hartford, CT 06108
John M. Crawford Group Vice President- None
Suite 200 Arkansas/Springfield/Memphis
10800 Financial Ctr Pkwy
Little Rock, AR 72211
Kevin F. Crowe Group Vice President- None
Suite 312 Carolinas/Eastern Georgia
7300 Carmel Executive Pk
Charlotte, NC 28226
Colleen Curran Vice President and None
IDS Tower 10 Assistant General Counsel
Minneapolis, MN 55440
Alan R. Dakay Vice President- Director and
IDS Tower 10 Institutional Products President
Minneapolis, MN 55440 Group
Regenia David Vice President- None
IDS Tower 10 Systems Services
Minneapolis, MN 55440
Scott M. DiGiammarino Group Vice President- None
Suite 500 Washington/Baltimore
8045 Leesburg Pike
Vienna, VA 22182
<PAGE>
PAGE 85
Item 29(b). As to each director, officer or partner of the
principal underwriter (American Express Financial Advisors):
(cont'd)
Positions and
Name and Principal Position and Offices Offices with
Business Address with Underwriter Registrant
Bradford L. Drew Group Vice President- None
Two Datran Center Eastern Florida
Penthouse One B
9130 S. Dadeland Blvd.
Miami, FL 33156
William H. Dudley Director and Executive None
IDS Tower 10 Vice President-
Minneapolis MN 55440 Investment Operations
Gordon L. Eid Senior Vice President None
IDS Tower 10 and General Counsel
Minneapolis, MN 55440
Robert M. Elconin Vice President- None
IDS Tower 10 Government Relations
Minneapolis, MN 55440
Mark A. Ernst Vice President- None
IDS Tower 10 Retail Services
Minneapolis, MN 55440
Joseph Evanovich Jr. Group Vice President- None
One Old Mill Nebraska/Iowa/Dakotas
101 South 108th Avenue
Omaha, NE 68154
Louise P. Evenson Group Vice President- None
Suite 200 San Francisco Bay Area
1333 N. California Blvd.
Walnut Creek, CA 94596
Gordon M. Fines Vice President- None
IDS Tower 10 Mutual Fund Equity
Minneapolis MN 55440 Investments
Douglas L. Forsberg Group Vice President- None
Suite 100 Portland/Eugene
7931 N. E. Halsey
Portland, OR 97213
William P. Fritz Group Vice President- None
Suite 160 Northern Missouri
12855 Flushing Meadows Dr
St. Louis, MO 63131
Carl W. Gans Group Vice President- None
8500 Tower Suite 1770 Twin City Metro
8500 Normandale Lake Blvd.
Bloomington, MN 55437
<PAGE>
PAGE 86
Item 29(b). As to each director, officer or partner of the
principal underwriter (American Express Financial Advisors):
(cont'd)
Positions and
Name and Principal Position and Offices Offices with
Business Address with Underwriter Registrant
Robert G. Gilbert Vice President- None
IDS Tower 10 Real Estate
Minneapolis, MN 55440
John J. Golden Vice President- None
IDS Tower 10 Field Compensation
Minneapolis, MN 55440 Development
Morris Goodwin Jr. Vice President and None
IDS Tower 10 Corporate Treasurer
Minneapolis, MN 55440
Suzanne Graf Vice President- None
IDS Tower 10 Systems Services
Minneapolis, MN 55440
Bruce M. Guarino Group Vice President- None
Suite 1736 Hawaii
1585 Kapiolani Blvd.
Honolulu, HI 96814
David A. Hammer Vice President None
IDS Tower 10 and Marketing
Minneapolis, MN 55440 Controller
Teresa A. Hanratty Group Vice President- None
Suites 6&7 Northern New England
169 South River Road
Bedford, NH 03110
John R. Hantz Group Vice President- None
Suite 107 Detroit Metro
17177 N. Laurel Park
Livonia, MI 48154
Robert L. Harden Group Vice President- None
Two Constitution Plaza Boston Metro
Boston, MA 02129
Lorraine R. Hart Vice President- None
IDS Tower 10 Insurance Investments
Minneapolis, MN 55440
Scott A. Hawkinson Vice President-Assured None
IDS Tower 10 Assets Product Development
Minneapolis, MN 55440 and Management
Brian M. Heath Group Vice President- None
Suite 150 North Texas
801 E. Campbell Road
Richardson, TX 75081<PAGE>
PAGE 87
Item 29(b). As to each director, officer or partner of the
principal underwriter (American Express Financial Advisors):
(cont'd)
Positions and
Name and Principal Position and Offices Offices with
Business Address with Underwriter Registrant
James G. Hirsh Vice President and None
IDS Tower 10 Assistant General
Minneapolis, MN 55440 Counsel
David J. Hockenberry Group Vice President- None
30 Burton Hills Blvd. Eastern Tennessee
Suite 175
Nashville, TN 37215
Kevin P. Howe Vice President- None
IDS Tower 10 Government and
Minneapolis, MN 55440 Customer Relations and
Chief Compliance Officer
David R. Hubers Chairman, Chief None
IDS Tower 10 Executive Officer and
Minneapolis, MN 55440 President
Marietta L. Johns Senior Vice President- None
IDS Tower 10 Field Management
Minneapolis, MN 55440
James E. Kaarre Vice President- None
IDS Tower 10 Marketing Promotions
Minneapolis, MN 55440
Linda B. Keene Vice President- None
IDS Tower 10 Market Development
Minneapolis, MN 55440
G. Michael Kennedy Vice President-Investment None
IDS Tower 10 Services and Investment
Minneapolis, MN 55440 Research
Susan D. Kinder Senior Vice President- None
IDS Tower 10 Human Resources
Minneapolis, MN 55440
Richard W. Kling Senior Vice President- Chairman of
IDS Tower 10 Risk Management Products the Board
Minneapolis, MN 55440
Paul F. Kolkman Vice President- None
IDS Tower 10 Actuarial Finance
Minneapolis, MN 55440
Claire Kolmodin Vice President- None
IDS Tower 10 Service Quality
Minneapolis, MN 55440
<PAGE>
PAGE 88
Item 29(b). As to each director, officer or partner of the
principal underwriter (American Express Financial Advisors):
(cont'd)
Positions and
Name and Principal Position and Offices Offices with
Business Address with Underwriter Registrant
David S. Kreager Group Vice President- None
Ste 108 Trestle Bridge V Greater Michigan
5136 Lovers Lane
Kalamazoo, MI 49002
Steven C. Kumagai Director and Senior None
IDS Tower 10 Vice President-Field
Minneapolis, MN 55440 Management and Business
Systems
Mitre Kutanovski Group Vice President- None
Suite 680 Chicago Metro
8585 Broadway
Merrillville, IN 48410
Edward Labenski Jr. Vice President- None
IDS Tower 10 Senior Portfolio
Minneapolis, MN 55440 Manager
Kurt A. Larson Vice President- None
IDS Tower 10 Senior Portfolio
Minneapolis, MN 55440 Manager
Lori J. Larson Vice President- None
IDS Tower 10 Variable Assets Product
Minneapolis, MN 55440 Development
Ryan R. Larson Vice President- None
IDS Tower 10 IPG Product Development
Minneapolis, MN 55440
Daniel E. Laufenberg Vice President and None
IDS Tower 10 Chief U.S. Economist
Minneapolis, MN 55440
Richard J. Lazarchic Vice President- None
IDS Tower 10 Senior Portfolio
Minneapolis, MN 55440 Manager
Peter A. Lefferts Senior Vice President- None
IDS Tower 10 Corporate Strategy and
Minneapolis, MN 55440 Development
Douglas A. Lennick Director and Executive None
IDS Tower 10 Vice President-Private
Minneapolis, MN 55440 Client Group
Mary J. Malevich Vice President- None
IDS Tower 10 Senior Portfolio
Minneapolis, MN 55440 Manager
<PAGE>
PAGE 89
Item 29(b). As to each director, officer or partner of the
principal underwriter (American Express Financial Advisors):
(cont'd)
Positions and
Name and Principal Position and Offices Offices with
Business Address with Underwriter Registrant
Fred A. Mandell Vice President- None
IDS Tower 10 Field Marketing Readiness
Minneapolis, MN 55440
Daniel E. Martin Group Vice President- None
Suite 650 Pittsburgh Metro
5700 Corporate Drive
Pittsburgh, PA 15237
William J. McKinney Vice President- None
IDS Tower 10 Field Management
Minneapolis, MN 55440 Support
Thomas W. Medcalf Vice President- None
IDS Tower 10 Senior Portfolio Manager
Minneapolis, MN 55440
William C. Melton Vice President- None
IDS Tower 10 International Research
Minneapolis, MN 55440 and Chief International
Economist
Janis E. Miller Vice President- None
IDS Tower 10 Variable Assets
Minneapolis, MN 55440
James A. Mitchell Executive Vice President- None
IDS Tower 10 Marketing and Products
Minneapolis, MN 55440
John P. Moraites Group Vice President- None
Union Plaza Suite 900 Kansas/Oklahoma
3030 Northwest Expressway
Oklahoma City, OK 73112
Pamela J. Moret Vice President-Services None
IDS Tower 10
Minneapolis, MN 55440
Alan D. Morgenstern Group Vice President- None
Suite 200 Central California/
3500 Market Street Western Nevada
Camp Hill, NJ 17011
Barry J. Murphy Senior Vice President- None
IDS Tower 10 Client Service
Minneapolis, MN 55440
Mary Owens Neal Vice President- None
IDS Tower 10 Mature Market Segment
Minneapolis, MN 55440<PAGE>
PAGE 90
Item 29(b). As to each director, officer or partner of the
principal underwriter (American Express Financial Advisors):
(cont'd)
Positions and
Name and Principal Position and Offices Offices with
Business Address with Underwriter Registrant
Robert J. Neis Vice President- None
IDS Tower 10 Technology Services
Minneapolis, MN 55440 Operations
Ronald E. Newton Group Vice President- None
319 Southbridge St. Rhode Island/Central
Auburn, MA 01501 Massachusetts
Thomas V. Nicolosi Group Vice President- None
Suite 220 New York Metro Area
500 Mamaroneck Avenue
Harrison, NY 10528
James R. Palmer Vice President- None
IDS Tower 10 Taxes
Minneapolis, MN 55440
Carla P. Pavone Vice President- None
IDS Tower 10 Specialty Service Teams
Minneapolis, MN 55440 and Emerging Business
Susan B. Plimpton Vice President- None
IDS Tower 10 Segmentation Development
Minneapolis, MN 55440 and Support
Larry M. Post Group Vice President- None
One Tower Bridge Philadelphia Metro
100 Front Street 8th Fl
West Conshohocken, PA 19428
Ronald W. Powell Vice President and None
IDS Tower 10 Assistant General
Minneapolis, MN 55440 Counsel
James M. Punch Vice President- None
IDS Tower 10 Geographical Service
Minneapolis, MN 55440 Teams
Frederick C. Quirsfeld Vice President-Taxable None
IDS Tower 10 Mutual Fund Investments
Minneapolis, MN 55440
R. Daniel Richardson Group Vice President- None
Suite 800 Southern Texas
Arboretum Plaza One
9442 Capital of Texas Hwy N.
Austin, TX 78759
<PAGE>
PAGE 91
Item 29(b). As to each director, officer or partner of the
principal underwriter (American Express Financial Advisors):
(cont'd)
Positions and
Name and Principal Position and Offices Offices with
Business Address with Underwriter Registrant
Roger B. Rogos Group Vice President- None
One Sarasota Tower Western Florida
Suite 700
Two N. Tamiami Trail
Sarasota, FL 34236
ReBecca K. Roloff Vice President-Private None
IDS Tower 10 Client Group
Minneapolis, MN 55440
Stephen W. Roszell Vice President- None
IDS Tower 10 Advisory Institutional
Minneapolis, MN 55440 Marketing
Max G. Roth Group Vice President- None
Suite 201 S IDS Ctr Wisconsin/Upper Michigan
1400 Lombardi Avenue
Green Bay, WI 54304
Robert A. Rudell Vice President- None
IDS Tower 10 American Express
Minneapolis, MN 55440 Institutional Retirement
Services
John P. Ryan Vice President and None
IDS Tower 10 General Auditor
Minneapolis, MN 55440
Erven Samsel Senior Vice President- None
45 Braintree Hill Park Field Management
Suite 402
Braintree, MA 02184
Russell L. Scalfano Group Vice President- None
Suite 201 Illinois/Indiana/Kentucky
101 Plaza East Blvd.
Evansville, IN 47715
William G. Scholz Group Vice President- None
Suite 205 Arizona/Las Vegas
7333 E Doubletree Ranch Rd
Scottsdale, AZ 85258
Stuart A. Sedlacek Vice President- Director and
IDS Tower 10 Assured Assets Executive
Minneapolis, MN 55440 Vice
President,
Assured
Assets
<PAGE>
PAGE 92
Item 29(b). As to each director, officer or partner of the
principal underwriter (American Express Financial Advisors):
(cont'd)
Positions and
Name and Principal Position and Offices Offices with
Business Address with Underwriter Registrant
Donald K. Shanks Vice President- None
IDS Tower 10 Property Casualty
Minneapolis, MN 55440
F. Dale Simmons Vice President-Senior None
IDS Tower 10 Portfolio Manager,
Minneapolis, MN 55440 Insurance Investments
Judy P. Skoglund Vice President- None
IDS Tower 10 Human Resources and
Minneapolis, MN 55440 Organization Development
Julian W. Sloter Group Vice President- None
Ste 1700 Orlando FinCtr Orlando/Jacksonville
800 North Magnolia Ave.
Orlando, FL 32803
Ben C. Smith Vice President- None
IDS Tower 10 Workplace Marketing
Minneapolis, MN 55440
William A. Smith Vice President and None
IDS Tower 10 Controller-Private
Minneapolis, MN 55440 Client Group
James B. Solberg Group Vice President- None
466 Westdale Mall Eastern Iowa Area
Cedar Rapids, IA 52404
Bridget Sperl Vice President- None
IDS Tower 10 Human Resources
Minneapolis, MN 55440 Management Services
Paul J. Stanislaw Group Vice President- None
Suite 1100 Southern California
Two Park Plaza
Irvine, CA 92714
Lois A. Stilwell Group Vice President- None
Suite 433 Outstate Minnesota Area/
9900 East Bren Road North Dakota/Western Wisconsin
Minnetonka, MN 55343
William A. Stoltzmann Vice President and Director,
IDS Tower 10 Assistant General Vice
Minneapolis, MN 55440 Counsel President,
General
Counsel and
Secretary
<PAGE>
PAGE 93
Item 29(b). As to each director, officer or partner of the
principal underwriter (American Express Financial Advisors):
(cont'd)
Positions and
Name and Principal Position and Offices Offices with
Business Address with Underwriter Registrant
James J. Strauss Vice President- None
IDS Tower 10 Corporate Planning
Minneapolis, MN 55440 and Analysis
Jeffrey J. Stremcha Vice President-Information None
IDS Tower 10 Resource Management/ISD
Minneapolis, MN 55440
Neil G. Taylor Group Vice President- None
Suite 425 Seattle/Tacoma
101 Elliott Avenue West
Seattle, WA 98119
John R. Thomas Senior Vice President- None
IDS Tower 10 Information and
Minneapolis, MN 55440 Technology
Melinda S. Urion Senior Vice President Vice
IDS Tower 10 and Chief Financial President and
Minneapolis, MN 55440 Officer Controller
Peter S. Velardi Group Vice President- None
Suite 180 Atlanta/Birmingham
1200 Ashwood Parkway
Atlanta, GA 30338
Charles F. Wachendorfer Group Vice President- None
Suite 100 Denver/Salt Lake City/
Stanford Plaza II Albuquerque
7979 East Tufts Ave Pkwy
Denver, CO 80237
Wesley W. Wadman Vice President- None
IDS Tower 10 Senior Portfolio
Minneapolis, MN 55440 Manager
Norman Weaver Jr. Senior Vice President- None
1010 Main St Suite 2B Field Management
Huntington Beach, CA 92648
Michael L. Weiner Vice President- None
IDS Tower 10 Tax Research and Audit
Minneapolis, MN 55440
Lawrence J. Welte Vice President- None
IDS Tower 10 Investment Administration
Minneapolis, MN 55440
Jeffry M. Welter Vice President- None
IDS Tower 10 Equity and Fixed Income
Minneapolis, MN 55440 Trading<PAGE>
PAGE 94
Item 29(b). As to each director, officer or partner of the
principal underwriter (American Express Financial Advisors):
(cont'd)
Positions and
Name and Principal Position and Offices Offices with
Business Address with Underwriter Registrant
William N. Westhoff Senior Vice President and None
IDS Tower 10 Global Chief Investment
Minneapolis, MN 55440 Officer
Thomas L. White Group Vice President- None
Suite 200 Cleveland Metro
28601 Chagrin Blvd.
Woodmere, OH 44122
Eric S. Williams Group Vice President- None
Suite 250 Virginia
3951 Westerre Parkway
Richmond, VA 23233
Edwin M. Wistrand Vice President and None
IDS Tower 10 Assistant General
Minneapolis, MN 55440 Counsel
Michael R. Woodward Senior Vice President- None
32 Ellicott St Ste 100 Field Management
Batavia, NY 14020
Item 29(c).
<TABLE>
<CAPTION>
Net Underwriting
Name of Principal Discounts and Compensation on Brokerage
Underwriter Commissions Redemption Commissions Compensation
<S> <C> <C> <C> <C>
American Express None None None None
Financial Advisors
Inc.
</TABLE>
Item 30. Location of Accounts and Records
American Enterprise Life Insurance Company
IDS Tower 10
Minneapolis, MN 55402
Item 31. Management Services
Not applicable.
Item 32. Undertakings
(a) Registrant undertakes that it will file a
post-effective amendment to this registration
statement as frequently as is necessary to ensure
that the audited financial statements in the
registration statement are never more than 16
months old for so long as payments under the
variable annuity contracts may be accepted.<PAGE>
PAGE 95
(b) Registrant undertakes that it will include either
(1) as part of any application to purchase a
contract offered by the prospectus, a space that an
applicant can check to request a Statement of
Additional Information, or (2) a post card or
similar written communication affixed to or
included the prospectus that the applicant can
remove to send for a Statement of Additional
Information.
(c) Registrant undertakes to deliver any Statement of
Additional Information and any financial statements
required to be made available under this Form
promptly upon written or oral request to IDS Life
Contract Owner Service at the address or phone
number listed in the prospectus.
(d) Registrant represents that it is relying upon the
no-action assurance given to the American Council
of Life Insurance (pub. avail. Nov. 28, 1989).
Further, Registrant represents that it has complied
with the provisions of paragraphs (1) - (4) of that
no-action letter.
<PAGE>
PAGE 96
SIGNATURES
As required by the Securities Act of 1933 and the Investment
Company Act of 1940, American Enterprise Life Insurance Company, on
behalf of the Registrant certifies that it meets the requirements
for effectiveness of this Amendmsnet to its Registration Statement
persuant 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 26th day
of April, 1996.
AMERICAN ENTERPRISE VARIABLE ANNUITY ACCOUNT
(Registrant)
By American Enterprise Life Insurance Company
(Sponsor)
By /s/ Richard W. Kling*
Richard W. Kling
Chairman of the Board
As required by the Securities Act of 1933, this Registration
Statement has been signed by the following persons in the
capacities indicated on the 26th day of April, 1996.
Signature Title
/s/ Richard W. Kling* Director and Chairman of
Richard W. Kling the Board
/s/ Alan R. Dakay* Director and President
Alan R. Dakay
/s/ Paul S. Mannweiler* Director
Paul S. Mannweiler
/s/ Stuart A. Sedlacek* Director and Executive Vice
Stuart A. Sedlacek President-Assured Assets
/s/ William A. Stoltzmann* Director, Vice President,
William A. Stoltzmann General Counsel and
Secretary
*Signed pursuant to Power of Attorney filed electronically as
Exhibit 14.2 to the Initial Registration Statement to Registration
Statement No. 33-54471, filed on or about July 5, 1994, is
incorporated herein by reference.
______________________________
Mary Ellyn Minenko
<PAGE>
PAGE 97
CONTENTS OF POST-EFFECTIVE AMENDMENT NO. 3
This Registration Statement is comprised of the following papers
and documents:
The Cover Page.
Cross-reference sheet.
Part A.
The prospectus.
Part B.
Statement of Additional Information.
Financial Statements.
Part C.
Other Information.
The signatures.
Exhibits.
<PAGE>
PAGE 1
American Enterprise Variable Annuity Account
File No. 33-54471/811-7195
EXHIBIT INDEX
Exhibit 8.1: Copy of Participation Agreement among (company) and
GT Global Variable Investment Trust and GT Global
Variable Investment Series and GT Global Financial
Services, Inc., dated February 10, 1995.
Exhibit 10: Consent of Independent Auditors'.
Exhibit 11: Financial Statement Schedules and Report of
Independent Auditors'.
Exhibit 14: Financial Data Schedules.
<PAGE>
PAGE 1
PARTICIPATION AGREEMENT Among
AMERICAN ENTERPRISE LIFE INSURANCE COMPANY And
G.T. GLOBAL VARIABLE INVESTMENT TRUST And
G.T. GLOBAL VARIABLE INVESTMENT SERIES And
G.T. GLOBAL FINANCIAL SERVICES, INC.
AGREEMENT dated as of February 10, 1995 by and among American
Enterprise Life Insurance Company, an Indiana corporation
("Company"), on its own behalf and on behalf of each separate
account of the Company set forth on Schedule A hereto as may be
amended from time to time (such accounts referred to as
"Accounts"); G.T. GLOBAL VARIABLE INVESTMENT TRUST and G.T. GLOBAL
VARIABLE INVESTMENT SERIES, each a business trust organized under
the laws of the Commonwealth of Massachusetts ("Investment
Companies"); and G.T. GLOBAL FINANCIAL SERVICES, INC., a California
corporation ("G.T. Global").
WHEREAS, the Accounts are separate accounts established and
maintained by Company pursuant to the laws of the State of Indiana
for variable annuity contracts to be issued by Company and herein
defined (the "Contracts"), under which income, gains and losses,
whether or not realized, from assets allocated to such Accounts
are, in accordance with the Contracts, credited to or charged
against the Accounts without regard to other income, gains, or
losses of Company or any other separate accounts established by
Company; and
WHEREAS, Company proposes to register interests in the
Contracts by registering the Accounts under the Investment Company
Act of 1940, as amended, and interests in the Accounts under the
Securities Act of 1933, as amended; and to that end has filed
registration statements with the Securities and Exchange
Commission; and
WHEREAS, each Investment Company engages in business as an
open-end, multiple series, management investment company, and has
established a number of distinct mutual funds, each to be
represented by a separate series of shares of beneficial interest
of such Investment Companies (each such mutual fund is referred to
as a "Fund," and all such funds in the aggregate are referred to as
the "Funds"); and
WHEREAS, the parties desire that the Funds act as the
investment vehicles for the Accounts for variable annuity contracts
to be offered by insurance companies which have entered into
participation agreements with the Investment Companies and G.T.
Global ("Participating Insurance Companies"); and
WHEREAS, G.T. Global is registered as a broker-dealer with the
SEC under the Securities Exchange Act of 1934, as amended, and is a
member in good standing of the National Association of Securities
Dealers, Inc.; and
<PAGE>
PAGE 2
WHEREAS, to the extent permitted by applicable insurance laws
and regulations, Company intends to purchase shares of certain of
the Funds on behalf of the Accounts to fund the Contracts, and G.T.
Global is authorized to sell such shares to unit investment trusts
such as the Accounts at net asset value.
NOW, THEREFORE, in consideration of their mutual promises,
Company, the Investment Companies and G.T. Global agree as follows:
1. Additional Definitions
(a) Contracts -- The variable annuity contracts which Company
proposes to issue and the purchase payments for which
will be deposited in the Accounts and Company's general
account, including any riders and/or endorsements to such
contracts and any other contracts offered in connection
therewith.
(b) 1933 Act -- The Securities Act of 1933, as amended.
(c) 1934 Act -- The Securities Exchange Act of 1934, as
amended.
(d) 1940 Act -- The Investment Company Act of 1940, as
amended.
(e) SEC -- The Securities and Exchange Commission.
(f) NASD -- The National Association of Securities Dealers,
Inc.
(g) Regulations -- The rules and regulations promulgated by
the SEC under the 1933 Act, the 1934 Act and the 1940 Act
as in effect at the time this Agreement is executed or
hereinafter promulgated.
2. Sale of Fund Shares
(a) G.T. Global agrees to sell to Company those shares of the
Funds which Company orders on behalf of the Accounts,
executing such orders on a daily basis in accordance with
Section 2(d) of this Agreement.
(b) The Investment Companies agree to make the shares of the
Funds available for purchase at the then applicable net
asset value per share by Company on behalf of the
Accounts on Business Days as defined in Section 2(i) of
this Agreement, and the Investment Companies shall
calculate such net asset value on each such Business Day.
Notwithstanding any other provision in this Agreement to
the contrary, the Boards of Trustees of the Investment
Companies (the "Boards") may suspend or terminate the
offering of shares of the Funds, if such action is
required by law or by regulatory authority having
jurisdiction or if, in the sole discretion of the Boards
acting in good faith and in light of their fiduciary
duties under federal and any applicable state
<PAGE>
PAGE 3
laws, suspension or termination is necessary and in the
best interests of the shareholders of the Funds. At such
time as the Boards may so determine to terminate the
offering of shares of the Funds, the Investment Companies
will promptly notify Company, in writing, of such
decision; however, the Investment Companies and G.T.
Global agree to continue to make shares of the Funds
available for purchase by the Accounts for a reasonable
period of time, in view of the circumstances surrounding
the determination to terminate the offering of shares of
such Funds, but neither shall be required to make shares
of such Funds available for more than twelve months and
in no event for longer than the period of time provided
by any applicable federal or state laws or regulatory
authority in accordance with which the Boards determine
to terminate such Funds.
(c) The Investment Companies agree to redeem, at Company's
request, any full or fractional shares of the Funds held
by each Account or Company, executing such requests at
the net asset value on a daily basis in accordance with
Section 2(d) of this Agreement. Notwithstanding the
foregoing, the Investment Companies may delay redemption
of shares of the Funds to the extent permitted by the
1940 Act.
(d) For purposes of Sections 2(a), 2(b) and 2(c), Company
shall be the agent of the Investment Companies for the
limited purpose of receiving redemption and purchase
requests each Business Day for shares of the Funds from
each Account (but not from the general account of
Company), and receipt by Company as such limited agent of
the Investment Companies shall constitute receipt by the
Investment Companies, with the effect that each such
redemption and purchase request for any Fund on any given
Business Day shall be effected at the applicable net
asset value for such Fund on such Business Day if for
each such purchase request and redemption the conditions
specified in clauses (i) and (ii) below, as applicable,
are satisfied:
(i) that, in the case of a redemption or purchase
request for the Funds, (a) Company has made all
reasonable efforts to transmit to the Investment
Companies notice of such redemption or purchase
request by 12:00 noon New York City Time on such
next following Business Day; and that (b) the
Investment Companies receive notice of such
redemption or purchase request by 4:00 p.m. New York
City Time on such next following Business Day; and
(ii) that for any purchase of shares of the Funds, (a)
Company has made all reasonable efforts to transmit
to the Investment Companies payment in Federal Funds
by 1:30 p.m. New York City time on the same Business
Day as notice of the order is received by the
Investment Companies pursuant to clauses (i) above;
<PAGE>
PAGE 4
and that (b) the Investment Companies have received
payment in Federal Funds by 12:00 midnight New York
City time on the same Business Day as notice of the
order is received by the Investment Companies
pursuant to clause (i) above as applicable.
(e) A redemption or purchase request for any Fund that does
not satisfy the conditions specified above, to the extent
applicable, will be effected at the net asset value
computed for such Fund on the Business Day immediately
preceding the next following Business Day upon which
conditions specified above have been satisfied.
(f) In the event that payment in Federal Funds for any
purchase is received by the Investment Companies
subsequent to 1:30 p.m. New York City time of the
Business Day upon which the applicable purchase request
was received by the Investment Companies pursuant to
clause (ii) of subparagraph (d) above, and the Company is
without fault as to such late receipt by the Investment
Companies, Company shall, promptly upon the Investment
Companies' request, reimburse the Investment Companies
for fifty percent (50%) of any charges, costs, fees,
interest or other expenses incurred by the Investment
Companies in connection with any advances to, or
borrowings or overdrafts by, the Investment Companies (or
any similar activities) as a result of portfolio
transactions effected by the Investment Companies based
upon such purchase request. However, if a reclaim is
made against the Federal Reserve System due to the late
receipt of the Federal Funds wire, and such reclaim is
paid, the Company will reimburse the Investment Companies
for the costs, fees or expenses paid in connection with a
purchase request contemplated by this subparagraph 2(f).
If such late receipt by the Investment Companies is due
to an error by the Company, the Company will reimburse
the Investment Companies 100% of the costs, fees and
expenses paid as contemplated herein.
(g) Company shall transmit (1) notices of net redemption
requests; (2) notices of net purchase requests; and (3)
Federal Funds in an amount netting purchases of the
Funds. The Investment Companies, G.T. Global, Company or
any of their subsidiaries, officers, directors, employees
or agents will not be liable for any loss, expense or
cost for acting upon notices or instructions believed to
be genuine.
(h) Shares of the Funds requested to be redeemed by the
Accounts or Company in accordance with clause (i) or
subparagraph (d) above, will be redeemed, and payment
therefor will be made in Federal Funds and will be
transmitted to Company by wire on the Business Day the
<PAGE>
PAGE 5
Investment Companies have received notice of the
redemption request (to the extent such payment can be
transmitted by wire at the time the redemption request is
processed by the Investment Companies, it being
understood that, if such payment cannot be so
transmitted, such payment will be transmitted on the
following Business Day) in accordance with clause (i) of
subparagraph (d) above (unless redemption proceeds are
applied to the purchase of shares of the Funds), except
that the Investment Companies reserve the right to delay
payment of redemption proceeds, but in no event may such
payment be delayed longer than the period permitted under
Section 22(e) of the 1940 Act.
(i) For purposes of this Section 2, "Business Day" shall mean
any day for which the Investment Companies calculate net
asset value per share as described in the Investment
Companies' then currently-effective prospectus and on
which Company is open for business.
(j) Issuance and transfer of shares of the Funds will be by
book entry only. Stock certificates will not be issued
to Company or the Accounts. Purchase and redemption
orders for shares of the Funds will be recorded in an
appropriate ledger for each Account or the appropriate
subaccount of each Account.
(k) The Investment Companies shall furnish notice to Company
of any income dividends or capital gain distributions
payable on the shares of the Funds. Company, on behalf of
each subaccount of each Account, hereby elects to receive
all such dividends and distributions as are payable on
any shares of the Funds in additional shares of that
Fund. The Investment Companies shall notify Company of
the number of shares so issued as payment of such
dividends and distributions.
(l) The Investment Companies shall inform Company of the net
asset value per share and distribution declarations, if
applicable, for each Fund before 7:00 p.m. New York City
Time each Business Day. The Investment Companies will
use their best efforts to provide this information to
Company before 7:00 p.m. New York City time. Net asset
value per share and distribution declarations, if
applicable, for each Fund will be calculated by the
Investment Companies in accordance with their currently-
effective prospectus. If the Investment Companies are
unable to calculate the net asset per share and
distribution declarations, if applicable, for any Fund by
7:00 p.m. New York City Time of any Business Day, the
Investment Companies and/or G.T. Global shall, promptly
upon Company's request, reimburse Company for any
charges, costs, fees, interest, or other expenses
incurred by Company in connection with charges,
corrections, or restatements of checks or confirmations
sent to customers based upon incorrect or untimely net
asset value calculations supplied to Company by the
<PAGE>
PAGE 6
Investment Companies or either of them. Neither the
Investment Companies nor G.T. Global shall be liable for
net asset values provided pursuant to this Agreement
which are based on incorrect information supplied by
Company.
(m) Company agrees to purchase and redeem shares of the Funds
offered by the then currently-effective prospectus of the
Investment Companies in accordance with the provisions of
such prospectus.
(n) Company also agrees that it will not take action to
operate the Accounts as management investment companies
under the 1940 Act without the Investment Companies' and
G.T. Global's prior written consent which will not be
unreasonably withheld.
(o) The Investment Companies and G.T. Global agree that
shares of the Funds will be sold only to Participating
Insurance Companies and their separate accounts. No
shares of the Funds will be sold to the general public.
(p) The Investment Companies and G.T. Global will not sell
Fund shares to any insurance company or separate account
unless an agreement containing provisions substantially
the same as Section 2, Section 4, Section 5, Section 7,
and Paragraph (g) of Section 3 of this Agreement is in
effect to govern such sales.
3. Representations and Warranties
(a) Company represents and warrants that the Contracts are
registered under the 1933 Act or will be so registered
before the issuance thereof, and that the Contracts will
be issued and sold in compliance in all material respects
with all applicable federal and state laws. Company
further represents and warrants that it is an insurance
company duly organized and in good standing under
applicable law and that it has legally and validly
authorized each Account as a separate account under
Section 27-1-5-1 Class 1(c) of the Indiana Insurance
Code and has registered or, prior to the issuance of any
Contracts, will register the subaccounts of each Account
together as a unit investment trust in accordance with
the provisions of the 1940 Act to serve as a segregated
asset account for the Contracts, and that it will
maintain such registration for so long as it is required
and any Contracts are outstanding. Company shall amend
the Accounts' registration statements under the 1933 Act
and under the 1940 Act from time to time as required in
order to effect the continuous offering of the Contracts
or as may otherwise be required by applicable law.
Company shall register and qualify the Contracts
for sale in accordance with the securities laws of the
various states only if and to the extent deemed necessary
by Company.
<PAGE>
PAGE 7
(b) G.T. Global and the Investment Companies represent and
warrant that shares of the Funds sold pursuant to this
Agreement shall be registered under the 1933 Act and duly
authorized for issuance in accordance with applicable law
and that the Investment Companies are and shall remain
registered under the 1940 Act for so long as the shares
of the Funds are sold. The Investment Companies further
represent and warrant that each is an unincorporated
business trust duly organized and in good standing under
the laws of the Commonwealth of Massachusetts. The
Investment Companies shall amend their registration
statements under the 1933 Act and the 1940 Act from time
to time as required in order to effect for so long as
shares of the Funds are sold the continuous offering of
shares of the Funds as described in the Investment
Companies' then currently-effective prospectus. The
Investment Companies shall register and qualify shares of
the Funds for sale in accordance with the securities laws
of the various states only if and to the extent deemed
necessary by the Investment Companies. G.T. Global
further represents and warrants that it has been duly
organized and is validly existing as a corporation in
good standing under the laws of the State of California,
and is duly qualified to transact the business of a
broker-dealer in California and each other state in the
United States.
(c) The Investment Companies represent that each Fund is
currently qualified as a Regulated Investment Company
under Subchapter M of the Internal Revenue Code of 1986,
as amended (the "Code") and will make every effort to
maintain such qualifications (under Subchapter M or any
successor or similar provision), and that they will
notify Company immediately upon having a reasonable basis
for believing that one or more Funds has ceased to so
qualify or might not so qualify in the future.
(d) The Investment Companies and G.T. Global warrant that
they have not received any notice from the SEC with
respect to the registration statements of the Investment
Companies pursuant to Section 8(e) of the 1940 Act and no
stop order under the 1933 Act has been issued and no
proceeding therefor has been instituted or threatened by
the SEC. The accountants who certified the financial
statements included in the registration statements and
prospectus of the Investment Companies are independent
public accountants as required by the 1933 Act and the
Regulations. The financial statements included in the
registration statements of the Investment Companies
present fairly the financial condition of the Investment
Companies at the date indicated. Such financial
statements have been prepared in conformity with
generally accepted accounting principles in the United
States applied on a consistent basis. Subsequent to the
respective dates as of which information is given in the
registration statements or prospectus of the Investment
Companies through the date of this Agreement, there has
<PAGE>
PAGE 8
not been any material adverse change in the condition,
financial or otherwise, of the Investment Companies which
would cause information to be materially misleading. The
Investment Companies and the Funds conform to the
descriptions thereof in the registration statements and
prospectus of the Investment Companies; shares of the
Funds, when issued as contemplated in such registration
statements and prospectus, will be fully paid and
nonassessable.
(e) The consummation of the transactions contemplated by this
Agreement, and the fulfillment of the terms of this
Agreement, will not conflict with, result in any breach
of any of the terms and provisions of or constitute (with
or without notice or lapse of time) a default under the
charter or by-laws of the Investment Companies or G.T.
Global, or any indenture, agreement, mortgage, deed of
trust or other instrument to which the Investment
Companies or G.T. Global is party or by which they are
bound; or violate any law, or, to the best of the
Investment Companies' and G.T. Global's knowledge, any
order, rule or regulation applicable to the Investment
Companies or G.T. Global of any court or any federal or
state regulatory body, administrative agency or any other
governmental instrumentality having jurisdiction over the
Investment Companies or G.T. Global or any of their
properties.
(f) Company represents that the Contracts are currently and
at the time of issuance will be treated as annuity
contracts under applicable provisions of the Code, and
agrees that it will make every effort to maintain such
treatment and that it will notify the Investment
Companies and G.T. Global immediately upon having a
reasonable basis for believing that the Contracts have
ceased to be so treated or that they might not be so
treated in the future.
(g) The Investment Companies currently do not intend to make
any payments to finance distribution expenses pursuant to
Rule 12b-1 under the 1940 Act or in contravention of such
rule, although they may make payments pursuant to Rule
12b-1 in the future. To the extent that they decide to
finance distribution expenses pursuant to Rule 12b-1, the
Investment Companies will do so only after obtaining
Company's prior written consent, and will undertake to
comply fully with Rule 12b-1.
(h) The Investment Companies make no representations as to
whether any aspect of their operations (including, but
not limited to, fees and expenses and investment
policies) complies with the insurance laws or regulations
of the various states except that the Investment
Companies represent that the Investment Companies'
investment policies, fees and expenses are and shall at
all times remain in material compliance with the laws of
the Commonwealth of Massachusetts and the Investment
<PAGE>
PAGE 9
Companies represent that their operations are and shall
at all times remain in material compliance with the laws
of the Commonwealth of Massachusetts to the extent
required to perform this Agreement. To the extent
feasible and consistent with market conditions, the
Investment Companies will adjust their investments to
comply with requirements of Company's domiciliary state
upon written notice from Company of such requirements and
proposed adjustment, it being agreed and understood that
in any such case the Investment Companies shall be
allowed a reasonable period of time under the
circumstances after receipt of such notice to make any
such adjustment.
(i) The Investment Companies and G.T. Global represent and
warrant that the operations of each Fund, including but
not limited to the declaration and payment of dividends,
will be conducted in a manner consistent with the
operations and practices of other SEC-registered mutual
funds that have comparable objectives and policies to the
Fund that are sold or managed by G.T. Global or its
affiliates.
4. Shareholder Reports, Proxy Solicitation and Voting
(a) The Investment Companies shall provide to the Accounts
which are the Investment Companies' shareholders, by
means of delivery to Company, copies of their proxy
material, the Funds' shareholder reports and other
shareholder communications.
(b) Subject to applicable law, Company shall:
(i) solicit voting instructions from Contract Owners;
(ii) vote shares of the Funds attributable to Contract
Owners in accordance with instructions or proxies
received from such Contract Owners;
(iii) vote shares of the Funds attributable to
Contract Owners for which no instructions have
been received in the same manner and proportion
as shares of the Funds for which instructions
have been received are voted; and
(iv) vote any shares of the Funds held by Company on its
own behalf or on behalf of each Account that are not
attributable to Contract Owners in the same manner
and proportion as shares of the Funds for which
instructions have been received are voted.
(v) Upon the prior written consent of G.T. Global and
the Investment Companies, Company may vote shares of
the Funds in accordance with its own discretion to
the extent and under the circumstances allowed by
law.
Participating Insurance Companies shall be responsible
for assuring that each of their separate accounts
participating in the Funds exercise and calculate voting
privileges in a manner consistent with the provisions set
<PAGE>
PAGE 10
forth above and the standards set forth in Paragraph 8
herein. Such standards will also be provided to the
other Participating Insurance Companies.
(c) The Investment Companies will comply with all provisions
of the 1940 Act requiring voting by shareholders, and in
particular the Investment Companies will either provide
for meetings or comply with Section 16(c) of the 1940 Act
(although the Investment Companies are not one of the
trusts described in that provision) as well as with
Sections 16(a) and, if and when applicable, 16(b).
Further, the Investment Companies will act in accordance
with the SEC's interpretation of the requirements of
Section 16(a) with respect to periodic elections of
Trustees of the Boards and with whatever rules the SEC
may promulgate with respect thereto.
(d) Company agrees that it shall not, without the prior
written consent of G.T. Global, solicit, induce or
encourage Contract owners to (1) change or supplement the
Investment Companies' investment manager and
administrator or (2) change, modify, substitute, add or
delete the Investment Companies or other investment
media, unless otherwise required under applicable law.
5. Prospectuses, Sales Material and Other Materials
(a) Except with the prior written permission of G.T. Global,
Company shall not give any information or make any
representations or statements on behalf of the Investment
Companies or concerning the Investment Companies in
connection with the sale of the Contracts other than the
information or representations contained in the
Investment Companies' registration statements or
prospectuses for the shares of the Funds, as such
registration statements or prospectuses may be amended
from time to time, or in reports or proxy statements for
the Investment Companies, or in promotional, sales
literature or advertising materials approved by G.T.
Global.
(b) The Investment Companies and G.T. Global shall not give
any information or make any representations on behalf of
Company or concerning Company, the Accounts or the
Contracts other than the information or representations
contained in the Accounts' registration statements or
prospectus, as such registration statements and
prospectus may be amended or supplemented from time to
time, or in published reports of the Accounts which are
in the public domain or approved in writing by Company
for distribution to Contract owners, or in promotional,
sales or advertising materials approved by Company,
except with the written permission of Company.
(c) The Investment Companies will provide to Company at least
one complete copy of registration statements,
prospectuses, statements of additional information,
annual and semi-annual reports and other reports, proxy
<PAGE>
PAGE 11
statements, promotional, sales or advertising materials,
applications for exemptions, requests for no-action
letters, and all amendments or supplements to any of the
above, that relate to the Investment Companies or shares
of the Funds, promptly after the filing of such document
with the SEC or other regulatory authorities.
(d) Company will provide to the Investment Companies at least
one complete copy of all Account registration statements,
prospectuses, statements of additional information,
reports, solicitations for voting instructions,
promotional, sales or advertising materials, applications
for exemptions, requests for no-action letters, and all
amendments or supplements to any of the above, that
relate to the Contracts or the Accounts, promptly after
the filing of such document with the SEC or other
regulatory authorities.
(e) Each party will make reasonable efforts under the
circumstances to provide to the other party copies of
draft versions of any registration statements,
prospectuses, statements of additional information,
reports, proxy statements, solicitations for voting
instructions, promotional, sales or advertising
materials, applications for exemptions, requests for no-
action letters, and all amendments or supplements to any
of the above, to the extent that the other party
reasonably needs such information for purposes of
preparing a report or other filing to be filed with or
submitted to a regulatory agency. If a party requests
any such information before it has been filed, the other
party will provide the requested information if then
available and in the version then available at the time
of such request.
(f) For purposes of this Section 5, the phrase "promotional,
sales or advertising materials" includes, but is not
limited to, advertisements (such as material published,
or designed for use, in a newspaper, magazine or other
periodical, radio, television, telephone or tape
recording, videotape display, signs or billboards, motion
pictures or other public media), sales literature (i.e.,
any written communication made generally available to
customers or the public, including brochures, circulars,
research reports, market letters, form letters, seminar
texts, or reprints or excerpts of any other
advertisement, sales literature, or published article),
educational or training materials or other communications
distributed or made generally available to some or all
agents or employees, registration statements,
prospectuses, statements of additional information,
shareholder reports and proxy materials, and any other
material constituting sales literature or advertising
under NASD rules, the 1940 Act or the 1933 Act.
<PAGE>
PAGE 12
(g) Licensed Marks
(1) G.T. Capital owns all right, title and interest in
and to the trademarks and servicemarks used to
identify the underlying investment medium for the
Annuity; and the name "G.T." in whatever manner used
in connection with the performance of this Agreement
(the "Licensed Marks"); and has licensed to G.T.
Global the right to the use and sublicense of the
licensed marks.
(2) G.T. Global hereby grants to the Company, a non-
exclusive license to use the Licensed Marks in
connection with its performance of the services as
set forth under this Agreement.
(i) Term. The grant of license as specified herein
shall terminate on the earlier of the following
events: (A) a change of name of the Fund to a
name that does not include the term "G.T.", in
accordance with the provisions of the Funds'
Investment Management Agreement; (B) whenever
the Annuity shall cease to be invested in the
Funds; or (C) solely at the option of G.T.
Global upon a termination of this Agreement
pursuant to Section 5 of this Agreement.
Subject to the preceding sentence, the grant of
license as specified herein shall survive the
termination of the Agreement. Upon termination
of the grant of license, the Company shall
immediately cease to issue new annuity
contracts or service existing Annuity contracts
under any of the Licensed Marks and shall
likewise cease any activity which suggests that
it has any right under any of the Licensed
Marks or that it has any association with G.T.
Global in connection with any such contracts or
policies.
(ii) Pre-Release Approval of Trademark-Bearing
Materials. The Company shall obtain the prior
written approval of G.T. Global for the public
release of any materials bearing the Licensed
Marks. Such material shall include, but not be
limited to, samples of each proposed standard
Annuity form and application, form
correspondence with Annuity owners, standard
reports to Annuity owners and any other
standard operating materials that bear any of
the Licensed Marks. During the term of this
grant of license, G.T. Global may request that
the Company submit samples of any materials
bearing any of the Licensed Marks which were
previously approved by G.T. Global but, due to
changed circumstances, G.T. Global may wish to
reconsider, or which were not previously
approved in the manner set forth above. If, on
<PAGE>
PAGE 13
reconsideration or on initial review,
respectively, any such samples fail to meet
with the written approval of G.T. Global, then
the Company shall cease distributing such
disapproved materials within a reasonable time
as agreed by the parties. The Company shall
obtain the prior written approval of G.T.
Global for the use of any new materials
developed to replace the disapproved materials,
in the manner set forth above.
(iii) Acknowledgment of Ownership. The Company:
(1) acknowledges and stipulates that the
Licensed Marks are valid and enforceable
trademarks and servicemarks owned
exclusively by G.T. Capital and that,
pursuant to such ownership, G.T. Capital
has the exclusive right to use, and
license others to use, the Licensed Marks
as indications of source, origin,
sponsorship, affiliation or endorsement;
(2) agrees never to contend otherwise in
legal proceedings or in other
circumstances; and (3) acknowledges and
agrees that the use of the Licensed Marks
pursuant to this grant of license shall
inure to the benefit of G.T. Capital and
its affiliates and shall not create any
right of ownership in the Licensed Marks
for the Company.
6. Fees and Expenses
(a) The Investment Companies and G.T. Global shall pay no fee
or other compensation to Company under this Agreement,
except that if the Investment Companies or any Fund
adopts and implements a plan pursuant to Rule 12b-1 under
the 1940 Act to finance distribution expenses, then G.T.
Global may make payments to Company in amounts agreed to
by Company and G.T. Global in writing. Currently, no
such plan or payments are contemplated.
(b) All expenses incident to the normal operations of the
Investment Companies and the performance by the
Investment Companies of their obligations under this
Agreement shall be paid by the Investment Companies to
the extent permitted by law. Each year the Company will
be responsible for the cost of distributing to
prospective Contract owners prospectuses and statements
of additional information of the Accounts and the
Investment Companies for the Contracts. Further, the
Company will be responsible for the cost of mailing proxy
statements to Contract owners. In addition, Company
shall be responsible for the costs of printing and
mailing of periodic reports and prospectus updates
required by law for the Investment Companies to existing
Contract owners. Further, each year the Company shall be
<PAGE>
PAGE 14
responsible for the costs associated with its tabulation
of the proxies for one meeting of shareholders of the
Investment Companies; the Investment Companies shall be
responsible for its costs related to a meeting of its
shareholders. Company shall not bear any of the expenses
for the: cost of registration and qualification of shares
of the Funds under federal and any state securities law;
design, preparation and filing of the Investment
Companies' registration statements, proxy materials and
reports; the cost of setting in type the Investment
Companies' proxy materials (except those proxy materials
which are required by insurance law or requested by the
Company to effect changes to an Investment Company's
objectives, policies or restrictions) and reports to
shareholders (including the costs of printing a
prospectus that constitutes an annual report), the
preparation of all statements and notices required by any
federal or state securities law; all taxes on the
issuance or transfer of shares of the Funds; and any
expenses permitted to be paid or assumed by the
Investment Companies pursuant to a plan, if any, under
Rule 12b-1 under the 1940 Act.
7. Diversification
The Investment Companies and G.T. Global shall use reasonable
efforts to comply with Section 817(h) of the Code and all
regulations issued thereunder concerning the diversification
of each Fund's assets. Promptly following the conclusion of
each calendar quarter, the Investment Companies shall certify
in writing to Company that the Investment Companies have
complied with such requirements for the preceding quarter.
8. Potential Conflicts
(a) The Board will monitor each Fund for the existence of any
material irreconcilable conflict between the interests of
the contract owners of all separate accounts investing in
such Fund. An irreconcilable material conflict may arise
for a variety of reasons, including: (a) an action by any
state insurance regulatory authority; (b) a change in
applicable federal or state insurance, tax or securities
laws or regulations, or a public ruling, private letter
ruling, no-action or interpretive letter, or any similar
action by insurance, tax, or securities regulatory
authorities; (c) an administrative or judicial decision
in any relevant proceeding; (d) the manner in which the
investments of any Fund are being managed; (e) a
difference in voting instructions given by variable
annuity contract owners of the Participating Insurance
Companies; or (f) a decision by a Participating Insurance
Company to disregard the voting instructions of its
Contract Owners. The Board shall promptly inform the
Participating Insurance Companies if it determines that
an irreconcilable material conflict exists and the
implications thereof.
<PAGE>
PAGE 15
(b) The Company will report any potential or existing
conflicts of which it is aware to the Board. The Company
will assist the Board in carrying out its
responsibilities in the same manner which would be
applicable if a Shared Funding Exemptive Order was
granted to the Company, by providing the Board with all
information reasonably necessary for the Board to
consider any issues raised. This includes, but is not
limited to, an obligation by the Company to inform the
Board whenever Contract Owner voting instructions are
disregarded.
(c) If it is determined by a majority of the Board, or a
majority of its disinterested trustees that a material
irreconcilable conflict exists, the Company and other
Participating Insurance Companies shall, at their expense
and to the extent reasonably practicable (as determined
by a majority of the disinterested trustees), take
whatever steps are necessary to remedy or eliminate the
irreconcilable material conflict, up to and including:
(1), withdrawing the assets allocable to some or all of
the subaccounts of the Account from the Funds and
reinvesting such assets in a different investment medium,
including (but not limited to) another Fund, or
submitting the question whether such segregation should
be implemented to a vote of all affected Contract Owners
and, as appropriate, segregating the assets of any
appropriate group (i.e., annuity contract owners of one
or more Participating Insurance Companies) that votes in
favor of such segregation, or offering to the affected
Contract Owners the option of making such a change; and
(2), establishing a new registered management investment
company or managed separate account.
(d) If a material irreconcilable conflict arises because of a
decision by the Company to disregard Contract Owner
voting instructions and that decision represents a
minority position or would preclude a majority vote, the
Company may be required, at the Investment Companies'
election, to withdraw the affected subaccount of the
Account's investment in the affected Fund(s) and
terminate this Agreement with respect to such subaccount
of the Account; provided, however that such withdrawal
and termination shall be limited to the extent required
by the foregoing material irreconcilable conflict as
determined by a majority of the disinterested members of
the Board. No charge or penalty will be imposed as a
result of such withdrawal. Any such withdrawal and
termination must take place within six (6) months after
the affected Fund(s) gives written notice that this
provision is being implemented, and until the end of that
six month period G.T. Global and such Fund(s) shall
continue to accept and implement orders by the Company
for the purchase (and redemption) of shares of that Fund.
(e) If a material irreconcilable conflict arises because a
particular state insurance regulator's decision
applicable to the Company conflicts with the majority of
<PAGE>
PAGE 16
other state regulators, then the Company will withdraw
the affected subaccount of the Account's investment in
the affected Funds and terminate this Agreement with
respect to such subaccount of the Account within six
months after the Board informs the Company in writing
that it has determined that such decision has created an
irreconcilable material conflict; provided, however, that
such withdrawal and termination shall be limited to the
extent required by the foregoing material irreconcilable
conflict as determined by a majority of the disinterested
members of the Board. Until the end of the foregoing six
month period, G.T. Global and such Fund(s) shall continue
to accept and implement orders by the Company for the
purchase (and redemption) of shares of that Fund.
(f) For purposes of Section 8(c) through 8(f) of this
Agreement, a majority of the disinterested members of
the Board shall determine whether any proposed action
adequately remedies any irreconcilable material conflict,
but in no event will the Investment Companies be required
to establish a new funding medium for the Contracts. The
Company shall not be required by Section 8(c) to
establish a new funding medium for the contracts if an
offer to do so has been declined by vote of a majority of
Contract Owners materially adversely affected by the
irreconcilable material conflict. In the event that the
Board determines that any proposed action does not
adequately remedy any irreconcilable material conflict,
then the Company will withdraw the subaccount of the
Account's investment in the affected Fund(s) and
terminate this Agreement within six (6) months after the
Board informs the Company in writing of the foregoing
determination, provided, however, that such withdrawal
and termination shall be limited to the extent required
by any such material irreconcilable conflict as
determined by a majority of the disinterested members of
the Board. No charge or penalty will be imposed as a
result of such withdrawal.
(g) If and to the extent that Rule 6e-2 and Rule 6e-3(T) are
amended, or Rule 6e-3 is adopted, to provide exemptive
relief from any provision of the 1940 Act or the rules
promulgated thereunder with respect to shared funding on
terms and conditions materially different from those
contained in Rule 6e-2 and Rule 6e-3(T), then (a) the
Investment Companies and/or the Participating Insurance
Companies, as appropriate, shall take such steps as may
be necessary to comply with Rules 6e-2 and 6e-3(T) as
amended, and Rule 6e-3, as adopted, to the extent such
rules are applicable; and (b) Sections 4(b), 4(c), 8(a),
8(b), 8(c), 8(d) and 8(e) of this Agreement shall
continue in effect only to the extent that terms and
conditions substantially identical to such Sections are
contained in such Rule(s) as so amended or adopted.
<PAGE>
PAGE 17
9. Indemnification
(a) Indemnification by Company
Company agrees to indemnify and hold harmless the
Investment Companies, G.T. Global and each person who
controls or is associated with the Investment Companies
or G.T. Global within the meaning of such terms under the
federal securities laws and any officer, trustee,
director, employee or agent of the foregoing, against any
and all losses, claims, damages or liabilities, joint or
several (including any investigative, legal and other
expenses reasonably incurred in connection with, and any
amounts paid in settlement of, any action, suit or
proceeding or any claim asserted), to which they or any
of them may become subject under any statute or
regulation, at common law or otherwise, insofar as such
losses, claims, damages or liabilities:
(i) arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact
contained in the Accounts' registration statements,
prospectus, statement of additional information and
promotional, sales or advertising materials
developed by Company (or any amendment or supplement
to any of the foregoing), or arise out of or are
based upon the omission or the alleged omission to
state therein a material fact required to be stated
therein or necessary to make the statements therein
not misleading in light of the circumstances in
which they were made; provided that these provisions
shall not apply if such statement or omission or
such alleged statement or alleged omission was made
in reliance upon and in conformity with information
furnished to Company by G.T. Global or the
Investment Companies for use in the Accounts'
registration statement, prospectus or statement of
additional information or in promotional, sales or
advertising materials developed by Company; or
(ii) arise out of or as a result of statements or
representations by or on behalf of Company (other
than statements or representations contained in the
Investment Companies registration statements or
prospectus or sales literature not developed by
Company or persons under its control) or wrongful
conduct of Company or persons under its control with
respect to the sale or distribution of the Contracts
or shares of the Funds; or
(iii) arise out of any untrue statement or alleged
untrue statement of a material fact contained
in the Investment Companies' registration
statements or prospectus or in promotional,
sales or advertising materials literature of
the Investment Companies, or any amendment
thereof or supplement thereto or the omission
<PAGE>
PAGE 18
or alleged omission to state therein a material
fact required to be stated therein or necessary
to make the statements therein not misleading
in light of the circumstances in which they
were made, if such statement or omission was
made in reliance upon and in conformity with
information furnished in writing to G.T. Global
or the Investment Companies by or on behalf of
Company; or
(iv) arise as a result of any failure by Company to
provide the services and furnish the materials or to
make any payments under the terms of this Agreement;
or
(v) arise out of any material breach by Company of this
Agreement, including but not limited to any failure
to transmit a request for redemption or purchase of
shares of the Funds on a timely basis in accordance
with the procedures set forth in Section 2.
(vi) Company shall not be liable under this
indemnification provisions with respect to any
losses, claims, damages, liabilities or litigation
incurred or assessed against G.T. Global or the
Investment Companies to the extent such may arise
from their willful misfeasance, bad faith or gross
negligence in the performance of their duties or by
reason of G.T. Global's or the Investment Companies'
reckless disregard of obligations or duties under
this Agreement.
This indemnification will be in addition to any liability
which Company may otherwise have.
(b) Indemnification by G.T. Global
G.T. Global agrees to indemnify and hold harmless Company
and each person who controls or is associated with
Company within the meaning of such terms under the
federal securities laws and any officer, director,
employee or agent of the foregoing, against any and all
losses, claims, damages or liabilities, joint or several
(including any investigative, legal and other expenses
reasonably incurred in connection with, and any amounts
paid in settlement of, any action, suit or proceeding or
any claim asserted), to which they or any of them may
become subject under any statute or regulation, at common
law or otherwise, insofar as such losses, claims, damages
or liabilities:
(i) arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact
contained in the Investment Companies registration
statements, prospectuses, statements of additional
information or in any promotional, sales or
advertising materials for the Investment Companies
(or any amendment or supplement to any of the
<PAGE>
PAGE 19
foregoing), or arise out of or are based upon the
omission or the alleged omission to state therein a
material fact required to be stated therein or
necessary to make the statements therein not
misleading in light of the circumstances in which
they were made; provided that this obligation to
indemnify shall apply only if such statement or
omission or alleged statement or alleged omission
was made in reliance upon and in conformity with
information furnished in writing by G.T. Global to
the Investment Companies for use in the Investment
Companies registration statements, prospectuses,
statements of additional information or such sales
materials; or
(ii) arise out of or as a result of statements or
representations contained in the registration
statements, prospectuses, statements of additional
information of the Accounts or the Investment
Companies or in promotional, sales or advertising
materials for the Contracts or the Investment
Companies supplied by G.T. Global or the Investment
Companies or persons under their control, or
wrongful conduct of G.T. Global with respect to the
sale or distribution of the Contracts or shares of
the Funds; or
(iii) arise out of any untrue statement or alleged
untrue statement of a material fact contained
in the Accounts' or Investment Companies'
registration statements, prospectuses,
statements of additional information or in
promotional, sales or advertising materials, or
the omission or alleged omission to state
therein a material fact required to be stated
therein or necessary to make the statements
therein not misleading in light of the
circumstances in which they were made, if such
statement or omission was made in reliance upon
information furnished in writing by G.T.
Global; or
(iv) arise out of any material breach by G.T. Global of
this Agreement, including but not limited to any
failure to supply timely and accurate net asset
value information relating to the Funds as specified
in Section 2, or failure to maintain a Fund's
diversification as required in Section 7.
(vii) G.T. Global shall not be liable under this
indemnification provision with respect to any
losses, claims, damages, liabilities or
litigation incurred or assessed against the
Company or the Investment Companies to the
extent such may arise from their willful
misfeasance, bad faith or gross negligence in
the performance of their duties or by reason of
<PAGE>
PAGE 20
the Company's or the Investment Companies'
reckless disregard of obligations or duties
under this Agreement.
This indemnification will be in addition to any liability
which G.T. Global may otherwise have.
(c) Indemnification by the Investment Companies
The Investment Companies agree to indemnify and hold
harmless Company and each person who controls or is
associated with Company within the meaning of such terms
under the federal securities laws and any officer,
director, employee or agent of the foregoing, against any
and all losses, claims, damages or liabilities, joint or
several (including any investigative, legal and other
expenses reasonably incurred in connection with, and any
amounts paid in settlement of, any action, suit or
proceeding or any claim asserted), to which they or any
of them may become subject under any statute or
regulation, at common law or otherwise, insofar as such
losses, claims, damages or liabilities:
(i) arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact
contained in the Investment Companies registration
statements, prospectus, statement of additional
information or in promotional, sales or advertising
materials, (or any amendment or supplement to any of
the foregoing) or arise out of or are based upon the
omission or the alleged omission to state therein a
material fact required to be stated therein or
necessary to make the statements therein not
misleading in light of the circumstances in which
they were made; provided that this obligation to
indemnify shall not apply if such statement or
omission or such alleged statement or alleged
omission was made in reliance upon and in conformity
with information furnished in writing by or on
behalf of the Company for use in its registration
statements, prospectuses or statements of additional
information or in sales literature or otherwise for
use in connection with the sale of the Contracts or
shares of the Funds; or
(ii) arise out of or as a result of statements or
representations contained in the registration
statements, prospectuses or statements of additional
information of the Accounts or Investment Companies
or in promotional, sales or advertising materials
supplied by the Investment Companies or persons
under their control, or wrongful conduct of the
Investment Companies or the Investment Companies'
investment adviser, with respect to the sale or
distribution of the Contracts or shares of the
Funds; or
<PAGE>
PAGE 21
(iii) arise out of any untrue statement or alleged
untrue statement of a material fact contained
in the registration statements, prospectuses or
statements of additional information of the
Investment Companies or in promotional, sales
or advertising materials, or the omission or
alleged omission to state therein a material
fact required to be stated therein or necessary
to make the statements therein not misleading
in light of the circumstances in which they
were made, if such statement or omission was
made in reliance upon information furnished in
writing by the Investment Companies; or
(iv) arise as a result of any failure by the Investment
Companies to provide the services and furnish the
materials under the terms of this Agreement
(including a failure, whether unintentional or in
good faith or otherwise, to comply with the
diversification requirements in accordance with the
conditions specified in Section 7 of this
Agreement); or
(v) arise out of any material breach by the Investment
Companies of this Agreement, including but not
limited to any failure to supply timely and accurate
net asset value information relating to the Funds as
specified in Section 2, an error in security
accounting which would cause a previously calculated
net asset value to be incorrect; faulty transmittal
of a net asset value; failure to furnish the Company
with correct and timely information on the
declaration of any dividend distribution payable; or
failure to maintain a Fund's diversification as
required in Section 7.
(vi) The Investment Company shall not be liable under
this indemnification provision with respect to any
losses, claims, damages, liabilities or litigation
incurred or assessed against the Company or G.T.
Global to the extent such may arise from their
willful misfeasance, bad faith or gross negligence
in the performance of their duties or by reason of
the Company's or G.T. Global's reckless disregard of
obligations or duties under this Agreement.
This indemnification will be in addition to any liability
which the Investment Companies may otherwise have.
(d) Indemnification Procedures
After receipt by a party entitled to indemnification
("indemnified party") under this Section 9 of notice of
the commencement of any action, if a claim in respect
thereof is to be made against any person obligated to
provide indemnification under this Section 9
("indemnifying party"), such indemnified party will
notify the indemnifying party in writing of the
<PAGE>
PAGE 22
commencement thereof as soon as practicable thereafter,
provided that the omission to so notify the indemnifying
party will not relieve it from any liability under this
Section 9, except to the extent that the omission results
in a failure of actual notice to the indemnifying party
and such indemnifying party is damaged solely as a result
of the failure to give such notice. The indemnifying
party, upon the request of the indemnified party, shall
retain counsel reasonably satisfactory to the indemnified
party to represent the indemnified party and any others
the indemnifying party may designate in such proceeding
and shall pay the fees and disbursements of such counsel
related to such proceeding. In any such proceeding, any
indemnified party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall
be at the expense of such indemnified party unless (1)
the indemnifying party and the indemnified party shall
have mutually agreed to the retention of such counsel or
(2) the named parties to any such proceeding (including
any impleaded parties), include both the indemnifying
party and the indemnified party and representation of
both parties by the same counsel, would be inappropriate
due to actual or potential differing interests between
them. The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be
a final judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party from and
against any loss or liability by reason of such
settlement or judgment. A successor by law of the
parties to this Agreement shall be entitled to the
benefits of the indemnification contained in this Section
9. The indemnification provisions contained in this
Section 9 shall survive any termination of this
Agreement.
10. Applicable Law
(a) This Agreement shall be construed and the provisions
hereof interpreted under and in accordance with the laws
of the state of California, without giving effect to the
principles of conflicts of laws.
(b) This Agreement shall be subject to the provisions of the
1933, 1934 and 1940 Acts, and the rules and regulations
and rulings thereunder, including such exemptions from
those statutes, rules and regulations as the SEC may
grant, and the terms hereof shall be limited, interpreted
and construed in accordance therewith.
11. Term
(a) Unless otherwise terminated pursuant to this Section 11
this Agreement shall remain in effect for a period of
three (3) years following its execution. This Agreement
shall remain in effect thereafter unless (i) terminated
at the option of any party, upon sixty days written
notice to the other parties, or (ii) terminated pursuant
<PAGE>
PAGE 23
to any of subparagraphs (b) through (n) of this Section
11. Termination of the Agreement with respect to any one
Fund shall not affect its continued effectiveness with
respect to the other Funds.
(b) The Investment Companies may terminate this Agreement
upon institution of formal proceedings against Company by
the NASD, the SEC, the insurance commission of any
state or any other regulatory body regarding Company's
duties under this Agreement or related to the sale of the
Contracts, the operation of the Accounts, or the purchase
of shares of the Funds, or an expected or anticipated
ruling, judgment or outcome which would, in the
Investment Companies' reasonable judgment, materially
impair Company's ability to meet and perform Company's
obligations and duties hereunder.
(c) G.T. Global at its option may terminate this Agreement in
the event (i) the A.M. Best & Co. rating of the Company
is not "A" or better or (ii) the Duff & Phelps' claims
paying ability rating of the Company is not "A" or
better.
(d) The Company may terminate this Agreement upon institution
of formal proceedings against the Investment Companies or
G.T. Global by the NASD, the SEC, or any state securities
or insurance commission or any other regulatory body.
(e) This Agreement will terminate with respect to any Fund
upon receipt of any required regulatory approvals and any
requisite vote of the Contract Owners having an interest
in the affected Fund to substitute the shares of another
investment company for the affected shares of the Fund in
accordance with the terms of the Contracts.
(f) The Investment Companies may terminate this Agreement in
the event any of the Contracts are not registered, issued
or sold in accordance with applicable federal and/or
state law.
(g) Either Company or the Investment Companies may terminate
this Agreement upon a determination by a majority of the
Boards, or a majority of disinterested board members,
that an irreconcilable material conflict exists among the
interests of the Contract Owners.
(h) The Investment Companies may terminate this Agreement
upon a determination by the Board in good faith that it
is no longer advisable and in the best interests of
shareholders for the Investment Companies to continue
with this Agreement.
(i) Company may terminate this Agreement with respect to any
Fund if it ceases to qualify as a Regulated Investment
Company under Subchapter M of the Code, or under any
successor or similar provision, or if Company reasonably
believes based on an opinion of counsel satisfactory to
the relevant Investment Company that such Fund may fail
<PAGE>
PAGE 24
to so qualify. Termination of this Agreement with
respect to one Fund under this provision shall not affect
the continued effectiveness of this Agreement to the
remaining Funds.
(j) Company may terminate this Agreement with respect to any
Fund if it fails to meet the diversification requirements
specified in Section 7 hereof. Termination of this
Agreement with respect to one Fund under this provision
shall not affect the continued effectiveness of this
Agreement to the remaining Funds.
(k) The Investment Companies may terminate this Agreement
immediately if the Contracts cease to qualify as annuity
contracts under the Code, or on ten days notice if the
Investment Companies reasonably believe that the
Contracts may fail to so qualify; provided that such
event has not been caused by a Fund's failure to maintain
diversification in accordance with the provisions of
Section 7.
(l) The Investment Companies may terminate this Agreement
immediately upon written notice in the event either
Company or G.T. Global files a petition for
reorganization or liquidation under the U.S. Bankruptcy
Code; becomes subject to the jurisdiction of the U.S.
Bankruptcy Court; has a liquidator or trustee appointed
to oversee its affairs; or is adjudged insolvent.
(m) This Agreement will terminate automatically if it is
assigned; provided that, to the extent permitted by
relevant law and regulation, no termination shall occur
if a party hereto assigns this Agreement to an affiliate.
(n) This Agreement may be terminated at the option of any
party, upon another party's material breach of any
provision of this Agreement.
(o) Unless otherwise indicated above, no termination of this
Agreement shall be effective unless and until the party
terminating this Agreement gives sixty (60) days prior
written notice to all other parties to this Agreement.
Any notice of termination shall set forth the basis for
such termination.
(p) The parties each agree to act in good faith with respect
to determining whether to exercise any right to terminate
this Agreement prior to its three (3) year term specified
in Section 11(a).
(q) If this Agreement is terminated pursuant to this Section
11, at G.T. Global's option one of the following will
occur with respect to all Contracts in effect on the
effective date of termination ("Existing Contracts"),
provided that the Investment Companies have consented or
approved such action to the extent and in the fashion
required by applicable law and regulation and all
required regulatory approvals have been obtained:
<PAGE>
PAGE 25
(i) The Investment Companies may continue to make
additional shares of the Funds available for the
Existing Contracts under the terms of this
Agreement, for so long as G.T. Global and the
Investment Companies may desire; provided that, if
shares of the Funds are so made available for the
Existing Contracts, G.T. Global and the Investment
Companies may elect to make shares of the Funds
available to insurance companies unaffiliated with
Company.
(ii) The Funds may be liquidated and the Investment
Companies cease to exist; provided that Company will
be provided with twelve months prior notice of such
action to enable Company to identify substitute
variable investment options for the Contracts.
(iii) G.T. Global and Company may negotiate an
agreement in good faith pursuant to which G.T.
Global will solicit the transfer of the
investments of holders of the Existing
Contracts to the variable annuity contracts of
an insurance company unaffiliated with Company,
and G.T. Global will pay such consideration to
Company as the parties then agree.
Notwithstanding the foregoing provisions, if this
Agreement is terminated pursuant to this Paragraph 11,
solely with respect to Existing Contracts that were sold
through the Company distribution system or the Company's
affiliated broker-dealer, the Company at its option may
arrange to substitute other appropriate investment
options for the Funds.
(r) If following termination of this Agreement shares of the
Funds continue to be made available for Existing
Contracts pursuant to Section 11(q) of this Agreement,
the owners of the Existing Contracts shall be permitted
to reallocate investments among the Funds, redeem
investments in the Funds and invest in the Funds by
making additional purchase payments under the Existing
Contracts. Thereafter either the Investment Companies or
Company may terminate the Agreement, as so continued
pursuant to this Section 11(r), upon prior written notice
to the other party, such notice to be for a period that
is reasonable under the circumstances but, if given by
the Investment Companies, the Company will be provided
with twelve months prior notice to enable the Company to
identify substitute variable investment options for the
Contracts.
(s) Neither G.T. Global and its affiliates nor Company and
its affiliates knowingly shall induce or cause, or
attempt to induce or cause, directly or indirectly, any
Contract owner to lapse, terminate, surrender or cancel
his or her Contract, or exchange his or her Contract for
another variable annuity contract, or to cease or
discontinue making purchase payments thereunder, without
the prior written consent of the other party.<PAGE>
PAGE 26
12. Applicability to New Accounts and New Contracts
The parties to this Agreement may amend Schedule A to this
Agreement from time to time to reflect changes in or relating
to the Contracts and upon G.T. Global's prior written consent,
the parties may amend Schedule A to this Agreement to add new
classes of variable annuity contracts to be issued by Company
through a separate account investing in the Investment
Companies. The provisions of this Agreement shall be equally
applicable to each such class of contracts, unless the context
otherwise requires.
13. Notices
Any notice shall be sufficiently given when sent by registered
or certified mail to the other party at the address of such
party set forth below or at such other address as such party
may from time to time specify in writing to the other party.
If to Company:
American Enterprise Life Insurance Company
80 South Eighth Street
Minneapolis, MN 55402
Attn: President
If to the Investment Companies:
G.T. Global Variable Investment Trust
G.T. Global Variable Investment Series
50 California Street, 27th Floor
San Francisco, CA 94111
Attn: Helge K. Lee, Esq.
Vice President and Secretary
With a simultaneous copy to:
Kirkpatrick & Lockhart
1800 M Street, N.W.
South Lobby, 9th Floor
Washington, DC 20036
Attn: Arthur J. Brown, Esq.
If to G.T. Global:
G.T. Global Financial Services, Inc.
50 California Street, 27th floor
San Francisco, CA 94111
Attn: Helge K. Lee, Esq.
Senior Vice President and General Counsel
With a simultaneous copy to:
Kirkpatrick & Lockhart
1800 M Street, N.W.
South Lobby, 9th Floor
Washington, DC 20036
Attn: Arthur J. Brown, Esq.
<PAGE>
PAGE 27
14. Miscellaneous
(a) This Agreement has been executed on behalf of the
Investment Companies by the undersigned officer of the
Investment Companies in his capacity as an officer of the
Investment Companies duly authorized to execute this
Agreement. The obligations of this Agreement shall only
be binding upon the assets and property of the Investment
Companies and shall not be binding upon any trustee,
officer or shareholder of the Investment Companies
individually.
(b) The captions in this Agreement are included for
convenience of reference only and in no way define or
delineate any of the provisions hereof or otherwise
affect their construction or effect.
(c) This Agreement may be executed simultaneously in two or
more counterparts, each of which together shall
constitute one and the same instrument.
(d) If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise,
the remainder of the Agreement shall not be affected
thereby.
(e) Each party hereto shall cooperate with each other party
and all appropriate governmental authorities (including
without limitation the SEC, the NASD and state insurance
regulators) and shall permit such authorities reasonable
access to its books and records in connection with any
investigation or inquiry relating to this Agreement or
the transactions contemplated hereby.
(f) Each party represents that the execution and delivery of
this Agreement and the consummation of the transaction
contemplated herein have been duly authorized by all
necessary corporate or trust action, as applicable, by
such party and when so executed and
delivered this Agreement will be the valid and binding
obligation of such party enforceable in accordance with
its terms.
<PAGE>
PAGE 28
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed in its name and behalf by its duly
authorized officer on the date specified below.
AMERICAN ENTERPRISE
LIFE INSURANCE COMPANY
Date: By: /s/ Ryan Larson
Name: Ryan Larson
Title: Vice President -
Product Development
G.T. GLOBAL VARIABLE INVESTMENT TRUST
Date: By: /s/ David A. Minella
David A. Minella
President
G.T. GLOBAL VARIABLE INVESTMENT
SERIES
Date: By: /s/ David A. Minella
David A. Minella
President
G.T. GLOBAL FINANCIAL SERVICES, INC.
Date: By: /s/ David A. Minella
David A. Minella
President
<PAGE>
PAGE 29
SCHEDULE A
American Enterprise Variable Annuity Account, established July 15,
1987 used to fund the AEL Personal PortfolioSM, a flexible premium
variable annuity contract.
<PAGE>
PAGE 1
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption
"Independent Auditors" and to the use of our reports dated February
2, 1996 on the financial statements and schedules of American
Enterprise Life Insurance Company and our report dated March 15,
1996 on the financial statements of American Enterprise Variable
Annuity Account in Post Effective Amendment No. 3 to the
Registration Statement (Form N-4, No. 33-54471) for the
registration of the American Enterprise Variable Annuity Account to
be offered by American Enterprise Life Insurance Company.
Ernst & Young LLP
Minneapolis, Minnesota
April 26, 1996
<PAGE>
PAGE 1
<TABLE>
<CAPTION>
AMERICAN ENTERPRISE LIFE INSURANCE COMPANY
SCHEDULE I - SUMMARY OF INVESTMENTS
OTHER THAN INVESTMENTS IN RELATED PARTIES ($ thousands)
AS OF DECEMBER 31, 1995
Column A Column B Column C Column D
Amount at which
Type of Investment Cost Value shown in the
balance sheet
<S> <C> <C> <C>
Fixed maturities:
Held to maturity:
United States Government and
government agencies and
authorities (a) $ 121,905 $ 122,130 $ 121,905
States, municipalities and
political subdivisions 3,004 3,114 3,004
All other corporate bonds 1,183,342 1,232,733 1,183,342
Total held to maturity 1,308,251 1,357,977 1,308,251
Available for sale:
United States Government and
government agencies and
authorities (b) 562,537 575,242 575,242
States, municipalities and
political subdivisions 999 1,024 1,024
All other corporate bonds 982,488 1,020,719 1,020,719
Total available for sale 1,546,024 1,596,985 1,596,985
Mortgage loans on real estate 393,020 XXXXXXXXXX 393,020
Other investments 4,055 XXXXXXXXXX 4,055
Total investments $3,251,350 XXXXXXXXXX $3,302,311
(a) - Includes mortgage-backed securities with a cost and market value of $105,855 and $105,510,
respectively.
(b) - Includes mortgage-backed securities with a cost and market value of $561,994 and $574,685,
respectively.
</TABLE>
<PAGE>
PAGE 2
<TABLE>
<CAPTION>
AMERICAN ENTERPRISE LIFE INSURANCE COMPANY
SCHEDULE V - VALUATION AND QUALIFYING ACCOUNTS ($ thousands)
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
Column A Column B Column C Column D Column E
Additions
--------------
Balance at Charged to
Description Beginning Charged to Other Accounts- Deductions- Balance at End
of Period Costs & Expenses Describe Describe of Period
<S> <C> <C> <C> <C> <C>
For the year ended
December 31, 1995
------------------------------
Reserve for
Fixed Maturities $ 0 $ 9 $0 $0 $ 9
For the year ended
December 31, 1994
------------------------------
Reserve for
Fixed Maturities $77 $(77) $0 $0 $ 0
For the year ended
December 31, 1993
------------------------------
Reserve for
Fixed Maturities $79 $ (2) $0 $0 $77
</TABLE>
<PAGE>
PAGE 3
Report of Independent Auditors
The Board of Directors
American Enterprise Life Insurance Company
We have audited the financial statements of American Enterprise
Life Insurance Company (a wholly owned subsidiary of IDS Life
Insurance Company) as of December 31, 1995 and 1994, and for each
of the three years in the period ended December 31, 1995, and have
issued our report thereon dated February 2, 1996 (included
elsewhere in this Registration Statement).
Our audits also included the financial statement schedules listed
in Item 24(b) of this Registration Statement. These schedules are
the responsibility of the Company's management. Our responsibility
is to express an opinion based on our audits.
In our opinion, the financial statement schedules referred to
above, when considered in relation to the basic financial
statements taken as a whole, present fairly, in all material
respects, the information set forth therein.
Ernst & Young LLP
Minneapolis, Minnesota
February 2, 1996
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<CIK>
<NAME> American Enterprise Bank Variable Annuity Account
<SERIES>
<NAME>
<NUMBER>
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> FEB-21-1995
<PERIOD-END> DEC-31-1995
<PERIOD-TYPE> YEAR
<EXCHANGE-RATE> 1
<INVESTMENTS-AT-COST> 7998915
<INVESTMENTS-AT-VALUE> 8348065
<RECEIVABLES> 134527
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 8482592
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> (141991)
<TOTAL-LIABILITIES> (141991)
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 6913568
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTIONS-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 8340601
<DIVIDEND-INCOME> 63901
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> (27708)
<NET-INVESTMENT-INCOME> 36193
<REALIZED-GAINS-CURRENT> 9278
<APPREC-INCREASE-CURRENT> 349151
<NET-CHANGE-FROM-OPS> 394622
<EQUALIZATION> 0
<DISTRIBUTION-OF-INCOME> 0
<DISTRIBUTION-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 7075120
<NUMBER-OF-SHARES-REDEEMDED> (161552)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 8340601
<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> (27708)
<AVERAGE-NET-ASSETS> 4170301
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 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
<PAGE>
<ARTICLE> 7
<LEGEND>
<CIK>
<NAME> American Enterprise Life Insurance Company
<MULTIPLIER> 1000
<CURRENCY> U.S. DOLLAR
<FISCAL-YEAR-END> DEC-31-1995 DEC-31-1994
<PERIOD-START> JAN-01-1995 JAN-01-1994
<PERIOD-END> DEC-31-1995 DEC-31-1994
<PERIOD-TYPE> YEAR YEAR
<EXCHANGE-RATE> 1 1
[DEBT-HELD-FOR-SALE] 1596985 1119371
[DEBT-CARRYING-VALUE] 1308251 1130752
[DEBT-MARKET-VALUE] 1357977 1040663
[EQUITIES] 2 28
[MORTGAGE] 393020 219445
[REAL-ESTATE] 0 0
[TOTAL-INVEST] 3302311 2469596
[CASH] 42896 53358
[RECOVER-REINSURE] 0 0
<DEFERRED-ACQUISTION> 170574 137648
[TOTAL-ASSETS] 3570960 2712286
[POLICY-LOSSES] 3155651 2480122
[UNEARNED-PREMIUMS] 0 0
[POLICY-OTHER] 0 0
[POLICY-HOLDER-FUNDS] 11641 15706
[NOTES-PAYABLE] 0 0
[COMMON] 2000 2000
[PREFERRED-MANDATORY] 0 0
[PREFERRED] 0 0
[OTHER-SE] 294816 161255
[TOTAL-LIABILITY-AND-EQUITY] 3570960 2712286
[PREMIUMS] 0 0
[INVESTMENT-INCOME] 223706 162201
[INVESTMENT-GAINS] (1154) (1190)
[OTHER-INCOME] 4214 2753
[BENEFITS] 162662 112977
[UNDERWRITING-AMORTIZATION] 20459 14052
[UNDERWRITING-OTHER] 10205 6523
[INCOME-PRETAX] 33440 30212
[INCOME-TAX] 11692 10574
[INCOME-CONTINUING] 21748 19638
[DISCONTINUED] 0 0
[EXTRAORDINARY] 0 0
[CHANGES] 0 0
[NET-INCOME] 21748 19638
[EPS-PRIMARY] 0 0
[EPS-DILUTED] 0 0
[RESERVE-OPEN] 0 0
[PROVISION-CURRENT] 0 0
[PROVISION-PRIOR] 0 0
[PAYMENTS-CURRENT] 0 0
[PAYMENTS-PRIOR] 0 0
[RESERVE-CLOSE] 0 0
[CUMULATIVE-DEFICIENCY] 0 0
</TABLE>
