Supplement Dated December 29, 2000*
to the Prospectus Dated May 1, 2000
of American Express New Solutions Variable AnnuitySM (240355 A)
The following information applies to contracts purchased in the state of
Pennsylvania.
1. The reference on page one of the prospectus to "Individual or Group
Flexible Premium Deferred Combination Fixed/Variable Annuity" is changed to
"Individual Flexible Premium Deferred Variable Annuity."
2. The one-year fixed account is not available under contracts purchased in
Pennsylvania. Any reference in this prospectus to the one-year fixed
account, and any contract features or benefits associated with the one-year
fixed account are deleted.
3. The Guarantee Period Accounts are not available under contracts purchased
in Pennsylvania. Any reference in this prospectus to the Guarantee Period
Accounts, and any contract features or benefits associated with the
Guarantee Period Accounts are deleted.
4. The minimum initial purchase payment (not including Systematic Investment
Plans) is changed from $5,000 to $2,000.
5. The following subsection replaces the subsection on the "Special
dollar-cost averaging program" that was added to the "Making the Most of
Your Contract" section of the prospectus by supplement on December 29,
2000:
Special dollar-cost averaging program
If your contract value** is at least $10,000, you may elect to allocate any
new purchase payments of at least $10,000 to a six-month or twelve-month
account under this program. You may not transfer money you previously
invested in this contract into the program.
We will credit your purchase payment (and any applicable purchase payment
credit) with interest at the current guaranteed annual rate in effect on
the date we receive your money. We will change the rates for new purchase
payments from time to time at our discretion and we base these rates on
competition. Once we set the interest rate for a payment, it does not
change even if your contract value changes.
We apply these rates to the balance remaining in the program accounts and
we do not credit interest after we transfer money to the accounts you
selected. We transfer money out of the program accounts into the
subaccounts you selected on a monthly basis. We transfer all money out of
the program within the time period (six or twelve months) you selected. If
you fund this program with money from a different existing annuity or life
insurance contract (1035 exchange), we will deposit money into the program
account as it arrives. This means that some of the money may be transferred
out of the program in less than the time period you selected (six or twelve
months), and you may receive less total interest than if we received all of
the money at one time. If we receive the last of the money from your 1035
exchange after the expiration of the six-month or twelve-month period, you
have the option of allocating this money to another program account (if
available) or any subaccounts you select.
If you have money in the program, you will not be able to allocate
additional purchase payments to the program unless another interest rate is
in effect.
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You may not participate in this program if you are making payments under a
Systematic Investment Plan. You may simultaneously participate in this
program and the automatic rebalancing program as long as your subaccount
asset allocation matches between the programs. If you elect to change your
subaccount asset allocation under one program, we will automatically change
it to match under the other program. If you have more than one account in
this program, the asset allocation for each account may be different as
long as you are not also participating in the automatic rebalancing
program.
You may terminate participation in this program at any time. If you do so,
you will no longer receive the guaranteed annual interest rate on any
remaining balance in the program account. If you terminate the program, or
we are unable to accept new money into the program, we will allocate that
money using the subaccounts you selected for the program or in any other
manner you specify.
We can modify the terms of this program or discontinue this program at any
time. Any modifications will not affect money already in the program.
** Contract value includes new purchase payments (or expected payments if you
fund the program from a 1035 exchange) and any applicable purchase payment
credit.
240355-12 A (12/00)
*Valid until April 30, 2001
