As filed with the Securities and Exchange Commission on November 19, 1999
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File Nos. 333-74411
811-07467
Securities And Exchange Commission
Washington. D.C. 20549
Form N-4
Registration Statement under the Securities Act of 1933 [X]
Pre-Effective Amendment No. 1
Post-effective Amendment No. __
and/or
Registration Statement under the Investment Company Act of 1940 [X]
Amendment No. 6
Allstate Life of New York Separate Account A
(Exact Name of Registrant)
Allstate Life Insurance Company of New York
(Name of Depositor)
One Allstate Drive
Farmingville, New York 11738-9075
(Address of Depositor's Principal Offices)
847/402-2400
(Depositor's Telephone Number, Including Area Code)
Michael J. Velotta
Vice President, Secretary And General Counsel
Allstate Life Insurance Company of New York
3100 Sanders Road 60062
Northbrook, Illinois 60062
847/402-2400
(Name, Complete Address and Telephone Number of Agent for Service)
Copy to:
Richard T. Choi, Esquire
Freedman, Levy, Kroll & Simonds
1050 Connecticut Avenue, N.W.
Suite 825
Washington, D.C. 20036-5366
Approximate date of proposed public offering: As soon as practicable after the
effective date of the registration statement.
The registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the registration shall become effective on such
date as the Commission, acting pursuant to Section 8(a), may determine.
Title of Securities Being Registered: Units of interest in the Allstate Life of
New York Separate Account A under deferred variable annuity contracts.
<PAGE>
THE PUTNAM ALLSTATE ADVISOR
Allstate Life Insurance Company of New York Prospectus dated December __, 1999
One Allstate Drive
Farmingville, New York 11738-9075
Telephone Number: 1(800) 390-1277
Allstate Life Insurance Company of New York ("Allstate New York") is offering
The Putnam Allstate Advisor, a group flexible premium deferred variable annuity
contract ("Contract"). This prospectus contains information about the Contract
that you should know before investing. Please keep it for future reference.
The Contract currently offers 24 investment alternatives ("investment
alternatives"). The investment alternatives include 2 fixed account options
("Fixed Account Options") and 22 variable sub-accounts ("Variable Sub-Accounts")
of the Allstate Life of New York Separate Account A ("Variable Account"). Each
Variable Sub-Account invests exclusively in the class IB shares of one of the
following mutual fund portfolios ("Funds") of Putnam Variable Trust:
<TABLE>
<CAPTION>
<S> <C>
Putnam VT Asia Pacific Growth Fund Putnam VT International New Opportunities Fund
Putnam VT Diversified Income Fund Putnam VT Investors Fund
Putnam VT The George Putnam Fund of Boston Putnam VT Money Market Fund
Putnam VT Global Asset Allocation Fund Putnam VT New Opportunities Fund
Putnam VT Global Growth Fund Putnam VT New Value Fund
Putnam VT Growth and Income Fund Putnam VT OTC & Emerging Growth Fund
Putnam VT Health Sciences Fund Putnam VT Research Fund
Putnam VT High Yield Fund Putnam VT Small Cap Value
Putnam VT Income Fund Putnam VT Utilities Growth and Income Fund
Putnam VT International Growth Fund Putnam VT Vista Fund
Putnam VT International Growth and Income Fund Putnam VT Voyager Fund
</TABLE>
We (Allstate New York) have filed a Statement of Additional Information, dated
December __, 1999, with the Securities and Exchange Commission ("SEC"). It
contains more information about the Contract and is incorporated herein by
reference, which means that it is legally a part of this prospectus. Its table
of contents appears on page __ of this prospectus. For a free copy, please write
or call us at the address or telephone number above, or go to the SEC's Web site
(http://www.sec.gov). You can find other information and documents about us,
including documents that are legally part of this prospectus, at the SEC's Web
site.
The Securities and Exchange Commission has not approved
or disapproved the securities described in this
prospectus, nor has it passed on the accuracy or the
adequacy of this prospectus. Anyone who tells you
otherwise is committing a federal crime.
The Contracts may be distributed through broker-dealers
IMPORTANT that have relationships with banks or other
NOTICES financial institutions or by employees of such banks.
However, the Contracts are not deposits, or obligations
of, or guaranteed by such institutions or any federal
regulatory agency. Investment in the Contracts involves
investment risks, including possible loss of principal.
The Contracts are not FDIC insured.
The Contracts are available only in New York.
<PAGE>
TABLE OF CONTENTS
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<TABLE>
<CAPTION>
Page
<S> <C> <C>
Important Terms...................................................
Overview The Contract At A Glance .........................................
How the Contract Works............................................
Expense Table.....................................................
Financial Information.............................................
The Contract......................................................
Purchases.........................................................
Contract Value....................................................
Investment Alternatives...........................................
Contract Features The Variable Sub-Accounts................................
The Fixed Account Options................................
Transfers................................................
Expenses..........................................................
Access To Your Money..............................................
Income Payments...................................................
Death Benefits....................................................
More Information..................................................
Other Information Taxes.............................................................
Performance Information...........................................
Statement of Additional Information Table of Contents.............
Appendix A........................................................
</TABLE>
<PAGE>
IMPORTANT TERMS
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This prospectus uses a number of important terms that you may not be familiar
with. The index below identifies the page that describes each term. The first
use of each term in this prospectus appears in highlights.
Page
Accumulation Phase...............................................
Accumulation Unit ...............................................
Accumulation Unit Value .........................................
Allstate New York ("We").........................................
Annuitant........................................................
Automatic Additions Program......................................
Automatic Fund Rebalancing Program...............................
Beneficiary .....................................................
Cancellation Period .............................................
*Contract .......................................................
Contract Anniversary.............................................
Contract Owner ("You") ..........................................
Contract Value ..................................................
Contract Year...................................................
Dollar Cost Averaging Program....................................
Due Proof of Death...............................................
Fixed Account Options ...........................................
Preferred Withdrawal Amount .....................................
Funds............................................................
Guarantee Period ................................................
Income Plan .....................................................
Investment Alternatives .........................................
Issue Date ......................................................
Maximum Anniversary Value........................................
Payout Phase.....................................................
Payout Start Date ...............................................
Right to Cancel .................................................
SEC..............................................................
Settlement Value ................................................
Systematic Withdrawal Program ...................................
Valuation Date...................................................
Variable Account ................................................
Variable Sub-Account ............................................
* The Contract is available only as a group Contract. We will issue you
a certificate that represents your ownership and that summarizes the
provisions of the group Contract. References to "Contract" in this
prospectus include certificates, unless the context requires otherwise.
<PAGE>
THE CONTRACT AT A GLANCE
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The following is a snapshot of the Contract. Please read the remainder of this
prospectus for more information.
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You can purchase a Contract with as little
Flexible Payments as $1,000 ($500 for "Qualified Contracts,"
which are Contracts issued with a
qualified plan). You can add to your
Contract as often and as much as
you like, but each payment must be at least
$500 ($50 for automatic payments). We may
limit the amount of any additional purchase
payment to a maximum of $1,000,000.
---------------------------------- -----------------------------------------
---------------------------------- -----------------------------------------
Right to Cancel You may cancel your Contract
within 10 days after receipt (60 days if
you are exchanging another contract for the
Contract described in this prospectus)
("Cancellation Period"). Upon cancellation,
we will return your purchase payments
adjusted to reflect the investment
experience of any amounts allocated to the
Variable Account.
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---------------------------------- -----------------------------------------
Expenses You will bear the following expenses:
o Mortality and expense risk charge equal
to 1.25% of average daily net assets
o Annual contract maintenance charge of $30
(waived in certain cases)
o Withdrawal charges ranging from 0% to 7%
of purchase payments withdrawn (with
certain exceptions)
o Transfer fee equal to 0.50% of the
amount transferred, up to a maximum
charge of $25, after 12th transfer in
any Contract Year. We measure a
Contract Year from the date we issue
your Contract or a Contract
Anniversary.
o State premium tax (New York currently
does not impose one)
In addition, each Fund pays expenses that
you will bear indirectly if you invest in a
Variable Sub-Account.
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---------------------------------- -----------------------------------------
Investment
Alternatives The Contract offers 24 investment
alternatives including:
o 2 Fixed Account Options (which credit
interest at rates we guarantee)
o 22 Variable Sub-Accounts investing in
Funds offering professional money
management by Putnam Investment
Management, Inc.
To find out current rates being paid on
the Fixed Account Options, or to
find out how the Variable Sub-Accounts
have performed, please call us at
1(800)390-1277.
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<PAGE>
----------------------------------- ----------------------------------------
Special Services For your convenience, we offer these
special services:
o Automatic Fund Rebalancing Program
o Automatic Additions Program
o Dollar Cost Averaging Program
o Systematic Withdrawal Program
----------------------------------- ----------------------------------------
----------------------------------- ----------------------------------------
Income Payments You can choose fixed income payments,
variable income payments, or a
combination of the two. You can receive
your income payments in one of the
following ways:
o life income with guaranteed payments
o a joint and survivor life income with
guaranteed payments
o guaranteed payments for a specified
period (5 to 30 years)
----------------------------------- ----------------------------------------
----------------------------------- ----------------------------------------
Death Benefits If you die before the Payout
Start Date, we will pay the death benefit
described in the Contract.
----------------------------------- ----------------------------------------
----------------------------------- ----------------------------------------
Transfers Before the Payout Start Date, you may
transfer your Contract value ("Contract
Value") among the investment alternatives,
with certain restrictions. The minimum
amount you may transfer is $100 or the
amount remaining in the investment
alternative, if less.
A charge will apply after the 12th
transfer in each Contract Year.
----------------------------------- ----------------------------------------
----------------------------------- ----------------------------------------
Withdrawals You may withdraw some or all of your
Contract Value at anytime prior to the
Payout Start Date. In general, you must
withdraw at least $50 at a time. A 10%
federal tax penalty may apply if you
withdraw before you are 59 1/2 years old.
A withdrawal charge also may apply.
----------------------------------- ----------------------------------------
<PAGE>
HOW THE CONTRACT WORKS
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The Contract basically works in two ways.
First, the Contract can help you (we assume you are the "Contract Owner")
save for retirement because you can invest in up to 24 investment alternatives
and pay no federal income taxes on any earnings until you withdraw them. You do
this during what we call the "Accumulation Phase" of the Contract. The
Accumulation Phase begins on the date we issue your Contract (we call that date
the "Issue Date") and continues until the Payout Start Date, which is the date
we apply your money to provide income payments. During the Accumulation Phase,
you may allocate your purchase payments to any combination of the Variable
Sub-Accounts and/or Fixed Account Options. If you invest in either of the Fixed
Account Options, you will earn a fixed rate of interest that we declare
periodically. If you invest in any of the Variable Sub-Accounts, your investment
return will vary up or down depending on the performance of the corresponding
Funds.
Second, the Contract can help you plan for retirement because you can use
it to receive retirement income for life and/or for a pre-set number of years,
by selecting one of the income payment options (we call these "Income Plans")
described on page __. You receive income payments during what we call the
"Payout Phase" of the Contract, which begins on the Payout Start Date and
continues until we make the last payment required by the Income Plan you select.
During the Payout Phase, if you select a fixed income payment option, we
guarantee the amount of your payments, which will remain fixed. If you select a
variable income payment option, based on one or more of the Variable
Sub-Accounts, the amount of your payments will vary up or down depending on the
performance of the corresponding Funds. The amount of money you accumulate under
your Contract during the Accumulation Phase and apply to an Income Plan will
determine the amount of your income payments during the Payout Phase.
The timeline below illustrates how you might use your Contract.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Issue Payout Start
Date Accumulation Phase Date Payout Phase
_________________________________________________________________________________________________________________________
You save for retirement
| | |
You buy You elect to receive You can receive Or you can
a Contract income payments or receive income payments receive income
a lump sum payment for a set period payments for life
</TABLE>
As the Contract Owner, you exercise all of the rights and privileges
provided by the Contract. If you die, any surviving Contract Owner or, if there
is none, the Beneficiary will exercise the rights and privileges provided by the
Contract. See "The Contract." In addition, if you die before the Payout Start
Date, we will pay a death benefit to any surviving Contract Owner or, if there
is none, to your Beneficiary. See "Death Benefits."
Please call us at 1(800)390-1277 if you have any question about how the
Contract works.
<PAGE>
EXPENSE TABLE
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The table below lists the expenses that you will bear directly or indirectly
when you buy a Contract. The table and the examples that follow do not reflect
premium taxes because New York currently does not impose premium taxes on
annuities. For more information about Variable Account expenses, see "Expenses,"
below. For more information about Fund expenses, please refer to the
accompanying prospectus for the Putnam Variable Trust.
CONTRACT OWNER TRANSACTION EXPENSES
Withdrawal Charge (as a percentage of purchase payments withdrawn)*
Number of Complete Years
Since We Received the Purchase
Payment Being Withdrawn 0 1 2 3 4 5 6 7+
Applicable Charge: 7% 7% 6% 5% 4% 3% 2% 0%
Annual Contract Maintenance Charge...............................$30.00**
Transfer Fee............................0.50% of the amount transferred***
* Each Contract Year, you may withdraw up to the greater of earnings not
previously withdrawn or 15% of your total purchase payments without incurring
a withdrawal charge.
** Waived in certain cases. See "Expenses."
***Applies solely to the thirteenth and subsequent transfers within a
Contract Year, excluding transfers due to dollar cost averaging and automatic
fund rebalancing. This charge will not exceed $25.
VARIABLE ACCOUNT ANNUAL EXPENSES
(as a percentage of average daily net asset value deducted from each
Variable Sub-Account)
Mortality and Expense Risk Charge....................................1.25%
Administrative Charge................................................0.00%
Total Variable Account Annual Expenses...............................1.25%
<PAGE>
FUND ANNUAL EXPENSES (After Voluntary Reductions and Reimbursements) (as a
percentage of Fund average daily net assets)(1)
<TABLE>
<CAPTION>
Management Rule 12b-1 Other Total Annual Fund
Fund Fees Fees Expenses Expenses (1)
<S> <C> <C> <C> <C>
Putnam VT Asia Pacific Growth Fund 0.80% 0.15% 0.32% 1.27%
Putnam VT Diversified Income Fund 0.67% 0.15% 0.11% 0.93%
Putnam VT The George Putnam Fund of Boston (2) 0.49% 0.15% 0.36% 1.00%
Putnam VT Global Asset Allocation Fund 0.65% 0.15% 0.13% 0.93%
Putnam VT Global Growth Fund 0.60% 0.15% 0.12% 0.87%
Putnam VT Growth and Income Fund 0.46% 0.15% 0.04% 0.65%
Putnam VT Health Sciences Fund (2) 0.56% 0.15% 0.34% 1.05%
Putnam VT High Yield Fund 0.64% 0.15% 0.07% 0.86%
Putnam VT Income Fund 0.60% 0.15% 0.07% 0.82%
Putnam VT International Growth Fund 0.80% 0.15% 0.27% 1.22%
Putnam VT International Growth and Income Fund 0.80% 0.15% 0.19% 1.14%
Putnam VT International New Opportunities Fund (2) 1.18% 0.15% 0.42% 1.75%
Putnam VT Investors Fund (2) 0.52% 0.15% 0.33% 1.00%
Putnam VT Money Market Fund 0.45% 0.15% 0.08% 0.68%
Putnam VT New Opportunities Fund 0.56% 0.15% 0.05% 0.76%
Putnam VT New Value Fund 0.70% 0.15% 0.11% 0.96%
Putnam VT OTC & Emerging Growth Fund (2) 0.56% 0.15% 0.34% 1.05%
Putnam VT Research Fund (2) 0.37% 0.15% 0.48% 1.00%
Putnam VT Small Cap Value Fund(3) 0.80% 0.15% 0.59% 1.54%
Putnam VT Utilities Growth and Income Fund 0.65% 0.15% 0.07% 0.87%
Putnam VT Vista Fund 0.65% 0.15% 0.12% 0.92%
Putnam VT Voyager Fund 0.54% 0.15% 0.04% 0.73%
</TABLE>
(1) Since the Funds have not offered Class IB shares for a full fiscal year,
figures shown in the table (except for Putnam VT Small Cap Value Fund) are
for the period ended December 31, 1998 and are estimates based on the
corresponding expenses for the Fund's Class IA shares for the last fiscal
year. Each Fund commenced operations on April 30, 1998, except for the
Putnam VT Diversified Income, Putnam VT Growth and Income, and Putnam VT
International Growth Funds, which commenced operations on April 6, 1998,
and the Putnam VT Research Fund, which commenced operations September 30,
1998, and the Putnam VT Small Cap Value Fund, which commenced operations on
April 30, 1999. Figures shown in the table include amounts paid through
expense offset and brokerage service arrangements.
(2) Absent voluntary reductions and reimbursements for certain Funds (including
amounts paid through expense offset and brokerage service arrangements),
advisory fees, Rule 12b-1 fees, other expenses, and total annual fund
expenses expressed as a percentage of average net assets of the Funds would
have been as follows:
<TABLE>
<CAPTION>
----------------------------------------------------- ---------------- ---------------- ------------- -------------------
<S> <C> <C> <C> <C>
Putnam VT The George Putnam Fund of Boston 0.65% 0.15% 0.36% 1.16%
Putnam VT Health Sciences Fund 0.70% 0.15% 0.34% 1.19%
Putnam VT International New Opportunities Fund 1.20% 0.15% 0.42% 1.77%
Putnam VT Investors Fund 0.65% 0.15% 0.33% 1.13%
Putnam VT OTC & Emerging Growth Fund 0.70% 0.15% 0.34% 1.19%
Putnam VT Research Fund 0.65% 0.15% 0.48% 1.28%
----------------------------------------------------- ---------------- ---------------- ------------- -------------------
</TABLE>
(3) Putnam VT Small Cap Value Fund commenced operations on April 30, 1999;
therefore, the management fee, other expenses and total annual fund
operating expenses are based on estimates for the fund's first full fiscal
year.
EXAMPLE 1
The example below shows the dollar amount of expenses that you would bear
directly or indirectly if you:
o invested a $1,000 in a Variable Sub-Account,
o earned a 5% annual return on your investment, and
o surrendered your Contract, or began receiving income payments for a
specified period of less than 120 months, at the end of each time period.
The example does not include any taxes or tax penalties you may be required to
pay if you surrender your Contract.
SUB-ACCOUNT 1 YEAR 3 YEARS
- ----------- ------ -------
Putnam Asia Pacific Growth $86 $124
Putnam Diversified Income $83 $113
The George Putnam Fund $83 $115
Putnam Global Asset Allocation $83 $113
Putnam Global Growth $82 $111
Putnam Growth and Income $80 $105
Putnam Health Sciences $84 $117
Putnam High Yield $82 $111
Putnam Income $81 $110
Putnam International Growth $85 $122
Putnam International Growth and Income $85 $120
Putnam International New Opportunities $91 $138
Putnam Investors $83 $115
Putnam Money Market $80 $106
Putnam New Opportunities $81 $108
Putnam New Value $83 $114
Putnam OTC & Emerging Growth $84 $117
Putnam Research $83 $115
Putnam Small Cap Value $89 $132
Putnam Utilities Growth and Income $82 $111
Putnam Vista $82 $113
Putnam Voyager $80 $107
<PAGE>
EXAMPLE 2
Same assumptions as Example 1 above, except that you decided not to surrender
your Contract, or you began receiving income payments for at least 120 months if
under an Income Plan for a specified period, at the end of each period.
SUB-ACCOUNT 1 YEAR 3 YEARS
- ----------- ------ -------
Putnam Asia Pacific Growth $26 $81
Putnam Diversified Income $23 $71
The George Putnam Fund $24 $73
Putnam Global Asset Allocation $23 $71
Putnam Global Growth $22 $69
Putnam Growth and Income $20 $62
Putnam Health Sciences $24 $75
Putnam High Yield $22 $69
Putnam Income $22 $67
Putnam International Growth $26 $80
Putnam International Growth and Income $25 $77
Putnam International New Opportunities $31 $96
Putnam Investors $24 $73
Putnam Money Market $20 $63
Putnam New Opportunities $21 $66
Putnam New Value $23 $72
Putnam OTC & Emerging Growth $24 $75
Putnam Research $24 $73
Putnam Small Cap Value $29 $90
Putnam Utilities Growth and Income $22 $69
Putnam Vista $23 $71
Putnam Voyager $21 $65
Please remember that you are looking at examples and not a representation of
past or future expenses. Your actual expenses may be lower or greater than those
shown above. Similarly, your rate of return may be lower or greater than 5%,
which is not guaranteed. To reflect the contract maintenance charge in the
examples, we estimated an equivalent percentage charge, based on an assumed
average Contract size of $45,000.
<PAGE>
FINANCIAL INFORMATION
- ------------------------------------------------------------------------------
To measure the value of your investment in the Variable Sub-Accounts during the
Accumulation Phase, we use a unit of measure we call the "Accumulation Unit."
Each Variable Sub-Account has a separate value for its Accumulation Units we
call "Accumulation Unit Value." Accumulation Unit Value is analogous to, but not
the same as, the share price of a mutual fund.
There are no Accumulation Unit Values to report because the Contracts were first
offered as of the date of this prospectus. The financial statements of Allstate
New York and the Variable Account appear in the Statement of Additional
Information.
<PAGE>
THE CONTRACT
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CONTRACT OWNER
The Putnam Allstate Advisor is a contract between you, the Contract Owner, and
Allstate New York, a life insurance company. As the Contract Owner, you may
exercise all of the rights and privileges provided to you by the Contract. That
means it is up to you to select or change (to the extent permitted):
o the investment alternatives during the Accumulation and Payout Phases,
o the amount and timing of your purchase payments and withdrawals,
o the programs you want to use to invest or withdraw money,
o the income payment plan you want to use to receive retirement income,
o the Annuitant (either yourself or someone else) on whose life the income
payments will be based,
o the Beneficiary or Beneficiaries who will receive the benefits that the
Contract provides when the last surviving Contract Owner or the Annuitant
dies, and
o any other rights that the Contract provides.
If you die, any surviving Contract Owner or, if none, the Beneficiary will
exercise the rights and privileges provided to them by the Contract. The
Contract cannot be jointly owned by both a non-natural person and a natural
person.
You can use the Contract with or without a qualified plan. A qualified plan is a
personal retirement savings plan, such as an IRA or tax-sheltered annuity, that
meets the requirements of the Internal Revenue Code. Qualified plans may limit
or modify your rights and privileges under the Contract. We use the term
"Qualified Contract" to refer to a Contract issued with a qualified plan. See
"Qualified Plans" on page __.
You may change the Contract Owner at any time. Once we have received a
satisfactory written request for a change of Contract Owner, the change will
take effect as of the date you signed it. We are not liable for any payment we
make or other action we take before receiving any written request for a change
from you.
ANNUITANT
The Annuitant is the individual whose age determines the latest Payout Start
Date and whose life determines the amount and duration of income payments (other
than under Income Plans with guaranteed payments for a specified period). If the
Annuitant dies prior to the Payout Start Date, and the Contract Owner does not
name a new Annuitant, the new Annuitant will be the youngest Owner; otherwise,
the youngest beneficiary. You may designate a joint Annuitant, who is a second
person on whose life income payments depend, at the time you select an Income
Plan.
BENEFICIARY
The Beneficiary is the person who may elect to receive the death benefit or
become the new Contract Owner if the sole surviving Contract Owner dies before
the Payout Start Date. If the sole surviving Contract Owner dies after the
Payout Start Date, the Beneficiary will receive any guaranteed income payments
scheduled to continue.
You may name one or more Beneficiaries when you apply for a Contract. You may
change or add Beneficiaries at any time by writing to us before income payments
begin, unless you have designated an irrevocable Beneficiary. We will provide a
change of Beneficiary form to be signed and filed with us. Any change will be
effective at the time you sign the written notice. Until we receive your written
notice to change a Beneficiary, we are entitled to rely on the most recent
Beneficiary information in our files. We will not be liable as to any payment or
settlement made prior to receiving the written notice. Accordingly, if you wish
to change your Beneficiary, you should deliver your written notice to us
promptly.
If you did not name a Beneficiary or unless otherwise provided in the
Beneficiary designation, if a Beneficiary predeceases the Contract Owner and
there are no other surviving Beneficiaries when the death benefit becomes
payable, the new Beneficiary will be:
o your spouse or, if he or she is no longer alive,
o your surviving children equally, or if you have no surviving children,
o your estate.
If more than one Beneficiary survives you, we will divide the death benefit
among your Beneficiaries according to your most recent written instructions. If
you have not given us written instructions, we will pay the death benefit in
equal amounts to the surviving Beneficiaries.
MODIFICATION OF THE CONTRACT
Only an Allstate New York officer may approve a change in or waive any provision
of the Contract. Any change or waiver must be in writing. None of our agents has
the authority to change or waive the provisions of the Contract. We may not
change the terms of the Contract without your consent, except to conform the
Contract to applicable law or changes in the law. If a provision of the Contract
is inconsistent with state law, we will follow state law.
ASSIGNMENT
We will not honor an assignment of an interest in a Contract as collateral or
security for a loan. No Beneficiary may assign benefits under the Contract until
they are due. We will not be bound by any assignment until you sign it and file
it with us. We are not responsible for the validity of any assignment. Federal
law prohibits or restricts the assignment of benefits under many types of
retirement plans and the terms of such plans may themselves contain restrictions
on assignments. An assignment may also result in taxes or tax penalties. You
should consult with an attorney before trying to assign your Contract.
<PAGE>
PURCHASES
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MINIMUM PURCHASE PAYMENTS
Your initial purchase payment must be at least $1,000 ($500 for a Qualified
Contract). All subsequent purchase payments must be $500 or more. You may make
purchase payments at any time prior to the Payout Start Date. We may limit the
amount of any additional purchase payment to a maximum of $1,000,000. We reserve
the right to limit the availability of the investment alternatives for
additional investments. We also reserve the right to reject any application.
AUTOMATIC ADDITIONS PROGRAM
You may make subsequent purchase payments of $50 or more per month by
automatically transferring money from your bank account. Please consult with
your sales representative for detailed information.
ALLOCATION OF PURCHASE PAYMENTS
At the time you apply for a Contract, you must decide how to allocate your
purchase payment among the investment alternatives. The allocation you specify
on your application will be effective immediately. All allocations must be in
whole percents that total 100% or in whole dollars. You can change your
allocations by calling 1(800)390-1277.
We will allocate your purchase payments to the investment alternatives according
to your most recent instructions on file with us. Unless you notify us in
writing otherwise, we will allocate subsequent purchase payments according to
the allocation for the previous purchase payment. We will effect any change in
allocation instructions at the time we receive written notice of the change in
good order.
We will credit the initial purchase payment that accompanies your completed
application to your Contract within 2 business days after we receive the payment
at our home office. If your application is incomplete, we will ask you to
complete your application within 5 business days. If you do so, we will credit
your initial purchase payment to your Contract within that 5 business day
period. If you do not, we will return your purchase payment at the end of the 5
business day period unless you expressly allow us to hold it until you complete
the application. We will credit subsequent purchase payments to the Contract at
the close of the business day on which we receive the purchase payment at our
home office.
We use the term "business day" to refer to each day Monday through Friday that
the New York Stock Exchange is open for business. We also refer to these days as
"Valuation Dates." Our business day closes when the New York Stock Exchange
closes, usually 4 p.m. Eastern Time. If we receive your purchase payment after 4
p.m. Eastern Time on any Valuation Date, we will credit your purchase payment
using the Accumulation Unit Values computed on the next Valuation Date.
RIGHT TO CANCEL
You may cancel the Contract by returning it to us within the Cancellation
Period, which is the 10 day period after you receive the Contract (60 days if
you are exchanging another contract for the Contract described in this
prospectus). You may return it by delivering it or mailing it to us. If you
exercise this "Right to Cancel," the Contract terminates and we will pay you the
full amount of your purchase payments allocated to the Fixed Account. We also
will return your purchase payments allocated to the Variable Account after an
adjustment to reflect investment gain or loss that occurred from the date of
allocation through the date of cancellation.
CONTRACT VALUE
- ------------------------------------------------------------------------------
Your Contract Value at any time during the Accumulation Phase is equal to the
sum of the value of your Accumulation Units in the Variable Sub-Accounts you
have selected, plus the value of your investment in the Fixed Account Options.
ACCUMULATION UNITS
To determine the number of Accumulation Units of each Variable Sub-Account to
allocate to your Contract, we divide (i) the amount of the purchase payment you
have allocated to a Variable Sub-Account by (ii) the Accumulation Unit Value of
that Variable Sub-Account next computed after we receive your payment. For
example, if we receive a $10,000 purchase payment allocated to a Variable
Sub-Account when the Accumulation Unit Value for the Sub-Account is $10, we
would credit 1,000 Accumulation Units of that Variable Sub-Account to your
Contract.
ACCUMULATION UNIT VALUE
As a general matter, the Accumulation Unit Value for each Variable Sub-Account
will rise or fall to reflect:
o changes in the share price of the Fund in which the Variable Sub-Account
invests, and
o the deduction of amounts reflecting the mortality and expense risk charge
and any provision for taxes that have accrued since we last calculated the
Accumulation Unit Value.
We determine contract maintenance charges, withdrawal charges, and transfer fees
separately for each Contract. They do not affect the Accumulation Unit Value.
Instead, we obtain payment of those charges and fees by redeeming Accumulation
Units. For details on how we compute Accumulation Unit Value, please refer to
the Statement of Additional Information.
We determine a separate Accumulation Unit Value for each Variable Sub-Account on
each Valuation Date.
You should refer to the prospectus for the Putnam Variable Trust that
accompanies this prospectus for a description of how the assets of each Fund is
valued, since that determination directly bears on the Accumulation Unit Value
of the corresponding Variable Sub-Account and, therefore, your Contract Value.
<PAGE>
INVESTMENT ALTERNATIVES: The Variable Sub-Accounts
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You may allocate your purchase payments to up to 22 Variable Sub-Accounts. Each
Variable Sub-Account invests in the shares of a corresponding Fund. Each Fund
has its own investment objective(s) and policies. We briefly describe the Funds
below.
For more complete information about each Fund, including expenses and risks
associated with the Fund, please refer to the accompanying prospectus for the
Putnam Variable Trust. You should carefully review the prospectus for the Funds
before allocating amounts to the Variable Sub-Accounts. Putnam Investment
Management, Inc. ("Putnam Management") serves as the investment adviser to each
Fund.
<TABLE>
<CAPTION>
- ------------------------------------------------------ ---------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Fund: Each Fund Seeks:
- ------------------------------------------------------ ---------------------------------------------------------------
Putnam VT Asia Pacific Growth Fund Capital appreciation
- ------------------------------------------------------ ---------------------------------------------------------------
- ------------------------------------------------------ ---------------------------------------------------------------
Putnam VT Diversified Income Fund High current income consistent with capital preservation
- ------------------------------------------------------ ---------------------------------------------------------------
- ------------------------------------------------------ ---------------------------------------------------------------
Putnam VT The George Putnam Fund of Boston To provide a balanced investment composed of a well
diversified portfolio of stocks and bonds that will produce
both capital growth and current income
- ------------------------------------------------------ ---------------------------------------------------------------
- ------------------------------------------------------ ---------------------------------------------------------------
Putnam VT Global Asset Allocation Fund A high level of long-term total
return consistent with preservation of capital
- ------------------------------------------------------ ---------------------------------------------------------------
- ------------------------------------------------------ ---------------------------------------------------------------
Putnam VT Global Growth Fund Capital appreciation
- ------------------------------------------------------ ---------------------------------------------------------------
Putnam VT Growth and Income Fund Capital growth and current income
- ------------------------------------------------------ ---------------------------------------------------------------
Putnam VT Health Sciences Fund Capital appreciation
- ------------------------------------------------------ ---------------------------------------------------------------
Putnam VT High Yield Fund High current income. Capital growth is a secondary
objective when consistent with high current income.
- ------------------------------------------------------ ---------------------------------------------------------------
Putnam VT Income Fund Current income consistent with preservation of capital
- ------------------------------------------------------ ---------------------------------------------------------------
Putnam VT International Growth Fund Capital growth
- ------------------------------------------------------ ---------------------------------------------------------------
Putnam VT International Growth and Income Fund Capital growth. Current income is a secondary objective.
- ------------------------------------------------------ ---------------------------------------------------------------
Putnam VT International New Opportunities Fund Long-term capital appreciation
- ------------------------------------------------------ ---------------------------------------------------------------
Putnam VT Investors Fund Long-term growth of capital and any increased income that
results from this growth
- ------------------------------------------------------ ---------------------------------------------------------------
Putnam VT Money Market Fund As high a rate of current income as Putnam Management
believes is consistent with preservation of capital and
maintenance of liquidity.
- ------------------------------------------------------ ---------------------------------------------------------------
Putnam VT New Opportunities Fund Long-term capital appreciation
- ------------------------------------------------------ ---------------------------------------------------------------
Putnam VT New Value Fund Long-term capital appreciation
- ------------------------------------------------------ ---------------------------------------------------------------
Putnam VT OTC & Emerging Growth Fund Capital appreciation
- ------------------------------------------------------ ---------------------------------------------------------------
Putnam VT Research Fund Capital appreciation
- ------------------------------------------------------ ---------------------------------------------------------------
Putnam VT Small Cap Value Fund Capital Appreciation
- ------------------------------------------------------ ---------------------------------------------------------------
Putnam VT Utilities Growth and Income Fund Capital growth and current income
- ------------------------------------------------------ ---------------------------------------------------------------
Putnam VT Vista Fund Capital appreciation
- ------------------------------------------------------ ---------------------------------------------------------------
Putnam VT Voyager Fund Capital appreciation
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
Amounts you allocate to Variable Sub-Accounts may grow in value, decline in
value, or grow less than you expect, depending on the investment performance of
the Funds in which those Variable Sub-Accounts invest. You bear the investment
risk that the Funds might not meet their investment objectives. Shares of the
Funds are not deposits, or obligations of, or guaranteed or endorsed by any bank
and are not insured by the Federal Deposit Insurance Corporation, the Federal
Reserve Board or any other agency.
<PAGE>
INVESTMENT ALTERNATIVES: The Fixed Account Options
- ------------------------------------------------------------------------------
You may allocate all or a portion of your purchase payments to the Fixed
Account. You may choose from among 2 Fixed Account Options, including the
7-to-12 Month Dollar Cost Averaging Option and the Standard Fixed Account
Option. We will credit a minimum annual interest rate of 3% to money you
allocate to either of the Fixed Account Options. Please consult with your sales
representative for current information. The Fixed Account supports our insurance
and annuity obligations. The Fixed Account consists of our general assets other
than those in segregated asset accounts. We have sole discretion to invest the
assets of the Fixed Account, subject to applicable law. Any money you allocate
to a Fixed Account Option does not entitle you to share in the investment
experience of the Fixed Account.
DOLLAR COST AVERAGING FIXED ACCOUNT OPTION
You may establish a Dollar Cost Averaging Program, as described on page __, by
allocating purchase payments to the Fixed Account for up to 12 months (the
"7-to-12 Month Dollar Cost Averaging Option"). Your purchase payments will earn
interest for the period you select at the current rates in effect at the time of
allocation. Rates may differ from those available for the Standard Fixed Account
Option described below.
You must transfer all of your money out of the 7-to-12 Month Dollar Cost
Averaging Option to other investment alternatives in equal monthly installments.
At the end of the 12 month period, we will transfer any remaining amounts in the
7-to-12 Month Dollar Cost Averaging Option to the Putnam Money Market Variable
Sub-Account unless you request a different investment alternative. Transfers out
of the 7-to-12 Month Dollar Cost Averaging Option do not count towards the 12
transfers you can make without paying a transfer fee.
You may not transfer money from other investment alternatives to the 7-to-12
Month Dollar Cost Averaging Option.
STANDARD FIXED ACCOUNT OPTION
Each payment or transfer allocated to the Standard Fixed Account Option earns
interest at the current rate in effect at the time of allocation. We guarantee
that rate for a period of years we call Guarantee Periods. We are currently
offering Guarantee Periods of 1 year in length. In the future we may offer
Guarantee Periods of different lengths or stop offering some Guarantee Periods.
You select a Guarantee Period for each purchase or transfer. After the initial
Guarantee Period, we will guarantee a renewal rate.
Allstate New York reserves the right to delete or add Fixed Account Options.
<PAGE>
INVESTMENT ALTERNATIVES: Transfers
- ------------------------------------------------------------------------------
TRANSFERS DURING THE ACCUMULATION PHASE
During the Accumulation Phase, you may transfer Contract Value among the
investment alternatives. We do not permit transfers into the 7-to-12 Month
Dollar Cost Averaging Option. You may request transfers in writing on a form
that we provided or by telephone according to the procedure described below.
You may make 12 transfers per Contract Year without charge. A transfer fee equal
to 0.50% of the amount transferred up to a maximum charge of $25 applies to each
transfer after the 12th transfer in any Contract Year.
The minimum amount that you may transfer from the Standard Fixed Account Option
or a Variable Sub-Account is $100 or the total remaining balance in the Standard
Fixed Account Option or the Variable Sub-Account, if less. These limitations do
not apply to the 7-to-12-Month Dollar Cost Averaging Option.
The most you can transfer from the Standard Fixed Account Option during any
Contract Year is the greater of (i) 30% of the Standard Fixed Account Option
balance as of the last Contract Anniversary or (ii) the greatest dollar amount
of any prior transfer from the Standard Fixed Account Option. This limitation
does not apply to the Dollar Cost Averaging Program. Also, if the interest rate
on any renewed Guarantee Period is at least one percentage point less than the
previous interest rate, you may transfer up to 100% of the monies receiving that
reduced rate within 60 days of the notification of the interest rate decrease.
We will process transfer requests that we receive before 4:00 p.m. Eastern Time
on any Valuation Date using the Accumulation Unit Values for that Date. We will
process requests completed after 4:00 p.m. on any Valuation Date using the
Accumulation Unit Values for the next Valuation Date. The Contract permits us to
defer transfers from the Fixed Account Options for up to 6 months from the date
we receive your request. If we decide to postpone transfers from either Fixed
Account Option for 30 days or more, we will pay interest as required by
applicable law. Any interest would be payable from the date we receive the
transfer request to the date we make the transfer.
We reserve the right to waive any transfer restrictions.
TRANSFERS DURING THE PAYOUT PHASE
During the Payout Phase, you may make transfers among the Variable Sub-Accounts
so as to change the relative weighting of the Variable Sub-Accounts on which
your variable income payments will be based. You may not convert any portion of
your fixed income payments into variable income payments.
You may not make any transfers for the first 6 months after the Payout Start
Date. Thereafter, you may make transfers among the Variable Sub-Accounts or make
transfers from the Variable Sub-Accounts to increase the proportion of your
income payments consisting of fixed income payments if Income Plan 3, described
below, is in effect. Your transfers must be at least 6 months apart.
TELEPHONE TRANSFERS
You may make transfers by telephone by calling 1(800)390-1277. The cut off time
for telephone transfer requests is 4:00 p.m. Eastern Time. In the event that the
New York Stock Exchange closes early, i.e., before 4:00 p.m. Eastern Time, or in
the event that the Exchange closes early for a period of time but then reopens
for trading on the same day, we will process telephone transfer requests as of
the close of the Exchange on that particular day. We will not accept telephone
requests received from you at any telephone number other than the number that
appears in this paragraph or received after the close of trading on the
Exchange. If you own the Contract with a joint Contract Owner, unless we receive
contrary instructions, we will accept instructions from either you or the other
Contract Owner.
We use procedures that we believe provide reasonable assurance that the
telephone transfers are genuine. For example, we tape telephone conversations
with persons purporting to authorize transfers and request identifying
information. Accordingly, we disclaim any liability for losses resulting from
allegedly unauthorized telephone transfers. However, if we do not take
reasonable steps to help ensure that a telephone authorization is valid, we may
be liable for such losses.
EXCESSIVE TRADING LIMITS
We reserve the right to limit transfers in any Contract Year, or to refuse any
transfer request for a Contract Owner or certain Contract Owners, if:
o we believe, in our sole discretion, that excessive trading by such Contract
Owner or Owners, or a specific transfer request or group of transfer
requests, may have a detrimental effect on the Accumulation Unit Values of
any Variable Sub-Account or the share prices of the corresponding Funds or
would be to the disadvantage of other Contract Owners; or
o we are informed by one or more of the corresponding Funds that they intend
to restrict the purchase or redemption of Fund shares because of excessive
trading or because they believe that a specific transfer or group of
transfers would have a detrimental effect on the prices of Fund shares.
We may apply the restrictions in any manner reasonably designed to prevent
transfers that we consider disadvantageous to other Contract Owners.
DOLLAR COST AVERAGING PROGRAM
You may automatically transfer a set amount from any Variable Sub-Account or
Fixed Account Option to any of the other Variable Sub-Accounts through our
Dollar Cost Averaging Program. The Program is available only during the
Accumulation Phase.
We will not charge a transfer fee for transfers made under this Program, nor
will such transfers count against the 12 transfers you can make each Contract
Year without paying a transfer fee.
The theory of dollar cost averaging is that if purchases of equal dollar amounts
are made at fluctuating prices, the aggregate average cost per unit will be less
than the average of the unit prices on the same purchase dates. However,
participation in this Program does not assure you of a greater profit from your
purchases under the Program nor will it prevent or necessarily reduce losses in
a declining market.
AUTOMATIC FUND REBALANCING PROGRAM
Once you have allocated your money among the Variable Sub-Accounts, the
performance of each Sub-Account may cause a shift in the percentage you
allocated to each Sub-Account. If you select our Automatic Fund Rebalancing
Program, we will automatically rebalance the Contract Value in each Variable
Sub-Account and return it to the desired percentage allocations. Money you
allocate to the Fixed Account will not be included in the rebalancing.
We will rebalance your account quarterly, semi-annually, or annually. We will
measure these periods according to your instructions. We will transfer amounts
among the Variable Sub-Accounts to achieve the percentage allocations you
specify. You can change your allocations at any time by contacting us in writing
or by telephone. The new allocation will be effective with the first rebalancing
that occurs after we receive your written or telephone request. We are not
responsible for rebalancing that occurs prior to receipt of proper notice of
your request.
Example:
Assume that you want your initial purchase payment split among 2
Variable Sub-Accounts. You want 40% to be in the Putnam Income Variable
Sub-Account and 60% to be in the Putnam Global Growth Variable
Sub-Account. Over the next 2 months the bond market does very well
while the stock market performs poorly. At the end of the first
quarter, the Putnam Income Variable Sub-Account now represents 50% of
your holdings because of its increase in value. If you choose to have
your holdings rebalanced quarterly, on the first day of the next
quarter we would sell some of your units in the Putnam Income Variable
Sub-Account and use the money to buy more units in the Putnam Global
Growth Variable Sub-Account so that the percentage allocations would
again be 40% and 60% respectively.
The Automatic Fund Rebalancing Program is available only during the Accumulation
Phase. The transfers made under the program do not count towards the 12
transfers you can make without paying a transfer fee, and are not subject to a
transfer fee. We may sometimes refer to this Program as the "Putnam Automatic
Rebalancing Program."
Fund rebalancing is consistent with maintaining your allocation of investments
among market segments, although it is accomplished by reducing your Contract
Value allocated to the better performing segments.
<PAGE>
EXPENSES
- ------------------------------------------------------------------------------
As a Contract Owner, you will bear, directly or indirectly, the charges and
expenses described below.
CONTRACT MAINTENANCE CHARGE
During the Accumulation Phase, on each Contract Anniversary, we will deduct a
$30 contract maintenance charge from your assets invested in the Putnam Money
Market Variable Sub-Account. If there are insufficient assets in that Variable
Sub-Account, we will deduct the charge proportionally from the other Variable
Sub-Accounts. We also will deduct this charge if you withdraw your entire
Contract Value, unless your Contract qualifies for a waiver. During the Payout
Phase, we will deduct the charge proportionately from each income payment.
The charge is to compensate us for the cost of administering the Contracts and
the Variable Account. Maintenance costs include expenses we incur in billing and
collecting purchase payments; keeping records; processing death claims, cash
withdrawals, and policy changes; proxy statements; calculating Accumulation Unit
Values and income payments; and issuing reports to Contract Owners and
regulatory agencies. We cannot increase the charge. We will waive this charge
if:
o your total Contract Value is $50,000 or more on a Contract Anniversary or
on the Payout Start Date, or
o all money is allocated to the Fixed Account options on the Contract
Anniversary, or
o all income payments are fixed income payments on a Contract Anniversary.
In addition, we reserve the right to waive this charge for all Contracts.
MORTALITY AND EXPENSE RISK CHARGE
We deduct a mortality and expense risk charge daily at an annual rate of 1.25%
of the average daily net assets you have invested in the Variable Sub-Accounts.
The mortality and expense risk charge is for all the insurance benefits
available with your Contract (including our guarantee of annuity rates and the
death benefits), for certain expenses of the Contract, and for assuming the risk
(expense risk) that the current charges will be sufficient in the future to
cover the cost of administering the Contract. If the charges under the Contract
are not sufficient, then Allstate New York will bear the loss.
We guarantee the mortality and expense risk charge and we cannot increase it. We
assess the mortality and expense risk charge during both the Accumulation Phase
and the Payout Phase.
TRANSFER FEE
We impose a fee upon transfers in excess of 12 during any Contract Year. The fee
is equal to 0.50% of the dollar amount transferred up to a maximum charge of
$25. We will not charge a transfer fee on transfers that are part of a Dollar
Cost Averaging Program or Automatic Fund Rebalancing Program.
WITHDRAWAL CHARGE
We may assess a withdrawal charge of up to 7% of the purchase payment(s) you
withdraw. The charge declines to 0% after 7 complete years from the date we
received the purchase payment being withdrawn. A schedule showing how the charge
declines appears on page ___, above. During each Contract Year, you can withdraw
up to the greater of earnings not previously withdrawn or 15% of your total
purchase payments without paying the charge. Unused portions of this 15%
"Preferred Withdrawal Amount" are not carried forward to future Contract Years.
We will deduct withdrawal charges, if applicable, from the amount paid. For
purposes of the withdrawal charge, we will treat withdrawals as coming from the
oldest purchase payments first. However, for federal income tax purposes, please
note that withdrawals are considered to have come first from earnings in the
Contract, which means you pay taxes on the earnings portion of your withdrawal.
We do not apply a withdrawal charge in the following situations:
o on the Payout Start Date (a withdrawal charge may apply if you elect to
receive income payments for a specified period of less than 120 months);
o the death of the Contract Owner or Annuitant; or
o withdrawals taken to satisfy IRS minimum distribution rules.
We use the amounts obtained from the withdrawal charge to pay sales commissions
and other promotional or distribution expenses associated with marketing the
Contracts. To the extent that the withdrawal charge does not cover all sales
commissions and other promotional or distribution expenses, we may use any of
our corporate assets, including potential profit which may arise from the
mortality and expense risk charge or any other charges or fee described above,
to make up any difference.
Withdrawals also may be subject to tax penalties or income tax. You should
consult your own tax counsel or other tax advisers regarding any withdrawals.
PREMIUM TAXES
Currently, we do not make deductions for premium taxes under the Contract
because New York does not charge premium taxes on annuities.
OTHER EXPENSES
Each Fund deducts advisory fees and other expenses from its assets. You
indirectly bear the charges and expenses of the Fund whose shares are held by
the Variable Sub-Accounts. These fees and expenses are described in the
accompanying prospectus for Putnam Variable Trust. For a summary of current
estimates of those charges and expenses, see pages ___ above. We may receive
compensation from the Funds' investment adviser, distributor, or their
affiliates for administrative services we provide to the Funds.
<PAGE>
ACCESS TO YOUR MONEY
- ------------------------------------------------------------------------------
You can withdraw some or all of your Contract Value at any time prior to the
Payout Start Date. Withdrawals are also available under limited circumstances on
or after the Payout Start Date. See "Income Plans" on page __.
The amount payable upon withdrawal is the Contract Value next computed after we
receive the request for a withdrawal at our home office, less any withdrawal
charges, contract maintenance charges, income tax withholding, and any premium
taxes. We will pay withdrawals from the Variable Account within 7 days of
receipt of the request, subject to postponement in certain circumstances.
You can withdraw money from the Variable Account or the Fixed Account Options.
To complete a partial withdrawal from the Variable Account, we will cancel
Accumulation Units in an amount equal to the withdrawal and any applicable
withdrawal charge and premium taxes.
You must name the investment alternative from which you are taking the
withdrawal. If none is named, then the withdrawal request is incomplete and
cannot be honored.
In general, you must withdraw at least $50 at a time. If you request a total
withdrawal, we may require that you return your Contract to us. Your Contract
will terminate if you withdraw all of your Contract Value. We will, however, ask
you to confirm your withdrawal request before terminating your Contract. If we
terminate your Contract, we will distribute to you its Contract Value, less
withdrawal and other charges and any premium taxes.
POSTPONEMENT OF PAYMENTS
We may postpone the payment of any amounts due from the Variable Account under
the Contract if:
1) the New York Stock Exchange is closed for other than usual weekends or
holidays, or trading on the Exchange is otherwise restricted,
2) an emergency exists as defined by the SEC, or
3) the SEC permits delay for your protection.
In addition, we may delay payments or transfers from the Fixed Account Options
for up to 6 months or shorter period if required by law. If we delay payment or
transfer for 30 days or more, we will pay interest as required by law.
SYSTEMATIC WITHDRAWAL PROGRAM
You may choose to receive systematic withdrawal payments on a monthly,
quarterly, semi-annual, or annual basis at any time prior to the Payout Start
Date. Please consult your sales representative or call us at 1(800)390-1277 for
more information. Depending on fluctuations in the net asset value of the
Variable Sub-Accounts and the value of the Fixed Account Options, systematic
withdrawals may reduce or even exhaust the Contract Value. Income taxes may
apply to systematic withdrawals. Please consult your tax adviser before taking
any withdrawal.
<PAGE>
INCOME PAYMENTS
- ------------------------------------------------------------------------------
PAYOUT START DATE
The Payout Start Date is the day that we apply your money to an Income Plan. The
Payout Start Date must be:
o at least 30 days after the Issue Date; and
o no later than the day the Annuitant reaches age 90.
You may change the Payout Start Date at any time by notifying us in writing of
the change at least 30 days before the scheduled Payout Start Date. Absent a
change, we will use the Payout Start Date stated in your Contract.
INCOME PLANS
You may choose and change your choice of Income Plan until 30 days before the
Payout Start Date. If you do not select an Income Plan, we will make income
payments in accordance with Income Plan 1 with guaranteed payments for 10 years.
Three Income Plans are available under the Contract. Each is available to
provide:
o fixed income payments;
o variable income payments; or
o a combination of the two.
The three Income Plans are:
Income Plan 1 -- Life Income with Guaranteed Payments. Under this plan,
we make periodic income payments for at least as long as the Annuitant
lives. If the Annuitant dies before we have made all of the guaranteed
income payments, we will continue to pay the remainder of the
guaranteed income payments as required by the Contract.
Income Plan 2 -- Joint and Survivor Life Income with Guaranteed
Payments. Under this plan, we make periodic income payments for at
least as long as either the Annuitant or the joint Annuitant, named at
the time the plan was selected, is alive. If both the Annuitant and the
joint Annuitant die before we have made all of the guaranteed income
payments, we will continue to pay the remainder of the guaranteed
income payments as required by the Contract.
Income Plan 3 -- Guaranteed Payments for a Specified Period (5 Years to
30 Years). Under this plan, we make periodic income payments for the
period you have chosen. These payments do not depend on the Annuitant's
life. Income payments for less than 120 months may be subject to a
withdrawal charge. We will deduct the mortality and expense risk charge
from the assets of the Variable Sub-Accounts supporting this Plan even
though we may not bear any mortality risk.
The length of any guaranteed payment period under your selected Income Plan
generally will affect the dollar amount of each income payment. As a general
rule, longer guarantee periods result in lower income payments, all other things
being equal. For example, if you choose an Income Plan with payments that depend
on the life of the Annuitant but with no minimum specified period for guaranteed
payments, the income payments generally will be greater than the income payments
made under the same Income Plan with a minimum specified period for guaranteed
payments.
If you choose Income Plan 1 or 2, or, if available, another Income Plan with
payments that continue for the life of the Annuitant or joint Annuitant, we may
require proof of age and sex of the Annuitant or joint Annuitant before starting
income payments, and proof that the Annuitant or joint Annuitant are alive
before we make each payment. Please note that under such Income Plans, if you
elect to take no minimum guaranteed payments, it is possible that the payee
could receive only 1 income payment if the Annuitant and any joint Annuitant
both die before the second income payment, or only 2 income payments if they die
before the third income payment, and so on.
Generally, you may not make withdrawals after the Payout Start Date. One
exception to this rule applies if you are receiving variable income payments
that do not depend on the life of the Annuitant (such as under Income Plan 3).
In that case you may terminate the Variable Account portion of the income
payments at any time and receive a lump sum equal to the present value of the
remaining variable payments due. A withdrawal charge may apply. We also assess
applicable premium taxes against all income payments.
We may make other Income Plans available. You may obtain information about them
by writing or calling us.
You may apply your Contract Value to an Income Plan. You must apply at least the
Contract Value in the Fixed Account on the Payout Start Date to fixed income
payments. If you wish to apply any portion of your Fixed Account balance to
provide variable income payments, you should plan ahead and transfer that amount
to the Variable Sub-Accounts prior to the Payout Start Date. If you do not tell
us how to allocate your Contract Value among fixed and variable income payments,
we will apply your Contract Value in the Variable Account to variable income
payments and your Contract Value in the Fixed Account to fixed income payments.
We will apply your Contract Value, less applicable taxes, to your Income Plan on
the Payout Start Date. We can make income payments in monthly, quarterly,
semi-annual or annual installments, as you select. If we have received no
purchase payments for 2 years, and your Contract Value is less than $2,000, or
not enough to provide an initial payment of at least $20:
o we may pay you the Contract Value, less any applicable taxes, in a lump sum
instead of the periodic payments you have chosen, or
o we may reduce the frequency of your payments so that each payment will be
at least $20.
VARIABLE INCOME PAYMENTS
The amount of your variable income payments depends upon the investment results
of the Variable Sub-Accounts you select, the premium taxes you pay, the age and
sex of the Annuitant, and the Income Plan you choose. We guarantee that the
payments will not be affected by (a) actual mortality experience and (b) the
amount of our administration expenses.
We cannot predict the total amount of your variable income payments. Your
variable income payments may be more or less than your total purchase payments
because (a) variable income payments vary with the investment results of the
underlying Funds; and (b) the Annuitant could live longer or shorter than we
expect based on the tables we use.
In calculating the amount of the periodic payments in the annuity tables in the
Contract, we assumed an annual investment rate of 3%. If the actual net
investment return of the Variable Sub-Accounts you choose is less than this
assumed investment rate, then the dollar amount of your variable income payments
will decrease. The dollar amount of your variable income payments will increase,
however, if the actual net investment return exceeds the assumed investment
rate. The dollar amount of the variable income payments stays level if the net
investment return equals the assumed investment rate. Please refer to the
Statement of Additional Information for more detailed information as to how we
determine variable income payments.
FIXED INCOME PAYMENTS
We guarantee income payment amounts derived from either Fixed Account Option for
the duration of the Income Plan. We calculate the fixed income payments by:
1) deducting any applicable premium tax; and
2) applying the resulting amount to the greater of (a) the appropriate value
from the income payment table in your Contract or (b) such other value as
we are offering at that time.
We may defer making fixed income payments for a period of up to 6 months or
whatever shorter time state law may require. If we defer payments for 30 days or
more, we will pay interest as required by law from the date we receive the
withdrawal request to the date we make payment.
CERTAIN EMPLOYEE BENEFIT PLANS
The Contracts offered by this prospectus contain income payment tables that
provide for different payments to men and women of the same age. We reserve the
right to use income payment tables that do not distinguish on the basis of sex
to the extent permitted by law. In certain employment-related situations,
employers are required by law to use the same income payment tables for men and
women. Accordingly, if the Contract is to be used in connection with an
employment-related retirement or benefit plan, you should consult with legal
counsel as to whether the purchase of a Contract is appropriate.
<PAGE>
DEATH BENEFITS
- ------------------------------------------------------------------------------
We will pay a death benefit if, prior to the Payout Start Date:
1) any Contract Owner dies, or
2) the Annuitant dies.
We will pay the death benefit to the new Contract Owner as determined
immediately after the death. The new Contract Owner would be a surviving
Contract Owner or, if none, the Beneficiary. In the case of the death of the
Annuitant, we will pay the death benefit to the current Contract Owner.
Death Benefit Amount
Prior to the Payout Start Date, the death benefit is equal to the greatest of
the following death benefit alternatives:
1) the Contract Value as of the date we determine the death benefit, or
2) the sum of all purchase payments made less an adjustment for withdrawals
(see "Withdrawal Adjustment" below), or
3) the most recent Maximum Anniversary Value prior to the date we determine
the death benefit (see "Maximum Anniversary Value" below).
We will determine the value of the death benefit as of the end of the Valuation
Date on which we receive a complete request for payment of the death benefit. If
we receive a request after 4 p.m. Eastern Time on a Valuation Date, we will
process the request as of the end of the following Valuation Date. A request for
payment of the death benefit must include Due Proof of Death. We will accept the
following documentation as "Due Proof of Death":
o a certified copy of a death certificate,
o a certified copy of a decree of a court of competent jurisdiction as to the
finding of death, or
o other documentation as we may accept in our sole discretion.
Withdrawal Adjustment. The withdrawal adjustment is equal to (a) divided by (b),
with the result multiplied by (c), where:
(a) = the withdrawal amount,
(b) = the Contract Value immediately prior to the withdrawal, and
(c) = the value of the applicable death benefit alternative immediately prior
to the withdrawal.
See Appendix A for an example of a withdrawal adjustment.
Maximum Anniversary Value. On the Issue Date, the Maximum Anniversary Value is
equal to the initial purchase payment. After the Issue Date, we recalculate the
Maximum Anniversary Value when a purchase payment or withdrawal is made or on a
Contract Anniversary as follows:
1) For purchase payments, the Maximum Anniversary Value is equal to the most
recently calculated Maximum Anniversary Value plus the purchase payment.
2) For withdrawals, the Maximum Anniversary Value is equal to the most
recently calculated Maximum Anniversary Value reduced by a withdrawal
adjustment, as defined above.
3) On each Contract Anniversary, the Maximum Anniversary Value is equal to the
greater of the Contract Value or the most recently calculated Maximum
Anniversary Value.
In the absence of any withdrawals or purchase payments, the Maximum Anniversary
Value will be the greatest of all anniversary Contract Values on or prior to the
date we calculate the death benefit.
We will recalculate the Maximum Anniversary Value until the first Contract
Anniversary after the 80th birthday of the oldest Contract Owner or, if no
Contract Owner is a living individual, the Annuitant. After that date, we will
recalculate the Maximum Anniversary Value only for purchase payments and
withdrawals. The Maximum Anniversary Value will never be greater than the
maximum death benefit allowed by any applicable state non-forfeiture laws.
Death Benefit Payments
Death of Contract Owner. Within 180 days of the date of your death, the new
Contract Owner may elect to:
1) receive the death benefit in a lump sum, or
2) apply an amount equal to the death benefit to one of the available Income
Plans described above. Income payments must be:
(a) over the life of the new Contract Owner,
(b) for a guaranteed number of payments from 5 to 30 years but not to
exceed the life expectancy of new Contract Owner, or
(c) over the life of the new Contract Owner with a guaranteed number of
payments from 5 to 30 years but not to exceed the life expectancy of
the new Contract Owner.
Otherwise, the new Contract Owner will receive the Settlement Value. The
"Settlement Value" is the Contract Value, less any applicable withdrawal charge,
contract maintenance charge, and premium tax. We will calculate the Settlement
Value as of the end of the Valuation Date coinciding with the requested
distribution date for payment or on the mandatory distribution date of 5 years
after the date of your death, whichever is earlier. If we receive a request
after 4 p.m. Eastern Time on a Valuation Date, we will process the request as of
the end of the following Valuation Date. We are currently waiving the 180 day
limit, but we reserve the right to enforce the limitation in the future. If the
new Contract Owner continues the Contract in the Accumulation Phase, the new
Contract Owner may make a single withdrawal of any amount within 1 year of the
date of death without incurring a withdrawal charge.
In any event, the entire value of the Contract must be distributed within 5
years after the date of death unless an Income Plan is elected or a surviving
spouse continues the Contract in accordance with the provisions described below.
If the new Contract Owner is your spouse, then he or she may elect one of the
options listed above or may continue the Contract in the Accumulation Phase as
if the death had not occurred. On the date the Contract is continued, the
Contract Value will equal the amount of the death benefit as determined as of
the Valuation Date on which we received Due Proof of Death (the next Valuation
Date if we receive Due Proof of Death after 4 p.m. Eastern Time). The Contract
may only be continued once. If the surviving spouse continues the Contract in
the Accumulation Phase, the surviving spouse may make a single withdrawal of any
amount within 1 year of the date of death without incurring a withdrawal charge.
Prior to the Payout Start Date, the death benefit or the continued Contract will
be the greater of:
o the sum of all purchase payments reduced by a withdrawal adjustment, as
defined under the "Death Benefit Amount" section; or
o the Contract Value on the date we determine the death benefit; or
o the Maximum Anniversary Value as defined in the "Death Benefit Amount"
section, with the following changes:
o "Issue Date" is replaced by the date the Contract is continued,
o "Initial Purchase Payment" is replaced with the death benefit as
described at the end of the Valuation Period during which we received
Due Proof of Death.
If the surviving spouse is under age 59 1/2, a 10% penalty tax may apply to the
withdrawal.
If the new Contract Owner is a corporation, trust, or other non-natural person,
then the new Contract Owner may elect, within 180 days of your death, to receive
the death benefit in lump sum or may elect to receive the Settlement Value in a
lump sum within 5 years of death. We are currently waiving the 180 day limit,
but we reserve the right to enforce the limitation in the future.
Death of Annuitant. If the Annuitant who is not also the Contract Owner dies
prior to the Payout Start Date, the Contract Owner must elect one of the
applicable options described below.
If the Contract Owner is a natural person, the Contract Owner may elect to
continue the Contract as if the death had not occurred, or, if we receive Due
Proof of Death within 180 days of the date of the Annuitant's death, the
Contract Owner may choose to:
1) receive the death benefit in a lump sum; or
2) apply the death benefit to an Income Plan that must begin within 1
year of the date of death.
If the Contract Owner elects to continue the Contract or to apply the death
benefit to an Income Plan, the new Annuitant will be the youngest Contract
Owner, unless the Contract Owner names a different Annuitant.
If the Contract Owner is a non-natural person, the non-natural Contract Owner
may elect, within 180 days of the Annuitant's date of death, to receive the
death benefit in a lump sum or may elect to receive the Settlement Value payable
in a lump sum within 5 years of the Annuitant's date of death. If the
non-natural Contract Owner does not make one of the above described elections,
the Settlement Value must be withdrawn by the non-natural Contract Owner on or
before the mandatory distribution date 5 years after the Annuitant's death. We
are currently waiving the 180 day limit, but we reserve the right to enforce the
limitation in the future.
<PAGE>
MORE INFORMATION
- ------------------------------------------------------------------------------
ALLSTATE NEW YORK
Allstate New York is the issuer of the Contract. Allstate New York is a stock
life insurance company organized under the laws of the State of New York.
Allstate New York was incorporated in 1967 and was known as "Financial Life
Insurance Company" from 1967 to 1978. From 1978 to 1984, Allstate New York was
known as "PM Life Insurance Company." Since 1984 the company has been known as
"Allstate Life Insurance Company of New York."
Allstate New York is currently licensed to operate in New York. Our home office
is located in Farmingville, New York. Our customer service office is located in
Palatine, Illinois.
Allstate New York is a wholly owned subsidiary of Allstate Life Insurance
Company ("Allstate Life"), a stock life insurance company incorporated under the
laws of the State of Illinois. Allstate Life is a wholly owned subsidiary of
Allstate Insurance Company, a stock property-liability insurance company
incorporated under the laws of Illinois. With the exception of directors
qualifying shares, all of the outstanding capital stock of Allstate Insurance
Company is owned by The Allstate Corporation.
Several independent rating agencies regularly evaluate life insurers'
claims-paying ability, quality of investments, and overall stability. A.M. Best
Company assigns Allstate New York the financial performance rating of A+(g).
Standard & Poor's Insurance Rating Services assigns an AA+ (Very Strong)
financial strength rating and Moody's assigns an Aa2 (Excellent) financial
strength rating to Allstate New York. We may from time to time advertise these
ratings in our sales literature.
THE VARIABLE ACCOUNT
Allstate New York established the Allstate Life of New York Separate Account A
on December 15, 1995. We have registered the Variable Account with the SEC as a
unit investment trust. The SEC does not supervise the management of the Variable
Account or Allstate New York.
We own the assets of the Variable Account. The Variable Account is a segregated
asset account under New York law. That means we account for the Variable
Account's income, gains and losses separately from the results of our other
operations. It also means that only the assets of the Variable Account that are
in excess of the reserves and other Contract liabilities with respect to the
Variable Account are subject to liabilities relating to our other operations.
Our obligations arising under the Contracts are general corporate obligations of
Allstate New York.
The Variable Account consists of multiple Variable Sub-Accounts, 22 of which are
available through the Contracts. Each Variable Sub-Account invests in a
corresponding Fund. We may add new Variable Sub-Accounts or eliminate one or
more of them, if we believe marketing, tax, or investment conditions so warrant.
We do not guarantee the investment performance of the Variable Account, its
Sub-Accounts or the Funds. We may use the Variable Account to fund our other
annuity contracts. We will account separately for each type of annuity contract
funded by the Variable Account.
THE FUNDS
Dividends and Capital Gain Distributions. We automatically reinvest all
dividends and capital gains distributions from the Funds in shares of the
distributing Fund at their net asset value.
Voting Privileges. As a general matter, you do not have a direct right to vote
the shares of the Funds held by the Variable Sub-Accounts to which you have
allocated your Contract Value. Under current law, however, you are entitled to
give us instructions on how to vote those shares on certain matters. Based on
our present view of the law, we will vote the shares of the Funds that we hold
directly or indirectly through the Variable Account in accordance with
instructions that we receive from Contract Owners entitled to give such
instructions. We will apply voting instructions to abstain on any item to be
voted upon on a pro rata basis to reduce the votes eligible to be cast.
As a general rule, before the Payout Start Date, the Contract Owner or anyone
with a voting interest is the person entitled to give voting instructions. The
number of shares that a person has a right to instruct will be determined by
dividing the Contract Value allocated to the applicable Variable Sub-Account by
the net asset value per share of the corresponding Fund as of the record date of
the meeting. After the Payout Start Date, the person receiving income payments
has the voting interest. The payee's number of votes will be determined by
dividing the reserve for such Contract allocated to the applicable Sub-Account
by the net asset value per share of the corresponding Fund as of the record date
of the meeting. After the Payout Start Date, the votes decrease as income
payments are made and as the reserves for the Contract decrease.
We will vote shares attributable to Contracts for which we have not received
instructions, as well as shares attributable to us, in the same proportion as we
vote shares for which we have received instructions, unless we determine that we
may vote such shares in our own discretion.
We reserve the right to vote Fund shares as we see fit without regard to voting
instructions to the extent permitted by law. If we disregard voting
instructions, we will include a summary of that action and our reasons for that
action in the next semi-annual financial report to you.
Changes in Funds. We reserve the right, subject to any applicable law, to make
additions to, deletions from or substitutions for the Fund shares held by any
Variable Sub-Account. If the shares of any of the Funds are no longer available
for investment by the Variable Account or if, in our judgment, further
investment in such shares is no longer desirable in view of the purposes of the
Contract, we may eliminate that Fund and substitute shares of another eligible
investment fund. Any substitution of securities will comply with the
requirements of the Investment Company Act of 1940. We also may add new Variable
Sub-Accounts that invest in additional mutual funds. We will notify you in
advance of any change.
Conflicts of Interest. Certain of the Funds sell their shares to separate
accounts underlying both variable life insurance and variable annuity contracts.
It is conceivable that in the future it may be unfavorable for variable life
insurance separate accounts and variable annuity separate accounts to invest in
the same Fund. The board of trustees of these Funds monitor for possible
conflicts among separate accounts buying shares of the Funds. Conflicts could
develop for a variety of reasons. For example, differences in treatment under
tax and other laws or the failure by a separate account to comply with such laws
could cause a conflict. To eliminate a conflict, a Fund's board of trustees may
require a separate account to withdraw its participation in a Fund. A Fund's net
asset value could decrease if it had to sell investment securities to pay
redemption proceeds to a separate account withdrawing because of a conflict.
THE CONTRACT
Distribution. Allstate Life Financial Services, Inc. ("ALFS"), located at 3100
Sanders Road, Northbrook, IL 60062-7154, serves as distributor of the Contracts.
ALFS is a wholly owned subsidiary of Allstate Life. ALFS is a registered broker
dealer under the Securities and Exchange Act of 1934, as amended ("Exchange
Act"), and is a member of the National Association of Securities Dealers, Inc.
Contracts are sold by registered representatives of unaffiliated broker-dealers
or bank employees who are licensed insurance agents appointed by Allstate New
York, either individually or through an incorporated insurance agency and have
entered into a selling agreement with ALFS to sell the Contract.
We will pay commissions to broker-dealers who sell the Contracts. Commissions
paid may vary, but we estimate that the total commission paid on all Contract
sales will not exceed 6% of all purchase payments (on a present value basis).
From time to time, we may pay or permit other promotional incentives, in cash or
credit or other compensation. The commission is intended to cover distribution
expenses. Contracts may be sold by representatives or employees of banks which
may be acting as broker-dealers without separate registration under the Exchange
Act, pursuant to legal and regulatory exceptions.
Allstate New York may pay ALFS a commission for distribution of the Contracts.
The underwriting agreement with ALFS provides that we will reimburse ALFS for
expenses incurred in distributing the Contracts, including any liability to
Contract Owners arising out of services rendered or Contracts issued.
Administration. We have primary responsibility for all administration of the
Contracts and the Variable Account.
We provide the following administrative services, among others:
o issuance of the Contracts;
o maintenance of Contract Owner records;
o Contract Owner services;
o calculation of unit values;
o maintenance of the Variable Account; and
o preparation of Contract Owner reports.
We will send you Contract statements at least annually. You should notify us
promptly in writing of any address change. You should read your statements and
confirmations carefully and verify their accuracy. You should contact us
promptly if you have a question about a periodic statement. We will investigate
all complaints and make any necessary adjustments retroactively, but you must
notify us of a potential error within a reasonable time after the date of the
questioned statement. If you wait too long, we will make the adjustment as of
the date that we receive notice of the potential error.
We will also provide you with additional periodic and other reports, information
and prospectuses as may be required by federal securities laws.
QUALIFIED PLANS
If you use the Contract with a qualified plan, the plan may impose different or
additional conditions or limitations on withdrawals, waivers of withdrawal
charges, death benefits, Payout Start Dates, income payments, and other Contract
features. In addition, adverse tax consequences may result if qualified plan
limits on distributions and other conditions are not met. Please consult your
qualified plan administrator for more information.
LEGAL MATTERS
Freedman, Levy, Kroll & Simonds, Washington, D.C., has advised Allstate New York
on certain federal securities law matters. All matters of New York law
pertaining to the Contracts, including the validity of the Contracts and
Allstate New York's right to issue such Contracts under New York insurance law,
have been passed upon by Michael J. Velotta, General Counsel of Allstate New
York.
YEAR 2000
Allstate New York is heavily dependent upon complex computer systems for all
phases of its operations, including customer service, risk management and policy
and contract administration. Since many of Allstate New York's older computer
software programs recognize only the last two digits of the year in any date,
some software may fail to operate properly in or after the year 1999, if the
software is not reprogrammed or replaced ("Year 2000 Issue"). Allstate New York
believes that many of its counterparties and suppliers also have Year 2000
Issues which could affect Allstate New York. In 1995, Allstate Insurance Company
commenced a plan intended to mitigate and/or prevent the adverse effects of the
Year 2000 Issue. These strategies include normal development and enhancement of
new and existing systems, upgrades to operating systems already covered by
maintenance agreements and modifications to existing systems to make them Year
2000 compliant. The plan also includes Allstate New York actively working with
its major external counterparties and suppliers to assess their compliance
efforts and Allstate New York's exposure to them. Allstate New York presently
believes that it will resolve the Year 2000 Issue in a timely manner, and the
financial impact will not materially affect its results of operations, liquidity
or financial position. Year 2000 costs are and will be expensed as incurred.
<PAGE>
TAXES
- ------------------------------------------------------------------------------
The following discussion is general and is not intended as tax advice. Allstate
New York makes no guarantee regarding the tax treatment of any Contract or
transaction involving a Contract.
Federal, state, local and other tax consequences of ownership or receipt of
distributions under an annuity contract depend on your individual circumstances.
If you are concerned about any tax consequences with regard to your individual
circumstances, you should consult a competent tax adviser.
Taxation of Annuities in General
Tax Deferral. Generally, you are not taxed on increases in the Contract Value
until a distribution occurs. This rule applies only where:
1) the Contract Owner is a natural person,
2) the investments of the Variable Account are "adequately diversified"
according to Treasury Department regulations, and
3) Allstate New York is considered the owner of the Variable Account
assets for federal income tax purposes.
Non-natural Owners. As a general rule, annuity contracts owned by non-natural
persons such as corporations, trusts, or other entities are not treated as
annuity contracts for federal income tax purposes. The income on such contracts
is taxed as ordinary income received or accrued by the owner during the taxable
year. Please see the Statement of Additional Information for a discussion of
several exceptions to the general rule for Contracts owned by non-natural
persons.
Diversification Requirements. For a Contract to be treated as an annuity for
federal income tax purposes, the investments in the Variable Account must be
"adequately diversified" consistent with standards under Treasury Department
regulations. If the investments in the Variable Account are not adequately
diversified, the Contract will not be treated as an annuity contract for federal
income tax purposes. As a result, the income on the Contract will be taxed as
ordinary income received or accrued by the Contract Owner during the taxable
year. Although Allstate New York does not have control over the Funds or their
investments, we expect the Funds to meet the diversification requirements.
Ownership Treatment. The IRS has stated that you will be considered the owner of
Variable Account assets if you possess incidents of ownership in those assets,
such as the ability to exercise investment control over the assets. At the time
the diversification regulations were issued, the Treasury Department announced
that the regulations do not provide guidance concerning circumstances in which
investor control of separate account investments may cause an investor to be
treated as the owner of the separate account. The Treasury Department also
stated that future guidance would be issued regarding the extent that owners
could direct sub-account investments without being treated as owners of the
underlying assets of the separate account.
Your rights under the Contract are different than those described by the IRS in
rulings in which it found that contract owners were not owners of separate
account assets. For example, you have the choice to allocate premiums and
Contract Values among more investment alternatives. Also, you may be able to
transfer among investment alternatives more frequently than in such rulings.
These differences could result in you being treated as the owner of the Variable
Account. If this occurs, income and gain from the Variable Account assets would
be includible in your gross income. Allstate New York does not know what
standards will be set forth in any regulations or rulings which the Treasury
Department may issue. It is possible that future standards announced by the
Treasury Department could adversely affect the tax treatment of your Contract.
We reserve the right to modify the Contract as necessary to attempt to prevent
you from being considered the federal tax owner of the assets of the Variable
Account. However, we make no guarantee that such modification to the Contract
will be successful.
Taxation of Partial and Full Withdrawals. If you make a partial withdrawal under
a non-Qualified Contract, amounts received are taxable to the extent the
Contract Value, without regard to surrender charges, exceeds the investment in
the Contract. The investment in the Contract is the gross premium paid for the
Contract minus any amounts previously received from the Contract if such amounts
were properly excluded from your gross income. If you make a partial withdrawal
under a Qualified Contract, the portion of the payment that bears the same ratio
to the total payment that the investment in the Contract (i.e., nondeductible
IRA contributions, after tax contributions to qualified plans) bears to the
Contract Value, is excluded from your income. If you make a full withdrawal
under a non-Qualified Contract or a Qualified Contract, the amount received will
be taxable only to the extent it exceeds the investment in the Contract.
"Nonqualified distributions" from Roth IRAs are treated as made from
contributions first and are included in gross income only to the extent that
distributions exceed contributions. "Qualified distributions" from Roth IRAs are
not included in gross income. "Qualified distributions" are any distributions
made more than 5 taxable years after the taxable year of the first contribution
to any Roth IRA and which are:
o made on or after the date the individual attains age 59 1/2,
o made to a beneficiary after the Contract Owner's death,
o attributable to the Contract Owner being disabled, or
o for a first time home purchase (first time home purchases are subject to a
lifetime limit of $10,000).
If you transfer a non-Qualified Contract without full and adequate consideration
to a person other than your spouse (or to a former spouse incident to a
divorce), you will be taxed on the difference between the Contract Value and the
investment in the Contract at the time of transfer. Except for certain Qualified
Contracts, any amount you receive as a loan under a Contract, and any assignment
or pledge (or agreement to assign or pledge) of the Contract Value is treated as
a withdrawal of such amount or portion.
Taxation of Annuity Payments. Generally, the rule for income taxation of annuity
payments received from a non-Qualified Contract provides for the return of your
investment in the Contract in equal tax-free amounts over the payment period.
The balance of each payment received is taxable. For fixed annuity payments, the
amount excluded from income is determined by multiplying the payment by the
ratio of the investment in the Contract (adjusted for any refund feature or
period certain) to the total expected value of annuity payments for the term of
the Contract. If you elect variable annuity payments, the amount excluded from
taxable income is determined by dividing the investment in the Contract by the
total number of expected payments. The annuity payments will be fully taxable
after the total amount of the investment in the Contract is excluded using these
ratios. If you die, and annuity payments cease before the total amount of the
investment in the Contract is recovered, the unrecovered amount will be allowed
as a deduction for your last taxable year.
Taxation of Annuity Death Benefits. Death of a Contract Owner, or death of the
Annuitant if the Contract is owned by a non-natural person, will cause a
distribution of death benefits from a Contract. Generally, such amounts are
included in income as follows:
1) if distributed in a lump sum, the amounts are taxed in the same manner
as a full withdrawal, or
2) if distributed under an annuity option, the amounts are taxed in the
same manner as an annuity payment. Please see the Statement of
Additional Information for more detail on distribution at death
requirements.
Penalty Tax on Premature Distributions. A 10% penalty tax applies to the taxable
amount of any premature distribution from a non-Qualified Contract. The penalty
tax generally applies to any distribution made prior to the date you attain age
59 1/2. However, no penalty tax is incurred on distributions:
1) made on or after the date the Contract Owner attains age 59 1/2;
2) made as a result of the Contract Owner's death or disability;
3) made in substantially equal periodic payments over the Contract
Owner's life or life expectancy,
4) made under an immediate annuity, or
5) attributable to investment in the Contract before August 14, 1982.
You should consult a competent tax advisor to determine if any other exceptions
to the penalty apply to your situation. Similar exceptions may apply to
distributions from Qualified Contracts.
Aggregation of Annuity Contracts. All non-qualified deferred annuity contracts
issued by Allstate New York (or its affiliates) to the same Contract Owner
during any calendar year will be aggregated and treated as one annuity contract
for purposes of determining the taxable amount of a distribution.
Tax Qualified Contracts
Contracts may be used as investments with certain qualified plans such as:
o Individual Retirement Annuities or Accounts (IRAs) under Section 408 of the
Code;
o Roth IRAs under Section 408A of the Code;
o Simplified Employee Pension Plans under Section 408(k) of the Code;
o Savings Incentive Match Plans for Employees (SIMPLE) Plans under Section
408(p) of the Code;
o Tax Sheltered Annuities under Section 403(b) of the Code;
o Corporate and Self Employed Pension and Profit Sharing Plans; and
o State and Local Government and Tax-Exempt Organization Deferred
Compensation Plans.
In the case of certain qualified plans, the terms of the plans may govern the
right to benefits, regardless of the terms of the Contract.
Restrictions Under Section 403(b) Plans. Section 403(b) of the Tax Code provides
tax-deferred retirement savings plans for employees of certain non-profit and
educational organizations. Under Section 403(b), any Contract used for a 403(b)
plan must provide that distributions attributable to salary reduction
contributions made after 12/31/88, and all earnings on salary reduction
contributions, may be made only:
1) on or after the date of employee
o attains age 59 1/2,
o separates from service,
o dies,
o becomes disabled, or
2) on account of hardship (earnings on salary reduction contributions may not
be distributed on the account of hardship).
These limitations do not apply to withdrawals where Allstate New York is
directed to transfer some or all of the Contract Value to another 403(b) plan.
Income Tax Withholding
Allstate New York is required to withhold federal income tax at a rate of 20% on
all "eligible rollover distributions" unless you elect to make a "direct
rollover" of such amounts to an IRA or eligible retirement plan. Eligible
rollover distributions generally include all distributions from Qualified
Contracts, excluding IRAs, with the exception of:
1) required minimum distributions, or
2) a series of substantially equal periodic payments made over a period
of at least 10 years, or,
3) over the life (joint lives) of the participant (and beneficiary).
Allstate New York may be required to withhold federal and state income taxes on
any distributions from non-Qualified Contracts or Qualified Contracts that are
not eligible rollover distributions, unless you notify us of your election to
not have taxes withheld.
<PAGE>
PERFORMANCE INFORMATION
- ------------------------------------------------------------------------------
We may advertise the performance of the Variable Sub-Accounts, including yield
and total return information. Total return represents the change, over a
specified period of time, in the value of an investment in a Variable
Sub-Account after reinvesting all income distributions. Yield refers to the
income generated by an investment in a Variable Sub-Account over a specified
period. All performance advertisements will include, as applicable, standardized
yield and total return figures that reflect the deduction of insurance charges,
the contract maintenance charge, and withdrawal charge. Performance
advertisements also may include total return figures that reflect the deduction
of insurance charges, but not the contract maintenance or withdrawal charges.
The deduction of such charges would reduce the performance shown. In addition,
performance advertisements may include aggregate, average, year-by-year, or
other types of total return figures.
Performance information for periods prior to the inception date of the Variable
Sub-Accounts will be based on the historical performance of the corresponding
Funds for the periods beginning with the inception dates of the Funds and
adjusted to reflect current Contract expenses. You should not interpret these
figures to reflect actual historical performance of the Variable Account.
We may include in advertising and sales materials tax deferred compounding
charts and other hypothetical illustrations that compare currently taxable and
tax deferred investment programs based on selected tax brackets. Our
advertisements also may compare the performance of our Variable Sub-Accounts
with: (a) certain unmanaged market indices, including but not limited to the Dow
Jones Industrial Average, the Standard & Poor's 500, and the Shearson Lehman
Bond Index; and/or (b) other management investment companies with investment
objectives similar to the underlying funds being compared. In addition, our
advertisements may include the performance ranking assigned by various
publications, including the Wall Street Journal, Forbes, Fortune, Money,
Barron's, Business Week, USA Today, and statistical services, including Lipper
Analytical Services Mutual Fund Survey, Lipper Annuity and Closed End Survey,
the Variable Annuity Research Data Survey, and SEI.
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS
PAGE
ADDITIONS, DELETIONS OR SUBSTITUTIONS OF INVESTMENTS
REINVESTMENT
THE CONTRACT
INCOME PAYMENTS
GENERAL MATTERS
FEDERAL TAX MATTERS
SALES COMMISSIONS
LEGAL MATTERS
EXPERTS
FINANCIAL STATEMENTS
-----------------------------------------------
This prospectus does not constitute an offering in any jurisdiction in which
such offering may not lawfully be made. We do not authorize anyone to provide
any information or representations regarding the offering described in this
prospectus other than as contained in this prospectus.
[back cover]
<PAGE>
APPENDIX A
WITHDRAWAL ADJUSTMENT EXAMPLE
Issue Date: January 1, 1999
Initial Purchase Payment: $50,000
<TABLE>
<CAPTION>
Death Benefit Amount
Contract Contract
Value Before Value Purchase Maximum
Occurrence Transaction Amount After Payment Anniversary
Date Type of Occurrence Occurrence Value Value
<S> <C> <C> <C> <C> <C> <C>
1/1/99 Issue Date - $50,000 $50,000 $50,000 $50,000
1/1/00 Contract Anniversary $55,000 - $55,000 $50,000 $55,000
7/1/00 Partial Withdrawal $60,000 $15,000 $45,000 $37,500 $41,125
Withdrawal adjustment equals the partial withdrawal amount divided by the
Contract Value immediately prior to the partial withdrawal multiplied by the
value of the applicable death benefit amount alternative immediately prior to
the partial withdrawal.
Purchase Payment Value Death Benefit
Partial Withdrawal Amount (w) $15,000
Contract Value Immediately Prior to Partial Withdrawal (a) $60,000
Value of Applicable Death Benefit Amount Immediately Prior to Partial Withdrawal (d) $50,000
Withdrawal Adjustment [(w)/(a)]*(d) $12,500
Adjusted Death Benefit $37,500
Maximum Anniversary Value Death Benefit
Partial Withdrawal Amount (w) $15,000
Contract Value Immediately Prior to Partial Withdrawal (a) $60,000
Value of Applicable Death Benefit Amount Immediately Prior to Partial Withdrawal (d) $55,000
Withdrawal Adjustment [(w)/a)]*(d) $13,750
Adjusted Death Benefit $41,250
This example represents the proportional reduction applicable in all contracts.
</TABLE>
A-1
<PAGE>
The Putnam Allstate Advisor
<TABLE>
<CAPTION>
<S> <C>
Allstate Life Insurance Company of New York Statement of Additional Information
3100 Sanders Road dated December __, 1999
Northbrook, Illinois 60062
1-800-390-1277
</TABLE>
This Statement of Additional Information supplements the information in the
prospectus for The Putnam Allstate Advisor. This Statement of Additional
Information is not a prospectus. You should read it with the prospectus, dated
December __, 1999, for the Contract. You may obtain a prospectus by calling or
writing us at the address or telephone number listed above.
Except as otherwise noted, this Statement of Additional Information uses the
same defined terms as the prospectus.
<PAGE>
TABLE OF CONTENTS
PAGE
ADDITIONS, DELETIONS OR SUBSTITUTIONS OF INVESTMENTS
REINVESTMENT
THE CONTRACT
INCOME PAYMENTS
GENERAL MATTERS
FEDERAL TAX MATTERS
SALES COMMISSIONS
LEGAL MATTERS
EXPERTS
FINANCIAL STATEMENTS
<PAGE>
ADDITIONS, DELETIONS OR SUBSTITUTIONS OF INVESTMENTS
- -------------------------------------------------------------------------------
We may add, delete, or substitute the Fund shares held by any Variable
Sub-Account to the extent the law permits. We may substitute shares of any Fund
with those of another Fund of the same or different mutual fund if the shares of
the Fund are no longer available for investment, or if we believe investment in
any Fund would become inappropriate in view of the purposes of the Variable
Account.
We will not substitute shares attributable to a Contract Owner's interest in a
Variable Sub-Account until we have notified the Contract Owner of the change,
and until the Securities and Exchange Commission has approved the change, to the
extent such notification and approval are required by law. Nothing contained in
this Statement of Additional Information shall prevent the Variable Account from
purchasing other securities for other series or classes of contracts, or from
effecting a conversion between series or classes of contracts on the basis of
requests made by Contract Owners.
We also may establish additional Variable Sub-Accounts or series of Variable
Sub-Accounts. Each additional Variable Sub-Account would purchase shares in a
new Fund of the same or different mutual fund. We may establish new Variable
Sub-Accounts when we believe marketing needs or investment conditions warrant.
We determine the basis on which we will offer any new Variable Sub-Accounts in
conjunction with the Contract to existing Contract Owners. We may eliminate one
or more Variable Sub-Accounts if, in our sole discretion, marketing, tax or
investment conditions so warrant.
We may, by appropriate endorsement, change the Contract as we believe necessary
or appropriate to reflect any substitution or change in the Funds. If we believe
the best interests of persons having voting rights under the Contracts would be
served, we may operate the Variable Account as a management company under the
Investment Company Act of 1940 or we may withdraw its registration under such
Act if such registration is no longer required.
<PAGE>
THE CONTRACT
- -------------------------------------------------------------------------------
The Contract is primarily designed to aid individuals in long-term financial
planning. You can use it for retirement planning regardless of whether the
retirement plan qualifies for special federal income tax treatment.
PURCHASE OF CONTRACTS
We offer the Contracts to the public through banks as well as brokers licensed
under the federal securities laws and state insurance laws. The principal
underwriter for the Variable Account, Allstate Life Financial Services, Inc.
("ALFS"), distributes the Contracts. ALFS is an affiliate of Allstate Life
Insurance Company of New York ("Allstate"). The offering of the Contracts is
continuous. We do not anticipate discontinuing the offering of the Contracts,
but we reserve the right to do so at any time.
TAX-FREE EXCHANGES (1035 EXCHANGES, ROLLOVERS AND TRANSFERS)
We accept purchase payments that are the proceeds of a Contract in a transaction
qualifying for a tax-free exchange under Section 1035 of the Internal Revenue
Code ("Code"). Except as required by federal law in calculating the basis of the
Contract, we do not differentiate between Section 1035 purchase payments and
non-Section 1035 purchase payments.
We also accept "rollovers" and transfers from Contracts qualifying as
tax-sheltered annuities ("TSAs"), individual retirement annuities or accounts
("IRAs"), or any other Qualified Contract that is eligible to "rollover" into an
IRA. We differentiate among non-Qualified Contracts, TSAs, IRAs and other
Qualified Contracts to the extent necessary to comply with federal tax laws. For
example, we restrict the assignment, transfer, or pledge of TSAs and IRAs so the
Contracts will continue to qualify for special tax treatment. A Contract Owner
contemplating any such exchange, rollover or transfer of a Contract should
contact a competent tax adviser with respect to the potential effects of such a
transaction.
<PAGE>
PERFORMANCE INFORMATION
- -------------------------------------------------------------------------------
From time to time we may advertise the "standardized," "non-standardized," and
"adjusted historical" total returns of the Variable Sub-Accounts, as described
below. Please remember that past performance is not an estimate or guarantee of
future performance and does not necessarily represent the actual experience of
amounts invested by a particular Contract Owner.
STANDARDIZED TOTAL RETURNS
A Variable Sub-Account's standardized total return represents the average annual
total return of that Sub-Account over a particular period. We compute
standardized total return by finding the annual percentage rate that, when
compounded annually, will accumulate a hypothetical $1,000 purchase payment to
the redeemable value at the end of the one, five or ten year period, or for a
period from the date of commencement of the Variable Sub-Account's operations,
if shorter than any of the foregoing. We use the following formula prescribed by
the SEC for computing standardized total return:
1000(1 + T)n = ERV
where:
T = average annual total return
ERV = ending redeemable value of a hypothetical $1,000 payment made at the
beginning of 1, 5, or 10 year periods or shorter period
n = number of years in the period
1000 = hypothetical $1,000 investment
When factoring in the withdrawal charge assessed upon redemption, we exclude the
Free Withdrawal Amount, which is the amount you can withdraw from the Contract
without paying a withdrawal charge. We also use the withdrawal charge that would
apply upon redemption at the end of each period. Thus, for example, when
factoring in the withdrawal charge for a one year standardized total return
calculation, we would use the withdrawal charge that applies to a withdrawal of
a purchase payment made one year prior.
When factoring in the contract maintenance charge, we pro rate the charge by
dividing (i) the contract maintenance charge by (ii) an assumed contract size of
$45,000. We then multiply the resulting percentage by a hypothetical $1,000
investment.
No standardized total returns are available for the Variable Sub-Accounts, which
commenced operations as of the date of this Statement of Additional Information.
NON-STANDARDIZED TOTAL RETURNS
From time to time, we also may quote average annual total returns that do not
reflect the withdrawal charge. We calculate these "non-standardized total
returns" in exactly the same way as the standardized total returns described
above, except that we replace the ending redeemable value of the hypothetical
account for the period with an ending redeemable value for the period that does
not take into account any charges on amounts surrendered.
In addition, we may advertise the total return over different periods of time by
means of aggregate, average, year-by-year or other types of total return
figures. Such calculations would not reflect deductions for withdrawal charges
which may be imposed on the Contracts which, if reflected, would reduce the
performance quoted. The formula for computing such total return quotations
involves a per unit change calculation. This calculation is based on the
Accumulation Unit Value at the end of the defined period divided by the
Accumulation Unit Value at the beginning of such period, minus 1. The periods
included in such advertisements are "year-to-date" (prior calendar year end to
the day of the advertisement); "year to most recent quarter" (prior calendar
year end to the end of the most recent quarter); "the prior calendar year"; "
'n' most recent Calendar Years"; and "Inception (commencement of the
Sub-account's operation) to date" (day of the advertisement).
No non-standardized total returns are shown for the Variable Sub-Accounts, which
commenced operations on the date of this Statement of Additional Information.
Adjusted Historical Total Returns
We may advertise the total return for periods prior to the date that the
Variable Sub-Accounts commenced operations. We will calculate such "adjusted
historical total returns" using the performance of the underlying Funds and
adjusting such performance to reflect the current level of charges that apply to
the Variable Sub-Accounts under the Contract.
The adjusted historical total returns for the Variable Sub-Accounts for the
periods ended September 30, 1999 are set out below.
<PAGE>
<TABLE>
<CAPTION>
Ten Years or Since
Variable Sub-Account One Year Five Years Inception of Fund*
<S> <C> <C> <C>
Putnam Asia Pacific Growth 71.06% N/A 26.24%
Putnam Diversified Income -0.83% 28.82% 26.12%
The George Putnam Fund 6.88% N/A 0.98%
Putnam Global Asset Allocation 15.06% 88.07% 171.22%
Putnam Global Growth 34.74% 108.84% 186.43%
Putnam Growth and Income 14.63% 121.46% 231.36%
Putnam Health Sciences 0.78% N/A -5.09%
Putnam High Yield 1.24% 39.26% 128.61%
Putnam Income -2.26% 36.69% 95.35%
Putnam International Growth 42.86% N/A 58.55%
Putnam International Growth and Income 34.31% N/A 50.75%
Putnam International New Opportunities 52.23% N/A 44.49%
Putnam Investors 28.57% N/A 19.94%
Putnam Money Market 3.60% 22.34% 65.36%
Putnam New Opportunities 44.79% 168.90% 184.45%
Putnam New Value 13.74% N/A 20.11%
Putnam OTC & Emerging Growth 62.96% N/A 27.82%
Putnam Research 25.44% N/A 25.43%
Putnam Small Cap Value N/A N/A -0.93%
Putnam Utilities Growth and Income 6.80% 107.20% 132.37%
Putnam Vista 32.27% N/A 55.04%
Putnam Voyager 40.68% 167.95% 381.59%
- --------------------
</TABLE>
* Each of the above Funds (Class IB) corresponding to the Variable Sub-Accounts
commenced operations on April 30, 1998, except for the Putnam VT Diversified
Income, Growth and Income, and International Growth Funds, which commenced
operations on April 6, 1998, and the Putnam VT Research Fund, which commenced
operations September 30, 1998. For periods prior to the inception dates of the
Funds (Class IB), the performance shown is based on the historical performance
of the Funds (Class IA), adjusted to reflect the current expenses of the Funds
(Class IB). The inception dates for the Funds (Class IA) are as follows:
Global Asset Allocation, Growth and Income, High Yield, Money Market, U.S.
Government and High Quality Bond, Voyager commenced operations on February 1,
1988; Global Growth commenced operations on May 1, 1990; Utilities Growth and
Income commenced operations on May 1, 1992; Diversified Income commenced
operations on September 15, 1993; New Opportunities commenced operations on May
2, 1994; Asia Pacific Growth commenced operations on May 1, 1995; International
Growth, International Growth and Income, International New Opportunities, New
Value and Vista commenced operations on January 2, 1997; The George Putnam Fund
of Boston, Health Sciences, Investors and OTC & Emerging Growth commenced
operations on April 30, 1998.
<PAGE>
Calculation of Accumulation Unit Values
- -------------------------------------------------------------------------------
The value of Accumulation Units will change each Valuation Period according to
the investment performance of the Fund shares purchased by each Variable
Sub-Account and the deduction of certain expenses and charges. A "Valuation
Period" is the period from the end of one Valuation Date and continues to the
end of the next Valuation Date. A Valuation Date ends at the close of regular
trading on the New York Stock Exchange (currently 3:00 p.m. Central Time).
The Accumulation Unit Value of a Variable Sub-Account for any Valuation Period
equals the Accumulation Unit Value as of the immediately preceding Valuation
Period, multiplied by the Net Investment Factor (described below) for that
Sub-Account for the current Valuation Period.
NET INVESTMENT FACTOR
The Net Investment Factor for a Valuation Period is a number representing the
change, since the last Valuation Period, in the value of Variable Sub-Account
assets per Accumulation Unit due to investment income, realized or unrealized
capital gain or loss, deductions for taxes, if any, and deductions for the
mortality and expense risk charge and administrative expense charge. We
determine the Net Investment Factor for each Variable Sub-Account for any
Valuation Period by dividing (A) by (B) and subtracting (C) from the result,
where:
(A) is the sum of:
(1) the net asset value per share of the Fund underlying the
Variable Sub-Account determined at the end of the current
Valuation Period; plus,
(2) the per share amount of any dividend or capital gain
distributions made by the Fund underlying the Variable
Sub-Account during the current Valuation Period;
(B) is the net asset value per share of the Fund underlying the Variable
Sub-Account determined as of the end of the immediately preceding
Valuation Period; and
(C) is the mortality and expense risk charge corresponding to the portion
of the current calendar year that is in the current Valuation Period.
<PAGE>
CALCULATION OF VARIABLE INCOME PAYMENTS
- -------------------------------------------------------------------------------
We calculate the amount of the first variable income payment under an Income
Plan by applying the Contract Value allocated to each Variable Sub-Account less
any applicable premium tax charge deducted at the time, to the income payment
tables in the Contract. We divide the amount of the first variable annuity
income payment by the Variable Sub-Account's then current Annuity Unit value to
determine the number of annuity units ("Annuity Units") upon which later income
payments will be based. To determine income payments after the first, we simply
multiply the number of Annuity Units determined in this manner for each Variable
Sub-Account by the then current Annuity Unit value ("Annuity Unit Value") for
that Variable Sub-Account.
CALCULATION OF ANNUITY UNIT VALUES
Annuity Units in each Variable Sub-Account are valued separately and Annuity
Unit Values will depend upon the investment experience of the particular Fund in
which the Variable Sub-Account invests. We calculate the Annuity Unit Value for
each Variable Sub-Account at the end of any Valuation Period by:
o multiplying the Annuity Unit Value at the end of the immediately preceding
Valuation Period by the Variable Sub-Account's Net Investment Factor
(described in the preceding section) for the Period; and then
o dividing the product by the sum of 1.0 plus the assumed investment rate for
the Valuation Period.
The assumed investment rate adjusts for the interest rate assumed in the
income payment tables used to determine the dollar amount of the first variable
income payment, and is at an effective annual rate which is disclosed in the
Contract.
We determine the amount of the first variable income payment paid under an
Income Plan using the income payment tables set out in the Contracts. The
Contracts include tables that differentiate on the basis of sex, except in
states that require the use of unisex tables.
<PAGE>
GENERAL MATTERS
- ------------------------------------------------------------------------------
INCONTESTABILITY
We will not contest the Contract after we issue it.
SETTLEMENTS
The Contract must be returned to us prior to any settlement. We must receive due
proof of the Contract Owner(s) death (or Annuitant's death if there is a
non-natural Contract Owner) before we will settle a death claim.
SAFEKEEPING OF THE VARIABLE ACCOUNT'S ASSETS
We hold title to the assets of the Variable Account. We keep the assets
physically segregated and separate and apart from our general corporate assets.
We maintain records of all purchases and redemptions of the Fund shares held by
each of the Variable Sub-Accounts.
The Funds do not issue stock certificates. Therefore, we hold the Variable
Account's assets in open account in lieu of stock certificates. See the Funds'
prospectuses for a more complete description of the custodian of the Funds.
PREMIUM TAXES
Applicable premium tax rates depend on the Contract Owner's state of residency
and the insurance laws and our status in those states where premium taxes are
incurred. Premium tax rates may be changed by legislation, administrative
interpretations, or judicial acts. Currently, the State of New York does not
assess a premium tax on annuities.
TAX RESERVES
We do not establish capital gains tax reserves for any Variable Sub-Account nor
do we deduct charges for tax reserves because we believe that capital gains
attributable to the Variable Account will not be taxable. However, we reserve
the right to deduct charges to establish tax reserves for potential taxes on
realized or unrealized capital gains.
<PAGE>
FEDERAL TAX MATTERS
- -------------------------------------------------------------------------------
THE FOLLOWING DISCUSSION IS GENERAL AND IS NOT INTENDED AS TAX ADVICE. WE MAKE
NO GUARANTEE REGARDING THE TAX TREATMENT OF ANY CONTRACT OR TRANSACTION
INVOLVING A CONTRACT.
Federal, state, local and other tax consequences of ownership or receipt of
distributions under an annuity contract depend on the individual circumstances
of each person. If you are concerned about any tax consequences with regard to
your individual circumstances, you should consult a competent tax adviser.
TAXATION OF ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
Allstate is taxed as a life insurance company under Part I of Subchapter L of
the Internal Revenue Code. Since the Variable Account is not an entity separate
from Allstate, and its operations form a part of Allstate, it will not be taxed
separately as a "Regulated Investment Company" under Subchapter M of the Code.
Investment income and realized capital gains of the Variable Account are
automatically applied to increase reserves under the Contract. Under existing
federal income tax law, Allstate believes that the Variable Account investment
income and capital gains will not be taxed to the extent that such income and
gains are applied to increase the reserves under the Contract. Accordingly,
Allstate does not anticipate that it will incur any federal income tax liability
attributable to the Variable Account, and therefore Allstate does not intend to
make provisions for any such taxes. If Allstate is taxed on investment income or
capital gains of the Variable Account, then Allstate may impose a charge against
the Variable Account in order to make provision for such taxes.
EXCEPTIONS TO THE NON-NATURAL OWNER RULE
There are several exceptions to the general rule that annuity contracts held by
a non-natural owner are not treated as annuity contracts for federal income tax
purposes. Contracts will generally be treated as held by a natural person if the
nominal owner is a trust or other entity which holds the Contract as agent for a
natural person. However, this special exception will not apply in the case of an
employer who is the nominal owner of an annuity contract under a non-qualified
deferred compensation arrangement for its employees. Other exceptions to the
non-natural owner rule are: (1) Contracts acquired by an estate of a decedent by
reason of the death of the decedent; (2) certain Qualified Contracts; (3)
Contracts purchased by employers upon the termination of certain qualified
plans; (4) certain Contracts used in connection with structured settlement
agreements, and (5) Contracts purchased with a single premium when the annuity
starting date is no later than a year from purchase of the annuity and
substantially equal periodic payments are made, not less frequently than
annually, during the annuity period.
IRS REQUIRED DISTRIBUTION AT DEATH RULES
In order to be considered an annuity contract for federal income tax purposes,
the Contract must provide: (1) if any Contract Owner dies on or after the Payout
Start Date but before the entire interest in the Contract has been distributed,
the remaining portion of such interest must be distributed at least as rapidly
as under the method of distribution being used as of the date of the Owner's
death; (2) if any Contract Owner dies prior to the Payout Start Date, the entire
interest in the Contract will be distributed within 5 years after the date of
the Owner's death. These requirements are satisfied if any portion of the
Contract Owner's interest that is payable to (or for the benefit of) a
designated Beneficiary is distributed over the life of such Beneficiary (or over
a period not extending beyond the life expectancy of the Beneficiary) and the
distributions begin within 1 year of the Owner's death. If the Contract Owner's
designated Beneficiary is the surviving spouse of the Owner, the Contract may be
continued with the surviving spouse as the new Contract Owner. If the Contract
Owner is a non-natural person, then the Annuitant will be treated as the
Contract Owner for purposes of applying the distribution at death rules. In
addition, a change in the Annuitant on a Contract owned by a non-natural person
will be treated as the death of the Contract Owner.
<PAGE>
QUALIFIED PLANS
- -------------------------------------------------------------------------------
The Contract may be used with several types of qualified plans. The tax rules
applicable to participants in such qualified plans vary according to the type of
plan and the terms and conditions of the plan itself. Adverse tax consequences
may result from excess contributions, premature distributions, distributions
that do not conform to specified commencement and minimum distribution rules,
excess distributions and in other circumstances. Contract Owners and
participants under the plan and Annuitants and Beneficiaries under the Contract
may be subject to the terms and conditions of the plan regardless of the terms
of the Contract.
INDIVIDUAL RETIREMENT ANNUITIES
Section 408 of the Code permits eligible individuals to contribute to an
individual retirement program known as an Individual Retirement Annuity (IRA).
Individual Retirement Annuities are subject to limitations on the amount that
can be contributed and on the time when distributions may commence. Certain
distributions from other types of qualified plans may be "rolled over" on a
tax-deferred basis into an Individual Retirement Annuity. An IRA generally may
not provide life insurance, but it may provide a death benefit that equals the
greater of the premiums paid and the Contract's Cash Value. The Contract
provides a death benefit that in certain circumstances may exceed the greater of
the payments and the Contract Value. It is possible that the death benefit could
be viewed as violating the prohibition on investment in life insurance contracts
with the result that the Contract would not be viewed as satisfying the
requirements of an IRA.
ROTH INDIVIDUAL RETIREMENT ANNUITIES
Section 408A of the Code permits eligible individuals to make nondeductible
contributions to an individual retirement program known as a Roth Individual
Retirement Annuity. Roth Individual Retirement Annuities are subject to
limitations on the amount that can be contributed and on the time when
distributions may commence. "Qualified distributions" from Roth Individual
Retirement Annuities are not includible in gross income. "Qualified
distributions" are any distributions made more than five taxable years after the
taxable year of the first contribution to the Roth Individual Retirement
Annuity, and which are made on or after the date the individual attains age 59
1/2, made to a beneficiary after the owner's death, attributable to the owner
being disabled or for a first time home purchase (first time home purchases are
subject to a lifetime limit of $10,000). "Nonqualified distributions" are
treated as made from contributions first and are includible in gross income to
the extent such distributions exceed the contributions made to the Roth
Individual Retirement Annuity. The taxable portion of a "nonqualified
distribution" may be subject to the 10% penalty tax on premature distributions.
Subject to certain limitations, a traditional Individual Retirement Account or
Annuity may be converted or "rolled over" to a Roth Individual Retirement
Annuity. The taxable portion of a conversion or rollover distribution is
includible in gross income, but is exempted from the 10% penalty tax on
premature distributions.
SIMPLIFIED EMPLOYEE PENSION PLANS
Section 408(k) of the Code allows employers to establish simplified employee
pension plans for their employees using the employees' individual retirement
annuities if certain criteria are met. Under these plans the employer may,
within specified limits, make deductible contributions on behalf of the
employees to their individual retirement annuities. Employers intending to use
the Contract in connection with such plans should seek competent advice.
SAVINGS INCENTIVE MATCH PLANS FOR EMPLOYEES (SIMPLE PLANS)
Sections 408(p) and 401(k) of the Code allow employers with 100 or fewer
employees to establish SIMPLE retirement plans for their employees. SIMPLE plans
may be structured as a SIMPLE retirement account using an employee's IRA to hold
the assets or as a Section 401(k) qualified cash or deferred arrangement. In
general, a SIMPLE plan consists of a salary deferral program for eligible
employees and matching or nonelective contributions made by employers. Employers
intending to use the Contract in conjunction with SIMPLE plans should seek
competent tax and legal advice.
TAX SHELTERED ANNUITIES
Section 403(b) of the Code permits public school employees and employees of
certain types of tax-exempt organizations (specified in Section 501(c)(3) of the
Code) to have their employers purchase annuity contracts for them, and subject
to certain limitations, to exclude the purchase payments from the employees'
gross income. An annuity contract used for a Section 403(b) plan must provide
that distributions attributable to salary reduction contributions made after
12/31/88, and all earnings on salary reduction contributions, may be made only
on or after the date the employee attains age 59 1/2, separates from service,
dies, becomes disabled or on the account of hardship (earnings on salary
reduction contributions may not be distributed for hardship). These limitations
do not apply to withdrawals where Allstate is directed to transfer some or all
of the Contract Value to another 403(b) plan.
CORPORATE AND SELF-EMPLOYED PENSION AND PROFIT SHARING PLANS
Sections 401(a) and 403(a) of the Code permit corporate employers to establish
various types of tax favored retirement plans for employees. The Self-Employed
Individuals Retirement Act of 1962, as amended, (commonly referred to as "H.R.
10" or "Keogh") permits self-employed individuals to establish tax favored
retirement plans for themselves and their employees. Such retirement plans may
permit the purchase of annuity contracts in order to provide benefits under the
plans.
STATE AND LOCAL GOVERNMENT AND TAX-EXEMPT ORGANIZATION
DEFERRED COMPENSATION PLANS
Section 457 of the Code permits employees of state and local governments and
tax-exempt organizations to defer a portion of their compensation without paying
current taxes. The employees must be participants in an eligible deferred
compensation plan. To the extent the Contracts are used in connection with an
eligible plan, employees are considered general creditors of the employer and
the employer as owner of the Contract has the sole right to the proceeds of the
Contract. Generally, under the non-natural owner rules, such Contracts are not
treated as annuity contracts for federal income tax purposes. Under these plans,
contributions made for the benefit of the employees will not be includible in
the employees' gross income until distributed from the plan. However, under a
Section 457 plan all the compensation deferred under the plan must remain solely
the property of the employer, subject only to the claims of the employer's
general creditors, until such time as made available to the employee or a
beneficiary.
SALES COMMISSIONS
Commissions paid may vary, but in the aggregate are not anticipated to exceed
7.0% of any purchase payment. In addition, under certain circumstances, Allstate
New York may pay certain sellers of the contracts a persistency bonus which will
take into account, among other things, the length of time purchase payments have
been held under a contract and the amount of purchase payments.
<PAGE>
LEGAL MATTERS
Freedman, Levy, Kroll & Simonds, Washington, D.C., has advised Allstate New York
on certain federal securities laws matters. All matters of New York law
pertaining to the contracts, including the validity of the contracts and
Allstate New York's right to issue such contracts under New York insurance law,
have been passed upon by Michael J. Velotta, General Counsel of Allstate New
York.
EXPERTS
The financial statements of Allstate Life Insurance Company of New York as of
December 31, 1998 and 1997 and for each of the three years in the period ended
December 31, 1998 and the financial statements of Allstate Life of New York
Separate Account A as of December 31, 1998 and for each of the two years in the
period ended December 31, 1998 appearing in this Statement of Additional
Information (which is incorporated by reference in the prospectus of Allstate
Life of New York Separate Account A of Allstate Life Insurance Company of New
York) have been audited by Deloitte & Touche LLP, independent auditors as stated
in their reports appearing herein, and are included in reliance upon the reports
of such firm given upon their authority as experts in accounting and auditing.
FINANCIAL STATEMENTS
The financial statements of Allstate New York and the Variable Account begin on
Page F-1 of this Statement of Additional Information.
<PAGE>
Financial Statements
Index
-----
Page
----
Independent Auditors' Report...............................................F-1
Financial Statements:
Statements of Financial Position,
December 31, 1998 and 1997...............................F-2
Statements of Operations and Comprehensive Income for the Years Ended
December 31, 1998, 1997 and 1996.........................F-3
Statements of Shareholder's Equity for the Years Ended
December 31, 1998, 1997 and 1996.........................F-4
Statements of Cash Flows for the Years Ended
December 31, 1998, 1997 and 1996.........................F-5
Notes to Financial Statements.....................................F-6
Schedule IV - Reinsurance for the Years Ended
December 31, 1998, 1997 and 1996.........................F-22
Schedule V - Valuation and Qualifying Accounts
December 31, 1998, 1997 and 1996.........................F-23
18
<PAGE>
INDEPENDENT AUDITORS' REPORT
TO THE BOARD OF DIRECTORS AND SHAREHOLDER OF ALLSTATE LIFE INSURANCE COMPANY OF
NEW YORK:
We have audited the accompanying Statements of Financial Position of Allstate
Life Insurance Company of New York (the "Company", an affiliate of The Allstate
Corporation) as of December 31, 1998 and 1997, and the related Statements of
Operations and Comprehensive Income, Shareholder's Equity and Cash Flows for
each of the three years in the period ended December 31, 1998. Our audits also
included Schedule IV - Reinsurance and Schedule V-Valuation and Qualifying
Accounts. These financial statements and financial statement schedules are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements and financial statement schedules 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, such financial statements present fairly, in all material
respects, the financial position of the Company as of December 31, 1998 and
1997, and the results of its operations and its cash flows for each of the three
years in the period ended December 31, 1998 in conformity with generally
accepted accounting principles. Also, in our opinion, Schedule IV - Reinsurance,
and Schedule V - Valuation and Qualifying Accounts, when considered in relation
to the basic financial statements taken as a whole, present fairly, in all
material respects, the information set forth therein.
/s/ Deloitte & Touche LLP
Chicago, Illinois
February 19, 1999
F-1
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
STATEMENTS OF FINANCIAL POSITION
December 31,
------------
($ in thousands) 1998 1997
---- ----
ASSETS
Investments
Fixed income securities, at fair value
(amortized cost $1,648,972 and $1,510,110) $1,966,067 $1,756,257
Mortgage loans 145,095 114,627
Short-term 76,127 9,513
Policy loans 29,620 27,600
---------- ----------
Total investments 2,216,909 1,907,997
Deferred acquisition costs 87,830 71,946
Accrued investment income 22,685 21,725
Reinsurance recoverables 2,210 1,726
Cash 3,117 393
Other assets 9,887 6,167
Separate Accounts 366,247 308,595
---------- ----------
TOTAL ASSETS $2,708,885 $2,318,549
========== ==========
LIABILITIES
Reserve for life-contingent contract benefits $1,208,104 $1,084,409
Contractholder funds 703,264 607,474
Current income taxes payable 14,029 1,419
Deferred income taxes 25,449 16,990
Other liabilities and accrued expenses 23,463 10,985
Payable to affiliates, net 38,835 5,267
Separate Accounts 366,247 308,595
---------- ----------
TOTAL LIABILITIES 2,379,391 2,035,139
---------- ----------
COMMITMENTS AND CONTINGENT LIABILITIES (NOTE 10)
SHAREHOLDER'S EQUITY
Common stock, $25 par value, 80,000 shares
authorized, issued and outstanding 2,000 2,000
Additional capital paid-in 45,787 45,787
Retained income 198,801 171,144
Accumulated other comprehensive income:
Unrealized net capital gains 82,906 64,479
---------- ----------
Total accumulated other comprehensive income 82,906 64,479
---------- ----------
TOTAL SHAREHOLDER'S EQUITY 329,494 283,410
---------- ----------
TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY $2,708,885 $2,318,549
========== ==========
See notes to financial statements.
F-2
<PAGE>
<TABLE>
<CAPTION>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
Year Ended December 31,
-----------------------
($ in thousands) 1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
REVENUES
Premiums and contract charges (net of reinsurance
ceded of $3,204, $3,087 and $2,273) $ 119,052 $ 118,963 $ 117,106
Net investment income 134,413 124,887 112,862
Realized capital gains and losses 4,697 701 (1,581)
--------- --------- ---------
258,162 244,551 228,387
--------- --------- ---------
COSTS AND EXPENSES
Contract benefits (net of reinsurance recoveries
of $997, $1,985 and $2,827) 183,839 179,872 172,772
Amortization of deferred acquisition costs 7,029 5,023 6,512
Operating costs and expenses 24,703 23,644 16,874
--------- --------- ---------
215,571 208,539 196,158
--------- --------- ---------
INCOME FROM OPERATIONS BEFORE INCOME TAX EXPENSE 42,591 36,012 32,229
Income tax expense 14,934 13,296 11,668
--------- --------- ---------
NET INCOME 27,657 22,716 20,561
--------- --------- ---------
OTHER COMPREHENSIVE INCOME
Change in unrealized net capital gains and losses 18,427 27,627 (37,561)
--------- --------- ---------
COMPREHENSIVE INCOME $ 46,084 $ 50,343 $ (17,000)
========= ========= =========
<FN>
See notes to financial statements.
</FN>
</TABLE>
F-3
<PAGE>
<TABLE>
<CAPTION>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
STATEMENTS OF SHAREHOLDER'S EQUITY
December 31,
------------
($ in thousands) 1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
COMMON STOCK $ 2,000 $ 2,000 $ 2,000
--------- --------- ---------
ADDITIONAL CAPITAL PAID-IN 45,787 45,787 45,787
--------- --------- ---------
RETAINED INCOME
Balance, beginning of year 171,144 148,428 127,867
Net income 27,657 22,716 20,561
--------- --------- ---------
Balance, end of year 198,801 171,144 148,428
--------- --------- ---------
ACCUMULATED OTHER COMPREHENSIVE INCOME
Balance, beginning of year 64,479 36,852 74,413
Change in unrealized net capital gains and losses 18,427 27,627 (37,561)
--------- --------- ---------
Balance, end of year 82,906 64,479 36,852
--------- --------- ---------
Total shareholder's equity $ 329,494 $ 283,410 $ 233,067
========= ========= =========
<FN>
See notes to financial statements.
</FN>
</TABLE>
F-4
<PAGE>
<TABLE>
<CAPTION>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
STATEMENTS OF CASH FLOWS
Year Ended December 31,
-----------------------
($ in thousands) 1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 27,657 $ 22,716 $ 20,561
Adjustments to reconcile net income to net
cash provided by operating activities
Amortization and other non-cash items (34,890) (31,112) (26,172)
Realized capital gains and losses (4,697) (701) 1,581
Interest credited to contractholder funds 41,200 31,667 25,817
Changes in:
Life-contingent contract benefits
and contractholder funds 53,343 68,114 75,217
Deferred acquisition costs (16,693) (10,781) (6,859)
Accrued investment income (960) (1,404) (1,493)
Income taxes payable 13,865 (158) 1,986
Other operating assets and liabilities (15,014) 9,949 (5,963)
--------- --------- ---------
Net cash provided by operating activities 63,811 88,290 84,675
--------- --------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sales of fixed income securities 65,281 15,723 28,454
Investment collections
Fixed income securities 159,648 120,061 72,751
Mortgage loans 5,855 5,365 12,508
Investment purchases
Fixed income securities (292,444) (236,984) (236,252)
Mortgage loans (24,252) (35,200) (10,325)
Change in short-term investments, net (55,846) 16,342 (18,598)
Change in policy loans, net (2,020) (2,241) (2,574)
--------- --------- ---------
Net cash used in investing activities (143,778) (116,934) (154,036)
--------- --------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Contractholder fund deposits 137,473 79,384 115,420
Contractholder fund withdrawals (54,782) (51,374) (46,504)
--------- --------- ---------
Net cash provided by financing activities 82,691 28,010 68,916
--------- --------- ---------
NET INCREASE (DECREASE) IN CASH 2,724 (634) (445)
CASH AT BEGINNING OF YEAR 393 1,027 1,472
--------- --------- ---------
CASH AT END OF YEAR $ 3,117 $ 393 $ 1,027
========= ========= =========
<FN>
See notes to financial statements.
</FN>
</TABLE>
F-5
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO FINANCIAL STATEMENTS
($ IN THOUSANDS)
1. GENERAL
BASIS OF PRESENTATION
The accompanying financial statements include the accounts of Allstate Life
Insurance Company of New York (the "Company"), a wholly owned subsidiary of
Allstate Life Insurance Company ("ALIC"), which is wholly owned by Allstate
Insurance Company ("AIC"), a wholly owned subsidiary of The Allstate Corporation
(the "Corporation"). These financial statements have been prepared in conformity
with generally accepted accounting principles.
To conform with the 1998 presentation, certain amounts in the prior years'
financial statements and notes have been reclassified.
NATURE OF OPERATIONS
The Company markets a broad line of life insurance and savings products in the
State of New York. Life insurance includes traditional products such as whole
life and term life insurance, as well as universal life and other
interest-sensitive life products. Savings products include deferred annuities,
such as variable annuities and fixed rate single and flexible premium annuities,
and immediate annuities such as structured settlement annuities. The Company
distributes its products using a combination of Allstate agents, which include
life specialists as well as banks, independent insurance agents, brokers and
direct marketing.
Structured settlement annuity contracts issued by the Company are long-term in
nature and involve fixed guarantees relating to the amount and timing of benefit
payments. Annuity contracts and life insurance policies issued by the Company
are subject to discretionary withdrawal or surrender by customers, subject to
applicable surrender charges. In low interest rate environments, funds from
maturing investments, particularly those supporting long-term structured
settlement annuity obligations, may be reinvested at substantially lower
interest rates than those which prevailed when the funds were previously
invested.
The Company monitors economic and regulatory developments which have the
potential to impact its business. There continues to be proposed federal and
state regulation and legislation that, if passed, would allow banks greater
participation in the securities and insurance businesses. Such events would
present an increased level of competition for sales of the Company's products.
Furthermore, the market for deferred annuities and interest-sensitive life
insurance is enhanced by the tax incentives available under current law. Any
legislative changes which lessen these incentives are likely to negatively
impact the demand for these products.
Additionally, traditional demutualizations of mutual insurance companies and
enacted and pending state legislation to permit mutual insurance companies to
convert to a hybrid structure known as a mutual holding company could have a
number of significant effects on the Company by (1) increasing industry
competition through consolidation caused by mergers and acquisitions related to
the new corporate form of business; and (2) increasing competition in capital
markets.
Although the Company currently benefits from agreements with financial services
entities who market and distribute its products, change in control of these
non-affliliated entities with which the Company has alliances could have a
detrimental effect on the Company's sales.
F-6
<PAGE>
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
INVESTMENTS
Fixed income securities include bonds and mortgage-backed and asset-backed
securities. All fixed income securities are carried at fair value and may be
sold prior to their contractual maturity ("available for sale"). The difference
between amortized cost and fair value, net of deferred income taxes, certain
deferred acquisition costs, and reserves for life and annuity policy benefits,
is reflected as a component of shareholder's equity. Provisions are recognized
for declines in the value of fixed income securities that are other than
temporary. Such writedowns are included in realized capital gains and losses.
Mortgage loans are carried at outstanding principal balance, net of unamortized
premium or discount and valuation allowances. Valuation allowances are
established for impaired loans when it is probable that contractual principal
and interest will not be collected. Valuation allowances for impaired loans
reduce the carrying value to the fair value of the collateral or the present
value of the loan's expected future repayment cash flows discounted at the
loan's original effective interest rate. Valuation allowances on loans not
considered to be impaired are established based on consideration of the
underlying collateral, borrower financial strength, current and expected market
conditions, and other factors.
Short-term investments are carried at cost or amortized cost which approximates
fair value, and includes collateral received in connection with securities
lending activities. Policy loans are carried at the unpaid principal balances.
Investment income consists primarily of interest and dividends on short-term
investments. Interest is recognized on an accrual basis and dividends are
recorded at the ex-dividend date. Interest income on mortgage-backed and
asset-backed securities is determined on the effective yield method, based on
estimated principal repayments. Accrual of income is suspended for fixed income
securities and mortgage loans that are in default or when the receipt of
interest payments is in doubt. Realized capital gains and losses are determined
on a specific identification basis.
DERIVATIVE FINANCIAL INSTRUMENTS
The Company utilizes futures contracts which are derivative financial
instruments. When futures contracts meet specific criteria they may be
designated as accounting hedges and accounted for on either a fair value or
deferral basis, depending upon the nature of the hedge strategy and the method
used to account for the hedged item. Derivatives that are not designated as
accounting hedges are accounted for on a fair value basis.
If, subsequent to entering into a hedge transaction, the futures contract
becomes ineffective (including if the the occurrence of a hedged anticipatory
transaction is no longer probable), the Company terminates the derivative
position. Gains and losses on these terminations are reported in realized
capital gains and losses in the period they occur. The Company may also
terminate derivatives as a result of other events or circumstances. Gains and
losses on these terminations are either deferred and amortized over the
remaining life of either the hedge or the hedged item, whichever is shorter, or
are reported in shareholder's equity, consistent with the accounting for the
hedged item. Futures contracts must reduce the primary market risk exposure on
an enterprise or transaction basis in conjunction with the hedge strategy; be
designated as a hedge at the inception of the transaction; and be highly
correlated with the fair value of, or interest income or expense associated
with, the hedged item at inception and throughout the hedge period.
DEFERRAL ACCOUNTING Under deferral accounting, gains and losses on futures
contracts are deferred on the statement of financial position and recognized in
earnings in conjunction with earnings on the hedged item. The Company accounts
for interest rate futures contracts as hedges using deferral accounting for
anticipatory investment purchases and sales when the criteria for futures
(discussed above) are met. In addition, anticipated transactions must be
probable of occurrence and their significant terms and characteristics
identified.
F-7
<PAGE>
Changes in fair values of these types of derivatives are initially deferred as
other liabilities and accrued expenses. Once the anticipated transaction occurs,
the deferred gains or losses are considered part of the cost basis of the asset
and reported net of tax in shareholder's equity or recognized as a gain or loss
from disposition of the asset, as appropriate. The Company reports initial
margin deposits on futures in short-term investments. Fees and commissions paid
on these derivatives are also deferred as an adjustment to the carrying value of
the hedged item.
RECOGNITION OF PREMIUM REVENUES AND CONTRACT CHARGES
Premiums for traditional life insurance and certain life-contingent annuities
are recognized as revenue when due. Accident and disability premiums are earned
on a pro rata basis over the policy period. Revenues on universal life-type
insurance policies are comprised of contract charges and fees, and are
recognized when assessed against the policyholder account balance. Revenues on
investment contracts include contract charges and fees for contract
administration and surrenders. These revenues are recognized when levied against
the contract balance. Gross premium in excess of the net premium on limited
payment contracts are deferred and recognized over the contract period.
REINSURANCE
The Company has reinsurance agreements whereby certain premiums and contract
benefits are ceded and reflected net of such reinsurance in the statements of
operations and comprehensive income. Reinsurance recoverable and the related
reserves for life-contingent contract benefits and contractholder funds are
reported separately in the statements of financial position. The Company
continues to have primary liability as the direct insurer for risks reinsured.
DEFERRED ACQUISITION COSTS
Certain costs of acquiring life and annuity business, principally agents'
remuneration, premium taxes, certain underwriting costs and direct mail
solicitation expenses are deferred and amortized to income. For traditional life
insurance, limited payment contracts and accident and disability insurance,
these costs are amortized in proportion to the estimated revenues on such
business. For universal life-type policies and investment contracts, the costs
are amortized in relation to the present value of estimated gross profits on
such business. Changes in the amount or timing of estimated gross profits will
result in adjustments in the cumulative amortization of these costs. To the
extent that unrealized gains or losses on fixed income securities carried at
fair value would result in an adjustment of deferred acquisition costs had those
gains or losses actually been realized, the related unamortized deferred
acquisition costs are recorded as a reduction of the unrealized gains or losses
included in shareholder's equity.
INCOME TAXES
The income tax provision is calculated under the liability method and presented
net of reinsurance. Deferred tax assets and liabilities are recorded based on
the difference between the financial statement and tax bases of assets and
liabilities at the enacted tax rates. The principal assets and liabilities
giving rise to such differences are insurance reserves and deferred acquisition
costs. Deferred income taxes also arise from unrealized capital gains and losses
on fixed income securities carried at fair value.
SEPARATE ACCOUNTS
The Company issues flexible premium deferred variable annuities, the assets and
liabilities of which are legally segregated and reflected in the accompanying
statements of financial position as assets and liabilities of the Separate
Accounts. The Company's Separate Accounts consist of: Allstate Life of New York
Variable Annuity Account, Allstate Life of New York Variable Annuity Account II
and Allstate Life of New York Separate Account A. Each of the Separate Accounts
are unit investment trusts registered with the Securities and Exchange
Commission.
F-8
<PAGE>
Assets of the Separate Accounts are carried at fair value. Investment income and
realized capital gains and losses of the Separate Accounts accrue directly to
the contractholders and, therefore, are not included in the Company's statements
of operations and comprehensive income. Revenues to the Company from the
Separate Accounts consist of contract maintenance fees, administration fees and
mortality and expense risk charges.
RESERVES FOR LIFE-CONTINGENT CONTRACT BENEFITS
The reserve for life-contingent contract benefits, which relates to traditional
life insurance, group retirement annuities and structured settlement annuities
with life contingencies, disability insurance and accident insurance, is
computed on the basis of assumptions as to future investment yields, mortality,
morbidity, terminations and expenses. These assumptions, which for traditional
life insurance are applied using the net level premium method, include
provisions for adverse deviation and generally vary by such characteristics as
type of coverage, year of issue and policy duration. Reserve interest rates
ranged from 4.0% to 11.0% during 1998. To the extent that unrealized gains on
fixed income securities would result in a premium deficiency had those gains
actually been realized, the related increase in reserves is recorded as a
reduction of the unrealized gains included in shareholder's equity.
CONTRACTHOLDER FUNDS
Contractholder funds arise from the issuance of individual or group policies and
contracts that include an investment component, including most fixed annuities
and universal life policies. Payments received are recorded as interest-bearing
liabilities. Contractholder funds are equal to deposits received and interest
credited to the benefit of the contractholder less withdrawals, mortality
charges and administrative expenses. During 1998, credited interest rates on
contractholder funds ranged from 3.46% to 11.00% for those contracts with fixed
interest rates and from 3.50% to 7.75% for those with flexible rates.
OFF-BALANCE-SHEET FINANCIAL INSTRUMENTS
Commitments to extend mortgage loans have only off-balance-sheet risk because
their contractual amounts are not recorded in the Company's statements of
financial position.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.
NEW ACCOUNTING STANDARDS
In 1998, the Company adopted Statement of Financial Accounting Standards
("SFAS") No. 125, "Accounting for Transfers and Servicing of Financial Assets
and Extinguishment of Liabilities" under the guidance of SFAS No. 127 "Deferral
of the Effective Date of Certain Provisions of FASB Statement No. 125". As a
result, the Company has recorded an asset and corresponding liability
representing the collateral received in connection with the Company's securities
lending program.
In 1998, the Company adopted SFAS No. 130, "Reporting Comprehensive Income."
Comprehensive income is a measurement of certain changes in shareholder's equity
that result from transactions and other economic events other than transactions
with shareholders. For the Company, these consist of changes in unrealized gains
and losses on the investment portfolio (See Note 9).
In 1998, the Company adopted SFAS No. 131, "Disclosures about Segments of an
Enterprise and Related Information." SFAS 131 redefines how segments are
determined and requires additional segment disclosures for both annual and
interim financial reporting. The Company has identified itself as a single
operating segment.
F-9
<PAGE>
PENDING ACCOUNTING STANDARDS
In December 1997, the Accounting Standards Executive Committee of the American
Institute of Certified Public Accountants issued Statement of Position ("SOP")
97-3, "Accounting by Insurance and Other Enterprises for Insurance-related
Assessments." The SOP is required to be adopted in 1999. The SOP provides
guidance concerning when to recognize a liability for insurance-related
assessments and how those liabilities should be measured. Specifically,
insurance-related assessments should be recognized as liabilities when all of
the following criteria have been met: 1) an assessment has been imposed or it is
probable that an assessment will be imposed, 2) the event obligating an entity
to pay an assessment has occurred and 3) the amount of the assessment can be
reasonably estimated. The Company is currently evaluating the effects of this
SOP on its accounting for insurance-related assessments. Certain information
required for compliance is not currently available and therefore the Company is
studying alternatives for estimating the accrual. In addition, industry groups
are working to improve the information available. Adoption of this standard is
not expected to be material to the results of operations or financial position
of the Company.
In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities." SFAS No. 133
replaces existing pronouncements and practices with a single, integrated
accounting framework for derivatives and hedging activities. The requirements
are effective for fiscal years beginning after June 15, 1999. Earlier
application is encouraged but is only permitted as of the beginning of any
fiscal quarter after issuance. This statement requires that all derivatives be
recognized on the balance sheet at fair value. Derivatives that are not hedges
must be adjusted to fair value through income. If the derivative is a hedge,
depending on the nature of the hedge, changes in the fair value of derivatives
will either be offset against the change in fair value of the hedged assets,
liabilities, or firm commitments through earnings or recognized in other
comprehensive income until the hedged item is recognized in earnings.
Additionally, the change in fair value of a derivative which is not effective as
a hedge will be immediately recognized in earnings. The Company expects to adopt
SFAS No. 133 as of January 1, 2000. Based on existing interpretations of the
requirements of SFAS No. 133, the impact of adoption is not expected to be
material to the results of operations or financial position of the Company.
3. RELATED PARTY TRANSACTIONS
REINSURANCE
The Company has reinsurance agreements with ALIC in order to limit aggregate and
single exposure on large risks. A portion of the Company's premiums and policy
benefits are ceded to ALIC and reflected net of such reinsurance in the
statements of operations and comprehensive income. Reinsurance recoverable and
the related reserve for life-contingent contract benefits and contractholder
funds are reported separately in the statements of financial position. The
Company continues to have primary liability as the direct insurer for risks
reinsured.
F-10
<PAGE>
The following amounts were ceded to the ALIC under reinsurance agreements.
YEAR ENDED DECEMBER 31,
-----------------------
($ in thousands) 1998 1997 1996
---- ---- ----
Premiums $ 2,519 $ 2,171 $ 1,383
Policy benefits 315 327 1,662
Included in the reinsurance recoverable at December 31, 1998 and 1997 are
amounts due from the ALIC of $532 and $342, respectively.
STRUCTURED SETTLEMENT ANNUITIES
AIC, through an affiliate, purchased $12,747, $12,766 and $15,610 of structured
settlement annuities from the Company in 1998, 1997 and 1996, respectively. Of
these amounts, $5,152, $3,468 and $8,517 relate to structured settlement
annuities with life contingencies and are included in premium income in 1998,
1997 and 1996, respectively. Additionally, the reserve for life-contingent
contract benefits was increased by approximately 94% of such premium received in
each of these years.
BUSINESS OPERATIONS
The Company utilizes services performed by AIC and ALIC and business facilities
owned or leased, and operated by AIC in conducting its business activities. The
Company reimburses AIC and ALIC for the operating expenses incurred on behalf of
the Company. The cost to the Company is determined by various allocation methods
and is primarily related to the level of services provided. Operating expenses,
including compensation and retirement and other benefit programs, allocated to
the Company were $32,326, $27,632 and $23,134 in 1998, 1997 and 1996,
respectively. A portion of these expenses relate to the acquisition of life and
annuity business which are deferred and amortized over the contract period.
4. INVESTMENTS
FAIR VALUES
The amortized cost, gross unrealized gains and losses, and fair value for fixed
income securities are as follows:
<TABLE>
<CAPTION>
AMORTIZED GROSS UNREALIZED FAIR
COST GAINS LOSSES VALUE
---- ----- ------ -----
<S> <C> <C> <C> <C>
AT DECEMBER 31, 1998
U.S. government and agencies $ 443,930 $ 179,455 $ (1) $ 623,384
Municipal 31,617 2,922 (19) 34,520
Corporate 848,289 121,202 (899) 968,592
Mortgage-backed securities 291,520 14,294 (700) 305,114
Asset-backed securities 33,616 869 (28) 34,457
---------- ---------- ---------- ----------
Total fixed income securities $1,648,972 $ 318,742 $ (1,647) $1,966,067
========== ========== ========== ==========
AT DECEMBER 31, 1997
U.S. government and agencies $ 416,203 $ 126,824 $ (212) $ 542,815
Municipal 35,382 2,449 (22) 37,809
Corporate 803,935 103,700 (479) 907,156
Mortgage-backed securities 215,465 13,442 (166) 228,741
Asset-backed securities 39,125 642 (31) 39,736
---------- ---------- ---------- ----------
Total fixed income securities $1,510,110 $ 247,057 $ (910) $1,756,257
========== ========== ========== ==========
</TABLE>
F-11
<PAGE>
SCHEDULED MATURITIES
The scheduled maturities for fixed income securities are as follows at December
31, 1998:
AMORTIZED FAIR
COST VALUE
---- -----
Due in one year or less $ 14,903 $ 15,087
Due after one year through five years 79,333 84,372
Due after five years through ten years 227,770 250,208
Due after ten years 1,001,830 1,276,829
---------- ----------
1,323,836 1,626,496
Mortgage- and asset-backed securities 325,136 339,571
---------- ----------
Total $1,648,972 $1,966,067
========== ==========
Actual maturities may differ from those scheduled as a result of prepayments by
the issuers.
NET INVESTMENT INCOME
YEAR ENDED DECEMBER, 31 1998 1997 1996
---- ---- ----
Fixed income securities $124,100 $116,763 $104,583
Mortgage loans 10,309 7,896 7,113
Other 2,940 2,200 2,942
-------- -------- --------
Investment income, before expense 137,349 126,859 114,638
Investment expense 2,936 1,972 1,776
-------- -------- --------
Net investment income $134,413 $124,887 $112,862
======== ======== ========
REALIZED CAPITAL GAINS AND LOSSES
YEAR ENDED DECEMBER 31, 1998 1997 1996
---- ---- ----
Fixed income securities $ 4,755 $ 955 $(1,522)
Mortgage loans (65) (221) (59)
Other 7 (33) --
------- ------- -------
Realized capital gains and losses 4,697 701 (1,581)
Income tax 1,644 245 (553)
------- ------- -------
Realized capital gains and losses, after tax $ 3,053 $ 456 $(1,028)
======= ======= =======
Excluding calls and prepayments, gross gains of $2,905, $471 and $480 and gross
losses of $164, $105 and $2,308 were realized on sales of fixed income
securities during 1998, 1997 and 1996, respectively.
F-12
<PAGE>
UNREALIZED NET CAPITAL GAINS
Unrealized net capital gains on fixed income securities included in
shareholder's equity at December 31, 1998 are as follows:
<TABLE>
<CAPTION>
COST/ GROSS UNREALIZED UNREALIZED
AMORTIZED COST FAIR VALUE GAINS LOSSES NET GAINS
-------------- ---------- ----- ------ ---------
<S> <C> <C> <C> <C> <C>
Fixed income securities $ 1,648,972 $ 1,966,067 $ 318,742 $ (1,647) $ 317,095
=========== =========== =========== ===========
Reserve for life-contingent
contract benefits (187,706)
Deferred income taxes (44,642)
Deferred acquisition costs
and other (1,841)
-----------
Unrealized net capital gains $ 82,906
===========
</TABLE>
<TABLE>
<CAPTION>
CHANGE IN UNREALIZED NET CAPITAL GAINS
YEAR ENDED DECEMBER 31, 1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
Fixed income securities $ 70,948 $ 123,519 $ (82,847)
Reserves for life contingent-contract benefits (42,251) (80,155) 24,300
Deferred income taxes (9,922) (14,876) 20,224
Deferred acquisition costs and other (348) (861) 762
--------- --------- ---------
Increase (decrease) in unrealized net
capital gains $ 18,427 $ 27,627 $ (37,561)
========= ========= =========
</TABLE>
INVESTMENT LOSS PROVISIONS AND VALUATION ALLOWANCES
Pretax provisions for investment losses, principally relating to other than
temporary declines in value of fixed income securities and valuation allowances
on mortgage loans were $114, $261 and $208 in 1998, 1997 and 1996, respectively.
MORTGAGE LOAN IMPAIRMENT
A mortgage loan is impaired when it is probable that the Company will be unable
to collect all amounts due according to the contractual terms of the loan
agreement.
The Company had no impaired loans at December 31, 1998, 1997 and 1996.
Interest income is recognized on a cash basis for impaired loans carried at the
fair value of the collateral, beginning at the time of impairment. For other
impaired loans, interest is accrued based on the net carrying value. There were
no impaired loans during 1998 and 1997. In 1996, the Company recognized interest
income of $281 on impaired loans, which was received in cash during the year.
The average recorded investment in impaired loans was $5,154 during 1996.
Valuation allowances for mortgage loans at December 31, 1998, 1997 and 1996 were
$600, $486 and $225, respectively. There were no direct write-downs of mortgage
loan valuation allowances for the years ended December 31, 1998 and 1997. For
the year ended December 31, 1996, direct write-downs of mortgage loan valuation
allowances were $1,431. Net (reductions) additions to the mortgage loan
valuation allowances were $114, $261 and $(296) for the years ended December 31,
1998, 1997 and 1996, respectively.
F-13
<PAGE>
INVESTMENT CONCENTRATION FOR MUNICIPAL BOND AND COMMERCIAL MORTGAGE PORTFOLIOS
AND OTHER INVESTMENT INFORMATION
The Company maintains a diversified portfolio of municipal bonds. The largest
concentrations in the portfolio are presented below. Except for the following,
holdings in no other state exceeded 5% of the portfolio at December 31, 1998 and
1997:
(% of municipal bond portfolio carrying value) 1998 1997
---- ----
Ohio 30.2% 28.4%
Illinois 21.1 19.8
California 17.4 22.7
Maryland 8.2 8.0
Minnesota 5.9 5.5
New York 5.7 5.4
Maine 5.3 5.6
The Company's mortgage loans are collateralized by a variety of commercial real
estate property types located throughout the United States. Substantially all of
the commercial mortgage loans are non-recourse to the borrower. The states with
the largest portion of the commercial mortgage loan portfolio are listed below.
Except for the following, holdings in no other state exceeded 5% of the
portfolio at December 31, 1998 and 1997:
(% of commercial mortgage portfolio carrying value) 1998 1997
---- ----
California 41.9% 47.7%
New York 26.3 30.5
Illinois 15.8 15.3
New Jersey 6.9 -
Pennsylvania 6.2 3.3
The types of properties collateralizing the commercial mortgage loans at
December 31, are as follows:
(% of commercial mortgage portfolio carrying value) 1998 1997
---- ----
Retail 39.5% 38.8%
Warehouse 19.2 25.4
Apartment complex 18.5 14.9
Office buildings 11.7 15.3
Industrial 5.5 4.9
Other 5.6 .7
------ ------
100.0% 100.0%
===== =====
F-14
<PAGE>
The contractual maturities of the commercial mortgage loan portfolio as of
December 31, 1998, for loans that were not in foreclosure are as follows:
NUMBER OF LOANS CARRYING VALUE PERCENT
--------------- -------------- -------
1999 1 $ 2,832 2.0%
2000 4 7,762 5.3
2001 5 7,066 4.9
2002 2 6,154 4.2
Thereafter 31 121,281 83.6
-------- -------- --------
Total 43 $145,095 100.0%
======== ======== ========
In 1998, there were no commercial mortgage loans which were contractually due.
SECURITIES ON DEPOSIT
At December 31, 1998, fixed income securities with a carrying value of $2,109
were on deposit with regulatory authorities as required by law.
5. FINANCIAL INSTRUMENTS
In the normal course of business, the Company invests in various financial
assets, incurs various financial liabilities and enters into agreements
involving derivative financial instruments and other off-balance-sheet financial
instruments. The fair value estimates of financial instruments presented below
are not necessarily indicative of the amounts the Company might pay or receive
in actual market transactions. Potential taxes and other transaction costs have
not been considered in estimating fair value. The disclosures that follow do not
reflect the fair value of the Company as a whole since a number of the Company's
significant assets (including deferred acquisition costs and reinsurance
recoverables) and liabilities (including traditional life and universal
life-type insurance reserves and deferred income taxes) are not considered
financial instruments and are not carried at fair value. Other assets and
liabilities considered financial instruments such as accrued investment income
and cash are generally of a short-term nature. Their carrying values are assumed
to approximate fair value.
FINANCIAL ASSETS
The carrying value and fair value of financial assets at December 31, are as
follows:
1998 1997
---- ----
CARRYING FAIR CARRYING FAIR
VALUE VALUE VALUE VALUE
----- ----- ----- -----
Fixed income securities $1,966,067 $1,966,067 $1,756,257 $1,756,257
Mortgage loans 145,095 154,872 114,627 120,849
Short-term investments 76,127 76,127 9,513 9,513
Policy loans 29,620 29,620 27,600 27,600
Separate Accounts 366,247 366,247 308,595 308,595
Carrying value and fair value include the effects of derivative financial
instruments where applicable.
F-15
<PAGE>
Fair values for fixed income securities are based on quoted market prices where
available. Non-quoted securities are valued based on discounted cash flows using
current interest rates for similar securities. Mortgage loans are valued based
on discounted contractual cash flows. Discount rates are selected using current
rates at which similar loans would be made to borrowers with similar
characteristics, using similar properties as collateral. Loans that exceed 100%
loan-to-value are valued at the estimated fair value of the underlying
collateral. Short-term investments are highly liquid investments with maturities
of less than one year whose carrying value approximates fair value.
The carrying value of policy loans approximates its fair value. Separate
Accounts assets are carried in the statements of financial position at fair
value based on quoted market prices.
FINANCIAL LIABILITIES
The carrying value and fair value of financial liabilities at December 31, are
as follows:
1998 1997
---- ----
CARRYING FAIR CARRYING FAIR
VALUE VALUE VALUE VALUE
----- ----- ----- -----
Contractholder funds on
investment contracts $512,239 $518,448 $437,449 $466,136
Separate Accounts 366,247 366,247 308,595 308,595
The fair value of contractholder funds on investment contracts is based on the
terms of the underlying contracts. Reserves on investment contracts with no
stated maturities (single premium and flexible premium deferred annuities) are
valued at the account balance less surrender charges. The fair value of
immediate annuities and annuities without life contingencies with fixed terms is
estimated using discounted cash flow calculations based on interest rates
currently offered for contracts with similar terms and durations. Separate
Accounts liabilities are carried at the fair value of the underlying assets.
DERIVATIVE FINANCIAL INSTRUMENTS
The only derivative financial instruments used by the Company are interest rate
futures contracts. The Company primarily uses this derivative financial
instrument to reduce its exposure to market risk, specifically interest rate
risk, in conjunction with asset/liability management. The Company does not hold
or issue these instruments for trading purposes.
The following table summarizes the contract amount, credit exposure, fair value
and carrying value of the Company's derivative financial instruments:
CARRYING
VALUE
CONTRACT CREDIT FAIR ASSETS/
AMOUNT EXPOSURE VALUE (LIABILITIES)
------ -------- ----- -------------
AT DECEMBER 31, 1998
- --------------------
Financial futures contracts $15,000 $ -- $ (15) $ (223)
AT DECEMBER 31, 1997
- --------------------
Financial futures contracts $29,800 $ -- $ (153) $ (810)
Carrying value is representative of deferred gains and losses.
F-16
<PAGE>
The contract amounts are used to calculate the exchange of contractual payments
under the agreements and are not representative of the potential for gain or
loss on these agreements.
Credit exposure represents the Company's potential loss if all of the
counterparties failed to perform under the contractual terms of the contracts
and all collateral, if any, became worthless. This exposure is measured by the
fair value of contracts with a positive fair value at the reporting date. The
Company manages its exposure to credit risk primarily by establishing risk
control limits. To date, the Company has not incurred any losses on derivative
financial instruments due to counterparty nonperformance.
Fair value is the estimated amount that the Company would receive (pay) to
terminate or assign the contracts at the reporting date, thereby taking into
account the current unrealized gains or losses of open contracts. Dealer and
exchange quotes are used to value the Company's derivatives.
Financial futures are commitments to either purchase or sell designated
financial instruments at a future date for a specified price or yield. They may
be settled in cash or through delivery. As part of its asset/liability
management, the Company generally utilizes futures contracts to manage its
market risk related to anticipatory investment purchases and sales, as well as
other risk management purposes. Futures used as hedges of anticipatory
transactions pertain to identified transactions which are probable to occur and
are generally completed within 90 days. Futures contracts have limited
off-balance-sheet credit risk as they are executed on organized exchanges and
require security deposits, as well as the daily cash settlement of margins.
Market risk is the risk that the Company will incur losses due to adverse
changes in market rates and prices. Market risk exists for all of the derivative
financial instruments that the Company currently holds, as these instruments may
become less valuable due to adverse changes in market conditions. The Company
mitigates this risk through established risk control limits set by senior
management. In addition, the change in the value of the Company's derivative
financial instruments designated as hedges are generally offset by the change in
the value of the related assets and liabilities.
OFF-BALANCE-SHEET FINANCIAL INSTRUMENTS
Commitments to extend mortgage loans are agreements to lend to a borrower
provided there is no violation of any condition established in the contract. The
Company enters these agreements to commit to future loan fundings at a
predetermined interest rate. Commitments generally have fixed expiration dates
or other termination clauses. Commitments to extend mortgage loans, which are
secured by the underlying properties, are valued based on estimates of fees
charged by other institutions to make similar commitments to similar borrowers.
The Company had no mortgage loan commitments at December 31, 1998. At December
31, 1997 the Company had $18,000 in mortgage loan commitments which had a fair
value of $180.
F-17
<PAGE>
6. INCOME TAXES
The Company joins the Corporation and its other eligible domestic subsidiaries
(the "Allstate Group") in the filing of a consolidated federal income tax return
and is party to a federal income tax allocation agreement (the "Allstate Tax
Sharing Agreement"). Under the Allstate Tax Sharing Agreement, the Company pays
to or receives from the Corporation the amount, if any, by which the Allstate
Group's federal income tax liability is affected by virtue of inclusion of the
Company in the consolidated federal income tax return. Effectively, this results
in the Company's annual income tax provision being computed, with adjustments,
as if the Company filed a separate return.
Prior to Sears, Roebuck and Co.'s ("Sears") distribution ("Sears distribution")
on June 30, 1995 of its 80.3% ownership in the Corporation to Sears
shareholders, the Allstate Group joined with Sears and its domestic business
units (the "Sears Group") in the filing of a consolidated federal income tax
return (the "Sears Tax Group") and were parties to a federal income tax
allocation agreement (the "Tax Sharing Agreement"). Under the Tax Sharing
Agreement, the Company, through the Corporation, paid to or received from the
Sears Group the amount, if any, by which the Sears Tax Group's federal income
tax liability was affected by virtue of inclusion of the Company in the
consolidated federal income tax return.
As a result of the Sears distribution, the Allstate Group was no longer included
in the Sears Tax Group, and the Tax Sharing Agreement was terminated.
Accordingly, the Allstate Group and Sears Group entered into a new tax sharing
agreement, which adopts many of the principles of the Tax Sharing Agreement and
governs their respective rights and obligations with respect to federal income
taxes for all periods prior to the Sears distribution, including the treatment
of audits of tax returns for such periods.
The Internal Revenue Service ("IRS") has completed its review of the Allstate
Group's federal income tax returns through the 1993 tax year. Any adjustments
that may result from IRS examinations of tax returns are not expected to have a
material impact on the financial position, liquidity or results of operations of
the Company.
The components of the deferred income tax assets and liabilities at December 31,
are as follows:
1998 1997
---- ----
DEFERRED ASSETS
Life and annuity reserves $ 41,073 $ 34,084
Difference in tax bases of investments -- 742
Discontinued operations 364 364
Other postretirement benefits 328 352
Other assets 2,023 255
-------- --------
Total deferred assets 43,788 35,797
-------- --------
DEFERRED LIABILITIES
Unrealized net capital gains (44,642) (34,720)
Deferred acquisition costs (20,573) (15,821)
Difference in tax bases of investments (1,784) --
Prepaid commission expense (790) (792)
Other liabilities (1,448) (1,454)
-------- --------
Total deferred liabilities (69,237) (52,787)
-------- --------
Net deferred liability $(25,449) $(16,990)
======== ========
F-18
<PAGE>
Although realization is not assured, management believes it is more likely than
not that the deferred tax assets will be realized based on the assumptions that
certain levels of income will be achieved.
The components of income tax expense for the year ended December 31, are as
follows:
1998 1997 1996
-------- -------- --------
Current $ 13,679 $ 14,874 $ 11,411
Deferred 1,255 (1,578) 257
-------- -------- --------
Total income tax expense $ 14,934 $ 13,296 $ 11,668
======== ======== ========
The Company paid income taxes of $3,788, $13,350 and $11,968 in 1998, 1997 and
1996, respectively. The Company had a current income tax liability of $14,029
and $1,419 at December 31, 1998 and 1997, respectively.
A reconciliation of the statutory federal income tax rate to the effective
income tax rate on income from operations for the year ended December 31, is as
follows:
1998 1997 1996
------ ------ ------
Statutory federal income tax rate 35.0% 35.0% 35.0%
State income tax expense 1.6 2.2 2.4
Other (1.5) (.3) (1.2)
------ ------ ------
Effective income tax rate 35.1% 36.9% 36.2%
====== ====== ======
Prior to January 1, 1984, the Company was entitled to exclude certain amounts
from taxable income and accumulate such amounts in a "policyholder surplus"
account. The balance in this account at December 31, 1998, approximately $389,
will result in federal income taxes payable of $136 if distributed by the
Company. No provision for taxes has been made as the Company has no plan to
distribute amounts from this account. No further additions to the account have
been permitted since the Tax Reform Act of 1984.
7. STATUTORY FINANCIAL INFORMATION
PERMITTED STATUTORY ACCOUNTING PRACTICES
The Company prepares its statutory financial statements in accordance with
accounting principles and practices prescribed or permitted by the New York
Department of Insurance. Prescribed statutory accounting practices include a
variety of publications of the National Association of Insurance Commissioners
("NAIC"), as well as state laws, regulations and general administrative rules.
Permitted statutory accounting practices encompass all accounting practices not
so prescribed. The Company does not follow any permitted statutory accounting
practices that have a significant impact on statutory surplus or statutory net
income.
The NAIC's codification initiative has produced a comprehensive guide of revised
statutory accounting principles. While the NAIC has approved a January 1, 2001
implementation date for the newly developed guidance, companies must adhere to
the implementation date adopted by their state of domicile. The Company's state
of domicile, New York, is continuing its comparison of codification and current
statutory accounting requirements to determine necessary revisions to existing
state laws and regulations. The requirements are not expected to have a material
impact on the statutory surplus of the Company.
F-19
<PAGE>
DIVIDENDS
The ability of the Company to pay dividends is dependent on business conditions,
income, cash requirements of the Company and other relevant factors. Under New
York Insurance Law, a notice of intention to distribute any dividend must be
filed with the New York Superintendent of Insurance not less than 30 days prior
to the distribution. Such proposed declaration is subject to the
Superintendent's disapproval.
8. BENEFIT PLANS
PENSION PLANS
Defined benefit pension plans, sponsored by the Corporation, cover domestic
full-time employees and certain part-time employees. Benefits under the pension
plans are based upon the employee's length of service, average annual
compensation and estimated social security retirement benefits. The
Corporation's funding policy for the pension plans is to make annual
contributions in accordance with accepted actuarial cost methods. The costs to
the Company included in net income were $382, $597 and $490 for the pension
plans in 1998, 1997 and 1996, respectively.
POSTRETIREMENT BENEFITS OTHER THAN PENSIONS
The Corporation also provides certain health care and life insurance benefits
for retired employees. Qualified employees may become eligible for these
benefits if they retire in accordance with the Corporation's established
retirement policy and are continuously insured under the Corporation's group
plans or other approved plans for ten or more years prior to retirement. The
Corporation shares the cost of the retiree medical benefits with retirees based
on years of service, with the Corporation's share being subject to a 5% limit on
annual medical cost inflation after retirement. The Corporation's postretirement
benefit plans currently are not funded. The Corporation has the right to modify
or terminate these plans.
PROFIT SHARING FUND
Employees of the Corporation and its domestic subsidiaries are also eligible to
become members of The Savings and Profit Sharing Fund of Allstate Employees
("Allstate Plan"). The Corporation's contributions are based on the
Corporation's matching obligation and performance.
The Company's contribution to the Allstate Plan was $567, $164 and $111 in 1998,
1997 and 1996, respectively.
F-20
<PAGE>
9. OTHER COMPREHENSIVE INCOME
The components of other comprehensive income on a pretax and after-tax basis for
the year ended December 31, are as follows:
<TABLE>
1998 1997 1996
------------------------------- ------------------------------------------------------------------
After- After- After-
Pretax Tax tax Pretax Tax tax Pretax Tax tax
------ --- --- ------ --- --- ------ --- ---
Unrealized capital gains
and losses:
- --------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Unrealized holding gains
(losses) arising during
the period $75,817 $(26,536) $49,281 $ 124,702 $(43,645) $ 81,057 $(86,096) $ 30,133 $(55,963)
Adjustments to unrealized
capital gains and losses
arising during the period:
Deferred acquisition costs (348) 122 (226) (861) 301 (560) 762 (267) 495
Reserve for life insurance
policy benefits (42,251) 14,788 (27,463) (80,155) 28,054 (52,101) 24,300 (8,505) 15,795
------- -------- ------- --------- -------- -------- -------- -------- --------
Net unrealized holding
gains arising during the
period 33,218 (11,626) 21,592 43,686 (15,290) 28,396 (61,034) 21,361 (39,673)
------- -------- ------- --------- -------- -------- -------- -------- --------
Less: reclassification
adjustment for realized
net capital gains included
in net income 4,869 (1,704) 3,165 1,183 (414) 769 (3,249) 1,137 (2,112)
------- -------- ------- --------- -------- -------- -------- -------- --------
Unrealized net capital
gains (losses) 28,349 (9,922) 18,427 42,503 (14,876) 27,627 (57,785) 20,224 (37,561)
------- -------- ------- --------- -------- -------- -------- -------- --------
OTHER COMPREHENSIVE
INCOME $28,349 $ (9,922) $18,427 $ 42,503 $(14,876) $ 27,627 $(57,785) $ 20,224 $(37,561)
======= ======== ======= ========= ======== ======== ======== ======== ========
</TABLE>
10. COMMITMENTS AND CONTINGENT LIABILITIES
REGULATIONS AND LEGAL PROCEEDINGS
The Company's business is subject to the effect of a changing social, economic
and regulatory environment. Public and regulatory initiatives have varied and
have included employee benefit regulation, controls on medical care costs,
removal of barriers preventing banks from engaging in the securities and
insurance business, tax law changes affecting the taxation of insurance
companies, the tax treatment of insurance products and its impact on the
relative desirability of various personal investment vehicles, and proposed
legislation to prohibit the use of gender in determining insurance rates and
benefits. The ultimate changes and eventual effects, if any, of these
initiatives are uncertain.
From time to time the Company is involved in pending and threatened litigation
in the normal course of its business in which claims for monetary damages are
asserted. In the opinion of management, the ultimate liability, if any, arising
from such pending or threatened litigation is not expected to have a material
effect on the results of operations, liquidity or financial position of the
Company.
F-21
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
SCHEDULE IV--REINSURANCE
($ in thousands)
GROSS NET
YEAR ENDED DECEMBER 31, 1998 AMOUNT CEDED AMOUNT
- ---------------------------- ------ ----- ------
Life insurance in force $12,656,826 $ 857,500 $11,799,326
=========== =========== ===========
Premiums and contract charges:
Life and annuities $ 116,678 $ 2,541 $ 114,137
Accident and health 5,578 663 4,915
----------- ----------- -----------
$ 122,256 $ 3,204 $ 119,052
=========== =========== ===========
GROSS NET
YEAR ENDED DECEMBER 31, 1997 AMOUNT CEDED AMOUNT
- ---------------------------- ------ ----- ------
Life insurance in force $11,339,990 $ 721,040 $10,618,950
=========== =========== ===========
Premiums and contract charges:
Life and annuities $ 116,167 $ 2,185 $ 113,982
Accident and health 5,883 902 4,981
----------- ----------- -----------
$ 122,050 $ 3,087 $ 118,963
=========== =========== ===========
GROSS NET
YEAR ENDED DECEMBER 31, 1996 AMOUNT CEDED AMOUNT
- ---------------------------- ------ ----- ------
Life insurance in force $ 9,962,300 $ 553,628 $ 9,408,672
=========== =========== ===========
Premiums and contract charges:
Life and annuities $ 114,296 $ 1,398 $ 112,898
Accident and health 5,083 875 4,208
----------- ----------- -----------
$ 119,379 $ 2,273 $ 117,106
=========== =========== ===========
F-22
<PAGE>
<TABLE>
<CAPTION>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
SCHEDULE V--VALUATION AND QUALIFYING ACCOUNTS
($ in thousands)
BALANCE AT CHARGED TO BALANCE AT
BEGINNING COSTS AND END OF
OF PERIOD EXPENSES DEDUCTIONS PERIOD
--------- -------- ---------- ------
<S> <C> <C> <C> <C>
YEAR ENDED DECEMBER 31, 1998
- ----------------------------
Allowance for estimated losses
on mortgage loans $ 486 $ 114 $ - $ 600
============ ============ ============ ============
YEAR ENDED DECEMBER 31, 1997
- ----------------------------
Allowance for estimated losses
on mortgage loans $ 225 $ 261 $ - $ 486
============ ============ ============ ============
YEAR ENDED DECEMBER 31, 1996
- ----------------------------
Allowance for estimated losses
on mortgage loans $ 1,952 $ (296) $ 1,431 $ 225
============ ============ ============ ============
</TABLE>
F-23
<PAGE>
ALLSTATE LIFE OF NEW YORK SEPARATE ACCOUNT A
Financial Statements as of December 31, 1998
and for the periods ended December 31, 1998
and December 31, 1997, and
Independent Auditors' Report
F-24
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Shareholder of
Allstate Life Insurance Company of New York:
We have audited the accompanying statements of net assets of each of the
sub-accounts ("portfolios" for purposes of this report) that comprise Allstate
Life of New York Separate Account A (the "Account"), a Separate Account of
Allstate Life Insurance Company of New York, an affiliate of The Allstate
Corporation, as of December 31, 1998, and the related statements of operations
and changes in net assets for the years ended December 31, 1998 and December 31,
1997 of the Capital Appreciation, Diversified Income, Global Utilities,
Government Securities, Growth, Growth and Income, International Equity, Money
Market, and Value portfolios of the AIM Variable Insurance Funds, Inc. that
comprise the Account. These financial statements are the responsibility of the
Account'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 audits 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, 1998. 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, such financial statements present fairly, in all material
respects, the financial position of each of the portfolios that comprise the
Account as of December 31, 1998, and the results of their operations for the
year then ended and the changes in their net assets for each of the two years in
the period then ended, of each of the portfolios comprising the Account, in
conformity with generally accepted accounting principles.
/s/ Deloitte & Touche LLP
Chicago, Illinois
March 18, 1999
F-25
<PAGE>
ALLSTATE LIFE OF NEW YORK SEPARATE ACCOUNT A
STATEMENTS OF NET ASSETS
DECEMBER 31, 1998
- --------------------------------------------------------------------------------
($ and shares in thousands)
ASSETS
Investments in the AIM Variable Insurance Funds, Inc. Portfolios:
Capital Appreciation, 171 shares (cost $3,829) $ 4,305
Diversified Income, 161 shares (cost $1,824) 1,765
Global Utilities, 23 shares (cost $364) 395
Government Securities, 320 shares (cost $3,576) 3,573
Growth, 169 shares (cost $3,615) 4,187
Growth and Income, 278 shares (cost $5,421) 6,604
International Equity, 100 shares (cost $1,818) 1,964
Money Market, 968 shares (cost $968) 968
Value, 272 shares (cost $6,060) 7,152
--------------
Total assets 30,913
LIABILITIES
Payable to Allstate Life Insurance Company of New York:
Accrued contract maintenance charges 8
--------------
Net assets $ 30,905
==============
See notes to financial statements.
F-26
<PAGE>
<TABLE>
<CAPTION>
ALLSTATE LIFE OF NEW YORK SEPARATE ACCOUNT A
STATEMENTS OF OPERATIONS
- ----------------------------------------------------------------------------------------------------------------------------------
($ in thousands)
AIM Variable Insurance Funds, Inc. Portfolios
---------------------------------------------------------------------------------------
For the Year Ended December 31, 1998
---------------------------------------------------------------------------------------
Capital Diversi- Globa Govt. Growth Inter-
Appreci- fied Utili- Securi- and national Money
ation Income ties ties Growth Income Equity Market Value
------- ------ ------- ------- ------- ------- -------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Dividends $ 115 $ 114 $ 8 $ 95 $ 264 $ 89 $ 16 $ 38 $ 327
Charges from Allstate Life Insurance
Company of New York:
Mortality and expense risk (45) (18) (3) (15) (36) (62) (21) (10) (61)
Administrative expense (4) (1) -- (1) (3) (5) (2) (1) (4)
------- ------- ------- ------- ------- ------- ------- ------- -------
Net investment income (loss) 66 95 5 79 225 22 (7) 27 262
REALIZED AND UNREALIZED GAINS
(LOSSES) ON INVESTMENTS
Realized gains (losses) from sales of
investments:
Proceeds from sales 574 233 124 551 243 395 227 352 342
Cost of investments sold 573 225 125 442 214 377 222 352 310
------- ------- ------- ------- ------- ------- ------- ------- -------
Net realized gains (losses) 1 8 (1) 109 29 18 5 -- 32
Change in unrealized gains (losses) 458 (86) 24 (23) 542 1,076 166 -- 1,022
------- ------- ------- ------- ------- ------- ------- ------- -------
Net gains (losses) on investments 459 (78) 23 86 571 1,094 171 -- 1,054
------- ------- ------- ------- ------- ------- ------- ------- -------
CHANGE IN NET ASSETS RESULTING
FROM OPERATIONS $ 525 $ 17 $ 28 $ 165 $ 796 $ 1,116 $ 164 $ 27 $ 1,316
======= ======= ======= ======= ======= ======= ======= ======= =======
<FN>
See notes to financial statements
</FN>
</TABLE>
F-27
<PAGE>
<TABLE>
<CAPTION>
ALLSTATE LIFE OF NEW YORK SEPARATE ACCOUNT A
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------------------------------------------------------
($ in thousands)
AIM Variable Insurance Funds, Inc. Portfolios
---------------------------------------------------------------------------------------
For the Year Ended December 31, 1998
---------------------------------------------------------------------------------------
Capital Diversi- Globa Govt. Growth Inter-
Appreci- fied Utili- Securi- and national Money
ation Income ties ties Growth Income Equity Market Value
------- ------ ------- ------- ------- ------- -------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
FROM OPERATIONS
Net investment income (loss) $ 66 $ 95 $ 5 $ 79 $ 225 $ 22 $ (7) $ 27 $ 262
Net realized gains (losses) 1 8 (1) 109 29 18 5 -- 32
Change in unrealized gains (losses) 458 (86) 24 (23) 542 1,076 166 -- 1,022
------- ------- ------- ------- ------- ------- ------- ------ -------
Change in net assets resulting from
operations 525 17 28 165 796 1,116 164 27 1,316
FROM CAPITAL TRANSACTIONS
Deposits 2,056 1,223 357 2,725 2,076 3,227 716 510 3,273
Benefit payments (30) (33) (5) -- (7) (82) (7) (37) (7)
Payments on termination (115) (38) (4) (9) (100) (162) (33) (16) (104)
Contract maintenance charges (2) -- -- (1) (1) (2) (1) -- (3)
Transfers among the portfolios and with
the Fixed Account - net (183) (99) (94) 268 31 76 42 32 236
------- ------- ------- ------- ------- ------- ------- ------ -------
Change in net assets resulting from
capital transactions 1,726 1,053 254 2,983 1,999 3,057 717 489 3,395
------- ------- ------- ------- ------- ------- ------- ------ -------
INCREASE IN NET ASSETS 2,251 1,070 282 3,148 2,795 4,173 881 516 4,711
NET ASSETS AT BEGINNING OF YEAR 2,053 695 113 424 1,391 2,429 1,082 452 2,439
------- ------- ------- ------- ------- ------- ------- ------ -------
NET ASSETS AT END OF YEAR $ 4,304 $ 1,765 $ 395 $ 3,572 $ 4,186 $ 6,602 $ 1,963 $ 968 $ 7,150
======= ======= ======= ======= ======= ======= ======= ======= =======
<FN>
See notes to financial statements.
</FN>
</TABLE>
F-28
<PAGE>
<TABLE>
<CAPTION>
ALLSTATE LIFE OF NEW YORK SEPARATE ACCOUNT A
STATEMENTS OF CHANGES IN NET ASSETS
- -------------------------------------------------------------------------------------------------------------------------------
($ and units in thousands, except value per unit)
AIM Variable Insurance Funds, Inc. Portfolios
--------------------------------------------------------------------------------------
For the Year Ended December 31, 1997
--------------------------------------------------------------------------------------
Capital Diversi- Global Govt. Growth Inter-
Appreci- fied Utili- Securi- and national Money
ation Income ties ties Growth Income Equity Market Value
------- ------ ------- ------- ------- ------- -------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
FROM OPERATIONS
Net investment income (loss) $ 12 $ (3) $ -- $ (3) $ 39 $ (10) $ 13 $ 10 $ 67
Net realized gains 1 -- -- -- 1 3 1 -- 2
Change in unrealized gains (losses) 17 30 7 20 31 106 (22) -- 70
------- ------- ------- ------- ------- ------- ------- ------- -------
Change in net assets resulting from
operations 30 27 7 17 71 99 (8) 10 139
FROM CAPITAL TRANSACTIONS
Deposits 1,832 570 106 406 1,279 2,277 988 694 2,294
Benefit payments -- -- -- -- -- (49) -- (75) (49)
Payments on termination (10) (5) -- -- (11) (20) (2) (16) (19)
Contract maintenance charges -- -- -- -- -- (1) -- -- (1)
Transfers among the portfolios and with
the Fixed Account - net 113 53 -- 1 25 60 39 (206) 9
------- ------- ------- ------- ------- ------- ------- ------- -------
Change in net assets resulting from
capital transactions 1,935 618 106 407 1,293 2,267 1,025 397 2,234
------- ------- ------- ------- ------- ------- ------- ------- -------
INCREASE IN NET ASSETS 1,965 645 113 424 1,364 2,366 1,017 407 2,373
NET ASSETS AT BEGINNING OF YEAR 88 50 -- -- 27 63 65 45 66
------- ------- ------- ------- ------- ------- ------- ------- -------
NET ASSETS AT END OF YEAR $ 2,053 $ 695 $ 113 $ 424 $ 1,391 $ 2,429 $ 1,082 $ 452 $ 2,439
======= ======= ======= ======= ======= ======= ======= ======= =======
Net asset value per unit at end of year $ 12.74 $ 11.79 $ 13.52 $ 10.83 $ 14.34 $ 14.50 $ 12.60 $ 10.74 $ 13.52
======= ======= ======= ======= ======= ======= ======= ======= =======
Units outstanding at end of year 161 59 8 39 97 168 86 42 180
======= ======= ======= ======= ======= ======= ======= ======= =======
<FN>
See notes to financial statements.
</FN>
</TABLE>
F-29
<PAGE>
ALLSTATE LIFE OF NEW YORK SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS
TWO YEARS ENDED DECEMBER 31, 1998
- --------------------------------------------------------------------------------
1. ORGANIZATION
Allstate Life of New York Separate Account A (the "Account"), a unit
investment trust registered with the Securities and Exchange Commission
under the Investment Company Act of 1940, is a Separate Account of Allstate
Life Insurance Company of New York ("ALNY"). The assets of the Account are
legally segregated from those of ALNY. ALNY is wholly owned by Allstate
Life Insurance Company, a wholly owned subsidiary of Allstate Insurance
Company, which is wholly owned by The Allstate Corporation.
ALNY issues certain annuity contracts, the deposits of which are invested
at the direction of the contractholder in the sub-accounts ("portfolios"
for purposes of this report) that comprise the Account. Contractholders
bear all investment risk for amounts allocated to the Account. The
portfolios invest in the AIM Variable Insurance Funds, Inc. (the "Fund").
ALNY provides insurance and administrative services to the contractholders
for a fee.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Valuation of Investments - Investments consist of shares of the Fund and
are stated at fair value based on quoted market prices at December 31,
1998.
Investment Income - Investment income consists of dividends declared by the
Fund and is recognized on the date of record.
Realized Gains and Losses - Realized gains and losses represent the
difference between the proceeds from sales of portfolio shares by the
Account and the cost of such shares, which is determined on a weighted
average basis.
Federal Income Taxes - The Account intends to qualify as a segregated asset
account as defined in the Internal Revenue Code ("Code"). As such, the
operations of the Account are included with and taxed as a part of ALNY.
ALNY is taxed as a life insurance company under the Code. No federal income
taxes are payable by the Account in 1998 as the Account did not generate
taxable income.
3. CONTRACT CHARGES
ALNY assumes mortality and expense risks related to the operations of the
Account and deducts charges daily at a rate equal to 1.35% per annum of the
daily net assets of the Account. ALNY guarantees that the amount of this
charge will not increase over the life of the contract.
ALNY deducts administrative expense charges daily at a rate equal to .10%
per annum of the daily net assets of the Account.
If aggregate deposits are less than $50,000, ALNY will deduct an annual
maintenance fee of $35 on each contract anniversary.
4. FINANCIAL INSTRUMENTS
The investments of the Account are carried at fair value, based upon quoted
market prices. Accrued contract maintenance charges are of a short-term
nature. It is assumed that their carrying value approximates fair value.
F-30
<PAGE>
<TABLE>
<CAPTION>
5. UNITS ISSUED AND REDEEMED
(Units in whole amounts) Unit activity during 1998
-------------------------
Units Units Accumulation
Outstanding Outstanding Unit Value
December 31, Units Units December 31, December 31,
1997 Issued Redeemed 1998 1998
--------------- --------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
Investments in the AIM Variable
Insurance Funds, Inc. Portfolio:
Capital Appreciation 161,013 184,864 (58,541) 287,336 $ 14.98
Diversified Income 58,958 110,754 (23,068) 146,644 12.03
Global Utilities 8,276 32,920 (15,778) 25,418 15.52
Government Securities 39,009 329,878 (66,904) 301,983 11.83
Growth 97,039 150,194 (26,402) 220,831 18.95
Growth and Income 167,625 228,614 (34,349) 361,890 18.24
International Equity 85,934 69,780 (18,816) 136,898 14.34
Money Market 42,128 76,593 (31,711) 87,010 11.13
Value 180,440 251,601 (26,795) 405,246 17.64
<FN>
Units relating to accrued contract maintenance charges are included in units
redeemed.
</FN>
</TABLE>
F-31
<PAGE>
PART C
OTHER INFORMATION
24A. FINANCIAL STATEMENTS
Allstate Life Insurance Company of New York Financial Statements and Financial
Schedule and Allstate Life of New York Separate Account A Financial Statements
are included in Part B of this Registration Statement
24B. EXHIBITS
Unless otherwise indicated, the following exhibits, which correspond to those
required by Item 24(b) of Form N-4, are filed herewith:
(1) Resolution of the Board of Directors of Allstate Life Insurance Company of
New York authorizing establishment of the Allstate Life of New York
Separate Account A*
(2) Not Applicable
(3) Form of Underwriting Agreement
(4) Form of Contract
(5) Form of application for a Contract
(6) (a) Certificate of Incorporation of Allstate Life Insurance Company of
New York**
(b) By-laws of Allstate Life Insurance Company of New York**
(7) Not applicable
(8) Participation Agreement
(9) Opinion of Michael J. Velotta, Vice President, Secretary and
General Counsel of Allstate Life Insurance Company of New York
(10) (a) Independent Auditors' Consent
(b) Consent of Freedman, Levy, Kroll & Simonds
(11) Not applicable
(12) Not applicable
(13) Schedule of Computation of Performance Quotations
(14) Not applicable
(99)(a) Powers of Attorney for Samuel H. Pilch and Joseph J. Richardson, Jr.
(b) Powers of Attorney for Marla G. Friedman, John C. Lounds, Louis G.
Lower, II, Timothy H. Plogh, Kevin R. Slawin, Casey J. Sylla and
Thomas J. Wilson, II previousely filed in N-4 Registration Statement
dated February 9, 1999 (file 333-72017).
* Incorporated herein by reference to Registrant's N-4 Registration Statement
(File No. 33-65381), as amended December 26, 1995.
** Incorporated herein by reference. Registrant's Form N-4 Registration
Statement (File No. 33-65381), as amended September 20, 1996.
<PAGE>
25. DIRECTORS AND OFFICERS OF THE DEPOSITOR
<TABLE>
<CAPTION>
NAME AND PRINCIPAL POSITION AND OFFICE WITH
BUSINESS ADDRESS DEPOSITOR OF THE ACCOUNT
<S> <C>
Louis G. Lower, II Director and Chairman of the Board of Directors
Thomas J. Wilson, II Director and President
Michael J. Velotta Director, Vice President, Secretary and General Counsel
Marcia D. Alazraki Director
Marla G. Friedman Director and Vice President
Vincent A. Fusco Director
Cleveland Johnson, Jr. Director
Gerard F. McDermott Director
Kenneth R. O'Brien Director
Timothy H. Plohg Director and Vice President
John R. Raben, Jr. Director
Joseph J. Richardson, Jr. Director and Chief Operations Officer
Sally A. Slacke Director
Kevin R. Slawin Director and Vice President
Patricia W. Wilson Director and Assistant Vice President
Karen C. Gardner Vice President
Samuel H. Pilch Controller
Casey J. Sylla Chief Investment Officer
James P. Zils Treasurer
Sharmaine M. Miller Chief Administrative Officer
Richard L. Baker Assistant Vice President
D. Steven Boger Assistant Vice President
Adrian B. Corbiere Assistant Vice President
Dorothy E. Even Assistant Vice President
John M. Goense Assistant Vice President
Judith P. Greffin Assistant Vice President
Keith A. Hauschildt Assistant Vice President
Ronald Johnson Assistant Vice President
Charles D. Mires Assistant Vice President
Barry S. Paul Assistant Vice President
Robert N. Roeters Assistant Vice President
C. Nelson Strom Assistant Vice President and Corporate Actuary
Timothy N. Vander Pas Assistant Vice President
David A. Walsh Assistant Vice President
Emma M. Kalaidjian Assistant Secretary
Paul N. Kierig Assistant Secretary
Mary J. McGinn Assistant Secretary
Ralph A. Bergholtz Assistant Treasurer
Mark A. Bishop Assistant Treasurer
Robert B. Bodett Assistant Treasurer
Barbara S. Brown Assistant Treasurer
Nancy M. Bufalino Assistant Treasurer
Peter S. Horos Assistant Treasurer
Thomas C. Jensen Assistant Treasurer
Kathleen A. Knudson Assistant Treasurer
David L. Kocourek Assistant Treasurer
Daniel C. Leimbach Assistant Treasurer
Beth K. Marder Assistant Treasurer
Ronald A. Mendel Assistant Treasurer
Stephen J. Stone Assistant Treasurer
R. Steven Taylor Assistant Treasurer
Louise J. Walton Assistant Treasurer
Jerry D. Zinkula Assistant Treasurer
</TABLE>
The principal business address of Mr. McDermott is P.O. Box 9095, Farmingville,
New York 11738. The principal business address of the other foregoing officers
and directors is 3100 Sanders Road, Northbrook, Illinois 60062.
<PAGE>
26. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH DEPOSITOR OR REGISTRANT
Incorporated herein by reference to Annual Report on Form 10-K, filed by the
Allstate Corporation on March 26, 1999 (File No. 1-11840).
27. NUMBER OF CONTRACT OWNERS
No contracts have been issued as of the effective date of this Registration
Statement.
28. INDEMNIFICATION
The by-laws of both Allstate Life Insurance Company of New York (Depositor) and
Allstate Life Financial Services, Inc. (Distributor), provide for the
indemnification of its Directors, Officers and Controlling Persons, against
expenses, judgments, fines and amounts paid in settlement as incurred by such
person, if such person acted properly. No indemnification shall be made in
respect of any claim, issue or matter as to which such person shall have been
adjudged to be liable for negligence or misconduct in the performance of a duty
to the company, unless a court determines such person is entitled to such
indemnity.
Insofar as indemnification for liability arising out of the Securities Act of
1933 may be permitted to directors, 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 payment by the registrant of expenses incurred 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 is 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.
29A. RELATIONSHIP OF PRINCIPAL UNDERWRITER TO OTHER INVESTMENT COMPANIES
(a) Allstate Life Financial Services also acts as a principal underwriter to
the following investment companies:
Glenbrook Life Multi-Manager Variable Account
Glenbrook Life and Annuity Company Variable Annuity Account
Glenbrook Life Variable Life Separate Account B
Glenbrook Life and Annuity Company Separate Account A
Glenbrook Life AIM Variable Life Separate Account A
Glenbrook Life Scudder Variable Account (A)
Glenbrook Life Variable Life Separate Account A
Allstate Life Insurance Company Separate Account A
<PAGE>
(b) The directors and officers of the principal underwriter are:
<TABLE>
<CAPTION>
Name and Principal Business Positions and Offices
Address* of Each Such Person with Underwriter
- ---------------------------- ----------------------
<S> <C>
Louis G. Lower, II Director
Thomas J. Wilson, II Director
Kevin R. Slawin Director
Michael J. Velotta Director and Secretary
John R. Hunter President and Chief Executive Officer
Janet M. Albers Vice President and Controller
Brent H. Hamann Vice President
Andrea J. Schur Vice President
Terry R. Young General Counsel and Assistant Secretary
James P. Zils Treasurer
Lisa A. Burnell Assistant Vice President and Compliance Officer
Robert N. Roeters Assistant Vice President
Emma M. Kalaidjian Assistant Secretary
Gregory C. Sernett Assistant Secretary
Nancy M. Bufalino Assistant Treasurer
</TABLE>
* The principal address of Allstate Life Financial Services, Inc. is 3100
Sanders Road, Northbrook, Illinois.
(c) Compensation of Allstate Life Financial Services, Inc.
None
30. LOCATION OF ACCOUNTS AND RECORDS
The Depositor, Allstate Life Insurance Company of New York, is located at One
Allstate Drive, P.O. Box 9095, Farmingville, New York 11738.
The Underwriter, Allstate Life Financial Services, Inc. is located at 3100
Sanders Road, Northbrook, Illinois 60062.
Each company maintains those accounts and records required to be maintained
pursuant to Section 31(a) of the Investment Company Act and the rules
promulgated thereunder.
31. MANAGEMENT SERVICES
None
32. UNDERTAKINGS
The Registrant undertakes to file a post-effective amendment to the 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.
Registrant furthermore agrees to include either, as part of any prospectus or
application to purchase a contract offered by the prospectus, a toll-free number
that an applicant can call to request a Statement of Additional Information or a
post card or similar written communication that the applicant can remove to send
for a Statement of Additional Information. Finally, the Registrant agrees to
deliver any Statement of Additional Information and any Financial Statements
required to be made available under this Form N-4 promptly upon written or oral
request.
REPRESENTATIONS PURSUANT TO SECTION 403(B) OF THE INTERNAL
REVENUE CODE
Allstate Life Insurance Company of New York represents that it is relying upon a
November 28, 1988 Securities and Exchange Commission no-action letter issued to
the American Council of Life Insurance and that the provisions of paragraphs 1-4
of the no-action letter have been complied with.
REPRESENTATION REGARDING CONTRACT EXPENSES
Allstate Life Insurance Company of New York represents that the fees and charges
deducted under the Flexible Premium Deferred Variable Annuity Contracts hereby
registered by this Registration Statement, in the aggregate, are reasonable in
relation to the services rendered, the expenses expected to be incurred, and the
risks assumed by Allstate Life Insurance Company of New York.
<PAGE>
SIGNATURES
As required by the Securities Act of 1933 and the Investment Company Act of
1940, the Registrant, Allstate Life of New York Separate Account A, has caused
this Amendment to the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, and its seal to be hereunto affixed and
attested, all in the Township of Northfield, State of Illinois, on the 19th day
of November, 1999.
ALLSTATE LIFE OF NEW YORK SEPARATE ACCOUNT A
(REGISTRANT)
BY: ALLSTATE LIFE INSURANCE COMPANY OF
NEW YORK
(DEPOSITOR)
(SEAL)
By: /s/MICHAEL J. VELOTTA
----------------------
Michael J. Velotta
Vice President, Secretary and
General Counsel
As required by the Securities Act of 1933, this amended Registration Statement
has been duly signed below by the following Directors and Officers of Allstate
Life Insurance Company of New York on the 19th day of November, 1999.
*/LOUIS G. LOWER, II Chairman of the Board and Director
- -------------------- (Principal Executive Officer)
Louis G. Lower, II
*/THOMAS J. WILSON, II President and Director
- ---------------------- (Principal Operating Officer)
Thomas J. Wilson, II
**/JOSEPH J. RICHARDSON, JR. Director and Chief Operations Officer
- ----------------------------
Joseph J. Richardson, Jr.
/s/MICHAEL J. VELOTTA Vice President, Secretary, General
- ----------------------- Counsel and Director
Michael J. Velotta
*/KEVIN R. SLAWIN Vice President and Director
- ------------------ (Principal Financial Officer)
Kevin R. Slawin
**/SAMUEL J. PILCH Controller
- ---------------------- (Principal Accounting Officer)
Samuel H. Pilch
*/TIMOTHY H. PLOHG Vice President and Director
- ------------------
Timothy H. Plohg
*/MARCIA D. ALAZRAKI Director
- --------------------
Marcia D. Alazraki
*/CLEVELAND JOHNSON, JR. Director
- ------------------------
Cleveland Johnson, Jr.
*/GERARD F. MCDERMOTT Director
- ------------------------
Gerard F. McDermott
*/JOHN R. RABEN, JR. Director
- ---------------------
John R. Raben, Jr.
*/SALLY A. SLACKE Director
- ---------------------
Sally A. Slacke
*/ By Michael J. Velotta, pursuant to Powers of Attorney previously filed.
**/ By Michael J. Velotta, pursuant to Powers of Attorney filed herewith.
<PAGE>
EXHIBIT INDEX
Exhibit Description
Exhibit 3 Form of Underwriting Agreement
Exhibit 4(b) Form of Contract
Exhibit 5(b) Form of Application for a Contract
Exhibit 8 Participation Agreement
Exhibit 9(b) Opinion and Consent of General Counsel
Exhibit 10(a) Independent Auditor's Consent
Exhibit 10(b) Consent of Freedman, Levy, Kroll & Simonds
Exhibit 13 Schedule of Computation of Performance Quotations
Exhibit 99(a) Powers of Attorney for Samuel H. Pilch and
Joseph J. Richardson, Jr.
FORM OF UNDERWRITING AGREEMENT
THIS AGREEMENT, is entered into on this day of ___, 1999, by and among
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK ("Allstate Life of New York" or
"Company"), a life insurance company organized under the laws of the State of
New York, and ALLSTATE LIFE FINANCIAL SERVICES, INC., ("Principal Underwriter"),
a corporation organized under the laws of the state of Delaware.
RECITALS
WHEREAS, Company proposes to issue to the public certain flexible premium
deferred variable annuity contracts identified in the Attachment A
("Contracts"); and
WHEREAS, the Separate Account is registered with the Securities and
Exchange Commission ("Commission") as a unit investment trust under the
Investment Company Act of 1940 (File No. 811-7467); and
WHEREAS, the Contracts to be issued by Company are registered with the
Commission under the Securities Act of 1933 and the Investment Company Act of
1940. (File No. 333-74411) for offer and sale to the public and otherwise are in
compliance with all applicable laws; and
WHEREAS, Principal Underwriter, a broker-dealer registered under the
Securities Exchange Act of 1934 and a member of the National Association of
Securities Dealers, Inc. ("NASD"), proposes to act as principal underwriter on
an agency (best efforts) basis in the marketing and distribution of said
Contracts; and
WHEREAS, Company desires to obtain the services of Principal Underwriter as
an underwriter and distributor of said Contracts issued by Company;
NOW THEREFORE, in consideration of the foregoing, and of the mutual
covenants and conditions set forth herein, and for other good and valuable
consideration, the Company, the Separate Account, and the Principal Underwriter
hereby agree as follows:
1. AUTHORITY AND DUTIES
(a) Principal Underwriter will serve as an underwriter and distributor on
an agency basis for the Contracts which will be issued by the Company.
<PAGE>
(b) Principal Underwriter will use its best efforts to provide information
and marketing assistance to licensed insurance agents and
broker-dealers on a continuing basis. However, Principal Underwriter
shall be responsible for compliance with the requirements of state
broker-dealer regulations and the Securities Exchange Act of 1934 as
each applies to Principal Underwriter in connection with its duties as
distributor of said Contracts. Moreover, Principal Underwriter shall
conduct its affairs in accordance with the rules of Fair Practice of
the NASD.
(c) Subject to agreement with the Company, Principal Underwriter may enter
into selling agreements with broker-dealers which are registered under
the Securities Exchange Act of 1934 and authorized by applicable law
or exemptions to sell single payment deferred annuity contracts issued
by Company. Any such contractual arrangement is expressly made subject
to this Agreement, and Principal Underwriter will at all times be
responsible to Company for supervision of compliance with the federal
securities laws regarding distribution of Contracts.
2. WARRANTIES
(a) The Company represents and warrants to Principal Underwriter that:
(i) Registration Statements on Form S-1 for each of the Contracts
identified in Attachment A have been filed with the Commission in
the form previously delivered to Principal Underwriter and that
copies of any and all amendments thereto will be forwarded to
Principal Underwriter at the time that they are filed with
Commission;
(ii) The Registration Statement and any further amendments or
supplements thereto will, when they become effective, conform in
all material respects to the requirements of the Securities Act
of 1933, and the rules and regulations of the Commission under
such Acts, and will not contain any untrue statement of a
material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading; provided, however, that this representation and
warranty shall not apply to any statement or omission made in
reliance upon and in conformity with information furnished in
writing to Company by Principal Underwriter expressly for use
therein;
(iii)The Company is validly existing as a stock life insurance
company in good standing under the laws of the State of New York,
with power to own its properties and conduct its business as
described in the Prospectus, and has been duly qualified for the
transaction of business and is in good standing under the laws of
each other jurisdiction in which it owns or leases properties, or
conducts any business;
(iv) Those persons who offer and sell the Contracts are to be
appropriately licensed or appointed to comply with the state
insurance laws;
(v) The performance of this Agreement and the consummation of the
transactions contemplated by this Agreement will not result in a
violation of any of the provisions of or default under any
statute, indenture, mortgage, deed of trust, note agreement or
other agreement or instrument to which Company is a party or by
which Company is bound (including Company's Charter or By-laws as
a stock life insurance company, or any order, rule or regulation
of any court or governmental agency or body having jurisdiction
over Company or any of its properties);
(vi) There is no consent, approval, authorization or order of any
court or governmental agency or body required for the
consummation by Company of the transactions contemplated by this
Agreement, except such as may be required under the Securities
Exchange Act of 1934 or state insurance or securities laws in
connection with the distribution of the Contracts; and
(vii)There are no material legal or governmental proceedings pending
to which Company is a party or of which any property of Company
is the subject (other than as set forth in the Prospectus
relating to the Contracts, or litigation incident to the kind of
business conducted by the Company) which, if determined adversely
to Company, would individually or in the aggregate have a
material adverse effect on the financial position, surplus or
operations of Company.
(b) Principal Underwriter represents and warrants to Company that:
(i) It is a broker-dealer duly registered with the Commission
pursuant to the Securities Exchange Act of 1934, is a member in
good standing of the NASD, and is in compliance with the
securities laws in those states in which it conducts business as
a broker-dealer;
(ii) As a principal underwriter, it shall permit the offer and sale of
Contracts to the public only by and through persons who are
appropriately licensed under the securities laws and who are
appointed in writing by the Company to be authorized insurance
agents;
(iii)The performance of this Agreement and the consummation of the
transactions herein contemplated will not result in a breach or
violation of any of the terms or provisions of or constitute a
default under any statute, indenture, mortgage, deed of trust,
note agreement or other agreement or instrument to which
Principal Underwriter is a party or by which Principal
Underwriter is bound (including the Certificate of Incorporation
or By-laws of Principal Underwriter or any order, rule or
regulation of any court or governmental agency or body having
jurisdiction over either Principal Underwriter or its property);
and
(iv) To the extent that any statements made in the Registration
Statement, or any amendment or supplement thereto, are made in
reliance upon and in conformity with written information
furnished to Company by Principal Underwriter expressly for use
therein, such statements will, when they become effective or are
filed with the Commission, as the case may be, conform in all
material respects to the requirements of the Securities Act of
1933 and the rules and regulations of the Commission thereunder,
and will not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading.
3. BOOKS AND RECORDS
(a) Principal Underwriter shall keep, in a manner and form approved by
Company and in accordance with Rules 17a-3 and 17a-4 under the
Securities Exchange Act of 1934, correct records and books of account
as required to be maintained by a registered broker-dealer, acting as
principal underwriter, of all transactions entered into on behalf of
Company with respect to its activities under this Agreement. Principal
Underwriter shall make such records and books of account available for
inspection by the Commission, and Company shall have the right to
inspect, make copies of or take possession of such records and books
of account at any time upon demand.
(b) Subject to applicable Commission or NASD restrictions, Company will
send confirmations of Contract transactions to Contract Owners.
Company will make such confirmations and records of transactions
available to Principal Underwriter upon request.
4. SALES MATERIALS
(a) After authorization to commence the activities contemplated herein,
Principal Underwriter will utilize the currently effective prospectus
relating to the subject Contracts in connection with its underwriting,
marketing and distribution efforts. As to other types of sales
material, Principal Underwriter hereby agrees and will require any
participating or selling broker-dealers to agree that they will use
only sales materials which have been authorized for use by Company,
which conform to the requirements of federal and state laws and
regulations, and which have been filed where necessary with the
appropriate regulatory authorities, including the NASD.
(b) Principal Underwriter will not distribute any prospectus, sales
literature or any other printed matter or material in the underwriting
and distribution of any Contract if, to the knowledge of Principal
Underwriter, any of the foregoing misstates the duties, obligation or
liabilities of Company or Principal Underwriter.
5. COMPENSATION
Principal Underwriter shall be entitled to such remuneration for its services
and reimbursement for its fees, charges and expenses as will be contained in
such Schedules as attached hereto as Attachment B. Said Schedules may be amended
from time to time at the mutual consent of the undersigned parties.
6. UNDERWRITING TERMS
(a) Principal Underwriter makes no representations or warranties regarding
the number of Contracts to be sold by licensed broker-dealers and
registered representatives of broker-dealers or the amount to be paid
thereunder. Principal Underwriter does, however, represent that it
will actively engage in its duties under this Agreement on a
continuous basis while there is an effective registration statement
with the Commission.
(b) Principal Underwriter will use its best efforts to ensure that the
Contracts shall be offered for sale by registered broker-dealers and
registered representatives (who are duly licensed as insurance agents)
on the terms described in the currently effective prospectus
describing such Contracts.
(c) It is understood and agreed that Principal Underwriter may render
similar services to other companies in the distribution of other
variable contracts.
(d) The Company will use its best efforts to assure that the Contracts are
continuously registered under the Securities Act of 1933 (and under
any applicable state "blue sky" laws) and to file for approval under
state insurance laws when necessary.
(e) The Company reserves the right at any time to suspend or limit the
public offering of the subject Contracts upon one day's written notice
to Principal Underwriter.
7. LEGAL AND REGULATORY ACTIONS
(a) The Company agrees to advise Principal Underwriter immediately of:
(i) any request by the Commission for amendment of the Registration
Statement or for additional information relating to the
Contracts;
(ii) the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement relating to the
Contracts or the initiation of any proceedings for that purpose;
and
(iii)the happening of any known material event which makes untrue any
statement made in the Registration Statement relating to the
Contracts or which requires the making of a change therein in
order to make any statement made therein not misleading.
(b) Each of the undersigned parties agrees to notify the other in writing
upon being apprised of the institution of any proceeding,
investigation or hearing involving the offer or sale of the subject
Contracts.
(c) During any legal action or inquiry, Company will furnish to Principal
Underwriter such information with respect the Contracts in such form
and signed by such of its officers as Principal Underwriter may
reasonably request and will warrant that the statements therein
contained when so signed are true and correct.
9. TERMINATION
(a) This Agreement will terminate automatically upon its assignment.
(b) This Agreement shall terminate without the payment of any penalty by
either party upon sixty (60) days' advance written notice.
(c) This Agreement shall terminate at the option of the Company upon
institution of formal proceedings against Principal Underwriter by the
NASD or by the Commission, or if Principal Underwriter or any
representative thereof at any time:
(i) employs any device, scheme, artifice, statement or omission to
defraud any person;
(ii) fails to account and pay over promptly to the Company money due
it according to the Company's records; or
(iii) violates the conditions of this Agreement.
10. INDEMNIFICATION
The Company agrees to indemnify Principal Underwriter for any liability that it
may incur to a Contract owner or party-in-interest under a Contract:
(a) arising out of any act or omission in the course of or in connection
with rendering services under this Agreement; or
(b) arising out of the purchase, retention or surrender of a contract;
provided, however, that the Company will not indemnify Principal
Underwriter for any such liability that results from the willful
misfeasance, bad faith or gross negligence of Principal Underwriter or
from the reckless disregard by such Principal Underwriter of its
duties and obligations arising under this Agreement.
11. GENERAL PROVISIONS
(a) This Agreement shall be subject to the laws of the State of Illinois.
(b) This Agreement, along with any Schedules attached hereto and
incorporated herein by reference, may be amended from time to time by
the mutual agreement and consent of the undersigned parties.
(c) In case any provision in this Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in way be affected or impaired thereby.
IN WITNESS WHEREOF, the undersigned parties have caused this Agreement to
be duly executed, to be effective as of , 1999.
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
BY: ____________________________ ______________________________
President Date
ALLSTATE LIFE FINANCIAL SERVICES, INC.
BY: ____________________________ ________________________________
President & COO Date
<PAGE>
Attachment A
UNDERWRITING AGREEMENT
"Contracts" Form #
Flexible Premium Deferred Variable Annuity Group Certificate NYLU448
<PAGE>
Attachment B
UNDERWRITING AGREEMENT
Compensation
NYLU448
Allstate Life Insurance
Company Of New York
A Stock Company
Home Office: One Allstate Drive, Farmingville, New York 11738
Flexible Premium Deferred Variable Annuity Certificate
This Certificate is issued to customers of participating financial services
corporations according to the terms of Master Policy number 64895004 issued by
Allstate Life Insurance Company of New York to the Trustee of the Financial
Services Group Insurance Trust. The Trustee of the Financial Services Group
Insurance Trust is called the Master Policyholder. This Certificate is issued in
the state of New York and is governed by New York law.
Throughout this Certificate, "you" and "your" refer to the Certificate owner(s).
"We", "us" and "our" refer to Allstate Life Insurance Company of New York.
Certificate Summary
This flexible premium deferred variable annuity provides a cash withdrawal
benefit and a death benefit during the Accumulation Phase and periodic income
payments beginning on the Payout Start Date during the Payout Phase. A Mortality
and Expense Risk Charge equivalent to an annualized charge of 1.25% will be
deducted daily from the Variable Account. A $30 Certificate Maintenance Charge
will be deducted from the Variable Account on each Certificate Anniversary. The
smallest annual rate of net investment return on the Variable Account assets
required to keep Variable Amount Income Payments from decreasing is 4.25%.
The dollar amount of income payments or other values provided by this
Certificate, when based on the investment experience of the Variable Account,
will vary to reflect the performance of the Variable Account and are not
guaranteed as to dollar amount.
This Certificate and Master Policy do not pay dividends.
The tax status of this Certificate as it applies to the owner should be reviewed
each year.
PLEASE READ YOUR CERTIFICATE CAREFULLY.
This is a legal contract between the Certificate owner and Allstate Life
Insurance Company of New York.
Return Privilege
If you are not satisfied with this Certificate for any reason, you may return it
to us or our agent within 10 days after you receive it. We will refund any
purchase payments allocated to the Variable Account, adjusted to reflect
investment gain or loss from the date of allocation to the date of cancellation,
plus any purchase payments allocated to the Fixed Account Options. If this
Certificate is qualified under Section 408 of the Internal Revenue Code, we will
refund the greater of any purchase payments or the Certificate Value.
If you have any questions about your Allstate Life Insurance Company of New York
variable annuity, please contact Allstate Life Insurance Company of New York at
(800) 390-1277.
Secretary Chairman and Chief
Executive Officer
<PAGE>
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TABLE OF CONTENTS
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THE PERSONS INVOLVED...................................................3
ACCUMULATION PHASE.....................................................4
PAYOUT PHASE..........................................................11
INCOME PAYMENT TABLES.................................................13
GENERAL PROVISIONS....................................................14
<PAGE>
NYLU448
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THE PERSONS INVOLVED
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Owner The person named at the time of application is the Owner of this
Certificate unless subsequently changed. As Owner, you will receive any periodic
income payments, unless you have directed us to pay them to someone else.
You may exercise all rights stated in this Certificate, subject to the rights of
any irrevocable Beneficiary.
You may change the Owner or Beneficiary at any time. You may name a new
Annuitant only upon the death of the current Annuitant. Once we have received a
satisfactory written request for a change of Owner or Beneficiary, the change
will take effect as of the date you signed it. We are not liable for any payment
we make or other action we take before receiving any written request for a
change from you. You may not assign an interest in this Certificate as
collateral or security for a loan.
If the sole surviving Owner dies prior to the Payout Start Date, the Beneficiary
becomes the new Owner. If the sole surviving Owner dies after the Payout Start
Date, the Beneficiary becomes the new Owner and will receive any subsequent
guaranteed income payments.
If more than one person is designated as Owner:
o Owner as used in this Certificate refers to all persons named as Owners,
unless otherwise indicated;
o any request to exercise ownership rights must be signed by all Owners; and
o on the death of any person who is an Owner, the surviving person(s) named
as Owner will continue as Owner.
New Owner The New Owner is the Owner determined immediately after death of the
Owner. The New Owner is:
o the surviving Owner
o if no surviving Owner, the beneficiary(ies) of a single Owner; or
o the beneficiary(ies) of a sole surviving Owner.
Annuitant The Annuitant is the person named on the Annuity Data Page, but may be
changed by the Owner, as described above. The Annuitant must be a living
individual. If the Annuitant dies prior to the Payout Start Date, the new
Annuitant will be:
o the youngest Owner; otherwise,
o the youngest Beneficiary.
Beneficiary The Beneficiary is the person(s) named on the Annuity Data Page, but
may be changed by the Owner, as described above. We will determine the
Beneficiary from the most recent written request we have received from you. If
you do not name a Beneficiary or if the Beneficiary named is no longer living,
the Beneficiary will be:
o your spouse if living; otherwise
o your children equally if living; otherwise
o your estate.
<PAGE>
The Beneficiary may become the Owner under the circumstances described in the
Owner provision above.
Natural Person As used in this Certificate, Natural Person means a living
individual or trust entity that is treated as an individual for Federal Income
Tax purposes under the Internal Revenue Code.
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ACCUMULATION PHASE
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Accumulation Phase Defined The "Accumulation Phase" is the first of two phases
during your Certificate. The Accumulation Phase begins on the issue date of the
Certificate stated on the Annuity Data Page. This phase will continue until the
Payout Start Date unless the Certificate is terminated before that date.
Certificate Year "Certificate Year" is the one year period beginning on the
issue date of the Certificate and on each anniversary of the issue date.
Investment Alternatives The "Investment Alternatives" are the subaccounts of the
Variable Account and the Fixed Account Options. We reserve the right to limit
the availability of the Investment Alternatives for new investments. Any limit
will be applied to all Owners and will be applied in a non-discriminatory
manner.
Purchase Payments The initial payment is shown on the Annuity Data Page. You may
make subsequent purchase payments during the Accumulation Phase. We may limit
the amount of each purchase payment that we will accept to a minimum of $500 and
a maximum of $1,000,000. Any limits to Purchase Payments will be applied to all
Owners and will be applied in a non-discriminatory manner.
We will invest the purchase payments in the Investment Alternatives you select.
You may allocate any portion of your purchase payment in whole percents from 0%
to 100% or in exact dollar amounts to any of the Investment Alternatives. The
total allocation must equal 100%.
The allocation of the initial purchase payment is shown on the Annuity Data
Page. Allocation of each subsequent purchase payment will be the same as the
allocation for the most recent purchase payment unless you change the
allocation. You may change the allocation of subsequent purchase payments at any
time, without charge, simply by giving us written notice.
Any change will be effective at the time we receive the notice.
Variable Account The "Variable Account" for this Certificate is the Allstate
Life of New York Separate Account A. This account is a separate investment
account to which we allocate assets contributed under this and certain other
certificates. These assets will not be charged with liabilities arising from any
other business we may have.
Variable Subaccounts The Variable Account is divided into subaccounts. Each
subaccount invests solely in the shares of the mutual fund underlying that
subaccount.
Fixed Account Options The Fixed Account Options are the Standard Fixed Account
and the Seven-to-Twelve-Month Dollar Cost Averaging Fixed Account. The Fixed
Account Options are assets of the General Account.
<PAGE>
Standard Fixed Account Money in the Standard Fixed Account will earn interest at
the current rate in effect at the time of allocation or transfer to the Standard
Fixed Account for the guarantee period. We will offer a one year guarantee
period. Other guarantee periods will be offered at our discretion. Subsequent
renewal dates will be on anniversaries of the first renewal date. After the
initial guarantee period, a renewal rate will be declared. The interest rate for
the Standard Fixed Account will never be less than the minimum guaranteed rate
shown on the Annuity Data Page.
Seven-to-Twelve-Month Dollar Cost Averaging Fixed Account Money in the
Seven-to-Twelve-Month Dollar Cost Averaging Fixed Account will earn interest at
the annual rate in effect at the time of allocation to the Seven-to-Twelve-Month
Dollar Cost Averaging Fixed Account. Each purchase payment and associated
interest in the Seven-to-Twelve-Month Dollar Cost Averaging Fixed Account must
be transferred to subaccounts of the Variable Account in equal monthly
installments within the twelve-month transfer period. If you discontinue the
Seven-to-Twelve-Month Dollar Cost Averaging Program before the end of the
transfer period, the remaining balance in the Seven-to-Twelve-Month Dollar Cost
Averaging Fixed Account will be transferred to the money market subaccount
unless you request a different Investment Alternative. No amount may be
transferred into the Seven-to-Twelve-Month Dollar Cost Averaging Fixed Account.
The interest rate for the Seven-to-Twelve-Month Dollar Cost Averaging Fixed
Account will never be less than the minimum guaranteed rate shown on the Annuity
Data Page.
Crediting Interest We credit interest daily to money allocated to the Fixed
Account Options at a rate which compounds over one year to the interest rate we
guaranteed when the money was allocated. We will credit interest to the initial
purchase payment allocated to the Fixed Account Options from the issue date. We
will credit interest to subsequent purchase payments allocated to the Fixed
Account Options from the date we receive them at a rate declared by us. We will
credit interest to transfers to the Standard Fixed Account from the date the
transfer is made. The interest rate for the Fixed Account Options will never be
less than the minimum guaranteed rate shown on the Annuity Data Page.
Transfers Prior to the Payout Start Date, you may transfer amounts among
Investment Alternatives. You may make 12 transfers per Certificate Year without
charge. Each transfer after the 12th transfer in any Certificate Year may be
assessed a transfer fee of .50% of the amount transferred, but not to exceed
$25. Transfers are subject to the following restrictions:
o No amount may be transferred into the Seven-to-Twelve-Month Dollar Cost
Averaging Fixed Account.
o The maximum amount transferable from the Standard Fixed Account during any
Certificate Year is the greater of 30% of the Standard Fixed Account
balance as of the last Certificate Anniversary or the greatest of any prior
transfer from the Standard Fixed Account. This limitation does not apply to
Dollar Cost Averaging. However, if any interest rate is renewed at a rate
at least one percentage point less than the previous rate, the Certificate
Owner may elect to transfer up to 100% of the Funds receiving that reduced
rate within 60 days of the notification of the interest rate decrease. The
Company reserves the right to defer transfers from the Standard Fixed
Account for up to six months from the date of request.
o The minimum amount that may be transferred from the Standard Fixed Account
or a Subaccount of the Variable Account is $100; if the total amount
remaining in the Standard Fixed Account or the Subaccount of the Variable
Account after a transfer would be less than $100, the entire amount may be
transferred. These limitations do not apply to the Seven-to-Twelve-Month
Dollar Cost Averaging Fixed Account.
o We reserve the right to limit the number of transfers in any Certificate
Year or to refuse any transfer request for an Owner or certain Owners if,
in our sole discretion, we believe that:
o excessive trading by such Owner or Owners or a specific transfer
request or group of transfer requests may have a detrimental effect on
Unit Values or the share prices of the underlying mutual funds or
would be to the disadvantage of other Certificate Owners; or
o we are informed by one or more of the underlying mutual funds that the
purchase or redemption of shares is to be restricted because of
excessive trading or a specific transfer or group of transfers is
deemed to have a detrimental effect on share prices of affected
underlying mutual funds.
<PAGE>
Such restrictions may be applied in any manner which is reasonably
designed to prevent any use of the transfer right which is considered
by us to be to the disadvantage of the other Certificate Owners.
We reserve the right to waive the transfer restrictions contained in this
Certificate.
Certificate Value On the issue date of the Certificate, the "Certificate Value"
is equal to the initial purchase payment. After the issue date, the "Certificate
Value" is equal to the sum of:
o the number of Accumulation Units you hold in each subaccount of the
Variable Account multiplied by the Accumulation Unit Value for that
subaccount on the most recent Valuation Date; plus
the total value you have in the Fixed Account Options.
If you withdraw the entire Certificate Value, you may receive an amount less
than the Certificate Value because a Withdrawal Charge, income tax withholding,
and a premium tax charge may apply.
Valuation Period and Valuation Date A "Valuation Period" is the time interval
between the closing of the New York Stock Exchange on consecutive Valuation
Dates. A "Valuation Date" is any date the New York Stock Exchange is open for
trading.
Accumulation Units and Accumulation Unit Value Amounts which you allocate to a
subaccount of the Variable Account are used to purchase Accumulation Units in
that subaccount. The Accumulation Unit Value for each subaccount at the end of
any Valuation Period is calculated by multiplying the Accumulation Unit Value at
the end of the immediately preceding Valuation Period by the subaccount's Net
Investment Factor for the Valuation Period. The Accumulation Unit Values may go
up or down. Additions or transfers to a subaccount of the Variable Account will
increase the number of Accumulation Units for that subaccount. Withdrawals or
transfers from a subaccount of the Variable Account and Certificate Maintenance
Charges will decrease the number of Accumulation Units for that subaccount.
Net Investment Factor For each Variable Subaccount, the "Net Investment Factor"
for a Valuation Period is equal to:
o The sum of:
o the net asset value per share of the mutual fund underlying the
subaccount determined at the end of the current Valuation Period, plus
o the per share amount of any dividend or capital gain distributions
made by the mutual fund underlying the subaccount during the current
Valuation Period.
o Divided by the net asset value per share of the mutual fund underlying the
subaccount determined as of the end of the immediately preceding Valuation
Period.
o The result is reduced by the Mortality and Expense Risk Charge
corresponding to the portion of the current calendar year that is in the
current Valuation Period.
Charges The charges for this Certificate include Mortality and Expense Risk
Charges, Certificate Maintenance Charges, transfer charges, and taxes. If a
withdrawal is made, the Certificate may also be subject to a Withdrawal Charge.
Mortality and Expense Risk Charge The annualized Mortality and Expense Risk
Charge will never be greater than 1.25%. (See Net Investment Factor for a
description of how this charge is applied.)
<PAGE>
Our actual mortality and expense experience will not adversely affect the dollar
amount of variable benefits or other contractual payments or values under this
Certificate.
Certificate Maintenance Charge Prior to the Payout Start Date, a Certificate
Maintenance Charge will be deducted from your Certificate Value on each
Certificate anniversary. The charge is deducted only from the subaccounts of the
Variable Account. The charge will be deducted from the money market subaccount;
if the money market subaccount has insufficient funds to cover the Certificate
Maintenance Charge, the balance will be deducted on a pro-rata basis from each
of the other subaccounts of the Variable Account in the proportion that your
value in each bears to your total value in all subaccounts of the Variable
Account, excluding the money market subaccount. A full Certificate Maintenance
Charge will be deducted if the Certificate is terminated on any date other than
a Certificate anniversary. The annualized charge will never be greater than $30
per Certificate Year. The Certificate Maintenance Charge will be waived if the
Certificate Value is greater than $50,000 or if all money is allocated to the
Fixed Account Options on the Certificate anniversary.
After the Payout Start Date the Certificate Maintenance Charge will be deducted
modally from each income payment in equal parts reflecting the frequency of
payments chosen by the policyholder (e.g., one-twelfth each monthly payment, or
one-fourth each quarterly payment, etc.) The Certificate Maintenance Charge will
be waived if the Certificate Value on the Payout Start Date is $50,000 or more
or if all payments are Fixed Amount Income Payments.
Taxes Any premium tax or income tax withholding relating to this Certificate may
be deducted from purchase payments or the Certificate Value when the tax is
incurred or at a later time.
Withdrawal You have the right to withdraw part or all of your Certificate Value
at any time during the Accumulation Phase. A withdrawal must be at least $50. If
you withdraw the entire Certificate Value, the Certificate will terminate.
You must specify the Investment Alternative(s) from which you wish to make a
withdrawal. When you make a withdrawal, your Certificate Value will be reduced
by the amount paid to you and any applicable Withdrawal Charge and/or taxes. A
Certificate Maintenance Charge will also be deducted if the Certificate is
terminated. Any Withdrawal Charge will be waived on withdrawals taken to satisfy
IRS minimum distribution rules. This waiver is permitted only for withdrawals
which satisfy distributions resulting from this Certificate.
Preferred Withdrawal Amount Each Certificate Year, the Preferred Withdrawal
Amount is equal to the greater of earnings not previously withdrawn or 15% of
purchase payments. Each Certificate Year, you may withdraw the Preferred
Withdrawal Amount without any Withdrawal Charge. Any Preferred Withdrawal Amount
which is not withdrawn during a Certificate year may not be carried over to
increase the Preferred Withdrawal Amount available in a subsequent year.
Withdrawal Charge Withdrawals in excess of the Preferred Withdrawal Amount will
be subject to a Withdrawal Charge as follows:
Payment Year: 1 2 3 4 5 6 7 8 and Later
Percentage: 7% 7% 6% 5% 4% 3% 2% 0%
To determine the Withdrawal Charge, we assume that purchase payments are
withdrawn first, beginning with the oldest payment. When all purchase payments
have been withdrawn, additional withdrawals will not be assessed a Withdrawal
Charge.
<PAGE>
For each purchase payment withdrawal, the "Payment Year" in the table is
measured from the date we received the purchase payment. The Withdrawal Charge
is determined by multiplying the percentage corresponding to the Payment Year
times that part of each purchase payment withdrawal that is in excess of the
Preferred Withdrawal Amount.
Death of Owner If you die prior to the Payout Start Date, the new Owner will be
the surviving Owner. If there is no surviving Owner, the new Owner will be the
Beneficiary(ies). The new Owner will have the options described below.
1. If the sole new Owner is your spouse:
a. Your spouse may elect, within 180 days of the date of your death, to
receive the Death Benefit described below in a lump sum.
b. Your spouse may elect, within 180 days of the date of your death, to
receive an amount equal to the Death Benefit paid out under one of the
Income Plans described in the Payout Phase section. The Payout Start
Date must be within one year of your date of death. Income Payments
must be:
i. over the life of your spouse; or
ii. for a guaranteed number of payments from 5 to 30 years but not to
exceed the life expectancy of your spouse; or
iii. Over the life of your spouse with a guaranteed number of payments
from 5 to 30 years but not to exceed the life expectancy of your
spouse.
c. If your spouse does not elect one of the options above, then your
spouse may continue the Certificate in the Accumulation Phase as if
the death had not occurred. If the Certificate is continued in the
Accumulation Phase, the following conditions apply:
o On the day the Certificate is continued, the Certificate Value
will be the Death Benefit as determined at the end of the
Valuation Period during which we received due proof of death.
o The surviving spouse may make a single withdrawal of any amount
within one year of the date of death without incurring a
Withdrawal Charge.
o Prior to the Payout Start Date, the Death Benefit of the
continued Certificate will be the greater of:
o the sum of all purchase payments reduced by a withdrawal
adjustment, as defined in the Death Benefit provision; or
o the Certificate Value on the date we determine the Death
Benefit; or
o the Maximum Anniversary Value, as defined in the Death
Benefit provision, with the following changes:
o "Date of Issue" is replaced by the date the Certificate is
continued; and
o "Initial purchase payment" is replaced with the Death
Benefit as determined at the end of the Valuation Period
during which we received due proof of death.
2. If the new Owner is not your spouse but is a Natural Person, then this new
Owner has the following options:
<PAGE>
a. The new Owner may elect, within 180 days of the date of your death, to
receive the death benefit described below in a lump sum.
b. The new Owner may elect, within 180 days of the date of your death, to
receive an amount equal to the Death Benefit paid out under one of the
Income Plans described in the Payout Phase section. The Payout Start
Date must be within one year of your date of death. Income Payments
must be:
i. over the life of the new Owner; or
ii. for a guaranteed number of payments from 5 to 30 years but not to
exceed the life expectancy of the new Owner; or
iii. Over the life of the new Owner with a guaranteed number of
payments from 5 to 30 years but not to exceed the life expectancy
of the new Owner.
c. The new Owner may elect to receive the Settlement Value
payable in a lump sum within 5 years of your date of death.
The New Owner may make a single withdrawal of any amount
within one year of the date of death without incurring a
Withdrawal Charge.
3. If the new Owner is a corporation or other non-Natural Person:
a. The non-natural Owner may elect, within 180 days of your death, to
receive the Death Benefit in a lump sum.
b. The non-natural Owner may elect to receive the Settlement Value
payable in a lump sum within 5 years of your date of death.
If any new Owner is a non-Natural Person, all new Owners will be considered to
be be non-Natural Persons for the above purposes.
If the new Owner who is not your spouse does not make one of the above described
elections, the Settlement Value must be withdrawn by the new Owner on or before
the mandatory distribution date 5 years after your date of death. Under any of
these options, all ownership rights are available to the new Owner from the date
of your death to the date on which the Death Benefit or Settlement Value is
paid. We reserve the right to extend beyond 180 days the period when we will pay
the Death Benefit.
Death of Annuitant If the Annuitant who is not also the Owner dies prior to the
Payout Start Date, the Owner must elect an applicable option listed below. If
the option selected is 1(a) or 1(b)(ii) below, the new Annuitant will be the
youngest Owner, unless the Owner names a different Annuitant.
1. If the Owner is a Natural Person:
a. The Owner may choose to continue this Certificate as if the death had
not occurred; or
b. If we receive due proof of death within 180 days of the date of the
Annuitant's death, then the Owner may alternatively choose to:
i. Receive the Death Benefit in a lump sum; or
ii. Apply the Death Benefit to an Income Plan which must begin within
one year of the date of death.
2. If the Owner is a non-Natural Person:
a. The non-natural Owner may elect, within 180 days of the Annuitant's
date of death, to receive the Death Benefit in a lump sum; or
<PAGE>
b. The non-natural Owner may elect to receive the Settlement Value
payable in a lump sum within 5 years of the Annuitant's date of death.
If the non-natural Owner does not make one of the above described elections, the
Settlement Value must be withdrawn by the non-natural Owner on or before the
mandatory distribution date 5 years after the Annuitant's death.
Under any of these options, all ownership rights are available to the Owner from
the date of the Annuitant's death to the date on which the Death Benefit or
Settlement Value is paid. We reserve the right to extend beyond 180 days the
period when we will pay the Death Benefit.
Death Benefit Except as defined above when the surviving spouse continues the
Certificate, prior to the Payout Start Date, the Death Benefit is equal to the
greatest of the following Death Benefit alternatives:
o the sum of all purchase payments reduced by a withdrawal adjustment, as
defined below; or
o the Certificate Value on the date we determine the Death Benefit; or
o the Maximum Anniversary Value.
o On the date of issue, the Maximum Anniversary Value is equal to the
initial purchase payment.
o After issue, the Maximum Anniversary Value is recalculated when a
purchase payment or withdrawal is made or on a certificate anniversary
as follows:
A. For purchase payments, the Maximum Anniversary Value
is equal to the most recently calculated Maximum
Anniversary Value plus the purchase payment.
B. For withdrawals, the Maximum Anniversary Value is
equal to the most recently calculated Maximum
Anniversary Value reduced by a withdrawal adjustment,
as defined below.
C. On each certificate anniversary, the Maximum
Anniversary Value is equal to the greater of the
Certificate Value or the most recently calculated
Maximum Anniversary Value.
In the absence of any withdrawals or purchase payments, the
Maximum Anniversary Value will be the greatest of all
anniversary Certificate Values on or prior to the date we
calculate the death benefit.
The Maximum Anniversary Value will be recalculated until the
first Certificate Anniversary after the 80th birthday of the
oldest Owner or, if no Owner is a living individual, the
Annuitant. After that date, the Maximum Anniversary Value will
be recalculated only for purchase payments and withdrawals.
The Maximum Anniversary Value will never be greater than the
maximum death benefit allowed by any non-forfeiture laws which
govern this Certificate.
The withdrawal adjustment is equal to (a) divided by (b), with the result
multiplied by (c), where:
(a) = the withdrawal amount.
(b) = the Certificate Value immediately prior to the withdrawal.
(c) = the value of the applicable Death Benefit alternative immediately
prior to the withdrawal.
We will determine the value of the Death Benefit as of the end of the Valuation
Period during which we receive a complete request for payment of the Death
Benefit. A complete request includes due proof of death.
Withdrawal Adjustment Example for Maximum Anniversary Value
(i) Maximum Anniversary Value Before Partial Withdrawal: $100
(ii) Certificate Value Before Partial Withdrawal: $50
(iii) Partial Withdrawal: $48
<PAGE>
(iv) New Certificate Value: $2
(v) New Maximum Anniversary Value: $4
Settlement Value The Settlement Value is the same amount that would be paid in
the event of a full withdrawal of the Certificate Value. We will calculate the
Settlement Value at the end of the Valuation Period coinciding with the
requested distribution date for payment or on the mandatory distribution date of
5 years after the date of death, whichever is earlier.
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PAYOUT PHASE
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Payout Phase Defined The "Payout Phase" is the second of the two phases during
your Certificate. During this phase the Certificate Value less any applicable
taxes is applied to the Income Plan you choose and is paid out as provided in
that plan.
The Payout Phase begins on the Payout Start Date. It continues until we make the
last payment as provided by the Income Plan chosen.
Payout Start Date The "Payout Start Date" is the date the Certificate Value less
any applicable taxes is applied to an Income Plan. The anticipated Payout Start
Date is shown on the Annuity Data Page. You may change the Payout Start Date by
writing to us at least 30 days prior to this date.
The Payout Start Date must be on or before the Annuitant's 90th birthday.
Income Plans An "Income Plan" is a series of payments on a scheduled basis to
you or to another person designated by you. The Certificate Value on the Payout
Start Date less any applicable taxes, will be applied to your Income Plan choice
from the following list:
1. Life Income with Guaranteed Payments. We will make payments for as long as
the Annuitant lives. If the Annuitant dies before the selected number of
guaranteed payments have been made, we will continue to pay the remainder
of the guaranteed payments.
2. Joint and Survivor Life Income with Guaranteed Payments. We will make
payments for as long as either the Annuitant or joint Annuitant, named at
the time of Income Plan selection, lives. If both the Annuitant and the
joint Annuitant die before the selected number of guaranteed payments have
been made, we will continue to pay the remainder of the guaranteed
payments.
3. Guaranteed Number of Payments. We will make payments for a specified number
of months beginning on the Payout Start Date. These payments do not depend
on the Annuitant's life. The number of months guaranteed may be from 60 to
360. Income payments for less than 120 months may be subject to a
Withdrawal Charge.
In lieu of applying all or a portion of the Certificate Value to Income
Plans 1, 2, or 3, the Owner may elect to:
o receive a withdrawal benefit as described in the Withdrawal provision:
or
o receive income payments for a specified period.
We reserve the right to make available other Income Plans.
<PAGE>
Income Payments Income payment amounts may be Variable Amount Income Payments,
Fixed Amount Income Payments, or both. The Certificate Maintenance Charge will
be deducted modally from each income payment in equal parts reflecting the
frequency of payments chosen by the policyholder (e.g., one-twelfth each monthly
payment, or one-fourth each quarterly payment, etc.) The Certificate Maintenance
Charge will be waived if the Certificate Value on the Payout Start Date is
$50,000 or more or if all payments are Fixed Amount Income Payments.
Variable Amount Income Payments Variable Amount Income Payments will vary to
reflect the performance of the Variable Account. The portion of the initial
income payment based upon a particular Variable subaccount is determined by
applying the amount of the Certificate Value in that subaccount on the Payout
Start Date, less any applicable premium tax, to the appropriate value from the
Income Payment Table. This portion of the initial income payment is divided by
the Annuity Unit Value on the Payout Start Date for that Variable subaccount to
determine the number of Annuity Units from that subaccount which will be used to
determine subsequent income payments. Unless transfers are made between
subaccounts, each subsequent income payment from that subaccount will be that
number of Annuity Units times the Annuity Unit Value for the subaccount for the
Valuation Date on which the income payment is made.
Annuity Unit Value The Annuity Unit Value for each subaccount of the Variable
Account at the end of any Valuation Period is calculated by:
o multiplying the Annuity Unit Value at the end of the immediately preceding
Valuation Period by the subaccount's Net Investment Factor during the
period; and then
o dividing the result by 1.000 plus the assumed investment rate for the
period. The assumed investment rate is an effective annual rate of 3%.
Fixed Amount Income Payments The income payment amount derived from any monies
allocated to the Fixed Account Options during the Accumulation Phase is fixed
for the duration of the Income Plan. The Fixed Amount Income Payment is
calculated by applying the portion of the Certificate Value in the Fixed Account
Options on the Payout Start Date, less any applicable premium tax, to the
greater of the appropriate value from the Income Payment Table selected or such
other value as we are offering at that time.
Annuity Transfers After the Payout Start Date, no transfers may be made from the
Fixed Amount Income Payment. Transfers between subaccounts of the Variable
Account may not be made for six months after the Payout Start Date. Transfers
from the Variable Amount Income Payment to the Fixed Amount Income Payment may
be made only if Income Plan 3 has been chosen, and may not be made for six
months after the Payout Start Date. Transfers permitted above may be made once
every six months after the initial six-month waiting period concludes.
Payout Terms and Conditions The income payments are subject to the following
terms and conditions:
o If no purchase payments have been received for two years preceding the
Payout Start Date and the Certificate Value either is less than $2,000 or
is not enough to provide an initial payment of at least $20, we reserve the
right to:
o change the payment frequency to make the payment at least $20; or
o terminate the Certificate and pay you the Certificate Value less any
applicable taxes in a lump sum.
o If we do not receive a written choice of an Income Plan from you at least
30 days before the Payout Start Date, the Income Plan will be Life Income
with Guaranteed Payments for 120 months.
<PAGE>
o If you choose an Income Plan which depends on any person's life, we may
require:
o proof of age and sex before income payments begin; and
o proof that the Annuitant or joint Annuitant is still alive before we
make each payment.
o After the Payout Start Date, the Income Plan cannot be changed and
withdrawals cannot be made unless income payments are being made from the
Variable Account under Income Plan 3. You may terminate the income payments
being made from the Variable Account under Income Plan 3 at any time and
withdraw their value, subject to Withdrawal Charges.
o If any Owner dies during the Payout Phase, the remaining income payments
will be paid to the successor Owner as scheduled.
- ------------------------------------------------------------------------------
INCOME PAYMENT TABLES
- ------------------------------------------------------------------------------
The initial income payment will be at least the amount based on the adjusted age
of the Annuitant(s) and the tables below, less any federal income taxes which
are withheld. The adjusted age is the actual age on the Payout Start Date
reduced by one year for each six full years between January 1, 1983 and the
Payout Start Date. Income payments for ages and guaranteed payment periods not
shown below will be determined on a basis consistent with that used to determine
those that are shown. The Income Payment Tables are based on 3.0% interest and
the 1983a Annuity Mortality Tables.
Fixed Amount Income Payments applied for will be offered at rates not less than
those offered to new immediate annuity applicants of the same class at the
Payout Start Date.
<TABLE>
<CAPTION>
Income Plan 1 - Life Income with Guaranteed Payments for 120 Months
============================================================================================================================
Monthly Income Payment for each $1,000 Applied to this Income Plan
============================================================================================================================
- ------------------- ---------------------- ---------------- ---------------------- ---------------- ========================
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Annuitant's Annuitant's Age Annuitant's
Age Male Female Male Female Age Male Female
- ------------------- ---------------------- ---------------- ---------------------- ---------------- ========================
- ------------------- ---------------------- ---------------- ---------------------- ---------------- ========================
35 $3.43 $3.25 49 $4.15 $3.82 63 $5.52 $4.97
36 3.47 3.28 50 4.22 3.88 64 5.66 5.09
37 3.51 3.31 51 4.29 3.94 65 5.80 5.22
38 3.55 3.34 52 4.37 4.01 66 5.95 5.35
39 3.60 3.38 53 4.45 4.07 67 6.11 5.49
40 3.64 3.41 54 4.53 4.14 68 6.27 5.64
41 3.69 3.45 55 4.62 4.22 69 6.44 5.80
42 3.74 3.49 56 4.71 4.29 70 6.61
43 3.79 3.53 57 4.81 4.38 71 5.96
44 3.84 3.58 58 4.92 4.46 72 6.78 6.13
45 3.90 3.62 59 5.02 4.55 73 6.96 6.31
46 3.96 3.67 60 5.14 4.65 74 7.13 6.50
47 4.02 3.72 61 5.26 4.75 75 7.31 6.69
48 4.08 3.77 62 5.39 4.86 7.49 6.88
- ------------------- ---------------------- ---------------- ---------------------- ---------------- ========================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Income Plan 2 - Joint and Survivor Life Income with Guaranteed Payments for 120 Months
==============================================================================================================================
Monthly Income Payment for each $1,000 Applied to this Income Plan
==============================================================================================================================
- -------------------- =========================================================================================================
Female Annuitant's Age
- -------------------- =========================================================================================================
- -------------------- ---------- ------------ ----------- ---------- ---------- ---------- ---------- --------- ===============
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Male
Annuitant's 35 40 45 50 55 60 65 70 75
Age
- -------------------- ---------- ------------ ----------- ---------- ---------- ---------- ---------- --------- ===============
- -------------------- ---------- ---------- ---------- ---------- ----------- ---------- ------------ ----------- =============
35 $3.09 $3.16 $3.23 $3.28 $3.32 $3.36 $3.39 $3.40 $3.42
40 3.13 3.22 3.31 3.39 3.46 3.51 3.56 3.59 3.61
45 3.17 3.28 3.39 3.50 3.60 3.69 3.76 3.81 3.85
50 3.19 3.32 3.45 3.60 3.74 3.87 3.98 4.07 4.14
55 3.21 3.35 3.51 3.68 3.87 4.06 4.23 4.37 4.48
60 3.23 3.37 3.55 3.75 3.98 4.23 4.47 4.70 4.88
65 3.24 3.39 3.57 3.80 4.07 4.37 4.71 5.04 5.34
70 3.24 3.40 3.59 3.83 4.13 4.48 4.90 5.36 5.81
75 3.25 3.41 3.61 3.86 4.17 4.56 5.04 5.61 6.22
- -------------------- ---------- ---------- ---------- ---------- ----------- ---------- ------------ ----------- =============
</TABLE>
Income Plan 3 - Guaranteed Number of Payments
- --------------------------------- ============================================
Monthly Income Payment for each
Specified Period $1,000 Applied to this Income Plan
- --------------------------------- ============================================
- --------------------------------- ============================================
10 Years $9.61
11 Years 8.86
12 Years 8.24
13 Years 7.71
14 Years 7.26
15 Years 6.87
16 Years 6.53
17 Years 6.23
18 Years 5.96
19 Years 5.73
20 Years 5.51
- --------------------------------- ============================================
- ------------------------------------------------------------------------------
GENERAL PROVISIONS
- ------------------------------------------------------------------------------
The Entire Contract The entire contract consists of this Certificate, the Master
Policy, the Master Policy application, any written application, and any
Certificate endorsements and riders.
All statements made in a written application are representations and not
warranties. No statement will be used by us in defense of a claim or to void the
Certificate unless it is included in a written application.
We may not modify this Certificate without your consent, except to make it
comply with any changes in the Internal Revenue Code or as required by any other
applicable law. Only our officers may change the Master Policy or this
Certificate or waive a right or requirement. No other individual may do this.
Master Policy Amendment or Termination The Master Policy may be amended by us,
terminated by us, or terminated by the Master Policyholder without the consent
of any other person. No termination completed after the issue date of this
Certificate will adversely affect your rights under this Certificate. Nothing in
the Master Policy will invalidate or impair any rights of Certificate owners.
<PAGE>
Incontestability We will not contest the validity of this Certificate after the
issue date.
Misstatement of Age or Sex If any age or sex has been misstated, we will pay the
amounts which would have been paid at the correct age and sex.
If we find the misstatement of age or sex after the income payments begin, we
will:
o pay all amounts underpaid including interest calculated at an effective
annual rate of 6%; or
o stop payments until the total payments are equal to the corrected amount.
Annual Statement At least once a year, prior to the Payout Start Date, we will
send the owner a statement containing Certificate Value information. We will
provide the owner with Certificate Value information at any time upon request.
At least once in each contract year, we shall mail to the holder of this
certificate under which benefit payments have not yet commenced a statement as
of a date during such year as to the amount available to provide a paid-up
annuity benefit, any cash surrender benefit, and any death benefit under the
contract. The statement shall be addressed to the last post-office address of
the certificateholder known to us as required by New York Insurance Law.
Settlements We may require that this Certificate be returned to us prior to any
settlement. We must receive due proof of death of the Owner or Annuitant prior
to settlement of a death claim. Due proof of death is one of the following:
o a certified copy of a death certificate; or
o a certified copy of a decree of a court of competent jurisdiction as to a
finding of death; or
o any other proof acceptable to us.
Any full withdrawal or Death Benefit under this Certificate will not be less
than the minimum benefits required by any statute of the state in which the
Certificate is delivered.
Deferment of Payments We will pay any amounts due from the Variable Account
under this Certificate within seven days, unless:
o the New York Stock Exchange is closed for other than usual weekends or
holidays, or trading on such Exchange is restricted;
o an emergency exists as defined by the Securities and Exchange Commission;
or
o the Securities and Exchange Commission permits delay for the protection of
Certificate holders.
We reserve the right to postpone payments or transfers from the Fixed Account
options for up to six months. If we elect to postpone payments from the Fixed
Account for 10 days or more, we will pay interest as required by applicable law.
Any interest would be payable from the date the withdrawal request is received
by us to the date the payment is made.
Variable Account Modifications We reserve the right, subject to New York
Insurance Law and applicable federal law, to make additions to, deletions from,
or substitutions for the mutual fund shares underlying the subaccounts of the
Variable Account. We will not substitute any shares attributable to your
interest in a subaccount of the Variable Account without notice to you and prior
approval of the Securities and Exchange Commission, to the extent required by
the Investment Company Act of 1940, as amended.
<PAGE>
We reserve the right to establish additional subaccounts of the Variable
Account, each of which would invest in shares of a mutual fund. You may then
instruct us to allocate purchase payments or transfers to such subaccounts,
subject to any terms set by us or the mutual fund. We reserve the right to limit
the availability of funds for this Certificate.
In the event of any such substitution or change, we may by endorsement, make
such changes as may be necessary or appropriate to reflect such substitution or
change.
If we deem it to be in the best interests of persons having voting rights under
the certificates, the Variable Account may be operated as a management company
under the Investment Company Act of 1940, as amended, or it may be deregistered
under such Act in the event such registration is no longer required.
Application for
Group Variable Annuity
Certificate for New York
Issued by Allstate Life Insurance Company of New York
Mail documents to:
Allstate Life Insurance Company
of New York
OVERNIGHT: 3100 Sanders Road - J4A
Northbrook, IL 60062
MAIL: P.O. Box 94036
Palatine, IL 60094-4036
Questions?
Call toll free at 1-800-390-1277.
Fax: 1-847-326-6661
REMEMBER
Keep a copy of all documents for your file.
Application for Variable Annuity
Insurer, as used in this application, means
Allstate Life Insurance Company of New York.
One Allstate Drive, Farmingville, New York 11738
Allstate Life Insurance Company of New York
OVERNIGHT: 3100 Sanders Road - J4A
Northbrook, IL 60062
MAIL: P.O. Box 94036
Palatine, IL 60094-4036
1) Owner
If no Annuitant is specified in section 3, the Owner will be the Annuitant.
Name
Street Address
City State Zip
SS#/TIN
Date of birth Month Day Year
o Male o Female o Trustee o CRT
Phone #
2) Joint owner (If any)
Name
Relationship to Owner
SS#/TIN
Date of birth Month Day Year
o Male
o Female
3) Annuitant
Complete only if different from the Owner in section 1.
Name
Street Address
City State Zip
SS#/TIN
Date of birth Month Day Year
o Male
o Female
4) Beneficiary(ies)
Designated
Contingent
Name(s) Relationship to Owner Percentage
Name(s) Relationship to Owner Percentage
5) Tax-qualified Plans Check the appropriate box in A and B.
A. o Nonqualified o Traditional IRAo SEP-IRA o Roth IRA o 401(k)
o 401(a) o 403(b)
o Other________________________________
B. o Initial o Transfer o Rollover
Tax year for which initial contribution is being made________
6) Investment Selection
Please check selected investment choice(s) and indicate whole percentage
allocations. The initial premium will be allocated as selected here. If dollar
cost averaging, see section 7B.
Initial $___________________
Monies remitted via o Check o Wire o 1035 o Tax-qualified transfer
Variable Subaccount Options:
Putnam Variable Trust
o Asia Pacific Growth ______%
o Diversified Income ______%
o The George Putnam Fund ______%
o Global Asset Allocation ______%
o Global Growth ______%
o Growth and Income ______%
o Health Sciences ______%
o High Yield ______%
o Income ______%
o International Growth ______%
o International Growth and Income ______%
o International New Opportunities ______%
o Investors ______%
o Money Market ______%
o New Opportunities ______%
o New Value ______%
o OTC & Emerging Growth ______%
o Research ______%
o Small Cap Value ______%
o Utilities Growth and Income ______%
o Vista ______%
o Voyager ______%
o ___________________________ ______%
o ___________________________ ______%
o 7-12 Month DCA Fixed Account ______%
o Standard Fixed Account ______%
Total ______%
Optional Programs
7A) Automatic rebalancing Program
o Moderate --35% Diversified Income, 20% Investors, 20% Growth and Income,
15% International Growth, 10% OTC & Emerging Growth
o Aggressive -- 25% Investors, 25% Growth and Income, 20% Diversified Income,
15% International Growth, 15% OTC & Emerging Growth
o Flagship -- 38% Growth and Income, 38% Voyager, 24% International Growth
7B) Dollar cost averaging Program
Transfer to (select investment option) Percent per transfer
----------------------------- --------------%
----------------------------- --------------%
----------------------------- --------------%
----------------------------- --------------%
Total = 100%
Number of occurrences (7-12)
DCA Program length: Minimum 7 months, maximum 12 months.
All assets must be transferred into the variable subaccounts within 7 to 12
months from the date of enrollment.
If you wish to dollar cost average from variable subaccounts, please see
the form in the back of the booklet.
The application of the DCA Program to a given purchase payment may be
terminated if investment option balances are inadequate by executing the
requested transfer/withdrawal. (Termination of the Program with regard to
any one purchase payment will not affect the Program with regard to any
other purchase payment or the continued availability of the Program for
future purchase payments.) In the unlikely event that another financial
transaction request is received on the transfer/withdrawal date, the
Insurer may delay processing the scheduled transfer/withdrawal if enrolling
in the Systematic/Withdrawal Plan.
8) Special Remarks (Attach separate page if necessary.)
9) Home office use only
10) Will the annuity applied for replace one or more existing annuity or life
insurance contracts? o Yes o No (If yes, explain in Special Remarks,
section 8.)
Have you purchased another annuity during the current calendar year? o Yes
o No
Do you or any joint owner currently own an annuity issued by the Insurer? o
Yes o No o
Optional Consent for Electronic Distribution to my E-mail address:
_________________________________________________ I(we) hereby consent to
the electronic distribution of annuity and fund prospectuses, statements of
additional information, shareholder reports, proxy statements and
prospectus supplements. I understand that I may revoke this consent at any
time, and that absent my revocation, this consent will be valid.
Dollar Cost Averaging ("DCA") is a method of investing. A primary objective
of DCA is to attempt to reduce the impact of short-term price fluctuations
on your investment portfolio. If you elect DCA, approximately the same
dollar amounts are transferred on a periodic basis (e.g., monthly) from
your source Account (e.g., your chosen DCA Program Account) to your
selected Subaccount(s). By this method, more Accumulation Units are
purchased when the value per Accumulation Unit is low and fewer
Accumulation Units are purchased when the value per Accumulation Unit is
high. Therefore, a lower average price per Accumulation Unit may be
achieved over the long term. This method of investing allows you to take
advantage of market fluctuations, but it does not assure a profit or
protect against loss in declining markets.
Under our DCA Program, you may allocate a contract contribution into a
designated DCA Account(s) and preauthorize transfers to any of the
Subaccounts over a time period. Each month, we will transfer amounts out of
the DCA Account(s) into the Subaccounts you selected.
The interest credited rate applied to assets remaining in the Dollar Cost
Averaging Fixed Account(s) (the "DCA Account(s)") exceeds our actual
earnings rate on supporting assets less appropriate risk and expense
adjustments. We will recover amounts credited over amounts earned from the
mortality and expense risk charges described in your certificate. These
charges do not increase as a result of allocating money to our DCA
Account(s).
o Receipt of a variable annuity and fund prospectus is hereby acknowledged.
If not checked, the appropriate prospectus will be mailed to you. I/WE
UNDERSTAND THAT ANNUITY PAYMENTS OR SURRENDER VALUES, WHEN BASED UPON THE
INVESTMENT EXPERIENCE OF A SEPARATE ACCOUNT, ARE VARIABLE AND NOT
GUARANTEED AS TO A FIXED DOLLAR AMOUNT.
A copy of this application signed by the Agent will be the receipt for the
first purchase payment. If the Insurer declines this application, the
Insurer will have no liability except to return the first purchase payment.
I have read the above statements and represent that they are complete and
true to the best of my knowledge and belief. I agree that this application
shall be a part of the annuity issued by the Insurer. The Insurer will
obtain written agreement from me for any change in investment allocations,
benefits, type of plan or birthdates.
Owner's signature ____________________________________________
Joint Owner's signature ______________________________
Signed at _______________________________ on ___________________________
City, State Date
Do you, as Agent, have reason to believe the product applied for will replace
existing annuities or insurance? o Yes o No
Licensed Agent _____________________________ __________________________
Signature Print name Broker/Dealer
Licensed Agent Social Security No. __________________________
__________________________
Address
__________________________
Telephone
For Broker Use Only -- Contact your home office for program information.
o Program A o Program B o Program C
PARTICIPATION AGREEMENT
Among
PUTNAM VARIABLE TRUST
PUTNAM MUTUAL FUNDS CORP.
and
[ALLSTATE LIFE INSURANCE COMPANY]
[ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK]
THIS AGREEMENT, made and entered into as of this day of , 1999, among
Allstate Life Insurance Company [of New York] (the "Company"), an [Illinois]
[New York] corporation, on its own behalf and on behalf of each separate account
of the Company set forth on Schedule A hereto, as such Schedule may be amended
from time to time (each such account hereinafter referred to as the "Account"),
PUTNAM VARIABLE TRUST (the "Trust"), a Massachusetts business trust, and PUTNAM
MUTUAL FUNDS CORP. (the "Underwriter"), a Massachusetts corporation.
WHEREAS, the Trust is an open-end diversified management investment company
and is available to act as the investment vehicle for separate accounts
established for variable life insurance policies and variable annuity contracts
(collectively, the "Variable Insurance Products") to be offered by insurance
companies which have entered into Participation Agreements with the Trust and
the Underwriter (the "Participating Insurance Companies"); and
WHEREAS, the beneficial interest in the Trust is divided into several
series of shares, each designated a "Fund" and representing the interest in a
particular managed portfolio of securities and other assets; and
WHEREAS, the Trust has obtained an order from the Securities and Exchange
Commission ("SEC"), dated December 29, 1993 (File No. 812-8612), granting the
variable annuity and variable life insurance separate accounts participating in
the Trust exemptions from the provisions of sections 9(a), 13(a), 15(a) and
15(b) of the Investment Company Act of 1940, as amended (the "1940 Act"), and
Rules 6e-2(b)(15) and 6e-3(T)(b)(15) thereunder, to the extent necessary to
permit shares of the Trust to be sold to and held by variable annuity and
variable life insurance separate accounts of the Participating Insurance
Companies (the "Shared Funding Exemptive Order"); and
WHEREAS, the Trust is registered as an open-end management investment
company under the 1940 Act and the sale of its shares is registered under the
Securities Act of 1933, as amended (the " 1933 Act"); and
WHEREAS, the Company has registered or will register certain variable life
and/or variable annuity contracts under the 1933 Act and any applicable state
securities and insurance law; and
WHEREAS, each Account is a duly organized, validly existing separate
account, established by resolution of the Board of Directors of the Company, on
the date shown for such Account on Schedule A hereto, to set aside and invest
assets attributable to one or more variable insurance contracts (the
"Contracts"); and
WHEREAS, the Company has registered or will register the Account as a unit
investment trust under the 1940 Act; and
WHEREAS, the Underwriter is registered as a broker dealer with the
Securities and Exchange Commission under the Securities Exchange Act of 1934, as
amended (the " 1934 Act"), and is a member in good standing of the National
Association of Securities Dealers, Inc. (the "NASD"); and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase shares in certain Funds
("Authorized Funds") on behalf of each Account to fund certain of the Contracts
and the Underwriter is authorized to sell such shares to unit investment trusts
such as each Account at net asset value;
NOW, THEREFORE, in consideration of the promises herein, the Company, the
Trust and the Underwriter agree as follows:
ARTICLE 1. Sale of Trust Shares
1.1 The Underwriter agrees, subject to the Trust's rights under Section 1.2
and otherwise under this Agreement, to sell to the Company those Trust shares
representing interests in Authorized Funds which each Account orders, executing
such orders on a daily basis at the net asset value next computed after receipt
by the Trust or its designee of the order for the shares of the Trust. For
purposes of this Section 1. 1, the Company shall be the designee of the Trust
for receipt of such orders from each Account and receipt by such designee shall
constitute receipt by the Trust; provided that the Trust receives notice of such
order by 8:30 a.m. Eastern time on the next following Business Day. "Business
Day" shall mean any day on which the New York Stock Exchange is open for trading
and on which the Trust calculates its net asset value pursuant to the rules of
the SEC. The initial Authorized Funds are set forth in Schedule B, as such
schedule is amended from time to time.
1.2 The Trust agrees to make its shares available indefinitely for purchase
at the applicable net asset value per share by the Company and its Accounts on
those days on which the Trust calculates its net asset value pursuant to rules
of the SEC and the Trust shall use reasonable efforts to calculate such net
asset value on each day on which the New York Stock Exchange is open for
trading. Notwithstanding the foregoing, the Trustees of the Trust (the
"Trustees") may refuse to sell shares of any Fund to the Company or any other
person, or suspend or terminate the offering of shares of any Fund if such
action is required by law or by regulatory authorities having jurisdiction over
the Trust or if the Trustees determine, in the exercise of their fiduciary
responsibilities, that to do so would be in the best interests of shareholders.
1.3 The Trust and the Underwriter agree that shares of the Trust will be
sold only to Participating Insurance Companies and their separate accounts. No
shares of any Fund will be sold to the general public.
1.4 The Trust shall redeem its shares in accordance with the terms of its
then current prospectus. For purposes of this Section 1.4, the Company shall be
the designee of the Trust for receipt of requests for redemption from each
Account and receipt by such designee shall constitute receipt by the Trust;
provided that the Trust receives notice of such request for redemption by 8:30
a.m., Eastern time, on the next following Business Day.
1.5 The Company shall purchase and redeem the shares of Authorized Funds
offered by the then current prospectus of the Trust in accordance with the
provisions of such prospectus.
1.6 The Company shall pay for Trust shares on the next Business Day after
an order to purchase Trust shares is made in accordance with the provisions of
Section 1.1 hereof. Payment shall be in federal funds transmitted by wire.
1.7 Issuance and transfer of the Trust's shares will be by book entry only.
Share certificates will not be issued to the Company or any Account. Shares
ordered from the Trust will be recorded as instructed by the Company to the
Underwriter in an appropriate title for each Account or the appropriate
sub-account of each Account.
1.8 The Underwriter shall furnish prompt notice (by wire or telephone,
followed by written confirmation) to the Company of the declaration of any
income, dividends or capital gain distributions payable on the Trust's shares.
The Company hereby elects to receive all such income dividends and capital gain
distributions as are payable on the Fund shares in additional shares of that
Fund. The Company reserves the right to revoke this election and therefore to
receive all such income dividends and capital gain distributions in cash. The
Underwriter shall notify the Company of the number of shares so issued as
payment of such dividends and distributions.
1.9 The Underwriter shall make the net asset value per share for each Fund
available to the Company on a daily basis as soon as reasonably practical after
the Trust calculates its net asset value per share and each of the Trust and the
Underwriter shall use its best efforts to make such net asset value per share
available by 7:00 p.m. Eastern time.
ARTICLE II. Representations and Warranties
2.1 The Company represents and warrants that
(a) at all times during the term of this Agreement the Contracts are
or will be registered under the 1933 Act; the Contracts will be issued and
sold in compliance in all material respects with all applicable laws and
the sale of the Contracts shall comply in all material respects with state
insurance suitability laws and regulations. The 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
established each Account prior to any issuance or sale thereof as a
separate account under applicable law and has registered or, prior to any
issuance or sale of the Contracts, will register each Account as a unit
investment trust in accordance with the provisions of the 1940 Act to serve
as a segregated investment account for the Contracts; and
(b) the Contracts are currently treated as endowment, annuity or life
insurance contracts, under applicable provisions of the Internal Revenue
Code of 1986, as amended (the "Code"), and that it will make every effort
to maintain such treatment and that it will notify the Trust and the
Underwriter 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.
2.2 The Trust represents and warrants that
(a) it is lawfully organized and validly existing under the laws of
the Commonwealth of Massachusetts and that it does and will comply in all
material respects with the 1940 Act.
(b) it is currently qualified as a Regulated Investment Company under
Subchapter M of the Code, and that it will use its best efforts to maintain
such qualification (under Subchapter M or any successor provision) and that
it will notify the Company immediately upon having a reasonable basis for
believing that it has ceased to so qualify or that it might not so qualify
in the future; and
(c) at all times during the term of this Agreement Trust shares sold
pursuant to this Agreement shall be registered under the 1933 Act, duly
authorized for issuance and sold by the Trust to the Company in compliance
with all applicable laws, subject to the terms of Section 2.4 below, and
the Trust is and shall remain registered under the 1940 Act. The Trust
shall amend the Registration Statement for its shares under the 1933 Act
and the 1940 Act from time to time as required in order to effect the
continuous offering of its shares. The Trust shall register and qualify the
shares for sale in accordance with the laws of the various states only if
and to the extent deemed advisable by the Trust or the Underwriter in
connection with their sale by the Trust to the Company and only as required
by Section 2.4;
2.3 The Underwriter represents and warrants that
(a) it is a member in good standing of the NASD;
(b) is registered as a broker-dealer with the SEC;
(c) it will sell and distribute the Trust shares in accordance with
all applicable securities laws, including without limitation, the 1933 Act,
the 1934 Act and the 1940 Act.
2.4 Notwithstanding any other provision of this Agreement, the Trust shall
be responsible for the registration and qualification of its shares and of the
Trust itself under the laws of any jurisdiction only in connection with the
sales of shares directly to the Company through the Underwriter. The Trust shall
not be responsible, and the Company shall take full responsibility, for
determining any jurisdiction in which any qualification or registration of Trust
shares or the Trust by the Trust may be required in connection with the sale of
the Contracts or the indirect interest of any Contract in any shares of the
Trust and advising the Trust thereof at such time and in such manner as is
necessary to permit the Trust to comply.
2.5 The Trust makes no representation as to whether any aspect of its
operations (including, but not limited to, fees and expenses and investment
policies) complies with the insurance laws or regulations of the various states.
ARTICLE III. Prospectuses and Proxy Statements; Voting
3.1 The Trust shall provide such documentation (including a camera-ready
copy of its prospectus) and other assistance as is reasonably necessary in order
for the Company once each year (or more frequently if the prospectus for the
Trust is amended) to have the prospectus for the Contracts and the Trust's
prospectus printed together in one or more documents. The cost of printing
prospectuses for the Contracts and the Trust for delivery in connection with the
offering and sale of new Contracts will be at the Underwriter's expense.
Printing of prospectuses for other purposes will be at the Company's expense.
The Company will bear the expense of mailing prospectuses to new purchasers of
Contracts.
3.2 The Trust's Prospectus shall state that the Statement of Additional
Information for the Trust is available from the Underwriter or its designee (or
in the Trust's discretion, the Prospectus shall state that such Statement is
available from the Trust), and the Underwriter (or the Trust), at its expense,
shall print and provide such Statement free of charge to the Company and free of
charge to any owner of a Contract or prospective owner who requests such
Statement.
3.3 The Trust, at its expense, shall provide the Company with copies of its
reports to shareholders, proxy material and other communications to shareholders
in such quantity as the Company shall reasonably require for distribution to the
Contract owners, such distribution shall be at the expense of the Trust,
provided that the Trust and the Company shall bear their proportional share of
the distribution expenses of any report containing both the Trust's and the
Accounts' financial reports.
3.4 The Company shall vote all Trust shares as required by law and the
Shared Funding Exemptive Order. The Company reserves the right to vote Trust
shares held in any separate account in its own right, to the extent permitted by
law and the Shared Funding Exemptive Order. The Company shall be responsible for
assuring that each of its separate accounts participating in the Trust
calculates voting privileges in a manner consistent with all legal requirements
and the Shared Funding Exemptive Order.
3.5 The Trust will comply with all applicable provisions of the 1940 Act
requiring voting by shareholders, and in particular the Trust will either
provide for annual meetings or comply with Section 16(c) of the 1940 Act
(although the Trust is not one of the trusts described in Section 16(c) of that
Act) as well as with Sections 16(a) and, if and when applicable, 16(b). Further,
the Trust will act in accordance with the SEC's interpretation of the
requirements of Section 16(a) with respect to periodic elections of trustees and
with whatever rules the SEC may promulgate with respect thereto.
ARTICLE IV. Sales Material and Information
4.1 Without limiting the scope or effect of Section 4.2 hereof, the Company
shall furnish, or shall cause to be furnished, to the Underwriter each piece of
sales literature or other promotional material (as defined hereafter) in which
the Trust, its investment adviser or the Underwriter is named at least 10 days
prior to its use. No such material shall be used if the Underwriter objects to
such use within five Business Days after receipt of such material.
4.2 The Company shall not give any information or make any representations
or statements on behalf of the Trust or concerning the Trust in connection with
the sale of the Contracts other than the information or representations
contained in the registration statement or prospectus for the Trust shares, as
such registration statement and prospectus may be amended or supplemented from
time to time, or in annual or semi-annual reports or proxy statements for the
Trust, or in sales literature or other promotional material approved by the
Trust or its designee or by the Underwriter, except with the written permission
of the Trust or the Underwriter or the designee of either or as is required by
law.
4.3 The Underwriter or its designee shall furnish, or shall cause to be
furnished, to the Company or its designee, each piece of sales literature or
other promotional material prepared by the Underwriter in which the Company
and/or its separate account(s) is named at least 10 days prior to its use. No
such material shall be used if the Company or its designee objects to such use
within five Business Days after receipt of such material.
4.4 Neither the Trust nor the Underwriter shall give any information or
make any representations on behalf of the Company concerning the Company, each
Account, or the Contracts other than the information or representations
contained in a registration statement or prospectus for the Contracts, as such
registration statement and prospectus may be amended or supplemented from time
to time, or in published reports for each Account which are in the public domain
or approved by the Company for distribution to Contract owners, or in sales
literature or other promotional material approved by the Company or its
designee, except with the written permission of the Company or as is required by
law.
4.5 For purposes of this Article IV, the phrase "sales literature or other
promotional material" 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 distributed or made generally available to
customers or the public, including brochures, circulars, research reports,
market letters, form letters, seminar texts, 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 registered representatives.
ARTICLE V. Fees and Expenses
5.1 Except as provided in Article VI, the Trust and Underwriter shall pay
no fee or other compensation to the Company under this agreement.
5.2 All expenses incident to performance by the Trust under this Agreement
shall be paid by the Trust. The Trust shall bear the expenses for the cost of
registration and qualification of the Trust's shares, preparation and filing of
the Trust's prospectus and registration statement, proxy materials and reports,
setting the prospectus and shareholder reports in type, setting in type and
printing the proxy materials, distributing reports and proxy statements to
contractholders (provided that if the reports are combined with the Company's
reports the Trust and the Company shall bear such share of the expense as its
proportion of the joint report bears the the whole combined report) and the
preparation of all statements and notices required by any federal or state law,
in each case as may reasonably be necessary for the performance by it of its
obligations under this Agreement.
5.3 The Company shall bear the expenses of printing the Trust's prospectus
(other than those used in connection with the offering and sales of the
Contracts) and of distributing the Trust's prospectuses to new purchasers of
Contracts.
Article VI. Service Fees
6.1 The Underwriter shall pay the Company a service fee (the "Service Fee")
on shares of the Funds held in the Accounts at the annual rates specified in
Schedule B (excluding any accounts for the Company's own corporate retirement
plans), subject to Section 6.2 hereof.
6.2 The Company understands and agrees that all Service Fee payments are
subject to the limitations contained in each Fund's Distribution Plan, which may
be varied or discontinued at any time, and understands and agrees that it will
cease to receive such Service Fee payments with respect to a Fund if the Fund
ceases to pay fees to the Underwriter pursuant to its Distribution Plan.
6.3 (a) The Company's failure to provide the services described in Section
6.4 will render it ineligible to receive Service Fees; and
(b) the Underwriter may, without the consent of the Company, amend
this Article VI to change the amount of Service Fees or the terms on which
Service Fees are paid or to terminate further payments of Service Fees upon
written notice to the Company.
6.4 The Company will provide the following services to the Contract Owners
purchasing Fund shares:
(i) Maintaining regular contact with Contract owners and assisting in
answering inquiries concerning the Funds;
(ii) Assisting in the process of printing and distributing shareholder
reports, prospectuses and other sale and service literature provided by the
Underwriter;
(iii) Assisting the Underwriter and its affiliates in the
establishment and maintenance of Contract owner and shareholder accounts
and records;
(iv) Assisting Contract owners in effecting administrative changes,
such as exchanging shares in or out of the Funds;
(v) Assisting in processing purchase and redemption transactions; and
(vi) Providing any other information or services as the Contract
owners or the Underwriter may reasonably request.
The Company will support the Underwriter's marketing and servicing efforts
by granting reasonable requests for visits to the Company's offices by
representatives of the Underwriter.
6.5 The Company's performance under the service requirement set forth in
this Agreement will be evaluated from time to time by the Underwriter's
monitoring of redemption levels of Fund shares held in any Account and by such
other methods as the Underwriter deems appropriate.
ARTICLE VII. Diversification
7.1 The Trust shall cause each Authorized Fund to maintain a diversified
pool of investments that would, if such Fund were a segregated asset account,
satisfy the diversification provisions of Treas. Reg. ss. 1.817-5(b)(1) or (2).
7.2 The Trust shall annually send the Company a certificate, in the form
mutually agreed, certifying as to its compliance with Section 7.1.
ARTICLE VIII. Potential Conflicts
8.1 The Trustees will monitor the Trust for the existence of any material
irreconcilable conflict between the interests of the contract owners of all
separate accounts investing in the Trust. A material irreconcilable 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 law or regulations, or a public ruling, private letter
ruling, no-action or interpretative 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 and variable life insurance contract owners; or (f) a
decision by an insurer to disregard the voting instructions of contract owners.
The Trust shall promptly inform the Company if the Trustees determine that a
material irreconcilable conflict exists and the implications thereof.
8.2 The Company will report any potential or existing conflicts of which it
is aware to the Trustees. The Company will assist the Trustees in carrying out
their responsibilities under the Shared Funding Exemptive Order, by providing
the Trustees with all information reasonably necessary for the Trustees to
consider any issues raised. This includes, but is not limited to, an obligation
by the Company to inform the Trustees whenever Contract owner voting
instructions are disregarded.
8.3 If it is determined by a majority of the Trustees, or a majority of the
disinterested Trustees, that a material irreconcilable conflict exists, the
Company shall to the extent reasonably practicable (as determined by a majority
of the disinterested Trustees), take, at the Company's expense, whatever steps
are necessary to remedy or eliminate the material irreconcilable conflict, up to
and including: (1) withdrawing the assets allocable to some or all of the
separate accounts from the Trust or any Fund and reinvesting such assets in a
different investment medium, including (but not limited to) another Fund of the
Trust, 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, life insurance
contract owners, or variable 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.
8.4 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 Trust's election, to withdraw the affected Account's
investment in one or more Authorized Funds of the Trust and terminate this
Agreement with respect to such 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 Trustees. No charge or penalty shall be imposed as a result of
such withdrawal. Any such withdrawal and termination must take place within six
(6) months after the Trust gives written notice that this provision is being
implemented, and until the end of that six month period the Underwriter and
Trust shall, to the extent permitted by law and any exemptive relief previously
granted to the Trust, continue to accept and implement orders by the Company for
the purchase (or redemption) of shares of the Trust.
8.5 If a material irreconcilable conflict arises because of a particular
state insurance regulator's decision applicable to the Company to disregard
Contract owner voting instructions and that decision represents a minority
position that would preclude a majority vote, then the Company may be required,
at the Trust's direction, to withdraw the affected Account's investment in one
or more Authorized Funds of the Trust; 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 Trustees. Any such withdrawal and termination must take place
within six (6) months after the Trust gives written notice that this provision
is being implemented, unless a shorter period is required by law, and until the
end of the foregoing six month period (or such shorter period if required by
law), the Underwriter and Trust shall, to the extent permitted by law and any
exemptive relief previously granted to the Trust, continue to accept and
implement orders by the Company for the purchase (and redemption) of shares of
the Trust. No charge or penalty will be imposed as a result of such withdrawal.
8.6 For purposes of Sections 8.3 through 8.6 of this Agreement, a majority
of the disinterested Trustees shall determine whether any proposed action
adequately remedies any material irreconcilable conflict. Neither the Trust nor
the Underwriter shall be required to establish a new funding medium for the
Contracts, nor shall the Company be required to do so, if an offer to do so has
been declined by vote of a majority of Contract owners materially adversely
affected by the material irreconcilable conflict. In the event that the Trustees
determine that any proposed action does not adequately remedy any material
irreconcilable conflict, then the Company will withdraw the Account's investment
in one or more Authorized Funds of the Trust and terminate this Agreement within
six (6) months (or such shorter period as may be required by law or any
exemptive relief previously granted to the Trust) after the Trustees inform 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 Trustees. No charge or penalty will be imposed as a result of such
withdrawal.
8.7 The responsibility to take remedial action in the event of the
Trustees' determination of a material irreconcilable conflict and to bear the
cost of such remedial action shall be the obligation of the Company, and the
obligation of the Company set forth in this Article VIII shall be carried out
with a view only to the interests of Contract owners.
8.8 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 mixed or shared funding
(as defined in the Shared Funding Exemptive Order) on terms and conditions
materially different from those contained in the Shared Funding Exemptive Order,
then (a) the Trust 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 3.4, 3.5, 8.1, 8.2, 8.3, 8.4 and 8.5 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.
8.9 The Company has reviewed the Shared Funding Exemption Order and hereby
assumes all obligations referred to therein which are required, including,
without limitation, the obligation to provide reports, material or data as the
Trustees may request as conditions to such Order, to be assumed or undertaken by
the Company.
ARTICLE IX. Indemnification
9.1. Indemnification by the Company
9.1 (a). The Company shall indemnify and hold harmless the Trust and the
Underwriter and each of the Trustees, directors of the Underwriter, officers,
employees or agents of the Trust or the Underwriter and each person, if any, who
controls the Trust or the Underwriter within the meaning of Section 15 of the
1933 Act (collectively, the "Indemnified Parties" for purposes of this Section
9.1) against any and all losses, claims, damages, liabilities (including amounts
paid in settlement with the written consent of the Company which consent may not
be unreasonably withheld) or litigation (including reasonable legal and other
expenses), to which the Indemnified Parties may become subject under any
statute, regulation or at common law or otherwise, insofar as such losses,
claims, damages, liabilities or expenses (or actions in respect thereof) or
settlements are related to the sale or acquisition of the Trust's shares or the
Contracts or the performance by the parties of their obligations hereunder and:
(i) arise out of or are based upon any untrue statements or alleged
untrue statements of any material fact contained in a Registration
Statement, Prospectus or Statement of Additional Information for the
Contracts or contained in the Contracts or sales literature for the
Contracts (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, provided that this agreement to
indemnify shall not apply as to any Indemnified Party if such statement or
omission or such alleged statement or omission was made in reliance upon
and in conformity with information furnished to the Company by or on behalf
of the Trust for use in the Registration Statement, Prospectus or Statement
of Additional Information for the Contracts or in the Contracts or sales
literature (or any amendment or supplement) or otherwise for use in
connection with the sale of the Contracts or Trust shares; or
(ii) arise out of or as a result of written statements or
representations (other than statements or representations contained in the
Trust's Registration Statement or Prospectus, or in sales literature for
Trust shares not supplied by the Company, or persons under its control) or
wrongful conduct of the Company or persons under its control, with respect
to the sale or distribution of the Contracts or Trust shares; or
(iii) arise out of any untrue statement or alleged untrue statement of
a material fact contained in a Registration Statement, Prospectus, or sales
literature of the Trust or any amendment thereof or supplement thereto 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 if such a statement or omission was made in reliance upon
information furnished to the Trust or the Underwriter by or on behalf of
the Company; or
(iv) arise out of or result from any breach of any representation
and/or warranty made by the Company in this Agreement or arise out of or
result from any other breach of this Agreement by the Company, as limited
by and in accordance with the provisions of Sections 9.1(b) and 9.1(c)
hereof.
9.1 (b) The Company shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
incurred or assessed against an Indemnified Party to the extent such may arise
from such Indemnified Party's willful misfeasance, bad faith, or gross
negligence in the performance of such Indemnified Party's duties or by reason of
such Indemnified Party's reckless disregard of obligations or duties under this
Agreement or to the Trust, whichever is applicable.
9.1 (c) The Company shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Company in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent), on the basis of which the Indemnified
Party should reasonably know of the availability of indemnity hereunder in
respect of such claim but failure to notify the Company of any such claim shall
not relieve the Company from any liability which it may have to the Indemnified
Party against whom such action is brought otherwise than on account of this
indemnification provision. In case any such action is brought against the
Indemnified Parties, the Company shall be entitled to participate, at its own
expense, in the defense of such action. The Company also shall be entitled to
assume the defense thereof, with counsel satisfactory to the Indemnified Party
named in the action. After notice from the Company to such Indemnified Party of
the Company's election to assume the defense thereof the Indemnified Party shall
bear the fees and expenses of any additional counsel retained by it, and the
Company will not be liable to such Indemnified Party under this Agreement for
any legal or other expenses subsequently incurred by such Indemnified Party
independently in connection with the defense thereof other than reasonable costs
of investigation.
9.1 (d) The Underwriter shall promptly notify the Company of the
commencement of any litigation or proceedings against the Trust or the
Underwriter in connection with the issuance or sale of the Trust Shares or the
Contracts or the operation of the Trust.
9. 1 (e) The provisions of this Section 9.1 shall survive any termination
of this Agreement.
9.2 Indemnification by the Underwriter
9.2 (a) The Underwriter shall indemnify and hold harmless the Company and
each person, if any, who controls the Company within the meaning of Section 15
of the 1933 Act and any director, officer, employee or agent of the foregoing
(collectively, the "Indemnified Parties" for purposes of this Section 9.2)
against any and all losses, claims, damages, liabilities (including amounts paid
in settlement with the written consent of the Underwriter which consent may not
be unreasonably withheld) or litigation (including reasonable legal and other
expenses) to which the Indemnified Parties may become subject under any statute,
regulation or at common law, insofar as such losses, claims, damages,
liabilities or expenses (or actions in respect thereof) or settlements are
related to the sale or acquisition of the Trust's shares or the Contracts or the
performance by the parties of their obligations hereunder and:
(i) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the sales literature of
the Trust prepared by or approved by the Trust or Underwriter (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, provided that this agreement to indemnify shall not
apply as to any Indemnified Party if such statement or omission or such
alleged statement or omission was made in reliance upon and in conformity
with information furnished to the Underwriter or Trust by or on behalf of
the Company for use in sales literature (or any amendment or supplement) or
otherwise for use in connection with the sale of the Contracts or Trust
shares; or
(ii) arise out of or as a result of written statements or
representations (other than statements or representations contained in the
Registration Statement, Prospectus, Statement of Additional Information or
sales literature for the Contracts not supplied by the Underwriter or
persons under its control) of the Underwriter or persons under its control,
with respect to the sale or distribution of the Contracts or Trust shares;
or
(iii) arise out of any untrue statement or alleged untrue statement of
a material fact contained in a Registration Statement, Prospectus,
Statement of Additional Information or sales literature covering the
Contracts, or any amendment thereof or supplement thereto, or the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statement or statements therein not
misleading, if such statement or omission was made in reliance upon
information furnished to the Company by or on behalf of the Underwriter; or
(iv) arise out of or result from any breach of any representation
and/or warranty made by the Underwriter in this Agreement or arise out of
or result from any other breach of this Agreement by the Underwriter or
result from a breach of Article VII; as limited by and in accordance with
the provisions of Sections 9.2(b) and 9.2(c) hereof.
9.2 (b) The Underwriter shall not be liable under this indemnification
provision with respect to any losses, claims, damages, liabilities or litigation
incurred or assessed against an Indemnified Party for willful misfeasance, bad
faith, or gross negligence in the performance of such Indemnified Party's duties
or by reason of such Indemnified Party's reckless disregard of obligations and
duties under this Agreement or to each Company or the Account, whichever is
applicable.
9.2 (c) The Underwriter shall not be liable under this indemnification
provision with respect to any claim made against an Indemnified Party unless
such Indemnified Party shall have notified the Underwriter in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon such
Indemnified Party (or after such Indemnified Party shall have received notice of
such service on any designated agent) on the basis of which the Indemnified
Party should reasonably know of the availability of indemnity hereunder in
respect of such claim, but failure to notify the Underwriter of any such claim
shall not relieve the Underwriter from any liability which it may have to the
Indemnified Party against whom such action is brought otherwise than on account
of this indemnification provision. In case any such action is brought against
the Indemnified Parties, the Underwriter will be entitled to participate, at its
own expense, in the defense thereof. The Underwriter also shall be entitled to
assume the defense thereof, with counsel satisfactory to the Indemnified Party
named in the action. After notice from the Underwriter to such Indemnified Party
of the Underwriter's election to assume the defense thereof, the Indemnified
Party shall bear the fees and expenses of any additional counsel retained by it,
and the Underwriter will not be liable to such Indemnified Party under this
Agreement for any legal or other expenses subsequently incurred by such
Indemnified Party independently in connection with the defense thereof other
than reasonable costs of investigation.
9.2 (d) The Company shall promptly notify the Underwriter of the Trust of
the commencement of any litigation or proceedings against it or any of its
officers or directors, in connection with the issuance or sale of the Contracts
or the operation of each Account.
9.2 (e) The provisions of this Section 9.2 shall survive any termination of
this Agreement.
9.3 Indemnification by the Trust
9.3 (a) The Trust shall indemnify and hold harmless the Company, and each
person, if any, who controls the Company within the meaning of Section 15 of the
1933 Act and any director, officer, employee or agent of the foregoing
(collectively, the "Indemnified Parties" for purposes of this Section 9.3)
against any and all losses, claims, damages, liabilities (including amounts paid
in settlement with the written consent of the Trust which consent may not be
unreasonably withheld) or litigation (including reasonable legal and other
expenses) to which the Indemnified Parties may become subject under any statute,
at common law or otherwise, insofar as such losses, claims, damages, liabilities
or expenses (or actions in respect thereof) or settlements are related to the
operations of the Trust and:
(i) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in a Registration
Statement, Prospectus and Statement of Additional Information of the Trust
(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, provided that this agreement to
indemnify shall not apply as to any Indemnified Party if such statement or
omission or such alleged statement or omission was made in reliance upon
and in conformity with information furnished to the Underwriter or Trust by
or on behalf of the Company for use in the Registration Statement,
Prospectus, or Statement of Additional Information for the Trust (or any
amendment or supplement) or otherwise for use in connection with the sale
of the Contracts or Trust shares; or
(ii) arise out of or result from any material breach of any
representation and/or warranty made by the Trust in this Agreement or arise
out of or result from any other material breach of this Agreement by the
Trust (including Section 7.1 hereof), as limited by and in accordance with
the provisions of Sections 9.3(b) and 9.3(c) hereof.
9.3 (b) The Trust shall not be liable under the indemnification provision
with respect to any losses, claims, damages, liabilities or litigation incurred
or assessed against an Indemnified Party for willful misfeasance, bad faith, or
gross negligence or by reason of such Indemnified Party's reckless disregard of
obligations and duties under this Agreement or to the Company, the Trust, the
Underwriter or each Account, whichever is applicable.
9.3 (c) The Trust shall not be liable under this indemnification provision
with respect to any claim made against any Indemnified Party unless such
Indemnified Party shall have notified the Trust in writing within a reasonable
time after the summons or other first legal process giving information of the
nature of the claim shall have been served upon such Indemnified Party (or after
such Indemnified Party shall have received notice of such service on any
designated agent) on the basis of which the Indemnified Party should reasonably
know of the availability of indemnity hereunder in respect of such claim, but
failure to notify the Trust of any such claim shall not relieve the Trust from
any liability which it may have to the Indemnified Party against whom such
action is brought otherwise than on account of this indemnification provision.
In case any such action is brought against the Indemnified Parties, the Trust
will be entitled to participate, at its own expense, in the defense thereof. The
Trust also shall be entitled to assume the defense thereof, with counsel
reasonably satisfactory to the Indemnified Party named in the action. After
notice from the Trust to such Indemnified Party of the Trust's election to
assume the defense thereof, the Indemnified Party shall bear the fees and
expenses of any additional counsel retained by it, and the Trust will not be
liable to such Indemnified Party under this Agreement for any legal or other
expenses subsequently incurred by such Indemnified Party independently in
connection with the defense thereof other than reasonable costs of
investigation.
9.3 (d) The Company agrees promptly to notify the Trust of the commencement
of any litigation or proceedings against it or any of its officers or directors,
in connection with this Agreement, the issuance or sale of the Contracts or the
sale or acquisition of shares of the Trust.
9.3 (e) The provisions of this Section 9.3 shall survive any termination of
this Agreement.
ARTICLE X. Applicable Law
10.1 This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the Commonwealth of
Massachusetts.
10.2 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
(including, but not limited to, the Shared Funding Exemptive Order) and the
terms hereof shall be interpreted and construed in accordance therewith.
ARTICLE XI. Termination
11.1.This Agreement shall terminate:
(a) upon the second anniversary of the termination of the Joint
Venture Agreement, dated March __, 1999, between Putnam Investments, Inc.
and the Allstate Corporation.
(b) at the option of the Trust upon 180 days prior written notice,
upon a decision by the Trustees of the Trust that termination of the
Agreement is in the best interests of shareholders of the Trust; or
(c) with respect to any Account, upon requisite vote of the Contract
owners having an interest in such Account (or any subaccount) to substitute
the shares of another investment company for the corresponding Fund shares
of the Trust in accordance with the terms of the Contracts for which those
Fund shares had been selected to serve as the underlying investment media.
The Company will give 90 days' prior written notice to the Trust of the
date of any proposed vote to replace the Trust's shares; or
(d) with respect to any Authorized Fund, upon 60 days advance written
notice from the Underwriter to the Company, upon a decision by the
Underwriter to cease offering shares of the Fund for sale.
11.2. It is understood and agreed that the right of any party hereto to
terminate this Agreement pursuant to Section 11.1 (a) may be exercised for any
reason or for no reason.
11.3 No termination of this Agreement shall be effective unless and until
the party terminating this Agreement gives prior written notice to all other
parties to this Agreement of its intent to terminate, which notice shall set
forth the basis for such termination. Such prior written notice shall be given
in advance of the effective date of termination as required by this Article XI.
11.4 Notwithstanding any termination of this Agreement, subject to Section
1.2 of this Agreement, the Trust and the Underwriter shall, at the option of the
Company, continue to make available additional shares of the Trust pursuant to
the terms and conditions of this Agreement, for all Contracts in effect on the
effective date of termination of this Agreement (hereinafter referred to as
"Existing Contracts"). Specifically, without limitation, subject to Section 1.2
of this Agreement, the owners of the Existing Contracts shall be permitted to
reallocate investments in the Trust, redeem investments in the Trust and/or
invest in the Trust upon the making of additional purchase payments under the
Existing Contracts. The parties agree that this Section 11.4 shall not apply to
any termination under Article VIII and the effect of such Article VIII
termination shall be governed by Article VIII of this Agreement.
11.5 The Company shall not redeem Trust shares attributable to the
Contracts (as opposed to Trust shares attributable to the Company's assets held
in either Account) except (i) as necessary to implement Contract owner initiated
transactions, or (ii) as required by state and/or federal laws or regulations or
judicial or other legal precedent of general application (hereinafter referred
to as a "Legally required Redemption"). Upon request, the Company will promptly
furnish to the Trust and the Underwriter an opinion of counsel for the Company,
reasonably satisfactory to the Trust, to the effect that any redemption pursuant
to clause (ii) above is a Legally Required Redemption. Furthermore, except in
cases where permitted under the terms of the Contracts, subject to Section 1.2
of this Agreement, the Company shall not prevent Contract owners from allocating
payments to an Authorized Fund that was otherwise available under the Contracts
without first giving the Trust or the Underwriter 90 days notice of its
intention to do.
ARTICLE XII. 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 the Trust:
One Post Office Square
Boston, MA 02109
Attention: John R. Verani
If to the Underwriter:
One Post Office Square
Boston, MA 02109
Attention: General Counsel
If to the Company:
[Address]
<PAGE>
ARTICLE XIII. Miscellaneous
13.1 A copy of the Agreement and Declaration of Trust of the Trust is on
file with the Secretary of State of the Commonwealth of Massachusetts, and
notice is hereby given that this instrument is executed on behalf of the
Trustees of the Trust as Trustees and not individually and that the obligations
of or arising out of this instrument, including without limitation Article VII,
are not binding upon any of the Trustees or shareholders individually but
binding only upon the assets and property of the Trust.
13.2 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.
13.3 This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.
13.4 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.
13.5 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 pertmit 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.
13.6 The rights, remedies and obligations contained in this Agreement are
cumulative and are in addition to any and all rights, remedies and obligations,
at law or in equity, which the parties hereto are entitled to under state and
federal laws.
13.7 Notwithstanding any other provision of this Agreement, the obligations
of the Trust and the Underwriter are several and, without limiting in any way
the generality of the foregoing, neither such party shall have any liability for
any action or failure to act by the other party, or any person acting on such
other party's behalf.
<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed in its name and on its behalf by its duly authorized representative
and its seal to be hereunder affixed hereto as of the date specified below.
[ALLSTATE LIFE INSURANCE COMPANY]
[ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK]
By its authorized officer,
Name:
Title:
PUTNAM VARIABLE TRUST
By its authorized officer,
Name:
Title:
PUTNAM MUTUAL FUNDS CORP.
By its authorized officer,
Name:
Title:
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
LAW AND REGULATION DEPARTMENT
3100 Sanders Road, J5B
Northbrook, Illinois 60062
Direct Dial Number 847-402-2400
Facsimile 847-402-4371
Michael J. Velotta
Vice President, Secretary
and General Counsel
November 12, 1999
TO: ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
NORTHBROOK, ILLINOIS 60062
FROM: MICHAEL J. VELOTTA
VICE PRESIDENT, SECRETARY AND GENERAL COUNSEL
RE: FORM N-4 REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933 AND THE INVESTMENT COMPANY ACT OF 1940
FILE NO. 333-74411, 811-07467
With reference to the Registration Statement on Form N-4 filed by Allstate
Life Insurance Company of New York (the "Company"), as depositor, and Allstate
Life of New York Separate Account A, as registrant, with the Securities and
Exchange Commission covering the Flexible Premium Deferred Variable Annuity
Contracts, marketed as the Allstate Putnam Advisor. I have examined such
documents and such law as I have considered necessary and appropriate, and on
the basis of such examination, it is my opinion that as of November 12, 1999:
1. The Company is duly organized and existing under the laws of the State of
New York and has been duly authorized to do business by the Director of
Insurance of the State of New York.
2. The securities registered by the above Registration Statement when issued
will be valid, legal and binding obligations of the Company.
I hereby consent to the filing of this opinion as an exhibit to the above
referenced Registration Statement and to the use of my name under the caption
"Legal Matters" in the Prospectus constituting a part of the Registration
Statement.
Sincerely,
/s/ MICHAEL J. VELOTTA
- -------------------------
Michael J. Velotta
Vice President, Secretary and
General Counsel
Exhibit (10)(a)
INDEPENDENT AUDITORS' CONSENT
We consent to the use in this Pre-Effective Amendment No. 1 to Registration
Statement No. 333-74411 of Allstate Life of New York Separate Account A of
Allstate Life Insurance Company of New York on Form N-4 or our report dated
February 19, 1999 relating to the financial statements and the related financial
statement schedules of Allstate Life Insurance Company of New York, and our
report dated March 18, 1999 relating to the financial statements of Allstate
Life of New York Separate Account A, appearing in the Statement of Additional
Information (which is incorporated by reference in the Prospectus of Allstate
Life of New York Separate Account A of Allstate Life Insurance Company of New
York), which is part of such Registration Statement, and to the reference to us
under the heading "Experts" in such Statement of Additional Information.
/s/ DELOITTE & TOUCHE LLP
Chicago Illinois
November 18, 1999
Exhibit (10)(b)
Freedman, Levy, Kroll & Simonds
CONSENT OF
FREEDMAN, LEVY, KROLL & SIMONDS
We hereby consent to the reference to our firm under the caption "Legal
Matters" in the prospectus contained in Pre-Effective Amendment No. 1 to the
Form N-4 Registration Statement of Allstate Life of New York Separate Account A
(File No. 333-74411).
/s/FREEDMAN, LEVY, KROLL & SIMONDS
Washington, D.C.
November 19, 1999
<TABLE>
<CAPTION>
Asia Pacific Growth
30-Sep-98 NO. YEARS 1.000
TO
30-Sep-99
<S> <C> <C> <C> <C> <C> <C>
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-98 1000.00 7.220088 138.50247
FEE 30-Sep-99 0.666667 12.350842 0.05398
RESULTING VALUE 30-Sep-99 12.350842 138.44849 1709.9554
1.000
FORMULA: 1000*(1+T)= 1709.9554 - (0.85 * 1000 * 0.07)
= 1650.4554
T = 65.05%
R = 65.05%
Diversified Income
9/30/98 NO. YEARS 1.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-98 1000.00 9.758897 102.47060
FEE 30-Sep-99 0.666667 9.677736 0.06889
RESULTING VALUE 30-Sep-99 9.677736 102.40171 991.0167
1.000
FORMULA: 1000*(1+T)= 991.0167 - (0.85 * 1000 * 0.07)
= 931.5167
T = -6.85%
R = -6.85%
George Putnam Fund of Boston
9/30/98 NO. YEARS 1.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-98 1000.00 8.649969 115.60735
FEE 30-Sep-99 0.666667 9.244676 0.07211
RESULTING VALUE 30-Sep-99 9.244676 115.53524 1068.0858
1.000
FORMULA: 1000*(1+T)= 1068.0858 - (0.85 * 1000 * 0.07)
= 1008.5858
T = 0.86%
R = 0.86%
Global Asset Allocation
9/30/98 NO. YEARS 1.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-98 1000.00 8.464283 118.14350
FEE 30-Sep-99 0.666667 9.739360 0.06845
RESULTING VALUE 30-Sep-99 9.739360 118.07505 1149.9754
1.000
FORMULA: 1000*(1+T)= 1149.9754 - (0.85 * 1000 * 0.07)
= 1090.4754
T = 9.05%
R = 9.05%
Global Growth
9/30/98 NO. YEARS 1.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-98 1000.00 7.884990 126.82324
FEE 30-Sep-99 0.666667 10.624416 0.06275
RESULTING VALUE 30-Sep-99 10.624416 126.76049 1346.7562
1.000
FORMULA: 1000*(1+T)= 1346.7562 - (0.85 * 1000 * 0.07)
= 1287.2562
T = 28.73%
R = 28.73%
Growth & Income
9/30/98 NO. YEARS 1.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-98 1000.00 7.855870 127.29335
FEE 30-Sep-99 0.666667 9.004906 0.07403
RESULTING VALUE 30-Sep-99 9.004906 127.21932 1145.5980
1.000
FORMULA: 1000*(1+T)= 1145.5980 - (0.85 * 1000 * 0.07)
= 1086.0980
T = 8.61%
R = 8.61%
Health Sciences
9/30/98 NO. YEARS 1.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-98 1000.00 9.659748 103.52237
FEE 30-Sep-99 0.666667 9.734659 0.06848
RESULTING VALUE 30-Sep-99 9.734659 103.45389 1007.0883
1.000
FORMULA: 1000*(1+T)= 1007.0883 - (0.85 * 1000 * 0.07)
= 947.5883
T = -5.24%
R = -5.24%
High Yield
9/30/98 NO. YEARS 1.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-98 1000.00 9.487895 105.39746
FEE 30-Sep-99 0.666667 9.605619 0.06940
RESULTING VALUE 30-Sep-99 9.605619 105.32805 1011.7411
1.000
FORMULA: 1000*(1+T)= 1011.7411 - (0.85 * 1000 * 0.07)
= 952.2411
T = -4.78%
R = -4.78%
Income
9/30/98 NO. YEARS 1.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-98 1000.00 9.993677 100.06327
FEE 30-Sep-99 0.666667 9.768230 0.06825
RESULTING VALUE 30-Sep-99 9.768230 99.99502 976.7744
1.000
FORMULA: 1000*(1+T)= 976.7744 - (0.85 * 1000 * 0.07)
= 917.2744
T = -8.27%
R = -8.27%
International Growth
9/30/98 NO. YEARS 1.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-98 1000.00 7.483379 133.62947
FEE 30-Sep-99 0.666667 10.690537 0.06236
RESULTING VALUE 30-Sep-99 10.690537 133.56711 1427.9042
1.000
FORMULA: 1000*(1+T)= 1427.9042 - (0.85 * 1000 * 0.07)
= 1368.4042
T = 36.84%
R = 36.84%
International Growth & Income
9/30/98 NO. YEARS 1.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-98 1000.00 7.670338 130.37235
FEE 30-Sep-99 0.666667 10.301703 0.06471
RESULTING VALUE 30-Sep-99 10.301703 130.30764 1342.3906
1.000
FORMULA: 1000*(1+T)= 1342.3906 - (0.85 * 1000 * 0.07)
= 1282.8906
T = 28.29%
R = 28.29%
International New Opportunities
9/30/98 NO. YEARS 1.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-98 1000.00 7.607362 131.45161
FEE 30-Sep-99 0.666667 11.580711 0.05757
RESULTING VALUE 30-Sep-99 11.580711 131.39405 1521.6365
1.000
FORMULA: 1000*(1+T)= 1521.6365 - (0.85 * 1000 * 0.07)
= 1462.1365
T = 46.21%
R = 46.21%
Investors
9/30/98 NO. YEARS 1.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-98 1000.00 7.617637 131.27430
FEE 30-Sep-99 0.666667 9.794105 0.06807
RESULTING VALUE 30-Sep-99 9.794105 131.20624 1285.0477
1.000
FORMULA: 1000*(1+T)= 1285.0477 - (0.85 * 1000 * 0.07)
= 1225.5477
T = 22.55%
R = 22.55%
Money Market
9/30/98 NO. YEARS 1.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-98 1000.00 9.783119 102.21689
FEE 30-Sep-99 0.666667 10.134868 0.06578
RESULTING VALUE 30-Sep-99 10.134868 102.15111 1035.2880
1.000
FORMULA: 1000*(1+T)= 1035.2880 - (0.85 * 1000 * 0.07)
= 975.7880
T = -2.42%
R = -2.42%
New Opportunities
9/30/98 NO. YEARS 1.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-98 1000.00 7.275620 137.44533
FEE 30-Sep-99 0.666667 10.534459 0.06328
RESULTING VALUE 30-Sep-99 10.534459 137.38205 1447.2455
1.000
FORMULA: 1000*(1+T)= 1447.2455 - (0.85 * 1000 * 0.07)
= 1387.7455
T = 38.77%
R = 38.77%
New Value
9/30/98 NO. YEARS 1.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-98 1000.00 7.639636 130.89629
FEE 30-Sep-99 0.666667 8.689042 0.07672
RESULTING VALUE 30-Sep-99 8.689042 130.81956 1136.6967
1.000
FORMULA: 1000*(1+T)= 1136.6967 - (0.85 * 1000 * 0.07)
= 1077.1967
T = 7.72%
R = 7.72%
OTC & Emerging Growth
9/30/98 NO. YEARS 1.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-98 1000.00 6.928094 144.33984
FEE 30-Sep-99 0.666667 11.289979 0.05905
RESULTING VALUE 30-Sep-99 11.289979 144.28079 1628.9271
1.000
FORMULA: 1000*(1+T)= 1628.9271 - (0.85 * 1000 * 0.07)
= 1569.4271
T = 56.94%
R = 56.94%
Research
9/30/98 NO. YEARS 1.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-98 1000.00 7.720814 129.52002
FEE 30-Sep-99 0.666667 9.684792 0.06884
RESULTING VALUE 30-Sep-99 9.684792 129.45119 1253.7078
1.000
FORMULA: 1000*(1+T)= 1253.7078 - (0.85 * 1000 * 0.07)
= 1194.2078
T = 19.42%
R = 19.42%
Small Cap Value
9/30/98 NO. YEARS 1.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-98 1000.00 #VALUE! #VALUE!
FEE 30-Sep-99 0.666667 9.907425 0.06729
RESULTING VALUE 30-Sep-99 9.907425 #VALUE! #VALUE!
1.000
FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.07)
= #VALUE!
T = N/A
R = N/A
Utilities Growth & Income
9/30/98 NO. YEARS 1.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-98 1000.00 9.413807 106.22695
FEE 30-Sep-99 0.666667 10.053807 0.06631
RESULTING VALUE 30-Sep-99 10.053807 106.16064 1067.3186
1.000
FORMULA: 1000*(1+T)= 1067.3186 - (0.85 * 1000 * 0.07)
= 1007.8186
T = 0.78%
R = 0.78%
Vista
9/30/98 NO. YEARS 1.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-98 1000.00 7.563568 132.21273
FEE 30-Sep-99 0.666667 10.003962 0.06664
RESULTING VALUE 30-Sep-99 10.003962 132.14609 1321.9845
1.000
FORMULA: 1000*(1+T)= 1321.9845 - (0.85 * 1000 * 0.07)
= 1262.4845
T = 26.25%
R = 26.25%
Voyager
9/30/98 NO. YEARS 1.000
TO
9/30/99 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-98 1000.00 7.228575 138.33985
FEE 30-Sep-99 0.666667 10.169134 0.06556
RESULTING VALUE 30-Sep-99 10.169134 138.27429 1406.1298
1.000
FORMULA: 1000*(1+T)= 1406.1298 - (0.85 * 1000 * 0.07)
= 1346.6298
T = 34.66%
R = 34.66%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Asia Pacific Growth
29-Sep-94
TO NO. YEARS 5.000
30-Sep-99
<S> <C> <C> <C> <C> <C> <C>
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-94 1000.00 #VALUE! #VALUE!
FEE 30-Sep-95 0.666667 9.803113 0.06801
FEE 30-Sep-96 0.666667 10.420622 0.06398
FEE 30-Sep-97 0.666667 10.819359 0.06162
FEE 30-Sep-98 0.666667 7.220088 0.09233
FEE 30-Sep-99 0.666667 12.350842 0.05398
RESULTING VALUE 30-Sep-99 12.350842 #VALUE! #VALUE!
5.000
FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.03)
= #VALUE!
T = N/A
R = N/A
Diversified Income
29-Sep-94
TO NO. YEARS 5.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-94 1000.00 7.512426 133.11279
FEE 30-Sep-95 0.666667 8.385209 0.07951
FEE 30-Sep-96 0.666667 9.147240 0.07288
FEE 30-Sep-97 0.666667 9.997177 0.06669
FEE 30-Sep-98 0.666667 9.758897 0.06831
FEE 30-Sep-99 0.666667 9.677736 0.06889
RESULTING VALUE 30-Sep-99 9.677736 132.75652 1284.7825
5.000
FORMULA: 1000*(1+T)= 1284.7825 - (0.85 * 1000 * 0.03)
= 1259.28255
T = 4.72%
R = 25.93%
George Putnam Fund of Boston
29-Sep-94
TO NO. YEARS 5.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-94 1000.00 #VALUE! #VALUE!
FEE 30-Sep-95 0.666667 #VALUE! #VALUE!
FEE 30-Sep-96 0.666667 #VALUE! #VALUE!
FEE 30-Sep-97 0.666667 #VALUE! #VALUE!
FEE 30-Sep-98 0.666667 8.649969 0.07707
FEE 30-Sep-99 0.666667 9.244676 0.07211
RESULTING VALUE 30-Sep-99 9.244676 #VALUE! #VALUE!
5.000
FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.03)
= #VALUE!
T = N/A
R = N/A
Global Asset Allocation
29-Sep-94
TO NO. YEARS 5.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-94 1000.00 5.178532 193.10492
FEE 30-Sep-95 0.666667 6.061764 0.10998
FEE 30-Sep-96 0.666667 6.895675 0.09668
FEE 30-Sep-97 0.666667 8.669038 0.07690
FEE 30-Sep-98 0.666667 8.464283 0.07876
FEE 30-Sep-99 0.666667 9.739360 0.06845
RESULTING VALUE 30-Sep-99 9.739360 192.67415 1876.5229
5.000
FORMULA: 1000*(1+T)= 1876.5229 - (0.85 * 1000 * 0.03)
= 1851.02287
T = 13.11%
R = 85.10%
Global Growth
29-Sep-94
TO NO. YEARS 5.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-94 1000.00 5.087322 196.56707
FEE 30-Sep-95 0.666667 5.491784 0.12139
FEE 30-Sep-96 0.666667 6.302417 0.10578
FEE 30-Sep-97 0.666667 7.931323 0.08405
FEE 30-Sep-98 0.666667 7.884990 0.08455
FEE 30-Sep-99 0.666667 10.624416 0.06275
RESULTING VALUE 30-Sep-99 10.624416 196.10855 2083.5388
5.000
FORMULA: 1000*(1+T)= 2083.5388 - (0.85 * 1000 * 0.03)
= 2058.0388
T = 15.53%
R = 105.80%
Growth & Income
29-Sep-94
TO NO. YEARS 5.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-94 1000.00 4.066067 245.93791
FEE 30-Sep-95 0.666667 5.067923 0.13155
FEE 30-Sep-96 0.666667 6.010549 0.11092
FEE 30-Sep-97 0.666667 7.974293 0.08360
FEE 30-Sep-98 0.666667 7.855870 0.08486
FEE 30-Sep-99 0.666667 9.004906 0.07403
RESULTING VALUE 30-Sep-99 9.004906 245.45294 2210.2807
5.000
FORMULA: 1000*(1+T)= 2210.2807 - (0.85 * 1000 * 0.03)
= 2184.78069
T = 16.92%
R = 118.48%
Health Sciences
29-Sep-94
TO NO. YEARS 5.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-94 1000.00 #VALUE! #VALUE!
FEE 30-Sep-95 0.666667 #VALUE! #VALUE!
FEE 30-Sep-96 0.666667 #VALUE! #VALUE!
FEE 30-Sep-97 0.666667 #VALUE! #VALUE!
FEE 30-Sep-98 0.666667 9.659748 0.06901
FEE 30-Sep-99 0.666667 9.734659 0.06848
RESULTING VALUE 30-Sep-99 9.734659 #VALUE! #VALUE!
5.000
FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.03)
= #VALUE!
T = N/A
R = N/A
High Yield
29-Sep-94
TO NO. YEARS 5.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-94 1000.00 6.897535 144.97933
FEE 30-Sep-95 0.666667 7.801642 0.08545
FEE 30-Sep-96 0.666667 8.778895 0.07594
FEE 30-Sep-97 0.666667 10.052269 0.06632
FEE 30-Sep-98 0.666667 9.487895 0.07026
FEE 30-Sep-99 0.666667 9.605619 0.06940
RESULTING VALUE 30-Sep-99 9.605619 144.61195 1389.0873
5.000
FORMULA: 1000*(1+T)= 1389.0873 - (0.85 * 1000 * 0.03)
= 1363.58728
T = 6.40%
R = 36.36%
Income
29-Sep-94
TO NO. YEARS 5.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-94 1000.00 7.146460 139.92942
FEE 30-Sep-95 0.666667 8.151481 0.08178
FEE 30-Sep-96 0.666667 8.416236 0.07921
FEE 30-Sep-97 0.666667 9.187378 0.07256
FEE 30-Sep-98 0.666667 9.993677 0.06671
FEE 30-Sep-99 0.666667 9.768230 0.06825
RESULTING VALUE 30-Sep-99 9.768230 139.56090 1363.2630
5.000
FORMULA: 1000*(1+T)= 1363.2630 - (0.85 * 1000 * 0.03)
= 1337.76299
T = 5.99%
R = 33.78%
International Growth
29-Sep-94
TO NO. YEARS 5.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-94 1000.00 #VALUE! #VALUE!
FEE 30-Sep-95 0.666667 #VALUE! #VALUE!
FEE 30-Sep-96 0.666667 #VALUE! #VALUE!
FEE 30-Sep-97 0.666667 8.181488 0.08148
FEE 30-Sep-98 0.666667 7.483379 0.08909
FEE 30-Sep-99 0.666667 10.690537 0.06236
RESULTING VALUE 30-Sep-99 10.690537 #VALUE! #VALUE!
5.000
FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.03)
= #VALUE!
T = N/A
R = N/A
International Growth & Income
29-Sep-94
TO NO. YEARS 5.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-94 1000.00 #VALUE! #VALUE!
FEE 30-Sep-95 0.666667 #VALUE! #VALUE!
FEE 30-Sep-96 0.666667 #VALUE! #VALUE!
FEE 30-Sep-97 0.666667 8.359898 0.07975
FEE 30-Sep-98 0.666667 7.670338 0.08691
FEE 30-Sep-99 0.666667 10.301703 0.06471
RESULTING VALUE 30-Sep-99 10.301703 #VALUE! #VALUE!
5.000
FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.03)
= #VALUE!
T = N/A
R = N/A
International New Opportunities
29-Sep-94
TO NO. YEARS 5.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-94 1000.00 #VALUE! #VALUE!
FEE 30-Sep-95 0.666667 #VALUE! #VALUE!
FEE 30-Sep-96 0.666667 #VALUE! #VALUE!
FEE 30-Sep-97 0.666667 8.692322 0.07670
FEE 30-Sep-98 0.666667 7.607362 0.08763
FEE 30-Sep-99 0.666667 11.580711 0.05757
RESULTING VALUE 30-Sep-99 11.580711 #VALUE! #VALUE!
5.000
FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.03)
= #VALUE!
T = N/A
R = N/A
Investors
29-Sep-94
TO NO. YEARS 5.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-94 1000.00 #VALUE! #VALUE!
FEE 30-Sep-95 0.666667 #VALUE! #VALUE!
FEE 30-Sep-96 0.666667 #VALUE! #VALUE!
FEE 30-Sep-97 0.666667 #VALUE! #VALUE!
FEE 30-Sep-98 0.666667 7.617637 0.08752
FEE 30-Sep-99 0.666667 9.794105 0.06807
RESULTING VALUE 30-Sep-99 9.794105 #VALUE! #VALUE!
5.000
FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.03)
= #VALUE!
T = N/A
R = N/A
Money Market
29-Sep-94
TO NO. YEARS 5.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-94 1000.00 8.284232 120.71125
FEE 30-Sep-95 0.666667 8.638423 0.07717
FEE 30-Sep-96 0.666667 9.000245 0.07407
FEE 30-Sep-97 0.666667 9.375756 0.07111
FEE 30-Sep-98 0.666667 9.783119 0.06814
FEE 30-Sep-99 0.666667 10.134868 0.06578
RESULTING VALUE 30-Sep-99 10.134868 120.35497 1219.7818
5.000
FORMULA: 1000*(1+T)= 1219.7818 - (0.85 * 1000 * 0.03)
= 1194.28177
T = 3.61%
R = 19.43%
New Opportunities
29-Sep-94
TO NO. YEARS 5.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-94 1000.00 3.917636 255.25598
FEE 30-Sep-95 0.666667 5.357526 0.12444
FEE 30-Sep-96 0.666667 6.646000 0.10031
FEE 30-Sep-97 0.666667 7.593254 0.08780
FEE 30-Sep-98 0.666667 7.275620 0.09163
FEE 30-Sep-99 0.666667 10.534459 0.06328
RESULTING VALUE 30-Sep-99 10.534459 254.78852 2684.0592
5.000
FORMULA: 1000*(1+T)= 2684.0592 - (0.85 * 1000 * 0.03)
= 2658.55919
T = 21.60%
R = 165.86%
New Value
29-Sep-94
TO NO. YEARS 5.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-94 1000.00 #VALUE! #VALUE!
FEE 30-Sep-95 0.666667 #VALUE! #VALUE!
FEE 30-Sep-96 0.666667 #VALUE! #VALUE!
FEE 30-Sep-97 0.666667 8.763438 0.07607
FEE 30-Sep-98 0.666667 7.639636 0.08726
FEE 30-Sep-99 0.666667 8.689042 0.07672
RESULTING VALUE 30-Sep-99 8.689042 #VALUE! #VALUE!
5.000
FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.03)
= #VALUE!
T = N/A
R = N/A
OTC & Emerging Growth
29-Sep-94
TO NO. YEARS 5.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-94 1000.00 #VALUE! #VALUE!
FEE 30-Sep-95 0.666667 #VALUE! #VALUE!
FEE 30-Sep-96 0.666667 #VALUE! #VALUE!
FEE 30-Sep-97 0.666667 #VALUE! #VALUE!
FEE 30-Sep-98 0.666667 6.928094 0.09623
FEE 30-Sep-99 0.666667 11.289979 0.05905
RESULTING VALUE 30-Sep-99 11.289979 #VALUE! #VALUE!
5.000
FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.03)
= #VALUE!
T = N/A
R = N/A
Research
29-Sep-94
TO NO. YEARS 5.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-94 1000.00 #VALUE! #VALUE!
FEE 30-Sep-95 0.666667 #VALUE! #VALUE!
FEE 30-Sep-96 0.666667 #VALUE! #VALUE!
FEE 30-Sep-97 0.666667 #VALUE! #VALUE!
FEE 30-Sep-98 0.666667 7.720814 0.08635
FEE 30-Sep-99 0.666667 9.684792 0.06884
RESULTING VALUE 30-Sep-99 9.684792 #VALUE! #VALUE!
5.000
FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.03)
= #VALUE!
T = N/A
R = N/A
Small Cap Value
29-Sep-94
TO NO. YEARS 5.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-94 1000.00 #VALUE! #VALUE!
FEE 30-Sep-95 0.666667 #VALUE! #VALUE!
FEE 30-Sep-96 0.666667 #VALUE! #VALUE!
FEE 30-Sep-97 0.666667 #VALUE! #VALUE!
FEE 30-Sep-98 0.666667 #VALUE! #VALUE!
FEE 30-Sep-99 0.666667 9.907425 0.06729
RESULTING VALUE 30-Sep-99 9.907425 #VALUE! #VALUE!
5.000
FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.03)
= #VALUE!
T = N/A
R = N/A
Utilities Growth & Income
29-Sep-94
TO NO. YEARS 5.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-94 1000.00 4.852150 206.09421
FEE 30-Sep-95 0.666667 5.804205 0.11486
FEE 30-Sep-96 0.666667 6.545550 0.10185
FEE 30-Sep-97 0.666667 7.972136 0.08362
FEE 30-Sep-98 0.666667 9.413807 0.07082
FEE 30-Sep-99 0.666667 10.053807 0.06631
RESULTING VALUE 30-Sep-99 10.053807 205.65674 2067.6332
5.000
FORMULA: 1000*(1+T)= 2067.6332 - (0.85 * 1000 * 0.03)
= 2042.13321
T = 15.35%
R = 104.21%
Vista
29-Sep-94
TO NO. YEARS 5.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-94 1000.00 #VALUE! #VALUE!
FEE 30-Sep-95 0.666667 #VALUE! #VALUE!
FEE 30-Sep-96 0.666667 #VALUE! #VALUE!
FEE 30-Sep-97 0.666667 7.906067 0.08432
FEE 30-Sep-98 0.666667 7.563568 0.08814
FEE 30-Sep-99 0.666667 10.003962 0.06664
RESULTING VALUE 30-Sep-99 10.003962 #VALUE! #VALUE!
5.000
FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.03)
= #VALUE!
T = N/A
R = N/A
Voyager
29-Sep-94
TO NO. YEARS 5.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 30-Sep-94 1000.00 3.795094 263.49808
FEE 30-Sep-95 0.666667 4.979074 0.13389
FEE 30-Sep-96 0.666667 6.076391 0.10971
FEE 30-Sep-97 0.666667 7.374781 0.09040
FEE 30-Sep-98 0.666667 7.228575 0.09223
FEE 30-Sep-99 0.666667 10.169134 0.06556
RESULTING VALUE 30-Sep-99 10.169134 263.00629 2674.5462
5.000
FORMULA: 1000*(1+T)= 2674.5462 - (0.85 * 1000 * 0.03)
= 2649.04625
T = 21.51%
R = 164.90%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Asia Pacific Growth
29-Sep-89
TO NO. YEARS 10.000
30-Sep-99
<S> <C> <C> <C> <C> <C> <C>
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 29-Sep-89 1000.00 #VALUE! #VALUE!
FEE 29-Sep-90 0.666667 #VALUE! #VALUE!
FEE 29-Sep-91 0.666667 #VALUE! #VALUE!
FEE 29-Sep-92 0.666667 #VALUE! #VALUE!
FEE 29-Sep-93 0.666667 #VALUE! #VALUE!
FEE 29-Sep-94 0.666667 #VALUE! #VALUE!
FEE 29-Sep-95 0.666667 9.803370 0.06800
FEE 29-Sep-96 0.666667 10.362720 0.06433
FEE 29-Sep-97 0.666667 10.730549 0.06213
FEE 29-Sep-98 0.666667 7.343147 0.09079
FEE 29-Sep-99 0.666667 12.128167 0.05497
RESULTING VALUE 29-Sep-99 12.128167 #VALUE! #VALUE!
10.000
FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0)
= #VALUE!
T = N/A
R = N/A
Diversified Income
29-Sep-89
TO NO. YEARS 10.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 29-Sep-89 1000.00 #VALUE! #VALUE!
FEE 29-Sep-90 0.666667 #VALUE! #VALUE!
FEE 29-Sep-91 0.666667 #VALUE! #VALUE!
FEE 29-Sep-92 0.666667 #VALUE! #VALUE!
FEE 29-Sep-93 0.666667 7.670856 0.08691
FEE 29-Sep-94 0.666667 7.504980 0.08883
FEE 29-Sep-95 0.666667 8.385428 0.07950
FEE 29-Sep-96 0.666667 9.147955 0.07288
FEE 29-Sep-97 0.666667 9.979632 0.06680
FEE 29-Sep-98 0.666667 9.730960 0.06851
FEE 29-Sep-99 0.666667 9.668081 0.06896
RESULTING VALUE 29-Sep-99 9.668081 #VALUE! #VALUE!
10.000
FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0)
= #VALUE!
T = N/A
R = N/A
George Putnam Fund of Boston
29-Sep-89
TO NO. YEARS 10.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 29-Sep-89 1000.00 #VALUE! #VALUE!
FEE 29-Sep-90 0.666667 #VALUE! #VALUE!
FEE 29-Sep-91 0.666667 #VALUE! #VALUE!
FEE 29-Sep-92 0.666667 #VALUE! #VALUE!
FEE 29-Sep-93 0.666667 #VALUE! #VALUE!
FEE 29-Sep-94 0.666667 #VALUE! #VALUE!
FEE 29-Sep-95 0.666667 #VALUE! #VALUE!
FEE 29-Sep-96 0.666667 #VALUE! #VALUE!
FEE 29-Sep-97 0.666667 #VALUE! #VALUE!
FEE 29-Sep-98 0.666667 8.796157 0.07579
FEE 29-Sep-99 0.666667 9.162855 0.07276
RESULTING VALUE 29-Sep-99 9.162855 #VALUE! #VALUE!
10.000
FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0)
= #VALUE!
T = N/A
R = N/A
Global Asset Allocation
29-Sep-89
TO NO. YEARS 10.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 29-Sep-89 1000.00 3.591002 278.47381
FEE 29-Sep-90 0.666667 3.453089 0.19306
FEE 29-Sep-91 0.666667 4.112967 0.16209
FEE 29-Sep-92 0.666667 4.456596 0.14959
FEE 29-Sep-93 0.666667 5.206367 0.12805
FEE 29-Sep-94 0.666667 5.174771 0.12883
FEE 29-Sep-95 0.666667 6.061922 0.10998
FEE 29-Sep-96 0.666667 6.883567 0.09685
FEE 29-Sep-97 0.666667 8.673859 0.07686
FEE 29-Sep-98 0.666667 8.628235 0.07727
FEE 29-Sep-99 0.666667 9.657571 0.06903
RESULTING VALUE 29-Sep-99 9.657571 277.28220 2677.8726
10.000
FORMULA: 1000*(1+T)= 2677.8726 - (0.85 * 1000 * 0)
= 2677.87258
T = 10.35%
R = 167.79%
Global Growth
29-Sep-89
TO NO. YEARS 10.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 29-Sep-89 1000.00 #VALUE! #VALUE!
FEE 29-Sep-90 0.666667 3.336403 0.19982
FEE 29-Sep-91 0.666667 3.797197 0.17557
FEE 29-Sep-92 0.666667 3.863919 0.17254
FEE 29-Sep-93 0.666667 4.638956 0.14371
FEE 29-Sep-94 0.666667 5.098539 0.13076
FEE 29-Sep-95 0.666667 5.491927 0.12139
FEE 29-Sep-96 0.666667 6.279361 0.10617
FEE 29-Sep-97 0.666667 7.911077 0.08427
FEE 29-Sep-98 0.666667 8.094425 0.08236
FEE 29-Sep-99 0.666667 10.490417 0.06355
RESULTING VALUE 29-Sep-99 10.490417 #VALUE! #VALUE!
10.000
FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0)
= #VALUE!
T = N/A
R = N/A
Growth & Income
29-Sep-89
TO NO. YEARS 10.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 29-Sep-89 1000.00 2.717531 367.98108
FEE 29-Sep-90 0.666667 2.533509 0.26314
FEE 29-Sep-91 0.666667 3.174701 0.20999
FEE 29-Sep-92 0.666667 3.478915 0.19163
FEE 29-Sep-93 0.666667 3.922638 0.16995
FEE 29-Sep-94 0.666667 4.056480 0.16435
FEE 29-Sep-95 0.666667 5.068055 0.13154
FEE 29-Sep-96 0.666667 5.984490 0.11140
FEE 29-Sep-97 0.666667 7.994304 0.08339
FEE 29-Sep-98 0.666667 8.098165 0.08232
FEE 29-Sep-99 0.666667 8.902021 0.07489
RESULTING VALUE 29-Sep-99 8.902021 366.49847 3262.5771
10.000
FORMULA: 1000*(1+T)= 3262.5771 - (0.85 * 1000 * 0)
= 3262.57709
T = 12.55%
Health Sciences
29-Sep-89
TO NO. YEARS 10.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 29-Sep-89 1000.00 #VALUE! #VALUE!
FEE 29-Sep-90 0.666667 #VALUE! #VALUE!
FEE 29-Sep-91 0.666667 #VALUE! #VALUE!
FEE 29-Sep-92 0.666667 #VALUE! #VALUE!
FEE 29-Sep-93 0.666667 #VALUE! #VALUE!
FEE 29-Sep-94 0.666667 #VALUE! #VALUE!
FEE 29-Sep-95 0.666667 #VALUE! #VALUE!
FEE 29-Sep-96 0.666667 #VALUE! #VALUE!
FEE 29-Sep-97 0.666667 #VALUE! #VALUE!
FEE 29-Sep-98 0.666667 9.895076 0.06737
FEE 29-Sep-99 0.666667 9.674212 0.06891
RESULTING VALUE 29-Sep-99 9.674212 #VALUE! #VALUE!
10.000
FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0)
= #VALUE!
T = N/A
R = N/A
High Yield
29-Sep-89
TO NO. YEARS 10.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 29-Sep-89 1000.00 4.201738 237.99675
FEE 29-Sep-90 0.666667 3.529557 0.18888
FEE 29-Sep-91 0.666667 4.751318 0.14031
FEE 29-Sep-92 0.666667 5.877738 0.11342
FEE 29-Sep-93 0.666667 6.630562 0.10054
FEE 29-Sep-94 0.666667 6.891717 0.09673
FEE 29-Sep-95 0.666667 7.801845 0.08545
FEE 29-Sep-96 0.666667 8.765689 0.07605
FEE 29-Sep-97 0.666667 10.022590 0.06652
FEE 29-Sep-98 0.666667 9.496234 0.07020
FEE 29-Sep-99 0.666667 9.614945 0.06934
RESULTING VALUE 29-Sep-99 9.614945 236.98930 2278.6391
10.000
FORMULA: 1000*(1+T)= 2278.6391 - (0.85 * 1000 * 0)
= 2278.63907
T = 8.58%
R = 127.86%
Income
29-Sep-89
TO NO. YEARS 10.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 29-Sep-89 1000.00 5.000432 199.98272
FEE 29-Sep-90 0.666667 5.246158 0.12708
FEE 29-Sep-91 0.666667 6.047955 0.11023
FEE 29-Sep-92 0.666667 6.850571 0.09732
FEE 29-Sep-93 0.666667 7.599152 0.08773
FEE 29-Sep-94 0.666667 7.134863 0.09344
FEE 29-Sep-95 0.666667 8.151694 0.08178
FEE 29-Sep-96 0.666667 8.423491 0.07914
FEE 29-Sep-97 0.666667 9.187618 0.07256
FEE 29-Sep-98 0.666667 9.927953 0.06715
FEE 29-Sep-99 0.666667 9.729616 0.06852
RESULTING VALUE 29-Sep-99 9.729616 199.09777 1937.1449
10.000
FORMULA: 1000*(1+T)= 1937.1449 - (0.85 * 1000 * 0)
= 1937.14489
T = 6.84%
R = 93.71%
International Growth
29-Sep-89
TO NO. YEARS 10.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 29-Sep-89 1000.00 #VALUE! #VALUE!
FEE 29-Sep-90 0.666667 #VALUE! #VALUE!
FEE 29-Sep-91 0.666667 #VALUE! #VALUE!
FEE 29-Sep-92 0.666667 #VALUE! #VALUE!
FEE 29-Sep-93 0.666667 #VALUE! #VALUE!
FEE 29-Sep-94 0.666667 #VALUE! #VALUE!
FEE 29-Sep-95 0.666667 #VALUE! #VALUE!
FEE 29-Sep-96 0.666667 #VALUE! #VALUE!
FEE 29-Sep-97 0.666667 8.087965 0.08243
FEE 29-Sep-98 0.666667 7.733001 0.08621
FEE 29-Sep-99 0.666667 10.590486 0.06295
RESULTING VALUE 29-Sep-99 10.590486 #VALUE! #VALUE!
10.000
FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0)
= #VALUE!
T = N/A
R = N/A
International Growth & Income
29-Sep-89
TO NO. YEARS 10.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 29-Sep-89 1000.00 #VALUE! #VALUE!
FEE 29-Sep-90 0.666667 #VALUE! #VALUE!
FEE 29-Sep-91 0.666667 #VALUE! #VALUE!
FEE 29-Sep-92 0.666667 #VALUE! #VALUE!
FEE 29-Sep-93 0.666667 #VALUE! #VALUE!
FEE 29-Sep-94 0.666667 #VALUE! #VALUE!
FEE 29-Sep-95 0.666667 #VALUE! #VALUE!
FEE 29-Sep-96 0.666667 #VALUE! #VALUE!
FEE 29-Sep-97 0.666667 8.258327 0.08073
FEE 29-Sep-98 0.666667 7.873102 0.08468
FEE 29-Sep-99 0.666667 10.179152 0.06549
RESULTING VALUE 29-Sep-99 10.179152 #VALUE! #VALUE!
10.000
FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0)
= #VALUE!
T = N/A
R = N/A
International New Opportunities
29-Sep-89
TO NO. YEARS 10.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 29-Sep-89 1000.00 #VALUE! #VALUE!
FEE 29-Sep-90 0.666667 #VALUE! #VALUE!
FEE 29-Sep-91 0.666667 #VALUE! #VALUE!
FEE 29-Sep-92 0.666667 #VALUE! #VALUE!
FEE 29-Sep-93 0.666667 #VALUE! #VALUE!
FEE 29-Sep-94 0.666667 #VALUE! #VALUE!
FEE 29-Sep-95 0.666667 #VALUE! #VALUE!
FEE 29-Sep-96 0.666667 #VALUE! #VALUE!
FEE 29-Sep-97 0.666667 8.629156 0.07726
FEE 29-Sep-98 0.666667 7.796933 0.08550
FEE 29-Sep-99 0.666667 11.424815 0.05835
RESULTING VALUE 29-Sep-99 11.424815 #VALUE! #VALUE!
10.000
FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0)
= #VALUE!
T = N/A
R = N/A
Investors
29-Sep-89
TO NO. YEARS 10.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 29-Sep-89 1000.00 #VALUE! #VALUE!
FEE 29-Sep-90 0.666667 #VALUE! #VALUE!
FEE 29-Sep-91 0.666667 #VALUE! #VALUE!
FEE 29-Sep-92 0.666667 #VALUE! #VALUE!
FEE 29-Sep-93 0.666667 #VALUE! #VALUE!
FEE 29-Sep-94 0.666667 #VALUE! #VALUE!
FEE 29-Sep-95 0.666667 #VALUE! #VALUE!
FEE 29-Sep-96 0.666667 #VALUE! #VALUE!
FEE 29-Sep-97 0.666667 #VALUE! #VALUE!
FEE 29-Sep-98 0.666667 7.845693 0.08497
FEE 29-Sep-99 0.666667 9.665352 0.06897
RESULTING VALUE 29-Sep-99 9.665352 #VALUE! #VALUE!
10.000
FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0)
= #VALUE!
T = N/A
R = N/A
Money Market
29-Sep-89
TO NO. YEARS 10.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 29-Sep-89 1000.00 6.816178 146.70978
FEE 29-Sep-90 0.666667 7.295479 0.09138
FEE 29-Sep-91 0.666667 7.671187 0.08691
FEE 29-Sep-92 0.666667 7.927674 0.08409
FEE 29-Sep-93 0.666667 8.074584 0.08256
FEE 29-Sep-94 0.666667 8.256263 0.08075
FEE 29-Sep-95 0.666667 8.601761 0.07750
FEE 29-Sep-96 0.666667 9.000945 0.07407
FEE 29-Sep-97 0.666667 9.336157 0.07141
FEE 29-Sep-98 0.666667 9.743725 0.06842
FEE 29-Sep-99 0.666667 10.133900 0.06579
RESULTING VALUE 29-Sep-99 10.133900 145.92691 1478.8087
10.000
FORMULA: 1000*(1+T)= 1478.8087 - (0.85 * 1000 * 0)
= 1478.80872
T = 3.99%
R = 47.88%
New Opportunities
29-Sep-89
TO NO. YEARS 10.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 29-Sep-89 1000.00 #VALUE! #VALUE!
FEE 29-Sep-90 0.666667 #VALUE! #VALUE!
FEE 29-Sep-91 0.666667 #VALUE! #VALUE!
FEE 29-Sep-92 0.666667 #VALUE! #VALUE!
FEE 29-Sep-93 0.666667 #VALUE! #VALUE!
FEE 29-Sep-94 0.666667 3.888226 0.17146
FEE 29-Sep-95 0.666667 5.357666 0.12443
FEE 29-Sep-96 0.666667 6.631998 0.10052
FEE 29-Sep-97 0.666667 7.597048 0.08775
FEE 29-Sep-98 0.666667 7.499655 0.08889
FEE 29-Sep-99 0.666667 10.440596 0.06385
RESULTING VALUE 29-Sep-99 10.440596 #VALUE! #VALUE!
10.000
FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0)
= #VALUE!
T = N/A
R = N/A
New Value
29-Sep-89
TO NO. YEARS 10.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 29-Sep-89 1000.00 #VALUE! #VALUE!
FEE 29-Sep-90 0.666667 #VALUE! #VALUE!
FEE 29-Sep-91 0.666667 #VALUE! #VALUE!
FEE 29-Sep-92 0.666667 #VALUE! #VALUE!
FEE 29-Sep-93 0.666667 #VALUE! #VALUE!
FEE 29-Sep-94 0.666667 #VALUE! #VALUE!
FEE 29-Sep-95 0.666667 #VALUE! #VALUE!
FEE 29-Sep-96 0.666667 #VALUE! #VALUE!
FEE 29-Sep-97 0.666667 8.756484 0.07613
FEE 29-Sep-98 0.666667 7.844121 0.08499
FEE 29-Sep-99 0.666667 8.577649 0.07772
RESULTING VALUE 29-Sep-99 8.577649 #VALUE! #VALUE!
10.000
FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0)
= #VALUE!
T = N/A
R = N/A
OTC & Emerging Growth
29-Sep-89
TO NO. YEARS 10.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 29-Sep-89 1000.00 #VALUE! #VALUE!
FEE 29-Sep-90 0.666667 #VALUE! #VALUE!
FEE 29-Sep-91 0.666667 #VALUE! #VALUE!
FEE 29-Sep-92 0.666667 #VALUE! #VALUE!
FEE 29-Sep-93 0.666667 #VALUE! #VALUE!
FEE 29-Sep-94 0.666667 #VALUE! #VALUE!
FEE 29-Sep-95 0.666667 #VALUE! #VALUE!
FEE 29-Sep-96 0.666667 #VALUE! #VALUE!
FEE 29-Sep-97 0.666667 #VALUE! #VALUE!
FEE 29-Sep-98 0.666667 7.148336 0.09326
FEE 29-Sep-99 0.666667 11.185743 0.05960
RESULTING VALUE 29-Sep-99 11.185743 #VALUE! #VALUE!
10.000
FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0)
= #VALUE!
T = N/A
R = N/A
Research
29-Sep-89
TO NO. YEARS 10.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 29-Sep-89 1000.00 #VALUE! #VALUE!
FEE 29-Sep-90 0.666667 #VALUE! #VALUE!
FEE 29-Sep-91 0.666667 #VALUE! #VALUE!
FEE 29-Sep-92 0.666667 #VALUE! #VALUE!
FEE 29-Sep-93 0.666667 #VALUE! #VALUE!
FEE 29-Sep-94 0.666667 #VALUE! #VALUE!
FEE 29-Sep-95 0.666667 #VALUE! #VALUE!
FEE 29-Sep-96 0.666667 #VALUE! #VALUE!
FEE 29-Sep-97 0.666667 #VALUE! #VALUE!
FEE 29-Sep-98 0.666667 7.720984 0.08634
FEE 29-Sep-99 0.666667 9.546100 0.06984
RESULTING VALUE 29-Sep-99 9.546100 #VALUE! #VALUE!
10.000
FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0)
= #VALUE!
T = N/A
R = N/A
Small Cap Equity
29-Sep-89
TO NO. YEARS 10.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 29-Sep-89 1000.00 #VALUE! #VALUE!
FEE 29-Sep-90 0.666667 #VALUE! #VALUE!
FEE 29-Sep-91 0.666667 #VALUE! #VALUE!
FEE 29-Sep-92 0.666667 #VALUE! #VALUE!
FEE 29-Sep-93 0.666667 #VALUE! #VALUE!
FEE 29-Sep-94 0.666667 #VALUE! #VALUE!
FEE 29-Sep-95 0.666667 #VALUE! #VALUE!
FEE 29-Sep-96 0.666667 #VALUE! #VALUE!
FEE 29-Sep-97 0.666667 #VALUE! #VALUE!
FEE 29-Sep-98 0.666667 #VALUE! #VALUE!
FEE 29-Sep-99 0.666667 9.817784 0.06790
RESULTING VALUE 29-Sep-99 9.817784 #VALUE! #VALUE!
10.000
FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0)
= #VALUE!
T = N/A
R = N/A
Utilities Growth & Income
29-Sep-89
TO NO. YEARS 10.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 29-Sep-89 1000.00 #VALUE! #VALUE!
FEE 29-Sep-90 0.666667 #VALUE! #VALUE!
FEE 29-Sep-91 0.666667 #VALUE! #VALUE!
FEE 29-Sep-92 0.666667 4.515706 0.14763
FEE 29-Sep-93 0.666667 5.315711 0.12541
FEE 29-Sep-94 0.666667 4.834388 0.13790
FEE 29-Sep-95 0.666667 5.804357 0.11486
FEE 29-Sep-96 0.666667 6.531642 0.10207
FEE 29-Sep-97 0.666667 7.977568 0.08357
FEE 29-Sep-98 0.666667 9.430835 0.07069
FEE 29-Sep-99 0.666667 9.959579 0.06694
RESULTING VALUE 29-Sep-99 9.959579 #VALUE! #VALUE!
10.000
FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0)
= #VALUE!
T = N/A
R = N/A
Vista
29-Sep-89
TO NO. YEARS 10.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 29-Sep-89 1000.00 #VALUE! #VALUE!
FEE 29-Sep-90 0.666667 #VALUE! #VALUE!
FEE 29-Sep-91 0.666667 #VALUE! #VALUE!
FEE 29-Sep-92 0.666667 #VALUE! #VALUE!
FEE 29-Sep-93 0.666667 #VALUE! #VALUE!
FEE 29-Sep-94 0.666667 #VALUE! #VALUE!
FEE 29-Sep-95 0.666667 #VALUE! #VALUE!
FEE 29-Sep-96 0.666667 #VALUE! #VALUE!
FEE 29-Sep-97 0.666667 7.899866 0.08439
FEE 29-Sep-98 0.666667 7.741559 0.08612
FEE 29-Sep-99 0.666667 10.023172 0.06651
RESULTING VALUE 29-Sep-99 10.023172 #VALUE! #VALUE!
10.000
FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0)
= #VALUE!
T = N/A
R = N/A
Voyager
29-Sep-89
TO NO. YEARS 10.000
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 29-Sep-89 1000.00 2.111575 473.58015
FEE 29-Sep-90 0.666667 1.754331 0.38001
FEE 29-Sep-91 0.666667 2.597476 0.25666
FEE 29-Sep-92 0.666667 2.825464 0.23595
FEE 29-Sep-93 0.666667 3.649416 0.18268
FEE 29-Sep-94 0.666667 3.772838 0.17670
FEE 29-Sep-95 0.666667 4.979204 0.13389
FEE 29-Sep-96 0.666667 6.054907 0.11010
FEE 29-Sep-97 0.666667 7.374974 0.09040
FEE 29-Sep-98 0.666667 7.421237 0.08983
FEE 29-Sep-99 0.666667 10.091222 0.06606
RESULTING VALUE 29-Sep-99 10.091222 471.85786 4761.6224
10.000
FORMULA: 1000*(1+T)= 4761.6224 - (0.85 * 1000 * 0)
= 4761.62243
T = 16.89%
R = 376.16%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Asia Pacific Growth
01-May-95
TO NO. YEARS 4.416
30-Sep-99
<S> <C> <C> <C> <C> <C> <C> <C>
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 01-May-95 1000.00 9.783411 102.21384
1 FEE 01-May-96 0.666667 10.540586 0.06325 0.07
2 FEE 01-May-97 0.666667 10.504633 0.06346 0.07
3 FEE 01-May-98 0.666667 8.909000 0.07483 0.06
4 01-May-99 0.666667 10.000000 0.06667 0.05
5 30-Sep-99 0.666667 12.350842 0.05398 0.04
6 N/A 0 N/A 0.00000 0.03
7 N/A 0 N/A 0.00000 0.02
8 N/A 0 N/A 0.00000 0
9 N/A 0 N/A 0.00000 0
10 N/A 0 N/A 0.00000 0
11 N/A 0 N/A 0.00000 0
12 N/A 0 N/A 0.00000 0
13 N/A 0 N/A 0.00000 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 30-Sep-99 12.350842 101.89165 1258.4477
4.416
FORMULA: 1000*(1+T)= 1258.4477
= 1224.44771
T = 4.69%
R = 22.44%
Diversified Income
15-Sep-93
TO NO. YEARS 6.040
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 15-Sep-93 1000.00 7.673662 130.31588
1 FEE 15-Sep-94 0.666667 7.515370 0.08871 0.07
2 FEE 15-Sep-95 0.666667 8.356629 0.07978 0.07
3 FEE 15-Sep-96 0.666667 9.033643 0.07380 0.06
4 15-Sep-97 0.666667 9.849693 0.06768 0.05
5 15-Sep-98 0.666667 9.630702 0.06922 0.04
6 15-Sep-99 0.666667 9.662755 0.06899 0.03
7 30-Sep-99 0.666667 9.677736 0.06889 0.02
8 N/A 0 N/A 0.00000 0
9 N/A 0 N/A 0.00000 0
10 N/A 0 N/A 0.00000 0
11 N/A 0 N/A 0.00000 0
12 N/A 0 N/A 0.00000 0
13 N/A 0 N/A 0.00000 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 30-Sep-99 9.677736 129.79881 1256.1586
6.040
FORMULA: 1000*(1+T)= 1256.1586
= 1239.1586
T = 3.61%
R = 23.92%
George Putnam Fund of Boston
30-Apr-98
TO NO. YEARS 1.418
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 30-Apr-98 1000.00 9.155212 109.22740
1 FEE 30-Apr-99 0.666667 10.000000 0.06667 0.07
2 FEE 30-Sep-99 0.666667 9.244676 0.07211 0.07
3 FEE N/A 0 N/A 0.00000 0.06
4 N/A 0 N/A 0.00000 0.05
5 N/A 0 N/A 0.00000 0.04
6 N/A 0 N/A 0.00000 0.03
7 N/A 0 N/A 0.00000 0.02
8 N/A 0 N/A 0.00000 0
9 N/A 0 N/A 0.00000 0
10 N/A 0 N/A 0.00000 0
11 N/A 0 N/A 0.00000 0
12 N/A 0 N/A 0.00000 0
13 N/A 0 N/A 0.00000 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 30-Sep-99 9.244676 109.08862 1008.4889
1.418
FORMULA: 1000*(1+T)= 1008.4889
= 948.988942
T = -3.62%
R = -5.10%
Global Asset Allocation
01-Feb-88
TO NO. YEARS 11.661
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 01-Feb-88 1000.00 3.043187 328.60288
1 FEE 01-Feb-89 0.666667 3.285585 0.20291 0.07
2 FEE 01-Feb-90 0.666667 3.579918 0.18622 0.07
3 FEE 01-Feb-91 0.666667 3.793417 0.17574 0.06
4 01-Feb-92 0.666667 4.279181 0.15579 0.05
5 01-Feb-93 0.666667 4.643211 0.14358 0.04
6 01-Feb-94 0.666667 5.438103 0.12259 0.03
7 01-Feb-95 0.666667 5.150139 0.12945 0.02
8 01-Feb-96 0.666667 6.437939 0.10355 0
9 01-Feb-97 0.666667 7.457620 0.08939 0
10 01-Feb-98 0.666667 8.645820 0.07711 0
11 01-Feb-99 0.666667 9.829414 0.06782 0
12 30-Sep-99 0.666667 9.739360 0.06845 0
13 N/A 0 N/A 0.00000 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 30-Sep-99 9.739360 327.08026 3185.5524
11.661
FORMULA: 1000*(1+T)= 3185.5524
= 3185.55243
T = 10.45%
R = 218.56%
Global Growth
01-May-90
TO NO. YEARS 9.415
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 01-May-90 1000.00 3.709313 269.59170
1 FEE 01-May-91 0.666667 3.756338 0.17748 0.07
2 FEE 01-May-92 0.666667 3.931079 0.16959 0.07
3 FEE 01-May-93 0.666667 4.236362 0.15737 0.06
4 01-May-94 0.666667 5.037219 0.13235 0.05
5 01-May-95 0.666667 4.992813 0.13353 0.04
6 01-May-96 0.666667 6.106801 0.10917 0.03
7 01-May-97 0.666667 6.899216 0.09663 0.02
8 01-May-98 0.666667 8.818029 0.07560 0
9 01-May-99 0.666667 10.000000 0.06667 0
10 30-Sep-99 0.666667 10.624416 0.06275 0
11 N/A 0 N/A 0.00000 0
12 N/A 0 N/A 0.00000 0
13 N/A 0 N/A 0.00000 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 30-Sep-99 10.624416 268.41058 2851.7056
9.415
FORMULA: 1000*(1+T)= 2851.7056
= 2851.70564
T = 11.77%
R = 185.17%
Growth & Income
01-Feb-88
TO NO. YEARS 11.661
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 01-Feb-88 1000.00 1.908985 523.83858
1 FEE 01-Feb-89 0.666667 2.390065 0.27893 0.07
2 FEE 01-Feb-90 0.666667 2.620639 0.25439 0.07
3 FEE 01-Feb-91 0.666667 2.857405 0.23331 0.06
4 01-Feb-92 0.666667 3.261712 0.20439 0.05
5 01-Feb-93 0.666667 3.578387 0.18630 0.04
6 01-Feb-94 0.666667 4.107531 0.16230 0.03
7 01-Feb-95 0.666667 4.069832 0.16381 0.02
8 01-Feb-96 0.666667 5.517396 0.12083 0
9 01-Feb-97 0.666667 6.768660 0.09849 0
10 01-Feb-98 0.666667 8.013575 0.08319 0
11 01-Feb-99 0.666667 9.194246 0.07251 0
12 30-Sep-99 0.666667 9.004906 0.07403 0
13 N/A 0 N/A 0.00000 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 30-Sep-99 9.004906 521.90609 4699.7152
11.661
FORMULA: 1000*(1+T)= 4699.7152
= 4699.71524
T = 14.19%
R = 369.97%
Health Sciences
30-Apr-98
TO NO. YEARS 1.418
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 30-Apr-98 1000.00 10.256440 97.49972
1 FEE 30-Apr-99 0.666667 10.000000 0.06667 0.07
2 FEE 30-Sep-99 0.666667 9.734659 0.06848 0.07
3 FEE N/A 0 N/A 0.00000 0.06
4 N/A 0 N/A 0.00000 0.05
5 N/A 0 N/A 0.00000 0.04
6 N/A 0 N/A 0.00000 0.03
7 N/A 0 N/A 0.00000 0.02
8 N/A 0 N/A 0.00000 0
9 N/A 0 N/A 0.00000 0
10 N/A 0 N/A 0.00000 0
11 N/A 0 N/A 0.00000 0
12 N/A 0 N/A 0.00000 0
13 N/A 0 N/A 0.00000 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 30-Sep-99 9.734659 97.36457 947.8109
1.418
FORMULA: 1000*(1+T)= 947.8109
= 888.310856
T = -8.01%
R = -11.17%
High Yield
01-Feb-88
TO NO. YEARS 11.661
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 01-Feb-88 1000.00 3.805177 262.79986
1 FEE 01-Feb-89 0.666667 4.108285 0.16227 0.07
2 FEE 01-Feb-90 0.666667 3.735410 0.17847 0.07
3 FEE 01-Feb-91 0.666667 3.597321 0.18532 0.06
4 01-Feb-92 0.666667 5.235011 0.12735 0.05
5 01-Feb-93 0.666667 6.085573 0.10955 0.04
6 01-Feb-94 0.666667 7.171793 0.09296 0.03
7 01-Feb-95 0.666667 6.893167 0.09671 0.02
8 01-Feb-96 0.666667 8.211356 0.08119 0
9 01-Feb-97 0.666667 9.096959 0.07328 0
10 01-Feb-98 0.666667 10.325935 0.06456 0
11 01-Feb-99 0.666667 9.632321 0.06921 0
12 30-Sep-99 0.666667 9.605619 0.06940 0
13 N/A 0 N/A 0.00000 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 30-Sep-99 9.605619 261.48958 2511.7693
11.661
FORMULA: 1000*(1+T)= 2511.7693
= 2511.76926
T = 8.22%
R = 151.18%
Income
01-Feb-88
TO NO. YEARS 11.661
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 01-Feb-88 1000.00 4.485457 222.94272
1 FEE 01-Feb-89 0.666667 4.638361 0.14373 0.07
2 FEE 01-Feb-90 0.666667 5.083782 0.13114 0.07
3 FEE 01-Feb-91 0.666667 5.606228 0.11892 0.06
4 01-Feb-92 0.666667 6.251556 0.10664 0.05
5 01-Feb-93 0.666667 6.955225 0.09585 0.04
6 01-Feb-94 0.666667 7.602063 0.08770 0.03
7 01-Feb-95 0.666667 7.287789 0.09148 0.02
8 01-Feb-96 0.666667 8.586242 0.07764 0
9 01-Feb-97 0.666667 8.704879 0.07659 0
10 01-Feb-98 0.666667 9.457381 0.07049 0
11 01-Feb-99 0.666667 10.076056 0.06616 0
12 30-Sep-99 0.666667 9.768230 0.06825 0
13 N/A 0 N/A 0.00000 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 30-Sep-99 9.768230 221.80815 2166.6730
11.661
FORMULA: 1000*(1+T)= 2166.6730
= 2166.67299
T = 6.86%
R = 116.67%
International Growth
02-Jan-97
TO NO. YEARS 2.741
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 02-Jan-97 1000.00 6.742689 148.30878
1 FEE 02-Jan-98 0.666667 7.796410 0.08551 0.07
2 FEE 02-Jan-99 0.666667 9.115505 0.07314 0.07
3 FEE 30-Sep-99 0.666667 10.690537 0.06236 0.06
4 N/A 0 N/A 0.00000 0.05
5 N/A 0 N/A 0.00000 0.04
6 N/A 0 N/A 0.00000 0.03
7 N/A 0 N/A 0.00000 0.02
8 N/A 0 N/A 0.00000 0
9 N/A 0 N/A 0.00000 0
10 N/A 0 N/A 0.00000 0
11 N/A 0 N/A 0.00000 0
12 N/A 0 N/A 0.00000 0
13 N/A 0 N/A 0.00000 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 30-Sep-99 10.690537 148.08778 1583.1379
2.741
FORMULA: 1000*(1+T)= 1583.1379
= 1532.13787
T = 16.85%
R = 53.21%
International Growth & Income
02-Jan-97
TO NO. YEARS 2.741
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 02-Jan-97 1000.00 6.833806 146.33134
1 FEE 02-Jan-98 0.666667 8.119537 0.08211 0.07
2 FEE 02-Jan-99 0.666667 8.918825 0.07475 0.07
3 FEE 30-Sep-99 0.666667 10.301703 0.06471 0.06
4 N/A 0 N/A 0.00000 0.05
5 N/A 0 N/A 0.00000 0.04
6 N/A 0 N/A 0.00000 0.03
7 N/A 0 N/A 0.00000 0.02
8 N/A 0 N/A 0.00000 0
9 N/A 0 N/A 0.00000 0
10 N/A 0 N/A 0.00000 0
11 N/A 0 N/A 0.00000 0
12 N/A 0 N/A 0.00000 0
13 N/A 0 N/A 0.00000 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 30-Sep-99 10.301703 146.10977 1505.1795
2.741
FORMULA: 1000*(1+T)= 1505.1795
= 1454.17948
T = 14.64%
R = 45.42%
International New Opportunities
27-Jan-97
TO NO. YEARS 2.672
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 27-Jan-97 1000.00 8.014667 124.77125
1 FEE 27-Jan-98 0.666667 7.764222 0.08586 0.07
2 FEE 27-Jan-99 0.666667 9.555269 0.06977 0.07
3 FEE 30-Sep-99 0.666667 11.580711 0.05757 0.06
4 N/A 0 N/A 0.00000 0.05
5 N/A 0 N/A 0.00000 0.04
6 N/A 0 N/A 0.00000 0.03
7 N/A 0 N/A 0.00000 0.02
8 N/A 0 N/A 0.00000 0
9 N/A 0 N/A 0.00000 0
10 N/A 0 N/A 0.00000 0
11 N/A 0 N/A 0.00000 0
12 N/A 0 N/A 0.00000 0
13 N/A 0 N/A 0.00000 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 30-Sep-99 11.580711 124.55805 1442.4707
2.672
FORMULA: 1000*(1+T)= 1442.4707
= 1391.47075
T = 13.16%
R = 39.15%
Investors
30-Apr-98
TO NO. YEARS 1.418
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 30-Apr-98 1000.00 8.165947 122.45977
1 FEE 30-Apr-99 0.666667 10.000000 0.06667 0.07
2 FEE 30-Sep-99 0.666667 9.794105 0.06807 0.07
3 FEE N/A 0 N/A 0.00000 0.06
4 N/A 0 N/A 0.00000 0.05
5 N/A 0 N/A 0.00000 0.04
6 N/A 0 N/A 0.00000 0.03
7 N/A 0 N/A 0.00000 0.02
8 N/A 0 N/A 0.00000 0
9 N/A 0 N/A 0.00000 0
10 N/A 0 N/A 0.00000 0
11 N/A 0 N/A 0.00000 0
12 N/A 0 N/A 0.00000 0
13 N/A 0 N/A 0.00000 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 30-Sep-99 9.794105 122.32504 1198.0642
1.418
FORMULA: 1000*(1+T)= 1198.0642
= 1138.56425
T = 9.58%
R = 13.86%
Money Market
01-Feb-88
TO NO. YEARS 11.661
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 01-Feb-88 1000.00 6.129132 163.15524
1 FEE 01-Feb-89 0.666667 6.475427 0.10295 0.07
2 FEE 01-Feb-90 0.666667 6.977848 0.09554 0.07
3 FEE 01-Feb-91 0.666667 7.459048 0.08938 0.06
4 01-Feb-92 0.666667 7.807023 0.08539 0.05
5 01-Feb-93 0.666667 7.997658 0.08336 0.04
6 01-Feb-94 0.666667 8.143580 0.08186 0.03
7 01-Feb-95 0.666667 8.391497 0.07945 0.02
8 01-Feb-96 0.666667 8.766269 0.07605 0
9 01-Feb-97 0.666667 9.122552 0.07308 0
10 01-Feb-98 0.666667 9.509485 0.07011 0
11 01-Feb-99 0.666667 9.910171 0.06727 0
12 30-Sep-99 0.666667 10.134868 0.06578 0
13 N/A 0 N/A 0.00000 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 30-Sep-99 10.134868 162.18502 1643.7238
11.661
FORMULA: 1000*(1+T)= 1643.7238
= 1643.72381
T = 4.35%
R = 64.37%
New Opportunities
02-May-94
TO NO. YEARS 5.413
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 02-May-94 1000.00 3.703502 270.01471
1 FEE 02-May-95 0.666667 4.271289 0.15608 0.07
2 FEE 02-May-96 0.666667 6.555625 0.10169 0.07
3 FEE 02-May-97 0.666667 6.114444 0.10903 0.06
4 02-May-98 0.666667 8.839731 0.07542 0.05
5 02-May-99 0.666667 10.000000 0.06667 0.04
6 30-Sep-99 0.666667 10.534459 0.06328 0.03
7 N/A 0 N/A 0.00000 0.02
8 N/A 0 N/A 0.00000 0
9 N/A 0 N/A 0.00000 0
10 N/A 0 N/A 0.00000 0
11 N/A 0 N/A 0.00000 0
12 N/A 0 N/A 0.00000 0
13 N/A 0 N/A 0.00000 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 30-Sep-99 10.534459 269.44253 2838.4313
5.413
FORMULA: 1000*(1+T)= 2838.4313
= 2812.93129
T = 21.05%
R = 181.29%
New Value
02-Jan-97
TO NO. YEARS 2.741
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 02-Jan-97 1000.00 7.234128 138.23366
1 FEE 02-Jan-98 0.666667 8.455318 0.07885 0.07
2 FEE 02-Jan-99 0.666667 8.870162 0.07516 0.07
3 FEE 30-Sep-99 0.666667 8.689042 0.07672 0.06
4 N/A 0 N/A 0.00000 0.05
5 N/A 0 N/A 0.00000 0.04
6 N/A 0 N/A 0.00000 0.03
7 N/A 0 N/A 0.00000 0.02
8 N/A 0 N/A 0.00000 0
9 N/A 0 N/A 0.00000 0
10 N/A 0 N/A 0.00000 0
11 N/A 0 N/A 0.00000 0
12 N/A 0 N/A 0.00000 0
13 N/A 0 N/A 0.00000 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 30-Sep-99 8.689042 138.00293 1199.1133
2.741
FORMULA: 1000*(1+T)= 1199.1133
= 1148.11327
T = 5.17%
R = 14.81%
OTC & Emerging Growth
30-Apr-98
TO NO. YEARS 1.418
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 30-Apr-98 1000.00 8.832917 113.21288
1 FEE 30-Apr-99 0.666667 10.000000 0.06667 0.07
2 FEE 30-Sep-99 0.666667 11.289979 0.05905 0.07
3 FEE N/A 0 N/A 0.00000 0.06
4 N/A 0 N/A 0.00000 0.05
5 N/A 0 N/A 0.00000 0.04
6 N/A 0 N/A 0.00000 0.03
7 N/A 0 N/A 0.00000 0.02
8 N/A 0 N/A 0.00000 0
9 N/A 0 N/A 0.00000 0
10 N/A 0 N/A 0.00000 0
11 N/A 0 N/A 0.00000 0
12 N/A 0 N/A 0.00000 0
13 N/A 0 N/A 0.00000 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 30-Sep-99 11.289979 113.08717 1276.7517
1.418
FORMULA: 1000*(1+T)= 1276.7517
= 1217.25174
T = 14.87%
R = 21.73%
Research
29-Sep-98
TO NO. YEARS 1.002
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 29-Sep-98 1000.00 7.720984 129.51717
1 FEE 29-Sep-99 0.666667 9.546100 0.06984 0.07
2 FEE 30-Sep-99 0.666667 9.684792 0.06884 0.07
3 FEE N/A 0 N/A 0.00000 0.06
4 N/A 0 N/A 0.00000 0.05
5 N/A 0 N/A 0.00000 0.04
6 N/A 0 N/A 0.00000 0.03
7 N/A 0 N/A 0.00000 0.02
8 N/A 0 N/A 0.00000 0
9 N/A 0 N/A 0.00000 0
10 N/A 0 N/A 0.00000 0
11 N/A 0 N/A 0.00000 0
12 N/A 0 N/A 0.00000 0
13 N/A 0 N/A 0.00000 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 30-Sep-99 9.684792 129.37850 1253.0038
1.002
FORMULA: 1000*(1+T)= 1253.0038
= 1193.50384
T = 19.31%
R = 19.35%
Small Cap Value
30-Apr-99
TO NO. YEARS 0.419
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 30-Apr-99 1000.00 10.000000 100.00000
1 FEE 30-Sep-99 0.666667 9.907425 0.06729 0.07
2 FEE N/A 0 N/A 0.00000 0.07
3 FEE N/A 0 N/A 0.00000 0.06
4 N/A 0 N/A 0.00000 0.05
5 N/A 0 N/A 0.00000 0.04
6 N/A 0 N/A 0.00000 0.03
7 N/A 0 N/A 0.00000 0.02
8 N/A 0 N/A 0.00000 0
9 N/A 0 N/A 0.00000 0
10 N/A 0 N/A 0.00000 0
11 N/A 0 N/A 0.00000 0
12 N/A 0 N/A 0.00000 0
13 N/A 0 N/A 0.00000 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 30-Sep-99 9.907425 99.93271 990.0758
0.419
FORMULA: 1000*(1+T)= 990.0758
= 930.575833
T = -15.78%
R = -6.94%
Utilities Growth & Income
01-May-92
TO NO. YEARS 7.414
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 01-May-92 1000.00 4.326599 231.12842
1 FEE 01-May-93 0.666667 4.928860 0.13526 0.07
2 FEE 01-May-94 0.666667 4.894033 0.13622 0.07
3 FEE 01-May-95 0.666667 5.138119 0.12975 0.06
4 01-May-96 0.666667 6.291678 0.10596 0.05
5 01-May-97 0.666667 7.096428 0.09394 0.04
6 01-May-98 0.666667 9.282198 0.07182 0.03
7 01-May-99 0.666667 10.000000 0.06667 0.02
8 30-Sep-99 0.666667 10.053807 0.06631 0
9 N/A 0 N/A 0.00000 0
10 N/A 0 N/A 0.00000 0
11 N/A 0 N/A 0.00000 0
12 N/A 0 N/A 0.00000 0
13 N/A 0 N/A 0.00000 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 30-Sep-99 10.053807 230.32249 2315.6179
7.414
FORMULA: 1000*(1+T)= 2315.6179
= 2315.61788
T = 11.99%
R = 131.56%
Vista
02-Jan-97
TO NO. YEARS 2.741
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 02-Jan-97 1000.00 6.452346 154.98239
1 FEE 02-Jan-98 0.666667 7.823429 0.08521 0.07
2 FEE 02-Jan-99 0.666667 9.335571 0.07141 0.07
3 FEE 30-Sep-99 0.666667 10.003962 0.06664 0.06
4 N/A 0 N/A 0.00000 0.05
5 N/A 0 N/A 0.00000 0.04
6 N/A 0 N/A 0.00000 0.03
7 N/A 0 N/A 0.00000 0.02
8 N/A 0 N/A 0.00000 0
9 N/A 0 N/A 0.00000 0
10 N/A 0 N/A 0.00000 0
11 N/A 0 N/A 0.00000 0
12 N/A 0 N/A 0.00000 0
13 N/A 0 N/A 0.00000 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 30-Sep-99 10.003962 154.75912 1548.2044
2.741
FORMULA: 1000*(1+T)= 1548.2044
= 1497.20439
T = 15.87%
R = 49.72%
Voyager
01-Feb-88
TO NO. YEARS 11.661
30-Sep-99
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 01-Feb-88 1000.00 1.574787 635.00651
1 FEE 01-Feb-89 0.666667 1.706469 0.39067 0.07
2 FEE 01-Feb-90 0.666667 1.873332 0.35587 0.07
3 FEE 01-Feb-91 0.666667 2.180853 0.30569 0.06
4 01-Feb-92 0.666667 2.964933 0.22485 0.05
5 01-Feb-93 0.666667 3.262370 0.20435 0.04
6 01-Feb-94 0.666667 3.883515 0.17167 0.03
7 01-Feb-95 0.666667 3.842819 0.17348 0.02
8 01-Feb-96 0.666667 5.397573 0.12351 0
9 01-Feb-97 0.666667 6.199184 0.10754 0
10 01-Feb-98 0.666667 7.419624 0.08985 0
11 01-Feb-99 0.666667 9.582577 0.06957 0
12 30-Sep-99 0.666667 10.169134 0.06556 0
13 N/A 0 N/A 0.00000 0
14 FEE N/A 0 N/A 0.00000 0
15 FEE N/A 0 N/A 0.00000 0
RESULTING VALUE 30-Sep-99 10.169134 632.72389 6434.2541
</TABLE>
Power of Attorney
With Respect to the Allstate Life Insurance Company of New York Filing
on Form N-4 for
Allstate Life of New York Separate Account A
Know all men by these presents that Samuel H. Pilch., whose signature
appears below, constitutes and appoints Louis G. Lower, II, and Michael J.
Velotta, and each of them, his attorney-in-fact, with power of substitution, and
herein any and all capacities, to sign any registration statements and
amendments thereto for the Form N-4 Allstate Life of New York Separate Account A
and to file the same, with exhibits thereto and other documents, in connection
therewith, with the Securities and Exchange Commission, hereby ratifying and
confirming all that each of said attorneys-in-fact, or his substitute or
substitutes, may do or cause to be done by virtue hereof.
Date: November 10, 1999
/s/ SAMUEL H. PILCH
- ----------------------------
Samuel H. Pilch
<PAGE>
Power of Attorney
With Respect to the Allstate Life Insurance Company of New York Filing
on Form N-4 for
Allstate Life of New York Separate Account A
Know all men by these presents that Joseph J. Richardson, Jr., whose
signature appears below, constitutes and appoints Louis G. Lower, II, and
Michael J. Velotta, and each of them, his attorney-in-fact, with power of
substitution, and herein any and all capacities, to sign any registration
statements and amendments thereto for the Form N-4 Allstate Life of New York
Separate Account A and to file the same, with exhibits thereto and other
documents, in connection therewith, with the Securities and Exchange Commission,
hereby ratifying and confirming all that each of said attorneys-in-fact, or his
substitute or substitutes, may do or cause to be done by virtue hereof.
Date: November 10, 1999
/S/ JOSEPH J. RICHARDSON, JR.
- -----------------------------
Joseph J. Richardson, Jr.
