AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON January 14, 2000
- -----------------------------------------------------------------------------
FILE NOS. _________
811-07467
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /X/
POST-EFFECTIVE AMENDMENT NO.
AND/OR
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY
ACT OF 1940
AMENDMENT NO. 9 /X/
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
P.O. BOX 9095
FARMINGVILLE, NEW YORK 11738
516/451-5300
(Address and Telephone Number of Depositor's Principal Offices)
MICHAEL J. VELOTTA
VICE PRESIDENT, SECRETARY AND GENERAL COUNSEL
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
3100 SANDERS ROAD
NORTHBROOK, ILLINOIS 60062
847-402-2400
(Name, Address and Telephone Number of Agent for Service)
COPIES TO:
RICHARD T. CHOI, ESQUIRE TERRY R. YOUNG, ESQUIRE
FREEDMAN, LEVY, KROLL & SIMONDS ALLSTATE LIFE FINANCIAL SERVICES, INC.
1050 CONNECTICUT AVENUE, N.W. 3100 SANDERS ROAD
SUITE 825 NORTHBROOK, IL 60062
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.
<PAGE>
ALLSTATE CUSTOM PORTFOLIO VARIABLE ANNUITY
Allstate Life Insurance Company Prospectus dated _____, 2000
of New York
P.O. Box 94038, Palatine, IL 60094-4038
Telephone Number: 1-800-692-4682
Allstate Life Insurance Company of New York ("Allstate New York") is offering
the Allstate Custom Portfolio Variable Annuity, 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 29 investment alternatives ("investment
alternatives"). The investment alternatives include the fixed account ("Fixed
Account") and 28 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 shares of one of the following mutual fund
portfolios ("Portfolios"):
<TABLE>
<CAPTION>
<S> <C>
AIM Variable Insurance Funds, Inc.: Oppenheimer Variable Account Funds:
AIM V.I. Capital Appreciation Fund Oppenheimer VA Main Street Growth & Income Fund
AIM V.I. Balanced Fund Oppenheimer VA Aggressive Growth Fund
AIM V.I. Growth Fund Oppenheimer VA Strategic Bond Fund
AIM V.I. International Equity Fund The Dreyfus Socially Responsible Growth Fund, Inc.:
AIM V.I. Value Fund Dreyfus Socially Responsible Growth Fund
AIM V.I. Government Securities Fund Dreyfus Stock Index Fund:
AIM V.I. High Yield Fund Dreyfus Stock Index Fund
Fidelity Variable Insurance Products Fund (VIP): Dreyfus Variable Investment Fund:
Fidelity VIP Equity Income Portfolio Dreyfus VI Capital Appreciation Portfolio
Fidelity VIP Overseas Portfolio Wells Fargo Variable Trust:
Fidelity VIP Growth Portfolio Wells Fargo VT Equity Income Fund
Fidelity Variable Insurance Products Fund II (VIP II): Wells Fargo VT Asset Allocation Fund
Fidelity VIP II Contrafund Portfolio Wells Fargo VT Growth Fund
Fidelity Variable Insurance Products Fund III (VIP Delaware Group Premium Fund, Inc.:
III):
Fidelity VIP III Growth Opportunities Portfolio Delaware GP Small Cap Value Series
Templeton Variable Products Series Fund: Delaware GP Trend Series
Templeton Asset Allocation Fund - Class 2 HSBC Variable Insurance Funds:
Templeton International Fund - Class 2 HSBC VI Fixed Income Fund
HSBC VI Growth & Income Fund
HSBC VI Cash Management Fund
</TABLE>
We (Allstate New York) have filed a Statement of Additional Information, dated
_______, 2000, with the Securities and Exchange Commission ("SEC"). It contains
more information about the Contract and is incorporated herein by reference,
which means 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
that have relationships with banks or other
IMPORTANT financial institutions or by employees of such banks.
NOTICES 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 only available in New York.
<PAGE>
TABLE OF CONTENTS
- ------------------------------------------------------------------------------
<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 Features Contract Value.........................................
Investment Alternatives................................
The Variable Sub-Accounts.....................
The Fixed Account ............................
Transfers.....................................
Expenses..............................................
Access To Your Money...................................
Income Payments........................................
Death Benefits.........................................
More Information:
Allstate New York.............................
The Variable Account..........................
The Portfolios................................
Other Information The Contract .................................
Qualified Plans ..............................
Legal Matters.................................
Year 2000.....................................
Taxes..................................................
Annual Reports and Other Documents.....................
Performance Information................................
Appendix A - Illustration of a Market Value Adjustment
Appendix B - Withdrawal Adjustment Example ............
Statement of Additional Information Table of Contents..
</TABLE>
<PAGE>
IMPORTANT TERMS
- ------------------------------------------------------------------------------
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").................................
Anniversary Values.......................................
Annuitant................................................
Automatic Additions Program .............................
Automatic Portfolio Rebalancing Program..................
Beneficiary .............................................
Cancellation Period .....................................
*Contract ................................................
Contract Anniversary.....................................
Contract Owner ("You") ..................................
Contract Value ..........................................
Contract Year...........................................
Death Benefit Anniversary ...............................
Dollar Cost Averaging Program............................
Due Proof of Death.......................................
Fixed Account............................................
Guarantee Periods ......................................
Income Plan .............................................
Investment Alternatives .................................
Issue Date ..............................................
Market Value Adjustment .................................
Payout Phase.............................................
Payout Start Date .......................................
Portfolios ..............................................
Preferred Withdrawal Amount..............................
Qualified Contracts .....................................
Right to Cancel .........................................
SEC......................................................
Settlement Value .......................................
Systematic Withdrawal Program ...........................
Treasury Rate ...........................................
Valuation Date...........................................
Variable Account ........................................
Variable Sub-Account ....................................
* The Allstate Custom Portfolio Variable Annuity is a group contract
and your ownership is represented by certificates. References to
"Contract" in this prospectus include certificates, unless the context
requires otherwise.
<PAGE>
THE CONTRACT AT A GLANCE
- ------------------------------------------------------------------------------
The following is a snapshot of the Contract. Please read the remainder of this
prospectus for more information.
---------------------------------- -----------------------------------------
Flexible Payments
You can purchase a Contract with as little
as $3,000 ($2,000 for a "Qualified
Contract," which is a Contract 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 $100. You
must maintain a minimum account size of
$1,000.
---------------------------------- -----------------------------------------
---------------------------------- -----------------------------------------
Right to Cancel You may cancel your Contract
within 10 days after receipt ("Cancellation
Period"). Upon cancellation we will return
your purchase payments adjusted to the
extent federal or state law permits to
reflect the investment experience of any
amounts allocated to the Variable Account.
---------------------------------- -----------------------------------------
---------------------------------- -----------------------------------------
Expenses You will bear the following expenses:
o Total Variable Account annual fees equal
to 1.25% of average daily net Assets
o Annual contract maintenance charge of
$30 (with certain exceptions)
o Withdrawal charges ranging from 0% to
7% of payment withdrawn (with certain
exceptions)
o Transfer fee of $10 after 12th transfer
in any Contract Year (fee currently
waived)
o State premium tax (New York currently
does not impose one).
In addition, each Portfolio pays expenses
that you will bear indirectly if you invest
in a Variable Sub-Account.
---------------------------------- -----------------------------------------
---------------------------------- -----------------------------------------
Investment
Alternatives The Contract offers 29 investment
alternatives including:
o the Fixed Account (which credits
interest at rates we guarantee), and
o 28 Variable Sub-Accounts investing in
Portfolios offering professional money
management by:
A I M Advisors, Inc.
Fidelity Management & Research Company
Templeton Investment Counsel, Inc.
OppenheimerFunds, Inc.
The Dreyfus Corporation
Wells Fargo Bank, N.A.
Delaware Management Company
HSBC Asset Management Americas Inc.
To find out current rates being paid on the
Fixed Account, or to find out how the
Variable Sub-Accounts have performed,
please call us at 1-800-692-4682.
---------------------------------- -----------------------------------------
<PAGE>
----------------------------------- ----------------------------------------
Special Services For your convenience, we offer these
special services:
o Automatic Portfolio 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. Transfers to
the Fixed Account must be at least $500.
We do not currently impose a fee upon
transfers. However, we reserve the right
to charge $10 per transfer after the 12th
transfer in each "Contract Year," which we
measure from the date we issue your
contract or a Contract anniversary
("Contract Anniversary").
----------------------------------- ----------------------------------------
----------------------------------- ----------------------------------------
Withdrawals You may withdraw some or all of your
Contract Value at anytime during the
Accumulation Phase.
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 and
Market Value Adjustment also may apply.
----------------------------------- ----------------------------------------
<PAGE>
HOW THE CONTRACT WORKS
- ------------------------------------------------------------------------------
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 29 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. If you invest in the Fixed Account, 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 Portfolios.
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 Portfolios. 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 income You can receive Or you can
a Contract payments or receive a lump income payments receive income
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 none,
to your Beneficiary. See "Death Benefits."
Please call us at 1-800-692-4682 if you have any question about how the
Contract works.
<PAGE>
EXPENSE TABLE
- ------------------------------------------------------------------------------
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 Portfolio expenses, please refer to the
accompanying prospectuses for the Portfolios.
------------------------------------------------------------------------
CONTRACT OWNER TRANSACTION EXPENSES
Withdrawal Charge (as a percentage of purchase payments)*
Number of Complete Years
Since We Received the Purchase
Payment Being Withdrawn: 0 1 2 3 4 5 6 7+
Applicable Charge: 7% 6% 5% 4% 3% 2% 1% 0%
Annual Contract Maintenance Charge............................$30.00**
Transfer Fee..................................................$10.00***
-------------------
* Each Contract Year, you may withdraw up to 15% of purchase payments
without incurring a withdrawal charge or a Market Value Adjustment.
** We will waive this charge in certain cases. See "Expenses."
***Applies solely to the thirteenth and subsequent transfers within a
Contract Year excluding transfers due to dollar cost averaging or
automatic portfolio rebalancing. We are currently waiving the transfer
fee.
------------------------------------------------------------------------
VARIABLE ACCOUNT ANNUAL EXPENSES
(as a percentage of average daily net assets deducted from each Variable
Sub-Account)
Mortality and Expense Risk Charge.................................1.15%
Administrative Expense Charge.....................................0.10%
Total Variable Account Annual Expenses.......1.25%
------------------------------------------------------------------------
<PAGE>
----------------------------------------------------------------------------
PORTFOLIO ANNUAL EXPENSES
(as a percentage of Portfolio average daily net assets)(1)
<TABLE>
<CAPTION>
Total Annual
Management 12b-1 Fee Other Expenses Portfolio Expenses
Fee (after any fee (after any fee (after any fee
(after any fee waivers waivers or waivers or waivers or
Portfolio or reductions) reductions) reductions) reductions)
<S> <C> <C> <C> <C>
AIM Variable Insurance Funds, Inc.:
AIM V.I. Capital Appreciation Fund 0.62% 0.05% 0.67%
AIM V.I. Balanced Fund(2) 0.00% 1.18% 1.18%
AIM V.I. Growth Fund 0.64% 0.08% 0.72%
AIM V.I. International Equity Fund 0.75% 0.16% 0.91%
AIM V.I. Value Fund 0.61% 0.05% 0.66%
AIM V.I. Government Securities Fund 0.50% 0.26% 0.76%
AIM V.I. High Yield Fund(2) 0.00% 1.13% 1.13%
Fidelity Variable Insurance Products Fund (VIP):
Fidelity VIP Equity Income Portfolio(3) 0.49% 0.08% 0.57%
Fidelity VIP Overseas Portfolio(3) 0.74% 0.15% 0.89%
Fidelity VIP Growth Portfolio(3) 0.59% 0.07% 0.66%
Fidelity Variable Insurance Products Fund II (VIP II):
Fidelity VIP II Contrafund Portfolio(3) 0.59% 0.11% 0.70%
Fidelity Variable Insurance Products Fund III (VIP III):
Fidelity VIP III Growth Opportunities Portfolio 0.74% 0.15% 0.89%
Templeton Variable Products Series Fund:
Templeton Asset Allocation Fund - Class 2 0.70% 0.25% 0.08% 1.03%
Templeton International Fund - Class 2 0.79% 0.25% 0.07% 1.11%
Oppenheimer Variable Account Funds:
Oppenheimer VA Main Street Growth & Income Fund 0.74% 0.05% 0.79%
Oppenheimer VA Aggressive Growth Fund 0.69% 0.02% 0.71%
Oppenheimer VA Strategic Bond Fund 0.74% 0.06% 0.80%
The Dreyfus Socially Responsible Growth Fund, Inc.:
Dreyfus Socially Responsible Growth Fund 0.75% 0.05% 0.80%
Dreyfus Stock Index Fund, Inc.:
Dreyfus Stock Index Fund 0.25% 0.01% 0.26%
Dreyfus Variable Investment Fund:
Dreyfus VI Capital Appreciation Portfolio 0.75% 0.06% 0.81%
Wells Fargo Variable Trust
Wells Fargo VT Equity Income Fund(4) 0.55% 0.62% 1.00%
Wells Fargo VT Asset Allocation Fund(4) 0.55% 0.58% 1.00%
Wells Fargo VT Growth Fund(4) 0.55% 0.68% 1.00%
Delaware Group Premium Fund, Inc.:
Delaware GP Small Cap Value Series 0.75% 0.10% 0.85%
Delaware GP Trend Series 0.75% 0.10% 0.85%
HSBC Variable Insurance Funds:
HSBC VI Fixed Income Fund(5) 0.00% 1.15% 1.15%
HSBC VI Growth & Income Fund(5) 0.33% 0.82% 1.15%
HSBC VI Cash Management Fund(5) 0.00% 0.93% 0.93%
</TABLE>
Footnotes
(1) Figures shown in the table are for the year ended December 31, 1998.
(2) Absent voluntary reductions and reimbursements for certain Portfolios,
management fees, other expenses, and total Portfolio annual expenses
expressed as a percentage of average net assets of the Portfolios would
have been as follows:
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------
Management Total Annual
Portfolio Fees Other Expenses Portfolio Expenses
------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------- -- --------------------- ---------------------- ---------------------
<S> <C> <C> <C>
AIM V.I. Balanced Fund 0.75% 2.08% 2.83%
-------------------------------------------------- -- --------------------- ---------------------- ---------------------
-------------------------------------------------- -- --------------------- ---------------------- ---------------------
AIM V.I. High Yield Fund 0.63% 1.87% 2.50%
-------------------------------------------------- -- --------------------- ---------------------- ---------------------
(3) A portion of the brokerage commissions that these Portfolios paid was used
to reduce the Portfolios' expenses. In addition, certain Portfolios, or
Fidelity Management & Research Company on behalf of certain Portfolios,
have entered into arrangements with their custodian whereby credits
realized as a result of uninvested cash balances were used to reduce
custodian expenses. Including these reductions, total operating expenses
would have been 0.58% for VIP Equity Income, 0.91% for VIP Overseas, 0.68%
for VIP Growth, and 0.70% for VIP II Contrafund.
(4) Figures shown in the table are for the year ended December 31, 1998. Absent
voluntary reductions and reimbursements for certain Portfolios, management
fees, other expenses, and total Portfolio annual expenses expressed as a
percentage of average net assets of the Portfolios would have been as
follows:
------------------------------------------------------------------------------------------------------------------------
Management Total Annual
Portfolio Fees Other Expenses Portfolio Expenses
------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------- -- --------------------- ---------------------- ---------------------
Wells Fargo VT Equity Income Fund 0.55% 0.62% 1.17%
-------------------------------------------------- -- --------------------- ---------------------- ---------------------
-------------------------------------------------- -- --------------------- ---------------------- ---------------------
Wells Fargo VT Asset Allocation Fund 0.55% 0.58% 1.13%
-------------------------------------------------- -- --------------------- ---------------------- ---------------------
-------------------------------------------------- -- --------------------- ---------------------- ---------------------
Wells Fargo VT Growth Fund 0.55% 0.68% 1.23%
-------------------------------------------------- -- --------------------- ---------------------- ---------------------
(5) Figures shown in the table are for the year ended December 31, 1998.
Investors will be notified of any material revision or cancellation of a
waiver or expense reimbursement, which may be terminated at any time at the
option of HSBC Asset Management Americas Inc. Absent voluntary reductions
and reimbursements for certain Portfolios, management fees, other expenses,
and total Portfolio annual expenses expressed as a percentage of average
net assets of the Portfolios would have been as follows:
------------------------------------------------------------------------------------------------------------------------
Management Total Annual
Portfolio Fees Other Expenses Portfolio Expenses
------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------- -- --------------------- ---------------------- ---------------------
HSBC VI Fixed Income Fund 0.55% 2.16% 2.71%
-------------------------------------------------- -- --------------------- ---------------------- ---------------------
-------------------------------------------------- -- --------------------- ---------------------- ---------------------
HSBC VI Growth & Income Fund 0.55% 0.93% 1.48%
-------------------------------------------------- -- --------------------- ---------------------- ---------------------
-------------------------------------------------- -- --------------------- ---------------------- ---------------------
HSBC VI Cash Management Fund 0.35% 1.51% 1.86%
-------------------------------------------------- -- --------------------- ---------------------- ---------------------
</TABLE>
<PAGE>
EXAMPLE 1
The example below shows the dollar amount of expenses that you would bear
directly or indirectly if you:
o invested $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 you may be required to pay if you
surrender your Contract. The example does not include deductions for premium
taxes because New York does not charge premium taxes on annuities.
<TABLE>
<CAPTION>
SUB-ACCOUNT 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ----------- ------ ------- ------- --------
<S> <C> <C> <C> <C>
AIM Variable Insurance Funds, Inc.:
AIM V.I. Capital Appreciation $ 80 $105 $134 $233
AIM V.I. Balanced $ 85 $121 $160 $286
AIM V.I. Growth $ 80 $107 $136 $238
AIM V.I. International Equity $ 82 $113 $146 $258
AIM V.I. Value $ 80 $105 $133 $231
AIM V.I. Government Securities $ 81 $108 $138 $242
AIM V.I. High Yield $ 85 $120 $157 $280
Fidelity Variable Insurance Products Fund (VIP):
Fidelity VIP Equity Income $ 79 $102 $128 $222
Fidelity VIP Overseas $ 82 $112 $145 $256
Fidelity VIP Growth $ 80 $105 $133 $231
Fidelity Variable Insurance Products Fund II (VIP II):
Fidelity VIP II Contrafund $ 80 $105 $133 $231
Fidelity Variable Insurance Products Fund III (VIP III):
Fidelity VIP III Growth Opportunities $ 82 $112 $145 $256
Templeton Variable Products Series Fund:
Templeton Asset Allocation - Class 2 $ 84 $117 $152 $270
Templeton International - Class 2 $ 84 $119 $156 $278
Oppenheimer Variable Account Funds:
Oppenheimer VA Main Street Growth & Income $ 81 $109 $140 $245
Oppenheimer VA Aggressive Growth $ 80 $107 $136 $237
Oppenheimer VA Strategic Bond $ 81 $110 $140 $246
The Dreyfus Socially Responsible Growth Fund, Inc.:
Dreyfus Socially Responsible Growth $ 81 $110 $140 $246
Dreyfus Stock Index Fund:
Dreyfus Stock Index $ 76 $ 93 $112 $188
Dreyfus Variable Investment Fund:
Dreyfus VI Capital Appreciation $ 81 $110 $141 $247
Wells Fargo Variable Trust:
Wells Fargo VT Equity Income $ 83 $116 $151 $267
Wells Fargo VT Asset Allocation $ 83 $116 $151 $267
Wells Fargo VT Growth $ 83 $116 $151 $267
Delaware Group Premium Fund, Inc.:
Delaware GP Small Cap Value Series $ 82 $111 $143 $252
Delaware GP Trend Series $ 82 $111 $143 $252
HSBC Variable Insurance Funds:
HSBC VI Fixed Income $101 $168 $236 $429
HSBC VI Growth & Income $ 88 $130 $175 $316
HSBC VI Cash Management $ 92 $142 $194 $352
</TABLE>
<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 with a specified period), at the end of each period.
<TABLE>
<CAPTION>
SUB-ACCOUNT 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ----------- ------ ------- ------- --------
<S> <C> <C> <C> <C>
AIM Variable Insurance Funds, Inc.:
AIM V.I. Capital Appreciation $ 20 $ 63 $108 $233
AIM V.I. Balanced $ 26 $ 79 $134 $286
AIM V.I. Growth $ 21 $ 65 $111 $238
AIM V.I. International Equity $ 23 $ 70 $121 $258
AIM V.I. Value $ 20 $ 63 $108 $231
AIM V.I. Government Securities $ 21 $ 66 $113 $242
AIM V.I. High Yield $ 25 $ 77 $132 $280
Fidelity Variable Insurance Products Fund (VIP):
Fidelity VIP Equity Income $ 19 $ 60 $103 $222
Fidelity VIP Overseas $ 23 $ 70 $119 $256
Fidelity VIP Growth $ 20 $ 63 $108 $231
Fidelity Variable Insurance Products Fund II (VIP II):
Fidelity VIP II Contrafund $ 20 $ 63 $108 $231
Fidelity Variable Insurance Products Fund III (VIP III):
Fidelity VIP III Growth Opportunities $ 23 $ 70 $119 $256
Templeton Variable Products Series Fund:
Templeton Asset Allocation - Class 2 $ 24 $ 74 $127 $270
Templeton International - Class 2 $ 25 $ 77 $131 $278
Oppenheimer Variable Account Funds:
Oppenheimer VA Main Street Growth & Income $ 22 $ 67 $114 $245
Oppenheimer VA Aggressive Growth $ 21 $ 64 $110 $237
Oppenheimer VA Strategic Bond $ 22 $ 67 $115 $246
The Dreyfus Socially Responsible Growth Fund, Inc.:
Dreyfus Socially Responsible Growth $ 22 $ 67 $115 $246
Dreyfus Stock Index Fund:
Dreyfus Stock Index $ 16 $ 50 $ 86 $188
Dreyfus Variable Investment Fund:
Dreyfus VI Capital Appreciation $ 22 $ 67 $115 $247
Wells Fargo Variable Trust:
Wells Fargo VT Equity Income $ 24 $ 73 $125 $267
Wells Fargo VT Asset Allocation $ 24 $ 73 $125 $267
Wells Fargo VT Growth $ 24 $ 73 $125 $267
Delaware Group Premium Fund, Inc.:
Delaware GP Small Cap Value Series $ 22 $ 69 $117 $252
Delaware GP Trend Series $ 22 $ 69 $117 $252
HSBC Variable Insurance Funds:
HSBC VI Fixed Income $ 41 $125 $210 $429
HSBC VI Growth & Income $ 29 $ 88 $150 $316
HSBC VI Cash Management $ 33 $ 99 $169 $352
</TABLE>
Please remember that you are looking at examples and not a representation of
past or future expenses. Your actual expenses may be lesser or greater than
those shown above. Similarly, your rate of return may be lesser 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 $40,000.
<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 the
Variable Account and Allstate New York appear in the Statement of Additional
Information.
<PAGE>
THE CONTRACT
- ------------------------------------------------------------------------------
CONTRACT OWNER
The Allstate Custom Portfolio Variable Annuity 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 Annuitant dies,
and
o any other rights that the Contract provides.
If you die, any surviving Contract owner or, if none, the Beneficiary may
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
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 __.
ANNUITANT
The Annuitant is the individual whose life determines the amount and duration of
income payments (other than under Income Plans with guaranteed payments for a
specified period). You initially designate an Annuitant in your application. If
the Contract owner is a natural person you may change the Annuitant prior to the
Payout Start Date. In our discretion, we may permit you to designate a joint
Annuitant, who is a second person on whose life income payments depend, on or
after the Payout Start Date.
If the Annuitant dies prior to the Payout Start Date, the new Annuitant will be:
o the youngest Contract owner, otherwise
o the youngest Beneficiary.
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, 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, whether or not the Annuitant is living when we
receive the 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 do not name a Beneficiary or, if the named Beneficiary is no longer
living and there are no other surviving Beneficiaries, 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 (or the Annuitant if the Contract
owner is not a natural person), 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. However, you may assign periodic income payments under the
Contract prior to the Payout Start Date. No Beneficiary may assign benefits
under the Contract until they are due. We will not be bound by any assignment
until the assignor signs it and files 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
- ------------------------------------------------------------------------------
MINIMUM PURCHASE PAYMENTS
Your initial purchase payment must be at least $3,000 ($2,000 for a Qualified
Contract). All subsequent purchase payments must be $100 or more. You may make
purchase payments at any time prior to the Payout Start Date. We reserve the
right to limit the maximum amount of purchase payments, or reduce the minimum
purchase payment we will accept. We reserve the right to reject any application.
AUTOMATIC ADDITIONS PROGRAM
You may make subsequent purchase payments of at least $25 ($500 for allocation
to the Fixed Account) by automatically transferring amounts 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 payments 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 notifying us in writing. We reserve the right to limit the
availability of the investment alternatives.
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 servicing center. 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
service center located at P.O. Box 94038, Palatine, Illinois, 60094.
We are open for business 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 (3 p.m. Central Time). If we receive your purchase payment after 3
p.m. Central 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. 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 will return your purchase
payments allocated to the Variable Account after an adjustment to the extent
federal or state law permits to reflect investment gain or loss that occurred
from the date of allocation through the date of cancellation. If your Contract
is qualified under Section 408 of the Internal Revenue Code, we will refund the
greater of any purchase payments or the Contract Value.
<PAGE>
CONTRACT VALUE
- ------------------------------------------------------------------------------
On the Issue Date, the Contract Value is equal to the initial purchase payment.
Your Contract Value at any other time during the Accumulation Phase is equal to
the sum of the value as of the most recent Valuation Date of your Accumulation
Units in the Variable Sub-Accounts you have selected, plus the value of your
interest in the Fixed Account.
ACCUMULATION UNITS
To determine the number of Accumulation Units of each Variable Sub-Account to
credit to your Contract, we divide (i) the amount of the purchase payment or
transfer 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 or transfer. 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. Withdrawals and transfers from a Variable
Sub-Account would, of course, reduce the number of Accumulation Units of that
Sub-Account allocated 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 Portfolio in which the Variable
Sub-Account invests, and
o the deduction of amounts reflecting the mortality and expense risk charge,
administrative expense 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
(currently waived) separately for each Contract. They do not affect Accumulation
Unit Value. Instead, we obtain payment of those charges and fees by redeeming
Accumulation Units. For details on how we calculate 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 Portfolios that accompanies this
prospectus for a description of how the assets of each Portfolio are 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
- ------------------------------------------------------------------------------
You may allocate your purchase payments to up to 28 Variable Sub-Accounts. Each
Variable Sub-Account invests in the shares of a corresponding Portfolio. Each
Portfolio has its own investment objective(s) and policies. We briefly describe
the Portfolios below.
For more complete information about each Portfolio, including expenses and risks
associated with the Portfolio, please refer to the accompanying prospectus for
the Portfolio. You should carefully review the Portfolio prospectuses before
allocating amounts to the Variable Sub-Accounts.
<TABLE>
<CAPTION>
- --------------------------------------------------- --------------------------------------------------- -----------------------
<S> <C> <C>
Portfolio: Each Portfolio Seeks Investment
Adviser:
- --------------------------------------------------- --------------------------------------------------- -----------------------
AIM V.I. Capital Appreciation Fund Growth of capital
A I M Advisors, Inc.
- --------------------------------------------------- --------------------------------------------------- -----------------------
- --------------------------------------------------- --------------------------------------------------- -----------------------
AIM V.I. Balanced Fund As high a total return as possible, consistent
with preservation of capital
- --------------------------------------------------- ---------------------------------------------------
AIM V.I. Growth Fund Growth of capital
- --------------------------------------------------- --------------------------------------------------- -----------------------
- --------------------------------------------------- ---------------------------------------------------
AIM V.I. International Equity Fund Long-term growth of capital
- --------------------------------------------------- --------------------------------------------------- -----------------------
- --------------------------------------------------- --------------------------------------------------- -----------------------
AIM V.I. Value Fund Long-term growth of capital
- --------------------------------------------------- --------------------------------------------------- -----------------------
AIM V.I. Government Securities Fund A high level of current income consistent with
reasonable concern for safety of principal
- --------------------------------------------------- --------------------------------------------------- -----------------------
AIM V.I. High Yield Fund A high level of current income
- --------------------------------------------------- --------------------------------------------------- -----------------------
Fidelity VIP Equity Income Portfolio Reasonable income
Fidelity Management
& Research Company
- --------------------------------------------------- --------------------------------------------------- -----------------------
Fidelity VIP Overseas Portfolio Long-term growth of capital
- --------------------------------------------------- --------------------------------------------------- -----------------------
Fidelity VIP Growth Portfolio Capital appreciation
- --------------------------------------------------- --------------------------------------------------- -----------------------
Fidelity VIP II Contrafund Portfolio Long-term capital appreciation
- --------------------------------------------------- --------------------------------------------------- -----------------------
Fidelity VIP III Growth Opportunities Portfolio Capital growth
- --------------------------------------------------- --------------------------------------------------- -----------------------
Templeton Asset Allocation Fund - Class 2 High total return Templeton Investment
Counsel, Inc.
- --------------------------------------------------- --------------------------------------------------- -----------------------
Templeton International Fund - Class 2 Long-term capital growth
- --------------------------------------------------- --------------------------------------------------- -----------------------
Oppenheimer VA Main Street Growth & Income High total return, which includes growth in the
Fund value of its shares as well as current income OppenheimerFunds,
Inc.
- --------------------------------------------------- --------------------------------------------------- -----------------------
Oppenheimer VA Aggressive Growth Fund Capital appreciation
- --------------------------------------------------- --------------------------------------------------- -----------------------
Oppenheimer VA Strategic Bond Fund A high level of current income
- --------------------------------------------------- --------------------------------------------------- -----------------------
Dreyfus Socially Responsible Growth Fund Capital growth and, secondarily, current income
The Dreyfus
Corporation
- --------------------------------------------------- --------------------------------------------------- -----------------------
Dreyfus Stock Index Fund To match the total returns of the Standard
& Poor's 500 Composite Stock Index
- --------------------------------------------------- --------------------------------------------------- -----------------------
Dreyfus VI Capital Appreciation Portfolio Long-term capital growth consistent with the
preservation of capital; current income is a
secondary goal.
- --------------------------------------------------- --------------------------------------------------- -----------------------
Wells Fargo VT Equity Income Fund Long-term capital appreciation and above-average
dividend income. Wells Fargo Bank,
N.A.
- --------------------------------------------------- ---------------------------------------------------
- --------------------------------------------------- --------------------------------------------------- -----------------------
Wells Fargo VT Asset Allocation Fund Long-term total
return, consistent with reasonable risk.
- --------------------------------------------------- ---------------------------------------------------
- --------------------------------------------------- --------------------------------------------------- -----------------------
Wells Fargo VT Growth Fund Long-term capital appreciation
- --------------------------------------------------- --------------------------------------------------- -----------------------
- --------------------------------------------------- --------------------------------------------------- -----------------------
Delaware GP Small Cap Value Series Capital appreciation Delaware Management
Company
- --------------------------------------------------- ---------------------------------------------------
- --------------------------------------------------- --------------------------------------------------- -----------------------
Delaware GP Trend Series Long-term capital appreciation
- --------------------------------------------------- --------------------------------------------------- -----------------------
- --------------------------------------------------- --------------------------------------------------- -----------------------
HSBC VI Fixed Income Fund High current income consistent with appreciation HSBC Asset
of capital Management Americas
Inc.
- --------------------------------------------------- --------------------------------------------------- -----------------------
- --------------------------------------------------- --------------------------------------------------- -----------------------
HSBC VI Growth & Income Fund Long-term growth of capital and current income
- --------------------------------------------------- --------------------------------------------------- -----------------------
- --------------------------------------------------- --------------------------------------------------- -----------------------
HSBC VI Cash Management Fund As high a level of
current income as is consistent with preservation
of capital and liquidity
- --------------------------------------------------- --------------------------------------------------- -----------------------
</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 Portfolios in which those Variable Sub-Accounts invest. You bear the
investment risk that the Portfolios might not meet their investment objectives.
Shares of the Portfolios 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.
INVESTMENT ALTERNATIVES : The Fixed Account
- ------------------------------------------------------------------------------
You may allocate all or a portion of your purchase payments to the Fixed
Account. 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 the Fixed Account
does not entitle you to share in the investment experience of the Fixed Account.
GUARANTEE PERIODS
Each payment or transfer allocated to the Fixed Account earns interest at a
specified rate that we guarantee for a period of years we call a Guarantee
Period. Guarantee Periods may range from 1 to 10 years. We are currently
offering Guarantee Periods of 1, 3, 5, 7, and 10 years in length. In the future
we may offer Guarantee Periods of different lengths or stop offering some
Guarantee Periods. You select one or more Guarantee Periods for each purchase
payment or transfer. If you do not select the Guarantee Period for a purchase
payment or transfer, we will assign the shortest Guarantee Period available
under the Contract for such payment or transfer.
Each payment or transfer allocated to a Guarantee Period must be at least $500.
We reserve the right to limit the number of additional purchase payments that
you may allocate to the Fixed Account. Please consult with your sales
representative for more information.
INTEREST RATES
We will tell you what interest rates and Guarantee Periods we are offering at a
particular time. We may declare different interest rates for Guarantee Periods
of the same length that begin at different times. We will not change the
interest rate that we credit to a particular allocation until the end of the
relevant Guarantee Period.
We have no specific formula for determining the rate of interest that we will
declare initially or in the future. We will set those interest rates based on
investment returns available at the time of the determination. In addition, we
may consider various other factors in determining interest rates including
regulatory and tax requirements, our sales commission and administrative
expenses, general economic trends, and competitive factors. We determine the
interest rates to be declared in our sole discretion. We can neither predict nor
guarantee what those rates will be in the future. For current interest rate
information, please contact your sales representative or Allstate New York at
1-800-692-4682. The interest rate will never be less than the minimum guaranteed
amount stated in the Contract.
HOW WE CREDIT INTEREST
We will credit interest daily to each amount allocated to a Guarantee Period at
a rate that compounds to the effective annual interest rate that we declared at
the beginning of the applicable Guarantee Period. The following example
illustrates how a purchase payment allocated to the Fixed Account would grow,
given an assumed Guarantee Period and effective annual interest rate:
Purchase Payment..............................$10,000
Guarantee Period..............................5 years
Annual Interest Rate........................... 4.50%
<TABLE>
<CAPTION>
END OF CONTRACT YEAR
<S> <C> <C> <C> <C> <C>
YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5
Beginning Contract Value $10,000.00
X (1 + Annual Interest Rate) X 1.045
$10,450.00
Contract Value at end of Contract Year $10,450.00
X (1 + Annual Interest Rate) X 1.045
$10,920.25
Contract Value at end of Contract Year $10,920.25
X (1 + Annual Interest Rate) X 1.045
$11,411.66
Contract Value at end of Contract Year $11,411.66
X (1 + Annual Interest Rate) X 1.045
$11,925.19
Contract Value at end of Contract Year $11,925.19
X (1 + Annual Interest Rate) X 1.045
$12,461.82
Total Interest Credited During Guarantee Period = $2,461.82 ($12,461.82-$10,000)
</TABLE>
This example assumes no withdrawals during the entire 5 year Guarantee Period.
If you were to make a partial withdrawal, you may be required to pay a
withdrawal charge. In addition, the amount withdrawn may be increased or
decreased by a Market Value Adjustment that reflects changes in interest rates
since the time you invested the amount withdrawn. The hypothetical interest rate
is for illustrative purposes only and is not intended to predict future interest
rates to be declared under the Contract. Actual interest rates declared for any
given Guarantee Period may be more or less than shown above but will never be
less than the guaranteed minimum rate stated in the Contract.
RENEWALS
At least 15 but not more than 45 days prior to the end of each Guarantee Period,
we will mail you a notice asking you what to do with your money, including the
accrued interest. During the 30-day period after the end of the Guarantee
Period, you may:
1) take no action. We will automatically apply your money to a new Guarantee
Period of the shortest duration available. The new Guarantee Period will
begin on the day the previous Guarantee Period ends. The new interest rate
will be our then current declared rate for a Guarantee Period of that
length; or
2) instruct us to apply your money to one or more new Guarantee Periods of
your choice. The new Guarantee Period(s) will begin on the day the previous
Guarantee Period ends. The new interest rate will be our then current
declared rate for those Guarantee Periods; or
3) instruct us to transfer all or a portion of your money to one or more
Variable Sub-Accounts. We will effect the transfer on the day we receive
your instructions. We will not adjust the amount transferred to include a
Market Value Adjustment; or
4) withdraw all or a portion of your money. You may be required to pay a
withdrawal charge, but we will not adjust the amount withdrawn to include a
Market Value Adjustment. You may also be required to pay premium taxes and
withholding (if applicable). The amount withdrawn will be deemed to have
been withdrawn on the day the previous Guarantee Period ends. Unless you
specify otherwise, amounts not withdrawn will be applied to a new Guarantee
Period of the shortest duration available. The new Guarantee Period will
begin on the day the previous Guarantee Period ends.
Under our Automatic Laddering Program ("Automatic Laddering Program"), you may
choose, in advance, to use Guarantee Periods of the same length for all
renewals. You can select this Program at any time during the Accumulation Phase,
including on the Issue Date. We will apply renewals to Guarantee Periods of the
selected length until you direct us in writing to stop. We may stop offering
this Program at any time. For additional information on the Automatic Laddering
Program, please call our Customer Service unit at 1-800-692-4682.
MARKET VALUE ADJUSTMENT
All withdrawals in excess of the Preferred Withdrawal Amount, and transfers from
a Guarantee Period, other than those taken during the 30 day period after such
Guarantee Period expires, are subject to a Market Value Adjustment. A Market
Value Adjustment also applies when you apply amounts currently invested in a
Guarantee Period to an Income Plan (unless paid or applied during the 30 day
period after such Guarantee Period expires). We will not apply a Market Value
Adjustment to a transfer you make as part of a Dollar Cost Averaging Program. We
also will not apply a Market Value Adjustment to a withdrawal you make:
o within the Preferred Withdrawal Amount as described on page __, or
o to satisfy the IRS minimum distribution rules for the Contract.
We apply the Market Value Adjustment to reflect changes in interest rates from
the time you first allocate money to a Guarantee Period to the time it is
removed from that Guarantee Period. We calculate the Market Value Adjustment by
comparing the Treasury Rate for a period equal to the Guarantee Period at its
inception to the Treasury Rate for a period equal to the time remaining in the
Guarantee Period when you remove your money. "Treasury Rate" means the U.S.
Treasury Note Constant Maturity Yield as reported in Federal Reserve Bulletin
Release H.15.
The Market Value Adjustment may be positive or negative, depending on changes in
interest rates. As such, you bear the investment risk associated with changes in
interest rates. If interest rates increase significantly, the Market Value
Adjustment and any withdrawal charge, premium taxes, and income tax withholding
(if applicable) could reduce the amount you receive upon full withdrawal of your
Contract Value to an amount that is less than the purchase payment plus interest
at the minimum guaranteed interest rate under the Contract.
Generally, if the Treasury Rate at the time you allocate money to a Guarantee
Period is higher than the applicable current Treasury Rate for a period equal to
the time remaining in the Guarantee Period, then the Market Value Adjustment
will result in a higher amount payable to you or transferred. Conversely, if the
Treasury Rate at the time you allocate money to a Guarantee Period is lower than
the applicable Treasury Rate for a period equal to the time remaining in the
Guarantee Period, then the Market Value Adjustment will result in a lower amount
payable to you or transferred.
For example, assume that you purchase a Contract and you select an initial
Guarantee Period of 5 years and the 5 year Treasury Rate for that duration is
4.50%. Assume that at the end of 3 years, you make a partial withdrawal. If, at
that later time, the current 2 year Treasury Rate is 4.20%, then the Market
Value Adjustment will be positive, which will result in an increase in the
amount payable to you. Conversely, if the current 2 year Treasury Rate is 4.80%,
then the Market Value Adjustment will be negative, which will result in a
decrease in the amount payable to you.
The formula for calculating Market Value Adjustments is set forth in Appendix A
to this prospectus, which also contains additional examples of the application
of the Market Value Adjustment.
<PAGE>
INVESTMENT ALTERNATIVES: Transfers
- ------------------------------------------------------------------------------
TRANSFERS DURING THE ACCUMULATION PHASE
During the Accumulation Phase, you may transfer Contract Value among the
investment alternatives at any time. The minimum amount that you may transfer
into a Guarantee Period is $500. You may request transfers in writing on a form
that we provided or by telephone according to the procedure described below. We
currently do not assess, but reserve the right to assess, a $10 charge on each
transfer in excess of 12 per Contract Year. We treat transfers to or from more
than one Portfolio on the same day as one transfer. Transfers you make as part
of a Dollar Cost Averaging Program or Automatic Fund Rebalancing Program do not
count against the 12 free transfers per Contract Year.
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 for up to 6 months from the date we
receive your request. If we decide to postpone transfers 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 we receive the transfer request to the
date we make the transfer.
If you transfer an amount from a Guarantee Period other than during the 30 day
period after such Guarantee Period expires, we will increase or decrease the
amount by a Market Value Adjustment. If any transfer reduces your value in such
Guarantee Period to less than $500, we will treat the request as a transfer of
the entire value in such Guarantee Period.
We reserve the right to waive any transfer fees and restrictions.
TRANSFERS DURING THE PAYOUT PHASE
During the Payout Phase, you may make transfers among the Variable Sub-Accounts
to change the relative weighting of the Variable Sub-Accounts on which your
variable income payments will be based. In addition, you will have a limited
ability to make transfers from the Variable Sub-Accounts to increase the
proportion of your income payments consisting of fixed income payments. You may
not, however, convert any portion of your right to receive 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. Your transfers must be at
least 6 months apart.
TELEPHONE TRANSFERS
You may make transfers by telephone by calling 1-800-692-4682, if you first send
us a completed authorization form. 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
at any telephone number other than the number that appears in this paragraph or
received after the close of trading on the Exchange.
We may suspend, modify or terminate the telephone transfer privilege at any time
without notice.
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.
DOLLAR COST AVERAGING PROGRAM
Through the Dollar Cost Averaging Program, you may automatically transfer a set
amount every month during the Accumulation Phase from any Variable Sub-Account,
or the 1 year Guarantee Period of the Fixed Account, to any other Variable
Sub-Account. You may not use dollar cost averaging to transfer amounts to the
Fixed Account.
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. In addition, we will not apply the Market
Value Adjustment to these transfers.
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.
Call or write us for instructions on how to enroll.
AUTOMATIC PORTFOLIO 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 Portfolio Rebalancing
Program, we will automatically rebalance the Contract Value in each Variable
Sub-Account and return it to the desired percentage allocations.
We will rebalance your account each quarter 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 request. We are not
responsible for rebalancing that occurs prior to receipt 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 AIM V.I. Balanced
Variable Sub-Account and 60% to be in the Fidelity VIP 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 AIM V.I. Balanced 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 AIM V.I. Balanced
Variable Sub-Account and use the money to buy more units in the
Fidelity VIP Growth Variable Sub-Account so that the percentage
allocations would again be 40% and 60% respectively.
The Automatic Portfolio 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.
Portfolio 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 Contract Value invested in each
Variable Sub-Account in proportion to the amount invested. We also will deduct a
full contract maintenance charge if you withdraw your entire Contract Value,
unless your Contract qualifies for a waiver, described below. During the Payout
Phase, we will deduct the charge proportionately from each income payment.
The charge is for the cost of maintaining each Contract 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 total purchase payments equal $50,000 or more, or
o all of your money is allocated to the Fixed Account on a Contract
Anniversary.
MORTALITY AND EXPENSE RISK CHARGE
We deduct a mortality and expense risk charge daily at an annual rate of 1.15%
of the 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 we 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.
ADMINISTRATIVE EXPENSE CHARGE
We deduct an administrative expense charge daily at an annual rate of 0.10% of
the average daily net assets you have invested in the Variable Sub-Accounts. We
intend this charge to cover actual administrative expenses that exceed the
revenues from the contract maintenance charge. There is no necessary
relationship between the amount of administrative charge imposed on a given
Contract and the amount of expenses that may be attributed to that Contract. We
assess this charge each day during the Accumulation Phase and the Payout Phase.
We guarantee that we will not raise this charge.
TRANSFER FEE
We do not currently impose a fee upon transfers among the investment
alternatives. However, we reserve the right to charge $10 per transfer after the
12th transfer in each Contract Year. We will not charge a transfer fee on
transfers that are part of a Dollar Cost Averaging or Automatic Portfolio
Rebalancing Program.
WITHDRAWAL CHARGE
We may assess a withdrawal charge of up to 7% of the purchase payment(s) you
withdraw in excess of the Preferred Withdrawal Amount, adjusted by a Market
Value Adjustment. The charge declines by 1% annually to 0% after 7 complete
years from the day we receive the purchase payment being withdrawn. A schedule
showing how the charge declines appears on page __. During each Contract Year,
you can withdraw up to 15% of purchase payments without paying the charge.
Unused portions of this 15% "Preferred Withdrawal Amount" are not carried
forward to future Contract Years.
We determine the withdrawal charge by:
o multiplying the percentage corresponding to the number of complete years
since we received the purchase payment being withdrawn, times
o the part of each purchase payment withdrawal that is in excess of the
Preferred Withdrawal Amount, adjusted by a Market Value Adjustment.
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. Thus, for tax purposes, earnings are considered to come out first,
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 (Annuitant if Contract owner is not a
natural person);
o withdrawals taken to satisfy IRS minimum distribution rules for the
Contract; and
o withdrawals made after all purchase payments have been withdrawn.
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 may be subject to tax penalties or income tax and a Market Value
Adjustment. 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. We may deduct taxes
that may be imposed in the future from purchase payments or the Contract Value
when the tax is incurred or at a later time.
DEDUCTION FOR VARIABLE ACCOUNT INCOME TAXES
We are not currently making a provision for taxes. In the future, however, we
may make a provision for taxes if we determine, in our sole discretion, that we
will incur a tax as a result of the operation of the Variable Account. We will
deduct for any taxes we incur as a result of the operation of the Variable
Account, whether or not we previously made a provision for taxes and whether or
not it was sufficient. Our status under the Internal Revenue Code is briefly
described in the Statement of Additional Information.
OTHER EXPENSES
Each Portfolio deducts advisory fees and other expenses from its assets. You
indirectly bear the charges and expenses of the Portfolios whose shares are held
by the Variable Sub-Accounts. These fees and expenses are described in the
accompanying prospectus for the Portfolios. For a summary of these charges and
expenses, see pages ___ above. We may receive compensation from the investment
advisers or administrators of the Portfolios for administrative services we
provide to the Portfolios.
.
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ACCESS TO YOUR MONEY
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You can withdraw some or all of your Contract Value at any time prior to the
Payout Start Date. Withdrawals also are 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 service center, adjusted by any
Market Value Adjustment, less any withdrawal charges, contract maintenance
charges, income tax withholding, penalty tax, 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. 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. You also may withdraw a
lesser amount if you are withdrawing your entire interest in a Variable
Sub-Account.
If you request a total withdrawal, you must return your Contract to us.
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 for up to
6 months or a shorter period if required by law. If we delay payment or transfer
for 10 business days or more, we will pay interest as required by law. Any
interest would be payable from the date we receive the withdrawal request to the
date we make the payment or transfer.
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. The minimum amount of each systematic withdrawal is $50. At our
discretion, systematic withdrawals may not be offered in conjunction with the
Dollar Cost Averaging Program or the Automatic Portfolio Rebalancing Program.
Depending on fluctuations in the net asset value of the Variable Sub-Accounts
and the value of the Fixed Account, systematic withdrawals may reduce or even
exhaust the Contract Value. Income taxes may apply to systematic withdrawals.
Please consult your tax advisor before taking any withdrawal.
We will make systematic withdrawal payments to you or your designated payee. We
may modify or suspend the Systematic Withdrawal Program and charge a processing
fee for the service. If we modify or suspend the Systematic Withdrawal Program,
existing systematic withdrawal payments will not be affected.
MINIMUM CONTRACT VALUE
If your request for a partial withdrawal would reduce the amount in any
Guarantee Period to less than $500, we will treat it as a request to withdraw
the entire amount invested in such Guarantee Period. In addition, if your
request for a partial withdrawal would reduce the Contract Value to less than
$1,000, we may treat it as a request to withdraw your entire Contract Value.
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, adjusted by any applicable Market Value Adjustment, less
withdrawal and other charges, income tax withholding, and premium taxes.
<PAGE>
INCOME PAYMENTS
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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 no later than the Annuitant's 90th birthday.
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
An "Income Plan" is a series of payments on a scheduled basis to you or to
another person designated by you. 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. After the Payout Start Date, you may not make
withdrawals (except as described below) or change your choice of Income Plan.
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 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 variable income payments 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 amounts 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 is 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 deduct
applicable premium taxes from the Contract Value at the Payout Start Date.
We may make other Income Plans available. You may obtain information about them
by writing or calling us.
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, adjusted by a Market Value Adjustment, less
applicable taxes to your Income Plan on the Payout Start Date. If the Contract
Value is less than $2,000 or not enough to provide an initial payment of at
least $20, and state law permits, we may:
o terminate the Contract and pay you the Contract Value, adjusted by any
Market Value Adjustment and less any applicable taxes, in a lump sum
instead of the periodic payments you have chosen, or
o 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 Portfolio 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 the Fixed Account for the
duration of the Income Plan. We calculate the fixed income payments by:
1) adjusting the portion of the Contract Value in the Fixed Account on the
Payout Start Date by any applicable Market Value Adjustment;
2) deducting any applicable premium tax; and
3) 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 such
shorter time as state law may require. If we defer payments for 10 business 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. However, 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. For qualified
plans, where it is appropriate, we may use income payment tables that do not
distinguish on the basis of sex.
<PAGE>
DEATH BENEFITS
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We will pay a death benefit if, prior to the Payout Start Date:
1) any Contract owner dies or,
2) the Annuitant dies, if the Contract owner is not a natural person.
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(ies).
Death Benefit Amount
Prior to the Payout Start Date, the death benefit is equal to the greatest of:
1) the Contract Value as of the date we determine the death benefit, or
2) the Settlement Value (that is, the amount payable on a full withdrawal
of Contract Value) on the date we determine the death benefit, or
3) the Contract Value on the Death Benefit Anniversary immediately
preceding the date we determine the death benefit, adjusted by any
purchase payments, withdrawal adjustment as defined below, and charges
made since that Death Benefit Anniversary. A "Death Benefit
Anniversary" is every seventh Contract Anniversary beginning with the
Issue Date. For example, the Issue Date, 7th and 14th Contract
Anniversaries are the first three Death Benefit Anniversaries, or
4) the greatest of the Anniversary Values as of the date we determine the
death benefit. An "Anniversary Value" is equal to the Contract Value
on a Contract Anniversary, increased by purchase payments made since
that anniversary and reduced by the amount of any withdrawal
adjustment, as defined below, since that anniversary. Anniversary
Values will be calculated for each Contract Anniversary prior to the
earlier of:
(i) the date we determine the death benefit, or
(ii) the deceased's 75th birthday or 5 years after the Issue Date, if
later.
The value of the death benefit will be determined at the end of the
Valuation Date on which we receive a complete request for payment of
the death benefit, which includes Due Proof of Death.
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 B for an example representative of how the withdrawal adjustment
applies.
We will not settle any death claim until we receive Due Proof of Death. We will
accept the following documentation as Due Proof of Death:
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.
Death Benefit Payments
A death benefit will be paid:
1) if the Contract owner elects to receive the death benefit distributed in a
single payment within 180 days of the date of death, and
2) if the death benefit is paid as of the day the value of the death benefit
is determined.
Otherwise, the Settlement Value will be paid. The new Contract owner may make a
single withdrawal of any amount within one year of the date of death without
incurring a withdrawal charge. We are currently waiving the 180 day limit, but
we reserve the right to enforce the limitation in the future. The Settlement
Value paid will be the Settlement Value next computed on or after the requested
distribution date for payment, or on the mandatory distribution date of 5 years
after the date of death.
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 Contract owner eligible to receive the death benefit is not a natural
person, the Contract owner may elect to receive the distribution upon death in
one or more distributions.
If the Contract owner is a natural person, the Contract owner may elect to
receive the death benefit either in one or more distributions, or by periodic
payments through an Income Plan. Payments from the Income Plan must begin within
one year of the date of death and must be payable throughout:
o the life of the Contract owner; or
o a period not to exceed the life expectancy of the Contract owner; or
o the life of the Contract owner with payments guaranteed for a period not to
exceed the life expectancy of the Contract owner.
If the surviving spouse of the deceased Contract owner is the new Contract
owner, then the spouse may elect one of the options listed above or may continue
the Contract in the Accumulation Phase as if the death had not occurred. The
Contract may only be continued once. If the Contract is continued in the
Accumulation Phase, the surviving spouse may make a single withdrawal of any
amount within one year of the date of death without incurring a withdrawal
charge. However, any applicable Market Value Adjustment, determined as of the
date of the withdrawal, will apply.
<PAGE>
MORE INFORMATION
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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 One Allstate Drive, Farmingville, New York 11738. Our servicing center is
located in Northbrook, 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 the State of Illinois. With the exception of the
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. These ratings do not reflect the
investment performance of the Variable Account. 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, 28 of which are
available through the Contracts. Each Variable Sub-Account invests in a
corresponding Portfolio. 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 Portfolios. 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 PORTFOLIOS
Dividends and Capital Gain Distributions. We automatically reinvest all
dividends and capital gains distributions from the Portfolios in shares of the
distributing Portfolio at their net asset value.
Voting Privileges. As a general matter, you do not have a direct right to vote
the shares of the Portfolios 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 Portfolios 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.
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 Portfolio 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 Variable
Sub-account by the net asset value per share of the corresponding Portfolio. 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 will apply voting instructions to
abstain on any item to be voted on a pro-rata basis to reduce the votes eligible
to be cast.
We reserve the right to vote Portfolio 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 we send to you.
Changes in Portfolios. If the shares of any of the Portfolios 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 Portfolio and substitute shares of another
eligible investment portfolio. Any substitution of securities will comply with
the requirements of the 1940 Act. We also may add new Variable Sub-Accounts that
invest in additional mutual funds. We will notify you in advance of any changes.
Conflicts of Interest. Certain of the Portfolios sell their shares to Variable
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 Variable Accounts and variable annuity Variable Accounts to invest in
the same Portfolio. The boards of directors of these Portfolios monitor for
possible conflicts among Variable Accounts buying shares of the Portfolios.
Conflicts could develop for a variety of reasons. For example, differences in
treatment under tax and other laws or the failure by a Variable Account to
comply with such laws could cause a conflict. To eliminate a conflict, a
Portfolio's board of directors may require a Variable Account to withdraw its
participation in a Portfolio. A Portfolio's net asset value could decrease if it
had to sell investment securities to pay redemption proceeds to a Variable
Account withdrawing because of a conflict.
THE CONTRACT
Distribution. Allstate Life Financial Services, Inc. ("ALFS"), located at 3100
Sanders Road, Northbrook, Illinois 60062-7154, serves as distributor of the
Contracts. ALFS is a wholly owned subsidiary of Allstate Life Insurance Company.
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.
We will pay commissions to broker-dealers who sell the Contracts. Commissions
paid may vary, but we estimate that the total commissions paid on all Contract
sales will not exceed 6.25% of any purchase payments. These commissions are
intended to cover distribution expenses. In some states, 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 does not pay ALFS a commission for distribution of the
Contracts. The underwriting agreement with ALFS provides that we will reimburse
ALFS for 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 and transaction confirmations at least
annually. The annual statement details values and specific Contract data for
each particular Contract. 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 also will 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 Year
2000 Issues. 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
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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 owner during the taxable year.
Although Allstate New York does not have control over the Portfolios or their
investments, we expect the Portfolios 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 the Variable Account investments may cause an investor to be
treated as the owner of the Variable 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 Variable 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 Variable
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 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
The income on qualified plan and IRA investments is tax deferred and variable
annuities held by such plans do not receive any additional tax deferral. You
should review the annuity features, including all benefits and expenses, prior
to purchasing a variable annuity in a qualified plan or IRA.
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.
Allstate New York reserves the right to limit the availability of the Contract
for use with any of the qualified plans listed above. 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 December 31, 1988, and all earnings on salary reduction
contributions, may be made only:
1) on or after the date the 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 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>
ANNUAL REPORTS AND OTHER DOCUMENTS
- ------------------------------------------------------------------------------
Allstate New York's annual report on Form 10-K for the year ended December 31,
1998 and the 10-Q reports for March 31, 1999, June 30, 1999 and September 30,
1999 are incorporated herein by reference, which means that they are legally a
part of this prospectus.
After the date of this prospectus and before we terminate the offering of the
securities under this prospectus, all documents or reports we file with the SEC
under the Exchange Act are also incorporated herein by reference, which means
that they also legally become a part of this prospectus.
Statements in this prospectus, or in documents that we file later with the SEC
and that legally become a part of this prospectus, may change or supersede
statements in other documents that are legally part of this prospectus.
Accordingly, only the statement that is changed or replaced will legally be a
part of this prospectus.
We file our Exchange Act documents and reports, including our annual and
quarterly reports on Form 10-K and Form 10-Q electronically on the SEC's "EDGAR"
system using the identifying number CIK No. 0000948255. The SEC maintains a Web
site that contains reports, proxy and information statements and other
information regarding registrants that file electronically with the SEC. The
address of the site is http://www.sec.gov. You also can view these materials at
the SEC's Public Reference Room at 450 Fifth Street, N.W., Washington, D.C.
20549. For more information on the operations of SEC's Public Reference Room,
call 1-800-SEC-0330.
If you have received a copy of this prospectus, and would like a free copy of
any document incorporated herein by reference (other than exhibits not
specifically incorporated by reference into the text of such documents), please
write or call us at Customer Service, P.O. Box 94038, Palatine, Illinois
60094-4038 (telephone:
1-800-692-4682).
<PAGE>
PERFORMANCE INFORMATION
- ------------------------------------------------------------------------------
We may advertise the performance of the Variable Sub-Accounts, including yield
and total return information. Yield refers to the income generated by an
investment in a Variable Sub-Account over a specified period. 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.
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
Portfolios for the periods beginning with the inception dates of the Portfolios
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>
APPENDIX A
MARKET VALUE ADJUSTMENT
The Market Value Adjustment is based on the following:
I = the Treasury Rate for a maturity equal to the applicable Guarantee
Period for the week preceding the establishment of the Guarantee Period.
N = the number of whole and partial years from the date we receive the
withdrawal, transfer or death benefit request, or from the Payout Start
Date to the end of the Guarantee Period.
J = the Treasury Rate for a maturity of length N for the week preceding
the receipt of the withdrawal, transfer, death benefit, or income payment
request. If a note with a maturity of length N is not available, a
weighted average will be used. If N is one year or less, J will be the
1-year Treasury Rate.
Treasury Rate means the U.S. Treasury Note Constant Maturity yield as
reported in Federal Reserve Bulletin Release H.15.
The Market Value Adjustment factor is determined from the following formula:
.9 X (I - J) X N
To determine the Market Value Adjustment, we will multiply the Market Value
Adjustment factor by the amount transferred, withdrawn (in excess of the
Preferred Withdrawal Amount), paid as a death benefit, or applied to an Income
Plan, from a Guarantee Period at any time other than during the 30 day period
after such Guarantee Period expires.
<PAGE>
EXAMPLES OF MARKET VALUE ADJUSTMENT
<TABLE>
<CAPTION>
<S> <C>
Purchase Payment: $10,000 allocated to a Guarantee Period
Guarantee Period: 5 years
Guaranteed Interest Rate: 4.50%
5 Year Treasury Rate at the time the
Guarantee Period is established: 4.50%
Full Surrender: End of Contract Year 3
NOTE: These examples assume that premium taxes are not applicable.
EXAMPLE 1: (Assumes declining interest rates)
Step 1. Calculate Contract Value at End of Contract Year 3: 10,000.00 X (1.045)3 = $11,411.66
Step 2. Calculate the Preferred Withdrawal Amount: .15 X 10,000.00 = $1,500.00
Step 3. Calculate the Market Value Adjustment: I = 4.5%
J = 4.2%
730 Days
--------
N = 365 days = 2
Market Value Adjustment Factor: .9 X (I-J) X N
= .9 X (.045 - .042) X (730/365) = .0054
Market Value
Adjustment =
Market Value
Adjustment
Factor X
Amount Subject
to Market
Value
Adjustment:
= .0054 X (11,411.66-1,500.00) = $53.52
Step 4. Calculate the Withdrawal Charge: .05 X (10,000.00 - 1,500.00 + 53.52)=$427.68
Step 5. Calculate the amount received by Customers as a
result of full withdrawal at the end of Contract Year 3: 11,411.66 - 427.68 + 53.52 = $11,037.50
</TABLE>
<PAGE>
EXAMPLE 2: (Assumes rising interest rates)
<TABLE>
<CAPTION>
<S> <C>
Step 1. Calculate Contract Value at End of Contract Year 3: 10,000.00 X (1.045)3 = $11,411.66
Step 2. Calculate the Preferred Withdrawal Amount: .15 X (10,000.00) = $1,500.00
Step 3. Calculate the Market Value Adjustment: I = 4.5%
J = 4.8%
730 days
--------
N = 365 days = 2
Market Value Adjustment Factor: .9 X (I-J) X N
= .9 X (.045 - .048) X (730/365) = -.0054
Market Value Adjustment = Market Value Adjustment
Factor X Amount Subject to Market Value Adjustment
= -.0054 X (11,411.66 - 1,500) = - $53.52
Step 4. Calculate the Withdrawal Charge: .05 X (10,000.00 - 1,500 - 53.52) = $422.32
Step 5. Calculate the amount received by customers as a
result of full withdrawal at the end of Contract Year 3: 11,411.66 - 422.32 - 53.52 = $10,935.82
</TABLE>
<PAGE>
APPENDIX B
WITHDRAWAL ADJUSTMENT EXAMPLE
Issue Date: January 1, 1999
Initial Purchase Payment: $50,000
<TABLE>
<CAPTION>
Death Benefit Amount
Contract Contract Death
Value Before Transaction Value Benefit Greatest
Occurrence Amount After Anniversary 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 $41,250
</TABLE>
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.
<TABLE>
<CAPTION>
<S> <C>
Death Benefit 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) $50,000
Withdrawal Adjustment [(w)/(a)]*(d) $12,500
Adjusted Death Benefit $37,500
Greatest 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>
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS
Description Page
Additions, Deletions or Substitutions of Investments......................
The Contract..............................................................
Purchases........................................................
Tax-free Exchanges (1035 Exchanges, Rollovers and Transfers).....
Performance Information...................................................
Calculation of Accumulation Unit Values...................................
Calculation of Variable Income Payments...................................
General Matters...........................................................
Incontestability.................................................
Settlements......................................................
Safekeeping of the Variable Account's Assets.....................
Premium Taxes....................................................
Tax Reserves.....................................................
Federal Tax Matters.......................................................
Qualified Plans...........................................................
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>
ALLSTATE CUSTOM PORTFOLIO VARIABLE ANNUITY
<TABLE>
<CAPTION>
<S> <C>
Allstate Life Insurance Company of New York Statement of Additional Information
Allstate Life of New York Separate Account A dated ________, 2000
One Allstate Drive, Farmingville, New York 11738
</TABLE>
Service Center
P.O. Box 94038, Palatine, IL 60094-4038
Telephone Number: 1-800-692-4682
This Statement of Additional Information supplements the information in the
prospectus for the Allstate Custom Portfolio Variable Annuity. This Statement of
Additional Information is not a prospectus. You should read it with the
prospectus, dated _________, 2000, for the Contract. You may obtain a prospectus
by writing or calling us at the Service Center address or telephone number
listed above.
Except as otherwise noted, this Statement of Additional Information uses the
same defined terms as the prospectus.
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Description Page
<S> <C>
Additions, Deletions or Substitutions of Investments
The Contract
Purchases
Tax-free Exchanges (1035 Exchanges, Rollovers
and Transfers)
Performance Information
Calculation of Accumulation Unit Values
Calculation of Variable Income Payments
General Matters
Incontestability
Settlements
Safekeeping of the Variable Account's Assets
Premium Taxes
Tax Reserves
Federal Tax Matters
Qualified Plans
Experts
Financial Statements
</TABLE>
<PAGE>
ADDITIONS, DELETIONS OR SUBSTITUTIONS OF INVESTMENTS
- ------------------------------------------------------------------------------
We may add, delete, or substitute the Portfolio shares held by any Variable
Sub-Account to the extent the law permits. We may substitute shares of any
Portfolio with those of another Portfolio of the same or different mutual fund
if the shares of the Portfolio are no longer available for investment, or if we
believe investment in any Portfolio 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 Portfolio 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 Portfolios. 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 New York.
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
Preferred 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 charges by (ii) the average Contract size
of $40,000. We then multiply the resulting percentage by a hypothetical $1,000
investment.
The standardized total returns for the Variable Sub-Accounts for the periods
ended June 30, 1999 are set out below. No standardized total returns are shown
for the HSBC VI Cash Management Variable Sub-Account. In addition, no
standardized total returns are shown for the AIM V.I. Balanced, AIM V.I. High
Yield, Fidelity VIP Equity Income, Fidelity VIP Growth, Fidelity VIP Overseas,
Fidelity VIP II Contrafund, Fidelity VIP III Growth Opportunities, Templeton
Asset Allocation - Class 2, Templeton International - Class 2, Oppenheimer VA
Aggressive Growth, Oppenheimer VA Main Street Growth & Income, Oppenheimer VA
Strategic Bond, Dreyfus Socially Responsible Growth, Dreyfus Stock Index,
Dreyfus VI Capital Appreciation, Wells Fargo VT Asset Allocation, Wells Fargo VT
Equity Income, Wells Fargo VT Growth, Delaware GP Small Cap Value Series,
Delaware GP Trend Series, HSBC VI Fixed Income, and HSBC VI Growth & Income
Variable Sub-Accounts, which had not commenced operations as of the date of this
Statement of Additional Information.
The Allstate Custom Portfolio Variable Annuity Contracts were first offered to
the public on __________, 2000. Accordingly, performance figures for the
Variable Sub-Accounts prior to that date reflect the historical performance of
the Variable Sub-Accounts, adjusted to reflect the current level of charges that
apply to the Variable Sub-Accounts under the Contracts, including the withdrawal
charge and contract maintenance charge described above.
The Variable Sub-Accounts commenced operations on the following dates:
AIM V.I. Capital Appreciation October 14, 1996
AIM V.I. Government Securities October 14, 1996
AIM V.I. Growth October 14, 1996
AIM V.I. International Equity October 14, 1996
AIM V.I. Value October 14, 1996
<TABLE>
<CAPTION>
Variable Sub-Account One Year Five Years Since Inception
<S> <C> <C> <C>
AIM V.I. Capital Appreciation 22.59% N/A 15.54%
AIM V.I. Government Securities -2.72% N/A 3.03%
AIM V.I. Growth 30.89% N/A 17.99%
AIM V.I. International Equity 14.37% N/A 11.32%
AIM V.I. Value 30.89% N/A 17.99%
</TABLE>
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).
The non-standardized total returns for the Variable Sub-Accounts for the periods
ended June 30, 1999 are set out below. No non-standardized total returns are
shown for the HSBC VI Cash Management Variable Sub-Account. In addition, no
non-standardized total returns are shown for the AIM V.I. Balanced, AIM V.I.
High Yield, Fidelity VIP Equity Income, Fidelity VIP Growth, Fidelity VIP
Overseas, Fidelity VIP II Contrafund, Fidelity VIP III Growth Opportunities,
Templeton Asset Allocation - Class 2, Templeton International - Class 2,
Oppenheimer VA Aggressive Growth, Oppenheimer VA Main Street Growth & Income,
Oppenheimer VA Strategic Bond, Dreyfus Socially Responsible Growth, Dreyfus
Stock Index, Dreyfus VI Capital Appreciation, Wells Fargo VT Asset Allocation,
Wells Fargo VT Equity Income, Wells Fargo VT Growth, Delaware GP Small Cap Value
Series, Delaware GP Trend Series, HSBC VI Fixed Income, and HSBC VI Growth &
Income Variable Sub-Accounts, which had not commenced operations as of the date
of this Statement of Additional Information. Performance figures for periods
prior to the availability of the Contracts reflect the historical performance of
the Variable Sub-Accounts, adjusted to reflect the current level of charges that
apply to the Variable Sub-Accounts under the Contracts, excluding any charges
imposed on amounts surrendered.
<TABLE>
<CAPTION>
Variable Sub-Account One Year Five Years Since Inception*
<S> <C> <C> <C>
AIM V.I. Capital Appreciation 30.40% N/A 16.04%
AIM V.I. Government Securities -2.66% N/A 3.50%
AIM V.I. Growth 39.23% N/A 18.51%
AIM V.I. International Equity 21.66% N/A 11.81%
AIM V.I. Value 38.35% N/A 19.40%
</TABLE>
* The inception date of each Variable Sub-Account appears under "Standardized
Total Returns," above.
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 historical performance of the underlying
Portfolios and adjusting such performance to reflect the current level of
charges that apply to the Variable Sub-Accounts under the Contract, the contract
maintenance charge and the appropriate withdrawal charge.
The adjusted historical total returns for the Variable Sub-Accounts for the
periods ended June 30, 1999 are set out below. No adjusted historical total
returns are shown for the HSBC VI Cash Management Variable Sub-Account.
The following list provides the inception date for the Portfolio corresponding
to each of the Variable Sub-Accounts included in the tables.
Inception Date of
Corresponding Portfolio
Variable Sub-Account
AIM V.I. Balanced May 1, 1998
AIM V.I. Capital Appreciation May 5, 1993
AIM V.I. Government Securities May 5, 1993
AIM V.I. Growth May 5, 1993
AIM V.I. High Yield May 1, 1998
AIM V.I. International Equity May 5, 1993
AIM V.I. Value May 5, 1993
Fidelity VIP Equity Income ___________
Fidelity VIP Growth ___________
Fidelity VIP Overseas ___________
Fidelity VIP II Contrafund ___________
Fidelity VIP III Growth Opportunities ___________
Templeton Asset Allocation - Class 2 ___________
Templeton International - Class 2 ___________
Oppenheimer VA Aggressive Growth ___________
Oppenheimer VA Main Street Growth & Income ___________
Oppenheimer VA Strategic Bond ___________
Dreyfus Socially Responsible Growth ___________
Dreyfus Stock Index ___________
Dreyfus VI Capital Appreciation ___________
Wells Fargo VT Asset Allocation ___________
Wells Fargo VT Equity Income ___________
Wells Fargo VT Growth ___________
Delaware GP Small Cap Value Series ___________
Delaware GP Trend Series ___________
HSBC VI Fixed Income ___________
HSBC VI Growth & Income ___________
<TABLE>
<CAPTION>
10 Years or
Since Inception of
Variable Sub-Account One Year Five Years Portfolio (if less)
<S> <C> <C> <C>
AIM V.I. Balanced 14.95% N/A 10.22%
AIM V.I. Capital Appreciation 30.66% 10.88% 11.70%
AIM V.I. Government Securities -2.46% 5.71% 4.26%
AIM V.I. Growth 39.51% 15.07% 23.19%
AIM V.I. High Yield 21.90% N/A 11.53%
AIM V.I. International Equity 5.30% 7.32% -3.13%
AIM V.I. Value 38.62% 13.98% 22.96%
Fidelity VIP Equity Income [ ] [ ] %
Fidelity VIP Growth [ ] [ ] %
Fidelity VIP Overseas [ ] [ ] %
Fidelity VIP II Contrafund [ ] [ ] %
Fidelity VIP III Growth Opportunities [ ] [ ] %
Templeton Asset Allocation - Class 2 [ ] [ ] %
Templeton International - Class 2 [ ] [ ] %
Oppenheimer VA Aggressive Growth [ ] [ ] %
Oppenheimer VA Main Street Growth & Income [ ] [ ] %
Oppenheimer VA Strategic Bond [ ] [ ] %
Dreyfus Socially Responsible Growth [ ] [ ] %
Dreyfus Stock Index [ ] [ ] %
Dreyfus VI Capital Appreciation [ ] [ ] %
Wells Fargo VT Asset Allocation [ ] [ ] %
Wells Fargo VT Equity Income [ ] [ ] %
Wells Fargo VT Growth [ ] [ ] %
Delaware GP Small Cap Value Series [ ] [ ] %
Delaware GP Trend Series [ ] [ ] %
HSBC VI Fixed Income [ ] [ ] %
HSBC VI Growth & Income [ ] [ ] %
</TABLE>
<PAGE>
Calculation of Accumulation Unit Values
- ------------------------------------------------------------------------------
The value of Accumulation Units will change each Valuation Period according to
the investment performance of the Portfolio 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 4:00 p.m.
Eastern 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 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 Portfolio 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 Portfolio underlying the Variable
Sub-Account during the current Valuation Period;
(B) is the net asset value per share of the Portfolio underlying the
Variable Sub-Account determined as of the end of the immediately
preceding Valuation Period; and
(C) is the sum of the annualized mortality and expense risk and
administrative expense charges divided by the number of days in the
current calendar year and then multiplied by the number of calendar days
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 each such portion 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
Portfolio 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 Portfolio shares
held by each of the Variable Sub-Accounts.
The Portfolios do not issue stock certificates. Therefore, we hold the Variable
Account's assets in open account in lieu of stock certificates. See the
Portfolios' prospectuses for a more complete description of the custodian of the
Portfolios.
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. The State of New York currently does not
impose a premium tax.
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 New York 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 New York, and its operations form a part of
Allstate New York, 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 New York
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 New York does not anticipate
that it will incur any federal income tax liability attributable to the Variable
Account, and therefore Allstate New York does not intend to make provisions for
any such taxes. If Allstate New York is taxed on investment income or capital
gains of the Variable Account, then Allstate New York 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,
an annuity contract must provide: (1) if any owner dies on or after the annuity
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 owner dies prior to the annuity start date, the entire
interest in the contract will be distributed within five years after the date of
the owner's death. These requirements are satisfied if any portion of the
owner's interest which 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 one year of the owner's death. If the owner's
designated beneficiary is the surviving spouse of the owner, the contract may be
continued with the surviving spouse as the new owner. If the owner of the
contract is a non-natural person, then the annuitant will be treated as the
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 owner.
<PAGE>
QUALIFIED PLANS
- ------------------------------------------------------------------------------
The Contract may be used with several types of qualified plans. The income on
qualified plan and IRA investments is tax deferred and variable annuities held
by such plans do not receive any additional tax deferral. You should review the
annuity features, including all benefits and expenses, prior to purchasing a
variable annuity in a qualified plan or IRA. Allstate New York reserves the
right to limit the availability of the Contract for use with any of the
Qualified Plans listed below. 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. In
particular, employers should consider that 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.
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 New York 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.
<PAGE>
EXPERTS
- ------------------------------------------------------------------------------
The financial statements of the Variable Account as of December 31, 1998, and
for each of the periods ended December 31, 1998, December 31, 1997, and December
31, 1996, and consolidated financial statements of Allstate New York as of
December 31, 1998, and 1997, and for each of the three years in the period ended
December 31, 1998, included in this Statement of Additional Information have
been audited by ________________________________________________, 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.
<PAGE>
FINANCIAL STATEMENTS
- ------------------------------------------------------------------------------
The financial statements as of and for the years ended December 31, 1998 of the
Variable Account and Allstate New York and the accompanying Reports of
Independent Auditors appear on the pages that follow. The financial statements
of Allstate New York included herein should be considered only as bearing upon
the ability of Allstate New York to meet its obligations under the Contracts.
<PAGE>
PART C
OTHER INFORMATION
24A. FINANCIAL STATEMENTS
Allstate Life Insurance Company of New York Financial Statements and Financial
Statement Schedules 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) Form of 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 (Incorporated herein by reference to Post-Effective
Amendment No. 3 to Registrant's Registration Statement (File No. 033-65381)
dated April 30, 1999.)
(2) Not Applicable
(3) (a) Form of Underwriting Agreement for the Allstate Custom Portfolio
Variable Annuity.*
(4) (a) Form of Contract for the Allstate Custom Portfolio Variable Annuity, a
group flexible premium deferred variable annuity contract.
(5) (a) Form of Application for Allstate Custom Portfolio Variable Annuity.*
(6) (a) Restated Certificate of Incorporation of Allstate Life Insurance
Company of New York (Previously filed in Depositor's Form 10-K dated
March 30, 1999 and incorporated herein by reference.)
(b) Amended By-laws of Allstate Life Insurance Company of New York
(Previously filed in Depositor's Form 10-K dated March 30, 1999 and
incorporated herein by reference.)
(7) Not applicable
(8) (a) Form of Participation Agreement for Allstate Custom Portfolio Variable
Annuity.*
(9) (a) Opinion and Consent 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 for Allstate Custom
Portfolio Variable Annuity.*
(14) Not applicable
(99) (a) Power of Attorney for Kevin R. Slawin (Incorporated herein by reference
to Pre-Effective Amendment No. 1 to Registrant's Form N-4 Registration
Statement (File Number 033-65381) dated September 20, 1996.)
(b) Power of Attorney for Louis G. Lower, II, Thomas J. Wilson, Michael J.
Velotta, Timothy H. Plogh, Marcia D. Alazraki, Cleveland Johnson, Jr.,
Gerard F. McDermott, John R. Raben, Jr., and Sally A. Slacke
(Incorporated herein by reference to Post-Effective Amendment No. 3 to
Registrant's Form N-4 Registration Statement (File Number 033-65381)
dated April 30, 1999.)
(c) Power of Attorney for Samuel L. Pilch and Joseph J. Richardson, Jr.
(Incorporated herein by reference to Post-Effective Amendment No. 4 to
Registrant's Form N-4 Registration Statement (File Number 033-65381)
dated November 8, 1999.)
*To be filed by Pre-Effective Amendment.
<PAGE>
25. DIRECTORS AND OFFICERS OF THE DEPOSITOR
<TABLE>
<CAPTION>
<S> <C>
NAME AND PRINCIPAL POSITION AND OFFICE WITH
BUSINESS ADDRESS DEPOSITOR OF THE ACCOUNT
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
As of the date of the filing of this Registration Statement, the offering of the
Allstate Custom Portfolio Variable Annuity Contract had not commenced.
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.
<PAGE>
29A. RELATIONSHIP OF PRINCIPAL UNDERWRITER TO OTHER INVESTMENT COMPANIES
(a) Registrant's principal underwriter is also the principal underwriter with
respect 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
(b) The directors and officers of the principal underwriter are:
<TABLE>
<CAPTION>
Name and Principal Business Positions and Offices with Underwriter
Address** of Each Such Person
- ---------------------------- ----------------------
<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
(1-800-692-4682) 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.
33. 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.
34. 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
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 14th day of January,
2000.
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 Registration Statement has been
duly signed below by the following Directors and Officers of Allstate Life
Insurance Company of New York on the 14th day of January, 2000.
*/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.
<PAGE>
*/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.
<PAGE>
Exhibit Index
Exhibit 4 Form of Contract
Exhibit 9 Opinion and Consent of Michael J. Velotta
NYLU446
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 financial institutions according to
the terms of Master Policy number 64900037 issued by Allstate Life Insurance
Company of New York to Trustee of the Delaware Financial Services Group
Insurance Trust. The Trustee of the Delaware 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.
The dollar amount of income payments or other values provided by this
Certificate, when based on the investment experience of the Variable Account,
varies to reflect the performance of the Variable Account. The smallest annual
rate of net investment return on the Variable Account assets required to keep
Variable Account income payments from decreasing is 3%. An annualized
Certificate Maintenance Charge of $30 and 1.25% per year (assessed daily) will
be deducted in equal parts from the Variable Account. For amounts in the Fixed
Account, the withdrawal benefit, transfers to other sub-accounts and any
periodic income payments may be subject to a Market Value Adjustment which may
result in an upward or downward adjustment of the amount distributed. For
amounts in the Fixed Account, the death benefit may be subject to a positive
Market Value Adjustment when the cash surrender value is greater than the
Certificate Value.
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(s) 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. 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 us at (800) 692-4682.
Secretary Chairman and Chief Executive Officer
Flexible Premium Deferred Variable Annuity
<PAGE>
NYLU446 Page 2
- -------------------------------------------------------------------------
TABLE OF CONTENTS
- -------------------------------------------------------------------------
THE PERSONS INVOLVED...................................................3
ACCUMULATION PHASE.....................................................3
PAYOUT PHASE...........................................................8
INCOME PAYMENT TABLES.................................................10
GENERAL PROVISIONS....................................................11
<PAGE>
- ------------------------------------------------------------------------------
THE PERSONS INVOLVED
- ------------------------------------------------------------------------------
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. If the owner is a natural
person, you may change the annuitant prior to the Payout Start Date. Once we
have received a satisfactory written request for an owner, beneficiary or
annuitant change, 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. However, you may assign periodic income payments under this Certificate
prior to the Payout Start Date. We are bound by an assignment only if it is
signed by the assignor and filed with us. We are not responsible for the
validity of an assignment.
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:
|X| owner as used in this certificate refers to all people named as owners,
unless otherwise indicated;
|X| any request to exercise ownership rights must be signed by all owners; and
|X| on the death of the first person who is named as an owner, the surviving
person(s) named as owner will continue as 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 natural
person. If the annuitant dies prior to the Payout Start Date, the new annuitant
will be:
|X| the youngest owner; otherwise,
|X| 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:
|X| your spouse if living; otherwise
|X| your children equally if living; otherwise
|X| your estate.
The beneficiary may become the owner under the circumstances described above.
The beneficiary may assign benefits under the Certificate, as described above,
once they are payable to the beneficiary. We are bound by an assignment only if
it is signed by the assignor and filed with us. We are not responsible for the
validity of an assignment.
- ------------------------------------------------------------------------------
ACCUMULATION PHASE
- ------------------------------------------------------------------------------
Accumulation Phase Defined The "Accumulation Phase" is the first of two phases
during your Certificate. The Accumulation Phase begins on the issue date stated
on the Annuity Data Page. This phase will continue until the Payout Start Date
unless the Certificate is terminated before that date.
<PAGE>
Certificate Year. The one year period beginning on the issue date and on each
anniversary of the issue date..
Purchase Payments You may make subsequent purchase payments during the
Accumulation Phase. The number of purchase payments is unlimited. The minimum
subsequent purchase payment amount is $100. We reserve the right to reduce the
minimum purchase payment. We may limit the maximum amount of purchase payments
we will accept.
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%. For each purchase payment, the minimum amount
that may be allocated to the Fixed Account is $500.
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 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.
Investment Alternatives Investment Alternatives are the Sub-accounts of the
Variable Account and the Sub-accounts of the Fixed Account shown on the Annuity
Data Page.
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 Sub-accounts The Variable Account is divided into Sub-accounts. Each
Sub-account invests solely in the shares of the mutual fund underlying that
Sub-account.
Fixed Account The Fixed Account is divided into Sub-accounts. A Sub-account is
identified by the Guarantee Period and the date the Guarantee Period begins. You
create a Sub-account when:
|X| you make a purchase payment; or
|X| you select a new Guarantee Period after the prior Sub-account expires; or
|X| you transfer an amount from an existing Sub-account of the Variable Account
or the Fixed Account.
A Sub-account continues until the end of the Guarantee Period.
You must select the Guarantee Period for all purchase payments and transfers
allocated to the Fixed Account. If you do not select a Guarantee Period for a
purchase payment or transfer, we will assign the shortest Guarantee Period
available under the Certificate for such payment or transfer. Guarantee Periods
are offered at our discretion and may range from one to ten years. We may change
the Guarantee Periods available for future purchase payments or transfers
allocated to the Fixed Account. We will mail you a notice at least 15 but not
more than 45 days prior to the expiration of each Sub-account outlining the
options available at the end of a Guarantee Period. During the 30 day period
after a Guarantee Period expires you may:
|X| take no action and we will automatically renew the Sub-account value to a
Guarantee Period of the shortest duration available to be established on
the day the previous Guarantee Period expired; or
|X| notify us to apply the Sub-account value to a new Guarantee Period(s) to be
established on the day the previous Guarantee Period expired; or
|X| notify us to apply the Sub-account value to any Sub-account of the Variable
Account on the day we receive the notification; or
|X| receive a portion of the Sub-account value or the entire Sub-account value
through a partial or full withdrawal that is not subject to a Market Value
Adjustment. In this case, the amount withdrawn will be deemed to have been
withdrawn on the day the Guarantee Period expired.
The minimum amount that can be allocated to a new Sub-account is $500.
<PAGE>
Crediting Interest We credit interest daily to money allocated to the Fixed
Account 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 from the issue date. We will credit interest to subsequent
purchase payments from the date we receive them. We will credit interest to
transfers from the date the transfer is made. The interest rates 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 between
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 $10 transfer fee. Transfers are subject to the following
restrictions.
|X| The minimum amount that may be transferred into a Sub-account of the Fixed
Account is $500.
|X| Except as described below, any transfer from a Sub-account of the Fixed
Account, at a time other than during the 30 day period after a Guarantee
Period expires, will be subject to a Market Value Adjustment.
|X| If any transfer reduces the value of a Sub-account of the Fixed Account to
less than $500, we will treat the request as a transfer of the entire
Sub-account value.
Transfers that are made as part of a Dollar Cost Averaging Program will not be
subject to any Market Value Adjustments or transfer fee, and will not be
included in the twelve free transfers per Certificate Year.
We reserve the right to waive the transfer fees and restrictions contained in
this Certificate.
Dollar Cost Averaging Program You may participate in a Dollar Cost Averaging
Program at any time during the Accumulation Phase. The Dollar Cost Averaging
Program is an investment strategy which permits an owner to transfer a specified
amount every month from the one year Guarantee Period Sub-account of the Fixed
Account or any Sub-account of the Variable Account, to any Sub-account of the
Variable Account. Transfers made through the Dollar Cost Averaging Program are
not subject to any transfer fee or Market Value Adjustment.
Certificate Value Your "Certificate Value" is equal to the sum of:
|X| the number of Accumulation Units you hold in each Sub-account of the
Variable Account multiplied by the Accumulation Unit Value for that
Sub-account on the most recent Valuation Date; plus
|X| the sum of Sub-account values in the Fixed Account.
Accumulation Units and Accumulation Unit Value Amounts which you allocate to a
Sub-account of the Variable Account are used to purchase Accumulation Units in
that Sub-account. The Accumulation Unit Value for each Sub-account 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 Sub-account's Net
Investment Factor for the Valuation Period. The Accumulation Unit Values may go
up or down. Additions or transfers to a Sub-account of the Variable Account will
increase the number of Accumulation Units for that Sub-account. Withdrawals or
transfers from a Sub-account of the Variable Account will decrease the number of
Accumulation Units for that Sub-account.
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.
Net Investment Factor For each Sub-account of the Variable Account, the "Net
Investment Factor" for a Valuation Period is (A) divided by (B), minus (C)
where:
(A) is the sum of:
(1) the net asset value per share of the mutual fund underlying
the 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 mutual fund underlying the
Sub-account during the current Valuation Period.
(B) is the net asset value per share of the mutual fund underlying the
Sub-account determined as of the end of the immediately preceding
Valuation Period.
<PAGE>
(C) is the sum of the annualized Administrative Expense Charge and the
annualized Mortality and Expense Risk Charge divided by 365 and then
multiplied by the number of calendar days in the current Valuation
Period.
Charges The charges for this Certificate include Administrative Expense Charges,
Mortality and Expense Risk Charges, Certificate Maintenance Charges, transfer
charges, and taxes. If withdrawals are made, the Certificate may also be subject
to Withdrawal Charges and Market Value Adjustments.
Administrative Expense Charge The annualized Administrative Expense Charge will
never be greater than 0.10%. (See Net Investment Factor for a description of how
this charge is applied.)
Mortality and Expense Risk Charge The annualized Mortality and Expense Risk
Charge will never be greater than 1.15%. (See Net Investment Factor for a
description of how this charge is applied.)
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 will be deducted on a pro-rata basis from
each Sub-account of the Variable Account in the proportion that your value in
each bears to your total value in all Sub-accounts of the Variable Account. A
full Certificate Maintenance Charge will be deducted if the Certificate is
terminated on any date other than a certificate anniversary. After the Payout
Start Date the Certificate Maintenance Charge will be deducted in equal parts
from each income payment. The annualized charge will never be greater than $30
per certificate year. The Certificate Maintenance Charge will be waived if total
purchase payments are $50,000 or more or if all money is allocated to the Fixed
Account on the certificate anniversary.
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
any withdrawal reduces the value of any Sub-account of the Fixed Account to less
than $500, we will treat the request as a withdrawal of the entire Sub-account
value. If any withdrawal reduces the Certificate Value to less than $1,000, we
will treat the request as a withdrawal of the entire Certificate Value. 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, Market Value
Adjustment, and taxes. Any Withdrawal Charge will be waived on withdrawals taken
to satisfy IRS minimum distribution rules.
Preferred Withdrawal Amount Each Certificate Year the Preferred Withdrawal
Amount is equal to 15% of the amount of purchase payments. Each Certificate Year
you may withdraw the Preferred Withdrawal Amount without any Withdrawal Charge
or Market Value Adjustment. Each Certificate Year begins on the anniversary of
the date the Certificate was established. Any Preferred Withdrawal Amount which
is not withdrawn in a year may not be carried over to increase the Preferred
Withdrawal Amount 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% 6% 5% 4% 3% 2% 1% 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:
|X| multiplying the percentage corresponding to the Payment Year, times
|X| that part of each purchase payment withdrawal that is in excess of the
Preferred Withdrawal Amount, adjusted by a Market Value Adjustment.
Market Value Adjustment Withdrawals in excess of the Preferred Withdrawal
Amount, transfers, and amounts applied to an income plan from a Sub-account of
the Fixed Account other than during the 30 day period after a Guarantee Period
expires are subject to a Market Value Adjustment. A Market Value Adjustment is
an increase or decrease in the amount reflecting changes in the level of
interest rates since the Sub-account was established. As used in this provision,
"Treasury Rate" means the U. S. Treasury Note Constant Maturity yield as
reported in Federal Reserve Bulletin Release H.15. The Market Value Adjustment
is based on the following:
I = the Treasury Rate for a maturity equal to the Sub-account's
Guarantee Period for the week preceding the establishment of
the Sub-account;
N = the number of whole and partial years from the date we
receive the withdrawal, transfer, or death benefit request, or
from the Payout Start Date, to the end of the Sub-account's
Guarantee Period;
J = the Treasury Rate for a maturity of N years for the week
preceding the receipt of the withdrawal request, transfer
request, death benefit request, or Income Payment request. If
a Note with a maturity of N years is not available, a weighted
average will be used. If N is one year or less, J will be the
1-year Treasury Rate.
An adjustment factor is determined from the following formula:
.9 x (I - J) x N
The amount subject to a Market Value Adjustment that is deducted from a
Sub-account of the Fixed Account is multiplied by the adjustment factor to
determine the amount of the Market Value Adjustment. The amount deducted from
the Sub-account includes the transfer amount or the amount we pay you, income
tax we withhold for you, the Withdrawal Charge, any applicable premium tax
charge, and the Market Value Adjustment.
Any Market Value Adjustment will be waived on withdrawals taken to satisfy IRS
minimum distribution rules.
Death of Owner or Annuitant A benefit may be paid to the owner determined
immediately after the death if, prior to the Payout Start Date:
|X| any owner dies; or
|X| the annuitant dies and the owner is not a natural person.
If the owner eligible to receive a benefit is not a natural person, the owner
may elect to receive the benefit in one or more distributions. Otherwise, if the
owner is a natural person, the owner may elect to receive a benefit either in
one or more distributions or by periodic payments through an Income Plan.
A Death Benefit will be paid: 1) if the owner elects to receive the Death
Benefit distributed in a single payment within 180 days of the date of death,
and 2) if the Death Benefit is paid as of the day the value of the Death Benefit
is determined. Otherwise, the Settlement Value will be paid. In any event, the
entire value of the certificate must be distributed within five (5) years after
the date of death unless an Income Plan is elected or a surviving spouse
continues the certificate in accordance with the following provisions. If the
owner who is not your spouse elects to receive the Settlement Value payable in a
lump sum within 5 years of your date of death, the owner may make a single
withdrawal of any amount within one year of the date of death without incurring
a Withdrawal Charge. However, any applicable Market Value Adjustment, determined
as of the date of the withdrawal, will apply.
Payments from the Income Plan must begin within one year of the date of death
and must be payable throughout:
|X| the life of the owner; or
|X| a period not to exceed the life expectancy of the owner; or
|X| the life of the owner with payments guaranteed for a period not to exceed
the life expectancy of the owner.
<PAGE>
If the surviving spouse of the deceased owner is the new owner, then the spouse
may elect one of the options listed above or 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 surviving spouse may make a single
withdrawal of any amount within one year of the date of death without incurring
a Withdrawal Charge. However, any applicable Market Value Adjustment, determined
as of the date of the withdrawal, will apply.
Death Benefit Prior to the Payout Start Date, the death benefit is equal to the
greatest of:
|X| Certificate Value on the date we determine the death benefit; or
|X| the amount that would have been payable in the event of a full withdrawal
of the Certificate Value on the date we determine the death benefit; or
|X| the Certificate Value on the Death Benefit Anniversary immediately
preceding the date we determine the death benefit adjusted by any purchase
payments, withdrawal adjustment as defined below, and charges made between
such Death Benefit Anniversary and the date we determine the death benefit.
The first Death Benefit Anniversary is the issue date. Subsequent Death
Benefit Anniversaries are those certificate anniversaries that are
multiples of 7 Certificate Years, beginning with the 7th certificate
anniversary. For example, the issue date, 7th, and 14th certificate
anniversaries are the first three Death Benefit Anniversaries; or
|X| the greatest of the Anniversary Values as of the date we determine the
death benefit. The Anniversary Value is equal to the Certificate Value on a
Certificate Anniversary, increased by purchase payments made since that
anniversary and reduced by the amount of any partial withdrawal adjustment,
as defined below, since that anniversary. Anniversary values will be
calculated for each Certificate anniversary prior to the earlier of:
a. the date we determine the death benefit, or
b. the oldest owner's or the annuitant's, if the owner is not a
natural person, attained age 75 or 5 years after the date the
Certificate was established, if later.
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.
The Death Benefit will never be greater than the maximum death benefit allowed
by any non-forfeiture laws which govern the Certificate.
Withdrawal Example for Anniversary Value
(I) Maximum Anniversary Value Before Partial Withdrawal: $100
(II) Certificate Value Before Partial Withdrawal: $50
(III) Partial Withdrawal: $48
(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 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.
- ------------------------------------------------------------------------------
PAYOUT PHASE
- ------------------------------------------------------------------------------
Payout Phase Defined The "Payout Phase" is the second of the two phases during
your Certificate. During this phase the Certificate Value adjusted by any Market
Value Adjustment and 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.
<PAGE>
Payout Start Date The "Payout Start Date" is the date the Certificate Value
adjusted by any Market Value Adjustment and 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 adjusted by any Market Value Adjustment and 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.
We reserve the right to make available other Income Plans.
Income Payments Income payment amounts may vary based on any Sub-account of the
Variable Account and/or may be fixed for the duration of the Income Plan. The
method of calculating the initial payment is different for the two accounts. The
Certificate Maintenance Charge will be deducted in equal payments from each
income payment. The Certificate Maintenance Charge will be waived if total
Purchase Payments are $50,000 or more.
Variable Amount Income Payments The initial income payment based upon the
Variable Account is calculated by applying the portion of the Certificate Value
in the Variable Account on the Payout Start Date, less any applicable premium
tax, to the appropriate value from the Income Payment Table selected. Subsequent
income payments will vary depending upon the changes in the Annuity Unit Values
for the Sub-accounts upon which the income payments are based.
The portion of the initial income payment based upon a particular Variable
Sub-account is determined by applying the amount of the Certificate Value in
that Sub-account 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 Sub-account to determine the number of Annuity Units from that
Sub-account which will be used to determine subsequent income payments. Unless
Annuity Transfers are made between Sub-accounts, each subsequent income payment
from that Sub-account will be that number of Annuity Units times the Annuity
Unit Value for the Sub-account for the Valuation Date on which the income
payment is made.
Annuity Unit Value. The Annuity Unit Value for each Sub-account of the Variable
Account at the end of any Valuation Period is calculated by:
|X| multiplying the Annuity Unit Value at the end of the immediately preceding
Valuation Period by the Sub-account's Net Investment Factor during the
period; and then
|X| 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 Sub-accounts of the Fixed Account during the Accumulation Phase are
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
on the Payout Start Date, adjusted by any Market Value Adjustment and 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.
<PAGE>
Annuity Transfers After the Payout Start Date, no transfers may be made from the
Fixed Amount Income Payment. Transfers between Sub-accounts of the Variable
Account, or from the Variable Amount Income Payment to the Fixed Amount Income
Payment may not be made for six months after the Payout Start Date. Annuity
Transfers may be made once every six months thereafter.
Payout Terms and Conditions The income payments are subject to the following
terms and conditions:
|X| If the Certificate Value is less than $2,000, or not enough to provide an
initial payment of at least $20, we reserve the right to:
|X| change the payment frequency to make the payment at least $20; or
|X| terminate the Certificate and pay you the Certificate Value adjusted
by any Market Value Adjustment and less any applicable taxes in a lump
sum.
|X| 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.
|X| If you choose an Income Plan which depends on any person's life, we may
require:
|X| proof of age and sex before income payments begin; and
|X| proof that the annuitant or joint annuitant is still alive before we
make each payment.
|X| 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.
|X| 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 he 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.
<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
============================================================================================================================
- ------------------- ---------------------- ---------------- ---------------------- ---------------- ========================
Annuitant's Annuitant's Annuitant's
Age Male Female Age Male Female Age Male Female
- ------------------- ---------------------- ---------------- ---------------------- ---------------- ========================
- ------------------- ---------------------- ---------------- ---------------------- ---------------- ========================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
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 5.96
43 3.79 3.53 57 4.81 4.38 71 6.78 6.13
44 3.84 3.58 58 4.92 4.46 72 6.96 6.31
45 3.90 3.62 59 5.02 4.55 73 7.13 6.50
46 3.96 3.67 60 5.14 4.65 74 7.31 6.69
47 4.02 3.72 61 5.26 4.75 75 7.49 6.88
48 4.08 3.77 62 5.39 4.86
- ------------------- ---------------------- ---------------- ---------------------- ---------------- ========================
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
- -------------------- =========================================================================================================
- -------------------- ---------- ------------ ----------- ---------- ---------- ---------- ---------- --------- ===============
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 the Master Policy, the
Master Policy application, and any written enrollments, any endorsements, and
any riders.
All statements made in written enrollments 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 enrollment.
Only our officers may, in order to conform to any state or federal law, change
the Master Policy or Certificate or waive a right or requirement. No other
individual may do this.
Master Policy 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 holders.
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.
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.
<PAGE>
If we find the misstatement of age or sex after the income payments begin, we
will:
|X| pay all amounts underpaid including interest; or
|X| stop payments until the total payments are equal to the corrected amount.
For purposes of the Misstatement of Age or Sex provision, interest will be
calculated at an effective annual rate of 6%.
Annual Statement At least once a year, prior to the Payout Start Date, we will
send you a statement containing Certificate Value information. We will provide
you with Certificate Value information at any time upon request.
The information presented will comply with any applicable 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:
|X| a certified copy of a death certificate; or
|X| a certified copy of a decree of a court of competent jurisdiction as to a
finding of death; or
|X| 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:
|X| the New York Stock Exchange is closed for other than usual weekends or
holidays, or trading on such Exchange is restricted;
|X| an emergency exists as defined by the Securities and Exchange Commission;
or
|X| 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
for up to six months. If we elect to postpone payments or transfers from the
Fixed Account for more than 10 working days, 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 or transfer is made.
Variable Account Modifications We reserve the right, subject to applicable law,
to make additions to, deletions from, or substitutions for the mutual fund
shares underlying the Sub-accounts of the Variable Account. We will not
substitute any shares attributable to your interest in a Sub-account 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.
We reserve the right to establish additional Sub-accounts of the Variable
Account, each of which would invest in shares of another mutual fund. You may
then instruct us to allocate purchase payments or transfers to such
Sub-accounts, subject to any terms set by us or the mutual fund.
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 or it may be deregistered under such
Act in the event such registration is no longer required.
NYLU446
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
LAW AND REGULATION DEPARTMENT
3100 Sanders Road, Suite J5B
Northbrook, Illinois 60062
Direct Dial Number 847-402-2400
Facsimile 847-402-4371
Michael J. Velotta
Vice President, Secretary
and General Counsel
January 14, 2000
TO: ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
FARMINGVILLE, NEW YORK 11738-9075
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 NOS. __________, 811-07467
ALLSTATE CUSTOM PORTFOLIO VARIABLE ANNUITY
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 Custom Portfolio Variable Annuity. 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
January 14, 2000:
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
