AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 26, 2000
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FILE NOS. 333-74411
811-07467
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
POST-EFFECTIVE AMENDMENT NO. 2/X/
AND/OR
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY
ACT OF 1940
AMENDMENT NO. 15 /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 11738-9095
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 DISTRIBUTORS, L.L.C.
1050 CONNECTICUT AVENUE, N.W., SUITE 825 3100 SANDERS ROAD, SUITE J5B
WASHINGTON, D.C. 20036-5366 NORTHBROOK, IL 60062
Approximate date of proposed public offering: Continuous
IT IS PROPOSED THAT THIS FILING WILL BECOME EFFECTIVE
(CHECK APPROPRIATE BOX):
/ / immediately upon filing pursuant to paragraph (b) of Rule 485
/x/ on May 1, 2000 pursuant to paragraph (b) of Rule 485
/ / 60 days after filing pursuant to paragraph (a)(1) of Rule 485
/ / on (date) pursuant to paragraph (a)(i) of Rule 485
IF APPROPRIATE, CHECK THE FOLLOWING BOX:
/ / This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
Title of Securities Being Registered: Units of Interest in the Allstate Life of
New York Separate Account A under deferred variable annuity contracts.
<PAGE>
The Putnam Allstate Advisor Variable Annuity
Allstate Life Insurance Company of New York Prospectus dated May 1, 2000
One Allstate Drive
Farmingville, New York 11738
Telephone Number: 1(800) 390-1277
Allstate Life Insurance Company of New York ("Allstate New York") is offering
The Putnam Allstate Advisor, a group flexible premium deferred variable annuity
contract ("Contract"). This prospectus contains information about the Contract
that you should know before investing. Please keep it for future reference.
The Contract currently offers 26 investment alternatives ("investment
alternatives"). The investment alternatives include 2 fixed account options
("Fixed Account Options") and 24 variable sub-accounts ("Variable Sub-Accounts")
of the Allstate Life of New York Separate Account A ("Variable Account"). Each
Variable Sub-Account invests exclusively in the class IB shares of one of the
following mutual fund portfolios ("Funds") of Putnam Variable Trust:
<TABLE>
<CAPTION>
<S> <C>
Putnam VT American Government Income Fund Putnam VT International Growth and Income Fund
Putnam VT Asia Pacific Growth Fund Putnam VT International New Opportunities Fund
Putnam VT Diversified Income Fund Putnam VT Investors Fund
Putnam VT The George Putnam Fund of Boston Putnam VT Money Market Fund
Putnam VT Global Asset Allocation Fund Putnam VT New Opportunities Fund
Putnam VT Global Growth Fund Putnam VT New Value Fund
Putnam VT Growth and Income Fund Putnam VT OTC & Emerging Growth Fund
Putnam VT Growth Opportunities Fund Putnam VT Research Fund
Putnam VT Health Sciences Fund Putnam VT Small Cap Value
Putnam VT High Yield Fund Putnam VT Utilities Growth and Income Fund
Putnam VT Income Fund Putnam VT Vista Fund
Putnam VT International Growth Fund Putnam VT Voyager Fund
</TABLE>
We (Allstate New York) have filed a Statement of Additional Information, dated
May 1, 2000, with the Securities and Exchange Commission ("SEC"). It contains
more information about the Contract and is incorporated herein by reference,
which means that it is legally a part of this prospectus. Its table of contents
appears on page __ of this prospectus. For a free copy, please write or call us
at the address or telephone number above, or go to the SEC's Web site (http:/
/www.sec.gov). You can find other information and documents about us, including
documents that are legally part of this prospectus, at the SEC's Web site.
The Securities and Exchange Commission has not approved or
disapproved the securities described in this prospectus, nor
has it passed on the accuracy or the adequacy of this
prospectus. Anyone who tells you otherwise is committing a
federal crime.
IMPORTANT The Contracts may be distributed through broker-dealers that
NOTICES have relationships with banks or other financial
institutions or by employees of such banks. However, the
Contracts are not deposits, or obligations of, or guaranteed
by such institutions or any federal regulatory agency.
Investment in the Contracts involves investment risks,
including possible loss of principal.
The Contracts are not FDIC insured.
The Contracts are available only in New York.
<PAGE>
Table of Contents
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Page
Overview
Important Terms
The Contract at a Glance
How the Contract Works
Expense Table
Financial Information
Contract Features
The Contract
Purchases
Contract Value
Investment Alternatives
The Variable Sub-Accounts
The Fixed Account Options
Transfers
Expenses
Access to Your Money
Income Payments
Death Benefits
Other Information
More Information
Taxes
Performance Information
Statement of Additional Information Table of Contents
Appendix A - Accumulation Unit Values A-1
Appendix B - Withdrawal Adjustment Example B-1
<PAGE>
Important Terms
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This prospectus uses a number of important terms that you may not be familiar
with. The index below identifies the page(s) that describes each term. The first
use of each term in this prospectus appears in highlights.
Page(s)
Accumulation Phase
Accumulation Unit
Accumulation Unit Value
Allstate New York ("We")
Annuitant
Automatic Additions Program
Automatic Fund Rebalancing Program
Beneficiary
Cancellation Period
*Contract
Contract Anniversary
Contract Owner ("You")
Contract Value
Contract Year
Dollar Cost Averaging Program
Due Proof of Death
Fixed Account Options
Funds
Guarantee Period
Income Plan
Investment Alternatives
Issue Date
Maximum Anniversary Value
Payout Phase
Payout Start Date
Preferred Withdrawal Amount
Right to Cancel
SEC
Settlement Value
Systematic Withdrawal Program
Valuation Date
Variable Account
Variable Sub-Account
* The Contract is available only as a group Contract. We will issue you a
certificate that represents your ownership and that summarizes the
provisions of the group Contract. References to "Contract" in this
prospectus include certificates, unless the context requires otherwise.
<PAGE>
The Contract at a Glance
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The following is a snapshot of the Contract. Please read the remainder of this
prospectus for more information.
<TABLE>
<CAPTION>
<S> <C>
Flexible Payments You can purchase a Contract with as little as $1,000 ($500 for
"Qualified Contracts", which are Contracts issued with a
qualified plan). You can add to your Contract as often and as much
as you like, but each payment must be at least $500 ($50 for
automatic payments). We may limit the amount of any additional
purchase payment to a maximum of $1,000,000.
Right to Cancel You may cancel your Contract within 10 days after receipt (pursuant to
New York law, 60 days if you are exchanging another contract for the
Contract described in this prospectus)("Cancellation Period"). Upon cancellation,
we will return your purchase payments adjusted, to 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 Mortality and expense risk charge equal to 1.25% of average daily net assets
o Annual contract maintenance charge of $30 (waived in certain cases)
o Withdrawal charges ranging from 0% to 7% of purchase payments
withdrawn(with certain exceptions)
o Transfer fee equal to 0.50% of the amount transferred, up to a
maximum charge of $25, after the 12th transfer in any Contract
Year. We measure a Contract Year from the date we issue your Contract
or a Contract Anniversary.
o State premium tax (New York currently does not impose one)
o In addition, each Fund pays expenses that you will bear indirectly
if you invest in a Variable Sub-Account.
Investment Alternatives The Contract offers 26 investment alternatives including:
o 2 Fixed Account Options(which credit interest at rates we guarantee)
o 24 Variable Sub-Accounts investing in Funds offering professional
money management by Putnam Investment Management, Inc.
To find out current rates being paid on the Fixed Account Options,
or to find out how the Variable Sub-Accounts have performed,
please call us at 1(800)390-1277.
<PAGE>
Special Services For your convenience, we offer these special services:
o Automatic Fund Rebalancing Program
o Automatic Additions Program
o Dollar Cost Averaging Program
o Systematic Withdrawal Program
Income Payments You can choose fixed income payments, variable income
payments, or a combination of the two. You can receive your
income payments in one ofthe following ways:
o life income with guaranteed payments
o a joint and survivor life income with guaranteed payments
o guaranteed payments for a specified period (5 to 30 years)
Death Benefits If you die before the Payout Start Date, we will pay
the death benefit described in the Contract.
Transfers Before the Payout Start Date, you may transfer your Contract
value ("Contract Value") among the investment alternatives,
with certain restrictions. The minimum amount you may transfer is
$100 or the amount remaining in the investment alternative, if less.
A charge will apply after the 12th transfer in each Contract Year, which we
measure from the date we issue your Contract or a Contract Anniversary.
Withdrawals You may withdraw some or all of your Contract Value at anytime prior to the
Payout Start Date. Full or partial withdrawals are also available under limited
circumstances after the Payout Start Date. In general, you must withdraw
at least $50 at a time ($1,000 for withdrawals made during the Payout Phase).
A 10% federal tax penalty may apply if you withdraw before you are 59 1/2
years old. A withdrawal charge also may apply.
</TABLE>
<PAGE>
How the Contract Works
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The Contract basically works in two ways.
First, the Contract can help you (we assume you are the "Contract Owner") save
for retirement because you can invest in up to 26 investment alternatives and
pay no federal income taxes on any earnings until you withdraw them. You do this
during what we call the "Accumulation Phase" of the Contract. The Accumulation
Phase begins on the date we issue your Contract (we call that date the "Issue
Date") and continues until the Payout Start Date, which is the date we apply
your money to provide income payments. During the Accumulation Phase, you may
allocate your purchase payments to any combination of the Variable Sub-Accounts
and/or Fixed Account Options. If you invest in either of the Fixed Account
Options, you will earn a fixed rate of interest that we declare periodically. If
you invest in any of the Variable Sub-Accounts, your investment return will vary
up or down depending on the performance of the corresponding Funds.
Second, the Contract can help you plan for retirement because you can use it to
receive retirement income for life and/or for a pre-set number of years, by
selecting one of the income payment options (we call these "Income Plans")
described on page __. You receive income payments during what we call the
"Payout Phase" of the Contract, which begins on the Payout Start Date and
continues until we make the last payment required by the Income Plan you select.
During the Payout Phase, if you select a fixed income payment option, we
guarantee the amount of your payments, which will remain fixed. If you select a
variable income payment option, based on one or more of the Variable
Sub-Accounts, the amount of your payments will vary up or down depending on the
performance of the corresponding Funds. The amount of money you accumulate under
your Contract during the Accumulation Phase and apply to an Income Plan will
determine the amount of your income payments during the Payout Phase.
The timeline below illustrates how you might use your Contract.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Issue Payout Start
Date Accumulation Phase Date Payout Phase
- ----------------------------------------------------------------------------------------------------------------->
You save for retirement
| | | |
You buy You elect to receive 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 there is none,
to your Beneficiary. See "Death Benefits."
Please call us at 1(800)390-1277 if you have any question about how the Contract
works.
<PAGE>
Expense Table
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The table below lists the expenses that you will bear directly or indirectly
when you buy a Contract. The table and the examples that follow do not reflect
premium taxes because New York currently does not impose premium taxes on
annuities. For more information about Variable Account expenses, see "Expenses,"
below. For more information about Fund expenses, please refer to the
accompanying prospectus for the Putnam Variable Trust.
Contract Owner Transaction Expenses
Withdrawal Charge (as a percentage of purchase payments withdrawn)*
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Number of Complete Years Since We Received
the Purchase Payment Being Withdrawn: 0 1 2 3 4 5 6 7+
Applicable Charge: 7% 7% 6% 5% 4% 3% 2% 0%
Annual Contract Maintenance Charge $30.00**
Transfer Fee 0.50% of the amount transferred***
</TABLE>
* Each Contract Year, you may withdraw up to the greater of earnings not
previously withdrawn or 15% of your total purchase payments without
incurring a withdrawal charge.
** Waived in certain cases. See "Expenses."
*** Applies solely to the thirteenth and subsequent transfers within a Contract
Year, excluding transfers due to dollar cost averaging and automatic fund
rebalancing. This charge will not exceed $25 per transfer.
Variable Account Annual Expenses (as a percentage of average daily net asset
value deducted from each Variable Sub-Account)
Mortality and Expense Risk Charge 1.25%
Administrative Charge 0.00%
Total Variable Account Annual Expenses 1.25%
<PAGE>
Fund Annual Expenses (After Voluntary Reductions and Reimbursements) (as a
percentage of Fund average daily net assets)(1)
<TABLE>
<CAPTION>
Fund Management Rule 12b-1 Other Total Annual
Fee Fee Expenses Fund Expenses(1)
<S> <C> <C> <C> <C>
Putnam VT American Government Income Fund(2) 0.41% 0.15% 0.49% 1.05%
Putnam VT Asia Pacific Growth Fund 0.80% 0.15% 0.33% 1.28%
Putnam VT Diversified Income Fund 0.68% 0.15% 0.10% 0.93%
Putnam VT The George Putnam Fund of Boston 0.65% 0.15% 0.18% 0.98%
Putnam VT Global Asset Allocation Fund 0.65% 0.15% 0.12% 0.92%
Putnam VT Global Growth Fund 0.61% 0.15% 0.12% 0.88%
Putnam VT Growth and Income Fund 0.46% 0.15% 0.04% 0.65%
Putnam VT Growth Opportunities Fund 0.70% 0.15% 0.20% 1.05%
Putnam VT Health Sciences Fund 0.70% 0.15% 0.13% 0.98%
Putnam VT High Yield Fund 0.65% 0.15% 0.07% 0.87%
Putnam VT Income Fund 0.60% 0.15% 0.07% 0.82%
Putnam VT International Growth Fund 0.80% 0.15% 0.22% 1.17%
Putnam VT International Growth and Income Fund 0.80% 0.15% 0.18% 1.13%
Putnam VT International New Opportunities Fund 1.08% 0.15% 0.33% 1.56%
Putnam VT Investors Fund 0.63% 0.15% 0.08% 0.86%
Putnam VT Money Market Fund 0.41% 0.15% 0.08% 0.64%
Putnam VT New Opportunities Fund 0.54% 0.15% 0.05% 0.74%
Putnam VT New Value Fund 0.70% 0.15% 0.10% 0.95%
Putnam VT OTC & Emerging Growth Fund(3) 0.53% 0.15% 0.37% 1.05%
Putnam VT Research Fund(3) 0.54% 0.15% 0.31% 1.00%
Putnam VT Small Cap Value Fund 0.53% 0.15% 0.76% 1.44%
Putnam VT Utilities Growth and Income Fund 0.65% 0.15% 0.06% 0.86%
Putnam VT Vista Fund 0.65% 0.15% 0.10% 0.90%
Putnam VT Voyager Fund 0.53% 0.15% 0.04% 0.72%
(1) Figures shown in the table are based on the Funds' last fiscal year ended
December 31, 1999, except that the figures for the Putnam VT Small Cap
Value Fund, which commenced operations on April 30, 1999, and Putnam VT
American Government Income Fund and Putnam VT Growth Opportunities Fund,
which commenced operations on January 31, 2000 are based on estimates for
the Funds' current fiscal year. Figures shown in the table include amounts
paid through expense offset and brokerage service arrangements. See the
prospectus for the Putnam Variable Trust for more information about Rule
12b-1 fees payable under the Funds' distribution plan.
(2) Absent voluntary reductions and reimbursements, the estimated management
fees, Rule 12b-1 fees, other expenses, and total annual fund expenses for
the Putnam VT American Government Income Fund expressed as a percentage of
average net assets of the Fund would have been as follows:
Fund Management Rule 12b-1 Other Total Annual
Fee Fee Expenses Fund Expenses
Putnam VT American Government Income Fund 0.65% 0.15% 0.49% 1.29%
(3) Absent voluntary reductions and reimbursements for certain Funds (but
including amounts paid through expense offset and brokerage service
arrangements), management fees, Rule 12b-1 fees, other expenses, and total
annual Fund expenses expressed as a percentage of average net assets of the
Funds would have been as follows:
Fund Management Rule 12b-1 Other Total Annual
Fee Fee Expenses Fund Expenses
Putnam VT OTC & Emerging Growth Fund 0.70% 0.15% 0.37% 1.22%
Putnam VT Research Fund 0.65% 0.15% 0.31% 1.11%
</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 or tax penalties you may be required to
pay if you surrender your Contract.
<TABLE>
<CAPTION>
<S> <C> <C>
Sub-Account 1 Year 3 Years
Putnam American Government Income $84 $117
Putnam Asia Pacific Growth $86 $124
Putnam Diversified Income $83 $113
The George Putnam Fund of Boston $83 $115
Putnam Global Asset Allocation $82 $113
Putnam Global Growth $82 $112
Putnam Growth and Income $81 $109
Putnam Growth Opportunities $84 $117
Putnam Health Sciences $83 $115
Putnam High Yield $82 $111
Putnam Income $81 $110
Putnam International Growth $85 $121
Putnam International Growth and Income $85 $120
Putnam International New Opportunities $89 $133
Putnam Investors $82 $111
Putnam Money Market $80 $104
Putnam New Opportunities $81 $107
Putnam New Value $83 $114
Putnam OTC & Emerging Growth $84 $117
Putnam Research $83 $115
Putnam Small Cap Value $88 $129
Putnam Utilities Growth and Income $82 $111
Putnam Vista $82 $112
Putnam Voyager $80 $107
</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 for a specified period, at the end of each period.
<TABLE>
<CAPTION>
<S> <C> <C>
Sub-Account 1 Year 3 Years
Putnam American Government Income $24 $75
Putnam Asia Pacific Growth $27 $82
Putnam Diversified Income $23 $71
The George Putnam Fund of Boston $24 $72
Putnam Global Asset Allocation $23 $71
Putnam Global Growth $22 $69
Putnam Growth and Income $20 $62
Putnam Growth Opportunities $24 $75
Putnam Health Sciences $24 $72
Putnam High Yield $22 $69
Putnam Income $22 $67
Putnam International Growth $25 $78
Putnam International Growth and Income $25 $77
Putnam International New Opportunities $29 $90
Putnam Investors $22 $69
Putnam Money Market $20 $62
Putnam New Opportunities $21 $65
Putnam New Value $23 $71
Putnam OTC & Emerging Growth $24 $75
Putnam Research $24 $73
Putnam Small Cap Value $28 $87
Putnam Utilities Growth and Income $22 $69
Putnam Vista $23 $70
Putnam Voyager $21 $64
</TABLE>
Please remember that you are looking at examples and not a representation of
past or future expenses. Your actual expenses may be lower or greater than those
shown above. Similarly, your rate of return may be lower or greater than 5%,
which is not guaranteed. To reflect the contract maintenance charge in the
examples, we estimated an equivalent percentage charge, based on an assumed
average Contract size of $45,000.
<PAGE>
Financial Information
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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.
Attached as Appendix A to this prospectus is a table showing the Accumulation
Unit Values of each Variable Sub-Account since its inception. To obtain a fuller
picture of each Variable Sub-Account's finances, please refer to the Variable
Account's financial statements contained in the Statement of Additional
Information. The financial statements of Allstate New York also appear in the
Statement of Additional Information.
<PAGE>
The Contract
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CONTRACT OWNER
The Putnam Allstate Advisor is a contract between you, the Contract Owner, and
Allstate New York, a life insurance company. As the Contract Owner, you may
exercise all of the rights and privileges provided to you by the Contract. That
means it is up to you to select or change (to the extent permitted):
o the investment alternatives during the Accumulation and Payout Phases,
o the amount and timing of your purchase payments and withdrawals,
o the programs you want to use to invest or withdraw money,
o the income payment plan you want to use to receive retirement income,
o the Annuitant (either yourself or someone else) on whose life the income
payments will be based,
o the Beneficiary or Beneficiaries who will receive the benefits that the
Contract provides when the last surviving Contract Owner dies, and
o any other rights that the Contract provides.
If you die, any surviving Contract Owner or, if none, the Beneficiary will
exercise the rights and privileges provided to them by the Contract. The
Contract cannot be jointly owned by both a non-natural person and a natural
person.
You can use the Contract with or without a qualified plan. A qualified plan is a
retirement savings plan, such as an IRA or tax-sheltered annuity, that meets the
requirements of the Internal Revenue Code. Qualified plans may limit or modify
your rights and privileges under the Contract. We use the term "Qualified
Contract" to refer to a Contract issued with a qualified plan. See "Qualified
Plans" on page __.
You may change the Contract Owner at any time. Once we have received a
satisfactory written request for a change of Contract Owner, the change will
take effect as of the date you signed it. We are not liable for any payment we
make or other action we take before receiving any written request for a change
from you.
ANNUITANT
The Annuitant is the individual whose age determines the latest Payout Start
Date and whose life determines the amount and duration of income payments (other
than under Income Plans with guaranteed payments for a specified period). If the
Annuitant dies prior to the Payout Start Date, and the Contract Owner does not
name a new Annuitant, the new Annuitant will be the youngest Owner; otherwise,
the youngest beneficiary. You may designate a joint Annuitant, who is a second
person on whose life income payments depend, at the time you select an Income
Plan.
BENEFICIARY
The Beneficiary is the person who may elect to receive the death benefit or
become the new Contract Owner if the sole surviving Contract Owner dies before
the Payout Start Date. If the sole surviving Contract Owner dies after the
Payout Start Date, the Beneficiary will receive any guaranteed income payments
scheduled to continue.
You may name one or more Beneficiaries when you apply for a Contract. You may
change or add Beneficiaries at any time by writing to us before income payments
begin, unless you have designated an irrevocable Beneficiary. We will provide a
change of Beneficiary form to be signed and filed with us. Any change will be
effective at the time you sign the written notice. Until we receive your written
notice to change a Beneficiary, we are entitled to rely on the most recent
Beneficiary information in our files. We will not be liable as to any payment or
settlement made prior to receiving the written notice. Accordingly, if you wish
to change your Beneficiary, you should deliver your written notice to us
promptly.
<PAGE>
If you did not name a Beneficiary or unless otherwise provided in the
Beneficiary designation, if a Beneficiary predeceases the Contract Owner and
there are no other surviving Beneficiaries when the death benefit becomes
payable, the new Beneficiary will be:
o your spouse or, if he or she is no longer alive,
o your surviving children equally, or if you have no surviving children,
o your estate.
If more than one Beneficiary survives you, we will divide the death benefit
among your Beneficiaries according to your most recent written instructions. If
you have not given us written instructions, we will pay the death benefit in
equal amounts to the surviving Beneficiaries.
MODIFICATION OF THE CONTRACT
Only an Allstate New York officer may approve a change in or waive any provision
of the Contract. Any change or waiver must be in writing. None of our agents has
the authority to change or waive the provisions of the Contract. We may not
change the terms of the Contract without your consent, except to conform the
Contract to applicable law or changes in the law. If a provision of the Contract
is inconsistent with state law, we will follow state law.
ASSIGNMENT
We will not honor an assignment of an interest in a Contract as collateral or
security for a loan. No Beneficiary may assign benefits under the Contract until
they are due. We will not be bound by any assignment until 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 $1,000 ($500 for a Qualified
Contract). All subsequent purchase payments must be $500 or more. You may make
purchase payments at any time prior to the Payout Start Date. We may limit the
amount of any additional purchase payment to a maximum of $1,000,000. We reserve
the right to limit the availability of the investment alternatives for
additional investments. We also reserve the right to reject any application.
AUTOMATIC ADDITIONS PROGRAM
You may make subsequent purchase payments of $50 or more per month by
automatically transferring money from your bank account. Please consult with
your representative for detailed information.
ALLOCATION OF PURCHASE PAYMENTS
At the time you apply for a Contract, you must decide how to allocate your
purchase payment among the investment alternatives. The allocation you specify
on your application will be effective immediately. All allocations must be in
whole percents that total 100% or in whole dollars. You can change your
allocations by calling 1(800)390-1277.
We will allocate your purchase payments to the investment alternatives according
to your most recent instructions on file with us. Unless you notify us in
writing otherwise, we will allocate subsequent purchase payments according to
the allocation for the previous purchase payment. We will effect any change in
allocation instructions at the time we receive written notice of the change in
good order.
We will credit the initial purchase payment that accompanies your completed
application to your Contract within 2 business days after we receive the payment
at our customer service 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
customer service center.
We use the term "business day" to refer to each day Monday through Friday that
the New York Stock Exchange is open for business. We also refer to these days as
"Valuation Dates." Our business day closes when the New York Stock Exchange
closes, usually 4:00 p.m. Eastern Time. If we receive your purchase payment
after 4:00 p.m. Eastern Time on any Valuation Date, we will credit your purchase
payment using the Accumulation Unit Values computed on the next Valuation Date.
RIGHT TO CANCEL
You may cancel the Contract by returning it to us within the Cancellation
Period, which is the 10 day period after you receive the Contract (pursuant to
New York law, 60 days if you are exchanging another contract for the Contract
described in this prospectus). You may return it by delivering it or mailing it
to us. If you exercise this "Right to Cancel," the Contract terminates and we
will pay you the full amount of your purchase payments allocated to the Fixed
Account. We also will return your purchase payments allocated to the Variable
Account after an adjustment, to the extent state or federal 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.
Thereafter, your Contract Value at any time during the Accumulation Phase is
equal to the sum of the value of your Accumulation Units in the Variable
Sub-Accounts you have selected, plus the value of your investment in the Fixed
Account Options.
ACCUMULATION UNITS
To determine the number of Accumulation Units of each Variable Sub-Account to
allocate to your Contract, we divide (i) the amount of the purchase payment 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 Fund in which the Variable Sub-Account
invests, and
o the deduction of amounts reflecting the mortality and expense risk charge
and any provision for taxes that have accrued since we last calculated the
Accumulation Unit Value.
We determine contract maintenance charges, withdrawal charges, and transfer fees
separately for each Contract. They do not affect the Accumulation Unit Value.
Instead, we obtain payment of those charges and fees by redeeming Accumulation
Units. For details on how we compute Accumulation Unit Value, please refer to
the Statement of Additional Information.
We determine a separate Accumulation Unit Value for each Variable Sub-Account on
each Valuation Date.
You should refer to the prospectus for the Putnam Variable Trust that
accompanies this prospectus for a description of how the assets of each Fund 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 24 Variable Sub-Accounts. Each
Variable Sub-Account invests in the shares of a corresponding Fund. Each Fund
has its own investment objective(s) and policies. We briefly describe the Funds
below.
For more complete information about each Fund, including expenses and risks
associated with the Fund, please refer to the accompanying prospectus for the
Putnam Variable Trust. You should carefully review the prospectus for the Funds
before allocating amounts to the Variable Sub-Accounts. Putnam Investment
Management, Inc. ("Putnam Management") serves as the investment adviser to each
Fund.
<TABLE>
<CAPTION>
Fund: Each Fund Seeks:
<S> <C>
Putnam VT American Government Income Fund High current income with preservation of capital as a
secondary objective
Putnam VT Asia Pacific Growth Fund Capital appreciation
Putnam VT Diversified Income Fund High current income consistent with capital preservation
Putnam VT The George Putnam Fund of Boston To provide a balanced investment composed of a
well-diversified portfolio of stocks and bonds that will
produce both capital growth and current income
Putnam VT Global Asset Allocation Fund A high level of long-term total return consistent
with preservation of capital
Putnam VT Global Growth Fund Capital appreciation
Putnam VT Growth and Income Fund Capital growth and current income
Putnam VT Growth Opportunities Fund Capital appreciation
Putnam VT Health Sciences Fund Capital appreciation
Putnam VT High Yield Fund High current income; capital growth is a secondary objective
when consistent with high current income
Putnam VT Income Fund Current income consistent with preservation of capital
Putnam VT International Growth Fund Capital growth
Putnam VT International Growth and Income Fund Capital growth; current income is a secondary objective
Putnam VT International New Opportunities Fund Long-term capital appreciation
Putnam VT Investors Fund Long-term growth of capital and any increased income that
results from this growth
Putnam VT Money Market Fund As high a rate of current income as Putnam Management
believes is consistent with preservation of capital
and maintenance of liquidity
Putnam VT New Opportunities Fund Long-term capital appreciation
Putnam VT New Value Fund Long-term capital appreciation
Putnam VT OTC & Emerging Growth Fund Capital appreciation
Putnam VT Research Fund Capital appreciation
Putnam VT Small Cap Value Fund Capital appreciation
Putnam VT Utilities Growth and Income Fund Capital growth and current income
Putnam VT Vista Fund Capital appreciation
Putnam VT Voyager Fund Capital appreciation
</TABLE>
Amounts you allocate to Variable Sub-Accounts may grow in value, decline in
value, or grow less than you expect, depending on the investment performance of
the Funds in which those Variable Sub-Accounts invest. You bear the investment
risk that the Funds might not meet their investment objectives. Shares of the
Funds are not deposits, or obligations of, or guaranteed or endorsed by any bank
and are not insured by the Federal Deposit Insurance Corporation, the Federal
Reserve Board or any other agency.
<PAGE>
Investment Alternatives: The Fixed Account Options
- -------------------------------------------------------------------------------
You may allocate all or a portion of your purchase payments to the Fixed
Account. You may choose from among 2 Fixed Account Options, including the
7-to-12 Month Dollar Cost Averaging Option and the Standard Fixed Account
Option. We will credit a minimum annual interest rate of 3% to money you
allocate to either of the Fixed Account Options. Please consult with your
representative for current information. The Fixed Account supports our insurance
and annuity obligations. The Fixed Account consists of our general assets other
than those in segregated asset accounts. We have sole discretion to invest the
assets of the Fixed Account, subject to applicable law. Any money you allocate
to a Fixed Account Option does not entitle you to share in the investment
experience of the Fixed Account.
DOLLAR COST AVERAGING FIXED ACCOUNT OPTION
You may establish a Dollar Cost Averaging Program, as described on page __, by
allocating purchase payments to the Fixed Account for up to 12 months (the
"7-to-12 Month Dollar Cost Averaging Option"). Your purchase payments will earn
interest for the period you select at the current rates in effect at the time of
allocation. Rates may differ from those available for the Standard Fixed Account
Option described below.
You must transfer all of your money out of the 7-to-12 Month Dollar Cost
Averaging Option to other investment alternatives in equal monthly installments.
At the end of the 12 month transfer period, we will transfer any remaining
amounts in the 7-to-12 Month Dollar Cost Averaging Option to the Putnam Money
Market Variable Sub-Account unless you request a different investment
alternative. Transfers out of the 7-to-12 Month Dollar Cost Averaging Option do
not count towards the 12 transfers you can make without paying a transfer fee.
You may not transfer money from other investment alternatives to the 7-to-12
Month Dollar Cost Averaging Option.
STANDARD FIXED ACCOUNT OPTION
Each payment or transfer allocated to the Standard Fixed Account Option earns
interest at the current rate in effect at the time of allocation. We guarantee
that rate for a period of years we call Guarantee Periods. We are currently
offering Guarantee Periods of 1 year in length. In the future we may offer
Guarantee Periods of different lengths or stop offering some Guarantee Periods.
You select a Guarantee Period for each purchase or transfer. After the initial
Guarantee Period, we will guarantee a renewal rate.
Allstate New York reserves the right to delete or add Fixed Account Options.
Investment Alternatives: Transfers
- ------------------------------------------------------------------------------
TRANSFERS DURING THE ACCUMULATION PHASE
During the Accumulation Phase, you may transfer Contract Value among the
investment alternatives. We do not permit transfers into the 7-to-12 Month
Dollar Cost Averaging Option. You may request transfers in writing on a form
that we provide or by telephone according to the procedure described below.
You may make 12 transfers per Contract Year without charge. A transfer fee equal
to 0.50% of the amount transferred up to a maximum charge of $25 applies to each
transfer after the 12th transfer in any Contract Year.
The minimum amount that you may transfer from the Standard Fixed Account Option
or a Variable Sub-Account is $100 or the total remaining balance in the Standard
Fixed Account Option or the Variable Sub-Account, if less. These limitations do
not apply to the 7-to-12-Month Dollar Cost Averaging Option.
The most you can transfer from the Standard Fixed Account Option during any
Contract Year is the greater of (i) 30% of the Standard Fixed Account Option
balance as of the last Contract Anniversary or (ii) the greatest dollar amount
of any prior transfer from the Standard Fixed Account Option. This limitation
does not apply to the Dollar Cost Averaging Program. Also, if the interest rate
on any renewed Guarantee Period is at least one percentage point less than the
previous interest rate, you may transfer up to 100% of the monies receiving that
reduced rate within 60 days of the notification of the interest rate decrease.
We will process transfer requests that we receive before 4:00 p.m. Eastern Time
on any Valuation Date using the Accumulation Unit Values for that Date. We will
process requests completed after 4:00 p.m. Eastern Time on any Valuation Date
using the Accumulation Unit Values for the next Valuation Date. The Contract
permits us to defer transfers from the Fixed Account Options for up to 6 months
from the date we receive your request. If we decide to postpone transfers from
either Fixed Account Option for 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.
We reserve the right to waive any transfer restrictions.
<PAGE>
TRANSFERS DURING THE PAYOUT PHASE
During the Payout Phase, you may make transfers among the Variable Sub-Accounts
so as to change the relative weighting of the Variable Sub-Accounts on which
your variable income payments will be based. You may not convert any portion of
your fixed income payments into variable income payments.
You may not make any transfers for the first 6 months after the Payout Start
Date. Thereafter, you may make transfers among the Variable Sub-Accounts or make
transfers from the Variable Sub-Accounts to increase the proportion of your
income payments consisting of fixed income payments if Income Plan 3, described
below, is in effect. Your transfers must be at least 6 months apart.
TELEPHONE TRANSFERS
You may make transfers by telephone by calling 1(800)390-1277. The cut off time
for telephone transfer requests is 4:00 p.m. Eastern Time. In the event that the
New York Stock Exchange closes early, i.e., before 4:00 p.m. Eastern Time, or in
the event that the Exchange closes early for a period of time but then reopens
for trading on the same day, we will process telephone transfer requests as of
the close of the Exchange on that particular day. We will not accept telephone
requests received from you at any telephone number other than the number that
appears in this paragraph or received after the close of trading on the
Exchange. If you own the Contract with a joint Contract Owner, unless we receive
contrary instructions, we will accept instructions from either you or the other
Contract Owner.
We use procedures that we believe provide reasonable assurance that the
telephone transfers are genuine. For example, we tape telephone conversations
with persons purporting to authorize transfers and request identifying
information. Accordingly, we disclaim any liability for losses resulting from
allegedly unauthorized telephone transfers. However, if we do not take
reasonable steps to help ensure that a telephone authorization is valid, we may
be liable for such losses.
EXCESSIVE TRADING LIMITS
We reserve the right to limit transfers in any Contract Year, or to refuse any
transfer request for a Contract Owner or certain Contract Owners, if:
o we believe, in our sole discretion, that excessive trading by such
Contract Owner or Owners, or a specific transfer request or group of
transfer requests, may have a detrimental effect on the Accumulation
Unit Values of any Variable Sub-Account or the share prices of the
corresponding Funds or would be to the disadvantage of other Contract
Owners; or
o we are informed by one or more of the corresponding Funds that they
intend to restrict the purchase or redemption of Fund shares because of
excessive trading or because they believe that a specific transfer or
group of transfers would have a detrimental effect on the prices of
Fund shares.
We may apply the restrictions in any manner reasonably designed to prevent
transfers that we consider disadvantageous to other Contract Owners.
DOLLAR COST AVERAGING PROGRAM
You may automatically transfer a set amount from any Variable Sub-Account or
Fixed Account Option to any of the other Variable Sub-Accounts through our
Dollar Cost Averaging Program. The Program is available only during the
Accumulation Phase.
We will not charge a transfer fee for transfers made under this Program, nor
will such transfers count against the 12 transfers you can make each Contract
Year without paying a transfer fee.
The theory of dollar cost averaging is that if purchases of equal dollar amounts
are made at fluctuating prices, the aggregate average cost per unit will be less
than the average of the unit prices on the same purchase dates. However,
participation in this Program does not assure you of a greater profit from your
purchases under the Program nor will it prevent or necessarily reduce losses in
a declining market.
AUTOMATIC FUND REBALANCING PROGRAM
Once you have allocated your money among the Variable Sub-Accounts, the
performance of each Sub-Account may cause a shift in the percentage you
allocated to each Sub-Account. If you select our Automatic Fund Rebalancing
Program, we will automatically rebalance the Contract Value in each Variable
Sub-Account and return it to the desired percentage allocations. Money you
allocate to the Fixed Account will not be included in the rebalancing.
We will rebalance your account quarterly, semi-annually, or annually. We will
measure these periods according to your instructions. We will transfer amounts
among the Variable Sub-Accounts to achieve the percentage allocations you
specify. You can change your allocations at any time by contacting us in writing
or by telephone. The new allocation will be effective with the first rebalancing
that occurs after we receive your written or telephone request. We are not
responsible for rebalancing that occurs prior to receipt of proper notice of
your request.
<PAGE>
Example:
Assume that you want your initial purchase payment split among 2
Variable Sub-Accounts. You want 40% to be in the Putnam Income Variable
Sub-Account and 60% to be in the Putnam Global Growth Variable
Sub-Account. Over the next 2 months the bond market does very well
while the stock market performs poorly. At the end of the first
quarter, the Putnam Income Variable Sub-Account now represents 50% of
your holdings because of its increase in value. If you choose to have
your holdings rebalanced quarterly, on the first day of the next
quarter we would sell some of your units in the Putnam Income Variable
Sub-Account and use the money to buy more units in the Putnam Global
Growth Variable Sub-Account so that the percentage allocations would
again be 40% and 60% respectively.
The Automatic Fund Rebalancing Program is available only during the Accumulation
Phase. The transfers made under the program do not count towards the 12
transfers you can make without paying a transfer fee, and are not subject to a
transfer fee. We may sometimes refer to this Program as the "Putnam Automatic
Rebalancing Program."
Fund rebalancing is consistent with maintaining your allocation of investments
among market segments, although it is accomplished by reducing your Contract
Value allocated to the better performing segments.
Expenses
- -----------------------------------------------------------------------------
As a Contract Owner, you will bear, directly or indirectly, the charges and
expenses described below.
CONTRACT MAINTENANCE CHARGE
During the Accumulation Phase, on each Contract Anniversary, we will deduct a
$30 contract maintenance charge from your assets invested in the Putnam Money
Market Variable Sub-Account. If there are insufficient assets in that Variable
Sub-Account, we will deduct the charge proportionally from the other Variable
Sub-Accounts. We also will deduct this charge if you withdraw your entire
Contract Value, unless your Contract qualifies for a waiver. During the Payout
Phase, we will deduct the charge proportionately from each variable income
payment.
The charge is to compensate us for the cost of administering the Contracts and
the Variable Account. Maintenance costs include expenses we incur in collecting
purchase payments; keeping records; processing death claims, cash withdrawals,
and policy changes; proxy statements; calculating Accumulation Unit Values and
income payments; and issuing reports to Contract Owners and regulatory agencies.
We cannot increase the charge. We will waive this charge if:
o your total Contract Value is $50,000 or more on a Contract Anniversary or
on the Payout Start Date, or
o all money is allocated to the Fixed Account options on the Contract
Anniversary, or
o all income payments are fixed income payments.
In addition, we reserve the right to waive this charge for all Contracts.
MORTALITY AND EXPENSE RISK CHARGE
We deduct a mortality and expense risk charge daily at an annual rate of 1.25%
of the average daily net assets you have invested in the Variable Sub-Accounts.
The mortality and expense risk charge is for all the insurance benefits
available with your Contract (including our guarantee of annuity rates and the
death benefits), for certain expenses of the Contract, and for assuming the risk
(expense risk) that the current charges will be sufficient in the future to
cover the cost of administering the Contract. If the charges under the Contract
are not sufficient, then Allstate New York will bear the loss.
We guarantee the mortality and expense risk charge and we cannot increase it. We
assess the mortality and expense risk charge during both the Accumulation Phase
and the Payout Phase.
<PAGE>
TRANSFER FEE
We impose a fee upon transfers in excess of 12 during any Contract Year. The fee
is equal to 0.50% of the dollar amount transferred up to a maximum charge of
$25. We will not charge a transfer fee on transfers that are part of a Dollar
Cost Averaging Program or Automatic Fund Rebalancing Program.
WITHDRAWAL CHARGE
We may assess a withdrawal charge of up to 7% of the purchase payment(s) you
withdraw. The charge declines to 0% after 7 complete years from the date we
received the purchase payment being withdrawn. A schedule showing how the charge
declines appears on page __. During each Contract Year, you can withdraw up to
the greater of earnings not previously withdrawn or 15% of your total purchase
payments without paying the charge. Unused portions of this 15% "Preferred
Withdrawal Amount" are not carried forward to future Contract Years.
We will deduct withdrawal charges, if applicable, from the amount paid. For
purposes of the withdrawal charge, we will treat withdrawals as coming from the
oldest purchase payments first. However, for federal income tax purposes, please
note that withdrawals are considered to have come first from earnings in the
Contract, which means you pay taxes on the earnings portion of your withdrawal.
We do not apply a withdrawal charge in the following situations:
o on the Payout Start Date (a withdrawal charge may apply if you elect to
receive income payments for a specified period of less than 120 months);
o the death of the Contract Owner or Annuitant (unless the Settlement Value
is used); or
o withdrawals taken to satisfy IRS minimum distribution rules for the
Contract.
We use the amounts obtained from the withdrawal charge to pay sales commissions
and other promotional or distribution expenses associated with marketing the
Contracts. To the extent that the withdrawal charge does not cover all sales
commissions and other promotional or distribution expenses, we may use any of
our corporate assets, including potential profit which may arise from the
mortality and expense risk charge or any other charges or fee described above,
to make up any difference.
Withdrawals also may be subject to tax penalties or income tax. You should
consult your own tax counsel or other tax advisers regarding any withdrawals.
PREMIUM TAXES
Currently, we do not make deductions for premium taxes under the Contract
because New York does not charge premium taxes on annuities. 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.
OTHER EXPENSES
Each Fund deducts advisory fees and other expenses from its assets. You
indirectly bear the charges and expenses of the Fund whose shares are held by
the Variable Sub-Accounts. These fees and expenses are described in the
accompanying prospectus for Putnam Variable Trust. For a summary of current
estimates of those charges and expenses, see page __. We may receive
compensation from the Funds' investment adviser, distributor, or their
affiliates for administrative services we provide to the Funds.
<PAGE>
Access to Your Money
- ------------------------------------------------------------------------------
You can withdraw some or all of your Contract Value at any time prior to the
Payout Start Date. Withdrawals are also available under limited circumstances on
or after the Payout Start Date. See "Income Plans" on page __.
The amount payable upon withdrawal is the Contract Value next computed after we
receive the request for a withdrawal at our customer service center, 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 Options.
To complete a partial withdrawal from the Variable Account, we will cancel
Accumulation Units in an amount equal to the withdrawal and any applicable
withdrawal charge and premium taxes.
You must name the investment alternative from which you are taking the
withdrawal. If none is named, then the withdrawal request is incomplete and
cannot be honored.
Withdrawals may be subject to income tax and a 10% penalty tax, as described
below.
In general, you must withdraw at least $50 at a time. If you request a total
withdrawal, we may require that you return your Contract to us. Your Contract
will terminate if you withdraw all of your Contract Value. We will, however, ask
you to confirm your withdrawal request before terminating your Contract. If we
terminate your Contract, we will distribute to you its Contract Value, less
withdrawal and other charges and taxes.
POSTPONEMENT OF PAYMENTS
We may postpone the payment of any amounts due from the Variable Account under
the Contract if:
1. the New York Stock Exchange is closed for other than usual weekends or
holidays, or trading on the Exchange is otherwise restricted,
2. an emergency exists as defined by the SEC, or
3. the SEC permits delay for your protection.
In addition, we may delay payments or transfers from the Fixed Account Options
for up to 6 months or shorter period if required by law. If we delay payment or
transfer for 10 days or more, we will pay interest as required by law.
SYSTEMATIC WITHDRAWAL PROGRAM
You may choose to receive systematic withdrawal payments on a monthly,
quarterly, semi-annual, or annual basis at any time prior to the Payout Start
Date. Please consult your representative or call us at 1(800)390-1277 for more
information. Depending on fluctuations in the net asset value of the Variable
Sub-Accounts and the value of the Fixed Account Options, systematic withdrawals
may reduce or even exhaust the Contract Value. Income taxes may apply to
systematic withdrawals. Please consult your tax adviser before taking any
withdrawal.
<PAGE>
Income Payments
- ------------------------------------------------------------------------------
PAYOUT START DATE
The Payout Start Date is the day that we apply your money to an Income Plan. The
Payout Start Date must be:
o at least 30 days after the Issue Date; and
o no later than the 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
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, named at the time the plan was selected, is
alive. If both the Annuitant and the joint Annuitant die before we have made all
of the guaranteed income payments, we will continue to pay the remainder of the
guaranteed income payments as required by the Contract.
Income Plan 3 - Guaranteed Payments for a Specified Period (5 Years to 30
Years). Under this plan, we make periodic income payments for the period you
have chosen. These payments do not depend on the Annuitant's life. Income
payments for less than 120 months may be subject to a withdrawal charge. We will
deduct the mortality and expense risk charge from the assets of the Variable
Sub-Accounts supporting this Plan even though we may not bear any mortality
risk.
The length of any guaranteed payment period under your selected Income Plan
generally will affect the dollar amount of each income payment. As a general
rule, longer guarantee periods result in lower income payments, all other things
being equal. For example, if you choose an Income Plan with payments that depend
on the life of the Annuitant but with no minimum specified period for guaranteed
payments, the income payments generally will be greater than the income payments
made under the same Income Plan with a minimum specified period for guaranteed
payments.
If you choose Income Plan 1 or 2, or, if available, another Income Plan with
payments that continue for the life of the Annuitant or joint Annuitant, we may
require proof of age and sex of the Annuitant or joint Annuitant before starting
income payments, and proof that the Annuitant or joint Annuitant are alive
before we make each payment. Please note that under such Income Plans, if you
elect to take no minimum guaranteed payments, it is possible that the payee
could receive only 1 income payment if the Annuitant and any joint Annuitant
both die before the second income payment, or only 2 income payments if they die
before the third income payment, and so on.
Generally, you may not make withdrawals after the Payout Start Date. One
exception to this rule applies if you are receiving variable income payments
that do not depend on the life of the Annuitant (such as under Income Plan 3).
In that case you may terminate all or part of 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 associated with the amount withdrawn.
The minimum amount you may withdraw under this feature is $1,000. A withdrawal
charge may apply. We deduct applicable premium taxes from the Contract Value at
the Payout Start Date.
<PAGE>
We may make other Income Plans available. You may obtain information about them
by writing or calling us.
You may apply your Contract Value to an Income Plan. You must apply at least the
Contract Value in the Fixed Account on the Payout Start Date to fixed income
payments. If you wish to apply any portion of your Fixed Account balance to
provide variable income payments, you should plan ahead and transfer that amount
to the Variable Sub-Accounts prior to the Payout Start Date. If you do not tell
us how to allocate your Contract Value among fixed and variable income payments,
we will apply your Contract Value in the Variable Account to variable income
payments and your Contract Value in the Fixed Account to fixed income payments.
We will apply your Contract Value, less applicable taxes, to your Income Plan on
the Payout Start Date. We can make income payments in monthly, quarterly,
semi-annual or annual installments, as you select. If we have received no
purchase payments for 2 years, and your Contract Value is less than $2,000, or
not enough to provide an initial payment of at least $20:
o we may pay you the Contract Value, less any applicable taxes, in a lump sum
instead of the periodic payments you have chosen, or
o we may reduce the frequency of your payments so that each payment will be
at least $20.
VARIABLE INCOME PAYMENTS
The amount of your variable income payments depends upon the investment results
of the Variable Sub-Accounts you select, the premium taxes you pay, the age and
sex of the Annuitant, and the Income Plan you choose. We guarantee that the
payments will not be affected by (a) actual mortality experience and (b) the
amount of our administration expenses.
We cannot predict the total amount of your variable income payments. Your
variable income payments may be more or less than your total purchase payments
because (a) variable income payments vary with the investment results of the
underlying Funds; and (b) the Annuitant could live longer or shorter than we
expect based on the tables we use.
In calculating the amount of the periodic payments in the annuity tables in the
Contract, we assumed an annual investment rate of 3%. If the actual net
investment return of the Variable Sub-Accounts you choose is less than this
assumed investment rate, then the dollar amount of your variable income payments
will decrease. The dollar amount of your variable income payments will increase,
however, if the actual net investment return exceeds the assumed investment
rate. The dollar amount of the variable income payments stays level if the net
investment return equals the assumed investment rate. Please refer to the
Statement of Additional Information for more detailed information as to how we
determine variable income payments.
FIXED INCOME PAYMENTS
We guarantee income payment amounts derived from either Fixed Account Option for
the duration of the Income Plan. We calculate the fixed income payments by:
1. deducting any applicable premium tax; and
2. applying the resulting amount to the greater of (a) the appropriate value
from the income payment table in your Contract or (b) such other value as we are
offering at that time.
We may defer making fixed income payments for a period of up to 6 months or
whatever shorter time state law may require. If we defer payments for 10 days or
more, we will pay interest as required by law from the date we receive the
withdrawal request to the date we make payment.
CERTAIN EMPLOYEE BENEFIT PLANS
The Contracts offered by this prospectus contain income payment tables that
provide for different payments to men and women of the same age. We reserve the
right to use income payment tables that do not distinguish on the basis of sex
to the extent permitted by law. In certain employment-related situations,
employers are required by law to use the same income payment tables for men and
women. Accordingly, if the Contract is to be used in connection with an
employment-related retirement or benefit plan, you should consult with legal
counsel as to whether the purchase of a Contract is appropriate.
<PAGE>
Death Benefits
- -------------------------------------------------------------------------------
We will pay a death benefit if, prior to the Payout Start Date:
1. any Contract Owner dies, or
2. the Annuitant dies.
We will pay the death benefit to the new Contract Owner as determined
immediately after the death. The new Contract Owner would be a surviving
Contract Owner(s) or, if none, the Beneficiary(ies). In the case of the death of
the Annuitant, we will pay the death benefit to the current Contract Owner.
DEATH BENEFIT AMOUNT
Prior to the Payout Start Date, the death benefit is equal to the greatest of
the following death benefit alternatives:
1. the Contract Value as of the date we determine the death benefit, or
2. the sum of all purchase payments made less an adjustment for withdrawals
(see "Withdrawal Adjustment" below), or
3. the most recent Maximum Anniversary Value prior to the date we determine
the death benefit (see "Maximum Anniversary Value" below).
We will determine the value of the death benefit as of the end of the Valuation
Date on which we receive a complete request for payment of the death benefit. If
we receive a request after 4:00 p.m. Eastern Time on a Valuation Date, we will
process the request as of the end of the following Valuation Date. A request for
payment of the death benefit must include Due Proof of Death. We will accept the
following documentation as "Due Proof of Death":
o a certified copy of a death certificate,
o a certified copy of a decree of a court of competent jurisdiction as to the
finding of death, or
o other documentation as we may accept in our sole discretion.
Withdrawal Adjustment. The withdrawal adjustment is equal to (a) divided by (b),
with the result multiplied by (c), where:
(a) = the withdrawal amount,
(b) = the Contract Value immediately prior to the withdrawal, and
(c) = the value of the applicable death benefit alternative immediately prior
to the withdrawal.
See Appendix B for an example of a withdrawal adjustment.
Maximum Anniversary Value. On the Issue Date, the Maximum Anniversary Value is
equal to the initial purchase payment. After the Issue Date, we recalculate the
Maximum Anniversary Value when a purchase payment or withdrawal is made or on a
Contract Anniversary as follows:
1. For purchase payments, the Maximum Anniversary Value is equal to the
most recently calculated Maximum Anniversary Value plus the purchase
payment.
2. For withdrawals, the Maximum Anniversary Value is equal to the most
recently calculated Maximum Anniversary Value reduced by a withdrawal
adjustment, as defined above.
3. On each Contract Anniversary, the Maximum Anniversary Value is equal
to the greater of the Contract Value or the most recently calculated
Maximum Anniversary Value.
In the absence of any withdrawals or purchase payments, the Maximum Anniversary
Value will be the greatest of all anniversary Contract Values on or prior to the
date we calculate the death benefit.
<PAGE>
We will recalculate the Maximum Anniversary Value until the first Contract
Anniversary after the 80th birthday of the oldest Contract Owner or, if no
Contract Owner is a living individual, the Annuitant. After that date, we will
recalculate the Maximum Anniversary Value only for purchase payments and
withdrawals. The Maximum Anniversary Value will never be greater than the
maximum death benefit allowed by any applicable state non-forfeiture laws.
DEATH BENEFIT PAYMENTS
Death of Contract Owner. Within 180 days of the date of your death, the new
Contract Owner may elect to:
1. receive the death benefit in a lump sum, or
2. apply an amount equal to the death benefit to one of the available Income
Plans described above. The Payout Start Date must be within one year of the
date of your death. Income payments must be:
(a) over the life of the new Contract Owner,
(b) for a guaranteed number of payments from 5 to 30 years but not to
exceed the life expectancy of new Contract Owner, or
(c) over the life of the new Contract Owner with a guaranteed number of
payments from 5 to 30 years but not to exceed the life expectancy of the
new Contract Owner.
Otherwise, the new Contract Owner will receive the Settlement Value. The
"Settlement Value" is the Contract Value, less any applicable withdrawal charge,
contract maintenance charge, and premium tax. We will calculate the Settlement
Value as of the end of the Valuation Date coinciding with the requested
distribution date for payment or on the mandatory distribution date of 5 years
after the date of your death, whichever is earlier. If we receive a request
after 4:00 p.m. Eastern Time on a Valuation Date, we will process the request as
of the end of the following Valuation Date. We are currently waiving the 180 day
limit, but we reserve the right to enforce the limitation in the future.
<PAGE>
In any event, the entire value of the Contract must be distributed within 5
years after the date of death unless an Income Plan is elected or a surviving
spouse continues the Contract in accordance with the provisions described below.
If the new Contract Owner is a natural person, the new Contract Owner may elect
one of the options listed above. The new Contract Owner may make a single
withdrawal of any amount within 1 year of the date of death without incurring a
withdrawal charge. If the new Contract Owner is your spouse, then he or she may
elect one of the options listed above or may continue the Contract in the
Accumulation Phase as if the death had not occurred. On the date the Contract is
continued, the Contract Value will equal the amount of the death benefit as
determined as of the Valuation Date on which we received Due Proof of Death (the
next Valuation Date if we receive Due Proof of Death after 4:00 p.m. Eastern
Time). The Contract may only be continued once. If the surviving spouse
continues the Contract in the Accumulation Phase, the surviving spouse may make
a single withdrawal of any amount within 1 year of the date of death without
incurring a withdrawal charge. Prior to the Payout Start Date, the death benefit
or the continued Contract will be the greater of:
o the sum of all purchase payments reduced by a withdrawal adjustment, as
defined under the "Death Benefit Amount" section; or
o the Contract Value on the date we determine the death benefit; or
o the Maximum Anniversary Value as defined in the "Death Benefit Amount"
section, with the following changes:
o "Issue Date" is replaced by the date the Contract is continued,
o "Initial Purchase Payment" is replaced with the death benefit as
described at the end of the Valuation Period during which we received Due
Proof of Death.
If the surviving spouse is under age 59 1/2 , a 10% penalty tax may apply to
withdrawals under the Contract.
If the new Contract Owner is a corporation, trust, or other non-natural person,
then the new Contract Owner may elect, within 180 days of your death, to receive
the death benefit in lump sum or may elect to receive the Settlement Value in a
lump sum within 5 years of death. We are currently waiving the 180 day limit,
but we reserve the right to enforce the limitation in the future.
Death of Annuitant. If the Annuitant who is not also the Contract Owner dies
prior to the Payout Start Date, the Contract Owner must elect one of the
applicable options described below.
If the Contract Owner is a natural person, the Contract Owner may elect to
continue the Contract as if the death had not occurred, or, if we receive Due
Proof of Death within 180 days of the date of the Annuitant's death, the
Contract Owner may choose to:
1. receive the death benefit in a lump sum; or
2. apply the death benefit to an Income Plan that must begin within 1 year of
the date of death.
If the Contract Owner elects to continue the Contract or to apply the death
benefit to an Income Plan, the new Annuitant will be the youngest Contract
Owner, unless the Contract Owner names a different Annuitant.
If the Contract Owner is a non-natural person, the non-natural Contract Owner
may elect, within 180 days of the Annuitant's date of death, to receive the
death benefit in a lump sum or may elect to receive the Settlement Value payable
in a lump sum within 5 years of the Annuitant's date of death. If the
non-natural Contract Owner does not make one of the above described elections,
the Settlement Value must be withdrawn by the non-natural Contract Owner on or
before the mandatory distribution date 5 years after the Annuitant's death. We
are currently waiving the 180 day limit, but we reserve the right to enforce the
limitation in the future.
<PAGE>
More Information
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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 located in Farmingville, New York. Our customer service center is located in
Northbrook, Illinois (mailing address: P.O. Box 94038, Palatine, Illinois,
60094-4038; overnight mail: 3100 Sanders Road, Suite J4A, Northbrook, Illinois,
60062).
Allstate New York is a wholly owned subsidiary of Allstate Life Insurance
Company ("Allstate Life"), a stock life insurance company incorporated under the
laws of the State of Illinois. Allstate Life is a wholly owned subsidiary of
Allstate Insurance Company, a stock property-liability insurance company
incorporated under the laws of Illinois. With the exception of directors'
qualifying shares, all of the outstanding capital stock of Allstate Insurance
Company is owned by The Allstate Corporation.
Several independent rating agencies regularly evaluate life insurers'
claims-paying ability, quality of investments, and overall stability. A.M. Best
Company assigns Allstate New York the financial performance rating of A+(g).
Standard & Poor's Insurance Rating Services assigns an AA+ (Very Strong)
financial strength rating and Moody's assigns an Aa2 (Excellent) financial
strength rating to Allstate New York. We may from time to time advertise these
ratings in our sales literature.
THE VARIABLE ACCOUNT
Allstate New York established the Allstate Life of New York Separate Account A
on December 15, 1995. We have registered the Variable Account with the SEC as a
unit investment trust. The SEC does not supervise the management of the Variable
Account or Allstate New York.
We own the assets of the Variable Account. The Variable Account is a segregated
asset account under New York law. That means we account for the Variable
Account's income, gains and losses separately from the results of our other
operations. It also means that only the assets of the Variable Account that are
in excess of the reserves and other Contract liabilities with respect to the
Variable Account are subject to liabilities relating to our other operations.
Our obligations arising under the Contracts are general corporate obligations of
Allstate New York.
The Variable Account consists of multiple Variable Sub-Accounts, 24 of which are
available through the Contracts. Each Variable Sub-Account invests in a
corresponding Fund. We may add new Variable Sub-Accounts or eliminate one or
more of them, if we believe marketing, tax, or investment conditions so warrant.
We do not guarantee the investment performance of the Variable Account, its
Sub-Accounts or the Funds. We may use the Variable Account to fund our other
annuity contracts. We will account separately for each type of annuity contract
funded by the Variable Account.
<PAGE>
THE FUNDS
Dividends and Capital Gain Distributions. We automatically reinvest all
dividends and capital gains distributions from the Funds in shares of the
distributing Fund at their net asset value.
Voting Privileges. As a general matter, you do not have a direct right to vote
the shares of the Funds held by the Variable Sub-Accounts to which you have
allocated your Contract Value. Under current law, however, you are entitled to
give us instructions on how to vote those shares on certain matters. Based on
our present view of the law, we will vote the shares of the Funds that we hold
directly or indirectly through the Variable Account in accordance with
instructions that we receive from Contract Owners entitled to give such
instructions. We will apply voting instructions to abstain on any item to be
voted upon on a pro rata basis to reduce the votes eligible to be cast.
As a general rule, before the Payout Start Date, the Contract Owner or anyone
with a voting interest is the person entitled to give voting instructions. The
number of shares that a person has a right to instruct will be determined by
dividing the Contract Value allocated to the applicable Variable Sub-Account by
the net asset value per share of the corresponding Fund as of the record date of
the meeting. After the Payout Start Date, the person receiving income payments
has the voting interest. The payee's number of votes will be determined by
dividing the reserve for such Contract allocated to the applicable Sub-Account
by the net asset value per share of the corresponding Fund as of the record date
of the meeting. After the Payout Start Date, the votes decrease as income
payments are made and as the reserves for the Contract decrease.
We will vote shares attributable to Contracts for which we have not received
instructions, as well as shares attributable to us, in the same proportion as we
vote shares for which we have received instructions, unless we determine that we
may vote such shares in our own discretion.
We reserve the right to vote Fund shares as we see fit without regard to voting
instructions to the extent permitted by law. If we disregard voting
instructions, we will include a summary of that action and our reasons for that
action in the next semi-annual financial report to you.
Changes in Funds. We reserve the right, subject to any applicable law, to make
additions to, deletions from or substitutions for the Fund shares held by any
Variable Sub-Account. If the shares of any of the Funds are no longer available
for investment by the Variable Account or if, in our judgment, further
investment in such shares is no longer desirable in view of the purposes of the
Contract, we may eliminate that Fund and substitute shares of another eligible
investment fund. Any substitution of securities will comply with the
requirements of the Investment Company Act of 1940. We also may add new Variable
Sub-Accounts that invest in additional mutual funds. We will notify you in
advance of any change.
<PAGE>
Conflicts of Interest. Certain of the Funds sell their shares to separate
accounts underlying both variable life insurance and variable annuity contracts.
It is conceivable that in the future it may be unfavorable for variable life
insurance separate accounts and variable annuity separate accounts to invest in
the same Fund. The board of trustees of these Funds monitor for possible
conflicts among separate accounts buying shares of the Funds. Conflicts could
develop for a variety of reasons. For example, differences in treatment under
tax and other laws or the failure by a separate account to comply with such laws
could cause a conflict. To eliminate a conflict, a Fund's board of trustees may
require a separate account to withdraw its participation in a Fund. A Fund's net
asset value could decrease if it had to sell investment securities to pay
redemption proceeds to a separate account withdrawing because of a conflict.
THE CONTRACT
Distribution. Allstate Distributors, L.L.C.* ("Allstate Distributors"), a
broker-dealer jointly owned by Allstate Life and Putnam Investments, located at
3100 Sanders Road, Northbrook, IL 60062-7154, serves as principal underwriter of
the Contracts. Allstate Distributors is a registered broker dealer under the
Securities and Exchange Act of 1934, as amended ("Exchange Act"), and is a
member of the National Association of Securities Dealers, Inc. Contracts are
sold by registered representatives of unaffiliated broker-dealers or bank
employees who are licensed insurance agents appointed by Allstate New York,
either individually or through an incorporated insurance agency and have entered
into a selling agreement with Allstate Distributors to sell the Contract.
We will pay commissions to broker-dealers who sell the Contracts. Commissions
paid may vary, but we estimate that the total commission paid on all Contract
sales will not exceed 6% of all purchase payments. From time to time, we may pay
or permit other promotional incentives, in cash or credit or other compensation.
The commission is intended to cover distribution expenses. Contracts may be sold
by representatives or employees of banks which may be acting as broker-dealers
without separate registration under the Exchange Act, pursuant to legal and
regulatory exceptions.
Allstate New York may pay Allstate Distributors a commission for distribution of
the Contracts. The underwriting agreement with Allstate Distributors provides
that we will reimburse Allstate Distributors for expenses incurred in
distributing the Contracts, including any liability to Contract Owners arising
out of services rendered or Contracts issued.
* Effective May 1, 2000, Allstate Distributors, L.L.C. replaced Allstate Life
Financial Services, Inc. as the principal underwriter of the Contracts.
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. You should notify us promptly in writing of any address change. You
should read your statements and confirmations carefully and verify their
accuracy. You should contact us promptly if you have a question about a periodic
statement. We will investigate all complaints and make any necessary adjustments
retroactively, but you must notify us of a potential error within a reasonable
time after the date of the questioned statement. If you wait too long, we will
make the adjustment as of the date that we receive notice of the potential
error.
We will also provide you with additional periodic and other reports, information
and prospectuses as may be required by federal securities laws.
QUALIFIED PLANS
If you use the Contract with a qualified plan, the plan may impose different or
additional conditions or limitations on withdrawals, waivers of withdrawal
charges, death benefits, Payout Start Dates, income payments, and other Contract
features. In addition, adverse tax consequences may result if qualified plan
limits on distributions and other conditions are not met. Please consult your
qualified plan administrator for more information.
<PAGE>
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 four phase 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 included 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. Because of the
accuracy of this plan, and its timely completion, Allstate New York has
experienced no material impacts on its results of operations, liquidity or
financial position due to the Year 2000 Issue. Year 2000 costs are 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 Contract Owner during the taxable
year. Although Allstate New York does not have control over the Funds or their
investments, we expect the Funds to meet the diversification requirements.
Ownership Treatment. The IRS has stated that you will be considered the owner of
Variable Account assets if you possess incidents of ownership in those assets,
such as the ability to exercise investment control over the assets. At the time
the diversification regulations were issued, the Treasury Department announced
that the regulations do not provide guidance concerning circumstances in which
investor control of separate account investments may cause an investor to be
treated as the owner of the separate account. The Treasury Department also
stated that future guidance would be issued regarding the extent that owners
could direct sub-account investments without being treated as owners of the
underlying assets of the separate account.
Your rights under the Contract are different than those described by the IRS in
rulings in which it found that contract owners were not owners of separate
account assets. For example, you have the choice to allocate premiums and
Contract Values among more investment alternatives. Also, you may be able to
transfer among investment alternatives more frequently than in such rulings.
These differences could result in you being treated as the owner of the Variable
Account. If this occurs, income and gain from the Variable Account assets would
be includible in your gross income. Allstate New York does not know what
standards will be set forth in any regulations or rulings which the Treasury
Department may issue. It is possible that future standards announced by the
Treasury Department could adversely affect the tax treatment of your Contract.
We reserve the right to modify the Contract as necessary to attempt to prevent
you from being considered the federal tax owner of the assets of the Variable
Account. However, we make no guarantee that such modification to the Contract
will be successful.
<PAGE>
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.
<PAGE>
Penalty Tax on Premature Distributions. A 10% penalty tax applies to the taxable
amount of any premature distribution from a non-Qualified Contract. The penalty
tax generally applies to any distribution made prior to the date you attain age
59 1/2. However, no penalty tax is incurred on distributions:
1. made on or after the date the Contract Owner attains age 59 1/2;
2. made as a result of the Contract Owner's death or disability;
3. made in substantially equal periodic payments over the Contract Owner's life
or life expectancy,
4. made under an immediate annuity, or
5. attributable to investment in the Contract before August 14, 1982.
You should consult a competent tax advisor to determine if any other exceptions
to the penalty apply to your situation. Similar exceptions may apply to
distributions from Qualified Contracts.
Aggregation of Annuity Contracts. All non-qualified deferred annuity contracts
issued by Allstate New York (or its affiliates) to the same Contract Owner
during any calendar year will be aggregated and treated as one annuity contract
for purposes of determining the taxable amount of a distribution.
TAX QUALIFIED CONTRACTS
Contracts may be used as investments with certain qualified plans such as:
o Individual Retirement Annuities or Accounts (IRAs) under Section 408 of the
Code;
o Roth IRAs under Section 408A of the Code;
o Simplified Employee Pension Plans under Section 408(k) of the Code;
o Savings Incentive Match Plans for Employees (SIMPLE) Plans under Section
408(p) of the Code;
o Tax Sheltered Annuities under Section 403(b) of the Code;
o Corporate and Self Employed Pension and Profit Sharing Plans; and
o State and Local Government and Tax-Exempt Organization Deferred
Compensation Plans.
In the case of certain qualified plans, the terms of the plans may govern the
right to benefits, regardless of the terms of the Contract. 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 above.
<PAGE>
Restrictions Under Section 403 Plans. Section 403(b) of the Tax Code provides
tax-deferred retirement savings plans for employees of certain non-profit and
educational organizations. Under Section 403(b), any Contract used for a 403(b)
plan must provide that distributions attributable to salary reduction
contributions made after 12/31/88, and all earnings on salary reduction
contributions, may be made only:
1. on or after the date of employee
o attains age 59 1/2,
o separates from service,
o dies,
o becomes disabled, or
2. on account of hardship (earnings on salary reduction contributions may not be
distributed on the account of hardship).
These limitations do not apply to withdrawals where Allstate New York is
directed to transfer some or all of the Contract Value to another 403(b) plan.
INCOME TAX WITHHOLDING
Allstate New York is required to withhold federal income tax at a rate of 20% on
all "eligible rollover distributions" unless you elect to make a "direct
rollover" of such amounts to an IRA or eligible retirement plan. Eligible
rollover distributions generally include all distributions from Qualified
Contracts, excluding IRAs, with the exception of:
1. required minimum distributions, or
2. a series of substantially equal periodic payments made over a period of at
least 10 years, or,
3. over the life (joint lives) of the participant (and beneficiary).
Allstate New York may be required to withhold federal and state income taxes on
any distributions from non-Qualified Contracts or Qualified Contracts that are
not eligible rollover distributions, unless you notify us of your election to
not have taxes withheld.
<PAGE>
Performance Information
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We may advertise the performance of the Variable Sub-Accounts, including yield
and total return information. Total return represents the change, over a
specified period of time, in the value of an investment in a Variable
Sub-Account after reinvesting all income distributions. Yield refers to the
income generated by an investment in a Variable Sub-Account over a specified
period. All performance advertisements will include, as applicable, standardized
yield and total return figures that reflect the deduction of insurance charges,
the contract maintenance charge, and withdrawal charge. Performance
advertisements also may include total return figures that reflect the deduction
of insurance charges, but not the contract maintenance or withdrawal charges.
The deduction of such charges would reduce the performance shown. In addition,
performance advertisements may include aggregate, average, year-by-year, or
other types of total return figures.
Performance information for periods prior to the inception date of the Variable
Sub-Accounts will be based on the historical performance of the corresponding
Funds for the periods beginning with the inception dates of the Funds and
adjusted to reflect current Contract expenses. You should not interpret these
figures to reflect actual historical performance of the Variable Account.
We may include in advertising and sales materials tax deferred compounding
charts and other hypothetical illustrations that compare currently taxable and
tax deferred investment programs based on selected tax brackets. Our
advertisements also may compare the performance of our Variable Sub-Accounts
with: (a) certain unmanaged market indices, including but not limited to the Dow
Jones Industrial Average, the Standard & Poor's 500, and the Shearson Lehman
Bond Index; and/or (b) other management investment companies with investment
objectives similar to the underlying funds being compared. In addition, our
advertisements may include the performance ranking assigned by various
publications, including the Wall Street Journal, Forbes, Fortune, Money,
Barron's, Business Week, USA Today, and statistical services, including Lipper
Analytical Services Mutual Fund Survey, Lipper Annuity and Closed End Survey,
the Variable Annuity Research Data Survey, and SEI.
<PAGE>
Statement of Additional Information
Table of Contents
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Page
Additions, Deletions or Substitutions of Investments
The Contract
Peformance Information
Calculation of Accumulation Unit Values
Calculation of Variable Income Payments
General Matters
Federal Tax Matters
Qualified Plans
Sales Commissions
Legal Matters
Experts
Financial Statements
-----------
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFERING IN ANY JURISDICTION IN WHICH
SUCH OFFERING MAY NOT LAWFULLY BE MADE. WE DO NOT AUTHORIZE ANYONE TO PROVIDE
ANY INFORMATION OR REPRESENTATIONS REGARDING THE OFFERING DESCRIBED IN THIS
PROSPECTUS OTHER THAN AS CONTAINED IN THIS PROSPECTUS.
<PAGE>
Appendix A
Accumulation Unit Value and Number of Accumulation Units Outstanding
for Each Variable Sub-Account Since Inception*
For the period December 10 through December 31, 1999
Putnam Asia Pacific Growth
Accumulation Unit Value, Beginning of Period $15.244
Accumulation Unit Value, End of Period $17.437
Number of Units Outstanding, End of Period 0
Putnam Diversified Income
Accumulation Unit Value, Beginning of Period $9.863
Accumulation Unit Value, End of Period $9.866
Number of Units Outstanding, End of Period 0
The George Putnam Fund of Boston
Accumulation Unit Value, Beginning of Period $9.313
Accumulation Unit Value, End of Period $9.299
Number of Units Outstanding, End of Period 0
Putnam Global Asset Allocation
Accumulation Unit Value, Beginning of Period $10.469
Accumulation Unit Value, End of Period $10.696
Number of Units Outstanding, End of Period 0
Putnam Global Growth
Accumulation Unit Value, Beginning of Period $13.887
Accumulation Unit Value, End of Period $15.665
Number of Units Outstanding, End of Period 0
Putnam Growth and Income
Accumulation Unit Value, Beginning of Period $9.168
Accumulation Unit Value, End of Period $9.172
Number of Units Outstanding, End of Period 0
Putnam Health Sciences
Accumulation Unit Value, Beginning of Period $9.953
Accumulation Unit Value, End of Period $10.597
Number of Units Outstanding, End of Period 0
Putnam High Yield
Accumulation Unit Value, Beginning of Period $9.896
Accumulation Unit Value, End of Period $9.934
Number of Units Outstanding, End of Period 0
Putnam Income
Accumulation Unit Value, Beginning of Period $9.861
Accumulation Unit Value, End of Period $9.714
Number of Units Outstanding, End of Period 0
Putnam International Growth
Accumulation Unit Value, Beginning of Period $13.249
Accumulation Unit Value, End of Period $14.427
Number of Units Outstanding, End of Period 0
Putnam International Growth and Income
Accumulation Unit Value, Beginning of Period $10.839
Accumulation Unit Value, End of Period $10.968
Number of Units Outstanding, End of Period 0
Putnam International New Opportunities
Accumulation Unit Value, Beginning of Period $15.988
Accumulation Unit Value, End of Period $18.134
Number of Units Outstanding, End of Period 0
Putnam Investors
Accumulation Unit Value, Beginning of Period $11.364
Accumulation Unit Value, End of Period $12.168
Number of Units Outstanding, End of Period 0
Putnam Money Market
Accumulation Unit Value, Beginning of Period $10.208
Accumulation Unit Value, End of Period $10.231
Number of Units Outstanding, End of Period 0
Putnam New Opportunities
Accumulation Unit Value, Beginning of Period $14.041
Accumulation Unit Value, End of Period $15.692
Number of Units Outstanding, End of Period 0
Putnam New Value
Accumulation Unit Value, Beginning of Period $8.705
Accumulation Unit Value, End of Period $8.795
Number of Units Outstanding, End of Period 0
Putnam OTC & Emerging Growth
Accumulation Unit Value, Beginning of Period $18.177
Accumulation Unit Value, End of Period $19.838
Number of Units Outstanding, End of Period 0
Putnam Research
Accumulation Unit Value, Beginning of Period $10.894
Accumulation Unit Value, End of Period $11.598
Number of Units Outstanding, End of Period 0
Putnam Small Cap Value
Accumulation Unit Value, Beginning of Period $9.813
Accumulation Unit Value, End of Period $10.302
Number of Units Outstanding, End of Period 0
Putnam Utilities Growth and Income
Accumulation Unit Value, Beginning of Period $10.047
Accumulation Unit Value, End of Period $9.987
Number of Units Outstanding, End of Period 0
Putnam Vista
Accumulation Unit Value, Beginning of Period $12.501
Accumulation Unit Value, End of Period $14.088
Number of Units Outstanding, End of Period 0
Putnam Voyager
Accumulation Unit Value, Beginning of Period $12.868
Accumulation Unit Value, End of Period $14.326
Number of Units Outstanding, End of Period 0
* The Contracts were first offered for sale on December 10, 1999. No
Accumulation Unit data is shown for the Putnam American Government Income or the
Putnam Growth Opportunities Variable Sub-Accounts which commenced operations on
February 1, 2000.
<PAGE>
Appendix B
Withdrawal Adjustment Example
Issue Date: January 1, 2000
Initial Purchase Payment: $50,000
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Death Benefit Amount
------------------------
Date Type Beginning Transaction Contract Purchase Maximum
of Contract Amount Value Payment Anniversary
Occurrence Value After Value Value
Occurrence
- ---------------------------------------------------------------------------------------------------------------------
1/1/00 Issue Date --- $50,000 $50,000 $50,000 $50,000
1/1/01 Contract Anniversary $55,000 --- $55,000 $50,000 $55,000
7/1/01 Partial Withdrawal $60,000 $15,000 $45,000 $37,500 $41,125
</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.
PURCHASE PAYMENT VALUE DEATH BENEFIT
<TABLE>
<CAPTION>
<S> <C> <C>
Partial Withdrawal Amount (w) $15,000
Contract Value Immediately Prior to Partial Withdrawal (a) $60,000
Value of Applicable Death Benefit Amount Immediately Prior to Partial Withdrawal (d) $50,000
Withdrawal Adjustment [(w)/(a)]*(d) $12,500
Adjusted Death Benefit $37,500
MAXIMUM ANNIVERSARY VALUE DEATH BENEFIT
Partial Withdrawal Amount (w) $15,000
Contract Value Immediately Prior to Partial Withdrawal (a) $60,000
Value of Applicable Death Benefit Amount Immediately Prior to Partial Withdrawal (d) $55,000
Withdrawal Adjustment [(w)/a)]*(d) $13,750
Adjusted Death Benefit $41,250
</TABLE>
This example represents the proportional reduction applicable in all contracts.
<PAGE>
The Putnam Allstate Advisor Variable Annuity
<TABLE>
<CAPTION>
<S> <C>
Allstate Life Insurance Company of New York Statement of Additional Information
One Allstate Drive dated May 1, 2000
Farmingville, New York 11738
1 (800) 390-1277
</TABLE>
This Statement of Additional Information supplements the information in the
prospectus for The Putnam Allstate Advisor. This Statement of Additional
Information is not a prospectus. You should read it with the prospectus, dated
May 1, 2000, for the Contract. You may obtain a prospectus by calling or writing
us at the address or telephone number listed above.
Except as otherwise noted, this Statement of Additional Information uses the
same defined terms as the prospectus.
<PAGE>
TABLE OF CONTENTS
PAGE
ADDITIONS, DELETIONS OR SUBSTITUTIONS OF INVESTMENTS
THE CONTRACT
PERFORMANCE INFORMATION
CALCULATION OF ACCUMULATION UNIT VALUES
CALCULATION OF VARIABLE INCOME PAYMENTS
GENERAL MATTERS
FEDERAL TAX MATTERS
QUALIFIED PLANS
SALES COMMISSIONS
LEGAL MATTERS
EXPERTS
FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
<PAGE>
ADDITIONS, DELETIONS OR SUBSTITUTIONS OF INVESTMENTS
We may add, delete, or substitute the Fund shares held by any Variable
Sub-Account to the extent the law permits. We may substitute shares of any Fund
with those of another Fund of the same or different mutual fund if the shares of
the Fund are no longer available for investment, or if we believe investment in
any Fund would become inappropriate in view of the purposes of the Variable
Account.
We will not substitute shares attributable to a Contract Owner's interest in a
Variable Sub-Account until we have notified the Contract Owner of the change,
and until the Securities and Exchange Commission has approved the change, to the
extent such notification and approval are required by law. Nothing contained in
this Statement of Additional Information shall prevent the Variable Account from
purchasing other securities for other series or classes of contracts, or from
effecting a conversion between series or classes of contracts on the basis of
requests made by Contract Owners.
We also may establish additional Variable Sub-Accounts or series of Variable
Sub-Accounts. Each additional Variable Sub-Account would purchase shares in a
new Fund of the same or different mutual fund. We may establish new Variable
Sub-Accounts when we believe marketing needs or investment conditions warrant.
We determine the basis on which we will offer any new Variable Sub-Accounts in
conjunction with the Contract to existing Contract Owners. We may eliminate one
or more Variable Sub-Accounts if, in our sole discretion, marketing, tax or
investment conditions so warrant.
We may, by appropriate endorsement, change the Contract as we believe necessary
or appropriate to reflect any substitution or change in the Funds. If we believe
the best interests of persons having voting rights under the Contracts would be
served, we may operate the Variable Account as a management company under the
Investment Company Act of 1940 or we may withdraw its registration under such
Act if such registration is no longer required.
<PAGE>
THE CONTRACT
- -------------------------------------------------------------------------------
The Contract is primarily designed to aid individuals in long-term financial
planning. You can use it for retirement planning regardless of whether the
retirement plan qualifies for special federal income tax treatment.
PURCHASE OF CONTRACTS
We offer the Contracts to the public through banks as well as brokers licensed
under the federal securities laws and state insurance laws. The principal
underwriter for the Variable Account, Allstate Distributors, L.L.C. ("Allstate
Distributors"). distributes the Contracts. Allstate Distributors is an affiliate
of Allstate Life Insurance Company of New York ("Allstate"). The offering of the
Contracts is continuous. We do not anticipate discontinuing the offering of the
Contracts, but we reserve the right to do so at any time.
TAX-FREE EXCHANGES (1035 EXCHANGES, ROLLOVERS AND TRANSFERS)
We accept purchase payments that are the proceeds of a Contract in a transaction
qualifying for a tax-free exchange under Section 1035 of the Internal Revenue
Code ("Code"). Except as required by federal law in calculating the basis of the
Contract, we do not differentiate between Section 1035 purchase payments and
non-Section 1035 purchase payments.
We also accept "rollovers" and transfers from Contracts qualifying as
tax-sheltered annuities ("TSAs"), individual retirement annuities or accounts
("IRAs"), or any other Qualified Contract that is eligible to "rollover" into an
IRA. We differentiate among non-Qualified Contracts, TSAs, IRAs and other
Qualified Contracts to the extent necessary to comply with federal tax laws. For
example, we restrict the assignment, transfer, or pledge of TSAs and IRAs so the
Contracts will continue to qualify for special tax treatment. A Contract Owner
contemplating any such exchange, rollover or transfer of a Contract should
contact a competent tax adviser with respect to the potential effects of such a
transaction.
<PAGE>
PERFORMANCE INFORMATION
- -------------------------------------------------------------------------------
From time to time we may advertise the "standardized," "non-standardized," and
"adjusted historical" total returns of the Variable Sub-Accounts, as described
below. Please remember that past performance is not an estimate or guarantee of
future performance and does not necessarily represent the actual experience of
amounts invested by a particular Contract Owner. Also, please note that the
performance figures shown do not reflect any applicable taxes.
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 charge by (ii) an assumed average contract
size of $45,000. We then multiply the resulting percentage by a hypothetical
$1,000 investment.
<PAGE>
Set out below are the standardized total returns for each Variable Sub-Account
(other than the Putnam V.T. American Government Income, Putnam V.T. Growth
Opportunities, and Putnam V.T. Money Market Variable Sub-Accounts) since its
inception through December 31, 1999. All of the Variable Sub-Accounts commenced
operations on December 10, 1999 except for the Putnam V.T. American Government
Income and Putnam V.T. Growth Opportunities Variable Sub-Accounts, which
commenced operations on February 1, 2000. The standardized total returns shown
are not annualized.
<TABLE>
<CAPTION>
- ------------------------------------------------- ----------- ------------- ------------------
<S> <C> <C> <C>
Variable Sub-Account One Year Five Years Since Inception
Putnam Asia Pacific Growth N/A N/A 8.37%
Putnam Diversified Income N/A N/A -5.99%
The George Putnam Fund of Boston N/A N/A -6.17%
Putnam Global Asset Allocation N/A N/A -3.84%
Putnam Global Growth N/A N/A 6.78%
Putnam Growth and Income N/A N/A -5.98%
Putnam Health Sciences N/A N/A 0.45%
Putnam High Yield N/A N/A -5.64%
Putnam Income N/A N/A -7.51%
Putnam International Growth N/A N/A 2.88%
Putnam International Growth and Income N/A N/A -4.83%
Putnam Investors N/A N/A 1.06%
Putnam New Opportunities N/A N/A 5.75%
Putnam New Value N/A N/A -4.98%
Putnam International New Opportunities N/A N/A 7.41%
Putnam OTC & Emerging Growth N/A N/A 3.12%
Putnam Research N/A N/A 0.44%
Putnam Small Cap Value N/A N/A -1.04%
Putnam Utilities Growth and Income N/A N/A -6.62%
Putnam Vista N/A N/A 6.68%
Putnam Voyager N/A N/A 5.31%
- ----------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
NON-STANDARDIZED TOTAL RETURNS
From time to time, we also may quote rates of return that reflect changes in the
values of each Variable Sub-Account's Accumulation Units. We may quote these
"non-standardized total returns" on an annualized, cumulative, year-by-year, or
other basis. These rates of return take into account asset-based charges, such
as the mortality and expense risk charge. However, these rates of return do not
reflect withdrawal charges, contract maintenance charges, or any taxes. Such
charges, if reflected, would reduce the performance shown.
Annualized returns reflect the rate of return that, when compounded annually,
would equal the cumulative rate of return for the period shown. We compute
annualized returns according to the following formula:
Annualized Return = (1 + r)1/n - 1
where r = cumulative rate of return for the period shown, and n =
number of years in the period.
The method of computing annualized rates of return is similar to that for
computing standardized performance, described above, except that rather than
using a hypothetical $1,000 investment and the ending redeemable value thereof,
we use the changes in value of an Accumulation Unit.
Cumulative rates of return reflect the cumulative change in value of an
Accumulation Unit over the period shown. Year-by-year rates of return reflect
the change in value of an Accumulation Unit during the course of each year
shown. We compute these returns by dividing the Accumulation Unit Value at the
end of each period shown, by the Accumulation Unit Value at the beginning of
that period, and subtracting one. We compute other total returns on a similar
basis.
We may quote non-standardized total returns for 1, 3, 5 and 10 year periods, or
period since inception of the Variable Sub-Account's operations, as well as
other periods, such as year-to-date (prior calendar year end to the day stated
in the advertisement); "year to most recent quarter" (prior calendar year end to
the end of the most recent quarter); "the prior calendar year"; and the "n" most
recent calendar years.
The non-standardized total returns for each Variable Sub-Account (other than the
Putnam V.T. American Government Income, Putnam V.T Growth Opportunities, and
Putnam V.T. Money Market Variable Sub-Accounts) since its inception through
December 31, 1999 are set out below. All of the Variable Sub-Accounts commenced
operations on December 10, 1999 except for the Putnam V.T. American Government
Income and Putnam V.T. Growth Opportunities Variable Sub-Accounts which
commenced operations on February 1, 2000. The non-standardized total returns
shown are not annualized.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
- ------------------------------------------------- ----------- ------------- -------------------
Variable Sub-Account One Year Five Years Since Inception
Putnam Asia Pacific Growth N/A N/A 14.38%
Putnam Diversified Income N/A N/A 0.03%
The George Putnam Fund of Boston N/A N/A -0.15%
Putnam Global Asset Allocation N/A N/A 2.18%
Putnam Global Growth N/A N/A 12.80%
Putnam Growth and Income N/A N/A 0.04%
Putnam Health Sciences N/A N/A 6.46%
Putnam High Yield N/A N/A 0.38%
Putnam Income N/A N/A -1.49%
Putnam International Growth N/A N/A 8.89%
Putnam International Growth and Income N/A N/A 1.19%
Putnam Investors N/A N/A 7.08%
Putnam New Opportunities N/A N/A 11.76%
Putnam New Value N/A N/A 1.04%
Putnam International New Opportunities N/A N/A 13.42%
Putnam OTC & Emerging Growth N/A N/A 9.14%
Putnam Research N/A N/A 6.46%
Putnam Small Cap Value N/A N/A 4.98%
Putnam Utilities Growth and Income N/A N/A -0.60%
Putnam Vista N/A N/A 12.69%
Putnam Voyager N/A N/A 11.33%
- ------------------------------------------------- ----------- ------------- -------------------
</TABLE>
ADJUSTED HISTORICAL TOTAL RETURNS
We may advertise the total return for periods prior to the date that the
Variable Sub-Accounts commenced operations. We will calculate such "adjusted
historical total returns" using the performance of the underlying Funds and
adjusting such performance to reflect the current level of charges that apply to
the Variable Sub-Accounts under the Contract.
The adjusted historical total returns for the Variable Sub-Accounts (other than
the Putnam V.T. American Government Income, Putnam V.T. Growth Opportunities,
and Putnam V.T. Money Market Variable Sub-Accounts) for the periods ended
December 31, 1999 are set out below. Each of the Funds' Class IB shares
corresponding to the Variable Sub-Accounts were first offered on April 30, 1998,
except for the Putnam VT Diversified Income, Growth and Income, and
International Growth Funds, which were first offered on April 6, 1998, the
Putnam VT Research Fund, which was first offered on September 30, 1998, the
Putnam VT Small Cap Value Fund, which was first offered on April 30, 1999, and
the Putnam VT American Government Income and Putnam V.T. Growth Opportunities
Funds, which were first offered on January 31, 2000. For periods prior to the
inception dates of the Funds' Class IB shares, the performance shown is based on
the historical performance of the Funds' Class IA shares, adjusted to reflect
the current expenses of the Funds' Class IB shares. The inception dates for the
Funds are as follows:
- ------------------------------------------------- ----------------------
Variable Sub-Account Inception Date of
Corresponding Fund
- ------------------------------------------------- ----------------------
- ------------------------------------------------- ----------------------
Putnam American Government Income January 31, 2000
Putnam Asia Pacific Growth May 1, 1995
Putnam Diversified Income September 15, 1993
The George Putnam Fund of Boston April 30, 1998
Putnam Global Asset Allocation February 1, 1988
Putnam Global Growth May 1, 1990
Putnam Growth and Income February 1, 1988
Putnam Growth Opportunities January 31, 2000
Putnam Health Sciences April 30, 1998
Putnam High Yield February 1, 1988
Putnam Income February 1, 1988
Putnam International Growth January 2, 1997
Putnam International Growth and Income January 2, 1997
Putnam International New Opportunities January 2, 1997
Putnam Investors April 30, 1998
Putnam Money Market February 1, 1988
Putnam New Opportunities May 2, 1994
Putnam New Value January 2, 1997
Putnam OTC & Emerging Growth April 30, 1998
Putnam Research September 29, 1998
Putnam Small Cap Value April 30, 1999
Putnam Utilities Growth and Income May 1, 1992
Putnam Vista January 2, 1997
Putnam Voyager February 1, 1988
- ------------------------------------------------- ----------------------
The adjusted historical total returns for the Variable Sub-Accounts for the
periods ended December 31, 1999 are set out below.
<TABLE>
<CAPTION>
- ------------------------------------------------- ----------- ----------- --------------------
Variable Sub-Account One Year Five Years Ten Years or Since
Inception
of Fund
- ------------------------------------------------- ----------- ----------- --------------------
- ------------------------------------------------- ----------- ----------- --------------------
<S> <C> <C> <C>
Putnam Asia Pacific Growth 98.49% N/A 12.19%
Putnam Diversified Income -5.54% 4.96% 3.36%
The George Putnam Fund of Boston -7.67% N/A -3.01%
Putnam Global Asset Allocation 4.35% 15.05% 10.67%
Putnam Global Growth 56.49% 25.06% 15.53%
Putnam Growth and Income -5.82% 17.43% 12.37%
Putnam Health Sciences -11.20% N/A -1.95%
Putnam High Yield -1.53% 6.83% 9.25%
Putnam Income -9.40% 5.34% 6.02%
Putnam International Growth 52.02% N/A 27.39%
Putnam International Growth and Income 16.78% N/A 15.39%
Putnam International New Opportunities 94.27% N/A 30.03%
Putnam Investors 22.34% N/A 23.48%
Putnam Money Market -2.62% 3.20% 3.46%
Putnam New Opportunities 60.97% 30.82% 28.33%
Putnam New Value -7.01% N/A 4.78%
Putnam OTC & Emerging Growth 117.60% N/A 59.21%
Putnam Research 20.08% N/A 33.55%
Putnam Small Cap Value N/A N/A -4.43%
Putnam Utilities Growth and Income -8.04% 15.16% 11.02%
Putnam Vista 44.67% N/A 28.27%
Putnam Voyager 50.03% 29.60% 20.57%
- ------------------------------------------------- ----------- ----------- --------------------
</TABLE>
<PAGE>
CALCULATION OF ACCUMULATION UNIT VALUES
- -------------------------------------------------------------------------------
The value of Accumulation Units will change each Valuation Period according to
the investment performance of the Fund shares purchased by each Variable
Sub-Account and the deduction of certain expenses and charges. A "Valuation
Period" is the period from the end of one Valuation Date and continues to the
end of the next Valuation Date. A Valuation Date ends at the close of regular
trading on the New York Stock Exchange (currently 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 Variable Sub-Account
assets per Accumulation Unit due to investment income, realized or unrealized
capital gain or loss, deductions for taxes, if any, and deductions for the
mortality and expense risk charge. We determine the Net Investment Factor for
each Variable Sub-Account for any Valuation Period by dividing (A) by (B) and
subtracting (C) from the result, where:
(A) is the sum of:
(1) the net asset value per share of the Fund underlying the Variable
Sub-Account determined at the end of the current Valuation Period; plus,
(2) the per share amount of any dividend or capital gain distributions made by
the Fund underlying the Variable Sub-Account during the current Valuation
Period;
(B) is the net asset value per share of the Fund underlying the Variable
Sub-Account determined as of the end of the immediately preceding Valuation
Period; and
(C) is the mortality and expense risk charge corresponding to the portion of
the current calendar year that is in the current Valuation Period.
<PAGE>
CALCULATION OF VARIABLE INCOME PAYMENTS
- ------------------------------------------------------------------------------
We calculate the amount of the first variable income payment under an Income
Plan by applying the Contract Value allocated to each Variable Sub-Account less
any applicable premium tax charge deducted at the time, to the income payment
tables in the Contract. We divide the amount of the first variable annuity
income payment by the Variable Sub-Account's then current Annuity Unit value to
determine the number of annuity units ("Annuity Units") upon which later income
payments will be based. To determine income payments after the first, we simply
multiply the number of Annuity Units determined in this manner for each Variable
Sub-Account by the then current Annuity Unit value ("Annuity Unit Value") for
that Variable Sub-Account.
CALCULATION OF ANNUITY UNIT VALUES
Annuity Units in each Variable Sub-Account are valued separately and Annuity
Unit Values will depend upon the investment experience of the particular Fund in
which the Variable Sub-Account invests. We calculate the Annuity Unit Value for
each Variable Sub-Account at the end of any Valuation Period by:
o multiplying the Annuity Unit Value at the end of the immediately preceding
Valuation Period by the Variable Sub-Account's Net Investment Factor
(described in the preceding section) for the Period; and then
o dividing the product by the sum of 1.0 plus the assumed investment rate for
the Valuation Period.
The assumed investment rate adjusts for the interest rate assumed in the income
payment tables used to determine the dollar amount of the first variable income
payment, and is at an effective annual rate which is disclosed in the Contract.
We determine the amount of the first variable income payment paid under an
Income Plan using the income payment tables set out in the Contracts. The
Contracts include tables that differentiate on the basis of sex, except in
states that require the use of unisex tables.
<PAGE>
GENERAL MATTERS
- ------------------------------------------------------------------------------
INCONTESTABILITY
We will not contest the Contract after we issue it.
SETTLEMENTS
The Contract must be returned to us prior to any settlement. We must receive due
proof of the Contract Owner(s) death (or Annuitant's death if there is a
non-natural Contract Owner) before we will settle a death claim.
SAFEKEEPING OF THE VARIABLE ACCOUNT'S ASSETS
We hold title to the assets of the Variable Account. We keep the assets
physically segregated and separate and apart from our general corporate assets.
We maintain records of all purchases and redemptions of the Fund shares held by
each of the Variable Sub-Accounts.
The Funds do not issue stock certificates. Therefore, we hold the Variable
Account's assets in open account in lieu of stock certificates. See the Funds'
prospectuses for a more complete description of the custodian of the Funds.
PREMIUM TAXES
Applicable premium tax rates depend on the Contract Owner's state of residency
and the insurance laws and our status in those states where premium taxes are
incurred. Premium tax rates may be changed by legislation, administrative
interpretations, or judicial acts. Currently, the State of New York does not
assess a premium tax on annuities.
TAX RESERVES
We do not establish capital gains tax reserves for any Variable Sub-Account nor
do we deduct charges for tax reserves because we believe that capital gains
attributable to the Variable Account will not be taxable. However, we reserve
the right to deduct charges to establish tax reserves for potential taxes on
realized or unrealized capital gains.
<PAGE>
FEDERAL TAX MATTERS
- -------------------------------------------------------------------------------
THE FOLLOWING DISCUSSION IS GENERAL AND IS NOT INTENDED AS TAX ADVICE. WE MAKE
NO GUARANTEE REGARDING THE TAX TREATMENT OF ANY CONTRACT OR TRANSACTION
INVOLVING A CONTRACT.
Federal, state, local and other tax consequences of ownership or receipt of
distributions under an annuity contract depend on the individual circumstances
of each person. If you are concerned about any tax consequences with regard to
your individual circumstances, you should consult a competent tax adviser.
TAXATION OF ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
Allstate is taxed as a life insurance company under Part I of Subchapter L of
the Internal Revenue Code. Since the Variable Account is not an entity separate
from Allstate, and its operations form a part of Allstate, it will not be taxed
separately as a "Regulated Investment Company" under Subchapter M of the Code.
Investment income and realized capital gains of the Variable Account are
automatically applied to increase reserves under the Contract. Under existing
federal income tax law, Allstate believes that the Variable Account investment
income and capital gains will not be taxed to the extent that such income and
gains are applied to increase the reserves under the Contract. Accordingly,
Allstate does not anticipate that it will incur any federal income tax liability
attributable to the Variable Account, and therefore Allstate does not intend to
make provisions for any such taxes. If Allstate is taxed on investment income or
capital gains of the Variable Account, then Allstate may impose a charge against
the Variable Account in order to make provision for such taxes.
EXCEPTIONS TO THE NON-NATURAL OWNER RULE
There are several exceptions to the general rule that annuity contracts held by
a non-natural owner are not treated as annuity contracts for federal income tax
purposes. Contracts will generally be treated as held by a natural person if the
nominal owner is a trust or other entity which holds the Contract as agent for a
natural person. However, this special exception will not apply in the case of an
employer who is the nominal owner of an annuity contract under a non-qualified
deferred compensation arrangement for its employees. Other exceptions to the
non-natural owner rule are: (1) Contracts acquired by an estate of a decedent by
reason of the death of the decedent; (2) certain Qualified Contracts; (3)
Contracts purchased by employers upon the termination of certain qualified
plans; (4) certain Contracts used in connection with structured settlement
agreements, and (5) Contracts purchased with a single premium when the annuity
starting date is no later than a year from purchase of the annuity and
substantially equal periodic payments are made, not less frequently than
annually, during the annuity period.
IRS REQUIRED DISTRIBUTION AT DEATH RULES
In order to be considered an annuity contract for federal income tax purposes,
the Contract must provide: (1) if any Contract Owner dies on or after the Payout
Start Date but before the entire interest in the Contract has been distributed,
the remaining portion of such interest must be distributed at least as rapidly
as under the method of distribution being used as of the date of the Owner's
death; (2) if any Contract Owner dies prior to the Payout Start Date, the entire
interest in the Contract will be distributed within 5 years after the date of
the Owner's death. These requirements are satisfied if any portion of the
Contract Owner's interest that is payable to (or for the benefit of) a
designated Beneficiary is distributed over the life of such Beneficiary (or over
a period not extending beyond the life expectancy of the Beneficiary) and the
distributions begin within 1 year of the Owner's death. If the Contract Owner's
designated Beneficiary is the surviving spouse of the Owner, the Contract may be
continued with the surviving spouse as the new Contract Owner. If the Contract
Owner is a non-natural person, then the Annuitant will be treated as the
Contract Owner for purposes of applying the distribution at death rules. In
addition, a change in the Annuitant on a Contract owned by a non-natural person
will be treated as the death of the Contract Owner.
<PAGE>
QUALIFIED PLANS
- -------------------------------------------------------------------------------
The Contract may be used with several types of qualified plans. The 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.
<PAGE>
ROTH INDIVIDUAL RETIREMENT ANNUITIES
Section 408A of the Code permits eligible individuals to make nondeductible
contributions to an individual retirement program known as a Roth Individual
Retirement Annuity. Roth Individual Retirement Annuities are subject to
limitations on the amount that can be contributed and on the time when
distributions may commence. "Qualified distributions" from Roth Individual
Retirement Annuities are not includible in gross income. "Qualified
distributions" are any distributions made more than five taxable years after the
taxable year of the first contribution to the Roth Individual Retirement
Annuity, and which are made on or after the date the individual attains age 59
1/2, made to a beneficiary after the owner's death, attributable to the owner
being disabled or for a first time home purchase (first time home purchases are
subject to a lifetime limit of $10,000). "Nonqualified distributions" are
treated as made from contributions first and are includible in gross income to
the extent such distributions exceed the contributions made to the Roth
Individual Retirement Annuity. The taxable portion of a "nonqualified
distribution" may be subject to the 10% penalty tax on premature distributions.
Subject to certain limitations, a traditional Individual Retirement Account or
Annuity may be converted or "rolled over" to a Roth Individual Retirement
Annuity. The taxable portion of a conversion or rollover distribution is
includible in gross income, but is exempted from the 10% penalty tax on
premature distributions.
SIMPLIFIED EMPLOYEE PENSION PLANS
Section 408(k) of the Code allows employers to establish simplified employee
pension plans for their employees using the employees' individual retirement
annuities if certain criteria are met. Under these plans the employer may,
within specified limits, make deductible contributions on behalf of the
employees to their individual retirement annuities. Employers intending to use
the Contract in connection with such plans should seek competent advice.
SAVINGS INCENTIVE MATCH PLANS FOR EMPLOYEES (SIMPLE PLANS)
Sections 408(p) and 401(k) of the Code allow employers with 100 or fewer
employees to establish SIMPLE retirement plans for their employees. SIMPLE plans
may be structured as a SIMPLE retirement account using an employee's IRA to hold
the assets or as a Section 401(k) qualified cash or deferred arrangement. In
general, a SIMPLE plan consists of a salary deferral program for eligible
employees and matching or nonelective contributions made by employers. Employers
intending to use the Contract in conjunction with SIMPLE plans should seek
competent tax and legal advice.
<PAGE>
TAX SHELTERED ANNUITIES
Section 403(b) of the Code permits public school employees and employees of
certain types of tax-exempt organizations (specified in Section 501(c)(3) of the
Code) to have their employers purchase annuity contracts for them, and subject
to certain limitations, to exclude the purchase payments from the employees'
gross income. An annuity contract used for a Section 403(b) plan must provide
that distributions attributable to salary reduction contributions made after
12/31/88, and all earnings on salary reduction contributions, may be made only
on or after the date the employee attains age 59 1/2, separates from service,
dies, becomes disabled or on the account of hardship (earnings on salary
reduction contributions may not be distributed for hardship). These limitations
do not apply to withdrawals where Allstate is directed to transfer some or all
of the Contract Value to another 403(b) plan.
CORPORATE AND SELF-EMPLOYED PENSION AND PROFIT SHARING PLANS
Sections 401(a) and 403(a) of the Code permit corporate employers to establish
various types of tax favored retirement plans for employees. The Self-Employed
Individuals Retirement Act of 1962, as amended, (commonly referred to as "H.R.
10" or "Keogh") permits self-employed individuals to establish tax favored
retirement plans for themselves and their employees. Such retirement plans may
permit the purchase of annuity contracts in order to provide benefits under the
plans.
STATE AND LOCAL GOVERNMENT AND TAX-EXEMPT ORGANIZATION
DEFERRED COMPENSATION PLANS
Section 457 of the Code permits employees of state and local governments and
tax-exempt organizations to defer a portion of their compensation without paying
current taxes. The employees must be participants in an eligible deferred
compensation plan. To the extent the Contracts are used in connection with an
eligible plan, employees are considered general creditors of the employer and
the employer as owner of the Contract has the sole right to the proceeds of the
Contract. Generally, under the non-natural owner rules, such Contracts are not
treated as annuity contracts for federal income tax purposes. Under these plans,
contributions made for the benefit of the employees will not be includible in
the employees' gross income until distributed from the plan. However, under a
Section 457 plan all the compensation deferred under the plan must remain solely
the property of the employer, subject only to the claims of the employer's
general creditors, until such time as made available to the employee or a
beneficiary.
SALES COMMISSIONS
Commissions paid may vary, but in the aggregate are not anticipated to exceed
6.0% of any purchase payment. In addition, under certain circumstances, Allstate
New York may pay certain sellers of the contracts a persistency bonus which will
take into account, among other things, the length of time purchase payments have
been held under a contract and the amount of purchase payments.
<PAGE>
LEGAL MATTERS
Freedman, Levy, Kroll & Simonds, Washington, D.C., has advised Allstate New York
on certain federal securities laws matters. All matters of New York law
pertaining to the contracts, including the validity of the contracts and
Allstate New York's right to issue such contracts under New York insurance law,
have been passed upon by Michael J. Velotta, General Counsel of Allstate New
York.
EXPERTS
The financial statements and related financial statement schedules of Allstate
New York as of December 31, 1999 and 1998 and for each of the three years in the
period ended December 31, 1999 that appear in this Statement of Additional
Information have been audited by Deloitte & Touche LLP, independent auditors, as
stated in their report appearing herein, and are included in reliance upon the
report of such firm given upon their authority as experts in accounting and
auditing.
The financial statements of the Variable Account as of December 31, 1999 and for
each of the periods in the two years then ended that appear in this Statement of
Additional Information have been audited by Deloitte & Touche LLP, independent
auditors, as stated in their report appearing herein, and are included in
reliance upon the report of such firm given upon their authority as experts in
accounting and auditing.
FINANCIAL STATEMENTS
The financial statements of the Variable Account as of December 31, 1999 and for
the periods in the two years then ended, the financial statements and related
financial statement schedule of Allstate New York as of December 31, 1999 and
1998 and for each of the three years in the period ended December 31, 1999 and
the accompanying Independent Auditors' Reports appear in 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 Contacts.
<PAGE>
INDEPENDENT AUDITORS' REPORT
TO THE BOARD OF DIRECTORS AND SHAREHOLDER OF
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK:
We have audited the accompanying Statements of Financial Position of Allstate
Life Insurance Company of New York (the "Company", an affiliate of The Allstate
Corporation) as of December 31, 1999 and 1998, and the related Statements of
Operations and Comprehensive Income, Shareholder's Equity and Cash Flows for
each of the three years in the period ended December 31, 1999. Our audits also
included Schedule IV - Reinsurance and Schedule V - Valuation and Qualifying
Accounts. These financial statements and financial statement schedules are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements and financial statement schedules based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of the Company as of December 31, 1999 and
1998, and the results of its operations and its cash flows for each of the three
years in the period ended December 31, 1999 in conformity with generally
accepted accounting principles. Also, in our opinion, Schedule IV - Reinsurance,
and Schedule V - Valuation and Qualifying Accounts, when considered in relation
to the basic financial statements taken as a whole, present fairly, in all
material respects, the information set forth therein.
/s/ Deloitte & Touche LLP
Chicago, Illinois
February 25, 2000
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
STATEMENTS OF FINANCIAL POSITION
<TABLE>
<CAPTION>
DECEMBER 31,
---------------------------------------
1999 1998
------------------ -------------------
<S> <C> <C>
($ in thousands, except par value data)
ASSETS
Investments
Fixed income securities, at fair value
(amortized cost $1,858,216 and $1,648,972) $ 1,912,545 $ 1,966,067
Mortgage loans 166,997 145,095
Short-term 46,037 76,127
Policy loans 31,109 29,620
----------------- ------------------
Total investments 2,156,688 2,216,909
Cash 1,135 3,117
Deferred policy acquisition costs 106,932 87,830
Accrued investment income 25,712 22,685
Reinsurance recoverables 1,949 2,210
Other assets 7,803 9,887
Separate Accounts 443,705 366,247
----------------- ------------------
TOTAL ASSETS $ 2,743,924 $ 2,708,885
================= ==================
LIABILITIES
Reserve for life-contingent contract benefits $ 1,098,016 $ 1,208,104
Contractholder funds 839,157 703,264
Current income taxes payable 10,132 14,029
Deferred income taxes 3,077 25,449
Other liabilities and accrued expenses 41,218 23,463
Payable to affiliates, net 4,731 38,835
Separate Accounts 443,705 366,247
----------------- ------------------
TOTAL LIABILITIES 2,440,036 2,379,391
----------------- ------------------
COMMITMENTS AND CONTINGENT LIABILITIES (NOTE 13)
SHAREHOLDER'S EQUITY
Common stock, $25 par value, 100,000 and 80,000
shares authorized, issued and outstanding 2,500 2,000
Additional capital paid-in 45,787 45,787
Retained income 225,367 198,801
Accumulated other comprehensive income:
Unrealized net capital gains 30,234 82,906
----------------- ------------------
TOTAL ACCUMULATED OTHER COMPREHENSIVE INCOME 30,234 82,906
----------------- ------------------
TOTAL SHAREHOLDER'S EQUITY 303,888 329,494
----------------- ------------------
TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY $ 2,743,924 $ 2,708,885
================= ==================
</TABLE>
See notes to financial statements.
2
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------------------------------
($ in thousands) 1999 1998 1997
------------------ ------------------ ------------------
<S> <C> <C> <C>
REVENUES
Premiums (net of reinsurance ceded
of $4,253, $3,204 and $3,087 ) $ 63,748 $ 85,771 $ 90,366
Contract charges 38,626 33,281 28,597
Net investment income 148,331 134,413 124,887
Realized capital gains and losses (2,096) 4,697 701
--------- --------- --------
248,609 258,162 244,551
--------- --------- --------
COSTS AND EXPENSES
Contract benefits (net of reinsurance recoveries
of $1,166, $997 and $1,985 ) 178,267 183,839 179,872
Amortization of deferred policy acquisition costs 8,985 7,029 5,023
Operating costs and expenses 20,151 24,703 23,644
--------- --------- --------
207,403 215,571 208,539
--------- --------- --------
INCOME FROM OPERATIONS
BEFORE INCOME TAX EXPENSE 41,206 42,591 36,012
Income tax expense 14,640 14,934 13,296
--------- --------- --------
NET INCOME 26,566 27,657 22,716
--------- --------- --------
OTHER COMPREHENSIVE (LOSS) INCOME, AFTER TAX
Change in unrealized net capital gains and losses (52,672) 18,427 27,627
--------- -------- --------
COMPREHENSIVE (LOSS) INCOME $ (26,106) $ 46,084 $ 50,343
========= ======== ========
</TABLE>
See notes to financial statements.
3
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
STATEMENTS OF SHAREHOLDER'S EQUITY
<TABLE>
<CAPTION>
DECEMBER 31,
------------------------------------------------------------
1999 1998 1997
------------------ ------------------- -----------------
($ in thousands)
COMMON STOCK
<S> <C> <C> <C>
Balance, beginning of year $ 2,000 $ 2,000 $ 2,000
Issuance of new shares of stock 500 - -
----------------- ----------------- -----------------
Balance, end of year 2,500 2,000 2,000
----------------- ----------------- -----------------
ADDITIONAL CAPITAL PAID-IN $ 45,787 $ 45,787 $ 45,787
----------------- ----------------- -----------------
RETAINED INCOME
Balance, beginning of year $ 198,801 $ 171,144 $ 148,428
Net income 26,566 27,657 22,716
----------------- ----------------- -----------------
Balance, end of year 225,367 198,801 171,144
----------------- ----------------- -----------------
ACCUMULATED OTHER COMPREHENSIVE INCOME
Balance, beginning of year $ 82,906 $ 64,479 $ 36,852
Change in unrealized net capital gains
and losses (52,672) 18,427 27,627
----------------- ----------------- -----------------
Balance, end of year 30,234 82,906 64,479
----------------- ----------------- -----------------
TOTAL SHAREHOLDER'S EQUITY $ 303,888 $ 329,494 $ 283,410
================= ================= =================
</TABLE>
See notes to financial statements.
4
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------------------------------
($ in thousands) 1999 1998 1997
------------------ ------------------- -----------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 26,566 $ 27,657 $ 22,716
Adjustments to reconcile net income to net cash
provided by operating activities
Amortization and other non-cash items (37,619) (34,890) (31,112)
Realized capital gains and losses 2,096 (4,697) (701)
Interest credited to contractholder funds 36,736 41,200 31,667
Changes in:
Life-contingent contract benefits and
contractholder funds 38,527 53,343 68,114
Deferred policy acquisition costs (17,262) (16,693) (10,781)
Income taxes payable 2,094 13,865 (158)
Other operating assets and liabilities 13,049 (15,974) 8,545
----------------- ----------------- -----------------
Net cash provided by operating activities 64,187 63,811 88,290
----------------- ----------------- -----------------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sales of fixed income securities 161,443 65,281 15,723
Investment collections
Fixed income securities 21,822 159,648 120,061
Mortgage loans 7,479 5,855 5,365
Investments purchases
Fixed income securities (383,961) (292,444) (236,984)
Mortgage loans (31,888) (24,252) (35,200)
Change in short-term investments, net 29,493 (55,846) 16,342
Change in policy loans, net (1,489) (2,020) (2,241)
----------------- ----------------- -----------------
Net cash used in investing activities (197,101) (143,778) (116,934)
----------------- ----------------- -----------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of common stock 500 - -
Contractholder fund deposits 197,439 137,473 79,384
Contractholder fund withdrawals (67,007) (54,782) (51,374)
----------------- ----------------- -----------------
Net cash provided by financing activities 130,932 82,691 28,010
----------------- ----------------- -----------------
NET (DECREASE) INCREASE IN CASH (1,982) 2,724 (634)
CASH AT THE BEGINNING OF YEAR 3,117 393 1,027
----------------- ----------------- -----------------
CASH AT END OF YEAR $ 1,135 $ 3,117 $ 393
================= ================= =================
</TABLE>
See notes to financial statements.
5
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO FINANCIAL STATEMENTS
($ IN THOUSANDS)
1. GENERAL
BASIS OF PRESENTATION
The accompanying financial statements include the accounts of Allstate Life
Insurance Company of New York (the "Company"), a wholly owned subsidiary of
Allstate Life Insurance Company ("ALIC"), which is wholly owned by Allstate
Insurance Company ("AIC"), a wholly owned subsidiary of The Allstate Corporation
(the "Corporation"). These financial statements have been prepared in conformity
with generally accepted accounting principles.
To conform with the 1999 presentation, certain amounts in the prior years'
financial statements and notes have been reclassified.
NATURE OF OPERATIONS
The Company markets a broad line of life insurance and savings products in the
state of New York through a combination of exclusive agencies, securities firms,
banks, specialized brokers and through direct response marketing. Life insurance
consists of traditional products, including term and whole life,
interest-sensitive life and immediate annuities with life contingencies. Savings
products include deferred annuities and immediate annuities without life
contingencies. Deferred annuities include fixed rate, market value adjusted and
variable annuities. Group pension savings products include immediate annuities
also referred to as retirement annuities. In 1999, annuity premiums and deposits
represented 76.2% of the Company's total statutory premiums and deposits.
The Company monitors economic and regulatory developments which have the
potential to impact its business. Recently enacted federal legislation will
allow for banks and other financial organizations to have greater participation
in the securities and insurance businesses. This legislation may present an
increased level of competition for sales of the Company's products. Furthermore,
the market for deferred annuities and interest-sensitive life insurance is
enhanced by the tax incentives available under current law. Any legislative
changes which lessen these incentives are likely to negatively impact the demand
for these products.
Additionally, traditional demutualizations of mutual insurance companies and
enacted and pending state legislation to permit mutual insurance companies to
convert to a hybrid structure known as a mutual holding company could have a
number of significant effects on the Company by (1) increasing industry
competition through consolidation caused by mergers and acquisitions related to
the new corporate form of business; and (2) increasing competition in capital
markets.
Although the Company currently benefits from agreements with financial services
entities who market and distribute its products, change in control of these
non-affliliated entities with which the Company has alliances could negatively
impact the Company's sales.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
INVESTMENTS
Fixed income securities include bonds and mortgage-backed and asset-backed
securities. All fixed income securities are carried at fair value and may be
sold prior to their contractual maturity ("available for sale"). The difference
between amortized cost and fair value, net of deferred income taxes, certain
deferred policy acquisition costs, and certain reserves for life-contingent
contract benefits, is reflected as a component of shareholder's equity.
Provisions are recognized for declines in the value of fixed income securities
that are other than temporary. Such writedowns are included in realized capital
gains and losses.
6
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO FINANCIAL STATEMENTS
($ IN THOUSANDS)
Mortgage loans are carried at outstanding principal balance, net of unamortized
premium or discount and valuation allowances. Valuation allowances are
established for impaired loans when it is probable that contractual principal
and interest will not be collected. Valuation allowances for impaired loans
reduce the carrying value to the fair value of the collateral or the present
value of the loan's expected future repayment cash flows discounted at the
loan's original effective interest rate. Valuation allowances on loans not
considered to be impaired are established based on consideration of the
underlying collateral, borrower financial strength, current and expected market
conditions, and other factors.
Short-term investments are carried at cost or amortized cost which approximates
fair value, and includes collateral received in connection with securities
lending activities. Policy loans are carried at the unpaid principal balances.
Investment income consists primarily of interest and short-term investment
dividends. Interest is recognized on an accrual basis and dividends are recorded
at the ex-dividend date. Interest income on mortgage-backed and asset-backed
securities is determined on the effective yield method, based on estimated
principal repayments. Accrual of income is suspended for fixed income securities
and mortgage loans that are in default or when the receipt of interest payments
is in doubt. Realized capital gains and losses are determined on a specific
identification basis.
DERIVATIVE FINANCIAL INSTRUMENTS
The Company utilizes financial futures contracts which are derivative financial
instruments. By meeting specific criteria these futures are designated as
accounting hedges and accounted for on a deferral basis. In order to qualify as
accounting hedges, financial futures contracts must reduce the primary market
risk exposure on an enterprise or transaction basis in conjunction with a hedge
strategy; be designated as a hedge at the inception of the transaction; and be
highly correlated with the fair value of, or interest income or expense
associated with, the hedged item at inception and throughout the hedge period.
Derivatives that are not designated as accounting hedges are accounted for on a
fair value basis.
If, subsequent to entering into a hedge transaction, the financial futures
contract becomes ineffective (including if the occurrence of a hedged
anticipatory transaction is no longer probable), the Company terminates the
derivative position. Gains and losses on these terminations are reported in
realized capital gains and losses in the period they occur. The Company may also
terminate derivatives as a result of other events or circumstances. Gains and
losses on these terminations are deferred and amortized over the remaining life
of the hedged item.
The Company accounts for financial futures as hedges using deferral accounting
for anticipatory investment purchases and sales when the criteria for futures
(discussed above) are met. In addition, anticipated transactions must be
probable of occurrence and their significant terms and characteristics
identified. Under deferral accounting, gains and losses on financial futures
contracts are deferred as other liabilities and accrued expenses. Once the
anticipated transaction occurs, the deferred gains and losses are considered
part of the cost basis of the asset and reported net of tax in shareholder's
equity. The gains and losses deferred are then recognized in conjunction with
the earnings on the hedged item. Fees and commissions paid on these derivatives
are also deferred as an adjustment to the carrying value of the hedged item.
RECOGNITION OF INSURANCE REVENUE AND RELATED BENEFITS AND INTEREST CREDITED
Traditional life insurance products consist principally of products with fixed
and guaranteed premiums and benefits, primarily term and whole life insurance
products and certain annuities with life contingencies. Premiums from these
products are recognized as revenue when due. Benefits are recognized in relation
to
7
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO FINANCIAL STATEMENTS
($ IN THOUSANDS)
such revenue so as to result in the recognition of profits over the life of
the policy and are reflected in contract benefits.
Interest-sensitive life contracts are insurance contracts whose terms are not
fixed and guaranteed. The terms that may be changed include premiums paid by the
contractholder, interest credited to the contractholder account balance and one
or more amounts assessed against the contractholder. Premiums from these
contracts are reported as deposits to the contractholder funds. Contract charge
revenue consists of fees assessed against the contractholder account balance for
cost of insurance (mortality risk), contract administration and surrender
charges. Contract benefits include interest credited to contracts and claims
incurred in excess of the related contractholder account balance.
Limited payment contracts, a type of life-contingent immediate annuity or
traditional life product, are contracts that provide insurance protection over a
contract period that extends beyond the period in which premiums are collected.
Gross premiums in excess of the net premium on limited payment contracts are
deferred and recognized over the contract period. Contract benefits are
recognized in relation to such revenue so as to result in the recognition of
profits over the life of the policy.
Contracts that do not subject the Company to significant risks arising from
mortality or morbidity are referred to as investment contracts. Fixed rate
annuities, market value adjusted annuities and immediate annuities without life
contingencies are considered investment contracts. Deposits received for such
contracts are reported as deposits to contractholder funds. Contract charge
revenue for investment contracts consists of charges assessed against the
contractholder account balance for contract administration and surrenders.
Contract benefits include interest credited and claims incurred in excess of the
related contractholder account balance.
Crediting rates for fixed rate annuities and interest-sensitive life contracts
are adjusted periodically by the Company to reflect current market conditions.
Investment contracts also include variable annuity contracts which are sold as
Separate Accounts products. The assets supporting these products are legally
segregated and available only to settle Separate Accounts contract obligations.
Deposits received are reported as Separate Accounts liabilities. The Company's
contract charge revenue for these contracts consists of charges assessed against
the Separate Accounts fund balances for contract maintenance, administration,
mortality, expense and surrenders.
DEFERRED POLICY ACQUISITION COSTS
Certain costs which vary with and are primarily related to acquiring life and
savings business, principally agents and brokers remuneration, premium taxes,
certain underwriting costs and direct mail solicitation expenses, are deferred
and amortized into income. Deferred policy acquisition costs are periodically
reviewed as to recoverability and written down where necessary.
For traditional life insurance and limited payment contracts, these costs are
amortized in proportion to the estimated revenue on such business. Assumptions
relating to estimated revenue, as well as to all other aspects of the deferred
acquisition costs and reserve calculations, are determined based upon conditions
as of the date of the policy issue and are generally not revised during the life
of the policy. Any deviations from projected business inforce, resulting from
actual policy terminations differing from expected levels, and any estimated
premium deficiencies change the rate of amortization in the period such events
occur. Generally, the amortization period for these contracts approximates the
estimated lives of the policies.
For interest-sensitive life and investment contracts, the costs are amortized in
proportion to the estimated gross profits on such business over the estimated
lives of the contract periods. Gross profits are determined
8
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO FINANCIAL STATEMENTS
($ IN THOUSANDS)
at the date of policy issue and comprise estimated investment, mortality,
expense margins and surrender charges. Assumptions underlying the gross profits
are periodically updated to reflect actual experience, and changes in the amount
or timing of estimated gross profits will result in adjustments to the
cumulative amortization of these costs.
The present value of future profits inherent in acquired blocks of insurance is
classified as a component of deferred policy acquisition costs. The present
value of future profits is amortized over the life of the blocks of insurance
using current crediting rates.
To the extent unrealized gains or losses on securities carried at fair value
would result in an adjustment of estimated gross profits had those gains or
losses actually been realized, the related carrying value of deferred
acquisition costs, including present value of future profits, are adjusted
together with accumulated unrealized net capital gains included in shareholder's
equity.
REINSURANCE RECOVERABLE
In the normal course of business, the Company seeks to limit aggregate and
single exposure to losses on large risks by purchasing reinsurance from other
insurers. Reinsurance recoverables are estimated based upon assumptions
consistent with those used in establishing the underlying reinsured contacts.
Insurance liabilities are reported gross of reinsurance recoverables.
Reinsurance does not extinguish the Company's primary liability under the
policies written and therefore reinsurers and amounts recoverable therefrom are
regularly evaluated by the Company and allowances for uncollectible reinsurance
are established as appropriate.
INCOME TAXES
The income tax provision is calculated under the liability method. Deferred tax
assets and liabilities are recorded based on the difference between the
financial statement and tax bases of assets and liabilities at the enacted tax
rates. The principal assets and liabilities giving rise to such differences are
insurance reserves and deferred policy acquisition costs. Deferred income taxes
also arise from unrealized capital gains and losses on fixed income securities
carried at fair value.
SEPARATE ACCOUNTS
The Company issues deferred variable annuity contracts, the assets and
liabilities of which are legally segregated and recorded as assets and
liabilities of the Separate Accounts. Absent any contract provisions wherein the
Company contractually guarantees either a minimum return or account value to the
beneficiaries of the contractholders in the form of a death benefit, the
contractholders bear the investment risk that the Separate Accounts' funds may
not meet their stated investment objectives.
The assets of the Separate Accounts are carried at fair value. Separate Accounts
liabilities represent the contractholders' claims to the related assets and are
carried at the fair value of the assets. In the event that the asset value of
certain contractholder accounts are projected to be below the value guaranteed
by the Company, a liability is established through a charge to earnings.
Investment income and realized capital gains and losses of the Separate Accounts
accrue directly to the contractholders and therefore, are not included in the
Company's statements of operations and comprehensive income. Revenues to the
Company from the Separate Accounts consist of contract maintenance and
administration fees, and mortality, surrender and expense charges.
RESERVES FOR LIFE-CONTINGENT CONTRACT BENEFITS
The reserve for life-contingent contract benefits, which relates to traditional
life insurance, group retirement annuities, immediate annuities with life
contingencies and certain variable annuity guarantees, is computed on the basis
of assumptions as to mortality, future investment yields, terminations and
9
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO FINANCIAL STATEMENTS
($ IN THOUSANDS)
expenses at the time the policy is issued. These assumptions, which for
traditional life insurance are applied using the net level premium method,
include provisions for adverse deviation and generally vary by such
characteristics as type of coverage, year of issue and policy duration. Detailed
reserve assumptions and reserve interest rates are outlined in Note 7. To the
extent that unrealized gains on fixed income securities would result in a
premium deficiency had those gains actually been realized, the related increase
in reserves is recorded as a reduction of the unrealized gains included in
shareholder's equity.
CONTRACTHOLDER FUNDS
Contractholder funds arise from the issuance of interest-sensitive life and
certain investment contracts. Deposits received are recorded as interest-bearing
liabilities. Contractholder funds are equal to deposits received, net of
commissions, and interest credited to the benefit of the contractholder less
withdrawals, mortality charges and administrative expenses. Detailed information
on crediting rates and surrender and withdrawal protection on contractholder
funds are outlined in Note 7.
OFF-BALANCE-SHEET FINANCIAL INSTRUMENTS
Commitments to extend mortgage loans have only off-balance-sheet risk because
their contractual amounts are not recorded in the Company's statements of
financial position. The contractual amounts and fair values of these instruments
are presented in Note 5.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.
NEW ACCOUNTING STANDARDS
In 1999, the Company adopted Statement of Position ("SOP") 97-3, "Accounting by
Insurance and Other Enterprises for Insurance-Related Assessments." The SOP
provides guidance concerning when to recognize a liability for insurance-related
assessments and how those liabilities should be measured. Specifically,
insurance-related assessments should be recognized as liabilities when all of
the following criteria have been met: 1) an assessment has been imposed or it is
probable that an assessment will be imposed, 2) the event obligating an entity
to pay an assessment has occurred and 3) the amount of the assessment can be
reasonably estimated. Adoption of this statement was not material to the
Company's results of operations or financial position.
PENDING ACCOUNTING STANDARDS
In June 1999, the Financial Accounting Standards Board delayed the effective
date of Statement of Financial Accounting Standards ("SFAS") No. 133,
"Accounting for Derivative Instruments and Hedging Activities." SFAS 133
replaces existing pronouncements and practices with a single, integrated
accounting framework for derivatives and hedging activities. This statement
requires that all derivatives be recognized on the balance sheet at fair value.
Derivatives that are not hedges must be adjusted to fair value through income.
If the derivative is a hedge, depending on the nature of the hedge, changes in
the fair value of derivatives will either be offset against the change in the
fair value of the hedged assets, liabilities, or firm commitments through
earnings or recognized in other comprehensive income until the hedged item is
recognized in earnings. Additionally, the change in fair value of a derivative
which is not effective as a hedge will be immediately recognized in earnings.
The delay was effected through the issuance of SFAS No. 137, which extends the
SFAS No. 133 requirements to fiscal years beginning after June 15, 2000. As
such, the Company expects to adopt the provisions of SFAS No. 133 as of January
1, 2001. The impact of this statement is dependent upon the Company's derivative
positions and market conditions existing at the date of adoption. Based on
existing interpretations of the requirements of SFAS
10
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO FINANCIAL STATEMENTS
($ IN THOUSANDS)
No. 133, the impact of the adoption is not expected to be material to the
results of operations or financial position of the Company.
3. RELATED PARTY TRANSACTIONS
REINSURANCE
The Company has reinsurance agreements with ALIC in order to limit aggregate and
single exposure on large risks. A portion of the Company's premiums and policy
benefits are ceded to ALIC and reflected net of such reinsurance in the
statements of operations and comprehensive income. Reinsurance recoverables and
the related reserve for life-contingent contract benefits and contractholder
funds are reported separately in the statements of financial position. The
Company continues to have primary liability as the direct insurer for risks
reinsured.
The following amounts were ceded to ALIC under reinsurance agreements.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Premiums $ 3,408 $ 2,519 $ 2,171
Policy benefits 211 315 327
</TABLE>
Included in reinsurance recoverables at December 31, 1999 and 1998 are the net
amounts owed to ALIC of $458 and $3, respectively.
STRUCTURED SETTLEMENT ANNUITIES
The Company issued $14,561, $12,747 and $12,766 of structured settlement
annuities, a type of immediate annuity, in 1999, 1998 and 1997, respectively, at
prices determined based upon interest rates in effect at the time of purchase,
to fund structured settlements in matters involving AIC. Of these amounts,
$4,298, $5,152 and $3,468 relate to structured settlement annuities with life
contingencies and are included in premium income in 1999, 1998 and 1997,
respectively. Additionally, the reserve for life-contingent contract benefits
was increased by approximately 94% of such premium received in each of these
years. In most cases, these annuities were issued to Allstate Settlement
Corporation ("ASC"), a subsidiary of ALIC, which, under a "qualified
assignment", assumed AIC's obligation to make the future payments.
AIC has issued surety bonds to guarantee the payment of structured settlement
benefits assumed by ASC (from both AIC and non-related parties) and funded by
certain annuity contracts issued by the Company. ASC has entered into General
Indemnity Agreements pursuant to which it indemnified AIC for any liabilities
associated with the surety bonds and gives AIC certain collateral security
rights with respect to the annuities and certain other rights in the event of
any defaults covered by the surety bonds. Reserves recorded by the Company for
annuities related to the surety bonds were $1.19 billion and $1.08 billion at
December 31, 1999 and 1998, respectively.
BUSINESS OPERATIONS
The Company utilizes services performed by AIC and ALIC and business facilities
owned or leased, and operated by AIC in conducting its business activities. In
addition, the Company shares the services of employees with AIC. The Company
reimburses AIC and ALIC for the operating expenses incurred on behalf of the
Company. The Company is charged for the cost of these operating expenses based
on the level of services provided. Operating expenses, including compensation
and retirement and other benefit programs, allocated to the Company were
$16,155, $23,369 and $19,425 in 1999, 1998 and 1997, respectively. A
11
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO FINANCIAL STATEMENTS
($ IN THOUSANDS)
portion of these expenses relate to the acquisition of business which are
deferred and amortized over the contract period.
4. INVESTMENTS
FAIR VALUES
The amortized cost, gross unrealized gains and losses, and fair value for fixed
income securities are as follows:
<TABLE>
<CAPTION>
GROSS UNREALIZED
AMORTIZED ---------------- FAIR
COST GAINS LOSSES VALUE
---- ----- ------ -----
<S> <C> <C> <C> <C>
AT DECEMBER 31, 1999
U.S. government and agencies $ 413,875 $ 53,717 $ (2,705) $ 464,887
Municipal 60,256 997 (1,976) 59,277
Corporate 996,298 36,303 (31,695) 1,000,906
Foreign government 61,987 3,217 (639) 64,565
Mortgage-backed securities 291,304 4,770 (7,370) 288,704
Asset-backed securities 34,496 26 (316) 34,206
-------------- -------------- -------------- --------------
Total fixed income securities $ 1,858,216 $ 99,030 $ (44,701) $ 1,912,545
============== ============== ============== ==============
AT DECEMBER 31, 1998
U.S. government and agencies $ 443,930 $ 179,455 $ (1) $ 623,384
Municipal 31,617 2,922 (19) 34,520
Corporate 848,289 121,202 (899) 968,592
Mortgage-backed securities 291,520 14,294 (700) 305,114
Asset-backed securities 33,616 869 (28) 34,457
-------------- -------------- -------------- --------------
Total fixed income securities $ 1,648,972 $ 318,742 $ (1,647) $ 1,966,067
============== ============== ============== ==============
</TABLE>
SCHEDULED MATURITIES
The scheduled maturities for fixed income securities are as follows at December
31, 1999:
<TABLE>
<CAPTION>
AMORTIZED FAIR
COST VALUE
---- -----
<S> <C> <C>
Due in one year or less $ 6,720 $ 6,798
Due after one year through five years 168,795 168,859
Due after five years through ten years 217,305 218,381
Due after ten years 1,139,596 1,195,597
--------------- ---------------
1,532,416 1,589,635
Mortgage- and asset-backed securities 325,800 322,910
--------------- ---------------
Total $ 1,858,216 $ 1,912,545
=============== ===============
</TABLE>
Actual maturities may differ from those scheduled as a result of prepayments by
the issuers.
12
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO FINANCIAL STATEMENTS
($ IN THOUSANDS)
<TABLE>
<CAPTION>
NET INVESTMENT INCOME
YEAR ENDED DECEMBER 31, 1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Fixed income securities $ 135,561 $ 124,100 $ 116,763
Mortgage loans 12,346 10,309 7,896
Other 3,495 2,940 2,200
------------- ------------- -------------
Investment income, before expense 151,402 137,349 126,859
Investment expense 3,071 2,936 1,972
------------- ------------- -------------
Net investment income $ 148,331 $ 134,413 $ 124,887
============= ============= =============
</TABLE>
REALIZED CAPITAL GAINS AND LOSSES
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Fixed income securities $ (2,207) $ 4,755 $ 955
Mortgage loans 42 (65) (221)
Other 69 7 (33)
------------ ----------- -------------
Realized capital gains and losses (2,096) 4,697 701
Income taxes (765) 1,644 245
------------ ----------- -------------
Realized capital gains and losses, after tax $ (1,331) $ 3,053 $ 456
============ =========== =============
</TABLE>
Excluding calls and prepayments, gross gains of $1,713, $2,905 and $471 and
gross losses of $3,920, $164 and $105 were realized on sales of fixed income
securities during 1999, 1998 and 1997, respectively.
UNREALIZED NET CAPITAL GAINS
Unrealized net capital gains on fixed income securities included in
shareholder's equity at December 31, 1999 are as follows:
<TABLE>
<CAPTION>
COST/ GROSS UNREALIZED UNREALIZED
AMORTIZED COST FAIR VALUE GAINS LOSSES NET GAINS
-------------- ---------- ----- ------ ---------
<S> <C> <C> <C> <C> <C>
Fixed income securities $1,858,216 $1,912,545 $ 99,030 $(44,701) $ 54,329
========== ========== ======== ========
Reserve for life-contingent
contract benefits (7,815)
Deferred income taxes (16,280)
--------
Unrealized net capital gains $ 30,234
========
</TABLE>
<TABLE>
<CAPTION>
CHANGE IN UNREALIZED NET CAPITAL GAINS
YEAR ENDED DECEMBER 31, 1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Fixed income securities $(262,766) $ 70,948 $123,519
Reserves for life contingent-contract benefits 179,891 (42,251) (80,155)
Deferred income taxes 28,362 (9,922) (14,876)
Deferred policy acquisition costs and other 1,841 (348) (861)
--------- -------- --------
(Decrease) increase in unrealized net capital gains $ (52,672) $ 18,427 $ 27,627
========= ======== ========
</TABLE>
13
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO FINANCIAL STATEMENTS
($ IN THOUSANDS)
INVESTMENT LOSS PROVISIONS AND VALUATION ALLOWANCES
Pretax provisions for investment losses, principally relating to valuation
allowances on mortgage loans were $114 and $261 in 1998 and 1997, respectively.
There was not a provision for investment losses in 1999.
MORTGAGE LOAN IMPAIRMENT
A mortgage loan is impaired when it is probable that the Company will be unable
to collect all amounts due according to the contractual terms of the loan
agreement.
The Company had no impaired loans at December 31, 1999 and 1998.
Valuation allowances for mortgage loans at December 31, 1999, 1998 and 1997 were
$600, $600 and $486, respectively. For the years ended December 31, 1999, 1998
and 1997, there were no reductions of the mortgage loan valuation allowance for
dispositions of impaired loans. Net additions to the mortgage loan valuation
allowances were $114 and $261 for the years ended December 31, 1998 and 1997,
respectively. There were no additions or reductions to the mortgage loan
valuation allowance for the year ended December 31, 1999.
INVESTMENT CONCENTRATION FOR MUNICIPAL BOND AND COMMERCIAL MORTGAGE PORTFOLIOS
AND OTHER INVESTMENT INFORMATION
The Company maintains a diversified portfolio of municipal bonds. The largest
concentrations in the portfolio are presented below. Except for the following,
holdings in no other state exceeded 5% of the portfolio at December 31, 1999:
<TABLE>
<CAPTION>
(% of municipal bond portfolio carrying value) 1999 1998
---- ----
<S> <C> <C>
Arizona 22.7% - %
California 20.2 17.4
Ohio 16.4 30.2
Illinois 11.6 21.1
Pennsylvania 7.5 -
Indiana 5.0 -
</TABLE>
The Company's mortgage loans are collateralized by a variety of commercial real
estate property types located throughout the United States. Substantially all of
the commercial mortgage loans are non-recourse to the borrower. The states with
the largest portion of the commercial mortgage loan portfolio are listed below.
Except for the following, holdings in no other state exceeded 5% of the
portfolio at December 31, 1999:
<TABLE>
<CAPTION>
(% of commercial mortgage portfolio carrying value) 1999 1998
---- ----
<S> <C> <C>
California 34.9% 41.9%
New York 27.6 26.3
Illinois 13.2 15.8
New Jersey 12.3 6.9
Pennsylvania 9.7 6.2
</TABLE>
14
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO FINANCIAL STATEMENTS
($ IN THOUSANDS)
The types of properties collateralizing the commercial mortgage loans at
December 31, are as follows:
<TABLE>
<CAPTION>
(% of commercial mortgage portfolio carrying value) 1999 1998
---- ----
<S> <C> <C>
Retail 33.1% 39.5%
Office buildings 18.9 11.7
Warehouse 18.5 19.2
Apartment complex 15.8 18.5
Industrial 4.6 5.5
Other 9.1 5.6
----- -----
100.0% 100.0%
===== =====
</TABLE>
The contractual maturities of the commercial mortgage loan portfolio as of
December 31, 1999, for loans that were not in foreclosure are as follows:
<TABLE>
<CAPTION>
NUMBER OF LOANS CARRYING VALUE PERCENT
--------------- -------------- -------
<S> <C> <C>
2000 2 $ 4,475 2.7%
2001 5 7,165 4.3
2002 2 5,904 3.5
2004 4 5,289 3.2
Thereafter 33 144,164 86.3
----- --------------- -----
Total 46 $ 166,997 100.0%
===== =============== =====
</TABLE>
In 1999, there were no commercial mortgage loans which were contractually due.
SECURITIES ON DEPOSIT
At December 31, 1999, fixed income securities with a carrying value of $1,903
were on deposit with regulatory authorities as required by law.
5. FINANCIAL INSTRUMENTS
In the normal course of business, the Company invests in various financial
assets, incurs various financial liabilities and enters into agreements
involving derivative financial instruments and other off-balance-sheet financial
instruments. The fair value estimates of financial instruments presented on the
following page are not necessarily indicative of the amounts the Company might
pay or receive in actual market transactions. Potential taxes and other
transaction costs have not been considered in estimating fair value. The
disclosures that follow do not reflect the fair value of the Company as a whole
since a number of the Company's significant assets (including deferred policy
acquisition costs and reinsurance recoverables) and liabilities (including
traditional life and interest-sensitive life insurance reserves and deferred
income taxes) are not considered financial instruments and are not carried at
fair value. Other assets and liabilities considered financial instruments such
as accrued investment income and cash are generally of a short-term nature.
Their carrying values are assumed to approximate fair value.
15
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO FINANCIAL STATEMENTS
($ IN THOUSANDS)
FINANCIAL ASSETS
The carrying value and fair value of financial assets at December 31, are as
follows:
<TABLE>
<CAPTION>
1999 1998
---- ----
CARRYING FAIR CARRYING FAIR
VALUE VALUE VALUE VALUE
----- ----- ----- -----
<S> <C> <C> <C> <C>
Fixed income securities $ 1,912,545 $ 1,912,545 $ 1,966,067 $ 1,966,067
Mortgage loans 166,997 159,853 145,095 154,872
Short-term investments 46,037 46,037 76,127 76,127
Policy loans 31,109 31,109 29,620 29,620
Separate Accounts 443,705 443,705 366,247 366,247
</TABLE>
CARRYING VALUE AND FAIR VALUE INCLUDE THE EFFECTS OF DERIVATIVE FINANCIAL
INSTRUMENTS WHERE APPLICABLE.
Fair values for fixed income securities are based on quoted market prices where
available. Non-quoted securities are valued based on discounted cash flows using
current interest rates for similar securities. Mortgage loans are valued based
on discounted contractual cash flows. Discount rates are selected using current
rates at which similar loans would be made to borrowers with similar
characteristics, using similar properties as collateral. Loans that exceed 100%
loan-to-value are valued at the estimated fair value of the underlying
collateral. Short-term investments are highly liquid investments with maturities
of less than one year whose carrying value are deemed to approximate fair value.
The carrying value of policy loans are deemed to approximate fair value.
Separate Accounts assets are carried in the statements of financial position at
fair value based on quoted market prices.
FINANCIAL LIABILITIES
The carrying value and fair value of financial liabilities at December 31, are
as follows:
<TABLE>
<CAPTION>
1999 1998
---- ----
CARRYING FAIR CARRYING FAIR
VALUE VALUE VALUE VALUE
----- ----- ----- -----
<S> <C> <C> <C> <C>
Contractholder funds on
investment contracts $ 627,488 $ 605,113 $ 512,239 $ 518,448
Separate Accounts 443,705 443,705 366,247 366,247
</TABLE>
The fair value of contractholder funds on investment contracts is based on the
terms of the underlying contracts. Reserves on investment contracts with no
stated maturities (single premium and flexible premium deferred annuities) are
valued at the account balance less surrender charges. The fair value of
immediate annuities and annuities without life contingencies with fixed terms is
estimated using discounted cash flow calculations based on interest rates
currently offered for contracts with similar terms and durations. Separate
Accounts liabilities are carried at the fair value of the underlying assets.
DERIVATIVE FINANCIAL INSTRUMENTS
The only derivative financial instruments used by the Company are financial
futures contracts. The Company primarily uses this derivative financial
instrument to reduce its exposure to market risk, specifically interest rate
risk, in conjunction with asset/liability management. The Company does not hold
or issue these instruments for trading purposes.
16
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO FINANCIAL STATEMENTS
($ IN THOUSANDS)
The following table summarizes the contract amount, credit exposure, fair value
and carrying value of the Company's derivative financial instruments:
<TABLE>
<CAPTION>
CARRYING
VALUE
CONTRACT CREDIT FAIR ASSETS/
AMOUNT EXPOSURE VALUE (LIABILITIES)
------ -------- ----- -------------
<S> <C> <C> <C> <C>
AT DECEMBER 31, 1999
Financial futures contracts $ 8,700 $ - $ (29) $ 588
AT DECEMBER 31, 1998
Financial futures contracts $ 15,000 $ - $ (15) $ (223)
</TABLE>
CARRYING VALUE IS REPRESENTATIVE OF DEFERRED GAINS AND LOSSES.
The contract amounts are used to calculate the exchange of contractual payments
under the agreements and are not representative of the potential for gain or
loss on these agreements.
Credit exposure represents the Company's potential loss if all of the
counterparties failed to perform under the contractual terms of the contracts
and all collateral, if any, became worthless. This exposure is measured by the
fair value of contracts with a positive fair value at the reporting date. The
Company manages its exposure to credit risk primarily by establishing risk
control limits. To date, the Company has not incurred any losses as financial
futures contracts have limited off-balance-sheet credit risk as they are
executed on organized exchanges and require daily cash settlement of margins.
Fair value is the estimated amount that the Company would receive (pay) to
terminate or assign the contracts at the reporting date, thereby taking into
account the current unrealized gains or losses of open contracts. Dealer and
exchange quotes are used to value the Company's derivatives.
Financial futures are commitments to either purchase or sell designated
financial instruments at a future date for a specified price or yield. They may
be settled in cash or through delivery. As part of its asset/liability
management, the Company generally utilizes financial futures contracts to manage
its market risk related to anticipatory investment purchases and sales.
Financial futures used as hedges of anticipatory transactions pertain to
identified transactions which are probable to occur and are generally completed
within 90 days.
Market risk is the risk that the Company will incur losses due to adverse
changes in market rates and prices. Market risk exists for all of the derivative
financial instruments that the Company currently holds, as these instruments may
become less valuable due to adverse changes in market conditions. The Company
mitigates this risk through established risk control limits set by senior
management. In addition, the change in the value of the Company's derivative
financial instruments designated as hedges are generally offset by the change in
the value of the related assets and liabilities.
OFF-BALANCE-SHEET FINANCIAL INSTRUMENTS
Commitments to extend mortgage loans are agreements to lend to a borrower
provided there is no violation of any condition established in the contract. The
Company enters into these agreements to commit to future loan fundings at a
predetermined interest rate. Commitments generally have fixed expiration dates
or other termination clauses. Commitments to extend mortgage loans, which are
secured by the underlying properties, are valued based on estimates of fees
charged by other institutions to make
17
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO FINANCIAL STATEMENTS
($ IN THOUSANDS)
similar commitments to borrowers. At December 31, 1999, the Company had $10,000
in mortgage loan commitments which had a fair value of $100. The Company had no
mortgage loan commitments at December 31, 1998.
6. DEFERRED POLICY ACQUISITION COSTS
Certain costs of acquiring business which were deferred and amortized for the
years ended December 31, 1999 and 1998 are as follows:
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
Balance, beginning of year $ 87,830 $ 71,946
Acquisition costs deferred 26,247 23,723
Amortization charged to income (8,861) (8,238)
Adjustment from unlocking assumptions (124) 1,209
Effect of unrealized gains/(losses) 1,840 (810)
------------ ------------
Balance, end of year $ 106,932 $ 87,830
============ ============
</TABLE>
7. RESERVE FOR LIFE-CONTINGENT CONTRACT BENEFITS AND CONTRACTHOLDER FUNDS
At December 31, the reserve for life-contingent contract benefits consists of
the following:
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
Immediate annuities:
Structured settlement annuities $ 1,024,049 $ 1,135,813
Other immediate annuities 2,933 2,577
Traditional life 70,254 68,511
Other 780 1,203
----------- ------------
Total life-contingent contract benefits $ 1,098,016 $ 1,208,104
=========== ============
</TABLE>
The assumptions for mortality generally utilized in calculating reserves
include, the U.S. population with projected calendar year improvements and age
setbacks for impaired lives for structured settlement annuities; the 1983 group
annuity mortality table for other immediate annuities; and actual Company
experience plus loading for traditional life. Interest rate assumptions vary
from 3.5% to 10.3% for immediate annuities and 4.5% to 7.0% for traditional
life. Other estimation methods include the present value of contractually fixed
future benefits for structured settlement annuities, the present value of
expected future benefits based on historical experience for other immediate
annuities and the net level premium reserve method using the Company's
withdrawal experience rates for traditional life.
Premium deficiency reserves are established, if necessary and have been recorded
for the structured settlement annuity business, to the extent the unrealized
gains on fixed income securities would result in a premium deficiency had those
gains actually been realized. A liability of $8 million and $188 million is
included in the reserve for life-contingent contract benefits with respect to
this deficiency for the years ended December 31, 1999 and 1998, respectively.
The decrease in this liability in 1999 reflects declines in unrealized capital
gains on fixed income securities.
18
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO FINANCIAL STATEMENTS
($ IN THOUSANDS)
At December 31, contractholder funds consists of the following:
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
Interest-sensitive life $211,729 $189,970
Fixed annuities:
Immediate annuities 303,564 285,977
Deferred annuities 273,864 177,317
Other investment contracts 50,000 50,000
-------- --------
Total contractholder funds $839,157 $703,264
======== ========
</TABLE>
Contractholder funds are equal to deposits received, net of commissions, and
interest credited to the benefit of the contractholder less withdrawals,
mortality charges and administrative expenses. Interest rates credited range
from 5.5% to 6.5% for interest-sensitive life contracts; 3.5% to 9.8% for
immediate annuities; 4.0% to 7.9% for deferred annuities and 6.6% for other
investment contracts. Withdrawal and surrender charge protection includes: i)
for interest-sensitive life, either a percentage of account balance or dollar
amount grading off generally over 20 years; and ii) for deferred annuities not
subject to a market value adjustment, either a declining or a level percentage
charge generally over nine years or less. Approximately 2% of deferred annuities
are subject to a market value adjustment.
8. CORPORATION RESTRUCTURING
On November 10, 1999 the Corporation announced a series of strategic initiatives
to aggressively expand its selling and servicing capabilities. The Corporation
also announced that it is implementing a program to reduce expenses by
approximately $600 million. The reduction will result in the elimination of
approximately 4,000 current non-agent positions, across all employment grades
and categories by the end of 2000, or approximately 10% of the Corporation's
non-agent work force. The impact of the reduction in employee positions is not
expected to materially impact the results of operations of the Company.
These cost reductions are part of a larger initiative to redeploy the cost
savings to finance new initiatives including investments in direct access and
internet channels for new sales and service capabilities, new competitive
pricing and underwriting techniques, new agent and claim technology and enhanced
marketing and advertising. As a result of the cost reduction program, the
Corporation recorded restructuring and related charges of $81 million pretax
during the fourth quarter of 1999. The Corporation anticipates that additional
pretax restructuring related charges of approximately $100 million will be
expensed as incurred throughout 2000. The Company's allocable share of these
expenses were immaterial in 1999 and are expected to be immaterial in 2000.
9. INCOME TAXES
The Company joins the Corporation and its other eligible domestic subsidiaries
(the "Allstate Group") in the filing of a consolidated federal income tax return
and is party to a federal income tax allocation agreement (the "Allstate Tax
Sharing Agreement"). Under the Allstate Tax Sharing Agreement, the Company pays
to or receives from the Corporation the amount, if any, by which the Allstate
Group's federal income tax liability is affected by virtue of inclusion of the
Company in the consolidated federal income tax return. Effectively, this
19
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO FINANCIAL STATEMENTS
($ IN THOUSANDS)
results in the Company's annual income tax provision being computed, with
adjustments, as if the Company filed a separate return.
Prior to June 30, 1995, the Corporation was a subsidiary of Sears, Roebuck & Co.
("Sears") and, with its eligible domestic subsidiaries, was included in the
Sears consolidated federal income tax return and federal income tax allocation
agreement. Effective June 30, 1995, the Corporation and Sears entered into a new
tax sharing agreement, which governs their respective rights and obligations
with respect to federal income taxes for all periods during which the
Corporation was a subsidiary of Sears, including the treatment of audits of tax
returns for such periods.
The Internal Revenue Service ("IRS") has completed its review of the Allstate
Group's federal income tax returns through the 1993 tax year. Any adjustments
that may result from IRS examinations of tax returns are not expected to have a
material impact on the financial position, liquidity or results of operations of
the Company.
The components of the deferred income tax assets and liabilities at December 31,
are as follows:
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
DEFERRED ASSETS
Life and annuity reserves $ 42,248 $ 41,073
Discontinued operations 366 364
Other postretirement benefits 296 328
Other assets 1,319 2,023
------------- -------------
Total deferred assets 44,229 43,788
DEFERRED LIABILITIES
Deferred policy acquisition costs (25,790) (20,573)
Unrealized net capital gains (16,280) (44,642)
Difference in tax bases of investments (3,194) (1,784)
Prepaid commission expense (682) (790)
Other liabilities (1,360) (1,448)
------------- -------------
Total deferred liabilities (47,306) (69,237)
------------- -------------
Net deferred liability $ (3,077) $ (25,449)
============= =============
</TABLE>
The components of income tax expense for the year ended December 31, are as
follows:
<TABLE>
<CAPTION>
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Current $ 8,650 $ 13,679 $ 14,874
Deferred 5,990 1,255 (1,578)
-------- -------- --------
Total income tax expense $ 14,640 $ 14,934 $ 13,296
======== ======== ========
</TABLE>
The Company paid income taxes of $12,547, $3,788 and $13,350 in 1999, 1998 and
1997, respectively.
20
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO FINANCIAL STATEMENTS
($ IN THOUSANDS)
A reconciliation of the statutory federal income tax rate to the effective
income tax rate on income from operations for the year ended December 31, is as
follows:
<TABLE>
<CAPTION>
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Statutory federal income tax rate 35.0% 35.0% 35.0%
State income tax expense 1.6 1.6 2.2
Other (1.1) (1.5) (.3)
----- ----- -----
Effective income tax rate 35.5% 35.1% 36.9%
===== ===== =====
</TABLE>
Prior to January 1, 1984, the Company was entitled to exclude certain amounts
from taxable income and accumulate such amounts in a "policyholder surplus"
account. The balance in this account at December 31, 1999, approximately $389,
will result in federal income taxes payable of $136 if distributed by the
Company. No provision for taxes has been made as the Company has no plan to
distribute amounts from this account. No further additions to the account have
been permitted since the Tax Reform Act of 1984.
10. STATUTORY FINANCIAL INFORMATION
The Company's statutory capital and surplus was $214,738 and $196,416 at
December 31, 1999 and 1998, respectively. The Company's statutory net income was
$18,767, $13,649 and $18,592 for the years ended December 31, 1999, 1998 and
1997, respectively.
PERMITTED STATUTORY ACCOUNTING PRACTICES
The Company prepares its statutory financial statements in accordance with
accounting practices prescribed or permitted by the New York Department of
Insurance. Prescribed statutory accounting practices include a variety of
publications of the National Association of Insurance Commissioners ("NAIC"), as
well as state laws, regulations and general administrative rules. Permitted
statutory accounting practices encompass all accounting practices not so
prescribed. The Company does not follow any permitted statutory accounting
practices that have a significant impact on statutory surplus or statutory net
income.
The NAIC's codification initiative has produced a comprehensive guide of
statutory accounting principles, which the Company will implement in January
2001. The Company's state of domicile, New York, continues to review
codification and existing statutory accounting requirements for desired
revisions to existing state laws and regulations. The requirements are not
expected to have a material impact on the statutory surplus of the Company.
DIVIDENDS
The ability of the Company to pay dividends is dependent on business conditions,
income, cash requirements of the Company and other relevant factors. Under New
York Insurance Law, a notice of intention to distribute any dividend must be
filed with the New York Superintendent of Insurance not less than 30 days prior
to the distribution. Such proposed declaration is subject to the
Superintendent's disapproval.
RISK-BASED CAPITAL
The NAIC has a standard for assessing the solvency of insurance companies, which
is referred to as risk-based capital ("RBC"). The requirement consists of a
formula for determining each insurer's RBC and a model law specifying regulatory
actions if an insurer's RBC falls below specified levels. The RBC formula for
life insurance companies establishes capital requirements relating to insurance,
business, asset and
21
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO FINANCIAL STATEMENTS
($ IN THOUSANDS)
interest rate risks. At December 31, 1999, RBC for the Company was significantly
above a level that would require regulatory action.
11. BENEFIT PLANS
PENSION PLANS
Defined benefit pension plans, sponsored by AIC, cover domestic full-time
employees and certain part-time employees. Benefits under the pension plans are
based upon the employee's length of service, average annual compensation and
estimated social security retirement benefits. AIC's funding policy for the
pension plans is to make annual contributions in accordance with accepted
actuarial cost methods. The (benefit) and cost to the Company included in net
income was $(263), $382 and $597 for the pension plans in 1999, 1998 and 1997,
respectively.
POSTRETIREMENT BENEFITS OTHER THAN PENSIONS
AIC also provides certain health care and life insurance benefits for retired
employees. Qualified employees may become eligible for these benefits if they
retire in accordance with AIC's established retirement policy and are
continuously insured under AIC's group plans or other approved plans for ten or
more years prior to retirement. AIC shares the cost of the retiree medical
benefits with retirees based on years of service, with AIC's share being subject
to a 5% limit on annual medical cost inflation after retirement. AIC's
postretirement benefit plans currently are not funded. AIC has the right to
modify or terminate these plans.
PROFIT SHARING FUND
Employees of the Corporation and its domestic subsidiaries, including the
Company are also eligible to become members of The Savings and Profit Sharing
Fund of Allstate Employees ("Allstate Plan"). The Corporation's contributions
are based on the Corporation's matching obligation and performance.
The Company paid $176, $567, $164 in 1999, 1998 and 1997, respectively for
profit sharing.
12. OTHER COMPREHENSIVE INCOME
The components of other comprehensive income on a pretax and after-tax basis for
the year ended December 31, are as follows:
<TABLE>
<CAPTION>
1999 1998 1997
------------------------------ ----------------------------- ------------------------------
AFTER- AFTER- AFTER-
PRETAX TAX TAX PRETAX TAX TAX PRETAX TAX TAX
------ --- ------ ------ --- ------- ------ ------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
UNREALIZED CAPITAL GAINS
AND LOSSES:
Unrealized holding
(losses) gains arising
during the period $(83,241) $ 29,134 $(54,107) $ 33,218 $(11,626) $ 21,592 $ 43,686 $(15,290) $ 28,396
Less: reclassification
adjustments (2,207) 772 (1,435) 4,869 (1,704) 3,165 1,183 (414) 769
-------- -------- -------- -------- -------- -------- -------- -------- --------
Unrealized net capital
(losses) gains (81,034) 28,362 (52,672) 28,349 (9,922) 18,427 42,503 (14,876) 27,627
-------- -------- -------- -------- -------- -------- -------- -------- --------
Other comprehensive
(loss) income $(81,034) $ 28,362 $(52,672) $ 28,349 $ (9,922) $ 18,427 $ 42,503 $(14,876) $ 27,627
======== ======== ========= ======== ======== ======== ======== ======== ========
</TABLE>
22
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO FINANCIAL STATEMENTS
($ IN THOUSANDS)
13. COMMITMENTS AND CONTINGENT LIABILITIES
REGULATIONS AND LEGAL PROCEEDINGS
The Company's business is subject to the effect of a changing social, economic
and regulatory environment. Public and regulatory initiatives have varied and
have included employee benefit regulation, controls on medical care costs,
removal of barriers preventing banks from engaging in the securities and
insurance business, tax law changes affecting the taxation of insurance
companies, the tax treatment of insurance products and its impact on the
relative desirability of various personal investment vehicles, and proposed
legislation to prohibit the use of gender in determining insurance rates and
benefits. The ultimate changes and eventual effects, if any, of these
initiatives are uncertain.
From time to time the Company is involved in pending and threatened litigation
in the normal course of its business in which claims for monetary damages are
asserted. In the opinion of management, the ultimate liability, if any, arising
from such pending or threatened litigation is not expected to have a material
effect on the results of operations, liquidity or financial position of the
Company.
GUARANTY FUNDS
Under state insurance guaranty fund laws, insurers doing business in a state can
be assessed, up to prescribed limits, for certain obligations of insolvent
insurance companies to policyholders and claimants. The Company's expense
related to these funds have been immaterial.
MARKETING AND COMPLIANCE ISSUES
Companies operating in the insurance and financial services markets have come
under the scrutiny of regulators with respect to market conduct and compliance
issues. Under certain circumstances, companies have been held responsible for
providing incomplete or misleading sales materials and for replacing existing
policies with policies that were less advantageous to the policyholder. The
Company monitors its sales materials and enforces compliance procedures to
mitigate any exposure to potential litigation. The Company is a member of the
Insurance Marketplace Standards Association, an organization which advocates
ethical market conduct.
23
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
SCHEDULE IV--REINSURANCE
($ IN THOUSANDS)
<TABLE>
<CAPTION>
GROSS NET
YEAR ENDED DECEMBER 31, 1999 AMOUNT CEDED AMOUNT
- ---------------------------- ------ ----- ------
<S> <C> <C> <C>
Life insurance in force $ 14,140,049 $ 1,066,993 $ 13,073,056
============ =========== ============
Premiums and contract charges:
Life and annuities $ 99,760 $ 3,397 $ 96,363
Accident and health 6,867 856 6,011
------------ ----------- ------------
$ 106,627 $ 4,253 $ 102,374
============ =========== ============
</TABLE>
<TABLE>
<CAPTION>
GROSS NET
YEAR ENDED DECEMBER 31, 1998 AMOUNT CEDED AMOUNT
- ---------------------------- ------ ----- ------
<S> <C> <C> <C>
Life insurance in force $ 12,656,826 $ 857,500 $ 11,799,326
============ =========== ============
Premiums and contract charges:
Life and annuities $ 116,455 $ 2,318 $ 114,137
Accident and health 5,801 886 4,915
------------ ----------- ------------
$ 122,256 $ 3,204 $ 119,052
============ =========== ============
</TABLE>
<TABLE>
<CAPTION>
GROSS NET
YEAR ENDED DECEMBER 31, 1997 AMOUNT CEDED AMOUNT
- ---------------------------- ------ ----- ------
<S> <C> <C> <C>
Life insurance in force $ 11,339,990 $ 721,040 $ 10,618,950
============ =========== ============
Premiums and contract charges:
Life and annuities $ 116,167 $ 2,185 $ 113,982
Accident and health 5,883 902 4,981
------------ ----------- ------------
$ 122,050 $ 3,087 $ 118,963
============ =========== ============
</TABLE>
24
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
SCHEDULE V--VALUATION AND QUALIFYING ACCOUNTS
($ IN THOUSANDS)
<TABLE>
<CAPTION>
BALANCE AT CHARGED TO BALANCE AT
BEGINNING COSTS AND END OF
OF PERIOD EXPENSES DEDUCTIONS PERIOD
--------- -------- ---------- ------
<S> <C> <C> <C> <C>
YEAR ENDED DECEMBER 31, 1999
Allowance for estimated losses
on mortgage loans $ 600 $ - $ - $ 600
============ ============ ============ ============
YEAR ENDED DECEMBER 31, 1998
Allowance for estimated losses
on mortgage loans $ 486 $ 114 $ - $ 600
============ ============ ============ ============
YEAR ENDED DECEMBER 31, 1997
Allowance for estimated losses
on mortgage loans $ 225 $ 261 $ - $ 486
============ ============ ============ ============
</TABLE>
25
<PAGE>
---------------------------------------------
ALLSTATE LIFE OF NEW
YORK SEPARATE
ACCOUNT A
FINANCIAL STATEMENTS AS OF DECEMBER 31, 1999
AND FOR THE PERIODS ENDED DECEMBER 31, 1999
AND DECEMBER 31, 1998 AND INDEPENDENT
AUDITORS' REPORT
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Shareholder of
Allstate Life Insurance Company of New York:
We have audited the accompanying statement of net assets of Allstate Life of
New York Separate Account A as of December 31, 1999 (including the assets of
each of the individual sub-accounts which comprise the Account as disclosed
in Note 1), and the related statements of operations for the period then
ended and the statements of changes in net assets for each of the periods in
the two year period then ended for each of the individual sub-accounts which
comprise the Account. These financial statements are the responsibility of
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
Our procedures included confirmation of securities owned at December 31, 1999
by correspondence with the account custodians. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of Allstate Life of New York Separate
Account A as of December 31, 1999 (including the assets of each of the
individual sub-accounts which comprise the Account), and the results of
operations for each of the individual sub-accounts for the period then ended
and the changes in their net assets for each of the periods in the two year
period then ended in conformity with generally accepted accounting principles.
/s/ Deloitte & Touche LLP
Chicago, Illinois
March 27, 2000
<PAGE>
ALLSTATE LIFE OF NEW YORK SEPARATE ACCOUNT A
<TABLE>
<CAPTION>
STATEMENT OF NET ASSETS
DECEMBER 31, 1999
- ------------------------------------------------------------------------------------------------
<S> <C>
ASSETS
Allocation to Sub-Accounts investing in the AIM Variable Insurance Funds:
Aggressive Growth, 12,432 shares (cost $158,759) $ 177,153
Balanced Fund, 6,444 shares (cost $79,572) 84,024
Capital Appreciation, 255,543 shares (cost $6,215,783) 9,092,204
Capital Development, 3,871 shares (cost $40,870) 46,028
Diversified Income, 262,808 shares (cost $2,884,027) 2,643,852
Global Utilities, 55,043 shares (cost $987,756) 1,254,971
Government Securities, 114,229 shares (cost $1,272,606) 1,214,257
Growth, 300,263 shares (cost $7,319,062) 9,683,482
Growth and Income, 493,077 shares (cost $11,214,069) 15,576,292
High Yield, 1,933 shares (cost $17,487) 17,433
International Equity, 165,155 shares (cost $3,272,322) 4,837,388
Money Market, 1,578,022 shares (cost $1,578,022) 1,578,022
Value, 665,744 shares (cost $17,789,516) 22,302,412
--------------
Total Assets 68,507,518
LIABILITIES
Payable to Allstate Life Insurance Company of New York:
Accrued contract maintenance charges 19,014
--------------
Net Assets $ 68,488,504
==============
</TABLE>
See notes to financial statements.
2
<PAGE>
ALLSTATE LIFE OF NEW YORK SEPARATE ACCOUNT A
<TABLE>
<CAPTION>
STATEMENTS OF OPERATIONS
- ----------------------------------------------------------------------------------------------------------------------------------
AIM Variable Insurance Funds Sub-Accounts
---------------------------------------------------------------------------
For the Period Ended December 31, 1999
---------------------------------------------------------------------------
Aggressive Capital Capital Diversified
Growth (a) Balanced (a) Appreciation Development (a) Income
---------- ------------ ------------ --------------- -------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Dividends $ - $ 1,095 $ 188,516 $ - $ 164,843
Charges from Allstate Life Insurance Company
of New York
Mortality and expense risk (143) (119) (76,212) (56) (28,287)
Administrative expense (11) (9) (5,645) (4) (2,095)
---------- ------------ ------------ --------------- -------------
Net investment income (loss) (154) 967 106,659 (60) 134,461
REALIZED AND UNREALIZED GAINS
(LOSSES) ON INVESTMENTS
Realized gains (losses) from sales of investments:
Proceeds from sales 123 189 324,982 55 476,703
Cost of investments sold 117 182 276,808 52 493,648
---------- ------------ ------------ --------------- -------------
Net realized gains (losses) 6 7 48,174 3 (16,945)
---------- ------------ ------------ --------------- -------------
Change in unrealized gains (losses) 18,394 4,451 2,401,290 5,157 (181,607)
---------- ------------ ------------ --------------- -------------
Net gains (losses) on investments 18,400 4,458 2,449,464 5,160 (198,552)
---------- ------------ ------------ --------------- -------------
CHANGE IN NET ASSETS
RESULTING FROM OPERATIONS $ 18,246 $ 5,425 $2,556,123 $ 5,100 $ (64,091)
========== ============ ============ =============== =============
</TABLE>
(a) For the Period Beginning October 25, 1999 and Ended December 31, 1999
See notes to financial statements.
3
<PAGE>
ALLSTATE LIFE OF NEW YORK SEPARATE ACCOUNT A
<TABLE>
<CAPTION>
STATEMENTS OF OPERATIONS
- ---------------------------------------------------------------------------------------------------------------------------------
AIM Variable Insurance Funds Sub-Accounts
------------------------------------------------------------------------
For the Period Ended December 31, 1999
------------------------------------------------------------------------
Global Government Growth High
Utilities Securities Growth and Income Yield (a)
----------- ------------ ------------ ------------ -------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Dividends $ 18,906 $ 43,946 $ 337,039 $ 129,184 $ 399
Charges from Allstate Life Insurance Company
of New York
Mortality and expense risk (9,493) (32,564) (83,130) (132,390) (14)
Administrative expense (703) (2,412) (6,158) (9,807) (1)
----------- ------------ ------------ ------------ -------------
Net investment income (loss) 8,710 8,970 247,751 (13,013) 384
REALIZED AND UNREALIZED GAINS
(LOSSES) ON INVESTMENTS
Realized gains (losses) from sales of investments:
Proceeds from sales 157,147 2,759,791 423,990 458,270 15
Cost of investments sold 137,026 2,894,175 359,129 380,204 15
----------- ------------ ------------ ------------ -------------
Net realized gains (losses) 20,121 (134,384) 64,861 78,066 -
----------- ------------ ------------ ------------ -------------
Change in unrealized gains (losses) 236,069 (54,186) 1,792,381 3,178,263 (54)
----------- ------------ ------------ ------------ -------------
Net gains (losses) on investments 256,190 (188,570) 1,857,242 3,256,329 (54)
----------- ------------ ------------ ------------ -------------
CHANGE IN NET ASSETS
RESULTING FROM OPERATIONS $ 264,900 $ (179,600) $2,104,993 $3,243,316 $ 330
=======-=== ============ ============ ============ =============
</TABLE>
(a) For the Period Beginning October 25, 1999 and Ended December 31, 1999
See notes to financial statements.
4
<PAGE>
ALLSTATE LIFE OF NEW YORK SEPARATE ACCOUNT A
<TABLE>
<CAPTION>
STATEMENTS OF OPERATIONS
- -----------------------------------------------------------------------------------------------------------------
AIM Variable Insurance Funds Sub-Accounts
---------------------------------------------------------
For the Period Ended December 31, 1999
---------------------------------------------------------
International Money
Equity Market Value
-------------- ------------ -------------
<S> <C> <C> <C>
INVESTMENT INCOME
Dividends $ 154,775 $ 61,128 $ 355,310
Charges from Allstate Life Insurance Company
of New York
Mortality and expense risk (37,180) (17,854) (173,801)
Administrative expense (2,754) (1,322) (12,874)
-------------- ------------ -------------
Net investment income (loss) 114,841 41,952 168,635
REALIZED AND UNREALIZED GAINS
(LOSSES) ON INVESTMENTS
Realized gains (losses) from sales of investments:
Proceeds from sales 300,780 1,206,358 530,128
Cost of investments sold 248,263 1,206,358 459,369
-------------- ------------ -------------
Net realized gains (losses) 52,517 - 70,759
-------------- ------------ -------------
Change in unrealized gains (losses) 1,419,551 - 3,419,919
-------------- ------------ -------------
Net gains (losses) on investments 1,472,068 - 3,490,678
-------------- ------------ -------------
CHANGE IN NET ASSETS
RESULTING FROM OPERATIONS $1,586,909 $ 41,952 $ 3,659,313
============== ============ =============
</TABLE>
See notes to financial statements.
5
<PAGE>
ALLSTATE LIFE OF NEW YORK SEPARATE ACCOUNT A
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE PERIOD ENDED DECEMBER 31,
- --------------------------------------------------------------------------------------------------------------------------
AIM Variable Insurance Funds Sub-Accounts
-------------------------------------------------------------------------
Aggressive Capital
Growth Balanced Capital Appreciation Development
------------ ------------ ----------------------------- ------------
1999 (a) 1999 (a) 1999 1998 1999 (a)
------------ ------------ ------------- ------------- ------------
<S> <C> <C> <C> <C> <C>
FROM OPERATIONS
Net investment income (loss) $ (154) $ 967 $ 106,659 $ 66,071 $ (60)
Net realized gains (losses) 6 7 48,174 760 3
Change in unrealized gains (losses) 18,394 4,451 2,401,290 457,939 5,157
------------ ------------ ------------- ------------- ------------
Change in net assets resulting from operations 18,246 5,425 2,556,123 524,770 5,100
------------ ------------ ------------- ------------- ------------
FROM CAPITAL TRANSACTIONS
Deposits 43,819 49,251 2,073,160 2,056,465 17,015
Benefit payments - - (23,548) (29,888) -
Payments on termination - (79) (225,136) (115,473) -
Contract maintenance charges (48) (24) (3,267) (1,759) (12)
Transfers among the sub-accounts
and with the Fixed Account - net 115,087 29,427 408,212 (181,131) 23,912
------------ ------------ ------------- ------------- ------------
Change in net assets resulting
from capital transactions 158,858 78,575 2,229,421 1,728,214 40,915
------------ ------------ ------------- ------------- ------------
INCREASE (DECREASE) IN NET ASSETS 177,104 84,000 4,785,544 2,252,984 46,015
NET ASSETS AT BEGINNING OF PERIOD - - 4,304,137 2,051,153 -
------------ ------------ ------------- ------------- ------------
NET ASSETS AT END OF PERIOD $ 177,104 $ 84,000 $ 9,089,681 $ 4,304,137 $ 46,015
============ ============ ============= ============= ============
</TABLE>
(a) For the Period Beginning October 25, 1999 and Ended December 31, 1999
See notes to financial statements.
6
<PAGE>
ALLSTATE LIFE OF NEW YORK SEPARATE ACCOUNT A
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE PERIOD ENDED DECEMBER 31,
- -----------------------------------------------------------------------------------------------------------------------------
AIM Variable Insurance Funds Sub-Accounts
----------------------------------------------------------------------------
Diversified Income Global Utilities Government Securities
------------------------- ------------------------ --------------------------
1999 1998 1999 1998 1999 1998
------------ ------------ ------------ ----------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
FROM OPERATIONS
Net investment income (loss) $ 134,461 $ 94,730 $ 8,710 $ 4,558 $ 8,970 $ 79,067
Net realized gains (losses) (16,945) 7,969 20,121 (484) (134,384) 109,308
Change in unrealized gains (losses) (181,607) (85,959) 236,069 24,459 (54,186) (23,404)
------------ ------------ ------------ ----------- ------------ ------------
Change in net assets resulting from operations (64,091) 16,740 264,900 28,533 (179,600) 164,971
------------ ------------ ------------ ----------- ------------ ------------
FROM CAPITAL TRANSACTIONS
Deposits 1,187,532 1,222,826 734,901 356,711 635,526 2,725,221
Benefit payments (12,220) (32,778) (3,120) (4,815) (661,198) -
Payments on termination (185,900) (37,509) (82,757) (3,609) (403,351) (8,618)
Contract maintenance charges (810) (491) (463) (223) 317 (913)
Transfers among the sub-accounts
and with the Fixed Account - net (46,215) (98,970) (53,342) (93,970) (1,749,948) 268,867
------------ ------------ ------------ ----------- ------------ ------------
Change in net assets resulting
from capital transactions 942,387 1,053,078 595,219 254,094 (2,178,654) 2,984,557
------------ ------------ ------------ ----------- ------------ ------------
INCREASE (DECREASE) IN NET ASSETS 878,296 1,069,818 860,119 282,627 (2,358,254) 3,149,528
------------ ------------ ------------ ----------- ------------ ------------
NET ASSETS AT BEGINNING OF PERIOD 1,764,822 695,004 394,504 111,877 3,572,174 422,646
------------ ------------ ------------ ----------- ------------ ------------
NET ASSETS AT END OF PERIOD $2,643,118 $1,764,822 $1,254,623 $ 394,504 $1,213,920 $3,572,174
============ ============ ============ =========== ============ ============
</TABLE>
See notes to financial statements.
7
<PAGE>
ALLSTATE LIFE OF NEW YORK SEPARATE ACCOUNT A
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE PERIOD ENDED DECEMBER 31,
- --------------------------------------------------------------------------------------------------------------------
AIM Variable Insurance Funds Sub-Accounts
-------------------------------------------------------------------
Growth Growth and Income High Yield
-------------------------- --------------------------- ----------
1999 1998 1999 1998 1999 (a)
------------ ------------ ------------- ------------ ----------
<S> <C> <C> <C> <C> <C>
FROM OPERATIONS
Net investment income (loss) $ 247,751 $ 225,339 $ (13,013) $ 21,895 $ 384
Net realized gains (losses) 64,861 29,091 78,066 17,916 -
Change in unrealized gains (losses) 1,792,381 542,074 3,178,263 1,076,360 (54)
------------ ------------ ------------- ------------ ----------
Change in net assets resulting from operations 2,104,993 796,504 3,243,316 1,116,171 330
------------ ------------ ------------- ------------ ----------
FROM CAPITAL TRANSACTIONS
Deposits 3,265,114 2,076,025 5,424,896 3,226,558 17,103
Benefit payments (26,647) (7,214) (46,523) (82,435) -
Payments on termination (298,191) (100,412) (319,041) (161,641) -
Contract maintenance charges (3,399) (1,377) (5,525) (2,399) (5)
Transfers among the sub-accounts
and with the Fixed Account - net 453,397 30,657 672,802 75,882 -
------------ ------------ ------------- ------------ ----------
Change in net assets resulting
from capital transactions 3,390,274 1,997,679 5,726,609 3,055,965 17,098
------------ ------------ ------------- ------------ ----------
INCREASE (DECREASE) IN NET ASSETS 5,495,267 2,794,183 8,969,925 4,172,136 17,428
NET ASSETS AT BEGINNING OF PERIOD 4,185,527 1,391,344 6,602,044 2,429,908 -
------------ ------------ ------------- ------------ ----------
NET ASSETS AT END OF PERIOD $9,680,794 $4,185,527 $15,571,969 $6,602,044 $ 17,428
============ ============ ============= ============ ==========
</TABLE>
(a) For the Period Beginning October 25, 1999 and Ended December 31, 1999
See notes to financial statements.
8
<PAGE>
ALLSTATE LIFE OF NEW YORK SEPARATE ACCOUNT A
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE PERIOD ENDED DECEMBER 31,
- ----------------------------------------------------------------------------------------------------------------------------------
AIM Variable Insurance Funds Sub-Accounts
----------------------------------------------------------------------------------
International Equity Money Market Value
-------------------------- ------------------------- ---------------------------
1999 1998 1999 1998 1999 1998
------------ ------------ ------------ ----------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
FROM OPERATIONS
Net investment income (loss) $ 114,841 $ (7,420) $ 41,952 $ 26,737 $ 168,635 $ 261,042
Net realized gains (losses) 52,517 5,640 - - 70,759 32,103
Change in unrealized gains (losses) 1,419,551 165,760 - - 3,419,919 1,022,492
------------ ------------ ------------ ----------- ------------- ------------
Change in net assets resulting from operations 1,586,909 163,980 41,952 26,737 3,659,313 1,315,637
------------ ------------ ------------ ----------- ------------- ------------
FROM CAPITAL TRANSACTIONS
Deposits 1,110,124 716,187 1,305,204 509,817 11,613,584 3,273,006
Benefit payments (27,341) (6,664) (28,371) (36,887) (57,538) (7,168)
Payments on termination (93,590) (33,261) (413,731) (16,252) (646,773) (103,596)
Contract maintenance charges (1,428) (726) (468) (218) (7,380) (2,602)
Transfers among the sub-accounts
and with the Fixed Account - net 298,246 41,000 (295,054) 32,193 584,939 235,246
------------ ------------ ------------ ----------- ------------- ------------
Change in net assets resulting
from capital transactions 1,286,011 716,536 567,580 488,653 11,486,832 3,394,886
------------ ------------ ------------ ----------- ------------- ------------
INCREASE (DECREASE) IN NET ASSETS 2,872,920 880,516 609,532 515,390 15,146,145 4,710,523
NET ASSETS AT BEGINNING OF PERIOD 1,963,126 1,082,610 968,052 452,662 7,150,077 2,439,554
------------ ------------ ------------ ----------- ------------- ------------
NET ASSETS AT END OF PERIOD $4,836,046 $1,963,126 $1,577,584 $ 968,052 $22,296,222 $7,150,077
============ ============ ============ =========== ============= ============
</TABLE>
See notes to financial statements.
9
<PAGE>
ALLSTATE LIFE OF NEW YORK SEPARATE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. ORGANIZATION
Allstate Life of New York Separate Account A (the "Account"), a unit
investment trust registered with the Securities and Exchange Commission
under the Investment Company Act of 1940, is a Separate Account of
Allstate Life Insurance Company of New York ("Allstate New York"). The
assets of the Account are legally segregated from those of Allstate New
York. Allstate New York is wholly owned by Allstate Life Insurance
Company, a wholly owned subsidiary of Allstate Insurance Company, which is
wholly owned by The Allstate Corporation.
Allstate New York issues two variable annuity contracts, the AIM Lifetime
Plus-SM- ("Lifetime Plus") and the AIM Lifetime Plus-SM-II ("Lifetime Plus
II"), the deposits of which are invested at the direction of the
contractholders in the sub-accounts that comprise the Account. Absent any
contract provisions wherein Allstate New York contractually guarantees
either a minimum return or account value to the beneficiaries of the
contractholders in the form of a death benefit, the contractholders bear
the investment risk that the sub-accounts may not meet their stated
objectives. The sub-accounts invest in the following underlying mutual
fund portfolios of the AIM Variable Insurance Funds (the "Funds").
Aggressive Growth Growth
Balanced Growth and Income
Capital Appreciation High Yield
Capital Development International Equity
Diversified Income Money Market
Global Utilities Value
Government Securities
Allstate New York provides insurance and administrative services to the
contractholders for a fee. Allstate New York also maintains a fixed
account ("Fixed Account"), to which contractholders may direct their
deposits and receive a fixed rate of return. Allstate New York has sole
discretion to invest the assets of the Fixed Account, subject to
applicable law.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
VALUATION OF INVESTMENTS - Investments consist of shares of the Funds,
and are stated at fair value based on quoted market prices at
December 31, 1999.
INVESTMENT INCOME - Investment income consists of dividends declared by
the Funds and is recognized on the ex-dividend date.
REALIZED GAINS AND LOSSES - Realized gains and losses represent the
difference between the proceeds from sales of portfolio shares by the
Account and the cost of such shares, which is determined on a weighted
average basis.
10
<PAGE>
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
FEDERAL INCOME TAXES - The Account intends to qualify as a segregated
asset account as defined in the Internal Revenue Code ("Code"). As such,
the operations of the Account are included in the tax return of Allstate
New York. Allstate New York is taxed as a life insurance company under the
Code. No federal income taxes are allocable to the Account as the Account
did not generate taxable income.
USE OF ESTIMATES - The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts reported in the
financial statements and accompanying notes. Actual results could differ
from those estimates.
3. EXPENSES
ADMINISTRATIVE EXPENSE CHARGE - Allstate New York deducts administrative
expense charges daily at a rate equal to .10% per annum of the average
daily net assets of the Account for the Lifetime Plus and Lifetime Plus
II. Allstate New York guarantees that the amount of this charge will not
increase over the life of the contract.
CONTRACT MAINTENANCE CHARGE - Allstate New York deducts an annual
maintenance charge of $35 for Lifetime Plus and Lifetime Plus II on each
contract anniversary and guarantees that this charge will not increase
over the life of the contract. This charge will be waived if certain
conditions are met.
MORTALITY AND EXPENSE RISK CHARGE - Allstate New York assumes mortality
and expense risks related to the operations of the Account and deducts
charges daily based on the daily net assets of the Account. The mortality
and expense risk charge covers insurance benefits available with the
contract and certain expenses of the contract. It also covers the risk
that the current charges will not be sufficient in the future to cover the
cost of administering the contract. Allstate New York guarantees that the
amount of this charge will not increase over the life of the contract. At
the contractholder's discretion, additional options, primarily death
benefits, may be purchased for an additional charge.
11
<PAGE>
4. UNITS ISSUED AND REDEEMED
<TABLE>
<CAPTION>
(Units in whole amounts) Unit activity during 1999
---------------------------------------------
Accumulation
Units Outstanding Units Units Units Outstanding Unit Value
December 31, 1998 Issued Redeemed December 31, 1999 December 31, 1999
----------------- ------------ ------------ ----------------- -----------------
<S> <C> <C> <C> <C> <C>
Investments in the AIM Variable Insurance
Funds Sub-Accounts:
Aggressive Growth - 12,664 (3) 12,661 $ 13.99
Balanced - 6,390 (8) 6,382 13.16
Capital Appreciation 287,336 167,925 (29,513) 425,748 21.35
Capital Development - 3,949 (1) 3,948 11.66
Diversified Income 146,644 128,234 (47,677) 227,201 11.63
Global Utilities 25,418 45,026 (9,036) 61,408 20.43
Government Securities 301,983 79,492 (272,981) 108,494 11.19
Growth 220,831 192,666 (30,283) 383,214 25.26
Growth and Income 361,890 324,260 (41,017) 645,133 24.14
High Yield - 1,751 - 1,751 9.96
International Equity 136,898 105,320 (21,528) 220,690 21.91
Money Market 87,010 167,828 (117,406) 137,432 11.48
Value 405,246 646,140 (64,309) 987,077 22.59
Units relating to accrued contract maintenance charges are included in units redeemed.
</TABLE>
12
<PAGE>
PART C
OTHER INFORMATION
24A. FINANCIAL STATEMENTS
The Financial Statements of Allstate Life Insurance Company of New York
("Allstate New York" or "Depositor") and Allstate Life of New York Separate
Account A ("Separate Account") are filed herewith in Part B of this Registration
Statement
24B. EXHIBITS
The following exhibits correspond to those required by paragraph (b) of Item 24
as to Exhibits in Form N-4:
(1) Resolution of the Board of Directors of Allstate Life Insurance Company of
New York authorizing establishment of the Allstate Life of New York
Separate Account A (Incorporated herein by reference to Post-Effective
Amendment No. 3 to Registrant's Form N-4 Registration Statement (File No.
033-65381) dated April 30, 1999.)
(2) Not Applicable
(3) (a) Form of Underwriting Agreement with ALFS, Inc. (formerly known as
Allstate Life Financial Services, Inc.) (Previously filed in Pre-Effective
Amendment No. 1 to this Registration Statement (File No. 333-74411) dated
November 19, 1999.)
(b) Form of Underwriting Agreement between Allstate New York and Allstate
Distributors, L.L.C.
(c) Form of Administrative Services Agreement between Allstate New York
and Allstate Distributors, L.L.C.
(4) Form of Contract (Previously filed in Pre-Effective Amendment No. 1 to this
Registration Statement (File No. 333-74411) dated November 19, 1999.)
(5) Form of Application for a Contract (Previously filed in Pre-Effective
Amendment No. 1 to this Registration Statement (File No. 333-74411) dated
November 19, 1999.)
(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) Form of Participation Agreement (Previously filed in Post-Effective
Amendment No. 1 to this Registration Statement (File No. 333-74411) dated
February 1, 2000.)
(9) (a) Opinion of Michael J. Velotta, Vice President, Secretary and General
Counsel of Allstate Life Insurance Company of New York (Previously filed in
Pre-Effective Amendment No. 1 to this Registration Statement (File No.
333-74411) dated November 19, 1999.)
(b) Opinion of Michael J. Velotta, Vice President, Secretary and General
Counsel of Allstate Life Insurance Company of New York (Previously filed in
Post-Effective Amendment No. 1 to this Registration Statement (File No.
333-74411) dated February 1, 2000.)
(10) (a) Independent Auditors' Consent
(b) Consent of Freedman, Levy, Kroll & Simonds
(11) Not applicable
(12) Not applicable
(13) Schedule of Computation of Performance Quotations
(14) Not applicable
(99)(a) 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 No. 033-65381) dated September 20, 1996.)
(b) Powers of Attorney for Thomas J. Wilson, II, Michael J. Velotta,
Marcia D. Alazraki, Cleveland Johnson, Jr., 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
No. 033-65381) dated April 30, 1999.)
(c) Power of Attorney for Samuel H. Pilch (Previously filed in
Pre-Effective Amendment No. 1 to this Registration Statement (File No.
333-74411) dated November 19, 1999.)
(d) Power of Attorney for Vincent A. Fusco (Incorporated herein by
reference to Post-Effective Amendment No. 6 to Registrant's Form N-4
Registration Statement (File No. 033-65381) dated February 14, 2000.)
25. DIRECTORS AND OFFICERS OF THE DEPOSITOR
<TABLE>
<CAPTION>
NAME AND PRINCIPAL POSITION AND OFFICE WITH
BUSINESS ADDRESS* DEPOSITOR OF THE ACCOUNT
<S> <C>
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 and Chief Operations Officer
Cleveland Johnson, Jr. Director
Kenneth R. O'Brien Director
John R. Raben, Jr. Director
Leonard G. Sherman Director and Vice President
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
Patricia A. Coffey Assistant Vice President
Adrian B. Corbiere Assistant Vice President
Dorothy E. Even Assistant Vice President
Judith P. Greffin Assistant Vice President
Keith A. Hauschildt Assistant Vice President
Ronald A. Johnson Assistant Vice President
Charles D. Mires Assistant Vice President
Barry S. Paul Assistant Vice President and Assistant Treasurer
C. Nelson Strom Assistant Vice President and Corporate Actuary
Timothy N. Vander Pas Assistant Vice President
David A. Walsh Assistant Vice President
Joanne M. Derrig Assistant Secretary and Assistant General Counsel
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
Rhonda Hoops 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
Jeffrey A. Mazer 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. Fusco is One Allstate Drive, P.O. Box
9095, Farmingville, New York 11738. The principal business address of Ms.
Alazraki, Mr. Johnson, Mr. O'Brien, Mr. Raben and Ms. Slacke is in the State of
New York. 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 the Form 10-K Annual Report of The Allstate
Corporation (File No. 1-11840).
27. NUMBER OF CONTRACT OWNERS
As of February 15, 2000, there were 61 nonqualified contracts and 35 qualified
contracts.
28. INDEMNIFICATION
The by-laws of both Allstate New York and Allstate Distributors, L.L.C.
(Principal Underwriter), 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 respective 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) Allstate Distributors, L.L.C. also acts as a principal underwriter to
the following investment companies:
Allstate Life Insurance Company Separate Account A
b) The directors and officers of the principal underwriter are:
Name and Principal Business Positions and Offices
Address* of Each Such Person with Principal Underwriter
- -------------------------------------------------------------------------
John R. Hunter Managing Director
Brent H. Hamann General Manager
Albert Dal Porto Senior Vice President
Karen C. Gardner Vice President
Evelyn Cooper Vice President
Lisa A. Burnell Chief Compliance Officer
Janet M. Albers Controller
Michael J. Velotta Assistant Secretary
James P. Zils Treasurer
Barry S. Paul Assistant Treasurer
* The principal address of Allstate Distributors, L.L.C. is 3100 Sanders Road,
Northbrook, Illinois.
(c) Compensation of Allstate Distributors, L.L.C.
None
30. LOCATION OF ACCOUNTS AND RECORDS
Allstate New York is located at One Allstate Drive, P.O. Box 9095, Farmingville,
New York 11738.
The Principal Underwriter, Allstate Distributors, L.L.C., 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
<PAGE>
32. UNDERTAKINGS
The Registrant undertakes to file a post-effective amendment to the Registration
Statement as frequently as is necessary to ensure that the audited financial
statements in the Registration Statement are never more than 16 months old for
so long as payments under the variable annuity contracts may be accepted.
Registrant furthermore agrees to include either, as part of any prospectus or
application to purchase a contract offered by the prospectus, a toll-free number
that an applicant can call to request a Statement of Additional Information or a
post card or similar written communication that the applicant can remove to send
for a Statement of Additional Information. Finally, the Registrant agrees to
deliver any Statement of Additional Information and any Financial Statements
required to be made available under this Form N-4 promptly upon written or oral
request.
REPRESENTATIONS PURSUANT TO SECTION 403(B) OF THE INTERNAL
REVENUE CODE
Allstate Life Insurance Company of New York represents that it is relying upon a
November 28, 1988 Securities and Exchange Commission no-action letter issued to
the American Council of Life Insurance and that the provisions of paragraphs 1-4
of the no-action letter have been complied with.
REPRESENTATION REGARDING CONTRACT EXPENSES
Allstate Life insurance Company of New York represents that the fees and charges
deducted under the Contracts described in 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 under the Contracts. Allstate Life Insurance Company of New
York bases its representation on its assessment of all of the facts and
circumstances, including such relevant factors as: the nature and extent of such
services, expenses and risks; the need for Allstate Life Insurance Company of
New York to earn a profit; the degree to which the Contracts include innovative
features; and the regulatory standards for exemptive relief under the Investment
Company Act of 1940 used prior to October 1996,including the range of industry
practice. This representation applies to all Contracts sold pursuant to this
Registration Statement, including those sold on the terms specifically described
in the prospectus(es) contained herein, or any variations therein, based on
supplements, endorsements, or riders to any Contracts or prospectus(es), or
otherwise.
<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, certifies
that it meets the requirements of Securities Act Rule 485(b) for effectiveness
of this amended Registration Statement and has caused this Amendment to the
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, all in the Township of Northfield, State of Illinois, on the
26th day of April, 2000.
ALLSTATE LIFE OF NEW YORK SEPARATE ACCOUNT A
(REGISTRANT)
BY: ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
(DEPOSITOR)
By: /s/MICHAEL J. VELOTTA
----------------------
Michael J. Velotta
Vice President, Secretary and
General Counsel
As required by the Securities Act of 1933, this amended Registration Statement
has been duly signed below by the following Directors and Officers of Allstate
Life Insurance Company of New York on the 26th day of April, 2000.
<TABLE>
<CAPTION>
<S> <C>
*/THOMAS J. WILSON, II President and Director
- ---------------------- (Principal Executive Officer)
Thomas J. Wilson, II
*/VINCENT A. FUSCO Director and Chief Operations Officer
- ----------------------------
Vincent A. Fusco
/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
*/MARCIA D. ALAZRAKI Director
- --------------------
Marcia D. Alazraki
*/CLEVELAND JOHNSON, JR. Director
- ------------------------
Cleveland Johnson, Jr.
*/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.
</TABLE>
<PAGE>
EXHIBIT INDEX
Item No. Description
Exhibit 3(b) Form of Underwriting Agreement between Allstate
New York and Allstate Distributors, L.L.C.
Exhibit 3(c) Form of Administrative Services Agreement between
Allstate New York and Allstate Distributors, L.L.C.
Exhibit 10(a) Independent Auditors' Consent
Exhibit 10(b) Consent of Freedman, Levy, Kroll and Simonds
Exhibit 13 Performance Data Calculations
Exhibit 3(b)
PRINCIPAL UNDERWRITING AGREEMENT
This Principal Underwriting Agreement (hereinafter "Agreement") is made and
entered into as of this ___ day of ______, 1999, by and between ALICNY Insurance
Company of New York ( "ALICNY") a life insurance company organized under the
laws of the state of Illinois, on its own and on behalf of each separate account
of ALICNY set forth on Attachment A, as such Attachment may be amended from time
to time (each such account herein referred to as the "Account"), and Allstate
Distributors, L.L.C. ("Distributors"), a limited liability corporation organized
under the laws of the state of Delaware.
In consideration of the mutual promises and covenants exchanged by the parties
in this Agreement, ALICNY grants to Distributors the right to be and
Distributors agrees to serve as Principal Underwriter for the sale of variable
insurance products and other insurance and investment products during the term
of this Agreement and the parties agree as follows:
ARTICLE I
DISTRIBUTORS DUTIES AND OBLIGATIONS
1.01 Distributors, a broker-dealer registered under the Securities Exchange Act
of 1934 (the "1934 Act") and a member of the National Association of Securities
Dealers, Inc. ("NASD"), will serve as principal underwriter and distributor for
the variable insurance contracts (contracts listed in Attachment A , herein, the
"Contracts") which will be issued by ALICNY.
1.02 Distributors shall be duly registered or licensed or otherwise qualified
under the insurance and securities laws of the states in which the Contracts are
authorized for sale.
1.03 Distributors proposes to act as principal underwriter on an agency best
efforts basis in the marketing and distribution of the Contracts. Distributors
will use its best efforts to provide information and marketing assistance to
licensed insurance agents and broker-dealers ("Selling Broker-Dealers") on a
continuing basis.
1.04 Distributors shall be responsible for compliance with the requirements of
state broker-dealer regulations and the 1934 Act as each applies to Distributors
in connection with its duties as distributor of the Contracts. Moreover,
Distributors shall conduct its affairs in accordance with the Rules of Fair
Practice of the NASD.
1.05 As a principal underwriter, Distributors shall permit the offer and sale of
Contracts to the public only by and through persons who are appropriately
licensed under the securities laws and who are appointed in writing by ALICNY to
be authorized insurance agents (unless such persons are exempt from such
licensing and appointment requirements);
1.06 To the extent that any statements made in the Registration Statement, or
any amendment or supplement thereto, are made in reliance upon and in conformity
with written information furnished to ALICNY by Distributors expressly for use
therein, such statements will, when they become effective or are filed with the
SEC, as the case may be, conform in all material respects to the requirements of
the 1933 Act and the rules and regulations of the Commission thereunder, and
will not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading.
1.07 Subject to agreement with ALICNY, Distributors may enter into selling
agreements with broker-dealers which are registered under the 1934 Act and/or
authorized by applicable law or exemptions to sell the Contracts. Any such
contractual arrangement is expressly made subject to this Agreement, and
Distributors will at all times be responsible to ALICNY for supervision of
compliance with federal securities laws regarding distribution of the Contracts.
ARTICLE II
ALICNY'S DUTIES AND OBLIGATIONS
2.01 ALICNY is validly existing as a stock life insurance company in good
standing under the laws of the State of Illinois, and has been duly qualified
for the transaction of business and is in good standing under the laws of each
other jurisdiction in which it owns or leases properties or conducts any
business.
2.02 ALICNY represents that:
a) Registration Statements for each of the Contracts identified in
Attachment A shall have been filed with the Securities and Exchange
Commission ("SEC") in the form previously delivered to Distributors and
that copies of any and all amendments thereto will be forwarded to
Distributors at the time that they are filed with the SEC;
b) Each Account is a duly organized, validly existing separate account,
established by resolution of the Board of Directors of ALICNY, on the
date shown for such Account on Attachment A, for the purpose of issuing
the Contracts; and
c) ALICNY has registered or will register the Account as a unit investment
trust under the Investment Company Act of 1940 (the "1940 Act").
2.03 The Registration Statement and any further amendments or supplements
thereto will, when they became effective, conform in all material respects to
the requirements of the Securities Act of 1933 (the "1933 Act") and the 1940
Act, and the rules and regulations of the Commission under such Acts and will
not contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading; provided, however, that this representation and warranty shall
not apply to any statement or omission made in reliance upon and in conformity
with information furnished in writing to ALICNY by Distributors expressly for
use therein.
2.04 ALICNY shall be responsible for the licensing and appointing of registered
representatives of Selling Broker-Dealers as required by state insurance laws.
ARTICLE III
RECORDS
3.01 Distributors shall keep, in a manner and form approved by ALICNY and in
accordance with Rules 17a-3 and 17a-4 under the 1934 Act, accurate records and
books of account as required to be maintained by a registered broker-dealer,
acting as principal underwriter, of all transactions entered into on behalf of
ALICNY with respect its activities under this Agreement. Distributors shall make
such records of account available for inspection by the SEC and ALICNY shall
have the right to inspect, make copies of or take possession of such records and
books of account at any time upon demand.
3.02 Subject to applicable SEC or NASD restrictions, ALICNY will send
confirmations of Contract transactions to Contract owners. ALICNY will make such
confirmations and records of transactions available to Distributors upon
request. ALICNY will also maintain Contract Owner records on behalf of
Distributors to the extent permitted by applicable securities law.
3.03 Distributors and ALICNY shall keep confidential the records, books of
account and other information concerning the Contract owners, annuitants,
insureds, beneficiaries or any persons who have rights arising out of the
Contracts. Distributors or ALICNY may disclose the Records and such information
only if the other has authorized disclosure and if the disclosure is required by
applicable law. In the event Distributors or ALICNY is served with a subpoena,
court order or demand from a regulatory organization which mandates disclosure
of the Records or such information, such party must notify the other and allow
such other party sufficient time to authorize disclosure or to intervene in the
judicial proceeding or matter so as to protect its interest.
3.04 Unless otherwise agreed to, no party to this Agreement shall voluntarily
disclose to any third party other than Putnam Investments, Inc. and its
affiliates, any books, reference manuals, instructions, information or data
which concern the other party's business and which are exchanged during the
negotiation and performance of this Agreement. When this Agreement terminates or
expires, the parties shall return all such books, reference manuals,
instructions, information or data in their possession.
3.05 For the purpose of determining the other party's compliance with this
Agreement, each party to this Agreement shall have reasonable access during
normal business hours to any records and books of account which concern the
Contracts and which are maintained by the other party.
3.06 Both ALICNY and Distributors agree to keep all information required by
applicable laws, to maintain the books, accounts and records as to clearly and
accurately disclose the precise nature and details of the transaction and to
assist one another in the timely perpetration of any reports required by law.
3.07 Distributors and ALICNY shall furnish to the other any reports and
information which the other may request for the purpose of meeting reporting and
recordkeeping requirements under the laws of Illinois or any other state or
jurisdiction.
ARTICLE IV
SALES MATERIALS
4.01 Distributors will utilize the currently effective prospectus relating to
the Contracts in connections with its underwriting, marketing and distribution
efforts. As to other types of sales material, Distributors hereby agrees and
will require Selling Broker-Dealers to agree to use only sales materials which
have been authorized for use by ALICNY, which conform to the requirements of
federal and state laws and regulations, and which have been filed where
necessary with the appropriate regulatory authorities including the NASD.
4.02 Distributors will not distribute any prospectus, sales literature or any
other printed matter or material in the underwriting and distribution or any
Contract if, to the knowledge of Distributors, any of the foregoing misstates
the duties, obligation or liabilities of ALICNY or Distributors.
ARTICLE V
COMPENSATION
5.01 ALICNY shall pay to Distributors commissions described in Attachment B ,
attached hereto and made a part hereof. Distributors shall not be obligated to
pay another broker/dealer for sales of Contracts pursuant to its selling
agreement with such broker/dealer until Distributors has received its
commissions for the sale of such Contracts from ALICNY.
5.02 In compensating Distributors, ALICNY reserves the right to withhold
commissions from Distributors if it determines Distributors is not paying
commissions to its Selling Broker-Dealers in accordance with applicable laws.
5.03 Distributors shall direct how commissions are paid, provided such direction
is in accordance with applicable law.
5.04 ALICNY agrees to pay Distributors for direct expenses incurred on behalf of
ALICNY. Such direct expenses shall include, but not be limited to, the costs of
goods and services purchased from outside vendors, travel expenses and state and
federal regulatory fees incurred on behalf of ALICNY.
5.05 Distributors shall present a statement after the end of the quarter showing
the apportionment of services rendered and the direct expenses incurred.
Settlements are due and payable within thirty days.
ARTICLE VI
UNDERWRITING TERMS
6.01 Distributors makes no representations or warranties regarding the number of
contracts to be sold by Selling Broker-Dealer and the registered representatives
of Selling Broker-Dealer or the amount to be paid thereunder. Distributors does,
however, represent that it will actively engage in its duties under this
Agreement on a continuous basis while there is an effective Registration
Statement with the SEC.
6.02 Distributors will use its best efforts to ensure that the Contracts shall
be offered for sale by registered broker-dealers and registered representatives
(who are duly licensed as insurance agents) on the terms described in the
currently effective prospectus describing such Contracts.
6.03 ALICNY will use its best efforts to assure that the Contracts are
continuously registered under the 1933 Act (and under any applicable state "blue
sky" laws) and to file for approval under state insurance laws when necessary.
ARTICLE VII
LEGAL AND REGULATORY ACTIONS
7.01 ALICNY agrees to advise Distributors immediately of:
a) any request by the SEC for amendment of the Registration Statement or
for additional information relating to the Contracts;
b) the issuance by the SEC of any stop order suspending the effectiveness
of the Registration Statement relating to the Contracts or the
initiation of any proceedings for that purpose; and
c) the happening of any known material event which makes untrue any
statement made in the Registration Statement relating to the Contracts
or which requires the making of a change therein in order to make any
statement made therein not misleading.
7.02 Each of the undersigned parties agrees to notify the other in writing upon
being apprised of the institution of any proceeding, investigation or hearing
involving the offer or sale of the subject Contracts.
7.03 During any legal action or inquiry, ALICNY will furnish to Distributors
such information with respect to the Contracts in such form and signed by such
of its officers as Distributors may reasonably request and will warrant that the
statements therein contained when so signed are true and correct.
7.04 If changes in insurance laws or regulations could reasonably be expected to
affect the sales and administration of Contracts under this Agreement, ALICNY
shall notify Distributors within a reasonable time after ALICNY receives notice
of those changes. Such notice shall be in writing except, if circumstances so
require, the notice may be communicated by telephone or facsimile and confirmed
in writing.
ARTICLE VIII
TERMINATION
8.01 This Agreement shall terminate at either Party's option, without penalty:
(a) without case, on not less than 180 days' prior written notice to the
other Party;
(b) upon the mutual written consent of the Parties;
(c) upon written notice of one Party to the other in the event of
bankruptcy or insolvency of the Party to which notice is given;
(d) upon the suspension or revocation of any material license or permit
held by a Party by the appropriate governmental agency or authority;
however, such termination shall extend only to the jurisdiction(s)
where the Party is prohibited from doing business; or
(e) upon the finding by any regulatory body in a formal proceeding of
material wrongdoing by a Party regarding its duties under this
Agreement.
8.02 If either Party breaches this Agreement or is in default in the performance
of any of its duties and obligations hereunder (the "defaulting Party"), the
non-defaulting Party may give written notice thereof to the defaulting Party,
and if such breach or default is not remedied within 60 days after such written
notice is given, then the non-defaulting Party may terminate this Agreement by
giving 30 days' prior written notice of such termination to the defaulting
Party.
8.03 The Parties agree to cooperate and give reasonable assistance to one
another in effecting an orderly transition following termination.
ARTICLE IX
INDEMNIFICATION
9.01 Scope of Indemnification
(a) Each Party (the "Indemnifying Party") agrees to indemnify and hold
harmless the other (the "Indemnified Party") against any loss, liability, claim,
damage or expense (including the reasonable cost of investigating or defending
any alleged loss, liability, claim, damage or expense, and reasonable counsel
fees incurred in connection therewith) arising by reason of any person's
acquiring any Contract, which may be based upon any law:
(i) on the ground that the Indemnifying Party, its directors,
officers, employees, agents, or subcontractors failed to comply with any
applicable laws and regulations in connection with its rendering of
duties or services under this Agreement; or
(ii) on the ground of negligence or misconduct by the
Indemnifying Party or its directors, officers, employees, agents, or
subcontractors, in the performance of its duties hereunder, or breach by
the Indemnifying Party of any representation or warranty hereunder.
The foregoing indemnities shall, upon the same terms and conditions,
extend to and inure to the benefit of each director, officer and employee of the
Indemnified Party and any person controlling or controlled by the Indemnified
Party within the meaning of Section 15 of the Securities Act of 1933 or Section
20 of the 1934 Act.
(b) In no case shall the indemnity in favor of the Indemnified Party,
including such controlling or controlled persons, be deemed to protect the
Indemnified Party against any liability to the Indemnifying Party to which it
would otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of its duties or by reason of reckless disregard
of its obligations and duties under this Agreement. In addition, in no case
shall the Indemnifying Party be liable under its indemnity agreement contained
in Section 4.1(a) hereof with respect to any claim made against an Indemnified
Party, unless the Indemnified Party shall have notified the Indemnifying Party
in writing by fax or overnight mail giving information of the nature of the
claim within two (2) business days after the summons or other first legal
process shall have been served upon the Indemnified Party (or after the
Indemnified Party shall have received notice of such service on any designated
agent), but failure to notify the Indemnifying Party of any such claim shall not
relieve it from any liability which it may have to the Indemnified Party against
whom such action is brought otherwise than on account of its indemnity agreement
contained in Section 4.1(a) hereof. The Indemnifying Party shall be entitled to
participate at its own expense in the defense, or, if it so elects, to assume
the defense of any suit brought to enforce such liability. If the Indemnifying
Party elects to assume the defense, such defense shall be conducted by counsel
chosen by it and satisfactory to the Indemnified Party. In the event the
Indemnifying Party elects to assume the defense of any such suit and retains
such counsel, the Indemnified Party shall bear the fees and expenses of any
additional counsel retained by it, but, in case the Indemnifying Party does not
elect to assume the defense of any such suit, it shall reimburse the Indemnified
Party for the reasonable fees and expense of any counsel retained by the
Indemnified Party. The Indemnifying Party shall promptly notify the Indemnified
Party of the commencement of any litigation or proceedings against the
Indemnifying Party or any of its officers, directors, employees or
subcontractors in connection with the issuance or sale of the Contracts.
9.02 Limitation on Liability
In no event shall either Party be liable for lost profits or for
exemplary, special, punitive or consequential damages alleged to have been
sustained by the other Party, as opposed to a third party.
9.03 Injunctive Relief
The Parties each agree that monetary damages may be an inadequate remedy
in the event of a breach by either Party of any of the covenants in this
Agreement, and that any such breach by a Party may cause the other Party great
and irreparable injury and damage. Accordingly, nothing in this Agreement shall
limit a Party's right to obtain equitable relief when appropriate.
<PAGE>
ARTICLE X
GENERAL PROVISIONS
10.01 This Agreement shall be subject to the laws of the state of Illinois.
10.02 This Agreement, along with any schedules attached hereto and incorporated
herein by reference, may be amended from time to time by mutual agreement and
consent of the under signed parties.
10.03 In case any provision of this Agreement shall be invalid, illegal or
unenforceable, the validity and enforceability of the remaining provisions shall
not in any way be affected or impaired thereby.
IN WITNESS WHEREOF, the undersigned parties have caused this Agreement to be
duly executed, to be effective as of _____________, 1999
Allstate Life Insurance Company of New York
(and the Account(s) set forth on Attachment A)
By: ___________________________ ______________________
Title Date
Allstate Distributors, L. L. C.
By: ___________________________ _______________________
Title Date
<PAGE>
ATTACHMENT A
Separate Account Effective Date Contract Form #
-------------- -------- ------
<PAGE>
ATTACHMENT B
Distributors shall be entitled to remuneration for its services as shown below
for all variable annuity purchase payments received on policies issued by
ALICNY. Such remuneration shall be reduced by the amount of commissions payable
to broker/dealers receiving compensation pursuant to selling agreements with
ALICNY and Distributors.
- -------------------- ------------------ -----------------
Schedule A
- -------------------- ------------------ -----------------
Issue Age: 0-80 7.30%
- -------------------- ------------------ -----------------
- -------------------- ------------------ -----------------
81-85 5.80%
- -------------------- ------------------ -----------------
- -------------------- ------------------ -----------------
86-90 4.30%
- -------------------- ------------------ -----------------
- -------------------- ------------------ ----------------- -----------------
Schedule B Up-Front Trail
- -------------------- ------------------ ----------------- -----------------
Issue Age: 0-80 6.30% 25 bps
- -------------------- ------------------ ----------------- -----------------
- -------------------- ------------------ ----------------- -----------------
81-85 5.05% 25 bps
- -------------------- ------------------ ----------------- -----------------
- -------------------- ------------------ ----------------- -----------------
86-90 3.80% 25 bps
- -------------------- ------------------ ----------------- -----------------
- ---------------------------------- ----------------------------------------
Charge Back Schedule
- ---------------------------------- ----------------------------------------
Full or partial Withdrawal 100% Charge Back due to "Right to Cancel" provision.
- ---------------------------------- ----------------------------------------
- ---------------------------------- ----------------------------------------
Early Annuitization Year 1 Only, Charge Back to Annuitization
Level Commission (TBD)
- ---------------------------------- ----------------------------------------
An additional 1% override is available up-front to Distributors on sales for the
first $1 billion or through 5/1/2000, if earlier.
<PAGE>
Exhibit 3(c)
ADMINISTRATIVE SERVICES AGREEMENT
This Administrative Services Agreement ("Agreement") is made on this
____day of ___________, 199_, by and between Allstate Distributors, L.L.C.
("Distributors") and Allstate Life Insurance Company of New York, ("ALICNY").
RECITALS
WHEREAS, ALICNY is duly licensed as required by applicable law to issue,
in certain states and other jurisdictions, the variable insurance contracts,
life insurance and annuity contracts identified on Schedule A attached hereto
and incorporated herein by reference (each a "Contract," collectively, the
"Contracts"), which schedule the Parties may amend from time to time by mutual
written agreement ("Schedule A"); and
WHEREAS, ALICNY and Distributors have entered or will enter into an
agreement pursuant to which Distributors will serve as the principal
underwriter, for the sale of the Contracts; and
WHEREAS, ALICNY and Distributors desire to allocate between themselves
certain functions relating to the marketing and administration of the Contracts.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, and of the mutual expectations of benefit occurring from the
activities herein contemplated, the Parties hereto agree as follows:
SECTION 1. ADMINISTRATIVE SERVICES
1.1 Duties
(a) ALICNY will provide to Distributors administrative, legal and
financial management services as described in Schedule B, attached hereto and
incorporated herein by reference. ALICNY will also provide to Distributors
technical support and sales tools, analysis of various products in the market,
sales ideas, and other sales support technical experts and personnel located at
ALICNY's offices located in Northbrook, Illinois. All ALICNY sales support
activities shall be performed under the same service standards as similar
services are provided for other variable products marketed by ALICNY and its
subsidiaries. ALICNY shall use its best efforts to meet such standards. To the
extent that higher service standards for these services are stated in the in the
Joint Venture Agreement between Putnam Investments, Inc. and The Allstate
Corporation dated as of , 1999, those higher standards will govern.
(b) ALICNY agrees to assume on behalf of Distributors responsibility for
the processing and payment of sales commissions in connection with the marketing
of variable insurance contracts. Such commissions will be processed and paid as
directed by, and on behalf of, Distributors. In this regard, ALICNY will not
exercise any discretion over the amount of the commissions, and such commissions
paid by ALICNY will be a purely clerical and ministerial function and will be
properly reflected on the books and records maintained by ALICNY on behalf of
Distributors. Service standards are described in Schedule B.
(c) ALICNY will send on behalf of Distributors confirmations of
transactions in connection with the marketing of variable insurance contracts to
contract owners in accordance with the provisions of Rule 10b-10 under the
Securities Exchange Act of 1934 (the "Exchange Act"), and such confirmations
will indicate that they were sent on behalf of Distributors. Service standards
are described in Schedule B.
(d) ALICNY will maintain and preserve books and records on behalf of and
as agent for Distributors in connection with the offer and sale of variable
insurance contracts, and all books and records relating to confirmation of
transactions in compliance with Rules 17a-3 and 17a-4 under the Exchange Act.
ALICNY agrees that all such books and records will remain the property of
Distributors and will be subject to inspection by the Securities Exchange
Commission and the National Association of Securities Dealers, Inc. ("NASD") in
accordance with Sections 17 and 15A of the Exchange Act.
(e) Records supporting inter-company costs and expense charges and
maintained by ALICNY on behalf of Distributors shall be considered Distributors'
records and shall be available to Distributors upon request. All original
documents and records relating to the operations of Distributors are the
property of Distributors.
(f) Each party shall own, have custody of and keep its own general
corporate records. Upon request, each party shall receive from the other party
any of its records which are currently in the other party's possession.
(g) The parties agree to keep all records required by federal and state
securities laws and state insurance laws, to maintain the books, accounts and
records so as to clearly and accurately disclose the precise nature and details
of the transactions and to assist one another in the timely preparation of
records.
1.2 Parties are Independent Contractors
Each party shall be deemed an independent contractor and its personnel shall not
be deemed to be the employees of the other solely by reason of this Agreement.
ALICNY employees performing duties hereunder at all times during the term of
this Agreement shall be in the employment, under the respective supervision and
responsibility of ALICNY.
SECTION 2. LEGAL COMPLIANCE
2.1 General
Each Party agrees to perform under this Agreement in a manner consistent
with all applicable laws and regulations. Each Party represents and warrants to
the other that it is a corporation duly organized, validly existing, and in good
standing under the laws of the state of Delaware (in the case of Distributors)
and Illinois (in the case of ALICNY) and that it has full corporate power,
authority, and legal right to execute, deliver, and perform its duties
hereunder.
2.2 Notice of Certain Proceedings and Other Circumstances
(a) Each Party agrees to notify the other of the issuance by any court
or regulatory body of any order having a material effect on its ability to
perform its obligations hereunder. Each Party also agrees to notify the other
within three (3) business days of receipt of any oral or written consumer or
regulatory agency complaint relating to the business of this Agreement, and to
coordinate and fully cooperate in responding to such complaints. Distributors
and ALICNY shall develop procedures to coordinate, investigate and respond to
such complaints.
(b) Each Party agrees to cooperate fully with the other in any
regulatory examination, investigation, or proceeding or any judicial proceeding
(collectively, "proceeding") involving ALICNY, Distributors, and their
respective affiliates, agents and representatives to the extent that such
proceeding relates to the business of this Agreement. Distributors and ALICNY
shall furnish applicable federal and state regulatory authorities with any
information or reports in connection with their respective obligations under
this Agreement as such authorities may lawfully request. The Parties shall, at
least ten (10) business days prior to provision of such information, notify the
other to enable that Party, if it so desires, to interpose any legal objections
to provision of the reports or information.
SECTION 3. COMPENSATION
3.1 Compensation
(a) Distributors agree to pay ALICNY 10 basis points of net sales of
Contracts for the services performed pursuant to this Agreement.
SECTION 4. TERM AND TERMINATION
4.1 Term
(a) This Agreement shall be effective as of the date first
written above and shall remain in full force and effect thereafter, until
terminated in accordance with Sections 4.2 or 4.3, below.
4.2 Events of Termination
(a) This Agreement shall terminate at either Party's option, without
penalty:
(i) without cause, on not less than 180 days' prior written
notice to the other Party;
(ii) upon the mutual written consent of the Parties;
(iii)upon written notice of one Party to the other in the event
of bankruptcy or insolvency of the Party to which notice is
given;
(iv) upon the suspension or revocation of any material license or
permit held by a Party by the appropriate governmental
agency or authority; however, such termination shall extend
only to the jurisdiction(s) where the Party is prohibited
from doing business; or
(v) upon the finding by any regulatory body in a formal
proceeding of material wrongdoing by a Party regarding its
duties under this Agreement.
4.3 Event of Default
If either Party breaches this Agreement or is in default in the
performance of any of its duties and obligations hereunder (the "defaulting
Party"), the non-defaulting Party may give written notice thereof to the
defaulting Party, and if such breach or default is not remedied within 60 days
after such written notice is given, then the non-defaulting Party may terminate
this Agreement by giving 30 days' prior written notice of such termination to
the defaulting Party.
4.4 Parties to Cooperate Respecting Termination
The Parties agree to cooperate and give reasonable assistance to one
another in effecting an orderly transition following termination.
SECTION 5. CONFIDENTIALITY
Subject to the requirements of legal process and regulatory authority,
each Party shall treat as confidential (a) the identity of existing or
prospective Contract owners, (b) any financial or other information provided by
existing or prospective Contract owners or persons acting on their behalf, and
(c) any other information reasonably identified as confidential in writing by
the other Party hereto (collectively "confidential information"). Except as
permitted by this Agreement, no Party shall disclose, disseminate or utilize
any confidential information without the express written consent of the
affected Party until such time as such information may come into the public
domain, except as permitted by this Agreement or as otherwise necessary to
service the Contracts and/or respond to appropriate regulatory authorities.
Each Party shall take all reasonable precautions to prevent the unauthorized
disclosure of any confidential information. Nothing in this Section 6 shall
prevent Distributors from using the confidential information pertaining to
existing or prospective Contract owners for marketing purposes, provided such
usage is consistent with all applicable state or federal laws regarding
privacy. In no event shall confidential information pertaining to existing or
prospective Contract owners be furnished by ALICNY to any other company or
person (except as required by law or regulation) or be used to solicit sales of
any kind, including but not limited to any other products, securities or
services for a period of two years following termination of this Agreement.
Without limiting the foregoing, no Party shall disclose any information that
another Party reasonably considers to be proprietary. For purposes of this
Agreement, proprietary information includes, but is not limited to, computer
system and client information. The intent of this Section 6 is that no Party or
any affiliate thereof shall utilize, or permit to be utilized, its knowledge of
the other Party that is derived as a result of the relationship created by this
Agreement and any related agreements, except to the extent necessary by the
terms of this Agreement or the related agreements.
SECTION 6. BONDING AND INSURANCE
Each Party shall maintain sufficient fidelity bond coverage (including
coverage for larceny and embezzlement) and errors and omissions insurance
coverage as may be required by applicable law or as such Party deems necessary
in light of its obligations under this Agreement.
SECTION 7. NOTICES
Any notice required or permitted to be sent under this Agreement shall
be given to the following persons at the following addresses and facsimile
numbers, or such other persons, addresses or facsimile numbers as the Party
receiving such notices or communications may subsequently direct in writing:
Allstate Life Insurance Company of New York
Attention:
Allstate Distributors, L.L.C.
Attention:
SECTION 8. MISCELLANEOUS
8.1 Amendment
This Agreement may be amended at any time by a writing executed by the
Parties.
8.2 Non-Assignment
This Agreement shall not be assigned by either Party without the prior
written consent of the other Party, provided, however, that ALICNY or
Distributors may subcontract its responsibilities relating to the administration
of the Contracts pursuant to Section 1.1 hereof, provided that any such
subcontracting does not relieve ALICNY or Distributors of any responsibility
with regard to its obligations under this Agreement.
8.3 Governing Law
This Agreement shall be interpreted in accordance with any governed by
the laws of the State of Illinois.
8.4 Survival of Provisions
Sections 1.1(d) and (e), 2.2, 3, 5, 8.3, 8.4 and 8.7 shall survive
termination of this Agreement.
8.5 Severability
Should any provision of this Agreement be held or made invalid by a
court decision, statute, rule, or otherwise, the remainder of this Agreement
shall not be affected thereby.
8.6 Waiver
Any failure or delay by either Party to enforce at any time any of the
provisions of this Agreement, or to exercise any right or option which is herein
provided, or to require at any time the performance of any of the provisions
hereof, shall in no way be construed to be a waiver of such provision of this
Agreement.
8.7 Right to Audit
Each Party, its employees or authorized representatives ("Examining
Party") may audit, inspect and examine at reasonable times, during regular
business hours and with at least twenty-four (24) hours' prior notice, all books
and records of the other Party and its agents with respect to matters pertaining
to this Agreement. The Examining Party agrees to limit its review of the books
and records to the extent necessary and as often as necessary to fulfill all
contractual obligations to the holders of Contracts, to comply with all legal
and regulatory requirements, to meet the requirements of the other Party's
auditors, and to ensure compliance with this Agreement.
8.8 Force Majeure
Neither Party shall be liable for damages due to delay or failure to
perform any obligation under this Agreement where such delay or failure results
directly or indirectly from circumstances beyond the control and without the
fault or negligence of such Party.
8.9 Entire Agreement
This Agreement shall be the sole agreement between ALICNY and
Distributors regarding the administration of the Contracts, and it supersedes
all prior and contemporaneous agreements between the Parties governing the
administration of the Contracts. This Agreement may not be amended,
supplemented, or modified, except as expressly permitted herein, without the
written agreement of the Parties.
----------------------------------
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the
day and year first written above.
Allstate Distributors, L.L.C. Allstate Life Insurance Company
of New York
BY:__________________________ BY:____________________________
<PAGE>
Schedule A
CONTRACTS
The administrative duties of the parties, shall apply only to with
respect to the following Contracts:
[Identify Contracts by form number and brief description]
<PAGE>
Schedule B
Services provided by Allstate Life Insurance Company of New York to Allstate
Distributors, L.L.C.
Accounting B-1
Treasury B-2
Technical Shared Services-Systems Support B-3
Internal Audit B-4
Human Resources B-5
Legal/Compliance Services B-6
Commission Processing B-7
Confirmation Processing B-8
<PAGE>
Schedule B-1
Accounting
Specific Tasks
Provide services to Distributor relating to auditing, tax preparation,
bank account management and fees, and strategic plans.
Performance Standards
- All functions will be performed in accordance with GAAP reporting
rules
- All functions will be completed on or before due dates
- Information reported will be reliable so the customer does not have to
independently validate
- Customers will be surveyed regularly for feedback and improvement
opportunities
<PAGE>
Schedule B-2
Treasury
Specific Tasks
Provide services to Distributor related to cash management
Performance Standards
- all analysis will be completed on or before due dates
- customers will be surveyed regularly for feedback and improvement
opportunities
<PAGE>
Schedule B-3
Technical Shared Services - Systems Support
Specific Tasks
Build and maintain any systems that are necessary to process Distributor
business. Support and maintain existing systems relating to Distributor
business.
Performance Standards
- Daily computer runs 5 days a week
- System balancing on a daily basis
- On-line visual Network support 24 hours a day with 99% availability
- Scheduled billing for all appropriate activities
<PAGE>
Schedule B-4
Internal Audit
Specific Tasks
Provide services to Distributor relating to the audit of the general
ledger and accounts payable system in addition to other control systems
and processes.
Performance Standards
- In accordance with industry standards.
<PAGE>
Schedule B-5
Human Resources
Specific Tasks
Perform payroll processing and benefits development and administration
for employees of Distributor business.
Performance Standards
- In accordance with industry standards
<PAGE>
Schedule B-6
Legal/Compliance Services
Specific Tasks
The Law and Regulation Department and Compliance Department will provide
legal advice, assist in the completion of business transactions,
implement compliance programs, assist with dispute resolution, and
provide public advocacy for Distributor.
Performance Standards
- All legal and compliance services will be performed in a manner
that is in compliance with all applicable laws, regulations, and
Codes of Professional Responsibility
<PAGE>
Schedule B-7
Commission Processing
Specific Tasks
Determine process and pay commissions.
Generate management and sales reports reflecting production and
commission payments.
Performance Standards
- Payable dates: Weekly
- Processing: 100% processed and mailed by payable date
- Management reports will be generated on a monthly basis or as
determined by the Distributor
<PAGE>
Schedule B-8
Confirmation Processing
Specific Tasks
Process and mail confirmations to contractholders, with duplicates to
the broker/dealer and/or registered rep upon request.
Performance Standards
- 100% mailed or sent for presorting within 2 business days of
transaction posting
(10) (a) Independent Auditors' Consent
INDEPENDENT AUDITORS' CONSENT
We consent to the use in this Post-Effective Amendment No. 2 to Registration
Statement No. 333-74411 of Allstate Life of New York Seperate Account A of
Allstate Life Insurance Company of New York on Form N-4 of our report dated
February 25, 2000 relating to the financial statements and the related financial
statement schedules of Allstate Life Insurance Company of New York, and our
report dated March 27, 2000 relating to the financial statements of Allstate
Life of New York Seperate Account A, appearing in the Statement of Additional
Information (which is incorporated by reference in the Prospectus of Allstate
Life of New York Seperate Account A of Allstate Life Insurance Company of New
York), which is part of such Registration Statement, and to the reference to us
under the heading "Experts" in such Statement of Additional Information.
Chicago, Illinois
April 26, 2000
<PAGE>
(10)(b) Consent of Freedman, Levy, Kroll & Simonds
FREEDMAN, LEVY, KROLL & SIMONDS
CONSENT OF
FREEDMAN, LEVY, KROLL & SIMONDS
We hereby consent to the reference to our firm under the caption "Legal
Matters" in the prospectus contained in Post-Effective Amendment No. 2 to the
Form N-4 Registration Statement of Allstate Life of New York Separate Account A
(File No. 333-74411).
/s/ Freedman, Levy, Kroll & Simonds
FREEDMAN, LEVY, KROLL & SIMONDS
Washington, D.C.
April 21, 2000
Putnam NY - Base Standardized
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Asia Pacific Growth
36504
TO NO. YEARS 0.057495
36525
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 12/10/99 1000 15.24419 65.59875
1 FEE 12/31/99 0.666667 17.43689 0.038233 0.07
2 FEE N/A 0 N/A 0 0.07
3 FEE N/A 0 N/A 0 0.06
4 N/A 0 N/A 0 0.05
5 N/A 0 N/A 0 0.04
6 N/A 0 N/A 0 0.03
7 N/A 0 N/A 0 0.02
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 12/31/99 17.43689 65.56052 1143.171
0.057495
FORMULA: 1000*(1+T)= 1143.171
= 1083.671
T = 3.045462
R = 0.083671
Diversified Income
36504
TO NO. YEARS 0.057495
36525
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 12/10/99 1000 9.863317 101.3858
1 FEE 12/31/99 0.666667 9.866141 0.067571 0.07
2 FEE N/A 0 N/A 0 0.07
3 FEE N/A 0 N/A 0 0.06
4 N/A 0 N/A 0 0.05
5 N/A 0 N/A 0 0.04
6 N/A 0 N/A 0 0.03
7 N/A 0 N/A 0 0.02
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 12/31/99 9.866141 101.3182 999.6196
0.057495
FORMULA: 1000*(1+T)= 999.6196
= 940.1196
T = -0.65835
R = -0.05988
George Putnam Fund of Boston
36504
TO NO. YEARS 0.057495
36525
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 12/10/99 1000 9.313119 107.3754
1 FEE 12/31/99 0.666667 9.299008 0.071692 0.07
2 FEE N/A 0 N/A 0 0.07
3 FEE N/A 0 N/A 0 0.06
4 N/A 0 N/A 0 0.05
5 N/A 0 N/A 0 0.04
6 N/A 0 N/A 0 0.03
7 N/A 0 N/A 0 0.02
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 12/31/99 9.299008 107.3037 997.8182
0.057495
FORMULA: 1000*(1+T)= 997.8182
= 938.3182
T = -0.66956
R = -0.06168
Global Asset Allocation
36504
TO NO. YEARS 0.057495
36525
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 12/10/99 1000 10.46924 95.51792
1 FEE 12/31/99 0.666667 10.69758 0.062319 0.07
2 FEE N/A 0 N/A 0 0.07
3 FEE N/A 0 N/A 0 0.06
4 N/A 0 N/A 0 0.05
5 N/A 0 N/A 0 0.04
6 N/A 0 N/A 0 0.03
7 N/A 0 N/A 0 0.02
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 12/31/99 10.69758 95.4556 1021.144
0.057495
FORMULA: 1000*(1+T)= 1021.144
= 961.6439
T = -0.49351
R = -0.03836
Global Growth
36504
TO NO. YEARS 0.057495
36525
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 12/10/99 1000 13.88746 72.00741
1 FEE 12/31/99 0.666667 15.66499 0.042558 0.07
2 FEE N/A 0 N/A 0 0.07
3 FEE N/A 0 N/A 0 0.06
4 N/A 0 N/A 0 0.05
5 N/A 0 N/A 0 0.04
6 N/A 0 N/A 0 0.03
7 N/A 0 N/A 0 0.02
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 12/31/99 15.66499 71.96486 1127.329
0.057495
FORMULA: 1000*(1+T)= 1127.329
= 1067.829
T = 2.131301
R = 0.067829
Growth & Income
36504
TO NO. YEARS 0.057495
36525
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 12/10/99 1000 9.16818 109.0729
1 FEE 12/31/99 0.666667 9.171812 0.072686 0.07
2 FEE N/A 0 N/A 0 0.07
3 FEE N/A 0 N/A 0 0.06
4 N/A 0 N/A 0 0.05
5 N/A 0 N/A 0 0.04
6 N/A 0 N/A 0 0.03
7 N/A 0 N/A 0 0.02
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 12/31/99 9.171812 109.0002 999.7295
0.057495
FORMULA: 1000*(1+T)= 999.7295
= 940.2295
T = -0.65766
R = -0.05977
Health Sciences
36504
TO NO. YEARS 0.057495
36525
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 12/10/99 1000 9.953391 100.4683
1 FEE 12/31/99 0.666667 10.59676 0.062912 0.07
2 FEE N/A 0 N/A 0 0.07
3 FEE N/A 0 N/A 0 0.06
4 N/A 0 N/A 0 0.05
5 N/A 0 N/A 0 0.04
6 N/A 0 N/A 0 0.03
7 N/A 0 N/A 0 0.02
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 12/31/99 10.59676 100.4054 1063.972
0.057495
FORMULA: 1000*(1+T)= 1063.972
= 1004.472
T = 0.080697
R = 0.004472
High Yield
36504
TO NO. YEARS 0.057495
36525
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 12/10/99 1000 9.896186 101.049
1 FEE 12/31/99 0.666667 9.933858 0.067111 0.07
2 FEE N/A 0 N/A 0 0.07
3 FEE N/A 0 N/A 0 0.06
4 N/A 0 N/A 0 0.05
5 N/A 0 N/A 0 0.04
6 N/A 0 N/A 0 0.03
7 N/A 0 N/A 0 0.02
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 12/31/99 9.933858 100.9819 1003.14
0.057495
FORMULA: 1000*(1+T)= 1003.14
= 943.6401
T = -0.6354
R = -0.05636
Income
36504
TO NO. YEARS 0.057495
36525
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 12/10/99 1000 9.860922 101.4104
1 FEE 12/31/99 0.666667 9.714014 0.068629 0.07
2 FEE N/A 0 N/A 0 0.07
3 FEE N/A 0 N/A 0 0.06
4 N/A 0 N/A 0 0.05
5 N/A 0 N/A 0 0.04
6 N/A 0 N/A 0 0.03
7 N/A 0 N/A 0 0.02
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 12/31/99 9.714014 101.3418 984.4353
0.057495
FORMULA: 1000*(1+T)= 984.4353
= 924.9353
T = -0.74262
R = -0.07506
International Growth
36504
TO NO. YEARS 0.057495
36525
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 12/10/99 1000 13.24887 75.47816
1 FEE 12/31/99 0.666667 14.42714 0.046209 0.07
2 FEE N/A 0 N/A 0 0.07
3 FEE N/A 0 N/A 0 0.06
4 N/A 0 N/A 0 0.05
5 N/A 0 N/A 0 0.04
6 N/A 0 N/A 0 0.03
7 N/A 0 N/A 0 0.02
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 12/31/99 14.42714 75.43195 1088.267
0.057495
FORMULA: 1000*(1+T)= 1088.267
= 1028.767
T = 0.637683
R = 0.028767
International Growth & Income
36504
TO NO. YEARS 0.057495
36525
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 12/10/99 1000 10.83906 92.25891
1 FEE 12/31/99 0.666667 10.96814 0.060782 0.07
2 FEE N/A 0 N/A 0 0.07
3 FEE N/A 0 N/A 0 0.06
4 N/A 0 N/A 0 0.05
5 N/A 0 N/A 0 0.04
6 N/A 0 N/A 0 0.03
7 N/A 0 N/A 0 0.02
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 12/31/99 10.96814 92.19812 1011.242
0.057495
FORMULA: 1000*(1+T)= 1011.242
= 951.7422
T = -0.57695
R = -0.04826
International New Opportunities
36504
TO NO. YEARS 0.057495
36525
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 12/10/99 1000 15.98813 62.54642
1 FEE 12/31/99 0.666667 18.13443 0.036762 0.07
2 FEE N/A 0 N/A 0 0.07
3 FEE N/A 0 N/A 0 0.06
4 N/A 0 N/A 0 0.05
5 N/A 0 N/A 0 0.04
6 N/A 0 N/A 0 0.03
7 N/A 0 N/A 0 0.02
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 12/31/99 18.13443 62.50966 1133.577
0.057495
FORMULA: 1000*(1+T)= 1133.577
= 1074.077
T = 2.465737
R = 0.074077
Investors
36504
TO NO. YEARS 0.057495
36525
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 12/10/99 1000 11.36371 87.99943
1 FEE 12/31/99 0.666667 12.16778 0.05479 0.07
2 FEE N/A 0 N/A 0 0.07
3 FEE N/A 0 N/A 0 0.06
4 N/A 0 N/A 0 0.05
5 N/A 0 N/A 0 0.04
6 N/A 0 N/A 0 0.03
7 N/A 0 N/A 0 0.02
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 12/31/99 12.16778 87.94464 1070.091
0.057495
FORMULA: 1000*(1+T)= 1070.091
= 1010.591
T = 0.201104
R = 0.010591
Money Market
36504
TO NO. YEARS 0.057495
36525
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 12/10/99 1000 10.2084 97.95859
1 FEE 12/31/99 0.666667 10.23142 0.065159 0.07
2 FEE N/A 0 N/A 0 0.07
3 FEE N/A 0 N/A 0 0.06
4 N/A 0 N/A 0 0.05
5 N/A 0 N/A 0 0.04
6 N/A 0 N/A 0 0.03
7 N/A 0 N/A 0 0.02
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 12/31/99 10.23142 97.89343 1001.589
0.057495
FORMULA: 1000*(1+T)= 1001.589
= 942.0887
T = -0.64569
R = -0.05791
New Opportunities
36504
TO NO. YEARS 0.057495
36525
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 12/10/99 1000 14.0407 71.22152
1 FEE 12/31/99 0.666667 15.69233 0.042484 0.07
2 FEE N/A 0 N/A 0 0.07
3 FEE N/A 0 N/A 0 0.06
4 N/A 0 N/A 0 0.05
5 N/A 0 N/A 0 0.04
6 N/A 0 N/A 0 0.03
7 N/A 0 N/A 0 0.02
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 12/31/99 15.69233 71.17904 1116.965
0.057495
FORMULA: 1000*(1+T)= 1116.965
= 1057.465
T = 1.642726
R = 0.057465
New Value
36504
TO NO. YEARS 0.057495
36525
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 12/10/99 1000 8.70494 114.8773
1 FEE 12/31/99 0.666667 8.795115 0.0758 0.07
2 FEE N/A 0 N/A 0 0.07
3 FEE N/A 0 N/A 0 0.06
4 N/A 0 N/A 0 0.05
5 N/A 0 N/A 0 0.04
6 N/A 0 N/A 0 0.03
7 N/A 0 N/A 0 0.02
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 12/31/99 8.795115 114.8015 1009.692
0.057495
FORMULA: 1000*(1+T)= 1009.692
= 950.1924
T = -0.58878
R = -0.04981
OTC & Emerging Growth
36504
TO NO. YEARS 0.057495
36525
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 12/10/99 1000 18.17679 55.01522
1 FEE 12/31/99 0.666667 19.83758 0.033606 0.07
2 FEE N/A 0 N/A 0 0.07
3 FEE N/A 0 N/A 0 0.06
4 N/A 0 N/A 0 0.05
5 N/A 0 N/A 0 0.04
6 N/A 0 N/A 0 0.03
7 N/A 0 N/A 0 0.02
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 12/31/99 19.83758 54.98161 1090.702
0.057495
FORMULA: 1000*(1+T)= 1090.702
= 1031.202
T = 0.706428
R = 0.031202
Research
36504
TO NO. YEARS 0.057495
36525
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 12/10/99 1000 10.89384 91.795
1 FEE 12/31/99 0.666667 11.59761 0.057483 0.07
2 FEE N/A 0 N/A 0 0.07
3 FEE N/A 0 N/A 0 0.06
4 N/A 0 N/A 0 0.05
5 N/A 0 N/A 0 0.04
6 N/A 0 N/A 0 0.03
7 N/A 0 N/A 0 0.02
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 12/31/99 11.59761 91.73751 1063.936
0.057495
FORMULA: 1000*(1+T)= 1063.936
= 1004.436
T = 0.08003
R = 0.004436
Small Cap Value
36504
TO NO. YEARS 0.057495
36525
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 12/10/99 1000 9.813389 101.9016
1 FEE 12/31/99 0.666667 10.30165 0.064715 0.07
2 FEE N/A 0 N/A 0 0.07
3 FEE N/A 0 N/A 0 0.06
4 N/A 0 N/A 0 0.05
5 N/A 0 N/A 0 0.04
6 N/A 0 N/A 0 0.03
7 N/A 0 N/A 0 0.02
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 12/31/99 10.30165 101.8369 1049.088
0.057495
FORMULA: 1000*(1+T)= 1049.088
= 989.5883
T = -0.16643
R = -0.01041
Utilities Growth & Income
36504
TO NO. YEARS 0.057495
36525
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 12/10/99 1000 10.04693 99.53289
1 FEE 12/31/99 0.666667 9.986611 0.066756 0.07
2 FEE N/A 0 N/A 0 0.07
3 FEE N/A 0 N/A 0 0.06
4 N/A 0 N/A 0 0.05
5 N/A 0 N/A 0 0.04
6 N/A 0 N/A 0 0.03
7 N/A 0 N/A 0 0.02
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 12/31/99 9.986611 99.46614 993.3296
0.057495
FORMULA: 1000*(1+T)= 993.3296
= 933.8296
T = -0.696
R = -0.06617
Vista
36504
TO NO. YEARS 0.057495
36525
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 12/10/99 1000 12.50116 79.99258
1 FEE 12/31/99 0.666667 14.08793 0.047322 0.07
2 FEE N/A 0 N/A 0 0.07
3 FEE N/A 0 N/A 0 0.06
4 N/A 0 N/A 0 0.05
5 N/A 0 N/A 0 0.04
6 N/A 0 N/A 0 0.03
7 N/A 0 N/A 0 0.02
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 12/31/99 14.08793 79.94525 1126.263
0.057495
FORMULA: 1000*(1+T)= 1126.263
= 1066.763
T = 2.077392
R = 0.066763
Voyager
36504
TO NO. YEARS 0.057495
36525
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 12/10/99 1000 12.86806 77.71181
1 FEE 12/31/99 0.666667 14.32585 0.046536 0.07
2 FEE N/A 0 N/A 0 0.07
3 FEE N/A 0 N/A 0 0.06
4 N/A 0 N/A 0 0.05
5 N/A 0 N/A 0 0.04
6 N/A 0 N/A 0 0.03
7 N/A 0 N/A 0 0.02
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 12/31/99 14.32585 77.66527 1112.621
0.057495
FORMULA: 1000*(1+T)= 1112.621
= 1053.121
T = 1.460136
R = 0.053121
</TABLE>
Putnam NY - Base
<TABLE>
<CAPTION>
Non-Standardized Calculations
Dates:
Current: 12/31/99
3 Months Ago: 9/30/99
End of Last Year: 12/31/98
One Yr Ago: 12/31/98
Two Yrs Ago: 12/31/97
Three Yrs Ago: 12/31/96
Five Yrs Ago: 12/31/94
Ten Yrs Ago: 12/31/89
Inception Inception Ten Yr Five Yr Three Two One Yr YTD 3 Months
Fund Date AUV AUV AUV AUV AUV AUV AUV AUV
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Asia Pacific Growth 12/10/99 15.24419 N/A N/A N/A N/A N/A N/A N/A
Diversified Income 12/10/99 9.863317 N/A N/A N/A N/A N/A N/A N/A
George Putnam of Boston 12/10/99 9.313119 N/A N/A N/A N/A N/A N/A N/A
Global Asset Allocation 12/10/99 10.46924 N/A N/A N/A N/A N/A N/A N/A
Global Growth 12/10/99 13.88746 N/A N/A N/A N/A N/A N/A N/A
Growth & Income 12/10/99 9.16818 N/A N/A N/A N/A N/A N/A N/A
Health Sciences 12/10/99 9.953391 N/A N/A N/A N/A N/A N/A N/A
High Yield 12/10/99 9.896186 N/A N/A N/A N/A N/A N/A N/A
Income 12/10/99 9.860922 N/A N/A N/A N/A N/A N/A N/A
International Growth 12/10/99 13.24887 N/A N/A N/A N/A N/A N/A N/A
International Growth
& Income 12/10/99 10.83906 N/A N/A N/A N/A N/A N/A N/A
International New
Opportunities 12/10/99 15.98813 N/A N/A N/A N/A N/A 10 N/A
Investors 12/10/99 11.36371 N/A N/A N/A N/A N/A 10 N/A
Money Market 12/10/99 10.2084 N/A N/A N/A N/A N/A 10 N/A
New Opportunities 12/10/99 14.0407 N/A N/A N/A N/A N/A 10 N/A
New Value 12/10/99 8.70494 N/A N/A N/A N/A N/A 10 N/A
OTC & Emerging Growth 12/10/99 18.17679 N/A N/A N/A N/A N/A 10 N/A
Research Fund 12/10/99 10.89384 N/A N/A N/A N/A N/A 10 N/A
Small Cap Value 12/10/99 9.813389 N/A N/A N/A N/A N/A 10 N/A
Utilities Growth
& Income 12/10/99 10.04693 N/A N/A N/A N/A N/A 10 N/A
Vista 12/10/99 12.50116 N/A N/A N/A N/A N/A 10 N/A
Voyager 12/10/99 12.86806 N/A N/A N/A N/A N/A 10 N/A
<PAGE>
Today's Inception Ten Years Five Years Three Years
Fund AUV Total Average Total Average Total Average Total Average
Asia Pacific Growth 17.43689 0.143838 9.337855 N/A N/A N/A N/A N/A N/A
Diversified Income 9.866141 0.000286 0.004988 N/A N/A N/A N/A N/A N/A
George Putnam of Boston 9.299008 -0.00152 -0.02601 N/A N/A N/A N/A N/A N/A
Global Asset Allocation 10.69758 0.021811 0.455011 N/A N/A N/A N/A N/A N/A
Global Growth 15.66499 0.127995 7.112444 N/A N/A N/A N/A N/A N/A
Growth & Income 9.171812 0.000396 0.006908 N/A N/A N/A N/A N/A N/A
Health Sciences 10.59676 0.064639 1.970299 N/A N/A N/A N/A N/A N/A
High Yield 9.933858 0.003807 0.068268 N/A N/A N/A N/A N/A N/A
Income 9.714014 -0.0149 -0.22963 N/A N/A N/A N/A N/A N/A
International Growth 14.42714 0.088934 3.396646 N/A N/A N/A N/A N/A N/A
International Growth & Income 10.96814 0.011909 0.228464 N/A N/A N/A N/A N/A N/A
International New Opportunities 18.13443 0.134244 7.929964 N/A N/A N/A N/A N/A N/A
Investors 12.16778 0.070758 2.281422 N/A N/A N/A N/A N/A N/A
Money Market 10.23142 0.002255 0.039934 N/A N/A N/A N/A N/A N/A
New Opportunities 15.69233 0.117631 5.909944 N/A N/A N/A N/A N/A N/A
New Value 8.795115 0.010359 0.196169 N/A N/A N/A N/A N/A N/A
OTC & Emerging Growth 19.83758 0.091369 3.570697 N/A N/A N/A N/A N/A N/A
Research Fund 11.59761 0.064603 1.968571 N/A N/A N/A N/A N/A N/A
Small Cap Value 10.30165 0.049755 1.325565 N/A N/A N/A N/A N/A N/A
Utilities Growth & Income 9.986611 -0.006 -0.09937 N/A N/A N/A N/A N/A N/A
Vista 14.08793 0.12693 6.98026 N/A N/A N/A N/A N/A N/A
Voyager 14.32585 0.113287 5.457714 N/A N/A N/A N/A N/A N/A
<PAGE>
Two Years One Year YTD Three Months
Fund Total Average
Asia Pacific Growth N/A N/A N/A N/A N/A
Diversified Income N/A N/A N/A N/A N/A
George Putnam of Boston N/A N/A N/A N/A N/A
Global Asset Allocation N/A N/A N/A N/A N/A
Global Growth N/A N/A N/A N/A N/A
Growth & Income N/A N/A N/A N/A N/A
Health Sciences N/A N/A N/A N/A N/A
High Yield N/A N/A N/A N/A N/A
Income N/A N/A N/A N/A N/A
International Growth N/A N/A N/A N/A N/A
International Growth & Income N/A N/A N/A N/A N/A
International New Opportunities N/A N/A N/A 0.813443 N/A
Investors N/A N/A N/A 0.216778 N/A
Money Market N/A N/A N/A 0.023142 N/A
New Opportunities N/A N/A N/A 0.569233 N/A
New Value N/A N/A N/A -0.12049 N/A
OTC & Emerging Growth N/A N/A N/A 0.983758 N/A
Research Fund N/A N/A N/A 0.159761 N/A
Small Cap Value N/A N/A N/A 0.030165 N/A
Utilities Growth & Income N/A N/A N/A -0.00134 N/A
Vista N/A N/A N/A 0.408793 N/A
Voyager N/A N/A N/A 0.432585 N/A
</TABLE>
<PAGE>
Putnam NY - Base
Adjusted Historical One Year
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Asia Pacific Growth
36160 NO. YEARS 1
TO
36525
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/98 1000 8.526457 117.282
FEE 12/31/99 0.666667 17.43689 0.038233
RESULTING VALUE 12/31/99 17.43689 117.2438 2044.366
1
FORMULA: 1000*(1+T)= 2044.366 - (0.85 * 1000 * 0.07)
= 1984.866
T = 0.984866
R = 0.984866
Diversified Income
36160 NO. YEARS 1
TO
36525 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/98 1000 9.819608 101.8371
FEE 12/31/99 0.666667 9.866141 0.067571
RESULTING VALUE 12/31/99 9.866141 101.7695 1004.072
1
FORMULA: 1000*(1+T)= 1004.072 - (0.85 * 1000 * 0.07)
= 944.5721
T = -0.05543
R = -0.05543
<PAGE>
George Putnam Fund of Boston
36160 NO. YEARS 1
TO
36525 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/98 1000 9.455755 105.7557
FEE 12/31/99 0.666667 9.299008 0.071692
RESULTING VALUE 12/31/99 9.299008 105.684 982.7564
1
FORMULA: 1000*(1+T)= 982.7564 - (0.85 * 1000 * 0.07)
= 923.2564
T = -0.07674
R = -0.07674
Global Asset Allocation
36160 NO. YEARS 1
TO
36525 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/98 1000 9.692572 103.1718
FEE 12/31/99 0.666667 10.69758 0.062319
RESULTING VALUE 12/31/99 10.69758 103.1095 1103.022
1
FORMULA: 1000*(1+T)= 1103.022 - (0.85 * 1000 * 0.07)
= 1043.522
T = 0.043522
R = 0.043522
<PAGE>
Global Growth
36160 NO. YEARS 1
TO
36525 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/98 1000 9.639516 103.7396
FEE 12/31/99 0.666667 15.66499 0.042558
RESULTING VALUE 12/31/99 15.66499 103.6971 1624.414
1
FORMULA: 1000*(1+T)= 1624.414 - (0.85 * 1000 * 0.07)
= 1564.914
T = 0.564914
R = 0.564914
Growth & Income
36160 NO. YEARS 1
TO
36525 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/98 1000 9.154015 109.2417
FEE 12/31/99 0.666667 9.171812 0.072686
RESULTING VALUE 12/31/99 9.171812 109.169 1001.278
1
FORMULA: 1000*(1+T)= 1001.278 - (0.85 * 1000 * 0.07)
= 941.7775
T = -0.05822
R = -0.05822
<PAGE>
Health Sciences
36160 NO. YEARS 1
TO
36525 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/98 1000 11.17644 89.47392
FEE 12/31/99 0.666667 10.59676 0.062912
RESULTING VALUE 12/31/99 10.59676 89.41101 947.4674
1
FORMULA: 1000*(1+T)= 947.4674 - (0.85 * 1000 * 0.07)
= 887.9674
T = -0.11203
R = -0.11203
High Yield
36160 NO. YEARS 1
TO
36525 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/98 1000 9.507419 105.181
FEE 12/31/99 0.666667 9.933858 0.067111
RESULTING VALUE 12/31/99 9.933858 105.1139 1044.187
1
FORMULA: 1000*(1+T)= 1044.187 - (0.85 * 1000 * 0.07)
= 984.6866
T = -0.01531
R = -0.01531
<PAGE>
Income
36160 NO. YEARS 1
TO
36525 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/98 1000 10.05459 99.45711
FEE 12/31/99 0.666667 9.714014 0.068629
RESULTING VALUE 12/31/99 9.714014 99.38848 965.4611
1
FORMULA: 1000*(1+T)= 965.4611 - (0.85 * 1000 * 0.07)
= 905.9611
T = -0.09404
R = -0.09404
International Growth
36160 NO. YEARS 1
TO
36525 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/98 1000 9.12885 109.5428
FEE 12/31/99 0.666667 14.42714 0.046209
RESULTING VALUE 12/31/99 14.42714 109.4966 1579.723
1
FORMULA: 1000*(1+T)= 1579.723 - (0.85 * 1000 * 0.07)
= 1520.223
T = 0.520223
R = 0.520223
<PAGE>
International Growth & Income
36160 NO. YEARS 1
TO
36525 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/98 1000 8.932026 111.9567
FEE 12/31/99 0.666667 10.96814 0.060782
RESULTING VALUE 12/31/99 10.96814 111.8959 1227.29
1
FORMULA: 1000*(1+T)= 1227.29 - (0.85 * 1000 * 0.07)
= 1167.79
T = 0.16779
R = 0.16779
International New Opportunities
36160 NO. YEARS 1
TO
36525 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/98 1000 9.05406 110.4477
FEE 12/31/99 0.666667 18.13443 0.036762
RESULTING VALUE 12/31/99 18.13443 110.4109 2002.239
1
FORMULA: 1000*(1+T)= 2002.239 - (0.85 * 1000 * 0.07)
= 1942.739
T = 0.942739
R = 0.942739
<PAGE>
Investors
36160 NO. YEARS 1
TO
36525 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/98 1000 9.479396 105.492
FEE 12/31/99 0.666667 12.16778 0.05479
RESULTING VALUE 12/31/99 12.16778 105.4372 1282.936
1
FORMULA: 1000*(1+T)= 1282.936 - (0.85 * 1000 * 0.07)
= 1223.436
T = 0.223436
R = 0.223436
Money Market
36160 NO. YEARS 1
TO
36525 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/98 1000 9.895727 101.0537
FEE 12/31/99 0.666667 10.23142 0.065159
RESULTING VALUE 12/31/99 10.23142 100.9886 1033.256
1
FORMULA: 1000*(1+T)= 1033.256 - (0.85 * 1000 * 0.07)
= 973.7563
T = -0.02624
R = -0.02624
<PAGE>
New Opportunities
36160 NO. YEARS 1
TO
36525 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/98 1000 9.397221 106.4144
FEE 12/31/99 0.666667 15.69233 0.042484
RESULTING VALUE 12/31/99 15.69233 106.372 1669.223
1
FORMULA: 1000*(1+T)= 1669.223 - (0.85 * 1000 * 0.07)
= 1609.723
T = 0.609723
R = 0.609723
New Value
36160 NO. YEARS 1
TO
36525 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/98 1000 8.883395 112.5696
FEE 12/31/99 0.666667 8.795115 0.0758
RESULTING VALUE 12/31/99 8.795115 112.4938 989.3957
1
FORMULA: 1000*(1+T)= 989.3957 - (0.85 * 1000 * 0.07)
= 929.8957
T = -0.0701
R = -0.0701
<PAGE>
OTC & Emerging Growth
36160 NO. YEARS 1
TO
36525 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/98 1000 8.871057 112.7261
FEE 12/31/99 0.666667 19.83758 0.033606
RESULTING VALUE 12/31/99 19.83758 112.6925 2235.547
1
FORMULA: 1000*(1+T)= 2235.547 - (0.85 * 1000 * 0.07)
= 2176.047
T = 1.176047
R = 1.176047
Research
36160 NO. YEARS 1
TO
36525 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/98 1000 9.19735 108.727
FEE 12/31/99 0.666667 11.59761 0.057483
RESULTING VALUE 12/31/99 11.59761 108.6695 1260.307
1
FORMULA: 1000*(1+T)= 1260.307 - (0.85 * 1000 * 0.07)
= 1200.807
T = 0.200807
R = 0.200807
<PAGE>
Small Cap Value
36160 NO. YEARS 1
TO
36525 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/98 1000 #VALUE! #VALUE!
FEE 12/31/99 0.666667 10.30165 0.064715
RESULTING VALUE 12/31/99 10.30165 #VALUE! #VALUE!
1
FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.07)
= #VALUE!
T = N/A
R = N/A
Utilities Growth & Income
36160 NO. YEARS 1
TO
36525 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/98 1000 10.19292 98.10729
FEE 12/31/99 0.666667 9.986611 0.066756
RESULTING VALUE 12/31/99 9.986611 98.04054 979.0927
1
FORMULA: 1000*(1+T)= 979.0927 - (0.85 * 1000 * 0.07)
= 919.5927
T = -0.08041
R = -0.08041
<PAGE>
Vista
36160 NO. YEARS 1
TO
36525 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/98 1000 9.349265 106.9603
FEE 12/31/99 0.666667 14.08793 0.047322
RESULTING VALUE 12/31/99 14.08793 106.913 1506.182
1
FORMULA: 1000*(1+T)= 1506.182 - (0.85 * 1000 * 0.07)
= 1446.682
T = 0.446682
R = 0.446682
Voyager
36160 NO. YEARS 1
TO
36525 TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/98 1000 9.180593 108.9254
FEE 12/31/99 0.666667 14.32585 0.046536
RESULTING VALUE 12/31/99 14.32585 108.8789 1559.782
1
FORMULA: 1000*(1+T)= 1559.782 - (0.85 * 1000 * 0.07)
= 1500.282
T = 0.500282
R = 0.500282
</TABLE>
<PAGE>
Putnam NY - Base
Adjusted Historical Five Year
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Asia Pacific Growth
34698
TO NO. YEARS 5
36525
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE!
FEE 12/31/95 0.666667 10.09656 0.066029
FEE 12/31/96 0.666667 10.86154 0.061379
FEE 12/31/97 0.666667 9.14003 0.072939
FEE 12/31/98 0.666667 8.526457 0.078188
FEE 12/31/99 0.666667 17.43689 0.038233
RESULTING VALUE 12/31/99 17.43689 #VALUE! #VALUE!
5
FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.03)
= #VALUE!
T = N/A
R = N/A
Diversified Income
34698
TO NO. YEARS 5
36525
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/94 1000 7.573503 132.0393
FEE 12/31/95 0.666667 8.896095 0.074939
FEE 12/31/96 0.666667 9.544503 0.069848
FEE 12/31/97 0.666667 10.10533 0.065972
FEE 12/31/98 0.666667 9.819608 0.067891
FEE 12/31/99 0.666667 9.866141 0.067571
RESULTING VALUE 12/31/99 9.866141 131.6931 1299.302
5
FORMULA: 1000*(1+T)= 1299.302 - (0.85 * 1000 * 0.03)
= 1273.802
T = 0.049592
R = 0.273802
George Putnam Fund of Boston
34698
TO NO. YEARS 5
36525
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE!
FEE 12/31/95 0.666667 #VALUE! #VALUE!
FEE 12/31/96 0.666667 #VALUE! #VALUE!
FEE 12/31/97 0.666667 #VALUE! #VALUE!
FEE 12/31/98 0.666667 9.455755 0.070504
FEE 12/31/99 0.666667 9.299008 0.071692
RESULTING VALUE 12/31/99 9.299008 #VALUE! #VALUE!
5
FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.03)
= #VALUE!
T = N/A
R = N/A
Global Asset Allocation
34698
TO NO. YEARS 5
36525
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/94 1000 5.229135 191.2362
FEE 12/31/95 0.666667 6.430103 0.103679
FEE 12/31/96 0.666667 7.330644 0.090942
FEE 12/31/97 0.666667 8.649969 0.077072
FEE 12/31/98 0.666667 9.692572 0.068781
FEE 12/31/99 0.666667 10.69758 0.062319
RESULTING VALUE 12/31/99 10.69758 190.8334 2041.456
5
FORMULA: 1000*(1+T)= 2041.456 - (0.85 * 1000 * 0.03)
= 2015.956
T = 0.150525
R = 1.015956
Global Growth
34698
TO NO. YEARS 5
36525
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/94 1000 5.066898 197.3594
FEE 12/31/95 0.666667 5.779079 0.115359
FEE 12/31/96 0.666667 6.678621 0.099821
FEE 12/31/97 0.666667 7.529085 0.088546
FEE 12/31/98 0.666667 9.639516 0.06916
FEE 12/31/99 0.666667 15.66499 0.042558
RESULTING VALUE 12/31/99 15.66499 196.944 3085.125
5
FORMULA: 1000*(1+T)= 3085.125 - (0.85 * 1000 * 0.03)
= 3059.625
T = 0.250644
R = 2.059625
Growth & Income
34698
TO NO. YEARS 5
36525
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/94 1000 4.053071 246.7265
FEE 12/31/95 0.666667 5.46365 0.122019
FEE 12/31/96 0.666667 6.568086 0.101501
FEE 12/31/97 0.666667 8.040267 0.082916
FEE 12/31/98 0.666667 9.154015 0.072828
FEE 12/31/99 0.666667 9.171812 0.072686
RESULTING VALUE 12/31/99 9.171812 246.2745 2258.784
5
FORMULA: 1000*(1+T)= 2258.784 - (0.85 * 1000 * 0.03)
= 2233.284
T = 0.174326
R = 1.233284
Health Sciences
34698
TO NO. YEARS 5
36525
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE!
FEE 12/31/95 0.666667 #VALUE! #VALUE!
FEE 12/31/96 0.666667 #VALUE! #VALUE!
FEE 12/31/97 0.666667 #VALUE! #VALUE!
FEE 12/31/98 0.666667 11.17644 0.059649
FEE 12/31/99 0.666667 10.59676 0.062912
RESULTING VALUE 12/31/99 10.59676 #VALUE! #VALUE!
5
FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.03)
= #VALUE!
T = N/A
R = N/A
High Yield
34698
TO NO. YEARS 5
36525
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/94 1000 6.993435 142.9912
FEE 12/31/95 0.666667 8.158984 0.08171
FEE 12/31/96 0.666667 9.07535 0.073459
FEE 12/31/97 0.666667 10.23183 0.065156
FEE 12/31/98 0.666667 9.507419 0.070121
FEE 12/31/99 0.666667 9.933858 0.067111
RESULTING VALUE 12/31/99 9.933858 142.6337 1416.903
5
FORMULA: 1000*(1+T)= 1416.903 - (0.85 * 1000 * 0.03)
= 1391.403
T = 0.068293
R = 0.391403
Income
34698
TO NO. YEARS 5
36525
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/94 1000 7.325115 136.5166
FEE 12/31/95 0.666667 8.699331 0.076634
FEE 12/31/96 0.666667 8.784919 0.075888
FEE 12/31/97 0.666667 9.41044 0.070843
FEE 12/31/98 0.666667 10.05459 0.066305
FEE 12/31/99 0.666667 9.714014 0.068629
RESULTING VALUE 12/31/99 9.714014 136.1583 1322.644
5
FORMULA: 1000*(1+T)= 1322.644 - (0.85 * 1000 * 0.03)
= 1297.144
T = 0.05341
R = 0.297144
International Growth
34698
TO NO. YEARS 5
36525
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE!
FEE 12/31/95 0.666667 #VALUE! #VALUE!
FEE 12/31/96 0.666667 #VALUE! #VALUE!
FEE 12/31/97 0.666667 7.802823 0.085439
FEE 12/31/98 0.666667 9.12885 0.073029
FEE 12/31/99 0.666667 14.42714 0.046209
RESULTING VALUE 12/31/99 14.42714 #VALUE! #VALUE!
5
FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.03)
= #VALUE!
T = N/A
R = N/A
International Growth & Income
34698
TO NO. YEARS 5
36525
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE!
FEE 12/31/95 0.666667 #VALUE! #VALUE!
FEE 12/31/96 0.666667 #VALUE! #VALUE!
FEE 12/31/97 0.666667 8.133735 0.081963
FEE 12/31/98 0.666667 8.932026 0.074638
FEE 12/31/99 0.666667 10.96814 0.060782
RESULTING VALUE 12/31/99 10.96814 #VALUE! #VALUE!
5
FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.03)
= #VALUE!
T = N/A
R = N/A
International New Opportunities
34698
TO NO. YEARS 5
36525
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE!
FEE 12/31/95 0.666667 #VALUE! #VALUE!
FEE 12/31/96 0.666667 #VALUE! #VALUE!
FEE 12/31/97 0.666667 7.94387 0.083922
FEE 12/31/98 0.666667 9.05406 0.073632
FEE 12/31/99 0.666667 18.13443 0.036762
RESULTING VALUE 12/31/99 18.13443 #VALUE! #VALUE!
5
FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.03)
= #VALUE!
T = N/A
R = N/A
Investors
34698
TO NO. YEARS 5
36525
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE!
FEE 12/31/95 0.666667 #VALUE! #VALUE!
FEE 12/31/96 0.666667 #VALUE! #VALUE!
FEE 12/31/97 0.666667 #VALUE! #VALUE!
FEE 12/31/98 0.666667 9.479396 0.070328
FEE 12/31/99 0.666667 12.16778 0.05479
RESULTING VALUE 12/31/99 12.16778 #VALUE! #VALUE!
5
FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.03)
= #VALUE!
T = N/A
R = N/A
Money Market
34698
TO NO. YEARS 5
36525
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/94 1000 8.527727 117.2645
FEE 12/31/95 0.666667 8.867736 0.075179
FEE 12/31/96 0.666667 9.188351 0.072556
FEE 12/31/97 0.666667 9.532895 0.069933
FEE 12/31/98 0.666667 9.895727 0.067369
FEE 12/31/99 0.666667 10.23142 0.065159
RESULTING VALUE 12/31/99 10.23142 116.9143 1196.2
5
FORMULA: 1000*(1+T)= 1196.2 - (0.85 * 1000 * 0.03)
= 1170.7
T = 0.032022
R = 0.1707
New Opportunities
34698
TO NO. YEARS 5
36525
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/94 1000 4.060861 246.2532
FEE 12/31/95 0.666667 5.800882 0.114925
FEE 12/31/96 0.666667 6.301573 0.105794
FEE 12/31/97 0.666667 7.66042 0.087027
FEE 12/31/98 0.666667 9.397221 0.070943
FEE 12/31/99 0.666667 15.69233 0.042484
RESULTING VALUE 12/31/99 15.69233 245.832 3857.676
5
FORMULA: 1000*(1+T)= 3857.676 - (0.85 * 1000 * 0.03)
= 3832.176
T = 0.308245
R = 2.832176
New Value
34698
TO NO. YEARS 5
36525
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE!
FEE 12/31/95 0.666667 #VALUE! #VALUE!
FEE 12/31/96 0.666667 #VALUE! #VALUE!
FEE 12/31/97 0.666667 8.478112 0.078634
FEE 12/31/98 0.666667 8.883395 0.075046
FEE 12/31/99 0.666667 8.795115 0.0758
RESULTING VALUE 12/31/99 8.795115 #VALUE! #VALUE!
5
FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.03)
= #VALUE!
T = N/A
R = N/A
OTC & Emerging Growth
34698
TO NO. YEARS 5
36525
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE!
FEE 12/31/95 0.666667 #VALUE! #VALUE!
FEE 12/31/96 0.666667 #VALUE! #VALUE!
FEE 12/31/97 0.666667 #VALUE! #VALUE!
FEE 12/31/98 0.666667 8.871057 0.075151
FEE 12/31/99 0.666667 19.83758 0.033606
RESULTING VALUE 12/31/99 19.83758 #VALUE! #VALUE!
5
FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.03)
= #VALUE!
T = N/A
R = N/A
Research
34698
TO NO. YEARS 5
36525
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE!
FEE 12/31/95 0.666667 #VALUE! #VALUE!
FEE 12/31/96 0.666667 #VALUE! #VALUE!
FEE 12/31/97 0.666667 #VALUE! #VALUE!
FEE 12/31/98 0.666667 9.19735 0.072485
FEE 12/31/99 0.666667 11.59761 0.057483
RESULTING VALUE 12/31/99 11.59761 #VALUE! #VALUE!
5
FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.03)
= #VALUE!
T = N/A
R = N/A
Small Cap Value
34698
TO NO. YEARS 5
36525
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE!
FEE 12/31/95 0.666667 #VALUE! #VALUE!
FEE 12/31/96 0.666667 #VALUE! #VALUE!
FEE 12/31/97 0.666667 #VALUE! #VALUE!
FEE 12/31/98 0.666667 #VALUE! #VALUE!
FEE 12/31/99 0.666667 10.30165 0.064715
RESULTING VALUE 12/31/99 10.30165 #VALUE! #VALUE!
5
FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.03)
= #VALUE!
T = N/A
R = N/A
Utilities Growth & Income
34698
TO NO. YEARS 5
36525
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/94 1000 4.859099 205.7995
FEE 12/31/95 0.666667 6.28026 0.106153
FEE 12/31/96 0.666667 7.170803 0.09297
FEE 12/31/97 0.666667 8.986551 0.074185
FEE 12/31/98 0.666667 10.19292 0.065405
FEE 12/31/99 0.666667 9.986611 0.066756
RESULTING VALUE 12/31/99 9.986611 205.394 2051.19
5
FORMULA: 1000*(1+T)= 2051.19 - (0.85 * 1000 * 0.03)
= 2025.69
T = 0.151634
R = 1.02569
Vista
34698
TO NO. YEARS 5
36525
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/94 1000 #VALUE! #VALUE!
FEE 12/31/95 0.666667 #VALUE! #VALUE!
FEE 12/31/96 0.666667 #VALUE! #VALUE!
FEE 12/31/97 0.666667 7.922443 0.084149
FEE 12/31/98 0.666667 9.349265 0.071307
FEE 12/31/99 0.666667 14.08793 0.047322
RESULTING VALUE 12/31/99 14.08793 #VALUE! #VALUE!
5
FORMULA: 1000*(1+T)= #VALUE! - (0.85 * 1000 * 0.03)
= #VALUE!
T = N/A
R = N/A
Voyager
34698
TO NO. YEARS 5
36525
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/94 1000 3.883859 257.4759
FEE 12/31/95 0.666667 5.387167 0.123751
FEE 12/31/96 0.666667 6.000754 0.111097
FEE 12/31/97 0.666667 7.485762 0.089058
FEE 12/31/98 0.666667 9.180593 0.072617
FEE 12/31/99 0.666667 14.32585 0.046536
RESULTING VALUE 12/31/99 14.32585 257.0328 3682.212
5
FORMULA: 1000*(1+T)= 3682.212 - (0.85 * 1000 * 0.03)
= 3656.712
T = 0.296039
R = 2.656712
</TABLE>
<PAGE>
Putnam NY - Base
Adjusted Historical Since Inception
<TABLE>
<CAPTION>
Asia Pacific Growth
34820
<S> <C> <C> <C> <C> <C> <C>
TO NO. YEARS 4.668036
36525
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 05/01/95 1000 9.96289 100.3725
1 FEE 05/01/96 0.666667 10.68517 0.062392 0.07
2 FEE 05/01/97 0.666667 10.6005 0.06289 0.07
3 FEE 05/01/98 0.666667 8.949497 0.074492 0.06
4 05/01/99 0.666667 10 0.066667 0.05
5 12/31/99 0.666667 17.43689 0.038233 0.04
6 N/A 0 N/A 0 0.03
7 N/A 0 N/A 0 0.02
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 12/31/99 17.43689 100.0678 1744.871
4.668036
FORMULA: 1000*(1+T)= 1744.871
= 1710.871
T = 0.121916
R = 0.710871
Diversified Income
34227
TO NO. YEARS 6.291581
36525
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 09/15/93 1000 7.872475 127.0249
1 FEE 09/15/94 0.666667 7.675103 0.086861 0.07
2 FEE 09/15/95 0.666667 8.495537 0.078473 0.07
3 FEE 09/15/96 0.666667 9.142358 0.072921 0.06
4 09/15/97 0.666667 9.922821 0.067185 0.05
5 09/15/98 0.666667 9.658186 0.069026 0.04
6 09/15/99 0.666667 9.882223 0.067461 0.03
7 12/31/99 0.666667 9.866141 0.067571 0.02
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 12/31/99 9.866141 126.5154 1248.218
6.291581
FORMULA: 1000*(1+T)= 1248.218
= 1231.218
T = 0.033613
R = 0.231218
George Putnam Fund of Boston
35915
TO NO. YEARS 1.670089
36525
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 04/30/98 1000 9.197039 108.7306
1 FEE 04/30/99 0.666667 10.00014 0.066666 0.07
2 FEE 12/31/99 0.666667 9.299008 0.071692 0.07
3 FEE N/A 0 N/A 0 0.06
4 N/A 0 N/A 0 0.05
5 N/A 0 N/A 0 0.04
6 N/A 0 N/A 0 0.03
7 N/A 0 N/A 0 0.02
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 12/31/99 9.299008 108.5923 1009.801
1.670089
FORMULA: 1000*(1+T)= 1009.801
= 950.3006
T = -0.03006
R = -0.0497
Global Asset Allocation
32873
TO NO. YEARS 10
36525
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/89 1000 3.86512 258.7242
FEE 12/31/90 0.666667 3.817852 0.174618
FEE 12/31/91 0.666667 4.48035 0.148798
FEE 12/31/92 0.666667 4.695502 0.14198
FEE 12/31/93 0.666667 5.439089 0.12257
FEE 12/31/94 0.666667 5.229135 0.127491
FEE 12/31/95 0.666667 6.430103 0.103679
FEE 12/31/96 0.666667 7.330644 0.090942
FEE 12/31/97 0.666667 8.649969 0.077072
FEE 12/31/98 0.666667 9.692572 0.068781
FEE 12/31/99 0.666667 10.69758 0.062319
RESULTING VALUE 12/31/99 10.69758 257.6059 2755.76
10
FORMULA: 1000*(1+T)= 2755.76 - (0.85 * 1000 * 0)
= 2755.76
T = 0.106685
R = 1.75576
Global Growth
32994
TO NO. YEARS 9.667351
36525
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 05/01/90 1000 3.864101 258.7924
1 FEE 05/01/91 0.666667 3.89534 0.171145 0.07
2 FEE 05/01/92 0.666667 4.058025 0.164284 0.07
3 FEE 05/01/93 0.666667 4.353421 0.153136 0.06
4 05/01/94 0.666667 5.152956 0.129376 0.05
5 05/01/95 0.666667 5.084303 0.131123 0.04
6 05/01/96 0.666667 6.190454 0.107693 0.03
7 05/01/97 0.666667 6.962069 0.095757 0.02
8 05/01/98 0.666667 8.858034 0.075261 0
9 05/01/99 0.666667 9.999994 0.066667 0
10 12/31/99 0.666667 15.66499 0.042558 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 12/31/99 15.66499 257.6554 4036.17
9.667351
FORMULA: 1000*(1+T)= 4036.17
= 4036.17
T = 0.155266
R = 3.03617
Growth & Income
32873
TO NO. YEARS 10
36525
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/89 1000 2.846826 351.2684
FEE 12/31/90 0.666667 2.862088 0.23293
FEE 12/31/91 0.666667 3.359576 0.198438
FEE 12/31/92 0.666667 3.635683 0.183368
FEE 12/31/93 0.666667 4.096257 0.16275
FEE 12/31/94 0.666667 4.053071 0.164484
FEE 12/31/95 0.666667 5.46365 0.122019
FEE 12/31/96 0.666667 6.568086 0.101501
FEE 12/31/97 0.666667 8.040267 0.082916
FEE 12/31/98 0.666667 9.154015 0.072828
FEE 12/31/99 0.666667 9.171812 0.072686
RESULTING VALUE 12/31/99 9.171812 349.8745 3208.983
10
FORMULA: 1000*(1+T)= 3208.983 - (0.85 * 1000 * 0)
= 3208.983
T = 0.123665
R = 2.208983
Health Sciences
35915
TO NO. YEARS 1.670089
36525
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 04/30/98 1000 10.30311 97.05812
1 FEE 04/30/99 0.666667 9.999917 0.066667 0.07
2 FEE 12/31/99 0.666667 10.59676 0.062912 0.07
3 FEE N/A 0 N/A 0 0.06
4 N/A 0 N/A 0 0.05
5 N/A 0 N/A 0 0.04
6 N/A 0 N/A 0 0.03
7 N/A 0 N/A 0 0.02
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 12/31/99 10.59676 96.92854 1027.129
1.670089
FORMULA: 1000*(1+T)= 1027.129
= 967.6289
T = -0.01951
R = -0.03237
High Yield
32873
TO NO. YEARS 10
36525
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/89 1000 4.083471 244.8897
FEE 12/31/90 0.666667 3.624684 0.183924
FEE 12/31/91 0.666667 5.176364 0.128791
FEE 12/31/92 0.666667 6.072785 0.109779
FEE 12/31/93 0.666667 7.159627 0.093115
FEE 12/31/94 0.666667 6.993435 0.095327
FEE 12/31/95 0.666667 8.158984 0.08171
FEE 12/31/96 0.666667 9.07535 0.073459
FEE 12/31/97 0.666667 10.23183 0.065156
FEE 12/31/98 0.666667 9.507419 0.070121
FEE 12/31/99 0.666667 9.933858 0.067111
RESULTING VALUE 12/31/99 9.933858 243.9212 2423.079
10
FORMULA: 1000*(1+T)= 2423.079 - (0.85 * 1000 * 0)
= 2423.079
T = 0.092539
R = 1.423079
Income
32873
TO NO. YEARS 10
36525
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/89 1000 5.388243 185.5893
FEE 12/31/90 0.666667 5.711911 0.116715
FEE 12/31/91 0.666667 6.605343 0.100928
FEE 12/31/92 0.666667 7.000927 0.095225
FEE 12/31/93 0.666667 7.681625 0.086787
FEE 12/31/94 0.666667 7.325115 0.091011
FEE 12/31/95 0.666667 8.699331 0.076634
FEE 12/31/96 0.666667 8.784919 0.075888
FEE 12/31/97 0.666667 9.41044 0.070843
FEE 12/31/98 0.666667 10.05459 0.066305
FEE 12/31/99 0.666667 9.714014 0.068629
RESULTING VALUE 12/31/99 9.714014 184.7403 1794.57
10
FORMULA: 1000*(1+T)= 1794.57 - (0.85 * 1000 * 0)
= 1794.57
T = 0.06022
R = 0.79457
International Growth
35432
TO NO. YEARS 2.992471
36525
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 01/02/97 1000 6.814036 146.7559
1 FEE 01/02/98 0.666667 7.84318 0.085 0.07
2 FEE 01/02/99 0.666667 9.12885 0.073029 0.07
3 FEE 12/31/99 0.666667 14.42714 0.046209 0.06
4 N/A 0 N/A 0 0.05
5 N/A 0 N/A 0 0.04
6 N/A 0 N/A 0 0.03
7 N/A 0 N/A 0 0.02
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 12/31/99 14.42714 146.5517 2114.321
2.992471
FORMULA: 1000*(1+T)= 2114.321
= 2063.321
T = 0.273853
R = 1.063321
International Growth & Income
35432
TO NO. YEARS 2.992471
36525
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 01/02/97 1000 6.906223 144.7969
1 FEE 01/02/98 0.666667 8.168379 0.081616 0.07
2 FEE 01/02/99 0.666667 8.932026 0.074638 0.07
3 FEE 12/31/99 0.666667 10.96814 0.060782 0.06
4 N/A 0 N/A 0 0.05
5 N/A 0 N/A 0 0.04
6 N/A 0 N/A 0 0.03
7 N/A 0 N/A 0 0.02
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 12/31/99 10.96814 144.5799 1585.773
2.992471
FORMULA: 1000*(1+T)= 1585.773
= 1534.773
T = 0.153907
R = 0.534773
International New Opportunities
35432
TO NO. YEARS 2.992471
36525
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 01/02/97 1000 8.064207 124.0048
1 FEE 01/02/98 0.666667 7.97516 0.083593 0.07
2 FEE 01/02/99 0.666667 9.05406 0.073632 0.07
3 FEE 12/31/99 0.666667 18.13443 0.036762 0.06
4 N/A 0 N/A 0 0.05
5 N/A 0 N/A 0 0.04
6 N/A 0 N/A 0 0.03
7 N/A 0 N/A 0 0.02
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 12/31/99 18.13443 123.8108 2245.238
2.992471
FORMULA: 1000*(1+T)= 2245.238
= 2194.238
T = 0.300312
R = 1.194238
Investors
35915
TO NO. YEARS 1.670089
36525
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 04/30/98 1000 8.203076 121.9055
1 FEE 04/30/99 0.666667 9.999955 0.066667 0.07
2 FEE 12/31/99 0.666667 12.16778 0.05479 0.07
3 FEE N/A 0 N/A 0 0.06
4 N/A 0 N/A 0 0.05
5 N/A 0 N/A 0 0.04
6 N/A 0 N/A 0 0.03
7 N/A 0 N/A 0 0.02
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 12/31/99 12.16778 121.784 1481.841
1.670089
FORMULA: 1000*(1+T)= 1481.841
= 1422.341
T = 0.23485
R = 0.422341
Money Market
32873
TO NO. YEARS 10
36525
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/89 1000 7.237846 138.1627
FEE 12/31/90 0.666667 7.705965 0.086513
FEE 12/31/91 0.666667 8.047891 0.082837
FEE 12/31/92 0.666667 8.218762 0.081115
FEE 12/31/93 0.666667 8.330009 0.080032
FEE 12/31/94 0.666667 8.527727 0.078176
FEE 12/31/95 0.666667 8.867736 0.075179
FEE 12/31/96 0.666667 9.188351 0.072556
FEE 12/31/97 0.666667 9.532895 0.069933
FEE 12/31/98 0.666667 9.895727 0.067369
FEE 12/31/99 0.666667 10.23142 0.065159
RESULTING VALUE 12/31/99 10.23142 137.4038 1405.836
10
FORMULA: 1000*(1+T)= 1405.836 - (0.85 * 1000 * 0)
= 1405.836
T = 0.03465
R = 0.405836
New Opportunities
34456
TO NO. YEARS 5.664613
36525
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 05/02/94 1000 3.788442 263.9608
1 FEE 05/02/95 0.666667 4.349438 0.153277 0.07
2 FEE 05/02/96 0.666667 6.64527 0.100322 0.07
3 FEE 05/02/97 0.666667 6.16996 0.10805 0.06
4 05/02/98 0.666667 8.879687 0.075078 0.05
5 05/02/99 0.666667 9.999806 0.066668 0.04
6 12/31/99 0.666667 15.69233 0.042484 0.03
7 N/A 0 N/A 0 0.02
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 12/31/99 15.69233 263.4149 4133.592
5.664613
FORMULA: 1000*(1+T)= 4133.592
= 4108.092
T = 0.283301
R = 3.108092
New Value
35432
TO NO. YEARS 2.992471
36525
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 01/02/97 1000 7.310878 136.7825
1 FEE 01/02/98 0.666667 8.506295 0.078373 0.07
2 FEE 01/02/99 0.666667 8.883395 0.075046 0.07
3 FEE 12/31/99 0.666667 8.795115 0.0758 0.06
4 N/A 0 N/A 0 0.05
5 N/A 0 N/A 0 0.04
6 N/A 0 N/A 0 0.03
7 N/A 0 N/A 0 0.02
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 12/31/99 8.795115 136.5533 1201.002
2.992471
FORMULA: 1000*(1+T)= 1201.002
= 1150.002
T = 0.047813
R = 0.150002
OTC & Emerging Growth
35915
TO NO. YEARS 1.670089
36525
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 04/30/98 1000 8.873279 112.6979
1 FEE 04/30/99 0.666667 10.00017 0.066666 0.07
2 FEE 12/31/99 0.666667 19.83758 0.033606 0.07
3 FEE N/A 0 N/A 0 0.06
4 N/A 0 N/A 0 0.05
5 N/A 0 N/A 0 0.04
6 N/A 0 N/A 0 0.03
7 N/A 0 N/A 0 0.02
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 12/31/99 19.83758 112.5976 2233.665
1.670089
FORMULA: 1000*(1+T)= 2233.665
= 2174.165
T = 0.592065
R = 1.174165
Research
36067
TO NO. YEARS 1.253936
36525
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 09/29/98 1000 7.741443 129.1749
1 FEE 09/29/99 0.666667 10.8991 0.061167 0.07
2 FEE 12/31/99 0.666667 11.59761 0.057483 0.07
3 FEE N/A 0 N/A 0 0.06
4 N/A 0 N/A 0 0.05
5 N/A 0 N/A 0 0.04
6 N/A 0 N/A 0 0.03
7 N/A 0 N/A 0 0.02
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 12/31/99 11.59761 129.0562 1496.744
1.253936
FORMULA: 1000*(1+T)= 1496.744
= 1437.244
T = 0.335454
R = 0.437244
Small Cap Value
36280
TO NO. YEARS 0.670773
36525
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 04/30/99 1000 9.999227 100.0077
1 FEE 12/31/99 0.666667 10.30165 0.064715 0.07
2 FEE N/A 0 N/A 0 0.07
3 FEE N/A 0 N/A 0 0.06
4 N/A 0 N/A 0 0.05
5 N/A 0 N/A 0 0.04
6 N/A 0 N/A 0 0.03
7 N/A 0 N/A 0 0.02
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 12/31/99 10.30165 99.94302 1029.578
0.670773
FORMULA: 1000*(1+T)= 1029.578
= 970.0784
T = -0.04428
R = -0.02992
Utilities Growth & Income
33725
TO NO. YEARS 7.665982
36525
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 05/01/92 1000 4.465893 223.9194
1 FEE 05/01/93 0.666667 5.064827 0.131627 0.07
2 FEE 05/01/94 0.666667 5.006291 0.133166 0.07
3 FEE 05/01/95 0.666667 5.232067 0.127419 0.06
4 05/01/96 0.666667 6.377626 0.104532 0.05
5 05/01/97 0.666667 7.160807 0.093099 0.04
6 05/01/98 0.666667 9.323951 0.0715 0.03
7 05/01/99 0.666667 9.999576 0.066669 0.02
8 12/31/99 0.666667 9.986611 0.066756 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 12/31/99 9.986611 223.1246 2228.259
7.665982
FORMULA: 1000*(1+T)= 2228.259
= 2228.259
T = 0.110174
R = 1.228259
Vista
35432
TO NO. YEARS 2.992471
36525
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE SURRENDER CHARGES
0 INIT DEPOSIT 01/02/97 1000 6.520658 153.3588
1 FEE 01/02/98 0.666667 7.870388 0.084706 0.07
2 FEE 01/02/99 0.666667 9.349265 0.071307 0.07
3 FEE 12/31/99 0.666667 14.08793 0.047322 0.06
4 N/A 0 N/A 0 0.05
5 N/A 0 N/A 0 0.04
6 N/A 0 N/A 0 0.03
7 N/A 0 N/A 0 0.02
8 N/A 0 N/A 0 0
9 N/A 0 N/A 0 0
10 N/A 0 N/A 0 0
11 N/A 0 N/A 0 0
12 N/A 0 N/A 0 0
13 N/A 0 N/A 0 0
14 FEE N/A 0 N/A 0 0
15 FEE N/A 0 N/A 0 0
RESULTING VALUE 12/31/99 14.08793 153.1554 2157.643
2.992471
FORMULA: 1000*(1+T)= 2157.643
= 2106.643
T = 0.282729
R = 1.106643
Voyager
32873
TO NO. YEARS 10
36525
TRANSACTION DATE $ VALUE UNIT VALUE NO. UNITS END VALUE
INIT DEPOSIT 12/31/89 1000 2.19974 454.5992
FEE 12/31/90 0.666667 2.124949 0.313733
FEE 12/31/91 0.666667 3.060957 0.217797
FEE 12/31/92 0.666667 3.330834 0.20015
FEE 12/31/93 0.666667 3.898458 0.171008
FEE 12/31/94 0.666667 3.883859 0.171651
FEE 12/31/95 0.666667 5.387167 0.123751
FEE 12/31/96 0.666667 6.000754 0.111097
FEE 12/31/97 0.666667 7.485762 0.089058
FEE 12/31/98 0.666667 9.180593 0.072617
FEE 12/31/99 0.666667 14.32585 0.046536
RESULTING VALUE 12/31/99 14.32585 453.0818 6490.779
10
FORMULA: 1000*(1+T)= 6490.779 - (0.85 * 1000 * 0)
= 6490.779
T = 0.205673
R = 5.490779
</TABLE>
