SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
INITIAL REGISTRATION STATEMENT TO
FORM S-6
FOR REGISTRATION UNDER THE SECURITIES ACT
OF 1933 OF SECURITIES OF UNIT INVESTMENT
TRUSTS REGISTERED ON FORM N-8B-2 (811-05213)
A. Exact name of trust: IDS Life of New York Account 8
B. Name of depositor: IDS LIFE INSURANCE COMPANY OF NEW YORK
C. Complete address of depositor's principal executive offices:
20 Madison Avenue Ext. Albany, NY 12203
D. Name and complete address of agent for service:
Mary Ellyn Minenko, Esq.
IDS Life Insurance Company
50607 AXP Financial Center
Minneapolis, Minnesota 55474
E. Title of securities being registered:
Flexible Premium Variable Life Insurance Policy
F. Approximate date of proposed public offering: as soon as practicable.
Prospectus
(DATE)
American Express Variable Universal Life III(SM), a Flexible Premium Variable
Life Insurance Policy
IDS Life of New York Account 8
Issued and sold by: IDS Life Insurance Company of New York
(IDS Life of New York)
20 Madison Avenue Extension
Albany, NY 12203
Telephone: 800-541-2251
This prospectus contains information about the life insurance policy that you
should know before investing. You also will receive prospectuses for the
underlying funds that are investment options under your policy. Please read all
prospectuses carefully and keep them for future reference.
The Securities and Exchange Commission has not approved or disapproved these
securities or passed upon the accuracy of this prospectus. Any representation to
the contrary is a criminal offense.
An investment in this policy is not a deposit of a bank or financial institution
and is not insured or guaranteed by the Federal Deposit Insurance Corporation or
any other government agency. An investment in this policy involves investment
risk including possible loss of principal.
Table of contents
The Policy in Brief 4
Loads, Fees and Charges 6
Fund expenses 6
Premium expense charge 8
Monthly deduction 9
Surrender charge 10
Partial surrender fee 12
Mortality and expense risk charge 12
Purchasing Your Policy 13
Application 13
Right to examine policy 14
Premiums 14
Keeping The Policy in Force 15
No lapse guarantee 15
Grace period 15
Reinstatement 15
The Variable Account 16
The Funds 17
Rates of Return of the Funds and Subaccounts 23
The Fixed Account 28
Policy Value 29
Fixed account value 29
Subaccount values 30
Proceeds Payable Upon Death 31
Change in death benefit option 33
Changes in specified amount 33
Misstatement of age or sex 34
Suicide 34
Beneficiary 34
Transfers between the Fixed Account and Subaccounts 34
Fixed account transfer policies 35
Minimum transfer amounts 35
Maximum transfer amounts 35
Maximum number of transfers per year 35
Two ways to request a transfer, loan or surrender 35
Automated transfers 36
Automated dollar-cost averaging 36
Policy Loans 37
Policy Surrenders 38
Total surrenders 39
Partial surrenders 39
Allocations of partial surrenders 39
Effects of partial surrenders 39
Taxes 39
Exchange right 39
Optional Insurance Benefits 40
Waiver of monthly deduction 40
Accidental death benefit 40
Other insured rider 40
Children's insurance rider 40
Automatic increase benefit rider 40
Payment of Policy Proceeds 41
Federal Taxes 43
IDS Life of New York's tax status 43
Taxation of policy proceeds 43
Modified endowment contracts 44
Other tax considerations 45
IDS Life of New York 46
Ownership 46
State regulation 46
Distribution of the policy 46
Legal proceedings 46
Year 2000 47
Experts 47
Management of IDS Life of New York 48
Other Information 50
Substitution of investments 50
Voting rights 50
Reports 51
Policy Illustrations 51
Key Terms 55
The Policy in Brief
Purpose: The purpose of the policy is to provide life insurance protection on
the life of the insured and to build policy value. The policy provides a death
benefit that we pay to the beneficiary upon the insured's death. As in the case
of other life insurance policies, it may not be advantageous to purchase this
policy as a replacement for, or in addition to an existing life insurance
policy.
The policy allows you, as the owner, to allocate your net premiums, or transfer
policy value, to:
The variable account, consisting of subaccounts, each of which invests in a fund
with a particular investment objective. You may direct premiums to any or all of
these subaccounts. Your policy's value may increase or decrease daily, depending
on the investment return. No minimum amount is guaranteed. (p. 16)
The fixed account, which earns interest at rates that are adjusted periodically
by IDS Life of New York. This rate will never be lower than 4.0%. (p. 28)
Purchasing your policy: To apply, send a completed application and premium
payment to IDS Life of New York's home office. You will need to provide medical
and other evidence that the person you propose to insure (yourself or someone
else) is insurable according to our underwriting rules before we can accept your
application. (p. 13)
Right to examine policy: You may return your policy for any reason and receive a
full refund of your premiums by mailing us the policy and a written request for
cancellation within a specified period. (p. 14)
Premiums: In applying for your policy, you state how much you intend to pay and
whether you will pay quarterly, semiannually or annually. You may also make
additional, unscheduled premium payments subject to certain limits. You cannot
make premium payments on or after the maturity date. We may refuse premiums in
order to comply with the Code. (p. 14)
No lapse guarantee: A feature of the policy guaranteeing the policy will remain
in force for five policy years. The feature is in effect if you meet certain
premium requirements. (p. 15)
Grace period: If the cash surrender value of your policy becomes less than the
amount needed to pay the monthly deduction and the no lapse guarantee is not in
effect, you will have 61 days to pay a premium that raises the cash surrender
value to an amount sufficient to pay the monthly deduction. If you don't, the
policy will lapse. (p. 15)
Reinstatement: If your policy lapses, it can be reinstated within five years.
The reinstatement is subject to certain conditions including evidence of
insurability satisfactory to IDS Life of New York and the payment of a
sufficient premium. (p. 15)
Loads, fees and charges: You pay the following charges, either directly (such as
deductions from your premium payments or from your policy value), or indirectly
(as deductions from the underlying funds.) These charges primarily compensate
IDS Life of New York for administering and distributing the policy as well as
paying policy benefits and assuming related risks:
o Premium expense charge -- deducted from each premium payment to cover
some distribution expenses, state and local premium taxes, and federal
taxes.
o Monthly deduction -- charged against the value of your policy each
month (prior to the maturity date), covering the cost of insurance,
cost of issuing the policy, certain administrative expenses and
optional insurance benefits.
o Surrender charge -- applies if you surrender your policy for its full
cash surrender value, or the policy lapses, during the first 10 years
and for 10 years after requesting an increase in the specified amount.
We base it on the initial specified amount and on any increase in the
specified amount.
o Partial surrender fee -- applies if you surrender part of the value of
your policy; equals $25 or 2% of the amount surrendered, whichever is
less.
o Mortality and expense risk charge -- applies only to the subaccounts;
equals, on an annual basis, 0.9% of the average daily net asset value
of the subaccounts for the first 10 policy years and 0.45% thereafter.
We reserve the right to charge up to 0.9% for all policy years.
o Fund expenses -- apply only to the underlying funds and consists of
investment management fees, taxes, brokerage commissions and
nonadvisory expenses. (p. 6)
Proceeds payable upon death: Prior to the maturity date, your policy's death
benefit can never be less than the specified amount, unless you change that
amount or your policy has outstanding indebtedness. The relationship between the
policy value and the death benefit depends on which of two options you choose:
o Option 1 level amount: The death benefit is the greater of the
specified amount or a percentage of policy value.
o Option 2 variable amount: The death benefit is the greater of the
specified amount plus the policy value or a percentage of policy
value.
You may change the death benefit option or specified amount within certain
limits; doing so generally will affect policy charges.
Transfers between the fixed account and subaccounts: You may, at no charge,
transfer policy value from one subaccount to another or between subaccounts and
the fixed account. (Certain restrictions apply to transfers involving the fixed
account.) You also can arrange for automated transfers among the fixed account
and subaccounts. (p. 34)
Policy loans: You may borrow against your policy's cash surrender value. A
policy loan, even if repaid, can have a permanent effect on the death benefit
and policy value. A loan may have tax consequences if your policy lapses or you
surrender it. (p. 37)
Policy surrenders: You may cancel this policy while it is in force and receive
its cash surrender value. The cash surrender value is the policy value minus
indebtedness, minus any applicable surrender charges. (p. 38)
Exchange right: For two years after the policy is issued, you can exchange it
for one that provides benefits that do not vary with the investment return of
the subaccounts. Because the policy itself offers a fixed return option, all you
need do is transfer all of the policy value in the subaccounts to the fixed
account.
Payment of policy proceeds: We will pay policy proceeds when you surrender the
policy or the insured dies. You or the beneficiary may choose whether you want
us to make a lump sum payment or payments under one or more of certain options.
(p. 41)
Federal taxes: The death benefit is not considered part of the beneficiary's
income and therefore is not subject to federal income taxes. When the proceeds
are paid after the maturity date, if the amount received plus any indebtedness
exceeds your investment in the policy, the excess may be taxable as ordinary
income. Part or all of any proceeds you receive through full or partial
surrender, lapse, policy loan or assignment of policy value may be subject to
federal income tax as ordinary income. Proceeds other than death benefits from
certain policies, classified as "modified endowments," are taxed
differently from proceeds of conventional life insurance contracts and also may
be subject to an additional 10% IRS penalty tax if you are younger than 59 1/2.
A policy is considered to be a modified endowment if it was applied for or
materially changed after June 21, 1988, and premiums paid in the early years
exceed certain modified endowment limits. (p. 43)
Loads, Fees and Charges
Policy charges compensate IDS Life of New York for:
o providing the insurance benefits of the policy;
o issuing the policy;
o administering the policy;
o assuming certain risks in connection with the policy; and
o distributing the policy.
We deduct some of these charges from your premium payments. We deduct others
periodically from your policy value in the fixed account and/or subaccounts. We
may also assess a charge if you surrender your policy or the policy lapses.
FUND EXPENSES
The investment managers and advisers receive fees for their services to the
funds. The funds also pay taxes, brokerage commissions and nonadvisory expenses,
such as custodian and trustee fees, registration fees for shares, postage,
fidelity and security bond costs, legal fees and other miscellaneous fees and
charges. The table below will help you understand the expenses that the funds
pay.
Annual operating expenses of the funds (as a percentage of average daily net assets)
- ---------------------------------------------------------- ------------------ ---------------- --------------- -------------
Management 12b-1 Other
Fees Fees Expenses Total
- ---------------------------------------------------------- ------------------ ---------------- --------------- -------------
IDS Life Series Fund
Equity Portfolio .70% -- .03 .73%1
- ---------------------------------------------------------- ------------------ ---------------- --------------- -------------
Equity Income Portfolio .70% -- .10 .80%2
- --------------------------------------------------------- ------------------ ---------------- --------------- -------------
Government Securities Portfolio .70% -- .10 .80%2
- ---------------------------------------------------------- ------------------ ---------------- --------------- -------------
Income Portfolio .70% -- .05 .75%1
- --------------------------------------------------------- ------------------ ---------------- --------------- -------------
International Equity Portfolio .95% -- .10 1.05%1
- ---------------------------------------------------------- ------------------ ---------------- --------------- -------------
Managed Portfolio .70% -- .04 .74%1
- ---------------------------------------------------------- ------------------ ---------------- --------------- -------------
Money Market Portfolio .50% -- .10 .60%1
- ---------------------------------------------------------- ------------------ ---------------- --------------- -------------
AXPSM Variable Portfolio -
Blue Chip Advantage Fund .56% .13 .26 .95%3
- ---------------------------------------------------------- ------------------ ---------------- --------------- -------------
Bond Fund .60% .13 .08 .81%4
- ---------------------------------------------------------- ------------------ ---------------- --------------- -------------
Capital Resource Fund .60% .13 .06 .79%4
- ---------------------------------------------------------- ------------------ ---------------- --------------- -------------
Cash Management Fund .51% .13 .05 .69%4
- ---------------------------------------------------------- ------------------ ---------------- --------------- -------------
Diversified Equity Income Fund .56% .13 .26 .95%4
- ---------------------------------------------------------- ------------------ ---------------- --------------- -------------
Emerging Markets Fund 1.27% .13 .35 1.75%3
- ---------------------------------------------------------- ------------------ ---------------- --------------- -------------
Extra Income Fund .62% .13 .08 .83%4
- ---------------------------------------------------------- ------------------ ---------------- --------------- -------------
Federal Income Fund .61% .13 .14 .88%3
- ---------------------------------------------------------- ------------------ ---------------- --------------- -------------
Global Bond Fund .84% .13 .12 1.09%4
- ---------------------------------------------------------- ------------------ ---------------- --------------- -------------
Growth Fund .63% .13 .19 .95%3
- ---------------------------------------------------------- ------------------ ---------------- --------------- -------------
International Fund .83% .13 .11 1.07%4
- ---------------------------------------------------------- ------------------ ---------------- --------------- -------------
Managed Fund .59% .13 .04 .76%4
- ---------------------------------------------------------- ------------------ ---------------- --------------- -------------
New Dimensions Fund .61% .13 .07 .81%4
- ---------------------------------------------------------- ------------------ ---------------- --------------- -------------
S&P 500 Index Fund .37% .13 -- .50%3
- ---------------------------------------------------------- ------------------ ---------------- --------------- -------------
Small Cap Advantage Fund .79% .13 .31 1.23%3
- ---------------------------------------------------------- ------------------ ---------------- --------------- -------------
Strategy Aggressive Fund .60% .13 .07 .80%4
- ---------------------------------------------------------- ------------------ ---------------- --------------- -------------
AIM V.I.
Capital Appreciation Fund .62% -- .11 .73%5
- ---------------------------------------------------------- ------------------ ---------------- --------------- -------------
Capital Development Fund --% -- 1.23 1.23%5, 6
- ---------------------------------------------------------- ------------------ ---------------- --------------- -------------
Growth and Income Fund .61% -- .16 .77%5
- ---------------------------------------------------------- ------------------ ---------------- --------------- -------------
- ---------------------------------------------------------- ------------------ ---------------- --------------- -------------
American Century VP
International 1.34% -- -- 1.34%7
- ---------------------------------------------------------- ------------------ ---------------- --------------- -------------
Value 1.00% -- -- 1.00%7
- ---------------------------------------------------------- ------------------ ---------------- --------------- -------------
Calvert CVS
- ---------------------------------------------------------- ------------------ ---------------- --------------- -------------
Social Balanced Portfolio .70% -- .16 .86%8
- ---------------------------------------------------------- ------------------ ---------------- --------------- -------------
Fidelity VIP
III Growth & Income Portfolio (Service Class) .48% .10 .12 .70%9
- ---------------------------------------------------------- ------------------ ---------------- --------------- -------------
III Mid Cap Portfolio (Service Class) .57% .10 .40 1.07%10
- ---------------------------------------------------------- ------------------ ---------------- --------------- -------------
Overseas Portfolio (Service Class) .73% .10 .18 1.01%9
- ---------------------------------------------------------- ------------------ ---------------- --------------- -------------
FT VIPT
Franklin Real Estate Fund - Class 2 .56% .25 .02 .83%11, 12
- ---------------------------------------------------------- ------------------ ---------------- --------------- -------------
Franklin Value Securities Fund - Class 2 .60% .25 .21 1.06%11
- ---------------------------------------------------------- ------------------ ---------------- --------------- -------------
Templeton International Securities Fund - Class 2 .69% .25 .19 1.13%11, 13
- ---------------------------------------------------------- ------------------ ---------------- --------------- -------------
Templeton International Smaller Companies Fund - .85% .25 .26 1.36%11
Class 2
- ---------------------------------------------------------- ------------------ ---------------- --------------- -------------
Goldman Sachs VIT
CORESM Small Cap Equity Fund .75% -- .25 1.00%14
- ---------------------------------------------------------- ------------------ ---------------- --------------- -------------
CORESM U.S. Equity Fund .70% -- .20 .90%14
- ---------------------------------------------------------- ------------------ ---------------- --------------- -------------
Mid Cap Value Fund .80% -- .25 1.05%14
- ---------------------------------------------------------- ------------------ ---------------- --------------- -------------
Janus Aspen Series
Aggressive Growth Portfolio: Service Shares .65% .25 .02 .92%15
- ---------------------------------------------------------- ------------------ ---------------- --------------- -------------
Global Technologies Portfolio: Service Shares .65% .25 .13 1.03%15
- ---------------------------------------------------------- ------------------ ---------------- --------------- -------------
International Growth Portfolio: Service Shares .65% .25 .11 1.01%15
- ---------------------------------------------------------- ------------------ ---------------- --------------- -------------
Lazard Retirement Series
International Equity Portfolio .75% .25 .25 1.25%16
- ---------------------------------------------------------- ------------------ ---------------- --------------- -------------
MFS(R) VIT
Growth Series - Service Class .75% .20 .16 1.11%17,
- ---------------------------------------------------------- ------------------ ---------------- --------------- -------------
New Discovery Series - Service Class .90% .20 .17 1.27%17,
- ---------------------------------------------------------- ------------------ ---------------- --------------- -------------
Putnam Variable Trust
Putnam VT High Yield Fund - Class IB Shares .65% .15 .07 .87%5
- ---------------------------------------------------------- ------------------ ---------------- --------------- -------------
Putnam VT International New Opportunities Fund - 1.08% .15 .33 1.56%5
Class IB Shares
- ---------------------------------------------------------- ------------------ ---------------- --------------- -------------
Putnam VT New Opportunities Fund - Class 1A Shares .54% -- .05 .59%5
- ---------------------------------------------------------- ------------------ ---------------- --------------- -------------
Putnam VT Vista Fund - Class IB Shares .65% .15 .10 .90%5
- ---------------------------------------------------------- ------------------ ---------------- --------------- -------------
Royce
Micro-Cap Portfolio 1.25% -- .10 1.35%20
- ---------------------------------------------------------- ------------------ ---------------- --------------- -------------
Third Avenue
Value Portfolio .90% -- .40 1.30%21
- ---------------------------------------------------------- ------------------ ---------------- --------------- -------------
Wanger
International Small Cap 1.25% -- .24 1.49%22
- ---------------------------------------------------------- ------------------ ---------------- --------------- -------------
U.S. Small Cap .95% -- .07 1.02%22
- ---------------------------------------------------------- ------------------ ---------------- --------------- -------------
Warburg Pincus Trust
Emerging Growth Portfolio --% -- 1.40 1.40%23
- ---------------------------------------------------------- ------------------ ---------------- --------------- -------------
Small Company Growth Portfolio .90% -- .24 1.14%5
- ---------------------------------------------------------- ------------------ ---------------- --------------- -------------
1Actual operating expenses for the fiscal year ending April 30, 1999.
2IDS Life has agreed to a voluntary limit of 0.1%, on an annual basis, of the
average daily net assets of each of the IDS Life series Fund Portfolio's for
other expenses like taxes and brokerage commissions and for nonadvisory
expenses. If the 0.1% limitation had not been in place, these other expenses
would have been 0.17% for IDS Life Series Fund - Government Securities
Portfolio. IDS Life Series Fund - Equity Income Portfolio is new. IDS Life plans
to limit these expenses to 0.1%. IDS Life reserves the right to discontinue
limiting these other expenses at 0.1%. However, its present intention is to
continue the limit until the time that actual expenses are less than the limit.
3Based on estimated expenses after fee waivers and expenses reimbursements.
Without fee waivers and expense reimbursements "Other Expenses and "Total" would
be 0.39% and 1.08% for AXP Variable Portfolio - Blue Chip Advantage and AXP
Variable Portfolio Diversified Equity Income Funds, 0.26% and 1.00% for AXP
Variable Portfolio - Federal Income Fund, 0.32% and 1.08% for AXP Variable
Portfolio - Growth Fund and 0.43% and 1.35% for AXP Variable Portfolio - Small
Cap Advantage Fund.
4The fund's expense figures are based on actual expenses for the fiscal year
ended Aug. 31, 1999 restated to include a Rule 12b-1 distribution fee of .125%
that went into effect Sept. 21, 1999.
5Figures in "Management Fees," "Other Expenses" and "Total" are based on actual
expenses for the fiscal year ended Dec. 31, 1999.
6Had there been no fee waivers or expense reimbursement, expenses would have
been: 0.75%, 0.00%, 2.67% and 3.42%.
7The Fund has a stepped fee schedule. As a result, the fund's management fee
rate generally decreases as fund assets increase.
8Net fund operating expenses after reductions for fees paid indirectly again
restated to reflect an indirect for Social Balanced would be 0.89%. Total
expenses have been restated to reflect expenses expected to be incurred in 2000.
9A portion of the brokerage commissions that certain funds pay was used to
reduce fund expenses. In addition, through arrangements with certain funds'
custodian, credits realized as a result of uninvested cash balances were used to
reduce a portion of each applicable funds' expenses. With these reductions,
"Other Expenses," and "Total Expenses" presented in the table would have been
0.11% and 0.69% for Growth & Income Portfolio and 0.15% and 0.98% for Overseas
Portfolio.
10FMR agreed to reimburse a portion of Mid Cap Portfolio's expenses during the
period. Without this reimbursement, the Portfolio's management fee, distribution
& service fee (12b-1), other expenses and total expenses would have been 0.57%,
0.10% 2.74% and 3.41%, respectively.
11The fund's Class 2 distribution plan or Rule 12b-1 plan is described in the
fund's prospectus.
12Previously Franklin Real Estate Securities Fund. The fund administration fee
is paid indirectly through the management fee. The fund's Class 2 distribution
plan or "Rule 12b-1 Plan" is described in the fund's prospectus.
13On Feb. 8, 2000, shareholders approved a merger and reorganization that
combined the fund with the Templeton International Equity Fund, effective May 1,
2000. The shareholders of that fund approved new management fees, which apply to
the combined fund effective May 1, 2000. The table shows restated total expenses
based on the new fees and the assets of the funds as of Dec. 31, 1999, and not
the assets of the combined fund. However, if the table reflected both the new
fees and the combined assets, the fund's expenses after May 1, 2000 would be
estimated as: Management Fees 0.65%, 12b-1 Fees 0.25%, Other Expenses 0.20%, and
Total 1.10%.
14The fund's expenses are based on estimated expenses for the fiscal year ended
Dec. 31, 2000. Goldman Sachs Asset Management and Goldman Sachs Asset Management
International, the investment advisers, have voluntarily agreed to reduce or
limit certain other expenses (excluding management fees, taxes, interest,
brokerage fees, litigation, indemnification and other extraordinary expenses) to
the extent such expenses exceed the percentage stated in the above table (as
calculated per annum) of each fund's respective average daily net assets.
Without the limitations described above, Other Expenses and Total would be as
follows: 0.75% and 1.50% for CORE Small Cap Equity Fund, and 0.42% and 1.22% for
Mid Cap Value Fund (formerly, the Mid Cap Equity Fund) and 0.20% and 0.90% for
the CORESM U.S. Equity Fund, CORESM, is a service mark of Goldman Sachs and Co.
15Expenses are based on estimated expenses that the new Service Shares class of
each portfolio expects to incur in its initial fiscal year. All expenses are
shown without the effect of expense offset arrangements.
16Effective May 1, 1999, the investment adviser agreed to waive its fees and/or
reimburse the Funds through Dec. 31, 2000 to the extent that total Fund expenses
exceed 1.25% for Equity and 1.25% for International Equity of the Funds' average
daily net assets. Absent fee waivers and/or reimbursements, Other Expenses and
Total Expenses for the year ended Dec. 31, 1999 would have been 11.94% and
12.94% for International Equity.
17Each series has adopted a distribution plan under Rule 12b-1 that permits it
to pay marketing and other fees to support the sales and distribution of service
class shares (these fees are referred to as distribution fees).
18Each series has an expense offset arrangement which reduces the series'
custodian fee based upon the amount of cash maintained by the series with its
custodian and dividend disbursing agent. The series may enter into other similar
arrangements and directed brokerage arrangements, which would also have the
effect of reducing the series' expenses. "Other Expenses" do not take into
account these expense reductions, and are therefore higher than the actual
expenses of the series. Had these fee reductions been taken into account, "Net
Expenses" would be lower, and for service class shares would be estimated to be:
1.10% for Growth Series and 1.25% for New Discovery Series.
19MFS has contractually agreed, subject to reimbursement, to bear expenses for
the series' expenses such that "Other Expenses" (after taking into account the
expense offset arrangement described above), do not exceed 0.15% annually.
Without this agreement, "Other Expenses" and Total would be 0.71% and 1.66% for
Growth Series and 1.59% and 2.69% for New Discovery Series. These contractual
fee arrangements will continue until at least May 1, 2001, unless changed with
the consent of the board of trustees which oversees the series.
20Royce has contractually agreed to waive its fees and reimburse expenses to the
extent necessary to maintain the Funds Net Annual Operating Expense ratio at or
below 1.35% through Dec. 31, 1999 and 1.99% through Dec. 31, 2008. Absent fee
waivers "Other Expenses" and "Total Expenses" would be 0.99% and 2.24% for Royce
Micro-Cap Portfolio.
21These expenses reflect reimbursements by the Adviser. The Adviser reimbursed
the Fund for all expenses incurred by the Fund in excess of 1.30% of Fund
assets. The fund will repay the Adviser the amount of its reimbursement for up
to three years following the reimbursement to the extent Fund expenses drop
below 1.30%. The Adviser expects to continue to reimburse the Fund for these
expenses for the foreseeable future. Either the Fund or the Adviser can
terminate this arrangement at any time. Without this reimbursement, the Fund's
"Other Expenses" and "Total" would have been 2.05% and 2.95%. Other expenses are
based on estimated amounts for the current fiscal year.
22Actual operating expenses of funds at Dec. 31, 1999.
23Expense ratios are shown after fee waivers and expenses reimbursements by the
investment adviser. The total expense ratios before the waivers and
reimbursements would have been 11.16% for Emerging Growth Portfolio of the
Warburg Pincus Trust.
IDS Life of New York has entered into certain arrangements under which it is
compensated by the funds' advisors and/or distributors for the administrative
services it provides to these funds.
PREMIUM EXPENSE CHARGE
We deduct this charge from each premium payment. We credit the amount remaining
after the deduction, called the net premium, to the account(s) you have
selected. The premium expense charge is 3.5% of each premium payment. It
partially compensates IDS Life of New York for expenses of distributing the
policy, including agents' commissions, advertising and printing of prospectuses
and sales literature. (The surrender charge, discussed under "Surrender charge",
below also may partially compensate these expenses.) It also compensates IDS
Life of New York for paying taxes imposed by certain states and governmental
subdivisions on premiums received by insurance companies. All policies in all
states are charged the same premium expense charge even though state premium
taxes vary.
MONTHLY DEDUCTION
On each monthly date we deduct from the value of your policy in the fixed
account and/or subaccounts an amount equal to the sum of:
1. the cost of insurance for the policy month;
2. the policy fee shown in your policy; and
3. charges for any optional insurance benefits provided by rider for
the policy month.
We explain each of the three components below.
You specify, in your policy application, what percentage of the monthly
deduction from 0% to 100% you want us to take from the fixed account and from
each of the subaccounts. You may change these percentages for future monthly
deductions by writing to us.
We will take monthly deductions from the fixed account and the subaccounts on a
pro rata basis if:
o you do not specify the accounts from which you want us to take the
monthly deduction, or
o the value in the fixed account or any subaccount is insufficient to
pay the portion of the monthly deduction you have specified.
If the cash surrender value of your policy is not enough to cover the monthly
deduction on a monthly anniversary, the policy may lapse. However, the policy
will not lapse if the no lapse guarantee is in effect. (See "No lapse
guarantee;" also "Grace period" and "Reinstatement.")
Components of the monthly deduction:
1. Cost of Insurance: primarily, the cost of providing the death benefit under
your policy. It depends on:
o the amount of the death benefit;
o the policy value; and
o the statistical risk that the insured will die in a given period.
The cost of insurance for a policy month is calculated as:
[a X (b - c)] + d
where:
(a) is the monthly cost of insurance rate based on the insured's attained
insurance age, sex (unless unisex rates are required by law) and risk
classification. Generally, the cost of insurance rate will increase as the
insured's attained insurance age increases.
We set the rates based on our expectations as to future mortality experience. We
may change the rates from time to time; any change will apply to all individuals
of the same rate classification. However, rates will not exceed the Guaranteed
Maximum Monthly Cost of Insurance Rates shown in your policy, which are based on
the 1980 Commissioners Standard Ordinary Smoker and Nonsmoker Mortality Tables,
Age Last Birthday.
(b) is the death benefit on the monthly date divided by 1.0032737 (which reduces
IDS Life of New York's net amount at risk, solely for computing the cost of
insurance, by taking into account assumed monthly earnings at an annual rate of
4.0%).
(c) is the policy value on the monthly date. At this point, the policy value has
been reduced by the policy fee, and any charges for optional riders.
(d) is any flat extra insurance charges we assess as a result of special
underwriting considerations.
2. Policy fee: $5 per month. This charge reimburses IDS Life of New York for
expenses of issuing the policy, such as processing the application
(primarily underwriting) and setting up computer records; and of
administering the policy, such as processing claims, maintaining records,
making policy changes and communicating with owners.
3. Optional insurance benefit charges: charges for any optional benefits you
add to the policy by rider. (See "Optional insurance benefits.)"
SURRENDER CHARGE
If you surrender your policy or the policy lapses during the first 10 policy
years and in the 10 years following an increase in specified amount, we will
assess a surrender charge.
The surrender charge reimburses IDS Life of New York for costs of issuing the
policy, such as processing the application (primarily underwriting) and setting
up computer records. It also partially pays for commissions, advertising and
printing the prospectus and sales literature.
The maximum surrender charge for the initial specified amount is shown in your
policy. It is based on the insured's insurance age, sex, risk classification and
initial specified amount. The maximum surrender charge for the initial specified
amount will remain level during the first five policy years and then decrease
monthly until it is zero at the end of 10 policy years. If you increase the
specified amount, an additional maximum surrender charge will apply. We will
show the additional maximum surrender charge in a revised policy. It will be
based on the insured's attained insurance age, sex, risk classification and the
amount of the increase. We will show the additional maximum surrender charge
will remain level during the first five years following the effective date of
the increase and then decrease monthly until it is zero at the end of the 10th
year following the increase.
The following example illustrates how we calculate the maximum surrender charge
for a male, insurance age 35 qualifying for nonsmoker rates. We assume the
specified amount to be $100,000.
Lapse or surrender at
beginning of year Surrender Charge
1 $901.00
2 901.00
3 901.00
4 901.00
5 901.00
6 901.00
7 720.80
8 540.60
9 360.40
10 180.20
11 0.00
From the beginning of year 6 to the end of year 10, the amounts shown decrease
on a monthly basis.
The maximum surrender charge is the rate from the table below multiplied by the
number of thousands of dollars of initial specified amount. For example, a male
age 20 with a nonsmoker risk classification and an initial specified amount of
$50,000 will have a maximum surrender charge of $6.61 multiplied by 50 or
$330.50. As another example, a female age 75 with a smoker risk classification
and an initial specified amount of $5,000,000 will have a maximum surrender
charge of $33.92 multiplied by 5,000 or $169,600.
Maximum Surrender Charges
(Rate per Thousand of Initial Specified Amount)
Issue Male Female
Age Standard Standard
0 5.44 5.13
1 5.40 5.11
2 5.45 5.14
3 5.50 5.18
4 5.55 5.22
5 5.61 5.27
6 5.67 5.31
7 5.73 5.36
8 5.81 5.42
9 5.88 5.47
10 5.96 5.53
11 6.05 5.60
12 6.14 5.66
13 6.23 5.73
14 6.33 5.81
15 6.43 5.88
16 6.52 5.96
17 6.62 6.04
18 6.72 6.13
19 6.82 6.22
Male Male Female Female
Issue Standard Standard Standard Standard
Age NonSmoker Smoker NonSmoker Smoker
20 6.61 7.47 6.19 6.61
21 6.70 7.60 6.29 6.72
22 6.81 7.74 6.38 6.84
23 6.92 7.89 6.48 6.97
24 7.04 8.05 6.59 7.10
25 7.16 8.22 6.71 7.24
26 7.30 8.41 6.83 7.39
27 7.45 8.61 6.95 7.54
28 7.60 8.82 7.09 7.70
29 7.77 9.05 7.23 7.88
30 7.94 9.29 7.38 8.06
31 8.13 9.55 7.54 8.25
32 8.33 9.83 7.70 8.46
33 8.54 10.12 7.88 8.67
34 8.77 10.44 8.07 8.90
35 9.01 10.77 8.26 9.14
36 9.26 11.12 8.47 9.39
37 9.53 11.49 8.69 9.66
38 9.81 11.88 8.92 9.94
39 10.11 12.30 9.16 10.23
40 10.42 12.74 9.42 10.54
41 10.76 13.20 9.69 10.86
42 11.12 13.69 9.97 11.19
43 11.49 14.21 10.27 11.54
44 11.89 14.75 10.58 11.91
45 12.32 15.33 10.91 12.30
46 12.77 15.94 11.26 12.70
47 13.25 16.58 11.63 13.13
48 13.75 17.26 12.02 13.58
49 14.30 17.99 12.44 14.05
50 14.87 18.75 12.88 14.55
51 15.49 19.57 13.35 15.08
52 16.15 20.44 13.84 15.64
53 16.85 21.35 14.37 16.23
54 17.60 22.32 14.93 16.85
55 18.39 23.35 15.52 17.51
56 19.24 24.43 16.15 18.20
57 20.15 25.58 16.83 18.94
58 21.11 26.79 17.55 19.73
59 22.15 28.08 18.32 20.58
60 23.26 29.46 19.16 21.49
61 24.45 30.93 20.06 22.48
62 25.72 32.50 21.03 23.54
63 27.09 34.16 22.08 24.68
64 28.55 35.92 23.20 25.90
65 30.11 36.80 24.40 27.19
66 31.78 36.80 25.69 28.57
67 33.57 36.80 27.07 30.04
68 34.87 36.80 28.56 31.63
69 34.87 36.80 30.19 33.35
70 34.87 36.80 31.97 33.92
71 34.87 36.80 33.08 33.92
72 34.87 36.80 33.08 33.92
73 34.87 36.80 33.08 33.92
74 34.87 36.80 33.08 33.92
75 34.87 36.80 33.08 33.92
76 34.87 36.80 33.08 33.92
77 34.87 36.80 33.08 33.92
78 34.87 36.80 33.08 33.92
79 34.87 36.80 33.08 33.92
80 34.87 36.80 33.08 33.92
81 34.87 36.80 33.08 33.92
82 34.87 36.80 33.08 33.92
83 34.87 36.80 33.08 33.92
84 34.87 36.80 33.08 33.92
85 34.87 36.80 33.08 33.92
PARTIAL SURRENDER FEE
If you surrender part of the value of your policy, we will charge you $25 (or 2%
of the amount surrendered, if less.) We guarantee that this fee will not
increase for the duration of your policy.
MORTALITY AND EXPENSE RISK CHARGE
This charge applies only to the subaccounts and not to the fixed account. It is
equal, on an annual basis, to 0.9% of the average daily net asset value of the
subaccounts for the first 10 policy years and 0.45% thereafter. We reserve the
right to charge up to 0.9% for all policy years. Computed daily, the charge
compensates IDS Life of New York for:
o Mortality risk -- the risk that the cost of insurance charge will be
insufficient to meet actual claims.
o Expense risk -- the risk that the policy fee and the surrender charge
(described above) may be insufficient to cover the cost of
administering the policy.
Any profit from the mortality and expense risk charge would be available to IDS
Life of New York for any proper corporate purpose including, among others,
payment of sales and distribution expenses, which we do not expect to be covered
by the premium expense charge and surrender charges discussed earlier. IDS Life
of New York will make up any further deficit from its general assets.
Other information on charges
IDS Life of New York may reduce or eliminate various fees and charges when we
incur lower sales costs and/or perform fewer administrative services than usual.
Purchasing Your Policy
APPLICATION
To apply for coverage, complete an application and send it with your premium
payment to IDS Life of New York's home office. In your application, you:
o select a specified amount of insurance;
o select a death benefit option;
o designate a beneficiary; and
o state how premiums are to be allocated among the fixed account and/or
the subaccounts.
Insurability: Before issuing your policy, we require satisfactory evidence of
the insurability of the person whose life you propose to insure (yourself or
someone else). Our underwriting department will review your application and any
medical information or other data required to determine whether the proposed
individual is insurable under our underwriting rules. We may decline your
application if we determine the individual is not insurable and we will return
any premium you have paid.
Age limit: IDS Life of New York generally will not issue a policy where the
proposed insured is over the insurance age of 80. We may, however, do so at our
sole discretion.
Risk classification: The risk classification is based on the insured's health,
occupation or other relevant underwriting standards. This classification will
affect the monthly deduction and may affect the cost of certain optional
insurance benefits. (See "Loads, fees and charges" and "Optional insurance
benefits").
Other conditions: In addition to proving insurability, you and the insured must
also meet certain conditions, stated in the application form, before coverage
will become effective and your policy will be delivered to you.
Incontestability: IDS Life of New York will have two years from the effective
date of your policy to contest the truth of statements or representations in
your application. After the policy has been in force during the insured's
lifetime for two years from the policy date, we cannot contest the policy.
RIGHT TO EXAMINE POLICY
You may return your policy for any reason and receive a full refund of all
premiums paid. To do so, you must mail or deliver the policy to IDS Life of New
York's home office or your financial advisor with a written request for
cancellation:
o by the 10th day after you receive it.
On the date your request is postmarked or received, the policy will immediately
be considered void from the start.
PREMIUMS
Payment of premiums:
In applying for your policy, you decide how much you intend to pay and how often
you will make payments. During the first several policy years until the policy
value is sufficient to cover the surrender charge, IDS Life of New York requires
that you pay premiums sufficient to keep the NLG in effect in order to keep the
policy in force.
You may schedule payments annually, semiannually or quarterly. (IDS Life of New
York must approve payment at any other interval). We show this premium schedule
in your policy.
The scheduled premium serves only as an indication of your intent as to the
frequency and amount of future premium payments. You may skip scheduled premium
payments at any time if your cash surrender value is sufficient to pay the
monthly deduction or if you have paid sufficient premiums to keep the no lapse
guarantee in effect.
You may also change the amount and frequency of scheduled premium payments by
written request. IDS Life of New York reserves the right to limit the amount of
such changes. Any change in the premium amount is subject to applicable tax laws
and regulations.
Although you have flexibility in paying premiums, the amount and frequency of
your payments will affect the policy value, cash surrender value and length of
time your policy will remain in force, as well as affect whether the NLG remains
in effect.
Premium limitations:
You may make unscheduled premium payments at any time and in any amount of at
least $25. IDS Life of New York reserves the right to limit the number and
amount of unscheduled premium payments. No premium payments, scheduled or
unscheduled, are allowed on or after the maturity date.
Also, in order to receive favorable tax treatment under the Code, premiums you
pay during the life of the policy must not exceed certain limitations. To comply
with the Code, we can either refuse excess premiums as you pay them or refund
excess premiums with interest no later than 60 days after the end of the policy
year in which they were paid.
Allocation of premiums:
Until the policy date, we hold all premiums in the fixed account and we credit
interest on the net premiums (gross premiums minus premium expense charge) at
the current fixed account rate. As of the policy date, we will allocate the net
premiums plus accrued interest to the account(s) you have selected in your
application. At that time, we will begin to assess the various loads, fees,
charges and expenses.
We convert any amount that you allocate to a subaccount into accumulation units
of that subaccount, as explained under "Policy value." Similarly, when you
transfer value between subaccounts, we convert accumulation units in one
subaccount into a cash value, which we then convert into accumulation units of
the second subaccount.
Keeping The Policy in Force
NO LAPSE GUARANTEE
The NLG provides that your policy will remain in force for five policy years,
even if the cash surrender value is insufficient to pay the monthly deduction.
The NLG will stay in effect as long as:
o the sum of premiums paid; minus
o partial surrenders; minus
o outstanding indebtedness; equals or exceeds
o the minimum monthly premiums due since the policy date.
The minimum monthly premium is shown in the policy.
If, on a monthly date, you have not paid enough premiums to keep the NLG in
effect, the no lapse guarantee will terminate. In addition, your policy will
lapse (terminate) if the cash surrender value is less than the amount needed to
pay the monthly deduction.
The no-lapse guarantee period may be reinstated within 2 years of its
termination if the policy is in force.
GRACE PERIOD
If on a monthly date the cash surrender value of your policy is less than the
amount needed to pay the next monthly deduction and the NLG is not in effect,
you will have 61 days to pay the required premium amount. If you do not pay the
required premium, the policy will lapse.
IDS Life of New York will mail a notice to your last known address, requesting
payment of the premium needed so that we can make the next three monthly
deductions. If we receive this premium before the end of the 61-day grace
period, we will use the payment to cover all monthly deductions and any other
charges then due. We will add any balance to the policy value and allocate it in
the same manner as other premium payments.
If a policy lapses with outstanding indebtedness, any excess of the outstanding
indebtedness over the premium paid generally will be taxable to the owner. (See
"Federal taxes.") If the insured dies during the grace period, we will deduct
any overdue monthly deductions from the death benefit.
REINSTATEMENT
Your policy may be reinstated within five years after it lapses, unless you
surrendered it for cash. To reinstate, IDS Life of New York will require:
o a written request;
o evidence satisfactory to IDS Life of New York that the insured remains
insurable;
o payment of the required reinstatement premium; and
o payment or reinstatement of any indebtedness.
The reinstatement premium is the required premium to reinstate the policy.
The effective date of a reinstated policy will be the monthly date on or next
following the day we accept your application for reinstatement. Surrender
charges will also be reinstated.
We will have two years from the effective date of reinstatement to contest the
truth of statements or representations in the reinstatement application.
The Variable Account
The variable account was established as a separate account of IDS Life of New
York pursuant to resolution of the board of directors of IDS Life of New York
adopted on September 12, 1985. It is registered as a single unit investment
trust under the Investment Company Act of 1940. The variable account consists of
a number of subaccounts, each of which invests in shares of a particular fund.
This registration does not involve any SEC supervision of the account's
management or investment practices or policies.
The variable account meets the definition of a separate account under federal
securities laws. Income, capital gains or capital losses of each subaccount are
credited to or charged against the assets of that subaccount alone. State
insurance law provides that we will not charge a variable subaccount with
liabilities of any other subaccount or of any other business conducted by IDS
Life of New York. Other variable life insurance policies that are not described
in this prospectus also invest in subaccounts of the variable account. At all
times, IDS Life of New York will maintain assets in the subaccounts with total
market value at least equal to the reserves and other liabilities required to
cover insurance benefits under all policies participating in the subaccount.
The U.S. Treasury and the IRS indicated they may provide additional guidance on
investment control. This concerns how many subaccounts an insurance company may
offer and how many exchanges among subaccounts it may allow before the owner
would be currently taxed on income earned within subaccount assets. We do not
know what the additional guidance will be or when action will be taken. We
reserve the right to modify the policy, as necessary, so that the owner will not
be subject to current taxation as the owner of the subaccount assets.
The Funds
You can direct your premiums to any or all of the subaccounts of the variable
account that invest in shares of the following funds:
- -----------------------------------------------------------------------------------------------------------------------
Investment Advisor or
Subaccount Investing In Investment Objectives and Policies: Manager
- -----------------------------------------------------------------------------------------------------------------------
Equity IDS Life Series Fund - Objective: capital appreciation. Invests primarily IDS Life Insurance
Equity Portfolio in common stocks and other securities convertible Company (IDS Life),
into common stock. investment manager;
American Express
Financial Corporation
(AEFC), investment
adviser.
- -----------------------------------------------------------------------------------------------------------------------
Equity Income IDS Life Series Fund - Objective: to provide a high level of current IDS Life, investment
Equity Income Portfolio income and, as a secondary goal, steady growth of manager; AEFC,
capital. Invests primarily in dividend-paying investment adviser.
stocks. Other investments may include: common
stocks, foreign securities, convertible
securities, debt securities, derivative
instruments and money market instruments.
- -----------------------------------------------------------------------------------------------------------------------
Government IDS Life Series Fund - Objective: to provide a high current return and IDS Life, investment
Securities Government Securities safety of principal. Invests primarily in debt manager; AEFC,
Portfolio obligations issued or guaranteed as to principal investment adviser.
and interest by the U.S. government, its agencies
and instrumentalities.
- -----------------------------------------------------------------------------------------------------------------------
Income IDS Life Series Fund - Objective: to maximize current income while IDS Life, investment
Income Portfolio attempting to conserve the value of the investment manager; AEFC,
and to continue the high level of
income for the investment adviser.
longest period of time. At least 50%
of net assets normally will be
invested in high-quality, lower-risk
corporate bonds, unrated corporate
bonds believed to have the same
investment qualities and government
bonds. Other investments may include
lower-rated corporate bonds, bonds
and common stocks sold together as a
unit, preferred stock and foreign
securities.
- -----------------------------------------------------------------------------------------------------------------------
International IDS Life Series Fund - Objective: capital appreciation. Invests primarily IDS Life, investment
Equity International Equity in common stocks of foreign issuers and foreign manager; AEFC,
Portfolio securities convertible into common stock. Other investment adviser.
investments may include certain international
bonds if the portfolio manager believes they have
greater potential for capital appreciation than
equities.
- -----------------------------------------------------------------------------------------------------------------------
Managed IDS Life Series Fund - Objective: to maximize total investment return IDS Life, investment
Managed Portfolio through a combination of capital appreciation and manager; AEFC,
current income. If the investment
manager believes investment adviser.
the stock market will be moving
higher, it can emphasize stocks that
offer potential for appreciation. At
other times, the manager may
increase the portfolio's holdings in
bonds and money-market securities
providing high current income.
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Money Market IDS Life Series Fund - Objective: to provide maximum current income IDS Life, investment
Money Market Portfolio consistent with liquidity and conservation of manager; AEFC,
capital. Invests in relatively short-term money investment adviser.
market securities, such as marketable debt
securities issued or guaranteed as to principal
and interest by the U.S. government or its
agencies or instrumentalities, bank certificates
of deposit, bankers' acceptances, letters of
credit and high-grade commercial paper.
- -----------------------------------------------------------------------------------------------------------------------
YBC AXPSM Variable Portfolio - Objective: long-term total return exceeding that IDS Life, investment
Blue Chip Advantage Fund of the U.S. stock market. Invests primarily in manager; AEFC,
common stocks of companies included in the investment adviser.
unmanaged S&P 500 Index.
- -----------------------------------------------------------------------------------------------------------------------
YBD AXPSM Variable Portfolio - Objective: high level of current income while IDS Life, investment
Bond Fund conserving the value of the investment for the manager; AEFC
longest time period. Invests primarily in investment adviser.
investment-grade bonds.
- -----------------------------------------------------------------------------------------------------------------------
YCR AXPSM Variable Portfolio - Objective: capital appreciation. Invests primarily IDS Life, investment
Capital Resource Fund in U.S. common stocks. manager; AEFC
investment adviser.
- -----------------------------------------------------------------------------------------------------------------------
YCM AXPSM Variable Portfolio - Objective: maximum current income consistent with IDS Life, investment
Cash Management Fund liquidity and conservation of capital. Invests in manager; AEFC
money market securities. investment adviser.
- -----------------------------------------------------------------------------------------------------------------------
YDE AXPSM Variable Portfolio - Objective: high level of current income and, IDS Life, investment
Diversified Equity Income as a secondary goal, steady growth of capital. manager; AEFC
Fund Invests primarily in dividend-paying common investment adviser.
and preferred stocks.
- -----------------------------------------------------------------------------------------------------------------------
YEM AXPSM Variable Portfolio - Objective: long-term capital growth. Invests IDS Life, investment
Emerging Markets Fund primarily in equity securities of companies in manager; AEFC
emerging markets. investment adviser;
American Express
Asset Management
International, Inc.,
a wholly-owned
subsidiary of AEFC,
is the
sub-investment
adviser.
- -----------------------------------------------------------------------------------------------------------------------
YEX AXPSM Variable Portfolio - Objective: high current income, with capital IDS Life, investment
Extra Income Fund growth as a secondary objective. Invests primarily manager; AEFC
in long-term, high-yielding, high-risk debt investment adviser.
securities below investment grade issued by U.S.
and foreign companies and governments.
- -----------------------------------------------------------------------------------------------------------------------
YFI AXPSM Variable Portfolio - Objective: high level of current income and safety IDS Life, investment
Federal Income Fund of principal consistent with an investment in U.S. manager; AEFC
government and government agency securities. investment adviser.
Invests primarily in debt obligations issued or
guaranteed as to principal and interest by the
U.S. government, its agencies or instrumentalities.
- -----------------------------------------------------------------------------------------------------------------------
YGB AXPSM Variable Portfolio - Objective: high total return through income and IDS Life, investment
Global Bond Fund growth of capital. Invests primarily in debt manager; AEFC
securities of U.S. and foreign issuers. investment adviser.
- -----------------------------------------------------------------------------------------------------------------------
YGR AXPSM Variable Portfolio - Objective: long-term capital growth. Invests IDS Life, investment
Growth Fund primarily in common stocks and securities manager; AEFC
convertible into common stocks that appear to investment adviser.
offer growth opportunities.
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
YIE AXPSM Variable Portfolio - Objective: capital appreciation. Invests primarily IDS Life, investment
International Fund in stocks or convertible securities of foreign manager; AEFC
issuers that offer growth potential. investment adviser.
American Express
Asset Management
International, Inc.,
a wholly-owned
subsidiary of AEFC,
is the
sub-investment
adviser.
- -----------------------------------------------------------------------------------------------------------------------
YMF AXPSM Variable Portfolio - Objective: maximum total investment return through IDS Life, investment
Managed Fund a combination of capital growth and current manager; AEFC
income. Invests primarily in stocks, convertible investment adviser.
securities, bonds and other debt securities.
- -----------------------------------------------------------------------------------------------------------------------
YND AXPSM Variable Portfolio - Objective: long-term growth of capital. Invests IDS Life, investment
New Dimensions Fund primarily in common stocks of U.S. and foreign manager; AEFC
companies showing potential for significant growth. investment adviser.
- -----------------------------------------------------------------------------------------------------------------------
YIV AXPSM Variable Portfolio - Objective: long-term capital appreciation. Invests IDS Life, investment
S&P 500 Index Fund primarily in securities that are expected to manager; AEFC
provide investment results that correspond to the investment adviser.
performance of the S&P 500 Index.
- -----------------------------------------------------------------------------------------------------------------------
YSM AXPSM Variable Portfolio - Objective: long-term capital growth. Invests IDS Life, investment
Small Cap Advantage Fund primarily in equity stocks of small companies that manager; AEFC
are often included in the S&P SmallCap 600 Index investment adviser.
or the Russell 2000 Index.
- -----------------------------------------------------------------------------------------------------------------------
YSA AXPSM Variable Portfolio - Objective: capital appreciation. Invests primarily IDS Life, investment
Strategy Aggressive Fund in common stocks of small-and medium-size manager; AEFC
companies. investment adviser.
- -----------------------------------------------------------------------------------------------------------------------
YCA AIM V.I. Capital Objective: growth of capital. Invests primarily A I M Advisors, Inc.
Appreciation Fund in common stocks, with emphasis on medium- or
small-sized growth companies.
- -----------------------------------------------------------------------------------------------------------------------
YCD AIM V.I. Capital Objective: long term growth of capital. Invests A I M Advisors, Inc.
Development Fund primarily in securities (including common stocks,
convertible securities and bonds) of small- and
medium-sized companies.
- -----------------------------------------------------------------------------------------------------------------------
YGI AIM V.I. Growth and Income Objective: growth of capital with a secondary AIM Advisors Inc.
Fund objective of current income.
- -----------------------------------------------------------------------------------------------------------------------
YIR American Century VP Objective: long term capital growth. Invests American Century
International primarily in stocks of growing foreign companies. Investment
- -----------------------------------------------------------------------------------------------------------------------
YVL American Century VP Value Objective: long-term capital growth, with income American Century
as a secondary objective. Invests primarily in Investment
securities that management believes to be Management, Inc.
undervalued at the time of purchase.
- -----------------------------------------------------------------------------------------------------------------------
YSB Calvert Variable Series, Objective: income and capital growth. Invests Calvert Asset
Inc. Social Balanced primarily in stocks, bonds and money market Management Company,
Portfolio instruments which offer income and capital growth Inc. (CAMCO),
opportunity and which satisfy the investment and investment adviser.
social criteria. NCM Capital
Management Group,
Inc. is the
sub-investment
adviser.
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
YGC Fidelity VIP III Growth & Objective: high total return through a combination Fidelity Management &
Income Portfolio (Service of current income and capital appreciation. Research Company
Class) Invests primarily in common stocks with a focus on (FMR), investment
those that pay current dividends and show manager; FMR U.K. and
potential for capital appreciation. FMR Far East,
sub-investment
advisers.
- -----------------------------------------------------------------------------------------------------------------------
YMP Fidelity VIP III Mid Cap Objective: long-term growth of capital. Invests FMR, investment
Portfolio (Service Class) primarily in medium market capitalization common manager; FMR U.K. and
stocks. FMR Far East,
sub-investment
advisers.
- -----------------------------------------------------------------------------------------------------------------------
YOS Fidelity VIP Overseas Objective: long-term growth of capital. Invests FMR, investment
Portfolio (Service Class) primarily in common stocks of foreign securities. manager; FMR U.K.,
FMR Far East,
Fidelity
International
Investment Advisors
(FIIA) and FIIA U.K.,
sub-investment
advisers.
- -----------------------------------------------------------------------------------------------------------------------
YRE FTVIPT Franklin Real Estate Objective: capital appreciation with a secondary Franklin Advisers,
Fund - Class 2 (previously goal to earn current income. Invests primarily in Inc.
Franklin Real Estate securities of companies operating in the real
Securities Fund) estate industry, primarily equity real estate
investment trusts (REITS).
- -----------------------------------------------------------------------------------------------------------------------
YSV FTVIPT Franklin Value Objective: long-term total return. Invests Franklin Advisory
Securities Fund - Class 2 primarily in equity securities of companies the Services, LLC
manager believes are significantly undervalued.
- -----------------------------------------------------------------------------------------------------------------------
YIF FTVIPT Templeton Objective: long-term capital growth. Invests Templeton Investment
International Securities primarily in equity securities of companies Counsel, Inc.
Fund - Class 2 located outside the United States, including those
in emerging markets.
- -----------------------------------------------------------------------------------------------------------------------
YIS FTVIPT Templeton Objective: long-term capital appreciation. Invests Templeton Investment
International Smaller primarily in equity securities of smaller Counsel, Inc.
Companies Fund - Class 2 companies located outside the U.S., including in
emerging markets.
- -----------------------------------------------------------------------------------------------------------------------
YSE Goldman Sachs VIT CORESM Objective: long-term growth of capital. Invests Goldman Sachs Asset
Small Cap Equity Fund primarily in a broadly diversified portfolio of Management
equity securities of U.S. issuers which are
included in the Russell 2000 Index at the time of
investment.
- -----------------------------------------------------------------------------------------------------------------------
YUE Goldman Sachs VIT CORESM Objective: long-term growth of capital and Goldman Sachs Asset
U.S. Equity Fund dividend income. Invests primarily in a broadly Management
diversified portfolio of large-cap and blue chip
equity securities representing all major sectors
of the U.S. economy.
- -----------------------------------------------------------------------------------------------------------------------
YMC Goldman Sachs VIT Mid Cap Objective: long-term capital appreciation. Goldman Sachs Asset
Value Fund Invests primarily in mid-capitalization companies Management
within the range of the market
capitalization of companies
constituting the Russell Midcap
Value Index at the time of
investment.
- -----------------------------------------------------------------------------------------------------------------------
YAG Janus Aspen Series Objective: long-term growth of capital. Janus Capital
Aggressive Growth Non-diversified mutual fund that invests primarily
Portfolio: Service Shares in common stocks selected for their growth
potential and normally invests at least 50% of its
equity assets in medium-sized companies.
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
YGT Janus Aspen Series Global Objective: long-term growth of capital. Janus Capital
Technology Portfolio: Non-diversified mutual fund that invests primarily
Service Shares in equity securities of U.S. and foreign companies
selected for their growth potential.
Normally invests at least 65% of
total assets in securities of
companies that the portfolio manager
believes will benefit significantly
from advancements or improvements in
technology.
- -----------------------------------------------------------------------------------------------------------------------
YIG Janus Aspen Series Objective: long-term growth of capital. Invests at Janus Capital
International Growth least 65%of its total assets in securities of
Portfolio: Service Shares issuers from at least five different countries,
excluding the U.S. It may at times invest all of
its assets in fewer than five countries or even a
single country.
- -----------------------------------------------------------------------------------------------------------------------
YIP Lazard Retirement Series Objective: long-term capital appreciation. Invests Lazard Asset
International Equity primarily in equity securities, principally common Management
Portfolio stocks of relatively large non-U.S. companies
(those whose total market value is
more than $1 billion) that the
Investment Manager believes are
undervalued based on their earnings,
cash flow or asset values.
- -----------------------------------------------------------------------------------------------------------------------
YGW MFS(R)VIT Growth Series - Objective: long-term growth of capital and future MFS Investment
Service Class income. Invests at least 80% of its total assets Management(R)
in common stocks and related
securities of companies which MFS
believes offer better than average
prospects for long-term growth.
- -----------------------------------------------------------------------------------------------------------------------
YDS MFS(R)VIT New Discovery Objective: capital appreciation. Invests primarily Massachusetts
Series - Service Class in equity securities of emerging growth companies. Financial Service
Company (MFS)
- -----------------------------------------------------------------------------------------------------------------------
YPH Putnam VT High Yield Fund - Objective: high current income and, when Putnam Investment
Class IB Shares consistent with this objective, a secondary Management, Inc.
objective of capital growth, by
investing primarily in
high-yielding, lower-rated fixed
income securities constituting a
portfolio which Putnam Management
believes does not involve undue risk
to income or principal. See the
special considerations for
investments in high yield securities
described in the Putnam Variable
Trust prospectus.
- -----------------------------------------------------------------------------------------------------------------------
YIO Putnam VT International New Objective: long-term capital appreciation. Invests Putnam Investment
Opportunities Fund - Class primarily in growth stocks outside the U.S. Management, Inc.
IB Shares
- -----------------------------------------------------------------------------------------------------------------------
YNO Putnam VT New Opportunites Objective: long term capital appreciation. Invests Putnam Investment
Fund - mainly in common stocks of U.S. companies with a Management, Inc.
Class IA Shares focus on growth stocks in sectors of the economy
that Putnam Management believes possesses high
growth potential.
- -----------------------------------------------------------------------------------------------------------------------
YVS Putnam VT Vista Fund - Objective: capital appreciation. Invests primarily Putnam Investment
Class IB Shares in a diversified portfolio of common stocks that Management, Inc.
Putnam Management believes have the
potential for above-average capital
appreciation.
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
YMI Royce Micro-Cap Portfolio Objective: long-term growth of capital. Invests Royce & Associates,
primarily in a broadly diversified portfolio of Inc.
equity securities issued by micro-cap companies
(companies with stock market capitalizations below
$300 million).
- -----------------------------------------------------------------------------------------------------------------------
YVA Third Avenue Value Portfolio Objective: long-term capital appreciation. Invests EQSF, Inc.
primarily in common stocks of well-financed
companies at a substantial discount to what the
Advisor believes is their true value.
- -----------------------------------------------------------------------------------------------------------------------
YIC Wanger International Small Objective: long-term growth of capital. Invests Wanger Asset
Cap primarily in stocks of small- and medium-size Management, L.P.
non-U.S. companies.
- -----------------------------------------------------------------------------------------------------------------------
YSP Wanger U.S. Small Cap Objective: long-term growth of capital. Invests Wanger Asset
primarily in stocks of small- and medium-size U.S. Management, L.P.
companies.
- -----------------------------------------------------------------------------------------------------------------------
YEG Warburg Pincus Trust - Objective: maximum capital appreciation. Invests Credit Suisse Asset
Emerging Growth Portfolio primarily in equity securities of small- to medium Management, LLC
sized U.S. emerging-growth companies.
- -----------------------------------------------------------------------------------------------------------------------
YSC Warburg Pincus Trust/Small Objective: capital growth. Invests primarily in Credit Suisse Asset
Company Growth Portfolio equity securities of small-sized domestic Management, LLC
companies.
- -----------------------------------------------------------------------------------------------------------------------
Fund objectives
The investment objectives and policies of some of the funds may be similar to
the investment objectives and policies of other mutual funds that the investment
advisor or its affiliates manage. Although the objectives and policies may be
similar, each fund will have its own portfolio holdings and its own fees and
expenses. Accordingly, each fund will have its own investment results, and those
may differ significantly from other funds with similar investment objectives and
policies.
The investment managers and advisors cannot guarantee that the funds will meet
their investment objectives. Please read the fund prospectuses for facts you
should know before investing. These prospectuses are available by contacting us
at the address or telephone number on the first page of this prospectus.
All funds are available to serve as the underlying investments for variable life
insurance policies. Some funds also are available to serve as investment options
for variable annuities and tax-deferred retirement plans. It is possible that in
the future, it may be disadvantageous for variable annuity accounts and variable
life insurance accounts and/or tax-deferred retirement plans to invest in the
available funds simultaneously.
Although the insurance company and the funds do not currently foresee any such
disadvantages, the boards of directors or trustees of the appropriate funds will
monitor events in order to identify any material conflicts between annuity
owners, life insurance policy owners and tax-deferred retirement plans and to
determine what action, if any, should be taken in response to a conflict. If a
board were to conclude that it should establish separate funds for the variable
annuity, variable life insurance and tax-deferred retirement plan accounts, you
would not bear any expenses associated with establishing separate funds. Please
refer to the fund prospectuses for risk disclosure regarding simultaneous
investments by variable annuity, variable life insurance and tax-deferred
retirement plan accounts.
Diversification: The Internal Revenue Service (IRS) has issued final regulations
relating to the diversification requirements under Section 817(h) of the Code.
Each fund intends to comply with these requirements.
RELATIONSHIP BETWEEN FUNDS AND SUBACCOUNTS
Each subaccount buys shares of the appropriate fund at net asset value without a
sales charge. Dividends and capital gain distributions from a fund are
reinvested at net asset value without a sales charge and held by the subaccount
as an asset. Each subaccount redeems fund shares without a charge to the extent
necessary to make death benefit or other payments under the policy.
Rates of Return of the Funds and Subaccounts
This section presents rates of return first for the funds, and then for the
corresponding subaccounts. Rates of return are different in the two cases
because those of the subaccounts reflect additional charges. All charges and
expenses mentioned in the section are explained fully under "Loads, fees and
charges".
Rates of return of the funds:
In the following table are average annual rates of return based on the actual
investment performance of the funds after deduction of applicable fund charges
(including the investment management fees and nonadvisory expenses) for the
periods indicated assuming reinvestment of dividends and capital gains. These
rates do not reflect charges that apply to the subaccounts or the policy and
therefore do not illustrate how actual investment performance will affect policy
benefits. If these charges were reflected, the illustrated rates of return would
have been lower. Past performance does not guarantee future results.
Period ending 12/31/99
Fund 10 years or since
1 year 3 years 5 years commencement
IDS Life Series Fund, Inc -
Equity Portfolio (Beta 1.16)1 (1/86)2 80.89% 33.69% 31.72% 22.62%
Equity Income Portfolio (5/99) 2 -- -- -- (2.28)4
Government Securities Portfolio (1/86) 2 (1.97) 4.89 6.69 6.87
Income Portfolio (1/86) 2 .44 4.61 7.48 7.78
International Equity Portfolio (10/94) 2 37.04 20.93 25.00 23.69
Managed Portfolio (Beta 0.72) 1 (1/86) 2 24.62 18.91 18.05 15.89
Money Market Portfolio (1/86) 2 4.72 4.96 5.01 4.82
AXPSM Variable Portfolio -
Blue Chip Advantage Fund (9/99) 2 -- -- -- 13.524
Bond Fund (10/81) 2 1.70 3.96 7.75 8.04
Capital Resource Fund (10/81) 2 23.75 24.00 21.30 15.50
Cash Management Fund (10/81) 2 4.73 5.01 4.94 4.82
Diversified Equity Income Fund (9/99) 2 -- -- -- 4.764
Emerging Markets Fund (5/00) 2 -- -- -- --
Extra Income Fund (5/96) 2 6.24 4.81 -- 5.51
Federal Income Fund (9/99) 2 -- -- -- 0.454
Global Bond Fund (5/96) 2 (4.40) 2.36 -- 4.07
Growth Fund (9/99) 2 -- -- -- 20.284
International Fund (1/92) 2 45.63 20.11 16.03 13.34
Managed Fund (4/86) 2 14.84 16.70 18.06 13.48
New Dimensions Fund(R)(5/96) 2 32.00 28.30 -- 26.35
S&P 500 Index Fund (5/00) 2 -- -- -- --
Small Cap Advantage Fund (9/99) 2 -- -- -- 13.334
Strategy Aggressive Fund (1/92) 2 71.03 25.51 24.75 17.02
AIM V.I.
Capital Appreciation Fund (5/93) 2 44.61 -- 25.59 22.33
Capital Development Fund (5/98) 2 29.10 -- -- 11.22
Growth and Income Fund (5/94) 2 34.25 -- 28.18 24.49
American Century VP
International (5/94) 2 64.04% 32.21% 24.28% 20.07%
Value (5/96) 2 (0.85) 9.43 -- 11.10
Calvert CVS
Social Balanced Portfolio (9/86) 2 12.12 -- 18.02 12.05
Fidelity VIP
III Growth & Income Portfolio (Service Class) (12/96) 9.06 22.41 -- 21.98
2, 7
III Mid Cap Portfolio (Service Class) (12/98) 2 48.94 -- -- 53.04
Overseas Portfolio (Service Class) (12/87) 2, 7 42.39 21.42 17.32 11.40
FTVIPT
Franklin Real Estate Fund - Class 2 (1/89) 2, 5 (6.36) -- 7.97 9.00
Franklin Value Securities Fund - Class 2 (5/98) 2, 5 1.39 -- -- (13.16)
Templeton International Securities Fund - Class 2 23.23 -- 17.03 15.25
(5/92) 2, 6
Templeton International Smaller Companies Fund - 23.90 2.30 -- 5.20
Class 2 (5/96) 2, 5
Goldman Sachs VIT
CORESM Small Cap Equity Fund (2/98) 2 17.54 -- -- 3.46
CORESM U.S. Equity Fund (2/98) 2 24.30 -- -- 20.75
Mid Cap Value Fund (5/98) 2 (0.95) -- -- 13.564
Janus Aspen Series
Aggressive Growth Portfolio: Service Shares (12/99) 2 -- -- -- --
Global Technology Portfolio: Service Shares (1/00) 2 -- -- -- --
International Growth Portfolio: Service Shares (12/99) 2 -- -- -- --
Lazard Retirement Series
International Equity Portfolio (9/98) 2 21.41 -- -- 26.16
MFS(R) VIT
Growth Series - Service Class (5/99) 2 -- -- -- 40.014
New Discovery Series - Service Class (5/98) 2 73.41 -- -- 40.91
Putnam Variable Trust
Putnam VT High Yield - Class IB Shares (2/88) 2, 3 5.81 -- 8.63 10.69
Putnam VT International New Opportunities Fund - Class 102.80 -- -- 32.79
IB Shares (1/97) 2, 3
Putnam VT New Opportunities Fund - Class IA Shares 69.35 -- 32.89 30.36
(5/94) 2
Putnam VT Vista Fund - Class IB Shares (1/97) 2, 3 52.59 -- -- 31.02
Royce
Micro-Cap Portfolio (12/96) 2 28.10 17.40 -- 17.40
Third Avenue
Value Portfolio (9/99) 2 -- -- -- 8.404
Wanger
International Small Cap (5/95) 2 126.37 37.42 -- 38.70
U.S. Small Cap (5/95) 2 25.06 20.71 -- 26.44
Warburg Pincus Trust
Emerging Growth Portfolio (9/99) 2 -- -- -- 31.954
Small Company Growth Portfolio (6/95) 2 69.08 23.85 -- 24.71
1 Beta is a volatility measure based on calculations of the fund's monthly
return compared to the S&P 500 Index. A beta less than 1 indicates
performance that is less volatile than the market; A beta more than 1
indicates performance that is more volatile than the market.
2 (Commencement date of the fund.)
3 Performance information for Class IB shares for the period prior to April
30, 1998 are based on the performance of the fund's Class IA shares (not
offered as an investment option), adjusted to reflect the fees paid by
Class IB shares, including a Rule 12b-1 fee of 0.15%.
4 Cumulative return (not annualized) since commencement date of the fund.
5 Because no Class 2 shares were issued until Jan. 6, 1999, Class 2
performance represents the historical performance of Class 1 shares.
Performance of Class 2 shares for periods after its Jan. 6, 1999 inception
will reflect Class 2's additional 12b-1 fee expense which also affects all
future performance.
6 Prior to May 1, 2000, the Templeton International Securities Fund was
called Templeton International Fund. Because no Class 2 shares were issued
until May 1, 1997, Class 2 performance represents the historical
performance of Class 1 shares. Performance of Class 2 shares for periods
after its May 1, 1997, inception will reflect Class 2's additional 12b-1
fee expense which also affects all future performance.
7 Service Class shares include an asset-based distribution fee (12b-1 fee).
Initial offering of Service Class shares took place on Nov. 3, 1997, at
which time the 12b-1 fee was imposed. Returns prior to that date do not
include the effect of the Service Class fee structure, and returns listed
would have been lower for each portfolio if the Service Class fee had been
in place and reflected in the performance.
Rates of return of subaccounts:
Performance information for the subaccounts may appear from time to time in
advertisements or sales literature. This information reflects the performance of
a hypothetical investment in a particular subaccount during a specified time
period. We show performance from the commencement date of the funds as if the
policy existed at that time, which it did not. Although we base performance
figures on historical earnings, past performance does not guarantee future
results.
Average annual rates of return in the following tables reflect all charges
incurred by the funds and charges against the subaccounts (including the
mortality and expense risk charge). In the first table, the rates of return also
reflect the 3.5% premium expense charge. In the second table the rates of return
do not reflect the 3.5% premium expense charge. In both tables the rates of
return do not reflect the surrender charge or monthly deduction. If these
charges were reflected, the illustrated rates of return would have been lower.
Period ending 12/31/99
Since commencement of the subaccounts reflecting the 3.5% premium expense charge
Subaccount Investing in: 1 year 3 years 5 years 10 years or
since
commencement
IDS Life Series Fund -
Equity Equity Portfolio (8/87) 1 ?% ?% ?% ?%
Equity Income Equity Income Portfolio (9/00)1 -- -- -- ?2
Government Government Securities Portfolio (8/87) 1 ? ? ? ?
Securities
Income Income Portfolio (8/87) 1 ? ? ? ?
International International Equity Portfolio (10/94) 1 ? ? ? ?
Equity
Managed Managed Portfolio (8/87) 1 ? ? ? ?
Money Market Money Market Portfolio (8/87) 1 ? ? ? ?
AXPSM Variable Portfolio -
YBC Blue Chip Advantage Fund (9/00) 1 -- -- -- (6.81)2
YBD Bond Fund (9/00) 1 (2.73) 1.81 6.03 6.69
YCR Capital Resource Fund (9/00) 1 18.35 21.45 19.37 14.06
YCM Cash Management Fund (9/00) 1 0.16 2.84 3.26 3.51
YDE Diversified Equity Income Fund (9/00) 1 -- -- -- 1.622
YEM Emerging Markets Fund (9/00) 1 -- -- -- --
YEX Extra Income Fund (9/00) 1 1.61 2.65 -- 3.56
YFI Federal Income Fund (9/00) 1 -- -- -- (3.10)2
YGB Global Bond Fund (9/00) 1 (8.58) 0.24 -- 2.14
YGR Growth Fund (9/00) 1 -- -- -- 12.532
YIE International Fund (9/00) 1 39.27 17.63 14.29 11.88
YMF Managed Fund (9/00) 1 9.83 14.29 16.18 12.07
YND New Dimensions Fund(R)(9/00) 1 ? ? -- ?
YIV S&P 500 Index Fund (9/00) 1 -- -- -- --
YSM Small Cap Advantage Fund (9/00) 1 -- -- -- 7.082
YSA Strategy Aggressive Fund (9/00) 1 63.57 22.91 22.80 15.48
AIM V.I.
YCA Capital Appreciation Fund (9/00) 1 38.34 22.53 23.59 20.58
YCD Capital Development Fund (9/00) 1 23.44 -- -- 7.85
YGI Growth and Income Fund (11/96) 1 ? ? ? ?
American Century VP
YIR International (9/00) 1 56.89 26.06 20.22 16.45
YVL Value (9/00) 1 ? ? -- ?
Calvert CVS
YSB Social Balanced Portfolio (9/00) 1 7.32 16.73 16.13 10.64
Fidelity VIP
YGC III Growth & Income Portfolio (Service Class) 4.31 19.48 -- 19.48
(9/00) 1
YMP III Mid Cap Portfolio (Service Class) (9/00) 1 42.46 -- -- 46.41
YOS Overseas Portfolio (Service Class) (9/00) 1 36.20 18.92 15.45 10.01
FTVIPT
YRE Franklin Real Estate Fund - Class 2 (9/00) 1 (10.45) (4.06) 6.25 7.63
YSV Franklin Value Securities Fund - Class 2 (9/00) (3.03) -- -- (15.79)
1
YIF Templeton International Securities Fund - Class ? ? ? ?
2 (9/00) 1
YIS Templeton International Smaller Companies Fund - 18.51 0.22 -- 3.28
Class 2 (9/00) 1
Goldman Sachs VIT
YSE CORESM Small Cap Equity Fund (9/00) 1 12.41 -- -- 0.56
YUE CORESM U.S. Equity Fund (9/00) 1 18.88 -- -- 17.40
YMC Mid Cap Value Fund (9/00) 1 (5.28) -- -- (11.60)
Janus Aspen Series
YAG Aggressive Growth Portfolio: Service Shares -- -- -- --
(9/00) 1
YGT Global Technology Portfolio: Service Shares -- -- -- --
(9/00) 1
YIG International Growth Portfolio: Service Shares -- -- -- --
(9/00) 1
Lazard Retirement Series
YIP International Equity Portfolio (9/00) 1 16.13 -- -- 21.80
MFS(R) VIT
YGW Growth Series - Service Class (9/00) 1 -- -- -- 34.302
YDS New Discovery Series - Service Class (9/00) 1 65.79 -- -- 36.53
Putnam Variable Trust
YPH Putnam VT High Yield - Class IB Shares (9/00) 1 ? ? ? ?
YIO Putnam VT International New Opportunities Fund - 93.96 -- -- 29.99
Class IB Shares (9/00) 1
YNO Putnam VT New Opportunities Fund - Class IA ? ? ? ?
Shares (11/96) 1
YVS Putnam VT Vista Fund - Class IB Shares (9/00) 1 46.06 -- -- 28.37
Royce
YMI Micro-Cap Portfolio (9/00) 1 22.56 14.91 -- 14.91
Third Avenue
YVA Value Portfolio (9/00) 1 -- -- -- 4.332
Wanger
YIC International Small Cap (9/00) 1 116.65 34.61 -- 36.48
YSP U.S. Small Cap (9/00) 1 19.46 18.18 -- 24.36
Warburg Pincus Trust
YEG Emerging Growth Portfolio (9/00) 1 -- -- -- 27.042
YSC Small Company Growth Portfolio (9/00) 1 ? ? -- ?
1 (Commencement date of the subaccount)
2 These numbers are year-to-date as of Dec. 31, 1999, not annualized.
Period ending 12/31/99
Since commencement of the subaccounts without reflecting the 3.5% premium expense charge
Subaccount Investing in: 1 year 3 years 5 years 10 years or
since
commencement
IDS Life Series Fund -
Equity Equity Portfolio (8/87) 1 79.28% 32.50% 30.54% 21.52%
Equity Income Equity Income Portfolio (9/00)1 -- -- -- (2.76)2
Government Government Securities Portfolio (8/87) 1 2.85 3.95 5.73 5.90
Securities
Income Income Portfolio (8/87) 1 (0.47) 3.66 6.51 6.81
International International Equity Portfolio (10/94) 1 35.82 19.85 23.88 22.58
Equity
Managed Managed Portfolio (8/87) 1 23.50 17.85 16.98 14.77
Money Market Money Market Portfolio (8/87) 1 3.77 4.01 4.08 3.89
AXPSM Variable Portfolio -
YBC Blue Chip Advantage Fund (9/00) 1 -- -- -- 10.682
YBD Bond Fund (9/00) 1 .80 3.03 6.79 7.07
YCR Capital Resource Fund (9/00) 1 22.64 22.90 20.22 14.47
YCM Cash Management Fund (9/00) 1 3.80 4.07 4.00 3.88
YDE Diversified Equity Income Fund (9/00) 1 -- -- -- 1.952
YEM Emerging Markets Fund (9/00) 1 -- -- -- --
YEX Extra Income Fund (9/00) 1 5.28 3.87 -- 4.58
YFI Federal Income Fund (9/00) 1 -- -- -- .422
YGB Global Bond Fund (9/00) 1 (5.27) 1.44 -- 3.15
YGR Growth Fund (9/00) 1 -- -- -- 16.612
YIE International Fund (9/00) 1 44.32 19.04 15.11 12.38
YMF Managed Fund (9/00) 1 13.81 15.66 17.01 12.46
YND New Dimensions Fund(R)(9/00) 1 30.82 27.15 -- 25.24
YIV S&P 500 Index Fund (9/00) 1 -- -- -- --
YSM Small Cap Advantage Fund (9/00) 1 -- -- -- 10.972
YSA Strategy Aggressive Fund (9/00) 1 69.50 24.38 23.68 15.99
AIM V.I.
YCA Capital Appreciation Fund (9/00) 1 43.36% 24.00% 24.47% 21.23%
YCD Capital Development Fund (9/00) 1 27.92 -- -- 10.18
YGI Growth and Income Fund (11/96) 1 33.05 28.01 27.15 23.37
American Century VP
YIR International (9/00) 1 62.58 27.57 21.08 17.18
YVL Value (9/00) 1 (1.69) 8.46 -- 10.12
Calvert CVS
YSB Social Balanced Portfolio (9/00) 1 11.21 18.12 16.96 11.04
Fidelity VIP
YGC III Growth & Income Portfolio (Service Class) 8.09 20.91 -- 20.91
(9/00) 1
YMP III Mid Cap Portfolio (Service Class) (9/00) 1 47.63 -- -- 51.68
YOS Overseas Portfolio (Service Class) (9/00) 1 41.14 20.34 16.27 10.40
FTVIPT
YRE Franklin Real Estate Fund - Class 2 (9/00) 1 (7.20) (2.92) 7.01 8.02
YSV Franklin Value Securities Fund - Class 2 (9/00) 0.49 -- -- (13.97)
1
YIF Templeton International Securities Fund - Class 22.13 14.17 15.99 14.22
2 (9/00) 1
YIS Templeton International Smaller Companies Fund - 22.81 1.41 -- 4.29
Class 2 (9/00) 1
Goldman Sachs VIT
YSE CORESM Small Cap Equity Fund (9/00) 1 16.49 -- -- 2.48
YUE CORESM U.S. Equity Fund (9/00) 1 23.19 -- -- 19.64
YMC Mid Cap Value Fund (9/00) 1 (1.84) -- -- (9.69)
Janus Aspen Series
YAG Aggressive Growth Portfolio: Service Shares -- -- -- --
(9/00) 1
YGT Global Technology Portfolio: Service Shares -- -- -- --
(9/00) 1
YIG International Growth Portfolio: Service Shares -- -- -- --
(9/00) 1
Lazard Retirement Series
YIP International Equity Portfolio (9/00) 1 20.34 -- -- 25.11
MFS(R) VIT
YGW Growth Series - Service Class (9/00) 1 -- -- -- 39.172
YDS New Discovery Series - Service Class (9/00) 1 71.81 -- -- 39.47
Putnam Variable Trust
YPH Putnam VT High Yield - Class IB Shares (9/00) 1 4.86 3.43 7.66 9.69
YIO Putnam VT International New Opportunities Fund - 100.99 -- -- 31.54
Class IB Shares (9/00) 1
YNO Putnam VT New Opportunities Fund - Class IA 67.84 36.22 31.70 29.16
Shares (11/96) 1
YVS Putnam VT Vista Fund - Class IB Shares (9/00) 1 51.35 -- -- 29.90
Royce
YMI Micro-Cap Portfolio (9/00) 1 27.00 16.29 -- 16.29
Third Avenue
YVA Value Portfolio (9/00) 1 -- -- -- 8.122
Wanger
YIC International Small Cap (9/00) 1 124.51 -- 36.22 37.53
YSP U.S. Small Cap (9/00) 1 23.79 -- 19.59 25.32
Warburg Pincus Trust
YEG Emerging Growth Portfolio (9/00) 1 -- -- -- 31.642
YSC Small Company Growth Portfolio (9/00) 1 67.57 22.77 -- 23.63
1 (Commencement date of the subaccount)
2 These numbers are year-to-date as of Dec. 31, 1999, not annualized.
The Fixed Account
You can allocate premiums to the fixed account or transfer policy value from the
subaccounts to the fixed account (with certain restrictions, explained in
"Transfers between the fixed account and subaccounts").
The fixed account is the general investment account of IDS Life of New York. It
includes all assets owned by IDS Life of New York other than those in the
variable account and other separate accounts. Subject to applicable law, IDS
Life of New York has sole discretion to decide how assets of the fixed account
will be invested.
Placing policy value in the fixed account does not entitle you to share in the
fixed account's investment experience, nor does it expose you to the account's
investment risk. Instead, IDS Life of New York guarantees that the policy value
you place in the fixed account will accrue interest at an effective annual rate
of at least 4.0%, independent of the actual investment experience of the
account. IDS Life of New York bears the full investment risk for amounts
allocated to the fixed account. IDS Life of New York is not obligated to credit
interest at any rate higher than 4.0%, although we may do so at our sole
discretion. Rates higher than 4.0% may change from time to time, at the
discretion of IDS Life of New York, and will be based on various factors
including, but not limited to, the interest rate environment, returns earned on
investments backing these policies, the rates currently in effect for new and
existing IDS Life of New York policies, product design, competition and IDS Life
of New York's revenues and expenses.
We will not credit interest in excess of 4.0% on any portion of policy value in
the fixed account against which you have a policy loan outstanding.
Because of exemptive and exclusionary provisions, interests in the fixed account
have not been registered under the Securities Act of 1933 and the fixed account
has not been registered as an investment company under the Investment Company
Act of 1940. Accordingly, neither the fixed account nor any interests in it are
subject to the provisions of these Acts and the staff of the SEC has not
reviewed the disclosures in this prospectus relating to the fixed account.
Disclosures regarding the fixed account may, however, be subject to certain
generally applicable provisions of the federal securities laws relating to the
accuracy and completeness of statements made in prospectuses.
Policy value
The value of your policy is the sum of values in the fixed account and each
subaccount of the variable account.
FIXED ACCOUNT VALUE
The value in the fixed account on the policy date (when the policy is issued)
equals:
o the portion of your initial net premium allocated to the fixed
account; plus
o interest accrued before the policy date; minus
o the portion of the monthly deduction for the first policy month
allocated to the fixed account.
On any later date, the value in the fixed account equals:
o the value on the previous monthly date; plus
o net premiums allocated to the fixed account since the last monthly
date; plus
o any transfers to the fixed account from the subaccounts, including
loan transfers, since the last monthly date; plus
o accrued interest on all of the above; minus
o any transfers from the fixed account to the subaccounts, including
loan repayment transfers, since the last monthly date; minus
o any partial surrenders or partial surrender fees allocated to the
fixed account since the last monthly date; minus
o interest on any transfers or partial surrenders, from the date of the
transfer or surrender to the date of calculation; minus
o any portion of the monthly deduction for the coming month allocated to
the fixed account if the date of calculation is a monthly date.
SUBACCOUNT VALUES
The value in each subaccount changes daily, depending on the investment
performance of the funds in which that subaccount invests and on other factors
detailed below. There is no guaranteed minimum subaccount value. You as owner
bear the entire investment risk.
Calculation of subaccount value: The value of each subaccount on the policy date
equals:
o the portion of your initial net premium allocated to the subaccount;
plus
o interest accrued before the policy date; minus
o the portion of the monthly deduction for the first policy month
allocated to that subaccount.
The value on each subaccount on each valuation date equals:
o the value of the subaccount on the preceding valuation date,
multiplied by the net investment factor for the current valuation
period (explained below); plus
o net premiums received and allocated to the subaccount during the
current valuation period; plus
o any transfers to the subaccount (from the fixed account or other
subaccounts, including loan repayment transfers) during the period;
minus
o any transfers from the subaccount including loan transfers during the
current valuation period; minus
o any partial surrenders and partial surrender fees allocated to the
subaccount during the period; minus
o any portion of the monthly deduction allocated to the subaccount
during the period.
The net investment factor measures the investment performance of a subaccount
from one valuation period to the next. Because performance may fluctuate, the
value of a subaccount may increase or decrease from day to day.
Accumulation units: We convert the policy value allocated to each subaccount
into accumulation units. Each time you direct a premium payment or transfer
policy value into one of the subaccounts, we credit a certain number of
accumulation units to your policy for that subaccount. Conversely, each time you
take a partial surrender or transfer value out of a subaccount, we subtract a
certain number of accumulation units.
Accumulation units are the true measure of investment value in each subaccount.
For subaccounts investing in the funds, they are related to, but not the same
as, the net asset value of the corresponding fund. The dollar value of each
accumulation unit can rise or fall daily, depending on the investment
performance of the underlying funds, and on certain charges. Here is how unit
values are calculated:
Number of units: To calculate the number of units for a particular subaccount,
we divide your investment (net premium or transfer amount) by the current
accumulation unit value.
Accumulation unit value: The current accumulation unit value for each subaccount
equals the last accumulation unit value times the current net investment factor.
Net investment factor: We determine the net investment factor at the end of each
valuation period. This factor equals
(a divided by b) - c,
where:
(a) equals:
o net asset value per share of the fund; plus
o per-share amount of any dividend or capital gain distribution made by
the relevant fund to the subaccount; plus
o any credit or minus any charge for reserves to cover any tax liability
resulting from the investment operations of the subaccount.
(b) equals:
o net asset value per share of the fund at the end of the preceding
valuation period; plus
o any credit or minus any charge for reserves to cover any tax liability
in the preceding valuation period.
(c) is a percentage factor representing the mortality and expense risk charge,
as described in "Loads, fees and charges" above.
Factors that affect subaccount accumulation units: Accumulation units of each
subaccount may change in two ways; in number and in value. Here are the factors
that influence those changes:
The number of accumulation units you own may fluctuate due to:
o additional premiums allocated to the subaccount;
o transfers into or out of the subaccount;
o partial surrenders and partial surrender fees;
o surrender charges; and/or
o pro rata portions of the monthly deductions
Accumulation unit values will fluctuate due to:
o changes in underlying fund's net asset value;
o dividends distributed to the subaccount;
o capital gains or losses of underlying fund;
o fund operating expenses; and/or
o mortality and expense risk fees.
Proceeds Payable Upon Death
We will pay a benefit to the beneficiary of the policy when the insured dies.
If that death is prior to the maturity date, the amount payable is based on the
specified amount and death benefit option (described below) that you have
selected, less any indebtedness.
Option 1 (level amount): Under this option, the policy's value is part of the
specified amount. The Option 1 death benefit is the greater of:
o the specified amount on the date of the insured's death; or
o the applicable percentage of the policy value on the date of the
insured's death, if that death occurs on a valuation date, or on the
next valuation date following the date of death. (See table below.)
Applicable percentage table
Insured's attained Applicable Insured's attained Applicable
insurance age percentage of insurance age percentage of
policy value policy value
40 or younger 250% 61 128%
41 243 62 126
42 236 63 124
43 229 64 122
44 222 65 120
45 215 66 119
46 209 67 118
47 203 68 117
48 197 69 116
49 191 70 115
50 185 71 113
51 178 72 111
52 171 73 109
53 164 74 107
54 157 75-95 105
55 150 96 104
56 146 97 103
57 142 98 102
58 138 99 101
59 134 100 100
60 130
The percentage is designed to ensure that the policy meets the provisions of
federal tax law which require a minimum death benefit in relation to policy
value for your policy to qualify as life insurance.
Option 2 (variable amount): Under this option, the policy value is added to the
specified amount. The Option 2 death benefit is the greater of:
o the policy value plus the specified amount; or
o the applicable percentage of policy value (from the preceding table)
on the date of the insureds death, if that death occurs on a valuation
date, or on the next valuation date following the date of death.
Examples: Option 1 Option 2
- --------- -------- --------
Specified amount $100,000 $100,000
Policy value $ 5,000 $ 5,000
Death benefit $100,000 $105,000
Policy value increases to $ 8,000 $ 8,000
Death benefit $100,000 $108,000
Policy value decreases to $ 3,000 $ 3,000
Death benefit $100,000 $103,000
If you want to have premium payments and favorable investment performance
reflected partly in the form of an increasing death benefit, you should consider
Option 2. If you are satisfied with the specified amount of insurance protection
and prefer to have premium payments and favorable investment performance
reflected to the maximum extent in the policy value, you should consider Option
1. Under Option 1, the cost of insurance is lower because IDS Life of New York's
net amount at risk is generally lower; for this reason the monthly deduction is
less and a larger portion of your premiums and investment returns is retained in
the policy value.
CHANGE IN DEATH BENEFIT OPTION
You may make a written request to change the death benefit option once per
policy year. A change in the death benefit option also will change the specified
amount. You do not need to provide additional evidence of insurability.
If you change from Option 1 to Option 2: The specified amount will decrease by
an amount equal to the policy value on the effective date of the change. You
cannot change from Option 1 to Option 2 if the resulting death benefit amount
would fall below the minimum amount shown in the policy.
If you change from Option 2 to Option 1: The specified amount will increase by
an amount equal to the policy value on the effective date of the change.
An increase or decrease in specified amount resulting from a change in the death
benefit option will affect the following policy costs:
o Monthly deduction because the cost of insurance depends upon the
specified amount.
o Minimum monthly premium.
o Charges for certain optional insurance benefits.
The surrender charge will not be affected.
CHANGES IN SPECIFIED AMOUNT
Subject to certain limitations, you may make a written request to increase or
decrease the specified amount at any time. Changes in specified amount may have
tax implications, discussed in the section "Modified endowment contracts" under
"Federal taxes."
Increases: If you increase the specified amount, we may require additional
evidence of insurability that is satisfactory to us. The effective date of the
increase will be the monthly anniversary on or next following our approval of
the increase. The increase may not be less than $10,000, and we will not permit
an increase after the insured's attained insurance age 85.
An increase in the specified amount will have the following effect on policy
costs:
o Your monthly deduction will increase because the cost of insurance
charge depends upon the specified amount.
o Charges for certain optional insurance benefits may increase.
o The minimum monthly premium will increase if the NLG is in effect.
o The surrender charge will increase.
At the time of the increase in specified amount, the cash surrender value of
your policy must be sufficient to pay the monthly deduction on the next monthly
anniversary. The increased surrender charge will reduce the cash surrender
value. If the remaining cash surrender value is not sufficient to cover the
monthly deduction, we will require you to pay additional premiums within the
61-day grace period. If you do not, the policy will lapse unless the NLG is in
effect. Because the minimum monthly premium will increase, you may also have to
pay additional premiums to keep the NLG in effect.
Decreases: Any decrease in specified amount will take effect on the monthly
anniversary on or next following our receipt of your written request. The
specified amount remaining after the decrease may not be less than the minimum
amount shown in the policy. If, following a decrease in specified amount, the
policy would no longer qualify as life insurance under federal tax law, the
decrease may be limited to the extent necessary to meet these requirements.
A decrease in specified amount will affect your costs as follows:
o Your monthly deduction will decrease because the cost of insurance
charge depends upon the specified amount.
o Charges for certain optional insurance benefits may decrease.
o The minimum monthly premium will decrease if the NLG is in effect.
o The surrender charge will not change.
No surrender charge is imposed when you request a decrease in the specified
amount.
We will deduct decreases in the specified amount from the current specified
amount in this order:
o First from the portion due to the most recent increase;
o Next from portions due to the next most recent increases successively;
and
o Then from the initial specified amount when the policy was issued.
This procedure may affect the cost of insurance if we have applied different
risk classifications to the current specified amount. We will eliminate the risk
classification applicable to the most recent increase in the specified amount
first, then the risk classification applicable to the next most recent increase,
and so on.
MISSTATEMENT OF AGE OR SEX
If the insured's age or sex has been misstated, the proceeds payable upon death
will be:
o the policy value on the date of death; plus
o the amount of insurance that would have been purchased by the cost of
insurance deducted for the policy month during which death occurred,
if that cost had been calculated using rates for the correct age and
sex; minus
o the amount of any outstanding indebtedness on the date of death.
SUICIDE
Suicide by the insured, whether sane or insane, within two years from the policy
date is not covered by the policy. If suicide occurs, the only amount payable to
the beneficiary will be the premiums paid, minus any indebtedness and partial
surrenders.
BENEFICIARY
Initially, the beneficiary will be the person you designate in your application
for the policy. You may change the beneficiary by giving written notice to IDS
Life of New York, subject to requirements and restrictions stated in the policy.
If you do not designate a beneficiary, or if the designated beneficiary dies
before the insured, the beneficiary will be you or your estate.
Transfers between the Fixed Account and Subaccounts
You may transfer policy values from one subaccount to another or between
subaccounts and the fixed account. For most transfers, we will process your
transfer request at the end of the valuation period during which we receive your
request. There is no charge for transfers. Before transferring policy value, you
should consider the risks involved in switching investments.
We may suspend or modify the transfer privilege at any time with the necessary
approval of the SEC. Transfers involving the fixed account are subject to the
restrictions below.
FIXED ACCOUNT TRANSFER POLICIES
o You must make transfers from the fixed account during a 30-day period
starting on a policy anniversary, except for automated transfers,
which can be set up at any time for transfer periods of your choosing
subject to certain minimums.
o If we receive your request to transfer amounts from the fixed account
within 30 days before the policy anniversary, the transfer will become
effective on the anniversary.
o If we receive your request on or within 30 days after the policy
anniversary, the transfer will be effective on the day we receive it.
o We will not accept requests for transfers from the fixed account at
any other time.
o If you made a transfer from the fixed account to one or more
subaccounts, you may not make a transfer from any subaccount back to
the fixed account until the next policy anniversary. We will waive
this limitation once during the first two policy years if you exercise
the policy's right to exchange provision. (See "Exchange right").
Minimum Transfer Amounts
From a subaccount to another subaccount or the fixed account:
o For mail and phone transfers--$250 or the entire subaccount balance,
whichever is less.
o For automated transfers--$50.
From the fixed account to a subaccount:
o $250 or the entire fixed account balance, minus any outstanding
indebtedness, whichever is less.
o For automated transfers -- $50.
Maximum Transfer Amounts
From a subaccount to another subaccount or the fixed account:
o None.
From the fixed account to a subaccount:
o Entire fixed account balance, minus any outstanding indebtedness.
Maximum Number of Transfers Per Year
We reserve the right to limit mail and telephone transfers to five per policy
year. Twelve automated transfers per policy year are allowed.
TWO WAYS TO REQUEST A TRANSFER, LOAN OR SURRENDER
Provide your name, policy number, Social Security Number or Taxpayer
Identification Number when you request a transfer.
1 By letter
Regular mail:
IDS Life of New York
P.O. Box 5144
Albany, NY 12205
Express mail:
IDS Life of New York
20 Madison Avenue Extension
Albany, NY 12203
2 By phone
Call between 8 a.m. and 6 p.m. Eastern Time:
1-800-541-2251 (toll free) or (518) 869-8613 (Albany area)
o We answer phone requests promptly, but you may experience delays when
call volume is unusually high. If you are unable to get through, use
mail procedure as an alternative.
o We will honor any telephone transfer or surrender request we believe
is authentic and we will use reasonable procedures to confirm that it
is. These procedures include asking identifying questions and tape
recording calls. As long as we follow these procedures, IDS Life of
New York and its affiliates will not be liable for any loss resulting
from fraudulent requests.
o We make telephone transfers available automatically. If you do not
want telephone transfers to be made from your account, please write to
IDS Life of New York and tell us.
AUTOMATED TRANSFERS
In addition to written and telephone requests, you can arrange to have policy
value transferred from one account to another automatically. Your financial
advisor can help you set up an automated transfer.
Automated transfer policies:
o Minimum automated transfer amount: $50
o Only one automated transfer arrangement can be in effect at any time.
You can transfer policy values to one or more subaccounts and the
fixed account, but you can transfer from only one account. o You can
start or stop this service by written request. You must allow seven
days for us to change any instructions that currently are in place.
o You cannot make automated transfers from the fixed account in an
amount that, if continued, would deplete the fixed account within 12
months.
o If you made a transfer from the fixed account to one or more
subaccounts, you may not make a transfer from any subaccount back to
the fixed account until the next policy anniversary.
o If you submit your automated transfer request with an application for
a policy, automated transfers will not take effect until the policy is
issued.
o If the value of the account from which you are transferring policy
value is less than the $50 minimum, we will stop the transfer
arrangement automatically.
o Automated transfers are subject to all other policy provisions and
terms including provisions relating to the transfer of money between
the fixed account and the subaccounts.
AUTOMATED DOLLAR-COST AVERAGING
You can use automated transfers to take advantage of dollar-cost averaging --
investing a fixed amount at regular intervals. For example, you might have a set
amount transferred monthly from a relatively conservative subaccount to a more
aggressive one, or to several others.
This systematic approach can help you benefit from fluctuations in accumulation
unit value, caused by fluctuations in the market value of the underlying fund.
Since you invest the same amount each period, you automatically acquire more
units when the market value falls, fewer units when it rises. The potential
effect is to lower your average cost per unit. There is no charge for
dollar-cost averaging.
How dollar-cost averaging works
Month Amount Accumulation Number of units
Invested unit value purchased
Jan $100 $20 5.00
Feb 100 16 6.25
Mar 100 9 11.11
Apr 100 5 20.00
May 100 7 14.29
June 100 10 10.00
July 100 15 6.67
Aug 100 20 5.00
Sept 100 17 5.88
Oct 100 12 8.33
(footnotes to table) By investing an equal number of dollars each month...
(arrow in table pointing to April) you automatically buy more units when the per
unit market price is low...
(arrow in table pointing to August) and fewer units when the per unit market
price is high.
You have paid an average price of only $10.81 per unit over the 10 months, while
the average market price actually was $13.10.
Dollar-cost averaging does not guarantee that any variable subaccount will gain
in value, nor will it protect against a decline in value if market prices fall.
Because this strategy involves continuous investing, your success with
dollar-cost averaging will depend upon your willingness to continue to invest
regularly through periods of low price levels. Dollar-cost averaging can be an
effective way to help meet your long-term goals.
Policy Loans
You may borrow against your policy by written or telephone request. (See chart
under "Transfers between the Fixed Account and Subaccounts" for address and
telephone numbers for your requests.) We will process your loan request at the
end of the valuation period during which we receive your request. (Loans by
telephone are limited to $50,000.)
Interest rate: The interest rate for policy loans is 6% per year. After the 10th
anniversary we expect to reduce the loan interest to 4% per year. Interest is
charged daily and due at the end of the policy year.
Minimum loan:
o $200
Maximum loan:
o 90% of the policy value minus surrender charges.
We will compute the maximum loan value as of the end of the valuation period
during which we receive your loan request. The amount available at any time for
a new loan is the maximum loan value less any existing indebtedness. When we
compute the amount available, we reserve the right to deduct from the loan value
interest for the period until the next policy anniversary and monthly deductions
that we will take until the next policy anniversary.
Payment of loaned funds: Generally, we will pay loans within seven days after we
receive your request (with certain exceptions -- see "Deferral of Payments,"
under "Payment of Policy Proceeds.")
Allocation of loans to accounts: If you do not specify whether the loan is to
come from the fixed account or the subaccounts, we will take it from the
subaccounts and the fixed account in proportion to their values, minus
indebtedness. When we make a loan from a subaccount, we redeem accumulation
units and transfer the proceeds into the fixed account. We will credit the
loaned amount with 4.0% annual interest.
Repayments: We will allocate loan repayments to subaccounts and/or the fixed
account using the premium allocation percentages in effect unless you tell us
otherwise. Repayments must be in amounts of at least $25.
Overdue interest: If you do not pay accrued interest when it is due, we will
increase the amount of indebtedness in the fixed account to cover the amount
due. Interest added to a policy loan will be charged the same interest rate as
the loan itself. We will take the interest from the fixed account and/or
subaccounts, using the monthly deduction allocation percentages. If the value in
the fixed account or any subaccount is not enough to pay the allocated interest,
we will take all of the interest from all of the accounts in proportion to their
value, minus indebtedness.
Effects of policy loans: If you do not repay your loan, it will reduce the death
benefit and cash surrender value. Even if you do repay it, your loan can have a
permanent effect on death benefits and policy values, because money you borrow
against the subaccounts will not share in the investment results of the relevant
fund(s).
A loan may terminate the no lapse guarantee. We deduct the loan amount from the
total premiums you pay, which may reduce the total below the level required to
keep the NLG in effect.
Taxes: If your policy lapses or you surrender it with an outstanding
indebtedness, and the amount of outstanding indebtedness plus the cash surrender
value is more than the sum of premiums you paid, you generally will be liable
for taxes on the excess. (See "Federal Taxes.")
Policy Surrenders
You may surrender your policy in full or in part by written or telephone
request. (See chart under "Transfers between the Fixed Account and
Subaccounts.") We will process your surrender request at the end of the
valuation period during which we receive your request. We may require you to
return your policy.
We normally will process your payment within seven days; however, we reserve the
right to defer payment. (See "Deferral of Payments," under "Payment of Policy
Proceeds.")
TOTAL SURRENDERS
If you totally surrender your policy, you receive its cash surrender value --
the policy value minus outstanding indebtedness and applicable surrender
charges. (See "Loads, Fees and Charges.") We will compute the value of each
subaccount as of the end of the valuation period during which we receive your
request.
PARTIAL SURRENDERS
After the first policy year, you may surrender any amount from $500 up to 90% of
the policy's cash surrender value. (Partial surrenders by telephone are limited
to $50,000.) We will charge you a partial surrender fee, described under "Loads,
Fees and Charges."
ALLOCATION OF PARTIAL SURRENDERS
Unless you specify otherwise, IDS Life of New York will make partial surrenders
from the fixed account and subaccounts in proportion to their values at the end
of the valuation period during which we receive your request. In determining
these proportions, we first subtract the amount of any outstanding indebtedness
from the fixed account value.
EFFECT OF PARTIAL SURRENDERS
o A partial surrender will reduce the policy value by the amount of the
partial surrender and fee.
o A partial surrender will reduce the death benefit by the amount of the
partial surrender and fee, or, if the death benefit is based on the
applicable percentage of policy value, by an amount equal to the
applicable percentage times the amount of the partial surrender.
o A partial surrender may terminate the no lapse guarantee. We deduct
the surrender amount from total premiums you paid, which may reduce
the total below the level required to keep the no lapse guarantee in
effect.
o If Option 1 is in effect, a partial surrender will reduce the
specified amount by the amount of the partial surrender and fee. IDS
Life of New York will deduct this decrease from the current specified
amount in this order:
1. First from the specified amount provided by the most recent
increase;
2. next from the next most recent increases successively;
3. then from the initial specified amount when the policy was
issued.
Because they reduce the specified amount, partial surrenders may affect the cost
of insurance. IDS Life of New York will not allow a partial surrender if it
would reduce the specified amount below the required minimum. (See "Decreases"
under "Proceeds Payable Upon Death").
o If Option 2 is in effect, a partial surrender does not affect the
specified amount.
TAXES
Upon surrender, you generally will be liable for taxes on any excess of the cash
surrender value plus outstanding indebtedness over the premium paid. (See
"Federal Taxes.")
EXCHANGE RIGHT
For two years after we issue the policy, you can exchange it for one that
provides benefits that do not vary with the investment return of the
subaccounts. Because the policy itself offers a fixed return option, all you
need to do is transfer all of the policy value in the subaccounts to the fixed
account. We automatically will credit all future premium payments to the fixed
account unless you request a different allocation.
A transfer for this purpose will not count against the five-transfers-per-year
limit. Also, we will waive any restrictions on transfers into the fixed account
for this type of transfer.
There is no effect on the policy's death benefit, specified amount, net amount
at risk, risk classification or issue age. Only the method of funding the policy
value will be affected.
We will not require evidence of insurability. We will require that:
1. this policy is in force; and
2. your request is in writing; and
3. you repay any existing indebtedness.
The new policy will have the same initial death benefit, policy date and issue
age as this policy. The premium for the new policy will be based on our rates in
effect on its policy date for the same class of risk as under this policy.
We will inform you of the premium for the new policy and any extra sum required
or allowance to be made for a cash surrender value adjustment that takes
appropriate account of the values under both this policy and the new policy. If
the cash surrender value of this policy exceeds the cash surrender value of the
new policy, the excess will be sent to you. If the cash surrender value of this
policy is less than the cash surrender value of the new policy, you will be
required to send us the shortage amount for this exchange to be completed.
PAID-UP INSURANCE OPTION
You may request that we use the cash surrender value of the policy be used to
purchase an amount of paid-up insurance. You may make your request in writing
during the 30 days before any policy anniversary. The paid-up insurance policy
will take effect as of the policy anniversary and will mature on the original
policy's maturity date. You will forfeit all rights to make future premium
payments and all riders will terminate.
The amount and cash surrender value of the paid-up insurance will be based on
the cost of insurance rates guaranteed in the policy and on the fixed account
guaranteed interest rate. The paid-up policy's death benefit amount, minus its
cash surrender value, cannot be greater than your current policy's death
benefit, minus its policy value (both as of the date of the paid-up policy's
purchase). The amount of paid-up insurance will remain level and will not be
less than required by law.
Optional Insurance Benefits
You may choose to add the following benefits to your policy at an additional
cost, in the form of riders (if you meet certain requirements). More detailed
information on these benefits is in your policy.
Waiver of monthly deduction (WMD): Under WMD, we will waive the monthly
deduction if the insured becomes totally disabled.
Accidental death benefit (ADB): ADB provides an additional death benefit if the
insured's death is caused by accidental injury.
Other insured rider (OIR): OIR provides a level, adjustable death benefit on the
life of each other insured covered.
Children's insurance rider (CIR): CIR provides level term coverage on each
eligible child.
Automatic increase benefit rider (AIB): AIB provides an increase in the
specified amount at a designated percentage on each policy anniversary until
insured's attained age 65.
Payment of Policy Proceeds
We will pay policy proceeds when:
o you surrender the policy; or
o the insured dies
o the policy maturity date is reached, which occurs when the insured
reaches attainded insurance age 100.
We will pay all proceeds by check. We will compute the amount of the death
proceeds and pay it in a single sum unless you select one of the payment options
below. We will pay interest at a rate then in effect on death proceeds from the
date of the insured's death to the settlement date (the date on which we pay the
proceeds in a lump sum or first place them under a payment option).
Payment options:
During the insured's lifetime, you may request in writing that we pay policy
proceeds under one or more of the three payment options below. (The beneficiary
also may select a payment option, unless you say that he or she cannot). You
decide how much of the proceeds to place under each option (minimum: $5,000). We
will transfer any such amount to IDS Life of New York's general account. Unless
we agree otherwise, we must make payments under all options to a natural person.
You also may make a written request to us to change a prior choice of payment
option or, if we agree, to elect a payment option other than the three below.
If you elect a payment option for pre-death proceeds, payments under this option
may be subject to federal income tax as ordinary income. If you elect Option A,
the full pre-death proceeds will be taxed as a full surrender or maturity as
described in "Taxation of policy proceeds" and also may be subject to an
additional 10% penalty tax if the policy is a modified endowment. The interest
paid under Option A will be ordinary income subject to income tax in the year
earned. The interest payments will not be subject to the 10% penalty tax.
If you elect Option B or Option C for payment of pre-death proceeds, any
indebtedness at the time of election will be taxed as a partial surrender as
described in "Taxation of policy proceeds" and also may be subject to an
additional 10% penalty tax if the policy is a modified endowment. We will use
the remainder of the proceeds to make payments under the option elected. A
portion of each payment will be taxed as ordinary income and a portion of each
payment will be considered a return of the investment in the policy and will not
be taxed. We describe an owner's investment in the policy in "Taxation of Policy
Proceeds." All payments we make after the investment in the policy is fully
recovered will be subject to tax. Amounts we pay under Option B or Option C that
are subject to tax also may be subject to an additional 10% penalty tax. (See
"Penalty tax" under "Federal taxes").
Death benefit proceeds applied to any payment option are not considered part of
the beneficiary's income and therefore are not subject to federal income tax.
Payments of interest under Option A will be ordinary income subject to tax.
Under Option B or Option C, a portion of each payment will be ordinary income
subject to tax and a portion of each payment will be considered a return of the
beneficiary's investment in the policy which is not subject to tax. The
beneficiary's investment in the policy is the death benefit proceeds we apply to
the payment option. All payments we make after the investment in the policy is
fully recovered will be subject to tax.
Option A -- Interest payments: We will pay interest on any proceeds placed under
this option at a rate of 4% per year compounded annually, at regular intervals
and for a period that is agreeable to both you and us. At the end of any payment
interval, you may withdraw proceeds in amounts of at least $100. At any time,
you may withdraw all of the proceeds that remain or you may place them under a
different payment option approved by us.
Option B -- Payments for a specified period: We will make fixed monthly payments
for any number of years you specify. Here are examples of monthly payments for
each $1,000 placed under this option:
Payment period Monthly payment per $1,000
(years) placed under Option B
_______________ ___________________________
10 $ 9.61
15 6.87
20 5.51
25 4.71
30 4.18
We will furnish monthly amounts for other payment periods at your request,
without charge.
Option C -- Lifetime income: We will make monthly payments for the life of the
person (payee) who is to receive the income. We will guarantee payment for 10,
15 or 20 years.
We will base the amount of each monthly payment per $1,000 placed under this
option on the table of settlement rates in effect at the time of the first
payment. The amount depends on the sex and adjusted age of the payee on that
date. Adjusted age means the age of the payee (on the payee's last birthday)
minus an adjustment as follows:
Calendar year of Adjustment Calendar year of Adjustment
Payee's birth payee's birth
Before 1920 0 1945-1949 6
1920-1924 1 1950-1959 7
1925-1929 2 1960-1969 8
1930-1934 3 1970-1979 9
1935-1939 4 1980-1989 10
1940-1944 5 After 1989 11
The amount of each monthly payment per $1,000 placed under this option will be
at least the amounts shown in the next table.
We will furnish monthly amounts for any adjusted age not shown at your request,
without charge.
Adjusted
age Life income per $1,000 with
payee payments guaranteed for
- ------------------------------------------------------------------------
10 years 15 years 20 years
Male Female Male Female Male Female
- ------------------------------------------------------------------------
50 $4.22 $3.89 $4.17 $3.86 $4.08 $3.82
55 4.62 4.22 4.53 4.18 4.39 4.11
60 5.14 4.66 4.96 4.57 5.71 4.44
65 5.81 5.22 5.46 5.05 5.02 4.79
70 6.61 5.96 5.96 5.60 5.27 5.12
75 7.49 6.89 6.38 6.14 5.42 5.35
Deferral of payments:
We reserve the right to defer payments of cash surrender value, policy loans or
variable death benefits in excess of the specified amount if:
o the payments derive from a premium payment made by a check that has
not cleared the banking system (we have not collected good payment);
o the NYSE is closed (other than customary weekend and holiday
closings);
o in accordance with SEC rules, trading on the NYSE is restricted or,
because of an emergency, it is not practical to dispose of securities
held in the subaccount or determine the value of the subaccount's net
assets.
We may delay the payment of any loans or surrenders from the fixed account up to
six months from the date we receive the request. If we postpone the payment of
surrender proceeds more than 30 days, we will pay you interest on the amount
surrendered at an annual rate of 3% for the period of postponement.
Federal Taxes
The following is a general discussion of the policy's federal income tax
implications. It is not intended as tax advice. Because the effect of taxes on
the value and benefits of your policy depends on your individual situation as
well as IDS Life of New York's tax status, YOU SHOULD CONSULT A TAX ADVISOR TO
FIND OUT HOW THESE GENERAL CONSIDERATIONS APPLY TO YOU. The discussion is based
on our understanding of federal income tax laws as the Internal Revenue Service
(IRS) currently interprets them; both the laws and their interpretation may
change.
We intend the policy to qualify as a life insurance policy for federal income
tax purposes. To that end, the provisions of the policy are to be interpreted to
ensure or maintain this tax qualification. IDS Life of New York reserves the
right to change the policy in order to ensure that it will continue to qualify
as life insurance for tax purposes. We will send you a copy of any changes.
IDS LIFE OF NEW YORK'S TAX STATUS
The IRS taxes IDS Life of New York as a life insurance company under the Code.
For federal income tax purposes, we consider the subaccounts to be a part of IDS
Life of New York, although we treat their operations separately in accounting
and financial statements. We reinvest the investment income from the subaccounts
and it becomes part of the subaccounts' value. The IRS does not tax IDS Life of
New York on this investment income, including realized capital gains. Therefore,
IDS Life of New York does not charge the subaccounts for our federal income
taxes. IDS Life of New York reserves the right to make such a charge in the
future if there is a change in the tax treatment of subaccounts or variable life
insurance contracts or in IDS Life of New York's tax status as we currently
understand it.
TAXATION OF POLICY PROCEEDS
The IRS does not consider the death benefit to be part of the beneficiary's
income and therefore it is not subject to federal income taxes. When we pay the
proceeds on the maturity date and the amount received plus any indebtedness
exceeds your investment in the policy, the IRS may tax the excess as ordinary
income.
The IRS may tax part or all of any pre-death proceeds that you receive through
full surrender or maturity, lapse, partial surrender, policy loan or assignment
of policy value or payment options as ordinary income. (See the following
table.) In some cases, the tax liability depends on whether the policy is a
modified endowment (explained following the table). The taxable amount also may
be subject to an additional 10% penalty tax if the policy is a modified
endowment.
Source of proceeds Taxable portion of pre-death proceeds
Full surrender: Amount you receive plus any indebtedness,
minus your investment in the policy.*
Lapse: Any outstanding indebtedness minus your
investment in the policy.*
Partial surrenders Lesser of:
(modified endowments): the amount you receive or policy value
minus your investment in the policy.*
Policy loans and assignments Lesser of:
(modified endowments) the amount of the loan/assignment or
policy value minus your investment in the
policy.*
Partial surrenders Generally, if the amount you receive is
(other policies): greater than your investment in the
policy,* the amount in excess of
your investment is taxable.
However, during the first
15 policy years, a
different amount may be
taxable if the partial
surrender results in or is
caused by a reduction in
benefits.
Policy loans and assignments None
(other policies):
Payment options: If we pay the
proceeds of the policy
under one of the payment
options, see the "Payment
option" under "Payment of
Policy proceeds" section
for tax information.
*The owner's investment is equal to premiums paid, minus the nontaxable portion
of any previous partial surrenders, plus the taxable portion of any previous
policy loans.
MODIFIED ENDOWMENT CONTRACTS
In 1988, Congress created a new class of life insurance policies called
"Modified Endowment Contracts." The IRS taxes these policies differently from
conventional life insurance contracts.
Your policy is a modified endowment contract if:
o you apply for it or materially change it on or after June 21, 1988 and
o the premiums you pay in the first seven years of the policy, or the
first seven years following a material change, exceed certain limits.
Also, any life insurance policy you receive in exchange for a modified endowment
is itself a modified endowment.
We have procedures for monitoring whether your policy may become a modified
endowment contract. We calculate modified endowment limits when we issue the
policy. We base these limits on the benefits we provide under the policy and on
the risk classification of the insured. We recalculate these limits later if
certain increases or reductions in benefits occur.
Increases in benefits: We recalculate limits when an increase is a "material
change." Almost any increase you request, such as an increase in specified
amount, the addition of a rider benefit or an increase in an existing rider
benefit, is a material change. An automatic increase under the terms of your
policy, such as an increase in death benefit due to operation of the applicable
percentage table described in the "Proceeds payable upon death" section or an
increase in policy value growth under Option 2, generally is not a material
change. A policy becomes a modified endowment if premiums you pay in the early
years following a material change exceed the recalculated limits.
Reductions in benefits: When you reduce benefits within seven years after we
issue the policy or after the most recent material change, we recalculate the
limits as if the reduced level of benefits had always been in effect. In most
cases, this recalculation will further restrict the amount of premiums that you
can pay without exceeding modified endowment limits. If the premiums you have
already paid exceed the recalculated limits, the policy becomes a modified
endowment even if you do not pay any further premiums.
Distributions affected: Modified endowment rules apply to distributions in the
year the policy becomes a modified endowment and in all subsequent years. In
addition, the rules apply to distributions taken two years before the policy
becomes a modified endowment because the IRS presumes that you took a
distribution in anticipation of that event.
Serial purchase of modified endowments: The IRS treats all modified endowments
issued by the same insurer (or possibly affiliated companies of the insurer) to
the same owner during any calendar year as one policy for purposes of
determining the amount of any loan or distribution that is taxable.
Penalty tax: If a policy is a modified endowment, the taxable portion of
pre-death proceeds from a full surrender, maturity, lapse, partial surrender,
policy loan or assignment of policy value or certain payment options may be
subject to a 10% penalty tax unless:
o the distribution occurs after the owner attains age 59 1/2;
o the distribution is attributable to the owner becoming disabled
(within the meaning of Code Section 72(m)(7); or
o the distribution is part of a series of substantially equal periodic
payments made at least once a year over the life (or life expectancy)
of the owner or over the joint lives (or life expectancies) of the
owner and the owner's beneficiary.
OTHER TAX CONSIDERATIONS
Interest paid on policy loans: If you use a policy loan for personal purposes,
interest paid on the loan is not tax-deductible. Other rules apply if you use
the loan for trade or business or investment purposes or if a business or
corporation owns the policy from which the loan is taken.
Policy changes: Changing ownership, exchanging or assigning the policy may have
tax consequences, depending on the circumstances.
Other taxes: Federal estate tax, state and local estate tax, inheritance tax,
gift tax and other tax consequences of ownership or receipt of policy proceeds
also will depend on the circumstances.
Tax-deferred retirement plans: The policy may be used in conjunction with
certain retirement plans that are already tax-deferred under the Code. The
policy will not provide any necessary or additional tax deferral if it is used
to fund a retirement plan that is tax-deferred. Since the rules governing such
use are complex, a purchaser should consult a competent pension consultant.
On July 6, 1983, the Supreme Court held in Arizona Governing Committee v. Norris
that optional annuity benefits provided under an employee's deferred
compensation plan could not, under Title VII of the Civil Rights Act of 1964,
vary between men and women on the basis of sex. Since the policy's cost of
insurance rates and purchase rates for certain settlement options distinguish
between men and women, employers and employee organizations should consult with
legal counsel before purchasing the policy for any employment-related insurance
or benefit program.
IDS Life of New York
IDS Life of New York is a stock life insurance company organized under the laws
of the State of New York in 1972. Our address is 20 Madison Avenue Extension,
Albany, NY 12203.
IDS Life of New York is licensed in New York and North Dakota, and it conducts a
conventional life insurance business in the state of New York. All annuity
contracts and insurance policies issued by IDS Life of New York, including the
policy described in this prospectus, are non-participating.
OWNERSHIP
IDS Life of New York, a New York corporation, is a wholly-owned subsidiary of
IDS Life, a Minnesota corporation, which is a wholly-owned subsidiary of
American Express Financial Corporation (AEFC). AEFC, a Delaware corporation, is
a wholly owned subsidiary of American Express Company.
The AEFC family of companies offers not only insurance and annuities, but also
mutual funds, investment certificates and a broad range of financial management
services.
Besides managing investments for all funds in the American Express(R) Funds,
AEFC manages investments for itself and its subsidiaries, American Express
Certificate Company and IDS Life Insurance Company. Total assets under
management as of the most recent fiscal year were more than $262 billion.
STATE REGULATION
IDS Life of New York is subject to the laws of New York governing insurance
companies and to regulation by the New York Department of Insurance. IDS Life of
New York files an annual statement in a prescribed form with New York's
Department of Insurance. IDS Life of New York's books and accounts are subject
to review by the New York Department of Insurance at all times and a full
examination of its operations is conducted periodically. Such regulation does
not, however, involve any supervision of management or investment practices or
policies.
DISTRIBUTION OF THE POLICY
American Express Financial Advisors, Inc., a registered broker/dealer and an
affiliate of IDS Life of New York, is the sole distributor of the policy.
IDS Life of New York pays its representatives a commission of up to 47.5% of the
initial minimum monthly premium (annualized) when the policy is sold, plus 3% of
all premiums in excess of 12 times the minimum monthly premium. IDS Life of New
York pays additional commissions if an increase in coverage occurs. IDS Life of
New York also pays approximately 27% of the total representative's commission to
the field vice presidents and district sales managers of the selling
representative.
LEGAL PROCEEDINGS
A number of lawsuits have been filed against life and health insurers in
jurisdictions in which IDS Life of New York and its affiliates do business
involving insurers' sales practices, alleged agent misconduct, failure to
properly supervise agents, and other matters. IDS Life is a defendant in three
class action lawsuits of this nature. IDS Life of New York is a named defendant
on one of these suits.
Richard Thoresen and Elizabeth Thoresen vs. AEFC, American Partners Life
Insurance Company, American Enterprise Life Insurance Company, American
Centurion Life Assurance Company, IDS Life Insurance Company and IDS Life
Insurance Company of New York, was commenced in Minnesota State Court in October
1998. The action was brought by individuals who purchased an annuity in a
qualified plan. The plaintiffs allege that the sale of annuities in tax-deferred
contributory retirement investment plans (e.g. IRA's) is never appropriate. The
plaintiffs purport to represent a class consisting of all persons who made
similar purchases. The plaintiffs seek damages in an unspecified amount.
IDS Life of New York is included as a party to a preliminary settlement of all
three class action lawsuits. We believe this approach will put these cases
behind us and provide a fair outcome for our clients. Our decision to settle
does not include any admission of wrongdoing. We do not anticipate that this
proposed settlement or any other lawsuits in which IDS Life of New York is a
defendant, will have a material adverse effect on our financial condition.
YEAR 2000
The Year 2000 issue is the result of computer programs having been written using
two digits rather than four to define a year. Any programs that have
time-sensitive software may recognize a date using "00" as the year 1900 rather
than 2000. This could result in the failure of major systems or miscalculations,
which could have a material impact on the operations of IDS Life of New York and
the Variable Account. All of the major systems used by IDS Life of New York and
the Variable Account are maintained by AEFC and are utilized by multiple
subsidiaries and affiliates of AEFC. IDS Life of New York's and the Variable
Account's businesses are heavily dependent upon AEFC's computer systems and have
significant interaction with systems of third parties.
A comprehensive review of AEFC's computer systems and business processes,
including those specific to IDS Life of New York and the Variable Account, was
conducted to identify the major systems that could be affected by the Year 2000
issue. Steps were taken to resolve potential problems including modification to
existing software and the purchase of new software. As of Dec. 31, 1999, AEFC
had completed its program of corrective measures on its internal systems and
applications, including Year 2000 compliance testing. As of Dec. 31, 1999, AEFC
had also completed an evaluation of the Year 2000 readiness of other third
parties whose system failures could have an impact on IDS Life of New York's and
the Variable Account's operations.
AEFC's Year 2000 project also included establishing Year 2000 contingency plans
for all key business units. Business continuation plans, which address business
continuation in the event of a system disruption, are in place for all key
business units. As of Dec. 31, 1999, these plans had been amended to include
specific Year 2000 considerations.
In assessing its Year 2000 initiatives and the results of actual production
since Jan. 1, 2000, management believes no material adverse consequences were
experienced, and there was no material effect on IDS Life of New York's and the
Variable Account's business, results of operations, or financial condition as a
result of the Year 2000 issue.
EXPERTS
Ernst & Young LLP, independent auditors, have audited the consolidated financial
statements of IDS Life Insurance Company of New York at Dec. 31, 1999 and 1998,
and for each of the three years in the period ended Dec. 31, 1999, and the
individual and combined financial statements of the segregated asset subaccounts
of the IDS Life of New York Account 8 - Flexible Premium Variable Life
Subaccounts (comprised of subaccounts YEQ, YGS, YIN, YIT, YMA, YMN, YGI, YNO and
YO4) at Dec. 31, 1999, and for each of the three years in the period then ended,
as set forth in their reports. We've included our financial statements in the
prospectus in reliance on Ernst & Young LLP's report, given on their authority
as experts in accounting and auditing.
Actuarial matters included in the prospectus have been examined by Mark Gorham,
F.S.A., M.A.A.A., Actuarial Director, Insurance Product Development, as stated
in his opinion filed as an exhibit to the Registration Statement.
Management of IDS Life of New York
Directors
Timothy V. Bechtold
Director since April 1999; president since 1998, Risk Management Products since
December 1999; vice president, Risk Management Products, IDS Life Insurance
Company from January 1995 to December 1999; vice president, Insurance Product
Development, IDS Life Insurance Company from May 1989 to December 1994.
Maureen A. Buckley
Director since April 1999; vice president, chief operating officer and consumer
affairs officer and claims officer since 1998; chief operating officer and
consumer affairs officer, American Centurion Life Assurance Company, since March
1995; supervisor, IDS Life of New York from September 1989 to March 1995.
Rodney P. Burwell
Director since April 1999; chairman, Xerxes Corporation (manufacturing), since
1969.
John Cattau
Director since April 1999; vice president, American Express Financial Direct,
since November 1997; manager, American express Financial Direct from June 1992
to November 1997.
Robert R. Grew
Lawyer and Partner, Carter, Ledyard & Milburn, NYC, since 1957.
Jean B. Keffeler
Director since April 1999; business and management consultant since 1991.
Richard W. Kling
Chairman of the board, IDS Life of New York, since April 1994; director, IDS
Life since February 1984; President, IDS Life, since March 1994; executive vice
president, Marketing and Products, IDS Life, from January 1988 to March 1994;
senior vice president, Risk Management Products, AEFC, since May 1994; vice
president, AEFC, from January 1988 to May 1994; director and president of IDS
Life Series Fund, Inc.; and chairman of the board of managers and president of
IDS Life Variable Annuity Funds A and B.
Thomas R. Mcburney
Director since April 1999; president, McBurney Management Associates, since
1990.
Edward J. Muhl
Director since April 1999; vice chairman, Peterson Consulting LLP, since January
1997; superintendent of insurance, New York State from January 1995 to December
1996; senior vice president, Reliance Insurance Group from November 1991 to
January 1995.
Thomas V. Nicolosi
Director since October 1996; group vice president, AEFA, from January 1995 to
present; field vice president, AEFA, from January 1988 to December 1994.
Stephen P. Norman
Secretary, American Express, since 1982.
Richard M. Starr
Director since October 1996; managing counsel, American Express Company, since
March 1995; senior counsel American Express Company, from May 1992 to March
1995; counsel American Express Company from June 1989 to May 1992.
Michael R. Woodward
Senior vice president, Field Management, AEFC, since June 1991; region vice
president, Atlantic Region, AEFC, from 1988 to June 1991.
Principal officers other than directors
Darrell C. Beckstrom
Underwriting officer since 1994; underwriting technical manger, IDS Life, since
1990; senior underwriter, IDS Life, from 1987 to 1992.
Jeffrey W. Sullivan, M.D.
Medical director since 1998.
Lorraine R. Hart
Vice President-Investments since December 1999; investment officer since March
1992; vice president, Insurance Investments, IDS Life, since October 1989.
Eric L. Marhoun
General counsel and secretary since 1998; group counsel and vice president,
AEFA, since 1997; counsel AEFA, from 1996 to 1997; associate counsel, AEFA, from
1995 to 1996; associate, Meagher & Gear, from 1991 to 1995.
Jeffrey S. Horton
Vice president and treasurer since December 1999; vice president, treasurer and
assistant secretary, IDS Life, since December 1997; vice president and corporate
treasurer, AEFC, since December 1997; controller, American Express
Technologies-Financial Services, AEFC, from July 1997 to December 1997;
controller, Risk Management Products, AEFC, from May 1994 to July 1997; director
of finance and analysis, Corporate Treasury, AEFC from June 1990 to May 1994.
The officers, employees and sales force of IDS Life of New York are bonded, in
the amount of $100 million, by virtue of a blanket fidelity bond issued to
American Express Company by Saint Paul Fire and Marine, the lead underwriter.
Other information
The variable account has filed a registration statement with the SEC. For
further information concerning the policy, the variable account and IDS Life of
New York, please refer to the registration statement. You can find the
registration statement on the SEC's web site at http://www.sec.gov.
SUBSTITUTION OF INVESTMENTS
We may change the funds from which the subaccounts buy shares if: the existing
funds become unavailable; or in the judgment of IDS Life of New York the funds
are no longer suitable for the subaccounts. If these situations occur, we have
the right to substitute the funds held in the subaccounts for other registered,
open-end management investment companies as long as we believe it would be in
the best interest of persons having voting rights under the policies.
In the event of any such substitution or change, IDS Life of New York may,
without the consent or approval of owners, amend the policy and take whatever
action is necessary and appropriate. However, we will not make any substitution
or change without any necessary approval of the SEC or state insurance
departments. IDS Life of New York will notify owners within five days of any
substitution or change.
VOTING RIGHTS
As a policy owner with investments in any subaccount, you may vote on important
fund matters. Each share of a fund has one vote. On some issues, such as
election of directors of IDS Life Series Fund, all shares of the IDS Life Series
Fund Portfolios vote together as one series. When electing directors, all shares
of IDS Life Series Fund Portfolios have cumulative voting rights. Cumulative
voting means that shareholders are entitled to a number of votes equal to the
number of shares they hold multiplied by the number of directors to be elected
and they have the right to divide votes among candidates.
On an issue affecting only one fund -- for example, a fundamental investment
restriction pertaining only to that fund -- its shares vote as a separate
series. If shareholders of a particular fund vote approval of an agreement, the
agreement becomes effective with respect to that fund, whether or not it is
approved by shareholders of the other funds.
IDS Life of New York is the owner of all fund shares and therefore holds all
voting rights. However, IDS Life of New York will vote the shares of each fund
according to instructions we receive from owners. If we do not receive timely
instructions from you, we will vote your shares in the same proportion as the
shares for which we do receive instructions. IDS Life of New York also will vote
fund shares that are not otherwise attributable to owners in the same proportion
as those shares in that subaccount for which we receive instructions.
We determine the number of fund shares in each subaccount for which you may give
instructions by applying your percentage interest in the subaccount to the total
number of votes attributable to the subaccount. We will determine that number as
of a date we choose that is 60 days or less before the meeting of the fund. We
will send you notice of each shareholder meeting, together with any proxy
solicitation materials and a statement of the number of votes for which you are
entitled to give instructions.
Under certain conditions, IDS Life of New York may disregard voting instructions
that would change the goals of one or more of the funds or would result in
approval or disapproval of an investment advisory contract. If IDS Life of New
York does disregard voting instructions, we will advise you of that action and
the reasons for in our next report to owners.
REPORTS
At least once a year IDS Life of New York will mail to you, at your last known
address of record, a report containing all information required by law or
regulation, including a statement showing the current policy value.
Policy Illustations
The following tables illustrate how policy values, cash surrender values and
death benefits may change with the investment experience of the subaccount. The
tables show how these amounts might vary, for a 35-year-old male nonsmoker,
under Death Benefit Option 1, if:
o the annual rate of return of the fund is 0%, 6% or 12%.
o the cost of insurance rates and policy fees are current rates or
guaranteed rates and fees.
This type of illustration involves a number of detailed assumptions. (See chart,
"Understanding the illustrations.") To the extent that your own circumstances
differ from those assumed in the illustrations, your expected results also would
differ.
Upon request, we will furnish you with comparable tables illustrating death
benefits, policy values and cash surrender values based on the actual age of the
person you propose to insure and on an initial specified amount and premium
payment schedule. In addition, after you have purchased a policy, you may
request illustrations based on policy values at the time of request.
UNDERSTANDING THE ILLUSTRATIONS:
Rates of return: assumes uniform, gross, after-tax, annual rates of 0%, 6% or
12% for the fund. Results would differ depending on allocations among the
subaccounts, if returns averaged 0%, 6% and 12% for the fund as a whole but
differed across portfolios.
Insured: assumes a male insurance age 35, in a standard risk classification,
qualifying for the nonsmoker rate. Results would be lower if the insured were in
a substandard risk classification or did not qualify for the non-smoker rate.
Premiums: assumes a $900 premium is paid in full at the beginning of each policy
year. Results would differ if premiums were paid on a different schedule.
Policy loans and partial withdrawals: assumes that none have been made. (Since
we assume indebtedness is zero, the cash surrender value in all cases equals the
policy value minus the surrender charge.)
Effect of expenses and charges
The death benefit, policy value and cash surrender value reflect the following
charges:
o Premium expense charge: 3.5% of each premium payment.
o Cost of insurance charge for the sex, age and rate classification for
the assumed insured.
o Policy fee: $5 per month.
The expenses paid by the fund and charges made against the subaccounts as
described below:
The net investment return of the subaccounts, shown in the tables, is lower than
the gross, after-tax return of the fund or trust because we deducted the
expenses paid by the fund and charges made against the subaccounts. These
include:
o the daily investment management fee paid by the fund, assumed to be
equivalent to an annual rate of 0.73% of the fund's average daily net
assets; the assumed investment management fee is approximately equal
to a simple average of the investment management fees, based on assets
of the subaccounts, of the funds available under the policy. The
actual charges you incur will depend on how you choose to allocate
policy value. See Fund expenses in the Loads, Fees and Charges section
of this prospectus for additional information;
o the 12b-1 fee, assumed to be equivalent to an annual rate of 0.09% of
the fund's average daily net assets.
o the daily mortality and expense risk charge, equivalent to 0.9% of the
daily net asset value of the subaccounts annually for the first 10
policy years and 0.45% thereafter, we reserve the right to charge up
to 0.9% for all policy years; and
o a nonadvisory expense charge assumed to be equivalent to an annual
rate of 0.17% of each fund's average daily net assets for direct
expenses incurred by the fund. The actual charges you incur will
depend on how you choose to allocate policy value. See Fund expenses
in the Loads, Fees, and Charges section of this prospectus for
additional information.
After deduction of the expenses and charges described above, the illustrated
gross annual investment rates of return correspond to the following approximate
net annual rates of return:
Net annual rate of Net annual rate of Net annual rate of
Gross annual investment return for "Guaranteed return for "Current return for "Current
rate costs assumed" costs assumed" costs assumed"
Of return illustration illustration, years 1-10 illustration, years 11
and after
0% (1.87)% (1.87)% (1.43)%
6 4.02 4.02 4.48
12 9.90 9.90 10.40
Taxes: Results shown in the tables reflect the fact that IDS Life of New York
does not currently charge the subaccounts for federal income tax. If we take
such a charge in the future, the portfolios will have to earn more than they do
now in order to produce the death benefits and policy values illustrated.
Illustration
- ----------------------------------------------------------------------------------------------------------------------------
Initial specified amount $100,000 Male age 35 Current costs assumed
Death benefit Option 1 nonsmoker Annual premium $900
- -----------------------------------------------------------------------------------------------------------------------------
Premium Death benefit (1)(2) Policy value (1)(2) Cash surrender value (1)(2)
accumulated assuming hypothetical gross assuming hypothetical gross assuming hypothetical gross
End of with annual annual investment return of annual investment return of annual investment return of
policy interest
year at 5% 0% 6% 12% 0% 6% 12% 0% 6% 12%
- -----------------------------------------------------------------------------------------------------------------------------
1 945 $100,000 $100,000 $100,000 $625 $669 $713 $- $- $-
2 1937 $100,000 $100,000 $100,000 $1,231 $1,358 $1,489 $330 $457 $588
3 2979 $100,000 $100,000 $100,000 $1,816 $2,063 $2,331 $915 $1,162 $1,430
4 4073 $100,000 $100,000 $100,000 $2,375 $2,783 $3,243 $1,474 $1,882 $2,342
5 5222 $100,000 $100,000 $100,000 $2,914 $3,522 $4,236 $2,013 $2,621 $3,335
6 6428 $100,000 $100,000 $100,000 $3,427 $4,275 $5,311 $2,706 $3,554 $4,590
7 7694 $100,000 $100,000 $100,000 $3,915 $5,042 $6,477 $3,374 $4,501 $5,937
8 9024 $100,000 $100,000 $100,000 $4,377 $5,825 $7,745 $4,017 $5,465 $7,385
9 10420 $100,000 $100,000 $100,000 $4,813 $6,622 $9,123 $4,633 $6,441 $8,942
10 11886 $100,000 $100,000 $100,000 $5,219 $7,430 $10,618 $5,219 $7,430 $10,618
11 13425 $100,000 $100,000 $100,000 $5,620 $8,286 $12,298 $5,620 $8,286 $12,298
12 15042 $100,000 $100,000 $100,000 $5,991 $9,159 $14,134 $5,991 $9,159 $14,134
13 16739 $100,000 $100,000 $100,000 $6,334 $10,049 $16,145 $6,334 $10,049 $16,145
14 18521 $100,000 $100,000 $100,000 $6,645 $10,956 $18,348 $6,645 $10,956 $18,348
15 20392 $100,000 $100,000 $100,000 $6,923 $11,878 $20,762 $6,923 $11,878 $20,762
16 22356 $100,000 $100,000 $100,000 $7,162 $12,811 $23,409 $7,162 $12,811 $23,409
17 24419 $100,000 $100,000 $100,000 $7,361 $13,753 $26,311 $7,361 $13,753 $26,311
18 26585 $100,000 $100,000 $100,000 $7,511 $14,699 $29,495 $7,511 $14,699 $29,495
19 28859 $100,000 $100,000 $100,000 $7,614 $15,649 $32,994 $7,614 $15,649 $32,994
20 31247 $100,000 $100,000 $100,000 $7,658 $16,594 $36,838 $7,658 $16,594 $36,838
Age 60 45102 $100,000 $100,000 $100,000 $6,836 $21,109 $62,886 $6,836 $21,109 $62,886
Age 65 62785 $100,000 $100,000 $118,793 $3,624 $24,752 $106,341 $3,624 $24,752 $106,341
(1) Assumes no policy loans or partial withdrawals have been made.
(2) Assumes a $900 premium is paid at the beginning of each policy year. Values
will be different if premiums are paid in different amounts or with a different
frequency.
The above hypothetical investment results are illustrative only and you should
not consider them to be a representation of past or future investment results.
Actual investment results may be more or less than those shown. The death
benefit, policy value and cash surrender value would be different from those
shown if returns averaged 0%, 6% and 12% over a period of years, but fluctuated
above and below those averages for individual policy years. We cannot represent
that these hypothetical rates of return can be achieved for any one year or
sustained over any period of time.
Illustration
- ----------------------------------------------------------------------------------------------------------------------------
Initial specified amount $100,000 Male age 35 Guaranteed costs assumed
Death benefit Option 1 nonsmoker Annual premium $900
- -----------------------------------------------------------------------------------------------------------------------------
Premium Death benefit (1)(2) Policy value (1)(2) Cash surrender value (1)(2)
accumulated assuming hypothetical gross assuming hypothetical gross assuming hypothetical gross
End of with annual annual investment return of annual investment return of annual investment return of
policy interest
year at 5% 0% 6% 12% 0% 6% 12% 0% 6% 12%
- -----------------------------------------------------------------------------------------------------------------------------
1 945 $100,000 $100,000 $100,000 $625 $669 $713 $- $- $-
2 1937 $100,000 $100,000 $100,000 $1,231 $1,358 $1,489 $330 $457 $588
3 2979 $100,000 $100,000 $100,000 $1,816 $2,063 $2,331 $915 $1,162 $1,430
4 4073 $100,000 $100,000 $100,000 $2,375 $2,783 $3,243 $1,474 $1,882 $2,342
5 5222 $100,000 $100,000 $100,000 $2,914 $3,522 $4,236 $2,013 $2,621 $3,335
6 6428 $100,000 $100,000 $100,000 $3,427 $4,275 $5,311 $2,706 $3,554 $4,590
7 7694 $100,000 $100,000 $100,000 $3,915 $5,042 $6,477 $3,374 $4,501 $5,937
8 9024 $100,000 $100,000 $100,000 $4,377 $5,825 $7,745 $4,017 $5,465 $7,385
9 10420 $100,000 $100,000 $100,000 $4,813 $6,622 $9,123 $4,633 $6,441 $8,942
10 11886 $100,000 $100,000 $100,000 $5,219 $7,430 $10,618 $5,219 $7,430 $10,618
11 13425 $100,000 $100,000 $100,000 $5,594 $8,248 $12,242 $5,594 $8,248 $12,242
12 15042 $100,000 $100,000 $100,000 $5,938 $9,077 $14,008 $5,938 $9,077 $14,008
13 16739 $100,000 $100,000 $100,000 $6,249 $9,915 $15,930 $6,249 $9,915 $15,930
14 18521 $100,000 $100,000 $100,000 $6,525 $10,760 $18,022 $6,525 $10,760 $18,022
15 20392 $100,000 $100,000 $100,000 $6,764 $11,611 $20,300 $6,764 $11,611 $20,300
16 22356 $100,000 $100,000 $100,000 $6,961 $12,462 $22,782 $6,961 $12,462 $22,782
17 24419 $100,000 $100,000 $100,000 $7,112 $13,310 $25,485 $7,112 $13,310 $25,485
18 26585 $100,000 $100,000 $100,000 $7,211 $14,149 $28,432 $7,211 $14,149 $28,432
19 28859 $100,000 $100,000 $100,000 $7,252 $14,973 $31,644 $7,252 $14,973 $31,644
20 31247 $100,000 $100,000 $100,000 $7,229 $15,776 $35,150 $7,229 $15,776 $35,150
Age 60 45102 $100,000 $100,000 $100,000 $5,934 $19,254 $58,392 $5,934 $19,254 $58,392
Age 65 62785 $100,000 $100,000 $117,459 $1,657 $20,822 $96,278 $1,657 $20,822 $96,278
(1) Assumes no policy loans or partial withdrawals have been made.
(2) Assumes a $900 premium is paid at the beginning of each policy year. Values
will be different if premiums are paid in different amounts or with a different
frequency.
The above hypothetical investment results are illustrative only and you should
not consider them to be a representation of past or future investment results.
Actual investment results may be more or less than those shown. The death
benefit, policy value and cash surrender value would be different from those
shown if returns averaged 0%, 6% and 12% over a period of years, but fluctuated
above and below those averages for individual policy years. We cannot represent
that these hypothetical rates of return can be achieved for any one year or
sustained over any period of time.
Key Terms
These terms can help you understand details about your policy.
Accumulation unit: An accounting unit used to calculate the policy value of the
subaccounts prior to the insured's death.
Attained insurance age: The insured's insurance age plus the number of policy
anniversaries since the policy date. Attained insurance age changes only on a
policy anniversary.
Cash surrender value: Proceeds received if you surrender the policy in full, or
the policy matures. The cash surrender value equals the policy value minus
indebtedness and any applicable surrender charges.
Close of business: Closing time of the New York Stock Exchange, normally 4 p.m.,
Eastern time.
Code: The Internal Revenue Code of 1986, as amended.
Fixed account: The general investment account of IDS Life of New York. The fixed
account is made up of all of IDS Life of New York's assets other than those held
in any separate account.
Fixed account value: The portion of the policy value that you allocate to the
fixed account, including indebtedness.
Funds: Mutual funds or portfolios, each with a different investment objective.
(See "The funds.") Each of the subaccounts of the variable account invests in a
specific one of these funds.
IDS Life of New York: In this prospectus, "we", "us", "our" and "IDS Life of New
York" refer to IDS Life Insurance Company of New York.
Indebtedness: All existing loans on the policy plus interest that has either
been accrued or added to the policy loan.
Insurance age: The insured's age, based upon his or her last birthday on the
date of the application.
Insured: The person whose life is insured by the policy.
Maturity date: The insured's attained insurance age 100, if living.
Minimum monthly premium: The premium required to keep the NLG in effect. We show
the minimum monthly premium in your policy.
Monthly date: The same day each month as the policy date. If there is no monthly
date in a calendar month, the monthly date is the first day of the next calendar
month.
Net amount at risk: A portion of the death benefit, equal to the total current
death benefit minus the policy value. This is the amount to which we apply cost
of insurance rates in determining the monthly cost of insurance.
Net premium: The premium paid minus the premium expense charge.
No lapse guarantee (NLG): A feature of the policy guaranteeing that the policy
will not lapse for five policy years. The guarantee is in effect if you meet
certain premium payment requirements.
Owner: The entity(ies) to which, or individual(s) to whom, we issue the policy
or to whom you subsequently transfer ownership. In the prospectus "you" and
"your" refer to the owner.
Policy anniversary: The same day and month as the policy date each year the
policy remains in force.
Policy date: The date we issue the policy and from which we determine policy
anniversaries, policy years and policy months.
Policy value: The sum of the fixed account value plus the variable account
value.
Proceeds: The amount payable under the policy as follows:
o Upon death of the insured prior to the maturity date, proceeds will be
the death benefit in effect as of the date of the insured has death,
minus any indebtedness.
o On the maturity date, proceeds will be the cash surrender value.
o On surrender of the policy prior to the maturity date, the proceeds
will be the cash surrender value.
Risk classification: A group of insureds that IDS Life of New York expects will
have similar mortality experience.
Scheduled premium: A premium you select at the time of application, of a level
amount, at a fixed interval of time.
Specified amount: An amount we use to determine the death benefit and the
proceeds payable upon death of the insured prior to the maturity date. We show
the initial specified amount in your policy.
Subaccount(s): One or more of the investment divisions of the variable account,
each of which invests in a particular fund.
Surrender charge: A charge we assess against the policy value at the time of
surrender, or if the policy lapses, during the first 10 years of the policy and
for 10 years after an increase in coverage.
Valuation date: A normal business day, Monday through Friday, on which the New
York Stock Exchange is open. We set the value of each subaccount at the close of
business on each valuation date.
Valuation period: The interval commencing at the close of business on each
valuation date and ending at the close of business on the next valuation date.
Variable account: IDS Life of New York Account 8 consisting of subaccounts, each
of which invests in a particular fund. The policy value in each subaccount
depends on the performance of the particular fund.
Variable account value: The sum of the values that you allocate to the
subaccounts of the variable account.
[Financial Information]
PART II
UNDERTAKINGS TO FILE REPORTS
Subject to the terms and conditions of Section 15(d) of the Securities
Exchange Act of 1934, the undersigned registrant hereby undertakes to file with
the Securities and Exchange Commission such supplementary and periodic
information, documents, and reports as may be prescribed by any rule or
regulation of the Commission hereto or hereafter duly adopted pursuant to
authority conferred in that section.
RULE 484 UNDERTAKING
The By-Laws of IDS Life Insurance Company of New York provide that:
To the extent permitted and in the manner prescribed by law, the Corporation
shall indemnify any person made, or threatened to be made, a party to any
action, suit or proceeding, civil or criminal, by reason of the fact that he,
his testator or intestate, is or was Director or officer of the Corporation or
of any other corporation of any type or kind, domestic or foreign, which he
served in any capacity at the request of the Corporation, against judgments,
fines, amounts paid in settlement and reasonable expenses (which the Corporation
may advance), including attorney's fees, actually and necessarily incurred as a
result of such action, suit or proceeding, or any appeal therein.
Insofar as indemnification for liability arising under 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 the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
REPRESENTATION PURSUANT TO SECTION 205 OF THE NATIONAL SECURITIES MARKET
IMPROVEMENT ACT OF 1996
The sponsoring insurance company represents that the fees and charges deducted
under the contract, in the aggregate, are reasonable in relation to the services
rendered, the expenses expected to be incurred, and the risks assumed by the
insurance company.
REPRESENTATIONS PURSUANT TO RULE 6e-3 (T)
This filing is made pursuant to Rule 6c-3 and 6e-3 (T) under the Investment
Company Act of 1940.
CONTENTS OF THE REGISTRATION STATEMENT
This Registration Statement comprises the following papers and documents:
The facing sheet.
The prospectus consisting of 56 pages.
The undertakings to file reports.
The signatures.
The following exhibits:
1.A. Copies of all exhibits required by paragraph A of
instructions for Exhibits in Form N-8B-2 to the
Registration Statement.
(1) Resolution of Board of Directors of IDS Life of
New York authorizing the Trust, adopted September 12,
1985, filed as Exhibit 1.A.(1) to Registrant's Form
N-8B-2 with Port-Effective Amendment No. 11 , File
No. 33-15290 is incorporated herein by reference.
(2) Not applicable.
(3) (a) Not applicable.
(b) (1) Form of Explanation of New York
Sales Agreement*
(2) Form of Personal Financial Planner's
Agreement with IDS Financial
Services Inc.*
(3) Form of Personal Financial Planner's
Agreement with IDS Life
Insurance Company of New York*
(4) Form of Field Trainer's Rider to
Personal Financial Planner's
Agreement.*
(5) Form of District Manager's Rider to
Personal Financial
Planner's Agreement.*
(6) Form of New York District Manager -
Insurance Rider to Personal
Financial Planner Agreement.*
(7) Form of Division Manager's Agreement
with IDS Financial Services Inc.*
(8) Form of New York Division Manager -
Insurance Rider to Division
Manager's Agreement with IDS
Financial Services Inc.*
(9) Form of Field President Agreement
with American Express Financial
Advisors Inc.**
(10) Form of Recruiting and Training
Manager License Agreement with IDS
Life Insurance Company of
New York.**
(11) Form of Group Vice President
Agreement with American Express
Financial Advisors Inc.**
(12) Form of IDS Paraplanner License
Agreement with IDS Life Insurance
Company of New York.**
(c) Schedules of Sales Commissions to be filed
by amendment.
(4) Not applicable.
(5) (a) Flexible Premium Variable Life Insurance
Policy (VUL3-NY) to be filed by amendment.
(b) Waiver of Monthly Deduction Rider for Total
Disability to be filed by amendment.
(c) Accidental Death Benefit Rider to be filed
by amendment.
(d) Other Insured Rider to be filed by
amendment.
(e) Children's Term Insurance Rider to be filed
by amendment.
(f) Automatic Increase Benefit Rider to be filed
by amendment.
(6) (a) Certificate of Incorporation of IDS Life
Insurance Company of New York, dated
July 23, 1957.*
(b) Amended By-Laws of IDS Life Insurance
Company of New York.*
(7) Not applicable.
(8) (a) Form of Investment Management and
Services Agreement dated December 17, 1985,
between IDS Life of New York and IDS Life of
New York Series Fund, Inc.*
(b) Form of Investment Advisory Agreement dated
July 11, 1984, between IDS Life of New York
and IDS Financial Services Inc. relating to
the Variable Account.*
(c) Addendum to Investment Management and
Services Agreement.***
(d) Addendum to Investment Advisory
Agreement.***
(e) Form of Participation Agreements to be filed
by amendment.
(9) None.
(10) (a) Application form for the Flexible Premium
Variable Life Insurance Policy to be filed
by amendment.
(b) Application form for Life and Disability
Income Insurance.**
(11) IDS Life Insurance Company of New York's Description
of Transfer and Redemption Procedures and Method of
Conversion to Fixed Benefit Policies to be filed by
amendment.
B. (1) Not applicable.
(2) Not applicable.
C. Not applicable.
2. Opinion of counsel to be filed by amendment.
3. Not applicable.
4. Not applicable.
5. Not applicable.
6. Actuarial Opinion to be filed by amendment.
7. Written actuarial consent to be filed by amendment.
8. Written auditor consent of Ernst & Young LLP to be filed by amendment.
9. Power of Attorney to sign amendments to this Registration Statement
dated April 14, 1999 filed electronically as Exhibit 9 to Post-
Effective Amendment No. 1 to Registration Statement, File No.
333-42257, is incorporated herein by reference.
* All of these exhibits are incorporated by reference to Amendment No. 3
to the Registration Statement to form N-8B-2 File No. 811-05213.
** All of these exhibits are incorporated by reference to Amendment No. 4
to the Registration Statement to form N-8B-2 File No. 811-05213.
*** All of these exhibits are incorporated by reference to the original
Registration Statement to form S-6, File No. 333-42257
**** All of these exhibits are incorporated by reference to Pre-Effective
No. 1 to the Registration Statement to Form S-6, File No. 333-42257.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, IDS Life Insurance Company of New York, on behalf of the
Registrant, certifies that it meets all of the requirements for effectiveness of
this Amendment to its Registration Statement pursuant to Rule 485(b) under the
Securities Act of 1933 and has duly caused this Amendment to its Registration
Statement to be signed on behalf of the Registrant by the undersigned, thereunto
duly authorized, in this City of Minneapolis, and State of Minnesota on the 28th
day of August, 2000.
IDS Life of New York Account 8
__________________________________________
(Registrant)
By IDS Life Insurance Company of New York
___________________________________________
(Sponsor)
By /s/ Richard W. Kling*
___________________________________________
Richard W. Kling, Director and
Chairman of the Board
Pursuant to the requirements of the Securities Act of 1933, this Amendment to
the Registration Statement has been signed by the following persons in the
capacities indicated on the 28th day of August, 2000:
Signature Title
/s/ Richard W. Kling* Director and Chairman of
------------------------------------ the Board
Richard W. Kling
/s/ Timothy V. Bechtold* Director and President
- ------------------------------------
Timothy V. Bechtold
/s/ Maureen A. Buckley* Director, Vice President,
- ------------------------------------ Chief Operating Officer,
Maureen A. Buckley Consumer Affairs Officer
and Claims Officer
/s/ Rodney P. Burwell* Director
- ------------------------------------
Rodney P. Burwell
/s/ John R. Cattau* Director
- ------------------------------------
John R. Cattau
/s/ Robert R. Grew* Director
- ------------------------------------
Robert R. Grew
/s/ Jeffrey S. Horton* Vice President and
- ------------------------------------ Treasurer
Jeffrey S. Horton
/s/ Jean B. Keffeler* Director
- ------------------------------------
Jean B. Keffeler
/s/ Thomas R. McBurney* Director
- ------------------------------------
Thomas R. McBurney
/s/ Edward J. Muhl* Director
- ------------------------------------
Edward J. Muhl
/s/ Thomas V. Nicolosi* Director
- ------------------------------------
Thomas V. Nicolosi
/s/ Stephen P. Norman* Director
- ------------------------------------
Stephen P. Norman
/s/ Richard M. Starr* Director
- ------------------------------------
Richard M. Starr
/s/ Philip C. Wentzel* Vice President and
- ------------------------------------ Controller
Philip C. Wentzel
/s/ Michael R. Woodward* Director
- ------------------------------------
Michael R. Woodward
*Signed pursuant to Power of Attorney dated April 14, 1999 filed as Exhibit No.
9 to this Amendment to the Registration Statement on Form S-6, File No.
333-42257 and is incorporated herein by reference.
By:
/s/ Mary Ellyn Minenko
Mary Ellyn Minenko
Counsel and Assistant Secretary