SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
PRE-EFFECTIVE AMENDMENT NO.1 TO
FORM S-6
FILE NO. 333-44644
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 of New York
50607 AXP Financial Center
Minneapolis, Minnesota 55474
It is proposed that this filing become effective November 20, 2000, or as soon
as practicable.
[ ] immediately upon filing pursuant to paragraph (b)
[ ] on (date) pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(1)
[ ] on (date) pursuant to paragraph (a)(1) of Rule 485
[ ] this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
E. Title of securities being registered:
Flexible Premium Variable Life Insurance Policy
F. Approximate date of proposed public offering: as soon as practicable.
American Express Variable Universal Life III(SM), a Flexible Premium Variable
Life Insurance Policy
Prospectus
(DATE)
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.
Variable universal life insurance is a complex vehicle. Before you invest, be
sure to ask your sales representative about the variable universal life
insurance policy's features, benefits, risks and fees, and whether the variable
universal life insurance is appropriate for you, based upon your financial
situation and objectives.
Your sales representative may be authorized to offer you several different
variable universal life insurance policies. Each policy has different features
or benefits that may be appropriate for you based on your financial situation
and needs, your age and how you intend to use the product. The different
features and benefits may include investment and fund manager options,
variations in interest rate amounts and guarantees and surrender charge
schedules. The fees and charges may also be different between each policy.
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 9
Monthly deduction 9
Surrender charge 10
Partial surrender fee 13
Mortality and expense risk charge 13
Purchasing Your Policy 14
Application 14
Right to examine policy 14
Premiums 15
Keeping The Policy in Force 15
No lapse guarantee 15
Grace period 16
Reinstatement 16
The Variable Account 17
The Funds 18
Fund objectives 23
Relationship between funds and subaccounts 24
Rates of Return of the Funds and Subaccounts 24
The Fixed Account 29
Policy Value 30
Fixed account value 30
Subaccount values 31
Proceeds Payable Upon Death 32
Change in death benefit option 34
Changes in specified amount 34
Misstatement of age or sex 35
Suicide 35
Beneficiary 35
Transfers between the Fixed Account and Subaccounts 35
Fixed account transfer policies 36
Minimum transfer amounts 36
Maximum transfer amounts 36
Maximum number of transfers per year 36
Two ways to request a transfer, loan or surrender 36
Automated transfers 37
Automated dollar-cost averaging 37
Policy Loans 38
Policy Surrenders 39
Total surrenders 40
Partial surrenders 40
Allocations of partial surrenders 40
Effects of partial surrenders 40
Taxes 40
Exchange right 40
Paid-up insurance option 41
Optional Insurance Benefits 41
Payment of Policy Proceeds 42
Federal Taxes 44
IDS Life of New York's tax status 44
Taxation of policy proceeds 44
Modified endowment contracts 45
Other tax considerations 46
IDS Life of New York 47
Ownership 47
State regulation 47
Distribution of the policy 47
Legal proceedings 47
Year 2000 48
Experts 48
Management of IDS Life of New York 49
Other Information 51
Substitution of investments 51
Voting rights 51
Reports 52
Policy Illustrations 52
Key Terms 56
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. 29)
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. 14)
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. 15)
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. 16)
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. 16)
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 - 3.5% is deducted from each premium payment to
cover some distribution expenses, state and local premium taxes, and
federal taxes. (p.9)
o Monthly deduction -- charged against the value of your policy each
month (prior to the maturity date), covering the cost of insurance,
the $5 per month policy fee and the cost of optional insurance
benefits. The cost of insurance depends on the amount of the death
benefit, the policy value and the insured's attained insurance age,
sex and risk classification. (p.9)
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. (p.10)
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. (p.13)
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. (p.13)
o Fund expenses -- apply only to the underlying funds and consists of
investment management fees, taxes, brokerage commissions and
nonadvisory expenses. (p. 6)
Optional insurance benefits: You may choose to add additional benefits to your
policy at an additional cost, in the form of riders. (p.10)
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. 35)
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. 38)
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. 39)
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. (p.40)
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. 42)
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. 44)
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 ( after fee waivers and/or expense
reimbursements, if applicable, 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. The Funds have voluntarily agreed to waive or reimburse
these expenses.
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%. The Fund has voluntarily agreed to waive or
reimburse these expenses.
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 voluntarily 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. The Fund has voluntarily agreed to waive or reimburse
these expenses.
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.
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.
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. For the Waiver of Monthly Deduction benefit, the charges
are based on the amount of the death benefit, the policy value and the insured's
attained insurance age, sex and risk classification. For the Accidental Death
Benefit, the charges are based on the amount of the accidental death benefit and
the insured's attained insurance age, sex and risk classification. For the Other
Insured Rider, the charges are based on the amount of the other insured's death
benefit and the other insured's attained insurance age, sex and risk
classification. For the Children's Insurance Rider, the charges are based on the
amount of the rider's death benefit. For the Automatic Increase Benefit Rider,
there are no charges to add the benefit to the policy. When automatic increases
in the policy's death benefit take place, the charges for the increases are
based on the amount of the increase in death benefit, the policy value and the
insured's attained insurance age, sex and risk classification. (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.
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 Adviser 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.
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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.
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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.
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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, as IDS Life, investment
Diversified Equity Income a secondary goal, steady growth of capital. manager; AEFC
Fund Invests primarily in dividend-paying common investment adviser.
and preferred stocks.
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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.
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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.
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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
Management, Inc.
- -----------------------------------------------------------------------------------------------------------------------
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.
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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
A fund underlying your policy in which a subaccount invests may have a name,
portfolio manager, objectives, strategies and characteristics that are the same
or substantially similar to those of a different retail mutual fund. Each
underlying fund will, however, have its own unique portfolio holdings, fees and
operating expenses. Consequently, each underlying fund will have its own
operating results, and those results may differ significantly from those of the
different retail mutual fund.
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 15.89 18.05
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 fund expenses
and 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 73.00% 30.93% 29.62% 21.09%
Equity Income Equity Income Portfolio (9/00)1 -- -- -- (7.81)
Government Government Securities Portfolio (8/87) 1 (6.25) 2.72 4.98 5.53
Securities
Income Income Portfolio (8/87) 1 (3.96) 2.44 5.76 6.43
International International Equity Portfolio (10/94) 1 31.07 18.43 23.00 21.74
Equity
Managed Managed Portfolio (8/87) 1 19.18 16.46 16.15 14.36
Money Market Money Market Portfolio (8/87) 1 0.14 2.79 3.34 3.52
AXPSM Variable Portfolio -
YBC Blue Chip Advantage Fund (9/00) 1 -- -- -- 6.812
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 -- -- -- (1.62)2
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 26.24 25.65 -- 24.03
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 28.39 26.50 26.13 22.60
American Century VP
YIR International (9/00) 1 56.89 26.06 20.22 16.45
YVL Value (9/00) 1 (5.13) 7.18 -- 9.06
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 17.86 12.82 15.17 13.69
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 1.19 2.21 6.90 9.30
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 61.96 34.61 30.77 28.35
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 61.71 21.32 -- 22.69
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. (Monday-Thursday); 8 a.m. and 4:30 p.m.(Friday)
All Eastern Times: 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.
Twelve automated transfers per policy year are allowed.
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.
As with any financial product purchased, the decision as to who the owner and
the beneficiary will be should be made by the client after consultation with his
or her tax and legal advisors. These decisions may significantly affect the
amount due for income tax, gift tax and estate tax and also the client's
ownership rights to the policy.
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, YMM, YGI and YNO)
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.
Lorraine R. Hart
Vice President-Investments since December 1999; investment officer since March
1992; vice president, Insurance Investments, IDS Life, since October 1989.
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.
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 W. Sullivan, M.D.
Medical director since 1998.
Philip C. Wentzel
Vice president and controller since 1998; Vice President - Finance, Risk
Management Products, AEFC since 1997; and director of financial reporting and
analysis from 1992-1997.
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 Of return costs assumed" costs assumed" costs assumed"
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.
At any time, upon written request by you, we will provide a projection of future
death benefits and policy values. The projection will be based on assumptions as
to specified amount(s), type of coverage option and future premium payments as
are necessary and specified by us and /or you.
Policy Illustrations
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.
IDS Life of New York Account 8 - Flexible Premium Variable Life Subaccounts
Statements of Net Assets (Unaudited)
Sept. 30, 2000
Segregated Asset Subaccounts
Assets YEQ YGS YIN YIT YMA YMM YGI YNO Combined
Variable
Account
Investments in shares of mutual funds and portfolios:
at cost $ 76,253,889 $617,941 $6,208,056 $19,612,424 $39,359,933 $2,207,231 $23,286,086 $21,434,562 $188,980,122
------------ -------- ---------- ----------- ----------- ---------- ----------- ----------- ------------
at market value $113,241,940 $606,127 $5,804,563 $19,197,497 $53,233,427 $2,207,234 $30,588,441 $30,257,958 $255,137,187
Dividends receivable -- 2,738 34,287 -- -- 10,870 -- -- 47,895
Accounts receivable
from IDS Life of
New York for
contract purchase
payments 23,917 -- -- 17,474 -- -- 36,734 46,480 124,605
Receivable from
mutual funds
and portfolios
for share
redemptions -- -- -- -- -- -- 21,787 21,630 43,417
------ ---- ----- ---- ---- ---- ------ ------ ------
Total assets 113,265,857 608,865 5,838,850 19,214,971 53,233,427 2,218,104 30,646,962 30,326,068 255,353,104
Liabilities
Payable to IDS Life of New York for:
Mortality and expense
risk fee 80,683 434 4,172 13,612 38,021 1,605 21,787 21,630 181,944
Contract terminations -- 63 4,843 -- 60,520 14,853 -- -- 80,279
Payable to mutual
funds, portfolios
and the trust for
investments purchased -- -- -- -- -- -- 36,734 46,480 83,214
Total liabilities 80,683 497 9,015 13,612 98,541 16,458 58,521 68,110 345,437
Net assets applicable to
Variable Life contracts
in accumulation
period $113,185,174 $608,368 $5,829,835 $19,201,359 $53,134,886 $2,201,646 $30,588,441 $30,257,958 $255,007,667
------------ -------- ---------- ----------- ----------- ---------- ----------- ----------- ------------
Accumulation units
outstanding 14,585,036 260,305 2,399,411 8,095,209 10,473,471 1,251,849 14,348,052 11,882,383
---------- ------- --------- --------- ---------- --------- ---------- ----------
Net asset value per
accumulation unit $ 7.76 $ 2.34 $ 2.43 $ 2.37 $ 5.07 $ 1.76 $ 2.13 $ 2.55
------ ------ ------ ------ ------ ------ ------ ------
See accompanying notes to financial statements.
IDS Life of New York Account 8 - Flexible Premium Variable Life Subaccounts
Statements of Operations (Unaudited)
Nine month period ended Sept. 30, 2000
Segregated Asset Subaccounts
Investment income YEQ YGS YIN YIT YMA YMM YGI YNO Combined
Variable
Account
Dividend income from
mutual funds and
portfolios $22,467,959 $25,084 $300,269 $3,223,670 $2,548,300 $100,774 $-- $ 2,036,114 $ 30,702,170
Mortality and expense
risk fee 736,114 3,979 38,912 130,635 355,903 15,563 187,430 187,426 1,655,962
------- ----- ------ ------- ------- ------ ------- ------- ---------
Investment income
(loss) - net 21,731,845 21,105 261,357 3,093,035 2,192,397 85,211 (187,430) 1,848,688 29,046,208
---------- ------ ------- --------- --------- ------ -------- --------- ----------
Realized and unrealized gain (loss) on investments - net
Realized gain (loss) on sales of investments in mutual funds and portfolios:
Proceeds from sales 2,498,324 156,311 640,426 347,586 2,197,733 3,782,250 377,149 206,811 10,206,590
Cost of investments
sold 1,356,626 164,256 689,123 281,890 1,549,646 3,782,236 281,507 131,783 8,237,067
--------- ------- ------- ------- --------- --------- ------- ------- ---------
Net realized gain
(loss) on investments 1,141,698 (7,945) (48,697) 65,696 648,087 14 95,642 75,028 1,969,523
Net change in unrealized
appreciation or
depreciation of
investments (17,142,298) 23,585 (29,830) (6,888,619) (1,045,857) (21) 449,660 (1,297,212) (25,930,592)
----------- ------ ------- ---------- ---------- --- ------- ---------- -----------
Net gain (loss) on
investments (16,000,600) 15,640 (78,527) (6,822,923) (397,770) (7) 545,302 (1,222,184) (23,961,069)
----------- ------ ------- ---------- -------- -- ------- ---------- -----------
Net increase (decrease)
in net assets
resulting from
operations $5,731,245 $36,745 $182,830 $(3,729,888) $1,794,627 $85,204 $357,872 $626,504 $5,085,139
========== ======= ======== =========== ========== ======= ======== ======== ==========
See accompanying notes to financial statements.
IDS Life of New York Account 8 - Flexible Premium Variable Life Subaccounts
Statements of Changes in Net Assets (Unaudited)
Nine month period ended Sept. 30, 2000
Segregated Asset Subaccounts
Operations YEQ YGS YIN YIT YMA YMM YGI YNO Combined
Variable
Account
Investment income
(loss) - net $21,731,845 $ 21,105 $ 261,357 $3,093,035 $ 2,192,397 $ 85,211 $ (187,430) $ 1,848,688 $ 29,046,208
Net realized gain
(loss) on
investments 1,141,698 (7,945) (48,697) 65,696 648,087 14 95,642 75,028 1,969,523
Net change in
unrealized
appreciation
or depreciation
of investments (17,142,298) 23,585 (29,830) (6,888,619) (1,045,857) (21) 449,660 (1,297,212) (25,930,592)
----------- ------ ------- ---------- ---------- --- ------- ---------- -----------
Net increase
(decrease) in
net assets
resulting from
operations 5,731,245 36,745 182,830 (3,729,888) 1,794,627 85,204 357,872 626,504 5,085,139
--------- ------ ------- ---------- --------- ------ ------- ------- ---------
Contract transactions
Contract purchase
payments 6,817,337 68,673 487,887 2,295,766 4,266,117 1,277,887 3,914,693 3,666,934 22,795,294
Net transfers* 1,953,527 (50,646) (387,443) 1,462,222 (1,137,122) (1,205,848) 2,988,868 3,722,420 7,345,978
Transfers for
policy loans (1,123,549) (13,658) (11,314) (168,466) (401,550) (4,439) (134,164) (245,255) (2,102,395)
Policy charges (2,236,999) (34,888) (215,209) (428,452) (1,442,590) (161,090) (653,519) (577,275) (5,750,022)
Contract terminations:
Surrender
benefits (2,074,089) (13,126) (96,386) (334,170) (937,792) (55,852) (420,454) (434,445) (4,366,314)
Death benefits (71,797) (6,532) (237) (5,787) (279,843) -- (135,001) (15,419) (514,616)
------- ------ ---- ------ -------- ------ -------- ------- --------
Increase (decrease)
from contract
transactions 3,264,430 (50,177) (222,702) 2,821,113 67,220 (149,342) 5,560,423 6,116,960 17,407,925
--------- ------- -------- --------- ------ -------- --------- --------- ----------
Net assets at
beginning of
year 104,189,499 621,800 5,869,707 20,110,134 51,273,039 2,265,784 24,670,146 23,514,494 232,514,603
----------- ------- --------- ---------- ---------- --------- ---------- ---------- -----------
Net assets at
end of period $113,185,174 $608,368 $5,829,835 $19,201,359 $53,134,886 $2,201,646 $30,588,441 $30,257,958 $255,007,667
------------ -------- ---------- ----------- ----------- ---------- ----------- ----------- ------------
Accumulation unit activity
Units outstanding
at beginning
of year 14,138,625 283,131 2,493,277 7,011,444 10,457,248 1,336,769 11,738,977 9,519,818
Contract purchase
payments 904,993 30,679 206,192 885,633 848,131 738,693 1,837,484 1,413,472
Net transfers* 273,103 (22,820) (161,720) 563,374 (219,011) (692,390) 1,414,093 1,442,821
Transfers for
policy loans (154,716) (6,435) (7,048) (69,764) (87,091) (5,375) (68,668) (99,242)
Policy charges (296,739) (15,507) (90,826) (165,172) (282,674) (93,292) (306,591) (223,310)
Contract terminations:
Surrender benefits (271,818) (5,834) (40,363) (128,248) (186,859) (32,556) (200,448) (165,444)
Death benefits (8,412) (2,909) (101) (2,058) (56,273) -- (66,795) (5,732)
------ ------ ---- ------ ------- ------ ------- ------
Units outstanding
at end of period 14,585,036 260,305 2,399,411 8,095,209 10,473,471 1,251,849 14,348,052 11,882,383
---------- ------- --------- --------- ---------- --------- ---------- ----------
*Includes transfer activity from (to) other subaccounts and transfers from (to)
IDS Life of New York's fixed account. See accompanying notes to financial
statements.
IDS Life of New York Acount 8 -- Flexible Premium Variable Life Subaccounts
Condensed Financial Information (Unaudited)
The following tables give per-unit information about the financial history of
each subaccount.
Nine month
period ended
Sept. 30, Year ended Dec. 31,
2000 1999 1998 1997 1996 1995 1994 1993 1992 1991 1990
Subaccount YEQ (Investing in shares of IDS Life Series Fund -- Equity Portfolio)
Accumulation unit $7.37 $4.11 $3.80 $3.17 $2.66 $1.94 $1.91 $1.70 $1.63 $0.98 $1.04
value at beginning
of period
Accumulation unit value $7.76 $7.37 $4.11 $3.80 $3.17 $2.66 $1.94 $1.91 $1.70 $1.63 $0.98
at end of period
Number of accumulation 14,585 14,139 13,469 11,924 10,219 7,545 6,265 4,382 2,916 1,668 1,061
units outstanding at end
of period (000 omitted)
Subaccount YGS (Investing in shares of IDS Life Series Fund -- Government Securities Portfolio)
Accumulation unit $2.20 $2.26 $2.11 $1.96 $1.94 $1.66 $1.76 $1.58 $1.50 $1.30 $1.23
value at beginning
of period
Accumulation unit value $2.34 $2.20 $2.26 $2.11 $1.96 $1.94 $1.66 $1.76 $1.58 $1.50 $1.30
at end of period
Number of accumulation 260 283 300 256 295 301 284 244 159 112 69
units outstanding at end
of period (000 omitted)
Subaccount YIN (Investing in shares of IDS Life Series Fund -- Income Portfolio)
Accumulation unit $2.35 $2.37 $2.26 $2.11 $2.06 $1.72 $1.81 $1.59 $1.47 $1.29 $1.23
value at beginning
of period
Accumulation unit value $2.43 $2.35 $2.37 $2.26 $2.11 $2.06 $1.72 $1.81 $1.59 $1.47 $1.29
at end of period
Number of accumulation 2,399 2,493 2,466 2,184 2,032 1,614 1,408 1,308 744 517 369
units outstanding at end
of period (000 omitted)
Subaccount YIT1 (Investing in shares of IDS Life Series Fund -- International Equity Portfolio)
Accumulation unit $2.87 $2.11 $1.75 $1.66 $1.36 $0.98 $1.00 -- -- -- --
value at beginning
of period
Accumulation unit value $2.37 $2.87 $2.11 $1.75 $1.66 $1.36 $0.98 -- -- -- --
at end of period
Number of accumulation 8,095 7,011 6,173 4,820 2,922 759 130 -- -- -- --
units outstanding at end
of period (000 omitted)
Subaccount YMA (Investing in shares of IDS Life Series Fund -- Managed Portfolio)
Accumulation unit $4.90 $3.97 $3.50 $2.99 $2.64 $2.24 $2.24 $1.89 $1.73 $1.32 $1.23
value at beginning
of period
Accumulation unit value $5.07 $4.90 $3.97 $3.50 $2.99 $2.64 $2.24 $2.24 $1.89 $1.73 $1.32
at end of period
Number of accumulation 10,473 10,457 9,923 9,079 8,043 6,737 6,000 4,308 2,720 1,912 1,236
units outstanding at end
of period (000 omitted)
Subaccount YMM (Investing in shares of IDS Life Series Fund -- Money Market Portfolio)
Accumulation unit $1.69 $1.63 $1.57 $1.52 $1.46 $1.39 $1.35 $1.33 $1.29 $1.24 $1.16
value at beginning
of period
Accumulation unit value $1.76 $1.69 $1.63 $1.57 $1.52 $1.46 $1.39 $1.35 $1.33 $1.29 $1.24
at end of period
Number of accumulation 1,252 1,337 1,055 735 605 352 196 193 147 191 167
units outstanding at end
of period (000 omitted)
Subaccount YGI2 (Investing in shares of AIM V.I. Growth and Income Fund)
Accumulation unit $2.10 $1.58 $1.25 $1.00 $1.00 -- -- -- -- -- --
value at beginning
of period
Accumulation unit value $2.13 $2.10 $1.58 $1.25 $1.00 -- -- -- -- -- --
at end of period
Number of accumulation 14,348 11,739 6,206 2,465 148 -- -- -- -- -- --
units outstanding at end
of period (000 omitted)
Subaccount YNO2 (Investing in shares of Putnam VT New Opportunities Fund - Class IA Shares)
Accumulation unit $2.47 $1.47 $1.19 $0.98 $1.00 -- -- -- -- -- --
value at beginning
of period
Accumulation unit value $2.55 $2.47 $1.47 $1.19 $0.98 -- -- -- -- -- --
at end of period
Number of accumulation 11,882 9,520 5,472 2,226 84 -- -- -- -- -- --
units outstanding at end
of period (000 omitted)
1Operations commenced on Oct. 28, 1994.
2Operations commenced on Nov. 22, 1996.
IDS Life of New York Account 8 -- Flexible Premium Variable Life Subaccounts
Notes to Financial Statements (Unaudited)
1. ORGANIZATION
IDS Life of New York Account 8 (the Variable Account) was established under New
York law on Sept. 12, 1985 as a segregated asset account of IDS Life Insurance
Company of New York (IDS Life of New York). The Variable Account is registered
as a single unit investment trust under the Investment Company Act of 1940, as
amended (the 1940 Act). Operations of the Variable Account commenced on Aug. 31,
1987.
The Variable Account is comprised of various subaccounts. Each subaccount
invests exclusively in shares of the following portfolios or funds (the Funds),
which are registered under the 1940 Act as diversified open-end management
investment companies and have the following investment managers.
Subaccount Invests exclusively in shares of Investment Manager
YEQ IDS Life Series Fund -- Equity Portfolio IDS Life Insurance Company 1
YGS IDS Life Series Fund -- Government Securities IDS Life Insurance Company 1
Portfolio
YIN IDS Life Series Fund -- Income Portfolio IDS Life Insurance Company 1
YIT IDS Life Series Fund -- International Equity IDS Life Insurance Company 1
Portfolio
YMA IDS Life Series Fund -- Managed Portfolio IDS Life Insurance Company 1
YMM IDS Life Series Fund -- Money Market Portfolio IDS Life Insurance Company 1
YGI AIM V.I. Growth and Income Fund A I M Management Group Inc.
YNO Putnam VT New Opportunities Fund - Class IA Shares Putnam Investment Management, Inc.
1 American Express Financial Corporation (AEFC) is the investment advisor.
The assets of each subaccount of the Variable Account are not chargeable with
liabilities arising out of the business conducted by any other segregated asset
account or by IDS Life of New York.
American Express Financial Advisors Inc., an affiliate of IDS Life of New York,
serves as distributor of the Flexible Premium Survivorship Variable Life Policy.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Investments in the Funds
Investments in shares of the Funds are stated at market value which is the net
asset value per share as determined by the respective Fund. Investment
transactions are accounted for on the date the shares are purchased and sold.
The cost of investments sold and redeemed is determined on the average cost
method. Dividend distributions received from the Funds are reinvested in
additional shares of the Funds and are recorded as income by the subaccounts on
the ex-dividend date.
Unrealized appreciation or depreciation of investments in the accompanying
financial statements represents the subaccounts' share of the Funds'
undistributed net investment income, undistributed realized gain or loss and the
unrealized appreciation or depreciation on their investment securities.
Use of Estimates
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the date of the financial
statements and the reported amounts of increase and decrease in net assets from
operations during the period. Actual results could differ from those estimates.
Federal Income Taxes
IDS Life of New York is taxed as a life insurance company. The Variable Account
is treated as part of IDS Life of New York for federal income tax purposes.
Under existing federal income tax law, no income taxes are payable with respect
to any investment income of the Variable Account.
3. MORTALITY AND EXPENSE RISK FEE AND POLICY CHARGES
IDS Life of New York makes contractual assurances to the Variable Account that
possible future adverse changes in administrative expenses and mortality
experience of the policy owners and beneficiaries will not affect the Variable
Account. The mortality and expense risk fee paid to IDS Life of New York is
computed daily and is equal, on an annual basis, to 0.9% of the average daily
net asset value of the subaccount. A monthly deduction is made for the cost of
insurance and the policy fee. The cost of insurance for the policy month is
determined on the monthly date by determining the net amount at risk, as of that
day, and by then applying the cost of insurance rates to the net amount at risk
which IDS Life of New York is assuming for the succeeding month. The monthly
deduction will be taken from the subaccounts as specified in the application for
the policy.
IDS Life of New York deducts a policy fee of $30 per month for the first 15
years. This charge reimburses IDS Life of New York for expenses incurred in
administering the policy, such as processing claims, maintaining records, making
policy changes and communicating with owners of policies. IDS Life of New York
does not anticipate that it will make any profit on this charge. IDS Life of New
York reserves the right to change this charge in the future, but guarantees that
it will never exceed $30 per month.
4. OPTIONAL INSURANCE BENEFIT CHARGE
Each month IDS Life of New York deducts charges for any optional insurance
benefits added to the policy by rider.
5. PREMIUM EXPENSE CHARGE
IDS Life of New York deducts charges for three separate items from each premium
payment. The total of these charges is called the premium expense charge.
Details regarding these three charges follows.
A sales charge of 7.25% of each premium payment is deducted to compensate IDS
Life of New York for expenses in distributing the policy, including agents'
compensation, advertising and printing the prospectus and sales literature.
The policy provides that a charge of 1% of each premium payment is deducted to
cover the premium taxes imposed by the state of New York.
The policy provides that a charge of 1.25% of each premium payment will be
deducted to cover the federal taxes resulting from the sale of the policy. IDS
Life of New York reserves the right to change this charge in the future if
applicable federal law changes.
6. SURRENDER CHARGE
There are surrender charges for full surrender in the first 15 years of the
policy. They are generally level for 5 years and decreasing the next 10 years.
The surrender charge is $4.00 per $1,000 of the amount used to determine the
death benefit (specified amount). This surrender charge reimburses IDS Life of
New York for the cost of issuing the policy. Charges by IDS Life of New York for
surrenders are not identified on an individual segregated asset account basis.
Charges for all segregated asset accounts amounted to $718,414 for the nine
months ended Sept. 30, 2000, $993,347 in 1999, $886,431 in 1998 and $688,445 in
1997. Such charges are not treated as a separate expense of the subaccounts or
Variable Account. They are ultimately deducted from surrender benefits paid by
IDS Life of New York.
7. INVESTMENT IN SHARES
The subaccounts' investment in shares of the Funds as of Sept. 30, 2000 were as follows:
Subaccount Investment Shares NAV
YEQ IDS Life Series Fund -- Equity Portfolio 2,749,856 $41.18
YGS IDS Life Series Fund -- Government Securities
Portfolio 61,394 9.87
YIN IDS Life Series Fund -- Income Portfolio 628,296 9.24
YIT IDS Life Series Fund -- International Equity
Portfolio 1,145,621 16.76
YMA IDS Life Series Fund -- Managed Portfolio 2,323,692 22.91
YMM IDS Life Series Fund -- Money Market Portfolio 2,207,397 1.00
YGI AIM V.I. Growth and Income Fund 948,185 32.26
YNO Putnam VT New Opportunities Fund - Class IA Shares 720,943 41.97
8. INVESTMENT TRANSACTIONS
The subaccounts' purchases of Funds' shares, including reinvestment of dividend
distributions, were as follows:
Nine month
period ended
Sept. 30, Year ended Dec. 31,
Subaccount Investment 2000 1999 1998 1997
YEQ IDS Life Series Fund-- Equity Portfolio $27,492,386 $ 5,795,202 $14,149,333 $7,620,803
YGS IDS Life Series Fund-- Government Securities
Portfolio 127,321 191,569 247,569 172,859
YIN IDS Life Series Fund-- Income Portfolio
746,023 999,574 1,624,048 1,092,864
YIT IDS Life Series Fund-- International Equity
Portfolio 6,254,640 2,811,966 3,401,869 4,017,372
YMA IDS Life Series Fund-- Managed Portfolio
4,515,573 4,958,516 6,658,468 6,573,036
YMM IDS Life Series Fund-- Money Market Portfolio
3,635,820 4,131,370 2,410,705 1,784,114
YGI AIM V.I. Growth and Income Fund
5,750,142 9,859,243 5,153,905 2,798,870
YNO Putnam VT New Opportunities Fund - Class IA Shares
8,172,459 6,901,504 4,188,738 2,378,386
--------- --------- --------- ---------
Combined Variable Account $56,694,364 $35,648,944 $37,834,635 $26,438,304
IDS LIFE OF NEW YORK ACCOUNT 8 -- FLEXIBLE PREMIUM VARIABLE LIFE SUBACCOUNTS
ANNUAL FINANCIAL INFORMATION
REPORT OF INDEPENDENT AUDITORS
THE BOARD OF DIRECTORS
IDS LIFE INSURANCE COMPANY OF NEW YORK
We have audited the accompanying individual and combined statements of net
assets of the segregated asset subaccounts of
IDS Life of New York Account 8 -- Flexible Premium Survivorship Variable Life
Subaccounts (comprised of subaccounts YEQ, YGS, YIN, YIT, YMA, YMM, YGI, and
YNO) as of December 31, 1999, and the related statements of operations and
changes in net assets for each of the three years in the period then ended.
These financial statements are the responsibility of the management of IDS Life
Insurance Company of New York. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. Our
procedures included confirmation of securities owned at December 31, 1999 with
the affiliated and unaffiliated mutual fund managers. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the individual and combined financial position of the
segregated asset subaccounts of IDS Life of New York Account 8 -- Flexible
Premium Survivorship Variable Life Subaccounts at December 31, 1999 and the
individual and combined results of its operations and the changes in its net
assets for the periods described above, in conformity with accounting principles
generally accepted in the United States.
/s/ ERNST & YOUNG LLP
ERNST & YOUNG LLP
Minneapolis, Minnesota
March 17, 2000
IDS LIFE OF NEW YORK ACCOUNT 8 -- FLEXIBLE PREMIUM VARIABLE LIFE SUBACCOUNTS
- --------------------------------------------------------------------------------
STATEMENTS OF NET ASSETS
SEGREGATED ASSET SUBACCOUNTS
DEC. 31, 1999 YEQ YGS YIN YIT YMA
ASSETS
- ----------------------------------------------------------------------------------------------------------------
Investments in shares of mutual
funds and portfolios:
at cost $ 50,118,129 $654,876 $6,151,156 $13,639,674 $36,394,006
---------------------------------------------------------------------------
at market value $104,248,478 $619,477 $5,777,493 $20,113,366 $51,313,357
Dividends receivable -- 2,867 70,484 -- --
Accounts receivable from IDS Life
of New York for contract purchase
payments 19,977 -- 26,202 12,004 --
Receivable from mutual funds and
portfolios for share redemptions -- -- -- -- --
- ----------------------------------------------------------------------------------------------------------------
Total assets 104,268,455 622,344 5,874,179 20,125,370 51,313,357
- ----------------------------------------------------------------------------------------------------------------
LIABILITIES
- ----------------------------------------------------------------------------------------------------------------
Payable to IDS Life of New York
for:
Mortality and expense risk fee 78,956 476 4,472 15,236 39,053
Contract terminations -- 68 -- -- 1,265
Payable to mutual funds and
portfolios for investments
purchased -- -- -- -- --
- ----------------------------------------------------------------------------------------------------------------
Total liabilities 78,956 544 4,472 15,236 40,318
- ----------------------------------------------------------------------------------------------------------------
Net assets applicable to Variable
Life contracts in accumulation
period $104,189,499 $621,800 $5,869,707 $20,110,134 $51,273,039
- ----------------------------------------------------------------------------------------------------------------
Accumulation units outstanding 14,138,625 283,131 2,493,277 7,011,444 10,457,248
- ----------------------------------------------------------------------------------------------------------------
Net asset value per accumulation
unit $ 7.37 $ 2.20 $ 2.35 $ 2.87 $ 4.90
- ----------------------------------------------------------------------------------------------------------------
COMBINED
SEGREGATED ASSET SUBACCOUNTS VARIABLE
DEC. 31, 1999 YMM YGI YNO ACCOUNT
ASSETS
- ----------------------------------- --------------------------------------------------------------
Investments in shares of mutual
funds and portfolios:
at cost $2,353,647 $17,817,451 $13,393,886 $140,522,825
--------------------------------------------------------------
at market value $2,353,671 $24,670,146 $23,514,494 $232,610,482
Dividends receivable 11,278 -- -- 84,629
Accounts receivable from IDS Life
of New York for contract purchase
payments -- 93,276 52,031 203,490
Receivable from mutual funds and
portfolios for share redemptions -- 18,698 17,669 36,367
- ----------------------------------- --------------------------------------------------------------
Total assets 2,364,949 24,782,120 23,584,194 232,934,968
- ----------------------------------- --------------------------------------------------------------
LIABILITIES
- ----------------------------------- --------------------------------------------------------------
Payable to IDS Life of New York
for:
Mortality and expense risk fee 1,878 18,698 17,669 176,438
Contract terminations 97,287 -- -- 98,620
Payable to mutual funds and
portfolios for investments
purchased -- 93,276 52,031 145,307
- ----------------------------------- --------------------------------------------------------------
Total liabilities 99,165 111,974 69,700 420,365
- ----------------------------------- --------------------------------------------------------------
Net assets applicable to Variable
Life contracts in accumulation
period $2,265,784 $24,670,146 $23,514,494 $232,514,603
- ----------------------------------- --------------------------------------------------------------
Accumulation units outstanding 1,336,769 11,738,977 9,519,818
- ----------------------------------- --------------------------------------------------------------
Net asset value per accumulation
unit $ 1.69 $ 2.10 $ 2.47
- ----------------------------------- --------------------------------------------------------------
See accompanying notes to financial statements.
IDS LIFE OF NEW YORK ACCOUNT 8 -- FLEXIBLE PREMIUM VARIABLE LIFE SUBACCOUNTS
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
SEGREGATED ASSET SUBACCOUNTS
YEAR ENDED DEC. 31, 1999 YEQ YGS YIN YIT YMA
INVESTMENT INCOME
- ---------------------------------------------------------------------------------------------------
Dividend income from mutual funds and
portfolios $ -- $ 38,762 $425,512 $ 398,665 $1,270,807
Mortality and expense risk fee 585,629 6,215 52,970 137,144 391,502
- ---------------------------------------------------------------------------------------------------
Investment income (loss) -- net (585,629) 32,547 372,542 261,521 879,305
- ---------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET
- ---------------------------------------------------------------------------------------------------
Realized gain (loss) on sales of
investments in mutual funds and
portfolios:
Proceeds from sales 3,258,742 197,166 653,512 634,066 1,793,507
Cost of investments sold 2,526,521 204,018 678,758 521,229 1,425,666
- ---------------------------------------------------------------------------------------------------
Net realized gain (loss) on investments 732,221 (6,852) (25,246) 112,837 367,841
Net change in unrealized appreciation or
depreciation of investments 45,611,195 (46,785) (376,233) 4,786,384 8,387,190
- ---------------------------------------------------------------------------------------------------
Net gain (loss) on investments 46,343,416 (53,637) (401,479) 4,899,221 8,755,031
- ---------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations $45,757,787 $(21,090) $(28,937) $5,160,742 $9,634,336
- ---------------------------------------------------------------------------------------------------
COMBINED
SEGREGATED ASSET SUBACCOUNTS VARIABLE
YEAR ENDED DEC. 31, 1999 YMM YGI YNO ACCOUNT
INVESTMENT INCOME
- ---------------------------------------- -----------------------------------------------
Dividend income from mutual funds and
portfolios $ 95,076 $ 202,377 $ 131,852 $ 2,563,051
Mortality and expense risk fee 18,496 141,258 115,978 1,449,192
- ---------------------------------------- -----------------------------------------------
Investment income (loss) -- net 76,580 61,119 15,874 1,113,859
- ---------------------------------------- -----------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
- ---------------------------------------- -----------------------------------------------
Realized gain (loss) on sales of
investments in mutual funds and
portfolios:
Proceeds from sales 3,500,815 94,692 107,800 10,240,300
Cost of investments sold 3,500,800 77,841 86,666 9,021,499
- ---------------------------------------- -----------------------------------------------
Net realized gain (loss) on investments 15 16,851 21,134 1,218,801
Net change in unrealized appreciation or
depreciation of investments 17 5,089,669 8,641,203 72,092,640
- ---------------------------------------- -----------------------------------------------
Net gain (loss) on investments 32 5,106,520 8,662,337 73,311,441
- ---------------------------------------- -----------------------------------------------
Net increase (decrease) in net assets
resulting from operations $ 76,612 $5,167,639 $8,678,211 $74,425,300
- ---------------------------------------- -----------------------------------------------
See accompanying notes to financial statements.
IDS LIFE OF NEW YORK ACCOUNT 8 -- FLEXIBLE PREMIUM VARIABLE LIFE SUBACCOUNTS
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
SEGREGATED ASSET SUBACCOUNTS
YEAR ENDED DEC. 31, 1998 YEQ YGS YIN YIT YMA
INVESTMENT INCOME
- ---------------------------------------------------------------------------------------------------
Dividend income from mutual funds and
portfolios $ 7,962,668 $ 36,677 $ 394,066 $ 530,817 $3,113,690
Mortality and expense risk fee 437,714 5,325 48,402 101,270 317,793
- ---------------------------------------------------------------------------------------------------
Investment income (loss) -- net 7,524,954 31,352 345,664 429,547 2,795,897
- ---------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET
- ---------------------------------------------------------------------------------------------------
Realized gain (loss) on sales of
investments in
mutual funds and portfolios:
Proceeds from sales 881,803 118,640 622,887 292,083 810,846
Cost of investments sold 697,183 117,394 613,975 264,666 694,915
- ---------------------------------------------------------------------------------------------------
Net realized gain (loss) on investments 184,620 1,246 8,912 27,417 115,931
Net change in unrealized appreciation or
depreciation of investments (3,495,686) 9,354 (117,407) 1,434,548 1,593,673
- ---------------------------------------------------------------------------------------------------
Net gain (loss) on investments (3,311,066) 10,600 (108,495) 1,461,965 1,709,604
- ---------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting
from operations $ 4,213,888 $ 41,952 $ 237,169 $1,891,512 $4,505,501
- ---------------------------------------------------------------------------------------------------
COMBINED
SEGREGATED ASSET SUBACCOUNTS VARIABLE
YEAR ENDED DEC. 31, 1998 YMM YGI YNO ACCOUNT
INVESTMENT INCOME
- ---------------------------------------- -----------------------------------------------
Dividend income from mutual funds and
portfolios $ 67,725 $ 130,855 $ 52,867 $12,289,365
Mortality and expense risk fee 12,392 54,253 44,663 1,021,812
- ---------------------------------------- -----------------------------------------------
Investment income (loss) -- net 55,333 76,602 8,204 11,267,553
- ---------------------------------------- -----------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
- ---------------------------------------- -----------------------------------------------
Realized gain (loss) on sales of
investments in
mutual funds and portfolios:
Proceeds from sales 1,840,441 13,030 17,330 4,597,060
Cost of investments sold 1,840,441 11,208 16,292 4,256,074
- ---------------------------------------- -----------------------------------------------
Net realized gain (loss) on investments -- 1,822 1,038 340,986
Net change in unrealized appreciation or
depreciation of investments 2 1,579,781 1,225,925 2,230,190
- ---------------------------------------- -----------------------------------------------
Net gain (loss) on investments 2 1,581,603 1,226,963 2,571,176
- ---------------------------------------- -----------------------------------------------
Net increase (decrease) in net assets
resulting
from operations $ 55,335 $1,658,205 $1,235,167 $13,838,729
- ---------------------------------------- -----------------------------------------------
See accompanying notes to financial statements.
IDS LIFE OF NEW YORK ACCOUNT 8 -- FLEXIBLE PREMIUM VARIABLE LIFE SUBACCOUNTS
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
SEGREGATED ASSET SUBACCOUNTS
YEAR ENDED DEC. 31, 1997 YEQ YGS YIN YIT YMA
INVESTMENT INCOME
- ---------------------------------------------------------------------------------------------------
Dividend income from mutual funds and
portfolios $1,459,523 $ 37,545 $322,998 $209,995 $2,754,122
Mortality and expense risk fee 354,681 4,929 40,932 62,452 257,676
- ---------------------------------------------------------------------------------------------------
Investment income (loss) -- net 1,104,842 32,616 282,066 147,543 2,496,446
- ---------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS -- NET
- ---------------------------------------------------------------------------------------------------
Realized gain (loss) on sales of
investments in
mutual funds and portfolios:
Proceeds from sales 751,190 227,327 476,335 544,898 679,787
Cost of investments sold 596,675 227,369 465,590 504,067 571,899
- ---------------------------------------------------------------------------------------------------
Net realized gain (loss) on investments 154,515 (42) 10,745 40,831 107,888
Net change in unrealized appreciation or
depreciation of investments 5,965,530 7,613 17,158 80,848 1,711,453
- ---------------------------------------------------------------------------------------------------
Net gain (loss) on investments 6,120,045 7,571 27,903 121,679 1,819,341
- ---------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations $7,224,887 $ 40,187 $309,969 $269,222 $4,315,787
- ---------------------------------------------------------------------------------------------------
SEGREGATED ASSET COMBINED
SUBACCOUNTS VARIABLE
YEAR ENDED DEC. 31, 1997 YMM YGI YNO ACCOUNT
INVESTMENT INCOME
- ---------------------------------------- -----------------------------------------------
Dividend income from mutual funds and
portfolios $ 49,171 $ 3,724 $ -- $ 4,837,078
Mortality and expense risk fee 8,873 11,474 10,317 751,334
- ---------------------------------------- -----------------------------------------------
Investment income (loss) -- net 40,298 (7,750) (10,317) 4,085,744
- ---------------------------------------- -----------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
- ---------------------------------------- -----------------------------------------------
Realized gain (loss) on sales of
investments in
mutual funds and portfolios:
Proceeds from sales 1,548,607 52,916 56,134 4,337,194
Cost of investments sold 1,548,623 50,365 53,706 4,018,294
- ---------------------------------------- -----------------------------------------------
Net realized gain (loss) on investments (16) 2,551 2,428 318,900
Net change in unrealized appreciation or
depreciation of investments 5 180,079 253,559 8,216,245
- ---------------------------------------- -----------------------------------------------
Net gain (loss) on investments (11) 182,630 255,987 8,535,145
- ---------------------------------------- -----------------------------------------------
Net increase (decrease) in net assets
resulting from operations $ 40,287 $174,880 $245,670 $12,620,889
- ---------------------------------------- -----------------------------------------------
See accompanying notes to financial statements.
IDS LIFE OF NEW YORK ACCOUNT 8 -- FLEXIBLE PREMIUM VARIABLE LIFE SUBACCOUNTS
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS
YEAR ENDED DEC. 31, 1999 YEQ YGS YIN YIT YMA
OPERATIONS
- --------------------------------------------------------------------------------------------------------
Investment income (loss) -- net $ (585,629) $ 32,547 $ 372,542 $ 261,521 $ 879,305
Net realized gain (loss) on investments 732,221 (6,852) (25,246) 112,837 367,841
Net change in unrealized appreciation or
depreciation of investments 45,611,195 (46,785) (376,233) 4,786,384 8,387,190
- --------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting
from operations 45,757,787 (21,090) (28,937) 5,160,742 9,634,336
- --------------------------------------------------------------------------------------------------------
CONTRACT TRANSACTIONS
- --------------------------------------------------------------------------------------------------------
Contract purchase payments 8,551,838 76,884 937,454 2,690,098 5,781,403
Net transfers* (266,660) (29,547) (297,141) 375,017 16,778
Transfers for policy loans (660,439) 972 (47,618) (148,216) (416,682)
Policy charges (2,555,364) (52,896) (339,475) (548,800) (1,960,792)
Contract terminations:
Surrender benefits (1,845,102) (31,234) (177,402) (431,146) (1,049,766)
Death benefits (161,163) -- (10,084) (23,806) (125,555)
- --------------------------------------------------------------------------------------------------------
Increase (decrease) from contract
transactions 3,063,110 (35,821) 65,734 1,913,147 2,245,386
- --------------------------------------------------------------------------------------------------------
Net assets at beginning of year 55,368,602 678,711 5,832,910 13,036,245 39,393,317
- --------------------------------------------------------------------------------------------------------
Net assets at end of year $104,189,499 $621,800 $5,869,707 $20,110,134 $51,273,039
- --------------------------------------------------------------------------------------------------------
ACCUMULATION UNIT ACTIVITY
- --------------------------------------------------------------------------------------------------------
Units outstanding at beginning of year 13,469,431 300,137 2,465,891 6,172,923 9,922,663
Contract purchase payments 1,912,015 38,617 398,861 1,178,548 1,366,155
Net transfers* (88,739) (18,107) (126,846) 162,379 9,127
Transfers for policy loans (152,457) 445 (20,230) (64,174) (98,711)
Policy charges (569,337) (23,883) (144,424) (241,215) (463,652)
Contract terminations:
Surrender benefits (392,808) (14,078) (75,706) (186,276) (248,464)
Death benefits (39,480) -- (4,269) (10,741) (29,870)
- --------------------------------------------------------------------------------------------------------
Units outstanding at end of year 14,138,625 283,131 2,493,277 7,011,444 10,457,248
- --------------------------------------------------------------------------------------------------------
COMBINED
SEGREGATED ASSET SUBACCOUNTS VARIABLE
YEAR ENDED DEC. 31, 1999 YMM YGI YNO ACCOUNT
OPERATIONS
- ---------------------------------------- ----------------------------------------------------
Investment income (loss) -- net $ 76,580 $ 61,119 $ 15,874 $ 1,113,859
Net realized gain (loss) on investments 15 16,851 21,134 1,218,801
Net change in unrealized appreciation or
depreciation of investments 17 5,089,669 8,641,203 72,092,640
- ---------------------------------------- ----------------------------------------------------
Net increase (decrease) in net assets
resulting
from operations 76,612 5,167,639 8,678,211 74,425,300
- ---------------------------------------- ----------------------------------------------------
CONTRACT TRANSACTIONS
- ---------------------------------------- ----------------------------------------------------
Contract purchase payments 1,668,505 4,193,541 3,518,254 27,417,977
Net transfers* (978,263) 6,517,721 4,066,144 9,404,049
Transfers for policy loans (23,816) (96,776) (101,160) (1,493,735)
Policy charges (183,207) (615,933) (490,797) (6,747,264)
Contract terminations:
Surrender benefits (11,484) (256,831) (197,525) (4,000,490)
Death benefits (5,647) (30,962) (11,094) (368,311)
- ---------------------------------------- ----------------------------------------------------
Increase (decrease) from contract
transactions 466,088 9,710,760 6,783,822 24,212,226
- ---------------------------------------- ----------------------------------------------------
Net assets at beginning of year 1,723,084 9,791,747 8,052,461 133,877,077
- ---------------------------------------- ----------------------------------------------------
Net assets at end of year $2,265,784 $24,670,146 $23,514,494 $232,514,603
- ---------------------------------------- ----------------------------------------------------
ACCUMULATION UNIT ACTIVITY
- ---------------------------------------- -------------------------------------
Units outstanding at beginning of year 1,054,652 6,205,902 5,471,531
Contract purchase payments 1,003,107 2,384,670 2,096,643
Net transfers* (586,229) 3,721,071 2,429,065
Transfers for policy loans (14,477) (55,821) (61,517)
Policy charges (110,009) (351,569) (293,045)
Contract terminations:
Surrender benefits (6,877) (146,760) (115,821)
Death benefits (3,398) (18,516) (7,038)
- ---------------------------------------- -------------------------------------
Units outstanding at end of year 1,336,769 11,738,977 9,519,818
- ---------------------------------------- -------------------------------------
* Includes transfer activity from (to) other subaccounts and transfers from (to)
IDS Life of New York's fixed account.
See accompanying notes to financial statements.
IDS LIFE OF NEW YORK ACCOUNT 8 -- FLEXIBLE PREMIUM VARIABLE LIFE SUBACCOUNTS
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS
YEAR ENDED DEC. 31, 1998 YEQ YGS YIN YIT YMA
OPERATIONS
- -------------------------------------------------------------------------------------------------------
Investment income (loss) -- net $ 7,524,954 $ 31,352 $ 345,664 $ 429,547 $ 2,795,897
Net realized gain (loss) on investments 184,620 1,246 8,912 27,417 115,931
Net change in unrealized appreciation or
depreciation of investments (3,495,686) 9,354 (117,407) 1,434,548 1,593,673
- -------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from
operations 4,213,888 41,952 237,169 1,891,512 4,505,501
- -------------------------------------------------------------------------------------------------------
CONTRACT TRANSACTIONS
- -------------------------------------------------------------------------------------------------------
Contract purchase payments 8,276,481 107,907 873,654 2,484,288 5,414,963
Net transfers* 1,632,511 70,271 306,683 949,063 672,497
Transfers for policy loans (597,388) (6,281) (59,506) (88,294) (474,625)
Policy charges (2,260,287) (46,372) (322,016) (469,309) (1,734,889)
Contract terminations:
Surrender benefits (1,145,779) (17,975) (114,726) (177,402) (706,720)
Death benefits (91,634) (11,432) (28,592) (5,766) (72,095)
- -------------------------------------------------------------------------------------------------------
Increase (decrease) from contract
transactions 5,813,904 96,118 655,497 2,692,580 3,099,131
- -------------------------------------------------------------------------------------------------------
Net assets at beginning of year 45,340,810 540,641 4,940,244 8,452,153 31,788,685
- -------------------------------------------------------------------------------------------------------
Net assets at end of year $55,368,602 $678,711 $5,832,910 $13,036,245 $39,393,317
- -------------------------------------------------------------------------------------------------------
ACCUMULATION UNIT ACTIVITY
- -------------------------------------------------------------------------------------------------------
Units outstanding at beginning of year 11,923,765 256,101 2,183,554 4,819,920 9,079,176
Contracts purchase payments 2,194,522 49,057 376,239 1,257,681 1,478,004
Net transfers* 434,065 32,510 132,004 468,519 183,037
Transfers for policy loans (157,095) (2,916) (25,559) (44,324) (130,705)
Policy charges (598,903) (21,244) (138,639) (236,945) (474,255)
Contract terminations:
Surrender benefits (303,797) (8,261) (49,418) (88,984) (193,111)
Death benefits (23,126) (5,110) (12,290) (2,944) (19,483)
- -------------------------------------------------------------------------------------------------------
Units outstanding at end of year 13,469,431 300,137 2,465,891 6,172,923 9,922,663
- -------------------------------------------------------------------------------------------------------
COMBINED
SEGREGATED ASSET SUBACCOUNTS VARIABLE
YEAR ENDED DEC. 31, 1998 YMM YGI YNO ACCOUNT
OPERATIONS
- ---------------------------------------- ----------------------------------------------------
Investment income (loss) -- net $ 55,333 $ 76,602 $ 8,204 $ 11,267,553
Net realized gain (loss) on investments -- 1,822 1,038 340,986
Net change in unrealized appreciation or
depreciation of investments 2 1,579,781 1,225,925 2,230,190
- ---------------------------------------- ----------------------------------------------------
Net increase (decrease) in net assets
resulting from
operations 55,335 1,658,205 1,235,167 13,838,729
- ---------------------------------------- ----------------------------------------------------
CONTRACT TRANSACTIONS
- ---------------------------------------- ----------------------------------------------------
Contract purchase payments 656,161 2,530,326 2,188,943 22,532,723
Net transfers* 244 2,932,508 2,341,436 8,905,213
Transfers for policy loans 16,135 (62,454) (73,041) (1,345,454)
Policy charges (138,571) (281,819) (251,476) (5,504,739)
Contract terminations:
Surrender benefits (5,617) (59,290) (46,630) (2,274,139)
Death benefits (13,421) -- -- (222,940)
- ---------------------------------------- ----------------------------------------------------
Increase (decrease) from contract
transactions 514,931 5,059,271 4,159,232 22,090,664
- ---------------------------------------- ----------------------------------------------------
Net assets at beginning of year 1,152,818 3,074,271 2,658,062 97,947,684
- ---------------------------------------- ----------------------------------------------------
Net assets at end of year $1,723,084 $9,791,747 $8,052,461 $133,877,077
- ---------------------------------------- ----------------------------------------------------
ACCUMULATION UNIT ACTIVITY
- ---------------------------------------- -------------------------------------
Units outstanding at beginning of year 734,855 2,465,393 2,226,094
Contracts purchase payments 409,620 1,863,213 1,717,997
Net transfers* (1,409) 2,172,226 1,815,859
Transfers for policy loans 10,000 (44,267) (54,454)
Policy charges (86,424) (207,286) (197,732)
Contract terminations:
Surrender benefits (3,504) (43,377) (36,233)
Death benefits (8,486) -- --
- ---------------------------------------- -------------------------------------
Units outstanding at end of year 1,054,652 6,205,902 5,471,531
- ---------------------------------------- -------------------------------------
* Includes transfer activity from (to) other subaccounts and transfers from (to)
IDS Life of New York's fixed account.
See accompanying notes to financial statements.
IDS LIFE OF NEW YORK ACCOUNT 8 -- FLEXIBLE PREMIUM VARIABLE LIFE SUBACCOUNTS
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
SEGREGATED ASSET SUBACCOUNTS
YEAR ENDED DEC. 31, 1997 YEQ YGS YIN YIT YMA
OPERATIONS
- -------------------------------------------------------------------------------------------------------
Investment income (loss) -- net $ 1,104,842 $ 32,616 $ 282,066 $ 147,543 $ 2,496,446
Net realized gain (loss) on investments 154,515 (42) 10,745 40,831 107,888
Net change in unrealized appreciation or
depreciation of investments 5,965,530 7,613 17,158 80,848 1,711,453
- -------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from
operations 7,224,887 40,187 309,969 269,222 4,315,787
- -------------------------------------------------------------------------------------------------------
CONTRACT TRANSACTIONS
- -------------------------------------------------------------------------------------------------------
Contract purchase payments 7,441,563 119,153 784,805 2,330,345 4,816,210
Net transfers* 2,009,267 (100,924) 142,593 1,512,734 1,374,196
Transfers for policy loans (598,478) (5,109) (66,319) (61,032) (441,258)
Policy charges (1,997,018) (46,144) (286,765) (361,587) (1,554,701)
Contract terminations:
Surrender benefits (1,045,185) (37,707) (233,575) (99,532) (793,080)
Death benefits (69,049) (6,354) (6,276) (1,487) (16,407)
- -------------------------------------------------------------------------------------------------------
Increase (decrease) from contract
transactions 5,741,100 (77,085) 334,463 3,319,441 3,384,960
- -------------------------------------------------------------------------------------------------------
Net assets at beginning of year 32,374,823 577,539 4,295,812 4,863,490 24,087,938
- -------------------------------------------------------------------------------------------------------
Net assets at end of year $45,340,810 $ 540,641 $4,940,244 $8,452,153 $31,788,685
- -------------------------------------------------------------------------------------------------------
ACCUMULATION UNIT ACTIVITY
- -------------------------------------------------------------------------------------------------------
Units outstanding at beginning of year 10,218,855 295,283 2,032,494 2,922,492 8,043,384
Contract purchase payments 2,193,598 60,085 358,800 1,327,806 1,469,705
Net transfers* 603,566 (51,527) 64,605 866,461 425,487
Transfers for policy loans (176,623) (2,557) (29,936) (34,345) (134,833)
Policy charges (588,039) (23,054) (131,741) (205,879) (475,355)
Contract terminations:
Surrender benefits (308,629) (19,111) (107,894) (55,746) (244,414)
Death benefits (18,963) (3,018) (2,774) (869) (4,798)
- -------------------------------------------------------------------------------------------------------
Units outstanding at end of year 11,923,765 256,101 2,183,554 4,819,920 9,079,176
- -------------------------------------------------------------------------------------------------------
COMBINED
SEGREGATED ASSET SUBACCOUNTS VARIABLE
YEAR ENDED DEC. 31, 1997 YMM YGI YNO ACCOUNT
OPERATIONS
- ---------------------------------------- ----------------------------------------------------
Investment income (loss) -- net $ 40,298 $ (7,750) $ (10,317) $ 4,085,744
Net realized gain (loss) on investments (16) 2,551 2,428 318,900
Net change in unrealized appreciation or
depreciation of investments 5 180,079 253,559 8,216,245
- ---------------------------------------- ----------------------------------------------------
Net increase (decrease) in net assets
resulting from
operations 40,287 174,880 245,670 12,620,889
- ---------------------------------------- ----------------------------------------------------
CONTRACT TRANSACTIONS
- ---------------------------------------- ----------------------------------------------------
Contract purchase payments 890,628 828,706 881,192 18,092,602
Net transfers* (455,707) 2,014,043 1,557,633 8,053,835
Transfers for policy loans (71,130) (5,786) (11,001) (1,260,113)
Policy charges (104,917) (68,945) (77,116) (4,497,193)
Contract terminations:
Surrender benefits (20,637) (16,584) (20,126) (2,266,426)
Death benefits (43,028) -- -- (142,601)
- ---------------------------------------- ----------------------------------------------------
Increase (decrease) from contract
transactions 195,209 2,751,434 2,330,582 17,980,104
- ---------------------------------------- ----------------------------------------------------
Net assets at beginning of year 917,322 147,957 81,810 67,346,691
- ---------------------------------------- ----------------------------------------------------
Net assets at end of year $1,152,818 $3,074,271 $2,658,062 $97,947,684
- ---------------------------------------- ----------------------------------------------------
ACCUMULATION UNIT ACTIVITY
- ---------------------------------------- -------------------------------------
Units outstanding at beginning of year 605,111 147,682 83,723
Contract purchase payments 577,058 697,652 805,177
Net transfers* (292,656) 1,695,960 1,434,487
Transfers for policy loans (45,562) (4,945) (9,924)
Policy charges (68,238) (57,282) (69,750)
Contract terminations:
Surrender benefits (13,385) (13,674) (17,619)
Death benefits (27,473) -- --
- ---------------------------------------- -------------------------------------
Units outstanding at end of year 734,855 2,465,393 2,226,094
- ---------------------------------------- -------------------------------------
* Includes transfer activity from (to) other subaccounts and transfers from (to)
IDS Life of New York's fixed account.
See accompanying notes to financial statements.
IDS LIFE OF NEW YORK ACCOUNT 8 -- FLEXIBLE PREMIUM VARIABLE LIFE SUBACCOUNTS
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION
IDS Life of New York Account 8 (the Variable Account) was established under New
York law on Sept. 12, 1985 as a segregated asset account of IDS Life Insurance
Company of New York (IDS Life of New York). The Variable Account is registered
as a single unit investment trust under the Investment Company Act of 1940, as
amended (the 1940 Act). Operations of the Variable Account commenced on
Aug. 31, 1987.
The Variable Account is comprised of various subaccounts. Each subaccount
invests exclusively in shares of the following portfolios or funds (the Funds),
which are registered under the 1940 Act as diversified open-end management
investment companies and have the following investment managers.
SUBACCOUNT INVESTS EXCLUSIVELY IN SHARES OF INVESTMENT MANAGER
- ----------------------------------------------------------------------------------------------------------------------
YEQ IDS Life Series Fund -- Equity Portfolio IDS Life Insurance Company(1)
YGS IDS Life Series Fund -- Government Securities Portfolio IDS Life Insurance Company(1)
YIN IDS Life Series Fund -- Income Portfolio IDS Life Insurance Company(1)
YIT IDS Life Series Fund -- International Equity Portfolio IDS Life Insurance Company(1)
YMA IDS Life Series Fund -- Managed Portfolio IDS Life Insurance Company(1)
YMM IDS Life Series Fund -- Money Market Portfolio IDS Life Insurance Company(1)
YGI AIM V.I. Growth and Income Fund A I M Management Group Inc.
YNO Putnam VT New Opportunities Fund - Class IA Shares Putnam Investment Management, Inc.
- ----------------------------------------------------------------------------------------------------------------------
(1) American Express Financial Corporation (AEFC) is the investment advisor.
The assets of each subaccount of the Variable Account are not chargeable with
liabilities arising out of the business conducted by any other segregated asset
account or by IDS Life of New York.
American Express Financial Advisors Inc., an affiliate of IDS Life of New York,
serves as distributor of the Flexible Premium Survivorship Variable Life Policy.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
INVESTMENTS IN THE FUNDS
Investments in shares of the Funds are stated at market value which is the net
asset value per share as determined by the respective Fund. Investment
transactions are accounted for on the date the shares are purchased and sold.
The cost of investments sold and redeemed is determined on the average cost
method. Dividend distributions received from the Funds are reinvested in
additional shares of the Funds and are recorded as income by the subaccounts on
the ex-dividend date.
Unrealized appreciation or depreciation of investments in the accompanying
financial statements represents the subaccounts' share of the Funds'
undistributed net investment income, undistributed realized gain or loss and the
unrealized appreciation or depreciation on their investment securities.
IDS LIFE OF NEW YORK ACCOUNT 8 -- FLEXIBLE PREMIUM VARIABLE LIFE SUBACCOUNTS
USE OF ESTIMATES
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the date of the financial
statements and the reported amounts of increase and decrease in net assets from
operations during the period. Actual results could differ from those estimates.
FEDERAL INCOME TAXES
IDS Life of New York is taxed as a life insurance company. The Variable Account
is treated as part of IDS Life of New York for federal income tax purposes.
Under existing federal income tax law, no income taxes are payable with respect
to any investment income of the Variable Account.
3. MORTALITY AND EXPENSE RISK FEE AND POLICY CHARGES
IDS Life of New York makes contractual assurances to the Variable Account that
possible future adverse changes in administrative expenses and mortality
experience of the policy owners and beneficiaries will not affect the Variable
Account. The mortality and expense risk fee paid to IDS Life of New York is
computed daily and is equal, on an annual basis, to 0.9% of the average daily
net asset value of the subaccount. A monthly deduction is made for the cost of
insurance and the policy fee. The cost of insurance for the policy month is
determined on the monthly date by determining the net amount at risk, as of that
day, and by then applying the cost of insurance rates to the net amount at risk
which IDS Life of New York is assuming for the succeeding month. The monthly
deduction will be taken from the subaccounts as specified in the application for
the policy.
IDS Life of New York deducts a policy fee of $30 per month for the first 15
years. This charge reimburses IDS Life of New York for expenses incurred in
administering the policy, such as processing claims, maintaining records, making
policy changes and communicating with owners of policies. IDS Life of New York
does not anticipate that it will make any profit on this charge. IDS Life of New
York reserves the right to change this charge in the future, but guarantees that
it will never exceed $30 per month.
4. OPTIONAL INSURANCE BENEFIT CHARGE
Each month IDS Life of New York deducts charges for any optional insurance
benefits added to the policy by rider.
5. PREMIUM EXPENSE CHARGE
IDS Life of New York deducts charges for three separate items from each premium
payment. The total of these charges is called the premium expense charge.
Details regarding these three charges follows.
A sales charge of 7.25% of each premium payment is deducted to compensate IDS
Life of New York for expenses in distributing the policy, including agents'
compensation, advertising and printing the prospectus and sales literature.
The policy provides that a charge of 1% of each premium payment is deducted to
cover the premium taxes imposed by the state of New York.
The policy provides that a charge of 1.25% of each premium payment will be
deducted to cover the federal taxes resulting from the sale of the policy. IDS
Life of New York reserves the right to change this charge in the future if
applicable federal law changes.
IDS LIFE OF NEW YORK ACCOUNT 8 -- FLEXIBLE PREMIUM VARIABLE LIFE SUBACCOUNTS
6. SURRENDER CHARGE
There are surrender charges for full surrender in the first 15 years of the
policy. They are generally level for 5 years and decreasing the next 10 years.
The surrender charge is $4.00 per $1,000 of the amount used to determine the
death benefit (specified amount). This surrender charge reimburses IDS Life of
New York for the cost of issuing the policy. Charges by IDS Life of New York for
surrenders are not identified on an individual segregated asset account basis.
Charges for all segregated asset accounts amounted to $993,347 in 1999, $886,431
in 1998 and $688,445 in 1997. Such charges are not treated as a separate expense
of the subaccounts or Variable Account. They are ultimately deducted from
surrender benefits paid by IDS Life of New York.
7. INVESTMENT IN SHARES
The subaccounts' investment in shares of the Funds as of Dec. 31, 1999 were as
follows:
SUBACCOUNT INVESTMENT SHARES NAV
- -------------------------------------------------------------------
IDS Life Series Fund -- Equity
YEQ Portfolio 2,092,703 $49.82
IDS Life Series Fund -- Government
YGS Securities Portfolio 64,436 9.61
IDS Life Series Fund -- Income
YIN Portfolio 616,847 9.37
IDS Life Series Fund --
YIT International Equity Portfolio 834,669 24.10
IDS Life Series Fund -- Managed
YMA Portfolio 2,221,289 23.10
IDS Life Series Fund -- Money
YMM Market Portfolio 2,353,853 1.00
YGI AIM V.I. Growth and Income Fund 780,948 31.59
Putnam VT New Opportunities Fund -
YNO Class IA Shares 540,066 43.54
- -------------------------------------------------------------------
8. INVESTMENT TRANSACTIONS
The subaccounts' purchases of Funds' shares, including reinvestment of dividend
distributions, were as follows:
YEAR ENDED DEC. 31,
SUBACCOUNT INVESTMENT 1999 1998 1997
- ----------------------------------------------------------------------------------
IDS Life Series Fund -- Equity
YEQ Portfolio $ 5,795,202 $14,149,333 $ 7,620,803
IDS Life Series Fund --
Government Securities
YGS Portfolio 191,569 247,569 172,859
IDS Life Series Fund -- Income
YIN Portfolio 999,574 1,624,048 1,092,864
IDS Life Series Fund --
YIT International Equity Portfolio 2,811,966 3,401,869 4,017,372
IDS Life Series Fund --
YMA Managed Portfolio 4,958,516 6,658,468 6,573,036
IDS Life Series Fund -- Money
YMM Market Portfolio 4,131,370 2,410,705 1,784,114
AIM V.I. Growth and Income
YGI Fund 9,859,243 5,153,905 2,798,870
Putnam VT New Opportunities
YNO Fund - Class IA Shares 6,901,504 4,188,738 2,378,386
- ----------------------------------------------------------------------------------
Combined Variable Account $35,648,944 $37,834,635 $26,438,304
- ----------------------------------------------------------------------------------
9. YEAR 2000 (UNAUDITED)
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
IDS LIFE OF NEW YORK ACCOUNT 8 -- FLEXIBLE PREMIUM VARIABLE LIFE SUBACCOUNTS
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 any 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 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.
IDS LIFE INSURANCE COMPANY OF NEW YORK
BALANCE SHEET
September 30, 2000
(unaudited)
($ thousands, except share amounts)
ASSETS
Investments:
Fixed maturities:
Held to maturity, at amortized cost (fair value:
2000, $408,986) $413,461
Available for sale, at fair value (amortized cost:
2000, $564,012) 540,974
---------
954,435
Mortgage loans on real estate 145,396
Policy Loans 30,266
Other investments
34
Total investments 1,130,131
Cash and Cash equivalents 32,056
Amounts recoverable from reinsurers 8,905
Accounts receivable 1,787
Premiums due 261
Accrued investment income 17,239
Deferred policy acquisition costs 143,004
Other assets 929
Separate account assets 1,903,454
--------------
Total assets $3,237,766
LIABILITIES AND STOCKHOLDER'S EQUITY
Liabilities:
Future policy benefits:
Fixed annuities $782,669
Universal life-type insurance 158,937
Traditional life, disability income and long-term care insurance 72,178
Policy claims and other policyholders' funds 2,595
Amounts due to brokers 1,997
Deferred income taxes 246
Other liabilities 18,012
Separate account liabilities 1,903,455
-------------
Total liabilities 2,940,089
Stockholder's equity:
Capital stock, $100 par value per share;
200,000 shares authorized, issued and outstanding 2,000
Additional paid-in capital 49,000
Accumulated other comprehensive income:
Net unrealized securities losses (14,682)
Retained earnings 261,359
Total stockholder's equity 297,677
Total liabilities and stockholder's equity $3,237,766
See accompanying notes.
IDS LIFE INSURANCE COMPANY OF NEW YORK
STATEMENTS OF INCOME
Nine months ended September 30,
(unaudited)
($ thousands)
2000 1999
Revenues:
Traditional life, disability income and long-term
care insurance premiums $13,281 $11,443
Policy holder and contractholder charges 17,923 16,424
Mortality and expense risk fees 15,733 12,436
Net investment income 69,641 71,880
Net realized gain on investments 737 1,145
----------- ---------
Total revenues 117,315 113,328
--------- --------
Benefits and expenses:
Death and other benefits:
Traditional life, disability income and long-term
care insurance 4,047 4,150
Universal life-type insurance and investment
contracts 3,092 4,876
Increase in liabilities for future policy benefits for
traditional life, disability income and long-term care
insurance 5,640 4,501
Interest credited on universal life-type insurance and
investment contracts 35,713 38,078
Amortization of deferred policy acquisition costs 11,461 13,624
Other insurance and operating expenses 6,967 6,790
--------- ----------
Total benefits and expenses 66,920 72,019
-------- -------
Income before income taxes 50,395 41,309
Income taxes 17,806 14,081
---------- ------------
Net income $ 32,589 $ 27,228
========= =========
See accompanying notes.
IDS LIFE INSURANCE COMPANY OF NEW YORK
STATEMENTS OF CASH FLOWS
Nine months ended September 30,
(unaudited)
($ thousands)
2000 1999
Cash flows from operating activities:
Net income $32,589 $27,228
Adjustments to reconcile net income to net cash
provided by operating activities:
Policy loans, excluding universal
life-type insurance:
Issuance (2,796) (2,289)
Repayment 2,192 1,989
Change in accrued investment income 1,126 1,756
Change in amounts recoverable from reinsurer (1,991) (2,095)
Change in accounts receivable (1,220) (260)
Change in other assets (205) (36)
Change in deferred policy acquisition costs, net (7,092) (1,581)
Change in liabilities for future policy benefits for
traditional life, disability income and long-term
care insurance 7,900 6,025
Change in policy claims and other
policyholders' funds 12 (687)
Deferred income tax provision 3,977 1,129
Change in other liabilities (3,422) 2,487
Accretion of discount, net 35 (1,602)
Net realized gain on investments (737) (1,145)
Policyholder and contractholder charges, non-cash (6,725) (7,215)
Other, net (669) 77
--------- ---------
Net cash provided by operating activities $22,974 $23,781
See accompanying notes.
IDS LIFE INSURANCE COMPANY OF NEW YORK
STATEMENTS OF CASH FLOWS (continued)
Years ended December 31,
($ thousands)
2000 1999
------ -----
Cash flows from investing activities: Fixed maturities held to maturity:
Purchases $ (34) $ --
Maturities, sinking fund payments and calls 20,582 33,165
Fixed maturities available for sale:
Purchases (59,663) (142,010)
Maturities, sinking fund payments and calls 21,128 36,638
Sales 54,593 72,615
Other investments, excluding policy loans:
Purchases -- (913)
Sales 9,562 13,806
Change in amounts due to brokers 1,998 2,502
----- -----
Net cash provided by investing activities 48,166 15,803
Cash flows from financing activities:
Activity related to universal life-type insurance
and investment contracts:
Considerations received 38,055 49,336
Surrenders and death benefits (103,849) (116,340)
Interest credited to account balances 35,713 38,078
Universal life-type insurance policy loans:
Issuance (4,388) (4,055)
Repayment 2,254 2,390
Cash dividend to parent (15,000) (12,000)
------- -------
Net cash used in financing activities (47,215) (42,591)
Net increase in cash and cash equivalents 23,925 (3,007)
Cash and cash equivalents at beginning of year 8,131 3,007
------- --------
Cash and cash equivalents at end of year $ 32,056 $ --
======== ========
See accompanying notes.
IDS LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO FINANCIAL STATEMENTS
(unaudited)
1. General
In the opinion of the management of IDS Life Insurance Company of New York
(the Company), the accompanying unaudited financial statements contain all
adjustments (consisting of normal recurring adjustments) necessary to present
fairly its balance sheet as of September 30, 2000 and the related statements of
income and cash flows for the nine month periods ended September 30, 2000 and
1999.
2. New Accounting Pronouncement
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative Instruments
and Hedging Activities", which is effective January 1, 2001. This statement
establishes accounting and reporting standards for derivative instruments,
including certain derivative instruments embedded in other contracts, and for
hedging activities. It requires that an entity recognize all derivatives as
either assets or liabilities in the balance sheet and measure those instruments
at fair value. The accounting for changes in the fair value of a derivative
depends on the intended use of the derivative and the resulting designation. The
Company holds no derivative instruments or embedded derivatives at September 30,
2000. Therefore, adoption of the new statement is expected to have no impact on
the financial position or results of operations of the Company.
IDS LIFE INSURANCE COMPANY OF NEW YORK
FINANCIAL INFORMATION
REPORT OF INDEPENDENT AUDITORS
THE BOARD OF DIRECTORS
IDS LIFE INSURANCE COMPANY OF NEW YORK
We have audited the accompanying balance sheets of IDS Life Insurance Company of
New York (a wholly-owned subsidiary of IDS Life Insurance Company) as of
December 31, 1999 and 1998, and the related statements of income, stockholder's
equity and cash flows for each of the three years in the period ended December
31, 1999. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of IDS Life Insurance Company of
New York at December 31, 1999 and 1998, and the results of its operations and
its cash flows for each of the three years in the period ended December 31,
1999, in conformity with accounting principles generally accepted in the
United States.
ERNST & YOUNG LLP
February 3, 2000
Minneapolis, Minnesota
- --------------------------------------------------------------------------------
IDS LIFE INSURANCE COMPANY OF NEW YORK F-1
IDS LIFE INSURANCE COMPANY OF NEW YORK
BALANCE SHEETS
DECEMBER 31, ($ THOUSANDS) 1999 1998
ASSETS
- -----------------------------------------------------------------
Investments:
Fixed maturities:
Held to maturity, at amortized cost
(fair value:
1999, $432,004; 1998, $503,909) $ 434,343 $ 473,592
Available for sale, at fair value
(amortized cost:
1999, $579,014; 1998, $561,325) 555,574 578,591
- -----------------------------------------------------------------
989,917 1,052,183
Mortgage loans on real estate 154,062 166,835
Policy loans 27,528 25,421
Other investments -- 566
- -----------------------------------------------------------------
Total investments 1,171,507 1,245,005
Cash and cash equivalents 8,131 3,007
Amounts recoverable from reinsurers 6,914 4,077
Accounts receivable 567 842
Premiums due 199 204
Accrued investment income 18,365 19,893
Deferred policy acquisition costs 136,229 129,477
Deferred income taxes 3,881 --
Other assets 723 1,042
Separate account assets 1,957,703 1,491,679
- -----------------------------------------------------------------
Total assets $3,304,219 $2,895,226
- -----------------------------------------------------------------
LIABILITIES AND STOCKHOLDER'S EQUITY
- -----------------------------------------------------------------
Liabilities:
Future policy benefits:
Fixed annuities $ 821,992 $ 875,507
Universal life-type insurance 156,420 152,195
Traditional life, disability income and
long-term care insurance 64,278 55,910
Policy claims and other policyholders'
funds 2,584 3,105
Deferred income taxes -- 7,912
Amounts due to brokers -- 4,507
Other liabilities 21,432 24,945
Separate account liabilities 1,957,703 1,491,679
- -----------------------------------------------------------------
Total liabilities 3,024,409 2,615,760
- -----------------------------------------------------------------
Stockholder's equity:
Capital stock, $10 par value per
share;
200,000 shares authorized, issued and
outstanding 2,000 2,000
Additional paid-in capital 49,000 49,000
Accumulated other comprehensive (loss)
income:
Net unrealized securities (losses) gains (14,966) 11,014
- -----------------------------------------------------------------
Retained earnings 243,776 217,452
- -----------------------------------------------------------------
Total stockholder's equity 279,810 279,466
- -----------------------------------------------------------------
Total liabilities and stockholder's
equity $3,304,219 $2,895,226
=================================================================
See accompanying notes.
- --------------------------------------------------------------------------------
F-2 IDS LIFE INSURANCE COMPANY OF NEW YORK
IDS LIFE INSURANCE COMPANY OF NEW YORK
STATEMENTS OF INCOME
YEARS ENDED DECEMBER 31, ($ THOUSANDS) 1999 1998 1997
REVENUES:
- --------------------------------------------------------------------------------------------
Traditional life, disability income and long-term care
insurance premiums $ 15,613 $ 13,852 $ 12,376
Policyholder and contractholder charges 22,502 20,467 18,319
Mortality and expense risk fees 17,019 13,980 11,312
Net investment income 95,514 100,871 106,274
Net realized gains on investments 1,386 2,163 547
- --------------------------------------------------------------------------------------------
Total revenues 152,034 151,333 148,828
- --------------------------------------------------------------------------------------------
BENEFITS AND EXPENSE:
- --------------------------------------------------------------------------------------------
Death and other benefits:
Traditional life, disability income and long-term care
insurance 5,579 5,553 3,633
Universal life-type insurance and investment contracts 6,313 4,320 3,852
Increase in liabilities for future policy benefits for for
traditional life, disability income and long-term care
insurance 6,098 3,662 3,979
Interest credited on universal life-type insurance and
investment contracts 50,767 55,073 62,294
Amortization of deferred policy acquisition costs 15,787 18,362 17,201
Other insurance and operating expenses 9,925 8,917 10,220
- --------------------------------------------------------------------------------------------
Total benefits and expenses 94,469 95,887 101,179
- --------------------------------------------------------------------------------------------
Income before income taxes 57,565 55,446 47,649
Income taxes 19,241 19,098 16,471
- --------------------------------------------------------------------------------------------
Net income $ 38,324 $ 36,348 $ 31,178
============================================================================================
See accompanying notes.
- --------------------------------------------------------------------------------
IDS LIFE INSURANCE COMPANY OF NEW YORK F-3
IDS LIFE INSURANCE COMPANY OF NEW YORK
STATEMENTS OF STOCKHOLDER'S EQUITY
ACCUMULATED
OTHER
TOTAL ADDITIONAL COMPREHENSIVE
STOCKHOLDER'S CAPITAL PAID-IN (LOSS) INCOME, RETAINED
THREE YEARS ENDED DECEMBER 31, 1999 ($ THOUSANDS) EQUITY STOCK CAPITAL NET OF TAX EARNINGS
COMPREHENSIVE INCOME:
- ---------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1996 $ 229,863 $ 2,000 $ 49,000 $ 6,937 $171,926
Net income 31,178 -- -- -- 31,178
Unrealized holding gains arising during the year,
net of deferred policy acquisition costs of ($1)
and taxes of ($3,412) 6,337 -- -- 6,337 --
Reclassification adjustment for gains included in
net income, net of tax of $54 (99) -- -- (99) --
Other comprehensive income 6,238 -- -- 6,238 --
- ---------------------------------------------------------------------------------------------------------------------
Comprehensive income 37,416 -- --
Cash dividends to parent (10,000) -- -- -- (10,000)
- ---------------------------------------------------------------------------------------------------------------------
COMPREHENSIVE INCOME:
- ---------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1997 257,279 2,000 49,000 13,175 193,104
Net income 36,348 -- -- -- 36,348
Unrealized holding losses arising during the year,
net of deferred policy acquisition costs of $22
and taxes of $1,415 (2,628) -- -- (2,628) --
Reclassification adjustment for losses included in
net income, net of tax of ($252) 467 -- -- 467 --
- ---------------------------------------------------------------------------------------------------------------------
Other comprehensive loss (2,161) -- -- (2,161) --
Comprehensive income 34,187 -- --
- ---------------------------------------------------------------------------------------------------------------------
Cash dividends to parent (12,000) -- -- -- (12,000)
- ---------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1998 279,466 2,000 49,000 11,014 217,452
COMPREHENSIVE INCOME:
- ---------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1998 279,466 2,000 49,000 11,014 217,452
Net income 38,324 -- -- -- 38,324
Unrealized holding losses arising during the year,
net of deferred policy acquisition costs of $737
and of taxes of $13,537 (25,140) -- -- (25,140) --
Reclassification adjustment for gains included in
net income, net of tax of $452 (840) -- -- (840) --
- ---------------------------------------------------------------------------------------------------------------------
Other comprehensive loss (25,980) -- -- (25,980) --
Comprehensive income 12,344 -- --
- ---------------------------------------------------------------------------------------------------------------------
Cash dividends to parent (12,000) -- -- -- (12,000)
- ---------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1999 $ 279,810 $ 2,000 $ 49,000 $(14,966) $243,776
- ---------------------------------------------------------------------------------------------------------------------
See accompanying notes.
- --------------------------------------------------------------------------------
F-4 IDS LIFE INSURANCE COMPANY OF NEW YORK
IDS LIFE INSURANCE COMPANY OF NEW YORK
STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, ($ THOUSANDS) 1999 1998 1997
CASH FLOWS FROM OPERATING ACTIVITIES:
- -----------------------------------------------------------------------------------------------
Net income $ 38,324 $ 36,348 $ 31,178
Adjustments to reconcile net income to net cash provided by
operating activities:
Policy loans, excluding universal life-type insurance:
Issuance (3,063) (3,110) (3,073)
Repayment 2,826 2,660 1,897
Change in accrued investment income 1,528 312 863
Change in amounts recoverable from reinsurer (2,837) (1,760) (1,345)
Change in premiums due 5 (12) (50)
Change in accounts receivable 275 (119) 218
Change in other assets 319 (47) (95)
Change in deferred policy acquisition costs, net (6,015) (2,841) (7,431)
Change in liabilities for future policy benefits for
traditional life, disability income and long-term care
insurance 8,368 5,441 5,131
Change in policy claims and other policyholders' funds (522) (908) 858
Deferred income tax provision (benefit) 2,196 (2,369) (960)
Change in other liabilities (3,513) (3,986) 3,468
Accretion of discount, net (1,794) (342) (352)
Net realized gain on investments (1,386) (2,163) (547)
Policyholder and contractholder charges, non-cash (9,875) (9,661) (8,772)
Other, net 1,859 118 715
- -----------------------------------------------------------------------------------------------
Net cash provided by operating activities $ 26,695 $ 17,561 $ 21,703
CASH FLOWS FROM INVESTING ACTIVITIES:
- -----------------------------------------------------------------------------------------------
Fixed maturities held to maturity:
Maturities, sinking fund payments and calls $ 37,852 $ 46,629 $ 36,511
Sales 790 16,173 12,616
Fixed maturities available for sale:
Purchases (155,690) (86,072) (101,818)
Maturities, sinking fund payments and calls 50,515 96,578 84,229
Sales 89,683 13,180 27,055
Other investments, excluding policy loans:
Purchases (3,598) (9,121) (33,243)
Sales 16,671 21,113 14,233
Change in amounts due from brokers -- -- 995
Change in amounts due to brokers (4,507) (24,547) 26,047
- -----------------------------------------------------------------------------------------------
Net cash provided by investing activities 31,716 73,933 66,625
CASH FLOWS FROM FINANCING ACTIVITIES:
- -----------------------------------------------------------------------------------------------
Activity related to universal life-type insurance and
investment contracts:
Considerations received 68,978 76,009 112,732
Surrenders and death benefits (159,161) (205,946) (251,259)
Interest credited to account balances 50,767 55,073 62,294
Universal life-type insurance policy loans:
Issuance (5,057) (5,222) (4,848)
Repayment 3,186 3,599 2,753
Cash dividend to parent (12,000) (12,000) (10,000)
- -----------------------------------------------------------------------------------------------
Net cash used in financing activities (53,287) (88,487) (88,328)
- -----------------------------------------------------------------------------------------------
Net increase in cash and cash equivalents 5,124 3,007 --
Cash and cash equivalents at beginning of year 3,007 -- --
- -----------------------------------------------------------------------------------------------
Cash and cash equivalents at end of year $ 8,131 $ 3,007 $ --
- -----------------------------------------------------------------------------------------------
See accompanying notes.
- --------------------------------------------------------------------------------
IDS LIFE INSURANCE COMPANY OF NEW YORK F-5
NOTES TO FINANCIAL STATEMENTS ($ THOUSANDS)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NATURE OF BUSINESS
IDS Life Insurance Company of New York (the Company) is engaged in the insurance
and annuity business in the state of New York. The Company's principal products
are deferred annuities and universal life insurance which are issued primarily
to individuals. It offers single premium and flexible premium deferred annuities
on both a fixed and variable dollar basis. Immediate annuities are offered as
well. The Company's insurance products include universal life (fixed and
variable), whole life, single premium life and term products (including waiver
of premium and accidental death benefits). The Company also markets disability
income and long-term care insurance.
BASIS OF PRESENTATION
The Company is a wholly owned subsidiary of IDS Life Insurance Company (IDS
Life), which is a wholly owned subsidiary of American Express Financial
Corporation (AEFC), which is a wholly owned subsidiary of American Express
Company. The accompanying financial statements have been prepared in conformity
with accounting principles generally accepted in the United States which vary in
certain respects from reporting practices prescribed or permitted by the New
York Department of Insurance as reconciled in Note 11.
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
INVESTMENTS
Fixed maturities that the Company has both the positive intent and the ability
to hold to maturity are classified as held to maturity and carried at amortized
cost. All other fixed maturities and all marketable equity securities are
classified as available for sale and carried at fair value. Unrealized gains and
losses on securities classified as available for sale are reported as a separate
component of accumulated other comprehensive (loss) income, net of deferred
policy acquisition costs and deferred income taxes.
Realized investment gains or losses are determined on an identified cost basis.
Prepayments are anticipated on certain investments in mortgage-backed securities
in determining the constant effective yield used to recognize interest income.
Prepayment estimates are based on information received from brokers who deal in
mortgage-backed securities.
Mortgage loans on real estate are carried at amortized cost less reserves for
mortgage loan losses. The estimated fair value of the mortgage loans is
determined by a discounted cash flow analysis using mortgage interest rates
currently offered for mortgages of similar maturities.
Impairment of mortgage loans is measured as the excess of the loan's recorded
investment over its present value of expected principal and interest payments
discounted at the loan's effective interest rate, or the fair value of
collateral. The amount of the impairment is recorded in an allowance for
mortgage loan losses. The allowance for mortgage loan losses is maintained at a
level that management believes is adequate to absorb estimated losses in the
portfolio. The level of the allowance account is determined based on several
factors, including historical experience, expected future principal and interest
payments, estimated collateral
- --------------------------------------------------------------------------------
F-6 IDS LIFE INSURANCE COMPANY OF NEW YORK
values, and current economic and political conditions. Management regularly
evaluates the adequacy of the allowance for mortgage loan losses.
The Company generally stops accruing interest on mortgage loans for which
interest payments are delinquent more than three months. Based on management's
judgment as to the ultimate collectibility of principal, interest payments
received are either recognized as income or applied to the recorded investment
in the loan.
The cost of interest rate caps is amortized to investment income over the life
of the contracts and payments received as a result of these agreements are
recorded as investment income when realized.
Policy loans are carried at the aggregate of the unpaid loan balances which do
not exceed the cash surrender values of the related policies.
When evidence indicates a decline, which is other than temporary, in the
underlying value or earning power of individual investments, such investments
are written down to the fair value by a charge to income.
STATEMENTS OF CASH FLOWS
The Company considers investments with a maturity at the date of their
acquisition of three months or less to be cash equivalents. These securities are
carried principally at amortized cost which approximates fair value.
Supplementary information to the statements of cash flows for the years ended
December 31 is summarized as follows:
1999 1998 1997
- --------------------------------------------------------------
Cash paid during the year for:
Income taxes $20,670 $22,470 $17,811
Interest on borrowings 124 1,600 1,026
RECOGNITION OF PROFITS ON ANNUITY CONTRACTS AND INSURANCE POLICIES
Profits on fixed deferred annuities are recognized by the Company over the lives
of the contracts, using primarily the interest method. Profits represent the
excess of investment income earned from investment of contract considerations
over interest credited to contract owners and other expenses.
The retrospective deposit method is used in accounting for universal life-type
insurance. This method recognizes profits over the lives of the policies in
proportion to the estimated gross profits expected to be realized.
Premiums on traditional life, disability income and long-term care insurance
policies are recognized as revenue when due, and related benefits and expenses
are associated with premium revenue in a manner that results in recognition of
profits over the lives of the insurance policies. This association is
accomplished by means of the provision for future policy benefits and the
deferral and subsequent amortization of policy acquisition costs.
Policyholder and contractholder charges include the monthly cost of insurance
charges, issue and administrative fees and surrender charges. These charges also
include the minimum death benefit guarantee fees received from the variable life
insurance separate accounts. Mortality and expense fees are received from the
variable annuity and variable life insurance separate accounts.
DEFERRED POLICY ACQUISITION COSTS
The costs of acquiring new business, principally sales compensation, policy
issue costs, underwriting and certain sales expenses, have been deferred on
insurance and annuity contracts. The deferred acquisition costs for most single
premium deferred annuities
- --------------------------------------------------------------------------------
IDS LIFE INSURANCE COMPANY OF NEW YORK F-7
and installment annuities are amortized primarily using the interest method. The
costs for universal life-type insurance and certain installment annuities are
amortized as a percentage of the estimated gross profits expected to be realized
on the policies. For traditional life, disability income and long-term care
insurance policies, the costs are amortized over an appropriate period in
proportion to premium revenue.
Amortization of deferred policy acquisition costs requires the use of
assumptions including interest margins, mortality margins, persistency rates,
maintenance expense levels and, for variable products, separate account
performance. For universal life-type insurance and deferred annuities, actual
experience is reflected in the Company's amortization models monthly. As actual
experience differs from the current assumptions, management considers the need
to change key assumptions underlying the amortization models prospectively. The
impact of changing prospective assumptions is reflected in the period that such
changes are made and is generally referred to as an unlocking adjustment. Net
unlocking adjustments in 1999, 1998 and 1997 were not significant.
LIABILITIES FOR FUTURE POLICY BENEFITS
Liabilities for universal-life type insurance and fixed and variable deferred
annuities are accumulation values.
Liabilities for equity indexed deferred annuities are determined as the present
value of guaranteed benefits and the intrinsic value of index-based benefits.
Liabilities for future benefits on traditional life insurance are based on the
net level premium method, using anticipated mortality, policy persistency and
interest earning rates. Anticipated mortality rates are based on established
industry mortality tables. Anticipated policy persistency rates vary by policy
form, issue age and policy duration with persistency on cash value plans
generally anticipated to be better than persistency on term insurance plans.
Anticipated interest rates range from 4% to 10%, depending on policy form, issue
year and policy duration.
Liabilities for future disability income and long-term care policy benefits
include both policy reserves and claim reserves. Policy reserves are based on
the net level premium method, using anticipated morbidity, mortality, policy
persistency and interest earning rates. Anticipated morbidity and mortality
rates are based on established industry morbidity and mortality tables.
Anticipated policy persistency rates vary by policy form, issue age, policy
duration and, for disability income policies, occupation class. Anticipated
interest rates for disability income and long-term care policy reserves are 3%
to 9.5% at policy issue and grade to ultimate rates of 5% to 7% over 4 to 10
years.
Claim reserves are calculated based on claim continuance tables and anticipated
interest earnings. Anticipated claim continuance rates are based on established
industry tables. Anticipated interest rates for claim reserves for both
disability income and long-term care range from 5% to 8%.
REINSURANCE
The maximum amount of life insurance risk retained by the Company is $750 on any
policy insuring a single life and $1,500 on any policy insuring a joint-life
combination. Risk not retained is reinsured with other life insurance companies,
primarily on a yearly renewable term basis. Long-term care policies are
primarily reinsured on a coinsurance basis. The Company retains all disability
income and waiver of premium risk. Beginning in 2000, the Company will retain
all accidental death benefit risk.
FEDERAL INCOME TAXES
The Company's taxable income is included in the consolidated federal income tax
return of American Express Company. The Company provides for income taxes on a
separate return basis, except that, under an agreement between AEFC and American
- --------------------------------------------------------------------------------
F-8 IDS LIFE INSURANCE COMPANY OF NEW YORK
Express Company, tax benefit is recognized for losses to the extent they can be
used on the consolidated tax return. It is the policy of AEFC and its
subsidiaries that AEFC will reimburse subsidiaries for all tax benefits.
Included in other liabilities at December 31, 1999 and 1998 are $366, and
$3,647, respectively, payable to IDS Life for federal income taxes.
SEPARATE ACCOUNT BUSINESS
The separate account assets and liabilities represent funds held for the
exclusive benefit of the variable annuity and variable life insurance contract
owners. The Company receives mortality and expense risk fees from the variable
annuity separate accounts.
The Company makes contractual mortality assurances to the variable annuity
contract owners that the net assets of the separate accounts will not be
affected by future variations in the actual life expectancy experience of the
annuitants and beneficiaries from the mortality assumptions implicit in the
annuity contracts. The Company makes periodic fund transfers to, or withdrawals
from, the separate account assets for such actuarial adjustments for variable
annuities that are in the benefit payment period. The Company also guarantees
that the rates at which administrative fees are deducted from contract funds
will not exceed contractual maximums.
For variable life insurance, the Company guarantees that the rates at which
insurance charges and administrative fees are deducted from contract funds will
not exceed contractual maximums. The Company also guarantees that the death
benefit will continue payable at the initial level regardless of investment
performance so long as minimum premium payments are made.
ACCOUNTING CHANGES
American Institute of Certified Public Accountants (AICPA) Statement of Position
(SOP) 98-1, "Accounting for Costs of Computer Software Developed or Obtained for
Internal Use" became effective January 1, 1999. The SOP requires the
capitalization of certain costs incurred after the date of adoption to develop
or obtain software for internal use. Software utilized by the Company is owned
by AEFC and capitalized by AEFC. As a result, the new rule did not have a
material impact on the Company's results of operations or financial condition.
Effective January 1, 1999, the Company adopted AICPA SOP 97-3, "Accounting by
Insurance and Other Enterprises for Insurance-Related Assessments," providing
guidance for the timing of recognition of liabilities related to guaranty fund
assessments. The Company had historically carried a balance in other liabilities
on the balance sheet for potential guaranty fund assessment exposure. Adoption
of the SOP did not have a material impact on the Company's results of operations
or financial condition.
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative Instruments
and Hedging Activities," which is effective January 1, 2001. This Statement
establishes accounting and reporting standards for derivative instruments,
including certain derivative instruments embedded in other contracts, and for
hedging activities. It requires that an entity recognize all derivatives as
either assets or liabilities in the balance sheet and measure those instruments
at fair value. The accounting for changes in the fair value of a derivative
depends on the intended use of the derivative and the resulting designation. The
ultimate financial effect of the new rule will be measured based on the
derivatives in place at adoption and cannot be estimated at this time.
PERMITTED STATUTORY ACCOUNTING PRACTICES
The Company's statutory-basis financial statements are prepared in accordance
with accounting practices prescribed or permitted by the New York Insurance
Department. Currently, "prescribed" statutory practices are interspersed
throughout state insurance laws and regulations, the NAIC ACCOUNTING PRACTICES
AND PROCEDURES MANUAL and a variety of other NAIC publications. "Permitted"
- --------------------------------------------------------------------------------
IDS LIFE INSURANCE COMPANY OF NEW YORK F-9
statutory accounting practices encompass all accounting practices that are not
prescribed: such practices may differ from state to state, may differ from
company to company within a state, and may change in the future.
In 1998, the NAIC adopted codified statutory accounting principles
("Codification") effective January 1, 2001. Codification will likely change, to
some extent, prescribed statutory accounting practices and may result in changes
to the accounting practices that the Company uses to prepare its statutory-basis
financial statements. Codification will require adoption by the various states
before it becomes the prescribed statutory basis of accounting for insurance
companies domesticated within those states. Accordingly, before Codification
becomes effective for the Company, the State of New York must adopt Codification
as the prescribed basis of accounting on which domestic insurers must report
their statutory-basis results to the Insurance Department. New York has not yet
made a decision regarding whether or not it will accept Codification. While
management has not yet determined the impact of Codification to the Company's
statutory-basis financial statements, it does not believe the impact will be
material.
RECLASSIFICATIONS
Certain 1998 and 1997 amounts have been reclassified to conform to the 1999
presentation.
2. INVESTMENTS
Fair values of investments in fixed maturities represent quoted market prices
and estimated values when quoted prices are not available. Estimated values are
determined by established procedures involving, among other things, review of
market indices, price levels of current offerings of comparable issues, price
estimates and market data from independent brokers and financial files.
The amortized cost, gross unrealized gains and losses and fair value of
investments in fixed maturities at December 31, 1999 are as follows:
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED FAIR
HELD TO MATURITY COST GAINS LOSSES VALUE
- ----------------------------------------------------------------------------------------
U.S. Government agency
obligations $ 2,490 $ 20 $ 150 $ 2,360
Corporate bonds and
obligations 384,241 6,066 7,058 383,249
Mortgage-backed securities 47,612 103 1,320 46,395
- ----------------------------------------------------------------------------------------
$434,343 $ 6,189 $ 8,528 $432,004
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED FAIR
AVAILABLE FOR SALE COST GAINS LOSSES VALUE
- ----------------------------------------------------------------------------
State and municipal
obligations $ 104 $ 6 $ -- $ 110
Corporate bonds and
obligations 374,846 2,324 20,325 356,845
Mortgage-backed securities 204,064 580 6,025 198,619
- ----------------------------------------------------------------------------
$579,014 $ 2,910 $26,350 $555,574
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
- --------------------------------------------------------------------------------
F-10 IDS LIFE INSURANCE COMPANY OF NEW YORK
The amortized cost, gross unrealized gains and losses and fair value of
investments in fixed maturities at December 31, 1998 are as follows:
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED FAIR
HELD TO MATURITY COST GAINS LOSSES VALUE
- ----------------------------------------------------------------------------
U.S. Government agency
obligations $ 2,871 $ 159 $ -- $ 3,030
Corporate bonds and
obligations 417,648 29,795 474 446,969
Mortgage-backed securities 53,073 844 7 53,910
- ----------------------------------------------------------------------------
$473,592 $30,798 $ 481 $503,909
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED FAIR
AVAILABLE FOR SALE COST GAINS LOSSES VALUE
- ----------------------------------------------------------------------------
State and municipal
obligations $ 105 $ 9 $ -- $ 114
Corporate bonds and
obligations 336,985 15,939 6,296 346,628
Mortgage-backed securities 224,235 7,614 -- 231,849
- ----------------------------------------------------------------------------
$561,325 $23,562 $ 6,296 $578,591
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
The amortized cost and fair value of investments in fixed maturities at December
31, 1999 by contractual maturity are shown below. Expected maturities will
differ from contractual maturities because borrowers may have the right to call
or prepay obligations with or without call or prepayment penalties.
AMORTIZED FAIR
HELD TO MATURITY COST VALUE
- --------------------------------------------------------------------
Due in one year or less $ 14,966 $ 15,118
Due from one to five years 213,933 214,972
Due from five to ten years 111,707 111,314
Due in more than ten years 46,125 44,205
Mortgage-backed securities 47,612 46,395
- --------------------------------------------------------------------
$434,343 $432,004
- --------------------------------------------------------------------
- --------------------------------------------------------------------
AMORTIZED FAIR
AVAILABLE FOR SALE COST VALUE
- --------------------------------------------------------------------
Due in one year or less $ 14,422 $ 14,657
Due from one to five years 37,204 37,477
Due from five to ten years 214,169 203,150
Due in more than ten years 109,155 101,671
Mortgage-backed securities 204,064 198,619
- --------------------------------------------------------------------
$579,014 $555,574
- --------------------------------------------------------------------
- --------------------------------------------------------------------
During the years ended December 31, 1999, 1998 and 1997, fixed maturities
classified as held to maturity were sold with amortized cost of $790, $16,175
and $12,737, respectively. Net gains and losses on these sales were not
significant. The sale of these fixed maturities was due to significant
deterioration in the issuers' creditworthiness.
Fixed maturities available for sale were sold during 1999 with proceeds of
$89,683 and gross realized gains and losses of $1,917 and $625, respectively.
Fixed maturities available for sale were sold during 1998 with proceeds of
$13,180 and gross realized gains and
- --------------------------------------------------------------------------------
IDS LIFE INSURANCE COMPANY OF NEW YORK F-11
losses of $1,159 and $440, respectively. Fixed maturities available for sale
were sold during 1997 with proceeds of $27,055 and gross realized gains and
losses of $461 and $309, respectively.
At December 31, 1999, bonds carried at $254 were on deposit with the state of
New York as required by law.
At December 31, 1999, investments in fixed maturities comprised 85 percent of
the Company's total invested assets. These securities are rated by Moody's and
Standard & Poor's (S&P), except for securities carried at approximately $147
million which are rated by AEFC internal analysts using criteria similar to
Moody's and S&P. A summary of investments in fixed maturities, at amortized
cost, by rating on December 31 is as follows:
RATING 1999 1998
- ----------------------------------------------------------------
Aaa/AAA $ 250,577 $ 280,669
Aa/AA 12,992 15,815
Aa/A 25,489 16,327
A/A 150,187 151,838
A/BBB 68,417 68,640
Baa/BBB 354,331 366,776
Baa/BB 23,562 39,666
Below investment grade 127,802 95,186
- ----------------------------------------------------------------
$1,013,357 $1,034,917
- ----------------------------------------------------------------
- ----------------------------------------------------------------
At December 31, 1999, 94 percent of the securities rated Aaa/AAA are GNMA, FNMA
and FHLMC mortgage-backed securities. No holdings of any other issuer are
greater than one percent of the Company's total investments in fixed maturities.
At December 31, 1999, approximately 13 percent of the Company's investments were
mortgage loans on real estate. Summaries of mortgage loans by region of the
United States and by type of real estate are as follows:
DECEMBER 31, 1999 DECEMBER 31, 1998
ON BALANCE COMMITMENTS ON BALANCE COMMITMENTS
REGION SHEET TO PURCHASE SHEET TO PURCHASE
- --------------------------------------------------------------------------------
West North Central $ 22,686 $ -- $ 24,725 $ --
East North Central 25,195 -- 29,134 59
South Atlantic 31,748 -- 34,175 598
Middle Atlantic 17,672 -- 18,350 --
Pacific 6,751 -- 9,706 --
Mountain 35,608 -- 36,636 --
New England 8,209 -- 7,851 --
East South Central 7,394 -- 7,521 --
West South Central 0 -- 237 --
- --------------------------------------------------------------------------------
155,262 -- 168,335 657
Less allowance for losses 1,200 -- 1,500 --
- --------------------------------------------------------------------------------
$154,062 $ -- $166,835 $657
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
F-12 IDS LIFE INSURANCE COMPANY OF NEW YORK
DECEMBER 31, 1999 DECEMBER 31, 1998
ON BALANCE COMMITMENTS ON BALANCE COMMITMENTS
PROPERTY TYPE SHEET TO PURCHASE SHEET TO PURCHASE
- --------------------------------------------------------------------------------
Apartments $ 54,118 $ -- $ 59,019 $ --
Department/retail stores 49,810 -- 54,018 624
Office buildings 22,090 -- 23,902 --
Industrial buildings 16,938 -- 18,590 33
Nursing/retirement 5,058 -- 5,153 --
Medical buildings 7,248 -- 7,416 --
Hotels/motels -- -- 237 --
- --------------------------------------------------------------------------------
155,262 -- 168,335 657
Less allowance for losses 1,200 -- 1,500 --
- --------------------------------------------------------------------------------
$154,062 $ -- $166,835 $657
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Mortgage loan fundings are restricted by state insurance regulatory authority to
80 percent or less of the market value of the real estate at the time of
origination of the loan. The Company holds the mortgage document, which gives it
the right to take possession of the property if the borrower fails to perform
according to the terms of the agreement. The fair value of the mortgage loans is
determined by a discounted cash flow analysis using mortgage interest rates
currently offered for mortgages of similar maturities. Commitments to purchase
mortgages are made in the ordinary course of business. The fair value of the
mortgage commitments is $nil.
At December 31, 1999 and 1998, the Company's recorded investment in impaired
loans was $nil and $1,268, with allowances of $nil and $300, respectively.
During 1999 and 1998, the average recorded investment in impaired loans was $nil
and $1,282, respectively.
The Company recognized $2, $123 and $126 of interest income related to impaired
loans for the years ended December 31, 1999, 1998 and 1997, respectively.
The following table presents changes in the allowance for investment losses
related to all loans:
1999 1998 1997
- -----------------------------------------------------------
Balance, January 1 $1,500 $1,500 $1,300
Provision (reduction) for
investment losses (300) -- 200
- -----------------------------------------------------------
Balance, December 31 $1,200 $1,500 $1,500
- -----------------------------------------------------------
- -----------------------------------------------------------
Net investment income for the years ended December 31 is summarized as follows:
1999 1998 1997
- ----------------------------------------------------------------
Interest on fixed maturities $78,342 $ 85,164 $ 92,007
Interest on mortgage loans 12,895 14,599 14,228
Other investment income 4,764 3,365 1,715
Interest on cash equivalents 350 64 91
- ----------------------------------------------------------------
96,351 103,192 108,041
Less investment expenses 837 2,321 1,767
- ----------------------------------------------------------------
$95,514 $100,871 $106,274
- ----------------------------------------------------------------
- ----------------------------------------------------------------
- --------------------------------------------------------------------------------
IDS LIFE INSURANCE COMPANY OF NEW YORK F-13
Net realized gains (losses) on investments for the years ended December 31 is
summarized as follows:
1999 1998 1997
- -----------------------------------------------------------
Fixed maturities $1,086 $2,018 $ 844
Mortgage loans 300 -- (200)
Other investments -- 145 (97)
- -----------------------------------------------------------
$1,386 $2,163 $ 547
- -----------------------------------------------------------
- -----------------------------------------------------------
Changes in net unrealized appreciation (depreciation) of investments for the
years ended December 31 are summarized as follows:
1999 1998 1997
- --------------------------------------------------------------
Fixed maturities available for sale $(40,706) $(3,347) $9,599
3. INCOME TAXES
The Company qualifies as a life insurance company for federal income tax
purposes. As such, the Company is subject to the Internal Revenue Code
provisions applicable to life insurance companies.
The income tax expense (benefit) for the years ending December 31 consists of
the following:
1999 1998 1997
- --------------------------------------------------------------
Federal income taxes:
Current $16,426 $20,192 $16,371
Deferred 2,196 (2,369) (960)
- --------------------------------------------------------------
18,622 17,823 15,411
State income taxes-current 619 1,275 1,060
- --------------------------------------------------------------
Income tax expense $19,241 $19,098 $16,471
- --------------------------------------------------------------
- --------------------------------------------------------------
Increases (decreases) to the income tax provision applicable to pretax income
based on the statutory rate are attributable to:
1999 1998 1997
PROVISION RATE PROVISION RATE PROVISION RATE
- -------------------------------------------------------------------------------
Federal income taxes
based on the statutory
rate $20,148 35.0% $19,406 35.0% $16,677 35.0%
Increases (decreases) are
attributable to:
Tax-excluded interest and
dividend income (509) (0.9) (660) (1.2) (569) (1.2)
State tax, net of federal
benefit 402 0.7 829 1.5 689 1.4
Other, net (800) (1.4) (477) (0.9) (326) (0.6)
- -------------------------------------------------------------------------------
Total income taxes $19,241 33.4% $19,098 34.4% $16,471 34.6%
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
A portion of life insurance company income earned prior to 1984 was not subject
to current taxation but was accumulated, for tax purposes, in a "policyholders'
surplus account." At December 31, 1999, the Company had a policyholders' surplus
account balance of $798. The policyholders' surplus account is only taxable if
dividends to the stockholder exceed the stockholder's surplus account or if the
Company is liquidated. Deferred income taxes of $279 have not been established
because no distributions of such amounts are contemplated.
- --------------------------------------------------------------------------------
F-14 IDS LIFE INSURANCE COMPANY OF NEW YORK
Significant components of the Company's deferred income tax assets and
liabilities as of December 31 are as follows:
1999 1998
- ----------------------------------------------------------
Deferred income tax assets:
Policy reserves $28,245 $29,318
Investments 6,980 --
Other 6,690 6,502
- ----------------------------------------------------------
Total deferred income tax assets 41,915 35,820
- ----------------------------------------------------------
- ----------------------------------------------------------
Deferred income tax liabilities:
Deferred policy acquisition costs 38,033 36,673
Investments -- 7,059
- ----------------------------------------------------------
Total deferred income tax liabilities 38,033 43,732
- ----------------------------------------------------------
Net deferred income tax assets
(liabilities) $ 3,882 ($7,912)
- ----------------------------------------------------------
- ----------------------------------------------------------
The Company is required to establish a valuation allowance for any portion of
the deferred income tax assets that management believes will not be realized. In
the opinion of management, it is more likely than not that the Company will
realize the benefit of the deferred tax assets and, therefore, no such valuation
allowance has been established.
4. STOCKHOLDER'S EQUITY
Retained earnings available for distribution as dividends to IDS Life are
limited to the Company's surplus as determined in accordance with accounting
practices prescribed by the New York Department of Insurance. All dividend
distributions must be approved by the New York Department of Insurance.
Statutory unassigned surplus aggregated $155,952 and $132,702 as of
December 31, 1999 and 1998, respectively (see Note 3 with respect to the income
tax effect of certain distributions and Note 11 for a reconciliation of net
income and stockholder's equity per the accompanying financial statements to
statutory net income and surplus).
BENEFIT PLANS
The Company participates in the American Express Company Retirement Plan which
covers all permanent employees age 21 and over who have met certain employment
requirements. Employer contributions to the plan are based on participants' age,
years of service and total compensation for the year. Funding of retirement
costs for this plan complies with the applicable minimum funding requirements
specified by ERISA. The Company's share of the total net periodic pension cost
was $27, $37 and $39 in 1999, 1998 and 1997, respectively.
The Company has a "Sales Benefit Plan" which is an unfunded, noncontributory
retirement plan for all eligible financial advisors. Total plan costs for 1999,
1998 and 1997, which are calculated on the basis of commission earnings of the
individual financial advisors, were $1,446, $1,480 and $1,965, respectively.
Such costs are included in deferred policy acquisition costs.
The Company also participates in defined contribution pension plans of American
Express Company which cover all employees who have met certain employment
requirements. Company contributions to the plans are a percent of either each
employee's eligible compensation or basic contributions. Costs of these plans
charged to operations in 1999, 1998 and 1997 were $218, $252 and $312,
respectively.
- --------------------------------------------------------------------------------
IDS LIFE INSURANCE COMPANY OF NEW YORK F-15
The Company participates in defined benefit health care plans of AEFC that
provide health care and life insurance benefits to retired employees and retired
financial advisors. The plans include participant contributions and
service-related eligibility requirements. Upon retirement, such employees are
considered to have been employees of AEFC. Costs of these plans charged to
operations in 1999, 1998 and 1997 were $nil.
6. INCENTIVE PLAN AND RELATED PARTY OPERATING EXPENSES
The Company maintains a "Persistency Payment Plan." Under the terms of this
plan, financial advisors earn additional compensation based on the volume and
persistency of insurance sales. The total costs for the plan for 1999, 1998 and
1997 were $96, $140 and $1,490, respectively. Such costs are included in
deferred policy acquisition costs.
Charges by IDS Life and AEFC for the use of joint facilities, marketing services
and other services aggregated $13,042, $9,403 and $11,589 for 1999, 1998 and
1997, respectively. Certain of these costs are included in deferred policy
acquisition costs.
7. COMMITMENTS AND CONTINGENCIES
In January 2000, AEFC reached an agreement in principle to settle three
class-action lawsuits. The Company had been named as a co-defendant in one of
these lawsuits. It is expected the settlement will provide $215 million of
benefits to more than 2 million participants. The agreement in principle to
settle also provides for release by class members of all insurance and annuity
market conduct claims dating back to 1985 and is subject to a number of
contingencies including a definitive agreement and court approval. The portion
of the settlement allocated to the Company did not have a material impact on the
Company's financial position or results from operations.
At December 31, 1999 and 1998, traditional life insurance and universal
life-type insurance in force aggregated $5,448,451 and $4,941,727 respectively,
of which $272,276 and $248,280 were reinsured at the respective year ends.
In addition, the Company has a stop loss reinsurance agreement with IDS Life
covering ordinary life benefits. IDS Life agrees to pay all death benefits
incurred each year which exceed 125 percent of normal claims, where normal
claims are defined in the agreement as .095 percent of the mean retained life
insurance in force. Premiums ceded to IDS Life amounted to $150, $134 and $115
for the years ended December 31, 1999, 1998 and 1997, respectively. Claim
recoveries under the terms of this reinsurance agreement were $nil, $nil and
$963 in 1999, 1998 and 1997, respectively.
Premiums ceded to reinsurers other than IDS Life amounted to $2,873, $2,178 and
$1,583 for the years ended December 31, 1999, 1998 and 1997, respectively. Claim
recoveries from reinsurers other than IDS Life amounted to $473, $228 and $1,366
for the years ended December 31, 1999, 1998 and 1997, respectively.
Reinsurance contracts do not relieve the Company from its primary obligations to
policyholders.
The Company has an agreement to assume a block of extended term life insurance
business. The amount of insurance in force related to this agreement was
$237,038 and $267,806 at December 31, 1999 and 1998, respectively. The
accompanying statement of income includes premiums of $nil for the years ended
December 31, 1999, 1998 and 1997, and decreases in liabilities for future policy
benefits of $1,277, $1,742 and $1,889 related to this agreement for the years
ended December 31, 1999, 1998 and 1997, respectively.
- --------------------------------------------------------------------------------
F-16 IDS LIFE INSURANCE COMPANY OF NEW YORK
8. LINES OF CREDIT
The Company has an available line of credit with AEFC aggregating $25,000. The
interest rate for any borrowing is established by reference to various indicies
plus 20 to 45 basis points depending on the term. There were no borrowings
outstanding under this agreement at December 31, 1999 or 1998.
9. DERIVATIVE FINANCIAL INSTRUMENTS
The Company enters into transactions involving derivative financial instruments
to manage its exposure to interest rate risk, including hedging specific
transactions. The Company does not hold derivative instruments for trading
purposes. The Company manages risks associated with these instruments as
described below.
Market risk is the possibility that the value of the derivative financial
instruments will change due to fluctuations in a factor from which the
instrument derives its value, primarily an interest rate. The Company is not
impacted by market risk related to derivatives held for non-trading purposes
beyond that inherent in cash market transactions. Derivatives are largely used
to manage risk and, therefore, the cash flow and income effects of the
derivatives are inverse to the effects of the underlying transactions.
Credit risk is the possibility that the counterparty will not fulfill the terms
of the contract. The Company monitors credit risk related to derivative
financial instruments through established approval procedures, including setting
concentration limits by counterparty and industry, and requiring collateral,
where appropriate. The Company's counterpart is rated A or better by Moody's and
Standard & Poor's.
Credit risk related to interest rate caps is measured by replacement cost of the
contracts. The replacement cost represents the fair value of the instruments.
The notional or contract amount of a derivative financial instrument is
generally used to calculate the cash flows that are received or paid over the
life of the agreement. Notional amounts are not recorded on the balance sheet.
Notional amounts far exceed the related credit exposure.
The Company's holdings of derivative financial instruments are as follows:
NOTIONAL CARRYING FAIR TOTAL CREDIT
DECEMBER 31, 1999 AMOUNT AMOUNT VALUE EXPOSURE
- ------------------------------------------------------------------------------------------
Assets:
Interest rate caps $200,000 $ -- $ -- $ --
- ------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------
DECEMBER 31, 1998
- ------------------------------------------------------------------------------------------
Assets:
Interest rate caps $200,000 $566 $ 2 $ 2
- ------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------
The fair values of derivative financial instruments are based on market values,
dealer quotes or pricing models. The interest rate caps expire in the year 2000.
Interest rate caps are used to manage the Company's exposure to interest rate
risk. These instruments are used primarily to protect the margin between
interest rates earned on investments and the interest rates credited to related
annuity contract holders.
- --------------------------------------------------------------------------------
IDS LIFE INSURANCE COMPANY OF NEW YORK F-17
10. FAIR VALUES OF FINANCIAL INSTRUMENTS
The Company discloses fair value information for most on- and off-balance sheet
financial instruments for which it is practicable to estimate that value. Fair
values of life insurance obligations, receivables and all non-financial
instruments, such as deferred acquisition costs, are excluded. Off-balance sheet
intangible assets, such as the value of the field force, are also excluded.
Management believes the value of excluded assets and liabilities is significant.
The fair value of the Company, therefore, cannot be estimated by aggregating the
amounts presented.
1999 1998
CARRYING FAIR CARRYING FAIR
FINANCIAL ASSETS AMOUNT VALUE AMOUNT VALUE
- ------------------------------------------------------------------------------
Investments:
Fixed maturities (Note 2):
Held to maturity $ 434,343 $ 432,004 $ 473,592 $ 503,909
Available for sale 555,574 555,574 578,591 578,591
Mortgage loans on real
estate (Note 2) 154,062 152,942 166,835 178,559
Other:
Derivative financial
instruments (Note 9) -- -- 566 2
Separate accounts assets
(Note 1) 1,957,703 1,957,703 1,491,679 1,491,679
1999 1998
CARRYING FAIR CARRYING FAIR
FINANCIAL LIABILITIES AMOUNT VALUE AMOUNT VALUE
- ------------------------------------------------------------------------------
Future policy benefits for
fixed annuities $ 732,752 $ 715,213 $ 788,780 $ 765,430
Separate account liabilities 1,722,028 1,668,067 1,355,430 1,302,422
At December 31, 1999 and 1998, the carrying amount and fair value of future
policy benefits for fixed annuities exclude life insurance-related contracts
carried at $83,646 and $81,358, respectively, and policy loans of $5,594 and
$5,369, respectively. The fair value of these benefits is based on the status of
the annuities at December 31, 1999 and 1998. The fair value of deferred
annuities is estimated as the carrying amount less any surrender charges and
related loans. The fair value for annuities in non-life contingent payout status
is estimated as the present value of projected benefit payments at rates
appropriate for contracts issued in 1999 and 1998.
At December 31, 1999 and 1998, the fair value of liabilities related to separate
accounts is estimated as the carrying amount less applicable surrender charges
and less variable insurance contracts carried at $235,675 and $136,249,
respectively.
- --------------------------------------------------------------------------------
F-18 IDS LIFE INSURANCE COMPANY OF NEW YORK
11. STATUTORY INSURANCE ACCOUNTING PRACTICES
Reconciliations of net income for the years ended December 31 and stockholder's
equity at December 31, as shown in the accompanying financial statements, to
that determined using statutory accounting practices are as follows:
1999 1998 1997
- -----------------------------------------------------------------
Net income, per accompanying
financial statements $ 38,324 $ 36,348 $ 31,178
Deferred policy acquisition costs (6,015) (2,841) (7,432)
Adjustments of future policy
benefit liabilities (4,615) (6,199) (4,928)
Deferred income tax benefit 2,196 (2,369) (960)
Provision for losses on investments (161) 862 296
IMR gain/loss transfer and
amortization (154) (1,451) (119)
Adjustment to separate account
reserves 5,498 2,767 10,267
Other, net 766 (350) 430
- -----------------------------------------------------------------
Net income, on basis of statutory
accounting practices $ 35,839 $ 26,767 $ 28,732
- -----------------------------------------------------------------
- -----------------------------------------------------------------
Stockholder's equity, per
accompanying financial statements $279,810 $279,466 $257,279
Deferred policy acquisition costs (136,229) (129,477) (126,614)
Adjustments of future policy
benefit liabilities 2,845 4,697 9,452
Deferred income taxes (3,881) 7,912 11,445
Asset valuation reserve (16,164) (15,516) (16,698)
Adjustments of separate account
liabilities 61,721 56,223 53,456
Adjustments of investments to
amortized cost 23,440 (17,266) (20,613)
Premiums due, deferred and advance 1,485 1,381 1,237
Deferred revenue liability 3,021 2,482 1,941
Allowance for losses 1,200 1,500 1,645
Non-admitted assets (421) (450) (552)
Interest maintenance reserve (3,155) (3,001) (1,551)
Other, net (5,416) (2,915) (1,463)
- -----------------------------------------------------------------
Stockholder's equity, on basis of
statutory accounting practices $208,256 $185,036 $168,963
- -----------------------------------------------------------------
- -----------------------------------------------------------------
12. YEAR 2000 (UNAUDITED)
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 the Company. All of the
major systems used by the Company are maintained by AEFC and are utilized by
multiple subsidiaries and affiliates of AEFC. The Company'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 the Company, 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 December 31, 1999, AEFC had completed its
program of corrective measures on its internal systems and applications,
including Year 2000 compliance testing. As of December 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 the Company's operations.
- --------------------------------------------------------------------------------
IDS LIFE INSURANCE COMPANY OF NEW YORK F-19
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. At December 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 January 1, 2000, management believes no material adverse consequences were
experienced, and there was no material effect on the Company's business, results
of operations, or financial condition as a result of the Year 2000 issue.
- --------------------------------------------------------------------------------
F-20 IDS LIFE INSURANCE COMPANY OF NEW YORK
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 PRE-EFFECTIVE AMENDMENT NO. 1
This Pre-Effective Amendment No. 1 comprises the following papers and documents:
The facing sheet.
The prospectus consisting of 57 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 is filed
electronically herewith.
(4) Not applicable.
(5) (a) Flexible Premium Variable Life Insurance
Policy (VUL3-NY) is filed electronically
herewith.
(b) Waiver of Monthly Deduction Rider for Total
Disability is filed electronically herewith.
(c) Accidental Death Benefit Rider is filed
electronically herewith.
(d) Other Insured Rider is filed electronically
herewith.
(e) Children's Term Insurance Rider is filed
electronically herewith.
(f) Automatic Increase Benefit Rider is filed
electronically herewith.
(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.***
(9) None.
(10) (a) Application form for the Flexible Premium
Variable Life Insurance Policy.**
(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 is filed
electronically herewith.
B. (1) Not applicable.
(2) Not applicable.
C. Not applicable.
2. Opinion of counsel is filed electronically herewith.
3. Not applicable.
4. Not applicable.
5. Not applicable.
6. Actuarial Opinion is filed electronically herewith.
7. Written actuarial consent is filed electronically herewith.
8. Written auditor consent of Ernst & Young LLP is filed electronically
herewith.
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.
10. Consent in writing to establish additional subaccounts.
* 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 9th
day of November, 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 9th day of November, 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