Supplement Dated December 29, 2000*
                   to the Prospectus Dated October 3, 2000 of
          American Express New Solutions Variable AnnuitySM (240355 A)

This supplement replaces the supplement dated May 1, 2000 that is printed in the
back of the American Express New Solutions Variable AnnuitySM prospectus.

The  following  subsection  is added to the "Making  the Most of Your  Contract"
section  of  the  prospectus   following  the  subsection   entitled  "Automated
dollar-cost  averaging."

Special dollar-cost  averaging program

If your contract value** is at least $10,000,  you may elect to allocate any new
purchase  payments of at least  $10,000 to a six-month or  twelve-month  account
under this program.  You may not transfer money you previously  invested in this
contract into the program.

We will  credit your  purchase  payment  (and any  applicable  purchase  payment
credit)  with  interest at the current  guaranteed  annual rate in effect on the
date we receive your money. We credit a higher interest rate on program accounts
than on the one-year  fixed  account.  We will change the rates for new purchase
payments from time to time at our discretion. We base these rates on competition
and the interest rate we credit on the one-year fixed account at the time of the
change.  Once we set the interest rate for a payment, it does not change even if
your contract value changes.

We apply these rates to the balance  remaining in the program accounts and we do
not credit  interest  after we transfer  money to the accounts you selected.  We
transfer  money out of the program  accounts into the accounts you selected on a
monthly  basis.  We transfer all money out of the program within the time period
(six or twelve months) you selected.  If you fund this program with money from a
different existing annuity or life insurance  contract (1035 exchange),  we will
deposit  money into the program  account as it arrives.  This means that some of
the money may be transferred out of the program in less than the time period you
selected (six or twelve months), and you may receive less total interest than if
we  received  all of the money at one time.  If we receive the last of the money
from your 1035 exchange  after the  expiration of the six-month or  twelve-month
period,  you have the option of allocating this money to another program account
(if available) or any accounts you select.

If you have money in the  program,  you will not be able to allocate  additional
purchase payments to the program unless another interest rate is in effect.

You may not  participate  in this  program  if you are making  payments  under a
Systematic  Investment Plan. You may simultaneously  participate in this program
and  the  automatic  rebalancing  program  as  long  as  your  subaccount  asset
allocation matches between the programs.  If you elect to change your subaccount
asset allocation  under one program,  we will  automatically  change it to match
under the other program. If you have more than one account in this program,  the
asset  allocation  for each account may be different as long as you are not also
participating in the automatic rebalancing program.

You may terminate  participation  in this program at any time. If you do so, you
will no longer  receive the  guaranteed  annual  interest  rate on any remaining
balance in the program account.  If you terminate the program,  or we are unable
to accept new money into the  program,  we will  allocate  that money  using the
accounts you selected for the program or in any other manner you specify.

We can modify the terms of this program or discontinue this program at any time.
Any modifications will not affect money already in the program.

**   Contract value includes new purchase  payments (or expected payments if you
     fund the program from a 1035 exchange) and any applicable  purchase payment
     credit.

*240355-13 A (12/00)
Valid until April 30, 2001