Supplement Dated December 29, 2000*
                       to the Prospectus Dated May 1, 2000
         of American Express New Solutions Variable AnnuitySM (240355 A)

The  following  information  applies  to  contracts  purchased  in the  state of
Pennsylvania.

1.   The  reference  on page  one of the  prospectus  to  "Individual  or  Group
     Flexible Premium Deferred Combination Fixed/Variable Annuity" is changed to
     "Individual Flexible Premium Deferred Variable Annuity."

2.   The one-year fixed account is not available  under  contracts  purchased in
     Pennsylvania.  Any  reference  in this  prospectus  to the  one-year  fixed
     account, and any contract features or benefits associated with the one-year
     fixed account are deleted.

3.   The Guarantee  Period Accounts are not available under contracts  purchased
     in  Pennsylvania.  Any reference in this prospectus to the Guarantee Period
     Accounts,  and any  contract  features  or  benefits  associated  with  the
     Guarantee Period Accounts are deleted.

4.   The minimum initial purchase payment (not including  Systematic  Investment
     Plans) is changed from $5,000 to $2,000.

5.   The  following   subsection   replaces  the   subsection  on  the  "Special
     dollar-cost  averaging  program"  that was added to the "Making the Most of
     Your  Contract"  section of the  prospectus  by  supplement on December 29,
     2000:

     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 will change the rates for new purchase
     payments  from time to time at our  discretion  and we base these  rates on
     competition.  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
     subaccounts  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 subaccounts 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  subaccounts  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.

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