SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-1
Post-Effective Amendment No. 2
to Registration Statement No. 333-65080
Under
The Securities Act of 1933
American Enterprise MVA Account
(Exact name of registrant as specified in charter)
Indiana
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(State or other jurisdiction of incorporation or organization)
63
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(Primary Standard Industrial Classification Code Number)
94-2786905
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(I.R.S. Employer Identification No.)
829 AXP Financial Center, Minneapolis, MN 55474
(612) 671-3131
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(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
Mary Ellyn Minenko, Counsel
50607 AXP Financial Center, Minneapolis, Minnesota 55474
(612) 671-3678
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(Name, address, including zip code, and telephone number,
including area code, of agent for service)
It is proposed that this filing become effective November 7, 2001.
If any of the Securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [X]
Pursuant to Rule 429 under the Securities Act, the prospectus contained herein
also relates to and constitutes a Post-Effective Amendment to Securities Act
Registration Statement No. 333-86297.
The prospectus filed electronically herewith is not intended to supersede the
prospectuses for the Wells Fargo Advantage(SM) Variable Annuity, the Wells Fargo
Advantage(SM) Builder Variable Annuity, the American Express Signature Variable
Annuity(R), and the American Express New Solutions(SM) Variable Annuity
contracts filed with the Initial Registration Statement No. 333-65080, filed on
or about July 13, 2001.
The prospectus filed electronically herewith is also not intended to supersede
the prospectuses for the American Express(R) Galaxy Premier Variable Annuity
and the American Express Pinnacle Variable Annuity(SM) contracts filed with
Post-Effective Amendment No. 1 to Registration Statement No. 333-65080, filed
on or about Aug. 9, 2001.
Calculation of Registration Fee
Title of each class of Amount to be Proposed maximum Proposed maximum Amount of
securities to be registered offering price per aggregate offering registration fee
registered unit price
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
Interests in the N/A
Guarantee Period
Accounts of the
Wells Fargo Advantage(SM) Variable Annuity,
the Wells Fargo Advantage(SM) Builder Variable Annuity,
the American Express Signature Variable Annuity(R),
the American Express(R) Signature One Variable Annuity,
the American Express New Solutions(SM) Variable Annuity,
the American Express(R) Galaxy Premier Variable Annuity,
and the American Express Pinnacle Variable Annuity(SM) Contracts
Registration Statement on Form S-1
Cross-Reference Sheet
Pursuant to Regulation S-K, Item 501(b)
Form S-1 Item Number and Caption Located in Prospectus
1. Forepart of the Registration
Statement and Outside Front
Cover Page of Prospectus Outside Front Cover
2. Inside Front and Outside Back
Cover Pages of Prospectus Table of Contents
3. Summary Information, Risk Factors
and Ratio of Earnings to Fixed
Charges Summary or, as to ratio of
earnings to fixed charges,
Not Applicable
4. Use of Proceeds The variable accounts; The
fixed accounts
5. Determination of Offering Price Not Applicable
6. Dilution Not Applicable
7. Selling Security Holders Not Applicable
8. Plan of Distribution Distribution of Contracts
9. Description of Securities to Be Registered The variable accounts;
The fixed accounts
10. Interests of Named Experts and Counsel Not Applicable
11. Information with Respect to the Registrant About American Enterprise
Life; Additional
Information about American
Enterprise Life
12. Disclosure of Commission Position
on Indemnification for Securities
Act Liabilities See Item 14 in Part II
PART I.
INFORMATION REQUIRED IN PROSPECTUS
Attached is the following prospectus containing information for the American
Enterprise MVA Account:
American Express(R) Signature One Variable Annuity
American Express(R)
Signature One
Variable Annuity
Issued by:
American Enterprise Life Insurance Company
Prospectus
Nov. 7, 2001
INDIVIDUAL OR GROUP FLEXIBLE PREMIUM DEFERRED COMBINATION FIXED/VARIABLE ANNUITY
American Enterprise Variable Annuity Account
Issued by: American Enterprise Life Insurance Company (American Enterprise Life)
829 AXP Financial Center
Minneapolis, MN 55474
Telephone: (800) 333-3437
This prospectus contains information that you should know before investing. You
also will receive the prospectuses for:
o American Express(R) Variable o J. P. Morgan Series Trust II
Portfolio Funds
o AIM Variable Insurance Funds o Lazard Retirement Series, Inc.
o Alliance Variable Products Series Fund o MFS(R) Variable Insurance Trust(SM)
o Baron Capital Funds Trust o Royce Capital Fund
o Credit Suisse Warburg Pincus Trust o Third Avenue Variable Series Trust
o Fidelity(R) Variable Insurance o Wanger Advisors Trust
Products - Service Class
o Franklin(R) Templeton(R) Variable o Wells Fargo Variable Trust Funds
Insurance Products Trust (FTVIPT) -
Class 2
o Goldman Sachs Variable Insurance
Trust (VIT)
o Janus Aspen Series: Service Shares
Please read the prospectuses carefully and keep them for future reference.
The contract provides for purchase payment credits which we may reverse up to
the maximum withdrawal charge under certain circumstances. Expense charges from
contracts with purchase payment credits may be higher than charges for contracts
without such credits. The amount of the credit may be more than offset by
additional fees and charges associated with the credit.
The Securities and Exchange Commission (SEC) has not approved or disapproved
these securities or passed upon the accuracy or adequacy of this prospectus. Any
representation to the contrary is a criminal offense.
An investment in this contract 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 contract
involves investment risk including the possible loss of principal.
A Statement of Additional Information (SAI), dated the same date as this
prospectus, is incorporated by reference into this prospectus. It is filed with
the SEC and is available without charge by contacting American Enterprise Life
at the telephone number and address listed above. The table of contents of the
SAI is on the last page of this prospectus. The SEC maintains an Internet site.
This prospectus, the SAI and other information about the product are available
on the EDGAR Database on the SEC's Internet site at (http://www.sec.gov).
Variable annuities are complex investment vehicles. Before you invest, be sure
to ask your sales representative about the variable annuity's features,
benefits, risks and fees, and whether the variable annuity is appropriate for
you, based upon your financial situation and objectives.
American Enterprise Life offers several different annuities which your sales
representative may be authorized to offer to you. Each annuity has different
features and benefits that may be appropriate for you based on your financial
situation and needs, your age and how you intend to use the annuity. The
different features and benefits may include the investment and fund manager
options, variations in interest rate amount and guarantees, credits, withdrawal
charge schedules and access to annuity account values. The fees and charges may
also be different between each annuity.
Table of Contents
Key Terms 3
The Contract in Brief 4
Expense Summary 6
Condensed Financial Information (Unaudited) 22
Financial Statements 30
Performance Information 31
The Variable Account and the Funds 32
The Fixed Accounts 38
Buying Your Contract 41
Charges 43
Valuing Your Investment 47
Making the Most of Your Contract 48
Withdrawals 51
Changing Ownership 51
Benefits in Case of Death 51
Optional Benefits 55
The Annuity Payout Period 63
Taxes 65
Voting Rights 66
Substitution of Investments 67
About the Service Providers 67
Additional Information About American Enterprise Life 68
Directors and Executive Officers 73
Experts 74
American Enterprise Life Insurance
Company Financial Information 75
Appendix A: Expense Examples for the
8% Performance Credit Rider 93
Appendix B: 8% Performance Credit Rider
Adjusted Partial Withdrawal 101
Table of Contents of the
Statement of Additional Information 103
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2 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
Key Terms
These terms can help you understand details about your contract.
Accumulation unit: A measure of the value of each subaccount before annuity
payouts begin.
Annuitant: The person on whose life or life expectancy the annuity payouts are
based.
Annuity payouts: An amount paid at regular intervals under one of several plans.
Assumed investment rate: The rate of return we assume your investments will earn
when we calculate your initial annuity payout amount using the annuity table in
your contract. The standard assumed investment rate we use is 5% but you may
request we substitute an assumed investment rate of 3.5%.
Beneficiary: The person you designate to receive benefits in case of the owner's
or annuitant's death while the contract is in force and before annuity payouts
begin.
Close of business: When the New York Stock Exchange (NYSE) closes, normally 4
p.m. Eastern time.
Contract: A deferred annuity contract, or a certificate showing your interest
under a group annuity contract, that permits you to accumulate money for
retirement by making one or more purchase payments. It provides for lifetime or
other forms of payouts beginning at a specified time in the future.
Contract value: The total value of your contract before we deduct any applicable
charges.
Contract year: A period of 12 months, starting on the effective date of your
contract and on each anniversary of the effective date.
Fixed accounts: The one-year fixed account is an account to which you may
allocate purchase payments. Amounts you allocate to this account earn interest
at rates that we declare periodically. Guarantee Period Accounts are fixed
accounts to which you may also allocate purchase payments. These accounts have
guaranteed interest rates declared for periods ranging from two to ten years.
Withdrawals from the Guarantee Period Accounts done more than 30 days before the
end of the Guarantee Period will receive a Market Value Adjustment, which may
result in a gain or loss of principal.
Funds: Investment options under your contract. You may allocate your purchase
payments into subaccounts investing in shares of any or all of these funds.
Guarantee Period: The number of years that a guaranteed interest rate is
credited.
Market Value Adjustment (MVA): A positive or negative adjustment assessed if any
portion of a Guarantee Period Account is withdrawn or transferred more than 30
days before the end of its Guarantee Period.
Owner (you, your): The person who controls the contract (decides on investment
allocations, transfers, payout options, etc.). Usually, but not always, the
owner is also the annuitant. The owner is responsible for taxes, regardless of
whether he or she receives the contract's benefits.
Purchase payment credits: An addition we make to your contract value. We base
the amount of the credit on total net payments (total payments less total
withdrawals). We apply the credit to your contract based on your current
payment.
Qualified annuity: A contract that you purchase to fund one of the following
tax-deferred retirement plans that is subject to applicable federal law and any
rules of the plan itself:
o Individual Retirement Annuities (IRAs) under Section 408(b) of the Internal
Revenue Code of 1986, as amended (the Code)
o Roth IRAs under Section 408A of the Code
o Simplified Employee Pension (SEP) plans under Section 408(k) of the Code
A qualified annuity will not provide any necessary or additional tax deferral if
it is used to fund a retirement plan that is already tax deferred.
All other contracts are considered nonqualified annuities.
Retirement date: The date when annuity payouts are scheduled to begin.
Rider effective date: The date you add a rider to the contract.
Valuation date: Any normal business day, Monday through Friday, that the NYSE is
open. Each valuation date ends at the close of business. We calculate the value
of each subaccount at the close of business on each valuation date.
Variable account: Consists of separate subaccounts to which you may allocate
purchase payments; each invests in shares of one fund. The value of your
investment in each subaccount changes with the performance of the particular
fund.
Withdrawal value: The amount you are entitled to receive if you make a full
withdrawal from your contract. It is the contract value minus any applicable
charges.
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3 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
The Contract in Brief
Purpose: The purpose of the contract is to allow you to accumulate money for
retirement. You do this by making one or more purchase payments. You may
allocate your purchase payments to the fixed accounts and/or subaccounts under
the contract. These accounts, in turn, may earn returns that increase the value
of the contract. Beginning at a specified time in the future called the
retirement date, the contract provides lifetime or other forms of payouts of
your contract value (less any applicable premium tax). As in the case of other
annuities, it may not be advantageous for you to purchase this contract as a
replacement for, or in addition to, an existing annuity or life insurance
contract.
Most annuities have a tax-deferred feature. So do many retirement plans under
the Internal Revenue Code. As a result, when you use an annuity to fund a
retirement plan that is tax deferred, your annuity will not provide any
necessary or additional tax deferral for that retirement plan. But annuities do
have features other than tax deferral that may help you reach your retirement
goals. You should consult your tax advisor prior to making a purchase for an
explanation of the tax implications to you.
Free look period: You may return your contract to your sales representative or
to our office within the time stated on the first page of your contract and
receive a full refund of the contract value, less any purchase payment credits
up to the maximum withdrawal charges. (See "Buying Your Contract -- Purchase
Payment Credits.") However, you bear the investment risk from the time of
purchase until you return the contract; the refund amount may be more or less
than the payment you made. (Exception: If the law requires, we will refund all
of your purchase payments.)
Accounts: Currently, you may allocate your purchase payments among any or all
of:
o the subaccounts, each of which invests in a fund with a particular investment
objective. The value of each subaccount varies with the performance of the
particular fund in which it invests. We cannot guarantee that the value at
the retirement date will equal or exceed the total purchase payments you
allocate to the subaccounts. (p. 32)
o the fixed accounts, which earn interest at rates that we adjust periodically.
Some states restrict the amount you can allocate to these accounts. (p. 38)
Buying your contract: Your sales representative will help you complete and
submit an application. Applications are subject to acceptance at our office. You
may buy a nonqualified annuity or a qualified annuity. After your initial
purchase payment, you have the option of making additional purchase payments in
the future. (p. 41)
o Minimum initial purchase payment:
$25,000.
o Minimum additional purchase payment:
$50 for Systematic Investment Plans.
$100 for any other type of payment.
o Maximum total purchase payments (without prior approval):
$1,000,000 for issue ages up to 85.
$100,000 for issue ages 86 to 90.
Transfers: Subject to certain restrictions, you currently may redistribute your
contract value among the accounts without charge at any time until annuity
payouts begin, and once per contract year among the subaccounts after annuity
payouts begin. Transfers out of the Guarantee Period Accounts done more than 30
days before the end of the Guarantee Period will be subject to a MVA. You may
establish automated transfers among the accounts. Fixed account transfers are
subject to special restrictions. (p. 49)
Withdrawals: You may withdraw all or part of your contract value at any time
before the retirement date. You also may establish automated partial
withdrawals. Withdrawals may be subject to charges and tax penalties (including
a 10% IRS penalty if you make withdrawals prior to your reaching age 59 1/2) and
may have other tax consequences; also, certain restrictions apply. (p. 51)
Changing ownership: You may change ownership of a nonqualified annuity by
written instruction, but this may have federal income tax consequences.
Restrictions apply to changing ownership of a qualified annuity. (p. 51)
Benefits in case of death: If you or the annuitant die before annuity payouts
begin, we will pay the beneficiary an amount at least equal to the contract
value. (p. 51)
Optional benefits: This contract offers optional features that are available for
additional charges if you meet certain criteria. (p. 55)
Annuity payouts: You can apply your contract value to an annuity payout plan
that begins on the retirement date. You may choose from a variety of plans to
make sure that payouts continue as long as you like. If you purchased a
qualified annuity, the payout schedule must meet the requirements of the
tax-deferred retirement plan. We can make payouts on a fixed or variable basis,
or both. Total monthly payouts may include amounts from each subaccount and the
one-year fixed account. During the annuity payout period, your choices for
subaccounts may be limited. The Guarantee Period Accounts are not available
during the payout period. (p. 63)
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4 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
Taxes: Generally, your contract grows tax deferred until you make withdrawals
from it or begin to receive payouts. (Under certain circumstances, IRS penalty
taxes may apply.) Even if you direct payouts to someone else, you will be taxed
on the income if you are the owner. However, Roth IRAs may grow and be
distributed tax free if you meet certain distribution requirements. (p. 65)
Charges: We assess certain charges in connection with your contract (p. 43):
o $40 annual contract administrative charge;
o a 0.15% variable account administrative charge (if you allocate money to one
or more subaccounts);
o a 1.45% mortality and expense risk fee (if you allocate money to one or more
subaccounts);
o if you select death benefit Option A -- Value option return of purchase
payment, a reduction of 0.10% in the mortality and expense risk fee (if you
allocate money to one or more subaccounts);
o if you select the Guaranteed Minimum Income Benefit Rider(1) (GMIB), an
annual fee (currently at 0.35%) based on the adjusted contract value;
o if you select the 8% Performance Credit Rider(1) (PCR), an annual fee of
0.25% of the contract value;
o if you select the Benefit Protector(SM) Death Benefit Rider(2) (Benefit
Protector), an annual fee of 0.25% of the contract value;
o if you select the Benefit Protector(SM) Plus Death Benefit Rider(2) (Benefit
Protector Plus), an annual fee of 0.40% of the contract value;
o withdrawal charge;
o any premium taxes that may be imposed on us by state or local governments
(currently, we deduct any applicable premium tax when you make a total
withdrawal or when annuity payouts begin, but we reserve the right to deduct
this tax at other times such as when you make purchase payments); and
o the operating expenses of the funds in which the subaccounts invest.
(1) You may select either the GMIB or the PCR, but not both. Riders may not be
available in all states. The GMIB is only available to annuitants 75 or
younger at contract issue. If you select the GMIB you must select either
death benefit Option B or Option C.
(2) You may select one of the following: death benefit Option C, the Benefit
Protector or the Benefit Protector Plus. These benefits may not be available
in all states. The Benefit Protector and the Benefit Protector Plus are only
available if both you and the annuitant are 75 or younger at contract issue.
Death benefit Option C is only available if both you and the annuitant are
79 or younger at contract issue.
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5 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
Expense Summary
The purpose of the following information is to help you understand the various
costs and expenses associated with your contract.
You pay no sales charge when you purchase your contract. We show all costs that
we deduct directly from your contract or indirectly from the subaccounts and
funds below. Some expenses may vary as we explain under "Charges." Please see
the funds' prospectuses for more information on the operating expenses for each
fund.
CONTRACT OWNER EXPENSES
Withdrawal charge (contingent deferred sales charge as a percentage of purchase
payment withdrawn)
Years from purchase Withdrawal charge
payment receipt percentage
1 8%
2 8
3 8
4 8
5 7
6 6
7 6
8 4
9 2
Thereafter 0
A withdrawal charge also applies to payouts under certain annuity payout plans
(see "Charges -- Withdrawal charge" and "The Annuity Payout Period -- Annuity
payout plans").
Annual contract administrative charge: $40*
* We will waive this charge when your contract value is $100,000 or more on
the current contract anniversary
Guaranteed Minimum Income Benefit Rider (GMIB) fee: 0.35%
(As a percentage of an adjusted contract value charged annually at the contract
anniversary. This is an optional expense.)
8% Performance Credit Rider (PCR) fee: 0.25%
(As a percentage of the contract value charged annually at the contract
anniversary. This is an optional expense.)
Benefit Protector(SM) Death Benefit Rider (Benefit Protector) fee: 0.25%
(As a percentage of the contract value charged annually at the contract
anniversary. This is an optional expense.)
Benefit Protector(SM) Plus Death Benefit Rider (Benefit Protector Plus) fee: 0.40%
(As a percentage of the contract value charged annually at the contract
anniversary. This is an optional expense.)
ANNUAL VARIABLE ACCOUNT EXPENSES
(As a percentage of average subaccount value)
You can choose the death benefit guarantee provided. The combination you choose
determines the fees you pay. The table below shows the combinations available to
you and their cost.
Death Benefit
Option B -- Maximum Option A -- Value
anniversary value or option return of
Option C -- 5% purchase payment
Accumulation
Variable account administrative charge: 0.15% 0.15%
Mortality and expense risk fee: 1.45 1.35
---- ----
Total annual variable account expenses: 1.60% 1.50%
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6 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
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
AXP(R) Variable Portfolio -
Blue Chip Advantage Fund .54% .13% .11% .78%(1)
Bond Fund .60 .13 .07 .80(2)
Capital Resource Fund .61 .13 .04 .78(2)
Cash Management Fund .51 .13 .04 .68(2)
Diversified Equity Income Fund .55 .13 .23 .91(1)
Extra Income Fund .62 .13 .07 .82(2)
Federal Income Fund .61 .13 .10 .84(1)
Growth Fund .62 .13 .15 .90(1)
Managed Fund .59 .13 .04 .76(2)
New Dimensions Fund(R) .60 .13 .06 .79(2)
Small Cap Advantage Fund .73 .13 .30 1.16(1)
AIM V.I.
Capital Appreciation Fund .61 -- .21 .82(3)
Capital Development Fund .75 -- .63 1.38(3),(4)
Value Fund .61 -- .23 .84(3)
Alliance VP
Premier Growth Portfolio (Class B) 1.00 .25 .05 1.30(5)
Technology Portfolio (Class B) .99 .25 .07 1.31(5)
U.S. Government/High Grade Securities Portfolio (Class B) .60 .25 .35 1.20(5)
Baron Capital Funds Trust
Capital Asset Fund - Insurance Shares 1.00 .25 .25 1.50(6)
Credit Suisse Warburg Pincus Trust -
Emerging Growth Portfolio (previously Warburg Pincus Trust -
Emerging Growth Portfolio) .90 -- .35 1.25(7)
Fidelity VIP
Growth & Income Portfolio (Service Class) .48 .10 .11 .69(8)
Mid Cap Portfolio (Service Class) .57 .10 .17 .84(8)
Overseas Portfolio (Service Class) .72 .10 .17 .99(8)
Franklin Templeton VIP Trust
Franklin Real Estate Fund - Class 2 .58 .25 .02 .85(9),(10)
Mutual Shares Securities Fund - Class 2 .60 .25 .20 1.05(10)
Templeton International Smaller Companies Fund - Class 2 .85 .25 .26 1.36(10
Goldman Sachs VIT
Capital Growth Fund .75 -- .25 1.00(11)
CORE(SM) U.S. Equity Fund .70 -- .20 .90(11)
Global Income Fund .90 -- .25 1.15(11)
International Equity Fund 1.00 -- .35 1.35(11)
Internet Tollkeeper Fund(SM) 1.00 -- .25 1.25(11)
Janus Aspen Series
Aggressive Growth Portfolio: Service Shares .65 .25 .02 .92(12)
Global Technology Portfolio: Service Shares .65 .25 .04 .94(12)
Growth Portfolio: Service Shares .65 .25 .02 .92(12)
International Growth Portfolio: Service Shares .65 .25 .06 .96(12)
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7 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
Annual operating expenses of the funds (after fee waivers and/or expense
reimbursements, if applicable, as a percentage of average daily net assets)
(continued)
Management 12b-1 Other
fees fees expenses Total
J.P. Morgan
U.S. Disciplined Equity Portfolio .35% --% .50% .85%(3)
Lazard Retirement Series
Equity Portfolio .75 .25 .25 1.25(13)
International Equity Portfolio .75 .25 .25 1.25(13)
MFS(R)
New Discovery Series - Initial Class .90 -- .16 1.06(14),(15)
Research Series - Initial Class .75 -- .10 .85(14)
Utilities Series - Initial Class .75 -- .16 .91(14)
Royce Capital Fund
Micro-Cap Portfolio 1.25 -- .10 1.35(16)
Small-Cap Portfolio (previously Royce Premier Portfolio) 1.00 -- .35 1.35(16)
Third Avenue
Value Portfolio .90 -- .40 1.30(17)
Wanger
International Small Cap 1.20 -- .21 1.41(3),(18)
U.S. Small Cap .95 -- .05 1.00(3),(18)
Wells Fargo VT
Equity Income Fund .53 .25 .22 1.00(19)
(1) The fund's expense figures are based on actual expenses, after fee waivers
and expense reimbursements, for the fiscal year ending Aug. 31, 2001.
Without fee waivers and expense reimbursements "Other Expenses" and
"Total" would be 0.49% and 1.17% for AXP Variable Portfolio - Diversified
Equity Income Fund, 0.13% and 0.87% for AXP Variable Portfolio - Federal
Income Fund, 0.16% and 0.91% for AXP Variable Portfolio - Growth Fund, and
0.40% and 1.26% for AXP Variable Portfolio - Small Cap Advantage Fund.
(2) The fund's expense figures are based on actual expenses for the fiscal
year ended Aug. 31, 2001.
(3) Figures in "Management Fees," "12b-1 Fees," "Other Expenses" and "Total"
are based on actual expenses for the fiscal year ended Dec. 31, 2000.
(4) Expenses have been restated to reflect current fees.
(5) Figures in "Management Fees," "12b-1 Fees," "Other Expenses" and "Total"
are based on actual expenses for the fiscal period ended Dec. 31, 2000.
Absent fee waivers and expense reimbursements "Management Fees," "12b-1
Fees," "Other Expenses" and "Total" would be 1.00%, 0.25%, 0.08% and 1.33%
for Alliance VP Technology Portfolio.
(6) The Advisor is contractually obligated to reduce its fee to the extent
required to limit Baron Capital Asset Fund's total operating expenses to
1.50% for the first $250 million of assets in the Fund, 1.35% for Fund
assets over $250 million and 1.25% for Fund assets over $500 million.
Without the expense limitations, total operating expenses for the Fund for
the period Dec. 31, 2000 would have been 1.66%.
(7) Expense 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: Credit Suisse Warburg Pincus Trust
Emerging Growth Portfolio (0.90%, 0%, 0.40% and 1.30%).
(8) There were no reimbursement or expense reductions for the period ended
Dec. 31, 2000. Actual annual class operating expenses were lower because a
portion of the brokerage commissions that the fund paid was used to reduce
the fund's expenses, and/or because through arrangements with the fund's
custodian, credits realized as a result of uninvested cash balances were
used to reduce a portion of the fund's custodian expenses. See the
accompanying fund prospectus for details.
(9) The Fund administration fee is paid indirectly through the management fee.
(10) The Fund's Class 2 distribution plan or "Rule 12b-1 plan" is described in
the Fund's prospectus.
(11) Expense ratios are shown after fee waivers and expense reimbursements by
the investment adviser. The expense ratios before the waivers and
reimbursements would have been: 0.75%, 1.09% and 1.84% for Capital Growth
Fund, 0.70%, 0.17%, and 0.87% for CORE(SM) U.S. Equity Fund, 0.90%, 2.05%
and 2.95% for Global Income Fund, 1.00%, 0.99% and 1.99% for International
Equity Fund and 1.00%, 4.62% and 5.62% for Internet Tollkeeper Fund(SM).
CORE(SM) and Internet Tollkeeper Fund(SM) are service marks of Goldman,
Sachs & Co.
(12) Expenses are based upon expenses for the fiscal year ended Dec. 31, 2000,
restated to reflect a reduction in the management fee for Aggressive
Growth Portfolio, Growth Portfolio and International Growth Portfolio.
Expenses are stated both with and without contractual waivers by Janus
Capital. Waivers, if applicable, are first applied against the management
fee and then against other expenses, and will continue until at least the
next annual renewal of the advisory agreement. All expenses are shown
without the effect of expense offset arrangements.
(13) Absent fee waivers and/or reimbursements, "Other Expenses" and "Total"
expenses for the year ended Dec. 31, 2000 would have been 4.07% and 5.07%
for Equity Portfolio and 1.32% and 2.32% for International Equity
Portfolio.
(14) Each 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. Each series may enter into
other such 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 for certain series and
would equal: 1.05% for New Discovery Series, 0.84% for Research Series,
and 0.90% for Utilities Series.
(15) MFS has contractually agreed, subject to reimbursement, to bear expenses
for these series such that each such series' "Other Expenses" (after
taking into account the expense offset arrangement described above), do
not exceed the following percentages of the average daily net assets of
the series during the current fiscal year 0.15% for the New Discovery
Series. Without this agreement, "Other Expenses" and "Total" would have
been 0.19% and 1.09%. These contractual fee arrangements will continue
until at least May 1, 2002, unless changed with the consent of the board
of trustees which oversees the series.
--------------------------------------------------------------------------------
8 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
(16) Royce 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, 2001 and 1.99% through Dec. 31,
2010. Absent fee waivers "Other Expenses" and "Total" would be 0.33% and
1.58% for Royce Micro-Cap Portfolio and 2.89% and 3.89% for Royce
Small-Cap Portfolio.
(17) The fund's expense figures are based on actual expenses, after fee waivers
and expense reimbursements, for the fiscal year ending Dec. 31, 2000.
Without fee waivers and expense reimbursements "Other Expenses" and
"Total" would be 1.62% and 2.52% for Third Avenue Value Portfolio.
(18) Annualized operating expenses of funds at Dec. 31, 2000. Liberty Wanger
Asset Management, L.P. will reimburse the Fund if its annual ordinary
operating expenses exceed 2.00% of average daily net assets. This
commitment expires on Sept. 30, 2002.
(19) Amounts represent expenses as of Dec. 31, 2000. Expenses are shown after
fee waivers and expense reimbursements. Without fee waivers and expense
reimbursements "Management Fee" and "Total" would have been 0.70% and
1.17% for Wells Fargo VT Equity Income Fund.
Examples*: In order to provide a more meaningful discussion about the contract
and its options, we provide expense examples for each fund showing every
available optional contract feature combination. These examples assume that
applicable fund fee waivers and/or expense reimbursements will continue for the
periods shown. First we show the expenses assuming selection of death benefit
Option B. Under each fund you will find an example showing: 1) the contract with
no additional riders, 2) the contract with selection of the optional Benefit
Protector(SM) Death Benefit (BP) Rider, 3) the contract with selection of the
optional Benefit Protector(SM) Plus Death Benefit (BPP) Rider, 4) the contract
with selection of the optional Guaranteed Minimum Income Benefit (GMIB) Rider,
5) the contract with selection of the optional GMIB and BP riders, and 6) the
contract with selection of the optional GMIB and BPP riders. Next we show
expenses assuming selection of death benefit Option A. Under each fund you will
find an example showing: 1) the contract with no additional riders, 2) the
contract with selection of the BP rider, and 3) the contract with selection of
the optional BPP rider. For information on expenses associated with selection of
the 8% Performance Credit Rider, please see Appendix A.
You would pay the following expenses on a $1,000 investment if you selected
death benefit Option B and assuming a 5% annual return and ...
no withdrawal or selection
full withdrawal at the of an annuity payout plan at the
end of each time period end of each time period
1 year 3 years 5 years 10 years 1 year 3 years 5 years 10 years
AXP(R) Variable Portfolio - Blue Chip Advantage Fund
contract with no additional riders $104.56 $155.57 $199.20 $275.70 $24.56 $75.57 $129.20 $275.70
optional BP rider 107.12 163.24 211.96 300.91 27.12 83.24 141.96 300.91
optional BPP rider 108.66 167.82 219.54 315.74 28.66 87.82 149.54 315.74
optional GMIB rider 108.15 166.30 217.02 310.82 28.15 86.30 147.02 310.82
optional GMIB and BP riders 110.71 173.92 229.58 335.17 30.71 93.92 159.58 335.17
optional GMIB and BPP riders 112.25 178.47 237.06 349.49 32.25 98.47 167.06 349.49
AXP(R) Variable Portfolio - Bond Fund
contract with no additional riders 104.76 156.18 200.23 277.74 24.76 76.18 130.23 277.74
optional BP rider 107.33 163.85 212.97 302.90 27.33 83.85 142.97 302.90
optional BPP rider 108.86 168.44 220.55 317.70 28.86 88.44 150.55 317.70
optional GMIB 108.35 166.91 218.03 312.79 28.35 86.91 148.03 312.79
optional GMIB and BP riders 110.91 174.52 230.58 337.09 30.91 94.52 160.58 337.09
optional GMIB and BPP riders 112.45 179.07 238.05 351.38 32.45 99.07 168.05 351.38
AXP(R) Variable Portfolio - Capital Resource Fund
contract with no additional riders 104.56 155.57 199.20 275.70 24.56 75.57 129.20 275.70
optional BP rider 107.12 163.24 211.96 300.91 27.12 83.24 141.96 300.91
optional BPP rider 108.66 167.82 219.54 315.74 28.66 87.82 149.54 315.74
optional GMIB 108.15 166.30 217.02 310.82 28.15 86.30 147.02 310.82
optional GMIB and BP riders 110.71 173.92 229.58 335.17 30.71 93.92 159.58 335.17
optional GMIB and BPP riders 112.25 178.47 237.06 349.49 32.25 98.47 167.06 349.49
AXP(R) Variable Portfolio - Cash Management Fund
contract with no additional riders 103.53 152.49 194.07 265.44 23.53 72.49 124.07 265.44
optional BP rider 106.10 160.18 206.87 290.90 26.10 80.18 136.87 290.90
optional BPP rider 107.63 164.77 214.49 305.88 27.63 84.77 144.49 305.88
optional GMIB 107.12 163.24 211.96 300.91 27.12 83.24 141.96 300.91
optional GMIB and BP riders 109.68 170.87 224.57 325.50 29.68 90.87 154.57 325.50
optional GMIB and BPP riders 111.22 175.43 232.08 339.96 31.22 95.43 162.08 339.96
--------------------------------------------------------------------------------
9 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
You would pay the following expenses on a $1,000 investment if you selected
death benefit Option B and assuming a 5% annual return and ... (continued)
no withdrawal or selection
full withdrawal at the of an annuity payout plan at the
end of each time period end of each time period
1 year 3 years 5 years 10 years 1 year 3 years 5 years 10 years
AXP(R) Variable Portfolio - Diversified Equity Income Fund
contract with no additional riders $105.89 $159.56 $205.85 $288.89 $25.89 $ 79.56 $135.85 $288.89
optional BP rider 108.45 167.21 218.53 313.77 28.45 87.21 148.53 313.77
optional BPP rider 109.99 171.79 226.08 328.41 29.99 91.79 156.08 328.41
optional GMIB 109.48 170.26 223.57 323.56 29.48 90.26 153.57 323.56
optional GMIB and BP riders 112.04 177.86 236.07 347.59 32.04 97.86 166.07 347.59
optional GMIB and BPP riders 113.58 182.40 243.50 361.72 33.58 102.40 173.50 361.72
AXP(R) Variable Portfolio - Extra Income Fund
contract with no additional riders 104.97 156.80 201.25 279.78 24.97 76.80 131.25 279.78
optional BP rider 107.53 164.46 213.98 304.89 27.53 84.46 143.98 304.89
optional BPP rider 109.07 169.05 221.56 319.66 29.07 89.05 151.56 319.66
optional GMIB 108.56 167.52 219.04 314.76 28.56 87.52 149.04 314.76
optional GMIB and BP riders 111.12 175.13 231.58 339.01 31.12 95.13 161.58 339.01
optional GMIB and BPP riders 112.66 179.68 239.05 353.27 32.66 99.68 169.05 353.27
AXP(R) Variable Portfolio - Federal Income Fund
contract with no additional riders 105.17 157.41 202.28 281.81 25.17 77.41 132.28 281.81
optional BP rider 107.74 165.08 215.00 306.87 27.74 85.08 145.00 306.87
optional BPP rider 109.27 169.65 222.56 321.61 29.27 89.65 152.56 321.61
optional GMIB 108.76 168.13 220.05 316.72 28.76 88.13 150.05 316.72
optional GMIB and BP riders 111.32 175.74 232.58 340.92 31.32 95.74 162.58 340.92
optional GMIB and BPP riders 112.86 180.28 240.04 355.15 32.86 100.28 170.04 355.15
AXP(R) Variable Portfolio - Growth Fund
contract with no additional riders 105.79 159.26 205.34 287.88 25.79 79.26 135.34 287.88
optional BP rider 108.35 166.91 218.03 312.79 28.35 86.91 148.03 312.79
optional BPP rider 109.89 171.48 225.58 327.44 29.89 91.48 155.58 327.44
optional GMIB 109.38 169.96 223.07 322.58 29.38 89.96 153.07 322.58
optional GMIB and BP riders 111.94 177.56 235.57 346.64 31.94 97.56 165.57 346.64
optional GMIB and BPP riders 113.48 182.10 243.01 360.79 33.48 102.10 173.01 360.79
AXP(R) Variable Portfolio - Managed Fund
contract with no additional riders 104.35 154.95 198.18 273.66 24.35 74.95 128.18 273.66
optional BP rider 106.92 162.63 210.94 298.92 26.92 82.63 140.94 298.92
optional BPP rider 108.45 167.21 218.53 313.77 28.45 87.21 148.53 313.77
optional GMIB 107.94 165.69 216.01 308.85 27.94 85.69 146.01 308.85
optional GMIB and BP riders 110.50 173.31 228.58 333.24 30.50 93.31 158.58 333.24
optional GMIB and BPP riders 112.04 177.86 236.07 347.59 32.04 97.86 166.07 347.59
AXP(R) Variable Portfolio - New Dimensions Fund(R)
contract with no additional riders 104.66 155.87 199.72 276.72 24.66 75.87 129.72 276.72
optional BP rider 107.22 163.55 212.46 301.91 27.22 83.55 142.46 301.91
optional BPP rider 108.76 168.13 220.05 316.72 28.76 88.13 150.05 316.72
optional GMIB 108.25 166.60 217.52 311.81 28.25 86.60 147.52 311.81
optional GMIB and BP riders 110.81 174.22 230.08 336.13 30.81 94.22 160.08 336.13
optional GMIB and BPP riders 112.35 178.77 237.56 350.43 32.35 98.77 167.56 350.43
--------------------------------------------------------------------------------
10 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
You would pay the following expenses on a $1,000 investment if you selected
death benefit Option B and assuming a 5% annual return and ... (continued)
no withdrawal or selection
full withdrawal at the of an annuity payout plan at the
end of each time period end of each time period
1 year 3 years 5 years 10 years 1 year 3 years 5 years 10 years
AXP(R) Variable Portfolio - Small Cap Advantage Fund
contract with no additional riders $108.45 $167.21 $218.53 $313.77 $28.45 $ 87.21 $148.53 $313.77
optional BP rider 111.02 174.83 231.08 338.05 31.02 94.83 161.08 338.05
optional BPP rider 112.55 179.38 238.55 352.32 32.55 99.38 168.55 352.32
optional GMIB 112.04 177.86 236.07 347.59 32.04 97.86 166.07 347.59
optional GMIB and BP riders 114.60 185.42 248.43 371.03 34.60 105.42 178.43 371.03
optional GMIB and BPP riders 116.14 189.93 255.79 384.81 36.14 109.93 185.79 384.81
AIM V.I. Capital Appreciation Fund
contract with no additional riders 104.97 156.80 201.25 279.78 24.97 76.80 131.25 279.78
optional BP rider 107.53 164.46 213.98 304.89 27.53 84.46 143.98 304.98
optional BPP rider 109.07 169.05 221.56 319.66 29.07 89.05 151.56 319.66
optional GMIB 108.56 167.52 219.04 314.76 28.56 87.52 149.04 314.76
optional GMIB and BP riders 111.12 175.13 231.58 339.01 31.12 95.13 161.58 339.01
optional GMIB and BPP riders 112.66 179.68 239.05 353.27 32.66 99.68 169.05 353.27
AIM V.I. Capital Development Fund
contract with no additional riders 110.71 173.92 229.58 335.17 30.71 93.92 159.58 335.17
optional BP rider 113.27 181.49 242.02 358.91 33.27 101.49 172.02 358.91
optional BPP rider 114.81 186.02 249.41 372.88 34.81 106.02 179.41 372.88
optional GMIB 114.30 184.51 246.95 368.24 34.30 104.51 176.95 368.24
optional GMIB and BP riders 116.86 192.04 259.20 391.17 36.86 112.04 189.20 391.17
optional GMIB and BPP riders 118.40 196.53 266.49 404.65 38.40 116.53 196.49 404.65
AIM V.I. Value Fund
contract with no additional riders 105.17 157.41 202.28 281.81 25.17 77.41 132.28 281.81
optional BP rider 107.74 165.08 215.00 306.87 27.74 85.08 145.00 306.87
optional BPP rider 109.27 169.65 222.56 321.61 29.27 89.65 152.56 321.61
optional GMIB 108.76 168.13 220.05 316.72 28.76 88.13 150.05 316.72
optional GMIB and BP riders 111.32 175.74 232.58 340.92 31.32 95.74 162.58 340.92
optional GMIB and BPP riders 112.86 180.28 240.04 355.15 32.86 100.28 170.04 355.15
Alliance VP Premier Growth Portfolio (Class B)
contract with no additional riders 109.89 171.48 225.58 327.44 29.89 91.48 155.58 327.44
optional BP rider 112.45 179.07 238.05 351.38 32.45 99.07 168.05 351.38
optional BPP rider 113.99 183.61 245.47 365.45 33.99 103.61 175.47 365.45
optional GMIB 113.48 182.10 243.01 360.79 33.48 102.10 173.01 360.79
optional GMIB and BP riders 116.04 189.63 255.30 383.90 36.04 109.63 185.30 383.90
optional GMIB and BPP riders 117.58 194.14 262.61 397.48 37.58 114.14 192.61 397.48
Alliance VP Technology Portfolio (Class B)
contract with no additional riders 109.99 171.79 226.08 328.41 29.99 91.79 156.08 328.41
optional BP rider 112.55 179.38 238.55 352.32 32.55 99.38 168.55 352.32
optional BPP rider 114.09 183.91 245.97 366.39 34.09 103.91 175.97 366.39
optional GMIB 113.58 182.40 243.50 361.72 33.58 102.40 173.50 361.72
optional GMIB and BP riders 116.14 189.93 255.79 384.81 36.14 109.93 185.79 384.81
optional GMIB and BPP riders 117.68 194.44 263.09 398.38 37.68 114.44 193.09 398.38
--------------------------------------------------------------------------------
11 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
You would pay the following expenses on a $1,000 investment if you selected
death benefit Option B and assuming a 5% annual return and ... (continued)
no withdrawal or selection
full withdrawal at the of an annuity payout plan at the
end of each time period end of each time period
1 year 3 years 5 years 10 years 1 year 3 years 5 years 10 years
Alliance VP U.S. Government/High Grade Securities Portfolio (Class B)
contract with no additional riders $108.86 $168.44 $220.55 $317.70 $28.86 $ 88.44 $150.55 $317.70
optional BP rider 111.43 176.04 233.08 341.88 31.43 96.04 163.08 341.88
optional BPP rider 112.96 180.59 240.53 356.09 32.96 100.59 170.53 356.09
optional GMIB 112.45 179.07 238.05 351.38 32.45 99.07 168.05 351.38
optional GMIB and BP riders 115.01 186.62 250.40 374.72 35.01 106.62 180.40 374.72
optional GMIB and BPP riders 116.55 191.14 257.74 388.45 36.55 111.14 187.74 388.45
Baron Capital Asset Fund - Insurance Shares
contract with no additional riders 111.94 177.56 235.57 346.64 31.94 97.56 165.57 346.64
optional BP rider 114.50 185.12 247.94 370.10 34.50 105.12 177.94 370.10
optional BPP rider 116.04 189.63 255.30 383.90 36.04 109.63 185.30 383.90
optional GMIB 115.53 188.13 252.85 379.32 35.53 108.13 182.85 379.32
optional GMIB and BP riders 118.09 195.63 265.04 401.97 38.09 115.63 195.04 401.97
optional GMIB and BPP riders 119.63 200.12 272.29 415.28 39.63 120.12 202.29 415.28
Credit Suisse Warburg Pincus Trust - Emerging Growth Portfolio
(previously Warburg Pincus Trust - Emerging Growth Portfolio)
contract with no additional riders 109.38 169.96 223.07 322.58 29.38 89.96 153.07 322.58
optional BP rider 111.94 177.56 235.57 346.64 31.94 97.56 165.57 346.64
optional BPP rider 113.48 182.10 243.01 360.79 33.48 102.10 173.01 360.79
optional GMIB 112.96 180.59 240.53 356.09 32.96 100.59 170.53 356.09
optional GMIB and BP riders 115.53 188.13 252.85 379.32 35.53 108.13 182.85 379.32
optional GMIB and BPP riders 117.06 192.64 260.18 392.98 37.06 112.64 190.18 392.98
Fidelity VIP Growth & Income Portfolio (Service Class)
contract with no additional riders 103.64 152.80 194.58 266.47 23.64 72.80 124.58 266.47
optional BP rider 106.20 160.48 207.38 291.91 26.20 80.48 137.38 291.91
optional BPP rider 107.74 165.08 215.00 306.87 27.74 85.08 145.00 306.87
optional GMIB 107.22 163.55 212.46 301.91 27.22 83.55 142.46 301.91
optional GMIB and BP riders 109.79 171.18 225.08 326.47 29.79 91.18 155.08 326.47
optional GMIB and BPP riders 111.32 175.74 232.58 340.92 31.32 95.74 162.58 340.92
Fidelity VIP Mid Cap Portfolio (Service Class)
contract with no additional riders 105.17 157.41 202.28 281.81 25.17 77.41 132.28 281.81
optional BP rider 107.74 165.08 215.00 306.87 27.74 85.08 145.00 306.87
optional BPP rider 109.27 169.65 222.56 321.61 29.27 89.65 152.56 321.61
optional GMIB 108.76 168.13 220.05 316.72 28.76 88.13 150.05 316.72
optional GMIB and BP riders 111.32 175.74 323.58 340.92 31.32 95.74 162.58 340.92
optional GMIB and BPP riders 112.86 180.28 240.04 355.15 32.86 100.28 170.04 355.15
Fidelity VIP Overseas Portfolio (Service Class)
contract with no additional riders 106.71 162.02 209.92 296.92 26.71 82.02 139.92 296.92
optional BP rider 109.27 169.65 222.56 321.61 29.27 89.65 152.56 321.61
optional BPP rider 110.81 174.22 230.08 336.13 30.81 94.22 160.08 336.13
optional GMIB 110.30 172.70 227.58 331.31 30.30 92.70 157.58 331.31
optional GMIB and BP riders 112.86 180.28 240.04 355.15 32.86 100.28 170.04 355.15
optional GMIB and BPP riders 114.40 184.82 247.45 369.17 34.40 104.82 177.45 369.17
--------------------------------------------------------------------------------
12 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
You would pay the following expenses on a $1,000 investment if you selected
death benefit Option B and assuming a 5% annual return and ... (continued)
no withdrawal or selection
full withdrawal at the of an annuity payout plan at the
end of each time period end of each time period
1 year 3 years 5 years 10 years 1 year 3 years 5 years 10 years
FTVIPT Franklin Real Estate Fund - Class 2
contract with no additional riders $105.28 $157.72 $202.79 $282.82 $25.28 $ 77.72 $132.79 $282.82
optional BP rider 107.84 165.38 215.50 307.86 27.84 85.38 145.50 307.86
optional BPP rider 109.38 169.96 223.07 322.58 29.38 89.96 153.07 322.58
optional GMIB 108.86 168.44 220.55 317.70 28.86 88.44 150.55 317.70
optional GMIB and BP riders 111.43 176.04 233.08 341.88 31.43 96.04 163.08 341.88
optional GMIB and BPP riders 112.96 180.59 240.53 356.09 32.96 100.59 170.53 356.09
FTVIPT Mutual Shares Securities Fund - Class 2
contract with no additional riders 107.33 163.85 212.97 302.90 27.33 83.85 142.97 302.90
optional BP rider 109.89 171.48 225.58 327.44 29.89 91.48 155.58 327.44
optional BPP rider 111.43 176.04 233.08 341.88 31.43 96.04 163.08 341.88
optional GMIB 110.91 174.52 230.58 337.09 30.91 94.52 160.58 337.09
optional GMIB and BP riders 113.48 182.10 243.01 360.79 33.48 102.10 173.01 360.79
optional GMIB and BPP riders 115.01 186.62 250.40 374.72 35.01 106.62 180.40 374.72
FTVIPT Templeton International Smaller Companies Fund - Class 2
contract with no additional riders 110.50 173.31 228.58 333.24 30.50 93.31 158.58 333.24
optional BP rider 113.07 180.89 241.03 357.03 33.07 100.89 171.03 357.03
optional BPP rider 114.60 185.42 248.43 371.03 34.60 105.42 178.43 371.03
optional GMIB 114.09 183.91 245.97 366.39 34.09 103.91 175.97 366.39
optional GMIB and BP riders 116.65 191.44 258.23 389.36 36.65 111.44 188.23 389.36
optional GMIB and BPP riders 118.19 195.93 265.52 402.86 38.19 115.93 195.52 402.86
Goldman Sachs VIT Capital Growth Fund
contract with no additional riders 106.81 162.32 210.43 297.92 26.81 82.32 140.43 297.92
optional BP rider 109.38 169.96 223.07 322.58 29.38 89.96 153.07 322.58
optional BPP rider 110.91 174.52 230.58 337.09 30.91 94.52 160.58 337.09
optional GMIB 110.40 173.00 228.08 332.28 30.40 93.00 158.08 332.28
optional GMIB and BP riders 112.96 180.59 240.53 356.09 32.96 100.59 170.53 356.09
optional GMIB and BPP riders 114.50 185.12 247.94 370.10 34.50 105.12 177.94 370.10
Goldman Sachs VIT CORE(SM) U.S. Equity Fund
contract with no additional riders 105.79 159.26 205.34 287.88 25.79 79.26 135.34 287.88
optional BP rider 108.35 166.91 218.03 312.79 28.35 86.91 148.03 312.79
optional BPP rider 109.89 171.48 225.58 327.44 29.89 91.48 155.58 327.44
optional GMIB 109.38 169.96 223.07 322.58 29.38 89.96 153.07 322.58
optional GMIB and BP riders 111.94 177.56 235.57 346.64 31.94 97.56 165.57 346.64
optional GMIB and BPP riders 113.48 182.10 243.01 360.79 33.48 102.10 173.01 360.79
Goldman Sachs VIT Global Income Fund
contract with no additional riders 108.35 166.91 218.03 312.79 28.35 86.91 148.03 312.79
optional BP rider 110.91 174.52 230.58 337.09 30.91 94.52 160.58 337.09
optional BPP rider 112.45 179.07 238.05 351.38 32.45 99.07 168.05 351.38
optional GMIB 111.94 177.56 235.57 346.64 31.94 97.56 165.57 346.64
optional GMIB and BP riders 114.50 185.12 247.94 370.10 34.50 105.12 177.94 370.10
optional GMIB and BPP riders 116.04 189.63 255.30 383.90 36.04 109.63 185.30 383.90
--------------------------------------------------------------------------------
13 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
You would pay the following expenses on a $1,000 investment if you selected
death benefit Option B and assuming a 5% annual return and ... (continued)
no withdrawal or selection
full withdrawal at the of an annuity payout plan at the
end of each time period end of each time period
1 year 3 years 5 years 10 years 1 year 3 years 5 years 10 years
Goldman Sachs VIT International Equity Fund
contract with no additional riders $110.40 $173.00 $228.08 $332.28 $30.40 $ 93.00 $158.08 $332.28
optional BP rider 112.96 180.59 240.53 356.09 32.96 100.59 170.53 356.09
optional BPP rider 114.50 185.12 247.94 370.10 34.50 105.12 177.94 370.10
optional GMIB 113.99 183.61 245.47 365.45 33.99 103.61 175.47 365.45
optional GMIB and BP riders 116.55 191.14 257.74 388.45 36.55 111.14 187.74 388.45
optional GMIB and BPP riders 118.09 195.63 265.04 401.97 38.09 115.63 195.04 401.97
Goldman Sachs VIT Internet Tollkeeper Fund(SM)
contract with no additional riders 109.38 169.96 223.07 322.58 29.38 89.96 153.07 322.58
optional BP rider 111.94 177.56 235.57 346.64 31.94 97.56 165.57 346.64
optional BPP rider 113.48 182.10 243.01 360.79 33.48 102.10 173.01 360.79
optional GMIB 112.96 180.59 240.53 356.09 32.96 100.59 170.53 356.09
optional GMIB and BP riders 115.53 188.13 252.85 379.32 35.53 108.13 182.85 379.32
optional GMIB and BPP riders 117.06 192.64 260.18 392.98 37.06 112.64 190.18 392.98
Janus Aspen Series Aggressive Growth Portfolio: Service Shares
contract with no additional riders 105.99 159.87 206.36 289.90 25.99 79.87 136.36 289.90
optional BP rider 108.56 167.52 219.04 314.76 28.56 87.52 149.04 314.76
optional BPP rider 110.09 172.09 226.58 329.38 30.09 92.09 156.58 329.38
optional GMIB 109.58 170.57 224.07 324.53 29.58 90.57 154.07 324.53
optional GMIB and BP riders 112.14 178.16 236.56 348.54 32.14 98.16 166.56 348.54
optional GMIB and BPP riders 113.68 182.70 243.99 362.66 33.68 102.70 173.99 362.66
Janus Aspen Series Global Technology Portfolio: Service Shares
contract with no additional riders 106.20 160.48 207.38 291.91 26.20 80.48 137.38 291.91
optional BP rider 108.76 168.13 220.05 316.72 28.76 88.13 150.05 316.72
optional BPP rider 110.30 172.70 227.58 331.31 30.30 92.70 157.58 331.31
optional GMIB 109.79 171.18 225.08 326.47 29.79 91.18 155.08 326.47
optional GMIB and BP riders 112.35 178.77 237.56 350.43 32.35 98.77 167.56 350.43
optional GMIB and BPP riders 113.89 183.31 244.98 364.52 33.89 103.31 174.98 364.52
Janus Aspen Series Growth Portfolio: Service Shares
contract with no additional riders 105.99 159.87 206.36 289.90 25.99 79.87 136.36 289.90
optional BP rider 108.56 167.52 219.04 314.76 28.56 87.52 149.04 314.76
optional BPP rider 110.09 172.09 226.58 329.38 30.09 92.09 156.58 329.38
optional GMIB 109.58 170.57 224.07 324.53 29.58 90.57 154.07 324.53
optional GMIB and BP riders 112.14 178.16 236.56 348.54 32.14 98.16 166.56 348.54
optional GMIB and BPP riders 113.68 182.70 243.99 362.66 33.68 102.70 173.99 362.66
Janus Aspen Series International Growth Portfolio: Service Shares
contract with no additional riders 106.40 161.10 208.40 293.92 26.40 81.10 138.40 293.92
optional BP rider 108.97 168.74 221.05 318.68 28.97 88.74 151.05 318.68
optional BPP rider 110.50 173.31 228.58 333.24 30.50 93.31 158.58 333.24
optional GMIB 109.99 171.79 226.08 328.41 29.99 91.79 156.08 328.41
optional GMIB and BP riders 112.55 179.38 238.55 352.32 32.55 99.38 168.55 352.32
optional GMIB and BPP riders 114.09 183.91 245.97 366.39 34.09 103.91 175.97 366.39
--------------------------------------------------------------------------------
14 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
You would pay the following expenses on a $1,000 investment if you selected
death benefit Option B and assuming a 5% annual return and ... (continued)
no withdrawal or selection
full withdrawal at the of an annuity payout plan at the
end of each time period end of each time period
1 year 3 years 5 years 10 years 1 year 3 years 5 years 10 years
J.P. Morgan U.S. Disciplined Equity Portfolio
contract with no additional riders $105.28 $157.72 $202.79 $282.82 $25.28 $ 77.72 $132.79 $282.82
optional BP rider 107.84 165.38 215.50 307.86 27.84 85.38 145.50 307.86
optional BPP rider 109.38 169.96 223.07 322.58 29.38 89.96 153.07 322.58
optional GMIB 108.86 168.44 220.55 317.70 28.86 88.44 150.55 317.70
optional GMIB and BP riders 111.43 176.04 233.08 341.88 31.43 96.04 163.08 341.88
optional GMIB and BPP riders 112.96 180.59 240.53 356.09 32.96 100.59 170.53 356.09
Lazard Retirement Equity Portfolio
contract with no additional riders 109.38 169.96 223.07 322.58 29.38 89.96 153.07 322.58
optional BP rider 111.94 177.56 235.57 346.64 31.94 97.56 165.57 346.64
optional BPP rider 113.48 182.10 243.01 360.79 33.48 102.10 173.01 360.79
optional GMIB 112.96 180.59 240.53 356.09 32.96 100.59 170.53 356.09
optional GMIB and BP riders 115.53 188.13 252.85 379.32 35.53 108.13 182.85 379.32
optional GMIB and BPP riders 117.06 192.64 260.18 392.98 37.06 112.64 190.18 392.98
Lazard Retirement International Equity Portfolio
contract with no additional riders 109.38 169.96 223.07 322.58 29.38 89.96 153.07 322.58
optional BP rider 111.94 177.56 235.57 346.64 31.94 97.56 165.57 346.64
optional BPP rider 113.48 182.10 243.01 360.79 33.48 102.10 173.01 360.79
optional GMIB 112.96 180.59 240.53 356.09 32.96 100.59 170.53 356.09
optional GMIB and BP riders 115.53 188.13 252.85 379.32 35.53 108.13 182.85 379.32
optional GMIB and BPP riders 117.06 192.64 260.18 392.98 37.06 112.64 190.18 392.98
MFS(R) New Discovery Series - Initial Class
contract with no additional riders 107.43 164.16 213.48 303.89 27.43 84.16 143.48 303.89
optional BP rider 109.99 171.79 226.08 328.41 29.99 91.79 156.08 328.41
optional BPP rider 111.53 176.34 233.58 342.83 31.53 96.34 163.58 342.83
optional GMIB 111.02 174.83 231.08 338.05 31.02 94.83 161.08 338.05
optional GMIB and BP riders 113.58 182.40 243.50 361.72 33.58 102.40 173.50 361.72
optional GMIB and BPP riders 115.12 186.93 250.89 375.64 35.12 106.93 180.89 375.64
MFS(R) Research Series - Initial Class
contract with no additional riders 105.28 157.72 202.79 282.82 25.28 77.72 132.79 282.82
optional BP rider 107.84 165.38 215.50 307.86 27.84 85.38 145.50 307.86
optional BPP rider 109.38 169.96 223.07 322.58 29.38 89.96 153.07 322.58
optional GMIB 108.86 168.44 220.55 317.70 28.86 88.44 150.55 317.70
optional GMIB and BP riders 111.43 176.04 233.08 341.88 31.43 96.04 163.08 341.88
optional GMIB and BPP riders 112.96 180.59 240.53 356.09 32.96 100.59 170.53 356.09
MFS(R) Utilities Series - Initial Class
contract with no additional riders 105.89 159.56 202.85 288.89 25.89 79.56 135.85 288.89
optional BP rider 108.45 167.21 218.53 313.77 28.45 87.21 148.53 313.77
optional BPP rider 109.99 171.79 226.08 328.41 29.99 91.79 156.08 328.41
optional GMIB 109.48 170.26 223.57 323.56 29.48 90.26 153.57 323.56
optional GMIB and BP riders 112.04 177.86 236.07 347.59 32.04 97.86 166.07 247.59
optional GMIB and BPP riders 113.58 182.40 243.50 361.72 33.58 102.40 173.50 361.72
--------------------------------------------------------------------------------
15 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
You would pay the following expenses on a $1,000 investment if you selected
death benefit Option B and assuming a 5% annual return and ... (continued)
no withdrawal or selection
full withdrawal at the of an annuity payout plan at the
end of each time period end of each time period
1 year 3 years 5 years 10 years 1 year 3 years 5 years 10 years
Royce Micro-Cap Portfolio
contract with no additional riders $110.40 $173.00 $228.08 $332.28 $30.40 $ 93.00 $158.08 $332.28
optional BP rider 112.96 180.59 240.53 356.09 32.96 100.59 170.53 356.09
optional BPP rider 114.50 185.12 247.94 370.10 34.50 105.12 177.94 370.10
optional GMIB 113.99 183.61 245.47 365.45 33.99 103.61 175.47 365.45
optional GMIB and BP riders 116.55 191.14 257.74 388.45 36.55 111.14 187.74 388.45
optional GMIB and BPP riders 118.09 195.63 265.04 401.97 38.09 115.63 195.04 401.97
Royce Small-Cap Portfolio (previously Royce Premier Portfolio)
contract with no additional riders 110.40 173.00 228.08 332.28 30.40 93.00 158.08 332.28
optional BP rider 112.96 180.59 240.53 356.09 32.96 100.59 170.53 356.09
optional BPP rider 114.50 185.12 247.94 370.10 34.50 105.12 177.94 370.10
optional GMIB 113.99 183.61 245.47 365.45 33.99 103.61 175.47 365.45
optional GMIB and BP riders 116.55 191.14 257.74 388.45 36.55 111.14 187.74 388.45
optional GMIB and BPP riders 118.09 195.63 265.04 401.97 38.09 115.63 195.04 401.97
Third Avenue Value Portfolio
contract with no additional riders 109.89 171.48 225.58 327.44 29.89 91.48 155.58 327.44
optional BP rider 112.45 179.07 238.05 351.38 32.45 99.07 168.05 351.38
optional BPP rider 113.99 183.61 245.47 365.45 33.99 103.61 175.47 365.45
optional GMIB 113.48 182.10 243.01 360.79 33.48 102.10 173.01 360.79
optional GMIB and BP riders 116.04 189.63 255.30 383.90 36.04 109.63 185.30 383.90
optional GMIB and BPP riders 117.58 194.14 262.61 397.48 37.58 114.14 192.61 397.48
Wanger International Small Cap
contract with no additional riders 111.02 174.83 231.08 338.05 31.02 94.83 161.08 338.05
optional BP rider 113.58 182.40 243.50 361.72 33.58 102.40 173.50 361.72
optional BPP rider 115.12 186.93 250.89 375.64 35.12 106.93 180.89 375.64
optional GMIB 114.60 185.42 248.43 371.03 34.60 105.42 178.43 371.03
optional GMIB and BP riders 117.17 192.94 260.66 393.88 37.17 112.94 190.66 393.88
optional GMIB and BPP riders 118.70 197.43 267.94 407.32 38.70 117.43 197.94 407.32
Wanger U.S. Small Cap
contract with no additional riders 106.81 162.32 210.43 297.92 26.81 82.32 140.43 297.92
optional BP rider 109.38 169.96 223.07 322.58 29.38 89.96 153.07 322.58
optional BPP rider 110.91 174.52 230.58 337.09 30.91 94.52 160.58 337.09
optional GMIB 110.40 173.00 228.08 332.28 30.40 93.00 158.08 332.28
optional GMIB and BP riders 112.96 180.59 240.53 356.09 32.96 100.59 170.53 356.09
optional GMIB and BPP riders 114.50 185.12 247.94 370.10 34.50 105.12 177.94 370.10
Wells Fargo VT Equity Income Fund
contract with no additional riders 106.81 162.32 210.43 297.92 26.81 82.32 140.43 297.92
optional BP rider 109.38 169.96 223.07 322.58 29.38 89.96 153.07 322.58
optional BPP rider 110.91 174.52 230.58 337.09 30.91 94.52 160.58 337.09
optional GMIB 110.40 173.00 228.08 332.28 30.40 93.00 158.08 332.28
optional GMIB and BP riders 112.96 180.59 240.53 356.09 32.96 100.59 170.53 356.09
optional GMIB and BPP riders 114.50 185.12 247.94 370.10 34.50 105.12 177.94 370.10
--------------------------------------------------------------------------------
16 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
You would pay the following expenses on a $1,000 investment if you selected
death benefit Option A and assuming a 5% annual return and ...
no withdrawal or selection
full withdrawal at the of an annuity payout plan at the
end of each time period end of each time period
1 year 3 years 5 years 10 years 1 year 3 years 5 years 10 years
AXP(R) Variable Portfolio - Blue Chip Advantage Fund
contract with no additional riders $103.53 $152.49 $194.07 $265.44 $23.53 $72.49 $124.07 $265.44
optional BP rider 106.10 160.18 206.87 290.90 26.10 80.18 136.87 290.90
optional BPP rider 107.63 164.77 214.49 305.88 27.63 84.77 144.49 305.88
AXP(R) Variable Portfolio - Bond Fund
contract with no additional riders 103.74 153.10 195.09 267.50 23.74 73.10 125.09 267.50
optional BP rider 106.30 160.79 207.89 292.91 26.30 80.79 137.89 292.91
optional BPP rider 107.84 165.38 215.50 307.86 27.84 85.38 145.50 307.86
AXP(R) Variable Portfolio - Capital Resource Fund
contract with no additional riders 103.53 152.49 194.07 265.44 23.53 72.49 124.07 265.44
optional BP rider 106.10 160.18 206.87 290.90 26.10 80.18 136.87 290.90
optional BPP rider 107.63 164.77 214.49 305.88 27.63 84.77 144.49 305.88
AXP(R) Variable Portfolio - Cash Management Fund
contract with no additional riders 102.51 149.40 188.91 255.08 22.51 69.40 118.91 255.08
optional BP rider 105.07 157.11 201.77 280.79 25.07 77.11 131.77 280.79
optional BPP rider 106.61 161.71 209.42 295.92 26.61 81.71 139.42 295.92
AXP(R) Variable Portfolio - Diversified Equity Income Fund
contract with no additional riders 104.87 156.49 200.74 278.76 24.87 76.49 130.74 278.76
optional BP rider 107.43 164.16 213.48 303.89 27.43 84.16 143.48 303.89
optional BPP rider 108.97 168.74 221.05 318.68 28.97 88.74 151.05 318.68
AXP(R) Variable Portfolio - Extra Income Fund
contract with no additional riders 103.94 153.72 196.12 269.56 23.94 73.72 126.12 269.56
optional BP rider 106.51 161.40 208.91 294.92 26.51 81.40 138.91 294.92
optional BPP rider 108.04 165.99 216.51 309.83 28.04 85.99 146.51 309.83
AXP(R) Variable Portfolio - Federal Income Fund
contract with no additional riders 104.15 154.34 197.15 271.61 24.15 74.34 127.15 271.61
optional BP rider 106.71 162.02 209.92 296.92 26.71 82.02 139.92 296.92
optional BPP rider 108.25 166.60 217.52 311.81 28.25 86.60 147.52 311.81
AXP(R) Variable Portfolio - Growth Fund
contract with no additional riders 104.76 156.18 200.23 277.74 24.76 76.18 130.23 277.74
optional BP rider 107.33 163.85 212.97 302.90 27.33 83.85 142.97 302.90
optional BPP rider 108.86 168.44 220.55 317.70 28.86 88.44 150.55 317.70
AXP(R) Variable Portfolio - Managed Fund
contract with no additional riders 103.33 151.87 193.04 263.38 23.33 71.87 123.04 263.38
optional BP rider 105.89 159.56 205.85 288.89 25.89 79.56 135.85 288.89
optional BPP rider 107.43 164.16 213.48 303.89 27.43 84.16 143.48 303.89
AXP(R) Variable Portfolio - New Dimensions Fund(R)
contract with no additional riders 103.64 152.80 194.58 266.47 23.64 72.80 124.58 266.47
optional BP rider 106.20 160.48 207.38 291.91 26.20 80.48 137.38 291.91
optional BPP rider 107.74 165.08 215.00 306.87 27.74 85.08 145.00 306.87
--------------------------------------------------------------------------------
17 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
You would pay the following expenses on a $1,000 investment if you selected
death benefit Option A and assuming a 5% annual return and ... (continued)
no withdrawal or selection
full withdrawal at the of an annuity payout plan at the
end of each time period end of each time period
1 year 3 years 5 years 10 years 1 year 3 years 5 years 10 years
AXP(R) Variable Portfolio - Small Cap Advantage Fund
contract with no additional riders $107.43 $164.16 $213.48 $303.89 $27.43 $ 84.16 $143.48 $303.89
optional BP rider 109.99 171.79 226.08 328.41 29.99 91.79 156.08 328.41
optional BPP rider 111.53 176.34 233.58 342.83 31.53 96.34 163.58 342.83
AIM V.I. Capital Appreciation Fund
contract with no additional riders 103.94 153.72 196.12 269.56 23.94 73.72 126.12 269.56
optional BP rider 106.51 161.40 208.91 294.92 26.51 81.40 138.91 294.92
optional BPP rider 108.04 165.99 216.51 309.83 28.04 85.99 146.51 309.83
AIM V.I. Capital Development Fund
contract with no additional riders 109.68 170.87 224.57 325.50 29.68 90.87 154.57 325.50
optional BP rider 112.25 178.47 237.06 349.49 32.25 98.47 167.06 349.49
optional BPP rider 113.78 183.00 244.49 363.59 33.78 103.00 174.49 363.59
AIM V.I. Value Fund
contract with no additional riders 104.15 154.34 197.15 271.61 24.15 74.34 127.15 271.61
optional BP rider 106.71 162.02 209.92 296.92 26.71 82.02 139.92 296.92
optional BPP rider 108.25 166.00 217.52 311.81 28.25 86.60 147.52 311.81
Alliance VP Premier Growth Portfolio (Class B)
contract with no additional riders 108.86 168.44 220.55 317.70 28.86 88.44 150.55 317.70
optional BP rider 111.43 176.04 233.08 341.88 31.43 96.04 163.08 341.88
optional BPP rider 112.96 180.59 240.53 356.09 32.96 100.59 170.53 356.09
Alliance VP Technology Portfolio (Class B)
contract with no additional riders 108.97 168.74 221.05 318.68 28.97 88.74 151.05 318.68
optional BP rider 111.53 176.34 233.58 342.83 31.53 96.34 163.58 342.83
optional BPP rider 113.07 180.89 241.03 357.03 33.07 100.89 171.03 357.03
Alliance VP U.S. Government/High Grade Securities Portfolio (Class B)
contract with no additional riders 107.84 165.38 215.50 307.86 27.84 85.38 145.50 307.86
optional BP rider 110.40 173.00 228.08 332.28 30.40 93.00 158.08 332.28
optional BPP rider 111.94 177.56 235.57 346.64 31.94 97.56 165.57 346.64
Baron Capital Asset Fund - Insurance Shares
contract with no additional riders 110.91 174.52 230.58 337.09 30.91 94.52 160.58 337.09
optional BP rider 113.48 182.10 243.01 360.79 33.48 102.10 173..01 360.79
optional BPP rider 115.01 186.62 250.40 374.72 35.01 106.62 180.40 374.72
Credit Suisse Warburg Pincus Trust - Emerging Growth Portfolio
(previously Warburg Pincus Trust - Emerging Growth Portfolio)
contract with no additional riders 108.35 166.91 218.03 312.79 28.35 86.91 148.03 312.79
optional BP rider 110.91 174.52 230.58 337.09 30.91 94.52 160.58 337.09
optional BPP rider 112.45 179.07 238.05 351.38 32.45 99.07 168.05 351.38
Fidelity VIP Growth & Income Portfolio (Service Class)
contract with no additional riders 102.61 149.71 189.42 256.12 22.61 69.71 119.42 256.12
optional BP rider 105.17 157.41 202.28 281.81 25.17 77.41 132.28 281.81
optional BPP rider 106.71 162.02 209.92 296.92 26.71 82.02 139.92 296.92
--------------------------------------------------------------------------------
18 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
You would pay the following expenses on a $1,000 investment if you selected
death benefit Option A and assuming a 5% annual return and ... (continued)
no withdrawal or selection
full withdrawal at the of an annuity payout plan at the
end of each time period end of each time period
1 year 3 years 5 years 10 years 1 year 3 years 5 years 10 years
Fidelity VIP Mid Cap Portfolio (Service Class)
contract with no additional riders $104.15 $154.34 $197.15 $271.61 $24.15 $ 74.34 $127.15 $271.61
optional BP rider 106.71 162.02 209.92 296.92 26.71 82.02 139.92 296.92
optional BPP rider 108.25 166.60 217.52 311.81 28.25 86.60 147.52 311.81
Fidelity VIP Overseas Portfolio (Service Class)
contract with no additional riders 105.69 158.95 204.83 286.87 25.69 78.95 134.83 286.87
optional BP rider 108.25 166.60 217.52 311.81 28.25 86.60 147.52 311.81
optional BPP rider 109.79 171.18 225.08 326.47 29.79 91.18 155.08 326.47
FTVIPT Franklin Real Estate Fund - Class 2
contract with no additional riders 104.25 154.64 197.66 272.63 24.25 74.64 127.66 272.63
optional BP rider 106.81 162.32 210.43 297.92 26.81 82.32 140.43 297.92
optional BPP rider 108.35 166.91 218.03 312.79 28.35 86.91 148.03 312.79
FTVIPT Mutual Shares Securities Fund - Class 2
contract with no additional riders 106.30 160.79 207.89 292.91 26.30 80.79 137.89 292.91
optional BP rider 108.86 168.44 220.55 317.70 28.86 88.44 150.55 317.70
optional BPP rider 110.40 173.00 228.08 332.28 30.40 93.00 158.08 332.28
FTVIPT Templeton International Smaller Companies Fund - Class 2
contract with no additional riders 109.48 170.26 223.57 323.56 29.48 90.26 153.57 323.56
optional BP rider 112.04 177.86 236.07 347.59 32.04 97.86 166.07 347.59
optional BPP rider 113.58 182.40 243.50 361.72 33.58 102.40 173.50 361.72
Goldman Sachs VIT Capital Growth Fund
contract with no additional riders 105.79 159.26 205.34 287.88 25.79 79.26 135.34 287.88
optional BP rider 108.35 166.91 218.03 312.79 28.35 86.91 148.03 312.79
optional BPP rider 109.89 171.48 225.58 327.44 29.89 91.48 155.58 327.44
Goldman Sachs VIT CORE(SM) U.S. Equity Fund
contract with no additional riders 104.76 156.18 200.23 277.74 24.76 76.18 130.23 277.74
optional BP rider 107.33 163.85 212.97 302.90 27.33 83.85 142.97 302.90
optional BPP rider 108.86 168.44 220.55 317.70 28.86 88.44 150.55 317.70
Goldman Sachs VIT Global Income Fund
contract with no additional riders 107.33 163.85 212.97 302.90 27.33 83.85 142.97 302.90
optional BP rider 109.89 171.48 225.58 327.44 29.89 91.48 155.58 327.44
optional BPP rider 111.43 176.04 233.08 341.88 31.43 96.04 163.08 341.88
Goldman Sachs VIT International Equity Fund
contract with no additional riders 109.38 169.96 223.07 322.58 29.38 89.96 153.07 322.58
optional BP rider 111.94 177.56 235.57 346.64 31.94 97.56 165.57 346.64
optional BPP rider 113.48 182.10 243.01 360.79 33.48 102.10 173.01 360.79
Goldman Sachs VIT Internet Tollkeeper Fund(SM)
contract with no additional riders 108.35 166.91 218.03 312.79 28.35 86.91 148.03 312.79
optional BP rider 110.91 174.52 230.58 337.09 30.91 94.52 160.58 337.09
optional BPP rider 112.45 179.07 238.05 351.38 32.45 99.07 168.05 351.38
--------------------------------------------------------------------------------
19 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
You would pay the following expenses on a $1,000 investment if you selected
death benefit Option A and assuming a 5% annual return and ... (continued)
no withdrawal or selection
full withdrawal at the of an annuity payout plan at the
end of each time period end of each time period
1 year 3 years 5 years 10 years 1 year 3 years 5 years 10 years
Janus Aspen Series Aggressive Growth Portfolio: Service Shares
contract with no additional riders $104.97 $156.80 $201.25 $279.78 $24.97 $76.80 $131.25 $279.78
optional BP rider 107.53 164.46 213.98 304.89 27.53 84.46 143.98 304.89
optional BPP rider 109.07 169.05 221.56 319.66 29.07 89.05 151.56 319.66
Janus Aspen Series Global Technology Portfolio: Service Shares
contract with no additional riders 105.17 157.41 202.28 281.81 25.17 77.41 132.28 281.81
optional BP rider 107.74 165.08 215.00 306.87 27.74 85.08 145.00 306.87
optional BPP rider 109.27 169.65 222.56 321.61 29.27 89.65 152.56 321.61
Janus Aspen Series Growth Portfolio: Service Shares
contract with no additional riders 104.97 156.80 201.25 279.78 24.97 76.80 131.25 279.78
optional BP rider 107.53 164.46 213.98 304.89 27.53 84.46 143.98 304.89
optional BPP rider 109.07 169.05 221.56 319.66 29.07 89.05 151.56 319.66
Janus Aspen Series International Growth Portfolio: Service Shares
contract with no additional riders 105.38 158.03 203.30 283.84 25.38 78.03 133.30 283.84
optional BP rider 107.94 165.69 216.01 308.85 27.94 85.69 146.01 308.85
optional BPP rider 109.48 170.26 223.57 323.56 29.48 90.26 153.57 323.56
J.P. Morgan U.S. Disciplined Equity Portfolio
contract with no additional riders 104.25 154.64 197.66 272.63 24.25 74.64 127.66 272.63
optional BP rider 106.81 162.32 210.43 297.92 26.81 82.32 140.43 297.92
optional BPP rider 108.35 166.91 218.03 312.79 28.35 86.91 148.03 312.79
Lazard Retirement Equity Portfolio
contract with no additional riders 108.35 166.91 218.03 312.79 28.35 86.91 148.03 312.79
optional BP rider 110.91 174.52 230.58 337.09 30.91 94.52 160.58 337.09
optional BPP rider 112.45 179.07 238.05 351.38 32.45 99.07 168.05 351.38
Lazard Retirement International Equity Portfolio
contract with no additional riders 108.35 166.91 218.03 312.79 28.35 86.91 148.03 312.79
optional BP rider 110.91 174.52 230.58 337.09 30.91 94.52 160.58 337.09
optional BPP rider 112.45 179.07 238.05 351.38 32.45 99.07 168.05 351.38
MFS(R) New Discovery Series - Initial Class
contract with no additional riders 106.40 161.10 208.40 293.92 26.40 81.10 138.40 293.92
optional BP rider 108.97 168.74 221.05 318.68 28.97 88.74 151.05 318.68
optional BPP rider 110.50 173.31 228.58 333.24 30.50 93.31 158.58 333.24
MFS(R) Research Series - Initial Class
contract with no additional riders 104.25 154.64 197.66 272.63 24.25 74.64 127.66 272.63
optional BP rider 106.81 162.32 210.43 297.92 26.81 82.32 140.43 297.92
optional BPP rider 108.35 166.91 218.03 312.79 28.35 86.91 148.03 312.79
MFS(R) Utilities Series - Initial Class
contract with no additional riders 104.87 156.49 200.74 278.76 24.87 76.49 130.74 278.76
optional BP rider 107.43 164.16 213.48 303.89 27.43 84.16 143.48 303.89
optional BPP rider 108.97 168.74 221.05 318.68 28.97 88.74 151.05 318.68
--------------------------------------------------------------------------------
20 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
You would pay the following expenses on a $1,000 investment if you selected
death benefit Option A and assuming a 5% annual return and ... (continued)
no withdrawal or selection
full withdrawal at the of an annuity payout plan at the
end of each time period end of each time period
1 year 3 years 5 years 10 years 1 year 3 years 5 years 10 years
Royce Micro-Cap Portfolio
contract with no additional riders $109.38 $169.96 $223.07 $322.58 $29.38 $ 89.96 $153.07 $322.58
optional BP rider 111.94 177.56 235.57 346.64 31.94 97.56 165.57 346.64
optional BPP rider 113.48 182.10 243.01 360.79 33.48 102.10 173.01 360.79
Royce Small-Cap Portfolio
(previously Royce Premier Portfolio)
contract with no additional riders 109.38 169.96 223.07 322.58 29.38 89.96 153.07 322.58
optional BP rider 111.94 177.56 235.57 346.64 31.94 97.56 165.57 346.64
optional BPP rider 113.48 182.10 243.01 360.79 33.48 102.10 173.01 360.79
Third Avenue Value Portfolio
contract with no additional riders 108.86 168.44 220.55 317.70 28.86 88.44 150.55 317.70
optional BP rider 111.43 176.04 233.08 341.88 31.43 96.04 163.08 341.88
optional BPP rider 112.96 180.59 240.53 356.09 32.96 100.59 170.53 356.09
Wanger International Small Cap
contract with no additional riders 109.99 171.79 226.08 328.41 29.99 91.79 156.08 328.41
optional BP rider 112.55 179.38 238.55 352.32 32.55 99.38 168.55 352.32
optional BPP rider 114.09 183.91 245.97 366.39 34.09 103.91 175.97 366.39
Wanger U.S. Small Cap
contract with no additional riders 105.79 159.26 205.34 287.88 25.79 79.26 135.34 287.88
optional BP rider 108.35 166.91 218.03 312.79 28.35 86.91 148.03 312.79
optional BPP rider 109.89 171.48 225.58 327.44 29.89 91.48 155.58 327.44
Wells Fargo VT Equity Income Fund
contract with no additional riders 105.79 159.26 205.34 287.88 25.79 79.26 135.34 287.88
optional BP rider 108.35 166.91 218.03 312.79 28.35 86.91 148.03 312.79
optional BPP rider 109.89 171.48 225.58 327.44 29.89 91.48 155.58 327.44
* In these examples, the $30 contract administrative charge is approximated as
a 0.016% charge based on our average contract size. Premium taxes imposed by
some state and local governments are not reflected in these tables. We
entered into certain arrangements under which we are compensated by the
funds' advisers and/or distributors for the administrative services we
provide to the funds.
You should not consider these examples as representations of past or future
expenses. Actual expenses may be more or less than those shown.
--------------------------------------------------------------------------------
21 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
Condensed Financial Information
(Unaudited)
The following tables give per-unit information about the financial history of
each subaccount.
Year ended Dec. 31, 2000
Subaccount SBCA1(1) (Investing in shares of AXP(R) Variable Portfolio - Blue Chip Advantage Fund)
Accumulation unit value at beginning of period $1.00
Accumulation unit value at end of period $0.93
Number of accumulation units outstanding at end of period (000 omitted) 738
Ratio of operating expense to average net assets 1.60%
Subaccount WBCA3(2) (Investing in shares of AXP(R) Variable Portfolio - Blue Chip Advantage Fund)
Accumulation unit value at beginning of period $1.00
Accumulation unit value at end of period $0.91
Number of accumulation units outstanding at end of period (000 omitted) 789
Ratio of operating expense to average net assets 1.50%
Subaccount SBND1(1) (Investing in shares of AXP(R) Variable Portfolio - Bond Fund)
Accumulation unit value at beginning of period $1.00
Accumulation unit value at end of period $1.03
Number of accumulation units outstanding at end of period (000 omitted) 688
Ratio of operating expense to average net assets 1.60%
Subaccount SBND2(3) (Investing in shares of AXP(R) Variable Portfolio - Bond Fund)
Accumulation unit value at beginning of period $1.00
Accumulation unit value at end of period $1.03
Number of accumulation units outstanding at end of period (000 omitted) 64
Ratio of operating expense to average net assets 1.50%
Subaccount SCAR1(1) (Investing in shares of AXP(R) Variable Portfolio - Capital Resource Fund)
Accumulation unit value at beginning of period $1.00
Accumulation unit value at end of period $0.85
Number of accumulation units outstanding at end of period (000 omitted) 785
Ratio of operating expense to average net assets 1.60%
Subaccount WCAR3(2) (Investing in shares of AXP(R) Variable Portfolio - Capital Resource Fund)
Accumulation unit value at beginning of period $1.00
Accumulation unit value at end of period $0.83
Number of accumulation units outstanding at end of period (000 omitted) 479
Ratio of operating expense to average net assets 1.50%
Subaccount SCMG1(1) (Investing in shares of AXP(R) Variable Portfolio - Cash Management Fund)
Accumulation unit value at beginning of period $1.00
Accumulation unit value at end of period $1.03
Number of accumulation units outstanding at end of period (000 omitted) 11,511
Ratio of operating expense to average net assets 1.60%
Simple yield(4) 4.33%
Compound yield(4) 4.42%
Subaccount SCMG2(3) (Investing in shares of AXP(R) Variable Portfolio - Cash Management Fund)
Accumulation unit value at beginning of period $1.00
Accumulation unit value at end of period $1.03
Number of accumulation units outstanding at end of period (000 omitted) 2,613
Ratio of operating expense to average net assets 1.50%
Simple yield(4) 4.45%
Compound yield(4) 4.55%
Subaccount SDEI1(1) (Investing in shares of AXP(R) Variable Portfolio - Diversified Equity Income Fund)
Accumulation unit value at beginning of period $1.00
Accumulation unit value at end of period $1.07
Number of accumulation units outstanding at end of period (000 omitted) 52
Ratio of operating expense to average net assets 1.60%
--------------------------------------------------------------------------------
22 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
Year ended Dec. 31, 2000
Subaccount WDEI3(2) (Investing in shares of AXP(R) Variable Portfolio - Diversified Equity Income Fund)
Accumulation unit value at beginning of period $1.00
Accumulation unit value at end of period $1.08
Number of accumulation units outstanding at end of period (000 omitted) 66
Ratio of operating expense to average net assets 1.50%
Subaccount SEXI1(1) (Investing in shares of AXP(R) Variable Portfolio - Extra Income Fund)
Accumulation unit value at beginning of period $1.00
Accumulation unit value at end of period $0.88
Number of accumulation units outstanding at end of period (000 omitted) 390
Ratio of operating expense to average net assets 1.60%
Subaccount WEXI3(2) (Investing in shares of AXP(R) Variable Portfolio - Extra Income Fund)
Accumulation unit value at beginning of period $1.00
Accumulation unit value at end of period $0.87
Number of accumulation units outstanding at end of period (000 omitted) 310
Ratio of operating expense to average net assets 1.50%
Subaccount SFDI1(1) (Investing in shares of AXP(R) Variable Portfolio - Federal Income Fund)
Accumulation unit value at beginning of period $1.00
Accumulation unit value at end of period $1.06
Number of accumulation units outstanding at end of period (000 omitted) 24
Ratio of operating expense to average net assets 1.60%
Subaccount WFDI3(2) (Investing in shares of AXP(R) Variable Portfolio - Federal Income Fund)
Accumulation unit value at beginning of period $1.00
Accumulation unit value at end of period $1.05
Number of accumulation units outstanding at end of period (000 omitted) 272
Ratio of operating expense to average net assets 1.50%
Subaccount SGRO1(1) (Investing in shares of AXP(R) Variable Portfolio - Growth Fund)
Accumulation unit value at beginning of period $1.00
Accumulation unit value at end of period $0.77
Number of accumulation units outstanding at end of period (000 omitted) 554
Ratio of operating expense to average net assets 1.60%
Subaccount SGRO2(3) (Investing in shares of AXP(R) Variable Portfolio - Growth Fund)
Accumulation unit value at beginning of period $1.00
Accumulation unit value at end of period $0.74
Number of accumulation units outstanding at end of period (000 omitted) 211
Ratio of operating expense to average net assets 1.50%
Subaccount SMGD1(1) (Investing in shares of AXP(R) Variable Portfolio - Managed Fund)
Accumulation unit value at beginning of period $1.00
Accumulation unit value at end of period $0.98
Number of accumulation units outstanding at end of period (000 omitted) 613
Ratio of operating expense to average net assets 1.60%
Subaccount SMGD2(3) (Investing in shares of AXP(R) Variable Portfolio - Managed Fund)
Accumulation unit value at beginning of period $1.00
Accumulation unit value at end of period $0.94
Number of accumulation units outstanding at end of period (000 omitted) 51
Ratio of operating expense to average net assets 1.50%
Subaccount SNDM1(1) (Investing in shares of AXP(R) Variable Portfolio - New Dimensions Fund(R))
Accumulation unit value at beginning of period $1.00
Accumulation unit value at end of period $0.90
Number of accumulation units outstanding at end of period (000 omitted) 2,468
Ratio of operating expense to average net assets 1.60%
Subaccount WNDM3(2) (Investing in shares of AXP(R) Variable Portfolio - New Dimensions Fund(R))
Accumulation unit value at beginning of period $1.00
Accumulation unit value at end of period $0.86
Number of accumulation units outstanding at end of period (000 omitted) 2,130
Ratio of operating expense to average net assets 1.50%
--------------------------------------------------------------------------------
23 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
Year ended Dec. 31, 2000
Subaccount SSCA1(1) (Investing in shares of AXP(R) Variable Portfolio - Small Cap Advantage Fund)
Accumulation unit value at beginning of period $1.00
Accumulation unit value at end of period $1.00
Number of accumulation units outstanding at end of period (000 omitted) 147
Ratio of operating expense to average net assets 1.60%
Subaccount WSCA3(2) (Investing in shares of AXP(R) Variable Portfolio - Small Cap Advantage Fund)
Accumulation unit value at beginning of period $1.00
Accumulation unit value at end of period $0.90
Number of accumulation units outstanding at end of period (000 omitted) 173
Ratio of operating expense to average net assets 1.50%
Subaccount SCAP1(1) (Investing in shares of AIM V.I. Capital Appreciation Fund)
Accumulation unit value at beginning of period $1.00
Accumulation unit value at end of period $0.83
Number of accumulation units outstanding at end of period (000 omitted) 8,641
Ratio of operating expense to average net assets 1.60%
Subaccount WCAP3(2) (Investing in shares of AIM V.I. Capital Appreciation Fund)
Accumulation unit value at beginning of period $1.00
Accumulation unit value at end of period $0.75
Number of accumulation units outstanding at end of period (000 omitted) 5,686
Ratio of operating expense to average net assets 1.50%
Subaccount SCDV1(1) (Investing in shares of AIM V.I. Capital Development Fund)
Accumulation unit value at beginning of period $1.00
Accumulation unit value at end of period $0.97
Number of accumulation units outstanding at end of period (000 omitted) 3,627
Ratio of operating expense to average net assets 1.60%
Subaccount SCDV2(3) (Investing in shares of AIM V.I. Capital Development Fund)
Accumulation unit value at beginning of period $1.00
Accumulation unit value at end of period $0.97
Number of accumulation units outstanding at end of period (000 omitted) 850
Ratio of operating expense to average net assets 1.50%
Subaccount SVAL1(1) (Investing in shares of AIM V.I. Value Fund)
Accumulation unit value at beginning of period $1.00
Accumulation unit value at end of period $0.83
Number of accumulation units outstanding at end of period (000 omitted) 10,738
Ratio of operating expense to average net assets 1.60%
Subaccount WVAL3(2) (Investing in shares of AIM V.I. Value Fund)
Accumulation unit value at beginning of period $1.00
Accumulation unit value at end of period $0.81
Number of accumulation units outstanding at end of period (000 omitted) 6,187
Ratio of operating expense to average net assets 1.50%
Subaccount SPGR1(1) (Investing in shares of Alliance VP Premier Growth Portfolio (Class B))
Accumulation unit value at beginning of period $1.00
Accumulation unit value at end of period $0.86
Number of accumulation units outstanding at end of period (000 omitted) 9,298
Ratio of operating expense to average net assets 1.60%
Subaccount SPGR2(3) (Investing in shares of Alliance VP Premier Growth Portfolio (Class B))
Accumulation unit value at beginning of period $1.00
Accumulation unit value at end of period $0.80
Number of accumulation units outstanding at end of period (000 omitted) 1,899
Ratio of operating expense to average net assets 1.50%
Subaccount STEC1(1) (Investing in shares of Alliance VP Technology Portfolio (Class B))
Accumulation unit value at beginning of period $1.00
Accumulation unit value at end of period $0.70
Number of accumulation units outstanding at end of period (000 omitted) 9,543
Ratio of operating expense to average net assets 1.60%
--------------------------------------------------------------------------------
24 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
Year ended Dec. 31, 2000
Subaccount STEC2(3) (Investing in shares of Alliance VP Technology Portfolio (Class B))
Accumulation unit value at beginning of period $1.00
Accumulation unit value at end of period $0.65
Number of accumulation units outstanding at end of period (000 omitted) 2,882
Ratio of operating expense to average net assets 1.50%
Subaccount SUGH1(1) (Investing in shares of Alliance VP U.S. Government/High Grade
Securities Portfolio (Class B))
Accumulation unit value at beginning of period $1.00
Accumulation unit value at end of period $1.09
Number of accumulation units outstanding at end of period (000 omitted) 319
Ratio of operating expense to average net assets 1.60%
Subaccount SUGH2(3) (Investing in shares of Alliance VP U.S. Government/High Grade
Securities Portfolio (Class B))
Accumulation unit value at beginning of period $1.00
Accumulation unit value at end of period $1.01
Number of accumulation units outstanding at end of period (000 omitted) 405
Ratio of operating expense to average net assets 1.50%
Subaccount SCAS1(1) (Investing in shares of Baron Capital Asset Fund - Insurance Shares)
Accumulation unit value at beginning of period $1.00
Accumulation unit value at end of period $0.96
Number of accumulation units outstanding at end of period (000 omitted) 668
Ratio of operating expense to average net assets 1.60%
Subaccount SCAS2(3) (Investing in shares of Baron Capital Asset Fund - Insurance Shares)
Accumulation unit value at beginning of period $1.00
Accumulation unit value at end of period $0.95
Number of accumulation units outstanding at end of period (000 omitted) 44
Ratio of operating expense to average net assets 1.50%
Subaccount SEGR1(1) (Investing in shares of Credit Suisse Warburg Pincus Trust -
Emerging Growth Portfolio(5))
Accumulation unit value at beginning of period $1.00
Accumulation unit value at end of period $0.83
Number of accumulation units outstanding at end of period (000 omitted) 1,637
Ratio of operating expense to average net assets 1.60%
Subaccount SEGR2(3) (Investing in shares of Credit Suisse Warburg Pincus Trust -
Emerging Growth Portfolio(5))
Accumulation unit value at beginning of period $1.00
Accumulation unit value at end of period $0.93
Number of accumulation units outstanding at end of period (000 omitted) 103
Ratio of operating expense to average net assets 1.50%
Subaccount SGRI1(1) (Investing in shares of Fidelity VIP Growth & Income Portfolio (Service Class))
Accumulation unit value at beginning of period $1.00
Accumulation unit value at end of period $1.01
Number of accumulation units outstanding at end of period (000 omitted) 2,250
Ratio of operating expense to average net assets 1.60%
Subaccount SGRI2(3) (Investing in shares of Fidelity VIP Growth & Income Portfolio (Service Class))
Accumulation unit value at beginning of period $1.00
Accumulation unit value at end of period $0.99
Number of accumulation units outstanding at end of period (000 omitted) 637
Ratio of operating expense to average net assets 1.50%
Subaccount SMDC1(1) (Investing in shares of Fidelity VIP Mid Cap Portfolio (Service Class))
Accumulation unit value at beginning of period $1.00
Accumulation unit value at end of period $1.14
Number of accumulation units outstanding at end of period (000 omitted) 10,072
Ratio of operating expense to average net assets 1.60%
Subaccount SMDC2(3) (Investing in shares of Fidelity VIP Mid Cap Portfolio (Service Class))
Accumulation unit value at beginning of period $1.00
Accumulation unit value at end of period $1.14
Number of accumulation units outstanding at end of period (000 omitted) 3,650
Ratio of operating expense to average net assets 1.50%
--------------------------------------------------------------------------------
25 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
Year ended Dec. 31, 2000
Subaccount SOVS1(1) (Investing in shares of Fidelity VIP Overseas Portfolio (Service Class))
Accumulation unit value at beginning of period $1.00
Accumulation unit value at end of period $0.80
Number of accumulation units outstanding at end of period (000 omitted) 1,064
Ratio of operating expense to average net assets 1.60%
Subaccount SOVS2(3) (Investing in shares of Fidelity VIP Overseas Portfolio (Service Class))
Accumulation unit value at beginning of period $1.00
Accumulation unit value at end of period $0.85
Number of accumulation units outstanding at end of period (000 omitted) 506
Ratio of operating expense to average net assets 1.50%
Subaccount SRES1(1) (Investing in shares of FTVIPT Franklin Real Estate Fund - Class 2)
Accumulation unit value at beginning of period $1.00
Accumulation unit value at end of period $1.32
Number of accumulation units outstanding at end of period (000 omitted) 269
Ratio of operating expense to average net assets 1.60%
Subaccount WRES3(2) (Investing in shares of FTVIPT Franklin Real Estate Fund - Class 2)
Accumulation unit value at beginning of period $1.00
Accumulation unit value at end of period $1.18
Number of accumulation units outstanding at end of period (000 omitted) 92
Ratio of operating expense to average net assets 1.50%
Subaccount SMSS1(1) (Investing in shares of FTVIPT Mutual Shares Securities Fund - Class 2)
Accumulation unit value at beginning of period $1.00
Accumulation unit value at end of period $1.19
Number of accumulation units outstanding at end of period (000 omitted) 79
Ratio of operating expense to average net assets 1.60%
Subaccount WMSS3(2) (Investing in shares of FTVIPT Mutual Shares Securities Fund - Class 2)
Accumulation unit value at beginning of period $1.00
Accumulation unit value at end of period $1.11
Number of accumulation units outstanding at end of period (000 omitted) 39
Ratio of operating expense to average net assets 1.50%
Subaccount SISC1(1) (Investing in shares of FTVIPT Templeton International Smaller Companies Fund - Class 2)
Accumulation unit value at beginning of period $1.00
Accumulation unit value at end of period $0.96
Number of accumulation units outstanding at end of period (000 omitted) 199
Ratio of operating expense to average net assets 1.60%
Subaccount SISC2(3) (Investing in shares of FTVIPT Templeton International Smaller Companies Fund - Class 2)
Accumulation unit value at beginning of period $1.00
Accumulation unit value at end of period $0.96
Number of accumulation units outstanding at end of period (000 omitted) 33
Ratio of operating expense to average net assets 1.50%
Subaccount SCGR1(1) (Investing in shares of Goldman Sachs VIT Capital Growth Fund)
Accumulation unit value at beginning of period $1.00
Accumulation unit value at end of period $0.95
Number of accumulation units outstanding at end of period (000 omitted) 1,157
Ratio of operating expense to average net assets 1.60%
Subaccount SCGR2(3) (Investing in shares of Goldman Sachs VIT Capital Growth Fund)
Accumulation unit value at beginning of period $1.00
Accumulation unit value at end of period $0.91
Number of accumulation units outstanding at end of period (000 omitted) 89
Ratio of operating expense to average net assets 1.50%
Subaccount SUSE1(1) (Investing in shares of Goldman Sachs VIT CORE(SM) U.S. Equity Fund)
Accumulation unit value at beginning of period $1.00
Accumulation unit value at end of period $0.94
Number of accumulation units outstanding at end of period (000 omitted) 1,910
Ratio of operating expense to average net assets 1.60%
--------------------------------------------------------------------------------
26 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
Year ended Dec. 31, 2000
Subaccount WUSE3(2) (Investing in shares of Goldman Sachs VIT CORE(SM) U.S. Equity Fund)
Accumulation unit value at beginning of period $1.00
Accumulation unit value at end of period $0.92
Number of accumulation units outstanding at end of period (000 omitted) 587
Ratio of operating expense to average net assets 1.50%
Subaccount SGLI1(1) (Investing in shares of Goldman Sachs VIT Global Income Fund)
Accumulation unit value at beginning of period $1.00
Accumulation unit value at end of period $1.07
Number of accumulation units outstanding at end of period (000 omitted) 260
Ratio of operating expense to average net assets 1.60%
Subaccount WGLI3(2) (Investing in shares of Goldman Sachs VIT Global Income Fund)
Accumulation unit value at beginning of period $1.00
Accumulation unit value at end of period $1.07
Number of accumulation units outstanding at end of period (000 omitted) 58
Ratio of operating expense to average net assets 1.50%
Subaccount SIEQ1(1) (Investing in shares of Goldman Sachs VIT International Equity Fund)
Accumulation unit value at beginning of period $1.00
Accumulation unit value at end of period $0.85
Number of accumulation units outstanding at end of period (000 omitted) 621
Ratio of operating expense to average net assets 1.60%
Subaccount SIEQ2(3) (Investing in shares of Goldman Sachs VIT International Equity Fund)
Accumulation unit value at beginning of period $1.00
Accumulation unit value at end of period $0.88
Number of accumulation units outstanding at end of period (000 omitted) 77
Ratio of operating expense to average net assets 1.50%
Subaccount SITO1(3) (Investing in shares of Goldman Sachs VIT Internet Tollkeeper Fund(SM))
Accumulation unit value at beginning of period $1.00
Accumulation unit value at end of period $0.67
Number of accumulation units outstanding at end of period (000 omitted) 2,260
Ratio of operating expense to average net assets 1.60%
Subaccount SITO2(3) (Investing in shares of Goldman Sachs VIT Internet Tollkeeper Fund(SM))
Accumulation unit value at beginning of period $1.00
Accumulation unit value at end of period $0.67
Number of accumulation units outstanding at end of period (000 omitted) 420
Ratio of operating expense to average net assets 1.50%
Subaccount SAGP1(1) (Investing in shares of Janus Aspen Series Aggressive Growth Portfolio: Service Shares)
Accumulation unit value at beginning of period $1.00
Accumulation unit value at end of period $0.58
Number of accumulation units outstanding at end of period (000 omitted) 8,739
Ratio of operating expense to average net assets 1.60%
Subaccount SAGP2(3) (Investing in shares of Janus Aspen Series Aggressive Growth Portfolio: Service Shares)
Accumulation unit value at beginning of period $1.00
Accumulation unit value at end of period $0.70
Number of accumulation units outstanding at end of period (000 omitted) 1,050
Ratio of operating expense to average net assets 1.50%
Subaccount SGLT1(3) (Investing in shares of Janus Aspen Series Global Technology Portfolio: Service Shares)
Accumulation unit value at beginning of period $1.00
Accumulation unit value at end of period $0.68
Number of accumulation units outstanding at end of period (000 omitted) 3,873
Ratio of operating expense to average net assets 1.60%
Subaccount SGLT2(3) (Investing in shares of Janus Aspen Series Global Technology Portfolio: Service Shares)
Accumulation unit value at beginning of period $1.00
Accumulation unit value at end of period $0.68
Number of accumulation units outstanding at end of period (000 omitted) 769
Ratio of operating expense to average net assets 1.50%
--------------------------------------------------------------------------------
27 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
Year ended Dec. 31, 2000
Subaccount SGRP1(1) (Investing in shares of Janus Aspen Series Growth Portfolio: Service Shares)
Accumulation unit value at beginning of period $1.00
Accumulation unit value at end of period $0.81
Number of accumulation units outstanding at end of period (000 omitted) 12,345
Ratio of operating expense to average net assets 1.60%
Subaccount SGRP2(3) (Investing in shares of Janus Aspen Series Growth Portfolio: Service Shares)
Accumulation unit value at beginning of period $1.00
Accumulation unit value at end of period $0.82
Number of accumulation units outstanding at end of period (000 omitted) 4,333
Ratio of operating expense to average net assets 1.50%
Subaccount SINT1(1) (Investing in shares of Janus Aspen Series International Growth Portfolio:
Service Shares)
Accumulation unit value at beginning of period $1.00
Accumulation unit value at end of period $0.73
Number of accumulation units outstanding at end of period (000 omitted) 7,309
Ratio of operating expense to average net assets 1.60%
Subaccount SINT2(3) (Investing in shares of Janus Aspen Series International Growth Portfolio:
Service Shares)
Accumulation unit value at beginning of period $1.00
Accumulation unit value at end of period $0.80
Number of accumulation units outstanding at end of period (000 omitted) 1,077
Ratio of operating expense to average net assets 1.50%
Subaccount SUDE1(1) (Investing in shares of J.P. Morgan U.S. Disciplined Equity Portfolio)
Accumulation unit value at beginning of period $1.00
Accumulation unit value at end of period $0.93
Number of accumulation units outstanding at end of period (000 omitted) 696
Ratio of operating expense to average net assets 1.60%
Subaccount SUDE2(3) (Investing in shares of J.P. Morgan U.S. Disciplined Equity Portfolio)
Accumulation unit value at beginning of period $1.00
Accumulation unit value at end of period $0.89
Number of accumulation units outstanding at end of period (000 omitted) 225
Ratio of operating expense to average net assets 1.50%
Subaccount SREQ1(1) (Investing in shares of Lazard Retirement Equity Portfolio)
Accumulation unit value at beginning of period $1.00
Accumulation unit value at end of period $1.08
Number of accumulation units outstanding at end of period (000 omitted) 70
Ratio of operating expense to average net assets 1.60%
Subaccount SREQ2(3) (Investing in shares of Lazard Retirement Equity Portfolio)
Accumulation unit value at beginning of period $1.00
Accumulation unit value at end of period $1.00
Number of accumulation units outstanding at end of period (000 omitted) 18
Ratio of operating expense to average net assets 1.50%
Subaccount SRIE1(1) (Investing in shares of Lazard Retirement International Equity Portfolio)
Accumulation unit value at beginning of period $1.00
Accumulation unit value at end of period $0.95
Number of accumulation units outstanding at end of period (000 omitted) 101
Ratio of operating expense to average net assets 1.60%
Subaccount SRIE2(3) (Investing in shares of Lazard Retirement International Equity Portfolio)
Accumulation unit value at beginning of period $1.00
Accumulation unit value at end of period $0.95
Number of accumulation units outstanding at end of period (000 omitted) 11
Ratio of operating expense to average net assets 1.50%
Subaccount SNDS1(1) (Investing in shares of MFS(R) New Discovery Series - Initial Class)
Accumulation unit value at beginning of period $1.00
Accumulation unit value at end of period $0.88
Number of accumulation units outstanding at end of period (000 omitted) 5,110
Ratio of operating expense to average net assets 1.60%
--------------------------------------------------------------------------------
28 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
Year ended Dec. 31, 2000
Subaccount SNDS2(3) (Investing in shares of MFS(R) New Discovery Series - Initial Class)
Accumulation unit value at beginning of period $1.00
Accumulation unit value at end of period $0.95
Number of accumulation units outstanding at end of period (000 omitted) 1,292
Ratio of operating expense to average net assets 1.50%
Subaccount SRSS1(1) (Investing in shares of MFS(R) Research Series - Initial Class)
Accumulation unit value at beginning of period $1.00
Accumulation unit value at end of period $0.95
Number of accumulation units outstanding at end of period (000 omitted) 2,978
Ratio of operating expense to average net assets 1.60%
Subaccount SRSS2(3) (Investing in shares of MFS(R) Research Series - Initial Class)
Accumulation unit value at beginning of period $1.00
Accumulation unit value at end of period $0.90
Number of accumulation units outstanding at end of period (000 omitted) 1,014
Ratio of operating expense to average net assets 1.50%
Subaccount SUTS1(1) (Investing in shares of MFS(R) Utilities Series - Initial Class)
Accumulation unit value at beginning of period $1.00
Accumulation unit value at end of period $0.98
Number of accumulation units outstanding at end of period (000 omitted) 3,551
Ratio of operating expense to average net assets 1.60%
Subaccount WUTS3(2) (Investing in shares of MFS(R) Utilities Series - Initial Class)
Accumulation unit value at beginning of period $1.00
Accumulation unit value at end of period $0.85
Number of accumulation units outstanding at end of period (000 omitted) 1,785
Ratio of operating expense to average net assets 1.50%
Subaccount SMCC1(1) (Investing in shares of Royce Micro-Cap Portfolio)
Accumulation unit value at beginning of period $1.00
Accumulation unit value at end of period $1.18
Number of accumulation units outstanding at end of period (000 omitted) 491
Ratio of operating expense to average net assets 1.60%
Subaccount SMCC2(3) (Investing in shares of Royce Micro-Cap Portfolio)
Accumulation unit value at beginning of period $1.00
Accumulation unit value at end of period $1.13
Number of accumulation units outstanding at end of period (000 omitted) 173
Ratio of operating expense to average net assets 1.50%
Subaccount SPRM1(1) (Investing in shares of Royce Small-Cap Portfolio(6))
Accumulation unit value at beginning of period $1.00
Accumulation unit value at end of period $1.33
Number of accumulation units outstanding at end of period (000 omitted) 640
Ratio of operating expense to average net assets 1.60%
Subaccount SPRM2(3) (Investing in shares of Royce Small-Cap Portfolio(6))
Accumulation unit value at beginning of period $1.00
Accumulation unit value at end of period $1.15
Number of accumulation units outstanding at end of period (000 omitted) 284
Ratio of operating expense to average net assets 1.50%
Subaccount SVLU1(1) (Investing in shares of Third Avenue Value Portfolio)
Accumulation unit value at beginning of period $1.00
Accumulation unit value at end of period $1.39
Number of accumulation units outstanding at end of period (000 omitted) 785
Ratio of operating expense to average net assets 1.60%
Subaccount SVLU2(3) (Investing in shares of Third Avenue Value Portfolio)
Accumulation unit value at beginning of period $1.00
Accumulation unit value at end of period $1.29
Number of accumulation units outstanding at end of period (000 omitted) 486
Ratio of operating expense to average net assets 1.50%
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29 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
Year ended Dec. 31, 2000
Subaccount SISM1(1) (Investing in shares of Wanger International Small Cap)
Accumulation unit value at beginning of period $1.00
Accumulation unit value at end of period $0.54
Number of accumulation units outstanding at end of period (000 omitted) 1,867
Ratio of operating expense to average net assets 1.60%
Subaccount SISM2(3) (Investing in shares of Wanger International Small Cap)
Accumulation unit value at beginning of period $1.00
Accumulation unit value at end of period $0.71
Number of accumulation units outstanding at end of period (000 omitted) 434
Ratio of operating expense to average net assets 1.50%
Subaccount SUSC1(1) (Investing in shares of Wanger U.S. Small Cap)
Accumulation unit value at beginning of period $1.00
Accumulation unit value at end of period $0.80
Number of accumulation units outstanding at end of period (000 omitted) 527
Ratio of operating expense to average net assets 1.60%
Subaccount SUSC2(3) (Investing in shares of Wanger U.S. Small Cap)
Accumulation unit value at beginning of period $1.00
Accumulation unit value at end of period $1.04
Number of accumulation units outstanding at end of period (000 omitted) 31
Ratio of operating expense to average net assets 1.50%
Subaccount SEQI1(1) (Investing in shares of Wells Fargo VT Equity Income Fund)
Accumulation unit value at beginning of period $1.00
Accumulation unit value at end of period $1.13
Number of accumulation units outstanding at end of period (000 omitted) 47
Ratio of operating expense to average net assets 1.60%
Subaccount WEQI3(2) (Investing in shares of Wells Fargo VT Equity Income Fund)
Accumulation unit value at beginning of period $1.00
Accumulation unit value at end of period $1.13
Number of accumulation units outstanding at end of period (000 omitted) 437
Ratio of operating expense to average net assets 1.50%
(1) Operations commenced on Feb. 11, 2000.
(2) Operations commenced on March 3, 2000.
(3) Operations commenced on May 1, 2000.
(4) Net of annual contract administrative charge and mortality and expense risk
fee.
(5) Previously named Warburg Pincus Trust - Emerging Growth Portfolio.
(6) Previously named Royce Premier Portfolio.
Financial Statements
You can find the audited financial statements of the subaccounts with financial
history in the SAI. You can find our audited financial statements later in this
prospectus.
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30 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
Performance Information
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 actual performance from the date the subaccounts began investing
in funds. We also show performance from the commencement date of the funds as if
the contract existed at that time, which it did not. Although we base
performance figures on historical earnings, past performance does not guarantee
future results.
We include non-recurring charges (such as withdrawal charges) in total return
figures, but not in yield quotations. Excluding non-recurring charges in yield
calculations increases the reported value.
Total return figures do not reflect any purchase payment credits or PCR credits.
We may show total return quotations by means of schedules, charts or graphs.
Total return figures reflect deduction of the following charges:
o contract administrative charge,
o variable account administrative charge,
o the Guaranteed Minimum Income Benefit Rider fee,
o the Benefit Protector(SM) Plus Death Benefit Rider fee;
o applicable mortality and expense risk fee, and
o withdrawal charge (assuming a full withdrawal at the end of the illustrated
period).
We may also show optional total return quotations that reflect deduction of the
8% Performance Credit Rider fee and/or the Benefit Protector(SM) Death Benefit
Rider fee.
We also show optional total return quotations that do not reflect a withdrawal
charge deduction (assuming no withdrawal), or fees for any of the optional
features.
Average annual total return is the average annual compounded rate of return of
the investment over a period of one, five and ten years (or up to the life of
the subaccount if it is less than ten years old).
Cumulative total return is the cumulative change in the value of an investment
over a specified time period. We assume that income earned by the investment is
reinvested. Cumulative total return generally will be higher than average annual
total return.
Annualized simple yield (for subaccounts investing in money market funds)
"annualizes" the income generated by the investment over a given seven-day
period. That is, we assume the amount of income generated by the investment
during the period will be generated each seven-day period for a year. We show
this as a percentage of the investment.
Annualized compound yield (for subaccounts investing in money market funds) is
calculated like simple yield except that we assume the income is reinvested when
we annualize it. Compound yield will be higher than the simple yield because of
the compounding effect of the assumed reinvestment.
Annualized yield (for subaccounts investing in income funds) divides the net
investment income (income less expenses) for each accumulation unit during a
given 30-day period by the value of the unit on the last day of the period. We
then convert the result to an annual percentage.
You should consider performance information in light of the investment
objectives, policies, characteristics and quality of the fund in which the
subaccount invests and the market conditions during the specified time period.
Advertised yields and total return figures include charges that reduce
advertised performance. Therefore, you should not compare subaccount performance
to that of mutual funds that sell their shares directly to the public. (See the
SAI for a further description of methods used to determine total return and
yield.)
If you would like additional information about actual performance, please
contact us at the address or telephone number on the first page of this
prospectus.
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31 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
The Variable Account and the Funds
You may allocate payments to any or all of the subaccounts of the variable
account that invest in shares of the following funds
---------------- ----------------------- ----------------------------------------- ----------------------------------
Subaccount Investing In Investment Objectives and Policies Investment Advisor or Manager
---------------- ----------------------- ----------------------------------------- ----------------------------------
SBCA1 AXP(R) Variable Objective: long-term total return IDS Life, investment manager;
WBCA3 Portfolio - Blue Chip exceeding that of the U.S. stock American Express Financial
Advantage Fund market. Invests primarily in common Corporation (AEFC), investment
stocks of companies included in the advisor.
unmanaged S&P 500 Index.
---------------- ----------------------- ----------------------------------------- ----------------------------------
SBND1 AXP(R) Variable Objective: high level of current income IDS Life, investment manager;
SBND2 Portfolio - Bond Fund while conserving the value of the AEFC, investment advisor.
investment and continuing a high level
of income for the longest time period.
Invests primarily in bonds and other
debt obligations.
---------------- ----------------------- ----------------------------------------- ----------------------------------
SCAR1 AXP(R) Variable Objective: capital appreciation. IDS Life, investment manager;
WCAR3 Portfolio - Capital Invests primarily in U.S. common stocks AEFC, investment advisor.
Resource Fund and other securities convertible
into common stocks.
---------------- ----------------------- ----------------------------------------- ----------------------------------
SCMG1 AXP(R) Variable Objective: maximum current income IDS Life, investment manager;
SCMG2 Portfolio - Cash consistent with liquidity and stability AEFC, investment advisor.
Management Fund of principal. Invests in money market
securities.
---------------- ----------------------- ----------------------------------------- ----------------------------------
SDEI1 AXP(R) Variable Objective: a high level of current IDS Life, investment manager;
WDEI3 Portfolio - income and, as a secondary goal, steady AEFC, investment advisor.
Diversified Equity growth of capital. Invests primarily in
Income Fund dividend-paying common and preferred
stocks.
---------------- ----------------------- ----------------------------------------- ----------------------------------
SEXI1 AXP(R) Variable Objective: high current income, with IDS Life, investment manager;
WEXI3 Portfolio - Extra capital growth as a secondary AEFC, investment advisor.
Income Fund objective. Invests primarily in
high-yielding, high-risk "junk"
corporate bonds issued by U.S. and
foreign companies and governments.
---------------- ----------------------- ----------------------------------------- ----------------------------------
SFDI1 AXP(R) Variable Objective: a high level of current IDS Life, investment manager;
WFDI3 Portfolio - Federal income and safety of principal AEFC, investment advisor.
Income Fund consistent with an investment in U.S.
government and government agency
securities. Invests primarily in debt
obligations issued or guaranteed as to
principal and interest by the U.S.
government, its agencies or
instrumentalities.
---------------- ----------------------- ----------------------------------------- ----------------------------------
SGRO1 AXP(R) Variable Objective: long-term capital growth. IDS Life, investment manager;
SGRO2 Portfolio - Growth Invests primarily in common stocks and AEFC, investment advisor.
Fund securities convertible into common
stocks that appear to offer growth
opportunities.
---------------- ----------------------- ----------------------------------------- ----------------------------------
SMGD1 AXP(R) Variable Objective: maximum total investment IDS Life, investment manager;
SMGD2 Portfolio - Managed return through a combination of capital AEFC, investment advisor.
Fund growth and current income. Invests
primarily in a combination of common
and preferred stocks, convertible
securities, bonds and other debt
securities.
---------------- ----------------------- ----------------------------------------- ----------------------------------
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32 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
---------------- ----------------------- ----------------------------------------- ----------------------------------
Subaccount Investing In Investment Objectives and Policies Investment Advisor or Manager
---------------- ----------------------- ----------------------------------------- ----------------------------------
SNDM1 AXP(R) Variable Objective: long-term growth of capital. IDS Life, investment manager;
WNDM3 Portfolio - New Invests primarily in common stocks of AEFC, investment advisor.
Dimensions Fund(R) U.S. and foreign companies showing
potential for significant growth.
---------------- ----------------------- ----------------------------------------- ----------------------------------
SSCA1 AXP(R) Variable Objective: long-term capital growth. IDS Life, investment manager;
WSCA3 Portfolio - Small Cap Invests primarily in equity stocks of AEFC, investment advisor;
Advantage Fund small companies that are often included Kenwood Capital Management LLC,
in the S&P SmallCap 600 Index or the sub-investment advisor.
Russell 2000 Index.
---------------- ----------------------- ----------------------------------------- ----------------------------------
SCAP1 AIM V.I. Capital Objective: growth of capital. Invests A I M Advisors, Inc.
WCAP3 Appreciation Fund mainly in common stocks of companies
likely to benefit from new or
innovative products, services or
processes as well as those with
above-average growth and excellent
prospects for future growth.
---------------- ----------------------- ----------------------------------------- ----------------------------------
SCDV1 AIM V.I. Capital Objective: long term growth of capital. A I M Advisors, Inc.
SCDV2 Development Fund Invests primarily in securities
(including common stocks, convertible
securities and bonds) of small- and
medium-sized companies.
---------------- ----------------------- ----------------------------------------- ----------------------------------
SVAL1 AIM V.I. Value Fund Objective: long-term growth of capital A I M Advisors, Inc.
WVAL3 with income as a secondary objective.
Invests primarily in equity securities
judged to be undervalued relative to
the investment advisor's appraisal of
the current or projected earnings of
the companies issuing the securities,
or relative to current market values of
assets owned by the companies issuing
the securities, or relative to the
equity market generally.
---------------- ----------------------- ----------------------------------------- ----------------------------------
SPGR1 Alliance VP Premier Objective: growth of capital by Alliance Capital Management, L.P.
SPGR2 Growth Portfolio pursuing aggressive investment
(Class B) policies. Invests primarily in
equity securities of a limited number
of large, carefully selected,
high-quality U.S. companies that are
judged likely to achieve superior
earnings growth.
---------------- ----------------------- ----------------------------------------- ----------------------------------
STEC1 Alliance VP Objective: growth of capital. Current Alliance Capital Management, L.P.
STEC2 Technology Portfolio income is only an incidental
(Class B) consideration. Invests primarily in
securities of companies expected to
benefit from technological advances and
improvements.
---------------- ----------------------- ----------------------------------------- ----------------------------------
SUGH1 Alliance VP U.S. Objective: high level of current income Alliance Capital Management, L.P.
SUGH2 Government/ High consistent with preservation of
Grade Securities capital. Invests primarily in (1) U.S.
Portfolio (Class B) Government securities and (2) other
high-grade debt securities or, if
unrated, of equivalent quality.
---------------- ----------------------- ----------------------------------------- ----------------------------------
SCAS1 Baron Capital Asset Objective: capital appreciation. BAMCO, Inc.
SCAS2 Fund - Insurance Invests primarily in securities of
Shares small and medium sized companies with
undervalued assets or favorable growth
prospects.
---------------- ----------------------- ----------------------------------------- ----------------------------------
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33 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
---------------- ----------------------- ----------------------------------------- ----------------------------------
Subaccount Investing In Investment Objectives and Policies Investment Advisor or Manager
---------------- ----------------------- ----------------------------------------- ----------------------------------
SEGR1 Credit Suisse Warburg Objective: maximum capital Credit Suisse Asset Management,
SEGR2 Pincus Trust - appreciation. Invests in U.S. equity LLC
Emerging Growth securities emerging-growth companies
Portfolio with growth characteristics such as
(previously Warburg positive earnings and potential for
Pincus Trust - accelerated growth.
Emerging Growth
Portfolio)
---------------- ----------------------- ----------------------------------------- ----------------------------------
SGRI1 Fidelity VIP Growth & Objective: high total return through a Fidelity Management & Research
SGRI2 Income Portfolio combination of current income and Company (FMR), investment
(Service Class) capital appreciation. Invests primarily manager; FMR U.K. and FMR Far
in common stocks with a focus on those East, sub-investment advisors.
that pay current dividends and show
potential for capital appreciation.
---------------- ----------------------- ----------------------------------------- ----------------------------------
SMDC1 Fidelity VIP Mid Cap Objective: long-term growth of capital. FMR, investment manager; FMR
SMDC2 Portfolio (Service Invests primarily in medium market U.K. and FMR Far East,
Class) capitalization common stocks. sub-investment advisors.
---------------- ----------------------- ----------------------------------------- ----------------------------------
SOVS1 Fidelity VIP Overseas Objective: long-term growth of capital. FMR, investment manager; FMR
SOVS2 Portfolio (Service Invests primarily in common stocks of U.K., FMR Far East, Fidelity
Class) foreign securities. International Investment
Advisors (FIIA) and FIIA U.K.,
sub-investment advisors.
---------------- ----------------------- ----------------------------------------- ----------------------------------
SRES1 FTVIPT Franklin Real Objective: capital appreciation with a Franklin Advisers, Inc.
WRES3 Estate Fund - Class 2 secondary goal to earn current income.
Invests primarily in securities of
companies operating in the real estate
industry, primarily equity real estate
investment trusts (REITS).
---------------- ----------------------- ----------------------------------------- ----------------------------------
SMSS1 FTVIPT Mutual Shares Objective: capital appreciation with Franklin Mutual Advisers, LLC
WMSS3 Securities Fund - income as a secondary goal. Invests
Class 2 primarily in equity securities of
companies that the manager believes are
available at market prices less than
their value based on certain recognized
or objective criteria (intrinsic value).
---------------- ----------------------- ----------------------------------------- ----------------------------------
SISC1 FTVIPT Templeton Objective: long-term capital Templeton Investment Counsel, LLC
SISC2 International Smaller appreciation. Invests primarily in
Companies Fund - equity securities of smaller companies
Class 2 located outside the U.S., including
those in emerging markets.
---------------- ----------------------- ----------------------------------------- ----------------------------------
SCGR1 Goldman Sachs VIT Objective: seeks long-term growth of Goldman Sachs Asset Management
SCGR2 Capital Growth Fund capital by investing in a diversified
portfolio of equity securities that are
considered by the investment adviser to
have long-term capital appreciation
potential.
---------------- ----------------------- ----------------------------------------- ----------------------------------
SUSE1 Goldman Sachs VIT Objective: seeks long-term growth of Goldman Sachs Asset Management
WUSE3 CORE(SM) U.S. Equity capital and dividend income. Invests
Fund primarily in a broadly diversified
portfolio of large-cap and blue chip
equity securities representing all
major sectors of the U.S. economy.
---------------- ----------------------- ----------------------------------------- ----------------------------------
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34 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
---------------- ----------------------- ----------------------------------------- ----------------------------------
Subaccount Investing In Investment Objectives and Policies Investment Advisor or Manager
---------------- ----------------------- ----------------------------------------- ----------------------------------
SGLI1 Goldman Sachs VIT Objective: seeks high total return, Goldman Sachs Asset Management
WGLI3 Global Income Fund emphasizing current income, and, to a International
lesser extent, providing opportunities
for capital appreciation. Invests
primarily in a portfolio of high
quality fixed-income securities of U.S.
and foreign issuers and enters into
transactions in foreign currencies.
---------------- ----------------------- ----------------------------------------- ----------------------------------
SIEQ1 Goldman Sachs VIT Objective: seeks long-term capital Goldman Sachs Asset Management
SIEQ2 International Equity appreciation. Invests primarily in International
Fund equity securities of companies that are
organized outside the U.S., or whose
securities are principally traded
outside the U.S.
---------------- ----------------------- ----------------------------------------- ----------------------------------
SITO1 Goldman Sachs VIT Objective: seeks long-term growth of Goldman Sachs Asset Management
SITO2 Internet Tollkeeper capital. Invests primarily in equity
Fund(SM) securities of companies the investment
adviser believes will benefit from the
growth of the Internet by providing
access, infrastructure, content and
services to Internet companies and
customers.
---------------- ----------------------- ----------------------------------------- ----------------------------------
SAGP1 Janus Aspen Series Objective: long-term growth of capital. Janus Capital
SAGP2 Aggressive Growth Non-diversified mutual fund that
Portfolio: Service primarily invests in common stocks
Shares selected for their growth potential and
normally invests at least 50% of its
equity assets in medium-sized companies.
---------------- ----------------------- ----------------------------------------- ----------------------------------
SGLT1 Janus Aspen Series Objective: long-term growth of capital. Janus Capital
SGLT2 Global Technology Non-diversified mutual fund that
Portfolio: Service primarily invests in equity securities
Shares of U.S. and foreign companies selected
for their growth potential. Normally
invests at least 65% of assets in
securities of companies that the
manager believes will benefit
significantly from advancements or
improvements in technology.
---------------- ----------------------- ----------------------------------------- ----------------------------------
SGRP1 Janus Aspen Series Objective: long-term growth of capital Janus Capital
SGRP2 Growth Portfolio: in a manner consistent with the
Service Shares preservation of capital. Invests
primarily in common stocks selected for
their growth potential.
---------------- ----------------------- ----------------------------------------- ----------------------------------
SINT1 Janus Aspen Series Objective: long-term growth of capital. Janus Capital
SINT2 International Growth Invests at least 65% of its total
Portfolio: Service assets in securities of issuers from at
Shares 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.
---------------- ----------------------- ----------------------------------------- ----------------------------------
SUDE1 J.P. Morgan U.S. Objective: seeks to provide a high J.P. Morgan
SUDE2 Disciplined Equity total return from a portfolio of
Portfolio selected equity securities. The
portfolio invests primarily in large
and medium capitalization U.S.
companies. The portfolio is designed
for investors who want an actively
managed portfolio of selected equity
securities that seeks to outperform the
S&P 500 Index.
---------------- ----------------------- ----------------------------------------- ----------------------------------
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35 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
---------------- ----------------------- ----------------------------------------- ----------------------------------
Subaccount Investing In Investment Objectives and Policies Investment Advisor or Manager
---------------- ----------------------- ----------------------------------------- ----------------------------------
SREQ1 Lazard Retirement Objective: long-term capital Lazard Asset Management
SREQ2 Equity Portfolio appreciation. Invests primarily in
equity securities, principally common
stocks, of relatively large U.S.
companies with market capitalizations
in the range of the S&P 500(R) Index
that the Investment Manager believes
are undervalued based on their
earnings, cash flow or asset values.
---------------- ----------------------- ----------------------------------------- ----------------------------------
SRIE1 Lazard Retirement Objective: long-term capital Lazard Asset Management
SRIE2 International Equity appreciation. Invests primarily in
Portfolio equity securities, principally common
stocks, of relatively large non-U.S.
companies with market capitalizations
in the range of the Morgan Stanley
Capital International (MSCI) Europe,
Australia and Far East (EAFE(R)) Index
that the Investment Manager believes
are undervalued based on their
earnings, cash flow or asset values.
---------------- ----------------------- ----------------------------------------- ----------------------------------
SNDS1 MFS(R) New Discovery Objective: capital appreciation. MFS Investment Management(R)
SNDS2 Series - Initial Class Invests primarily in equity securities
of emerging growth companies.
---------------- ----------------------- ----------------------------------------- ----------------------------------
SRSS1 MFS(R) Research Objective: long-term growth of capital MFS Investment Management(R)
SRSS2 Series - Initial Class and future income. Invests primarily in
common stocks and related securities
that have favorable prospects for
long-term growth, attractive valuations
based on current and expected earnings
or cash flow, dominant or growing
market share, and superior management.
---------------- ----------------------- ----------------------------------------- ----------------------------------
SUTS1 MFS(R) Utilities Objective: capital growth and current MFS Investment Management(R)
WUTS3 Series - Initial Class income. Invests primarily in equity and
debt securities of domestic and foreign
companies in the utilities industry.
---------------- ----------------------- ----------------------------------------- ----------------------------------
SMCC1 Royce Micro-Cap Objective: long-term growth of capital. Royce & Associates, Inc.
SMCC2 Portfolio Invests primarily in a broadly
diversified portfolio of equity
securities issued by micro-cap
companies (companies with stock market
capitalizations below $300 million).
---------------- ----------------------- ----------------------------------------- ----------------------------------
SPRM1 Royce Small-Cap Objective: long-term growth of capital Royce & Associates, Inc.
SPRM2 Portfolio (previously with current income as a secondary
Royce Premium objective. Invests primarily in a
Portfolio) limited number of equity securities
issued by small companies with stock
market capitalization between $300
million and $1.5 billion.
---------------- ----------------------- ----------------------------------------- ----------------------------------
SVLU1 Third Avenue Value Objective: long-term capital EQSF Advisers, Inc.
SVLU2 Portfolio appreciation. Invests primarily in
common stocks of well financed, well
managed companies at a substantial
discount to what the Adviser believes
is their true value.
---------------- ----------------------- ----------------------------------------- ----------------------------------
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36 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
---------------- ----------------------- ----------------------------------------- ----------------------------------
Subaccount Investing In Investment Objectives and Policies Investment Advisor or Manager
---------------- ----------------------- ----------------------------------------- ----------------------------------
SISM1 Wanger International Objective: long-term growth of capital. Liberty Wanger Asset Management,
SISM2 Small Cap Invests primarily in stocks of small- L.P.
and medium-size non-U.S. companies with
capitalizations of less than $2 billion.
---------------- ----------------------- ----------------------------------------- ----------------------------------
SUSC1 Wanger U.S. Small Cap Objective: long-term growth of capital. Liberty Wanger Asset Management,
SUSC2 Invests primarily in stocks of small- L.P.
and medium-size U.S. companies with
capitalizations of less than $2 billion.
---------------- ----------------------- ----------------------------------------- ----------------------------------
SEQI1 Wells Fargo VT Equity Objective: long-term capital Wells Fargo Funds Management,
WEQI3 Income Fund appreciation and above-average dividend LLC, advisor; Wells Capital
income. Invests primarily in common Management Incorporated,
stocks of large, high-quality domestic sub-advisor.
companies with above-average return
potential and above-average dividend
income.
---------------- ----------------------- ----------------------------------------- ----------------------------------
A fund underlying your contract 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 publicly-traded retail mutual fund.
Despite these similarities, an underlying fund is not the same as any
publicly-traded retail mutual fund. Each underlying fund will have its own
unique portfolio holdings, fees, operating expenses and operating results. The
results of each underlying fund may differ significantly from any
publicly-traded retail mutual fund.
The investment managers and advisors cannot guarantee that the funds will meet
their investment objectives. Please read the funds' prospectuses for facts you
should know before investing. These prospectuses are also 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
annuities. Some funds also are available to serve as investment options for
variable life insurance policies 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, 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 funds' prospectuses for risk disclosure regarding simultaneous investments
by variable annuity, variable life insurance and tax-deferred retirement plan
accounts.
The Internal Revenue Service (IRS) issued final regulations relating to the
diversification requirements under Section 817(h) of the Code. Each fund intends
to comply with these requirements.
The variable account was established under Indiana law on July 15, 1987, and the
subaccounts are registered together as a single unit investment trust under the
Investment Company Act of 1940 (the 1940 Act). This registration does not
involve any supervision of our management or investment practices and policies
by the SEC. All obligations arising under the contracts are general obligations
of American Enterprise Life.
The variable account meets the definition of a separate account under federal
securities laws. We credit or charge income, capital gains and capital losses of
each subaccount only to that subaccount. State insurance law prohibits us from
charging a subaccount with liabilities of any other subaccount or of our general
business. The variable account includes other subaccounts that are available
under contracts that are not described in this prospectus.
The U.S. Treasury and the IRS indicated that they may provide additional
guidance on investment control. This concerns how many variable subaccounts an
insurance company may offer and how many exchanges among subaccounts it may
allow before the contract owner would be currently taxed on income earned within
subaccount assets. At this time, we do not know what the additional guidance
will be or when action will be taken. We reserve the right to modify the
contract, as necessary, so that the owner will not be subject to current
taxation as the owner of the subaccount assets.
We intend to comply with all federal tax laws so that the contract continues to
qualify as an annuity for federal income tax purposes. We reserve the right to
modify the contract as necessary to comply with any new tax laws.
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37 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
The Fixed Accounts
GUARANTEE PERIOD ACCOUNTS (GPAS)
You may allocate purchase payments to one or more of the GPAs with Guarantee
Periods ranging from two to ten years. These accounts are not available in all
states and are not offered after annuity payouts begin. Some states also
restrict the amount you can allocate to these accounts.
Each GPA pays an interest rate that is declared when you allocate money to that
account. That interest rate is then fixed for the Guarantee Period that you
chose. We will periodically change the declared interest rate for any future
allocations to these accounts, but we will not change the rate paid on money
currently in a GPA.
The minimum guaranteed interest rate on the GPAs is 3%.
The interest rates that we will declare as guaranteed rates in the future are
determined by us at our discretion. We will determine these rates based on
various factors including, but not limited to, the interest rate environment,
returns earned on investments backing these annuities, the rates currently in
effect for new and existing American Enterprise Life annuities, product design,
competition and American Enterprise Life's revenues and other expenses. We
cannot predict nor can we guarantee future guaranteed interest rates above the
3% rate.
You may transfer or withdraw contract value out of the GPAs within 30 days
before the end of the Guarantee Period without receiving a MVA (see "Market
Value Adjustment (MVA)" below.) At that time you may choose to start a new
Guarantee Period of the same length, transfer the contract value to another GPA,
transfer the contract value to any of the subaccounts, or withdraw the contract
value from the contract (subject to applicable withdrawal provisions). If we do
not receive any instructions at the end of your Guarantee Period, we will
automatically transfer the contract value into the one-year fixed account.
We hold amounts you allocate to the GPAs in a "nonunitized" separate account we
have established under the Indiana Insurance Code. This separate account
provides an additional measure of assurance that we will make full payment of
amounts due under the GPAs. State insurance law prohibits us from charging this
separate account with liabilities of any other separate account or of our
general business. We own the assets of this separate account as well as any
favorable investment performance of those assets. You do not participate in the
performance of the assets held in this separate account. We guarantee all
benefits relating to your value in the GPAs. This guarantee is based on the
continued claims-paying ability of the company.
We intend to construct and manage the investment portfolio relating to the
separate account using a strategy known as "immunization." Immunization seeks to
lock in a defined return on the pool of assets versus the pool of liabilities
over a specified time horizon. Since the return on the assets versus the
liabilities is locked in, it is "immune" to any potential fluctuations in
interest rates during the given time.
We achieve immunization by constructing a portfolio of assets with a price
sensitivity to interest rate changes (i.e., price duration) that is essentially
equal to the price duration of the corresponding portfolio of liabilities.
Portfolio immunization provides us with flexibility and efficiency in creating
and managing the asset portfolio, while still assuring safety and soundness for
funding liability obligations.
We must invest this portfolio of assets in accordance with requirements
established by applicable state laws regarding the nature and quality of
investments that life insurance companies may make and the percentage of their
assets that they may commit to any particular type of investment. Our investment
strategy will incorporate the use of a variety of debt instruments having price
durations tending to match the applicable Guarantee Periods. These instruments
include, but are not necessarily limited to, the following:
o Securities issued by the U.S. government or its agencies or
instrumentalities, which issues may or may not be guaranteed by the U.S.
government;
o Debt securities that have an investment grade, at the time of purchase,
within the four highest grades assigned by any of three nationally recognized
rating agencies -- Standard & Poor's, Moody's Investors Service or Fitch
(formerly Duff & Phelp's) -- or are rated in the two highest grades by the
National Association of Insurance Commissioners;
o Other debt instruments which are unrated or rated below investment grade,
limited to 10% of assets at the time of purchase; and
o Real estate mortgages, limited to 45% of portfolio assets at the time of
acquisition.
In addition, options and futures contracts on fixed income securities will be
used from time to time to achieve and maintain appropriate investment and
liquidity characteristics on the overall asset portfolio.
While this information generally describes our investment strategy, we are not
obligated to follow any particular strategy except as may be required by federal
law and Indiana and other state insurance laws.
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38 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
MARKET VALUE ADJUSTMENT (MVA)
We guarantee the contract value allocated to your GPA, including the interest
credited, if you do not make any transfers or withdrawals from that GPA prior to
30 days before the end of the Guarantee Period. However, we will apply an MVA if
a transfer or withdrawal occurs prior to this time. The MVA also affects amounts
withdrawn from a GPA prior to 30 days before the end of the Guarantee Period
that are used to purchase payouts under an annuity payout plan. We will refer to
all of these transactions as "early withdrawals" in the discussion below.
When you request an early withdrawal, we adjust the early withdrawal amount by
an MVA formula. The early withdrawal amount reflects the relationship between
the guaranteed interest rate you are earning in your current GPA and the
interest rate we are crediting on new GPAs that end at the same time as your
current GPA.
The MVA is sensitive to changes in current interest rates. The magnitude of any
applicable MVA will depend on our current schedule of guaranteed interest rates
at the time of the withdrawal, the time remaining in your Guarantee Period and
your guaranteed interest rate. The MVA is negative, zero or positive depending
on how the guaranteed interest rate on your GPA compares to the interest rate of
a new GPA for the same number of years as the Guarantee Period remaining on your
GPA.
Before we look at the MVA formula, it may help to look in a general way at how
comparing your GPA's guaranteed rate and the rate for a new GPA affects the MVA.
Relationship between your GPA's guaranteed rate and the new GPA for the same
time as the Guarantee Period remaining on your GPA:
If your GPA rate is: The MVA is:
Less than the new GPA rate + 0.10% Negative
Equal to the new GPA rate + 0.10% Zero
Greater than the new GPA rate + 0.10% Positive
General Examples
Assume:
o You purchase a contract and allocate part of your purchase payment to the
ten-year GPA.
o We guarantee an interest rate of 4.5% annually for your ten-year Guarantee
Period.
o After three years, you decide to make a withdrawal from your GPA. In other
words, there are seven years left in your Guarantee Period.
Remember that the MVA depends partly on the interest rate of a new GPA for the
same number of years as the Guarantee Period remaining on your GPA. In this
case, that is seven years.
Example 1: Remember that your GPA is earning 4.5%. Assume at the time of your
withdrawal new GPAs that we offer with a seven-year Guarantee Period are earning
5.0%. We add 0.10% to the 5.0% rate to get 5.10%. Your GPA's 4.5% rate is less
than the 5.10% rate and, as reflected in the table above, the MVA will be
negative.
Example 2: Remember again that your GPA is earning 4.5%, and assume that new
GPAs that we offer with a seven-year Guarantee Period are earning 4.0%. We add
0.10% to the 4.0% rate to get 4.10%. In this example, since your GPA's 4.5% rate
is greater than the 4.10% rate, the MVA will be positive. To determine that
adjustment precisely, you will have to use the formula described below.
Sample MVA Calculations:
The precise MVA formula we apply is as follows:
[ ( 1 + i ) (to the power of n/12) - 1] = MVA
Early withdrawal amount x ------------
1 + j + .001
Where i = rate earned in the GPA from which amounts are being transferred
or withdrawn.
j = current rate for a new Guaranteed Period equal to the remaining
term in the current Guarantee Period.
n = number of months remaining in the current Guarantee Period
(rounded up).
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39 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
Examples
Using assumptions similar to those we used in the examples above:
o You purchase a contract and allocate part of your purchase payment to the
ten-year GPA.
o We guarantee an interest rate of 4.5% annually for your ten-year Guarantee
Period.
o After three years, you decide to make a $1,000 withdrawal from your GPA. In
other words, there are seven years left in your Guarantee Period.
Example 1: You request an early withdrawal of $1,000 from your ten-year GPA
earning a guaranteed interest rate of 4.5%. Assume at the time of your
withdrawal new GPAs that we offer with a seven-year Guarantee Period are earning
5.0%. Using the formula above, we determine the MVA as follows:
$1,000 x [ ( 1.045 )(to the power of 84/12) - 1] = -$39.28
--------------
1 + .05 + .001
In this example, the MVA is a negative $39.28.
Example 2: You request an early withdrawal of $1,000 from your ten-year GPA
earning a guaranteed interest rate of 4.5%. Assume at the time of your
withdrawal new GPAs that we offer with a seven-year Guarantee Period are earning
4.0%. Using the formula above, we determine the MVA as follows:
$1,000 x [ ( 1.045 )(to the power of 84/12) - 1] = $27.21
--------------
1 + .04 + .001
In this example, the MVA is a positive $27.21.
Please note that when you allocate your purchase payment to the ten-year GPA and
you have begun your fourth contract year at the beginning of the Guarantee
Period, your withdrawal charge percentage is 8%. (See "Charges -- Withdrawal
Charge.") We do not apply MVAs to the amounts we deduct for withdrawal charges,
so we would deduct the withdrawal charge from your early withdrawal after we
applied the MVA. Also note that when you request an early withdrawal, we
withdraw an amount from your GPA that will give you the net amount you requested
after we apply the MVA and any applicable withdrawal charge, unless you request
otherwise.
The current interest rate we offer on the GPA will change periodically at our
discretion. It is the rate we are then paying on purchase payments, renewals and
transfers paid under this class of contracts for Guarantee Period durations
equaling the remaining Guarantee Period of the GPA to which the formula is being
applied.
We will not apply MVAs to amounts withdrawn for the annual contract
administrative charge, to amounts we pay as death claims or to automatic
transfers from the two-year Guarantee Period Account. In some states, the MVA is
limited.
THE ONE-YEAR FIXED ACCOUNT
You may also allocate purchase payments or transfer accumulated value to the
one-year fixed account. Some states may restrict the amount you can allocate to
this account. We back the principal and interest guarantees relating to the
one-year fixed account. These guarantees are based on the continued
claims-paying ability of the company. The value of the one-year fixed account
increases as we credit interest to the account. Purchase payments and transfers
to the one-year fixed account become part of our general account. We credit and
compound interest daily to produce the annual effective rate which we declare.
The interest rate we apply to each purchase payment or transfer to the one-year
fixed account is guaranteed for one year. Thereafter we will change the rates
from time-to-time at our discretion. These rates will be based on various
factors including, but not limited to, the interest rate environment, returns
earned on investments backing these annuities, the rates currently in effect for
new and existing American Enterprise Life annuities, product design,
competition, and American Enterprise Life's revenues and expenses.
Interest in the one-year fixed account is not required to be registered with the
SEC. However, the Market Value Adjustment interests under the contracts are
registered with the SEC. The SEC staff does not review the disclosures in this
prospectus on the one-year fixed account (but the SEC does review the
disclosures in this prospectus on the Market Value Adjustment interests).
Disclosures regarding the one-year fixed account, however, may be subject to
certain generally applicable provisions of the federal securities laws relating
to the accuracy and completeness of statements made in prospectuses. (See
"Making the Most of Your Contract -- Transfer policies" for restrictions on
transfers involving the one-year fixed account.)
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40 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
Buying Your Contract
Your sales representative will help you complete and submit an application and
send it along with your initial purchase payment to our office. As the owner,
you have all rights and may receive all benefits under the contract. You can own
a nonqualified annuity in joint tenancy with rights of survivorship only in
spousal situations. You cannot own a qualified annuity in joint tenancy. You can
buy a contract or become an annuitant if you are 90 or younger. (The age limit
may be younger for qualified annuities in some states.)
When you apply, you may select:
o the one-year fixed account, Guarantee Period Accounts and/or subaccounts in
which you want to invest(1);
o how you want to make purchase payments;
o one of three death benefit options if you and the annuitant are 79 or
younger(2):
-- Option A -- Value option return of purchase payment death benefit,
-- Option B -- Maximum anniversary value death benefit, or
-- Option C -- 5% Accumulation death benefit rider(3);
o the optional Guaranteed Minimum Income Benefit Rider(4);
o the optional 8% Performance Credit Rider(4);
o the optional Benefit Protector(SM) Death Benefit Rider(5);
o the optional Benefit Protector(SM) Plus Death Benefit Rider(5); and
o a beneficiary.
(1) Some states restrict the amount you can allocate to the fixed accounts.
(2) If either you or the annuitant are 80 or older at contract issue, death
benefit Option A will apply.
(3) May not be available in all states.
(4) You may select either the GMIB or the PCR, but not both. Riders may not be
available in all states. The GMIB is only available to annuitants 75 or
younger at contract issue. If you select the GMIB you must select either
death benefit Option B or Option C.
(5) You may select one of the following: death benefit Option C, the Benefit
Protector or the Benefit Protector Plus. These benefits may not be
available in all states. The Benefit Protector and the Benefit Protector
Plus are only available if both you and the annuitant are 75 or younger at
contract issue. Death benefit Option C is only available if both you and
the annuitant are 79 or younger at contract issue.
The contract provides for allocation of purchase payments to the subaccounts of
the variable account and/or to the fixed accounts in even 1% increments.
If your application is complete, we will process it and apply your purchase
payment to the fixed accounts and subaccounts you selected within two business
days after we receive it at our office. If we accept your application, we will
send you a contract. If we cannot accept your application within five business
days, we will decline it and return your payment. We will credit additional
purchase payments you make to your accounts on the valuation date we receive
them. We will value the additional payments at the next accumulation unit value
calculated after we receive your payments at our office.
You may make monthly payments to your contract under a Systematic Investment
Plan (SIP). You must make an initial purchase payment of $25,000. Then, to begin
the SIP, you will complete and send a form and your first SIP payment along with
your application. There is no charge for SIP. You can stop your SIP payments at
any time.
In most states, you may make additional purchase payments to nonqualified and
qualified annuities until the retirement date.
THE RETIREMENT DATE
Annuity payouts are scheduled to begin on the retirement date. When we process
your application, we will establish the retirement date to the maximum age or
date described below. You can also select a date within the maximum limits. You
can align this date with your actual retirement from a job, or it can be a
different future date, depending on your needs and goals and on certain
restrictions. You also can change the date, provided you send us written
instructions at least 30 days before annuity payouts begin.
For nonqualified annuities and Roth IRAs, the retirement date must be:
o no earlier than the 30th day after the contract's effective date; and
o no later than the annuitant's 85th birthday or the tenth contract
anniversary, if purchased after age 75.
For qualified annuities (except Roth IRAs), to avoid IRS penalty taxes, the
retirement date generally must be:
o on or after the date the annuitant reaches age 59 1/2; and
o for IRAs and SEPs, by April 1 of the year following the calendar year when
the annuitant reaches age 70 1/2.
If you take the minimum IRA distribution as required by the Code from another
tax-qualified investment, or in the form of partial withdrawals from this
contract, annuity payouts can start as late as the annuitant's 85th birthday or
the tenth contract anniversary, if later.
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41 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
BENEFICIARY
We will pay your named beneficiary the death benefit if it becomes payable
before the retirement date (while the contract is in force and before annuity
payouts begin). If there is no named beneficiary, then you or your estate will
be the beneficiary. (See "Benefits in Case of Death" for more about
beneficiaries.)
PURCHASE PAYMENTS
Minimum initial purchase payment:
$25,000
Minimum additional purchase payments:
$50 for SIPs.
$100 for any other type of payment.
Maximum total allowable purchase payments* (without prior approval):
$1,000,000 for issue ages up to 85.
$100,000 for issue ages 86 to 90.
* This limit applies in total to all American Enterprise Life annuities you
own. We reserve the right to increase the maximum limit. For qualified
annuities, the tax-deferred retirement plan's limits on annual contributions
also apply.
HOW TO MAKE PURCHASE PAYMENTS
1 By letter:
Send your check along with your name and contract number to:
American Enterprise Life Insurance Company
829 AXP Financial Center
Minneapolis, MN 55474
2 By SIP:
Contact your sales representative to complete the necessary SIP paperwork.
PURCHASE PAYMENT CREDITS
You will generally receive a purchase payment credit with every payment you make
to your contract. We apply this credit immediately. We allocate the credit to
the fixed accounts and subaccounts in the same proportions as your purchase
payment. We apply the credit as a percentage of your current payment based on
the following schedule:
If total net payments* made during Then the purchase payment
the life of the contract equals... credit percentage equals...
$25,000 to less than $100,000 3%
$100,000 to less than $1 million 4
$1 million and over 5
* Net payments equal total payments less total withdrawals.
If you make any additional payments that cause the contract to become eligible
for a higher percentage credit, we will add credits to your prior payments (less
total withdrawals). We allocate credits according to the purchase payment
allocation on the date we add the credits to the contract.
We fund the credit from our general account. We do not consider credits to be
"investments" for income tax purposes. (See "Taxes.")
We will reverse credits from the contract value for any purchase payment that is
not honored (if, for example, your purchase payment check is returned for
insufficient funds).
To the extent a death benefit or withdrawal payment includes purchase payment
credits applied within twelve months preceding: (1) the date of death that
results in a lump sum death benefit under this contract; or (2) a request for
withdrawal charge waiver due to "Contingent events" (see "Charges -- Contingent
events"), we will assess a charge, similar to a withdrawal charge, equal to the
amount of the purchase payment credits. The amount we pay to you under these
circumstances will always equal or exceed your withdrawal value. The amount
returned to you under the free look provision also will not include any credits
applied to your contract.
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42 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
Because of these higher charges, there may be circumstances where you may be
worse off for having received the credit than in other contracts. All things
being equal (such as guarantee availability or fund performance and
availability), this may occur if you hold your contract for 15 years or more.
For contracts less than $100,000, this may also occur if you make a full
withdrawal in the fifth to ninth contract years. You should consider these
higher charges and other relevant factors before you buy this contract or before
you exchange a contract you currently own for this contract.
This credit is available because of lower costs associated with larger sized
contracts and through revenue from a higher and longer withdrawal charge
schedule, a higher contract administrative charge and a higher mortality and
expense risk fee. In general, we do not profit from the higher charges assessed
to cover the cost of the purchase payment credit. We use all the revenue from
these higher charges to pay for the cost of the credits. However, we could
profit from the higher charges if market appreciation is higher than expected or
if contract owners hold their contracts for longer than expected.
We reserve the right to increase the amount of the credit for certain groups of
contract owners. The increase will not be greater than 8% of total net payments.
Increases in credit amounts are funded by reduced expenses expected from such
groups.
Charges
CONTRACT ADMINISTRATIVE CHARGE
We charge this fee for establishing and maintaining your records. We deduct $40
from the contract value on your contract anniversary at the end of each contract
year. We prorate this charge among the subaccounts and the fixed accounts in the
same proportion your interest in each account bears to your total contract
value.
We will waive this charge when your contract value is $100,000 or more on the
current contract anniversary.
If you take a full withdrawal from your contract, we will deduct the charge at
the time of withdrawal regardless of the contract value. We cannot increase the
annual contract administrative charge and it does not apply after annuity
payouts begin or when we pay death benefits.
VARIABLE ACCOUNT ADMINISTRATIVE CHARGE
We apply this charge daily to the subaccounts. It is reflected in the unit
values of your subaccounts and it totals 0.15% of their average daily net assets
on an annual basis. It covers certain administrative and operating expenses of
the subaccounts such as accounting, legal and data processing fees and expenses
involved in the preparation and distribution of reports and prospectuses. We
cannot increase the variable account administrative charge.
MORTALITY AND EXPENSE RISK FEE
We charge this fee daily to the subaccounts. The unit values of your subaccounts
reflect this fee and it totals 1.45% of their average daily net assets on an
annual basis. This fee includes coverage in the contract under either death
benefit Option B or Option C. The fee would be 1.35% if you choose death benefit
Option A. We cannot increase this fee. These fees cover the mortality and
expense risk that we assume. Approximately two-thirds of this amount is for our
assumption of mortality risk, and one-third is for our assumption of expense
risk. These fees do not apply to the fixed accounts.
Mortality risk arises because of our guarantee to pay a death benefit and our
guarantee to make annuity payouts according to the terms of the contract, no
matter how long a specific annuitant lives and no matter how long our entire
group of annuitants live. If, as a group, annuitants outlive the life expectancy
we assumed in our actuarial tables, then we must take money from our general
assets to meet our obligations. If, as a group, annuitants do not live as long
as expected, we could profit from the mortality risk fee.
Expense risk arises because we cannot increase the contract administrative
charge or the variable account administrative charge and these charges may not
cover our expenses. We would have to make up any deficit from our general
assets. We could profit from the expense risk fee if future expenses are less
than expected.
The subaccounts pay us the mortality and expense risk fee they accrued as
follows:
o first, to the extent possible, the subaccounts pay this fee from any
dividends distributed from the funds in which they invest;
o then, if necessary, the funds redeem shares to cover any remaining fees
payable.
We may use any profits we realize from the subaccounts' payment to us of the
mortality and expense risk fee for any proper corporate purpose, including,
among others, payment of distribution (selling) expenses. We do not expect that
the withdrawal charge, discussed in the following paragraphs, will cover sales
and distribution expenses.
GUARANTEED MINIMUM INCOME BENEFIT RIDER (GMIB) FEE
We charge a fee (currently 0.35%) based on the adjusted contract value for this
optional feature only if you select it.* If selected, we deduct the fee from the
contract value on your contract anniversary at the end of each contract year. We
prorate the GMIB fee among the subaccounts and fixed accounts in the same
proportion your interest in each account bears to your total contract value.
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43 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
If the contract is terminated for any reason or when annuity payouts begin, we
will deduct the GMIB fee, adjusted for the number of calendar days coverage was
in place. We cannot increase the GMIB fee after the rider effective date and it
does not apply after annuity payouts begin. We can increase the GMIB fee on new
contracts up to a maximum of 0.75%.
We calculate the fee as follows: 0.35% x (CV + ST - FAV)
CV = contract value on the contract anniversary.
ST = transfers from the subaccounts to the fixed accounts made six months
before the contract anniversary.
FAV = the value of your fixed accounts.
The result of ST - FAV will never be greater than zero. This allows us to base
the GMIB fee largely on the subaccounts, and not on the fixed accounts.
Example:
o You purchase the contract with a payment of $50,000 on Jan. 1, 2001 and we
add a $1,500 purchase payment credit to your contract. You allocate all of
your payment and purchase payment credit to the subaccounts.
o On Sept. 1, 2001 your contract value is $75,000. You transfer $15,000 from
the subaccounts to the one-year fixed account.
o On Jan. 1, 2002 (the first contract anniversary) the one-year fixed account
value is $15,250 and the subaccount value is $58,000. Your total contract
value is $73,250.
o The GMIB fee percentage is 0.35%.
We calculate the charge for the GMIB as follows:
Contract value on the contract anniversary: $73,250.00
plus transfers from the subaccounts to the fixed accounts
in the six months before the contract anniversary: +15,000.00
minus the value of the fixed accounts on the
contract anniversary: -15,250.00
---------
$73,000.00
The GMIB fee charged to you: 0.35% x $73,000 = $ 255.50
8% PERFORMANCE CREDIT RIDER (PCR) FEE
We charge a fee of 0.25% of your contract value for this optional feature only
if you select it.* If selected, we deduct the PCR fee from your contract value
on your contract anniversary at the end of each contract year. We prorate this
fee among the subaccounts and fixed accounts in the same proportion as your
interest in each account bears to your total contract value.
If the contract is terminated for any reason or when annuity payouts begin, we
will deduct the PCR fee, adjusted for the number of calendar days coverage was
in place. We cannot increase the PCR fee.
* You may select either the GMIB or the PCR, but not both. Riders may not be
available in all states. The GMIB is only available to annuitants age 75 or
younger at contract issue. If you select the GMIB you must select either
death benefit Option B or Option C.
BENEFIT PROTECTOR(SM) DEATH BENEFIT RIDER FEE
We charge a fee for the optional feature only if you select it**. If selected,
we deduct 0.25% of your contract value on your contract anniversary at the end
of each contract year. We prorate this fee among the subaccounts and fixed
accounts in the same proportion your interest in each account bears to your
total contract value.
When annuity payouts begin, or if you terminate the contract for any reason
other than death, we will deduct this fee, adjusted for the number of calendar
days coverage was in place. We cannot increase this annual fee after the rider
effective date and it does not apply after annuity payouts begin or when we pay
death benefits. We can increase this fee on new contracts up to a maximum of
0.75%.
BENEFIT PROTECTOR(SM) PLUS DEATH BENEFIT RIDER FEE
We charge a fee for the optional feature only if you select it**. If selected,
we deduct 0.40% of your contract value on your contract anniversary at the end
of each contract year. We prorate this fee among the subaccounts and fixed
accounts in the same proportion your interest in each account bears to your
total contract value.
When annuity payouts begin, or if you terminate the contract for any reason
other than death, we will deduct this fee, adjusted for the number of calendar
days coverage was in place. We cannot increase this annual fee after the rider
effective date and it does not apply after annuity payouts begin or when we pay
death benefits. We can increase this fee on new contracts up to a maximum of
1.25%.
** You may select one of the following: death benefit Option C, the Benefit
Protector or the Benefit Protector Plus. These benefits may not be available
in all states. The Benefit Protector and the Benefit Protector Plus are only
available if both you and the annuitant are 75 or younger at contract issue.
Death benefit Option C is only available if both you and the annuitant are
79 or younger at contract issue.
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44 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
WITHDRAWAL CHARGE
If you withdraw all or part of your contract, you may be subject to a withdrawal
charge. A withdrawal charge applies if all or part of the withdrawal amount is
from purchase payments we received within nine years before withdrawal. The
withdrawal charge percentages that apply to you are shown in your contract. In
addition, amounts withdrawn from a Guarantee Period Account more than 30 days
before the end of the applicable Guarantee Period will be subject to a MVA. (See
"The Fixed Accounts -- Market Value Adjustments (MVA).")
For purposes of calculating any withdrawal charge, we treat amounts withdrawn
from your contract value in the following order:
1. First, in each contract year, we withdraw amounts totaling up to 10% of your
prior anniversary's contract value. (We consider your initial purchase
payment to be the prior anniversary's contract value during the first
contract year.) We do not assess a withdrawal charge on this amount.
2. Next we withdraw contract earnings, if any, that are greater than the annual
10% free withdrawal amount described in number one above. Contract earnings
equal contract value less purchase payments received and not previously
withdrawn. We do not assess a withdrawal charge on contract earnings.
NOTE: We determine contract earnings by looking at the entire contract
value, not the earnings of any particular subaccount or the fixed accounts.
3. Next we withdraw purchase payments received prior to the withdrawal charge
period shown in your contract. We do not assess a withdrawal charge on these
purchase payments.
4. Finally, if necessary, we withdraw purchase payments received that are still
within the withdrawal charge period shown in your contract. We withdraw
these payments on a first-in, first-out (FIFO) basis. We do assess a
withdrawal charge on these payments.
We determine your withdrawal charge by multiplying each of your payments
withdrawn by the applicable withdrawal charge percentage, and then adding the
total withdrawal charges.
The withdrawal charge percentage depends on the number of years since you made
the payments that are withdrawn:
Years from purchase Withdrawal charge
payment receipt percentage
1 8%
2 8
3 8
4 8
5 7
6 6
7 6
8 4
9 2
Thereafter 0
For a partial withdrawal that is subject to a withdrawal charge, the amount we
actually deduct from your contract value will be the amount you request plus any
applicable withdrawal charge. The withdrawal charge percentage is applied to
this total amount. We pay you the amount you requested.
Example: Assume you requested a withdrawal of $1,000 and there is a withdrawal
charge of 7%. The total amount we actually deduct from your contract is
$1,075.26. We determine this amount as follows:
Amount requested or $1,000 = $1,075.27
------------------ ------
1.00 - withdrawal charge .93
By applying the 7% withdrawal charge to $1,075.27, the withdrawal charge is
$75.27. We pay you the $1,000 you requested. If you make a full withdrawal of
your contract, we also will deduct the applicable contract administrative
charge.
Withdrawal charge under Annuity Payout Plan E -- Payouts for a specified period:
Under this payout plan, you can choose to take a withdrawal. The amount that you
can withdraw is the present value of any remaining variable payouts. The
discount rate we use in the calculation will be 5.36% if the assumed investment
rate is 3.5% and 6.86% if the assumed investment rate is 5%. The withdrawal
charge equals the present value of the remaining payouts using the assumed
investment rate minus the present value of the remaining payouts using the
discount rate. In no event would your withdrawal charge exceed 9% of the amount
available for payouts under the plan.
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45 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
Withdrawal charge calculation example:
The following is an example of the calculation we would make to determine the
withdrawal charge on a contract with this history:
o The contract date is Nov. 1, 2001 with a contract year of Nov. 1 through
Oct. 30 and with an anniversary date of Nov. 1 each year; and
o We received these payments
-- $10,000 Nov. 1, 2001;
-- $8,000 Dec. 31, 2007;
-- $6,000 Feb. 20, 2009; and
o You withdraw the contract for its total withdrawal value of $38,101 on Aug.
5, 2011 and made no other withdrawals during that contract year; and
o The prior anniversary Nov. 1, 2010 contract value was $38,488.
Withdrawal Charge Explanation
$ 0 $3,848.80 is 10% of the prior anniversary's contract
value withdrawn without withdrawal charge; and
0 $10,252.20 is contract earnings in excess of the 10% free
withdrawal amount withdrawn without withdrawal charge; and
0 $10,000 Nov. 1, 2001 payment was received more than nine
years before withdrawal and is withdrawn without
withdrawal charge; and
640 $8,000 Dec. 31, 2007 payment is in its fourth year from
receipt, withdrawn with an 8% withdrawal charge; and
480 $6,000 Feb. 20, 2009 payment is in its third year from
------ receipt withdrawn with an 8% withdrawal charge.
$1,120
Waiver of withdrawal charges
We do not assess withdrawal charges for:
o withdrawals of any contract earnings;
o withdrawals of amounts totaling up to 10% of your prior contract
anniversary's contract value to the extent that it exceeds contract earnings;
o required minimum distributions from a qualified annuity (for those amounts
required to be distributed from the contract described in this prospectus);
o contracts settled using an annuity payout plan;
o withdrawals made as a result of one of the "Contingent events"* described
below to the extent permitted by state law (see your contract for additional
conditions and restrictions);
o amounts we refund to you during the free look period*; and
o death benefits.*
* However, we will reverse certain purchase payment credits up to the maximum
withdrawal charge. (See "Buying Your Contract -- Purchase Payment Credits.")
Contingent events
o Withdrawals you make if you or the annuitant are confined to a hospital or
nursing home and have been for the prior 60 days. Your contract will include
this provision when you and the annuitant are under age 76 at contract issue.
You must provide proof satisfactory to us of the confinement as of the date
you request withdrawal.
o To the extent permitted by state law, withdrawals you make if you or the
annuitant are diagnosed in the second or later contract years as disabled
with a medical condition that with reasonable medical certainty will result
in death within 12 months or less from the date of the licensed physician's
statement. You must provide us with a licensed physician's statement
containing the terminal illness diagnosis and the date the terminal illness
was initially diagnosed.
Possible group reductions: In some cases we may incur lower sales and
administrative expenses due to the size of the group, the average contribution
and the use of group enrollment procedures. In such cases, we may be able to
reduce or eliminate the contract administrative and withdrawal charges. However,
we expect this to occur infrequently.
PREMIUM TAXES
Certain state and local governments impose premium taxes on us (up to 3.5%).
These taxes depend upon your state of residence or the state in which the
contract was issued. Currently, we deduct any applicable premium tax when
annuity payouts begin but we reserve the right to deduct this tax at other
times, such as when you make purchase payments or when you make a full
withdrawal from your contract.
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46 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
Valuing Your Investment
We value your fixed accounts and subaccounts as follows:
FIXED ACCOUNTS
We value the amounts you allocated to the fixed accounts directly in dollars.
The value of a fixed account equals:
o the sum of your purchase payments and transfer amounts allocated to the
one-year fixed account and the Guarantee Period Accounts;
o plus any purchase payment credits allocated to the fixed accounts;
o plus interest credited;
o minus the sum of amounts withdrawn after any applicable MVA (including any
applicable withdrawal charges) and amounts transferred out;
o minus any prorated contract administrative charge;
o minus any prorated portion of the Guaranteed Minimum Income Benefit Rider fee
(if applicable);
o minus any prorated portion of the 8% Performance Credit Rider fee (if
applicable);
o minus any prorated portion of the Benefit Protector(SM) Death Benefit Rider
fee (if applicable); and
o minus any prorated portion of the Benefit Protector(SM) Plus Death Benefit
Rider fee (if applicable).
SUBACCOUNTS
We convert amounts you allocated to the subaccounts into accumulation units.
Each time you make a purchase payment or transfer amounts into one of the
subaccounts or we apply any purchase payment credits, we credit a certain number
of accumulation units to your contract for that subaccount. Conversely, each
time you take a partial withdrawal, transfer amounts out of a subaccount, or we
assess a contract administrative charge, or the 8% Performance Credit Rider fee,
or the Guaranteed Minimum Income Benefit Rider fee, we subtract a certain number
of accumulation units from your contract.
The accumulation units are the true measure of investment value in each
subaccount during the accumulation period. They are related to, but not the same
as, the net asset value of the fund in which the subaccount invests. The dollar
value of each accumulation unit can rise or fall daily depending on the variable
account expenses, performance of the fund and on certain fund expenses.
Here is how we calculate accumulation unit values:
Number of units: to calculate the number of accumulation units for a particular
subaccount, we divide your investment by the current accumulation unit value.
Accumulation unit value: the current accumulation unit value for each subaccount
equals the last value times the subaccount's current net investment factor.
We determine the net investment factor by:
o adding the fund's current net asset value per share, plus the per share
amount of any accrued income or capital gain dividends to obtain a current
adjusted net asset value per share; then
o dividing that sum by the previous adjusted net asset value per share; and
o subtracting the percentage factor representing the mortality and expense risk
fee and the variable account administrative charge from the result.
Because the net asset value of the fund may fluctuate, the accumulation unit
value may increase or decrease. You bear all the investment risk in a
subaccount.
Factors that affect subaccount accumulation units: accumulation units may change
in two ways -- in number and in value.
The number of accumulation units you own may fluctuate due to:
o additional purchase payments you allocate to the subaccounts;
o any purchase payment credits allocated to the subaccounts;
o transfers into or out of the subaccounts;
o partial withdrawals;
o withdrawal charges;
o prorated portions of the contract administrative charge;
o prorated portions of the Guaranteed Minimum Income Benefit Rider fee (if
applicable);
o prorated portions of the 8% Performance Credit Rider fee (if applicable);
o prorated portions of the Benefit Protector(SM) Death Benefit Rider fee (if
applicable); and/or
o prorated portions of the Benefit Protector(SM) Plus Death Benefit Rider fee
(if applicable).
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47 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
Accumulation unit values will fluctuate due to:
o changes in funds' net asset value;
o dividends distributed to the subaccounts;
o capital gains or losses of funds;
o fund operating expenses; and/or
o mortality and expense risk fee and the variable account administrative
charge.
Making the Most of Your Contract
AUTOMATED DOLLAR-COST AVERAGING
Currently, you can use automated transfers to take advantage of dollar-cost
averaging (investing a fixed amount at regular intervals). For example, you
might transfer a set amount monthly from a relatively conservative subaccount to
a more aggressive one, or to several others, or from the one-year fixed account
or the two-year Guarantee Period Account (without a MVA) to one or more
subaccounts. The three to ten year Guarantee Period Accounts are not available
for automated transfers. You can also obtain the benefits of dollar-cost
averaging by setting up regular automatic SIP payments. There is no charge for
dollar-cost averaging.
This systematic approach can help you benefit from fluctuations in accumulation
unit values caused by fluctuations in the market values of the funds. Since you
invest the same amount each period, you automatically acquire more units when
the market value falls and fewer units when it rises. The potential effect is to
lower your average cost per unit.
How dollar-cost averaging works
By investing an equal number Number
of dollars each month... Amount Accumulation of units
Month invested unit value purchased
Jan $100 $20 5.00
you automatically buy Feb 100 18 5.56
more units when the Mar 100 17 5.88
per unit market price is low... Apr 100 15 6.67
May 100 16 6.25
Jun 100 18 5.56
and fewer units Jul 100 17 5.88
when the per unit Aug 100 19 5.26
market price is high. Sept 100 21 4.76
Oct 100 20 5.00
You paid an average price of only $17.91 per unit over the 10 months, while the
average market price actually was $18.10.
Dollar-cost averaging does not guarantee that any subaccount will gain in value
nor will it protect against a decline in value if market prices fall. Because
dollar-cost averaging involves continuous investing, your success 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. For specific features contact your sales representative.
ASSET REBALANCING
You can ask us in writing to automatically rebalance the subaccount portion of
your contract value either quarterly, semi-annually, or annually. The period you
select will start to run on the date we record your request. On the first
valuation date of each of these periods, we automatically will rebalance your
contract value so that the value in each subaccount matches your current
subaccount percentage allocations. These percentage allocations must be in whole
numbers. Asset rebalancing does not apply to the fixed accounts. There is no
charge for asset rebalancing. The contract value must be at least $2,000.
You can change your percentage allocations or your rebalancing period at any
time by contacting us in writing. We will restart the rebalancing period you
selected as of the date we record your change. You also can ask us in writing to
stop rebalancing your contract value. You must allow 30 days for us to change
any instructions that currently are in place. For more information on asset
rebalancing, contact your sales representative.
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48 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
TRANSFERRING BETWEEN ACCOUNTS
You may transfer contract value from any one subaccount, or the fixed accounts,
to another subaccount before annuity payouts begin. (Certain restrictions apply
to transfers involving the fixed accounts.) We will process your transfer on the
valuation date we receive your request. We will value your transfer at the next
accumulation unit value calculated after we receive your request. There is no
charge for transfers. Before making a transfer, you should consider the risks
involved in changing investments. Transfers out of the Guarantee Period Accounts
will be subject to a MVA if done more than 30 days before the end of the
Guarantee Period.
We may suspend or modify transfer privileges at any time. Excessive trading
activity can disrupt fund management strategy and increase expenses, which are
borne by all contract owners who allocated purchase payments to the fund
regardless of their transfer activity. We may apply modifications or
restrictions in any reasonable manner to prevent transfers we believe will
disadvantage other contract owners. These modifications could include, but not
be limited to:
o requiring a minimum time period between each transfer;
o not accepting transfer requests of an agent acting under power of attorney on
behalf of more than one contract owner; or
o limiting the dollar amount that a contract owner may transfer at any one
time.
For information on transfers after annuity payouts begin, see "Transfer
policies" below.
Transfer policies
o Before annuity payouts begin, you may transfer contract values between the
subaccounts, or from the subaccounts to the fixed accounts at any time.
However, if you made a transfer from the one-year fixed account to the
subaccounts, you may not make a transfer from any subaccount back to the
one-year fixed account for six months following that transfer.
o You may transfer contract values from the one-year fixed account to the
subaccounts or the Guarantee Period Accounts once a year on or within 30 days
before or after the contract anniversary (except for automated transfers,
which can be set up at any time for certain transfer periods subject to
certain minimums). Transfers from the one-year fixed account are not subject
to a MVA.
o You may transfer contract values from a Guarantee Period Account any time
after 60 days of transfer or payment allocation to the account. Transfers
made more than 30 days before the end of the Guarantee Period will receive a
MVA, which may result in a gain or loss of contract value.
o If we receive your request on or within 30 days before or after the contract
anniversary date, the transfer from the one-year fixed account to the
subaccounts or the Guarantee Period Accounts will be effective on the
valuation date we receive it.
o We will not accept requests for transfers from the one-year fixed account at
any other time.
o Once annuity payouts begin, you may not make transfers to or from the
one-year fixed account, but you may make transfers once per contract year
among the subaccounts. During the annuity payout period, we reserve the right
to limit the number of subaccounts in which you may invest.
o Once annuity payouts begin, you may not make any transfers to the Guarantee
Period Accounts.
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49 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
HOW TO REQUEST A TRANSFER OR WITHDRAWAL
1 By letter:
Send your name, contract number, Social Security Number or Taxpayer
Identification Number and signed request for a transfer or withdrawal to:
American Enterprise Life Insurance Company
829 AXP Financial Center
Minneapolis, MN 55474
Minimum amount
Transfers or withdrawals: $500 or entire account balance
Maximum amount
Transfers or withdrawals: Contract value or entire account balance
2 By automated transfers and automated partial withdrawals:
Your sales representative can help you set up automated transfers or partial
withdrawals among your subaccounts or fixed accounts.
You can start or stop this service by written request or other method acceptable
to us. You must allow 30 days for us to change any instructions that are
currently in place.
o Automated transfers from the one-year fixed account to any one of the
subaccounts may not exceed an amount that, if continued, would deplete the
one-year fixed account within 12 months.
o Automated withdrawals may be restricted by applicable law under some
contracts.
o You may not make additional purchase payments if automated partial
withdrawals are in effect.
o Automated partial withdrawals may result in IRS taxes and penalties on all or
part of the amount withdrawn.
Minimum amount
Transfers or withdrawals: $100 monthly
$250 quarterly, semiannually or annually
3 By phone:
Call between 8 a.m. and 7 p.m. Central time:
(800) 333-3437
Minimum amount
Transfers or withdrawals: $500 or entire account balance
Maximum amount
Transfers: Contract value or entire account balance
Withdrawals: $25,000
We answer telephone requests promptly, but you may experience delays when the
call volume is unusually high. If you are unable to get through, use the mail
procedure as an alternative.
We will honor any telephone transfer or withdrawal requests that we believe are
authentic and we will use reasonable procedures to confirm that they are. This
includes asking identifying questions and tape recording calls. We will not
allow a telephone withdrawal within 30 days of a phoned-in address change. As
long as we follow the procedures, we (and our affiliates) will not be liable for
any loss resulting from fraudulent requests.
Telephone transfers and withdrawals are automatically available. You may request
that telephone transfers and withdrawals not be authorized from your account by
writing to us.
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50 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
Withdrawals
You may withdraw all or part of your contract at any time before annuity payouts
begin by sending us a written request or calling us. We will process your
withdrawal request on the valuation date we receive it. For full withdrawals, we
will compute the value of your contract at the next accumulation unit value
calculated after we receive your request. We may ask you to return the contract.
You may have to pay charges (see "Charges -- Withdrawal Charge") and IRS taxes
and penalties (see "Taxes"). You cannot make withdrawals after annuity payouts
begin except under Plan E (see "The Annuity Payout Period -- Annuity Payout
Plans").
WITHDRAWAL POLICIES
If you have a balance in more than one account and you request a partial
withdrawal, we will withdraw money from all your subaccounts and/or the fixed
accounts in the same proportion as your value in each account correlates to your
total contract value, unless you request otherwise.
RECEIVING PAYMENT
By regular or express mail:
o payable to owner;
o mailed to address of record.
NOTE: We will charge you a fee if you request express mail delivery.
Normally, we will send the payment within seven days after receiving your
request. However, we may postpone the payment if:
-- the withdrawal amount includes a purchase payment check that has not
cleared;
-- the NYSE is closed, except for normal holiday and weekend closings;
-- trading on the NYSE is restricted, according to SEC rules;
-- an emergency, as defined by SEC rules, makes it impractical to sell
securities or value the net assets of the accounts; or
-- the SEC permits us to delay payment for the protection of security
holders.
Changing Ownership
You may change ownership of your nonqualified annuity at any time by completing
a change of ownership form we approve and sending it to our office. The change
will become binding upon us when we receive and record it. We will honor any
change of ownership request that we believe is authentic and we will use
reasonable procedures to confirm authenticity. If we follow these procedures, we
will not take any responsibility for the validity of the change.
If you have a nonqualified annuity, you may incur income tax liability by
transferring, assigning or pledging any part of it. (See "Taxes.")
If you have a qualified annuity, you may not sell, assign, transfer, discount or
pledge your contract as collateral for a loan, or as security for the
performance of an obligation or for any other purpose except as required or
permitted by the Code. However, if the owner is a trust or custodian, or an
employer acting in a similar capacity, ownership of the contract may be
transferred to the annuitant.
Benefits in Case of Death
There are three death benefit options under this contract:
o Option A -- Value option return of purchase payment death benefit;
o Option B -- Maximum anniversary value death benefit; and
o Option C -- 5% Accumulation death benefit rider.
If either you or the annuitant are age 80 or older at contract issue, death
benefit Option A will apply. If both you and the annuitant are age 79 or younger
at contract issue, you can elect death benefit Option A, Option B or Option C
(if its available in your state) on your application. If you select the
Guaranteed Minimum Income Benefit Rider you must select either death benefit
Option B or Option C. Once you elect an option, you cannot change it. We show
the option that applies in your contract.
There is a 0.10% reduction of the mortality expense risk fee if you select death
benefit Option A.
Under all options, we will pay the death benefit to your beneficiary upon the
earlier of your death or the annuitant's death. We will base the benefit paid on
the death benefit coverage you select when you purchased the contract. If a
contract has more than one person as the owner, we will pay benefits upon the
first to die of any owner or the annuitant.
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51 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
OPTION A -- VALUE OPTION RETURN OF PURCHASE PAYMENT DEATH BENEFIT
Death benefit Option A is intended to help protect your beneficiaries
financially in that they will never receive less than your purchase payments
adjusted for withdrawals. If you or the annuitant dies before annuity payouts
begin while this contract is in force, we will pay the beneficiary the greatest
of the following amounts less any purchase payment credits added to the contract
in the last 12 months:
1. contract value; or
2. total purchase payments plus purchase payment credits minus adjusted partial
withdrawals.
Adjusted partial withdrawals for death benefit Option A or Option B = PW x DB
--------
CV
PW = the partial withdrawal including any applicable withdrawal charge or
MVA.
DB = the death benefit on the date of (but prior to) the partial
withdrawal.
CV = the contract value on the date of (but prior to) the partial
withdrawal.
Example:
o You purchase the contract with a payment of $100,000 on January 1, 2001. We
add a purchase payment credit of $4,000 to the contract.
o On January 1, 2002, you make an additional payment of $20,000. We add a
purchase payment credit of $800.
o On March 1, 2002, the contract value is $110,000 and you take a $10,000
withdrawal.
o On March, 1, 2003, the contract value is $105,000.
We calculate the Option A death benefit on March 1, 2003, as follows:
Contract Value at death: $ 105,000
=========
Purchase payments plus credits minus adjusted partial withdrawals:
Total purchase payments: $120,000.00
plus purchase payment credits: 4,800.00
minus adjusted partial withdrawals calculated as:
10,000 x 124,800 = -11,345.45
----------------- -----------
110,000
for a death benefit of: $113,454.55
===========
Option A death benefit, calculated as the greatest
of these two values: $113,454.55
OPTION B -- MAXIMUM ANNIVERSARY VALUE DEATH BENEFIT
Death benefit Option B is intended to help protect your beneficiaries
financially while your investments have the opportunity to grow. Death benefit
Option B does not provide any additional benefit before the first contract
anniversary and it may not be appropriate for issue ages 75 to 79 because the
benefit values may be limited after age 81. Be sure to discuss with your sales
representative whether or not death benefit Option B is appropriate for your
situation.
If both you and the annuitant are age 79 or younger at contract issue, you may
choose to add death benefit Option B to your contract. If you select the
Guaranteed Minimum Income Benefit Rider you must select either death benefit
Option B or Option C.
Death benefit Option B provides that if you or the annuitant die before annuity
payouts begin while this contract is in force, we will pay the beneficiary the
greatest of the following less any purchase payment credits added to the
contract in the last 12 months:
1. contract value;
2. total purchase payments plus purchase payment credits minus adjusted
partial withdrawals; or
3. the maximum anniversary value immediately preceding the date of death plus
any payments and purchase payment credits since that anniversary minus
adjusted partial withdrawals since that anniversary.
Maximum anniversary value (MAV): This is the greatest of your contract values on
any contract anniversary plus subsequent purchase payments minus adjusted
partial withdrawals. We calculate the MAV on each contract anniversary through
age 80. There is no MAV prior to the first contract anniversary. On the first
contract anniversary we set the MAV equal to the highest of: (a) your current
contract value, or (b) total purchase payments and purchase payment credits
minus adjusted partial withdrawals. Every contract anniversary after that,
through age 80, we compare the previous anniversary's MAV to the current
contract value and we reset the MAV if the current contract value is higher. We
stop resetting the MAV after you or the annuitant reach age 81. However, we
continue to add subsequent purchase payments and purchase payment credits and
subtract adjusted partial withdrawals from the MAV.
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52 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
Example:
o You purchase the contract with a payment of $25,000 on Jan. 1, 2001. We add a
purchase payment credit of $750 to your contract.
o On Jan. 1, 2002 (the first contract anniversary) the contract value grows to
$29,000.
o On March 1, 2002 the contract value falls to $27,000, at which point you take
a $1,500 partial withdrawal, leaving a contract value of $25,500.
We calculate death benefit Option B on March 1, 2002 as follows:
Contract value at death: $25,500.00
==========
Purchase payments plus purchase payment credits minus
adjusted partial withdrawals:
Total purchase payments and purchase payment credits: $25,750.00
minus adjusted partial withdrawals, calculated as:
$1,500 x $25,750 -1,430.56
---------------- = --------
$27,000
for a death benefit of: $24,319.44
==========
The MAV immediately preceding the date of death plus any
payments made since that anniversary minus adjusted
partial withdrawals:
Greatest of your contract anniversary contract values: $29,000.00
plus purchase payments and purchase payment credits
made since that anniversary: +0.00
minus adjusted partial withdrawals, calculated as:
$1,500 x $29,000 -1,611.11
---------------- = ---------
$27,000
for a death benefit of: $27,388.89
==========
The Option B death benefit, calculated as the greatest
of these three values, which is the MAV: $27,388.89
OPTION C -- 5% ACCUMULATION DEATH BENEFIT RIDER
Death benefit Option C is intended to help protect your beneficiaries
financially while your investments have the opportunity to grow. Death benefit
Option C does not provide any additional benefit before the first contract
anniversary and it may not be appropriate for issue ages 75 to 79 because the
benefit values may be limited after age 81. Be sure to discuss with your sales
representative whether or not death benefit Option C is appropriate for your
situation.
If this rider is available in your state and both you and the annuitant are 79
or younger at contract issue, you may choose to add death benefit Option C to
your contract. You may not select death benefit Option C if you add either the
Benefit Protector or the Benefit Protector Plus riders to your contract. If you
select the Guaranteed Minimum Income Benefit Rider you must select either death
benefit Option B or Option C.
Death benefit Option C provides that if you or the annuitant die before annuity
payouts begin while this contract is in force, we will pay the beneficiary the
greatest of the following less any purchase payment credits added to the
contract in the last 12 months:
1. contract value;
2. total purchase payments plus purchase payment credits minus adjusted
partial withdrawals; or
3. the 5% rising floor.
5% rising floor: This is the sum of the value of your fixed accounts plus the
variable account floor. We calculate the variable account floor on each contract
anniversary through age 80. There is no variable account floor prior to the
first contract anniversary. On the first contract anniversary, we set the
variable account floor equal to:
o the initial purchase payments and purchase payment credits allocated to the
subaccounts increased by 5%,
o plus any subsequent amounts allocated to the subaccounts, and
o minus adjusted transfers or partial withdrawals from the subaccounts.
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53 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
Every contract anniversary after that, through age 80, we reset the variable
account floor by accumulating the prior anniversary's variable account floor at
5% plus any subsequent amounts allocated to the subaccounts minus adjusted
transfers or partial withdrawals from the subaccounts. We stop resetting the
variable account floor after you or the annuitant reach age 81. However, we
continue to add subsequent amounts you allocate to the subaccounts and subtract
adjusted transfers or partial withdrawals from the subaccounts.
5% rising floor adjusted transfers or partial withdrawals = PWT x VAF
----------
SV
PWT = the amount transferred from the subaccounts or the amount of the
partial withdrawal (including any applicable withdrawal charge) from
the subaccounts.
VAF = variable account floor on the date of (but prior to) the transfer or
partial withdrawal.
SV = value of the subaccounts on the date of (but prior to) the transfer
or partial withdrawal.
Example:
o You purchase the contract with a payment of $25,000 on Jan. 1, 2001 and we
add a purchase payment credit of $750 to your contract. You allocate $5,100
to the one-year fixed account and $20,650 to the subaccounts.
o On Jan. 1, 2002 (the first contract anniversary), the one-year fixed account
value is $5,200 and the subaccount value is $17,000. Total contract value is
$23,200.
o On March 1, 2002, the one-year fixed account value is $5,300 and the
subaccount value is $19,000. Total contract value is $24,300. You take a
$1,500 partial withdrawal all from the subaccounts, leaving the contract
value at $22,800.
The death benefit on March 1, 2002 is calculated as follows:
Contract value at death: $22,800.00
==========
Purchase payments plus purchase payment credits minus
adjusted partial withdrawals:
Total purchase payments and purchase payment credits: $25,750.00
minus adjusted partial withdrawals, calculated as:
$1,500 x $25,750 -1,589.51
---------------- = ---------
$24,300
for a death benefit of: $24,160.49
==========
The 5% rising floor:
The variable account floor on Jan. 1, 2002, calculated as:
1.05 x $20,650 = $21,682.50
plus amounts allocated to the subaccounts since
that anniversary: +0.00
minus the 5% rising floor adjusted partial withdrawal
from the subaccounts,
calculated as:
$1,500 x $21,682.50 -$1,711.78
------------------- = ---------
$19,000
variable account floor benefit: $19,970.72
plus the one-year fixed account value: +5,300.00
--------
5% rising floor (value of the fixed accounts plus the
variable account floor): $25,270.72
==========
Option C death benefit, calculated as the greatest of these
three values, which is the 5% rising floor: $25,270.72
If you die before your retirement date: When paying the beneficiary, we will
process the death claim on the valuation date our death claim requirements are
fulfilled. We will determine the contract's value at the next accumulation unit
value calculated after our death claim requirements are fulfilled. We pay
interest, if any, at a rate no less than required by law. We will mail payment
to the beneficiary within seven days after our death claim requirements are
fulfilled.
Nonqualified annuities: If your spouse is sole beneficiary and you die before
the retirement date, your spouse may keep the contract as owner with the
contract value equal to the death benefit that would otherwise have been paid.
To do this your spouse must, within 60 days after we receive proof of death,
give us written instructions to keep the contract in force. There will be no
withdrawal charges on the contract from that point forward unless additional
purchase payments are made. The Guaranteed Minimum Income Benefit Rider (see
"Optional Benefits"), if selected, will terminate.
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54 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
If your beneficiary is not your spouse, we will pay the beneficiary in a single
sum unless you give us other written instructions. We must fully distribute the
death benefit within five years of your death. However, the beneficiary may
receive payouts under any annuity payout plan available under this contract if:
o the beneficiary asks us in writing within 60 days after we receive proof of
death; and
o payouts begin no later than one year after your death, or other date as
permitted by the Code; and
o the payout period does not extend beyond the beneficiary's life or life
expectancy.
Qualified annuities: The IRS has issued proposed regulations which will affect
distributions from your qualified annuity. These are proposed regulations that
may take effect Jan. 1, 2002. The information below is an explanation based on
existing law. Contact your tax advisor if you have any questions as to the
impact of the new proposed rules on your situation.
If your spouse is the sole beneficiary, your spouse may keep the contract as
owner until the date on which the annuitant would have reached age 70 1/2, or
any other date permitted by the Code. The contract value will be equal to the
death benefit that would otherwise have been paid. There will be no withdrawal
charges on the contract from that point forward unless additional purchase
payments are made. The Guaranteed Minimum Income Benefit Rider (see "Optional
Benefits"), if selected, will terminate.
If your beneficiary is not your spouse, we will pay the beneficiary in a single
sum unless you give us other written instructions. We must fully distribute the
death benefit within five years of your death. However, the beneficiary may
receive payouts under any annuity payout plan available under this contract if:
o the beneficiary asks us in writing within 60 days after we receive proof of
death; and
o payouts begin no later than one year following the year of your death; and
o the payout period does not extend beyond the beneficiary's life or life
expectancy.
Optional Benefits
BENEFIT PROTECTOR(SM) DEATH BENEFIT RIDER (BENEFIT PROTECTOR)
The Benefit Protector is intended to provide an additional benefit to your
beneficiary to help offset expenses after your death such as funeral expenses or
federal and state taxes. This is an optional benefit that you may select for an
additional annual charge (see "Charges"). The Benefit Protector provides reduced
benefits if you or the annuitant are 70 or older at the rider effective date and
it does not provide any additional benefit before the first rider anniversary.
Be sure to discuss with your sales representative whether or not the Benefit
Protector is appropriate for your situation.
If this rider is available in your state and both you and the annuitant are 75
or younger at contract issue, you may choose to add the Benefit Protector to
your contract. Generally, you must elect the Benefit Protector at the time you
purchase your contract and your rider effective date will be the contract issue
date. This rider is only available under a nonqualified annuity contract. You
may not select this rider if you select death benefit Option C or the Benefit
Protector Plus rider. We reserve the right to discontinue offering the Benefit
Protector for new contracts.
In some instances the rider effective date for the Benefit Protector may be
after we issue the contract according to terms determined by us and at our sole
discretion.
The Benefit Protector provides that if you or the annuitant die after the first
contract anniversary, but before annuity payouts begin, and while this contract
is in force, we will pay the beneficiary:
o the applicable death benefit,
PLUS
o 40% of your earnings at death if you and the annuitant were under age 70 on
the rider effective date, up to a maximum of 100% of purchase payments not
previously withdrawn that are one or more years old; or
o 15% of your earnings at death if you or the annuitant were 70 or older on the
rider effective date, up to a maximum of 37.5% of purchase payments not
previously withdrawn that are one or more years old.
Earnings at death: for purposes of the Benefit Protector and Benefit Protector
Plus riders, this is an amount equal to the applicable death benefit minus
purchase payments not previously withdrawn. The earnings at death may not be
less than zero and may not be more than 250% of the purchase payments not
previously withdrawn that are one or more years old.
Terminating the Benefit Protector:
o You may terminate the rider within 30 days of the first rider anniversary.
o You may terminate the rider within 30 days of any rider anniversary beginning
with the seventh rider anniversary.
o The rider will terminate when you make a full withdrawal from the contract or
when annuity payouts begin.
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55 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
If your spouse is sole beneficiary and you die before the retirement date, your
spouse may keep the contract as owner with the contract value equal to the death
benefit that would otherwise have been paid. We will substitute this new
contract value on the date of death for "purchase payments not previously
withdrawn" used in calculating earnings at death. Your spouse has the option of
discontinuing the Benefit Protector within 30 days of the date of death.
For an example of how we calculate the death benefit under the Benefit
Protector, please see the example in the Benefit Protector(SM) Plus Death
Benefit Rider below.
NOTE: For special tax considerations associated with the Benefit Protector, see
"Taxes."
BENEFIT PROTECTOR(SM) PLUS DEATH BENEFIT RIDER (BENEFIT PROTECTOR PLUS)
The Benefit Protector Plus is intended to provide an additional benefit to your
beneficiary to help offset expenses after your death such as funeral expenses or
federal and state taxes. This is an optional benefit that you may select for an
additional annual charge (see "Charges"). The Benefit Protector Plus provides
reduced benefits if you or the annuitant are 70 or older at the rider effective
date and it does not provide any additional benefit before the first rider
anniversary and it does not provide any benefit beyond what is offered under the
Benefit Protector rider during the second rider year. Be sure to discuss with
your sales representative whether or not the Benefit Protector Plus is
appropriate for your situation.
If this rider is available in your state and both you and the annuitant are 75
or younger at contract issue, you may choose to add the Benefit Protector Plus
to your contract. You must elect the Benefit Protector Plus at the time you
purchase your contract and your rider effective date will be the contract issue
date. This rider is only available under nonqualified annuities purchased
through a transfer or exchange. You may not select this rider if you select
death benefit Option C or the Benefit Protector Rider. We reserve the right to
discontinue offering the Benefit Protector Plus for new contracts.
The Benefit Protector Plus provides that if you or the annuitant die after the
first contract anniversary, but before annuity payouts begin, and while this
contract is in force, we will pay the beneficiary:
o the benefits payable under the Benefit Protector described above,
PLUS
o a percentage of purchase payments made within 60 days of contract issue not
previously withdrawn as follows:
Percentage if you and the annuitant are Percentage if you or the annuitant are
Contract year under age 70 on the rider effective date 70 or older on the rider effective date
One and Two 0% 0%
Three and Four 10% 3.75%
Five or more 20% 7.5%
Another way to describe the benefits payable under the Benefit Protector Plus
rider is as follows:
o the applicable death benefit PLUS
If you and the annuitant are under If you or the annuitant are age 70
Contract year age 70 on the rider effective date, add... or older on the rider effective date, add...
One Zero Zero
Two 40% x earnings at death (see above) 15% x earnings at death
Three and Four 40% x (earnings at death + 25% of initial purchase payment*) 15% x (earnings at death + 25% of initial
purchase payment*)
Five or more 40% x (earnings at death + 50% of initial purchase payment*) 15% x (earnings at death + 50% of initial
purchase payment*)
* Initial purchase payments are payments made within 60 days of contract issue
not previously withdrawn.
Terminating the Benefit Protector Plus:
o You may terminate the rider within 30 days of the first rider anniversary.
o You may terminate the rider within 30 days of any rider anniversary beginning
with the seventh rider anniversary.
o The rider will terminate when you make a full withdrawal from the contract or
when annuity payouts begin.
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56 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
Example of the Benefit Protector and Benefit Protector Plus:
o You purchase the contract with a payment of $100,000 on Jan. 1, 2001 and you
and the annuitant are under age 70. We add a $1,000 credit to your contract.
You select death benefit Option B.
o On July 1, 2001 the contract value grows to $105,000. The death benefit under
Option B on July 1, 2001 equals the contract value, less any purchase payment
credits added to the contract in the last 12 months, or $104,000. You have
not reached the first contract anniversary so neither the Benefit Protector
nor the Benefit Protector Plus provides any additional benefit at this time.
o On Jan. 1, 2002 the contract value grows to $110,000. You have not reached
the second contract anniversary so the Benefit Protector Plus does not
provide any additional benefit at this time. The death benefit on Jan. 1,
2002 equals:
death benefit Option B (contract value): $110,000
plus the Benefit Protector benefit which equals 40%
of earnings at death (death benefit Option B minus
payments not previously withdrawn):
0.40 x ($110,000 - $100,000) = +4,000
--------
Total death benefit of: $114,000
o On Jan. 1, 2003 the contract value falls to $105,000. The death benefit on
Jan. 1, 2003 equals:
death benefit Option B (MAV): $110,000
plus the Benefit Protector benefit
(40% of earnings at death):
0.40 x ($110,000 - $100,000) = +4,000
plus the Benefit Protector Plus which in the third
contract year equals 10% of purchase payments made
within 60 days of contract issue and not previously
withdrawn: 0.10 x $100,000 = +10,000
--------
Total death benefit of: $124,000
o On Feb. 1, 2003 the contract value remains at $105, 000 and you request a
partial withdrawal, including the applicable 7% withdrawal charge, of
$50,000. We will withdraw $10,500 from your contract value free of charge
(10% of your prior anniversary's contract value). The remainder of the
withdrawal is subject to an 7% withdrawal charge because your payment is two
years old, so we will withdraw $39,500 ($36,735 + $2,765 in withdrawal
charges) from your contract value. Altogether, we will withdraw $50,000 and
pay you $47,235. We calculate purchase payments not previously withdrawn as
$100,000 - $45,000 = $55,000 (remember that $5,000 of the partial withdrawal
is contract earnings). The death benefit on Feb. 1, 2003 equals:
death benefit Option B (MAV adjusted for
partial withdrawals): $57,619
plus the Benefit Protector benefit
(40% of earnings at death):
0.40 x ($57,619 - $55,000) = +1,048
plus the Benefit Protector Plus which in the third
contract year equals 10% of purchase payments made
within 60 days of contract issue and not previously
withdrawn: 0.10 x $55,000 = +5,500
-------
Total death benefit of: $64,167
o On Jan. 1, 2004 the contract value falls $40,000. The death benefit on Jan.
1, 2004 equals the death benefit paid on Feb. 1, 2003. The reduction in
contract value has no effect.
o On Jan. 1, 2010 the contract value grows to a new high of $200,000. Earnings
at death reaches its maximum of 250% of purchase payments not previously
withdrawn that are one or more years old. Because we are beyond the fourth
contract anniversary the Benefit Protector Plus also reaches its maximum of
20%. The death benefit on Jan. 1, 2010 equals:
death benefit Option B (contract value): $200,000
plus the Benefit Protector (40% of earnings at death, up to a
maximum of 100% of purchase payments not previously
withdrawn that are one or more years old) +55,000
plus the Benefit Protector Plus which after the fourth
contract year equals 20% of purchase payments made
within 60 days of contract issue and not previously
withdrawn: 0.20 x $55,000 = +11,000
--------
Total death benefit of: $266,000
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57 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
o On July 1, 2010 you make an additional purchase payment of $50,000 and we add
a purchase payment credit of $500. Your new contract value is now $250,000.
The new purchase payment is less than one year old and so it has no effect on
either the Benefit Protector or Benefit Protector Plus values. The death
benefit on July 1, 2010 equals:
death benefit Option B (contract value less any
purchase payment credits added in the last 12 months): $249,500
plus the Benefit Protector (40% of earnings at death, up to a
maximum of 100% of purchase payments not previously
withdrawn that are one or more years old) +55,000
plus the Benefit Protector Plus which after the fourth
contract year equals 20% of purchase payments made
within 60 days of contract issue and not previously
withdrawn: 0.20 x $55,000 = +11,000
--------
Total death benefit of: $315,500
o On July 1, 2011 the contract value remains $250,000 and the "new" purchase
payment is one year old. The value of the Benefit Protector changes but value
of the Benefit Protector Plus remains constant. The death benefit on July 1,
2011 equals:
death benefit Option B (contract value): $250,000
plus the Benefit Protector benefit which equals 40% of
earnings at death (death benefit Option B minus payments
not previously withdrawn):
0.40 x ($250,000 - $105,000) = +58,000
plus the Benefit Protector Plus which after the fourth
contract year equals 20% of purchase payments made
within 60 days of contract issue and not previously
withdrawn: 0.20 x $55,000 = +11,000
--------
Total death benefit of: $319,000
If your spouse is sole beneficiary and you die before the retirement date, your
spouse may keep the contract as owner with the contract value equal to the death
benefit that would otherwise have been paid. We will then terminate the Benefit
Protector Plus and substitute the applicable death benefit (see "Benefits in
Case of Death").
NOTE: For special tax considerations associated with the Benefit Protector Plus,
see "Taxes."
GUARANTEED MINIMUM INCOME BENEFIT RIDER (GMIB)
The GMIB is intended to provide you with a guaranteed minimum lifetime income
regardless of the volatility inherent in the investments in the subaccounts. If
the annuitant is between age 73 and age 75 at contract issue, you should
consider whether the GMIB is appropriate for your situation because:
o you must hold the GMIB for 7 years,
o the GMIB terminates after the annuitant's 86th birthday,
o you can only exercise the GMIB within 30 days after a contract anniversary,
o the 6% rising floor value we use in the GMIB benefit base to calculate
annuity payouts under the GMIB is limited after age 81, and
o the additional costs associated with the rider.
Be sure to discuss whether or not the GMIB is appropriate for your situation
with your sales representative.
If this rider is available in your state and the annuitant is 75 or younger at
contract issue, you may choose to add this benefit to your contract for an
additional annual charge (see "Charges). You cannot select this rider if you
select the 8% Performance Credit Rider. You must elect the GMIB along with
either death benefit Option B or Option C at the time you purchase your contract
and your rider effective date will be the contract issue date.
In some instances we may allow you to add the GMIB to your contract at a later
date if it was not available when you initially purchased your contract. In
these instances, we would add the GMIB at the next contract anniversary and this
would become the rider effective date. For purposes of calculating the GMIB
benefit base under these circumstances, we consider the contract value on the
rider effective date to be the initial purchase payment and purchase payment
credit; we disregard all previous purchase payments, purchase payment credits,
transfers and withdrawals in the GMIB calculations.
Investment selection under the GMIB: You may allocate your purchase payments and
purchase payment credits or transfers to any of the subaccounts or the fixed
accounts. However, we reserve the right to limit the amount you allocate to
subaccounts investing in the AXP(R) Variable Portfolio - Cash Management Fund to
10% of the total amount in the subaccounts. If we are required to activate this
restriction, and you have more than 10% of your subaccount value in this fund,
we will send you a notice and ask that you reallocate your contract value so
that the 10% limitation is satisfied within 60 days. We will terminate the GMIB
if you have not satisfied the limitation after 60 days.
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58 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
Exercising the GMIB:
o you may only exercise the GMIB within 30 days after any contract anniversary
following the expiration of a seven-year waiting period from the rider
effective date.
o the annuitant on the retirement date must be between 50 and 86 years old.
o you can only take an annuity payout under one of the following annuity payout
plans:
-- Plan A - Life Annuity -- no refund
-- Plan B - Life Annuity with ten years certain
-- Plan D - Joint and last survivor life annuity -- no refund
o you may change the annuitant for the payouts.
The GMIB guarantees a minimum amount of fixed annuity lifetime income or a
minimum first year variable annuity payout. We calculate fixed annuity payouts
and first year variable annuity payouts based on the guaranteed annuity purchase
rates stated in Table B of the contract but using a 2.5% guaranteed annual
effective interest rate which is lower than the 3% rate used in Table B of the
contract. Therefore, your payout rates under the GMIB will be lower than the
payout rates stated in Table B. This 2.5% Table is not stated in your contract.
After the first year, lifetime income variable annuity payouts will depend on
the investment performance of the subaccounts you select. The payouts will be
higher if your investment performance is greater than a 5% annual return and
lower if investment performance is less than a 5% annual return.
The GMIB benchmarks the contract growth at each anniversary against several
comparison values and sets the GMIB benefit base (described below) equal to the
largest value. The GMIB benefit base, less any applicable premium tax, is the
value we apply to the guaranteed annuity purchase rates stated in Table B of the
contract to calculate the minimum annuity payouts you will receive if you
exercise the GMIB. If the GMIB benefit base is greater than the contract value,
the GMIB may provide a higher annuity payout level than is otherwise available.
However, the GMIB uses guaranteed annuity purchase rates that are more
conservative than the annuity purchase rates that we will apply at annuitization
under the standard contract provisions. Therefore, the level of income provided
by the GMIB may be less than the income the contract otherwise provides. If the
annuity payouts through the standard contract provisions are more favorable than
the payouts available through the GMIB, you may elect the higher standard payout
option. The GMIB does not create contract value or guarantee the performance of
any investment option.
GMIB benefit base: If the GMIB is effective at contract issue, the GMIB benefit
base is the greatest of:
1. contract value;
2. total purchase payments plus purchase payment credits minus adjusted
partial withdrawals; or
3. the 6% rising floor.
6% rising floor: We calculate this in the same manner as the 5% rising floor but
we use a 6% accumulation rate. This is the sum of the value of your fixed
accounts plus the variable account floor. We calculate the variable account
floor on each contract anniversary through age 80. There is no variable account
floor prior to the first contract anniversary. On the first contract
anniversary, we set the variable account floor equal to:
o the initial purchase payments and purchase payment credits allocated to the
subaccounts increased by 6%,
o plus any subsequent amounts allocated to the subaccounts, and
o minus adjusted transfers or partial withdrawals from the subaccounts.
Every contract anniversary after that, through age 80, we reset the variable
account floor by accumulating the prior anniversary's variable account floor at
6% plus any subsequent amounts allocated to the subaccounts minus adjusted
transfers or partial withdrawals from the subaccounts. We stop resetting the
variable account floor after you or the annuitant reach age 81. However, we
continue to add subsequent amounts you allocate to the subaccounts and subtract
adjusted transfers or partial withdrawals from the subaccounts. We calculate
adjusted transfers or partial withdrawals for the 6% rising floor using the same
formula as adjusted transfers or partial withdrawals for the 5% rising floor.
Keep in mind that the 6% rising floor is limited after age 81.
We reserve the right to exclude from the GMIB benefit base any purchase payments
and purchase payment credits made in the five years before you exercise the
GMIB. We would do so only if such payments and credits total $50,000 or more or
if they are 25% or more of total contract payments. If we exercise this right,
we:
o subtract each payment and purchase payment credit adjusted for market value
from the contract value.
o subtract each payment and purchase payment credit from the 6% rising floor.
We adjust the payments and purchase payment credit made to the fixed account
for market value. We increase payments and purchase payment credit allocated
to the subaccounts by 6% for the number of full contract years they have been
in the contract before we subtract them from the 6% rising floor.
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59 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
For each payment and purchase payment credit, we calculate the market value
adjustment to the contract value and the fixed account value of the 6% rising
floor as:
PMT x CVG
---------
ECV
PMT = each purchase payment and purchase payment credit made in the five
years before you exercise the GMIB.
CVG = current contract value at the time you exercise the GMIB.
ECV = the estimated contract value on the anniversary prior to the
payment in question. We assume that all payments, purchase payment
credits and partial withdrawals occur at the beginning of a contract
year.
For each payment and purchase payment credit, we calculate the 6% increase of
payments and purchase payment credits allocated to the subaccounts as:
PMT x (1.06)(to the power of CY)
CY = the full number of contract years the payment and purchase payment
credit have been in the contract.
Terminating the GMIB:
o You may terminate the rider within 30 days after the first rider anniversary.
o You may terminate the rider any time after the seventh rider anniversary.
o The rider will terminate on the date:
-- you make a full withdrawal from the contract;
-- a death benefit is payable; or
-- you choose to begin taking annuity payouts under the regular contract
provisions.
o The rider will terminate on the contract anniversary after the annuitant's
86th birthday.
Example:
o You purchase the contract with a payment of $100,000 on Jan. 1, 2001 and we
add a $4,000 purchase payment credit to your contract. You allocate all of
your purchase payment and purchase payment credit to the subaccounts.
o There are no additional purchase payments and no partial withdrawals.
o Assume the annuitant is male and age 55 at contract issue. For the joint and
last survivor option (annuity payout Plan D), the joint annuitant is female
and age 55 at contract issue.
Taking into account fluctuations in contract value due to market conditions, we
calculate the GMIB benefit base as:
Contract Purchase payments and GMIB
anniversary Contract value purchase payment credit 6% rising floor benefit base
1 $112,000 $104,000 $110,240
2 130,000 104,000 116,854
3 137,000 104,000 123,866
4 156,000 104,000 131,298
5 88,000 104,000 139,175
6 125,000 104,000 147,526
7 144,000 104,000 156,378 $156,378
8 158,000 104,000 165,760 165,760
9 145,000 104,000 175,706 175,706
10 133,000 104,000 186,248 186,248
11 146,000 104,000 197,423 197,423
12 153,000 104,000 209,268 209,268
13 225,000 104,000 221,825 225,000
14 245,000 104,000 235,134 245,000
15 250,000 104,000 249,242 250,000
NOTE: The 6% rising floor value is limited after age 81, but the GMIB benefit
base may increase if the contract value increases. However, you should keep in
mind that you are always entitled to annuitize using the contract value without
exercising the GMIB.
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60 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
If you annuitize the contract within 30 days after a contract anniversary, the
payout under a fixed annuity option (which is the same as the minimum payout for
the first year under a variable annuity options) would be:
Minimum Guaranteed Monthly Income
Contract Plan A - Plan B - Plan D - joint and
anniversary GMIB life annuity -- life annuity with last survivor life
at exercise benefit base no refund ten years certain annuity -- no refund
10 $186,248 (6% Rising Floor) $ 916.34 $ 892.13 $ 722.64
15 250,000 (Contract Value) 1,420.00 1,352.50 1,085.00
The payouts above are shown at guaranteed annuity rates we use in the 2.5%
Table. Payouts under the standard provisions of this contract will be based on
our annuity rates in effect at annuitization and are guaranteed to be greater
than or equal to the guaranteed annuity rates stated in Table B of the contract.
The fixed annuity payout available under the standard provisions of this
contract would be at least as great as shown below:
Contract Plan A - Plan B - Plan D - joint and
anniversary life annuity -- life annuity with last survivor life
at exercise Contract value no refund ten years certain annuity -- no refund
10 $133,000 $ 692.93 $ 674.31 $ 551.95
15 250,000 1,490.00 1,420.00 1,152.50
At the 15th contract anniversary you would not experience a benefit from the
GMIB as the payout available to you is equal to or less than the payout
available under the standard provisions of the contract.
Remember that after the first year, lifetime income payouts under a variable
annuity payout option will depend on the investment performance of the
subaccounts you select. The payouts will be higher if investment performance is
greater than a 5% annual return and lower if investment performance is less than
a 5% annual return.
8% PERFORMANCE CREDIT RIDER (PCR)
The PCR is intended to provide you with an additional benefit if your earnings
are less than the target value on the seventh and tenth rider anniversaries (see
below). This is an optional benefit you may select for an additional charge (see
"Charges"). The PCR does not provide any additional benefit before the seventh
rider anniversary and it may not be appropriate for issue ages 83 or older due
to this required holding period. Be sure to discuss with your sales
representative whether or not the PCR is appropriate for your situation.
If the PCR is available in your state, you may choose to add this benefit to
your contract at issue. You cannot select the PCR if you select the GMIB.
In some instances we may allow you to add the PCR to your contract at a later
date if it was not available when you initially purchased your contract. In
these instances, we would add the PCR at the next contract anniversary and this
would become the rider effective date. For purposes of calculating the target
value under these circumstances, we consider the contract value on the rider
effective date to be the first contract year's purchase payments.
Investment selection under the PCR: You may allocate your purchase payments and
purchase payment credits or transfers to any of the subaccounts or the fixed
accounts. However, we reserve the right to limit the aggregate amount in your
fixed accounts and amounts you allocate to subaccounts investing in the AXP(R)
Variable Portfolio - Cash Management Fund to 10% of your total contract value.
If we are required to activate this restriction, and you have more than 10% of
your contract value in these accounts, we will send you a notice and ask that
you reallocate your contract value so that the 10% limitation is satisfied
within 60 days. We will terminate the PCR if you have not satisfied the
limitation after 60 days.
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61 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
Target value: We calculate the target value on each rider anniversary. There is
no target value prior to the first rider anniversary. On the first rider
anniversary we set the target value equal to your first year's purchase payments
plus purchase payment credits minus the target value adjusted partial
withdrawals accumulated at an annual effective rate of 8%. Every rider
anniversary after that, we recalculate the target value by accumulating the
prior anniversary's target value and any additional purchase payments and
purchase payment credits minus the target value adjusted partial withdrawals at
an annual effective rate of 8%.
Target value adjusted partial withdrawals = PW x TV
-------
CV
PW = the partial withdrawal including any applicable withdrawal charge or
MVA.
TV = the target value on the date of (but prior to) the partial withdrawal.
CV = contract value on the date of (but prior to) the partial withdrawal.
Your benefits under the PCR are as follows:
(a) If on the seventh rider anniversary your contract value is less than the
target value, we will add a PCR credit to your contract equal to:
3% x (PP - PCRPW - PP5)
PP = total purchase payments and purchase payment credits.
PCRPW = PCR adjusted partial withdrawals. The PCR adjusted partial
withdrawal amount is an adjustment we make to determine the
proportionate amount of any partial withdrawal attributable to
purchase payments received five or more years before the
target value is calculated (on the tenth year rider
anniversary). For a more detailed description of the PCR
adjusted partial withdrawal please see Appendix B.
PP5 = purchase payments and purchase payment credits made in the
prior five years.
We apply the PCR credit to your contract on the seventh rider anniversary and
allocate it among the fixed accounts and subaccounts according to your current
asset allocation.
(b) If on the tenth rider anniversary your contract value is less than the
target value, we will add a PCR credit to your contract equal to:
5% x (PP - PCRPW - PP5)
We restart the calculation period for the PCR on the tenth rider anniversary and
every ten years after that while you own the contract. We use the contract value
(including any credits) on that anniversary as your first contract year's
payments for calculating the target value and any applicable PCR credit. We may
then apply additional PCR credits to your contract at the end of each seven and
ten-year period as described above.
PCR reset: You can elect to lock in your contract growth by restarting the
ten-year PCR calculation period on any contract anniversary. If you elect to
restart the calculation period, the contract value on the restart date is used
as the first year's payments for the calculating the target value and any
applicable PCR credit. The next calculation period for the PCR will restart at
the end of this new ten-year period. We must receive your request to restart the
PCR calculation period within 30 days after a contract anniversary.
Terminating the PCR:
o You may terminate the PCR within 30 days following the first contract
anniversary after the PCR rider effective date.
o You may terminate the PCR within 30 days following the later of the tenth
contract anniversary after the PCR rider effective date or the last rider
reset date.
o The PCR will terminate on the date:
-- you make a full withdrawal from the contract,
-- that a death benefit is payable, or
-- you choose to begin taking annuity payouts.
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62 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
Example:
o You purchase the contract with a payment of $100,000 on Jan. 1, 2001 and we
add a $4,000 purchase payment credit to your contract.
o There are no additional purchase payments and no partial withdrawals.
o On Jan. 1, 2008, the contract value is $150,000.
o We determine the target value on Jan. 1, 2008 as your purchase payments plus
purchase payment credits (there are no partial withdrawals to subtract)
accumulated at an annual effective rate of 8% or:
$104,000 x (1.08)(to the power of 7) = $104,000 x 1.71382 = $178,237.72.
Your contract value ($150,000) is less than the target value ($178,237.72) so
we will add a PCR credit to your contract equal to 3% of your purchase
payments and purchase payment credits (there are no partial withdrawals or
purchase payments made in the last five years to subtract), which is:
0.03 x $104,000 = $3,120.
After application of the PCR credit, your total contract value on Jan. 1,
2008 would be $153,120.
o On Jan. 1, 2011, the contract value is $220,000.
o We determine the target value on Jan. 1, 2011 as your purchase payments plus
purchase payment credits (there are no partial withdrawals to subtract)
accumulated at an annual effective rate of 8% or:
$104,000 x (1.08)(to the power of 10) = $104,000 x 2.158924 = $224,528.20
Your contract value ($220,000) is less than the target value ($224,528.20) so
we will add a PCR credit to your contract equal to 5% of your purchase
payments and purchase payment credits (there are no partial withdrawals or
purchase payments made in the last five years to subtract), which is:
0.05 x $104,000 = $5,200.
After application of the PCR credit, your total contract value on Jan. 1,
2011 would be $225,200.
o The PCR calculation period automatically restarts on Jan. 1, 2011 with the
target values first year's payments equal to $225,200. We would make the next
PCR credit determination on Jan. 1, 2018.
The Annuity Payout Period
As owner of the contract, you have the right to decide how and to whom annuity
payouts will be made starting at the retirement date. You may select one of the
annuity payout plans outlined below, or we may mutually agree on other payout
arrangements. We do not deduct any withdrawal charges under the payout plans
listed below.
You also decide whether we will make annuity payouts on a fixed or variable
basis, or a combination of fixed and variable. The amount available to purchase
payouts under the plan you select is the contract value on your retirement date
(less any applicable premium tax). You may reallocate this contract value to the
one-year fixed account to provide fixed dollar payouts and/or among the
subaccounts to provide variable annuity payouts. During the annuity payout
period, we reserve the right to limit the number of subaccounts in which you may
invest. The Guarantee Period Accounts are not available during this payout
period.
Amounts of fixed and variable payouts depend on:
o the annuity payout plan you select;
o the annuitant's age and, in most cases, sex;
o the annuity table in the contract; and
o the amounts you allocated to the accounts at settlement.
In addition, for variable payouts only, amounts depend on the investment
performance of the subaccounts you select. These payouts will vary from month to
month because the performance of the funds will fluctuate. (In the case of fixed
annuities, payouts remain the same from month to month.)
For information with respect to transfers between accounts after annuity payouts
begin, see "Making the Most of Your Contract -- Transfer policies."
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63 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
ANNUITY TABLES
The annuity tables in your contract show the amount of the monthly payout for
each $1,000 of contract value according to the age and, when applicable, the sex
of the annuitant. (Where required by law, we will use a unisex table of
settlement rates.)
Table B shows the minimum amount of each fixed payout. Amounts in Table B are
based on the guaranteed annual effective interest rate shown in your contract.
We declare current payout rates that we use in determining the actual amount of
your fixed payout. The current payout rates will equal or exceed the guaranteed
payout rates shown in Table B. We will furnish these rates to you upon request.
Table A shows the amount of the first monthly variable payout assuming that the
contract value is invested at the beginning of the annuity payout period and
earns a 5% rate of return, which is reinvested and helps to support future
payouts. If you ask us at least 30 days before the retirement date, we will
substitute an annuity table based on an assumed 3.5% investment rate for the 5%
Table A in the contract. The assumed investment rate affects both the amount of
the first payout and the extent to which subsequent payouts increase or
decrease. Using Table A results in a higher initial payment, but later payouts
will increase more slowly when annuity unit values rise and decrease more
rapidly when they decline.
ANNUITY PAYOUT PLANS
You may choose any one of these annuity payout plans by giving us written
instructions at least 30 days before contract values are used to purchase the
payout plan:
o Plan A - Life annuity -- no refund: We make monthly payouts until the
annuitant's death. Payouts end with the last payout before the annuitant's
death. We will not make any further payouts. This means that if the annuitant
dies after we made only one monthly payout, we will not make any more
payouts.
o Plan B - Life annuity with five, ten or 15 years certain: We make monthly
payouts for a guaranteed payout period of five, ten or 15 years that you
elect. This election will determine the length of the payout period to the
beneficiary if the annuitant should die before the elected period expires. We
calculate the guaranteed payout period from the retirement date. If the
annuitant outlives the elected guaranteed payout period, we will continue to
make payouts until the annuitant's death.
o Plan C - Life annuity -- installment refund: We make monthly payouts until
the annuitant's death, with our guarantee that payouts will continue for some
period of time. We will make payouts for at least the number of months
determined by dividing the amount applied under this option by the first
monthly payout, whether or not the annuitant is living.
o Plan D - Joint and last survivor life annuity -- no refund: We make monthly
payouts while both the annuitant and a joint annuitant are living. If either
annuitant dies, we will continue to make monthly payouts at the full amount
until the death of the surviving annuitant. Payouts end with the death of the
second annuitant.
o Plan E - Payouts for a specified period: We make monthly payouts for a
specific payout period of ten to 30 years that you elect. We will make
payouts only for the number of years specified whether the annuitant is
living or not. Depending on the selected time period, it is foreseeable that
an annuitant can outlive the payout period selected. During the payout
period, you can elect to have us determine the present value of any remaining
variable payouts and pay it to you in a lump sum. We determine the present
value of the remaining annuity payouts which are assumed to remain level at
the initial payout. The discount rate we use in the calculation will vary
between 5.36% and 6.86% depending on the applicable assumed investment rate.
(See "Charges -- Withdrawal charge under Annuity Payout Plan E.") You can
also take a portion of the discounted value once a year. If you do so, your
monthly payouts will be reduced by the proportion of your withdrawal to the
full discounted value. A 10% IRS penalty tax could apply if you take a
withdrawal. (See "Taxes.")
Annuity payout plan requirements for qualified annuities: If you purchased a
qualified annuity, you must select a payout plan as of the retirement date set
forth in your contract. You have the responsibility for electing a payout plan
that complies with your contract and with applicable law. Your contract
describes your payout plan options. The options will meet certain IRS
regulations governing required minimum distributions if the payout plan meets
the incidental distribution benefit requirements, if any, and the payouts are
made:
o in equal or substantially equal payments over a period not longer than the
life of the annuitant or over the life of the annuitant and designated
beneficiary; or
o in equal or substantially equal payments over a period not longer than the
life expectancy of the annuitant or over the life expectancy of the annuitant
and designated beneficiary; or
o over a period certain not longer than the life expectancy of the annuitant or
over the life expectancy of the annuitant and designated beneficiary.
If we do not receive instructions: You must give us written instructions for the
annuity payouts at least 30 days before the annuitant's retirement date. If you
do not, we will make payouts under Plan B, with 120 monthly payouts guaranteed.
Contract values that you allocated to the one-year fixed account will provide
fixed dollar payouts and contract values that you allocated among the
subaccounts will provide variable annuity payouts.
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64 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
If monthly payouts would be less than $20: We will calculate the amount of
monthly payouts at the time the contract value is used to purchase a payout
plan. If the calculations show that monthly payouts would be less than $20, we
have the right to pay the contract value to the owner in a lump sum or to change
the frequency of the payouts.
Death after annuity payouts begin: If you or the annuitant die after annuity
payouts begin, we will pay any amount payable to the beneficiary as provided in
the annuity payout plan in effect.
Taxes
Generally, under current law, your contract has a tax-deferral feature. This
means any increase in the value of the fixed accounts and/or subaccounts in
which you invest is taxable to you only when you receive a payout or withdrawal
(see detailed discussion below). Any portion of the annuity payouts and any
withdrawals you request that represent ordinary income normally are taxable. We
will send you a tax information reporting form for any year in which we made a
taxable distribution according to our records. Roth IRAs may grow and be
distributed tax free if you meet certain distribution requirements.
Annuity payouts under nonqualified annuities: A portion of each payout will be
ordinary income and subject to tax, and a portion of each payout will be
considered a return of part of your investment and will not be taxed. All
amounts you receive after your investment in the contract is fully recovered
will be subject to tax.
Tax law requires that all nonqualified deferred annuity contracts issued by the
same company (and possibly its affiliates) to the same owner during a calendar
year be taxed as a single, unified contract when you take distributions from any
one of those contracts.
Qualified annuities: When you use your contract to fund a retirement plan that
is already tax deferred under the Code, the contract will not provide any
necessary or additional tax deferral for the retirement plan.
Adverse tax consequences may result if you do not ensure that contributions,
distributions and other transactions under the contract comply with the law.
Qualified annuities have minimum distribution rules that govern the timing and
amount of distributions during your life (except for Roth IRAs) and after your
death. You should refer to your retirement plan or adoption agreement, or
consult a tax advisor for more information about these distribution rules.
Annuity payouts under qualified annuities (except Roth IRAs): Under a qualified
annuity, the entire payout generally is includable as ordinary income and is
subject to tax except to the extent that contributions were made with after-tax
dollars. If you or your employer invested in your contract with deductible or
pre-tax dollars as part of a tax-deferred retirement plan, such amounts are not
considered to be part of your investment in the contract and will be taxed when
paid to you.
Purchase payment credits and PCR credits: These are considered earnings and are
taxed accordingly.
Withdrawals: If you withdraw part or all of your contract before your annuity
payouts begin, your withdrawal payment will be taxed to the extent that the
value of your contract immediately before the withdrawal exceeds your
investment. You also may have to pay a 10% IRS penalty for withdrawals you make
before reaching age 59 1/2 unless certain exceptions apply. For qualified
annuities, other penalties may apply if you make withdrawals from your contract
before your plan specifies that you can receive payouts.
Death benefits to beneficiaries under nonqualified annuities: The death benefit
under a contract is not tax exempt. Any amount your beneficiary receives that
represents previously deferred earnings within the contract is taxable as
ordinary income to the beneficiary in the year he or she receives the payments.
Death benefits to beneficiaries under qualified annuities: The entire death
benefit generally is taxable as ordinary income to the beneficiary in the year
he or she receives the payments. Death benefits under a Roth IRA generally are
not taxable as ordinary income to the beneficiary if certain distribution
requirements are met.
Special considerations if you select either the Benefit Protector(SM) or the
Benefit Protector(SM) Plus Death Benefit Riders: As of the date of this
prospectus, we believe that charges related to these riders are not subject to
current taxation. Therefore, we will not report these charges as partial
withdrawals from your contract. However, the IRS may determine that these
charges should be treated as partial withdrawals subject to taxation to the
extent of any gain as well as the 10% tax penalty for withdrawals before the age
of 59 1/2, if applicable.
We reserve the right to report charges for these riders as partial withdrawals
if we, as a withholding and reporting agent, believe that we are required to
report them. In addition, we will report the benefits attributable to these
riders on the death of you or the annuitant as an annuity death benefit
distribution, not as proceeds from life insurance.
Annuities owned by corporations, partnerships or trusts: For nonqualified
annuities, any annual increase in the value of annuities held by such entities
generally will be treated as ordinary income received during that year. This
provision is effective for purchase payments made after Feb. 28, 1986. However,
if the trust was set up for the benefit of a natural person only, the income
will remain tax deferred.
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65 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
Penalties: If you receive amounts from your contract before reaching age 59 1/2,
you may have to pay a 10% IRS penalty on the amount includable in your ordinary
income. However, this penalty will not apply to any amount received:
o because of your death;
o because you become disabled (as defined in the Code);
o if the distribution is part of a series of substantially equal periodic
payments, made at least annually, over your life or life expectancy (or joint
lives or life expectancies of you and your beneficiary); or
o if it is allocable to an investment before Aug. 14, 1982 (except for
qualified annuities).
For IRAs, other exceptions may apply if you make withdrawals from your contract
prior to age 59 1/2.
Withholding, generally: If you receive all or part of the contract value, we may
deduct withholding against the taxable income portion of the payment. Any
withholding represents a prepayment of your tax due for the year. You take
credit for these amounts on your annual tax return.
If the payment is part of an annuity payout plan, we generally compute the
amount of withholding using payroll tables. You may provide us with a statement
of how many exemptions to use in calculating the withholding. As long as you've
provided us with a valid Social Security Number or Taxpayer Identification
Number, you can elect not to have any withholding occur.
If the distribution is any other type of payment (such as a partial or full
withdrawal) we compute withholding using 10% of the taxable portion. Similar to
above, as long as you have provided us with a valid Social Security Number or
Taxpayer Identification Number, you can elect not to have this withholding
occur.
Some states also may impose withholding requirements similar to the federal
withholding described above. If this should be the case, we may deduct state
withholding from any payment from which we deduct federal withholding. The
withholding requirements may differ if we are making payment to a non-U.S.
citizen or if we deliver the payment outside the United States.
Transfer of ownership of a nonqualified annuity: If you transfer a nonqualified
annuity without receiving adequate consideration, the transfer is a gift and
also may be a withdrawal for federal income tax purposes. If the gift is a
currently taxable event for income tax purposes, the original owner will be
taxed on the amount of deferred earnings at the time of the transfer and also
may be subject to the 10% IRS penalty discussed earlier. In this case, the new
owner's investment in the contract will be the value of the contract at the time
of the transfer.
Collateral assignment of a nonqualified annuity: If you collaterally assign or
pledge your contract, earnings on purchase payments you made after Aug. 13, 1982
will be taxed to you like a withdrawal.
Important: Our discussion of federal tax laws is based upon our understanding of
current interpretations of these laws. Federal tax laws or current
interpretations of them may change. For this reason and because tax consequences
are complex and highly individual and cannot always be anticipated, you should
consult a tax advisor if you have any questions about taxation of your contract.
Tax qualification: We intend that the contract qualify as an annuity for federal
income tax purposes. To that end, the provisions of the contract are to be
interpreted to ensure or maintain such tax qualification, in spite of any other
provisions of the contract. We reserve the right to amend the contract to
reflect any clarifications that may be needed or are appropriate to maintain
such qualification or to conform the contract to any applicable changes in the
tax qualification requirements. We will send you a copy of any amendments.
Voting Rights
As a contract owner with investments in the subaccounts, you may vote on
important fund policies until annuity payouts begin. Once they begin, the person
receiving them has voting rights. We will vote fund shares according to the
instructions of the person with voting rights.
Before annuity payouts begin, the number of votes you have is determined by
applying your percentage interest in each subaccount to the total number of
votes allowed to the subaccount.
After annuity payouts begin, the number of votes you have is equal to:
o the reserve held in each subaccount for your contract; divided by
o the net asset value of one share of the applicable fund.
As we make annuity payouts, the reserve for the contract decreases; therefore,
the number of votes also will decrease.
We calculate votes separately for each subaccount. We will send notice of
shareholders' meetings, proxy materials and a statement of the number of votes
to which the voter is entitled. We will vote shares for which we have not
received instructions in the same proportion as the votes for which we received
instructions. We also will vote the shares for which we have voting rights in
the same proportion as the votes for which we received instructions.
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66 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
Substitution of Investments
We may substitute the funds in which the subaccounts invest if:
o laws or regulations change;
o the existing funds become unavailable; or
o in our judgment, the funds no longer are suitable for the subaccounts.
If any of these situations occur, and if we believe it is in the best interest
of persons having voting rights under the contract, we have the right to
substitute the funds currently listed in this prospectus for other funds.
We may also:
o add new subaccounts;
o combine any two or more subaccounts;
o make additional subaccounts investing in additional funds;
o transfer assets to and from the subaccounts or the variable account; and
o eliminate or close any subaccounts.
In the event of substitution or any of these changes, we may amend the contract
and take whatever action is necessary and appropriate without your consent or
approval. However, we will not make any substitution or change without the
necessary approval of the SEC and state insurance departments. We will notify
you of any substitution or change.
About the Service Providers
PRINCIPAL UNDERWRITER
American Express Financial Advisors Inc. (AEFA) serves as the principal
underwriter for the contract. Its offices are located at 70100 AXP Financial
Center, Minneapolis, MN 55474. AEFA is a wholly-owned subsidiary of American
Express Financial Corporation (AEFC) which is a wholly-owned subsidiary of
American Express Company, a financial services company headquartered in New York
City.
The contracts will be distributed by broker-dealers which have entered into
distribution agreements with AEFA and American Enterprise Life.
ISSUER
American Enterprise Life issues the annuities. American Enterprise Life is a
wholly-owned subsidiary of IDS Life, which is a wholly-owned subsidiary of AEFC.
American Enterprise Life is a stock life insurance company organized in 1981
under the laws of the state of Indiana. Its administrative offices are located
at 829 AXP Financial Center, Minneapolis, MN 55474. Its statutory address is 100
Capitol Center South, 201 North Illinois Street, Indianapolis, IN 46204.
American Enterprise Life conducts a conventional life insurance business.
American Enterprise Life pays cash compensation to the broker-dealers and
insurance agencies who have entered into distribution agreements with American
Enterprise Life and AEFA for the sale of contracts. This compensation will not
result in any charge to contract owners or to the variable account in addition
to the charges described in this prospectus. This cash compensation will not be
more than 9.0% of the purchase payments it receives on the contracts. From time
to time and in accordance with applicable laws and regulations we will pay or
permit other promotional incentives, in cash or credit or other compensation.
LEGAL PROCEEDINGS
A number of lawsuits have been filed against life and health insurers in
jurisdictions in which American Enterprise Life and its affiliates do business
involving insurers' sales practices, alleged agent misconduct, failure to
properly supervise agents and other matters. IDS Life was a defendant in three
class action lawsuits of this nature. American Enterprise Life was a named
defendant in one of the suits, Richard W. and Elizabeth J. Thoresen v. American
Express Financial Corporation, American Centurion Life Assurance Company,
American Enterprise Life Insurance Company, American Partners Life Insurance
Company, IDS Life Insurance Company and IDS Life Insurance Company of New York,
which was commenced in Minnesota state court on October 13, 1998. The action was
brought by individuals who purchased an annuity in a qualified plan. The
allegations alleged that the sales of annuities in tax-deferred contributory
retirement plans (e.g., IRAs) is never appropriate. In January, 2000, AEFC
reached an agreement in principle to settle the three class-action lawsuits
described above. In August, 2000 another action entitled Lesa Benacquisto,
Daniel Benacquisto, Richard Thoresen, Elizabeth Thoresen, Arnold Mork, Isabella
Mork, Ronald Melchert and Susan Melchert v. American Express Financial
Corporation, American Express Financial Advisors, American Centurion Life
Assurance Company, American Enterprise Life Insurance Company, American Partners
Life Insurance Company, IDS Life Insurance Company and IDS Life Insurance
Company of New York was commenced in the United States District Court for the
District of Minnesota.
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67 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
In May, 2001 the District Court, Fourth Judicial District for the State of
Minnesota, County of Hennepin and the United States District Court for the
District of Minnesota entered orders approving the settlement as tentatively
reached in January, 2000. Appeals were filed in both federal and state appellate
courts but subsequently dismissed by the parties filing the appeals. The orders
approving the settlement were final as of September 24, 2001. Implementation of
the settlement commenced October 15, 2001.
A number of individuals opted out of the settlement. To date, very few of these
individuals have filed lawsuits against the company. Several of the individuals
who opted out are represented by counsel. In the aggregate, the Company does not
consider this litigation material.
Additional Information About American Enterprise Life
SELECTED FINANCIAL DATA
The following selected financial data for American Enterprise Life should be
read in conjunction with the financial statements and notes.
Six months ended Years ended Dec. 31,
(thousands) June 30, 2001 June 30, 2000 June 30, 1999 2000 1999 1998 1997 1996
Net investment income $ 133,060 $ 152,928 $ 161,367 $ 299,759 $ 322,746 $ 340,219 $ 332,268 $ 271,719
Net loss on investments (84,799) (138) 1,890 469 6,565 (4,788) (509) (5,258)
Other 7,737 4,972 3,827 12,248 8,338 7,662 6,329 5,753
Total revenues $ 55,998 $ 157,762 $ 167,084 $ 312,476 $ 337,649 $ 343,093 $ 338,088 $ 272,214
Income before income taxes $ (70,940) $ 22,594 $ 28,847 $ 38,452 $ 50,662 $ 36,421 $ 44,958 $ 35,735
Net income $ (46,322) $ 14,437 $ 19,846 $ 24,365 $ 33,987 $ 22,026 $ 28,313 $ 22,823
Total assets $4,771,887 $4,473,356 $4,934,161 $4,652,221 $4,603,343 $4,885,621 $4,973,413 $4,425,837
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
Six months ended June 30, 2001 compared to six months ended June 30, 2000:
American Enterprise Life's net loss was $46 million for the six months ended
June 30, 2001, compared to net income of $14 million for the six months ended
June 30, 2000. Net loss before income taxes totaled $71 million for the six
months ended June 30, 2001, compared to net income before income taxes of $23
million for the six months ended June 30, 2000. This decline primarily reflects
a net loss on investments of $85 million, primarily from the recognition of
impairment losses and the sale of certain high-yield securities.
Total investment contract deposits received increased to $433 million for the
six months ended June 30, 2001, compared to $227 million for the six months
ended June 30, 2000. This increase is primarily due to an increase in variable
annuity deposits received from sales.
Total revenues decreased to $56 million for the six months ended June 30, 2001,
compared to $158 million for the six months ended June 30, 2000. The decrease is
primarily due to net losses on investments and decreases in net investment
income. Net investment income, the largest component of revenues, decreased 13%
from the same period of the prior year, reflecting a decrease in investments
owned, lower investment yields and investment interest reversals related to
structured investments.
Policyholder and contractholder charges decreased 3% to $3.0 million for the six
months ended June 30, 2001, compared to $3.1 million for the six months ended
June 30, 2000. American Enterprise Life receives mortality and expense risk fees
from the separate accounts. Mortality and expense risk fees increased 161% to
$4.7 million for the six months ended June 30, 2000, compared to $1.8 million
for the six months ended June 30, 2000, reflecting an increase in separate
account assets.
Net loss on investments was $85 million for the six months ended June 30, 2001,
compared to a net loss of $0.1 million for the six months ended June 30, 2000.
The net loss for the six months ended June 30, 2001 was composed of an $18
million net loss in the first quarter resulting primarily from the recognition
of impairment losses and the sale of certain high-yield securities, a $20
million writedown in the second quarter to recognize the impact of higher
default assumptions on rated structured investments and a $51 million writedown
of high-yield securities in the second quarter primarily reflecting management's
decision to reduce and rebalance high-yield risk exposure in the fixed maturity
investment portfolio during the second half of 2001 and a $4 million net gain
related to the disposal of available for sale securities.
Total benefits and expenses decreased 6% to $127 million for the six months
ended June 30, 2001, compared to $135 million for the same period in 2000. The
largest component of expenses, interest credited on investment contracts,
decreased $6 million to $90 million for the six months ended June 30, 2001,
compared to $96 million for the six months ended June 30, 2000, reflecting a
decrease in fixed annuities in force and lower crediting rates. Amortization of
deferred policy acquisition costs increased to $23 million for the six months
ended June 30, 2001, compared to $22 million for the six months ended June 30,
2000. This increase was due primarily to an increase in aggregate amounts in
force, specifically variable annuities.
Other operating expenses decreased 18% to $14 million for the six months ended
June 30, 2001, compared to $17 million for the six months ended June 30, 2000,
primarily due to expense savings associated with re-engineering initiatives.
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68 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
Six months ended June 30, 2000 compared to six months ended June 30, 1999:
American Enterprise Life's net income decreased 27% to $14 million for the six
months ended June 30, 2000, compared to $20 million for the six months ended
June 30, 1999. Earnings declined primarily due to weak equity markets and
narrower spreads on the investment portfolio.
Total investment contract deposits received increased to $227 million for the
six months ended June 30, 2000, compared to $192 million for the six months
ended June 30, 1999. This increase is primarily due to an increase in variable
annuity deposits in 2000.
Total revenues decreased to $158 million for the six months ended June 30, 2000,
compared with $167 million for the six months ended June 30, 1999. The decrease
is primarily due to a decrease in net investment income. Net investment income,
the largest component of revenues, decreased 5% from the same period of the
prior year, reflecting a decrease in investments owned and lower investment
yields.
Policyholder and contractholder charges increased 11% to $3.1 million for the
six months ended June 30, 2000, compared to $2.8 million for the six months
ended June 30, 1999, reflecting an increase in annuity surrender charges.
American Enterprise Life receives mortality and expense risk fees from the
separate accounts. Mortality and expense risk fees increased 80% to $1.8 million
for the six months ended June 30, 2000, compared to $1.0 million for the six
months ended June 30, 1999. This reflects the increase in separate account
assets.
Net loss on investments was $0.1 million for the six months ended June 30, 2000,
compared to a net gain of $1.9 million for the six months ended June 30, 1999.
The net losses were primarily due to recognition of impairment losses and the
sale of certain fixed maturity investments.
Total benefits and expenses decreased 2% to $135 million for the six months
ended June 30, 2000, compared to $138 million for the six months ended June 30,
1999. The largest component of expenses, interest credited on investment
contracts, decreased $9 million to $96 million for the six months ended June 30,
2000, compared to $105 million for the six months ended June 30, 1999. This
reflects a decrease in fixed annuities in force and lower crediting rates.
Amortization of deferred policy acquisition costs increased to $22 million,
compared to $20 million for the six months ended June 30, 1999. This increase
was due primarily to an increase in aggregate amounts in force.
Other operating expenses increased 31% to $17 million for the six months ended
June 30, 2000, compared to $13 million for the six months ended June 30, 1999.
This increase is mainly due to higher technology costs related to growth
initiatives.
Three months ended June 30, 2001 compared to three months ended June 30, 2000:
American Enterprise Life's net loss was $39 million for the three month period
ended June 30, 2001, compared to net income of $8 million for the three month
period ended June 30, 2000. Net loss before income taxes totaled $59 million for
the three month period ended June 30, 2001, compared to net income before income
taxes of $13 million for the three month period ended June 30, 2000. This
decline primarily reflects net loss on investments of $66 million primarily from
recognition of impairment losses and the sale of certain high-yield securities.
Total investment contract deposits received increased to $231 million for the
three month period ended June 30, 2001, compared to $160 million for the three
month period ended June 30, 2000. This increase is primarily due to an increase
in variable annuity deposits received from sales.
Total revenues decreased to $1 million for the three month period ended June 30,
2001, compared to $80 million for three month period ended June 30, 2000. The
decrease is primarily due to net losses on investments and decreases in net
investment income. Net investment income, the largest component of revenues,
decreased 16% from the same period of the prior year, reflecting a decrease in
investments owned, lower investment yields and investment interest reversals
related to structured investments.
Policyholder and contractholder charges decreased 21% to $1.3 million for the
three month period ended June 30, 2001, compared to $1.7 million for the three
month period ended June 30, 2000. American Enterprise Life receives mortality
and expense risk fees from the separate accounts. Mortality and expense risk
fees increased 142% to $2.5 million for the three month period ended June 30,
2000, compared to $1.0 million for the three month period ended June 30, 2000,
reflecting an increase in separate account assets.
Net loss on investments was $66 million for the three month period ended June
30, 2001, compared to a net loss of $2 million for the three month period ended
June 30, 2000. The net loss for the three months ended June 30, 2001 was
composed of a $20 million writedown to recognize the impact of higher default
assumptions on rated structured investments and a $51 million writedown of
high-yield securities primarily reflecting management's decision to reduce and
rebalance high-yield exposure in the fixed maturity investment portfolio during
the second half of 2001 and a $5 million net gain related to the disposal of
available for sale securities.
Total benefits and expenses decreased 11% to $60 million for the three month
period ended June 30, 2001, compared to $68 million for the same period in 2000.
The largest component of expenses, interest credited on investment contracts,
increased $1 million to $48 million for the three month period ended June 30,
2001, compared to $47 million for the three month period ended June 30, 2000.
Amortization of deferred policy acquisition costs decreased to $11 million for
the three month period ended June 30, 2001, compared to $12 million for the
three month period ended June 30, 2000.
Other operating expenses decreased 81% to $2 million for the three month period
ended June 30, 2001, compared to $9 million for the three month period ended
June 30, 2000, primarily due to expense savings associated with re-engineering
initiatives.
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69 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
Three months ended June 30, 2000 compared to three months ended June 30, 1999:
American Enterprise Life's net income decreased 38% to $8 million for the three
month period ended June 30, 2000, compared to $13 million for the three month
period ended June 30, 1999. Earnings declined primarily due to weak equity
markets and narrower spreads on the investment portfolio.
Total investment contract deposits received increased to $160 million for the
three month period ended June 30, 2000, compared to $121 million for the three
month period ended June 30, 1999. This increase is primarily due to an increase
in variable annuity deposits in 2000.
Total revenues decreased to $80 million for the three month period ended June
30, 2000, compared with $90 million for the three month period ended June 30,
1999. The decrease is primarily due to a decrease in net investment income. Net
investment income, the largest component of revenues, decreased 7% from the same
period of the prior year, reflecting a decrease in investments owned and lower
investment yields.
Policyholder and contractholder charges increased 6% to $1.7 million for the
three month period ended June 30, 2000, compared to $1.6 million for the three
month period ended June 30, 1999, reflecting an increase in annuity surrender
charges. American Enterprise Life receives mortality and expense risk fees from
the separate accounts. Mortality and expense risk fees increased 100% to $1.0
million for the three month period ended June 30, 2000, compared to $.5 million
for the three month period ended June 30, 1999. This reflects an increase in
separate account assets.
Net gain on investments was $2.3 million for the three month period ended June
30, 2000, compared to a net gain of $5.7 million for the three month period
ended June 30, 1999. The decline was primarily due to recognition of impairment
losses and the sale of certain fixed maturity investments.
Total benefits and expenses decreased 3% to $68 million for the three month
period ended June 30, 2000, compared to $70 million for the three month period
ended June 30, 1999. The largest component of expenses, interest credited on
investment contracts, decreased $6 million to $47 million for the three month
period ended June 30, 2000, compared to $53 million for the three month period
ended June 30, 1999. This reflects a decrease in fixed annuities in force and
lower crediting rates. Amortization of deferred policy acquisition costs
increased to $12 million, compared to $10 million for the three month period
ended June 30, 1999. This increase was due primarily to an increase in aggregate
amounts in force.
Other operating expenses increased 29% to $9 million for the three month period
ended June 30, 2000, compared to $7 million for the three month period ended
June 30, 1999. This increase is mainly due to higher technology costs related to
growth initiatives.
Dec. 31, 2000 Compared to Dec. 31, 1999:
Net income decreased 29% to $24 million in 2000, compared to $34 million in
1999. Income before income taxes totaled $38 million in 2000, compared with $51
million in 1999. The decrease was primarily the result of lower net investment
income of $300 million in 2000, compared with $323 million in 1999.
Total investment contract deposits received increased to $721 million in 2000,
compared with $336 million in 1999. This increase is primarily due to an
increase in variable annuity deposits in 2000.
Total revenues decreased to $312 million in 2000, compared with $338 million in
1999. The decrease is primarily due to decreases in net investment income and
net realized gains on investments. Net investment income, the largest component
of revenues, decreased 7% from the prior year, reflecting a decrease in
investments owned and lower investment yields.
Policyholder and contractholder charges increased 13% to $6.9 million in 2000,
compared with $6.1 million in 1999, reflecting an increase in annuity withdrawal
charges. American Enterprise Life receives mortality and expense risk fees from
the separate accounts. Mortality and expense risk fees increased 135% to $5.4
million in 2000, compared with $2.3 million in 1999, this reflects the increase
in separate account assets.
Net realized gain on investments was $0.5 million in 2000, compared with $6.6
million in 1999. The decrease in net realized gains was primarily due to the
loss on sale and writedowns of fixed maturity investments.
Total benefits and expenses decreased 5% to $274 million in 2000, compared with
$287 million in 1999. The largest component of expenses, interest credited on
investment contracts, decreased to $191 million, reflecting a decrease in fixed
annuities in force and lower crediting rates. Amortization of deferred policy
acquisition costs increased to $48 million, compared to $43 million in 1999.
This increase was due primarily to increased aggregate amounts in force.
Other operating expenses remained steady at $35 million in 2000.
--------------------------------------------------------------------------------
70 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
Dec. 31, 1999 Compared to Dec. 31, 1998:
Net income increased 54% to $34 million in 1999, compared to $22 million in
1998. Earnings growth resulted primarily net realized gains of $6.6 million in
1999, compared to net realized losses of $4.8 in 1998.
Income before income taxes totaled $51 million in 1999, compared with $36
million in 1998.
Total investment contract deposits received decreased to $336 million in 1999,
compared with $348 million in 1998. This decrease is primarily due to a decrease
in sales of variable annuities in 1999.
Total revenues decreased to $338 million in 1999, compared with $343 million in
1998. The decrease is primarily due to decreased net investment income which was
partially offset by an increase in realized gain on investments. Net investment
income, the largest component of revenues, decreased 5% from the prior year,
reflecting decreases in investments owned and investment yields.
Contractholder charges decreased 5% to $6.1 million in 1999, compared with $6.4
million in 1998, reflecting a decrease in fixed annuities inforce. American
Enterprise Life receives mortality and expense risk fees from the separate
accounts. Mortality and expense risk fees increased 77% to $2.3 million in 1999,
compared with $1.3 million in 1998, this reflects the increase in separate
account assets.
Net realized gain on investments was $6.6 million in 1999, compared to a net
realized loss on investments of $4.8 million in 1998. The net realized gains
were primarily due to the sale of available for sale fixed maturity investments
at a gain as well as a decrease in the allowance for mortgage loan losses based
on management's regular evaluation of allowance adequacy.
Total benefits and expenses decreased slightly to $287 million in 1999. The
largest component of expenses, interest credited on investment contracts,
decreased to $209 million, reflecting a decrease in fixed annuities in force and
lower interest rates. Amortization of deferred policy acquisition costs
decreased to $43 million, compared to $54 million in 1998. This decrease was due
primarily to decreased aggregate amounts in force, as well as the impact of
changing prospective assumptions in 1998 based on actual lapse experience on
certain fixed annuities.
Other operating expenses increased 46% to $35 million in 1999, compared to $24
million in 1998. This increase primarily reflects technology costs related to
growth initiatives.
Risk Management
The sensitivity analysis of the test of market risk discussed below estimates
the effects of hypothetical sudden and sustained changes in the applicable
market conditions on the ensuing year's earnings based on year-end positions.
The market changes, assumed to occur as of year-end, is a 100 basis point
increase in market interest rates. Computations of the prospective effects of
hypothetical interest rate change based on numerous assumptions, including
relative levels of market interest rates as well as the levels of assets and
liabilities. The hypothetical changes and assumptions will be different from
what actually occurs in the future. Furthermore, the computations do not
anticipate actions that may be taken by management if the hypothetical market
changes actually occurred over time. As a result, actual earnings effects in the
future will differ from those quantified below.
American Enterprise Life primarily invests in fixed income securities over a
broad range of maturities for the purpose of providing fixed annuity clients
with a competitive rate of return on their investments while minimizing risk,
and to provide a dependable and targeted spread between the interest rate earned
on investments and the interest rate credited to contractholders' accounts.
American Enterprise Life does not invest in securities to generate trading
profits.
American Enterprise Life has an investment committee that holds regularly
scheduled meetings and, when necessary, special meetings. At these meetings, the
committee reviews models projecting different interest rate scenarios and their
impact on profitability. The objective of the committee is to structure the
investment security portfolio based upon the type and behavior of products in
the liability portfolio so as to achieve targeted levels of profitability.
Rates credited to contractholders' accounts are generally reset at shorter
intervals than the maturity of underlying investments. Therefore, margins may be
negatively impacted by increases in the general level of interest rates. Part of
the committee's strategy includes the purchase of some types of derivatives,
such as interest rate caps, swaps and floors, for hedging purposes. These
derivatives protect margins by increasing investment returns if there is a
sudden and severe rise in interest rates, thereby mitigating the impact of an
increase in rates credited to contractholders' accounts.
The negative effect on American Enterprise Life's pretax earnings of a 100 basis
point increase in interest rates, which assumes repricings and customer behavior
based on the application of proprietary models to the book of business at Dec.
31, 2000, would be approximately $4.6 million.
--------------------------------------------------------------------------------
71 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
Liquidity and Capital Resources
The liquidity requirements of American Enterprise Life are met by funds provided
by annuity considerations, investment income, proceeds from sales of investments
as well as maturities and periodic repayments of investment principal.
The primary uses of funds are policy benefits, commissions and operating
expenses, policy loans, and investment purchases.
American Enterprise Life has an available line of credit with AEFC aggregating
$50 million. The line of credit is used strictly as a short-term source of
funds. No borrowings were outstanding under the agreement at Dec. 31, 2000. At
Dec. 31, 2000, outstanding reverse repurchase agreements totaled $25 million.
At Dec. 31, 2000, investments in fixed maturities comprised 80% of American
Enterprise Life's total invested assets. Of the fixed maturity portfolio,
approximately 30% is invested in GNMA, FNMA and FHLMC mortgage-backed securities
which are considered AAA/Aaa quality.
At Dec. 31, 2000, approximately 15% of American Enterprise Life's investments in
fixed maturities were below investment grade bonds. These investments may be
subject to a higher degree of risk than the investment grade issues because of
the borrower's generally greater sensitivity to adverse economic conditions,
such as recession or increasing interest rates, and in certain instances, the
lack of an active secondary market. Expected returns on below investment grade
bonds reflect consideration of such factors. American Enterprise Life has
identified those fixed maturities for which a decline in fair value is
determined to be other than temporary, and has written them down to fair value
with a charge to earnings.
At Dec. 31, 2000, net unrealized depreciation on fixed maturities held to
maturity included $10.7 million of gross unrealized appreciation and $17.8
million of gross unrealized depreciation. Net unrealized depreciation on fixed
maturities available for sale included $30.2 million of gross unrealized
appreciation and $125.6 million of gross unrealized depreciation.
At Dec. 31, 2000, American Enterprise Life had an allowance for losses for
mortgage loans totaling $3.3 million.
The economy and other factors have caused a number of insurance companies to go
under regulatory supervision. This circumstance has resulted in assessments by
state guaranty associations to cover losses to policyholders of insolvent or
rehabilitated companies. Some assessments can be partially recovered through a
reduction in future premium taxes in certain states. American Enterprise Life
established an asset for guaranty association assessments paid to those states
allowing a reduction in future premium taxes over a reasonable period of time.
The asset is being amortized as premium taxes are reduced. American Enterprise
Life has also estimated the potential effect of future assessments on American
Enterprise Life's financial position and results of operations and has
established a reserve for such potential assessments.
The National Association of Insurance Commissioners has established risk-based
capital standards to determine the capital requirements of a life insurance
company based upon the risks inherent in its operations. These standards require
the computation of a risk-based capital amount which is then compared to a
company's actual total adjusted capital. The computation involves applying
factors to various statutory financial data to address four primary risks: asset
default, adverse insurance experience, interest rate risk and external events.
These standards provide for regulatory attention when the percentage of total
adjusted capital to authorized control level risk-based capital is below certain
levels. As of Dec. 31, 2000, American Enterprise Life's total adjusted capital
was well in excess of the levels requiring regulatory attention.
RESERVES
In accordance with the insurance laws and regulations under which we operate, we
are obligated to carry on our books, as liabilities, actuarially determined
reserves to meet our obligations on our outstanding annuity contracts. We base
our reserves for deferred annuity contracts on accumulation value and for fixed
annuity contracts in a benefit status on established industry mortality tables.
These reserves are computed amounts that will be sufficient to meet our policy
obligations at their maturities.
INVESTMENTS
Of our total investments of $3,735,994 at Dec. 31, 2000, 27% was invested in
mortgage-backed securities, 54% in corporate and other bonds, 19% in primary
mortgage loans on real estate and less than 1% in other investments.
COMPETITION
We are engaged in a business that is highly competitive due to the large number
of stock and mutual life insurance companies and other entities marketing
insurance products. There are over 1,600 stock, mutual and other types of
insurers in the life insurance business. Best's Insurance Reports, Life-Health
edition 2000, assigned us one of its highest classifications, A+ (Superior).
EMPLOYEES
As of Dec. 31, 2000, we had no employees.
PROPERTIES
We occupy office space in Minneapolis, MN, which is leased by AEFC. We reimburse
AEFC for rent based on direct and indirect allocation methods. Facilities
occupied by us are believed to be adequate for the purposes for which they are
used and well maintained.
--------------------------------------------------------------------------------
72 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
STATE REGULATION
American Enterprise Life is subject to the laws of the State of Indiana
governing insurance companies and to the regulations of the Indiana Department
of Insurance. An annual statement in the prescribed form is filed with the
Indiana Department of Insurance each year covering our operation for the
preceding year and its financial condition at the end of such year. Regulation
by the Indiana Department of Insurance includes periodic examination to
determine American Enterprise's contract liabilities and reserves so that the
Indiana Department of Insurance may certify that these items are correct. The
Company's books and accounts are subject to review by the Indiana Department of
Insurance at all times. Such regulation does not, however, involve any
supervision of the account's management or the company's investment practices or
policies. In addition, American Enterprise Life is subject to regulation under
the insurance laws of other jurisdictions in which it operates. A full
examination of American Enterprise Life's operations is conducted periodically
by the National Association of Insurance Commissioners. Under insurance guaranty
fund laws, in most states, insurers doing business therein can be assessed up to
prescribed limits for policyholder losses incurred by insolvent companies. Most
of these laws do provide however, that an assessment may be excused or deferred
if it would threaten an insurer's own financial strength.
Directors and Executive Officers*
The directors and principal executive officers of American Enterprise Life and
the principal occupation of each during the last five years is as follows:
DIRECTORS
Gumer C. Alvero
Born in 1967
Director, chairman of the board and executive vice president - Annuities since
January 2001; vice president - Variable Annuities, AEFC, since April 1998;
executive assistant to president/CEO, AEFC, from April 1996 to April 1998.
Carol A. Holton
Born in 1952
Director, president and chief executive officer since January 2001; vice
president - Third Party Distribution, AEFC, since April 1998; director -
Distributor Services, AEFC, from September 1997 to April 1998; director -
Business Systems and Operations, F&G Life, from July 1996 to August 1997.
Paul S. Mannweiler**
Born in 1949
Director since 1986; Partner at Locke Reynolds Boyd & Weisell since 1980.
Teresa J. Rasmussen
Born in 1956
Director, vice president, general counsel and secretary since December 2000;
vice president and assistant general counsel, AEFC, since August 2000; assistant
vice president, AEFC, from October 1995 to August 2000.
OFFICERS OTHER THAN DIRECTORS
Lorraine R. Hart
Born in 1951
Vice president - Investments since 1992; vice president - Insurance Investments,
AEFC since 1998; and vice president - Investments, American Express Certificate
Company since 1994.
Stuart A. Sedlacek
Born in 1957
Executive vice president since 1998; executive vice president - Assured Assets,
1994 to 1998; senior vice president and chief financial officer, AEFC, since
1998; vice president, AEFC, from September 1988 to 1998.
Philip C. Wentzel
Born in 1961
Vice president and controller since 1998; director of financial reporting and
analyses, AEFC, from 1992 to 1997.
David L. Yowan
Born in 1957
Vice president and treasurer since March 2001; senior vice president and
assistant treasurer of American Express Company since January 1999; vice
president and corporate treasurer, AEFC, since April 2001; senior portfolio and
risk management officer for the North American Consumer Bank of Citigroup from
August 1987 to January 1999.
* The address for all of the directors and principal officers is: 200 AXP
Financial Center, Minneapolis, MN 55474 except for Mr. Mannweiler who is an
independent director.
** Mr. Mannweiler's address is: 201 No. Illinois Street, Indianapolis, IN 46204
--------------------------------------------------------------------------------
73 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
EXECUTIVE COMPENSATION
Our executive officers also may serve one or more affiliated companies. The
following table reflects cash compensation paid to the five most highly
compensated executive officers as a group for services rendered in the most
recent year to us and our affiliates. The table also shows the total cash
compensation paid to all our executive officers, as a group, who were executive
officers at any time during the most recent year.
Name of individual or number in group Position held Cash compensation
Five most highly compensated executive officers as a group: $ 8,138,209
Stephen W. Roszell President and Chief Executive Officer
Richard W. Kling Chairman of the Board
Lorraine R. Hart Vice President - Investments
David M. Kuplic Assistant Vice President - Investments
Stuart A. Sedlacek Executive Vice President
All executive officers as a group (11) $11,289,475
SECURITY OWNERSHIP OF MANAGEMENT
Our directors and officers do not beneficially own any outstanding shares of
stock of the company. All of our outstanding shares of stock are beneficially
owned by IDS Life. The percentage of shares of IDS Life owned by any director,
and by all our directors and officers as a group, does not exceed 1% of the
class outstanding.
Experts
Ernst & Young LLP, independent auditors, have audited the financial statements
of American Enterprise Life Insurance Company at Dec. 31, 2000 and 1999, and for
each of the three years in the period ended Dec. 31, 2000, and the individual
and combined statements of the segregated asset subaccounts of American
Enterprise Variable Annuity Account as of Dec. 31, 2000 and for the periods
indicated therein, as set forth in their reports. We've included our financial
statements in the prospectus and elsewhere in the registration statement in
reliance on Ernst & Young LLP's reports, given on their authority as experts in
accounting and auditing.
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74 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
American Enterprise Life Insurance Company
--------------------------------------------------------------------------------
Balance sheet
June 30, 2001 (unaudited) ($ thousands, except share amounts)
Assets
Investments:
Fixed maturities:
Available for sale, at fair value (amortized cost: $3,008,732) $3,046,072
Mortgage loans on real estate 694,922
Other investments 628
---
Total investments 3,741,622
Cash and cash equivalents 96,851
Amounts due from brokers 1,648
Accounts receivable 1,070
Accrued investment income 49,364
Deferred policy acquisition costs 207,370
Deferred income taxes 30,336
Other assets 8,592
Separate account assets 635,034
-------
Total assets $4,771,887
==========
Liabilities and stockholder's equity Liabilities:
Future policy benefits: $3,592,884
Fixed annuities
Universal life-type insurance 5
Policy claims and other policyholders' funds 3,436
Amounts due to brokers 44,226
Other liabilities 59,657
Separate account liabilities 635,034
-------
Total liabilities 4,335,242
Stockholder's equity:
Capital stock, $150 par value per share; 100,000 shares authorized, 20,000 shares issued and outstanding 3,000
Additional paid-in capital 281,872 Accumulated other comprehensive loss:
Net unrealized securities gains 8,437
Net unrealized derivative loss (25,881)
Retained earnings 169,217
-------
Total stockholder's equity 436,645
-------
Total liabilities and stockholder's equity $4,771,887
==========
See accompanying notes.
--------------------------------------------------------------------------------
75 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
American Enterprise Life Insurance Company
--------------------------------------------------------------------------------
Statements of income
Six months ended June 30, (unaudited) ($ thousands) 2001 2000
Revenues:
Policyholder and contractholder charges $ 3,054 $ 3,133
Mortality and expense risk fees 4,683 1,839
Net investment income 133,060 152,928
Net loss on investments (84,799) (138)
------- ----
Total revenues 55,998 157,762
------ -------
Benefits and expenses:
Interest credited on investment contracts 90,348 95,973
Amortization of deferred policy acquisition costs 22,950 22,291
Other operating expenses 13,640 16,904
------ ------
Total benefits and expenses 126,938 135,168
------- -------
(Loss) income before income taxes (70,940) 22,594
Income tax (benefit) expense (24,618) 8,157
------- -----
Net (loss) income $(46,322) $ 14,437
======== ========
Statements of income
Three months ended June 30, (unaudited) ($ thousands) 2001 2000
Revenues:
Policyholder and contractholder charges $ 1,308 $ 1,657
Mortality and expense risk fees 2,484 1,026
Net investment income 63,600 75,342
Net (loss) gain on investments (66,257) 2,287
------- -----
Total revenues 1,135 80,312
----- ------
Benefits and expenses:
Interest credited on investment contracts 47,875 46,921
Amortization of deferred policy acquisition costs 10,795 11,546
Other operating expenses 1,781 9,229
----- -----
Total benefits and expenses 60,451 67,696
------ ------
(Loss) income before income taxes (59,316) 12,616
Income tax (benefit) expense (20,631) 4,511
------- -----
Net (loss) income $(38,685) $ 8,105
======== =======
See accompanying notes.
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76 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
American Enterprise Life Insurance Company
--------------------------------------------------------------------------------
Statements of cash flows
Six months ended June 30, (unaudited) ($ thousands) 2001 2000
Cash flows from operating activities:
Net (loss) income $ (46,322) $ 14,437
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Change in accrued investment income 5,577 1,952
Change in accounts receivable (203) (170)
Change in other assets 2,759 (1,989)
Change in deferred policy acquisition costs, net (8,748) 2,386
Change in policy claims and other policyholders' funds (5,859) 1,062
Deferred income tax provision (27,825) 3,588
Change in other liabilities 19,033 4,967
(Accretion of discount) amortization of premium, net (172) 1,297
Net realized loss on investments 84,799 138
Other, net 6,908 1,619
----- -----
Net cash provided by operating activities 29,947 29,287
Cash flows from investing activities: Fixed maturities held to maturity:
Maturities, sinking fund payments and calls -- 41,509
Fixed maturities available for sale:
Purchases (454,647) (4,487)
Maturities, sinking fund payments and calls 152,741 98,172
Sales 280,650 24,332
Other investments, excluding policy loans:
Purchases (5,054) (1,388)
Sales 30,765 29,727
Change in amounts due from brokers (332) --
Change in amounts due to brokers 19,840 (13,431)
------ -------
Net cash provided by investing activities 23,963 174,434
Cash flows from financing activities:
Activity related to universal life-type insurance and investment contracts:
Considerations received 357,244 131,542
Surrenders and death benefits (439,503) (431,236)
Interest credited to account balances 90,348 95,973
------ ------
Net cash provided by (used in) financing activities 8,089 (203,721)
----- --------
Net increase in cash and cash equivalents 61,999 --
Cash and cash equivalents at beginning of period 34,852 --
------ ---------
Cash and cash equivalents at end of period $ 96,851 $ --
========= =========
See accompanying notes.
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77 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
American Enterprise Life Insurance Company
--------------------------------------------------------------------------------
Notes to Financial Statements
(unaudited)
($ thousands)
1. GENERAL
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. In addition to the normal recurring accruals, adjustments have
been made to reflect the adoption of Statement of Financial Accounting Standards
(SFAS) No. 133, "Accounting for Derivative Instruments and Hedging Activities"
as of January 1, 2001 and the Financial Accounting Standard Board (FASB)
Emerging Issues Task Force (EITF) consensus on Issue 99-20, "Recognition of
Interest Income and Impairment on Purchased and Retained Beneficial Interests in
Securitized Financial Assets." In addition, the Company recognized significant
losses on fixed maturity investment writedowns and sales during the second
quarter associated with credit deterioration and management's decision to reduce
and rebalance the high-yield risk exposure in the fixed maturity investment
portfolio. Operating results for the three- and six-month periods ended June 30,
2001 are not necessarily indicative of the results that may be expected for the
year ended December 31, 2001.
For further information, refer to the financial statements and footnotes thereto
included in this prospectus for the year ended December 31, 2000.
2. NEW ACCOUNTING PRONOUNCEMENT
In July 2000, the EITF issued a consensus on Issue 99-20, "Recognition of
Interest Income and Impairment on Purchased and Retained Beneficial Interests in
Securitized Financial Assets." The Company elected to early adopt the consensus
as of January 1, 2001. Issue 99-20 prescribes new procedures for recording
interest income and measuring impairment on retained and purchased beneficial
interests. The consensus primarily affects certain high-yield investments
contained in certain structured securities whose cash flows have been negatively
affected by credit experience.
Although there was no impact resulting from the adoption of Issue 99-20, the
Company holds structured securities that will be accounted for under Issue
99-20.
In June 1998, the FASB issued, and subsequently amended, Statement of Financial
Accounting Standards (SFAS) No. 133, "Accounting for Derivative Instruments and
Hedging Activities," which the Company adopted on January 1, 2001. This
Statement establishes accounting and reporting standards for derivative
instruments, including those embedded in other contracts, and hedging
activities. It requires that an entity recognize all derivatives as either
assets or liabilities on the balance sheet and measure those instruments at fair
value. Derivatives that are not hedges must be adjusted to fair value through
income.
Changes in the fair value of a derivative are recorded in income or directly to
equity, depending on the instrument's designated use. For those derivative
instruments that are designated and qualify as hedging instruments under SFAS
133, a company must designate the hedging instrument, based upon the exposure
being hedged, as either a fair value hedge, cash flow hedge or a hedge of a net
investment in a foreign operation. For derivative instruments not designated as
hedging instruments per SFAS 133, changes in fair value are adjusted immediately
through earnings. Currently, the Company does not carry derivatives that are
designated or qualify as hedging instruments under SFAS 133.
Because of changes to the rules for hedging investments, the transition
provisions of SFAS 133, as amended, permitted held-to-maturity securities under
SFAS No. 115, "Accounting for Certain Investments in Debt and Equity
Securities," to be reclassified at the date of adoption to available-for-sale or
trading. To increase flexibility with respect to its investment portfolio, the
Company reclassified held-to-maturity securities with a net carrying value of
$934 and a market value of $927 to available-for-sale upon adoption.
Prior to adopting SFAS No. 133, the Company's interest rate caps, floors and
swaps qualified as cash flow hedges. The derivatives do not qualify for hedge
accounting per SFAS No. 133. For "pre-existing" cash flow-type hedges, the
transition adjustment upon adoption of SFAS No. 133 was reported in accumulated
other comprehensive income (OCI) as a cumulative effect of an accounting change.
This resulted in a decrease of $35 million to other comprehensive income (OCI),
net of tax. The Company estimates $4 million of net derivative losses included
in OCI will be reclassified into earnings by December 31, 2001. The adoption of
SFAS No. 133 did not have a significant impact on the Company's results of
operations.
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78 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
American Enterprise Life Insurance Company
--------------------------------------------------------------------------------
3. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
The Company maintains an overall risk management strategy that incorporates the
use of derivative instruments to minimize significant unplanned fluctuations in
earnings that are caused by interest rate volatility. The Company enters into
interest rate swaps, caps and floors to manage the Company's interest rate risk.
The instruments are used to protect the margin between interest rates earned on
investments and the interest rates credited to related annuity contract holders.
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 index. The Company is
not impacted by market risk related to derivatives held for non-trading purposes
beyond that inherent in cash market transactions. Derivatives held for purposes
other than trading 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 requiring collateral, where
appropriate. A vast majority of the Company's counterparties are rated A or
better by Moody's and Standard & Poor's.
The fair values of the interest rate swaps, caps and floors are included in
Other assets or Other liabilities on the balance sheet. They expire on various
dates from 2002 to 2006.
4. COMPREHENSIVE INCOME
Total comprehensive loss was as follows for the six months ended June 30, 2001
and 2000 respectively: ($ thousands)
June 30, 2001 June 30, 2000
Net (loss) Income $(46,322) $ 14,437
Other comprehensive income (loss)
Unrealized gains on available-for-sale securities, net of tax 75,123 (20,410)
Net unrealized loss on derivative instruments, net of tax (25,881) --
SFAS 133 impact of reclassifying held-to-maturity securities to available-for-sale (4,589) --
------ --------
Total comprehensive loss $ (1,669) $ (5,973)
======== ========
Total comprehensive loss was as follows for the three months ended June 30, 2001
and 2000 respectively: ($ thousands)
June 30, 2001 June 30, 2000
Net (loss) Income $(38,685) $ 8,105
Other comprehensive income (loss)
Unrealized gains on available-for-sale securities, net of tax 16,887 (9,527)
Net unrealized loss on derivative instruments, net of tax 2,106 --
------ --------
Total comprehensive loss $(19,692) $(1,422)
======== =======
5. INCOME TAXES
The Company's effective income tax rate was 34.7% for the six months ended June
30, 2001 compared to 36.1% for the six months ended June 30, 2000. The effective
income tax rate was 34.8% for the three month period ended June 30, 2001
compared to 35.8% for the three month period ended June 30, 2000. The net impact
of changes in state tax rules for certain states had a favorable impact on the
effective tax rate for the Company.
6. INVESTMENTS
Net income in the six month period ended June 30, 2001 includes a $20 million
pretax charge to recognize the impact of higher default assumptions on rated
structured investments, which reflect rising actual default rates in the
corporate high-yield bond market.
Additionally, net income in the six month period ended June 30, 2001 reflects a
$51 million pretax writedown of high-yield securities primarily reflecting
management's decision to reduce and rebalance the high-yield risk exposure in
the fixed maturity investment portfolio.
7. STOCKHOLDER'S EQUITY
During the first quarter of 2001, the Company increased the par value of the
20,000 issued and outstanding shares of capital stock. This increase is
reflected in the increase of capital stock in the stockholder's equity section
of the balance sheet from $2 million at December 31, 2000 to $3 million as of
June 30, 2001 with a corresponding decrease in additional paid-in capital from
$283 million to $282 million.
8. SUBSEQUENT EVENT
During the third quarter 2001, the Company received a $60 million cash capital
contribution from its parent, IDS Life Insurance Company.
--------------------------------------------------------------------------------
79 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
American Enterprise Life Insurance Company
-------------------------------------------------------------------------------
REPORT OF INDEPENDENT AUDITORS
THE BOARD OF DIRECTORS
AMERICAN ENTERPRISE LIFE INSURANCE COMPANY
We have audited the accompanying balance sheets of American Enterprise Life
Insurance Company (a wholly owned subsidiary of IDS Life Insurance Company) as
of December 31, 2000 and 1999, and the related statements of income,
stockholder's equity and cash flows for each of the three years in the period
ended December 31, 2000. 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 American Enterprise Life
Insurance Company at December 31, 2000 and 1999, and the results of its
operations and its cash flows for each of the three years in the period ended
December 31, 2000, in conformity with accounting principles generally accepted
in the United States.
/S/ Ernst & Young LLP
---------------------
Ernst & Young LLP
February 8, 2001
Minneapolis, Minnesota
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80 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
American Enterprise Life Insurance Company
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Balance sheets
December 31, ($ thousands, except share amounts) 2000 1999
Assets
Investments:
Fixed maturities:
Held to maturity, at amortized cost
(fair value: 2000, $927,031;
1999, $984,103) $ 934,091 $1,006,349
Available for sale, at fair value
(amortized cost: 2000, $2,163,906;
1999, $2,411,799) 2,068,487 2,304,487
--------- ---------
3,002,578 3,310,836
Mortgage loans on real estate 724,009 785,253
Other investments 9,407 11,470
----- ------
Total investments 3,735,994 4,107,559
Cash and cash equivalents 34,852 --
Amounts due from brokers 1,316 --
Accounts receivable 867 316
Accrued investment income 54,941 56,676
Deferred policy acquisition costs 198,622 180,288
Deferred income taxes 26,350 37,501
Other assets 9,969 9
Separate account assets 589,310 220,994
------- -------
Total assets $4,652,221 $4,603,343
========== ==========
Liabilities and stockholder's equi1ty
Liabilities:
Future policy benefits for:
Fixed annuities $3,584,784 $3,921,513
Universal life-type insurance 10 --
Policy claims and other policyholders' funds 9,295 12,097
Amounts due to brokers 24,387 25,215
Other liabilities 6,326 17,436
Separate account liabilities 589,310 220,994
------- -------
Total liabilities 4,214,112 4,197,255
Commitments and contingencies
Stockholder's equity:
Capital stock, $100 par value per share;
100,000 shares authorized, 20,000 shares
issued and outstanding 2,000 2,000
Additional paid-in capital 282,872 282,872
Accumulated other comprehensive loss:
Net unrealized securities losses (62,097) (69,753)
Retained earnings 215,334 190,969
------- -------
Total stockholder's equity 438,109 406,088
------- -------
Total liabilities and stockholder's equity $4,652,221 $4,603,343
========== ==========
See accompanying notes.
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81 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
American Enterprise Life Insurance Company
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Statements of income
Years ended December 31, ($ thousands) 2000 1999 1998
Revenues:
Net investment income $299,759 $322,746 $340,219
Policyholder and contractholder charges 6,865 6,069 6,387
Mortality and expense risk fees 5,383 2,269 1,275
Net realized gain (loss) on investments 469 6,565 (4,788)
--- ----- ------
Total revenues 312,476 337,649 343,093
------- ------- -------
Benefits and expenses:
Interest credited on investment contracts 191,040 208,583 228,533
Amortization of deferred policy acquisition costs 47,676 43,257 53,663
Other operating expenses 35,308 35,147 24,476
------ ------ ------
Total benefits and expenses 274,024 286,987 306,672
------- ------- -------
Income before income taxes 38,452 50,662 36,421
Income taxes 14,087 16,675 14,395
------ ------ ------
Net income $ 24,365 $ 33,987 $ 22,026
======== ======== ========
See accompanying notes.
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82 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
American Enterprise Life Insurance Company
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Statements of stockholder's equity
Accumulated
Other
Total Additional Comprehensive
Stockholder's Capital Paid-In (Loss) Income, Retained
Three years ended December 31, ($ thousands) Equity Stock Capital Net of Tax Earnings
Balance, January 1, 1998 $ 469,344 $2,000 $282,872 $ 49,516 $134,956
Comprehensive income:
Net income 22,026 -- -- -- 22,026
Unrealized holding losses arising
during the year, net of taxes of $3,400 (6,314) -- -- (6,314) --
Reclassification adjustment for losses
included in net income,
net of tax of ($588) 1,093 -- -- 1,093 --
----- ----- ----- ----- -----
Other comprehensive loss (5,221) -- -- (5,221) --
------ ----- ----- ------ -----
Comprehensive income: 16,805
------
Balance, December 31, 1998 486,149 2,000 282,872 44,295 156,982
Comprehensive loss:
Net income 33,987 -- -- -- 33,987
Unrealized holding losses arising
during the year, net of taxes of $59,231 (110,001) -- -- (110,001) --
Reclassification adjustment for gains
included in net income,
net of tax of $2,179 (4,047) -- -- (4,047) --
------ ----- ----- ------ -----
Other comprehensive loss (114,048) -- -- (114,048) --
-------- ----- ----- -------- -----
Comprehensive loss (80,061)
-------
Balance, December 31, 1999 406,088 2,000 282,872 (69,753) 190,969
Comprehensive income:
Net income 24,365 -- -- -- 24,365
Unrealized holding gains arising
during the year, net of taxes of $(4,812) 8,937 -- -- 8,937 --
Reclassification adjustment for gains
included in net income,
net of tax of $690 (1,281) -- -- (1,281) --
------ ----- ----- ------ -----
Other comprehensive income 7,656 -- -- 7,656 --
----- ----- ----- ----- -----
Comprehensive income 32,021
------
Balance, December 31, 2000 $ 438,109 $2,000 $282,872 $ (62,097) $215,334
========= ====== ======== =========== ========
See accompanying notes.
--------------------------------------------------------------------------------
83 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
American Enterprise Life Insurance Company
-------------------------------------------------------------------------------
Statements of cash flows
Years ended December 31, ($ thousands) 2000 1999 1998
Cash flows from operating activities:
Net income $ 24,365 $ 33,987 $ 22,026
Adjustments to reconcile net income
to net cash (used in) provided by operating activities:
Change in accrued investment income 1,735 5,064 (2,152)
Change in accounts receivable (551) (102) 349
Change in deferred policy acquisition costs, net (18,334) 16,191 28,022
Change in other assets (9,960) 34 74
Change in policy claims and other policyholders' funds (2,802) 4,708 (3,939)
Deferred income tax provision (benefit) 7,029 711 (9,591)
Change in other liabilities (11,110) (7,064) 7,595
Amortization of premium, net 2,682 2,315 122
Net realized (gain) loss on investments (469) (6,565) 4,788
Other, net (233) (1,562) 2,544
---- ------ -----
Net cash (used in) provided by operating activities (7,648) 47,717 49,838
Cash flows from investing activities: Fixed maturities held to maturity:
Maturities 65,716 65,705 73,601
Sales 5,128 8,466 31,117
Fixed maturities available for sale:
Purchases (101,665) (593,888) (298,885)
Maturities 171,297 248,317 335,357
Sales 176,296 469,126 48,492
Other investments:
Purchases (1,388) (28,520) (161,252)
Sales 65,978 57,548 78,681
Change in amounts due from brokers (1,316) -- --
Change in amounts due to brokers (828) (29,132) 19,412
---- ------- ------
Net cash provided by investing activities 379,218 197,622 126,523
Cash flows from financing activities:
Activity related to universal life type insurance and investment contracts:
Considerations received 398,462 299,899 302,158
Surrenders and other benefits (926,220) (753,821) (707,052)
Interest credited to account balances 191,040 208,583 228,533
------- ------- -------
Net cash used in financing activities (336,718) (245,339) (176,361)
-------- -------- --------
Net increase in cash and cash equivalents 34,852 -- --
Cash and cash equivalents at beginning of year -- -- --
---- ---- ----
Cash and cash equivalents at end of year $ 34,852 $ -- $ --
========= ========= =========
See accompanying notes.
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84 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
American Enterprise Life Insurance Company
-------------------------------------------------------------------------------
Notes to Financial Statements
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of business
American Enterprise Life Insurance Company (the Company) is a stock life
insurance company that is domiciled in Indiana and is licensed to transact
insurance business in 48 states. The Company's principal product is deferred
annuities, which are issued primarily to individuals. It offers single premium
and annual premium deferred annuities on both a fixed and variable dollar basis.
Immediate annuities and variable universal life are offered as well. The Company
distributes its products through financial institutions and unbranded
independent financial advisors.
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). AEFC 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 Indiana
Department of Insurance (see Note 4).
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 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 income taxes.
Realized investment gain or loss is 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.
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.
Mortgage loans on real estate are carried at amortized cost less a reserve 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 a reserve for mortgage
loan losses. The reserve 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 reserve account is determined based on several factors, including
historical experience, expected future principal and interest payments,
estimated collateral values, and current and anticipated economic and political
conditions. Management regularly evaluates the adequacy of the reserve 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 and floors 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. The amortized cost of interest
rate caps and floors is included in other investments. Amounts paid or received
under interest rate swap agreements are recognized as an adjustment to
investment income.
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85 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
American Enterprise Life Insurance Company
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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:
2000 1999 1998
Cash paid during the year for:
Income taxes $14,861 $22,007 $19,035
Interest on borrowings 1,073 2,187 5,437
----- ----- -----
Recognition of profits on annuity contracts
Profits on fixed and variable deferred annuities are recognized by the Company
over the lives of the contracts, using primarily the interest method. Profits on
fixed annuities represent the excess of investment income earned from investment
of contract considerations over interest credited to contract owners and other
expenses. Profits on variable annuities represent the excess of contractholder
charges over the costs of benefits provided and other expenses.
The retrospective deposit method is used in accounting for fixed and variable
universal life-type insurance. Under this method, profits are recognized over
the lives of the policies in proportion to the estimated gross profits expected
to be realized.
Policyholder and contractholder charges include surrender charges and fees
collected regarding the issue and administration of annuity contracts.
Deferred policy acquisition costs
The costs of acquiring new business, principally sales compensation, policy
issue costs, and certain sales expenses, have been deferred on annuity
contracts. These costs are amortized using primarily the interest method.
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 variable 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.
During 2000, unlocking adjustments resulted in a net increase in amortization of
$1.5 million. Net unlocking adjustments in 1999 were not significant. During
1998, unlocking adjustments resulted in a net increase in amortization of $11
million.
Liabilities for future policy benefits
Liabilities for universal-life type insurance and fixed and variable deferred
annuities are accumulation values.
Liabilities for fixed annuities in a benefit status are based on established
industry mortality tables and interest rates ranging from 5% to 9.5%, depending
on year of issue.
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
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, 2000 and 1999 are $9,944 and
$2,147, receivable from and payable to, respectively, 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 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.
--------------------------------------------------------------------------------
86 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
American Enterprise Life Insurance Company
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Accounting changes
In June 1998, the Financial Accounting Standards Board (FASB) issued, and
subsequently amended, Statement of Financial Accounting Standards (SFAS) No.
133, "Accounting for Derivative Instruments and Hedging Activities," which the
company adopted on January 1, 2001. This Statement establishes accounting and
reporting standards for derivative instruments, including some embedded in other
contracts, and hedging activities. It requires that an entity recognize all
derivatives as either assets or liabilities on the balance sheet and measure
those instruments at fair value. Changes in the fair value of a derivative will
be recorded in income or directly to equity, depending on the instrument's
designated use.
A one-time opportunity to reclassify held-to-maturity investments to
available-for-sale is allowed without tainting the remaining securities in the
held-to-maturity portfolio. The Company has elected to take this opportunity to
reclass its held-to-maturity investments to available-for-sale.
As of January 1, 2001, the cumulative impact of applying the Statement's
accounting requirements will not have a significant impact on the Company's
financial position or results of operations.
In September 2000, the FASB issued SFAS No. 140, "Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities," superceding
SFAS No. 125. The Statement is effective for transfers and servicing of
financial assets and extinguishments of liabilities occurring after March 31,
2001. The Statement is effective for recognition and reclassification of
collateral and for disclosures relating to securitization transactions and
collateral for fiscal years ending after December 15, 2000. The company does not
expect SFAS No. 140 to have a material impact on the company's financial
position or results of operations.
In July 2000, the FASB's Emerging Issues Task Force (EITF) issued a consensus on
Issue 99-20, "Recognition of Interest Income and Impairment on Purchased
Beneficial Interests in Securitized Financial Assets." The consensus must be
adopted for fiscal quarters beginning after March 15, 2001, with earlier
adoption permitted. Issue 99-20 prescribes new procedures for recording interest
income and measuring impairment on retained and purchased beneficial interests.
Application of the provisions of the consensus will not have a material impact
on the Company's financial position or results of operations.
Reclassifications
Certain 1999 and 1998 amounts have been reclassified to conform to the 2000
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, 2000 are as follows:
Gross Gross
Amortized unrealized unrealized Fair
Held to maturity cost gains losses value
U.S. Government agency obligations $ 6,949 $ 26 $ 55 $ 6,920
State and municipal obligations 2,101 1 -- 2,102
Corporate bonds and obligations 773,630 9,876 17,470 766,036
Mortgage-backed securities 151,411 801 239 151,973
------- --- --- -------
$934,091 $10,704 $ 17,764 $ 927,031
======== ======= ======== ==========
Available for sale
U.S. Government agency obligations $ 5,154 $ 284 $ -- $ 5,438
State and municipal obligations 2,250 5 -- 2,255
Corporate bonds and obligations 1,319,781 19,103 123,865 1,215,019
Mortgage-backed securities 836,721 10,780 1,726 845,775
------- ------ ----- -------
$2,163,906 $30,172 $125,591 $2,068,487
========== ======= ======== ==========
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87 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
American Enterprise Life Insurance Company
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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 $ 7,514 $ 23 $ 431 $ 7,106
State and municipal obligations 3,002 44 -- 3,046
Corporate bonds and obligations 816,826 5,966 23,311 799,482
Mortgage-backed securities 179,007 296 4,834 174,469
------- --- ----- -------
$1,006,349 $6,329 $28,576 $ 984,103
========== ====== ======= ==========
Available for sale
U.S. Government agency obligations $ 2,047 $ -- $ 47 $ 1,999
State and municipal obligations 2,250 -- 190 2,060
Corporate bonds and obligations 1,419,150 7,445 90,703 1,335,892
Mortgage-backed securities 988,352 1,929 25,746 964,536
------- ----- ------ -------
$2,411,799 $9,374 $116,686 $2,304,487
========== ====== ======== ==========
The amortized cost and fair value of investments in fixed maturities at December
31, 2000 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 from one to five years $405,375 $402,691
Due from five to ten years 321,802 317,320
Due in more than ten years 55,503 55,047
Mortgage-backed securities 151,411 151,973
------- -------
$934,091 $927,031
======== ========
Amortized Fair
Available for sale cost value
Due from one to five years $ 61,851 $ 67,514
Due from five to ten years 965,579 878,853
Due in more than ten years 299,755 276,345
Mortgage-backed securities 836,721 845,775
------- -------
$2,163,906 $2,068,487
========== ==========
During the years ended December 31, 2000, 1999 and 1998, fixed maturities
classified as held to maturity were sold with amortized cost of $5,128, $8,466
and $31,117, respectively. Net gains and losses on these sales were not
significant. The sales of these fixed maturities were due to significant
deterioration in the issuers' creditworthiness.
In addition, fixed maturities available for sale were sold during 2000 with
proceeds of $176,296 and gross realized gains and losses of $3,488 and $1,516
respectively. Fixed maturities available for sale were sold during 1999 with
proceeds of $469,126 and gross realized gains and losses of $10,374 and $4,147,
respectively. Fixed maturities available for sale were sold during 1998 with
proceeds of $48,492 and gross realized gains and losses of $2,835 and $4,516,
respectively.
At December 31, 2000, bonds carried at $3,259 were on deposit with various
states as required by law.
At December 31, 2000, investments in fixed maturities comprised 80 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 $463
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 2000 1999
Aaa/AAA $ 998,333 $1,168,144
Aaa/AA 1,000 --
Aa/AA 34,535 42,859
Aa/A 59,569 52,416
A/A 367,643 422,668
A/BBB 121,028 189,072
Baa/BBB 989,301 995,152
Baa/BB 67,156 64,137
Below investment grade 459,432 483,700
------- -------
$3,097,997 $3,418,148
========== ==========
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88 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
American Enterprise Life Insurance Company
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At December 31, 2000, approximately 92 percent of the securities rated Aaa/AAA
were GNMA, FNMA and FHLMC mortgage-backed securities. No holdings of any other
issuer were greater than one percent of the Company's total investments in fixed
maturities.
At December 31, 2000, approximately 19 percent of the Company's invested assets
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, 2000 December 31, 1999
On balance Commitments On balance Commitments
Region sheet to purchase sheet to purchase
South Atlantic $172,349 $-- $194,325 $ --
Middle Atlantic 106,376 -- 118,699 --
East North Central 122,354 -- 126,243 --
Mountain 100,208 -- 103,751 --
West North Central 110,669 -- 125,891 513
New England 39,877 -- 43,345 802
Pacific 38,559 -- 41,396 --
West South Central 30,172 -- 31,153 --
East South Central 6,749 -- 7,100 --
----- ----- ----- -----
727,313 -- 791,903 1,315
Less allowance for losses 3,304 -- 6,650 --
----- ----- ----- -----
$724,009 $-- $785,253 $1,315
======== === ======== ======
December 31, 2000 December 31, 1999
On balance Commitments On balance Commitments
Property type sheet to purchase sheet to purchase
Department/retail stores $214,927 $-- $232,449 $1,315
Apartments 152,906 -- 181,346 --
Office buildings 191,767 -- 202,132 --
Industrial buildings 80,330 -- 83,186 --
Hotels/Motels 41,977 -- 43,839 --
Medical buildings 29,173 -- 32,284 --
Nursing/retirement homes 6,471 -- 6,608 --
Mixed Use 9,762 -- 10,059 --
----- ----- ------ -----
727,313 -- 791,903 1,315
Less allowance for losses 3,304 -- 6,650 --
----- ----- ----- -----
$724,009 $-- $785,253 $1,315
======== === ======== ======
Mortgage loan fundings are restricted by state insurance regulatory authorities
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. Commitments to purchase mortgages are
made in the ordinary course of business. The fair value of the mortgage
commitments is $nil.
At December 31, 2000 and 1999, the Company's recorded investment in impaired
loans was $9,014 and $5,200, respectively, with allowances of $500 and $1,250,
respectively. During 2000 and 1999, the average recorded investment in impaired
loans was $4,684 and $5,399, respectively.
The Company recognized $221, $136 and $251 of interest income related to
impaired loans for the years ended December 31, 2000, 1999 and 1998,
respectively.
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89 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
American Enterprise Life Insurance Company
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The following table presents changes in the allowance for investment losses
related to all loans:
2000 1999 1998
Balance, January 1 $6,650 $8,500 $3,718
(Reduction) provision for investment losses (3,346) (1,850) 4,782
------ ------ -----
Balance, December 31 $3,304 $6,650 $8,500
====== ====== ======
At December 31, 2000 the Company had no commitments to purchase investments.
Net investment income for the years ended December 31 is summarized as follows:
2000 1999 1998
Interest on fixed maturities $237,201 $265,199 $285,260
Interest on mortgage loans 59,686 63,721 65,351
Interest on cash equivalents 1,136 534 137
Other 5,693 (1,755) (2,493)
----- ------ ------
303,716 327,699 348,255
Less investment expenses 3,957 4,953 8,036
----- ----- -----
$299,759 $322,746 $340,219
======== ======== ========
Net realized gain (loss) on investments for the years ended December 31 is
summarized as follows:
2000 1999 1998
Fixed maturities $ (2,877) $ 4,715 $ 28
Mortgage loans 3,346 (1,650) (4,816)
----- ------ ------
$ 469 $ 3,065 $(4,788)
======== ======= =======
Changes in net unrealized appreciation (depreciation) of investments for the
years ended December 31 are summarized as follows:
2000 1999 1998
Fixed maturities available for sale $11,894 $(175,458) $(8,032)
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 for the years ended December 31, consists of the
following:
2000 1999 1998
Federal income taxes:
Current $ 6,170 $15,531 $23,227
Deferred 7,029 711 (9,591)
----- --- ------
13,199 16,242 13,636
State income taxes -- current 888 433 759
--- --- ---
Income tax expense $14,087 $16,675 $14,395
======= ======= =======
Increases (decreases) to the federal income tax provision applicable to pretax
income based on the statutory rate, for the years ended December 31, are
attributable to:
2000 1999 1998
Provision Rate Provision Rate Provision Rate
Federal income taxes based on the statutory rate $13,458 35.0% $17,731 35.0% $13,972 35.0%
Increases (decreases) are attributable to :
Tax-excluded interest (4) -- (14) -- (35) (0.1)
State tax, net of federal benefit 578 1.5 281 0.5 493 1.2
Other, net 55 0.1 (1,323) (2.6) (35) --
-- --- ------ ---- --- ---
Total income taxes $14,087 36.6% $16,675 32.9% $14,395 36.1%
======= ==== ======= ==== ======= ====
Significant components of the Company's deferred income tax assets and
liabilities as of December 31 are as follows:
Deferred income tax assets: 2000 1999
Policy reserves $40,242 $46,243
Unrealized losses on investments 31,441 39,678
Other 6,208 1,070
----- -----
Total deferred income tax assets 77,891 86,991
------ ------
Deferred income tax liabilities:
Deferred policy acquisition costs 51,541 49,490
------ ------
Total deferred income tax liabilities 51,541 49,490
------ ------
Net deferred income tax assets $26,350 $37,501
======= =======
--------------------------------------------------------------------------------
90 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
American Enterprise Life Insurance Company
-------------------------------------------------------------------------------
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 income 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 state insurance regulatory authorities. Statutory
unassigned surplus aggregated $31,152 and $58,223 as of December 31, 2000 and
1999, respectively. In addition, dividends in excess of $nil would require
approval by the Insurance Department of the state of Indiana.
Statutory net (loss) income for the years ended December 31 and statutory
capital and surplus as of December 31, are summarized as follows:
2000 1999 1998
Statutory net (loss) income $(11,928) $ 15,241 $ 37,902
Statutory capital and surplus 315,930 343,094 330,588
------- ------- -------
The National Association of Insurance Commissioners (NAIC) revised the
Accounting Practices and Procedures Manual in a process referred to as
Codification. The revised manual will be effective January 1, 2001. The state of
Indiana has adopted the provisions of the revised manual. The revised manual has
changed, to some extent, prescribed statutory accounting practices and will
result in changes to the accounting practices that the Company uses to prepare
their statutory-basis financial statements. Management believes these changes
will not adversely impact the Company's statutory-basis capital and surplus as
of January 1, 2001.
5. RELATED PARTY TRANSACTIONS
The Company has purchased interest rate floors from IDS Life and entered into an
interest rate swap with IDS Life to manage its exposure to interest rate risk.
The interest rate floors had a carrying amount of $6,489 and $8,258 at December
31, 2000 and 1999, respectively. The interest rate swap is an off balance sheet
transaction.
The Company has no employees. Charges by IDS Life for services and use of other
joint facilities aggregated $45,191, $38,931 and $28,482 for the years ended
December 31, 2000, 1999 and 1998, respectively. Certain of these costs are
included in deferred policy acquisition costs.
6. LINES OF CREDIT
The Company has an available line of credit with AEFC aggregating $50,000. The
rate for the line of credit is established by reference to various indices plus
20 to 45 basis points, depending on the term. There were no borrowings
outstanding under this agreement at December 31, 2000 or 1999.
7. 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 requiring collateral, where
appropriate. A vast majority of the Company's counterparties are rated A or
better by Moody's and Standard & Poor's.
Credit risk related to interest rate caps and floors 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.
--------------------------------------------------------------------------------
91 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
American Enterprise Life Insurance Company
-------------------------------------------------------------------------------
The Company's holdings of derivative financial instruments are as follows:
Notional Carrying Fair Total credit
December 31, 2000 amount amount value exposure
Assets:
Interest rate caps $ 500,000 $2,037 $ 414 $ 414
Interest rate floors 2,000,000 6,489 13,185 13,185
Off balance sheet:
Interest rate swaps 2,000,000 -- (51,369) (51,369)
--------- ------ ------- -------
$8,526 $(37,770) $(37,770)
====== ======== ========
Notional Carrying Fair Total credit
December 31, 1999 amount amount value exposure
Assets:
Interest rate caps $ 900,000 $ 3,212 $ 4,437 $ 4,437
Interest rate floors 2,000,000 8,258 2,251 2,251
Off balance sheet:
Interest rate swaps 2,000,000 -- 18,274 18,274
--------- ----- ------ ------
$11,470 $24,962 $24,962
======= ======= =======
The fair values of derivative financial instruments are based on market values,
dealer quotes or pricing models. All interest rate caps, floors and swaps will
expire on various dates from 2001 to 2006.
Interest rate caps, floors and swaps 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.
8. 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
value of life insurance obligations, receivables and all non-financial
instruments, such as deferred acquisition costs are excluded. Off-balance sheet
intangible assets 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.
December 31, 2000 December 31, 1999
Carrying Fair Carrying Fair
Financial Assets amount value amount value
Investments:
Fixed maturities (Note 2):
Held to maturity $ 934,091 $ 927,031 $1,006,349 $ 984,103
Available for sale 2,068,487 2,068,487 2,304,487 2,304,487
Mortgage loans on real estate (Note 2) 724,009 740,992 785,253 770,095
Derivative financial instruments (Note 7) 8,526 (37,770) 11,470 24,962
Separate account assets (Note 1) 589,310 589,310 220,994 220,994
Cash and cash equivalents 34,852 34,852 -- --
Financial Liabilities
Future policy benefits for fixed annuities $3,567,085 $3,480,270 $3,905,849 $3,778,945
Separate account liabilities 589,310 567,989 220,994 209,942
------- ------- ------- -------
At December 31, 2000 and 1999, the carrying amount and fair value of future
policy benefits for fixed annuities exclude life insurance-related contracts
carried at $17,699 and $15,633, respectively. The fair value of these benefits
is based on the status of the annuities at December 31, 2000 and 1999.
The fair values of deferred annuities and separate account liabilities are
estimated as the carrying amount less applicable surrender charges. 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 2000 and 1999.
9. COMMITMENTS AND CONTINGENCIES
In January 2000, AEFC reached an agreement in principle to settle three
class-action lawsuits related to the sales of insurance and annuity products,
anticipated to provide for approximately $215 million of benefits. The Company
had been named as a co-defendant in one of these lawsuits. In September 2000,
the court gave preliminary approval to the proposed settlement and AEFC has
mailed notices to all of the over two million class members. A fairness hearing
is scheduled for March 2001, with final approval anticipated in the second
quarter, pending any legal appeals. The anticipated costs of settlement remain
unchanged from 1999. The portion of the settlement allocated to the Company did
not have a material impact on the Company's financial position or results of
operations. The agreement 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 final court approval.
--------------------------------------------------------------------------------
92 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
Appendix A: Expense Examples for the 8% Performance Credit Rider
Examples*: These examples assume that applicable fund fee waivers and/or expense
reimbursements will continue for the periods shown. Under each fund you will
find an example showing: 1) the contract with selection of death benefit Option
A and no additional riders, 2) the contract with selection of death benefit
Option A and the optional Benefit Protector(SM) Death Benefit (BP) rider, 3) the
contract with selection of death benefit Option A and the optional Benefit
Protector(SM) Plus Death Benefit (BPP) rider, 4) the contract with selection of
death benefit Option B and no additional riders, 5) the contract with selection
of death benefit Option B and the optional BP rider, and 6) the contract with
selection of death benefit Option B and the optional BPP rider.
You would pay the following expenses on a $1,000 investment with selection of
the optional 8% Performance Credit Rider assuming a 5% annual return and ...
no withdrawal or selection
full withdrawal at the of an annuity payout plan at the
end of each time period end of each time period
1 year 3 years 5 years 10 years 1 year 3 years 5 years 10 years
AXP(R) Variable Portfolio - Blue Chip Advantage Fund
death benefit Option A with no additional riders $106.10 $160.18 $206.87 $290.90 $26.10 $80.18 $136.87 $290.90
death benefit Option A with optional BP rider 108.66 167.82 219.54 315.74 28.66 87.82 149.54 315.74
death benefit Option A with optional BPP rider 110.20 172.40 227.08 330.35 30.20 92.40 157.08 330.35
death benefit Option B with no additional riders 107.12 163.24 211.96 300.91 27.12 83.24 141.96 300.91
death benefit Option B with optional BP rider 109.68 170.87 224.57 325.50 29.68 90.87 154.57 325.50
death benefit Option B with optional BPP rider 111.22 175.43 232.08 339.96 31.22 95.43 162.08 339.96
AXP(R) Variable Portfolio - Bond Fund
death benefit Option A with no additional riders 106.30 160.79 207.89 292.91 26.30 80.79 137.89 292.91
death benefit Option A with optional BP rider 108.86 168.44 220.55 317.70 28.86 88.44 150.55 317.70
death benefit Option A with optional BPP rider 110.40 173.00 228.08 332.28 30.40 93.00 158.08 332.28
death benefit Option B with no additional riders 107.33 163.85 212.97 302.90 27.33 83.85 142.97 302.90
death benefit Option B with optional BP rider 109.89 171.48 225.58 327.44 29.89 91.48 155.58 327.44
death benefit Option B with optional BPP rider 111.43 176.04 233.08 341.88 31.43 96.04 163.08 341.88
AXP(R) Variable Portfolio - Capital Resource Fund
death benefit Option A with no additional riders 106.10 160.18 206.87 290.90 26.10 80.18 136.87 290.90
death benefit Option A with optional BP rider 108.66 167.82 219.54 315.74 28.66 87.82 149.54 315.74
death benefit Option A with optional BPP rider 110.20 172.40 227.08 330.35 30.20 92.40 157.08 330.35
death benefit Option B with no additional riders 107.12 163.24 211.96 300.91 27.12 83.24 141.96 300.91
death benefit Option B with optional BP rider 109.68 170.87 224.57 325.50 29.68 90.87 154.57 325.50
death benefit Option B with optional BPP rider 111.22 175.43 232.08 339.96 31.22 95.43 162.08 339.96
AXP(R) Variable Portfolio - Cash Management Fund
death benefit Option A with no additional riders 105.07 157.11 201.77 280.79 25.07 77.11 131.77 280.79
death benefit Option A with optional BP rider 107.63 164.77 214.49 305.88 27.63 84.77 144.49 305.88
death benefit Option A with optional BPP rider 109.17 169.35 222.06 320.63 29.17 89.35 152.06 320.63
death benefit Option B with no additional riders 106.10 160.18 206.87 290.90 26.10 80.18 136.87 290.90
death benefit Option B with optional BP rider 108.66 167.82 219.54 315.74 28.66 87.82 149.54 315.74
death benefit Option B with optional BPP rider 110.20 172.40 227.08 330.35 30.20 92.40 157.08 330.35
AXP(R) Variable Portfolio - Diversified Equity Income Fund
death benefit Option A with no additional riders 107.43 164.16 213.48 303.89 27.43 84.16 143.48 303.89
death benefit Option A with optional BP rider 109.99 171.79 226.08 328.41 29.99 91.79 156.08 328.41
death benefit Option A with optional BPP rider 111.53 176.34 233.58 342.83 31.53 96.34 163.58 342.83
death benefit Option B with no additional riders 108.45 167.21 218.53 313.77 28.45 87.21 148.53 313.77
death benefit Option B with optional BP rider 111.02 174.83 231.08 338.05 31.02 94.83 161.08 338.05
death benefit Option B with optional BPP rider 112.55 179.38 238.55 352.32 32.55 99.38 168.55 352.32
--------------------------------------------------------------------------------
93 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
You would pay the following expenses on a $1,000 investment with selection of
the optional 8% Performance Credit Rider assuming a 5% annual return and ...
(continued)
no withdrawal or selection
full withdrawal at the of an annuity payout plan at the
end of each time period end of each time period
1 year 3 years 5 years 10 years 1 year 3 years 5 years 10 years
AXP(R) Variable Portfolio - Extra Income Fund
death benefit Option A with no additional riders $106.51 $161.40 $208.91 $294.92 $26.51 $ 81.40 $138.91 $294.92
death benefit Option A with optional BP rider 109.07 169.05 221.56 319.66 29.07 89.05 151.56 319.66
death benefit Option A with optional BPP rider 110.61 173.61 229.08 334.20 30.61 93.61 159.08 334.20
death benefit Option B with no additional riders 107.53 164.46 312.98 304.89 27.53 84.46 143.98 304.89
death benefit Option B with optional BP rider 110.09 172.09 226.58 329.38 30.09 92.09 156.58 329.38
death benefit Option B with optional BPP rider 111.63 176.65 234.08 343.78 31.63 96.65 164.08 343.78
AXP(R) Variable Portfolio - Federal Income Fund
death benefit Option A with no additional riders 106.71 162.02 209.92 296.92 26.71 82.02 139.92 296.92
death benefit Option A with optional BP rider 109.27 169.65 222.56 321.61 29.27 89.65 152.56 321.61
death benefit Option A with optional BPP rider 110.81 174.22 230.08 336.13 30.81 94.22 160.08 336.13
death benefit Option B with no additional riders 107.74 165.08 215.00 306.87 27.74 85.08 145.00 306.87
death benefit Option B with optional BP rider 110.30 172.70 227.58 331.31 30.30 92.70 157.58 331.31
death benefit Option B with optional BPP rider 111.84 177.25 235.07 345.69 31.84 97.25 165.07 345.69
AXP(R) Variable Portfolio - Growth Fund
death benefit Option A with no additional riders 107.33 163.85 212.97 302.90 27.33 83.85 142.97 302.90
death benefit Option A with optional BP rider 109.89 171.48 225.58 327.44 29.89 91.48 155.58 327.44
death benefit Option A with optional BPP rider 111.43 176.04 233.08 341.88 31.43 96.04 163.08 341.88
death benefit Option B with no additional riders 108.35 166.91 218.03 312.79 28.35 86.91 148.03 312.79
death benefit Option B with optional BP rider 110.91 174.52 230.58 337.09 30.91 94.52 160.58 337.09
death benefit Option B with optional BPP rider 112.45 179.07 238.05 351.38 32.45 99.07 168.05 351.38
AXP(R) Variable Portfolio - Managed Fund
death benefit Option A with no additional riders 105.89 159.56 205.85 288.89 25.89 79.56 135.85 288.89
death benefit Option A with optional BP rider 108.45 167.21 218.53 313.77 28.45 87.21 148.53 313.77
death benefit Option A with optional BPP rider 109.99 171.79 226.08 328.41 29.99 91.79 156.08 328.41
death benefit Option B with no additional riders 106.92 162.63 210.94 298.92 26.92 82.63 140.94 298.92
death benefit Option B with optional BP rider 109.48 170.26 223.57 323.56 29.48 90.26 153.57 323.56
death benefit Option B with optional BPP rider 111.02 174.83 231.08 338.05 31.02 94.83 161.08 338.05
AXP(R) Variable Portfolio - New Dimensions Fund(R)
death benefit Option A with no additional riders 106.20 160.48 207.38 291.91 26.20 80.48 137.38 291.91
death benefit Option A with optional BP rider 108.76 168.13 220.05 316.72 28.76 88.13 150.05 316.72
death benefit Option A with optional BPP rider 110.30 172.70 227.58 331.31 30.30 92.70 157.58 331.31
death benefit Option B with no additional riders 107.22 163.55 212.46 301.91 27.22 83.55 142.46 301.91
death benefit Option B with optional BP rider 109.79 171.18 225.08 326.47 29.79 91.18 155.08 326.47
death benefit Option B with optional BPP rider 111.32 175.74 232.58 340.92 31.32 95.74 162.58 340.92
AXP(R) Variable Portfolio - Small Cap Advantage Fund
death benefit Option A with no additional riders 109.99 171.79 226.08 328.41 29.99 91.79 156.08 328.41
death benefit Option A with optional BP rider 112.55 179.38 238.55 352.32 32.55 99.38 168.55 352.32
death benefit Option A with optional BPP rider 114.09 183.91 246.97 336.39 34.09 103.91 175.97 366.39
death benefit Option B with no additional riders 111.02 174.83 231.08 338.05 31.02 94.83 161.08 338.05
death benefit Option B with optional BP rider 113.58 182.40 243.50 361.72 33.58 102.40 173.50 361.72
death benefit Option B with optional BPP rider 115.12 186.93 250.89 375.64 35.12 106.93 180.89 375.64
--------------------------------------------------------------------------------
94 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
You would pay the following expenses on a $1,000 investment with selection of
the optional 8% Performance Credit Rider assuming a 5% annual return and ...
(continued)
no withdrawal or selection
full withdrawal at the of an annuity payout plan at the
end of each time period end of each time period
1 year 3 years 5 years 10 years 1 year 3 years 5 years 10 years
AIM V.I. Capital Appreciation Fund
death benefit Option A with no additional riders $106.51 $161.40 $208.91 $294.92 $26.51 $ 81.40 $138.91 $294.92
death benefit Option A with optional BP rider 109.07 169.05 221.56 319.66 29.07 89.05 151.56 319.66
death benefit Option A with optional BPP rider 110.61 173.61 229.08 334.20 30.61 93.61 159.08 334.20
death benefit Option B with no additional riders 107.53 164.46 213.98 304.89 27.53 84.46 143.98 304.89
death benefit Option B with optional BP rider 110.09 172.09 226.58 329.38 30.09 92.09 156.58 329.38
death benefit Option B with optional BPP rider 111.63 176.65 234.08 343.78 31.63 96.65 164.08 343.78
AIM V.I. Capital Development Fund
death benefit Option A with no additional riders 112.25 178.47 237.06 349.49 32.25 98.47 167.06 349.49
death benefit Option A with optional BP rider 114.81 186.02 249.41 372.88 34.81 106.02 179.41 372.88
death benefit Option A with optional BPP rider 116.35 190.54 256.76 386.63 36.35 110.54 186.76 386.63
death benefit Option B with no additional riders 113.27 181.49 242.02 358.91 33.27 101.49 172.02 358.91
death benefit Option B with optional BP rider 115.38 189.03 254.32 382.07 35.83 109.03 184.32 382.07
death benefit Option B with optional BPP rider 117.37 193.54 261.64 395.68 37.37 113.54 191.64 395.68
AIM V.I. Value Fund
death benefit Option A with no additional riders 106.71 162.02 209.92 296.92 26.71 82.02 139.92 296.92
death benefit Option A with optional BP rider 109.27 169.65 222.56 321.61 29.27 89.65 152.56 321.61
death benefit Option A with optional BPP rider 110.81 174.22 230.08 336.13 30.81 94.22 160.08 336.13
death benefit Option B with no additional riders 107.74 165.08 215.00 306.87 27.74 85.08 145.00 306.87
death benefit Option B with optional BP rider 110.30 172.70 227.58 331.31 30.30 92.70 157.58 331.31
death benefit Option B with optional BPP rider 111.84 177.25 235.07 345.69 31.84 97.25 165.07 345.69
Alliance VP Premier Growth Portfolio (Class B)
death benefit Option A with no additional riders 111.43 176.04 233.08 341.88 31.43 96.04 163.08 341.88
death benefit Option A with optional BP rider 113.99 183.61 245.47 365.45 33.99 103.61 175.47 365.45
death benefit Option A with optional BPP rider 115.53 188.13 252.85 379.32 35.53 108.13 182.85 379.32
death benefit Option B with no additional riders 112.45 179.07 238.05 351.38 32.45 99.07 168.05 351.38
death benefit Option B with optional BP rider 115.01 186.62 250.40 374.72 35.01 106.62 180.40 374.72
death benefit Option B with optional BPP rider 116.55 191.14 257.74 388.45 36.55 111.14 187.74 388.45
Alliance VP Technology Portfolio (Class B)
death benefit Option A with no additional riders 111.53 176.34 233.58 342.83 31.53 96.34 163.58 342.83
death benefit Option A with optional BP rider 114.09 183.91 245.97 366.39 34.09 103.91 175.97 366.39
death benefit Option A with optional BPP rider 115.63 188.43 253.34 380.24 35.63 108.43 183.34 380.24
death benefit Option B with no additional riders 112.55 179.38 238.55 352.32 32.55 99.38 168.55 352.32
death benefit Option B with optional BP rider 115.12 186.93 250.89 375.64 35.12 106.93 180.89 375.64
death benefit Option B with optional BPP rider 116.65 191.44 258.23 389.36 36.65 111.44 188.23 389.36
Alliance VP U.S. Government/High Grade Securities Portfolio (Class B)
death benefit Option A with no additional riders 110.40 173.00 228.08 332.28 30.40 93.00 158.08 332.28
death benefit Option A with optional BP rider 112.96 180.59 240.53 356.09 32.96 100.59 170.53 356.09
death benefit Option A with optional BPP rider 114.50 185.12 247.94 370.10 34.50 105.12 177.94 370.10
death benefit Option B with no additional riders 111.43 179.04 233.08 341.88 31.43 96.04 163.08 341.88
death benefit Option B with optional BP rider 113.99 183.61 245.47 365.45 33.99 103.61 175.47 265.45
death benefit Option B with optional BPP rider 115.53 188.13 252.85 379.32 35.53 108.13 182.85 379.32
--------------------------------------------------------------------------------
95 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
You would pay the following expenses on a $1,000 investment with selection of
the optional 8% Performance Credit Rider assuming a 5% annual return and ...
(continued)
no withdrawal or selection
full withdrawal at the of an annuity payout plan at the
end of each time period end of each time period
1 year 3 years 5 years 10 years 1 year 3 years 5 years 10 years
Baron Capital Asset Fund - Insurance Shares
death benefit Option A with no additional riders $113.48 $182.10 $243.01 $360.79 $33.48 $102.10 $173.01 $360.79
death benefit Option A with optional BP rider 116.04 189.63 255.30 383.90 36.04 109.63 185.30 383.90
death benefit Option A with optional BPP rider 117.58 194.14 262.61 397.48 37.58 114.14 192.61 397.48
death benefit Option B with no additional riders 114.50 185.12 247.94 370.10 34.50 105.12 177.94 370.10
death benefit Option B with optional BP rider 117.06 192.64 260.18 392.98 37.06 112.64 190.18 392.98
death benefit Option B with optional BPP rider 118.60 197.13 267.46 406.43 38.60 117.13 197.46 406.43
Credit Suisse Warburg Pincus Trust - Emerging Growth Portfolio
(previously Warburg Pincus Trust - Emerging Growth Portfolio)
death benefit Option A with no additional riders 110.91 174.52 230.58 337.09 30.91 94.52 160.58 337.09
death benefit Option A with optional BP rider 113.48 182.10 243.01 360.79 33.48 102.10 173.01 360.79
death benefit Option A with optional BPP rider 115.01 186.62 250.40 374.72 35.01 106.62 180.40 374.72
death benefit Option B with no additional riders 111.94 177.56 235.57 346.64 31.94 97.56 165.57 346.64
death benefit Option B with optional BP rider 114.50 185.12 247.94 370.10 34.50 105.12 177.94 370.10
death benefit Option B with optional BPP rider 116.04 189.63 255.30 383.90 36.04 109.63 185.30 383.90
Fidelity VIP Growth & Income Portfolio (Service Class)
death benefit Option A with no additional riders 105.17 157.41 202.28 281.81 25.17 77.41 132.28 281.81
death benefit Option A with optional BP rider 107.74 165.08 215.00 306.87 27.74 85.08 145.00 306.87
death benefit Option A with optional BPP rider 109.27 169.65 222.56 321.61 29.27 89.65 152.56 321.61
death benefit Option B with no additional riders 106.20 160.48 207.38 291.91 26.20 80.48 137.38 291.91
death benefit Option B with optional BP rider 108.76 168.13 220.05 316.72 28.76 88.13 150.05 316.72
death benefit Option B with optional BPP rider 110.30 172.70 227.58 331.31 30.30 92.70 157.58 331.31
Fidelity VIP Mid Cap Portfolio (Service Class)
death benefit Option A with no additional riders 106.71 162.02 209.92 296.92 26.71 82.02 139.92 296.92
death benefit Option A with optional BP rider 109.27 169.65 222.56 321.61 29.27 89.65 152.56 321.61
death benefit Option A with optional BPP rider 110.81 174.22 230.08 336.13 30.81 94.22 160.08 336.13
death benefit Option B with no additional riders 107.74 165.08 215.00 306.87 27.74 85.08 145.00 306.87
death benefit Option B with optional BP rider 110.30 172.70 227.58 331.31 30.30 92.70 157.58 331.31
death benefit Option B with optional BPP rider 111.84 177.25 235.07 345.69 31.84 97.25 165.07 345.69
Fidelity VIP Overseas Portfolio (Service Class)
death benefit Option A with no additional riders 108.25 166.60 217.52 311.81 28.25 86.60 147.52 311.81
death benefit Option A with optional BP rider 110.81 174.22 230.08 336.13 30.81 94.22 160.08 336.13
death benefit Option A with optional BPP rider 112.35 178.77 237.56 350.43 32.35 98.77 167.56 350.43
death benefit Option B with no additional riders 109.27 169.65 222.56 321.61 29.27 89.65 152.56 321.61
death benefit Option B with optional BP rider 111.84 177.25 235.07 345.69 31.84 97.25 165.07 345.69
death benefit Option B with optional BPP rider 113.37 181.80 242.51 359.85 33.37 101.80 172.51 359.85
FTVIPT Franklin Real Estate Fund - Class 2
death benefit Option A with no additional riders 106.81 162.32 210.43 297.92 26.81 82.32 140.43 297.92
death benefit Option A with optional BP rider 109.38 169.96 223.07 322.58 29.38 89.96 153.07 322.58
death benefit Option A with optional BPP rider 110.91 174.52 230.58 337.09 30.91 94.52 160.58 337.09
death benefit Option B with no additional riders 107.84 165.38 215.50 307.86 27.84 85.38 145.50 307.86
death benefit Option B with optional BP rider 110.40 173.00 228.08 332.28 30.40 93.00 158.08 332.28
death benefit Option B with optional BPP rider 111.94 177.56 235.57 346.64 31.94 97.56 165.57 346.64
--------------------------------------------------------------------------------
96 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
You would pay the following expenses on a $1,000 investment with selection of
the optional 8% Performance Credit Rider assuming a 5% annual return and ...
(continued)
no withdrawal or selection
full withdrawal at the of an annuity payout plan at the
end of each time period end of each time period
1 year 3 years 5 years 10 years 1 year 3 years 5 years 10 years
FTVIPT Mutual Shares Securities Fund - Class 2
death benefit Option A with no additional riders $108.86 $168.44 $220.55 $317.70 $28.86 $ 88.44 $150.55 $317.70
death benefit Option A with optional BP rider 111.43 176.04 233.08 341.88 31.43 96.04 163.08 341.88
death benefit Option A with optional BPP rider 112.96 180.59 240.53 356.09 32.96 100.59 170.53 356.09
death benefit Option B with no additional riders 109.89 171.48 225.58 327.44 29.89 91.48 155.58 327.44
death benefit Option B with optional BP rider 112.45 179.07 238.05 351.38 32.45 99.07 168.05 351.38
death benefit Option B with optional BPP rider 113.99 183.61 245.47 365.45 33.99 103.61 175.47 365.45
FTVIPT Templeton International Smaller Companies Fund - Class 2
death benefit Option A with no additional riders 112.04 177.86 236.07 347.59 32.04 97.86 166.07 347.59
death benefit Option A with optional BP rider 114.60 185.42 248.43 371.03 34.60 105.42 178.43 371.03
death benefit Option A with optional BPP rider 116.14 189.93 255.79 384.81 36.14 109.93 185.79 384.81
death benefit Option B with no additional riders 113.07 180.89 241.03 357.03 33.07 100.89 171.03 357.03
death benefit Option B with optional BP rider 115.63 188.43 253.34 380.24 35.63 108.43 183.34 380.24
death benefit Option B with optional BPP rider 117.17 192.94 260.66 393.88 37.17 112.94 190.66 393.88
Goldman Sachs VIT Capital Growth Fund
death benefit Option A with no additional riders 108.35 166.91 218.03 312.79 28.35 86.91 148.03 312.79
death benefit Option A with optional BP rider 110.91 174.52 230.58 337.09 30.91 94.52 160.58 337.09
death benefit Option A with optional BPP rider 112.45 179.07 238.05 351.38 32.45 99.07 168.05 351.38
death benefit Option B with no additional riders 109.38 169.96 223.07 322.58 29.38 89.96 153.07 322.58
death benefit Option B with optional BP rider 111.94 177.56 235.57 346.64 31.94 97.56 165.57 346.64
death benefit Option B with optional BPP rider 113.48 182.10 243.01 360.79 33.48 102.10 173.01 360.79
Goldman Sachs VIT CORE(SM) U.S. Equity Fund
death benefit Option A with no additional riders 107.33 163.85 212.97 302.90 27.33 83.85 142.97 302.90
death benefit Option A with optional BP rider 109.89 171.48 225.58 327.44 29.89 91.48 155.58 327.44
death benefit Option A with optional BPP rider 111.43 176.04 233.08 341.88 31.43 96.04 163.08 341.88
death benefit Option B with no additional riders 108.35 166.91 218.03 312.79 28.35 86.91 148.03 312.79
death benefit Option B with optional BP rider 110.91 174.52 230.58 337.09 30.91 94.52 160.58 337.09
death benefit Option B with optional BPP rider 112.45 179.07 238.05 351.38 32.45 99.07 168.05 351.38
Goldman Sachs VIT Global Income Fund
death benefit Option A with no additional riders 109.89 171.48 225.58 327.44 29.89 91.48 155.58 327.44
death benefit Option A with optional BP rider 112.45 179.07 238.05 351.38 32.45 99.07 168.05 351.38
death benefit Option A with optional BPP rider 113.99 183.61 245.47 365.45 33.99 103.61 175.47 365.45
death benefit Option B with no additional riders 110.91 174.52 230.58 337.09 30.91 94.52 160.58 337.09
death benefit Option B with optional BP rider 113.48 182.10 243.01 360.79 33.48 102.10 173.01 360.79
death benefit Option B with optional BPP rider 115.01 186.62 250.40 374.72 35.01 106.62 180.40 374.72
Goldman Sachs VIT International Equity Fund
death benefit Option A with no additional riders 111.94 177.56 235.57 346.64 31.94 97.56 165.57 346.64
death benefit Option A with optional BP rider 114.50 185.12 247.94 370.10 34.50 105.12 177.94 370.10
death benefit Option A with optional BPP rider 116.04 189.63 255.30 383.90 36.04 109.63 185.30 383.90
death benefit Option B with no additional riders 112.96 180.59 240.53 356.09 32.96 100.59 170.53 356.09
death benefit Option B with optional BP rider 115.53 188.13 252.85 379.32 35.53 108.13 182.85 379.32
death benefit Option B with optional BPP rider 117.06 192.64 260.18 392.98 37.06 112.64 190.18 392.98
--------------------------------------------------------------------------------
97 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
You would pay the following expenses on a $1,000 investment with selection of
the optional 8% Performance Credit Rider assuming a 5% annual return and ...
(continued)
no withdrawal or selection
full withdrawal at the of an annuity payout plan at the
end of each time period end of each time period
1 year 3 years 5 years 10 years 1 year 3 years 5 years 10 years
Goldman Sachs VIT Internet Tollkeeper Fund(SM)
death benefit Option A with no additional riders $110.91 $174.52 $230.58 $337.09 $30.91 $ 94.52 $160.58 $337.09
death benefit Option A with optional BP rider 113.48 182.10 243.01 360.79 33.48 102.10 173.01 360.79
death benefit Option A with optional BPP rider 115.01 186.62 250.40 374.72 35.01 106.62 180.40 374.72
death benefit Option B with no additional riders 111.94 177.56 235.57 346.64 31.94 97.56 165.57 346.64
death benefit Option B with optional BP rider 114.50 185.12 247.94 370.10 34.50 105.12 177.94 370.10
death benefit Option B with optional BPP rider 116.04 189.63 255.30 383.90 36.04 109.63 185.30 383.90
Janus Aspen Series Aggressive Growth Portfolio: Service Shares
death benefit Option A with no additional riders 107.53 164.46 213.98 304.89 27.53 84.46 143.98 304.89
death benefit Option A with optional BP rider 110.09 172.09 226.58 329.38 30.09 92.09 156.58 329.38
death benefit Option A with optional BPP rider 111.63 176.65 234.08 343.78 31.63 99.65 164.08 343.78
death benefit Option B with no additional riders 108.56 167.52 219.04 314.76 28.56 87.52 149.04 314.76
death benefit Option B with optional BP rider 111.12 175.13 231.58 339.01 31.12 95.13 161.58 339.01
death benefit Option B with optional BPP rider 112.66 179.68 239.05 353.27 32.66 99.68 169.05 353.27
Janus Aspen Series Global Technology Portfolio: Service Shares
death benefit Option A with no additional riders 107.74 165.08 215.00 306.87 27.74 85.08 145.00 306.87
death benefit Option A with optional BP rider 110.30 172.70 227.58 331.31 30.30 92.70 157.58 331.31
death benefit Option A with optional BPP rider 111.84 172.25 235.07 345.69 31.84 97.25 165.07 345.69
death benefit Option B with no additional riders 108.76 168.13 220.05 316.72 28.76 88.13 150.05 316.72
death benefit Option B with optional BP rider 111.32 175.74 323.58 340.92 31.32 95.74 162.58 340.92
death benefit Option B with optional BPP rider 112.86 180.28 240.04 355.15 32.86 100.28 170.04 355.15
Janus Aspen Series Growth Portfolio: Service Shares
death benefit Option A with no additional riders 107.53 164.46 213.98 304.89 27.53 84.46 143.98 304.89
death benefit Option A with optional BP rider 110.09 172.09 226.58 329.38 30.09 92.09 156.58 329.38
death benefit Option A with optional BPP rider 111.63 176.65 234.08 343.78 31.63 99.65 164.08 343.78
death benefit Option B with no additional riders 108.56 167.52 219.04 314.76 28.56 87.52 149.04 314.76
death benefit Option B with optional BP rider 111.12 175.13 231.58 339.01 31.12 95.13 161.58 339.01
death benefit Option B with optional BPP rider 112.66 179.68 239.05 353.27 32.66 99.68 169.05 353.27
Janus Aspen Series International Growth Portfolio: Service Shares
death benefit Option A with no additional riders 107.94 165.69 216.01 308.85 27.94 85.69 146.01 308.85
death benefit Option A with optional BP rider 110.50 173.31 228.58 333.24 30.50 93.31 158.58 333.24
death benefit Option A with optional BPP rider 112.04 177.86 236.07 347.59 32.04 97.86 166.07 347.59
death benefit Option B with no additional riders 108.97 168.74 221.05 318.68 28.97 88.74 151.05 318.68
death benefit Option B with optional BP rider 111.53 176.34 233.58 342.83 31.53 96.34 163.58 342.83
death benefit Option B with optional BPP rider 113.07 180.89 241.03 257.03 33.07 100.89 171.03 357.03
J.P. Morgan U.S. Disciplined Equity Portfolio
death benefit Option A with no additional riders 106.81 162.32 210.43 297.92 26.81 82.32 140.43 297.92
death benefit Option A with optional BP rider 109.38 169.96 223.07 322.58 29.38 89.96 153.07 322.58
death benefit Option A with optional BPP rider 110.91 174.52 230.58 337.09 30.91 94.52 160.58 337.09
death benefit Option B with no additional riders 107.84 165.38 215.50 307.86 27.84 85.38 145.50 307.86
death benefit Option B with optional BP rider 110.40 173.00 228.08 332.28 30.40 93.00 158.08 332.28
death benefit Option B with optional BPP rider 111.94 177.56 235.57 346.64 31.94 97.56 165.57 346.64
--------------------------------------------------------------------------------
98 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
You would pay the following expenses on a $1,000 investment with selection of
the optional 8% Performance Credit Rider assuming a 5% annual return and ...
(continued)
no withdrawal or selection
full withdrawal at the of an annuity payout plan at the
end of each time period end of each time period
1 year 3 years 5 years 10 years 1 year 3 years 5 years 10 years
Lazard Retirement Equity Portfolio
death benefit Option A with no additional riders $110.91 $174.52 $230.58 $337.09 $30.91 $ 94.52 $160.58 $337.09
death benefit Option A with optional BP rider 113.48 182.10 243.01 360.79 33.48 102.10 173.01 360.79
death benefit Option A with optional BPP rider 115.01 186.62 250.40 374.72 35.01 106.62 180.40 374.72
death benefit Option B with no additional riders 111.94 177.56 235.57 346.64 31.94 97.56 165.57 346.64
death benefit Option B with optional BP rider 114.50 185.12 247.94 370.10 34.50 105.12 177.94 370.10
death benefit Option B with optional BPP rider 116.04 189.63 255.30 383.90 36.04 109.63 185.30 383.90
Lazard Retirement International Equity Portfolio
death benefit Option A with no additional riders 110.91 174.52 230.58 337.09 30.91 94.52 160.58 337.09
death benefit Option A with optional BP rider 113.48 182.10 243.01 360.79 33.48 102.10 173.01 360.79
death benefit Option A with optional BPP rider 115.01 186.62 250.40 374.72 35.01 106.62 180.40 374.72
death benefit Option B with no additional riders 111.94 177.56 235.57 346.64 31.94 97.56 165.57 346.64
death benefit Option B with optional BP rider 114.50 185.12 247.94 370.10 34.50 105.12 177.94 370.10
death benefit Option B with optional BPP rider 116.04 189.63 255.30 383.90 36.04 109.63 185.30 383.90
MFS(R) New Discovery Series - Initial Class
death benefit Option A with no additional riders 108.97 168.74 221.05 318.68 28.97 88.74 151.05 318.68
death benefit Option A with optional BP rider 111.53 176.34 233.58 342.83 31.53 96.34 163.58 342.83
death benefit Option A with optional BPP rider 113.07 180.89 241.03 357.03 33.07 100.89 171.03 357.03
death benefit Option B with no additional riders 109.99 171.79 226.08 328.41 29.99 91.79 156.08 328.41
death benefit Option B with optional BP rider 112.55 179.38 238.55 352.32 32.55 99.38 168.55 352.32
death benefit Option B with optional BPP rider 114.09 183.91 245.97 366.39 34.09 103.91 175.97 366.39
MFS(R) Research Series - Initial Class
death benefit Option A with no additional riders 106.81 162.32 210.43 297.92 26.81 82.32 140.43 297.92
death benefit Option A with optional BP rider 109.38 169.96 223.07 322.58 29.38 89.96 153.07 322.58
death benefit Option A with optional BPP rider 110.91 174.52 230.58 337.09 30.91 94.52 160.58 337.09
death benefit Option B with no additional riders 107.84 165.38 215.50 307.86 27.84 85.38 145.50 307.86
death benefit Option B with optional BP rider 110.40 173.00 228.08 332.28 30.40 93.00 158.08 332.28
death benefit Option B with optional BPP rider 111.94 177.56 235.57 346.64 31.94 97.56 165.57 346.64
MFS(R) Utilities Series - Initial Class
death benefit Option A with no additional riders 107.43 164.16 213.48 303.89 27.43 84.16 143.48 303.89
death benefit Option A with optional BP rider 109.99 171.79 226.08 328.41 29.99 91.79 156.08 328.41
death benefit Option A with optional BPP rider 111.53 176.34 233.58 342.83 31.53 96.34 163.58 342.83
death benefit Option B with no additional riders 108.45 167.21 218.53 313.77 28.45 87.21 148.53 313.77
death benefit Option B with optional BP rider 111.02 174.83 231.08 338.05 31.02 94.83 161.08 338.05
death benefit Option B with optional BPP rider 112.55 179.38 238.55 352.32 32.55 99.38 168.55 352.32
Royce Micro-Cap Portfolio
death benefit Option A with no additional riders 111.94 177.56 235.57 346.64 31.94 97.56 165.57 346.64
death benefit Option A with optional BP rider 114.50 185.12 247.94 370.10 34.50 105.12 177.94 370.10
death benefit Option A with optional BPP rider 116.04 189.63 255.30 383.90 36.04 109.63 185.30 383.90
death benefit Option B with no additional riders 112.96 180.59 240.53 356.09 32.96 100.59 170.53 356.09
death benefit Option B with optional BP rider 115.53 188.13 252.85 379.32 35.53 108.13 182.85 379.32
death benefit Option B with optional BPP rider 117.06 192.64 260.18 392.98 37.06 112.64 190.18 392.98
--------------------------------------------------------------------------------
99 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
You would pay the following expenses on a $1,000 investment with selection of
the optional 8% Performance Credit Rider assuming a 5% annual return and ...
(continued)
no withdrawal or selection
full withdrawal at the of an annuity payout plan at the
end of each time period end of each time period
1 year 3 years 5 years 10 years 1 year 3 years 5 years 10 years
Royce Small-Cap Portfolio (previously Royce Premier Portfolio)
death benefit Option A with no additional riders $111.94 $177.56 $235.57 $346.64 $31.94 $ 97.56 $165.57 $346.64
death benefit Option A with optional BP rider 114.50 185.12 247.94 370.10 34.50 105.12 177.94 370.10
death benefit Option A with optional BPP rider 116.04 189.63 255.30 383.90 36.04 109.63 185.30 383.90
death benefit Option B with no additional riders 112.96 180.59 240.53 356.09 32.96 100.59 170.53 356.09
death benefit Option B with optional BP rider 115.53 188.13 252.85 379.32 35.53 108.13 182.85 379.32
death benefit Option B with optional BPP rider 117.06 192.64 260.18 392.98 37.06 112.64 190.18 392.98
Third Avenue Value Portfolio
death benefit Option A with no additional riders 111.43 176.04 233.08 341.88 31.43 96.04 163.08 341.88
death benefit Option A with optional BP rider 113.99 183.61 245.47 365.45 33.99 103.61 175.47 365.45
death benefit Option A with optional BPP rider 115.53 188.13 252.85 379.32 35.53 108.13 182.85 379.32
death benefit Option B with no additional riders 112.45 179.07 238.05 351.38 32.45 99.07 168.05 351.38
death benefit Option B with optional BP rider 115.01 186.62 250.40 374.72 35.01 106.62 180.40 374.72
death benefit Option B with optional BPP rider 116.55 191.14 257.74 388.45 36.55 111.14 187.74 388.45
Wanger International Small Cap
death benefit Option A with no additional riders 112.55 179.38 238.55 352.32 32.55 99.38 168.55 352.32
death benefit Option A with optional BP rider 115.12 186.93 250.89 375.64 35.12 106.93 180.89 375.64
death benefit Option A with optional BPP rider 116.65 191.44 258.23 389.36 36.65 111.44 188.23 389.36
death benefit Option B with no additional riders 113.58 182.40 243.50 361.72 33.58 102.40 173.50 361.72
death benefit Option B with optional BP rider 116.14 189.93 255.79 384.81 36.14 109.93 185.79 384.81
death benefit Option B with optional BPP rider 117.68 194.44 263.09 398.38 37.68 114.44 193.09 398.38
Wanger U.S. Small Cap
death benefit Option A with no additional riders 108.35 166.91 218.03 312.79 28.35 86.91 148.03 312.79
death benefit Option A with optional BP rider 110.91 174.52 230.58 337.09 30.91 94.52 160.58 337.09
death benefit Option A with optional BPP rider 112.45 179.07 238.05 351.38 32.45 99.07 168.05 351.38
death benefit Option B with no additional riders 109.38 169.96 223.07 322.58 29.38 89.96 153.07 322.58
death benefit Option B with optional BP rider 111.94 177.56 235.57 346.64 31.94 97.56 165.57 346.64
death benefit Option B with optional BPP rider 113.48 182.10 243.01 360.79 33.48 102.10 173.01 360.79
Wells Fargo VT Equity Income Fund
death benefit Option A with no additional riders 108.35 166.91 218.03 312.79 28.35 86.91 148.03 312.79
death benefit Option A with optional BP rider 110.91 174.52 230.58 337.09 30.91 94.52 160.58 337.09
death benefit Option A with optional BPP rider 112.45 179.07 238.05 351.38 32.45 99.07 168.05 351.38
death benefit Option B with no additional riders 109.38 169.96 223.07 322.58 29.38 89.96 153.07 322.58
death benefit Option B with optional BP rider 111.94 177.56 235.57 346.64 31.94 97.56 165.57 346.64
death benefit Option B with optional BPP rider 113.48 182.10 243.01 360.79 33.48 102.10 173.01 360.79
* In these examples, the $30 contract administrative charge is approximated as
a 0.016% charge based on our average contract size. Premium taxes imposed by
some state and local governments are not reflected in these tables. We
entered into certain arrangements under which we are compensated by the
funds' advisers and/or distributors for the administrative services we
provide to the funds.
You should not consider these examples as representations of past or future
expenses. Actual expenses may be more or less than those shown.
--------------------------------------------------------------------------------
100 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
Appendix B: 8% Performance Credit Rider Adjusted Partial Withdrawal
STEP ONE:
For each withdrawal made within the current calculation period we calculate the
remaining purchase payment amount (RPA):
RPA = Total purchase payments and purchase payment credits made prior to the
partial withdrawal in question minus the RPA adjusted partial withdrawals
for all previous partial withdrawals.
NOTE: In our calculations for the first partial withdrawal, the RPA will simply
be the total purchase payments and purchase payment credits as there are
no previous withdrawals to subtract.
RPA adjusted partial withdrawals = PW x RP
-------
CV
PW = the partial withdrawal including any applicable withdrawal charge or
MVA.
CV = the contract value on the date of (but prior to) the partial
withdrawal.
RPA = the remaining premium amount on the date of (but prior to) the
partial withdrawal.
STEP TWO:
For each withdrawal made within the current calculation period we calculate the
eligible purchase payment amount (EPA):
EPA = Total purchase payments and purchase payment credits made prior to the
partial withdrawal in question AND prior to the five year exclusion
period minus EPA adjusted partial withdrawals for all previous partial
withdrawals.
NOTE: In our calculations for the first partial withdrawal, the EPA will simply
be the total purchase payments and purchase payment credits made before
the five year exclusion period as there are no previous withdrawals to
subtract. Also note that EPA/RPA will always be less than or equal to
one.
EPA adjusted partial withdrawals = PW x EPA EPA
-------- x ---
CV RPA
PW = the partial withdrawal including any applicable withdrawal charge or
MVA.
CV = the contract value on the date of (but prior to) the partial
withdrawal.
EPA = the eligible premium amount on the date of (but prior to) the partial
withdrawal.
RPA = the remaining premium amount on the date of (but prior to) the
partial withdrawal.
STEP THREE:
The total PCRPW (Performance Credit Rider adjusted partial withdrawal) amount is
the sum of each EPA adjusted partial withdrawal.
Example: Calculation at the end of the ten-year period assuming the contract is
eligible for the PCR credit (i.e., your contract value is less than target
value). This example does not include purchase payment credits.
o On Jan. 1, 2001 you purchase the contract with a purchase payment of
$100,000.
o On Jan. 1, 2007 you make an additional purchase payment in the amount of
$100,000.
o Contract values before any partial withdrawals are shown below.
o On Jan. 1, 2004 you make a partial withdrawal in the amount of $10,000.
o On Jan. 1, 2009 you make another partial withdrawal in the amount of $10,000.
NOTE: The shaded portion of the table indicates the five year exclusion period.
Date Total Purchase Payments Contract Value
Jan. 1, 2001 $100,000 $100,000
Jan. 1, 2002 100,000 110,000
Jan. 1, 2003 100,000 115,000
Jan. 1, 2004 100,000 120,000
Jan. 1, 2005 100,000 115,000
Jan. 1, 2006 100,000 120,000
(shaded portion from here down)
Jan. 1, 2007 200,000 225,000
Jan. 1, 2008 200,000 230,000
Jan. 1, 2009 200,000 235,000
Jan. 1, 2010 200,000 230,000
Jan. 1, 2011 200,000 235,000
--------------------------------------------------------------------------------
101 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
Step one: For each withdrawal made within the current calculation period we
calculate the RPA:
For the first partial withdrawal on Jan. 1, 2004:
RPA before the partial withdrawal = RPA adjusted partial withdrawal =
total purchase payments made prior to the $10,000 x $100,000
partial withdrawal minus the RPA adjusted ------------------ = $8,333
partial withdrawals for all previous $120,000
partial withdrawals =
$100,000 - 0 = $100,000
For the second partial withdrawal on Jan. 1, 2009:
RPA before the partial withdrawal = RPA adjusted partial withdrawal =
total purchase payments made prior to the $10,000 x $191,667
partial withdrawal minus the RPA adjusted ------------------ = $8,156
partial withdrawals for all previous $235,000
partial withdrawals =
$200,000 - $8,333 = $191,667
Step two: For each withdrawal made within the current calculation period, we
calculate the EPA:
For the first partial withdrawal on Jan. 1, 2004:
EPA before the partial withdrawal = EPA adjusted partial withdrawal =
total purchase payments made prior to the $10,000 x $100,000 x $100,000
partial withdrawal AND the five-year ------------------ -------- = $8,156
exclusion period minus the EPA adjusted $120,000 $100,000
partial withdrawals for all previous
partial withdrawals =
$100,000 - 0 = $100,000
For the second partial withdrawal on Jan. 1, 2009:
EPA before the partial withdrawal = EPA adjusted partial withdrawal =
total purchase payments made prior to the $10,000 x $91,844 x $91,844
partial withdrawal AND the five-year ----------------- -------- = $1,873
exclusion period minus the EPA adjusted $235,000 $191,667
partial withdrawals for all previous
partial withdrawals =
$100,000 - $8,156 = $91,844
Step three: The total PCRPW amount is the sum of each EPA adjusted partial
withdrawal.
PCRPW amount = $8,156 + $1,873 = $10,029
--------------------------------------------------------------------------------
102 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
Table of Contents of the Statement of Additional Information
Performance Information p. 3
Calculating Annuity Payouts p. 21
Rating Agencies p. 22
Principal Underwriter p. 22
Independent Auditors p. 23
Financial Statements
--------------------------------------------------------------------------------
103 AMERICAN EXPRESS SIGNATURE ONE VARIABLE ANNUITY -- PROSPECTUS
American Enterprise Life Insurance Company (logo)
829 AXP Financial Center AMERICAN
Minneapolis, MN 55474 EXPRESS
(800) 333-3437
240192 F (11/01)
PART II.
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13. Other Expenses of Issuance and Distribution.
The expenses of the issuance and distribution of the interests in the
Guarantee Period Accounts of the Contract to be registered, other than
commissions on sales of the Contracts, are to be borne by the
registrant.
Item 14. Indemnification
The By-Laws of the depositor provide that the Corporation shall have
the power to indemnify a director, officer, agent or employee of the
Corporation pursuant to the provisions of applicable statues or
pursuant to contract.
The Corporation may purchase and maintain insurance on behalf of any
director, officer, agent or employee of the Corporation against any
liability asserted against or incurred by the director, officer,
agent or employee in such capacity or arising out of the director's,
officer's, agent's or employee's status as such, whether or not the
Corporation would have the power to indemnify the director, officer,
agent or employee against such liability under the provisions of
applicable law.
The By-Laws of the depositor provide that it shall indemnify a
director, officer, agent or employee of the depositor pursuant to the
provisions of applicable statutes or pursuant to contract.
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.
Item 15. Recent Sales of Unregistered Securities
None
Item 16. Exhibits and Financial Statement Schedules
(a) Exhibits
1. Not applicable.
2. Not applicable.
3.1 Amendment and Restatement of Articles of Incorporation of American
Enterprise Life dated July 29, 1986, filed electronically as Exhibit 6.1
to American Enterprise Life Personal Portfolio Plus 2's Initial
Registration Statement No. 33-54471, filed on or about July 5, 1994, is
incorporated by reference.
3.2 Amended By-laws of American Enterprise Life, filed electronically as
Exhibit 6.2 to American Enterprise Life Personal Portfolio Plus 2's
Initial Registration Statement No. 33-54471, filed on or about July 5,
1994, is incorporated by reference.
3.3 Consent in writing in lieu of a meeting of the Board of Directors of
American Enterprise Life Insurance Company establishing the American
Enterprise MVA Account dated Aug. 18, 1999, filed electronically as
Exhibit 3.3 to Registrant's Initial Registration Statement No. 333-86297,
filed on or about Aug. 31, 1999, is incorporated by reference.
4.1 Form of Deferred Annuity Contract for the American Express(R)
Signature One Variable Annuity (form 240180), filed electronically as
Exhibit 4.1 to American Enterprise Variable Annuity Account's
Post-Effective Amendment No. 1 to Registration Statement No. 333-85567
on form N-4, filed on or about Dec. 7, 1999, is incorporated by
reference.
4.2 Form of Deferred Annuity Contract for the Wells Fargo Advantage(SM)
Variable Annuity (form 44209), filed electronically as Exhibit 4.1 to
American Enterprise Variable Annuity Account's Pre-Effective Amendment
No. 1 to Registration Statement No. 333-85567 on form N-4, filed on or
about Nov. 4, 1999, is incorporated by reference.
4.3 Form of Deferred Annuity Contract for the Wells Fargo Advantage(SM)
Builder Variable Annuity (form 44210), filed electronically as Exhibit
4.2 to American Enterprise Variable Annuity Account's Pre-Effective
Amendment No. 1 to Registration Statement No. 333-85567 on form N-4,
filed on or about Nov. 4, 1999, is incorporated by reference.
4.4 Form of Deferred Annuity Contract for the American Express New
Solutions(SM) Variable Annuity (form 240343) filed electronically as
Exhibit 4.1 to American Enterprise Variable Annuity Account's
Pre-Effective Amendment No. 1 to Registration Statement No. 333-92297
on Form N-4, filed on or about Feb. 11, 2000, is incorporated by
reference.
4.5 Form of Deferred Annuity Contract for American Express Signature
Variable Annuity (R) (form 43431) filed electronically as Exhibit 4.1 to
American Enterprise Variable Annuity Account's Pre-Effective Amendment
No. 1 to Registration Statement No. 333-74865 on form N-4, filed on or
about Aug. 4, 1999, is incorporated by reference.
4.6 Form of Deferred Annuity Contract for the American Express(R)
Galaxy Premier Variable Annuity and the American Express Pinnacle
Variable Annuity(SM) (form 44170) filed electronically as Exhibit 4.1
to American Enterprise Variable Annuity Account's Pre-Effective
Amendment No. 1 to Registration Statement No. 333-82149, filed on or
about Sept. 21, 1999, is incorporated by reference.
4.7 Form of Enhanced Death Benefit Rider for the Wells Fargo Advantage(SM)
Variable Annuity and the Wells Fargo Advantage(SM) Builder Variable
Annuity (form 44213), filed electronically as Exhibit 4.3 to American
Enterprise Variable Annuity Account's Pre-Effective Amendment No. 1 to
Registration Statement No. 333-85567 on form N-4, filed on or about Nov.
4, 1999, is incorporated by reference.
4.8 Form of Guaranteed Minimum Income Benefit Rider for the American Express
Signature Variable Annuity (R) and the American Express(R) Signature One
Variable Annuity (6% Accumulation Benefit Base) (form 240186), filed
electronically as Exhibit 4.2 to American Enterprise Variable Annuity
Account's Post-Effective Amendment No. 3 to Registration Statement No.
333-85567 on form N-4, filed on or about Feb. 11, 2000, is incorporated
by reference.
4.9 Form of Guaranteed Minimum Income Benefit Rider for the American Express
New Solutions(SM) Variable Annuity (form 240350), filed electronically as
Exhibit 4.4 to American Enterprise Variable Annuity Account's
Pre-Effective Amendment No. 1 to Registration Statement No. 333-92297 on
Form N-4, filed on or about Feb. 11, 2000, is incorporated by reference.
4.10 Form of Guaranteed Minimum Income Benefit Rider for the Wells Fargo
Advantage(SM) Variable Annuity and the Wells Fargo Advantage(SM) Builder
Variable Annuity (form 44214), filed electronically as Exhibit 4.4 to
American Enterprise Variable Annuity Account's Pre-Effective Amendment
No. 1 to Registration Statement No. 333-85567 on form N-4, filed on or
about Nov. 4, 1999, is incorporated by reference.
4.11 Form of 5% Accumulation Death Benefit Rider for the American Express
Signature Variable Annuity(R) and the American Express Signature One
Variable Annuity(SM) (form 240183), filed electronically as Exhibit 4.3
to American Enterprise Variable Annuity Account's Post-Effective
Amendment No. 1 to Registration Statement No. 333-85567 on form N-4,
filed on or about Dec. 8, 1999, is incorporated by reference.
4.12 Form of Value Option Return of Purchase Payment Death Benefit Rider
for the American Express (R) Signature One Variable Annuity (form
240182), filed electronically as Exhibit 4.11 to Registrant's
Post-Effective Amendment No. 6 to Registration Statement No. 333-86297
on form S-1, filed on or about May 1, 2000, is incorporated by
reference.
4.13 Form of 8% Performance Credit Rider for the American Express Signature
Variable Annuity(R) and the American Express(R) Signature One Variable
Annuity (form 240187), filed electronically as Exhibit 4.4 to
American Enterprise Variable Annuity Account's Post-Effective Amendment
No. 2 to Registration Statement No. 333-85567 on form N-4, filed on or
about Dec. 30, 1999, is incorporated by reference.
4.14 Form of Performance Credit Rider for the American Express New
Solutions(SM) Variable Annuity (form 240349), filed electronically as
Exhibit 4.2 to American Enterprise Variable Annuity Account's
Pre-Effective Amendment No. 1 to Registration Statement No. 333-92297
on Form N-4, filed on or about Feb. 11, 2000, is incorporated by
reference.
4.15 Form of Roth IRA Endorsement for the Wells Fargo Advantage(SM)
Variable Annuity, the Wells Fargo Advantage(SM) Builder Variable
Annuity, the American Express Signature Variable Annuity(R), the
American Express(R) Signature One Variable Annuity, the American
Express New Solutions (SM) Variable Annuity, the American Express(R)
Galaxy Premier Variable Annuity, and the American Express Pinnacle
Variable Annuity(SM) (form 43094), filed electronically as Exhibit 4.2
to American Enterprise Variable Annuity Account's Pre-Effective
Amendment No. 1 to Registration Statement No. 333-74865 on form N-4,
filed on or about Aug. 4, 1999, incorporated by reference.
4.16 Form of SEP-IRA for the Wells Fargo Advantage(SM) Variable Annuity,
the Wells Fargo Advantage(SM) Builder Variable Annuity, the American
Express (R) Signature One Variable Annuity, the American Express(R)
Galaxy Premier Variable Annuity, and the American Express Pinnacle
Variable Annuity(SM) (form 43412), filed electronically as Exhibit 4.3
to American Enterprise Variable Annuity Account's Pre-Effective
Amendment No. 1 to Registration Statement No. 333-72777 on form N-4,
filed on or about July 8, 1999, is incorporated by reference.
4.17 Form of SEP-IRA for the American Express Signature Variable Annuity(R)
and the American Express New Solutions(SM) Variable Annuity (form 43433)
filed electronically as Exhibit 4.3 to American Enterprise Variable
Annuity Account's Pre-Effective Amendment No. 1 to Registration Statement
No. 333-74865 on form N-4, filed on or about Aug. 4, 1999, is
incorporated by reference.
4.18 Form of Disability Waiver of Withdrawal Charges Rider for the Wells Fargo
Advantage(SM) Variable Annuity and the Wells Fargo Advantage(SM) Builder
Variable Annuity (form 44215), filed electronically as Exhibit 4.5 to
American Enterprise Variable Annuity Account's Pre-Effective Amendment
No. 1 to Registration Statement No. 333-85567 on form N-4, filed on or
about Nov. 4, 1999, is incorporated by reference.
4.19 Form of Unemployment Waiver of Withdrawal Charges Rider for the Wells
Fargo Advantage(SM) Variable Annuity and the Wells Fargo Advantage(SM)
Builder Variable Annuity (form 44216), to American Enterprise Variable
Annuity Account's Pre-Effective Amendment No. 1 to Registration Statement
No. 333-85567 on form N-4, filed on or about Nov. 4, 1999, is
incorporated by reference.
4.20 Form of TSA Endorsement for the Wells Fargo Advantage(SM) Variable
Annuity, the Wells Fargo Advantage(SM) Builder Variable Annuity and the
American Express Signature Variable Annuity(R) (form 43413), filed
electronically as Exhibit 4.4 to American Enterprise Variable Annuity
Account's Pre-Effective Amendment No. 1 to Registration Statement No.
333-72777 on form N-4, filed on or about July 8, 1999, is incorporated by
reference.
4.21 Form of Benefit Protector(SM) Death Benefit Rider for the Wells Fargo
Advantage(SM) Variable Annuity, the Wells Fargo Advantage(SM) Builder
Variable Annuity, the American Express New Solutions (SM) Variable
Annuity, the American Express(R) Galaxy Premier Variable Annuity, the
American Express Pinnacle Variable Annuity(SM), and the American
Express(R) Signature One Variable Annuity (form 271155), filed
electronically as Exhibit 4.15 to American Znterprise Variable Annuity
Account's Post-Effective Amendment No. 6 to Registration Statement No.
333-85567 on form N-4, filed on or about March 1, 2001, is
incorporated by reference.
4.22 Form of Benefit Protector(SM) Plus Death Benefit Rider for the Wells
Fargo Advantage(SM) Variable Annuity, the Wells Fargo Advantage(SM)
Builder Variable Annuity, the American Express New Solutions (SM)
Variable Annuity, the American Express(R) Galaxy Premier Variable
Annuity, the American Express Pinnacle Variable Annuity(SM), and the
American Express(R) Signature One Variable Annuity (form 271156),
filed electronically as Exhibit 4.16 to American Enterprise Variable
Annuity Account's Post-Effective Amendment No. 6 to Registration
Statement No. 333-85567 on form N-4, filed on or about March 1, 2001,
is incorporated by reference.
4.23 Form of Maximum Anniversary Value Death Benefit Rider for the American
Express New Solutions (SM) Variable Annuity (form 240346), filed
electronically as Exhibit 4.3 to American Enterprise Variable Annuity
Account's Pre-Effective Amendment No. 1 to Registration Statement No.
333-92297, filed on or about February 11, 2000, is incorporated by
reference.
5. Opinion of Counsel and consent to its use as to the securities being
registered for the American Express(R) Signature One Variable Annuity,
filed electronically herewith.
8. Not applicable.
9. Not applicable.
10. Not applicable.
11. Not applicable.
12. Not applicable.
15. Not applicable.
16. Not applicable.
21. Not applicable.
22. Not applicable.
23. Consent of Independent Auditors, filed electronically herewith.
24. Power of Attorney to sign this Registration Statement, dated April 25,
2001, filed electronically as Exhibit 24 to Registrant's Post-Effective
Amendment No. 7 to Registration Statement No. 333-86297 on form S-1,
filed on or about April 26, 2001, is incorporated by reference.
25. Not applicable.
26. Not applicable.
27. None.
Item 17. Undertakings
Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set
forth in the registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement.
(iv) Registrant represents that it is relying upon the no-action
assurance given to the American Council of Life Insurance (pub.
Avail. Nov. 28, 1998). Further, Registrant represents that it has
complied with the provisions of paragraphs (1) - (4) of that
no-action letter.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of
the offering.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, American Enterprise
Life Insurance Company, on behalf of the Registrant, has duly caused this
Registration Statement to be signed on its behalf by the undersigned, duly
authorized in the City of Minneapolis, and State of Minnesota on the 29th day of
October, 2001.
American Enterprise MVA Account
(Registrant)
By American Enterprise Life Insurance Company
By /s/ Carol A. Holton*
--------------------
Carol A. Holton
President and Chief Executive Officer
As required by the Securities Act of 1933, this Registration Statement has been
signed by the following persons in the capacities indicated on the 29th day of
October, 2001.
Signature Title
/s/ Gumer C. Alvero* Director, Chairman of the Board and
-------------------- Executive Vice President - Annuities
Gumer C. Alvero
/s/ Carol A. Holton* Director, Vice President and Chief
--------------------- Executive Officer
Carol A. Holton
Paul S. Mannweiler Director
/s/ Teresa J. Rasmussen* Director, Vice President, General
------------------------- Counsel and Secretary
Teresa J. Rasmussen
/s/ Stuart A. Sedlacek* Executive Vice President
------------------------
Stuart A. Sedlacek
/s/ Philip C. Wentzel* Vice President and Controller
-----------------------
Philip C. Wentzel
/s/ David L. Yowan* Vice President and Treasurer
--------------------
David L. Yowan
*Signed pursuant to Power of Attorney, dated April 25, 2001, filed
electronically as Exhibit 24 to Registrant's Post-Effective Amendment No. 7 to
Registration Statement No. 333-86297 on form S-1, filed on or about April 26,
2001, and incorporated by reference.
By:/s/ Mary Ellyn Minenko
----------------------
Mary Ellyn Minenko