Section 7: NY Commission and production schedules

Variable Second-to-Die Life Insurance (V2D)

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Persistency EAP Sales
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Standard Qual. Calc. Benefit Plan
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87% o o o
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Variable(s) Commission Production
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PERCENT OF PERCENT OF PREMIUMS PAID
PREMIUM UP TO PREMIUM PAID IN IN EXCESS OF
CATEGORY TARGET EXCESS OF TARGET TARGET X FACTOR TARGET X FACTOR
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All ages 50% 2.0% 28 1.1
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Variable(s) Client Service Commissions
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YEAR COMMISSION PER $1,000 MARKET VALUE OF THE
AVERAGE QUARTERLY CASH VALUE*(LESS LOANS)
--------------------------------------------------------------------------------
PROPRIETARY ASSETS NONPROPRIETARY ASSETS
- --------------------------- ---------------------------------------- ---------------------------------------
1+ $1.25 $.75**
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* Average quarterly cash value (less loans) is calculated by taking the cash
values from the previous and current quarter's consolidated statement and
dividing by two.
** Paid quarterly (i.e., $.3125 per $1,000 each quarter for proprietary assets
and $.1875 per $1,000 for nonproprietary assets). Quarterly service fee is
paid when the quarterly client Consolidated Statement is printed.

New Business Commissions

Credited to the selling advisor(s) with weighted production up to the target
premium. Credited to the servicing advisor(s) on payments made in excess of the
target premium.

Client Service Commissions

Client Service Commissions are credited to the servicing advisor(s) on the
market value of the cash value.

Examples:
a. If the target premium is $8,000 and the entire amount has been paid,
commissions and weighted production would be calculated as follows:

COMMISSIONS PRODUCTION
- -----------------------------------------------------------
$8,000 X 50% = $4,000 $8,000 X 28 = 224,000

b. If the target premium is $8,000 and a $10,000 premium is applied,
commissions and weighted production would be calculated as follows:

COMMISSIONS PRODUCTION
- -------------------------------------------------------------------------
Target: $8,000 x 50% = $4,000 $8,000 x 28 = 224,000
Excess: $2,000 x 2% = 40 $2,000 x 1.1 = 2,200
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$4,040 226,200

c. If the selling advisor in Examples a. and b. is a second-year advisor in
his or her 45th service period, Supplemental Commissions would be
calculated as follows (assumes the advisor is meeting PVS and FPR):

SUPPLEMENTAL COMMISSIONS
- --------------------------------------------------------------------------------
$4,040 (commissions earned) x 15% (Supplemental rate) = $606

TOTAL COMMISSIONS EARNED
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$4,040 (commissions earned) + $606 (Supplemental Commissions = $4,646

Guidelines

1. Annualization

a. What are the criteria for annualization?

Commissions will annualize if accounts are submitted with money and set up with
a bank authorization (BA), group billing, special payment option (SPO) from Cash
Management or Tax-Free Money Fund, military allotment (MA) or payroll deduction.
Annualized commissions are not credited on payroll deductions for American
Express financial advisors or corporate office employees.

b. How is the compensation base determined?

Annualized commissions are based on the lesser of the target premium or the
systematic payment times frequency up to a maximum of $1,500. (Exception: If a
group bill is set up as a percent of the client's total group bill, annualized
commissions will be calculated based on the lesser of the target premium or
$1,500.)

c. When does it annualize?

Annualized commissions will be credited when the policy is submitted with money
and the systematic billing is set up. (Exceptions: MAs will annualize without
submitted money. SPOs are set up when the policy is issued; therefore,
annualized commissions are not credited until the policy is issued.) Commissions
will also annualize up to the target premium if the systematic billing is set up
in the first contract year before the target premium is met.

d. What is the maximum annualized compensation?

Annualized commissions are limited to $1,500 per account.

e. What causes adjustment?

If payments decrease, the annualized commissions will be adjusted. If payments
increase, the time required to reduce the amount of unearned annualized
commissions will decrease. If the systematic payment is stopped, all unearned
annualized commissions will be reversed. If the policy lapses or is surrendered,
the advisor will lose all unearned annualized commissions and weighted
production.

2. Compensation timing

Compensation is credited after business is processed.

New Business:
Up to two business days for new business entries
Two to 60 business days for underwriting, depending on underwriting
requirements Up to five business days after underwriting to issue the
policy

1035 exchanges:
60 business days or until the money is received from the other company

Policy changes:
Fourteen calendar days or up to 60 calendar days, depending on underwriting
requirements. IDS Life credits compensation only after the policy change is
completed and money is applied to the account.

Surrenders:
Four business days

Death claims:
Seven calendar days

IDS Life of New York will pay a maximum of $1,500 in commissions on submitted
business. If additional commissions are due, they will be credited once the
policy is in force. The maximum annualized commission of $1,500 still applies.
If additional commissions are due, they will be credited once the $1,500 in
annualized commissions is earned and then subsequent commissions are credited as
each premium is applied to the account. (Exception: Submitted business
commissions will not be paid on personal purchases and sales to relatives;
however, full compensation will be credited once the policy is in force.)

IDS Life of New York credits compensation on permanent ratings only after the
policy is in force. The company does not credit compensation on temporary
ratings or aviation riders.

If the client is 76 years old or older, the face amount of policy is more than
$1 million, or if it is COD business, commissions and weighted production will
not be credited until the policy is issued. The weighted production is effective
on the date the policy is received in the corporate office.

Weighted production on the initial sale is effective on the date the policy is
received in the corporate office. For payments in excess of the target premium,
weighted production is effective on the accounting date of the increase or older
addition, it is not backdated to the date the corporate office received the
policy change.

3. Exit/purchase transactions

Exit/purchase transaction rules apply only when IDS Life or IDS Life of New York
traditional life, Universal Life, Variable Second-to-Die Life, Variable
Universal Life or LP+ policy is surrendered or lapses and a Variable
Second-to-Die Life policy is purchased. When this occurs and the final premium
due date of the lapsed or surrendered policy is six months before or one year
after the corporate office receipt date of the new policy, compensation will be
adjusted.

If the lapsed or surrendered policy is not another Variable Universal Life or
Variable Second-to Die Life policy, the following rules apply:

New policies that result in the same amount of coverage as the lapsed or
surrendered policy will pay a conservation fee without weighted production. The
amount of the conservation will be an amount equal to 25% of normal commissions.

Full commission and weighed production will be paid on any increased coverage
portion of the new policy.

If the lapsed or surrendered policy is another Variable Second-to Die Life
policy or Variable Universal Life, the following rules apply:

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Lapsed or surrendered policy base Conservation fee amount
plan-specified amount
- --------------------------------------- ----------------------------------------
$ 0 - 99,999 $100
100,000 - 349,999 200
350,000 + 400
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Full commission and weighted production will be paid on any increased coverage
portion of the new policy.

Cash-value rollover premium dollars from life insurance policies to Variable
Second-to Die Life policies pay compensation. Full compensation will only be
paid on the rollover dollars used to fund the portion of the target premium or
MFYAP associated with the increased portion of coverage. No compensation is paid
on rollover dollars used to fulfill the target premium or MFYAP associated with
the even coverage portion of the new policy. Compensation is not credited on
loans or partial surrenders used to pay premiums on another policy. No excess
commissions are paid on cash-value rollovers.

4. Licenses required

An advisor must have a life insurance license for the state in which the
application was signed to receive new business compensation. For Variable
Second-to-Die Life, an advisor must also have a Series 6 or 7 license. In
addition, some, but not all states require a Variable Life Insurance license and
either a Variable Annuity license or a Variable Contracts license. After the
account is open, the advisor must hold the appropriate license(s) in the
client's resident state to receive compensation. For IDS Life of New York
products, the advisor must also hold the appropriate New York licenses.

5. Persistency

The persistency standard for Variable Second-to-Die Life products sold is 87%.

6. Advisor/relative purchases

No special rates are available for advisors or their relatives on these
products; therefore, full compensation is credited on these sales only after the
policy is in force. Annualized commissions will be credited when the policy is
issued if the account is set up on a systematic payment arrangement, except for
payroll deductions for American Express financial advisors and corporate office
employees.

7. Reversals

On applications that are withdrawn, declined or not taken, or if all
requirements are not received in the corporate office within the allotted time,
commissions and weighted production will be reversed. IDS Life of New York does
not credit further compensation until the policy is re-opened, all requirements
are received in the corporate office and the policy is placed in force. If the
policy lapses or is surrendered, the advisor will lose any unearned commissions,
all target premium production up to 26 months from the sale date, and all add-on
production for the previous 14 months. Ten-day free looks and cancellations will
result in a full reversal of both commissions and weighted production . In the
case of a death claim, the advisor will lose all unearned annualized
commissions. Weighted production will be reversed as of the sale effective date.

8. Supplemental Commissions

For first-, second- and third-year advisors, Supplemental Commissions will be
credited at the following rates:

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Service year Service period Highly fronted, some deferred*
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1 1-26 35%
2 27-39 25
2 40-52 15
3 53-78 10
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* These rates are a percentage of New Business Commissions

Supplemental Commissions are credited based on the rate in effect at the time
the business was submitted and the first payment was received. For instance, if
you submit business while you are a first-year advisor but it is not issued
until you reach your second year, you will received Supplemental Commissions at
the first-year rate.

Supplemental Commissions are credited when the policy is in force; they are not
credited on submitted business. For more information about Supplemental
Commissions, refer to Section 2, Compensation plan descriptions.