-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, RfDXVS4h08x4p1F2nPPT7AzDcTaLBPk0SIqHxgZcMpAbARnkE5hFNrzRL6nJZKfq oi1IyX2A2WV/GhTiuJe5AA== 0000945094-00-000010.txt : 20000202 0000945094-00-000010.hdr.sgml : 20000202 ACCESSION NUMBER: 0000945094-00-000010 CONFORMED SUBMISSION TYPE: N-4 PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 20000114 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ALLSTATE LIFE OF NEW YORK SEPARATE ACCOUNT A CENTRAL INDEX KEY: 0000948255 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 362608394 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-4 SEC ACT: SEC FILE NUMBER: 333-94785 FILM NUMBER: 508219 BUSINESS ADDRESS: STREET 1: ONE ALLSTATE DRIVE STREET 2: P O BOX 9095 CITY: FARMINGTON STATE: NY ZIP: 11738 BUSINESS PHONE: 708-402-7383 MAIL ADDRESS: STREET 1: 3100 SANDERS ROAD STREET 2: J5B CITY: NORTHBROOK STATE: IL ZIP: 60062 N-4 1 ALLSTATE LIFE OF NEW YORK HSBC AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON January 14, 2000 - ----------------------------------------------------------------------------- FILE NOS. _________ 811-07467 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM N-4 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /X/ POST-EFFECTIVE AMENDMENT NO. AND/OR REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 AMENDMENT NO. 9 /X/ ALLSTATE LIFE OF NEW YORK SEPARATE ACCOUNT A (Exact Name of Registrant) ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK (Name of Depositor) ONE ALLSTATE DRIVE P.O. BOX 9095 FARMINGVILLE, NEW YORK 11738 516/451-5300 (Address and Telephone Number of Depositor's Principal Offices) MICHAEL J. VELOTTA VICE PRESIDENT, SECRETARY AND GENERAL COUNSEL ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK 3100 SANDERS ROAD NORTHBROOK, ILLINOIS 60062 847-402-2400 (Name, Address and Telephone Number of Agent for Service) COPIES TO: RICHARD T. CHOI, ESQUIRE TERRY R. YOUNG, ESQUIRE FREEDMAN, LEVY, KROLL & SIMONDS ALLSTATE LIFE FINANCIAL SERVICES, INC. 1050 CONNECTICUT AVENUE, N.W. 3100 SANDERS ROAD SUITE 825 NORTHBROOK, IL 60062 WASHINGTON, D.C. 20036-5366 Approximate date of proposed public offering: As soon as practicable after the effective date of the registration statement. The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration shall become effective on such date as the Commission, acting pursuant to Section 8(a), may determine. ALLSTATE CUSTOM PORTFOLIO VARIABLE ANNUITY Allstate Life Insurance Company Prospectus dated _____, 2000 of New York P.O. Box 94038, Palatine, IL 60094-4038 Telephone Number: 1-800-692-4682 Allstate Life Insurance Company of New York ("Allstate New York") is offering the Allstate Custom Portfolio Variable Annuity, a group flexible premium deferred variable annuity contract ("Contract"). This prospectus contains information about the Contract that you should know before investing. Please keep it for future reference. The Contract currently offers 29 investment alternatives ("investment alternatives"). The investment alternatives include the fixed account ("Fixed Account") and 28 variable sub-accounts ("Variable Sub-Accounts") of the Allstate Life of New York Separate Account A ("Variable Account"). Each Variable Sub-Account invests exclusively in shares of one of the following mutual fund portfolios ("Portfolios"):
AIM Variable Insurance Funds, Inc.: Oppenheimer Variable Account Funds: AIM V.I. Capital Appreciation Fund Oppenheimer VA Main Street Growth & Income Fund AIM V.I. Balanced Fund Oppenheimer VA Aggressive Growth Fund AIM V.I. Growth Fund Oppenheimer VA Strategic Bond Fund AIM V.I. International Equity Fund The Dreyfus Socially Responsible Growth Fund, Inc.: AIM V.I. Value Fund Dreyfus Socially Responsible Growth Fund AIM V.I. Government Securities Fund Dreyfus Stock Index Fund: AIM V.I. High Yield Fund Dreyfus Stock Index Fund Fidelity Variable Insurance Products Fund (VIP): Dreyfus Variable Investment Fund: Fidelity VIP Equity Income Portfolio Dreyfus VI Capital Appreciation Portfolio Fidelity VIP Overseas Portfolio Wells Fargo Variable Trust: Fidelity VIP Growth Portfolio Wells Fargo VT Equity Income Fund Fidelity Variable Insurance Products Fund II (VIP II): Wells Fargo VT Asset Allocation Fund Fidelity VIP II Contrafund Portfolio Wells Fargo VT Growth Fund Fidelity Variable Insurance Products Fund III (VIP Delaware Group Premium Fund, Inc.: III): Fidelity VIP III Growth Opportunities Portfolio Delaware GP Small Cap Value Series Templeton Variable Products Series Fund: Delaware GP Trend Series Templeton Asset Allocation Fund - Class 2 HSBC Variable Insurance Funds: Templeton International Fund - Class 2 HSBC VI Fixed Income Fund HSBC VI Growth & Income Fund HSBC VI Cash Management Fund
We (Allstate New York) have filed a Statement of Additional Information, dated _______, 2000, with the Securities and Exchange Commission ("SEC"). It contains more information about the Contract and is incorporated herein by reference, which means it is legally a part of this prospectus. Its table of contents appears on page __ of this prospectus. For a free copy, please write or call us at the address or telephone number above, or go to the SEC's Web site (http://www.sec.gov). You can find other information and documents about us, including documents that are legally part of this prospectus, at the SEC's Web site. The Securities and Exchange Commission has not approved or disapproved the securities described in this prospectus, nor has it passed on the accuracy or the adequacy of this prospectus. Anyone who tells you otherwise is committing a federal crime. The Contracts may be distributed through broker-dealers that have relationships with banks or other IMPORTANT financial institutions or by employees of such banks. NOTICES However, the Contracts are not deposits, or obligations of, or guaranteed by such institutions or any federal regulatory agency. Investment in the Contracts involves investment risks, including possible loss of principal. The Contracts are not FDIC insured. The Contracts are only available in New York. TABLE OF CONTENTS - ------------------------------------------------------------------------------
Page Important Terms........................................ Overview The Contract at a Glance............................... How the Contract Works................................. Expense Table.......................................... Financial Information.................................. The Contract........................................... Purchases.............................................. Contract Features Contract Value......................................... Investment Alternatives................................ The Variable Sub-Accounts..................... The Fixed Account ............................ Transfers..................................... Expenses.............................................. Access To Your Money................................... Income Payments........................................ Death Benefits......................................... More Information: Allstate New York............................. The Variable Account.......................... The Portfolios................................ Other Information The Contract ................................. Qualified Plans .............................. Legal Matters................................. Year 2000..................................... Taxes.................................................. Annual Reports and Other Documents..................... Performance Information................................ Appendix A - Illustration of a Market Value Adjustment Appendix B - Withdrawal Adjustment Example ............ Statement of Additional Information Table of Contents..
IMPORTANT TERMS - ------------------------------------------------------------------------------ This prospectus uses a number of important terms that you may not be familiar with. The index below identifies the page that describes each term. The first use of each term in this prospectus appears in highlights. Page Accumulation Phase....................................... Accumulation Unit ....................................... Accumulation Unit Value ................................. Allstate New York ("We")................................. Anniversary Values....................................... Annuitant................................................ Automatic Additions Program ............................. Automatic Portfolio Rebalancing Program.................. Beneficiary ............................................. Cancellation Period ..................................... *Contract ................................................ Contract Anniversary..................................... Contract Owner ("You") .................................. Contract Value .......................................... Contract Year........................................... Death Benefit Anniversary ............................... Dollar Cost Averaging Program............................ Due Proof of Death....................................... Fixed Account............................................ Guarantee Periods ...................................... Income Plan ............................................. Investment Alternatives ................................. Issue Date .............................................. Market Value Adjustment ................................. Payout Phase............................................. Payout Start Date ....................................... Portfolios .............................................. Preferred Withdrawal Amount.............................. Qualified Contracts ..................................... Right to Cancel ......................................... SEC...................................................... Settlement Value ....................................... Systematic Withdrawal Program ........................... Treasury Rate ........................................... Valuation Date........................................... Variable Account ........................................ Variable Sub-Account .................................... * The Allstate Custom Portfolio Variable Annuity is a group contract and your ownership is represented by certificates. References to "Contract" in this prospectus include certificates, unless the context requires otherwise. THE CONTRACT AT A GLANCE - ------------------------------------------------------------------------------ The following is a snapshot of the Contract. Please read the remainder of this prospectus for more information. ---------------------------------- ----------------------------------------- Flexible Payments You can purchase a Contract with as little as $3,000 ($2,000 for a "Qualified Contract," which is a Contract issued with a qualified plan). You can add to your Contract as often and as much as you like, but each payment must be at least $100. You must maintain a minimum account size of $1,000. ---------------------------------- ----------------------------------------- ---------------------------------- ----------------------------------------- Right to Cancel You may cancel your Contract within 10 days after receipt ("Cancellation Period"). Upon cancellation we will return your purchase payments adjusted to the extent federal or state law permits to reflect the investment experience of any amounts allocated to the Variable Account. ---------------------------------- ----------------------------------------- ---------------------------------- ----------------------------------------- Expenses You will bear the following expenses: o Total Variable Account annual fees equal to 1.25% of average daily net Assets o Annual contract maintenance charge of $30 (with certain exceptions) o Withdrawal charges ranging from 0% to 7% of payment withdrawn (with certain exceptions) o Transfer fee of $10 after 12th transfer in any Contract Year (fee currently waived) o State premium tax (New York currently does not impose one). In addition, each Portfolio pays expenses that you will bear indirectly if you invest in a Variable Sub-Account. ---------------------------------- ----------------------------------------- ---------------------------------- ----------------------------------------- Investment Alternatives The Contract offers 29 investment alternatives including: o the Fixed Account (which credits interest at rates we guarantee), and o 28 Variable Sub-Accounts investing in Portfolios offering professional money management by: A I M Advisors, Inc. Fidelity Management & Research Company Templeton Investment Counsel, Inc. OppenheimerFunds, Inc. The Dreyfus Corporation Wells Fargo Bank, N.A. Delaware Management Company HSBC Asset Management Americas Inc. To find out current rates being paid on the Fixed Account, or to find out how the Variable Sub-Accounts have performed, please call us at 1-800-692-4682. ---------------------------------- ----------------------------------------- ----------------------------------- ---------------------------------------- Special Services For your convenience, we offer these special services: o Automatic Portfolio Rebalancing Program o Automatic Additions Program o Dollar Cost Averaging Program o Systematic Withdrawal Program ----------------------------------- ---------------------------------------- ----------------------------------- ---------------------------------------- Income Payments You can choose fixed income payments, variable income payments, or a combination of the two. You can receive your income payments in one of the following ways: o life income with guaranteed payments o a joint and survivor life income with guaranteed payments o guaranteed payments for a specified period (5 to 30 years) ----------------------------------- ---------------------------------------- ----------------------------------- ---------------------------------------- Death Benefits If you die before the Payout Start Date, we will pay the death benefit described in the Contract. ----------------------------------- ---------------------------------------- ----------------------------------- ---------------------------------------- Transfers Before the Payout Start Date, you may transfer your Contract value ("Contract Value") among the investment alternatives, with certain restrictions. Transfers to the Fixed Account must be at least $500. We do not currently impose a fee upon transfers. However, we reserve the right to charge $10 per transfer after the 12th transfer in each "Contract Year," which we measure from the date we issue your contract or a Contract anniversary ("Contract Anniversary"). ----------------------------------- ---------------------------------------- ----------------------------------- ---------------------------------------- Withdrawals You may withdraw some or all of your Contract Value at anytime during the Accumulation Phase. In general, you must withdraw at least $50 at a time. A 10% federal tax penalty may apply if you withdraw before you are 59 1/2 years old. A withdrawal charge and Market Value Adjustment also may apply. ----------------------------------- ---------------------------------------- HOW THE CONTRACT WORKS - ------------------------------------------------------------------------------ The Contract basically works in two ways. First, the Contract can help you (we assume you are the Contract owner) save for retirement because you can invest in up to 29 investment alternatives and pay no federal income taxes on any earnings until you withdraw them. You do this during what we call the "Accumulation Phase" of the Contract. The Accumulation Phase begins on the date we issue your Contract (we call that date the "Issue Date") and continues until the Payout Start Date, which is the date we apply your money to provide income payments. During the Accumulation Phase, you may allocate your purchase payments to any combination of the Variable Sub-Accounts and/or Fixed Account. If you invest in the Fixed Account, you will earn a fixed rate of interest that we declare periodically. If you invest in any of the Variable Sub-Accounts, your investment return will vary up or down depending on the performance of the corresponding Portfolios. Second, the Contract can help you plan for retirement because you can use it to receive retirement income for life and/or for a pre-set number of years, by selecting one of the income payment options (we call these "Income Plans") described on page __. You receive income payments during what we call the "Payout Phase" of the Contract, which begins on the Payout Start Date and continues until we make the last payment required by the Income Plan you select. During the Payout Phase, if you select a fixed income payment option, we guarantee the amount of your payments, which will remain fixed. If you select a variable income payment option, based on one or more of the Variable Sub-Accounts, the amount of your payments will vary up or down depending on the performance of the corresponding Portfolios. The amount of money you accumulate under your Contract during the Accumulation Phase and apply to an Income Plan will determine the amount of your income payments during the Payout Phase. The timeline below illustrates how you might use your Contract.
Issue Payout Start Date Accumulation Phase Date Payout Phase - ---------------------------------------------------------------------------------------------------------------------------- You save for retirement You buy You elect to receive income You can receive Or you can a Contract payments or receive a lump income payments receive income sum payment for a set period payments for life
As the Contract owner, you exercise all of the rights and privileges provided by the Contract. If you die, any surviving Contract owner, or if there is none, the Beneficiary will exercise the rights and privileges provided by the Contract. See "The Contract." In addition, if you die before the Payout Start Date, we will pay a death benefit to any surviving Contract owner or, if none, to your Beneficiary. See "Death Benefits." Please call us at 1-800-692-4682 if you have any question about how the Contract works. EXPENSE TABLE - ------------------------------------------------------------------------------ The table below lists the expenses that you will bear directly or indirectly when you buy a Contract. The table and the examples that follow do not reflect premium taxes because New York currently does not impose premium taxes on annuities. For more information about Variable Account expenses, see "Expenses," below. For more information about Portfolio expenses, please refer to the accompanying prospectuses for the Portfolios. ------------------------------------------------------------------------ CONTRACT OWNER TRANSACTION EXPENSES Withdrawal Charge (as a percentage of purchase payments)* Number of Complete Years Since We Received the Purchase Payment Being Withdrawn: 0 1 2 3 4 5 6 7+ Applicable Charge: 7% 6% 5% 4% 3% 2% 1% 0% Annual Contract Maintenance Charge............................$30.00** Transfer Fee..................................................$10.00*** ------------------- * Each Contract Year, you may withdraw up to 15% of purchase payments without incurring a withdrawal charge or a Market Value Adjustment. ** We will waive this charge in certain cases. See "Expenses." ***Applies solely to the thirteenth and subsequent transfers within a Contract Year excluding transfers due to dollar cost averaging or automatic portfolio rebalancing. We are currently waiving the transfer fee. ------------------------------------------------------------------------ VARIABLE ACCOUNT ANNUAL EXPENSES (as a percentage of average daily net assets deducted from each Variable Sub-Account) Mortality and Expense Risk Charge.................................1.15% Administrative Expense Charge.....................................0.10% Total Variable Account Annual Expenses.......1.25% ------------------------------------------------------------------------ ---------------------------------------------------------------------------- PORTFOLIO ANNUAL EXPENSES (as a percentage of Portfolio average daily net assets)(1)
Total Annual Management 12b-1 Fee Other Expenses Portfolio Expenses Fee (after any fee (after any fee (after any fee (after any fee waivers waivers or waivers or waivers or Portfolio or reductions) reductions) reductions) reductions) AIM Variable Insurance Funds, Inc.: AIM V.I. Capital Appreciation Fund 0.62% 0.05% 0.67% AIM V.I. Balanced Fund(2) 0.00% 1.18% 1.18% AIM V.I. Growth Fund 0.64% 0.08% 0.72% AIM V.I. International Equity Fund 0.75% 0.16% 0.91% AIM V.I. Value Fund 0.61% 0.05% 0.66% AIM V.I. Government Securities Fund 0.50% 0.26% 0.76% AIM V.I. High Yield Fund(2) 0.00% 1.13% 1.13% Fidelity Variable Insurance Products Fund (VIP): Fidelity VIP Equity Income Portfolio(3) 0.49% 0.08% 0.57% Fidelity VIP Overseas Portfolio(3) 0.74% 0.15% 0.89% Fidelity VIP Growth Portfolio(3) 0.59% 0.07% 0.66% Fidelity Variable Insurance Products Fund II (VIP II): Fidelity VIP II Contrafund Portfolio(3) 0.59% 0.11% 0.70% Fidelity Variable Insurance Products Fund III (VIP III): Fidelity VIP III Growth Opportunities Portfolio 0.74% 0.15% 0.89% Templeton Variable Products Series Fund: Templeton Asset Allocation Fund - Class 2 0.70% 0.25% 0.08% 1.03% Templeton International Fund - Class 2 0.79% 0.25% 0.07% 1.11% Oppenheimer Variable Account Funds: Oppenheimer VA Main Street Growth & Income Fund 0.74% 0.05% 0.79% Oppenheimer VA Aggressive Growth Fund 0.69% 0.02% 0.71% Oppenheimer VA Strategic Bond Fund 0.74% 0.06% 0.80% The Dreyfus Socially Responsible Growth Fund, Inc.: Dreyfus Socially Responsible Growth Fund 0.75% 0.05% 0.80% Dreyfus Stock Index Fund, Inc.: Dreyfus Stock Index Fund 0.25% 0.01% 0.26% Dreyfus Variable Investment Fund: Dreyfus VI Capital Appreciation Portfolio 0.75% 0.06% 0.81% Wells Fargo Variable Trust Wells Fargo VT Equity Income Fund(4) 0.55% 0.62% 1.00% Wells Fargo VT Asset Allocation Fund(4) 0.55% 0.58% 1.00% Wells Fargo VT Growth Fund(4) 0.55% 0.68% 1.00% Delaware Group Premium Fund, Inc.: Delaware GP Small Cap Value Series 0.75% 0.10% 0.85% Delaware GP Trend Series 0.75% 0.10% 0.85% HSBC Variable Insurance Funds: HSBC VI Fixed Income Fund(5) 0.00% 1.15% 1.15% HSBC VI Growth & Income Fund(5) 0.33% 0.82% 1.15% HSBC VI Cash Management Fund(5) 0.00% 0.93% 0.93%
Footnotes (1) Figures shown in the table are for the year ended December 31, 1998. (2) Absent voluntary reductions and reimbursements for certain Portfolios, management fees, other expenses, and total Portfolio annual expenses expressed as a percentage of average net assets of the Portfolios would have been as follows:
------------------------------------------------------------------------------------------------------------------------ Management Total Annual Portfolio Fees Other Expenses Portfolio Expenses ------------------------------------------------------------------------------------------------------------------------ -------------------------------------------------- -- --------------------- ---------------------- --------------------- AIM V.I. Balanced Fund 0.75% 2.08% 2.83% -------------------------------------------------- -- --------------------- ---------------------- --------------------- -------------------------------------------------- -- --------------------- ---------------------- --------------------- AIM V.I. High Yield Fund 0.63% 1.87% 2.50% -------------------------------------------------- -- --------------------- ---------------------- --------------------- (3) A portion of the brokerage commissions that these Portfolios paid was used to reduce the Portfolios' expenses. In addition, certain Portfolios, or Fidelity Management & Research Company on behalf of certain Portfolios, have entered into arrangements with their custodian whereby credits realized as a result of uninvested cash balances were used to reduce custodian expenses. Including these reductions, total operating expenses would have been 0.58% for VIP Equity Income, 0.91% for VIP Overseas, 0.68% for VIP Growth, and 0.70% for VIP II Contrafund. (4) Figures shown in the table are for the year ended December 31, 1998. Absent voluntary reductions and reimbursements for certain Portfolios, management fees, other expenses, and total Portfolio annual expenses expressed as a percentage of average net assets of the Portfolios would have been as follows: ------------------------------------------------------------------------------------------------------------------------ Management Total Annual Portfolio Fees Other Expenses Portfolio Expenses ------------------------------------------------------------------------------------------------------------------------ -------------------------------------------------- -- --------------------- ---------------------- --------------------- Wells Fargo VT Equity Income Fund 0.55% 0.62% 1.17% -------------------------------------------------- -- --------------------- ---------------------- --------------------- -------------------------------------------------- -- --------------------- ---------------------- --------------------- Wells Fargo VT Asset Allocation Fund 0.55% 0.58% 1.13% -------------------------------------------------- -- --------------------- ---------------------- --------------------- -------------------------------------------------- -- --------------------- ---------------------- --------------------- Wells Fargo VT Growth Fund 0.55% 0.68% 1.23% -------------------------------------------------- -- --------------------- ---------------------- --------------------- (5) Figures shown in the table are for the year ended December 31, 1998. Investors will be notified of any material revision or cancellation of a waiver or expense reimbursement, which may be terminated at any time at the option of HSBC Asset Management Americas Inc. Absent voluntary reductions and reimbursements for certain Portfolios, management fees, other expenses, and total Portfolio annual expenses expressed as a percentage of average net assets of the Portfolios would have been as follows: ------------------------------------------------------------------------------------------------------------------------ Management Total Annual Portfolio Fees Other Expenses Portfolio Expenses ------------------------------------------------------------------------------------------------------------------------ -------------------------------------------------- -- --------------------- ---------------------- --------------------- HSBC VI Fixed Income Fund 0.55% 2.16% 2.71% -------------------------------------------------- -- --------------------- ---------------------- --------------------- -------------------------------------------------- -- --------------------- ---------------------- --------------------- HSBC VI Growth & Income Fund 0.55% 0.93% 1.48% -------------------------------------------------- -- --------------------- ---------------------- --------------------- -------------------------------------------------- -- --------------------- ---------------------- --------------------- HSBC VI Cash Management Fund 0.35% 1.51% 1.86% -------------------------------------------------- -- --------------------- ---------------------- ---------------------
EXAMPLE 1 The example below shows the dollar amount of expenses that you would bear directly or indirectly if you: o invested $1,000 in a Variable Sub-Account, o earned a 5% annual return on your investment, and o surrendered your Contract, or began receiving income payments for a specified period of less than 120 months, at the end of each time period. The example does not include any taxes you may be required to pay if you surrender your Contract. The example does not include deductions for premium taxes because New York does not charge premium taxes on annuities.
SUB-ACCOUNT 1 YEAR 3 YEARS 5 YEARS 10 YEARS - ----------- ------ ------- ------- -------- AIM Variable Insurance Funds, Inc.: AIM V.I. Capital Appreciation $ 80 $105 $134 $233 AIM V.I. Balanced $ 85 $121 $160 $286 AIM V.I. Growth $ 80 $107 $136 $238 AIM V.I. International Equity $ 82 $113 $146 $258 AIM V.I. Value $ 80 $105 $133 $231 AIM V.I. Government Securities $ 81 $108 $138 $242 AIM V.I. High Yield $ 85 $120 $157 $280 Fidelity Variable Insurance Products Fund (VIP): Fidelity VIP Equity Income $ 79 $102 $128 $222 Fidelity VIP Overseas $ 82 $112 $145 $256 Fidelity VIP Growth $ 80 $105 $133 $231 Fidelity Variable Insurance Products Fund II (VIP II): Fidelity VIP II Contrafund $ 80 $105 $133 $231 Fidelity Variable Insurance Products Fund III (VIP III): Fidelity VIP III Growth Opportunities $ 82 $112 $145 $256 Templeton Variable Products Series Fund: Templeton Asset Allocation - Class 2 $ 84 $117 $152 $270 Templeton International - Class 2 $ 84 $119 $156 $278 Oppenheimer Variable Account Funds: Oppenheimer VA Main Street Growth & Income $ 81 $109 $140 $245 Oppenheimer VA Aggressive Growth $ 80 $107 $136 $237 Oppenheimer VA Strategic Bond $ 81 $110 $140 $246 The Dreyfus Socially Responsible Growth Fund, Inc.: Dreyfus Socially Responsible Growth $ 81 $110 $140 $246 Dreyfus Stock Index Fund: Dreyfus Stock Index $ 76 $ 93 $112 $188 Dreyfus Variable Investment Fund: Dreyfus VI Capital Appreciation $ 81 $110 $141 $247 Wells Fargo Variable Trust: Wells Fargo VT Equity Income $ 83 $116 $151 $267 Wells Fargo VT Asset Allocation $ 83 $116 $151 $267 Wells Fargo VT Growth $ 83 $116 $151 $267 Delaware Group Premium Fund, Inc.: Delaware GP Small Cap Value Series $ 82 $111 $143 $252 Delaware GP Trend Series $ 82 $111 $143 $252 HSBC Variable Insurance Funds: HSBC VI Fixed Income $101 $168 $236 $429 HSBC VI Growth & Income $ 88 $130 $175 $316 HSBC VI Cash Management $ 92 $142 $194 $352
EXAMPLE 2 Same assumptions as Example 1 above, except that you decided not to surrender your Contract, or you began receiving income payments (for at least 120 months if under an Income Plan with a specified period), at the end of each period.
SUB-ACCOUNT 1 YEAR 3 YEARS 5 YEARS 10 YEARS - ----------- ------ ------- ------- -------- AIM Variable Insurance Funds, Inc.: AIM V.I. Capital Appreciation $ 20 $ 63 $108 $233 AIM V.I. Balanced $ 26 $ 79 $134 $286 AIM V.I. Growth $ 21 $ 65 $111 $238 AIM V.I. International Equity $ 23 $ 70 $121 $258 AIM V.I. Value $ 20 $ 63 $108 $231 AIM V.I. Government Securities $ 21 $ 66 $113 $242 AIM V.I. High Yield $ 25 $ 77 $132 $280 Fidelity Variable Insurance Products Fund (VIP): Fidelity VIP Equity Income $ 19 $ 60 $103 $222 Fidelity VIP Overseas $ 23 $ 70 $119 $256 Fidelity VIP Growth $ 20 $ 63 $108 $231 Fidelity Variable Insurance Products Fund II (VIP II): Fidelity VIP II Contrafund $ 20 $ 63 $108 $231 Fidelity Variable Insurance Products Fund III (VIP III): Fidelity VIP III Growth Opportunities $ 23 $ 70 $119 $256 Templeton Variable Products Series Fund: Templeton Asset Allocation - Class 2 $ 24 $ 74 $127 $270 Templeton International - Class 2 $ 25 $ 77 $131 $278 Oppenheimer Variable Account Funds: Oppenheimer VA Main Street Growth & Income $ 22 $ 67 $114 $245 Oppenheimer VA Aggressive Growth $ 21 $ 64 $110 $237 Oppenheimer VA Strategic Bond $ 22 $ 67 $115 $246 The Dreyfus Socially Responsible Growth Fund, Inc.: Dreyfus Socially Responsible Growth $ 22 $ 67 $115 $246 Dreyfus Stock Index Fund: Dreyfus Stock Index $ 16 $ 50 $ 86 $188 Dreyfus Variable Investment Fund: Dreyfus VI Capital Appreciation $ 22 $ 67 $115 $247 Wells Fargo Variable Trust: Wells Fargo VT Equity Income $ 24 $ 73 $125 $267 Wells Fargo VT Asset Allocation $ 24 $ 73 $125 $267 Wells Fargo VT Growth $ 24 $ 73 $125 $267 Delaware Group Premium Fund, Inc.: Delaware GP Small Cap Value Series $ 22 $ 69 $117 $252 Delaware GP Trend Series $ 22 $ 69 $117 $252 HSBC Variable Insurance Funds: HSBC VI Fixed Income $ 41 $125 $210 $429 HSBC VI Growth & Income $ 29 $ 88 $150 $316 HSBC VI Cash Management $ 33 $ 99 $169 $352
Please remember that you are looking at examples and not a representation of past or future expenses. Your actual expenses may be lesser or greater than those shown above. Similarly, your rate of return may be lesser or greater than 5%, which is not guaranteed. To reflect the contract maintenance charge in the examples, we estimated an equivalent percentage charge, based on an assumed average Contract size of $40,000. FINANCIAL INFORMATION - ------------------------------------------------------------------------------ To measure the value of your investment in the Variable Sub-Accounts during the Accumulation Phase, we use a unit of measure we call the "Accumulation Unit." Each Variable Sub-Account has a separate value for its Accumulation Units we call "Accumulation Unit Value." Accumulation Unit Value is analogous to, but not the same as, the share price of a mutual fund. There are no accumulation unit values to report because the Contracts were first offered as of the date of this Prospectus. The financial statements of the Variable Account and Allstate New York appear in the Statement of Additional Information. THE CONTRACT - ------------------------------------------------------------------------------ CONTRACT OWNER The Allstate Custom Portfolio Variable Annuity is a contract between you, the Contract owner, and Allstate New York, a life insurance company. As the Contract owner, you may exercise all of the rights and privileges provided to you by the Contract. That means it is up to you to select or change (to the extent permitted): o the investment alternatives during the Accumulation and Payout Phases, o the amount and timing of your purchase payments and withdrawals, o the programs you want to use to invest or withdraw money, o the income payment plan you want to use to receive retirement income, o the Annuitant (either yourself or someone else) on whose life the income payments will be based, o the Beneficiary or Beneficiaries who will receive the benefits that the Contract provides when the last surviving Contract owner or Annuitant dies, and o any other rights that the Contract provides. If you die, any surviving Contract owner or, if none, the Beneficiary may exercise the rights and privileges provided to them by the Contract. The Contract cannot be jointly owned by both a non-natural person and a natural person. You can use the Contract with or without a qualified plan. A qualified plan is a retirement savings plan, such as an IRA or tax-sheltered annuity, that meets the requirements of the Internal Revenue Code. Qualified plans may limit or modify your rights and privileges under the Contract. We use the term "Qualified Contract" to refer to a Contract issued with a qualified plan. See "Qualified Plans" on page __. ANNUITANT The Annuitant is the individual whose life determines the amount and duration of income payments (other than under Income Plans with guaranteed payments for a specified period). You initially designate an Annuitant in your application. If the Contract owner is a natural person you may change the Annuitant prior to the Payout Start Date. In our discretion, we may permit you to designate a joint Annuitant, who is a second person on whose life income payments depend, on or after the Payout Start Date. If the Annuitant dies prior to the Payout Start Date, the new Annuitant will be: o the youngest Contract owner, otherwise o the youngest Beneficiary. BENEFICIARY The Beneficiary is the person who may elect to receive the death benefit or become the new Contract owner if the sole surviving Contract owner dies before the Payout Start Date. If the sole surviving Contract owner dies after the Payout Start Date, the Beneficiary will receive any guaranteed income payments scheduled to continue. You may name one or more Beneficiaries when you apply for a Contract. You may change or add Beneficiaries at any time by writing to us, unless you have designated an irrevocable Beneficiary. We will provide a change of Beneficiary form to be signed and filed with us. Any change will be effective at the time you sign the written notice, whether or not the Annuitant is living when we receive the notice. Until we receive your written notice to change a Beneficiary, we are entitled to rely on the most recent Beneficiary information in our files. We will not be liable as to any payment or settlement made prior to receiving the written notice. Accordingly, if you wish to change your Beneficiary, you should deliver your written notice to us promptly. If you do not name a Beneficiary or, if the named Beneficiary is no longer living and there are no other surviving Beneficiaries, the new Beneficiary will be: o your spouse or, if he or she is no longer alive, o your surviving children equally, or if you have no surviving children, o your estate. If more than one Beneficiary survives you (or the Annuitant if the Contract owner is not a natural person), we will divide the death benefit among your Beneficiaries according to your most recent written instructions. If you have not given us written instructions, we will pay the death benefit in equal amounts to the surviving Beneficiaries. MODIFICATION OF THE CONTRACT Only an Allstate New York officer may approve a change in or waive any provision of the Contract. Any change or waiver must be in writing. None of our agents has the authority to change or waive the provisions of the Contract. We may not change the terms of the Contract without your consent, except to conform the Contract to applicable law or changes in the law. If a provision of the Contract is inconsistent with state law, we will follow state law. ASSIGNMENT We will not honor an assignment of an interest in a Contract as collateral or security for a loan. However, you may assign periodic income payments under the Contract prior to the Payout Start Date. No Beneficiary may assign benefits under the Contract until they are due. We will not be bound by any assignment until the assignor signs it and files it with us. We are not responsible for the validity of any assignment. Federal law prohibits or restricts the assignment of benefits under many types of retirement plans and the terms of such plans may themselves contain restrictions on assignments. An assignment may also result in taxes or tax penalties. You should consult with an attorney before trying to assign your Contract. PURCHASES - ------------------------------------------------------------------------------ MINIMUM PURCHASE PAYMENTS Your initial purchase payment must be at least $3,000 ($2,000 for a Qualified Contract). All subsequent purchase payments must be $100 or more. You may make purchase payments at any time prior to the Payout Start Date. We reserve the right to limit the maximum amount of purchase payments, or reduce the minimum purchase payment we will accept. We reserve the right to reject any application. AUTOMATIC ADDITIONS PROGRAM You may make subsequent purchase payments of at least $25 ($500 for allocation to the Fixed Account) by automatically transferring amounts from your bank account. Please consult with your sales representative for detailed information. ALLOCATION OF PURCHASE PAYMENTS At the time you apply for a Contract, you must decide how to allocate your purchase payments among the investment alternatives. The allocation you specify on your application will be effective immediately. All allocations must be in whole percents that total 100% or in whole dollars. You can change your allocations by notifying us in writing. We reserve the right to limit the availability of the investment alternatives. We will allocate your purchase payments to the investment alternatives according to your most recent instructions on file with us. Unless you notify us in writing otherwise, we will allocate subsequent purchase payments according to the allocation for the previous purchase payment. We will effect any change in allocation instructions at the time we receive written notice of the change in good order. We will credit the initial purchase payment that accompanies your completed application to your Contract within 2 business days after we receive the payment at our servicing center. If your application is incomplete, we will ask you to complete your application within 5 business days. If you do so, we will credit your initial purchase payment to your Contract within that 5 business day period. If you do not, we will return your purchase payment at the end of the 5 business day period unless you expressly allow us to hold it until you complete the application. We will credit subsequent purchase payments to the Contract at the close of the business day on which we receive the purchase payment at our service center located at P.O. Box 94038, Palatine, Illinois, 60094. We are open for business each day Monday through Friday that the New York Stock Exchange is open for business. We also refer to these days as "Valuation Dates." Our business day closes when the New York Stock Exchange closes, usually 4 p.m. Eastern Time (3 p.m. Central Time). If we receive your purchase payment after 3 p.m. Central Time on any Valuation Date, we will credit your purchase payment using the Accumulation Unit Values computed on the next Valuation Date. RIGHT TO CANCEL You may cancel the Contract by returning it to us within the Cancellation Period, which is the 10 day period after you receive the Contract. You may return it by delivering it or mailing it to us. If you exercise this "Right to Cancel," the Contract terminates and we will pay you the full amount of your purchase payments allocated to the Fixed Account. We will return your purchase payments allocated to the Variable Account after an adjustment to the extent federal or state law permits to reflect investment gain or loss that occurred from the date of allocation through the date of cancellation. If your Contract is qualified under Section 408 of the Internal Revenue Code, we will refund the greater of any purchase payments or the Contract Value. CONTRACT VALUE - ------------------------------------------------------------------------------ On the Issue Date, the Contract Value is equal to the initial purchase payment. Your Contract Value at any other time during the Accumulation Phase is equal to the sum of the value as of the most recent Valuation Date of your Accumulation Units in the Variable Sub-Accounts you have selected, plus the value of your interest in the Fixed Account. ACCUMULATION UNITS To determine the number of Accumulation Units of each Variable Sub-Account to credit to your Contract, we divide (i) the amount of the purchase payment or transfer you have allocated to a Variable Sub-Account by (ii) the Accumulation Unit Value of that Variable Sub-Account next computed after we receive your payment or transfer. For example, if we receive a $10,000 purchase payment allocated to a Variable Sub-Account when the Accumulation Unit Value for the Sub-Account is $10, we would credit 1,000 Accumulation Units of that Variable Sub-Account to your Contract. Withdrawals and transfers from a Variable Sub-Account would, of course, reduce the number of Accumulation Units of that Sub-Account allocated to your Contract. ACCUMULATION UNIT VALUE As a general matter, the Accumulation Unit Value for each Variable Sub-Account will rise or fall to reflect: o changes in the share price of the Portfolio in which the Variable Sub-Account invests, and o the deduction of amounts reflecting the mortality and expense risk charge, administrative expense charge, and any provision for taxes that have accrued since we last calculated the Accumulation Unit Value. We determine contract maintenance charges, withdrawal charges, and transfer fees (currently waived) separately for each Contract. They do not affect Accumulation Unit Value. Instead, we obtain payment of those charges and fees by redeeming Accumulation Units. For details on how we calculate Accumulation Unit Value, please refer to the Statement of Additional Information. We determine a separate Accumulation Unit Value for each Variable Sub-Account on each Valuation Date. You should refer to the prospectus for the Portfolios that accompanies this prospectus for a description of how the assets of each Portfolio are valued, since that determination directly bears on the Accumulation Unit Value of the corresponding Variable Sub-Account and, therefore, your Contract Value. INVESTMENT ALTERNATIVES: The Variable Sub-Accounts - ------------------------------------------------------------------------------ You may allocate your purchase payments to up to 28 Variable Sub-Accounts. Each Variable Sub-Account invests in the shares of a corresponding Portfolio. Each Portfolio has its own investment objective(s) and policies. We briefly describe the Portfolios below. For more complete information about each Portfolio, including expenses and risks associated with the Portfolio, please refer to the accompanying prospectus for the Portfolio. You should carefully review the Portfolio prospectuses before allocating amounts to the Variable Sub-Accounts.
- --------------------------------------------------- --------------------------------------------------- ----------------------- Portfolio: Each Portfolio Seeks Investment Adviser: - --------------------------------------------------- --------------------------------------------------- ----------------------- AIM V.I. Capital Appreciation Fund Growth of capital A I M Advisors, Inc. - --------------------------------------------------- --------------------------------------------------- ----------------------- - --------------------------------------------------- --------------------------------------------------- ----------------------- AIM V.I. Balanced Fund As high a total return as possible, consistent with preservation of capital - --------------------------------------------------- --------------------------------------------------- AIM V.I. Growth Fund Growth of capital - --------------------------------------------------- --------------------------------------------------- ----------------------- - --------------------------------------------------- --------------------------------------------------- AIM V.I. International Equity Fund Long-term growth of capital - --------------------------------------------------- --------------------------------------------------- ----------------------- - --------------------------------------------------- --------------------------------------------------- ----------------------- AIM V.I. Value Fund Long-term growth of capital - --------------------------------------------------- --------------------------------------------------- ----------------------- AIM V.I. Government Securities Fund A high level of current income consistent with reasonable concern for safety of principal - --------------------------------------------------- --------------------------------------------------- ----------------------- AIM V.I. High Yield Fund A high level of current income - --------------------------------------------------- --------------------------------------------------- ----------------------- Fidelity VIP Equity Income Portfolio Reasonable income Fidelity Management & Research Company - --------------------------------------------------- --------------------------------------------------- ----------------------- Fidelity VIP Overseas Portfolio Long-term growth of capital - --------------------------------------------------- --------------------------------------------------- ----------------------- Fidelity VIP Growth Portfolio Capital appreciation - --------------------------------------------------- --------------------------------------------------- ----------------------- Fidelity VIP II Contrafund Portfolio Long-term capital appreciation - --------------------------------------------------- --------------------------------------------------- ----------------------- Fidelity VIP III Growth Opportunities Portfolio Capital growth - --------------------------------------------------- --------------------------------------------------- ----------------------- Templeton Asset Allocation Fund - Class 2 High total return Templeton Investment Counsel, Inc. - --------------------------------------------------- --------------------------------------------------- ----------------------- Templeton International Fund - Class 2 Long-term capital growth - --------------------------------------------------- --------------------------------------------------- ----------------------- Oppenheimer VA Main Street Growth & Income High total return, which includes growth in the Fund value of its shares as well as current income OppenheimerFunds, Inc. - --------------------------------------------------- --------------------------------------------------- ----------------------- Oppenheimer VA Aggressive Growth Fund Capital appreciation - --------------------------------------------------- --------------------------------------------------- ----------------------- Oppenheimer VA Strategic Bond Fund A high level of current income - --------------------------------------------------- --------------------------------------------------- ----------------------- Dreyfus Socially Responsible Growth Fund Capital growth and, secondarily, current income The Dreyfus Corporation - --------------------------------------------------- --------------------------------------------------- ----------------------- Dreyfus Stock Index Fund To match the total returns of the Standard & Poor's 500 Composite Stock Index - --------------------------------------------------- --------------------------------------------------- ----------------------- Dreyfus VI Capital Appreciation Portfolio Long-term capital growth consistent with the preservation of capital; current income is a secondary goal. - --------------------------------------------------- --------------------------------------------------- ----------------------- Wells Fargo VT Equity Income Fund Long-term capital appreciation and above-average dividend income. Wells Fargo Bank, N.A. - --------------------------------------------------- --------------------------------------------------- - --------------------------------------------------- --------------------------------------------------- ----------------------- Wells Fargo VT Asset Allocation Fund Long-term total return, consistent with reasonable risk. - --------------------------------------------------- --------------------------------------------------- - --------------------------------------------------- --------------------------------------------------- ----------------------- Wells Fargo VT Growth Fund Long-term capital appreciation - --------------------------------------------------- --------------------------------------------------- ----------------------- - --------------------------------------------------- --------------------------------------------------- ----------------------- Delaware GP Small Cap Value Series Capital appreciation Delaware Management Company - --------------------------------------------------- --------------------------------------------------- - --------------------------------------------------- --------------------------------------------------- ----------------------- Delaware GP Trend Series Long-term capital appreciation - --------------------------------------------------- --------------------------------------------------- ----------------------- - --------------------------------------------------- --------------------------------------------------- ----------------------- HSBC VI Fixed Income Fund High current income consistent with appreciation HSBC Asset of capital Management Americas Inc. - --------------------------------------------------- --------------------------------------------------- ----------------------- - --------------------------------------------------- --------------------------------------------------- ----------------------- HSBC VI Growth & Income Fund Long-term growth of capital and current income - --------------------------------------------------- --------------------------------------------------- ----------------------- - --------------------------------------------------- --------------------------------------------------- ----------------------- HSBC VI Cash Management Fund As high a level of current income as is consistent with preservation of capital and liquidity - --------------------------------------------------- --------------------------------------------------- -----------------------
Amounts you allocate to Variable Sub-Accounts may grow in value, decline in value, or grow less than you expect, depending on the investment performance of the Portfolios in which those Variable Sub-Accounts invest. You bear the investment risk that the Portfolios might not meet their investment objectives. Shares of the Portfolios are not deposits, or obligations of, or guaranteed or endorsed by any bank and are not insured by the Federal Deposit Insurance Corporation, the Federal Reserve Board or any other agency. INVESTMENT ALTERNATIVES : The Fixed Account - ------------------------------------------------------------------------------ You may allocate all or a portion of your purchase payments to the Fixed Account. The Fixed Account supports our insurance and annuity obligations. The Fixed Account consists of our general assets other than those in segregated asset accounts. We have sole discretion to invest the assets of the Fixed Account, subject to applicable law. Any money you allocate to the Fixed Account does not entitle you to share in the investment experience of the Fixed Account. GUARANTEE PERIODS Each payment or transfer allocated to the Fixed Account earns interest at a specified rate that we guarantee for a period of years we call a Guarantee Period. Guarantee Periods may range from 1 to 10 years. We are currently offering Guarantee Periods of 1, 3, 5, 7, and 10 years in length. In the future we may offer Guarantee Periods of different lengths or stop offering some Guarantee Periods. You select one or more Guarantee Periods for each purchase payment or transfer. If you do not select the Guarantee Period for a purchase payment or transfer, we will assign the shortest Guarantee Period available under the Contract for such payment or transfer. Each payment or transfer allocated to a Guarantee Period must be at least $500. We reserve the right to limit the number of additional purchase payments that you may allocate to the Fixed Account. Please consult with your sales representative for more information. INTEREST RATES We will tell you what interest rates and Guarantee Periods we are offering at a particular time. We may declare different interest rates for Guarantee Periods of the same length that begin at different times. We will not change the interest rate that we credit to a particular allocation until the end of the relevant Guarantee Period. We have no specific formula for determining the rate of interest that we will declare initially or in the future. We will set those interest rates based on investment returns available at the time of the determination. In addition, we may consider various other factors in determining interest rates including regulatory and tax requirements, our sales commission and administrative expenses, general economic trends, and competitive factors. We determine the interest rates to be declared in our sole discretion. We can neither predict nor guarantee what those rates will be in the future. For current interest rate information, please contact your sales representative or Allstate New York at 1-800-692-4682. The interest rate will never be less than the minimum guaranteed amount stated in the Contract. HOW WE CREDIT INTEREST We will credit interest daily to each amount allocated to a Guarantee Period at a rate that compounds to the effective annual interest rate that we declared at the beginning of the applicable Guarantee Period. The following example illustrates how a purchase payment allocated to the Fixed Account would grow, given an assumed Guarantee Period and effective annual interest rate: Purchase Payment..............................$10,000 Guarantee Period..............................5 years Annual Interest Rate........................... 4.50%
END OF CONTRACT YEAR YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 Beginning Contract Value $10,000.00 X (1 + Annual Interest Rate) X 1.045 $10,450.00 Contract Value at end of Contract Year $10,450.00 X (1 + Annual Interest Rate) X 1.045 $10,920.25 Contract Value at end of Contract Year $10,920.25 X (1 + Annual Interest Rate) X 1.045 $11,411.66 Contract Value at end of Contract Year $11,411.66 X (1 + Annual Interest Rate) X 1.045 $11,925.19 Contract Value at end of Contract Year $11,925.19 X (1 + Annual Interest Rate) X 1.045 $12,461.82 Total Interest Credited During Guarantee Period = $2,461.82 ($12,461.82-$10,000)
This example assumes no withdrawals during the entire 5 year Guarantee Period. If you were to make a partial withdrawal, you may be required to pay a withdrawal charge. In addition, the amount withdrawn may be increased or decreased by a Market Value Adjustment that reflects changes in interest rates since the time you invested the amount withdrawn. The hypothetical interest rate is for illustrative purposes only and is not intended to predict future interest rates to be declared under the Contract. Actual interest rates declared for any given Guarantee Period may be more or less than shown above but will never be less than the guaranteed minimum rate stated in the Contract. RENEWALS At least 15 but not more than 45 days prior to the end of each Guarantee Period, we will mail you a notice asking you what to do with your money, including the accrued interest. During the 30-day period after the end of the Guarantee Period, you may: 1) take no action. We will automatically apply your money to a new Guarantee Period of the shortest duration available. The new Guarantee Period will begin on the day the previous Guarantee Period ends. The new interest rate will be our then current declared rate for a Guarantee Period of that length; or 2) instruct us to apply your money to one or more new Guarantee Periods of your choice. The new Guarantee Period(s) will begin on the day the previous Guarantee Period ends. The new interest rate will be our then current declared rate for those Guarantee Periods; or 3) instruct us to transfer all or a portion of your money to one or more Variable Sub-Accounts. We will effect the transfer on the day we receive your instructions. We will not adjust the amount transferred to include a Market Value Adjustment; or 4) withdraw all or a portion of your money. You may be required to pay a withdrawal charge, but we will not adjust the amount withdrawn to include a Market Value Adjustment. You may also be required to pay premium taxes and withholding (if applicable). The amount withdrawn will be deemed to have been withdrawn on the day the previous Guarantee Period ends. Unless you specify otherwise, amounts not withdrawn will be applied to a new Guarantee Period of the shortest duration available. The new Guarantee Period will begin on the day the previous Guarantee Period ends. Under our Automatic Laddering Program ("Automatic Laddering Program"), you may choose, in advance, to use Guarantee Periods of the same length for all renewals. You can select this Program at any time during the Accumulation Phase, including on the Issue Date. We will apply renewals to Guarantee Periods of the selected length until you direct us in writing to stop. We may stop offering this Program at any time. For additional information on the Automatic Laddering Program, please call our Customer Service unit at 1-800-692-4682. MARKET VALUE ADJUSTMENT All withdrawals in excess of the Preferred Withdrawal Amount, and transfers from a Guarantee Period, other than those taken during the 30 day period after such Guarantee Period expires, are subject to a Market Value Adjustment. A Market Value Adjustment also applies when you apply amounts currently invested in a Guarantee Period to an Income Plan (unless paid or applied during the 30 day period after such Guarantee Period expires). We will not apply a Market Value Adjustment to a transfer you make as part of a Dollar Cost Averaging Program. We also will not apply a Market Value Adjustment to a withdrawal you make: o within the Preferred Withdrawal Amount as described on page __, or o to satisfy the IRS minimum distribution rules for the Contract. We apply the Market Value Adjustment to reflect changes in interest rates from the time you first allocate money to a Guarantee Period to the time it is removed from that Guarantee Period. We calculate the Market Value Adjustment by comparing the Treasury Rate for a period equal to the Guarantee Period at its inception to the Treasury Rate for a period equal to the time remaining in the Guarantee Period when you remove your money. "Treasury Rate" means the U.S. Treasury Note Constant Maturity Yield as reported in Federal Reserve Bulletin Release H.15. The Market Value Adjustment may be positive or negative, depending on changes in interest rates. As such, you bear the investment risk associated with changes in interest rates. If interest rates increase significantly, the Market Value Adjustment and any withdrawal charge, premium taxes, and income tax withholding (if applicable) could reduce the amount you receive upon full withdrawal of your Contract Value to an amount that is less than the purchase payment plus interest at the minimum guaranteed interest rate under the Contract. Generally, if the Treasury Rate at the time you allocate money to a Guarantee Period is higher than the applicable current Treasury Rate for a period equal to the time remaining in the Guarantee Period, then the Market Value Adjustment will result in a higher amount payable to you or transferred. Conversely, if the Treasury Rate at the time you allocate money to a Guarantee Period is lower than the applicable Treasury Rate for a period equal to the time remaining in the Guarantee Period, then the Market Value Adjustment will result in a lower amount payable to you or transferred. For example, assume that you purchase a Contract and you select an initial Guarantee Period of 5 years and the 5 year Treasury Rate for that duration is 4.50%. Assume that at the end of 3 years, you make a partial withdrawal. If, at that later time, the current 2 year Treasury Rate is 4.20%, then the Market Value Adjustment will be positive, which will result in an increase in the amount payable to you. Conversely, if the current 2 year Treasury Rate is 4.80%, then the Market Value Adjustment will be negative, which will result in a decrease in the amount payable to you. The formula for calculating Market Value Adjustments is set forth in Appendix A to this prospectus, which also contains additional examples of the application of the Market Value Adjustment. INVESTMENT ALTERNATIVES: Transfers - ------------------------------------------------------------------------------ TRANSFERS DURING THE ACCUMULATION PHASE During the Accumulation Phase, you may transfer Contract Value among the investment alternatives at any time. The minimum amount that you may transfer into a Guarantee Period is $500. You may request transfers in writing on a form that we provided or by telephone according to the procedure described below. We currently do not assess, but reserve the right to assess, a $10 charge on each transfer in excess of 12 per Contract Year. We treat transfers to or from more than one Portfolio on the same day as one transfer. Transfers you make as part of a Dollar Cost Averaging Program or Automatic Fund Rebalancing Program do not count against the 12 free transfers per Contract Year. We will process transfer requests that we receive before 4:00 p.m. Eastern Time on any Valuation Date using the Accumulation Unit Values for that Date. We will process requests completed after 4:00 p.m. on any Valuation Date using the Accumulation Unit Values for the next Valuation Date. The Contract permits us to defer transfers from the Fixed Account for up to 6 months from the date we receive your request. If we decide to postpone transfers from the Fixed Account for 10 days or more, we will pay interest as required by applicable law. Any interest would be payable from the date we receive the transfer request to the date we make the transfer. If you transfer an amount from a Guarantee Period other than during the 30 day period after such Guarantee Period expires, we will increase or decrease the amount by a Market Value Adjustment. If any transfer reduces your value in such Guarantee Period to less than $500, we will treat the request as a transfer of the entire value in such Guarantee Period. We reserve the right to waive any transfer fees and restrictions. TRANSFERS DURING THE PAYOUT PHASE During the Payout Phase, you may make transfers among the Variable Sub-Accounts to change the relative weighting of the Variable Sub-Accounts on which your variable income payments will be based. In addition, you will have a limited ability to make transfers from the Variable Sub-Accounts to increase the proportion of your income payments consisting of fixed income payments. You may not, however, convert any portion of your right to receive fixed income payments into variable income payments. You may not make any transfers for the first 6 months after the Payout Start Date. Thereafter, you may make transfers among the Variable Sub-Accounts or make transfers from the Variable Sub-Accounts to increase the proportion of your income payments consisting of fixed income payments. Your transfers must be at least 6 months apart. TELEPHONE TRANSFERS You may make transfers by telephone by calling 1-800-692-4682, if you first send us a completed authorization form. The cut off time for telephone transfer requests is 4:00 p.m. Eastern Time. In the event that the New York Stock Exchange closes early, i.e., before 4:00 p.m. Eastern Time, or in the event that the Exchange closes early for a period of time but then reopens for trading on the same day, we will process telephone transfer requests as of the close of the Exchange on that particular day. We will not accept telephone requests received at any telephone number other than the number that appears in this paragraph or received after the close of trading on the Exchange. We may suspend, modify or terminate the telephone transfer privilege at any time without notice. We use procedures that we believe provide reasonable assurance that the telephone transfers are genuine. For example, we tape telephone conversations with persons purporting to authorize transfers and request identifying information. Accordingly, we disclaim any liability for losses resulting from allegedly unauthorized telephone transfers. However, if we do not take reasonable steps to help ensure that a telephone authorization is valid, we may be liable for such losses. DOLLAR COST AVERAGING PROGRAM Through the Dollar Cost Averaging Program, you may automatically transfer a set amount every month during the Accumulation Phase from any Variable Sub-Account, or the 1 year Guarantee Period of the Fixed Account, to any other Variable Sub-Account. You may not use dollar cost averaging to transfer amounts to the Fixed Account. We will not charge a transfer fee for transfers made under this Program, nor will such transfers count against the 12 transfers you can make each Contract Year without paying a transfer fee. In addition, we will not apply the Market Value Adjustment to these transfers. The theory of dollar cost averaging is that if purchases of equal dollar amounts are made at fluctuating prices, the aggregate average cost per unit will be less than the average of the unit prices on the same purchase dates. However, participation in this program does not assure you of a greater profit from your purchases under the Program nor will it prevent or necessarily reduce losses in a declining market. Call or write us for instructions on how to enroll. AUTOMATIC PORTFOLIO REBALANCING PROGRAM Once you have allocated your money among the Variable Sub-Accounts, the performance of each Sub-Account may cause a shift in the percentage you allocated to each Sub-Account. If you select our Automatic Portfolio Rebalancing Program, we will automatically rebalance the Contract Value in each Variable Sub-Account and return it to the desired percentage allocations. We will rebalance your account each quarter according to your instructions. We will transfer amounts among the Variable Sub-Accounts to achieve the percentage allocations you specify. You can change your allocations at any time by contacting us in writing or by telephone. The new allocation will be effective with the first rebalancing that occurs after we receive your request. We are not responsible for rebalancing that occurs prior to receipt of your request. Example: Assume that you want your initial purchase payment split among 2 Variable Sub-Accounts. You want 40% to be in the AIM V.I. Balanced Variable Sub-Account and 60% to be in the Fidelity VIP Growth Variable Sub-Account. Over the next 2 months the bond market does very well while the stock market performs poorly. At the end of the first quarter, the AIM V.I. Balanced Variable Sub-Account now represents 50% of your holdings because of its increase in value. If you choose to have your holdings rebalanced quarterly, on the first day of the next quarter we would sell some of your units in the AIM V.I. Balanced Variable Sub-Account and use the money to buy more units in the Fidelity VIP Growth Variable Sub-Account so that the percentage allocations would again be 40% and 60% respectively. The Automatic Portfolio Rebalancing Program is available only during the Accumulation Phase. The transfers made under the Program do not count towards the 12 transfers you can make without paying a transfer fee, and are not subject to a transfer fee. Portfolio rebalancing is consistent with maintaining your allocation of investments among market segments, although it is accomplished by reducing your Contract Value allocated to the better performing segments. EXPENSES - ------------------------------------------------------------------------------ As a Contract owner, you will bear, directly or indirectly, the charges and expenses described below. CONTRACT MAINTENANCE CHARGE During the Accumulation Phase, on each Contract Anniversary, we will deduct a $30 contract maintenance charge from your Contract Value invested in each Variable Sub-Account in proportion to the amount invested. We also will deduct a full contract maintenance charge if you withdraw your entire Contract Value, unless your Contract qualifies for a waiver, described below. During the Payout Phase, we will deduct the charge proportionately from each income payment. The charge is for the cost of maintaining each Contract and the Variable Account. Maintenance costs include expenses we incur in billing and collecting purchase payments; keeping records; processing death claims, cash withdrawals, and policy changes; proxy statements; calculating Accumulation Unit Values and income payments; and issuing reports to Contract owners and regulatory agencies. We cannot increase the charge. We will waive this charge if: o total purchase payments equal $50,000 or more, or o all of your money is allocated to the Fixed Account on a Contract Anniversary. MORTALITY AND EXPENSE RISK CHARGE We deduct a mortality and expense risk charge daily at an annual rate of 1.15% of the daily net assets you have invested in the Variable Sub-Accounts. The mortality and expense risk charge is for all the insurance benefits available with your Contract (including our guarantee of annuity rates and the death benefits), for certain expenses of the Contract, and for assuming the risk (expense risk) that the current charges will be sufficient in the future to cover the cost of administering the Contract. If the charges under the Contract are not sufficient, then we will bear the loss. We guarantee the mortality and expense risk charge and we cannot increase it. We assess the mortality and expense risk charge during both the Accumulation Phase and the Payout Phase. ADMINISTRATIVE EXPENSE CHARGE We deduct an administrative expense charge daily at an annual rate of 0.10% of the average daily net assets you have invested in the Variable Sub-Accounts. We intend this charge to cover actual administrative expenses that exceed the revenues from the contract maintenance charge. There is no necessary relationship between the amount of administrative charge imposed on a given Contract and the amount of expenses that may be attributed to that Contract. We assess this charge each day during the Accumulation Phase and the Payout Phase. We guarantee that we will not raise this charge. TRANSFER FEE We do not currently impose a fee upon transfers among the investment alternatives. However, we reserve the right to charge $10 per transfer after the 12th transfer in each Contract Year. We will not charge a transfer fee on transfers that are part of a Dollar Cost Averaging or Automatic Portfolio Rebalancing Program. WITHDRAWAL CHARGE We may assess a withdrawal charge of up to 7% of the purchase payment(s) you withdraw in excess of the Preferred Withdrawal Amount, adjusted by a Market Value Adjustment. The charge declines by 1% annually to 0% after 7 complete years from the day we receive the purchase payment being withdrawn. A schedule showing how the charge declines appears on page __. During each Contract Year, you can withdraw up to 15% of purchase payments without paying the charge. Unused portions of this 15% "Preferred Withdrawal Amount" are not carried forward to future Contract Years. We determine the withdrawal charge by: o multiplying the percentage corresponding to the number of complete years since we received the purchase payment being withdrawn, times o the part of each purchase payment withdrawal that is in excess of the Preferred Withdrawal Amount, adjusted by a Market Value Adjustment. We will deduct withdrawal charges, if applicable, from the amount paid. For purposes of the withdrawal charge, we will treat withdrawals as coming from the oldest purchase payments first. However, for federal income tax purposes, please note that withdrawals are considered to have come first from earnings in the Contract. Thus, for tax purposes, earnings are considered to come out first, which means you pay taxes on the earnings portion of your withdrawal. We do not apply a withdrawal charge in the following situations: o on the Payout Start Date (a withdrawal charge may apply if you elect to receive income payments for a specified period of less than 120 months); o the death of the Contract owner (Annuitant if Contract owner is not a natural person); o withdrawals taken to satisfy IRS minimum distribution rules for the Contract; and o withdrawals made after all purchase payments have been withdrawn. We use the amounts obtained from the withdrawal charge to pay sales commissions and other promotional or distribution expenses associated with marketing the Contracts. To the extent that the withdrawal charge does not cover all sales commissions and other promotional or distribution expenses, we may use any of our corporate assets, including potential profit which may arise from the mortality and expense risk charge or any other charges or fee described above, to make up any difference. Withdrawals may be subject to tax penalties or income tax and a Market Value Adjustment. You should consult your own tax counsel or other tax advisers regarding any withdrawals. PREMIUM TAXES Currently, we do not make deductions for premium taxes under the Contract because New York does not charge premium taxes on annuities. We may deduct taxes that may be imposed in the future from purchase payments or the Contract Value when the tax is incurred or at a later time. DEDUCTION FOR VARIABLE ACCOUNT INCOME TAXES We are not currently making a provision for taxes. In the future, however, we may make a provision for taxes if we determine, in our sole discretion, that we will incur a tax as a result of the operation of the Variable Account. We will deduct for any taxes we incur as a result of the operation of the Variable Account, whether or not we previously made a provision for taxes and whether or not it was sufficient. Our status under the Internal Revenue Code is briefly described in the Statement of Additional Information. OTHER EXPENSES Each Portfolio deducts advisory fees and other expenses from its assets. You indirectly bear the charges and expenses of the Portfolios whose shares are held by the Variable Sub-Accounts. These fees and expenses are described in the accompanying prospectus for the Portfolios. For a summary of these charges and expenses, see pages ___ above. We may receive compensation from the investment advisers or administrators of the Portfolios for administrative services we provide to the Portfolios. . ACCESS TO YOUR MONEY - ------------------------------------------------------------------------------ You can withdraw some or all of your Contract Value at any time prior to the Payout Start Date. Withdrawals also are available under limited circumstances on or after the Payout Start Date. See "Income Plans" on page __. The amount payable upon withdrawal is the Contract Value next computed after we receive the request for a withdrawal at our service center, adjusted by any Market Value Adjustment, less any withdrawal charges, contract maintenance charges, income tax withholding, penalty tax, and any premium taxes. We will pay withdrawals from the Variable Account within 7 days of receipt of the request, subject to postponement in certain circumstances. You can withdraw money from the Variable Account or the Fixed Account. To complete a partial withdrawal from the Variable Account, we will cancel Accumulation Units in an amount equal to the withdrawal and any applicable withdrawal charge and premium taxes. You must name the investment alternative from which you are taking the withdrawal. If none is named, then the withdrawal request is incomplete and cannot be honored. In general, you must withdraw at least $50 at a time. You also may withdraw a lesser amount if you are withdrawing your entire interest in a Variable Sub-Account. If you request a total withdrawal, you must return your Contract to us. POSTPONEMENT OF PAYMENTS We may postpone the payment of any amounts due from the Variable Account under the Contract if: 1) The New York Stock Exchange is closed for other than usual weekends or holidays, or trading on the Exchange is otherwise restricted; 2) An emergency exists as defined by the SEC; or 3) The SEC permits delay for your protection. In addition, we may delay payments or transfers from the Fixed Account for up to 6 months or a shorter period if required by law. If we delay payment or transfer for 10 business days or more, we will pay interest as required by law. Any interest would be payable from the date we receive the withdrawal request to the date we make the payment or transfer. SYSTEMATIC WITHDRAWAL PROGRAM You may choose to receive systematic withdrawal payments on a monthly, quarterly, semi-annual, or annual basis at any time prior to the Payout Start Date. The minimum amount of each systematic withdrawal is $50. At our discretion, systematic withdrawals may not be offered in conjunction with the Dollar Cost Averaging Program or the Automatic Portfolio Rebalancing Program. Depending on fluctuations in the net asset value of the Variable Sub-Accounts and the value of the Fixed Account, systematic withdrawals may reduce or even exhaust the Contract Value. Income taxes may apply to systematic withdrawals. Please consult your tax advisor before taking any withdrawal. We will make systematic withdrawal payments to you or your designated payee. We may modify or suspend the Systematic Withdrawal Program and charge a processing fee for the service. If we modify or suspend the Systematic Withdrawal Program, existing systematic withdrawal payments will not be affected. MINIMUM CONTRACT VALUE If your request for a partial withdrawal would reduce the amount in any Guarantee Period to less than $500, we will treat it as a request to withdraw the entire amount invested in such Guarantee Period. In addition, if your request for a partial withdrawal would reduce the Contract Value to less than $1,000, we may treat it as a request to withdraw your entire Contract Value. Your Contract will terminate if you withdraw all of your Contract Value. We will, however, ask you to confirm your withdrawal request before terminating your Contract. If we terminate your Contract, we will distribute to you its Contract Value, adjusted by any applicable Market Value Adjustment, less withdrawal and other charges, income tax withholding, and premium taxes. INCOME PAYMENTS - ------------------------------------------------------------------------------ PAYOUT START DATE The Payout Start Date is the day that we apply your money to an Income Plan. The Payout Start Date must be no later than the Annuitant's 90th birthday. You may change the Payout Start Date at any time by notifying us in writing of the change at least 30 days before the scheduled Payout Start Date. Absent a change, we will use the Payout Start Date stated in your Contract. INCOME PLANS An "Income Plan" is a series of payments on a scheduled basis to you or to another person designated by you. You may choose and change your choice of Income Plan until 30 days before the Payout Start Date. If you do not select an Income Plan, we will make income payments in accordance with Income Plan 1 with guaranteed payments for 10 years. After the Payout Start Date, you may not make withdrawals (except as described below) or change your choice of Income Plan. Three Income Plans are available under the Contract. Each is available to provide: o fixed income payments; o variable income payments; or o a combination of the two. The three Income Plans are: Income Plan 1 -- Life Income with Guaranteed Payments. Under this plan, we make periodic income payments for at least as long as the Annuitant lives. If the Annuitant dies before we have made all of the guaranteed income payments, we will continue to pay the remainder of the guaranteed income payments as required by the Contract. Income Plan 2 -- Joint and Survivor Life Income with Guaranteed Payments. Under this plan, we make periodic income payments for at least as long as either the Annuitant or the joint Annuitant is alive. If both the Annuitant and the joint Annuitant die before we have made all of the guaranteed income payments, we will continue to pay the remainder of the guaranteed income payments as required by the Contract. Income Plan 3 -- Guaranteed Payments for a Specified Period (5 Years to 30 Years). Under this plan, we make periodic income payments for the period you have chosen. These payments do not depend on the Annuitant's life. Income payments for less than 120 months may be subject to a withdrawal charge. We will deduct the mortality and expense risk charge from variable income payments even though we may not bear any mortality risk. The length of any guaranteed payment period under your selected Income Plan generally will affect the dollar amounts of each income payment. As a general rule, longer guarantee periods result in lower income payments, all other things being equal. For example, if you choose an Income Plan with payments that depend on the life of the Annuitant but with no minimum specified period for guaranteed payments, the income payments generally will be greater than the income payments made under the same Income Plan with a minimum specified period for guaranteed payments. If you choose Income Plan 1 or 2, or, if available, another Income Plan with payments that continue for the life of the Annuitant or joint Annuitant, we may require proof of age and sex of the Annuitant or joint Annuitant before starting income payments, and proof that the Annuitant or joint Annuitant is alive before we make each payment. Please note that under such Income Plans, if you elect to take no minimum guaranteed payments, it is possible that the payee could receive only 1 income payment if the Annuitant and any joint Annuitant both die before the second income payment, or only 2 income payments if they die before the third income payment, and so on. Generally, you may not make withdrawals after the Payout Start Date. One exception to this rule applies if you are receiving variable income payments that do not depend on the life of the Annuitant (such as under Income Plan 3). In that case you may terminate the Variable Account portion of the income payments at any time and receive a lump sum equal to the present value of the remaining variable payments due. A withdrawal charge may apply. We deduct applicable premium taxes from the Contract Value at the Payout Start Date. We may make other Income Plans available. You may obtain information about them by writing or calling us. You must apply at least the Contract Value in the Fixed Account on the Payout Start Date to fixed income payments. If you wish to apply any portion of your Fixed Account balance to provide variable income payments, you should plan ahead and transfer that amount to the Variable Sub-Accounts prior to the Payout Start Date. If you do not tell us how to allocate your Contract Value among fixed and variable income payments, we will apply your Contract Value in the Variable Account to variable income payments and your Contract Value in the Fixed Account to fixed income payments. We will apply your Contract Value, adjusted by a Market Value Adjustment, less applicable taxes to your Income Plan on the Payout Start Date. If the Contract Value is less than $2,000 or not enough to provide an initial payment of at least $20, and state law permits, we may: o terminate the Contract and pay you the Contract Value, adjusted by any Market Value Adjustment and less any applicable taxes, in a lump sum instead of the periodic payments you have chosen, or o reduce the frequency of your payments so that each payment will be at least $20. VARIABLE INCOME PAYMENTS The amount of your variable income payments depends upon the investment results of the Variable Sub-Accounts you select, the premium taxes you pay, the age and sex of the Annuitant, and the Income Plan you choose. We guarantee that the payments will not be affected by (a) actual mortality experience and (b) the amount of our administration expenses. We cannot predict the total amount of your variable income payments. Your variable income payments may be more or less than your total purchase payments because (a) variable income payments vary with the investment results of the underlying Portfolio and (b) the Annuitant could live longer or shorter than we expect based on the tables we use. In calculating the amount of the periodic payments in the annuity tables in the Contract, we assumed an annual investment rate of 3%. If the actual net investment return of the Variable Sub-Accounts you choose is less than this assumed investment rate, then the dollar amount of your variable income payments will decrease. The dollar amount of your variable income payments will increase, however, if the actual net investment return exceeds the assumed investment rate. The dollar amount of the variable income payments stays level if the net investment return equals the assumed investment rate. Please refer to the Statement of Additional Information for more detailed information as to how we determine variable income payments. FIXED INCOME PAYMENTS We guarantee income payment amounts derived from the Fixed Account for the duration of the Income Plan. We calculate the fixed income payments by: 1) adjusting the portion of the Contract Value in the Fixed Account on the Payout Start Date by any applicable Market Value Adjustment; 2) deducting any applicable premium tax; and 3) applying the resulting amount to the greater of (a) the appropriate value from the income payment table in your Contract or (b) such other value as we are offering at that time. We may defer making fixed income payments for a period of up to 6 months or such shorter time as state law may require. If we defer payments for 10 business days or more, we will pay interest as required by law from the date we receive the withdrawal request to the date we make payment. CERTAIN EMPLOYEE BENEFIT PLANS The Contracts offered by this prospectus contain income payment tables that provide for different payments to men and women of the same age. However, we reserve the right to use income payment tables that do not distinguish on the basis of sex to the extent permitted by law. In certain employment-related situations, employers are required by law to use the same income payment tables for men and women. Accordingly, if the Contract is to be used in connection with an employment-related retirement or benefit plan, you should consult with legal counsel as to whether the purchase of a Contract is appropriate. For qualified plans, where it is appropriate, we may use income payment tables that do not distinguish on the basis of sex. DEATH BENEFITS - ------------------------------------------------------------------------------ We will pay a death benefit if, prior to the Payout Start Date: 1) any Contract owner dies or, 2) the Annuitant dies, if the Contract owner is not a natural person. We will pay the death benefit to the new Contract owner as determined immediately after the death. The new Contract owner would be a surviving Contract owner or, if none, the Beneficiary(ies). Death Benefit Amount Prior to the Payout Start Date, the death benefit is equal to the greatest of: 1) the Contract Value as of the date we determine the death benefit, or 2) the Settlement Value (that is, the amount payable on a full withdrawal of Contract Value) on the date we determine the death benefit, or 3) the Contract Value on the Death Benefit Anniversary immediately preceding the date we determine the death benefit, adjusted by any purchase payments, withdrawal adjustment as defined below, and charges made since that Death Benefit Anniversary. A "Death Benefit Anniversary" is every seventh Contract Anniversary beginning with the Issue Date. For example, the Issue Date, 7th and 14th Contract Anniversaries are the first three Death Benefit Anniversaries, or 4) the greatest of the Anniversary Values as of the date we determine the death benefit. An "Anniversary Value" is equal to the Contract Value on a Contract Anniversary, increased by purchase payments made since that anniversary and reduced by the amount of any withdrawal adjustment, as defined below, since that anniversary. Anniversary Values will be calculated for each Contract Anniversary prior to the earlier of: (i) the date we determine the death benefit, or (ii) the deceased's 75th birthday or 5 years after the Issue Date, if later. The value of the death benefit will be determined at the end of the Valuation Date on which we receive a complete request for payment of the death benefit, which includes Due Proof of Death. The withdrawal adjustment is equal to (a) divided by (b), with the result multiplied by (c), where: (a) = the withdrawal amount, (b) = the Contract Value immediately prior to the withdrawal, and (c) = the value of the applicable death benefit alternative immediately prior to the withdrawal. See Appendix B for an example representative of how the withdrawal adjustment applies. We will not settle any death claim until we receive Due Proof of Death. We will accept the following documentation as Due Proof of Death: o a certified copy of a death certificate; or o a certified copy of a decree of a court of competent jurisdiction as to a finding of death; or o any other proof acceptable to us. Death Benefit Payments A death benefit will be paid: 1) if the Contract owner elects to receive the death benefit distributed in a single payment within 180 days of the date of death, and 2) if the death benefit is paid as of the day the value of the death benefit is determined. Otherwise, the Settlement Value will be paid. The new Contract owner may make a single withdrawal of any amount within one year of the date of death without incurring a withdrawal charge. We are currently waiving the 180 day limit, but we reserve the right to enforce the limitation in the future. The Settlement Value paid will be the Settlement Value next computed on or after the requested distribution date for payment, or on the mandatory distribution date of 5 years after the date of death. In any event, the entire value of the Contract must be distributed within 5 years after the date of death unless an Income Plan is elected or a surviving spouse continues the Contract in accordance with the provisions described below. If the Contract owner eligible to receive the death benefit is not a natural person, the Contract owner may elect to receive the distribution upon death in one or more distributions. If the Contract owner is a natural person, the Contract owner may elect to receive the death benefit either in one or more distributions, or by periodic payments through an Income Plan. Payments from the Income Plan must begin within one year of the date of death and must be payable throughout: o the life of the Contract owner; or o a period not to exceed the life expectancy of the Contract owner; or o the life of the Contract owner with payments guaranteed for a period not to exceed the life expectancy of the Contract owner. If the surviving spouse of the deceased Contract owner is the new Contract owner, then the spouse may elect one of the options listed above or may continue the Contract in the Accumulation Phase as if the death had not occurred. The Contract may only be continued once. If the Contract is continued in the Accumulation Phase, the surviving spouse may make a single withdrawal of any amount within one year of the date of death without incurring a withdrawal charge. However, any applicable Market Value Adjustment, determined as of the date of the withdrawal, will apply. MORE INFORMATION - ------------------------------------------------------------------------------ ALLSTATE NEW YORK Allstate New York is the issuer of the Contract. Allstate New York is a stock life insurance company organized under the laws of the State of New York. Allstate New York was incorporated in 1967 and was known as "Financial Life Insurance Company" from 1967 to 1978. From 1978 to 1984, Allstate New York was known as "PM Life Insurance Company." Since 1984 the company has been known as "Allstate Life Insurance Company of New York." Allstate New York is currently licensed to operate in New York. Our home office is One Allstate Drive, Farmingville, New York 11738. Our servicing center is located in Northbrook, Illinois. Allstate New York is a wholly owned subsidiary of Allstate Life Insurance Company ("Allstate Life"), a stock life insurance company incorporated under the laws of the State of Illinois. Allstate Life is a wholly owned subsidiary of Allstate Insurance Company, a stock property-liability insurance company incorporated under the laws of the State of Illinois. With the exception of the directors qualifying shares, all of the outstanding capital stock of Allstate Insurance Company is owned by The Allstate Corporation. Several independent rating agencies regularly evaluate life insurers' claims-paying ability, quality of investments, and overall stability. A.M. Best Company assigns Allstate New York the financial performance rating of A+(g). Standard & Poor's Insurance Rating Services assigns an AA+ (Very Strong) financial strength rating and Moody's assigns an Aa2 (Excellent) financial strength rating to Allstate New York. These ratings do not reflect the investment performance of the Variable Account. We may from time to time advertise these ratings in our sales literature. THE VARIABLE ACCOUNT Allstate New York established the Allstate Life of New York Separate Account A on December 15, 1995. We have registered the Variable Account with the SEC as a unit investment trust. The SEC does not supervise the management of the Variable Account or Allstate New York. We own the assets of the Variable Account. The Variable Account is a segregated asset account under New York law. That means we account for the Variable Account's income, gains and losses separately from the results of our other operations. It also means that only the assets of the Variable Account that are in excess of the reserves and other Contract liabilities with respect to the Variable Account are subject to liabilities relating to our other operations. Our obligations arising under the Contracts are general corporate obligations of Allstate New York. The Variable Account consists of multiple Variable Sub-Accounts, 28 of which are available through the Contracts. Each Variable Sub-Account invests in a corresponding Portfolio. We may add new Variable Sub-Accounts or eliminate one or more of them, if we believe marketing, tax, or investment conditions so warrant. We do not guarantee the investment performance of the Variable Account, its Sub-Accounts or the Portfolios. We may use the Variable Account to fund our other annuity contracts. We will account separately for each type of annuity contract funded by the Variable Account. THE PORTFOLIOS Dividends and Capital Gain Distributions. We automatically reinvest all dividends and capital gains distributions from the Portfolios in shares of the distributing Portfolio at their net asset value. Voting Privileges. As a general matter, you do not have a direct right to vote the shares of the Portfolios held by the Variable Sub-Accounts to which you have allocated your Contract Value. Under current law, however, you are entitled to give us instructions on how to vote those shares on certain matters. Based on our present view of the law, we will vote the shares of the Portfolios that we hold directly or indirectly through the Variable Account in accordance with instructions that we receive from Contract owners entitled to give such instructions. As a general rule, before the Payout Start Date, the Contract owner or anyone with a voting interest is the person entitled to give voting instructions. The number of shares that a person has a right to instruct will be determined by dividing the Contract Value allocated to the applicable Variable Sub-Account by the net asset value per share of the corresponding Portfolio as of the record date of the meeting. After the Payout Start Date, the person receiving income payments has the voting interest. The payee's number of votes will be determined by dividing the reserve for such Contract allocated to the applicable Variable Sub-account by the net asset value per share of the corresponding Portfolio. The votes decrease as income payments are made and as the reserves for the Contract decrease. We will vote shares attributable to Contracts for which we have not received instructions, as well as shares attributable to us, in the same proportion as we vote shares for which we have received instructions, unless we determine that we may vote such shares in our own discretion. We will apply voting instructions to abstain on any item to be voted on a pro-rata basis to reduce the votes eligible to be cast. We reserve the right to vote Portfolio shares as we see fit without regard to voting instructions to the extent permitted by law. If we disregard voting instructions, we will include a summary of that action and our reasons for that action in the next semi-annual financial report we send to you. Changes in Portfolios. If the shares of any of the Portfolios are no longer available for investment by the Variable Account or if, in our judgment, further investment in such shares is no longer desirable in view of the purposes of the Contract, we may eliminate that Portfolio and substitute shares of another eligible investment portfolio. Any substitution of securities will comply with the requirements of the 1940 Act. We also may add new Variable Sub-Accounts that invest in additional mutual funds. We will notify you in advance of any changes. Conflicts of Interest. Certain of the Portfolios sell their shares to Variable Accounts underlying both variable life insurance and variable annuity contracts. It is conceivable that in the future it may be unfavorable for variable life insurance Variable Accounts and variable annuity Variable Accounts to invest in the same Portfolio. The boards of directors of these Portfolios monitor for possible conflicts among Variable Accounts buying shares of the Portfolios. Conflicts could develop for a variety of reasons. For example, differences in treatment under tax and other laws or the failure by a Variable Account to comply with such laws could cause a conflict. To eliminate a conflict, a Portfolio's board of directors may require a Variable Account to withdraw its participation in a Portfolio. A Portfolio's net asset value could decrease if it had to sell investment securities to pay redemption proceeds to a Variable Account withdrawing because of a conflict. THE CONTRACT Distribution. Allstate Life Financial Services, Inc. ("ALFS"), located at 3100 Sanders Road, Northbrook, Illinois 60062-7154, serves as distributor of the Contracts. ALFS is a wholly owned subsidiary of Allstate Life Insurance Company. ALFS is a registered broker dealer under the Securities and Exchange Act of 1934, as amended ("Exchange Act"), and is a member of the National Association of Securities Dealers, Inc. We will pay commissions to broker-dealers who sell the Contracts. Commissions paid may vary, but we estimate that the total commissions paid on all Contract sales will not exceed 6.25% of any purchase payments. These commissions are intended to cover distribution expenses. In some states, Contracts may be sold by representatives or employees of banks which may be acting as broker-dealers without separate registration under the Exchange Act, pursuant to legal and regulatory exceptions. Allstate New York does not pay ALFS a commission for distribution of the Contracts. The underwriting agreement with ALFS provides that we will reimburse ALFS for any liability to Contract owners arising out of services rendered or Contracts issued. Administration. We have primary responsibility for all administration of the Contracts and the Variable Account. We provide the following administrative services, among others: o issuance of the Contracts; o maintenance of Contract owner records; o Contract owner services; o calculation of unit values; o maintenance of the Variable Account; and o preparation of Contract owner reports. We will send you Contract statements and transaction confirmations at least annually. The annual statement details values and specific Contract data for each particular Contract. You should notify us promptly in writing of any address change. You should read your statements and confirmations carefully and verify their accuracy. You should contact us promptly if you have a question about a periodic statement. We will investigate all complaints and make any necessary adjustments retroactively, but you must notify us of a potential error within a reasonable time after the date of the questioned statement. If you wait too long, we will make the adjustment as of the date that we receive notice of the potential error. We also will provide you with additional periodic and other reports, information and prospectuses as may be required by federal securities laws. QUALIFIED PLANS If you use the Contract with a qualified plan, the plan may impose different or additional conditions or limitations on withdrawals, waivers of withdrawal charges, death benefits, Payout Start Dates, income payments, and other Contract features. In addition, adverse tax consequences may result if qualified plan limits on distributions and other conditions are not met. Please consult your qualified plan administrator for more information. LEGAL MATTERS Freedman, Levy, Kroll & Simonds, Washington, D.C., has advised Allstate New York on certain federal securities law matters. All matters of New York law pertaining to the Contracts, including the validity of the Contracts and Allstate New York's right to issue such Contracts under New York insurance law, have been passed upon by Michael J. Velotta, General Counsel of Allstate New York. YEAR 2000 Allstate New York is heavily dependent upon complex computer systems for all phases of its operations, including customer service, risk management, and policy and contract administration. Since many of Allstate New York's older computer software programs recognize only the last two digits of the year in any date, some software may fail to operate properly in or after the year 1999, if the software is not reprogrammed or replaced, ("Year 2000 Issue"). Allstate New York believes that many of its counterparties and suppliers also have Year 2000 Issues which could affect Allstate New York. In 1995, Allstate Insurance Company commenced a plan intended to mitigate and/or prevent the adverse effects of Year 2000 Issues. These strategies include normal development and enhancement of new and existing systems, upgrades to operating systems already covered by maintenance agreements and modifications to existing systems to make them Year 2000 compliant. The plan also includes Allstate New York actively working with its major external counterparties and suppliers to assess their compliance efforts and Allstate New York's exposure to them. Allstate New York presently believes that it will resolve the Year 2000 Issue in a timely manner, and the financial impact will not materially affect its results of operations, liquidity or financial position. Year 2000 costs are and will be expensed as incurred. TAXES - ------------------------------------------------------------------------------ The following discussion is general and is not intended as tax advice. Allstate New York makes no guarantee regarding the tax treatment of any Contract or transaction involving a Contract. Federal, state, local and other tax consequences of ownership or receipt of distributions under an annuity contract depend on your individual circumstances. If you are concerned about any tax consequences with regard to your individual circumstances, you should consult a competent tax adviser. Taxation of Annuities in General Tax Deferral. Generally, you are not taxed on increases in the Contract Value until a distribution occurs. This rule applies only where: 1) the Contract owner is a natural person, 2) the investments of the Variable Account are "adequately diversified" according to Treasury Department regulations, and 3) Allstate New York is considered the owner of the Variable Account assets for federal income tax purposes. Non-natural Owners. As a general rule, annuity contracts owned by non-natural persons such as corporations, trusts, or other entities are not treated as annuity contracts for federal income tax purposes. The income on such contracts is taxed as ordinary income received or accrued by the owner during the taxable year. Please see the Statement of Additional Information for a discussion of several exceptions to the general rule for Contracts owned by non-natural persons. Diversification Requirements. For a Contract to be treated as an annuity for federal income tax purposes, the investments in the Variable Account must be "adequately diversified" consistent with standards under Treasury Department regulations. If the investments in the Variable Account are not adequately diversified, the contract will not be treated as an annuity contract for federal income tax purposes. As a result, the income on the Contract will be taxed as ordinary income received or accrued by the owner during the taxable year. Although Allstate New York does not have control over the Portfolios or their investments, we expect the Portfolios to meet the diversification requirements. Ownership Treatment. The IRS has stated that you will be considered the owner of Variable Account assets if you possess incidents of ownership in those assets, such as the ability to exercise investment control over the assets. At the time the diversification regulations were issued, the Treasury Department announced that the regulations do not provide guidance concerning circumstances in which investor control of the Variable Account investments may cause an investor to be treated as the owner of the Variable Account. The Treasury Department also stated that future guidance would be issued regarding the extent that owners could direct sub-account investments without being treated as owners of the underlying assets of the Variable Account. Your rights under the Contract are different than those described by the IRS in rulings in which it found that contract owners were not owners of Variable Account assets. For example, you have the choice to allocate premiums and Contract Values among more investment alternatives. Also, you may be able to transfer among investment alternatives more frequently than in such rulings. These differences could result in you being treated as the owner of the Variable Account. If this occurs, income and gain from the Variable Account assets would be includible in your gross income. Allstate New York does not know what standards will be set forth in any regulations or rulings which the Treasury Department may issue. It is possible that future standards announced by the Treasury Department could adversely affect the tax treatment of your Contract. We reserve the right to modify the Contract as necessary to attempt to prevent you from being considered the federal tax owner of the assets of the Variable Account. However, we make no guarantee that such modification to the Contract will be successful. Taxation of Partial and Full Withdrawals. If you make a partial withdrawal under a non-Qualified Contract, amounts received are taxable to the extent the Contract Value, without regard to surrender charges, exceeds the investment in the Contract. The investment in the Contract is the gross premium paid for the Contract minus any amounts previously received from the Contract if such amounts were properly excluded from your gross income. If you make a partial withdrawal under a Qualified Contract, the portion of the payment that bears the same ratio to the total payment that the investment in the Contract (i.e., nondeductible IRA contributions, after tax contributions to qualified plans) bears to the contract value, is excluded from your income. If you make a full withdrawal under a non-Qualified Contract or a Qualified Contract, the amount received will be taxable only to the extent it exceeds the investment in the contract. "Nonqualified distributions" from Roth IRAs are treated as made from contributions first and are included in gross income only to the extent that distributions exceed contributions. "Qualified distributions" from Roth IRAs are not included in gross income. "Qualified distributions" are any distributions made more than 5 taxable years after the taxable year of the first contribution to any Roth IRA and which are: o made on or after the date the individual attains age 59 1/2, o made to a beneficiary after the Contract owner's death, o attributable to the Contract owner being disabled, or o for a first time home purchase (first time home purchases are subject to a lifetime limit of $10,000). If you transfer a non-Qualified Contract without full and adequate consideration to a person other than your spouse (or to a former spouse incident to a divorce), you will be taxed on the difference between the Contract Value and the investment in the Contract at the time of transfer. Except for certain Qualified Contracts, any amount you receive as a loan under a Contract, and any assignment or pledge (or agreement to assign or pledge) of the Contract Value is treated as a withdrawal of such amount or portion. Taxation of Annuity Payments. Generally, the rule for income taxation of annuity payments received from a non-Qualified Contract provides for the return of your investment in the Contract in equal tax-free amounts over the payment period. The balance of each payment received is taxable. For fixed annuity payments, the amount excluded from income is determined by multiplying the payment by the ratio of the investment in the Contract (adjusted for any refund feature or period certain) to the total expected value of annuity payments for the term of the contract. If you elect variable annuity payments, the amount excluded from taxable income is determined by dividing the investment in the Contract by the total number of expected payments. The annuity payments will be fully taxable after the total amount of the investment in the Contract is excluded using these ratios. If you die, and annuity payments cease before the total amount of the investment in the Contract is recovered, the unrecovered amount will be allowed as a deduction for your last taxable year. Taxation of Annuity Death Benefits. Death of a Contract owner, or death of the Annuitant if the Contract is owned by a non-natural person, will cause a distribution of death benefits from a Contract. Generally, such amounts are included in income as follows: 1) if distributed in a lump sum, the amounts are taxed in the same manner as a full withdrawal, or 2) if distributed under an annuity option, the amounts are taxed in the same manner as an annuity payment. Please see the Statement of Additional Information for more detail on distribution at death requirements. Penalty Tax on Premature Distributions. A 10% penalty tax applies to the taxable amount of any premature distribution from a non-Qualified Contract. The penalty tax generally applies to any distribution made prior to the date you attain age 59 1/2. However, no penalty tax is incurred on distributions: 1) made on or after the date the Contract owner attains age 59 1/2; 2) made as a result of the Contract owner's death or disability; 3) made in substantially equal periodic payments over the owner's life or life expectancy, 4) made under an immediate annuity; or 5) attributable to investment in the contract before August 14, 1982. You should consult a competent tax advisor to determine if any other exceptions to the penalty apply to your situation. Similar exceptions may apply to distributions from Qualified Contracts. Aggregation of Annuity Contracts. All non-qualified deferred annuity contracts issued by Allstate New York (or its affiliates) to the same Contract owner during any calendar year will be aggregated and treated as one annuity contract for purposes of determining the taxable amount of a distribution. TAX QUALIFIED CONTRACTS The income on qualified plan and IRA investments is tax deferred and variable annuities held by such plans do not receive any additional tax deferral. You should review the annuity features, including all benefits and expenses, prior to purchasing a variable annuity in a qualified plan or IRA. Contracts may be used as investments with certain qualified plans such as: o Individual Retirement Annuities or Accounts (IRAs) under Section 408 of the Code; o Roth IRAs under Section 408A of the Code; o Simplified Employee Pension Plans under Section 408(k) of the Code; o Savings Incentive Match Plans for Employees (SIMPLE) Plans under Section 408(p) of the Code; o Tax Sheltered Annuities under Section 403(b) of the Code; o Corporate and Self Employed Pension and Profit Sharing Plans; and o State and Local Government and Tax-Exempt Organization Deferred Compensation Plans. Allstate New York reserves the right to limit the availability of the Contract for use with any of the qualified plans listed above. In the case of certain qualified plans, the terms of the plans may govern the right to benefits, regardless of the terms of the Contract. Restrictions Under Section 403(b) Plans. Section 403(b) of the Tax Code provides tax-deferred retirement savings plans for employees of certain non-profit and educational organizations. Under Section 403(b), any Contract used for a 403(b) plan must provide that distributions attributable to salary reduction contributions made after December 31, 1988, and all earnings on salary reduction contributions, may be made only: 1) on or after the date the employee o attains age 59 1/2, o separates from service, o dies, o becomes disabled, or 2) on account of hardship (earnings on salary reduction contributions may not be distributed on account of hardship). These limitations do not apply to withdrawals where Allstate New York is directed to transfer some or all of the Contract Value to another 403(b) plan. INCOME TAX WITHHOLDING Allstate New York is required to withhold federal income tax at a rate of 20% on all "eligible rollover distributions" unless you elect to make a "direct rollover" of such amounts to an IRA or eligible retirement plan. Eligible rollover distributions generally include all distributions from Qualified Contracts, excluding IRAs, with the exception of: 1) required minimum distributions, or 2) a series of substantially equal periodic payments made over a period of at least 10 years, or, 3) over the life (joint lives) of the participant (and beneficiary). Allstate New York may be required to withhold federal and state income taxes on any distributions from non-Qualified Contracts or Qualified Contracts that are not eligible rollover distributions, unless you notify us of your election to not have taxes withheld. ANNUAL REPORTS AND OTHER DOCUMENTS - ------------------------------------------------------------------------------ Allstate New York's annual report on Form 10-K for the year ended December 31, 1998 and the 10-Q reports for March 31, 1999, June 30, 1999 and September 30, 1999 are incorporated herein by reference, which means that they are legally a part of this prospectus. After the date of this prospectus and before we terminate the offering of the securities under this prospectus, all documents or reports we file with the SEC under the Exchange Act are also incorporated herein by reference, which means that they also legally become a part of this prospectus. Statements in this prospectus, or in documents that we file later with the SEC and that legally become a part of this prospectus, may change or supersede statements in other documents that are legally part of this prospectus. Accordingly, only the statement that is changed or replaced will legally be a part of this prospectus. We file our Exchange Act documents and reports, including our annual and quarterly reports on Form 10-K and Form 10-Q electronically on the SEC's "EDGAR" system using the identifying number CIK No. 0000948255. The SEC maintains a Web site that contains reports, proxy and information statements and other information regarding registrants that file electronically with the SEC. The address of the site is http://www.sec.gov. You also can view these materials at the SEC's Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549. For more information on the operations of SEC's Public Reference Room, call 1-800-SEC-0330. If you have received a copy of this prospectus, and would like a free copy of any document incorporated herein by reference (other than exhibits not specifically incorporated by reference into the text of such documents), please write or call us at Customer Service, P.O. Box 94038, Palatine, Illinois 60094-4038 (telephone: 1-800-692-4682). PERFORMANCE INFORMATION - ------------------------------------------------------------------------------ We may advertise the performance of the Variable Sub-Accounts, including yield and total return information. Yield refers to the income generated by an investment in a Variable Sub-Account over a specified period. Total return represents the change, over a specified period of time, in the value of an investment in a Variable Sub-Account after reinvesting all income distributions. All performance advertisements will include, as applicable, standardized yield and total return figures that reflect the deduction of insurance charges, the contract maintenance charge, and withdrawal charge. Performance advertisements also may include total return figures that reflect the deduction of insurance charges, but not the contract maintenance or withdrawal charges. The deduction of such charges would reduce the performance shown. In addition, performance advertisements may include aggregate, average, year-by-year, or other types of total return figures. Performance information for periods prior to the inception date of the Variable Sub-Accounts will be based on the historical performance of the corresponding Portfolios for the periods beginning with the inception dates of the Portfolios and adjusted to reflect current Contract expenses. You should not interpret these figures to reflect actual historical performance of the Variable Account. We may include in advertising and sales materials tax deferred compounding charts and other hypothetical illustrations that compare currently taxable and tax deferred investment programs based on selected tax brackets. Our advertisements also may compare the performance of our Variable Sub-Accounts with: (a) certain unmanaged market indices, including but not limited to the Dow Jones Industrial Average, the Standard & Poor's 500, and the Shearson Lehman Bond Index; and/or (b) other management investment companies with investment objectives similar to the underlying funds being compared. In addition, our advertisements may include the performance ranking assigned by various publications, including the Wall Street Journal, Forbes, Fortune, Money, Barron's, Business Week, USA Today, and statistical services, including Lipper Analytical Services Mutual Fund Survey, Lipper Annuity and Closed End Survey, the Variable Annuity Research Data Survey, and SEI. APPENDIX A MARKET VALUE ADJUSTMENT The Market Value Adjustment is based on the following: I = the Treasury Rate for a maturity equal to the applicable Guarantee Period for the week preceding the establishment of the Guarantee Period. N = the number of whole and partial years from the date we receive the withdrawal, transfer or death benefit request, or from the Payout Start Date to the end of the Guarantee Period. J = the Treasury Rate for a maturity of length N for the week preceding the receipt of the withdrawal, transfer, death benefit, or income payment request. If a note with a maturity of length N is not available, a weighted average will be used. If N is one year or less, J will be the 1-year Treasury Rate. Treasury Rate means the U.S. Treasury Note Constant Maturity yield as reported in Federal Reserve Bulletin Release H.15. The Market Value Adjustment factor is determined from the following formula: .9 X (I - J) X N To determine the Market Value Adjustment, we will multiply the Market Value Adjustment factor by the amount transferred, withdrawn (in excess of the Preferred Withdrawal Amount), paid as a death benefit, or applied to an Income Plan, from a Guarantee Period at any time other than during the 30 day period after such Guarantee Period expires. EXAMPLES OF MARKET VALUE ADJUSTMENT
Purchase Payment: $10,000 allocated to a Guarantee Period Guarantee Period: 5 years Guaranteed Interest Rate: 4.50% 5 Year Treasury Rate at the time the Guarantee Period is established: 4.50% Full Surrender: End of Contract Year 3 NOTE: These examples assume that premium taxes are not applicable. EXAMPLE 1: (Assumes declining interest rates) Step 1. Calculate Contract Value at End of Contract Year 3: 10,000.00 X (1.045)3 = $11,411.66 Step 2. Calculate the Preferred Withdrawal Amount: .15 X 10,000.00 = $1,500.00 Step 3. Calculate the Market Value Adjustment: I = 4.5% J = 4.2% 730 Days -------- N = 365 days = 2 Market Value Adjustment Factor: .9 X (I-J) X N = .9 X (.045 - .042) X (730/365) = .0054 Market Value Adjustment = Market Value Adjustment Factor X Amount Subject to Market Value Adjustment: = .0054 X (11,411.66-1,500.00) = $53.52 Step 4. Calculate the Withdrawal Charge: .05 X (10,000.00 - 1,500.00 + 53.52)=$427.68 Step 5. Calculate the amount received by Customers as a result of full withdrawal at the end of Contract Year 3: 11,411.66 - 427.68 + 53.52 = $11,037.50
EXAMPLE 2: (Assumes rising interest rates)
Step 1. Calculate Contract Value at End of Contract Year 3: 10,000.00 X (1.045)3 = $11,411.66 Step 2. Calculate the Preferred Withdrawal Amount: .15 X (10,000.00) = $1,500.00 Step 3. Calculate the Market Value Adjustment: I = 4.5% J = 4.8% 730 days -------- N = 365 days = 2 Market Value Adjustment Factor: .9 X (I-J) X N = .9 X (.045 - .048) X (730/365) = -.0054 Market Value Adjustment = Market Value Adjustment Factor X Amount Subject to Market Value Adjustment = -.0054 X (11,411.66 - 1,500) = - $53.52 Step 4. Calculate the Withdrawal Charge: .05 X (10,000.00 - 1,500 - 53.52) = $422.32 Step 5. Calculate the amount received by customers as a result of full withdrawal at the end of Contract Year 3: 11,411.66 - 422.32 - 53.52 = $10,935.82
APPENDIX B WITHDRAWAL ADJUSTMENT EXAMPLE Issue Date: January 1, 1999 Initial Purchase Payment: $50,000
Death Benefit Amount Contract Contract Death Value Before Transaction Value Benefit Greatest Occurrence Amount After Anniversary Anniversary Date Type of Occurrence Occurrence Value Value 1/1/99 Issue Date - $50,000 $50,000 $50,000 $50,000 1/1/00 Contract Anniversary $55,000 - $55,000 $50,000 $55,000 7/1/00 Partial Withdrawal $60,000 $15,000 $45,000 $37,500 $41,250
Withdrawal adjustment equals the partial withdrawal amount divided by the Contract Value immediately prior to the partial withdrawal multiplied by the value of the applicable death benefit amount alternative immediately prior to the partial withdrawal.
Death Benefit Anniversary Value Death Benefit Partial Withdrawal Amount (w) $15,000 Contract Value Immediately Prior to Partial Withdrawal (a) $60,000 Value of Applicable Death Benefit Amount Immediately Prior to Partial Withdrawal (d) $50,000 Withdrawal Adjustment [(w)/(a)]*(d) $12,500 Adjusted Death Benefit $37,500 Greatest Anniversary Value Death Benefit Partial Withdrawal Amount (w) $15,000 Contract Value Immediately Prior to Partial Withdrawal (a) $60,000 Value of Applicable Death Benefit Amount Immediately Prior to Partial Withdrawal (d) $55,000 Withdrawal Adjustment [(w)/a)]*(d) $13,750 Adjusted Death Benefit $41,250 This example represents the proportional reduction applicable in all contracts.
STATEMENT OF ADDITIONAL INFORMATION TABLE OF CONTENTS Description Page Additions, Deletions or Substitutions of Investments...................... The Contract.............................................................. Purchases........................................................ Tax-free Exchanges (1035 Exchanges, Rollovers and Transfers)..... Performance Information................................................... Calculation of Accumulation Unit Values................................... Calculation of Variable Income Payments................................... General Matters........................................................... Incontestability................................................. Settlements...................................................... Safekeeping of the Variable Account's Assets..................... Premium Taxes.................................................... Tax Reserves..................................................... Federal Tax Matters....................................................... Qualified Plans........................................................... Experts................................................................... Financial Statements...................................................... ----------------------------------------------- This prospectus does not constitute an offering in any jurisdiction in which such offering may not lawfully be made. We do not authorize anyone to provide any information or representations regarding the offering described in this prospectus other than as contained in this prospectus. [back cover] ALLSTATE CUSTOM PORTFOLIO VARIABLE ANNUITY
Allstate Life Insurance Company of New York Statement of Additional Information Allstate Life of New York Separate Account A dated ________, 2000 One Allstate Drive, Farmingville, New York 11738
Service Center P.O. Box 94038, Palatine, IL 60094-4038 Telephone Number: 1-800-692-4682 This Statement of Additional Information supplements the information in the prospectus for the Allstate Custom Portfolio Variable Annuity. This Statement of Additional Information is not a prospectus. You should read it with the prospectus, dated _________, 2000, for the Contract. You may obtain a prospectus by writing or calling us at the Service Center address or telephone number listed above. Except as otherwise noted, this Statement of Additional Information uses the same defined terms as the prospectus.
TABLE OF CONTENTS Description Page Additions, Deletions or Substitutions of Investments The Contract Purchases Tax-free Exchanges (1035 Exchanges, Rollovers and Transfers) Performance Information Calculation of Accumulation Unit Values Calculation of Variable Income Payments General Matters Incontestability Settlements Safekeeping of the Variable Account's Assets Premium Taxes Tax Reserves Federal Tax Matters Qualified Plans Experts Financial Statements
ADDITIONS, DELETIONS OR SUBSTITUTIONS OF INVESTMENTS - ------------------------------------------------------------------------------ We may add, delete, or substitute the Portfolio shares held by any Variable Sub-Account to the extent the law permits. We may substitute shares of any Portfolio with those of another Portfolio of the same or different mutual fund if the shares of the Portfolio are no longer available for investment, or if we believe investment in any Portfolio would become inappropriate in view of the purposes of the Variable Account. We will not substitute shares attributable to a Contract owner's interest in a Variable Sub-Account until we have notified the Contract owner of the change, and until the Securities and Exchange Commission has approved the change, to the extent such notification and approval are required by law. Nothing contained in this Statement of Additional Information shall prevent the Variable Account from purchasing other securities for other series or classes of contracts, or from effecting a conversion between series or classes of contracts on the basis of requests made by Contract owners. We also may establish additional Variable Sub-Accounts or series of Variable Sub-Accounts. Each additional Variable Sub-Account would purchase shares in a new Portfolio of the same or different mutual fund. We may establish new Variable Sub-Accounts when we believe marketing needs or investment conditions warrant. We determine the basis on which we will offer any new Variable Sub-Accounts in conjunction with the Contract to existing Contract owners. We may eliminate one or more Variable Sub-Accounts if, in our sole discretion, marketing, tax or investment conditions so warrant. We may, by appropriate endorsement, change the Contract as we believe necessary or appropriate to reflect any substitution or change in the Portfolios. If we believe the best interests of persons having voting rights under the Contracts would be served, we may operate the Variable Account as a management company under the Investment Company Act of 1940 or we may withdraw its registration under such Act if such registration is no longer required. THE CONTRACT - ------------------------------------------------------------------------------ The Contract is primarily designed to aid individuals in long-term financial planning. You can use it for retirement planning regardless of whether the retirement plan qualifies for special federal income tax treatment. PURCHASE OF CONTRACTS We offer the Contracts to the public through banks as well as brokers licensed under the federal securities laws and state insurance laws. The principal underwriter for the Variable Account, Allstate Life Financial Services, Inc. ("ALFS"), distributes the Contracts. ALFS is an affiliate of Allstate New York. The offering of the Contracts is continuous. We do not anticipate discontinuing the offering of the Contracts, but we reserve the right to do so at any time. TAX-FREE EXCHANGES (1035 EXCHANGES, ROLLOVERS AND TRANSFERS) We accept purchase payments that are the proceeds of a Contract in a transaction qualifying for a tax-free exchange under Section 1035 of the Internal Revenue Code ("Code"). Except as required by federal law in calculating the basis of the Contract, we do not differentiate between Section 1035 purchase payments and non-Section 1035 purchase payments. We also accept "rollovers" and transfers from Contracts qualifying as tax-sheltered annuities ("TSAs"), individual retirement annuities or accounts ("IRAs"), or any other Qualified Contract that is eligible to "rollover" into an IRA. We differentiate among non-Qualified Contracts, TSAs, IRAs and other Qualified Contracts to the extent necessary to comply with federal tax laws. For example, we restrict the assignment, transfer, or pledge of TSAs and IRAs so the Contracts will continue to qualify for special tax treatment. A Contract owner contemplating any such exchange, rollover or transfer of a Contract should contact a competent tax adviser with respect to the potential effects of such a transaction. PERFORMANCE INFORMATION - ------------------------------------------------------------------------------ From time to time we may advertise the "standardized," "non-standardized," and "adjusted historical" total returns of the Variable Sub-Accounts, as described below. Please remember that past performance is not an estimate or guarantee of future performance and does not necessarily represent the actual experience of amounts invested by a particular Contract owner. STANDARDIZED TOTAL RETURNS A Variable Sub-Account's standardized total return represents the average annual total return of that Sub-Account over a particular period. We compute standardized total return by finding the annual percentage rate that, when compounded annually, will accumulate a hypothetical $1,000 purchase payment to the redeemable value at the end of the one, five or ten year period, or for a period from the date of commencement of the Variable Sub-Account's operations, if shorter than any of the foregoing. We use the following formula prescribed by the SEC for computing standardized total return: 1000(1 + T)n = ERV where: T = average annual total return ERV = ending redeemable value of a hypothetical $1,000 payment made at the beginning of 1, 5, or 10 year periods or shorter period n = number of years in the period 1000 = hypothetical $1,000 investment When factoring in the withdrawal charge assessed upon redemption, we exclude the Preferred Withdrawal Amount, which is the amount you can withdraw from the Contract without paying a withdrawal charge. We also use the withdrawal charge that would apply upon redemption at the end of each period. Thus, for example, when factoring in the withdrawal charge for a one year standardized total return calculation, we would use the withdrawal charge that applies to a withdrawal of a purchase payment made one year prior. When factoring in the contract maintenance charge, we pro rate the charge by dividing (i) the contract maintenance charges by (ii) the average Contract size of $40,000. We then multiply the resulting percentage by a hypothetical $1,000 investment. The standardized total returns for the Variable Sub-Accounts for the periods ended June 30, 1999 are set out below. No standardized total returns are shown for the HSBC VI Cash Management Variable Sub-Account. In addition, no standardized total returns are shown for the AIM V.I. Balanced, AIM V.I. High Yield, Fidelity VIP Equity Income, Fidelity VIP Growth, Fidelity VIP Overseas, Fidelity VIP II Contrafund, Fidelity VIP III Growth Opportunities, Templeton Asset Allocation - Class 2, Templeton International - Class 2, Oppenheimer VA Aggressive Growth, Oppenheimer VA Main Street Growth & Income, Oppenheimer VA Strategic Bond, Dreyfus Socially Responsible Growth, Dreyfus Stock Index, Dreyfus VI Capital Appreciation, Wells Fargo VT Asset Allocation, Wells Fargo VT Equity Income, Wells Fargo VT Growth, Delaware GP Small Cap Value Series, Delaware GP Trend Series, HSBC VI Fixed Income, and HSBC VI Growth & Income Variable Sub-Accounts, which had not commenced operations as of the date of this Statement of Additional Information. The Allstate Custom Portfolio Variable Annuity Contracts were first offered to the public on __________, 2000. Accordingly, performance figures for the Variable Sub-Accounts prior to that date reflect the historical performance of the Variable Sub-Accounts, adjusted to reflect the current level of charges that apply to the Variable Sub-Accounts under the Contracts, including the withdrawal charge and contract maintenance charge described above. The Variable Sub-Accounts commenced operations on the following dates: AIM V.I. Capital Appreciation October 14, 1996 AIM V.I. Government Securities October 14, 1996 AIM V.I. Growth October 14, 1996 AIM V.I. International Equity October 14, 1996 AIM V.I. Value October 14, 1996
Variable Sub-Account One Year Five Years Since Inception AIM V.I. Capital Appreciation 22.59% N/A 15.54% AIM V.I. Government Securities -2.72% N/A 3.03% AIM V.I. Growth 30.89% N/A 17.99% AIM V.I. International Equity 14.37% N/A 11.32% AIM V.I. Value 30.89% N/A 17.99%
NON-STANDARDIZED TOTAL RETURNS From time to time, we also may quote average annual total returns that do not reflect the withdrawal charge. We calculate these "non-standardized total returns" in exactly the same way as the standardized total returns described above, except that we replace the ending redeemable value of the hypothetical account for the period with an ending redeemable value for the period that does not take into account any charges on amounts surrendered. In addition, we may advertise the total return over different periods of time by means of aggregate, average, year-by-year or other types of total return figures. Such calculations would not reflect deductions for withdrawal charges which may be imposed on the Contracts which, if reflected, would reduce the performance quoted. The formula for computing such total return quotations involves a per unit change calculation. This calculation is based on the Accumulation Unit Value at the end of the defined period divided by the Accumulation Unit Value at the beginning of such period, minus 1. The periods included in such advertisements are "year-to-date" (prior calendar year end to the day of the advertisement); "year to most recent quarter" (prior calendar year end to the end of the most recent quarter); "the prior calendar year"; " 'n' most recent Calendar Years"; and "Inception (commencement of the Sub-account's operation) to date" (day of the advertisement). The non-standardized total returns for the Variable Sub-Accounts for the periods ended June 30, 1999 are set out below. No non-standardized total returns are shown for the HSBC VI Cash Management Variable Sub-Account. In addition, no non-standardized total returns are shown for the AIM V.I. Balanced, AIM V.I. High Yield, Fidelity VIP Equity Income, Fidelity VIP Growth, Fidelity VIP Overseas, Fidelity VIP II Contrafund, Fidelity VIP III Growth Opportunities, Templeton Asset Allocation - Class 2, Templeton International - Class 2, Oppenheimer VA Aggressive Growth, Oppenheimer VA Main Street Growth & Income, Oppenheimer VA Strategic Bond, Dreyfus Socially Responsible Growth, Dreyfus Stock Index, Dreyfus VI Capital Appreciation, Wells Fargo VT Asset Allocation, Wells Fargo VT Equity Income, Wells Fargo VT Growth, Delaware GP Small Cap Value Series, Delaware GP Trend Series, HSBC VI Fixed Income, and HSBC VI Growth & Income Variable Sub-Accounts, which had not commenced operations as of the date of this Statement of Additional Information. Performance figures for periods prior to the availability of the Contracts reflect the historical performance of the Variable Sub-Accounts, adjusted to reflect the current level of charges that apply to the Variable Sub-Accounts under the Contracts, excluding any charges imposed on amounts surrendered.
Variable Sub-Account One Year Five Years Since Inception* AIM V.I. Capital Appreciation 30.40% N/A 16.04% AIM V.I. Government Securities -2.66% N/A 3.50% AIM V.I. Growth 39.23% N/A 18.51% AIM V.I. International Equity 21.66% N/A 11.81% AIM V.I. Value 38.35% N/A 19.40%
* The inception date of each Variable Sub-Account appears under "Standardized Total Returns," above. ADJUSTED HISTORICAL TOTAL RETURNS We may advertise the total return for periods prior to the date that the Variable Sub-Accounts commenced operations. We will calculate such "adjusted historical total returns" using the historical performance of the underlying Portfolios and adjusting such performance to reflect the current level of charges that apply to the Variable Sub-Accounts under the Contract, the contract maintenance charge and the appropriate withdrawal charge. The adjusted historical total returns for the Variable Sub-Accounts for the periods ended June 30, 1999 are set out below. No adjusted historical total returns are shown for the HSBC VI Cash Management Variable Sub-Account. The following list provides the inception date for the Portfolio corresponding to each of the Variable Sub-Accounts included in the tables. Inception Date of Corresponding Portfolio Variable Sub-Account AIM V.I. Balanced May 1, 1998 AIM V.I. Capital Appreciation May 5, 1993 AIM V.I. Government Securities May 5, 1993 AIM V.I. Growth May 5, 1993 AIM V.I. High Yield May 1, 1998 AIM V.I. International Equity May 5, 1993 AIM V.I. Value May 5, 1993 Fidelity VIP Equity Income ___________ Fidelity VIP Growth ___________ Fidelity VIP Overseas ___________ Fidelity VIP II Contrafund ___________ Fidelity VIP III Growth Opportunities ___________ Templeton Asset Allocation - Class 2 ___________ Templeton International - Class 2 ___________ Oppenheimer VA Aggressive Growth ___________ Oppenheimer VA Main Street Growth & Income ___________ Oppenheimer VA Strategic Bond ___________ Dreyfus Socially Responsible Growth ___________ Dreyfus Stock Index ___________ Dreyfus VI Capital Appreciation ___________ Wells Fargo VT Asset Allocation ___________ Wells Fargo VT Equity Income ___________ Wells Fargo VT Growth ___________ Delaware GP Small Cap Value Series ___________ Delaware GP Trend Series ___________ HSBC VI Fixed Income ___________ HSBC VI Growth & Income ___________
10 Years or Since Inception of Variable Sub-Account One Year Five Years Portfolio (if less) AIM V.I. Balanced 14.95% N/A 10.22% AIM V.I. Capital Appreciation 30.66% 10.88% 11.70% AIM V.I. Government Securities -2.46% 5.71% 4.26% AIM V.I. Growth 39.51% 15.07% 23.19% AIM V.I. High Yield 21.90% N/A 11.53% AIM V.I. International Equity 5.30% 7.32% -3.13% AIM V.I. Value 38.62% 13.98% 22.96% Fidelity VIP Equity Income [ ] [ ] % Fidelity VIP Growth [ ] [ ] % Fidelity VIP Overseas [ ] [ ] % Fidelity VIP II Contrafund [ ] [ ] % Fidelity VIP III Growth Opportunities [ ] [ ] % Templeton Asset Allocation - Class 2 [ ] [ ] % Templeton International - Class 2 [ ] [ ] % Oppenheimer VA Aggressive Growth [ ] [ ] % Oppenheimer VA Main Street Growth & Income [ ] [ ] % Oppenheimer VA Strategic Bond [ ] [ ] % Dreyfus Socially Responsible Growth [ ] [ ] % Dreyfus Stock Index [ ] [ ] % Dreyfus VI Capital Appreciation [ ] [ ] % Wells Fargo VT Asset Allocation [ ] [ ] % Wells Fargo VT Equity Income [ ] [ ] % Wells Fargo VT Growth [ ] [ ] % Delaware GP Small Cap Value Series [ ] [ ] % Delaware GP Trend Series [ ] [ ] % HSBC VI Fixed Income [ ] [ ] % HSBC VI Growth & Income [ ] [ ] %
Calculation of Accumulation Unit Values - ------------------------------------------------------------------------------ The value of Accumulation Units will change each Valuation Period according to the investment performance of the Portfolio shares purchased by each Variable Sub-Account and the deduction of certain expenses and charges. A "Valuation Period" is the period from the end of one Valuation Date and continues to the end of the next Valuation Date. A Valuation Date ends at the close of regular trading on the New York Stock Exchange (currently 4:00 p.m. Eastern Time). The Accumulation Unit Value of a Variable Sub-Account for any Valuation Period equals the Accumulation Unit Value as of the immediately preceding Valuation Period, multiplied by the Net Investment Factor (described below) for that Sub-Account for the current Valuation Period. NET INVESTMENT FACTOR The Net Investment Factor for a Valuation Period is a number representing the change, since the last Valuation Period, in the value of Sub-account assets per Accumulation Unit due to investment income, realized or unrealized capital gain or loss, deductions for taxes, if any, and deductions for the mortality and expense risk charge and administrative expense charge. We determine the Net Investment Factor for each Variable Sub-Account for any Valuation Period by dividing (A) by (B) and subtracting (C) from the result, where: (A) is the sum of: (1) the net asset value per share of the Portfolio underlying the Variable Sub-Account determined at the end of the current Valuation Period; plus, (2) the per share amount of any dividend or capital gain distributions made by the Portfolio underlying the Variable Sub-Account during the current Valuation Period; (B) is the net asset value per share of the Portfolio underlying the Variable Sub-Account determined as of the end of the immediately preceding Valuation Period; and (C) is the sum of the annualized mortality and expense risk and administrative expense charges divided by the number of days in the current calendar year and then multiplied by the number of calendar days in the current Valuation Period. CALCULATION OF VARIABLE INCOME PAYMENTS - ------------------------------------------------------------------------------ We calculate the amount of the first variable income payment under an Income Plan by applying the Contract Value allocated to each Variable Sub-Account less any applicable premium tax charge deducted at the time, to the income payment tables in the Contract. We divide each such portion of the first variable annuity income payment by the Variable Sub-Account's then current Annuity Unit value to determine the number of annuity units ("Annuity Units") upon which later income payments will be based. To determine income payments after the first, we simply multiply the number of Annuity Units determined in this manner for each Variable Sub-Account by the then current Annuity Unit value ("Annuity Unit Value") for that Variable Sub-Account. CALCULATION OF ANNUITY UNIT VALUES Annuity Units in each Variable Sub-Account are valued separately and Annuity Unit Values will depend upon the investment experience of the particular Portfolio in which the Variable Sub-Account invests. We calculate the Annuity Unit Value for each Variable Sub-Account at the end of any Valuation Period by: o multiplying the Annuity Unit Value at the end of the immediately preceding Valuation Period by the Variable Sub-Account's Net Investment Factor (described in the preceding section) for the Period; and then o dividing the product by the sum of 1.0 plus the assumed investment rate for the Valuation Period. The assumed investment rate adjusts for the interest rate assumed in the income payment tables used to determine the dollar amount of the first variable income payment, and is at an effective annual rate which is disclosed in the Contract. We determine the amount of the first variable income payment paid under an Income Plan using the income payment tables set out in the Contracts. The Contracts include tables that differentiate on the basis of sex, except in states that require the use of unisex tables. GENERAL MATTERS - ------------------------------------------------------------------------------ INCONTESTABILITY We will not contest the Contract after we issue it. SETTLEMENTS The Contract must be returned to us prior to any settlement. We must receive due proof of the Contract owner(s) death (or Annuitant's death if there is a non-natural Contract owner) before we will settle a death claim. SAFEKEEPING OF THE VARIABLE ACCOUNT'S ASSETS We hold title to the assets of the Variable Account. We keep the assets physically segregated and separate and apart from our general corporate assets. We maintain records of all purchases and redemptions of the Portfolio shares held by each of the Variable Sub-Accounts. The Portfolios do not issue stock certificates. Therefore, we hold the Variable Account's assets in open account in lieu of stock certificates. See the Portfolios' prospectuses for a more complete description of the custodian of the Portfolios. PREMIUM TAXES Applicable premium tax rates depend on the Contract owner's state of residency and the insurance laws and our status in those states where premium taxes are incurred. Premium tax rates may be changed by legislation, administrative interpretations, or judicial acts. The State of New York currently does not impose a premium tax. TAX RESERVES We do not establish capital gains tax reserves for any Variable Sub-Account nor do we deduct charges for tax reserves because we believe that capital gains attributable to the Variable Account will not be taxable. However, we reserve the right to deduct charges to establish tax reserves for potential taxes on realized or unrealized capital gains. FEDERAL TAX MATTERS - ------------------------------------------------------------------------------ THE FOLLOWING DISCUSSION IS GENERAL AND IS NOT INTENDED AS TAX ADVICE. WE MAKE NO GUARANTEE REGARDING THE TAX TREATMENT OF ANY CONTRACT OR TRANSACTION INVOLVING A CONTRACT. Federal, state, local and other tax consequences of ownership or receipt of distributions under an annuity contract depend on the individual circumstances of each person. If you are concerned about any tax consequences with regard to your individual circumstances, you should consult a competent tax adviser. TAXATION OF ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK Allstate New York is taxed as a life insurance company under Part I of Subchapter L of the Internal Revenue Code. Since the Variable Account is not an entity separate from Allstate New York, and its operations form a part of Allstate New York, it will not be taxed separately as a "Regulated Investment Company" under Subchapter M of the Code. Investment income and realized capital gains of the Variable Account are automatically applied to increase reserves under the contract. Under existing federal income tax law, Allstate New York believes that the Variable Account investment income and capital gains will not be taxed to the extent that such income and gains are applied to increase the reserves under the contract. Accordingly, Allstate New York does not anticipate that it will incur any federal income tax liability attributable to the Variable Account, and therefore Allstate New York does not intend to make provisions for any such taxes. If Allstate New York is taxed on investment income or capital gains of the Variable Account, then Allstate New York may impose a charge against the Variable Account in order to make provision for such taxes. EXCEPTIONS TO THE NON-NATURAL OWNER RULE There are several exceptions to the general rule that annuity contracts held by a non-natural owner are not treated as annuity contracts for federal income tax purposes. Contracts will generally be treated as held by a natural person if the nominal owner is a trust or other entity which holds the Contract as agent for a natural person. However, this special exception will not apply in the case of an employer who is the nominal owner of an annuity contract under a non-qualified deferred compensation arrangement for its employees. Other exceptions to the non-natural owner rule are: (1) contracts acquired by an estate of a decedent by reason of the death of the decedent; (2) certain qualified contracts; (3) contracts purchased by employers upon the termination of certain qualified plans; (4) certain contracts used in connection with structured settlement agreements, and (5) contracts purchased with a single premium when the annuity starting date is no later than a year from purchase of the annuity and substantially equal periodic payments are made, not less frequently than annually, during the annuity period. IRS REQUIRED DISTRIBUTION AT DEATH RULES In order to be considered an annuity contract for federal income tax purposes, an annuity contract must provide: (1) if any owner dies on or after the annuity start date but before the entire interest in the contract has been distributed, the remaining portion of such interest must be distributed at least as rapidly as under the method of distribution being used as of the date of the owner's death; (2) if any owner dies prior to the annuity start date, the entire interest in the contract will be distributed within five years after the date of the owner's death. These requirements are satisfied if any portion of the owner's interest which is payable to (or for the benefit of) a designated beneficiary is distributed over the life of such beneficiary (or over a period not extending beyond the life expectancy of the beneficiary) and the distributions begin within one year of the owner's death. If the owner's designated beneficiary is the surviving spouse of the owner, the contract may be continued with the surviving spouse as the new owner. If the owner of the contract is a non-natural person, then the annuitant will be treated as the owner for purposes of applying the distribution at death rules. In addition, a change in the annuitant on a contract owned by a non-natural person will be treated as the death of the owner. QUALIFIED PLANS - ------------------------------------------------------------------------------ The Contract may be used with several types of qualified plans. The income on qualified plan and IRA investments is tax deferred and variable annuities held by such plans do not receive any additional tax deferral. You should review the annuity features, including all benefits and expenses, prior to purchasing a variable annuity in a qualified plan or IRA. Allstate New York reserves the right to limit the availability of the Contract for use with any of the Qualified Plans listed below. The tax rules applicable to participants in such qualified plans vary according to the type of plan and the terms and conditions of the plan itself. Adverse tax consequences may result from excess contributions, premature distributions, distributions that do not conform to specified commencement and minimum distribution rules, excess distributions and in other circumstances. Contract owners and participants under the plan and annuitants and beneficiaries under the Contract may be subject to the terms and conditions of the plan regardless of the terms of the Contract. INDIVIDUAL RETIREMENT ANNUITIES Section 408 of the Code permits eligible individuals to contribute to an individual retirement program known as an Individual Retirement Annuity (IRA). Individual Retirement Annuities are subject to limitations on the amount that can be contributed and on the time when distributions may commence. Certain distributions from other types of qualified plans may be "rolled over" on a tax-deferred basis into an Individual Retirement Annuity. An IRA generally may not provide life insurance, but it may provide a death benefit that equals the greater of the premiums paid and the Contract's Cash Value. The Contract provides a death benefit that in certain circumstances may exceed the greater of the payments and the Contract Value. It is possible that the death benefit could be viewed as violating the prohibition on investment in life insurance contracts with the result that the Contract would not be viewed as satisfying the requirements of an IRA. ROTH INDIVIDUAL RETIREMENT ANNUITIES Section 408A of the Code permits eligible individuals to make nondeductible contributions to an individual retirement program known as a Roth Individual Retirement Annuity. Roth Individual Retirement Annuities are subject to limitations on the amount that can be contributed and on the time when distributions may commence. "Qualified distributions" from Roth Individual Retirement Annuities are not includible in gross income. "Qualified distributions" are any distributions made more than five taxable years after the taxable year of the first contribution to the Roth Individual Retirement Annuity, and which are made on or after the date the individual attains age 59 1/2, made to a beneficiary after the owner's death, attributable to the owner being disabled or for a first time home purchase (first time home purchases are subject to a lifetime limit of $10,000). "Nonqualified distributions" are treated as made from contributions first and are includible in gross income to the extent such distributions exceed the contributions made to the Roth Individual Retirement Annuity. The taxable portion of a "nonqualified distribution" may be subject to the 10% penalty tax on premature distributions. Subject to certain limitations, a traditional Individual Retirement Account or Annuity may be converted or "rolled over" to a Roth Individual Retirement Annuity. The taxable portion of a conversion or rollover distribution is includible in gross income, but is exempted from the 10% penalty tax on premature distributions. SIMPLIFIED EMPLOYEE PENSION PLANS Section 408(k) of the Code allows employers to establish simplified employee pension plans for their employees using the employees' individual retirement annuities if certain criteria are met. Under these plans the employer may, within specified limits, make deductible contributions on behalf of the employees to their individual retirement annuities. Employers intending to use the Contract in connection with such plans should seek competent advice. In particular, employers should consider that an IRA generally may not provide life insurance, but it may provide a death benefit that equals the greater of the premiums paid and the contract's cash value. The Contract provides a death benefit that in certain circumstances may exceed the greater of the payments and the Contract Value. SAVINGS INCENTIVE MATCH PLANS FOR EMPLOYEES (SIMPLE PLANS) Sections 408(p) and 401(k) of the Code allow employers with 100 or fewer employees to establish SIMPLE retirement plans for their employees. SIMPLE plans may be structured as a SIMPLE retirement account using an employee's IRA to hold the assets or as a Section 401(k) qualified cash or deferred arrangement. In general, a SIMPLE plan consists of a salary deferral program for eligible employees and matching or nonelective contributions made by employers. Employers intending to use the Contract in conjunction with SIMPLE plans should seek competent tax and legal advice. TAX SHELTERED ANNUITIES Section 403(b) of the Code permits public school employees and employees of certain types of tax-exempt organizations (specified in Section 501(c)(3) of the Code) to have their employers purchase annuity contracts for them, and subject to certain limitations, to exclude the purchase payments from the employees' gross income. An annuity contract used for a Section 403(b) plan must provide that distributions attributable to salary reduction contributions made after 12/31/88, and all earnings on salary reduction contributions, may be made only on or after the date the employee attains age 59 1/2, separates from service, dies, becomes disabled or on the account of hardship (earnings on salary reduction contributions may not be distributed for hardship). These limitations do not apply to withdrawals where Allstate New York is directed to transfer some or all of the Contract Value to another 403(b) plan. CORPORATE AND SELF-EMPLOYED PENSION AND PROFIT SHARING PLANS Sections 401(a) and 403(a) of the Code permit corporate employers to establish various types of tax favored retirement plans for employees. The Self-Employed Individuals Retirement Act of 1962, as amended, (commonly referred to as "H.R. 10" or "Keogh") permits self-employed individuals to establish tax favored retirement plans for themselves and their employees. Such retirement plans may permit the purchase of annuity contracts in order to provide benefits under the plans. STATE AND LOCAL GOVERNMENT AND TAX-EXEMPT ORGANIZATION DEFERRED COMPENSATION PLANS Section 457 of the Code permits employees of state and local governments and tax-exempt organizations to defer a portion of their compensation without paying current taxes. The employees must be participants in an eligible deferred compensation plan. To the extent the Contracts are used in connection with an eligible plan, employees are considered general creditors of the employer and the employer as owner of the contract has the sole right to the proceeds of the contract. Generally, under the non-natural owner rules, such Contracts are not treated as annuity contracts for federal income tax purposes. Under these plans, contributions made for the benefit of the employees will not be includible in the employees' gross income until distributed from the plan. However, under a Section 457 plan all the compensation deferred under the plan must remain solely the property of the employer, subject only to the claims of the employer's general creditors, until such time as made available to the employee or a beneficiary. EXPERTS - ------------------------------------------------------------------------------ The financial statements of the Variable Account as of December 31, 1998, and for each of the periods ended December 31, 1998, December 31, 1997, and December 31, 1996, and consolidated financial statements of Allstate New York as of December 31, 1998, and 1997, and for each of the three years in the period ended December 31, 1998, included in this Statement of Additional Information have been audited by ________________________________________________, independent auditors, as stated in their reports appearing herein, and are included in reliance upon the reports of such firm given upon their authority as experts in accounting and auditing. FINANCIAL STATEMENTS - ------------------------------------------------------------------------------ The financial statements as of and for the years ended December 31, 1998 of the Variable Account and Allstate New York and the accompanying Reports of Independent Auditors appear on the pages that follow. The financial statements of Allstate New York included herein should be considered only as bearing upon the ability of Allstate New York to meet its obligations under the Contracts. PART C OTHER INFORMATION 24A. FINANCIAL STATEMENTS Allstate Life Insurance Company of New York Financial Statements and Financial Statement Schedules and Allstate Life of New York Separate Account A Financial Statements are included in Part B of this Registration Statement.* 24B. EXHIBITS Unless otherwise indicated, the following exhibits, which correspond to those required by Item 24(b) of Form N-4, are filed herewith: (1) Form of Resolution of the Board of Directors of Allstate Life Insurance Company of New York authorizing establishment of the Allstate Life of New York Separate Account A (Incorporated herein by reference to Post-Effective Amendment No. 3 to Registrant's Registration Statement (File No. 033-65381) dated April 30, 1999.) (2) Not Applicable (3) (a) Form of Underwriting Agreement for the Allstate Custom Portfolio Variable Annuity.* (4) (a) Form of Contract for the Allstate Custom Portfolio Variable Annuity, a group flexible premium deferred variable annuity contract. (5) (a) Form of Application for Allstate Custom Portfolio Variable Annuity.* (6) (a) Restated Certificate of Incorporation of Allstate Life Insurance Company of New York (Previously filed in Depositor's Form 10-K dated March 30, 1999 and incorporated herein by reference.) (b) Amended By-laws of Allstate Life Insurance Company of New York (Previously filed in Depositor's Form 10-K dated March 30, 1999 and incorporated herein by reference.) (7) Not applicable (8) (a) Form of Participation Agreement for Allstate Custom Portfolio Variable Annuity.* (9) (a) Opinion and Consent of Michael J. Velotta, Vice President, Secretary and General Counsel of Allstate Life Insurance Company of New York. (10) (a) Independent Auditors' Consent* (b) Consent of Freedman, Levy, Kroll & Simonds* (11) Not applicable (12) Not applicable (13) Schedule of Computation of Performance Quotations for Allstate Custom Portfolio Variable Annuity.* (14) Not applicable (99) (a) Power of Attorney for Kevin R. Slawin (Incorporated herein by reference to Pre-Effective Amendment No. 1 to Registrant's Form N-4 Registration Statement (File Number 033-65381) dated September 20, 1996.) (b) Power of Attorney for Louis G. Lower, II, Thomas J. Wilson, Michael J. Velotta, Timothy H. Plogh, Marcia D. Alazraki, Cleveland Johnson, Jr., Gerard F. McDermott, John R. Raben, Jr., and Sally A. Slacke (Incorporated herein by reference to Post-Effective Amendment No. 3 to Registrant's Form N-4 Registration Statement (File Number 033-65381) dated April 30, 1999.) (c) Power of Attorney for Samuel L. Pilch and Joseph J. Richardson, Jr. (Incorporated herein by reference to Post-Effective Amendment No. 4 to Registrant's Form N-4 Registration Statement (File Number 033-65381) dated November 8, 1999.) *To be filed by Pre-Effective Amendment. 25. DIRECTORS AND OFFICERS OF THE DEPOSITOR
NAME AND PRINCIPAL POSITION AND OFFICE WITH BUSINESS ADDRESS DEPOSITOR OF THE ACCOUNT Louis G. Lower, II Director and Chairman of the Board of Directors Thomas J. Wilson, II Director and President Michael J. Velotta Director, Vice President, Secretary and General Counsel Marcia D. Alazraki Director Marla G. Friedman Director and Vice President Vincent A. Fusco Director Cleveland Johnson, Jr. Director Gerard F. McDermott Director Kenneth R. O'Brien Director Timothy H. Plohg Director and Vice President John R. Raben, Jr. Director Joseph J. Richardson, Jr. Director and Chief Operations Officer Sally A. Slacke Director Kevin R. Slawin Director and Vice President Patricia W. Wilson Director and Assistant Vice President Karen C. Gardner Vice President Samuel H. Pilch Controller Casey J. Sylla Chief Investment Officer James P. Zils Treasurer Sharmaine M. Miller Chief Administrative Officer Richard L. Baker Assistant Vice President D. Steven Boger Assistant Vice President Adrian B. Corbiere Assistant Vice President Dorothy E. Even Assistant Vice President John M. Goense Assistant Vice President Judith P. Greffin Assistant Vice President Keith A. Hauschildt Assistant Vice President Ronald Johnson Assistant Vice President Charles D. Mires Assistant Vice President Barry S. Paul Assistant Vice President Robert N. Roeters Assistant Vice President C. Nelson Strom Assistant Vice President and Corporate Actuary Timothy N. Vander Pas Assistant Vice President David A. Walsh Assistant Vice President Emma M. Kalaidjian Assistant Secretary Paul N. Kierig Assistant Secretary Mary J. McGinn Assistant Secretary Ralph A. Bergholtz Assistant Treasurer Mark A. Bishop Assistant Treasurer Robert B. Bodett Assistant Treasurer Barbara S. Brown Assistant Treasurer Nancy M. Bufalino Assistant Treasurer Peter S. Horos Assistant Treasurer Thomas C. Jensen Assistant Treasurer Kathleen A. Knudson Assistant Treasurer David L. Kocourek Assistant Treasurer Daniel C. Leimbach Assistant Treasurer Beth K. Marder Assistant Treasurer Ronald A. Mendel Assistant Treasurer Stephen J. Stone Assistant Treasurer R. Steven Taylor Assistant Treasurer Louise J. Walton Assistant Treasurer Jerry D. Zinkula Assistant Treasurer
The principal business address of Mr. McDermott is P.O. Box 9095, Farmingville, New York 11738. The principal business address of the other foregoing officers and directors is 3100 Sanders Road, Northbrook, Illinois 60062. 26. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH DEPOSITOR OR REGISTRANT Incorporated herein by reference to Annual Report on Form 10-K, filed by the Allstate Corporation on March 26, 1999 (File No. 1-11840). 27. NUMBER OF CONTRACT OWNERS As of the date of the filing of this Registration Statement, the offering of the Allstate Custom Portfolio Variable Annuity Contract had not commenced. 28. INDEMNIFICATION The by-laws of both Allstate Life Insurance Company of New York (Depositor) and Allstate Life Financial Services, Inc. (Distributor), provide for the indemnification of its Directors, Officers and Controlling Persons, against expenses, judgments, fines and amounts paid in settlement as incurred by such person, if such person acted properly. No indemnification shall be made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable for negligence or misconduct in the performance of a duty to the company, unless a court determines such person is entitled to such indemnity. Insofar as indemnification for liability arising out of 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 payment by the registrant of expenses incurred 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 is 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. 29A. RELATIONSHIP OF PRINCIPAL UNDERWRITER TO OTHER INVESTMENT COMPANIES (a) Registrant's principal underwriter is also the principal underwriter with respect to the following investment companies: Glenbrook Life Multi-Manager Variable Account Glenbrook Life and Annuity Company Variable Annuity Account Glenbrook Life Variable Life Separate Account B Glenbrook Life and Annuity Company Separate Account A Glenbrook Life AIM Variable Life Separate Account A Glenbrook Life Scudder Variable Account (A) Glenbrook Life Variable Life Separate Account A Allstate Life Insurance Company Separate Account A (b) The directors and officers of the principal underwriter are:
Name and Principal Business Positions and Offices with Underwriter Address** of Each Such Person - ---------------------------- ---------------------- Louis G. Lower, II Director Thomas J. Wilson, II Director Kevin R. Slawin Director Michael J. Velotta Director and Secretary John R. Hunter President and Chief Executive Officer Janet M. Albers Vice President and Controller Brent H. Hamann Vice President Andrea J. Schur Vice President Terry R. Young General Counsel and Assistant Secretary James P. Zils Treasurer Lisa A. Burnell Assistant Vice President and Compliance Officer Robert N. Roeters Assistant Vice President Emma M. Kalaidjian Assistant Secretary Gregory C. Sernett Assistant Secretary Nancy M. Bufalino Assistant Treasurer
** The principal address of Allstate Life Financial Services, Inc. is 3100 Sanders Road, Northbrook, Illinois. (c) Compensation of Allstate Life Financial Services, Inc. None 30. LOCATION OF ACCOUNTS AND RECORDS The Depositor, Allstate Life Insurance Company of New York, is located at One Allstate Drive, P.O. Box 9095, Farmingville, New York 11738. The Underwriter, Allstate Life Financial Services, Inc. is located at 3100 Sanders Road, Northbrook, Illinois 60062. Each company maintains those accounts and records required to be maintained pursuant to Section 31(a) of the Investment Company Act and the rules promulgated thereunder. 31. MANAGEMENT SERVICES None 32. UNDERTAKINGS The Registrant undertakes to file a post-effective amendment to the Registration Statement as frequently as is necessary to ensure that the audited financial statements in the Registration statement are never more than 16 months old for so long as payments under the variable annuity contracts may be accepted. Registrant furthermore agrees to include either, as part of any prospectus or application to purchase a contract offered by the prospectus, a toll-free number (1-800-692-4682) that an applicant can call to request a Statement of Additional Information or a post card or similar written communication that the applicant can remove to send for a Statement of Additional Information. Finally, the Registrant agrees to deliver any Statement of Additional Information and any Financial Statements required to be made available under this Form N-4 promptly upon written or oral request. 33. REPRESENTATIONS PURSUANT TO SECTION 403(B) OF THE INTERNAL REVENUE CODE Allstate Life Insurance Company of New York represents that it is relying upon a November 28, 1988 Securities and Exchange Commission no-action letter issued to the American Council of Life Insurance and that the provisions of paragraphs 1-4 of the no-action letter have been complied with. 34. REPRESENTATION REGARDING CONTRACT EXPENSES Allstate Life Insurance Company of New York represents that the fees and charges deducted under the Flexible Premium Deferred Variable Annuity Contracts hereby registered by this Registration Statement, in the aggregate, are reasonable in relation to the services rendered, the expenses expected to be incurred, and the risks assumed by Allstate Life Insurance Company of New York. SIGNATURES As required by the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant, Allstate Life of New York Separate Account A, has caused the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, and its seal to be hereunto affixed and attested, all in the Township of Northfield, State of Illinois, on the 14th day of January, 2000. ALLSTATE LIFE OF NEW YORK SEPARATE ACCOUNT A (REGISTRANT) BY: ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK (DEPOSITOR) (SEAL) By: /s/ MICHAEL J. VELOTTA ------------------------------------- Michael J. Velotta Vice President, Secretary and General Counsel As required by the Securities Act of 1933, this Registration Statement has been duly signed below by the following Directors and Officers of Allstate Life Insurance Company of New York on the 14th day of January, 2000. */LOUIS G. LOWER, II Chairman of the Board and Director - -------------------- (Principal Executive Officer) Louis G. Lower, II */THOMAS J. WILSON, II President and Director - ---------------------- (Principal Operating Officer) Thomas J. Wilson, II */JOSEPH J. RICHARDSON, JR. Director and Chief Operations Officer - ---------------------------- Joseph J. Richardson, Jr. /s/MICHAEL J. VELOTTA Vice President, Secretary, General - ----------------------- Counsel and Director Michael J. Velotta */KEVIN R. SLAWIN Vice President and Director - ------------------ (Principal Financial Officer) Kevin R. Slawin */SAMUEL J. PILCH Controller - ---------------------- (Principal Accounting Officer) Samuel H. Pilch */TIMOTHY H. PLOHG Vice President and Director - ------------------ Timothy H. Plohg */MARCIA D. ALAZRAKI Director - -------------------- Marcia D. Alazraki */CLEVELAND JOHNSON, JR. Director - ------------------------ Cleveland Johnson, Jr. */GERARD F. MCDERMOTT Director - ------------------------ Gerard F. McDermott */JOHN R. RABEN, JR. Director - --------------------- John R. Raben, Jr. */SALLY A. SLACKE Director - --------------------- Sally A. Slacke */ By Michael J. Velotta, pursuant to Powers of Attorney previously filed. Exhibit Index Exhibit 4 Form of Contract Exhibit 9 Opinion and Consent of Michael J. Velotta EX-4 2 FORM OF CONTRACT NYLU446 Allstate Life Insurance Company of New York A Stock Company Home Office: One Allstate Drive, Farmingville, New York 11738 Flexible Premium Deferred Variable Annuity Certificate This Certificate is issued to customers of financial institutions according to the terms of Master Policy number 64900037 issued by Allstate Life Insurance Company of New York to Trustee of the Delaware Financial Services Group Insurance Trust. The Trustee of the Delaware Financial Services Group Insurance Trust is called the Master Policyholder. This Certificate is issued in the state of New York and is governed by New York law. Throughout this Certificate, "you" and "your" refer to the Certificate owner(s). "We", "us" and"our" refer to Allstate Life Insurance Company of New York. Certificate Summary This flexible premium deferred variable annuity provides a cash withdrawal benefit and a death benefit during the Accumulation Phase and periodic income payments beginning on the Payout Start Date during the Payout Phase. The dollar amount of income payments or other values provided by this Certificate, when based on the investment experience of the Variable Account, varies to reflect the performance of the Variable Account. The smallest annual rate of net investment return on the Variable Account assets required to keep Variable Account income payments from decreasing is 3%. An annualized Certificate Maintenance Charge of $30 and 1.25% per year (assessed daily) will be deducted in equal parts from the Variable Account. For amounts in the Fixed Account, the withdrawal benefit, transfers to other sub-accounts and any periodic income payments may be subject to a Market Value Adjustment which may result in an upward or downward adjustment of the amount distributed. For amounts in the Fixed Account, the death benefit may be subject to a positive Market Value Adjustment when the cash surrender value is greater than the Certificate Value. This Certificate and Master Policy do not pay dividends. The tax status of this Certificate as it applies to the owner should be reviewed each year. PLEASE READ YOUR CERTIFICATE CAREFULLY. This is a legal contract between the Certificate owner(s) and Allstate Life Insurance Company of New York. Return Privilege If you are not satisfied with this Certificate for any reason, you may return it to us or our agent within 10 days after you receive it. We will refund any purchase payments allocated to the Variable Account, adjusted to reflect investment gain or loss from the date of allocation to the date of cancellation, plus any purchase payments allocated to the Fixed Account. If this Certificate is qualified under Section 408 of the Internal Revenue Code, we will refund the greater of any purchase payments or the Certificate Value. If you have any questions about your Allstate Life Insurance Company of New York variable annuity, please contact us at (800) 692-4682. Secretary Chairman and Chief Executive Officer Flexible Premium Deferred Variable Annuity NYLU446 Page 2 - ------------------------------------------------------------------------- TABLE OF CONTENTS - ------------------------------------------------------------------------- THE PERSONS INVOLVED...................................................3 ACCUMULATION PHASE.....................................................3 PAYOUT PHASE...........................................................8 INCOME PAYMENT TABLES.................................................10 GENERAL PROVISIONS....................................................11 - ------------------------------------------------------------------------------ THE PERSONS INVOLVED - ------------------------------------------------------------------------------ Owner The person named at the time of application is the owner of this Certificate unless subsequently changed. As owner, you will receive any periodic income payments, unless you have directed us to pay them to someone else. You may exercise all rights stated in this Certificate, subject to the rights of any irrevocable beneficiary. You may change the owner or beneficiary at any time. If the owner is a natural person, you may change the annuitant prior to the Payout Start Date. Once we have received a satisfactory written request for an owner, beneficiary or annuitant change, the change will take effect as of the date you signed it. We are not liable for any payment we make or other action we take before receiving any written request for a change from you. You may not assign an interest in this Certificate as collateral or security for a loan. However, you may assign periodic income payments under this Certificate prior to the Payout Start Date. We are bound by an assignment only if it is signed by the assignor and filed with us. We are not responsible for the validity of an assignment. If the sole surviving owner dies prior to the Payout Start Date, the beneficiary becomes the new owner. If the sole surviving owner dies after the Payout Start Date, the beneficiary becomes the new owner and will receive any subsequent guaranteed income payments. If more than one person is designated as owner: |X| owner as used in this certificate refers to all people named as owners, unless otherwise indicated; |X| any request to exercise ownership rights must be signed by all owners; and |X| on the death of the first person who is named as an owner, the surviving person(s) named as owner will continue as owner. Annuitant The annuitant is the person named on the Annuity Data Page, but may be changed by the owner, as described above. The annuitant must be a natural person. If the annuitant dies prior to the Payout Start Date, the new annuitant will be: |X| the youngest owner; otherwise, |X| the youngest beneficiary. Beneficiary The beneficiary is the person(s) named on the Annuity Data Page, but may be changed by the owner, as described above. We will determine the beneficiary from the most recent written request we have received from you. If you do not name a beneficiary or if the beneficiary named is no longer living, the beneficiary will be: |X| your spouse if living; otherwise |X| your children equally if living; otherwise |X| your estate. The beneficiary may become the owner under the circumstances described above. The beneficiary may assign benefits under the Certificate, as described above, once they are payable to the beneficiary. We are bound by an assignment only if it is signed by the assignor and filed with us. We are not responsible for the validity of an assignment. - ------------------------------------------------------------------------------ ACCUMULATION PHASE - ------------------------------------------------------------------------------ Accumulation Phase Defined The "Accumulation Phase" is the first of two phases during your Certificate. The Accumulation Phase begins on the issue date stated on the Annuity Data Page. This phase will continue until the Payout Start Date unless the Certificate is terminated before that date. Certificate Year. The one year period beginning on the issue date and on each anniversary of the issue date.. Purchase Payments You may make subsequent purchase payments during the Accumulation Phase. The number of purchase payments is unlimited. The minimum subsequent purchase payment amount is $100. We reserve the right to reduce the minimum purchase payment. We may limit the maximum amount of purchase payments we will accept. We will invest the purchase payments in the Investment Alternatives you select. You may allocate any portion of your purchase payment in whole percents from 0% to 100% or in exact dollar amounts to any of the Investment Alternatives. The total allocation must equal 100%. For each purchase payment, the minimum amount that may be allocated to the Fixed Account is $500. The allocation of the initial purchase payment is shown on the Annuity Data Page. Allocation of each subsequent purchase payment will be the same as for the most recent purchase payment unless you change the allocation. You may change the allocation of subsequent purchase payments at any time, without charge, simply by giving us written notice. Any change will be effective at the time we receive the notice. Investment Alternatives Investment Alternatives are the Sub-accounts of the Variable Account and the Sub-accounts of the Fixed Account shown on the Annuity Data Page. Variable Account The "Variable Account" for this Certificate is the Allstate Life of New York Separate Account A. This account is a separate investment account to which we allocate assets contributed under this and certain other certificates. These assets will not be charged with liabilities arising from any other business we may have. Variable Sub-accounts The Variable Account is divided into Sub-accounts. Each Sub-account invests solely in the shares of the mutual fund underlying that Sub-account. Fixed Account The Fixed Account is divided into Sub-accounts. A Sub-account is identified by the Guarantee Period and the date the Guarantee Period begins. You create a Sub-account when: |X| you make a purchase payment; or |X| you select a new Guarantee Period after the prior Sub-account expires; or |X| you transfer an amount from an existing Sub-account of the Variable Account or the Fixed Account. A Sub-account continues until the end of the Guarantee Period. You must select the Guarantee Period for all purchase payments and transfers allocated to the Fixed Account. If you do not select a Guarantee Period for a purchase payment or transfer, we will assign the shortest Guarantee Period available under the Certificate for such payment or transfer. Guarantee Periods are offered at our discretion and may range from one to ten years. We may change the Guarantee Periods available for future purchase payments or transfers allocated to the Fixed Account. We will mail you a notice at least 15 but not more than 45 days prior to the expiration of each Sub-account outlining the options available at the end of a Guarantee Period. During the 30 day period after a Guarantee Period expires you may: |X| take no action and we will automatically renew the Sub-account value to a Guarantee Period of the shortest duration available to be established on the day the previous Guarantee Period expired; or |X| notify us to apply the Sub-account value to a new Guarantee Period(s) to be established on the day the previous Guarantee Period expired; or |X| notify us to apply the Sub-account value to any Sub-account of the Variable Account on the day we receive the notification; or |X| receive a portion of the Sub-account value or the entire Sub-account value through a partial or full withdrawal that is not subject to a Market Value Adjustment. In this case, the amount withdrawn will be deemed to have been withdrawn on the day the Guarantee Period expired. The minimum amount that can be allocated to a new Sub-account is $500. Crediting Interest We credit interest daily to money allocated to the Fixed Account at a rate which compounds over one year to the interest rate we guaranteed when the money was allocated. We will credit interest to the initial purchase payment from the issue date. We will credit interest to subsequent purchase payments from the date we receive them. We will credit interest to transfers from the date the transfer is made. The interest rates will never be less than the minimum guaranteed rate shown on the Annuity Data Page. Transfers Prior to the Payout Start Date, you may transfer amounts between Investment Alternatives. You may make 12 transfers per Certificate Year without charge. Each transfer after the 12th transfer in any Certificate Year may be assessed a $10 transfer fee. Transfers are subject to the following restrictions. |X| The minimum amount that may be transferred into a Sub-account of the Fixed Account is $500. |X| Except as described below, any transfer from a Sub-account of the Fixed Account, at a time other than during the 30 day period after a Guarantee Period expires, will be subject to a Market Value Adjustment. |X| If any transfer reduces the value of a Sub-account of the Fixed Account to less than $500, we will treat the request as a transfer of the entire Sub-account value. Transfers that are made as part of a Dollar Cost Averaging Program will not be subject to any Market Value Adjustments or transfer fee, and will not be included in the twelve free transfers per Certificate Year. We reserve the right to waive the transfer fees and restrictions contained in this Certificate. Dollar Cost Averaging Program You may participate in a Dollar Cost Averaging Program at any time during the Accumulation Phase. The Dollar Cost Averaging Program is an investment strategy which permits an owner to transfer a specified amount every month from the one year Guarantee Period Sub-account of the Fixed Account or any Sub-account of the Variable Account, to any Sub-account of the Variable Account. Transfers made through the Dollar Cost Averaging Program are not subject to any transfer fee or Market Value Adjustment. Certificate Value Your "Certificate Value" is equal to the sum of: |X| the number of Accumulation Units you hold in each Sub-account of the Variable Account multiplied by the Accumulation Unit Value for that Sub-account on the most recent Valuation Date; plus |X| the sum of Sub-account values in the Fixed Account. Accumulation Units and Accumulation Unit Value Amounts which you allocate to a Sub-account of the Variable Account are used to purchase Accumulation Units in that Sub-account. The Accumulation Unit Value for each Sub-account at the end of any Valuation Period is calculated by multiplying the Accumulation Unit Value at the end of the immediately preceding Valuation Period by the Sub-account's Net Investment Factor for the Valuation Period. The Accumulation Unit Values may go up or down. Additions or transfers to a Sub-account of the Variable Account will increase the number of Accumulation Units for that Sub-account. Withdrawals or transfers from a Sub-account of the Variable Account will decrease the number of Accumulation Units for that Sub-account. Valuation Period and Valuation Date A "Valuation Period" is the time interval between the closing of the New York Stock Exchange on consecutive Valuation Dates. A "Valuation Date" is any date the New York Stock Exchange is open for trading. Net Investment Factor For each Sub-account of the Variable Account, the "Net Investment Factor" for a Valuation Period is (A) divided by (B), minus (C) where: (A) is the sum of: (1) the net asset value per share of the mutual fund underlying the Sub-account determined at the end of the current Valuation Period, plus (2) the per share amount of any dividend or capital gain distributions made by the mutual fund underlying the Sub-account during the current Valuation Period. (B) is the net asset value per share of the mutual fund underlying the Sub-account determined as of the end of the immediately preceding Valuation Period. (C) is the sum of the annualized Administrative Expense Charge and the annualized Mortality and Expense Risk Charge divided by 365 and then multiplied by the number of calendar days in the current Valuation Period. Charges The charges for this Certificate include Administrative Expense Charges, Mortality and Expense Risk Charges, Certificate Maintenance Charges, transfer charges, and taxes. If withdrawals are made, the Certificate may also be subject to Withdrawal Charges and Market Value Adjustments. Administrative Expense Charge The annualized Administrative Expense Charge will never be greater than 0.10%. (See Net Investment Factor for a description of how this charge is applied.) Mortality and Expense Risk Charge The annualized Mortality and Expense Risk Charge will never be greater than 1.15%. (See Net Investment Factor for a description of how this charge is applied.) Our actual mortality and expense experience will not adversely affect the dollar amount of variable benefits or other contractual payments or values under this Certificate. Certificate Maintenance Charge Prior to the Payout Start Date, a Certificate Maintenance Charge will be deducted from your Certificate Value on each certificate anniversary. The charge will be deducted on a pro-rata basis from each Sub-account of the Variable Account in the proportion that your value in each bears to your total value in all Sub-accounts of the Variable Account. A full Certificate Maintenance Charge will be deducted if the Certificate is terminated on any date other than a certificate anniversary. After the Payout Start Date the Certificate Maintenance Charge will be deducted in equal parts from each income payment. The annualized charge will never be greater than $30 per certificate year. The Certificate Maintenance Charge will be waived if total purchase payments are $50,000 or more or if all money is allocated to the Fixed Account on the certificate anniversary. Taxes Any premium tax or income tax withholding relating to this Certificate may be deducted from purchase payments or the Certificate Value when the tax is incurred or at a later time. Withdrawal You have the right to withdraw part or all of your Certificate Value at any time during the Accumulation Phase. A withdrawal must be at least $50. If any withdrawal reduces the value of any Sub-account of the Fixed Account to less than $500, we will treat the request as a withdrawal of the entire Sub-account value. If any withdrawal reduces the Certificate Value to less than $1,000, we will treat the request as a withdrawal of the entire Certificate Value. If you withdraw the entire Certificate Value, the Certificate will terminate. You must specify the Investment Alternative(s) from which you wish to make a withdrawal. When you make a withdrawal, your Certificate Value will be reduced by the amount paid to you and any applicable Withdrawal Charge, Market Value Adjustment, and taxes. Any Withdrawal Charge will be waived on withdrawals taken to satisfy IRS minimum distribution rules. Preferred Withdrawal Amount Each Certificate Year the Preferred Withdrawal Amount is equal to 15% of the amount of purchase payments. Each Certificate Year you may withdraw the Preferred Withdrawal Amount without any Withdrawal Charge or Market Value Adjustment. Each Certificate Year begins on the anniversary of the date the Certificate was established. Any Preferred Withdrawal Amount which is not withdrawn in a year may not be carried over to increase the Preferred Withdrawal Amount in a subsequent year. Withdrawal Charge Withdrawals in excess of the Preferred Withdrawal Amount will be subject to a Withdrawal Charge as follows: Payment Year: 1 2 3 4 5 6 7 8 and Later Percentage: 7% 6% 5% 4% 3% 2% 1% 0% To determine the Withdrawal Charge, we assume that purchase payments are withdrawn first, beginning with the oldest payment. When all purchase payments have been withdrawn, additional withdrawals will not be assessed a Withdrawal Charge. For each purchase payment withdrawal, the "Payment Year" in the table is measured from the date we received the purchase payment. The Withdrawal Charge is determined by: |X| multiplying the percentage corresponding to the Payment Year, times |X| that part of each purchase payment withdrawal that is in excess of the Preferred Withdrawal Amount, adjusted by a Market Value Adjustment. Market Value Adjustment Withdrawals in excess of the Preferred Withdrawal Amount, transfers, and amounts applied to an income plan from a Sub-account of the Fixed Account other than during the 30 day period after a Guarantee Period expires are subject to a Market Value Adjustment. A Market Value Adjustment is an increase or decrease in the amount reflecting changes in the level of interest rates since the Sub-account was established. As used in this provision, "Treasury Rate" means the U. S. Treasury Note Constant Maturity yield as reported in Federal Reserve Bulletin Release H.15. The Market Value Adjustment is based on the following: I = the Treasury Rate for a maturity equal to the Sub-account's Guarantee Period for the week preceding the establishment of the Sub-account; N = the number of whole and partial years from the date we receive the withdrawal, transfer, or death benefit request, or from the Payout Start Date, to the end of the Sub-account's Guarantee Period; J = the Treasury Rate for a maturity of N years for the week preceding the receipt of the withdrawal request, transfer request, death benefit request, or Income Payment request. If a Note with a maturity of N years is not available, a weighted average will be used. If N is one year or less, J will be the 1-year Treasury Rate. An adjustment factor is determined from the following formula: .9 x (I - J) x N The amount subject to a Market Value Adjustment that is deducted from a Sub-account of the Fixed Account is multiplied by the adjustment factor to determine the amount of the Market Value Adjustment. The amount deducted from the Sub-account includes the transfer amount or the amount we pay you, income tax we withhold for you, the Withdrawal Charge, any applicable premium tax charge, and the Market Value Adjustment. Any Market Value Adjustment will be waived on withdrawals taken to satisfy IRS minimum distribution rules. Death of Owner or Annuitant A benefit may be paid to the owner determined immediately after the death if, prior to the Payout Start Date: |X| any owner dies; or |X| the annuitant dies and the owner is not a natural person. If the owner eligible to receive a benefit is not a natural person, the owner may elect to receive the benefit in one or more distributions. Otherwise, if the owner is a natural person, the owner may elect to receive a benefit either in one or more distributions or by periodic payments through an Income Plan. A Death Benefit will be paid: 1) if the owner elects to receive the Death Benefit distributed in a single payment within 180 days of the date of death, and 2) if the Death Benefit is paid as of the day the value of the Death Benefit is determined. Otherwise, the Settlement Value will be paid. In any event, the entire value of the certificate must be distributed within five (5) years after the date of death unless an Income Plan is elected or a surviving spouse continues the certificate in accordance with the following provisions. If the owner who is not your spouse elects to receive the Settlement Value payable in a lump sum within 5 years of your date of death, the owner may make a single withdrawal of any amount within one year of the date of death without incurring a Withdrawal Charge. However, any applicable Market Value Adjustment, determined as of the date of the withdrawal, will apply. Payments from the Income Plan must begin within one year of the date of death and must be payable throughout: |X| the life of the owner; or |X| a period not to exceed the life expectancy of the owner; or |X| the life of the owner with payments guaranteed for a period not to exceed the life expectancy of the owner. If the surviving spouse of the deceased owner is the new owner, then the spouse may elect one of the options listed above or may continue the Certificate in the Accumulation Phase as if the death had not occurred. If the Certificate is continued in the Accumulation Phase, the surviving spouse may make a single withdrawal of any amount within one year of the date of death without incurring a Withdrawal Charge. However, any applicable Market Value Adjustment, determined as of the date of the withdrawal, will apply. Death Benefit Prior to the Payout Start Date, the death benefit is equal to the greatest of: |X| Certificate Value on the date we determine the death benefit; or |X| the amount that would have been payable in the event of a full withdrawal of the Certificate Value on the date we determine the death benefit; or |X| the Certificate Value on the Death Benefit Anniversary immediately preceding the date we determine the death benefit adjusted by any purchase payments, withdrawal adjustment as defined below, and charges made between such Death Benefit Anniversary and the date we determine the death benefit. The first Death Benefit Anniversary is the issue date. Subsequent Death Benefit Anniversaries are those certificate anniversaries that are multiples of 7 Certificate Years, beginning with the 7th certificate anniversary. For example, the issue date, 7th, and 14th certificate anniversaries are the first three Death Benefit Anniversaries; or |X| the greatest of the Anniversary Values as of the date we determine the death benefit. The Anniversary Value is equal to the Certificate Value on a Certificate Anniversary, increased by purchase payments made since that anniversary and reduced by the amount of any partial withdrawal adjustment, as defined below, since that anniversary. Anniversary values will be calculated for each Certificate anniversary prior to the earlier of: a. the date we determine the death benefit, or b. the oldest owner's or the annuitant's, if the owner is not a natural person, attained age 75 or 5 years after the date the Certificate was established, if later. The withdrawal adjustment is equal to (a) divided by (b), with the result multiplied by (c), where: (a) = the withdrawal amount. (b) = the Certificate Value immediately prior to the withdrawal. (c) = the value of the applicable Death Benefit alternative immediately prior to the withdrawal. We will determine the value of the death benefit as of the end of the Valuation Period during which we receive a complete request for payment of the death benefit. A complete request includes due proof of death. The Death Benefit will never be greater than the maximum death benefit allowed by any non-forfeiture laws which govern the Certificate. Withdrawal Example for Anniversary Value (I) Maximum Anniversary Value Before Partial Withdrawal: $100 (II) Certificate Value Before Partial Withdrawal: $50 (III) Partial Withdrawal: $48 (IV) New Certificate Value: $2 (V) New Maximum Anniversary Value: $4 Settlement Value The Settlement Value is the same amount that would be paid in the event of withdrawal of the Certificate Value. We will calculate the Settlement Value at the end of the Valuation Period coinciding with the requested distribution date for payment or on the mandatory distribution date of 5 years after the date of death. - ------------------------------------------------------------------------------ PAYOUT PHASE - ------------------------------------------------------------------------------ Payout Phase Defined The "Payout Phase" is the second of the two phases during your Certificate. During this phase the Certificate Value adjusted by any Market Value Adjustment and less any applicable taxes is applied to the Income Plan you choose and is paid out as provided in that plan. The Payout Phase begins on the Payout Start Date. It continues until we make the last payment as provided by the Income Plan chosen. Payout Start Date The "Payout Start Date" is the date the Certificate Value adjusted by any Market Value Adjustment and less any applicable taxes is applied to an Income Plan. The anticipated Payout Start Date is shown on the Annuity Data Page. You may change the Payout Start Date by writing to us at least 30 days prior to this date. The Payout Start Date must be on or before the annuitant's 90th birthday. Income Plans An "Income Plan" is a series of payments on a scheduled basis to you or to another person designated by you. The Certificate Value on the Payout Start Date adjusted by any Market Value Adjustment and less any applicable taxes, will be applied to your Income Plan choice from the following list: 1. Life Income with Guaranteed Payments We will make payments for as long as the annuitant lives. If the annuitant dies before the selected number of guaranteed payments have been made, we will continue to pay the remainder of the guaranteed payments. 2. Joint and Survivor Life Income with Guaranteed Payments We will make payments for as long as either the annuitant or joint annuitant, named at the time of Income Plan selection, lives. If both the annuitant and the joint annuitant die before the selected number of guaranteed payments have been made, we will continue to pay the remainder of the guaranteed payments. 3. Guaranteed Number of Payments We will make payments for a specified number of months beginning on the Payout Start Date. These payments do not depend on the annuitant's life. The number of months guaranteed may be from 60 to 360. We reserve the right to make available other Income Plans. Income Payments Income payment amounts may vary based on any Sub-account of the Variable Account and/or may be fixed for the duration of the Income Plan. The method of calculating the initial payment is different for the two accounts. The Certificate Maintenance Charge will be deducted in equal payments from each income payment. The Certificate Maintenance Charge will be waived if total Purchase Payments are $50,000 or more. Variable Amount Income Payments The initial income payment based upon the Variable Account is calculated by applying the portion of the Certificate Value in the Variable Account on the Payout Start Date, less any applicable premium tax, to the appropriate value from the Income Payment Table selected. Subsequent income payments will vary depending upon the changes in the Annuity Unit Values for the Sub-accounts upon which the income payments are based. The portion of the initial income payment based upon a particular Variable Sub-account is determined by applying the amount of the Certificate Value in that Sub-account on the Payout Start Date, less any applicable premium tax, to the appropriate value from the Income Payment Table. This portion of the initial income payment is divided by the Annuity Unit Value on the Payout Start Date for that Variable Sub-account to determine the number of Annuity Units from that Sub-account which will be used to determine subsequent income payments. Unless Annuity Transfers are made between Sub-accounts, each subsequent income payment from that Sub-account will be that number of Annuity Units times the Annuity Unit Value for the Sub-account for the Valuation Date on which the income payment is made. Annuity Unit Value. The Annuity Unit Value for each Sub-account of the Variable Account at the end of any Valuation Period is calculated by: |X| multiplying the Annuity Unit Value at the end of the immediately preceding Valuation Period by the Sub-account's Net Investment Factor during the period; and then |X| dividing the result by 1.000 plus the assumed investment rate for the period. The assumed investment rate is an effective annual rate of 3%. Fixed Amount Income Payments The income payment amount derived from any monies allocated to Sub-accounts of the Fixed Account during the Accumulation Phase are fixed for the duration of the Income Plan. The Fixed Amount Income Payment is calculated by applying the portion of the Certificate Value in the Fixed Account on the Payout Start Date, adjusted by any Market Value Adjustment and less any applicable premium tax, to the greater of the appropriate value from the Income Payment Table selected or such other value as we are offering at that time. Annuity Transfers After the Payout Start Date, no transfers may be made from the Fixed Amount Income Payment. Transfers between Sub-accounts of the Variable Account, or from the Variable Amount Income Payment to the Fixed Amount Income Payment may not be made for six months after the Payout Start Date. Annuity Transfers may be made once every six months thereafter. Payout Terms and Conditions The income payments are subject to the following terms and conditions: |X| If the Certificate Value is less than $2,000, or not enough to provide an initial payment of at least $20, we reserve the right to: |X| change the payment frequency to make the payment at least $20; or |X| terminate the Certificate and pay you the Certificate Value adjusted by any Market Value Adjustment and less any applicable taxes in a lump sum. |X| If we do not receive a written choice of an Income Plan from you at least 30 days before the Payout Start Date, the Income Plan will be life income with guaranteed payments for 120 months. |X| If you choose an Income Plan which depends on any person's life, we may require: |X| proof of age and sex before income payments begin; and |X| proof that the annuitant or joint annuitant is still alive before we make each payment. |X| After the Payout Start Date, the Income Plan cannot be changed and withdrawals cannot be made unless income payments are being made from the Variable Account under Income Plan 3. You may terminate the income payments being made from the Variable Account under Income Plan 3 at any time and withdraw their value, subject to Withdrawal Charges. |X| If any owner dies during the Payout Phase, the remaining income payments will be paid to the successor owner as scheduled. - ------------------------------------------------------------------------------ INCOME PAYMENT TABLES - ------------------------------------------------------------------------------ The initial income payment will be at least the amount based on he adjusted age of the annuitant(s) and the tables below, less any federal income taxes which are withheld. The adjusted age is the actual age on the Payout Start Date reduced by one year for each six full years between January 1, 1983 and the Payout Start Date. Income payments for ages and guaranteed payment periods not shown below will be determined on a basis consistent with that used to determine those that are shown. The Income Payment Tables are based on 3.0% interest and the 1983a Annuity Mortality Tables.
Income Plan 1 - Life Income with Guaranteed Payments for 120 Months ============================================================================================================================ Monthly Income Payment for each $1,000 Applied to this Income Plan ============================================================================================================================ - ------------------- ---------------------- ---------------- ---------------------- ---------------- ======================== Annuitant's Annuitant's Annuitant's Age Male Female Age Male Female Age Male Female - ------------------- ---------------------- ---------------- ---------------------- ---------------- ======================== - ------------------- ---------------------- ---------------- ---------------------- ---------------- ======================== 35 $3.43 $3.25 49 $4.15 $3.82 63 $5.52 $4.97 36 3.47 3.28 50 4.22 3.88 64 5.66 5.09 37 3.51 3.31 51 4.29 3.94 65 5.80 5.22 38 3.55 3.34 52 4.37 4.01 66 5.95 5.35 39 3.60 3.38 53 4.45 4.07 67 6.11 5.49 40 3.64 3.41 54 4.53 4.14 68 6.27 5.64 41 3.69 3.45 55 4.62 4.22 69 6.44 5.80 42 3.74 3.49 56 4.71 4.29 70 6.61 5.96 43 3.79 3.53 57 4.81 4.38 71 6.78 6.13 44 3.84 3.58 58 4.92 4.46 72 6.96 6.31 45 3.90 3.62 59 5.02 4.55 73 7.13 6.50 46 3.96 3.67 60 5.14 4.65 74 7.31 6.69 47 4.02 3.72 61 5.26 4.75 75 7.49 6.88 48 4.08 3.77 62 5.39 4.86 - ------------------- ---------------------- ---------------- ---------------------- ---------------- ======================== Income Plan 2 - Joint and Survivor Life Income with Guaranteed Payments for 120 Months ============================================================================================================================== Monthly Income Payment for each $1,000 Applied to this Income Plan ============================================================================================================================== - -------------------- ========================================================================================================= Female Annuitant's Age - -------------------- ========================================================================================================= - -------------------- ---------- ------------ ----------- ---------- ---------- ---------- ---------- --------- =============== Male Annuitant's 35 40 45 50 55 60 65 70 75 Age - -------------------- ---------- ------------ ----------- ---------- ---------- ---------- ---------- --------- =============== - -------------------- ---------- ---------- ---------- ---------- ----------- ---------- ------------ ----------- ============= 35 $3.09 $3.16 $3.23 $3.28 $3.32 $3.36 $3.39 $3.40 $3.42 40 3.13 3.22 3.31 3.39 3.46 3.51 3.56 3.59 3.61 45 3.17 3.28 3.39 3.50 3.60 3.69 3.76 3.81 3.85 50 3.19 3.32 3.45 3.60 3.74 3.87 3.98 4.07 4.14 55 3.21 3.35 3.51 3.68 3.87 4.06 4.23 4.37 4.48 60 3.23 3.37 3.55 3.75 3.98 4.23 4.47 4.70 4.88 65 3.24 3.39 3.57 3.80 4.07 4.37 4.71 5.04 5.34 70 3.24 3.40 3.59 3.83 4.13 4.48 4.90 5.36 5.81 75 3.25 3.41 3.61 3.86 4.17 4.56 5.04 5.61 6.22 - -------------------- ---------- ---------- ---------- ---------- ----------- ---------- ------------ ----------- =============
Income Plan 3 - Guaranteed Number of Payments - --------------------------------- ============================================ Monthly Income Payment for each Specified Period $1,000 Applied to this Income Plan - --------------------------------- ============================================ - --------------------------------- ============================================ 10 Years $9.61 11 Years 8.86 12 Years 8.24 13 Years 7.71 14 Years 7.26 15 Years 6.87 16 Years 6.53 17 Years 6.23 18 Years 5.96 19 Years 5.73 20 Years 5.51 - --------------------------------- ============================================ - ------------------------------------------------------------------------------ GENERAL PROVISIONS - ------------------------------------------------------------------------------ The Entire Contract The entire contract consists of the Master Policy, the Master Policy application, and any written enrollments, any endorsements, and any riders. All statements made in written enrollments are representations and not warranties. No statement will be used by us in defense of a claim or to void the Certificate unless it is included in a written enrollment. Only our officers may, in order to conform to any state or federal law, change the Master Policy or Certificate or waive a right or requirement. No other individual may do this. Master Policy The Master Policy may be amended by us, terminated by us, or terminated by the Master Policyholder without the consent of any other person. No termination completed after the issue date of this Certificate will adversely affect your rights under this Certificate. Nothing in the Master Policy will invalidate or impair any rights of Certificate holders. We may not modify this Certificate without your consent, except to make it comply with any changes in the Internal Revenue Code or as required by any other applicable law. Incontestability We will not contest the validity of this Certificate after the issue date. Misstatement of Age or Sex If any age or sex has been misstated, we will pay the amounts which would have been paid at the correct age and sex. If we find the misstatement of age or sex after the income payments begin, we will: |X| pay all amounts underpaid including interest; or |X| stop payments until the total payments are equal to the corrected amount. For purposes of the Misstatement of Age or Sex provision, interest will be calculated at an effective annual rate of 6%. Annual Statement At least once a year, prior to the Payout Start Date, we will send you a statement containing Certificate Value information. We will provide you with Certificate Value information at any time upon request. The information presented will comply with any applicable law. Settlements We may require that this Certificate be returned to us prior to any settlement. We must receive due proof of death of the owner or annuitant prior to settlement of a death claim. Due proof of death is one of the following: |X| a certified copy of a death certificate; or |X| a certified copy of a decree of a court of competent jurisdiction as to a finding of death; or |X| any other proof acceptable to us. Any full withdrawal or death benefit under this Certificate will not be less than the minimum benefits required by any statute of the state in which the Certificate is delivered. Deferment of Payments We will pay any amounts due from the Variable Account under this Certificate within seven days, unless: |X| the New York Stock Exchange is closed for other than usual weekends or holidays, or trading on such Exchange is restricted; |X| an emergency exists as defined by the Securities and Exchange Commission; or |X| the Securities and Exchange Commission permits delay for the protection of Certificate holders. We reserve the right to postpone payments or transfers from the Fixed Account for up to six months. If we elect to postpone payments or transfers from the Fixed Account for more than 10 working days, we will pay interest as required by applicable law. Any interest would be payable from the date the withdrawal request is received by us to the date the payment or transfer is made. Variable Account Modifications We reserve the right, subject to applicable law, to make additions to, deletions from, or substitutions for the mutual fund shares underlying the Sub-accounts of the Variable Account. We will not substitute any shares attributable to your interest in a Sub-account of the Variable Account without notice to you and prior approval of the Securities and Exchange Commission, to the extent required by the Investment Company Act of 1940. We reserve the right to establish additional Sub-accounts of the Variable Account, each of which would invest in shares of another mutual fund. You may then instruct us to allocate purchase payments or transfers to such Sub-accounts, subject to any terms set by us or the mutual fund. In the event of any such substitution or change, we may, by endorsement, make such changes as may be necessary or appropriate to reflect such substitution or change. If we deem it to be in the best interests of persons having voting rights under the certificates, the Variable Account may be operated as a management company under the Investment Company Act of 1940 or it may be deregistered under such Act in the event such registration is no longer required. NYLU446 EX-9 3 CONSENT AND OPINION OF MICHAEL J. VELOTTA ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK LAW AND REGULATION DEPARTMENT 3100 Sanders Road, Suite J5B Northbrook, Illinois 60062 Direct Dial Number 847-402-2400 Facsimile 847-402-4371 Michael J. Velotta Vice President, Secretary and General Counsel January 14, 2000 TO: ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK FARMINGVILLE, NEW YORK 11738-9075 FROM: MICHAEL J. VELOTTA VICE PRESIDENT, SECRETARY AND GENERAL COUNSEL RE: FORM N-4 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 AND THE INVESTMENT COMPANY ACT OF 1940 FILE NOS. __________, 811-07467 ALLSTATE CUSTOM PORTFOLIO VARIABLE ANNUITY With reference to the Registration Statement on Form N-4 filed by Allstate Life Insurance Company of New York (the "Company"), as depositor, and Allstate Life of New York Separate Account A, as registrant, with the Securities and Exchange Commission covering the Flexible Premium Deferred Variable Annuity Contracts, marketed as the Allstate Custom Portfolio Variable Annuity. I have examined such documents and such law as I have considered necessary and appropriate, and on the basis of such examination, it is my opinion that as of January 14, 2000: 1. The Company is duly organized and existing under the laws of the State of New York and has been duly authorized to do business by the Director of Insurance of the State of New York. 2. The securities registered by the above Registration Statement when issued will be valid, legal and binding obligations of the Company. I hereby consent to the filing of this opinion as an exhibit to the above referenced Registration Statement and to the use of my name under the caption "Legal Matters" in the Prospectus constituting a part of the Registration Statement. Sincerely, /s/ MICHAEL J. VELOTTA - ------------------------------ Michael J. Velotta Vice President, Secretary and General Counsel -----END PRIVACY-ENHANCED MESSAGE-----