SUPPLEMENT TO THE PROSPECTUS DATED MAY 1, 1997
                 OF ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
                            FOR THE "CUSTOM ANNUITY"




The following  information  is added to the Federal Tax Matters  Section of your
prospectus.


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.

Please retain this Supplement for future reference.




January 1, 1998