Notice: Investment Company Act of 1940: IDS Life Insurance Co., Et Al.

1914 Federal Register / Vol. 70, No.
7 / Tuesday, January 11, 2005 / Notices
be submitted to OMB within 30 days of Washington, DC 20503, or send an e- by 5:30 p.m. on January 31, 2005 and
this notice. mail to: David_Rostker@omb.eop.gov; should be accompanied by proof of
Dated: January 5, 2005. and (ii) R. Corey Booth, Director/Chief service on the applicants, in the form of
Jill M. Peterson,
Information Officer, Office of an affidavit or, for lawyers, a certificate
Information Technology, Securities and of service. Hearing requests should state
Assistant Secretary.
Exchange Commission, 450 Fifth Street, the nature of the writer’s interest, the
[FR Doc. 05–463 Filed 1–10–05; 8:45 am] NW., Washington, DC 20549. Comments reason for the request, and the issues
BILLING CODE 8010–01–M must be submitted to OMB within 30 contested. Persons who wish to be
days of this notice. notified of a hearing may request
January 3, 2005. notification by writing to the
SECURITIES AND EXCHANGE
Jill M. Peterson,
Commission’s secretary.
COMMISSION
Assistant Secretary. ADDRESSES: Secretary, Securities and
Submission for OMB Review; [FR Doc. E5–50 Filed 1–10–05; 8:45 am] Exchange Commission, 450 Fifth Street,
Comment Request BILLING CODE 8010–01–P
NW., Washington, DC 20549–0609.
Applicants, Mary Ellyn Minenko, Vice
Upon Written Request; Copies Available President and Group Counsel, American
From: Securities and Exchange Express Financial Advisors Inc., 50607
Commission, Office of Filings and SECURITIES AND EXCHANGE
COMMISSION AXP Financial Center, Minneapolis, MN
Information Services, Washington, DC 55474.
20549. [Release No. IC–26719; File No. 812–13110]
FOR FURTHER INFORMATION CONTACT:
Extension:
Form CB; OMB Control No. 3235–0518; IDS Life Insurance Company, et al., Mark Cowan, Senior Counsel, or Zandra
SEC File No. 270–457. Notice of Application Bailes, Branch Chief, Office of Insurance
Products, Division of Investment
Notice is hereby given that, pursuant January 5, 2005. Management, at (202) 942–0670.
to the Paperwork Reduction Act of 1995 AGENCY: The Securities and Exchange
(44 U.S.C. 3501 et seq.) the Securities SUPPLEMENTARY INFORMATION: The
Commission (‘‘Commission’’).
and Exchange Commission following is a summary of the
ACTION: Notice of application for an application. The complete application
(‘‘Commission’’) has submitted to the amended order pursuant to section 11(a)
Office of Management and Budget may be obtained for a fee from the SEC’s
of the Investment Company Act of 1940, Public Reference Branch, 450 Fifth
request for extension of the previously as amended (‘‘Act’’) approving the terms
approved collection of information Street, NW., Washington, DC 20549–
of an offer of exchange. 0102 (telephone (202) 942–8090).
discussed below.
Form CB (OMB Control No. 3235– APPLICANTS: IDS Life Insurance Applicants’ Representations
0518; SEC File No. 270–457) is a tender Company (‘‘IDS Life’’), IDS Life Variable
offer statement filed in connection with 1. IDS Life is a stock life insurance
Account 10 (‘‘Account 10’’) and IDS Life company organized in 1957 under the
a tender offer for a foreign private Accounts F, G, H, IZ, JZ, KZ, LZ, MZ,
issuer. This form is used to report an laws of the State of Minnesota. It
N, PZ, QZ, RZ, SZ and TZ (‘‘Old conducts a conventional life insurance
issuer tender offer conducted in Accounts’’ and collectively with
compliance with Exchange Act Rule business. IDS Life is registered with the
Account 10, ‘‘Accounts’’) (collectively, Commission as a broker-dealer under
13e–4(h)(8) and a third-party tender ‘‘Applicants’’).
offer conducted in compliance with the Securities Exchange Act of 1934, as
SUMMARY OF APPLICATION: Applicants amended, and is a member of the
Exchange Act Rule 14d–1(c). It also is
seek an order to amend an Existing National Association of Securities
used by a subject company pursuant to
Order (described below) (‘‘Amended Dealers. IDS Life is a wholly owned
Exchange Act Rule 14e–2(d). This
Order’’) pursuant to section 11(a) of the subsidiary of American Express
information is made available to the
Act to approve extending the terms of Financial Corporation (‘‘AEFC’’). IDS
public. Information provided on Form
an existing offer of exchange of certain Life is the issuer and principal
CB is mandatory. Approximately 200
outstanding annuity contracts issued by underwriter of the Contracts funded
respondents file Form CB at an
IDS Life and made available through the through the Accounts.
estimated .5 hours per response for a
Old Accounts (‘‘Old Contracts’’) for new 2. Account 10 is a segregated asset
total annual burden of 100 hours. It is
American Express Retirement Advisor account of IDS Life. Account 10 funds
estimated that 25% of the total burden
Advantage Plussm Variable Annuity the variable benefits available under
hours (25 reporting burden hours) is
contracts issued by IDS Life and made RAVA Advantage Plus. Account 10 and
prepared by the filer. The remaining
available through Account 10 (‘‘RAVA its component subaccounts are
75% of the burden hours is prepared by
Advantage Plus’’ and collectively with registered together with the Commission
outside counsel.
An agency may not conduct or the Old Contracts, ‘‘Contracts’’). as a single unit investment trust under
sponsor, and a person is not required to FILING DATE: The Application was filed the Act (File No. 811–07355).
respond to, a collection of information on July 19, 2004 and amended and 3. The Old Accounts are segregated
unless it displays a currently valid restated on December 20, 2004. asset accounts of IDS Life. The Old
control number. HEARING OR NOTIFICATION OF HEARING: An Accounts fund the variable benefits
Written comments regarding the order granting the application will be available under the IDS Life Variable
above information should be directed to issued unless the Commission orders a Retirement Annuity (‘‘VRA’’), the IDS
the following persons: (i) Desk Officer hearing. Interested persons may request Life Combination Retirement Annuity
for the Securities and Exchange a hearing by writing to the (‘‘CRA’’), the IDS Life Flexible Annuity
Commission, Office of Information and Commission’s secretary and serving (‘‘Flex’’) and the IDS Life Employee
Regulatory Affairs, Office of applicants with a copy of the request, Benefit Annuity (‘‘EBA’’). The Old
Management and Budget, Room 10102, personally or by mail. Hearing requests Accounts are registered together with
New Executive Office Building, should be received by the Commission the Commission as a single unit
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Federal Register / Vol. 70, No. 7 / Tuesday, January 11, 2005 / Notices 1915
investment trust under the Act (File No. offers a lower mortality and expense of AEFC and their spouses (collectively,
811–3217). risk (‘‘M&E’’) charge than the Old ‘‘Employees’’); current or retired
4. Applicants assert that in recent Contracts, credits (‘‘Purchase Payment financial advisors who are registered
years the variable annuity marketplace Credits’’) on certain payments to the representatives of IDS Life and their
has become increasingly competitive. contracts (initial payments and spouses (collectively, ‘‘Advisors’’); or
Many of the purchasers of variable subsequent additional payments to the individuals who, with IDS Life’s
annuity contracts in the 1980s and early contracts are referred to herein approval, invest an initial Purchase
1990s are at, or close to, the expiration individually as a ‘‘Purchase Payment’’ Payment of $1,000,000 or more
of their contingent deferred sales charge and collectively as ‘‘Purchase (collectively, ‘‘Band 3 Contracts’’).
(‘‘CDSC’’) periods, and the contract Payments’’), more subaccounts investing RAVA Advantage Plus offers an
values of many contracts are no longer in corresponding funds or portfolios additional death benefit, additional
subject to a CDSC. Holders of such (collectively, ‘‘Investment Funds’’) and Purchase Payment Credits under Band 3
contracts have become prime targets for optional enhanced death benefits. IDS Contracts, different Investment Funds,
competitors’ variable annuity sales Life applies a credit to certain guarantee period accounts (‘‘GPAs’’), an
efforts. One feature offered to variable exchanges (‘‘Exchange Credit’’ and optional guaranteed minimum
annuity purchasers is a ‘‘bonus’’ or collectively with Purchase Payment withdrawal benefit (‘‘Withdrawal
‘‘credit’’ funded from the insurer’s Credits, ‘‘Credits’’) that is in addition to Benefit’’), different transfer provisions
general account, generally ranging from any Purchase Payment Credit for which and additional features such as a special
1–4% of contract value. IDS Life has the contract owner would otherwise be dollar-cost averaging program. If an Old
experienced the effects of these ‘‘bonus eligible under the RAVA Advantage Contract owner exchanged into a RAVA
offers’’ through the loss of a portion of contract. Advantage Plus contract, he or she
its Old Contracts. 8. When a contract owner exchanges could allocate Purchase Payments to
5. IDS Life states that its competitors into a RAVA Advantage contract, he or any of the Investment Funds available
are permitted to make bonus offers to she can allocate the Purchase Payment under RAVA Advantage Plus, including
IDS Life’s Old Contract owners because to any of the Investment Funds available most of the Investment Funds available
offers of exchange to contract owners of under RAVA Advantage. If a contract under the Old Contract, as well as
unaffiliated insurance companies are owner exercises the free look option, Investment Funds that are not available
not prohibited by Section 11 of the Act IDS Life reverses either the RAVA under the Old Contract. To the extent a
by virtue of a no-action position granted Advantage contract value (less any death benefit or surrender payment
to Alexander Hamilton Funds (pub. Credits) or the Purchase Payment made included any Credit amounts applied
avail. July 20, 1994) (‘‘Alexander to the RAVA Advantage contract, within twelve months preceding: (i) The
Hamilton’’). Applicants state that depending on applicable law. IDS Life date of death that results in a lump sum
Alexander Hamilton stands for the applies this amount to restore the Old death benefit under RAVA Advantage
proposition that, except for limited Contract to the extent possible. IDS Life Plus; (ii) a request for a CDSC waiver
exceptions, exchange offers between allocates this amount to the selected Old due to the owner or owner’s spouse’s
unaffiliated investment companies are Contract investments in the proportions confinement to a nursing home or
not prohibited under section 11. that existed just prior to the exchange. hospital or the owner’s terminal illness;
Consistent with section 11(a), therefore, Any adjustments made due to or (iii) the owner’s settlement under an
a fund may impose a CDSC on shares investment experience are allocated or annuity payout plan, IDS Life will
purchased by investors with proceeds of deducted according to the selected recapture the Credits. If a non-natural
shares from an unaffiliated fund. investment percentage allocations under person owns the RAVA Advantage Plus
6. Applicants assert that, but for the the Old Contract just prior to the contract, the benefits and distributions
existence of the affiliated nature of the exchange. Withdrawals made after the under the contract are based on the life
exchange, IDS Life would be able to free look period under RAVA Advantage of the annuitant.
offer an exchange program to its existing has expired are governed by the terms 10. Applicants now seek an Amended
Old Contract owners that is similar to its of the RAVA Advantage contract, Order to approve extending the terms of
competitors’ programs. However, unlike including application of the CDSC. To the Existing Exchange Offer to permit
its competitors who may make bonus the extent a death benefit or surrender the exchange of the Old Contracts for
offers to Old Contract owners, IDS Life payment included any Credit amounts new RAVA Advantage Plus contracts in
is constrained from making a similar applied within twelve months those states where RAVA Advantage
offer without first obtaining preceding: (i) The date of death that Plus is approved (‘‘Extended Exchange
Commission approval of the terms of the results in a lump sum death benefit Offer’’). The terms of the Extended
exchange. under RAVA Advantage; or (ii) a request Exchange Offer would be substantially
for a CDSC waiver due to the owner or similar to those described in the
Existing Exchange Offer
annuitant’s confinement to a nursing Existing Order. Applicants state that the
7. Applicants state that in response to home, IDS Life will recapture the Extended Exchange Offer, like the
this competitive dilemma, IDS Life Credits. Existing Exchange Offer, is designed to
developed an offer of exchange. On respond to IDS Life’s competitive
March 12, 2002, the Commission issued Extended Exchange Offer
dilemma and to assure that persisting
an order approving the terms of the offer 9. In February 2004, IDS Life began contract owners who accept the
of exchange (‘‘Existing Exchange Offer’’) selling RAVA Advantage Plus in Extended Exchange Offer receive an
that permits eligible contract owners to approved States. RAVA Advantage Plus immediate and enduring economic
exchange Old Contracts for American is an enhanced version of RAVA benefit.
Express Retirement Advisor Advantage and is available as a
Advantagesm Variable Annuity (‘‘RAVA nonqualified annuity for after-tax Comparison of RAVA Advantage and
Advantage’’) contracts issued by IDS contributions only, or as a qualified RAVA Advantage Plus
Life and made available through annuity under certain retirement plans. 11. The primary differences between
Account 10 (‘‘Existing Order’’). RAVA RAVA Advantage Plus—Band 3 is RAVA Advantage and RAVA Advantage
Advantage is an enhanced contract that available to current or retired employees Plus are as follows:
1916 Federal Register / Vol. 70, No. 7 / Tuesday, January 11, 2005 / Notices
a. Purchase Payments c. Optional Withdrawal Benefit account or another GPA any time after
Both RAVA Advantage and RAVA RAVA Advantage Plus contains a new 60 days of transfer or Purchase Payment
Advantage Plus may be issued as a non- optional living benefit that currently is allocation into that GPA. Transfers
qualified annuity for after-tax not available under RAVA Advantage. made more than 30 days before the end
contributions only, or as a qualified The Withdrawal Benefit is available (in of the guarantee period will receive a
annuity under the following retirement approved States) if the owner is age 75 market value adjustment, which may
plans: (i) Individual Retirement or younger at contract issue. The result in a gain or loss of contract value.
Annuities, including Roth IRAs Withdrawal Benefit gives the owner the e. Purchase Payment Credits
(collectively, ‘‘IRAs’’); (ii) SIMPLE IRAs; right to take limited partial withdrawals Under RAVA Advantage, the
(iii) Simplified Employee Pension in each contract year that ultimately Purchase Payment Credits are: 1% of
(‘‘SEP’’) plans; (iv) plans under Section equal Purchase Payments plus Purchase each Purchase Payment received if the
401(k) of the Internal Revenue Code of Payment Credits, as adjusted for certain owner selected the ten-year CDSC
1986, as amended (‘‘Code’’) (‘‘section excess withdrawals. The Guaranteed schedule and the initial Purchase
401(k) Plans’’); (v) custodial and Benefit Payment is the amount that the Payment is under $100,000 or if the
trusteed plans under section 401(a) of owner is entitled to take through partial owner selected the seven-year CDSC
the Code (‘‘section 401(a) Plans’’); or (vi) withdrawals each contract year. An schedule and the initial Purchase
Tax-Sheltered Annuities under section annual Elective Step up option is Payment is at least $100,000; and 2% of
403(b) of the Code (‘‘TSAs’’). Under available that allows the owner to step each Purchase Payment received if the
RAVA Advantage, the owner may up the Guaranteed Benefit Amount to owner selected the ten-year CDSC
allocate Purchase Payments to 100% of the contract anniversary value, schedule and the initial Purchase
subaccounts or the fixed account in subject to certain rules. The Withdrawal Payment is at least $100,000.
even 1% increments. Under RAVA Benefit requires that the owner Under RAVA Advantage Plus, the
Advantage Plus, if the owner has not participate in an available asset Purchase Payment Credits are: 1% of
selected the Withdrawal Benefit, the allocation program. The current cost of each Purchase Payment received if the
owner may allocate Purchase Payments the Withdrawal Benefit is 0.60%. IDS owner selected the ten-year CDSC
to the subaccounts, GPAs (in approved Life reserves the right to increase this schedule and the initial Purchase
States), the fixed account and/or the cost up to a maximum of 2.50% for new Payment is under $100,000 or if the
special dollar cost averaging account RAVA Advantage Plus contract owners. owner selected the seven-year CDSC
(when available) in even 1% However, any change to the cost will schedule and the initial Purchase
increments. If the owner has selected only apply to an existing RAVA Payment is at least $100,000 but less
the Withdrawal Benefit, the owner must Advantage Plus contract owner if: (i) He than $1,000,000; and 2% of each
allocate Purchase Payments in or she changes asset allocation models Purchase Payment received if the owner
accordance with an available asset and the current cost for new owners is selected the ten-year CDSC schedule
allocation program. IDS Life reserves the higher than the cost currently paid by and the initial Purchase Payment is at
right to not accept Purchase Payments the existing owner; or (ii) the existing least $100,000 but less than $1,000,000.
allocated to the fixed account for twelve RAVA Advantage Plus contract owner For Band 3 Contracts, the Purchase
months following either a partial chooses the annual Elective Step up and Payment Credits are: 2% of each
surrender from the fixed account or a the current cost for new owners is Purchase Payment received if the owner
lump sum transfer from the fixed higher than the cost currently paid by selected the seven-year CDSC schedule;
account to a subaccount. the existing owner. IDS Life also and 3% of each Purchase Payment
reserves the right to charge a fee that received if the owner selected the ten-
b. Investment Funds and Other
varies by the asset allocation model year CDSC schedule.
Investment Options
selected.
Owners of RAVA Advantage contracts f. Recapture of Purchase Payment
currently may allocate their Purchase d. Transfers Credits
Payments among 53 Investment Funds Under RAVA Advantage the owner Under RAVA Advantage, IDS Life
from 17 fund families. Owners of RAVA may transfer contract values between currently recaptures Purchase Payment
Advantage Plus contracts currently may the subaccounts, or from the Credits if the owner returns the RAVA
allocate their Purchase Payments among subaccounts to the fixed account. Advantage contract during the free look
56 Investment Funds from 17 fund However, certain restrictions apply with period. IDS Life also may recapture
families. RAVA Advantage also offers a respect to the timing of transfers from Purchase Payment Credits if they were
fixed account investment option with a the fixed account. Under RAVA applied within twelve months
guaranteed minimum interest rate of 3% Advantage Plus, if required to preceding: the date of death that results
on an annual basis. RAVA Advantage participate in the asset allocation in a lump sum death benefit; or a
Plus offers a fixed account investment program in connection with the request for a surrender due to the owner
option with a guaranteed minimum Withdrawal Benefit, the owners may not or annuitant’s confinement to a nursing
interest rate ranging from 1.5% to 3% make transfers except among the various home. See, IDS Life Insurance
on an annual basis depending on the asset allocation models then available. Company, et al., Investment Company
State in which the contract is issued. In Otherwise, the owner may transfer Act Release Nos. 24220 (December 23,
addition, RAVA Advantage Plus offers contract values between the 1999) (Notice) and 24257 (January 19,
GPAs (in approved States). The owner subaccounts. The owner also may 2000) (Order).
may allocate Purchase Payments and transfer contract values from the Under RAVA Advantage Plus, IDS
Purchase Payment Credits to one or subaccounts to the GPAs and the fixed Life currently recaptures Purchase
more of the GPAs with guarantee account. However, certain restrictions Payment Credits if the owner returns the
periods that IDS Life declares. Each apply with respect to the timing of RAVA Advantage Plus contract during
GPA pays an interest rate that IDS Life transfers from the fixed account. The the free look period. IDS Life also may
declares when the owner makes an owner may transfer contract values from recapture Purchase Payment Credits if
allocation to the account. any GPA to the subaccounts, fixed they were applied within twelve months
preceding: the date of death that results the RAVA Advantage standard death subject to recapture and less a pro rata
in a lump sum death benefit; a request benefit at no extra cost. portion of any rider fees; Purchase
for a surrender due to the owner or Under RAVA Advantage Plus, if the Payments minus adjusted partial
owner’s spouse’s confinement to a owner is age 75 or younger at contract surrenders; or the MAV as calculated on
nursing home or hospital or the owner’s issue, the death benefit is the greater of: the most recent contract anniversary
terminal illness; or settlement under an the contract value, less any Purchase plus subsequent Purchase Payments
annuity payout plan. See, IDS Life Payment Credits subject to recapture made and minus adjustments for partial
Insurance Company, et al., Investment and less a pro rata portion of any rider surrenders since that contract
Company Act Release Nos. 26338 fees; or Purchase Payments less adjusted anniversary. The current cost of the
(January 22, 2004) (Notice) and 26354 partial surrenders. If the owner is age 76 MAV Death Benefit under RAVA
(February 20, 2004) (Order). or older at contract issue, the death Advantage Plus is 0.25%. IDS Life
benefit is: The contract value, less any reserves the right to increase this cost
g. Surrender Options Purchase Payment Credits subject to after the tenth rider anniversary to a
Under RAVA Advantage, the owner recapture and less a pro rata portion of maximum of 0.35% and to discontinue
can access contract values at any time any rider fees. offering the MAV Death Benefit for new
through partial or full surrender and the j. Optional Return of Purchase Payment RAVA Advantage Plus contracts. A fee
owner has a Free Withdrawal Amount (‘‘ROPP’’) Death Benefit discount of 0.10% applies if the owner
equal to earnings or up to 10% of the purchases the MAV Death Benefit with
Under RAVA Advantage Plus, the either the EEB or EEP (described below).
prior anniversary contract value per
ROPP Death Benefit is available (in
contract year (if not already included in l. Optional Maximum Five-Year
approved states) if the owner is age 76
earnings). Anniversary Value (‘‘5-Year MAV’’)
or older at contract issue. The benefit
Under RAVA Advantage Plus, the provided by the ROPP Death Benefit is Death Benefit
owner can access contract values at any included in the standard death benefit RAVA Advantage Plus contains a new
time through partial or full surrender. If if the owner is age 75 or younger at optional death benefit that currently is
the owner has not selected the contract issue at no additional cost. The not available under RAVA Advantage.
Withdrawal Benefit, the owner has a ROPP Death Benefit states that, upon The 5-Year MAV Death Benefit is
Total Free Amount equal to earnings or the owner’s death before annuity available (in approved states) if the
up to 10% of the prior anniversary payouts begin and while the contract is owner is age 75 or younger at contract
contract value per contract year (if not in force, IDS Life will pay the issue. The 5-Year MAV Death Benefit
already included in earnings). If the designated beneficiary the greater of: states that, upon the owner’s death
owner selected the Withdrawal Benefit, The contract value, less Purchase before annuity payouts begin and while
the owner may withdraw up to the Payment Credits subject to recapture the contract is in force, IDS Life will pay
Guaranteed Benefit Payment each and less a pro rata portion of any rider the designated beneficiary the greatest
contract year. Amounts withdrawn in fees; or Purchase Payments minus of: The contract value, less Purchase
excess of Guaranteed Benefit Payment adjusted partial surrenders. The current Payment Credits subject to recapture
may reduce future amounts available cost of the ROPP Death Benefit is and less a pro rata portion of any rider
under the Withdrawal Benefit. 0.20%. IDS Life reserves the right to fees; Purchase Payments minus adjusted
h. All Standard and Optional Death increase the cost after the tenth rider partial surrenders; or the MAV as
Benefits anniversary to a maximum of 0.30% and calculated on the most recent fifth
to discontinue offering the ROPP Death contract anniversary plus subsequent
Under RAVA Advantage, payment to Benefit for new RAVA Advantage Plus Purchase Payments made and minus
the beneficiary occurs upon the earlier contracts. adjustments for partial surrenders since
of the owner or annuitant’s death, and that contract anniversary. The current
benefits are based on the age of both the k. Optional Maximum Anniversary cost of the 5-Year MAV Death Benefit is
owner and annuitant. Under RAVA Value (‘‘MAV’’) Death Benefit 0.10%. IDS Life reserves the right to
Advantage Plus, payment to the The optional MAV Death Benefit is increase this cost after the tenth rider
beneficiary occurs upon the owner’s available under both RAVA Advantage anniversary to a maximum of 0.20% and
death, and benefits are based on the age and RAVA Advantage Plus. Under to discontinue offering the 5-Year MAV
of the owner. RAVA Advantage, the MAV Death Death Benefit for new RAVA Advantage
i. Standard Death Benefit Benefit is available (in approved States) Plus contracts. A fee discount of 0.05%
if both the owner and annuitant are age applies if the owner purchases the 5-
Under RAVA Advantage, if the owner 75 or younger at contract issue. The Year MAV Death Benefit with either the
and annuitant are age 80 or younger on MAV Death Benefit states that, upon the EEB or EEP (described below).
date of death, the death benefit is the earlier of the owner or annuitant’s death
greatest of: The contract value; the before annuity payouts begin and while m. Optional Enhanced Earnings Death
contract value as of most recent sixth the contract is in force, IDS Life will pay Benefit (‘‘EEB’’)
contract anniversary plus subsequent the designated beneficiary the The optional EEB is available under
Purchase Payments less adjusted partial Maximum Anniversary Value (‘‘MAV’’). both RAVA Advantage and RAVA
surrenders; or Purchase Payments less Under RAVA Advantage Plus, the Advantage Plus. Under RAVA
adjusted partial surrenders. If either the MAV Death Benefit is available (in Advantage, the EEB is available (in
owner or annuitant is age 81 or older on approved States) if the owner is age 75 approved States) if both the owner and
the date of death, the death benefit is or younger at contract issue. The MAV annuitant are age 75 or younger at the
the greatest of: The contract value; or Death Benefit states that, upon the rider effective date. The EEB states that,
Purchase Payments less adjusted partial owner’s death before annuity payouts upon the earlier of the owner or
surrenders. The benefit provided under begin and while the contract is in force, annuitant’s death after the first contract
the optional Return of Purchase IDS Life will pay the designated anniversary but before annuity payouts
Payments Death Benefit (‘‘ROPP Death beneficiary the greatest of: The contract begin and while the contract is in force,
Benefit’’) described below is included in value, less Purchase Payment Credits IDS Life will pay the designated
beneficiary the standard death benefit or or 5-Year MAV Death Benefit, if n. Optional Enhanced Earnings Plus
the MAV Death Benefit, if applicable, applicable, plus: 40% of earnings at Death Benefit (‘‘EEP’’)
plus: 40% of earnings at death if the death if the owner was under age 70 on
owner and the annuitant were under age the rider effective date, up to a The optional EEP is available under
70 on the rider effective date, up to a maximum of 100% of Purchase both RAVA Advantage and RAVA
maximum of 100% of Purchase Payments not previously surrendered Advantage Plus. Under RAVA
Payments not previously surrendered that are one or more years old; or 15% Advantage, this benefit is available (in
that are one or more years old; or 15% of earnings at death if the owner was age approved states) if both the owner and
of earnings at death if the owner or the 70 to 75 on the rider effective date, up annuitant are age 75 or younger at
annuitant were age 70 to 75 on the rider to a maximum of 37.5% of Purchase contract issue, and the contract is
effective date, up to a maximum of Payments not previously surrendered purchased through an exchange. The
37.5% of Purchase Payments not that are one or more years old. The EEP states that, upon the earlier of the
previously surrendered that are one or owner or annuitant’s death, after the
current cost of the EEB under RAVA
more years old. The cost of the EEB first contract anniversary but before
Advantage Plus is 0.30%. IDS Life
under RAVA Advantage is 0.30%. annuity payouts begin and while the
Under RAVA Advantage Plus, the reserves the right to increase this cost
after the tenth rider anniversary to a contract is in force, IDS Life will pay the
EEB is available (in approved States) if
maximum of 0.40% and to discontinue designated beneficiary: EEP Part I
the owner is age 75 or younger at the
rider effective date. The EEB states that, offering the EEB for new RAVA benefits, which equal the benefits
upon the owner’s death after the first Advantage Plus contracts. A fee payable under the EEB described above;
contract anniversary but before annuity discount of 0.10% applies if the owner plus EEP Part II benefits, which equal a
payouts begin and while the contract is purchases the MAV Death Benefit with percentage of exchanged Purchase
in force, IDS Life will pay the the EEB and a fee discount of 0.05% Payments identified at issue and not
designated beneficiary the standard applies if the owner purchases the 5- previously surrendered as follows:
death benefit or the MAV Death Benefit Year MAV Death Benefit with the EEB.
Percentage if Percentage if
owner and owner or
annuitant are annuitant
Contract year date under age 70 are 70–75
on the rider on the rider
effective date effective date
One and Two ................................................................................................................................................... 0 0

Three and Four ................................................................................................................................................ 10 3.75
Five or more .................................................................................................................................................... 20 7.5
The cost of the EEP under RAVA owner’s death after the first contract EEB described above; plus EEP Part II
Advantage is 0.40%. anniversary but before annuity payouts benefits, which equal a percentage of
Under RAVA Advantage Plus, the EEP begin and while the contract is in force, exchanged Purchase Payments
is available (in approved States) if the IDS Life will pay the designated identified at issue and not previously
owner is age 75 or younger at contract beneficiary: EEP Part I benefits, which surrendered as follows:
issue. The EEP states that, upon the equal the benefits payable under the
Percentage if Percentage if
owner is owner is
Contract year under age 70 age 70–75
on the rider on the rider
effective date effective date
One and Two ................................................................................................................................................... 0 0

Three and Four ................................................................................................................................................ 10 3.75
Five or more .................................................................................................................................................... 20 7.5
The current cost of the EEP under o. Annuity Payout Options Withdrawal Benefit under RAVA
RAVA Advantage Plus is 0.40%. IDS Advantage Plus. This sixth annuity
Life reserves the right to increase this There are five annuity payout options payout is available on a fixed basis only.
cost after the tenth rider anniversary to under both RAVA Advantage and RAVA IDS may also agree to other payout
a maximum of 0.50% and to Advantage Plus: (A) Life annuity—no arrangements.
discontinue offering the EEP for new refund; (B) life annuity with five, ten or
15 years certain; (C) life annuity— p. Asset Rebalancing
RAVA Advantage Plus contracts. A fee
installment refund; (D) joint and last Under both RAVA Advantage and
discount of 0.10% applies if the owner
survivor life annuity—no refund; and RAVA Advantage Plus, if the owner has
purchases the MAV Death Benefit with
(E) payouts for a specified period. These not selected the Withdrawal Benefit, the
the EEP and a fee discount of 0.05%
five annuity payouts are available on a owner can elect to have the variable
applies if the owner purchases the 5- fixed or variable basis, or a combination subaccount portion of the contract value
Year MAV Death Benefit with the EEP. of both. A sixth annuity payout option, automatically rebalanced on either a
the Remaining Benefit Amount Payout quarterly, semi-annual or annual basis,
Option, is available only under the based on the allocations chosen by the
contract owner. Under RAVA s. M&E Charge Section 401(a) Plans; (v) TSAs, or (vi)
Advantage Plus, if the owner has During the life of the RAVA plans under Section 457 of the Code
selected the Withdrawal Benefit and Advantage contract, IDS life deducts an (‘‘Section 457 Plans’’). VRA was
therefore is required to participate in an M&E charge at an annual rate of 0.95% purchased with a single Purchase
asset allocation program, IDS rebalances of the average daily subaccount value Payment between $5,000 and $500,000.
contract values quarterly. There is no for nonqualified annuity contracts and No additional Purchase Payments are
additional cost for asset rebalancing. 0.75% of the average daily subaccount allowed under VRA. CRA may be
value for qualified annuity contracts. purchased with a minimum initial
q. Other Features Purchase Payment of $600, or in
During the life of the RAVA Advantage
Plus contract, IDS life deducts an M&E minimum installments of $50 per month
Both RAVA Advantage and RAVA
charge at an annual rate of 0.95% of the or $23.08 biweekly under a scheduled
Advantage Plus provide for dollar-cost
average daily subaccount value for payment plan. An owner may make
averaging. In addition, RAVA
nonqualified annuity contracts, 0.75% additional Purchase Payments to CRA,
Advantage Plus provides for a special
of the average daily subaccount value which require a $50 minimum (unless
dollar-cost averaging program (which
for qualified annuity contracts and Purchase Payments are made by
may not be available at all times). IDS installments under a scheduled
Life reserves the right to add new 0.55% of the average daily subaccount
value for Band 3 Contracts. payment plan), subsequent to the initial
contract features to RAVA Advantage Purchase Payment. Maximum
and/or RAVA Advantage Plus. t. Contract Administrative Charge limitations on Purchase Payments are
r. CDSC Schedules Under both RAVA Advantage and imposed for the first year and
RAVA Advantage Plus, IDS Life deducts subsequent years, depending on
Under both RAVA Advantage and an annual charge of $30 for whether the annuity is nonqualified or
RAVA Advantage Plus, IDS Life assesses administrative expenses from the qualified. Participants in the CRA Select
a CDSC against partial or full surrenders contract value of each contract. For University of Wisconsin TSA Plan
in excess of the Free Withdrawal RAVA Advantage Plus, IDS Life reserves (‘‘CRA Select’’) bought CRA with
Amount/ Total Free Amount. IDS Life the right to increase this annual contract installment payments of $200 to $25,000
applies a CDSC on each Purchase administrative charge after the first annually.
Payment. The length of time from contract anniversary to a maximum of 13. Owners of VRA and CRA contracts
receipt of a Purchase Payment to the $50. Under RAVA Advantage and currently may allocate their Purchase
time of surrender determines the RAVA Advantage Plus, IDS Life waives Payments among 14 Old Accounts that
percentage of CDSC. Under the seven- the contract administrative charge when invest in 14 corresponding Investment
year CDSC period, the CDSC ranges the contract value, or total Purchase Funds (most of which currently are
from 7% in year 1 to 0% in year 8 and Payments less any Purchase Payments available under RAVA Advantage Plus).
after. Under the ten-year CDSC period, surrendered, is $50,000 or more on the CRA also offers a fixed account
the CDSC ranges from 8% in year 1 to current contract anniversary. investment option with a guaranteed
0% in year 11 and after. IDS Life does minimum interest rate of 3.5% to 4% on
u. Premium Tax an annual basis depending on when the
not assess a CDSC on contract earnings,
Free Withdrawal Amounts/ Total Free Under both RAVA Advantage and CRA contract was issued. VRA does not
Amounts, required minimum RAVA Advantage Plus, IDS life deducts have a fixed account investment option.
premium taxes of up to 3.5%, if 14. Owners of VRA and CRA contracts
distributions (provided the amount is no
applicable. These taxes depend upon may transfer contract values among the
greater than the required minimum
the contract owner’s state of residence Old Accounts without charge. Transfers
distribution amount calculated under
or the State in which the contract was to and from CRA’s fixed account are
the specific contract, currently in force),
sold. Currently IDS Life deducts any permitted, subject to certain restrictions
amounts refunded during the free look
applicable premium tax when annuity described in the prospectus for the CRA
period, death benefits, or if payments contracts.
are made under any annuity payout payouts begin. However, IDS Life
reserves the right to deduct this tax at 15. The owner of a VRA or CRA
option (unless payouts made under contract can access contract values at
annuity payout option E are later other times such as when a contract is
surrendered. any time before annuity payouts begin
surrendered). Additionally, the RAVA by means of partial surrenders or a full
Advantage contract provides for a v. Operating Expenses of the Investment surrender. In addition, VRA permits the
waiver of the CDSC if the owner or Funds owner a Free Withdrawal Amount of up
annuitant is confined to a nursing home, Under both RAVA Advantage and to 10% of the initial Purchase Payment
and has been for the prior 90 days, and RAVA Advantage Plus, assets invested amount each year after the first without
confinement began after the contract in the Investment Funds are charged incurring a CDSC. CRA Select permits
date. RAVA Advantage Plus provides with the annual operating expenses of an annual Free Withdrawal Amount of
for a waiver of the CDSC if the owner those Investment Funds. 10% of the contract value at the
or the owner’s spouse is confined to a beginning of each contract year. There
nursing home or hospital, and has been The Old Contracts are no other Free Withdrawal Amounts
for the prior 60 days, and confinement 12. VRA and CRA are registered under CRA.
began after the contract date. RAVA together under the 1933 Act (File No. 2– 16. The death benefit under VRA and
Advantage Plus also provides for a 73114). IDS Life no longer offers VRA CRA is available at no extra cost. The
waiver of the CDSC if the owner is contracts. IDS Life offers CRA contracts death benefit provision under both VRA
diagnosed in the second or later contract only for limited purposes. VRA and and CRA states that, upon the earlier of
years as disabled with a medical CRA both were issued as nonqualified the owner or annuitant’s death before
condition that with reasonable medical annuities for after-tax contributions annuity payouts begin and while the
certainty will result in death within 12 only, or as qualified annuities under the contract is in force, IDS Life will pay the
months or less from the date of a following retirement plans: (i) IRAs; (ii) following death benefits to the
licensed physician’s statement. SEP plans; (iii) Section 401(k) Plans; (iv) designated beneficiary: (i) If death
occurs before the annuitant’s 75th administrative charge is $20 per occurs before the annuitant’s 75th
birthday, the beneficiary receives the contract year for VRA and $30 per birthday, the beneficiary receives the
greater of the contract value; or contract year for CRA. greatest of the contract value; the
Purchase Payments, minus any 21. IDS Life deducts premium taxes of contract value as of the most recent
surrenders, or (ii) if death occurs on or up to 3.5%, if applicable, and under the sixth contract anniversary, minus any
after the annuitant’s 75th birthday, the same terms as RAVA Advantage Plus. surrenders since that anniversary; or
beneficiary receives the contract value. 22. Assets invested in the Investment Purchase Payments, minus any
17. The VRA and CRA contracts Funds are charged with the annual surrenders; or (ii) if death occurs on or
contain the same annuity payout operating expenses of those Investment after the annuitant’s 75th birthday, the
options A through E as RAVA Funds. beneficiary receives the greater of the
Advantage Plus. Annuity payouts are 23. Flex is registered under the 1933 contract value; or the contract value as
available on a fixed or variable basis, or Act (File No. 33–4173). IDS Life no of the most recent sixth contract
a combination of both. longer offers Flex contracts. Flex was anniversary, minus any surrenders since
18. Under VRA, IDS Life assesses a issued as a nonqualified annuity for that anniversary.
CDSC against partial or full surrenders after-tax contributions only, or as a 28. Flex contains the same annuity
in excess of the Free Withdrawal qualified annuity under the following payout options A through E as RAVA
Amount. The CDSC applies to retirement plans: (i) IRAs; (ii) SEP plans; Advantage Plus. Annuity payouts are
surrenders in the first seven contract (iii) Section 401(k) Plans; (iv) Section available on a fixed or variable basis, or
years as a percentage of the amount 401(a) Plans; (v) TSAs; or (vi) Section a combination of both.
surrendered. The CDSC ranges from 7% 457 Plans. Flex was purchased with a 29. Under Flex, IDS Life assesses a
in the first contract year to 0% after 7 minimum initial Purchase Payment of CDSC against partial or full surrenders
contract years. Under CRA, IDS Life $1,000 for qualified annuities or $2,000 in excess of the Free Withdrawal
assesses a CDSC against partial or full for nonqualified annuities, or in Amount. IDS Life applies a CDSC of 7%
surrenders (in excess of the Free minimum installments of $50 per month on each Purchase Payment if the
Withdrawal Amount for CRA Select). or $23.08 biweekly under a scheduled contract owner requests a surrender
The CDSC is a percentage of the amount payment plan. An owner may make within six years of making that Purchase
surrendered. Three separate CDSC additional Purchase Payments, which Payment. The Flex contract provides for
periods apply to the three different require a $50 minimum (unless a waiver of the CDSC for amounts
versions of CRA. For the original CRA, Purchase Payments are made by surrendered after the later of the
which is no longer sold, the CDSC installments under a scheduled annuitant’s attaining age 65 or the tenth
applies to surrenders in the first eleven payment plan), subsequent to the initial contract anniversary. Additionally, IDS
contract years and ranges from 7% in Purchase Payment. Maximum Life does not assess a CDSC on contract
the first contract year to 0% after 11 limitations on Purchase Payments are earnings, required minimum
contract years. For CRA Select, which imposed for the first year, depending on distributions (provided the amount is no
funded the University of Wisconsin the age of the owner or annuitant, and greater than the required minimum
TSA Plan but is no longer sold, the for each subsequent year. distribution amount calculated under
CDSC applies to surrenders in the first 24. Owners of Flex contracts currently the specific contract, currently in force),
eight contract years and ranges from 7% may allocate their Purchase Payments death benefits, or if payments are made
in the first contract year to 0% after 8 among the 14 Old Accounts that invest under any annuity payout option
contract years. For the CRA version that in 14 corresponding Investment Funds (unless payouts made under annuity
currently is sold for conversions from (most of which currently are available payout option E are later surrendered).
American Express Retirement Services under RAVA Advantage Plus). Flex also 30. During the life of the Flex
or other IDS Life retirement annuities offers a fixed account investment option contract, IDS Life deducts an M&E
under which conversion is available, the with guaranteed minimum interest rates charge at an annual rate of 1% of the
CDSC applies to surrenders in the first ranging from 3% to 4% on an annual average daily variable account value.
seven contract years and ranges from basis, depending on when the Flex 31. IDS Life deducts a charge of $6 for
6% in the first contract year to 0% after contract was issued. administrative expenses at the end of
7 contract years. IDS Life does not 25. Owners of Flex contracts may each contract quarter from the contract
assess a CDSC on Free Withdrawal transfer contract values among the Old value of the Flex contract (which equals
Amounts under any VRA or CRA Select Accounts without charge. Transfers to an annual charge of $24 per contract
contract, required minimum and from the fixed account are year).
distributions (provided the amount is no permitted, subject to certain restrictions 32. IDS Life deducts premium taxes of
greater than the required minimum described in the prospectus for the Flex up to 3.5%, if applicable, and under the
distribution amount calculated under contracts. same terms as RAVA Advantage Plus.
the specific contract, currently in force), 26. The owner of a Flex contract can 33. Assets invested in the Investment
amounts refunded during the free look access contract values at any time before Funds are charged with the annual
period, death benefits, or if payments annuity payouts begin by means of operating expenses of those Investment
are made under any annuity payout partial surrenders or a full surrender. In Funds.
option (unless payouts made under addition, Flex permits the owner a Free 34. EBA is registered under the 1933
annuity payout option E are later Withdrawal Amount of contract Act (File No. 33–52518). IDS Life no
surrendered). earnings without incurring a CDSC. longer offers EBA contracts. EBA was
19. During the life of each VRA and 27. The death benefit under Flex is issued only as a group TSA. EBA was
CRA contract, IDS Life deducts an M&E available at no extra cost. The death purchased with a minimum initial
charge at an annual rate of 1% of the benefit provision states that, upon the Purchase Payment of $1,000 or in
average daily variable account value. earlier of the owner or annuitant’s death minimum installments of $25 per month
20. IDS Life deducts a charge for before annuity payouts begin and while or $300 annually under a scheduled
administrative expenses annually from the contract is in force, IDS Life will pay payment plan. An owner may make
the contract value of each VRA and CRA the following death benefits to the additional Purchase Payments, which
contract. The annual contract designated beneficiary: (i) If death require a $50 minimum (unless
Purchase Payments are made by any annuity payout option (unless plus any additional transfers or
installments under a scheduled payouts made under annuity payout rollovers for qualified annuities or any
payment plan), subsequent to the initial option E are later surrendered). additional Purchase Payments or
Purchase Payment. Maximum 41. During the life of the EBA exchanges for nonqualified annuities
limitations on Purchase Payments are contract, IDS Life deducts an M&E (individually and collectively, the
imposed for the first year, depending on charge at an annual rate of 1% of the ‘‘Additional Amounts’’) for eligibility
the age of the contract owner, and for average daily variable account value. for the Extended Exchange Offer and to
each subsequent year. 42. IDS Life deducts a $30 charge for change those minimum amounts from
35. Owners of EBA contracts currently administrative expenses at the end of time to time.
may allocate their Purchase Payments each certificate year from the certificate 48. If an owner accepts the Extended
among the 14 Old Accounts that invest value of the EBA contract. Exchange Offer, IDS Life will allocate to
in 14 corresponding Investment Funds 43. IDS Life deducts premium taxes of the owner’s account either a Purchase
(most of which currently are available up to 3.5%, if applicable, and under the Payment Credit or an Exchange Credit.
under RAVA Advantage Plus). EBA also same terms as RAVA Advantage Plus. Under RAVA Advantage Plus, each time
offers a fixed account investment option 44. Assets invested in the Investment IDS Life receives a Purchase Payment
with a guaranteed minimum interest Funds are charged with the annual from an owner, it allocates to the
rate of 4% on an annual basis. operating expenses of those Investment owner’s account a Purchase Payment
36. Owners of EBA contracts may Funds. Credit equal to 1% of each Purchase
transfer contract values among the Old 45. Applicants represent that the Payment received: (i) If the owner
Accounts without charge. Transfers to features and benefits of RAVA selected the ten-year CDSC schedule
and from the fixed account are Advantage Plus will be no less favorable and the initial Purchase Payment is
permitted, subject to certain restrictions than those under the Old Contracts, under $100,000; or (ii) if the owner
described in the prospectus for the EBA with some exceptions for differences in selected the seven-year CDSC schedule
contracts. the guaranteed minimum interest rate and the initial Purchase Payment is at
37. Subject to certain restrictions under the fixed account investment least $100,000 but less than $1,000,000.
imposed by the Code, the owner of an option, lower annuity settlement rates, Each time IDS Life receives a Purchase
EBA contract can access certificate some additional transfer restrictions and Payment from the owner, it allocates to
values at any time before annuity lower initial death benefits. Applicants the owner’s account a Purchase
payouts begin by means of partial also represent that, with some Payment Credit equal to 2% of each
surrenders or a full surrender. exceptions for the CDSC, the charge for Purchase Payment received if the owner
38. The death benefit under EBA is administrative expenses and optional selected the ten-year CDSC schedule
available at no extra cost. The death charges for optional death benefits, the and the initial Purchase Payment is at
benefit provision states that, upon the fees and charges of the RAVA least $100,000 but less than $1,000,000.
owner/annuitant’s death before annuity Advantage Plus contract will be no Under the Band 3 Contracts, each time
payouts begin and while the contract is higher than those of the Old Contracts. IDS Life receives a Purchase Payment
in force, IDS Life will pay the following from the owner, it allocates to the
death benefits to the designated Terms of the Extended Exchange Offer
owner’s account a Purchase Payment
beneficiary: (i) If death occurs before the 46. Applicants propose to offer Credit equal to 2% of each Purchase
annuitant’s 75th birthday, the eligible owners of Old Contracts the Payment received if the owner selected
beneficiary receives the greater of the opportunity to exchange their Old the seven-year CDSC schedule and 3%
certificate value; or Purchase Payments, Contracts for RAVA Advantage Plus by of each Purchase Payment received if
minus any surrenders; or (ii) if death means of the Extended Exchange Offer. the owner selected the ten-year CDSC
occurs on or after the annuitant’s 75th Partial exchanges will not be permitted. schedule. To increase the likelihood of
birthday, the beneficiary receives the 47. To be eligible for the Extended remaining eligible to receive the
certificate value. Exchange Offer, an Old Contract owner applicable Purchase Payment Credit
39. EBA contains the same annuity must meet all of the following criteria: based on the initial Purchase Payment
payout options A through E as RAVA (i) Have completed ten or more contract amount, the Old Contract owner could
Advantage Plus. Annuity payouts are or certificate years under the Old transfer that contract or certificate value
available on a fixed or variable basis, or Contract; (ii) have not made Purchase allocated to the Old Accounts to the Old
a combination of both. Payments greater than $4,000 in any tax Account investing in the AXP  VP Cash
40. Under EBA, IDS Life assesses a year under the Old Contract in the 36 Management Fund while the exchange
CDSC against partial or full surrenders months prior to accepting the Extended is pending to help reduce the risk of
in the first eleven certificate years as a Exchange Offer (except for installment market volatility.
percentage of the amount surrendered. payments made under a scheduled 49. Under the terms of the RAVA
The CDSC ranges from 8% in the first payment plan); and (iii) have a Advantage Plus contract, if the initial
certificate year to 0% after 11 certificate remaining CDSC of 2% or less of the Purchase Payment is less than $100,000,
years. The EBA contract provides for a contract or certificate value of the Old IDS Life will not allocate a 1% Purchase
waiver of the CDSC for amounts Contract. IDS Life reserves the right to Payment Credit based on the initial
surrendered due to the owner’s expand the Extended Exchange Offer to Purchase Payment amount. However, in
retirement under the TSA plan on or owners of contracts who have those cases where the initial Purchase
after age 55. Additionally, IDS Life does completed less than ten contract or Payment is less than $100,000, IDS Life
not assess a CDSC on required certificate years under the Old Contract will provide, from its general account
minimum distributions (provided the or who have made Purchase Payments assets, a 1% Exchange Credit based on
amount is no greater than the required greater than $4,000 in any tax year the Exchange Value of the Old Contract
minimum distribution amount under the Old Contract in the 36 months applied to RAVA Advantage Plus on the
calculated under the specific contract, prior to accepting the Extended day the exchange is effected (‘‘Exchange
currently in force), amounts refunded Exchange Offer. IDS Life also reserves Date’’). This 1% Exchange Credit will
during the free look period, death the right to require a minimum contract not apply to subsequent Purchase
benefits, or if payments are made under or certificate value (‘‘Exchange Value’’) Payments to RAVA Advantage Plus.
However, even when the initial (‘‘Program Announcement’’). This off than if he or she had rejected the
Purchase Payment is less than $100,000, Program Announcement will: (i) Extended Exchange Offer.
IDS Life will allocate a Purchase Describe the terms and conditions of the 55. Furthermore, IDS Life will state,
Payment Credit of 1% of the initial Extended Exchange Offer; (ii) suggest to in clear and plain English, that
Purchase Payment and 1% of each owners who may qualify that they guaranteed annuity settlement rates
subsequent Purchase Payment received contact their registered representatives generally are lower under RAVA
if the owner selects the ten-year CDSC to learn more about the Extended Advantage Plus. Therefore, if the Old
period. Exchange Offer and to discuss their Contract owner contemplates
50. Upon the owner’s acceptance of individual situations (including tax, annuitizing the RAVA Advantage Plus
the Extended Exchange Offer, IDS Life financial planning and contract contract during the first few years, the
will issue a RAVA Advantage Plus considerations); and (iii) notify owners lower settlement factors may more than
contract with all applicable Credits. No that IDS Life reserves the right to cancel offset the lower M&E charges and any
CDSC will be deducted upon the the Extended Exchange Offer at any applicable Credits.
surrender of an Old Contract in time. In addition, IDS Life may send the 56. IDS Life will explain that if an
connection with the exchange. The information in the Program owner accepts the Extended Exchange
Exchange Value of each Old Contract, Announcement to some or all Old Offer, IDS Life will allocate to the
together with any applicable Additional Contract owners via additional owner’s account either a Purchase
Amounts and Credits, will be applied to communications that also may include Payment Credit or an Exchange Credit.
the new RAVA Advantage Plus contract that owner’s specific contract If the initial Purchase Payment is at
as of the Exchange Date. The Exchange information (such as Exchange Value least $100,000, IDS Life will allocate to
Date will be the contract date of the new and applicable CDSC). the owner’s account a Purchase
RAVA Advantage Plus contract for 53. IDS Life, either directly or through Payment Credit on the initial Purchase
purposes of determining contract years its registered representatives, will Payment and on each subsequent
and anniversaries after the Exchange provide eligible Old Contract owners Purchase Payment received. To increase
Date. who are interested in learning more the likelihood of remaining eligible to
51. If the owner of the new RAVA about the Extended Exchange Offer with receive the applicable Purchase
Advantage Plus contract exercises the an Offering Communication that Payment Credit based on the initial
free look option, IDS Life will recapture includes information outlined in the Purchase Payment amount, the Old
any Credits. IDS Life will reverse either Program Announcement and additional Contract owner could transfer that
the RAVA Advantage Plus contract information describing the Extended contract or certificate value allocated to
value (less any Credits and reflecting Exchange Offer. The Offering the Old Accounts to the Old Account
any applicable market value adjustment) Communication will state, in clear and investing in the AXP VP Cash
or the Purchase Payment made to the plain English, that the Extended Management Fund while the exchange
RAVA Advantage Plus contract, Exchange Offer is not designed for a is pending to help reduce the risk of
depending on applicable law. IDS Life contract owner who: (i) Intends to hold market volatility. If the initial Purchase
will apply this amount to restore the the RAVA Advantage Plus contract as a Payment to RAVA Advantage Plus is
Old Contract to the extent possible. IDS short-term investment vehicle; or (ii) less than $100,000, IDS Life will
Life will allocate this amount to the anticipates surrendering all or part (i.e. provide a 1% Exchange Credit based on
selected Old Contract investments in the more than the Total Free Amount on an the Exchange Value of the Old Contract
proportions that existed just prior to the annual basis) of his or her RAVA applied to RAVA Advantage Plus on the
exchange. Any adjustments made due to Advantage Plus contract before five to Exchange Date. The 1% Exchange Credit
investment experience and/or market seven years (if the Old Contract owner will not apply to subsequent Purchase
value adjustment will be allocated or would select the seven-year CDSC Payments. However, even when the
deducted according to the selected period under RAVA Advantage Plus) or initial Purchase Payment is less than
investment percentage allocations under eight to ten years (if the Old Contract $100,000, IDS Life will allocate a
the Old Contract just prior to the owner would select the ten-year CDSC Purchase Payment Credit of 1% of the
exchange. Withdrawals made after the period under RAVA Advantage Plus). initial Purchase Payment and 1% of
free look period under RAVA Advantage IDS Life will encourage Old Contract each subsequent Purchase Payment
Plus has expired will be governed by the owners to carefully evaluate their received if the owner selects the ten-
terms of the RAVA Advantage Plus personal financial planning situation year CDSC period.
contract, including the application of when deciding whether to accept or 57. In addition, IDS Life will
the CDSC. To the extent a death benefit reject the Extended Exchange Offer. prominently disclose that the
or surrender payment includes any 54. In addition, the Offering guaranteed minimum interest rate on
Credit amounts applied within twelve Communication will explain how the RAVA Advantage Plus’ fixed account
months preceding: (i) The date of death owner of an Old Contract contemplating investment option may be less than the
that results in a lump sum death benefit an exchange may avoid the applicable guaranteed minimum interest rate on
under RAVA Advantage Plus; (ii) a CDSC on the RAVA Advantage Plus the Old Contract’s fixed account
request for a CDSC waiver due to the contract by not surrendering more than investment option. IDS Life also will
owner or owner’s spouse’s confinement the annual Total Free Amount and by disclose that the current death benefit
to a nursing home or hospital or the holding any subsequent Purchase on the Old Contract may be greater than
owner’s terminal illness; or (iii) the Payments until expiration of the CDSC the initial death benefit on RAVA
owner’s settlement under an annuity period. In this regard, IDS Life will Advantage Plus. When applicable, IDS
payout plan, IDS Life will recapture the state, in clear and plain English, that if Life also will explain that an owner of
Credits. the owner surrenders the RAVA an Old Contract may lose some tax
52. IDS Life will notify all owners of Advantage Plus contract during the benefits. The Offering Communication
the Old Contracts of the Extended initial CDSC period: (i) The lower M&E will state that certain Investment Funds
Exchange Offer through normal client charges and any applicable Credits may available under the Old Contracts are
communications such as updated be more than offset by the CDSC; and not available under RAVA Advantage
prospectuses or prospectus supplements (ii) an Old Contract owner may be worse Plus and that transfers to and from the
fixed account are more restricted under 1. The Offering Communication and in an easily accessible place for the time
RAVA Advantage Plus than under the Termination Notice will contain periods specified below in this
Old Contract. Finally, the Offering concise, plain English statements that: Condition (4) for review by the
Communication will state that IDS Life (i) The Extended Exchange Offer is Commission upon request: (i) Records
may terminate the Extended Exchange suitable only for an Old Contract owner showing the level of exchange activity
Offer at any time. The Offering who expects to hold RAVA Advantage and how it relates to the total number
Communication also will include a Plus as a long-term investment; (ii) if the of Old Contract owners eligible to
prospectus for the new RAVA RAVA Advantage Plus contract is exchange (quarterly as a percentage of
Advantage Plus contract. partially or completely surrendered the number eligible); (ii) copies of any
58. To accept the Extended Exchange during the initial CDSC period or form of Program Announcements,
Offer, the owner of an Old Contract annuitized during the first few years, Offering Communications, Termination
must complete an internal exchange the lower M&E charges and any Notices and other written materials or
form and application for the RAVA applicable Credits may be more than scripts for presentations by registered
Advantage Plus contract. Applicants offset by the CDSC or lower annuity representatives regarding the Extended
state that those Old Contract owners settlement rates and an Old Contract Exchange Offer that IDS Life either
who accept the Extended Exchange owner may be worse off than if he or she prepares or approves, including the
Offer will incur no current taxes and had rejected the Extended Exchange
dates that such materials were used; (iii)
that the exchanges will constitute tax- Offer; (iii) IDS Life will allocate an
records containing information about
free transfers, rollovers or exchanges Exchange Credit equal to 1% of the
each exchange transaction that occurs,
pursuant to Section 1035 of the Code. Exchange Value of the Old Contract
when the initial Purchase Payment to including the name of the contract
59. Applicants submit that the owner, Old Contract and RAVA
Extended Exchange Offer is meant to the RAVA Advantage Plus contract is
less than $100,000 (this Exchange Credit Advantage Plus contract numbers; the
encourage existing Old Contract owners amount of CDSC waived on surrender of
to remain with IDS Life rather than will not apply to subsequent Purchase
Payments received); (iv) the guaranteed the Old Contract; Purchase Payment
surrender their contracts in exchange for Credits and Exchange Credits paid; the
a competitor’s product. If the CDSC interest rate on RAVA Advantage Plus’
fixed account option may be less than name and CRD number of the registered
under RAVA Advantage Plus did not representative soliciting the exchange,
apply to the Exchange Value, the guaranteed interest rate on the Old
Contract’s fixed account option; (v) the firm affiliation, branch office address,
Applicants assert that IDS Life would telephone number and the name of the
have no assurance that an Old Contract current death benefit on the Old
Contract may be greater than the initial registered representative’s broker-dealer;
owner who accepted the Extended
death benefit on RAVA Advantage Plus; commission paid; the internal exchange
Exchange Offer would persist long
(vi) certain Investment Funds available form (and separate document, if any,
enough for any applicable Credits,
under the Old Contract are not available used to obtain the Old Contract owner’s
payments to registered representatives
under RAVA Advantage Plus; (vii) acknowledgment of the caveats required
and other relevant expenses to be
transfers to and from the fixed account in Condition (1)) showing the name,
recouped through standard fees from the
are more restricted under RAVA date of birth, address and telephone
ongoing operation of the RAVA
Advantage Plus than under the Old number of the contract owner and the
Advantage Plus contract.
Contract; (viii) an Old Contract owner date the internal exchange form (or
60. Applicants state that the may lose some tax benefits (when
commissions that IDS Life will pay its separate document) was signed; amount
applicable); and (ix) IDS Life reserves of contract or certificate value
registered representatives for soliciting the right to terminate the Extended
exchanges under the Extended exchanged; and persistency information
Exchange Offer. relating to the RAVA Advantage Plus
Exchange Offer are less than the normal 2. The Offering Communication will
commissions paid for soliciting sales of contract, including the date of any
disclose in concise, plain English each subsequent surrender and the amount of
RAVA Advantage Plus contracts. aspect of the RAVA Advantage Plus
Applicants assert that compensating IDS CDSC paid on the surrender; and (iv)
contract that could be less favorable logs showing a record of any contract
Life’s registered representatives for than the Old Contracts.
these exchanges is necessary in order to owner complaint about the exchange,
3. IDS Life, either directly or through
provide sufficient incentive for them to its registered representatives, will send state insurance department inquiries
compete with competitors’ registered an Offering Communication to eligible about the exchange, or litigation,
representatives. Old Contract owners who are interested arbitration, or other proceeding
61. IDS Life reserves the right to in learning more about the Extended regarding any exchange. The logs will
terminate the Extended Exchange Offer Exchange Offer. An Old Contract owner include the date of the complaint or
at any time. If IDS Life terminates the choosing to exchange will then commencement of the proceeding, name
Extended Exchange Offer, it will send a complete and sign an internal exchange and address of the person making the
notice to currently eligible Old Contract form and RAVA Advantage Plus complaint or commencing the
owners (‘‘Termination Notice’’). The application and return it to IDS Life. proceeding, nature of the complaint or
Termination Notice will state that Old This internal exchange form will proceeding, and the persons named or
Contract owners who wish to participate prominently restate in concise, plain involved in the complaint or
in the Extended Exchange Offer must do English the caveats described above in proceeding. Applicants will retain
so within two months from the date of Condition (1). If the internal exchange records specified in (i) and (iv) for a
the Termination Notice. The form is more than two pages long, IDS period of six years after the date the
Termination Notice will contain all of Life will use a separate document to records are created, records specified in
the caveats described herein. obtain contract owner acknowledgment (ii) for a period of six years after the date
of the caveats described in Condition of last use, and records specified in (iii)
Applicants’ Conditions for a period of two years after the date
(1).
Applicants agree to the following 4. IDS Life will maintain the that the initial CDSC period of the
conditions: following separately identifiable records RAVA Advantage Plus contract ends.
Applicants’ Legal Analysis because exchanging Old Contract Payments); (iii) RAVA Advantage Plus
1. Section 11(a) of the Act makes it owners will be given Purchase Payment has more Investment Funds. RAVA
unlawful for any registered open-end Credits and/or Exchange Credits), the Advantage Plus offers 56 Investment
company, or any principal underwriter only part of Rule 11a–2 that would not Funds in contrast to the 14 Investment
for such a company, to make or cause be satisfied by the proposed Extended Funds under the Old Contracts. One
to be made an offer to the holder of a Exchange Offer is the requirement that small cap Investment Fund available
security of such company, or of any payments under the Old Contract be under the Old Contracts currently is not
other open-end investment company, to treated as if they had been made under available under RAVA Advantage Plus.
exchange his or her security for a the new RAVA Advantage Plus contract However, RAVA Advantage Plus
on the dates actually made. This currently includes six small cap
security in the same or another such
provision of Rule 11a–2 is often referred Investment Funds to which a contract
company on any basis other than the
to as a ‘‘tacking’’ requirement because it owner can allocate Purchase Payments.
relative net asset values of the
has the effect of ‘‘tacking together’’ the Therefore, RAVA Advantage Plus
respective securities, unless the terms of
CDSC expiration periods of the contract owners can allocate Purchase
the offer have first been submitted to
exchanged and acquired contracts. Payments not only to most of the
and approved by the Commission or are
7. Applicants assert that the absence Investment Funds under the Old
in accordance with Commission rules
of tacking does not mean that an Contracts, but also to many additional
adopted under section 11.
exchange offer cannot be attractive and Investment Funds. This gives RAVA
2. Section 11(c) of the Act, in
beneficial to investors. Applicants state Advantage Plus contract owners the
pertinent part, requires, in effect, that
that the proposed Extended Exchange opportunity for greater diversification
any offer of exchange of the securities of
Offer would assure an immediate and and asset allocation; (iv) RAVA
a registered unit investment trust for the
enduring economic benefit to investors Advantage Plus offers an optional living
securities of any other investment
for the following reasons: (i) RAVA benefit. RAVA Advantage Plus contract
company be approved by the owners may select the Withdrawal
Commission or satisfy applicable rules Advantage Plus has a lower M&E charge
than the Old Contracts. During the life Benefit for an additional cost. The
adopted under Section 11, regardless of Withdrawal Benefit gives the owner the
the basis of the exchange. of the Old Contracts, IDS Life deducts
right to take limited partial withdrawals
3. The purpose of section 11 of the an M&E charge at an annual rate of 1%
in each contract year that ultimately
Act is to prevent ‘‘switching,’’ the of the average daily variable account
equal Purchase Payments plus Credits,
practice of inducing security holders of value. During the life of a RAVA
as adjusted for certain excess
one investment company to exchange Advantage Plus contract, IDS Life
withdrawals; and (v) RAVA Advantage
their securities for those of a different deducts an M&E charge at an annual
Plus has optional enhanced death
investment company solely for the rate of 0.95% of the average daily
benefits. RAVA Advantage Plus contract
purpose of exacting additional selling subaccount value for nonqualified
owners may elect optional death
charges. That type of practice was found annuities, 0.75% of the average daily
benefits for an additional cost that
by Congress to be widespread in the subaccount value for qualified annuities provide substantive value to
1930s prior to the adoption of the Act. and 0.55% of the average daily beneficiaries. A contract owner who
4. Section 11(c) of the Act requires subaccount value for Band 3 Contracts; expects to hold RAVA Advantage Plus
Commission approval (by order or by (ii) RAVA Advantage Plus contract as a long-term investment will receive
rule) of any exchange, regardless of its owners receive applicable Purchase the economic benefits of the Extended
basis, involving securities issued by a Payment Credits and/or Exchange Exchange Offer. No sales charge will
unit investment trust, because investors Credits. Each time IDS Life receives a ever be paid on the amounts exchanged
in unit investment trusts were found by Purchase Payment from an owner, it unless the RAVA Advantage Plus
Congress to be particularly vulnerable to allocates to the owner’s RAVA contract is surrendered before
switching operations. Advantage Plus account a Purchase expiration of the CDSC period the
5. Applicants assert that the potential Payment Credit equal to: (a) 1% of each owner has selected.
for harm to investors perceived in Purchase Payment received if the owner 8. Applicants assert that tacking
switching was its use to extract selected the ten-year CDSC period, or if should be viewed as a useful way to
additional sales charges from those the owner selected the seven-year CDSC avoid the need to scrutinize the terms of
investors. Applicants further assert that period and the initial Purchase Payment an offer of exchange to make sure that
the terms of the proposed Extended is at least $100,000 but less than there is no abuse. Tacking is not a
Exchange Offer do not present the $1,000,000; (b) 2% of each Purchase requirement of section 11. Rather, it is
abuses against which section 11 was Payment received if the owner selected a creation of a rule designed to approve
intended to protect. The Extended the ten-year CDSC period and the initial the terms of offers of exchange ‘‘sight
Exchange Offer is designed to allow IDS Purchase Payment is at least $100,000 unseen.’’ Tacking focuses on the closest
Life to compete on a level playing field but less than $1,000,000; or (c) for Band thing to multiple deduction of sales
with its competitors who are making 3 Contracts, 2% of each Purchase loads that is possible in a CDSC
bonus offers to its current Old Contract Payment received if the owner selected context—multiple exposure to sales
owners. No additional sales load or the seven-year CDSC period and 3% of loads upon surrender or redemption. If
other fee will be imposed at the time of each Purchase Payment received if the tacking and other safeguards of Rule
exercise of the Extended Exchange owner selected the ten-year CDSC 11a–2 are present, there is no need for
Offer. period. If the initial Purchase Payment the Commission or its staff to evaluate
6. Rule 11a–2, by its express terms, to RAVA Advantage Plus is less than the terms of the offer. The absence of
provides Commission approval of $100,000, IDS Life will provide a 1% tacking in this fully scrutinized section
certain types of offers of exchange of Exchange Credit based on the Exchange 11 application will have no impact on
one variable annuity contract for Value of the Old Contract applied to offers made pursuant to the rule on a
another. Applicants assert that other RAVA Advantage Plus on the Exchange ‘‘sight unseen’’ basis.
than the relative net asset value Date (but the 1% Exchange Credit will 9. Applicants assert that the terms of
requirement (which is not satisfied not apply to subsequent Purchase IDS Life’s Extended Exchange Offer are
better than those of its competitors. SECURITIES AND EXCHANGE Fuel Gas Distribution Corporation, a
Unlike the Extended Exchange Offer COMMISSION gas-utility company that distributes
proposed by IDS Life, when Old natural gas at retail to approximately
[Release No. 35–27935]
Contract owners exchange into 732,000 residential, commercial and
competitors’ contracts, they must pay Filings Under the Public Utility Holding industrial customers (including
any remaining CDSC on the Old Company Act of 1935, as Amended transportation-only customers) in
Contracts at the time of the exchange. (‘‘Act’’); National Fuel Gas Company portions of western New York and
No tacking is required when IDS Life’s (70–10273) northwestern Pennsylvania. National
competitors offer their variable annuity Fuel Gas’ principal non-utility
January 5, 2005. subsidiaries include National Fuel Gas
contracts to owners of Old Contracts or
Notice is hereby given that the Supply Corporation, Empire State
when IDS Life makes such an offer to
following filing(s) has/have been made Pipeline, Seneca Resources Corporation,
competitors’ contract owners. The with the Commission pursuant to National Fuel Resources, Inc., Highland
Commission has previously approved provisions of the Act and rules Forest Resources, Inc., Horizon Energy
similar exchange offers to permit the promulgated under the Act. All Development, Inc., and Horizon LFG,
owners of older contracts to exchange interested persons are referred to the Inc. (formerly Upstate Energy Inc.).
them for contracts offering an application(s) and/or declaration(s) for For the twelve months that ended
immediate and enduring economic complete statements of the proposed September 30, 2004, National Fuel Gas
benefit even where tacking did not transaction(s) summarized below. The reported operating revenues of
occur. application(s) and/or declaration(s) and approximately $2.0 billion, of which
10. To the extent there are differences any amendment(s) is/are available for $1.1 billion (56%) were attributable to
between the Old Contracts and the public inspection through the regulated utility gas sales. As of
RAVA Advantage Plus contract, those Commission’s Branch of Public September 30, 2004, National and its
Reference. subsidiaries owned total assets worth
differences relate to enhanced
Interested persons wishing to approximately $3.7 billion, including
contractual features and charges that are
comment or request a hearing on the approximately $3.0 billion in net
fully described in the prospectus for the application(s) and/or declaration(s) property, plant and equipment.
RAVA Advantage Plus contract. should submit their views in writing by
Furthermore, the Offering II. Requests for Authority
January 31, 2005, to the Secretary,
Communication (and any Termination Securities and Exchange Commission, National Fuel Gas requests authority
Notice) will contain concise, plain Washington, DC 20549–0609, and serve to amend its Restated Certificate of
English disclosure of each aspect of the a copy on the relevant applicant(s) and/ Incorporation (‘‘Certificate of
RAVA Advantage Plus contract that or declarant(s) at the address(es) Incorporation’’), as described below,
could be less favorable than the Old specified below. Proof of service (by and to solicit proxies from its
Contracts. affidavit or, in the case of an attorney at shareholders in connection with the
law, by certificate) should be filed with proposed amendment. The annual
Conclusion meeting of National Fuel Gas
the request. Any request for hearing
should identify specifically the issues of shareholders (‘‘Annual Meeting’’) is
Applicants submit, for the reasons
facts or law that are disputed. A person scheduled for February 17, 2005. To
stated herein, that the Extended
who so requests will be notified of any change the Certificate of Incorporation,
Exchange Offer is consistent with the the proposed amendment must be
protections provided by section 11 of hearing, if ordered, and will receive a
copy of any notice or order issued in the approved by the affirmative vote of a
the Act, and that approving the terms of majority of the votes cast by the holders
matter. After January 31, 2005, the
the Extended Exchange Offer is of the outstanding shares of Common
application(s) and/or declaration(s), as
necessary or appropriate in the public Stock entitled to vote at the Annual
filed or as amended, may be granted
interest and consistent with the Meeting. Proxies may be solicited on
and/or permitted to become effective.
protection of investors and the purposes behalf of the directors personally, and
fairly intended by the policies and Notice of Proposal To Amend Restated by mail, telephone, telecopy, and
provisions of the Act. Applicants submit Certificate of Incorporation; Order employees of National Fuel Gas and its
that the requested Amended Order Authorizing the Solicitation of Proxies subsidiaries (with no special
approving the terms of the proposed National Fuel Gas Company compensation to these employees). In
Extended Exchange Offer therefore (‘‘National Fuel Gas’’), 6363 Main Street, addition, National Fuel Gas has retained
should be granted. Williamsville, NY 14221, a registered Morrow & Co., Inc., to assist in the
holding company, has filed with the solicitation of proxies.
For the Commission, by the Division of The board of directors of National
Investment Management, pursuant to Commission a declaration
(‘‘Declaration’’) under sections 6(a)(2), 7 Fuel Gas proposes to amend Article
delegated authority.
and 12(e) of the Act and rules 54, 62(d) EIGHTH of the Certificate of
Jill M. Peterson, and 65 under the Act. Incorporation to revise the provisions
Assistant Secretary. relating to shareholder votes on certain
I. Description of National Fuel Gas actions. National Fuel Gas states that,
[FR Doc. E5–42 Filed 1–10–05; 8:45 am]
BILLING CODE 8010–01–P
National Fuel Gas, a New Jersey under the New Jersey Business
corporation, through its direct and Corporation Act (‘‘BCA’’), certain
indirect subsidiaries is engaged in the exceptions are available to the general
exploration, production, purchasing, rule that shareholder approval is
gathering, processing, transportation, required for certain actions (collectively,
storage, retail distribution, and ‘‘Actions’’): (1) Amendments to the
wholesale and retail marketing of Certificate of Incorporation; (2) plans of
natural gas. It owns all of the issued and merger or consolidation; (3) sales,
outstanding common stock of National leases, exchanges or other dispositions

Notice: Investment Company Act of 1940: IDS Life Insurance Co., Et Al.

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Notice: Investment Company Act of 1940: IDS Life Insurance Co., Et Al.

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1914 Federal Register / Vol. 70, No.

7 / Tuesday, January 11, 2005 / Notices

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