<PAGE>

                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549

                                   FORM 10-Q


         |X|  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934

               FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2006

                                      OR

         | | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934

             FOR THE TRANSITION PERIOD FROM             TO
                                            -----------    ------------

                        COMMISSION FILE NUMBER 33-28976

                          IDS LIFE INSURANCE COMPANY
            (Exact name of registrant as specified in its charter)

            MINNESOTA                                  41-0823832
 (State or other jurisdiction of         (I.R.S. Employer Identification No.)
  incorporation or organization)

55 AMERIPRISE FINANCIAL CENTER, MINNEAPOLIS, MINNESOTA                 55474
       (Address of principal executive offices)                     (Zip Code)

Registrant's telephone number, including area code    (612) 671-3131

Former name, former address and former fiscal year, if changed since last
report NOT APPLICABLE

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.

                                                                 Yes |X| No | |

Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer. See definition of "accelerated
filer and large accelerated filer" in Rule 12b-2 of the Exchange Act.
Large accelerated filer | |   Accelerated filer | |   Non-accelerated filer |X|

Indicate by check mark whether the registrant is a shell company (as defined
in Rule 12b-2 of the Exchange Act).

                                                                Yes | | No |X|

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

                 CLASS                        OUTSTANDING AT NOVEMBER 7, 2006
--------------------------------------        -------------------------------
Common Stock (par value $30 per share)               100,000 shares

THE REGISTRANT MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTIONS H(1) (a)
AND (b) OF FORM 10-Q AND IS THEREFORE FILING THIS FORM WITH THE REDUCED
DISCLOSURE FORMAT.



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                          IDS LIFE INSURANCE COMPANY

                                   FORM 10-Q

                                     INDEX
                                                                        PAGE NO.

Part I.  Financial Information:

         Item 1.   Financial Statements

                   Consolidated Balance Sheets - September 30, 2006 and
                   December 31, 2005.....................................     1

                   Consolidated Statements of Income - Three Months and
                   Nine Months Ended September 30, 2006 and 2005.........     2

                   Consolidated Statements of Cash Flows - Nine Months
                   Ended September 30, 2006 and 2005.....................     3

                   Consolidated Statements of Shareholder's Equity - Nine
                   Months Ended September 30, 2006 and 2005..............     4

                   Notes to Consolidated Financial Statements............  5-10

         Item 2.   Management's Discussion and Analysis.................. 11-16

         Item 4.   Controls and Procedures...............................    17

Part II. Other Information:

         Item 1.   Legal Proceedings.....................................    17

         Item 1A.  Risk Factors..........................................    17

         Item 6.   Exhibits..............................................    17

         Signatures......................................................    18

         Exhibit Index...................................................   E-1



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<TABLE>
PART I.  FINANCIAL INFORMATION
ITEM 1.  FINANCIAL STATEMENTS

                                                   IDS LIFE INSURANCE COMPANY

                                                   CONSOLIDATED BALANCE SHEETS
                                              (in thousands, except share amounts)
<CAPTION>
                                                                                             SEPTEMBER 30,        DECEMBER 31,
                                                                                                 2006                2005
                                                                                          -----------------    -----------------
                                                                                             (UNAUDITED)

<S>                                                                                         <C>                  <C>
ASSETS
Investments:
Available-for-Sale:
   Fixed maturities, at fair value (amortized cost: 2006, $25,995,183;
   2005, $27,817,021)...................................................................    $  25,689,856        $  27,753,174
   Common and preferred stocks, at fair value (cost: 2006, $29,965; 2005, $13)..........           31,024                   21
Mortgage loans on real estate, at cost (less allowance for loan losses: 2006, $37,347;
   2005, $41,347).......................................................................        2,793,393            2,842,362
Policy loans............................................................................          634,988              605,212
Trading securities and other investments................................................          294,732              547,668
                                                                                          -----------------    -----------------
  Total investments.....................................................................       29,443,993           31,748,437

Cash and cash equivalents...............................................................          238,650              272,562
Reinsurance recoverables................................................................        1,104,073              982,521
Amounts due from brokers................................................................           15,613                4,166
Other accounts receivable...............................................................           74,986               62,930
Accrued investment income...............................................................          326,143              328,567
Deferred acquisition costs..............................................................        4,330,320            4,035,879
Deferred sales inducement costs.........................................................          431,732              370,166
Other assets............................................................................          287,091              220,371
Separate account assets.................................................................       44,650,399           37,929,960
                                                                                          -----------------    -----------------
  Total assets..........................................................................    $  80,903,000       $  75,955,559
                                                                                          =================    =================
LIABILITIES AND SHAREHOLDER'S EQUITY
Liabilities:
Future policy benefits..................................................................    $  30,322,140        $  32,311,694
Policy claims and other policyholders' funds............................................          103,834               90,233
Amounts due to brokers..................................................................           98,371               31,772
Deferred income tax liabilities, net....................................................           77,713                9,099
Other liabilities.......................................................................          423,938              420,911
Separate account liabilities............................................................       44,650,399           37,929,960
                                                                                          -----------------    -----------------
  Total liabilities.....................................................................       75,676,395           70,793,669
                                                                                          -----------------    -----------------
Shareholder's equity:
Common shares, $30 par value;
    100,000 shares authorized, issued and outstanding...................................            3,000                3,000
Additional paid-in capital..............................................................        2,020,388            2,020,388
Retained earnings.......................................................................        3,418,133            3,269,206
Accumulated other comprehensive loss, net of tax........................................         (214,916)            (130,704)
                                                                                          -----------------    -----------------
  Total shareholder's equity............................................................        5,226,605            5,161,890
                                                                                          -----------------    -----------------
  Total liabilities and shareholder's equity............................................    $  80,903,000        $  75,955,559
                                                                                          =================    =================

                                        See Notes to Consolidated Financial Statements.
</TABLE>

                                     1

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<TABLE>
                                                    IDS LIFE INSURANCE COMPANY

                                         CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
                                                          (in thousands)

<CAPTION>
                                                                      THREE MONTHS ENDED                  NINE MONTHS ENDED
                                                                         SEPTEMBER 30,                      SEPTEMBER 30,
                                                               --------------------------------    -------------------------------
                                                                     2006            2005                 2006           2005
                                                               --------------  ----------------    ---------------  --------------
<S>                                                             <C>             <C>                 <C>              <C>
REVENUES
   Premiums:
     Traditional life insurance...............................  $     18,189    $       15,933      $      54,515    $     52,690
     Disability income and long-term care insurance...........        90,367            74,310            242,277         218,429
                                                               --------------  ----------------    ---------------  --------------
         Total premiums.......................................       108,556            90,243            296,792         271,119

   Net investment income......................................       392,871           461,450          1,253,526       1,343,160
   Contractholder and policyholder charges....................       155,388           145,477            481,221         431,291
   Mortality and expense risk and other fees..................       157,887           125,559            458,008         348,727
   Net realized investment gains..............................        13,535             8,070             24,350          45,909
                                                               --------------  ----------------    ---------------  --------------

         Total revenues.......................................       828,237           830,799          2,513,897       2,440,206
                                                               --------------  ----------------    ---------------  --------------

BENEFITS AND EXPENSES
   Death and other benefits:
     Traditional life insurance...............................         8,805            10,144             21,302          30,724
     Investment contracts and universal life-type insurance...        62,815            49,453            189,924         168,177
     Disability income and long-term care insurance...........        20,919            18,895             61,514          55,094
   Increase (decrease) in liabilities for future
    policy benefits:
     Traditional life insurance...............................        (2,407)              517                285           2,927
     Disability income and long-term care insurance...........        33,105            49,200            106,554         108,766
   Interest credited to account values........................       260,879           278,623            794,746         832,244
   Amortization of deferred acquisition costs.................        64,384            24,543            274,176         221,818
   Separation costs...........................................        35,574            38,915             90,966          64,687
   Other insurance and operating expenses.....................       155,664           152,414            472,298         438,109
                                                               --------------  ----------------    ---------------  --------------

         Total benefits and expenses..........................       639,738           622,704          2,011,765       1,922,546
                                                               --------------  ----------------    ---------------  --------------

Income before income tax provision............................       188,499           208,095            502,132         517,660
Income tax provision..........................................        60,768            83,024            153,205         175,584
                                                               --------------  ----------------    ---------------  --------------

Net income....................................................  $    127,731    $      125,071      $     348,927    $    342,076
                                                               ==============  ================    ===============  ==============

                                         See Notes to Consolidated Financial Statements.
</TABLE>


                                      2

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<TABLE>
                                                IDS LIFE INSURANCE COMPANY

                                     CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
                                                      (in thousands)

<CAPTION>
                                                                                                 NINE MONTHS ENDED
                                                                                                   SEPTEMBER 30,
                                                                                        ----------------------------------
                                                                                              2006               2005
                                                                                         --------------     --------------
<S>                                                                                       <C>                <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income............................................................................    $   348,927        $   342,076
Adjustments to reconcile net income to net cash provided by operating activities:
  Amortization of deferred acquisition costs..........................................        274,176            221,818
  Amortization of deferred sales inducement costs.....................................         37,806             27,727
  Capitalization of deferred acquisition costs........................................       (513,565)          (468,397)
  Capitalization of deferred sales inducement costs...................................        (92,368)           (72,911)
  Premium and discount amortization on Available-for-Sale and other securities........         56,871             66,363
  Deferred income taxes...............................................................        113,960            116,423
  Policyholder and contractholder charges, non-cash...................................       (163,071)          (175,430)
  Net realized investment gains.......................................................        (24,350)           (45,909)
  Net realized gain on trading securities and equity method investments in hedge funds         (9,513)           (19,236)
Change in operating assets and liabilities:
  Trading securities and equity method investments in hedge funds, net................        254,511            187,944
  Future policy benefits for traditional life, disability income and long-term care
     insurance........................................................................        206,567            169,463
  Policy claims and other policyholders' funds........................................         13,601             13,261
  Policy loans, excluding universal life-type insurance:
     Repayment........................................................................         26,124             27,239
     Issuance.........................................................................        (31,080)           (29,061)
  Reinsurance recoverables............................................................       (121,552)           (66,355)
  Other accounts receivable...........................................................        (12,056)            (9,706)
  Accrued investment income...........................................................          2,424             14,266
  Other assets and liabilities, net...................................................       (206,467)           121,347
                                                                                         --------------     --------------
NET CASH PROVIDED BY OPERATING ACTIVITIES.............................................        160,945            420,922
                                                                                         --------------     --------------
CASH FLOWS FROM INVESTING ACTIVITIES
Available-for-Sale securities:
  Proceeds from sales.................................................................      1,604,637          2,394,030
  Maturities, sinking fund payments and calls.........................................      1,477,499          1,527,979
  Purchases...........................................................................     (1,319,199)        (4,065,968)
Other investments, excluding policy loans:
  Proceeds from sales, maturities, sinking fund payments and calls....................        390,751            501,096
  Purchases...........................................................................       (333,712)          (419,774)
Change in amounts due to and from brokers, net........................................         55,152            (61,285)
Change in restricted cash.............................................................              -            535,821
                                                                                         --------------     --------------
NET CASH PROVIDED BY INVESTING ACTIVITIES.............................................      1,875,128            411,899
                                                                                         --------------     --------------
CASH FLOWS FROM FINANCING ACTIVITIES
Activity related to investment contracts and universal life-type insurance:
  Considerations received.............................................................        980,107          1,227,285
  Interest credited to account values.................................................        794,746            832,244
  Surrenders and other benefits.......................................................     (3,620,018)        (2,449,625)
Universal life-type insurance policy loans:
  Repayment...........................................................................         71,329             71,228
  Issuance............................................................................        (96,149)           (77,184)
Cash dividend to Ameriprise Financial, Inc............................................       (200,000)                 -
Capital contribution from Ameriprise Financial, Inc. .................................              -            650,000
                                                                                         --------------     --------------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES...................................     (2,069,985)           253,948
                                                                                         --------------     --------------

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS..................................        (33,912)         1,086,769
Cash and cash equivalents at beginning of period......................................        272,562            162,561
                                                                                         --------------     --------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD............................................    $   238,650        $ 1,249,330
                                                                                         ==============     ==============
Supplemental Disclosures:
  Income taxes paid, net..............................................................    $    47,024        $   100,707
  Interest paid on borrowings.........................................................    $     1,176        $        84

                                    See Notes to Consolidated Financial Statements.
</TABLE>


                                      3

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<TABLE>
                                               IDS LIFE INSURANCE COMPANY

                                CONSOLIDATED STATEMENTS OF SHAREHOLDER'S EQUITY (UNAUDITED)
                                      NINE MONTHS ENDED SEPTEMBER 30, 2006 AND 2005
                                                      (in thousands)
<CAPTION>
                                                                                                ACCUMULATED
                                                               ADDITIONAL                          OTHER
                                                 COMMON         PAID-IN         RETAINED       COMPREHENSIVE
                                                 SHARES         CAPITAL         EARNINGS       INCOME (LOSS)       TOTAL
                                               -----------   --------------  ---------------  --------------  --------------
<S>                                             <C>           <C>             <C>              <C>             <C>
BALANCES AT DECEMBER 31, 2004.................  $   3,000     $  1,370,388    $   3,190,474    $    341,693    $  4,905,555

Comprehensive loss:
   Net income.................................                                      342,076                         342,076
   Change in unrealized holding losses on
     securities, net..........................                                                     (336,074)       (336,074)
   Change in unrealized derivative losses, net                                                       (9,443)         (9,443)
                                                                                                              --------------
Total comprehensive loss......................                                                                       (3,441)
Capital contribution from Ameriprise
   Financial, Inc. ...........................                     650,000                                          650,000
                                               -----------   --------------  ---------------  --------------  --------------
BALANCES AT SEPTEMBER 30, 2005................  $   3,000     $  2,020,388    $   3,532,550    $     (3,824)   $  5,552,114
                                               ===========   ==============  ===============  ==============  ==============

BALANCES AT DECEMBER 31, 2005.................  $   3,000     $  2,020,388    $   3,269,206    $   (130,704)   $  5,161,890

Comprehensive income:
   Net income.................................                                      348,927                         348,927
   Change in unrealized holding losses on
     securities, net..........................                                                      (82,856)        (82,856)
   Change in unrealized derivative losses, net                                                       (1,356)         (1,356)
                                                                                                               -------------
Total comprehensive income....................                                                                      264,715
Cash dividend to Ameriprise Financial, Inc....                                     (200,000)                       (200,000)
                                               -----------   --------------  ---------------  --------------  --------------
BALANCES AT SEPTEMBER 30, 2006................  $   3,000     $  2,020,388    $   3,418,133    $   (214,916)   $  5,226,605
                                               ===========   ==============  ===============  ==============  ==============

                                       See Notes to Consolidated Financial Statements.
</TABLE>

                                      4

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                          IDS LIFE INSURANCE COMPANY

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1.   BASIS OF PRESENTATION

     The accompanying Consolidated Financial Statements include the accounts
     of IDS Life Insurance Company and companies in which it directly or
     indirectly has a controlling financial interest. All material
     intercompany transactions and balances between or among IDS Life
     Insurance Company and its subsidiaries and affiliates have been
     eliminated in consolidation. IDS Life Insurance Company is a wholly-owned
     subsidiary of Ameriprise Financial, Inc. ("Ameriprise Financial"). IDS
     Life Insurance Company is a stock life insurance company with four
     wholly-owned operating subsidiaries: IDS Life Insurance Company of New
     York ("IDS Life of New York"), American Partners Life Insurance Company
     ("American Partners Life"), American Enterprise Life Insurance Company
     ("American Enterprise Life") and American Centurion Life Assurance
     Company ("American Centurion Life"). IDS Life Insurance Company also owns
     IDS REO 1, LLC; IDS REO 2, LLC and American Enterprise REO 1, LLC which
     hold real estate investments. IDS Life Insurance Company and its seven
     subsidiaries are referred to collectively in this Form 10-Q as "IDS
     Life".

     The accompanying Consolidated Financial Statements have been prepared in
     accordance with U.S. generally accepted accounting principles ("GAAP").
     The interim financial information in this report has not been audited.
     In the opinion of management, all adjustments necessary for a fair
     presentation of the consolidated financial position and results of
     operations for the interim periods have been made. All adjustments made
     were of a normal, recurring nature. Results of operations reported for
     interim periods are not necessarily indicative of results for the
     entire year. These Consolidated Financial Statements and Notes should
     be read in conjunction with the Consolidated Financial Statements and
     Notes in the Annual Report on Form 10-K of IDS Life for the year ended
     December 31, 2005, filed with the Securities and Exchange Commission
     ("SEC") on March 10, 2006.

     On March 17, 2006, IDS Life Insurance Company executed an Agreement and
     Plan of Merger with both American Enterprise Life and American Partners
     Life whereby both companies will be merged with and into IDS Life
     Insurance Company. The agreement provides that IDS Life Insurance
     Company shall be the surviving corporation of the mergers and shall
     continue to exist as a domestic stock life insurance company under the
     laws of the State of Minnesota. The merger agreement also provides
     that, upon effectiveness of the merger, American Enterprise Life and
     American Partners Life shall cease to exist and their property and
     obligations shall become the property and obligations of IDS Life
     Insurance Company. Simultaneously with the effectiveness of the merger,
     the agreement provides that the Articles of Incorporation of IDS Life
     Insurance Company shall be amended to change its name to RiverSource
     Life Insurance Company. Among other conditions precedent, the merger
     and the change of IDS Life Insurance Company's name to RiverSource Life
     Insurance Company are subject to certain regulatory approvals.

     In addition, IDS Life of New York and American Centurion Life executed an
     Agreement and Plan of Merger on March 17, 2006 whereby American
     Centurion Life will be merged with and into IDS Life of New York. The
     agreement provides that IDS Life of New York shall be the surviving
     corporation of the merger and shall continue to exist as a domestic
     stock life insurance company under the laws of the State of New York.
     The merger agreement also provides that, upon effectiveness of the
     merger, American Centurion Life shall cease to exist and its property
     and obligations shall become the property and obligations of IDS Life
     of New York. Simultaneously with the effectiveness of the merger, the
     agreement provides that the Articles of Incorporation of IDS Life of
     New York shall be amended to change its name to RiverSource Life
     Insurance Co. of New York. Among other conditions precedent, the merger
     and the change of IDS Life of New York's name to RiverSource Life
     Insurance Co. of New York are subject to certain regulatory approvals.

     It is currently anticipated that the mergers will be effective as of
     December 31, 2006. It is expected that there will be no material effect
     on the consolidated financial condition and results of operations for
     IDS Life from the mergers.

     Certain reclassifications of prior period amounts have been made to
     conform to the current presentation.


                                      5

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                          IDS LIFE INSURANCE COMPANY

      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

2.   RECENT ACCOUNTING PRONOUNCEMENTS

     In September 2006, the Financial Accounting Standards Board ("FASB")
     issued Statement of Financial Accounting Standards ("SFAS") No. 157,
     "Fair Value Measurements" ("SFAS 157"). SFAS 157 defines fair value,
     establishes a framework for measuring fair value and expands disclosures
     about fair value measurements. SFAS 157 applies under other accounting
     pronouncements that require or permit fair value measurements.
     Accordingly, SFAS 157 does not require any new fair value measurements.
     SFAS 157 is effective for fiscal years beginning after November 15, 2007,
     and interim periods within those fiscal years. Early adoption is
     permitted provided that the entity has not issued financial statements
     for any period within the year of adoption. The provisions of SFAS 157
     are required to be applied prospectively as of the beginning of the
     fiscal year in which SFAS 157 is initially applied, except for certain
     financial instruments as defined in SFAS 157 which will require
     retrospective application of SFAS 157. The transition adjustment, if any,
     will be recognized as a cumulative-effect adjustment to the opening
     balance of retained earnings for the fiscal year of adoption. IDS Life is
     currently evaluating the impact of SFAS 157 on its consolidated financial
     condition and results of operations.

     In September 2006, the SEC issued Staff Accounting Bulletin ("SAB") No.
     108, "Considering the Effects of Prior Year Misstatements when
     Quantifying Misstatements in Current Year Financial Statements" ("SAB
     108"). SAB 108 addresses quantifying the financial statement effects of
     misstatements, specifically, how the effects of prior year uncorrected
     errors must be considered in quantifying misstatements in the current
     year financial statements. SAB 108 does not change the SEC staff's
     previous positions in SAB 99, "Materiality," regarding qualitative
     considerations in assessing the materiality of misstatements. SAB 108 is
     effective for fiscal years ending after November 15, 2006. In the initial
     year of adoption, the cumulative effect of applying SAB 108, if any, will
     be recorded as an adjustment to the beginning balance of retained
     earnings. IDS Life is currently evaluating the impact of SAB 108 on its
     consolidated financial condition and results of operations.

     In June 2006, the FASB issued FASB Interpretation No. 48, "Accounting for
     Uncertainty in Income Taxes - an interpretation of FASB Statement No. 109"
     ("FIN 48"). FIN 48 clarifies the accounting for uncertainty in income
     taxes recognized in accordance with FASB Statement No. 109, "Accounting
     for Income Taxes." FIN 48 prescribes a recognition threshold and
     measurement attribute for the financial statement recognition and
     measurement of a tax position taken or expected to be taken in a tax
     return. FIN 48 also provides guidance on derecognition, classification,
     interest and penalties, accounting in interim periods, disclosure and
     transition. FIN 48 is effective for fiscal years beginning after December
     15, 2006. IDS Life is currently evaluating the impact of FIN 48 on its
     consolidated financial condition and results of operations.

     In February 2006, the FASB issued SFAS No. 155, "Accounting for Certain
     Hybrid Financial Instruments" ("SFAS 155"). SFAS 155 amends FASB
     Statement No. 133, "Accounting for Derivative Instruments and Hedging
     Activities" ("SFAS 133") and FASB Statement No. 140, "Accounting for
     Transfers and Servicing of Financial Assets and Extinguishments of
     Liabilities" ("SFAS 140"). SFAS 155: (1) permits fair value remeasurement
     for any hybrid financial instrument that contains an embedded derivative
     that otherwise would require bifurcation; (2) clarifies which
     interest-only and principal-only strips are not subject to the
     requirements of SFAS 133; (3) establishes a requirement to evaluate
     interests in securitized financial assets to identify interests that are
     freestanding derivatives or that are hybrid financial instruments that
     contain an embedded derivative requiring bifurcation; (4) clarifies that
     concentrations of credit risk in the form of subordination are not
     embedded derivatives; and (5) amends SFAS 140 to eliminate the prohibition
     on a qualifying special-purpose entity from holding a derivative
     financial instrument that pertains to a beneficial interest other than
     another derivative financial instrument. SFAS 155 is effective for all
     financial instruments acquired or issued after the beginning of an
     entity's fiscal year that begins after September 15, 2006. At adoption,
     the fair value election may also be applied to hybrid financial
     instruments that have been bifurcated under SFAS 133 prior to adoption of
     this Statement. Any changes resulting from the adoption of this Statement
     should be recognized as a cumulative effect adjustment to beginning
     retained earnings. IDS Life is currently evaluating the impact of SFAS
     155 on its consolidated financial condition and results of operations.


                                      6

<PAGE>
<PAGE>


                          IDS LIFE INSURANCE COMPANY

      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

2.   RECENT ACCOUNTING PRONOUNCEMENTS (CONTINUED)

     In September 2005, the American Institute of Certified Public Accountants
     issued Statement of Position 05-1, "Accounting by Insurance Enterprises
     for Deferred Acquisition Costs in Connection With Modifications or
     Exchanges of Insurance Contracts" ("SOP 05-1"). SOP 05-1 provides
     guidance on accounting by insurance enterprises for deferred acquisition
     costs on internal replacements of insurance and investment contracts
     other than those specifically described in SFAS No. 97, "Accounting and
     Reporting by Insurance Enterprises for Certain Long-Duration Contracts
     and for Realized Gains and Losses from the Sale of Investments." SOP 05-1
     is effective for internal replacements occurring in fiscal years
     beginning after December 15, 2006, with earlier adoption encouraged. IDS
     Life currently accounts for many types of internal replacements as
     continuations of the existing contract and does not consider these
     transactions as surrenders in setting deferred acquisition cost ("DAC")
     valuation assumptions. Some of these transactions will not qualify as
     continuations under SOP 05-1 and IDS Life may need to increase certain
     policy surrender assumptions and record a reduction in DAC as a
     cumulative change in accounting principle when it adopts SOP 05-1. This
     may result in quarterly DAC amortization expense that is higher or lower
     than under IDS Life's current accounting policy. IDS Life is currently
     evaluating the impact of SOP 05-1 on its consolidated financial condition
     and results of operations.

3.   SEPARATION AND DISTRIBUTION OF AMERIPRISE FINANCIAL, INC. FROM AMERICAN
     EXPRESS

     On February 1, 2005, the American Express Company ("American Express")
     Board of Directors announced its intention to pursue the disposition of
     100% of its shareholdings in Ameriprise Financial ("the Separation")
     through a tax-free distribution to American Express shareholders.
     Effective as of the close of business on September 30, 2005, American
     Express completed the Separation of Ameriprise Financial and the
     distribution of Ameriprise Financial common shares to American Express
     shareholders ("the Distribution"). Prior to the Distribution, Ameriprise
     Financial had been a wholly-owned subsidiary of American Express. In
     connection with the Distribution, Ameriprise Financial entered into
     certain agreements with American Express to effect the separation of its
     business and to define the responsibility for obligations arising before
     and after the date of the Distribution, including, among others,
     obligations relating to transition services, taxes, and employees. IDS
     Life was allocated certain expenses incurred as a result of Ameriprise
     Financial becoming an independent company. Cumulatively, the expenses
     allocated to IDS Life are significant to IDS Life. IDS Life received a
     capital contribution of $650 million from Ameriprise Financial during the
     third quarter of 2005 to support its financial strength ratings and to
     cover separation costs.

     During 2005, Ameriprise Financial developed an allocation policy for
     separation costs resulting in the allocation of certain costs to IDS
     Life that it considered to be a reasonable reflection of separation
     costs benefiting IDS Life. Separation costs incurred during the first
     nine months of 2006 primarily related to technology costs and marketing
     and rebranding. Separation costs incurred during the 2005 year-to-date
     period were primarily related to advisor retention program costs,
     technology costs and costs associated with establishing the Ameriprise
     Financial brand. Net income includes separation costs of $35.6 million
     and $38.9 million for the three months ended September 30, 2006 and
     2005, respectively, and $91.0 million and $64.7 million for the nine
     months ended September 30, 2006 and 2005, respectively.


                                      7

<PAGE>
<PAGE>


                          IDS LIFE INSURANCE COMPANY

      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

4.   INVESTMENTS

     The following is a summary of Available-for-Sale securities by type:

<TABLE>
<CAPTION>
                                                                            GROSS             GROSS
                                                                          UNREALIZED        UNREALIZED
                                                         AMORTIZED        INVESTMENT        INVESTMENT          FAIR
     SEPTEMBER 30, 2006                                    COST             GAINS             LOSSES            VALUE
     -----------------------------------------------  --------------    -------------    --------------     --------------
                                                                               (IN THOUSANDS)
<S>                                                    <C>               <C>              <C>                <C>
     Fixed maturities:
     Corporate debt securities...................      $ 12,457,042      $   121,864      $  (278,244)       $ 12,300,662
     Mortgage and other asset-backed securities..         9,779,560           32,568         (178,194)          9,633,934
     Foreign corporate bonds and obligations.....         3,178,047           43,458          (71,117)          3,150,388
     U.S. government and agencies obligations....           295,625           14,167           (5,179)            304,613
     State and municipal obligations.............           165,017            3,707           (4,056)            164,668
     Foreign government bonds and obligations....           117,627           15,832             (133)            133,326
     Structured investments (a)..................             2,265                -                -               2,265
                                                      --------------    -------------    --------------     --------------
     Total fixed maturities.....................         25,995,183          231,596         (536,923)         25,689,856
     Preferred and common stocks.................            29,965            1,060               (1)             31,024
                                                      --------------    -------------    --------------     --------------
     Total ......................................      $ 26,025,148      $   232,656      $  (536,924)       $ 25,720,880
                                                      ==============    =============    ==============     ==============
     (a) Includes unconsolidated collateralized debt obligations.


<CAPTION>
                                                                            GROSS             GROSS
                                                                          UNREALIZED        UNREALIZED
                                                         AMORTIZED        INVESTMENT        INVESTMENT          FAIR
     DECEMBER 31, 2005                                     COST             GAINS             LOSSES            VALUE
     -----------------------------------------------  --------------    -------------    --------------     --------------
                                                                               (IN THOUSANDS)
<S>                                                    <C>               <C>              <C>                <C>
     Fixed maturities:
     Corporate debt securities........................ $ 13,318,636      $   208,577      $  (198,774)       $ 13,328,439
     Mortgage and other asset-backed securities..        10,804,984           45,531         (158,784)         10,691,731
     Foreign corporate bonds and obligations.....         3,148,534           67,097          (54,721)          3,160,910
     U.S. government and agencies obligations....           300,337           16,207           (5,282)            311,262
     State and municipal obligations.............           114,165            2,756           (3,262)            113,659
     Foreign government bonds and obligations....           127,912           16,922             (114)            144,720
     Structured investments (a)..................             2,453                -                -               2,453
                                                      --------------    -------------    --------------     --------------
     Total fixed maturities.....................         27,817,021          357,090         (420,937)         27,753,174
     Preferred and common stocks.................                13                8                -                  21
                                                      --------------    -------------    --------------     --------------
     Total ......................................      $ 27,817,034      $   357,098      $  (420,937)       $ 27,753,195
                                                      ==============    =============    ==============     ==============
     (a)  Includes unconsolidated collateralized debt obligations.
</TABLE>

     In the above tables, the majority of the gross unrealized investment
     losses related to corporate debt securities and substantially all of the
     gross unrealized investment losses related to mortgage and other
     asset-backed securities were attributable to changes in interest rates. A
     small portion of the gross unrealized investment losses, particularly
     related to corporate debt securities, was also attributable to credit
     spreads and specific issuer credit events.


                                      8

<PAGE>
<PAGE>

                          IDS LIFE INSURANCE COMPANY

      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

4.   INVESTMENTS (CONTINUED)

     Gross realized investment gains and losses on Available-for-Sale
     securities and other-than-temporary impairments on Available-for-Sale
     securities included in net realized investment gains were as follows:

<TABLE>
<CAPTION>
                                                         THREE MONTHS ENDED                NINE MONTHS ENDED
                                                            SEPTEMBER 30,                    SEPTEMBER 30,
                                                     ---------------------------     -----------------------------
                                                         2006           2005             2006             2005
                                                     -----------    ------------     -----------      ------------
                                                                           (IN THOUSANDS)
<S>                                                   <C>            <C>              <C>              <C>
     Gross realized investment gains............      $  13,171      $  11,350        $  33,148        $   83,713
     Gross realized investment losses...........            (38)        (3,121)          (9,306)          (35,368)
     Other-than-temporary impairments...........             --             --               --              (636)
</TABLE>

5.   DEFERRED ACQUISITION COSTS

     Changes in deferred acquisition costs were as follows:

<TABLE>
<CAPTION>
                                                                      2006                    2005
                                                                ----------------        ---------------
                                                                             (IN THOUSANDS)
<S>                                                              <C>                     <C>
     BALANCE, JANUARY 1.......................................   $   4,035,879           $   3,637,956
     Capitalization of acquisition costs......................         513,565                 468,397
     Amortization, excluding impact of changes in assumptions.        (311,676)               (288,818)
     Amortization, impact of annual third quarter changes in
        DAC-related assumptions...............................          37,500                  67,000
     Impact of changes in net unrealized securities losses....          55,052                  59,897
                                                                ----------------        ---------------
     BALANCE, SEPTEMBER 30....................................   $   4,330,320           $   3,944,432
                                                                ================        ===============
</TABLE>

6.   LINES OF CREDIT

     IDS Life has available a committed line of credit with Ameriprise
     Financial aggregating $200 million. The interest rate for any borrowings
     is established by reference to LIBOR plus 28 basis points. There were no
     amounts outstanding on this line of credit at September 30, 2006.

7.   INCOME TAXES

     IDS Life's effective tax rate was 31% for the nine months ended September
     30, 2006. IDS Life's effective tax rate was 34% for the nine months ended
     September 30, 2005. The effective tax rate for the nine months ended
     September 30, 2006 primarily reflects higher tax-advantaged items
     compared to pretax income in the nine months of 2006 compared to the same
     period a year ago. The effective tax rate for the nine months ended
     September 30, 2005 also reflects a $20 million tax expense applicable to
     prior years and a $9 million tax benefit related to the finalization of
     the prior year tax return.

     IDS Life is required to establish a valuation allowance for any portion
     of the deferred tax assets that management believes will not be
     realized. Included in IDS Life's deferred tax assets is a significant
     deferred tax asset relating to capital losses realized for tax return
     purposes and capital losses that have been recognized for financial
     statement purposes but not yet for tax return purposes. Under current
     U.S. federal income tax law, capital losses generally must be used
     against capital gain income within five years of the year in which the
     capital losses are recognized for tax purposes. IDS Life's deferred tax
     assets at September 30, 2006 included $180.3 million in capital loss
     carryforwards that expire December 31, 2009. Based on analysis of IDS
     Life's tax position, management believes it is more likely than not
     that the results of future operations and implementation of tax
     planning strategies will generate sufficient taxable income to enable
     IDS Life to utilize all of its deferred tax assets. Accordingly, no
     valuation allowance for deferred tax assets was established as of
     September 30, 2006 and December 31, 2005.

                                      9

<PAGE>
<PAGE>


                          IDS LIFE INSURANCE COMPANY

      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

8.   COMMITMENTS AND CONTINGENCIES

     At September 30, 2006 and December 31, 2005, IDS Life had commitments to
     fund mortgage loans on real estate of $90.2 million and $106.8 million,
     respectively.

     The SEC, the National Association of Securities Dealers and several state
     authorities have brought proceedings challenging several mutual fund and
     variable product financial practices, generally including suitability,
     late trading, market timing, compensation and disclosure of revenue
     sharing arrangements. IDS Life has received requests for information and
     has been contacted by regulatory authorities concerning its practices and
     is cooperating fully with these inquiries.

     IDS Life is involved in other proceedings concerning matters arising in
     connection with the conduct of its business activities. IDS Life believes
     that it is not a party to, nor are any of its properties the subject of,
     any pending legal, arbitration or regulatory proceedings that would have
     a material adverse effect on its consolidated financial condition,
     results of operations or liquidity. However, it is possible that the
     outcome of any such proceedings could have a material adverse impact on
     results of operations in any particular reporting period as the
     proceedings are resolved.

                                      10


<PAGE>
<PAGE>


ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS

The following Management's Discussion and Analysis ("MD&A") should be read
in conjunction with IDS Life Insurance Company's Consolidated Financial
Statements and Notes presented in Item 1. IDS Life Insurance Company
and its seven subsidiaries are referred to collectively in this Form 10-Q as
"IDS Life". This discussion may contain forward-looking statements that
reflect IDS Life's plans, estimates and beliefs. Actual results could differ
materially from those discussed in these forward-looking statements. Factors
that could cause or contribute to these differences include, but are not
limited to, those discussed under "Forward-Looking Statements." IDS Life
believes it is useful to read its MD&A in conjunction with its Annual Report
on Form 10-K for the year ended December 31, 2005, filed with the Securities
and Exchange Commission ("SEC") on March 10, 2006, as well as its current
reports on Form 8-K and other publicly available information.

IDS Life follows U.S. generally accepted accounting principles ("GAAP"), and
the following discussion is presented on a consolidated basis consistent
with GAAP.

Management's narrative analysis of the results of operations is presented in
lieu of MD&A, pursuant to General Instructions H(2) (a) of Form 10-Q.

OVERVIEW

IDS Life Insurance Company is a stock life insurance company with four
wholly-owned operating subsidiaries: IDS Life Insurance Company of New York
("IDS Life of New York"), American Partners Life Insurance Company ("American
Partners Life"), American Enterprise Life Insurance Company ("American
Enterprise Life") and American Centurion Life Assurance Company ("American
Centurion Life"). IDS Life Insurance Company is a wholly-owned subsidiary of
Ameriprise Financial, Inc. ("Ameriprise Financial").

o    IDS Life Insurance Company is domiciled in Minnesota and holds
     Certificates of Authority in American Samoa, the District of Columbia
     and all states except New York. IDS Life Insurance Company issues
     insurance and annuity products.

o    American Enterprise Life is a stock life insurance company domiciled in
     Indiana, which holds Certificates of Authority in the District of
     Columbia and all states except New York. American Enterprise Life
     provides RiverSource branded financial products and wholesaling
     services to support its annuity operations. American Enterprise Life
     issues variable and fixed annuity contracts primarily through regional
     and national financial institutions and regional and/or independent
     broker-dealers, in all states except New York. In past years, American
     Enterprise Life issued a nominal number of variable universal life
     contracts.

o    American Partners Life is a stock life insurance company domiciled in
     Arizona, which holds Certificates of Authority in the District of
     Columbia and all states except New York and New Hampshire.

o    IDS Life of New York is a stock life insurance company domiciled in
     New York, which holds Certificates of Authority in New York and North
     Dakota. IDS Life of New York issues insurance and annuity products.

o    American Centurion Life is a stock life insurance company domiciled in
     New York, which holds Certificates of Authority in New York, Alabama
     and Delaware. American Centurion Life issues fixed and variable annuity
     contracts primarily through financial institutions and independent
     broker-dealers

IDS Life Insurance Company also owns IDS REO 1, LLC; IDS REO 2, LLC and
American Enterprise REO 1, LLC which hold real estate investments.

                                     11


<PAGE>
<PAGE>

On March 17, 2006, IDS Life Insurance Company executed an Agreement and Plan
of Merger with both American Enterprise Life and American Partners Life
whereby both companies will be merged with and into IDS Life Insurance
Company. The agreement provides that IDS Life Insurance Company shall be the
surviving corporation of the mergers and shall continue to exist as a
domestic stock life insurance company under the laws of the State of
Minnesota. The merger agreement also provides that, upon effectiveness of
the merger, American Enterprise Life and American Partners Life shall cease
to exist and their property and obligations shall become the property and
obligations of IDS Life Insurance Company. Simultaneously with the
effectiveness of the merger, the agreement provides that the Articles of
Incorporation of IDS Life Insurance Company shall be amended to change its
name to RiverSource Life Insurance Company. Among other conditions
precedent, the merger and the change of IDS Life Insurance Company's name to
RiverSource Life Insurance Company are subject to certain regulatory
approvals.

In addition, IDS Life of New York and American Centurion Life executed an
Agreement and Plan of Merger on March 17, 2006 whereby American Centurion
Life will be merged with and into IDS Life of New York. The agreement
provides that IDS Life of New York shall be the surviving corporation of the
merger and shall continue to exist as a domestic stock life insurance
company under the laws of the State of New York. The merger agreement also
provides that, upon effectiveness of the merger, American Centurion Life
shall cease to exist and its property and obligations shall become the
property and obligations of IDS Life of New York. Simultaneously with the
effectiveness of the merger, the agreement provides that the Articles of
Incorporation of IDS Life of New York shall be amended to change its name to
RiverSource Life Insurance Co. of New York. Among other conditions
precedent, the merger and the change of IDS Life of New York's name to
RiverSource Life Insurance Co. of New York are subject to certain regulatory
approvals.

It is currently anticipated that the mergers will be effective as of
December 31, 2006. It is expected that there will be no material effect on
the consolidated financial condition and results of operations for IDS Life
from the mergers.

On February 1, 2005, the American Express Company ("American Express") Board of
Directors announced its intention to pursue the disposition of 100% of its
shareholdings in Ameriprise Financial ("the Separation") through a tax-free
distribution to American Express shareholders. Effective as of the close of
business on September 30, 2005, American Express completed the Separation of
Ameriprise Financial and the distribution of Ameriprise Financial common
shares to American Express shareholders ("the Distribution"). Prior to the
Distribution, Ameriprise Financial had been a wholly-owned subsidiary of
American Express. In connection with the Distribution, Ameriprise Financial
entered into certain agreements with American Express to effect the
separation of its business and to define the responsibility for obligations
arising before and after the date of the Distribution, including, among
others, obligations relating to transition services, taxes, and employees.
IDS Life was allocated certain expenses incurred as a result of Ameriprise
Financial becoming an independent company. Cumulatively, the expenses
allocated to IDS Life are significant to IDS Life. The majority of such
costs are expected to be incurred by December 31, 2006. IDS Life received a
capital contribution of $650 million from Ameriprise Financial during the
third quarter of 2005 to support its financial strength ratings and to cover
separation costs.

RECENT ACCOUNTING PRONOUNCEMENTS

For information regarding recent accounting pronouncements and their
expected impact on future consolidated financial condition or results of
operations, see Note 2 to the Consolidated Financial Statements.

RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2006 AND 2005

Overview

Net income was $348.9 million for the nine months ended September 30, 2006
compared to $342.1 million for the nine months ended September 30, 2005, an
increase of $6.8 million. The net income growth was positively impacted by
strong growth in separate account assets, both from variable annuity net
flows and market appreciation. Net flows of client assets are a measure of
new sales of, or deposits into, IDS Life's products offset by redemptions
of, or withdrawals from, IDS Life's products. Net flows can have a
significant impact on IDS Life's results of operations due to their impact
on revenues and expenses. These positive impacts were partially offset by
lower account balances and spread compression in the fixed annuity products.
Also, the impact of the annual third quarter review of deferred acquisitions
cost ("DAC") valuation assumptions ("DAC unlocking") was $41.8 million less
favorable in 2006 compared to 2005.

                                     12

<PAGE>
<PAGE>

Revenues

Premiums for disability income ("DI") and long-term care ("LTC") insurance
increased $23.8 million or 11% including $14.6 million as a result of a
review of IDS Life's LTC reinsurance arrangements during the third quarter of
2006. Higher DI insurance in force levels also contributed to the increase in
premiums.

Net investment income decreased $89.6 million or 7% reflecting a decrease in
both the average yield and the average level of invested assets. The lower
level of invested assets reflects declining fixed annuity account values due
to a shift in sales from fixed to variable products. Also, the decrease
reflects unfavorable mark-to-market adjustments on derivatives economically
hedging guaranteed minimum withdrawal benefit ("GMWB") riders and equity
method investments in hedge funds. Fluctuations in the value of the GMWB
embedded derivative, which is economically hedged, are reported in the death
and other benefits for investment contracts and universal life-type
insurance line item on IDS Life's Consolidated Statements of Income.
Included in the mark-to-market adjustments on equity method investments in
hedge funds is a loss of $20.0 million on a single externally-managed hedge
fund investment that occurred during the third quarter of 2006. These
changes were partially offset by favorable mark-to-market adjustments on
derivatives economically hedging equity index annuities ("EIA").
Fluctuations in the EIA liability are reported in interest credited to
account values on IDS Life's Consolidated Statements of Income.

Contractholder and policyholder charges increased $49.9 million or 12%
primarily due to an increase in the cost of insurance charges on variable
universal life products and charges for variable annuity GMWB riders as well
as $17.9 million from recognizing previously deferred cost of insurance
revenues.

Mortality and expense risk and other fees increased $109.3 million or 31%
reflecting higher average values of separate account assets due to positive
net flows and market appreciation.

Net realized investment gains were $24.4 million for the nine months ended
September 30, 2006 compared to $45.9 million for the nine months ended
September 30, 2005. For the nine months ended September 30, 2006, $33.7
million of gross realized investment gains were partially offset by $9.3
million of losses. Included in these total net investment gains and losses
were $33.1 million of gross realized investment gains, partially offset by
$9.3 million of gross realized investment losses, classified as
Available-for-Sale.

For the nine months ended September 30, 2005, $83.8 million of gross
realized investment gains were partially offset by $37.9 million of losses
and impairments. Included in these total net investment gains and losses
were $83.7 million of gross realized investment gains partially offset by
$35.4 million of gross realized investment losses, as well as $0.6 million
of other-than-temporary impairment losses on investments, classified as
Available-for-Sale. Included in net realized investment gains classified as
Available-for-Sale for the nine months ended September 30, 2005 were gross
realized investment gains and losses of $39.2 million and $14.3 million,
respectively, related to the sale of all of IDS Life's retained interest in
a collateralized debt obligation securitization trust.

Benefits and Expenses

Total benefits and expenses reflect the impact of IDS Life's annual third
quarter detailed review of DAC unlocking. For the third quarter of 2006, IDS
Life recorded a net benefit from DAC unlocking of $25.2 million, primarily
resulting in a $38.2 million benefit in DAC amortization expense and a $12.3
million increase in death and other benefits for investment contracts and
universal life-type insurance. DAC unlocking for the third quarter of 2005
resulted in a $67.0 million reduction to DAC amortization.

The DAC unlocking net benefit for the third quarter of 2006 primarily
reflected a $25.1 million benefit from modeling increased product
persistency and a $14.9 million benefit from modeling improvements in
mortality, offset by negative impacts of $8.0 million from modeling lower
variable product fund fee revenue and $7.9 million from model changes
related to variable life second to die insurance.

The DAC unlocking net benefit for the third quarter of 2005 primarily
reflected a $31.7 million benefit from modeling improvements in mortality, a
$32.8 million benefit from lower than previously assumed surrender rates and
higher associated surrender charges and a $2.5 million net benefit from
other changes in DAC valuation assumptions.

                                     13

<PAGE>
<PAGE>

Death and other benefits for traditional life insurance decreased $9.4
million or 31% reflecting lower claims volume.

Death and other benefits for investment contracts and universal life-type
insurance increased $21.7 million or 13% reflecting a net increase in
guaranteed minimum death benefit ("GMDB") costs of $11.3 million, $15.0
million of additional claims expense (including $6.9 million in connection
with the recognition of the previously deferred cost of insurance revenues
discussed previously), the impact of $12.3 million in DAC unlocking reserve
for certain variable plans, higher sales inducement costs of $8.5 million
and other increases in costs and benefits of $15.1 million, partially offset
by a net decrease in GMWB costs of $40.5 million.

Benefits for DI and LTC insurance increased $6.4 million or 12% reflecting
unfavorable claims experience relative to the same period a year ago.

Interest credited to account values decreased by $37.5 million or 5%
primarily due to lower interest crediting rates and lower average
accumulation values of annuities, partially offset by the effect of
appreciation on equity indexed annuities linked to the S&P 500 Index in 2006
versus depreciation in the same period a year ago.

Amortization of DAC increased to $274.2 million for the nine months ended
September 30, 2006 from $221.8 million for the nine months ended September
30, 2005 primarily due to higher DAC unlocking related to the amortization
in the third quarter of 2005. The reduction to DAC amortization from the DAC
unlocking was $38.2 million in the third quarter of 2006, a decrease of
$28.8 million compared to DAC unlocking in the third quarter of 2005 of
$67.0 million.

During the nine months ended September 30, 2006 and 2005, IDS Life incurred
$91.0 million and $64.7 million, respectively, in separation costs.
Separation costs incurred during the first nine months of 2006 primarily
related to technology costs and marketing and rebranding. Separation costs
incurred during the 2005 year-to-date period were primarily related to
advisor retention program costs, technology costs and costs associated with
establishing the Ameriprise Financial brand.

Other insurance and operating expenses increased $34.2 million or 8%
primarily reflecting increased business reinvestment initiatives,
compensation costs and corporate overhead expenses, as well as increased
non-deferrable distribution costs, due in part to higher variable annuity
sales.

Income Taxes

IDS Life's effective tax rate was 31% for the nine months ended September
30, 2006 compared to 34% for the nine months ended September 30, 2005. The
lower effective tax rate primarily reflects higher tax-advantaged items
compared to pretax income in the nine months of 2006 compared to the same
period a year ago. The effective tax rate for the nine months ended
September 30, 2005 also reflects a $20 million tax expense applicable to
prior years and a $9 million tax benefit related to the finalization of the
prior year tax return.

                                     14

<PAGE>
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

The liquidity requirements of IDS Life are generally met by funds provided
by investment income, maturities and periodic repayments of investments,
deposits, premiums and proceeds from sales of investments, as well as
capital contributions from Ameriprise Financial. The primary uses of funds
are surrenders and other benefits, commissions, other product-related
acquisition and sales inducement costs, operating expenses, policy loans,
dividends to Ameriprise Financial and investment purchases. IDS Life
routinely reviews its sources and uses of funds in order to meet its ongoing
obligations. In connection with the separation, IDS Life received a capital
contribution of $650 million from Ameriprise Financial during the third
quarter of 2005 to support its financial strength ratings and to cover
separation costs. During the fourth quarter of 2005 IDS Life paid cash
dividends to Ameriprise Financial of $380 million. On May 15, 2006 and
September 26, 2006, IDS Life paid extraordinary cash dividends of $100
million on each date, to Ameriprise Financial for a total of $200 million of
dividends paid for the nine months ended September 30, 2006. Prior to the
payment of these dividends, IDS Life made the required advance notices to
the Minnesota Department of Commerce, its primary state regulator, and
received responses stating there were no objections to the payment of these
dividends. IDS Life of New York and American Centurion Life paid dividends
to IDS Life Insurance Company on June 19, 2006 of $23 million and $2
million, respectively.

IDS Life has available a committed line of credit with Ameriprise Financial
aggregating $200 million. At September 30, 2006 there were no amounts
outstanding on this line of credit. At September 30, 2006 and December 31,
2005, IDS Life had outstanding reverse repurchase agreements totaling nil
and $25.0 million, respectively.

IDS Life Insurance Company and its wholly-owned life insurance subsidiaries
are subject to regulatory capital requirements. Actual capital, determined
on a statutory basis, and regulatory capital requirements, based on the most
recent statutory risk-based capital filings for each of the life insurance
entities, are as follows:

<TABLE>
<CAPTION>
                                                                                                           REGULATORY
                                                                                                             CAPITAL
                                                                    ACTUAL CAPITAL AS OF (a)               REQUIREMENT
                                                           ------------------------------------------   -----------------
                                                               SEPTEMBER 30,          DECEMBER 31,         DECEMBER 31,
                                                                   2006                  2005                 2005
                                                           -------------------    -------------------   -----------------
                                                                                    (IN THOUSANDS)
                                                           --------------------------------------------------------------
<S>                                                         <C>                    <C>                    <C>
    IDS Life Insurance Company..........................     $   3,340,288          $   3,270,285         $   750,975
    American Enterprise Life Insurance Company..........           593,123                583,303             125,285
    IDS Life Insurance Company of New York..............           245,421                246,001              39,880
    American Partners Life Insurance Company............            76,278                 67,884              10,906
    American Centurion Life Assurance Company...........            67,653                 61,748              12,654

-------------
    (a)    Actual capital, as defined by the National Association of Insurance
           Commissioners for purposes of meeting regulatory capital
           requirements, includes statutory capital and surplus, plus certain
           statutory valuation reserves.
</TABLE>

                                     15


<PAGE>
<PAGE>

FORWARD-LOOKING STATEMENTS

This report includes forward-looking statements, which are subject to risks
and uncertainties. The words "believe," "expect," "anticipate,"
"optimistic," "intend," "plan," "aim," "will," "may," "should," "could,"
"would," "likely," and similar expressions are intended to identify
forward-looking statements. Readers are cautioned not to place undue
reliance on these forward-looking statements, which speak only as of the
date on which they are made. IDS Life undertakes no obligation to update or
revise any forward-looking statements. Factors that could cause actual
results to differ materially from these forward-looking statements include,
but are not limited to, the following: the success, timeliness and financial
impact (including the amount of intercompany costs allocated to IDS Life,
cost savings and other benefits including increased revenues), both in the
short-term and over time, of reengineering initiatives being implemented or
considered by Ameriprise Financial that could impact IDS Life, including
cost management, structural and strategic measures such as vendor, process,
facilities and operations consolidation and outsourcing (including, among
others, technologies operations); the ability to control and manage
operating infrastructure, advertising and promotion expenses as business
expands or changes; the ability to attract and retain high-quality
personnel; a downturn in IDS Life's businesses and/or negative changes in
IDS Life's credit or financial strength ratings, which could result in
decreased liquidity, negative impact on marketing and sale of products, and
higher borrowing costs; IDS Life's ability to improve investment performance
and reduce outflows of invested funds; IDS Life's ability to develop and
introduce new and attractive products to clients in a timely manner and
effectively manage the economics in selling a growing volume of
non-proprietary mutual funds and other retail financial products to clients;
fluctuation in the equity and fixed income markets, which can affect the
amount and types of investment products sold by IDS Life, and other fees
received based on the value of those assets; IDS Life's ability to recover
DAC, as well as the timing of such DAC amortization, in connection with the
sale of annuity and insurance products; the level of GMDB or living benefits
paid to clients; changes in assumptions relating to DAC, which could impact
the amount of DAC amortization; IDS Life's ability to avoid deterioration in
its high-yield portfolio in order to mitigate losses in its investment
portfolio; fluctuations in interest rates, which impact IDS Life's borrowing
costs, return on lending products and spreads in the insurance and annuity
products; accuracy of estimates for the fair value of the assets in IDS
Life's investment portfolio and, in particular, those investments that are
not readily marketable; the potential negative effect on IDS Life's
businesses and infrastructure, including information technology, terrorist
attacks, disasters or other catastrophic events in the future; changes in
laws or government regulations, including changes in tax laws or regulations
that could result in the elimination of certain tax benefits; outcomes and
costs associated with litigation and compliance and regulatory matters;
successfully cross-selling insurance and annuity products and services to
Ameriprise Financial's client base; lower than anticipated spreads in the
insurance and annuity business; the type and the value of certain benefit
features on variable annuity contracts; the effect of assessments and other
surcharges for guaranty funds; the response of reinsurance companies under
reinsurance contracts; the impact of the separation of Ameriprise Financial
from American Express; the impact of reinsurance rates and the availability
and adequacy of reinsurance; and competitive pressures in IDS Life's
business. A further description of these and other risks and uncertainties
can be found under "Item 1A - Risk Factors" and elsewhere in IDS Life's
Annual Report on Form 10-K for the year ended December 31, 2005, filed on
March 10, 2006 and its other reports filed with the Securities and Exchange
Commission.

                                     16


<PAGE>
<PAGE>

ITEM 4. CONTROLS AND PROCEDURES

DISCLOSURE CONTROLS AND PROCEDURES

IDS Life maintains disclosure controls and procedures (as defined in Rules
13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended
("the Exchange Act")) designed to provide reasonable assurance that the
information required to be reported in the Exchange Act filings is recorded,
processed, summarized and reported within the time periods specified and
pursuant to the regulations of the Securities and Exchange Commission,
including controls and procedures designed to ensure that this information
is accumulated and communicated to IDS Life's management, including its
Chief Executive Officer and Chief Financial Officer, as appropriate, to
allow timely decisions regarding the required disclosure.

IDS Life's management, with the participation of its Chief Executive Officer
and Chief Financial Officer, evaluated the effectiveness of IDS Life's
disclosure controls and procedures as of the end of the period covered by this
report. Based upon that evaluation, IDS Life's Chief Executive Officer and
Chief Financial Officer have concluded that IDS Life's disclosure controls and
procedures were effective at a reasonable level of assurance as of September
30, 2006.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

There were no changes in IDS Life's internal control over financial
reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under
the Exchange Act) during the fiscal quarter to which this report relates
that have materially affected, or are reasonably likely to materially
affect, IDS Life's internal control over financial reporting.

PART II . OTHER INFORMATION

Item 1.      Legal Proceedings

             The information set forth in Note 8 to the Consolidated
             Financial Statements in Part I, Item 1 is incorporated herein
             by reference.

Item 1A.     Risk Factors

             There have been no material changes in the risk factors provided
             in Part I, Item 1A of IDS Life's Annual Report on Form 10-K for
             the year ended December 31, 2005 filed with the SEC on
             March 10, 2006.

Item 6.      Exhibits

             The list of exhibits required to be filed as exhibits to this
             report are listed on page E-1 hereof, under "Exhibit Index,"
             which is incorporated herein by reference.


                                    17


<PAGE>
<PAGE>

                                 SIGNATURES



Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.


                                       IDS LIFE INSURANCE COMPANY
                                       -----------------------------------
                                              (Registrant)






Date:  November 7, 2006                By   /s/ Mark E. Schwarzmann
                                            ------------------------------
                                            Mark E. Schwarzmann
                                            Director, Chairman of the Board
                                            and Chief Executive Officer




Date:  November 7, 2006                By   /s/ Brian J. McGrane
                                            ------------------------------
                                            Brian J. McGrane
                                            Executive Vice President
                                            and Chief Financial Officer

                                     18


<PAGE>
<PAGE>


                                EXHIBIT INDEX


The following exhibits are filed as part of this Quarterly Report:

EXHIBIT                                 DESCRIPTION
---------- -------------------------------------------------------------------
*  31.1    Certification of Mark E. Schwarzmann pursuant to Rule 13a-14(a)
           promulgated under the Securities Exchange Act of 1934, as amended.

*  31.2    Certification of Brian J. McGrane pursuant to Rule 13a-14(a)
           promulgated under the Securities Exchange Act of 1934, as amended.

*  32.1    Certification of Mark E. Schwarzmann and Brian J. McGrane pursuant
           to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
           the Sarbanes-Oxley Act of 2002.


*          Filed electronically herewith.

                                    E-1