UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 10-Q


                   Quarterly Report Under Section 13 or 15(d)
                     of the Securities Exchange Act of 1934

                                   (Mark one)

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

                  For the quarterly period ended June 30, 2003

                                       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
  incorporation or organization)                      Identification No.)


 227 AXP FINANCIAL CENTER, MINNEAPOLIS, MINNESOTA             55474
 ------------------------------------------------             -----
     (Address of principal executive offices)              (Zip Code)

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

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 an  accelerated  filer (as
defined in Rule 12b-2 of the Exchange Act). Yes    No X
                                               ---   ---

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.


<PAGE>


                           IDS LIFE INSURANCE COMPANY

                                    FORM 10-Q

                                      INDEX
                                                                        Page No.
Part I.    Financial Information:

           Item 1.  Financial Statements

                    Consolidated Statements of Income -
                    Three months ended June 30, 2003 and 2002              3

                    Consolidated Statements of Income -
                    Six months ended June 30, 2003 and 2002                4

                    Consolidated Balance Sheets -
                    June 30, 2003 and December 31, 2002                    5

                    Consolidated Statements of Cash Flows -
                    Six months ended June 30, 2003 and 2002                7

                    Notes to Consolidated Financial Statements             9

           Item 2.  Management's Discussion and Analysis of
                    Financial Condition and Results of Operations         14

           Item 4. Controls and Procedures                                21

Part II.   Other Information

           Item 1.  Legal Proceedings                                     23

           Item 6.  Exhibits and Reports on Form 8-K                      23

           Signatures                                                     24

           Exhibit Index                                                 E-1

<PAGE>

PART I.  FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS


                           IDS LIFE INSURANCE COMPANY
                        CONSOLIDATED STATEMENTS OF INCOME
                                   (thousands)
                                   (unaudited)


<TABLE>
<CAPTION>
                                                                  Three months ended
                                                                       June 30,
                                                                  2003           2002

<S>                                                             <C>          <C>
Revenues:
        Premiums:
                Traditional life insurance                      $ 16,267     $ 16,752
                Disability income and long-term care insurance    70,190       66,335
                                                                --------     --------
                      Total premiums                              86,457       83,087

        Policyholder and contractholder charges                  134,419      130,324
        Management and other fees                                 95,395      108,835
        Net investment income                                    422,406      381,953
        Net realized gain (loss) on investments                    1,201      (40,590)
                                                                --------     --------
                      Total revenues                             739,878      663,609
                                                                --------     --------

Benefits and expenses:
        Death and other benefits:
                Traditional life insurance                         9,360       10,992
                Universal life-type insurance
                   and investment contracts                       41,458       43,048
                Disability income and
                   long-term care insurance                       13,641       12,610
        Increase (decrease) in liabilities for
           future policy benefits:
                Traditional life insurance                        (2,319)       2,636
                Disability income and
                   long-term care insurance                       35,322       34,943
        Interest credited on universal life-type
           insurance and investment contracts                    311,309      275,504
        Amortization of deferred policy
           acquisition costs                                      68,831       91,407
        Other insurance and operating expenses                   124,983      112,823
                                                                --------     --------
                        Total benefits and expenses              602,585      583,963
                                                                --------     --------
Income before income tax expense                                 137,293       79,646

Income tax expense                                                27,060        7,915
                                                                --------     --------
Net income                                                      $110,233      $71,731
                                                                ========     ========
</TABLE>


          See accompanying notes to consolidated financial statements.

                                     - 3 -
<PAGE>


                           IDS LIFE INSURANCE COMPANY
                        CONSOLIDATED STATEMENTS OF INCOME
                                   (thousands)
                                   (unaudited)
<TABLE>
<CAPTION>

                                                                    Six months ended
                                                                        June 30,
                                                                   2003         2002
<S>                                                           <C>          <C>
Revenues:
        Premiums:
                Traditional life insurance                    $   32,385   $   32,664
                Disability income and
                  long-term care insurance                       139,381      131,720
                                                              ----------   ----------
                        Total premiums                           171,766      164,384

        Policyholder and contractholder charges                  264,723      255,663
        Management and other fees                                182,450      220,005
        Net investment income                                    818,533      781,854
        Net realized gain (loss) on investments                   23,320      (45,314)
                                                              ----------   ----------
                        Total revenues                         1,460,792    1,376,592
                                                              ----------   ----------
Benefits and expenses:
        Death and other benefits:
                Traditional life insurance                        19,792       18,187
                Universal life-type insurance
                   and investment contracts                       98,243       89,617
                Disability income and
                   long-term care insurance                       27,347       24,778
        Increase (decrease) in liabilities for
           future policy benefits:
                Traditional life insurance                          (297)       4,425
                Disability income and
                   long-term care insurance                       65,839       64,017
        Interest credited on universal life-type
           insurance and investment contracts                    610,404      555,248
        Amortization of deferred policy
           acquisition costs                                     148,574      167,640
        Other insurance and operating expenses                   237,903      206,138
                                                              ----------   ----------
                        Total benefits and expenses            1,207,805    1,130,050
                                                              ----------   ----------

Income before income tax expense                                 252,987      246,542

Income tax expense                                                46,566       46,581
                                                              ----------   ----------

Net income                                                    $  206,421   $  199,961
                                                              ==========   ==========
</TABLE>

          See accompanying notes to consolidated financial statements.

                                     - 4 -

<PAGE>

                           IDS LIFE INSURANCE COMPANY
                           CONSOLIDATED BALANCE SHEETS
                                   (thousands)
<TABLE>
<CAPTION>


                                                                 June 30,           December 31,
                                                                   2003                 2002
                                                              ---------------      ---------------
ASSETS                                                         (unaudited)
------
<S>                                                              <C>                  <C>
Investments:
    Available-for-sale:
       Fixed maturity investments, at fair value (amortized
             cost: 2003, $26,756,706; 2002, $23,209,226)         $28,011,855          $24,052,104
       Common stocks, at fair value (cost: 2003,
               $19; 2002, $19)                                            99                   21
    Mortgage loans on real estate (less reserves: 2003,
             $47,947; 2002, $30,103)                               3,249,853            3,417,651
    Policy loans                                                     578,503              591,126
    Other investments                                              1,133,026              752,558
                                                                 ------------         ------------
                  Total investments                               32,973,336           28,813,460

Cash and cash equivalents                                            101,952            4,424,061
Amounts recoverable from reinsurers                                  687,259              633,510
Amounts due from brokers                                             607,138               25,835
Other accounts receivable                                             36,636               56,245
Accrued investment income                                            336,689              277,279
Deferred policy acquisition costs                                  3,447,413            3,309,783
Other assets                                                         118,726              117,788
Separate account assets                                           24,051,375           21,980,674
                                                                 ------------         ------------

                  Total assets                                   $62,360,524          $59,638,635
                                                                 ============         ============
</TABLE>

          See accompanying notes to consolidated financial statements.

                                     - 5 -
<PAGE>

                           IDS LIFE INSURANCE COMPANY
                           CONSOLIDATED BALANCE SHEETS
                 (thousands, except par value and share amounts)

<TABLE>
<CAPTION>

                                                                   June 30,             December 31,
                                                                     2003                   2002
                                                               ----------------       ----------------
LIABILITIES AND STOCKHOLDER'S EQUITY                               (unaudited)
------------------------------------
<S>                                                                 <C>                    <C>
Liabilities:
    Future policy benefits:
       Fixed annuities                                              $25,891,714            $23,411,314
       Universal life-type insurance                                  3,556,602              3,515,010
       Traditional life insurance                                       251,367                247,441
       Disability income and
           long-term care insurance                                   1,586,911              1,466,171
    Policy claims and other
       policyholders' funds                                              86,637                 85,400
    Amounts due to brokers                                              842,691              3,342,989
    Deferred income taxes                                               326,587                182,059
    Other liabilities                                                   371,099                463,326
    Separate account liabilities                                     24,051,375             21,980,674
                                                                    -----------            -----------

                      Total liabilities                              56,964,983             54,694,384
                                                                    -----------            -----------

Stockholder's equity:
    Capital stock, $30 par value per share;
       100,000 shares authorized, issued and outstanding                  3,000                  3,000
    Additional paid-in capital                                        1,088,327              1,088,327
    Retained earnings                                                 3,561,262              3,354,841
    Other comprehensive income, net of tax:
        Net unrealized securities gains                                 741,490                497,319
        Net unrealized derivative gains                                   1,462                    764
                                                                    -----------            -----------
            Accumulated other comprehensive income                      742,952                498,083
                                                                    -----------            -----------

                      Total stockholder's equity                      5,395,541              4,944,251
                                                                    -----------            -----------

Total liabilities and stockholder's equity                          $62,360,524            $59,638,635
                                                                    ===========            ===========
</TABLE>


          See accompanying notes to consolidated financial statements.

                                     - 6 -
<PAGE>


                           IDS LIFE INSURANCE COMPANY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (thousands)
                                   (unaudited)
<TABLE>
<CAPTION>

                                                                        Six months ended
                                                                            June 30,
                                                                      2003                   2002
                                                                ----------------       ------------
Cash flows from operating activities:

<S>                                                                 <C>                   <C>
    Net income                                                      $ 206,421             $ 199,961
    Adjustments  to  reconcile  net  income
       to net cash  (used in)  provided  by operating activities:
             Policy loans, excluding universal life-type insurance:
                  Issuance                                            (40,664)              (18,974)
                  Repayment                                            47,131                25,028
             Change in amounts recoverable from reinsurers            (53,749)              (57,572)
             Change in other accounts receivable                       19,609               (16,735)
             Change in accrued investment income                      (53,080)                 (665)
             Change in deferred policy
                acquisition costs, net                               (172,397)             (135,362)
             Change in liabilities for future policy
                benefits for traditional life,
                disability income and
                long-term care insurance                              124,666               131,156
             Change in policy claims and other
                policyholders' funds                                    1,237                 7,245
             Deferred income taxes                                     12,631                 7,690
             Change in other assets                                      (938)                9,101
             Change in other liabilities                              (92,227)              (96,345)
             Amortization of premium, net                              98,240                31,399
             Net realized (gain) loss on investments                  (23,320)               45,314
             Contractholder charges, non-cash                        (118,956)             (112,063)
             Other, net                                               (28,483)              (11,144)
                                                                   -----------      ---------------
                Net cash (used in) provided by operating
                activities                                          $ (73,879)            $   8,034
                                                                   -----------      ---------------
</TABLE>

          See accompanying notes to consolidated financial statements.

                                     - 7 -

<PAGE>



                                      IDS LIFE INSURANCE COMPANY
                                CONSOLIDATED STATEMENTS OF CASH FLOWS
                                             (thousands)
                                             (unaudited)
<TABLE>
<CAPTION>

                                                                          Six months ended
                                                                              June 30,
                                                                     2003                      2002
                                                                 -------------             ------------
<S>                                                              <C>                       <C>
Cash flows from investing activities:
    Available-for-sale investments:
       Purchases                                                 $(12,096,165)             $(4,894,562)
       Maturities, sinking fund payments and calls                  2,268,842                1,604,836
       Sales                                                        6,260,068                3,226,222
    Other investments, excluding policy loans:
       Purchases                                                     (567,419)               (279,229)
       Sales                                                          320,940                  222,646
    Change in amounts due to and from brokers, net                 (3,081,601)              (1,037,584)
                                                                 -------------             ------------
       Net cash used in investing activities                       (6,895,335)              (1,157,671)
                                                                 -------------             ------------

Cash flows from financing activities:
    Activity related to universal life-type insurance
     and investment contracts:
       Considerations received                                      2,918,726                1,633,285
       Interest credited to account balances                          610,404                  555,248
       Surrenders and death benefits                                 (888,181)              (1,022,386)
    Universal life-type insurance policy loans:
       Repayment                                                       22,079                   48,882
       Issuance                                                       (15,923)                 (39,107)
    Cash dividends to parent                                               --                  (70,000)
                                                                 -------------             ------------
         Net cash provided by financing activities                  2,647,105                1,105,922
                                                                 -------------             ------------

Net decrease in cash and cash equivalents                          (4,322,109)                 (43,715)

Cash and cash equivalents at beginning of period                    4,424,061                 1,150,251
                                                                 -------------             ------------

Cash and cash equivalents at end of period                       $     101,952             $  1,106,536
                                                                 =============             ============
</TABLE>


          See accompanying notes to consolidated financial statements.

                                     - 8 -
<PAGE>


                           IDS LIFE INSURANCE COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)

1.       Basis of Presentation

         The accompanying  Consolidated  Financial  Statements should be read in
         conjunction with the financial  statements in the Annual Report on Form
         10-K of IDS Life  Insurance  Company  (the  Company) for the year ended
         December 31, 2002.  Certain  reclassifications  of prior period amounts
         have been made to conform to the current presentation.

         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  the
         consolidated  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.

         Recently Issued Accounting Standards

         In January 2003, the FASB issued  Interpretation No. 46, "Consolidation
         of Variable Interest Entities" (FIN 46), which addresses  consolidation
         by business  enterprises  of variable  interest  entities  (VIEs).  The
         accounting  provisions and expanded  disclosure  requirements  for VIEs
         were  effective at inception  for VIEs created  after January 31, 2003,
         and are effective for reporting  periods  beginning after June 15, 2003
         for VIEs  created  prior to February  1, 2003.  An entity is subject to
         consolidation  according  to the  provisions  of FIN 46, if, by design,
         either (i) the total equity  investment  at risk is not  sufficient  to
         permit  the  entity  to  finance  its  activities   without  additional
         subordinated financial support from other parties, or, (ii) as a group,
         the  holders  of the  equity  investment  at risk  lack:  (a) direct or
         indirect  ability to make decisions about an entity's  activities;  (b)
         the  obligation  to absorb  the  expected  losses of the entity if they
         occur; or (c) the right to receive the expected residual returns of the
         entity  if  they  occur.  In  general,  FIN  46  requires  a VIE  to be
         consolidated  when an  enterprise  has a  variable  interest  that will
         absorb a majority of the VIE's expected losses or receive a majority of
         the VIE's expected residual return.

         The  entities  primarily  impacted  by FIN  46  relate  to  structured
         investments,  including  collateralized  debt  obligations  (CDOs) and
         secured loan trusts  (SLTs),  which are owned by the  Company.  FIN 46
         does not impact the accounting for qualified  special purpose entities
         as defined by SFAS No. 140, "Accounting for Transfers and Servicing of
         Financial Assets and  Extinguishments  of Debt," such as the Company's
         securitization  trust established in 2001 where the Company's retained
         interests  in the trust had a carrying  value of $531  million at June
         30, 2003, of which $395 million is considered investment grade.

                                     - 9 -


<PAGE>

                           IDS LIFE INSURANCE COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)

         The CDO  entities  impacted by FIN 46 contain  debt issued to investors
         which is non-recourse to the Company and solely supported by portfolios
         of high-yield bonds and loans. From time-to-time the Company invests in
         the residual and rated tranches of the CDO  structures  that are either
         managed by a related party or a third-party.  The SLTs provide  returns
         to  investors  primarily  based  on the  performance  of an  underlying
         portfolio of high-yield loans which are managed by a related party.

         Detailed   interpretations   of  FIN  46   continue   to  emerge  and,
         accordingly,  the  Company is still in the process of  evaluating  its
         impact.  Preliminary estimates are that the consolidation of these and
         other VIE entities  could result in a cumulative  effect of accounting
         change that will reduce reported third quarter 2003 net income through
         a non-cash  charge  with the  consolidation  of up to $450  million of
         related  assets.  Taken  together,  over the  lives of the  structures
         subject  to FIN 46  through  their  maturity,  the  Company's  maximum
         cumulative  exposure to pre-tax loss as a result of its  investment in
         these entities is represented by the carrying values at June 30, 2003.
         Those carrying values include CDO residual tranches having an adjusted
         cost basis of $5 million  and SLTs  having an  adjusted  cost basis of
         $644 million.

         The initial charge  related to the  application of FIN 46 will have no
         cash  flow  effect  on  the  Company.   Future  valuation  adjustments
         specifically  related  to the  application  of FIN 46 to the CDOs,  if
         consolidated,  would also be non-cash items, and would be reflected in
         the Company's  quarterly  results until maturity.  The Company expects
         the   aggregate   gains  or  losses,   including   the  July  1,  2003
         implementation  charge,  if CDOs are required to be  consolidated,  to
         reverse  themselves  over time as the structures  mature,  because the
         debt  issued  to the  investors  in the  CDOs is  non-recourse  to the
         Company and further  reduction in the value of the related assets will
         be  absorbed by the third party  investors.  To the extent  losses are
         incurred in the SLT portfolio,  future charges could be incurred under
         FIN 46.

         In July 2003, the American  Institute of Certified  Public  Accountants
         issued  Statement  of  Position  03-1,  "Accounting  and  Reporting  by
         Insurance   Enterprises   for  Certain   Nontraditional   Long-Duration
         Contracts  and for  Separate  Accounts"  (SOP  03-1).  The  Company  is
         currently  evaluating  its  impact,   which,  among  other  provisions,
         requires reserves related to guaranteed  minimum death benefits (GMDBs)
         included within the majority of variable annuity  contracts  offered by
         the Company. SOP 03-1 is required to be adopted on January 1, 2004.

2.       Investment Securities

         Gross   realized   gains   on  sales  of   securities   classified   as
         Available-for-Sale,  using the specific identification method, were $53
         million and $46 million  for the three  months  ended June 30, 2003 and
         2002, respectively. Gross realized losses on sales


                                     - 10 -


<PAGE>

                           IDS LIFE INSURANCE COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)

         of securities  classified as  Available-for-Sale  were ($8 million) and
         ($2  million)  for the  three  months  ended  June 30,  2003 and  2002,
         respectively.   The  Company   also   recognized   other-than-temporary
         impairment losses on Available-for-Sale securities of ($35 million) and
         ($83  million)  for the  three  months  ended  June 30,  2003 and 2002,
         respectively.

         Gross   realized   gains   on  sales  of   securities   classified   as
         Available-for-Sale, using the specific identification method, were $191
         million  and $83  million  for the six months  ended June 30,  2003 and
         2002,  respectively.  Gross  realized  losses  on sales  of  securities
         classified as  Available-for-Sale  were ($55 million) and ($28 million)
         for the six months  ended  June 30,  2003 and 2002,  respectively.  The
         Company  also  recognized  other-than-temporary  impairment  losses  on
         Available-for-Sale  securities of ($103  million) and ($87 million) for
         the six months ended June 30, 2003 and 2002, respectively.

3.       Comprehensive Income

         Comprehensive   income  is   defined   as  the   aggregate   change  in
         stockholders' equity,  excluding changes in ownership interests.  It is
         the sum of net income  and  changes  in  unrealized  gains or losses on
         Available-for-Sale  securities,  net  of  related  tax  and  applicable
         deferred policy  acquisition  costs,  and unrealized gains or losses on
         derivatives, net of related tax.

         Total  comprehensive  income was $327  million and $324 million for the
         three  months  ended  June  30,  2003  and  2002,  respectively.  Total
         comprehensive  income was $451  million  and $319  million  for the six
         months  ended  June 30,  2003 and 2002,  respectively.  The  difference
         between net income and total comprehensive  income for these periods is
         primarily  the  result  of  the  change  in  net  unrealized  gains  on
         Available-for-Sale securities.

4.       Taxes and Interest

         Cash paid for income taxes totaled $73 million and $107 million for the
         six months  ended June 30, 2003 and 2002,  respectively.  Cash paid for
         interest  on  borrowings  totaled $2 million and $5 million for the six
         months ended June 30, 2003 and 2002, respectively.

5.       Commitments and contingencies

         Commitments to fund mortgage loan  investments in the ordinary  course
         of business at June 30, 2003 aggregated $55 million.

                                     - 11 -

<PAGE>


                           IDS LIFE INSURANCE COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)

         The maximum  amount of life  insurance  risk retained by the Company is
         $750,000 on any policy  insuring a single life and $1.5  million on any
         policy insuring a joint-life combination. The Company generally retains
         10% of the  mortality  risk on new life  insurance  policies.  Risk not
         retained is  reinsured  with other life  insurance  companies.  Risk on
         universal  life and variable  universal life policies is reinsured on a
         yearly renewable term basis.  Risk on term insurance and long-term care
         policies is reinsured on a coinsurance  basis.  The Company retains all
         accidental death benefit, disability income and waiver of premium risk.
         Reinsurance  contracts  do not  relieve  the  Company  from its primary
         obligation to policyholders.

         The Company is a party to litigation and arbitration proceedings in the
         ordinary  course of its  business.  The  outcome of any  litigation  or
         threatened litigation cannot be predicted with any certainty.  However,
         in the  aggregate,  the Company does not consider any lawsuits in which
         it is named as a defendant to have a material  impact on the  Company's
         financial position or operating results.

         The majority of the variable annuity  contracts  offered by the Company
         contain GMDB provisions.  The standard guaranteed minimum death benefit
         in the current  "flagship"  annuity  offered by the  Company,  American
         Express Retirement Advisor Advantage Variable Annuity, provides that if
         the contract  owner and  annuitant are age 80 or younger on the date of
         death,  the  beneficiary  will receive the greatest of (i) the contract
         value on the date of  death,  (ii)  purchase  payments  minus  adjusted
         partial  surrenders,  or (iii) the contract value as of the most recent
         sixth contract  anniversary,  plus purchase  payment and minus adjusted
         partial surrenders since that anniversary.

         To the extent that the GMDB is higher than the current account value at
         the time of death,  a cost is  incurred  by the  issuer of the  policy.
         Current accounting literature does not prescribe advance recognition of
         the projected  future net costs associated with these  guarantees,  and
         accordingly,   the  Company  currently  does  not  record  a  liability
         corresponding to these future  obligations for death benefits in excess
         of annuity  account  value.  At  present,  the amount paid in excess of
         contract value is expensed when payable.  Amounts  expensed for the six
         months ended June 30, 2003 and 2002,  were $19 million and $13 million,
         respectively.   The  Company  also  issues  certain   variable  annuity
         contracts  that  contain a guaranteed  minimum  income  benefit  (GMIB)
         feature which,  if elected by the contract owner and after a stipulated
         waiting period from contract  issuance,  guarantees a minimum  lifetime
         annuity based on  predetermined  annuity  purchase  rates. To date, the
         Company has not expensed any amount  related to GMIBs.  As discussed in
         Note 1, SOP  03-1,  which  was  issued by the AICPA in July 2003 with a
         required  adoption  date of  January  1, 2004,  will  require  reserves
         related  to GMDBs.  The  impact of that  requirement,  as well as other
         provisions of SOP 03-1, is being evaluated.


                                     - 12 -

<PAGE>

                           IDS LIFE INSURANCE COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)

         The Company's life and annuity  products all have minimum interest rate
         guarantees in their fixed accounts.  These  guarantees range from 3% to
         5%. To the extent the yield on the Company's  invested asset  portfolio
         declines  below its  target  spread  plus the  minimum  guarantee,  the
         Company's profitability would be negatively affected.

         The IRS routinely examines the Company's federal income tax returns and
         is currently  conducting  an audit for the 1993 through 1996 tax years.
         Management does not believe there will be a material  adverse effect on
         the  Company's  consolidated  financial  position  as a result of these
         audits.

                                     - 13 -

<PAGE>



         ITEM 2.  MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL  CONDITION
         AND RESULTS OF OPERATIONS

         IDS Life  Insurance  Company ("the  Company") is a stock life insurance
         company organized under the laws of the State of Minnesota. The Company
         is a wholly owned subsidiary of American Express Financial  Corporation
         ("AEFC") and serves all states except New York.  AEFC is a wholly-owned
         subsidiary of American  Express  Company.  The Company  distributes its
         fixed and variable insurance and annuities products exclusively through
         the American Express Financial  Advisors'  ("AEFA") retail sales force.
         The Company has four wholly owned  subsidiaries  that distribute  their
         products  through  the various  AEFA  distribution  channels.  IDS Life
         Insurance  Company  of New York  ("IDS  Life of New  York") is a wholly
         owned  subsidiary  of the Company and serves New York State  residents.
         IDS Life of New York  distributes its fixed and variable  insurance and
         annuity  products  exclusively  through AEFA's retail sales force.  The
         Company also owns American Enterprise Life Insurance Company ("American
         Enterprise Life"), an Indiana corporation, which primarily issues fixed
         and  variable  annuity   contracts  for  sale  through   non-affiliated
         representatives  and  agents  of  third  party  distributors.  American
         Centurion Life Assurance Company ("American  Centurion Life") is also a
         subsidiary  of the Company.  American  Centurion  Life offers fixed and
         variable annuities to American Express(R) Cardmembers and others in New
         York,  as well  as  fixed  and  variable  annuities  for  sale  through
         non-affiliated  representatives and agents of third party distributors,
         in New York. The Company owns American  Partners Life Insurance Company
         ("American  Partners Life"), an Arizona  corporation which offers fixed
         and variable annuity contracts to American  Express(R)  Cardmembers and
         others who reside in states other than New York.  The Company also owns
         IDS REO 1, LLC, IDS REO 2, LLC and American Express Corporation.  These
         subsidiaries  hold real estate,  mortgage  loans on real estate  and/or
         affordable housing investments.

         The Company follows  accounting  principles  generally accepted in the
         United States (GAAP).

         Results of Operations for the Three Months Ended June 30, 2003 and 2002

         Net income was $110  million for the three  months ended June 30, 2003,
         compared to $72 million in 2002.  The  increase in net income  reflects
         increases in net investment  income and realized gains on  investments,
         partially  offset by lower management and other fees and higher overall
         benefits and expenses.

         Premiums and investment contract deposits increased to $2.5 billion for
         the three months  ended June 30, 2003  compared to $2.0 billion for the
         three  months  ended June 30,  2002.  This growth is due to  relatively
         strong cash sales of both fixed annuities and fixed account portions of
         the Company's variable annuities.

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<PAGE>

         Policyholder and contractholder  charges increased $4 million or 3% for
         the three months ended June 30, 2003 compared to the three months ended
         June 30,  2002.  This  increase  reflects  increased  cost of insurance
         charges due primarily to higher amounts of insurance in force,  as well
         as an increase in surrender charges.

         Management  and other  fees  decreased  to $95  million  for the three
         months  ended June 30, 2003  compared  with $109 million for the three
         months ended June 30, 2002.  This was primarily due to a lower average
         value of separate  account  assets.  While equity  markets rose in the
         second  quarter of 2003,  average  asset  values  remained  below 2002
         levels. The Company provides  investment  management services for many
         of the mutual funds used as investment  options for variable annuities
         and variable life insurance. The Company also receives a mortality and
         expense risk fee from the separate accounts based on asset levels.

         Net  investment  income  increased to $422 million for the three months
         ended June 30, 2003 compared to $382 million for the three months ended
         June 30, 2002. This increase was primarily due to higher invested asset
         amounts in 2003, partially offset by lower investment yields.

         Net realized  gain (loss) on  investments  was $1 million for the three
         months  ended June 30,  2003  compared to ($41  million)  for the three
         months ended June 30,  2002.  For the three months ended June 30, 2003,
         $54 million of investment gains, were partially offset by ($53 million)
         of impairments and losses. Included in these total investment gains and
         losses are $53 million of gross realized  gains,  ($8 million) of gross
         realized  losses from sales of securities,  as well as ($35 million) of
         other-than-temporary   investment  impairment  losses,   classified  as
         Available-for-Sale.

         For the three  months ended June 30,  2002,  $46 million of  investment
         gains,  were  partially  offset by ($87  million)  of  impairments  and
         losses.  Included  in these total  investment  gains and losses are $46
         million of gross realized gains,  ($2 million) of gross realized losses
         from   sales   of   securities,   as   well   as   ($83   million)   of
         other-than-temporary   investment  impairment  losses,   classified  as
         Available-for-Sale.  The 2002 net realized loss on investments reflects
         losses on WorldCom debt holdings.

         Total  benefits  and  expenses  were $603  million for the three months
         ended June 30,  2003,  an increase of 3 percent from the same period in
         2002.  This increase  reflects  higher  interest  credited  expenses on
         universal life-type insurance and investment  contracts which increased
         13  percent  to $311  million.  This  was  primarily  due to  increased
         interest credited to annuity products due to higher accumulation values
         in force,  partially offset by lower crediting  rates.  Total death and
         other benefits  decreased $2 million.  The second quarter 2002 benefits
         and expenses  reflect a $7 million  release of reserves  related to the
         September 11, 2001 terrorist attacks.

         Amortization  of deferred policy  acquisition  costs (DAC) decreased to
         $69 million for the three  months  ended June 30, 2003  compared to $91
         million for the three months  ended June 30, 2002.  The decrease in DAC
         amortization  reflects the

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         impact of significantly  better equity market performance in 2003 than
         in  2002.   Faster-than-assumed   growth  in  customer   asset  values
         associated with the Company's  variable annuity and insurance products
         resulted  in a  deceleration  of DAC  amortization  in  2003,  whereas
         declines  in variable  annuity and  insurance  customer  asset  values
         resulted in an acceleration of DAC amortization in 2002.

         Other insurance and operating expenses increased 11 percent,  primarily
         due to the impact of fewer capitalized  costs, which is the result of a
         comprehensive review of the DAC-related  practices completed during the
         third quarter of 2002.

         Results of Operations for the Six Months Ended June 30, 2003 and 2002

         Net income was $206  million  for the six months  ended June 30,  2003,
         compared to $200 million in 2002.  The increase in net income  reflects
         increases in net investment  income and realized gains on  investments,
         partially  offset by lower management and other fees and higher overall
         benefits and expenses.

         Premiums and investment contract deposits increased to $4.6 billion for
         the six months ended June 30, 2003 compared to $3.5 billion for the six
         months ended June 30,  2002.  This growth is due to  relatively  strong
         cash sales of both fixed  annuities and fixed  account  portions of the
         Company's variable annuities.

         Policyholder and contractholder  charges increased $9 million or 4% for
         the six months  ended June 30, 2003  compared  to the six months  ended
         June 30,  2002.  This  increase  reflects  increased  cost of insurance
         charges due primarily to higher amounts of insurance in force,  as well
         as an increase in surrender charges.

         Management and other fees decreased to $182 million for the six months
         ended June 30,  2003  compared  with $220  million  for the six months
         ended June 30, 2002.  This was  primarily due to a decrease in average
         value of separate  account  assets.  While equity  markets rose in the
         second  quarter of 2003,  average  asset  values  remained  below 2002
         levels. The Company provides  investment  management services for many
         of the mutual funds, which are used as investment options for variable
         annuities  and variable  life  insurance.  The Company also receives a
         mortality  and expense  risk fee from the separate  accounts  based on
         asset levels.

         Net  investment  income  increased  to $819  million for the six months
         ended June 30, 2003  compared to $782  million for the six months ended
         June 30, 2002. This increase was primarily due to higher invested asset
         amounts in 2003, partially offset by lower investment yields.

         Net  realized  gain (loss) on  investments  was $23 million for the six
         months ended June 30, 2003 compared to ($45 million) for the six months
         ended June 30,  2002.  For the six months  ended  June 30,  2003,  $192
         million  of total  investment  gains,  were  partially  offset by ($169
         million) of impairments and losses.  Included in these total investment
         gains and losses  are $191  million  of gross  realized  gains and ($55
         million) of gross realized losses from sales of securities,  as well as
         ($103

                                     - 16 -


<PAGE>

         million)  of   other-than-temporary   investment   impairment  losses,
         classified as Available-for-Sale.

         For the six  months  ended June 30,  2002,  $83  million of  investment
         gains,  were  partially  offset by ($128  million) of  impairments  and
         losses.  Included  in these total  investment  gains and losses are $83
         million of gross realized gains, ($28 million) of gross realized losses
         from   sales   of   securities,   as   well   as   ($87   million)   of
         other-than-temporary   investment  impairment  losses,   classified  as
         Available-for-Sale.  The 2002 net realized loss on investments reflects
         losses on WorldCom debt holdings.

         Total  benefits and expenses were $1.2 billion for the six months ended
         June 30,  2003,  an increase of 7 percent from the same period in 2002.
         This increase  reflects higher interest  credited expenses on universal
         life-type  insurance  and  investment  contracts,  which  increased  10
         percent to $610 million.  This was primarily due to increased  interest
         credited  to  annuity  products  due to higher  accumulation  values in
         force, partially offset by lower crediting rates. Total death and other
         benefits increased $13 million.  The 2002 benefits and expenses include
         a $7 million  release of  reserves  related to the  September  11, 2001
         terrorist attacks.

         Amortization  of deferred policy  acquisition  costs (DAC) decreased to
         $149  million for the six months  ended June 30, 2003  compared to $168
         million for the six months  ended June 30,  2002.  The  decrease in DAC
         amortization  reflects the impact of significantly better equity market
         performance  in  2003  than  in  2002.  Faster-than-assumed  growth  in
         customer asset values  associated with the Company's  variable  annuity
         and insurance  products  resulted in a deceleration of DAC amortization
         in 2003,  whereas declines in variable  annuity and insurance  customer
         asset values resulted in an acceleration of DAC amortization in 2002.

         Other insurance and operating expenses increased 15 percent,  primarily
         due to the impact of fewer capitalized  costs, which is the result of a
         comprehensive review of the DAC-related  practices completed during the
         third quarter of 2002.

         Deferred Policy Acquisition Costs

         The costs of acquiring  new  business,  including  for example,  direct
         sales   commissions,   related  sales  incentive  bonuses  and  awards,
         underwriting  costs,  policy issue costs and other related costs,  have
         been  deferred  on the sale of  insurance  and annuity  contracts.  The
         deferred policy acquisition costs (DAC) for universal life and variable
         universal  life  insurance  and  certain   installment   annuities  are
         amortized as a percentage of the estimated gross profits expected to be
         realized on the policies.  DAC for other  annuities are amortized using
         the  interest  method.  For  traditional  life,  disability  income and
         long-term  care  insurance   policies,   the  costs  are  amortized  in
         proportion to premium revenue.

         Amortization of DAC requires the use of certain  assumptions  including
         interest  margins,  mortality  rates,  persistency  rates,  maintenance
         expense  levels and  customer  asset value  growth  rates for  variable
         products.  The  customer  asset value  growth rate is the rate at which
         contract  values are assumed to appreciate in the

                                     - 17 -
<PAGE>

         future.  This rate is net of asset fees,  and  anticipates  a blend of
         equity and fixed income investments.  Management  routinely monitors a
         wide  variety  of trends in the  business,  including  comparisons  of
         actual  and  assumed   experience.   Management   reviews  and,  where
         appropriate,  adjusts its  assumptions  with respect to customer asset
         value growth rates on a quarterly basis.

         Management   monitors  other   principal  DAC   assumptions,   such  as
         persistency,  mortality rate,  interest margin and maintenance  expense
         level  assumptions,   each  quarter.  Unless  management  identifies  a
         material  deviation  over  the  course  of  the  quarterly  monitoring,
         management  reviews and updates these DAC  assumptions  annually in the
         third quarter of each year.

         When assumptions are changed, the percentage of estimated gross profits
         or portion of interest  margins used to amortize DAC may also change. A
         change   in   the   required   amortization   percentage   is   applied
         retrospectively;  an increase in amortization percentage will result in
         an  acceleration of DAC  amortization  while a decrease in amortization
         percentage  will  result in a  deceleration  of DAC  amortization.  The
         impact on results of operations of changing assumptions with respect to
         the  amortization  of DAC can be either  positive  or  negative  in any
         particular period, and is reflected in the period that such changes are
         made.

         DAC of $3.4  billion  was on the  Company's  balance  sheet at June 30,
         2003. This balance consisted of $1.7 billion related to life and health
         insurance and $1.7 billion related to annuities.

         Impact of Recent Market-Volatility on Results of Operations

         Various  aspects of the Company  business are impacted by equity market
         levels and other market-based events. Three areas in particular involve
         DAC, asset  management fees and structured  investments.  The direction
         and magnitude of the changes in equity markets can increase or decrease
         DAC expense levels and asset management fees and correspondingly affect
         results of operations in any particular period. Similarly, the value of
         the Company's  structured  investment  portfolio is impacted by various
         market factors.  Persistency of, or increases in, bond and loan default
         rates, among other factors, could result in negative adjustments to the
         market values of these investments in the future, which would adversely
         impact  results of  operations.  See  Liquidity  and Capital  Resources
         section of Management  Discussion and Analysis for a further discussion
         of structured investments.

         Another area  impacted by  market-based  events is  guaranteed  minimum
         death benefits (GMDBs).  The majority of the variable annuity contracts
         offered by the Company contain GMDB provisions. The standard guaranteed
         minimum death benefit in the current  "flagship" annuity offered by the
         Company,   American  Express   Retirement  Advisor  Advantage  Variable
         Annuity,  provides that if the contract  owner and annuitant are age 80
         or younger  on the date of death,  the  beneficiary  will  receive  the
         greatest of (i) the contract value on the date of death,  (ii) purchase
         payments minus adjusted partial surrenders, or (iii) the contract value


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<PAGE>

         as of the most recent sixth contract anniversary, plus purchase payment
         and minus adjusted partial surrenders since that anniversary.

         To the extent that the GMDB is higher than the current account value at
         the time of death,  a cost is  incurred  by the  issuer of the  policy.
         Current accounting literature does not prescribe advance recognition of
         the projected  future net costs associated with these  guarantees,  and
         accordingly,   the  Company  currently  does  not  record  a  liability
         corresponding to these future  obligations for death benefits in excess
         of annuity  account  value.  At  present,  the amount paid in excess of
         contract value is expensed when payable.  Amounts  expensed for the six
         months ended June 30, 2003 and 2002,  were $19 million and $13 million,
         respectively.   The  Company  also  issues  certain   variable  annuity
         contracts  that  contain a guaranteed  minimum  income  benefit  (GMIB)
         feature which,  if elected by the contract owner and after a stipulated
         waiting period from contract  issuance,  guarantees a minimum  lifetime
         annuity based on  predetermined  annuity  purchase  rates. To date, the
         Company has not expensed any amount related to GMIBs. In July 2003, the
         American  Institute  of Certified  Public  Accountants  (AICPA)  issued
         Statement  of Position  03-1,  "Accounting  and  Reporting by Insurance
         Enterprises for Certain Nontraditional  Long-Duration Contracts and for
         Separate  Accounts"  (SOP  03-1)  which  requires  reserves  related to
         guaranteed  minimum death benefits.  The impact of that  requirement as
         well as other provisions of SOP 03-1 are currently being evaluated.

         The Company's life and annuity  products all have minimum interest rate
         guarantees in their fixed accounts.  These  guarantees range from 3% to
         5%. To the extent the yield on the Company's  invested asset  portfolio
         declines  below its  target  spread  plus the  minimum  guarantee,  the
         Company's profitability would be negatively affected.

         Liquidity and Capital Resources

         The  liquidity  requirements  of the Company are generally met by funds
         provided by premiums,  investment contract deposits, investment income,
         proceeds  from sales of  investments  as well as  maturities,  periodic
         repayments  of  investment  principal  and capital  contributions.  The
         primary uses of funds are policy  benefits,  commissions  and operating
         expenses, policy loans, dividends and investment purchases. The Company
         routinely  reviews  its  sources and uses of funds in order to meet its
         ongoing obligations.

         The Company has an  available  line of credit with AEFC of $200 million
         ($100  million  committed and $100 million  uncommitted).  This line of
         credit is used strictly as a short-term source of funds.  There were no
         borrowings  outstanding at June 30, 2003. The Company also uses reverse
         repurchase  agreements  for  short-term  liquidity  needs.  Outstanding
         reverse repurchase agreements totaled $348 million at June 30, 2003.

         At June 30, 2003 and 2002,  based on amortized  cost,  approximately  6
         percent  of  the  Company's   investments  in  fixed   maturities  were
         below-investment-grade  bonds.  These  investments  may be subject to a
         higher degree of risk than the

                                     - 19 -


<PAGE>

         investment  grade issues because of the borrowers'  generally  greater
         sensitivity  to adverse  economic  conditions,  such as  recession  or
         increasing  interest  rates,  and in certain  instances the lack of an
         active secondary  market.  Expected returns on  below-investment-grade
         bonds  reflect   consideration  of  such  factors.   The  Company  has
         identified those fixed maturities for which a decline in fair value is
         determined  to be other than  temporary,  and has written them down to
         fair value with a charge to earnings.  Additionally, the Company had a
         reserve for losses on mortgage loans of $48 million at June 30, 2003.

         The Company holds investments in collateralized debt obligations (CDOs)
         and secured loan trusts  (SLTs)  (backed by  high-yield  bonds and bank
         loans),  some of which are also managed by a related party. The Company
         invested in CDOs and SLTs as part of its  investment  strategy in order
         to pay a competitive rate to contractholders'  accounts.  The Company's
         exposure as an investor is limited  solely to its aggregate  investment
         in the  CDOs  and  SLTs,  and it has  no  obligations  or  commitments,
         contingent or otherwise, that could require any further funding of such
         investments.  As of June  30,  2003,  the  carrying  values  of the CDO
         residual  tranches  and SLT notes  were $5  million  and $644  million,
         respectively. CDOs and SLTs are illiquid investments. As an investor in
         the residual  tranche of CDOs, the Company's  return  correlates to the
         performance of portfolios of high-yield  bonds and/or bank loans.  As a
         noteholder  of SLTs,  the  Company's  return  is  based on a  reference
         portfolio of loans.  The carrying value of the CDO and SLT  investments
         and the Company's  projected  return are based on discounted  cash flow
         projections that require a significant degree of management judgment as
         to assumptions  primarily  related to default and recovery rates of the
         high-yield  bonds and/or bank loans either held  directly by the CDO or
         in the  reference  portfolio  of the SLT and,  as such,  are subject to
         change.  Generally,  the SLTs are  structured  such that the  principal
         amount of the loans in the reference  portfolio may be up to five times
         that of the par amount of the notes held by the  Company.  Although the
         exposure  associated with the Company's  investment in CDOs and SLTs is
         limited to the carrying  value of such  investments,  they are volatile
         investments and have a substantial  degree of risk associated with them
         because the amount of the initial  value of the loans and/or other debt
         obligations in the related portfolios is significantly greater than the
         Company's exposure.  Deterioration in the value of the high-yield bonds
         or bank loans would likely  result in  deterioration  of the  Company's
         investment  return with respect to the relevant CDO or SLT, as the case
         may be. In the event of significant  deterioration of a portfolio,  the
         relevant  CDO or SLT may be subject to early  liquidation,  which could
         result in further  deterioration of the investment return or, in severe
         cases, loss of the carrying amount.

         During 2001, the Company placed a majority of its rated CDO securities
         and related accrued interest,  as well as a relatively minor amount of
         other  liquid  securities,  (collectively  referred to as  transferred
         assets),  having  an  aggregate  book  value of $675  million,  into a
         securitization  trust.  In return,  the Company received $90 million in
         cash   (excluding   transaction   expenses)   relating   to  sales  to
         unaffiliated  investors  and  retained  interests  in the  trust  with
         allocated book amounts  aggregating $586 million. As of June 30, 2003,
         the retained interests had

                                     - 20 -


<PAGE>

         a carrying value of $531 million,  of which $395 million is considered
         investment  grade.  The  Company  has no  obligations,  contingent  or
         otherwise, to such unaffiliated investors.  One of the results of this
         transaction is that increases or decreases in future cash flows of the
         individual  CDOs are combined  into one overall cash flow for purposes
         of  determining  the  carrying  value of the  retained  interests  and
         related impact on results of operations.

         OTHER REPORTING MATTERS
         Accounting Developments

         In January 2003, the Financial Accounting Standards Board (FASB) issued
         Interpretation  No. 46,  "Consolidation of Variable Interest  Entities"
         (FIN 46),  which  addresses  consolidation  by business  enterprises of
         variable interest entities (VIEs). Certain disclosures are required for
         financial statements issued after January 31, 2003 and are addressed in
         Note 1 to the Consolidated Financial Statements. The impact of adopting
         FIN  46  on  the  Consolidated  Financial  Statements  is  still  being
         reviewed.

         In April  2003,  the FASB  issued  Statement  of  Financial  Accounting
         Standards  (SFAS) No. 149,  "Amendment  of Statement  133 on Derivative
         Instruments  and  Hedging   Activities."   This  Statement  amends  and
         clarifies  accounting  for  derivative  instruments  embedded  in other
         contracts, and for hedging activities under SFAS No. 133. The Statement
         is  effective  for  contracts  entered  into or  modified  and  hedging
         relationships   designated   after  June  30,  2003,   and  to  certain
         preexisting  contracts.  The Company is currently evaluating the impact
         of adopting SFAS No. 149 on the Consolidated Financial Statements.

         In July 2003, the AICPA issued Statement of Position 03-1,  "Accounting
         and  Reporting  by  Insurance  Enterprises  for Certain  Nontraditional
         Long-Duration  Contracts  and for  Separate  Accounts."  The Company is
         currently  evaluating  its  impact,   which,  among  other  provisions,
         requires  reserves related to GMDBs included within the majority of its
         variable  annuity  contracts.  The SOP is  required  to be  adopted  on
         January 1, 2004. See Impact of Recent  Market-Volatility  on Results of
         Operations section of Management's  Discussion and Analysis for further
         discussion.

         ITEM 4. CONTROLS AND PROCEDURES

        (a)   Disclosure Controls and Procedures. The Company's management, with
              the  participation  of the Company's Chief  Executive  Officer and
              Chief Financial  Officer,  has evaluated the  effectiveness of the
              Company's  disclosure  controls  and  procedures  (as such term is
              defined in Rules  13a-15(e)  and  15d-15(e)  under the  Securities
              Exchange Act of 1934, as amended (the  "Exchange  Act")) as of the
              end  of  the  period  covered  by  this  report.   Based  on  such
              evaluation,  the  Company's  Chief  Executive  Officer  and  Chief
              Financial  Officer  have  concluded  that,  as of the  end of such
              period,  the  Company's  disclosure  controls and  procedures  are
              effective.

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<PAGE>

        (b)   Internal Control Over Financial Reporting. There have not been any
              changes in the Company'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,  the Company's internal control over financial
              reporting.

         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,"  "should,"  "could,"
         "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.  The Company  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 Company's  ability to
         successfully  implement a business  model that  allows for  significant
         earnings  growth based on revenue growth that is lower than  historical
         levels,  including  the  ability to improve  its  operating  expense to
         revenue ratio both in the short-term  and over time,  which will depend
         in part on the  effectiveness of  reengineering  and other cost control
         initiatives,  as well as factors impacting the Company's revenues;  the
         Company's  ability to grow its business over time, which will depend on
         the  Company's  ability to manage its  capital  needs and the effect of
         business mix, and rating agency  requirements;  the ability to increase
         investment  spending,  which will depend in part on the equity  markets
         and other factors affecting revenues,  and the ability to capitalize on
         such investments to improve business  metrics;  the accuracy of certain
         critical accounting estimates,  including, the fair value of the assets
         in the Company's investment portfolio (including those investments that
         are not readily marketable); fluctuation in the equity and fixed income
         markets,  which can affect the amount and types of investment  products
         sold, the market value of its managed assets, management,  distribution
         and  other  fees  received  based on the  value of  those  assets,  the
         Company's  ability  to  recover  DAC as well as the  timing of such DAC
         amortization,  in  connection  with the sale of annuity  and  insurance
         products,  and the level of guaranteed  minimum death  benefits paid to
         clients; changes in assumptions relating to DAC, which could impact the
         amount of DAC  amortization;  potential  deterioration in the Company's
         high-yield and other investments,  which could result in further losses
         in the  investment  portfolio;  the ability to sell certain  high-yield
         investments at expected values and within anticipated timeframes and to
         maintain its high-yield  portfolio at certain levels in the future; the
         types and value of certain death benefit  features on variable  annuity
         contracts;  the affect of assessments and other surcharges for guaranty
         funds;  the  response  of  reinsurance   companies  under   reinsurance
         contracts;  the impact of reinsurance  rates and the  availability  and
         adequacy  of  reinsurance  to protect  the Company  against  losses;  a
         downturn  in the  Company's  business  and/or  negative  changes in the
         Company's  and  its  subsidiaries'   claims-paying  ability  and  other
         ratings, which could negatively impact sales; increasing competition in
         all of the Company's major lines of business;  fluctuations in interest
         rates, which impact the

                                     - 22 -


<PAGE>

         Company's spreads,  credit trends and the rate of bankruptcies,  which
         can affect returns on the Company's investment portfolios;  changes in
         laws or  government  regulations,  including  tax laws  affecting  the
         Company's  business  or that may  affect  the  sales of the  Company's
         products,  and regulatory  activity in the areas of customer  privacy,
         consumer  protection,  business  continuity and data  protection;  the
         adoption  of  recently   issued   accounting   rules  related  to  the
         consolidation of variable interest entities, including those involving
         CDOs and SLTs that the Company invests in, which could affect both the
         Company's  balance sheet and results of  operations;  and outcomes and
         costs   associated  with  litigation  and  compliance  and  regulatory
         matters.

PART II - OTHER INFORMATION

Item 1.           LEGAL PROCEEDINGS

                  In November 2002, a suit, captioned HARITOS ET AL. V. AMERICAN
                  EXPRESS FINANCIAL  CORPORATION AND IDS LIFE INSURANCE COMPANY,
                  was filed in the United States District Court for the District
                  of  Arizona.  The suit is filed by  plaintiffs  who purport to
                  represent a class of all persons that have purchased financial
                  plans from AEFA  advisors  during an undefined  class  period.
                  Plaintiffs  allege  that the  sale of the  plans  violate  the
                  Investment Advisors Act of 1940. The suit seeks an unspecified
                  amount of  damages,  rescission  and  injunction  relief.  The
                  Company believes that it has meritorious defenses to this suit
                  and intends to defend this case vigorously.

Item 6.           EXHIBITS AND REPORTS ON FORM 8-K

                           (a)  Exhibits

                                    See Exhibit Index on page E-1 hereof.

                           (b) Reports on Form 8-K.

                                    Form  8-K,  filed  April 21,  2003,  Item 5,
                                    reporting  that on April  15,  2003 IDS Life
                                    Insurance Company appointed Jeryl A. Millner
                                    Vice President and  Controller.  Ms. Millner
                                    will   act   as  the   Company's   Principal
                                    Accounting  Officer.  She succeeds Philip C.
                                    Wentzel,  who was  recently  appointed  Vice
                                    President,  Business Planning & Analysis for
                                    American Express Financial Corporation,  the
                                    Company's parent. John T. Sweeney, Executive
                                    Vice  President  - Finance  for the  Company
                                    will  act as  the  Company's  Principal  and
                                    Chief Financial Officer.

                                     - 23 -

<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:  August 13, 2003           By   /s/ John T. Sweeney
                                      ---------------------------------
                                      John T. Sweeney
                                      Executive Vice President -Finance
                                      and Chief Financial Officer







Date:  August 13, 2003           By   /s/ Barbara H. Fraser
                                      ---------------------------------
                                      Barbara H. Fraser
                                      Chief Executive Officer

<PAGE>

                                  EXHIBIT INDEX


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


Exhibit                                 Description

31.1    Certification  of Barbara H. Fraser pursuant to Rule 13a-14(a)
        promulgated under the Securities Exchange Act of 1934, as amended.

31.2    Certification  of John T. Sweeney  pursuant to Rule  13a-14(a)
        promulgated under the Securities Exchange Act of 1934, as amended.

32.1    Certification  of Barbara H. Fraser pursuant to 18 U.S.C.  Section 1350,
        as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2    Certification  of John T. Sweeney  pursuant to 18 U.S.C.  Section  1350,
        as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.




                                       E-1