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 September 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 September 30, 2003 and 2002                       1

                      Consolidated Statements of Income - Nine
                      months ended September 30, 2003 and 2002                2

                      Consolidated Balance Sheets - September 30,
                      2003 and December 31, 2002                              3

                      Consolidated Statements of Cash Flows - Nine
                      months ended September 30, 2003 and 2002              4-5

                      Notes to Consolidated Financial Statements           6-10

             Item 2.  Management's Discussion and Analysis of
                      Financial Condition and Results of Operations       11-19

             Item 4.  Controls and Procedures                                20

Part II.     Other Information                                               22

             Item 1.  Legal Proceedings                                      22

             Item 6.  Exhibits and Reports on Form 8-K                       22

             Signatures                                                      23

             Exhibit Index                                                  E-1

<PAGE>

PART I.  FINANCIAL INFORMATION
ITEM 1.  FINANCIAL STATEMENTS

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

                                                                              Three months ended
                                                                                 September 30,
                                                                     ------------------------------------
                                                                        2003                    2002
                                                                     -----------             ----------
Revenues:
    Premiums:
<S>                                                                    <C>                    <C>
         Traditional life insurance                                    $ 16,021               $ 17,549
         Disability income and  long-term care insurance                 71,433                 69,893
                                                                        --------               --------
                        Total premiums                                   87,454                 87,442

    Policyholder and contractholder charges                             130,320                132,140
    Management and other fees                                           101,980                 93,723
    Net investment income                                               427,603                385,490
    Net realized (loss) gain on investments                             (10,665)                11,619
                                                                        --------               --------
                        Total revenues                                  736,692                710,414
                                                                        --------               --------

Benefits and expenses:
    Death and other benefits:
         Traditional life insurance                                      11,063                  9,213
         Universal life-type insurance and investment contracts          56,620                 54,956
         Disability income and long-term care insurance                  14,877                 13,636
    (Decrease) increase in liabilities for future policy benefits:
                  Traditional life insurance                             (2,374)                (2,373)
                   Disability income and long-term care insurance        36,398                 34,104
    Interest credited on universal life-type
       insurance and investment contracts                               308,675                287,046
    Amortization of deferred policy acquisition costs                    74,234                 96,443
    Other insurance and operating expenses                              107,627                115,537
                                                                       ---------               --------
                        Total benefits and expenses                     607,120                608,562
                                                                       ---------               --------

Income before income tax (benefit) provision                            129,572                101,852

Income tax (benefit) provision                                           (3,592)                15,681
                                                                       ---------               --------

Net income                                                             $133,164               $ 86,171
                                                                       =========               ========

                                See Notes to Consolidated Financial Statements.
</TABLE>

                                                             -1-
<PAGE>

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

                                                                              Nine months ended
                                                                                 September 30,
                                                                     ----------------------------------
                                                                        2003                  2002
                                                                     -----------            ----------
Revenues:
    Premiums:
<S>                                                                  <C>                   <C>
         Traditional life insurance                                  $   48,406            $   50,213
         Disability income and  long-term care insurance                210,814               201,613
                                                                     -----------            ----------
                     Total premiums                                     259,220               251,826

    Policyholder and contractholder charges                             397,287               386,969
    Management and other fees                                           284,430               313,728
    Net investment income                                             1,246,136             1,167,344
    Net realized gain (loss) on investments                              12,655               (33,695)
                                                                     -----------            ----------
                     Total revenues                                   2,199,728             2,086,172
                                                                     -----------            ----------

Benefits and expenses:
    Death and other benefits:
         Traditional life insurance                                      30,916                27,413
         Universal life-type insurance and investment contracts         155,015               143,353
         Disability income and long-term care insurance                  42,224                38,414
    (Decrease) increase in liabilities for future policy benefits:
                  Traditional life insurance                             (2,733)                2,039
                  Disability income and long-term care insurance        102,237                98,121
    Interest credited on universal life-type
       insurance and investment contracts                               919,558               842,647
    Amortization of deferred policy acquisition costs                   228,292               264,114
    Other insurance and operating expenses                              341,660               321,679
                                                                     -----------            ----------
                     Total benefits and expenses                     $1,817,169            $1,737,780
                                                                     -----------            ----------

Income before income tax provision                                      382,559               348,392

Income tax provision                                                     42,974                62,262
                                                                     -----------            ----------

Net income                                                           $  339,585            $  286,130
                                                                     ===========            ==========

                                See Notes to Consolidated Financial Statements.
</TABLE>

                                                      -2-
<PAGE>

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

                                                                 September 30,          December 31,
                                                                      2003                  2002
                                                              -----------------        --------------
                                                                  (unaudited)
<S>                                                              <C>                    <C>
Assets
Investments:
    Available-for-sale:
         Fixed maturity investments, at fair value  (amortized
                   cost: 2003, $27,149,933; 2002, $23,209,226)   $28,073,453            $24,052,104
    Mortgage loans on real estate (less reserves: 2003,
                   $47,947; 2002, $30,103)                         3,235,521              3,417,651
    Policy loans                                                     579,401                591,126
    Other investments                                              1,112,785                752,579
                                                                 ------------           ------------
                  Total investments                               33,001,160             28,813,460

Cash and cash equivalents                                             79,970              4,424,061
Amounts recoverable from reinsurers                                  723,093                633,510
Amounts due from brokers                                             433,108                 25,835
Other accounts receivable                                             58,503                 56,245
Accrued investment income                                            340,498                277,279
Deferred policy acquisition costs                                  3,523,189              3,309,783
Other assets                                                         121,905                117,788
Separate account assets                                           24,996,574             21,980,674
                                                                 ------------           ------------

                  Total assets                                   $63,278,000            $59,638,635
                                                                 ============           ============

Liabilities and Stockholder's Equity
Liabilities:
    Future policy benefits:
       Fixed annuities                                           $26,311,665            $23,411,314
       Universal life-type insurance                               3,566,598              3,515,010
       Traditional life insurance                                    251,344                247,441
         Disability income and long-term care insurance            1,653,495              1,466,171
    Policy claims and other policyholders' funds                      83,230                 85,400
    Amounts due to brokers                                           464,918              3,342,989
    Deferred income taxes                                            214,643                182,059
    Other liabilities                                                413,182                463,326
    Separate account liabilities                                  24,996,574             21,980,674
                                                                 ------------           ------------

                     Total liabilities                            57,955,649             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                                              3,694,426              3,354,841
    Other comprehensive income, net of tax:
        Net unrealized securities gains                              535,380                497,319
        Net unrealized derivative gains                                1,218                    764
                                                                 ------------           ------------
            Accumulated other comprehensive income                   536,598                498,083
                                                                 ------------           ------------

                     Total stockholder's equity                    5,322,351              4,944,251
                                                                 ------------           ------------

Total liabilities and stockholder's equity                       $63,278,000            $59,638,635
                                                                 ============           ============

                          See Notes to Consolidated Financial Statements.
</TABLE>

                                                   -3-
<PAGE>

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

                                                                         Nine months ended
                                                                           September 30,
                                                                      2003              2002
                                                                   ----------       ----------
Cash Flows from Operating Activities
<S>                                                                <C>              <C>
    Net income                                                     $ 339,585        $ 286,130
    Adjustments to reconcile net income to
        net cash provided by operating activities:
              Policy loans, excluding universal
                    life-type insurance
                        Issuance                                     (25,868)         (28,126)
                        Repayment                                     33,403           37,939
              Change in amounts recoverable from reinsurers          (89,583)         (72,869)
              Change in other accounts receivable                     (2,258)          (7,164)
              Change in accrued investment income                    (72,249)          (1,655)
              Change in deferred policy acquisition costs, net      (233,646)        (195,873)
              Change in liabilities for future policy benefits
                    for traditional life, disability income and
                    long-term care insurance                         191,227          178,522
              Change in policy claims and other
                    policyholders' funds                              (2,170)          25,363
              Deferred income taxes                                   11,800           53,671
              Change in other assets                                  (4,117)           9,637
              Change in other liabilities                            (50,144)         (63,075)
              Amortization of premium, net                           136,950           48,874
              Net realized (gain) loss on investments                (12,655)          33,695
              Net realized gains on trading securities               (19,079)          (6,993)
              Contractholder charges, non-cash                      (175,764)        (172,811)
              Other, net                                              (4,168)           5,123
                                                                   ----------       ----------
    Net cash provided by operating activities                         21,264          130,388
                                                                   ----------       ----------

                               See Notes to Consolidated Financial Statements.
</TABLE>


                                                   -4-
<PAGE>

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

                                                                          Nine months ended
                                                                            September 30,
                                                                   2003                     2002
                                                             ----------------        -----------------
Cash Flows from Investing Activities
    Available-for-Sale investments:
<S>                                                           <C>                      <C>
       Sales                                                  $  9,205,312             $  6,581,196
       Maturities, sinking fund payments and calls               3,546,041                2,276,303
       Purchases                                               (16,738,868)             (10,031,715)

    Other investments, excluding policy loans:
       Sales, maturities, sinking fund payments and calls          471,588                  355,323
       Purchases                                                  (697,042)                (362,979)
    Change in amounts due to and from brokers, net              (3,285,344)              (1,344,862)
                                                             --------------            -------------
    Net cash used in investing activities                       (7,498,313)              (2,526,734)
                                                             --------------            -------------

Cash Flows from Financing Activities
    Activity related to universal life-type insurance
    and investment contracts:
       Considerations received                                   3,701,940                3,315,296
       Interest credited to account balances                       919,558                  842,647
       Surrenders and death benefits                            (1,492,730)              (1,205,070)
    Universal life-type insurance policy loans:
       Repayment                                                    66,085                   71,752
       Issuance                                                    (61,895)                 (57,875)
    Cash dividends to parent                                            --                  (70,000)
    Capital contribution from parent                                    --                  250,000
                                                             --------------            -------------
    Net cash provided by financing activities                    3,132,958                3,146,750
                                                             --------------            -------------

Net (decrease) increase in cash and cash equivalents            (4,344,091)                 750,404

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

Cash and cash equivalents at end of period                    $     79,970             $  1,900,655
                                                             ==============            =============

                               See Notes to Consolidated Financial Statements.
</TABLE>

                                                   -5-
<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. See Note
         4., Taxes and Interest, regarding the Company's third quarter 2003
         income tax benefit. 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 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). In October 2003, the FASB issued a
         statement delaying the effective date of the consolidation provisions
         of FIN 46 from July 1, 2003 to December 31, 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, which the Company may
         consolidate, relate to structured investments, including collateralized
         debt obligations (CDOs) and secured loan trusts (SLTs), which are
         partially 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 CDO-related
         securitization trust established in 2001. That trust contains a
         majority of the Company's rated CDOs whose retained interests in the
         trust had a carrying value of $548 million at

                                      -6-
<PAGE>

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

         September 30, 2003, of which $411 million is considered investment
         grade. Separately, FIN 46 is not expected to impact the accounting for
         an additional $24 million of rated CDO tranches managed by a third
         party.

         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 debt 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 the FASB's
         statement delaying its implementation indicated the FASB intends to
         issue further interpretations over the next few months. Accordingly,
         the Company decided to delay its planned third quarter 2003 adoption of
         FIN 46 until the revised effective date of December 31, 2003. The
         Company will record a cumulative effect of accounting change with the
         consolidation of up to $450 million of additional assets. The impact of
         adopting FIN 46 will be dependent upon further interpretations of FIN
         46 and market factors at December 31, 2003. 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 September 30, 2003. Those carrying values include CDO residual
         tranches having an adjusted cost basis of $4 million and SLTs having an
         adjusted cost basis of $652 million.

         The initial impact related to the application of FIN 46 will have no
         cash flow effect on the Company. Ongoing 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. Subsequent to the
         December 31, 2003 FIN 46 adoption, if required, these ongoing valuation
         adjustments, which will be reflected in operating results over the then
         remaining lives of the structures subject to FIN 46 and which will be
         dependent upon market factors during such time, will result in periodic
         gains or losses. The Company expects, in the aggregate, such gains or
         losses, including the December 31, 2003 implementation amount, 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 the further reductions 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"

                                      -7-
<PAGE>

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


         (SOP 03-1). The Company is currently evaluating its impact, which,
         among other provisions, requires reserves related to guaranteed minimum
         death benefits (GMDBs) and guaranteed minimum income benefits (GMIBs)
         included within the 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
         $26.3 million and $93.9 million for the three months ended September
         30, 2003 and 2002, respectively. Gross realized losses on sales of
         securities classified as Available-for-Sale were $36.6 million and
         $49.7 million for the three months ended September 30, 2003 and 2002,
         respectively. The Company also recognized other-than-temporary
         impairment losses on Available-for-Sale securities of $33.1 million for
         the three months ended September 30, 2002.

         Gross realized gains on sales of securities classified as
         Available-for-Sale, using the specific identification method, were
         $217.3 million and $176.6 million for the nine months ended September
         30, 2003 and 2002, respectively. Gross realized losses on sales of
         securities classified as Available-for-Sale were $91.4 million and
         $78.0 million for the nine months ended September 30, 2003 and 2002,
         respectively. The Company also recognized other-than-temporary
         impairment losses on Available-for-Sale securities of $102.6 million
         and $119.8 million for the nine months ended September 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 and applicable deferred policy
         acquisition costs, net of related tax and unrealized gains or losses on
         derivatives, net of related tax.

         Total comprehensive (loss) income was ($61) million and $402 million
         for the three months ended September 30, 2003 and 2002, respectively.
         Total comprehensive income was $390 million and $721 million for the
         nine months ended September 30, 2003 and 2002, respectively. The
         difference between net income and total comprehensive income for these
         periods primarily reflects the change in net unrealized gains on
         Available-for-Sale securities.

                                      -8-
<PAGE>

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

4.       Taxes and Interest

         Net income taxes paid during the nine months ended September 30, 2003
         and 2002, were $58.8 million and $80.4 million, respectively. The
         income tax benefit in the third quarter of 2003 reflects a $29 million
         reduction in the tax provision resulting from adjustments related to
         the finalization of the 2002 tax return filed during the quarter and
         publication of favorable technical guidance related to the taxation of
         dividend income. Interest paid on borrowings during the nine months
         ended September 30, 2003 and 2002, were $2.3 million and $6.3 million,
         respectively.

5.       Commitments and Contingencies

         Commitments to fund mortgage loans on real estate at September 30, 2003
         were $86.2 million.

         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 percent 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 are 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 majority of the variable annuity contracts offered by the Company
         contain guaranteed minimum death benefit (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

                                      -9-
<PAGE>

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

         value is expensed when payable.  Amounts expensed for the three months
         ended  September  30, 2003 and 2002,  were $7 million and $10 million,
         respectively. Amounts expensed for the nine months ended September 30,
         2003 and 2002,  were $26 million and $23  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 all terms on GMIB  features are within the
         stipulated  waiting  periods.  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 and GMIBs. The
         impact of that  requirement,  as well as other provisions of SOP 03-1,
         is being  evaluated.  The Company's life and annuity products all have
         minimum  interest  rate  guarantees  in their  fixed  accounts.  These
         guarantees range from 3 percent to 5 percent.  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 information
         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.

         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.

                                      -10-
<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"), a New York
         corporation, 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"), a New York corporation, 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 September 30, 2003 and
         2002

         Net income increased 55 percent to $133.2 million from $86.2 million.
         This increase reflects: (i) a $29 million reduction in income tax
         provision due to adjustments related to the finalization of the 2002
         tax return filed during the third quarter of 2003 and the publication
         of favorable technical guidance related to the taxation of dividend
         income; (ii) net realized loss on investments of $10.7 million in the
         third quarter of 2003 compared to a net realized gain on investments of
         $11.6 million in the third quarter of 2002; (iii) increased revenues
         from management and other fees; and (iv) substantially increased net
         investment income.

         Management and other fees revenue increased $8.3 million or 9 percent.
         This was primarily due to a higher average value of separate account
         assets, reflecting the

                                      -11-
<PAGE>

         recent improvement in equity market conditions. As of September 30,
         2003, 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 $42.1 million or 11 percent as higher
         levels of invested assets were partially offset by lower average yields
         on the investment portfolio.

         Net realized (loss) gain on investments was a $10.7 million net loss
         for the three months ended September 30, 2003 compared to an $11.6
         million net gain for the three months ended September 30, 2002. For the
         three months ended September 30, 2003, $26.4 million of investment
         gains were more than offset by $37.1 million of impairments and losses.
         Included in these total investment gains and losses are $26.3 million
         of gross realized gains and $36.6 million of gross realized losses from
         sales of securities, classified as Available-for-Sale.

         For the three months ended September 30, 2002, $96.9 million of
         investment gains were partially offset by $85.3 million of impairments
         and losses. Included in these total investment gains and losses are
         $93.9 million of gross realized gains and $49.7 million of gross
         realized losses from sales of securities, as well as $33.1 million of
         other-than-temporary investment impairment losses, classified as
         Available-for-Sale.

         Interest credited expenses on universal life-type insurance and
         investment contracts increased 8 percent due to higher average in force
         levels across annuity and life products and the effect of appreciation
         in the S&P 500 on equity indexed annuities this period versus
         depreciation in the same period a year ago, partially offset by lower
         crediting rates on both annuities and life insurance products. Total
         death and other benefits increased slightly by $4.8 million. These two
         increases were substantially offset by lower DAC amortization expense
         together with a 7 percent decrease in other insurance and operating
         expenses.

         Amortization of deferred policy acquisition costs (DAC) decreased $22.2
         million or 23 percent reflecting a net $18 million increase in DAC
         amortization expense in the third quarter of 2002, and a net $2 million
         decrease in DAC amortization expense in the third quarter of 2003, both
         as a result of the Company's annual third quarter review of various DAC
         assumptions and practices. See the DAC section below for further
         discussion of DAC and related adjustments.

         The income tax benefit in the third quarter of 2003 reflects a $29
         million reduction in the tax provision resulting from adjustments
         related to the finalization of the 2002 tax return filed during the
         quarter and publication of favorable technical guidance related to the
         taxation of dividend income. Partially offsetting this expense
         reduction were realized losses from sales of mortgage-backed
         securities as the Company made adjustments in the level of these
         investments, such that mortgage-backed securities were 39 percent of
         the Company's overall portfolio at September 30, 2003 compared to 44
         percent at December 31, 2002.

                                      -12-
<PAGE>

         Results of Operations for the Nine Months Ended September 30, 2003 and
         2002

         Net income increased 19 percent to $339.6 million from $286.1 million.
         This increase reflects the third quarter 2003 $29 million reduction in
         income tax provision discussed above and a net realized gain on
         investments of $12.7 million compared to a net realized loss on
         investments of $33.7 million in the third quarter of 2002, partially
         offset by lower revenues from management and other fees and higher
         total benefits and expenses.

         Management and other fees decreased to $284 million for the nine
         months ended September 30, 2003 compared with $314 million for the
         nine months ended September 30, 2002. This was primarily due to a
         decrease in average value of separate account assets. While equity
         markets rose in the third quarter of 2003, average asset values for
         the nine months ended September 30, 2003 remained below 2002 levels.
         As of September 30, 2003, 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 7 percent to $1.2 billion for the nine
         months ended September 30, 2003 reflecting higher invested asset
         amounts in 2003, partially offset by lower average yields on the
         investment portfolio as a result of the relatively low interest rate
         environment.

         Net realized gain (loss) on investments was a $12.7 million net gain
         for the nine months ended September 30, 2003 compared to a $33.7
         million net loss for the nine months ended September 30, 2002. For the
         nine months ended September 30, 2003, $218.4 million of total
         investment gains were partially offset by $205.7 million of impairments
         and losses. Included in these total investment gains and losses are
         $217.3 million of gross realized gains and $91.4 million of gross
         realized losses from sales of securities, as well as $102.6 million of
         other-than-temporary investment impairment losses, classified as
         Available-for-Sale.

         For the nine months ended September 30, 2002, $180 million of
         investment gains were partially offset by $213.7 million of impairments
         and losses. Included in these total investment gains and losses are
         $176.6 million of gross realized gains, $78 million of gross realized
         losses from sales of securities, as well as $119.8 million of
         other-than-temporary investment impairment losses, classified as
         Available-for-Sale.

         Total benefits and expenses were $1.8 billion for the nine months ended
         September 30, 2003, an increase of 5 percent from the same period in
         2002. This increase reflects a 9 percent increase in interest credited
         expenses on universal life-type insurance and investment contracts,
         which was primarily due to higher levels of annuities and insurance
         products in force, partially offset by lower crediting rates. Total
         death and other benefits increased 9 percent reflecting the $7 million
         release of reserves in the 2002 period, which was related to the
         September 11, 2001 terrorist attacks.

                                      -13-
<PAGE>

         DAC amortization expense decreased to $228.3 million for the nine
         months ended September 30, 2003 compared to $264.1 million for the nine
         months ended September 30, 2002. The decrease in DAC amortization
         reflects the impact of annual third quarter DAC-related adjustments
         discussed above together with the recently improved equity market
         performance in 2003 as compared with 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
         during the nine months ended September 30, 2003, whereas declines in
         variable annuity and insurance customer asset values resulted in an
         acceleration of DAC amortization during the nine months ended September
         30, 2002.

         Other insurance and operating expenses increased 6 percent, reflecting,
         during the six months ended June 30, 2003, the impact of fewer
         capitalized costs, which was primarily the result of a comprehensive
         review of the DAC-related practices completed during the third quarter
         of 2002 and which is more fully described below.

         The income tax provision for the nine months ended September 30, 2003
         reflects a $29 million reduction in the tax expense during the third
         quarter of 2003 resulting from adjustments related to the finalization
         of the 2002 tax return filed during the quarter and publication of
         favorable technical guidance related to the taxation of dividend
         income. Partially offsetting this expense reduction were realized
         losses from sales of mortgage-backed securities as the Company made
         adjustments in the level of these investments, such that
         mortgage-backed securities were 39 percent of the Company's overall
         portfolio at September 30, 2003 compared to 44 percent at December 31,
         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 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.

                                      -14-
<PAGE>

         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. As a result of these reviews, the Company took actions in both
         2003 and 2002 that impacted the DAC balance and expenses. In the third
         quarter 2003, these actions resulted in a net $2 million in DAC
         amortization expense reduction reflecting:

          o    A  $106  million  DAC  amortization   reduction   resulting  from
               extending  10 - 15 year  amortization  periods for  certain  Flex
               Annuity   contracts   to  20  years.   The  Flex  Annuity  is  an
               advisor-distributed  variable  annuity  product  sold from 1986 -
               1996.  In reviewing  the  persistency  of this business in recent
               years, the Company had observed  significant  volumes  persisting
               beyond the end of the 10- and 15-year  amortization  periods. The
               Company had maintained these amortization  periods,  however, due
               to  uncertainty  over the impact of a program  launched  in April
               2002 under which eligible Flex Annuity contracts can be exchanged
               for  new  variable  annuity  contracts  offered  by the  Company.
               Exchange  rates to date  under this  program  have been less than
               those expected, and the Company concluded in the third quarter it
               would be  appropriate  to  measure  the  meaningful  life of this
               business  without   anticipating   future   exchanges.   This  is
               consistent with the measurement made for other Company  products,
               and the  resulting  20-year  period  is the same as that used for
               other advisor-distributed variable annuity products.

          o    A $92  million  DAC  amortization  increase  resulting  from  the
               recognition  of a premium  deficiency on the Company's  Long-Term
               Care (LTC)  business.  The Company has  monitored  this  business
               closely  in recent  periods as claim and  persistency  experience
               have developed  adversely.  The Company discontinued sales of its
               proprietary  LTC  product  in the  first  quarter  of  2003,  and
               outsourced  claims  administration  on the  existing  book in the
               second quarter. On the basis of updated analysis completed in the
               third quarter,  the Company concluded that the associated DAC was
               not fully  recoverable at current premium levels.  The associated
               DAC remaining after this $92 million reduction is $162 million.

          o    A $12 million net DAC amortization  increase across the Company's
               Universal  Life,  Variable  Universal Life and fixed and variable
               annuity products. The Company updated a number of DAC assumptions
               resulting in increases in  amortization  totaling $26 million and
               decreases in amortization totaling $14

                                      -15-
<PAGE>

              million. The largest single item was a $16 million increase in
              amortization from reflecting lower than previously assumed spreads
              on fixed contract values.

         In the third quarter 2002, these actions resulted in a net $37 million
         increase in expenses reflecting:

         o    A $173 million DAC amortization  expense increase  resulting from
              resetting the customer  asset value growth rate  assumptions  for
              variable   annuity  and  variable  life  products  to  anticipate
              near-term  and  long-term  growth at an annual rate of 7 percent;
              and

         o    A $155 million DAC amortization  expense  reduction from revising
              certain  mortality and persistency  assumptions for universal and
              variable universal life insurance products and fixed and variable
              annuity  products to better reflect actual  experience and future
              expectations.

         o    These two items  resulted  in a net  increase  in expenses of $18
              million as compared to the net decrease in expenses of $2 million
              in 2003.

         o    In  addition,  2002  expenses  increased  $19  million  from  the
              revision of the types and amounts of costs  deferred,  in part to
              reflect the impact of advisor platform changes and the effects of
              related  reengineering.  This  revision,  which  resulted  in  an
              increase  in  ongoing  expenses,  continues  to  impact  the 2003
              quarterly results.

         DAC of $3.5 billion was on the Company's balance sheet at September 30,
         2003. This balance consisted of $1.6 billion related to life and health
         insurance and $1.9 billion related to annuities. The DAC balance at
         December 31, 2002 was $3.3 billion and consisted of $1.7 billion
         related to life and health insurance and $1.6 billion related to
         annuities.

         Impact of 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

                                      -16-
<PAGE>

         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 three
         months ended September 30, 2003 and 2002, were $7 million and $10
         million, respectively. Amounts expensed for the nine months ended
         September 30, 2003 and 2002, were $26 million and $23 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 all terms on
         GMIB features are within the stipulated waiting periods. 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 GMDBs
         and GMIBs. 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
         percent to 5 percent. 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 under this line of credit at September 30, 2003.
         The Company also uses reverse

                                      -17-
<PAGE>

         repurchase agreements for short-term liquidity needs. Reverse
         repurchase agreements outstanding at September 30, 2003 were $130
         million.

         At September 30, 2003 and 2002, based on amortized cost, approximately
         7 percent of the Company's fixed maturity investments were
         below-investment-grade bonds. These investments may be subject to a
         higher degree of risk than the 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 September 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 September 30, 2003, the carrying values of the CDO
         residual tranches and SLT notes were $4 million and $652 million,
         respectively. The Company also has an interest in a CDO securitization
         trust described below as well as $24 million in rated CDO tranches
         managed by a third party. 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
         have additional 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. See Note 1 to the Consolidated Financial Statements.

                                      -18-
<PAGE>

         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 September 30, 2003, the
         retained interests had a carrying value of $548 million, of which $411
         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). In October 2003, the FASB issued a
         statement delaying the effective date of the consolidation provisions
         of FIN 46 from July 31, 2003 to December 31, 2003 for VIEs created
         prior to February 1, 2003. Certain disclosures are addressed in Note 1
         to the Consolidated Financial Statements. The impact of adopting FIN 46
         on the Consolidated Financial Statements is dependent upon further
         interpretations of FIN 46 and market conditions at December 31, 2003.

         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" (SOP 03-1). The
         Company is currently evaluating its impact, which, among other
         provisions, requires reserves related to guaranteed minimum death
         benefits and guaranteed minimum income benefits included within its
         variable annuity contracts. SOP 03-1 is required to be adopted on
         January 1, 2004. See Impact of Recent Market-Volatility on Results of
         Operations section of MD&A for further discussion.

                                      -19-
<PAGE>

    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.

    (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

                                      -20-
<PAGE>

         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 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.

                                      -21-
<PAGE>

PART II - OTHER INFORMATION

IDS LIFE INSURANCE COMPANY

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 was 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.

                           There were no reports on Form 8-K filed by
                           the Company during the quarterly period
                           ended September 30, 2003.

                                      -22-
<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 14, 2003        By  /s/ Barbara H. Fraser
                                    -----------------------
                                        Barbara H. Fraser
                                        Chief Executive Officer



Date:  November 14, 2003        By  /s/ John T. Sweeney
                                    -------------------
                                        John T. Sweeney
                                        Executive Vice President - Finance
                                        and Chief Financial Officer

                                      -23-
<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 and 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