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                                                                   Exhibit 10.31

                          INVESTMENT ADVISORY AGREEMENT
                       AND AMENDMENT TO SERVICE AGREEMENT

     This Agreement (this "Agreement") is made as of the 1st day of January,
2002 ("Effective Date"), by and between Allstate Insurance Company, an Illinois
insurance company ("Allstate"), Allstate Investments, LLC ("ALLSTATE
INVESTMENTS") and Allstate Life Insurance Company of ALNY, a ALNY insurance
company ("ALNY").

     WHEREAS, Allstate currently provides investment management services to ALNY
pursuant to a Service Agreement, dated as of July 1, 1989 (the "Service
Agreement");

     WHEREAS, it has been determined that such services in the future will be
more appropriately provided to ALNY by a separate entity performing only
investment management activities rather than by a department of Allstate,
resulting in benefits to ALNY. Therefore, subject to obtaining all required
regulatory approvals, effective January 1, 2002, Allstate's Investment
Department will cease providing investment management services pursuant to the
Service Agreement. All investment management services will instead be provided
to ALNY by ALLSTATE INVESTMENTS; and

     WHEREAS, to accomplish this change, ALNY desires to amend the Service
Agreement to terminate the provision of investment management services by
Allstate. ALNY also desires to contract with ALLSTATE INVESTMENTS for the
rendering of investment management services by ALLSTATE INVESTMENTS subject to
the terms and conditions hereinafter set forth.

          NOW, THEREFORE, in consideration of the premises and of the mutual
promises set forth herein, and intending to be legally bound hereby, Allstate,
ALLSTATE INVESTMENTS and ALNY agree as follows.

ARTICLE 1
                     AMENDMENT OF EXISTING SERVICE AGREEMENT

     1.1  AMENDMENT. Allstate and ALNY hereby agree to amend the Service
Agreement by deleting Section 4(g) and all references thereto such that Allstate
no longer provides investment management services to ALNY.

ARTICLE 2
                          INVESTMENT ADVISORY SERVICES

     2.1  APPOINTMENT. ALNY hereby appoints ALLSTATE INVESTMENTS as the
investment advisor and manager of its investment assets (the "Account") and
grants ALLSTATE INVESTMENTS the power and authority to advise, manage, and
direct the investment and reinvestment of the assets of the Account for the
period and on the terms and conditions set forth

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in this Agreement, subject to the supervision of the Board of Directors of ALNY
(the "Board"). Such activities shall be conducted subject to and in accordance
with the investment objectives, restrictions, and strategies set forth in
Exhibit A attached hereto, in investment objectives that are not inconsistent
with Exhibit A that are adopted by the Board, and in accordance with such other
limitations and guidelines that are not inconsistent with Exhibit A as may be
established from time to time for the Account by the Board (such investment
objectives, restrictions, strategies, limitations, and guidelines herein
referred to collectively as the "Investment Guidelines"). ALLSTATE INVESTMENTS
hereby accepts such responsibility and agrees during such period to render the
services and to assume the obligations herein set forth.

     2.2  ALLSTATE INVESTMENTS AS AGENT. ALNY shall retain responsibility,
authority and control with respect to the management and investment of the
Account and shall supervise the activities of ALLSTATE INVESTMENTS with respect
to the Account. Subject to the foregoing and to the Investment Guidelines,
ALLSTATE INVESTMENTS shall, for purposes of this Agreement, be granted and
exercise full investment discretion and authority in buying, selling or
otherwise disposing of or managing the investment of the assets held in the
Account and in the performance of the services rendered hereunder, and shall do
so as ALNY's agent only. ALNY hereby authorizes ALLSTATE INVESTMENTS to exercise
all such powers with respect to the assets of the Account as may be necessary or
appropriate for the performance by ALLSTATE INVESTMENTS of its obligations under
this Agreement, subject to the supervision of the Board and the limitations
contained herein. All investments made by ALLSTATE INVESTMENTS on behalf of ALNY
shall be in those classes of investments prescribed by Section 1405 of the ALNY
Insurance Law or as otherwise permitted ALNY by law; provided, however, that
nothing contained herein shall authorize ALLSTATE INVESTMENTS to purchase or
dispose of on ALNY's behalf without ALNY's prior written approval any mortgages
or any interest in real property.

     2.3  INVESTMENT ADVISORY SERVICES. In furtherance of the foregoing, and in
carrying out its obligations to manage the investment and reinvestment of the
assets in the Account, ALLSTATE INVESTMENTS shall, as appropriate and consistent
with the Investment Guidelines:

          (a)  perform research and obtain and evaluate such information
          relating to the economics, industries, businesses, markets and new
          investment structures, techniques, practices, and financial data as
          ALLSTATE INVESTMENTS deems appropriate in its discharge of its duties
          under this Agreement;

          (b)  consult with and furnish to the Board recommendations with
          respect to overall investment strategies for the Account;

          (c)  seek out and implement specific investment opportunities,
          consistent with such overall investment strategies approved by the
          Board, including making and carrying out day-to-day decisions to
          acquire or dispose of permissible investments, managing the investment
          of the assets of the Account, and providing or obtaining such services
          as may be necessary in managing, acquiring or disposing of
          investments;

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          (d)  regularly report to the Board with respect to the implementation
          of investment strategies and any other activities in connection with
          management of the Account's assets, including furnishing to the Board,
          within 15 days after the end of each quarter, a summary of investment
          activity during the quarter, and a schedule of investments and other
          assets of the Account as of the end of the quarter;

          (e)  maintain all required accounts, records, memoranda, instructions
          or authorizations relating to the acquisition or disposition of
          investments for the Account;

          (f)  determine the securities to be purchased or sold by the Account
          and place orders either directly with the issuer, with any
          broker-dealer or underwriter that specializes in the securities for
          which the order is made, or with any other broker or dealer that
          ALLSTATE INVESTMENTS selects; and

          (g)  perform the services hereunder in a manner consistent with
          investment objectives and policies of ALNY as detailed in the
          Investment Guidelines, as amended from time to time, and in compliance
          with the provisions of the ALNY Insurance Law, as amended.

     2.4  ALLOCATION OF BROKERAGE. ALLSTATE INVESTMENTS is authorized in its
sole discretion to select the brokers or dealers that will execute the purchases
and sales of securities for the Account. In making such selection, ALLSTATE
INVESTMENTS shall use its best efforts to obtain for the Account the most
favorable net price and execution available taking into account all appropriate
factors, including price, dealer spread or commission, if any, and size and
difficulty of the transaction.

          If, in the judgment of ALLSTATE INVESTMENTS, ALNY should be benefited
by supplemental investment research, ALLSTATE INVESTMENTS is authorized, but not
obligated, to select brokers or dealers on the basis of research information,
materials, or service furnished by them to ALLSTATE INVESTMENTS to use in
supplementing ALLSTATE INVESTMENTS' own information and in making investment
decisions for the Account. The expenses of ALLSTATE INVESTMENTS and the charges
to ALNY may not necessarily be reduced as a result of receipt of such
supplemental information. Subject to the above requirements, nothing shall
prohibit ALLSTATE INVESTMENTS from selecting brokers or dealers with which it or
ALNY are affiliated.

     2.5  SERVICE TO OTHER CLIENTS. ALNY acknowledges that ALLSTATE INVESTMENTS
may perform services for clients other than ALNY which are similar to the
services to be performed pursuant to this Agreement, and that ALLSTATE
INVESTMENTS is free to do so provided that its services pursuant to this
Agreement are not in any way impaired. ALNY agrees that ALLSTATE INVESTMENTS may
provide investment advice to any of its other clients that may differ from
advice given to ALNY, or take action with respect to assets owned by it or its
other clients that may differ from the action taken with respect to the Account
and/or assets held therein, so long as ALLSTATE INVESTMENTS, to the extent
reasonable and practicable, allocates investment opportunities to the Account on
a fair and equitable basis

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relative to ALLSTATE INVESTMENTS' other clients. It is understood that ALLSTATE
INVESTMENTS shall have no obligation to purchase or sell, or to recommend for
purchase or sale for the Account, any security, which ALLSTATE INVESTMENTS, its
affiliates, employees or agents may purchase or sell for its or their own
accounts or for the account of any other client, if, in the opinion of ALLSTATE
INVESTMENTS, such transaction or investment appears unsuitable, impractical or
undesirable for the Account. It is agreed that ALLSTATE INVESTMENTS may use any
supplemental investment research obtained for the benefit of ALNY in providing
investment advice to its other clients or its own accounts. Conversely, such
supplemental information obtained by the placement of business for ALLSTATE
INVESTMENTS or other entities advised by ALLSTATE INVESTMENTS will be considered
by and may be useful to ALLSTATE INVESTMENTS in carrying out its obligations to
ALNY.

     2.6  ALLOCATION OF TRADES. It is acknowledged that securities held by ALNY
may also be held by separate investment accounts or other funds for which
ALLSTATE INVESTMENTS may act as a manager or by ALLSTATE INVESTMENTS or its
other affiliates. If purchases or sales of securities for ALNY or other entities
for which ALLSTATE INVESTMENTS or its affiliates act as investment manager arise
for consideration at or about the same time, ALNY agrees that ALLSTATE
INVESTMENTS may make transactions in such securities, insofar as feasible, for
the respective entities in a manner deemed equitable to all. To the extent that
transactions on behalf of more than one client of ALLSTATE INVESTMENTS during
the same period may increase the demand for securities being purchased or the
supply of securities being sold, ALNY recognizes that there may be an adverse
effect on price.

          It is agreed that, on occasions when ALLSTATE INVESTMENTS deems the
purchase or sale of a security to be in the best interests of ALNY as well as
other accounts or companies, it may, to the extent permitted by applicable laws
and regulations, but will not be obligated to, aggregate the securities to be so
sold or purchased for ALNY with those to be sold or purchased for other accounts
or companies in order to obtain favorable execution and lower brokerage
commissions. In that event, allocation of the securities purchased or sold, as
well as the expenses incurred in the transaction, will be made by ALLSTATE
INVESTMENTS in the manner it considers to be most equitable and consistent with
its obligations to ALNY and to such other accounts or companies. ALNY recognizes
that in some cases this procedure may adversely affect the size of the position
obtainable for ALNY.

     2.7  CONTRACTS; AUTHORIZED SIGNATORIES. ALLSTATE INVESTMENTS shall have the
full power, right and authority, as ALNY's agent, in accordance with this
Agreement and the Investment Guidelines, to negotiate, apply for, enter into,
execute, deliver, amend, modify and/or terminate legal documents of every kind
and nature relating to or required by the investment of the assets of the
Account. All such documents may be entered into in ALNY's name or in ALLSTATE
INVESTMENTS' name (as agent for ALNY), as ALLSTATE INVESTMENTS shall determine,
and all such documents shall be legally binding on ALNY. Those certain employees
and officers of ALLSTATE INVESTMENTS who are authorized to execute transactions
and sign documentation pursuant to the Policies and Procedures and Investment
guidelines adopted by the Investment Committee of ALLSTATE INVESTMENTS, as they
may be amended from time to time, shall also be authorized to the same extent to
execute transactions and sign documentation on behalf of ALNY and/or ALLSTATE
INVESTMENTS

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in connection with transactions entered into on behalf of the assets of the
Account pursuant to this Agreement.

     2.8  COMPLIANCE WITH LEGAL REQUIREMENTS. ALLSTATE INVESTMENTS shall make
all reasonable efforts to comply with and cause to be complied with all
applicable laws, rules, and regulations of the State of ALNY, and any federal,
state or municipal authority governing this Agreement, the services rendered
hereunder, the Account and the assets held therein. Without limiting the
foregoing, ALLSTATE INVESTMENTS shall comply with all securities laws and other
laws applicable to the services provided under this Agreement.

     2.9  TRANSACTION PROCEDURES. The assets of the Account are or will be held
in custody in the State of ALNY by the bank custodian(s) appointed by ALNY from
time to time. ALLSTATE INVESTMENTS shall not act as custodian for the assets of
the Account and shall not under any circumstances have or be deemed to have
ownership, custody or physical control of any of the assets of the Account.
ALLSTATE INVESTMENTS may, however, issue instructions to, and communicate with,
the bank custodian for the Account as may be necessary and appropriate in
connection with provision of its services pursuant to this Agreement. At the
option of ALLSTATE INVESTMENTS, instructions by ALLSTATE INVESTMENTS to the bank
custodian may be made orally or by computer, electronic instruction systems or
telecommunications terminals. ALLSTATE INVESTMENTS will confirm that the bank
custodian has effected such instructions either by access to the bank's
computerized identification system or by telephonic confirmation. The bank
custodian will confirm with ALLSTATE INVESTMENTS receipt of trade instructions
orally or by computer for the Account. ALLSTATE INVESTMENTS will instruct all
brokers, dealers and counterparties executing orders on behalf of the assets of
the Account to forward to ALLSTATE INVESTMENTS and ALNY copies of all
confirmations. In the event ALLSTATE INVESTMENTS receives and collects monies
for the account of ALNY, ALLSTATE INVESTMENTS will not commingle such monies
with its own, but will deposit such monies in an appropriate ALNY account.

     2.10 STANDARD OF PERFORMANCE. ALLSTATE INVESTMENTS shall discharge its
duties hereunder at all times in good faith and with that degree of prudence,
diligence, care and skill which a prudent person rendering services as an
institutional investment manager and adviser would exercise under similar
circumstances. The provisions of this Agreement shall not be interpreted to
imply any obligation on the part of ALLSTATE INVESTMENTS to observe any standard
of care other than as set forth in this Section 2.10.

     2.11 RECORDKEEPING. ALLSTATE INVESTMENTS shall keep and maintain an
accurate and detailed accounting of each transaction concerning the assets of
the Account and of all receipts, disbursements, and other transactions relating
to the purchase and sale transactions arising hereunder. All such records shall
be kept in accordance with applicable laws and regulations, including, but not
limited to, ALNY Insurance Department Regulation 152. ALLSTATE INVESTMENTS
acknowledges that all such records shall be the property of ALNY and shall be
made available, within five (5) business days of a written request, to ALNY, its
accountants, auditors or other representatives of ALNY for inspection and/or
copying (at ALNY's expense) during regular business hours. In addition, ALLSTATE
INVESTMENTS

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will provide any materials, reasonably related to the investment advisory
services provided hereunder, as may be reasonably requested in writing by the
directors or officers of ALNY or as may be required by any governmental agency
with jurisdiction thereunder.

     ALLSTATE INVESTMENTS further agrees to prepare and furnish to ALNY and to
other persons designated by ALNY, at such regular intervals and other times as
may be specified by ALNY from time to time (a) such balance sheets, income and
expense statements and other financial statements and reports, and (b) such
other statements, reports and information, in each case regarding the assets of
the Account as ALNY shall from time to time reasonably direct.

     In the event of termination for any reason, all such records shall be
returned promptly to ALNY, free from any claim or retention of rights by
ALLSTATE INVESTMENTS.

     2.12 LIABILITY OF ALLSTATE INVESTMENTS. In the absence of ALLSTATE
INVESTMENTS' willful or negligent misconduct (or the willful or negligent
misconduct of its officers, directors, agents, employees, controlling persons,
shareholders, and any other person or entity affiliated with ALLSTATE
INVESTMENTS or retained by it to perform or assist in the performance of its
obligations under this Agreement), neither ALLSTATE INVESTMENTS nor any of its
officers, directors, employees or agents shall be subject to liability to ALNY
for any act or omission in the course of, or connected with, rendering services
hereunder.

     2.13 INDEPENDENT CONTRACTOR. ALLSTATE INVESTMENTS shall for all purposes be
deemed to be an independent contractor. ALLSTATE INVESTMENTS shall have no power
or authority to bind ALNY or to assume or create an obligation or
responsibility, express or implied, on behalf of ALNY, nor shall it represent to
anyone that it has such power or authority, except as expressly provided in this
Agreement. Nothing in this Agreement shall be deemed to create a partnership
between or among the parties, whether for purposes of taxation or otherwise.

     2.14 STATUS OF FACILITIES. No facility of ALLSTATE INVESTMENTS used in
performing services for ALNY shall be deemed to be transferred, assigned,
conveyed, or leased by performance or use pursuant to this Agreement.

     2.15 FEES. ALNY agrees to reimburse ALLSTATE INVESTMENTS for services
provided by ALLSTATE INVESTMENTS to ALNY pursuant to this Agreement. The charge
to ALNY for such services shall be at cost. Cost shall mean ALLSTATE
INVESTMENTS' actual costs and expenses fairly attributable to this Agreement.
     Subject to New York Insurance Department Regulation 33, the bases for
determining such charges to ALNY shall be those used by ALLSTATE INVESTMENTS for
internal cost distribution including, where appropriate, time records prepared
at least annually for this purpose.

     Cost analyses will be made at least annually by ALLSTATE INVESTMENTS to
determine, as closely as possible, the actual cost of services rendered to ALNY
hereunder. ALLSTATE INVESTMENTS shall forward to ALNY the information developed
by these analyses, and such information shall be used to develop bases for
distribution of expenses, which more currently reflect the actual incidence of
costs incurred by ALLSTATE INVESTMENTS on behalf of ALNY.

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     The fees provided for in this Section 2.15 are exclusive of any fees
charged or to be charged by any custodian under a separate custody agreement.
ALNY agrees that ALLSTATE INVESTMENTS may direct custodians of the Account to
make direct payment of fees due hereunder.

     2.16 PAYMENT. Within thirty (30) days after the end of each month, ALLSTATE
INVESTMENTS shall submit to ALNY, via an intercompany settlement process, a
statement of the amount owed by ALNY for services pursuant to this Agreement in
that month, and, unless such amount is disputed by ALNY, ALNY shall pay to
ALLSTATE INVESTMENTS within thirty (30) days following receipt of such statement
the amount set forth in the statement.

          If ALNY objects to any determination of the amount owed by ALNY, it
shall so advise ALLSTATE INVESTMENTS within thirty (30) days of receipt of
notice of said determination. Unless the parties can reconcile any such
objection, they shall agree to the selection of a firm of independent certified
public accountants, which shall determine the charges properly allocable to ALNY
and shall, within a reasonable time, submit such determination together with the
basis therefor, in writing to ALLSTATE INVESTMENTS and ALNY, whereupon such
determination shall be binding. The expenses of such a determination by a firm
of independent certified public accountants shall be borne equally by ALLSTATE
INVESTMENTS and ALNY.

     2.17 CONTACT PERSON(S). ALNY and ALLSTATE INVESTMENTS each shall appoint
one or more individuals who shall serve as contact person(s) for the purpose of
carrying out this Agreement. Such contact person(s) shall be authorized to act
on behalf of their respective parties as to the matters pertaining to this
Agreement. Effective upon execution of this Agreement, the initial contact
person(s) shall be those set forth in Appendix A. Each party shall notify the
other, in writing, as to the name, address, and telephone number of any
replacement for any such designated contact person.

     2.18 TERMINATION. This Agreement shall remain in effect until terminated by
either ALLSTATE INVESTMENTS or ALNY upon giving thirty (30) days or more advance
written notice. Upon termination, ALLSTATE INVESTMENTS shall promptly deliver to
ALNY all books and records that are, or are deemed by this Agreement to be, the
property of ALNY.

     2.19. SETTLEMENT ON TERMINATION. No later than thirty (30) days after the
effective date of termination of this Agreement, ALLSTATE INVESTMENTS shall
deliver to ALNY a detailed written statement for all fees due and not included
in any previous statement to the effective date of termination. The amount owed
shall be due and payable within thirty (30) days of receipt of such statement.

     2.20 CONFIDENTIALITY. ALNY agrees to give ALLSTATE INVESTMENTS any
information in its possession, which ALNY deems relevant to the suitability of
the investment strategy implemented by ALLSTATE INVESTMENTS, including
information on ALNY's liabilities, whether this information becomes known before
or after the adoption of the strategy. ALLSTATE INVESTMENTS shall keep any
information it obtains about ALNY's business or investment objectives and
results in confidence

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ARTICLE 3
                                  MISCELLANEOUS

     3.1  ASSIGNMENT. This Agreement and any rights pursuant hereto shall not be
assignable by either party hereto without the prior written consent of the other
party, except as set forth herein or by operation of law. Except as and to the
extent specifically provided in this Agreement, nothing in this Agreement,
expressed or implied, is intended to confer on any person other than the parties
hereto, or their respective legal successors, any rights, remedies, obligations,
or liabilities, or to relieve any person other than the parties hereto, or their
respective legal successors, from any obligations or liabilities that would
otherwise be applicable. The representations, warranties, covenants, and
agreements contained in this Agreement shall be binding upon, extend to and
inure to the benefit of the parties hereto, their, and each of their, successors
and assigns, respectively.

     3.2  GOVERNING LAW. This Agreement shall be governed by and construed and
enforced in accordance with the internal laws of the State of New York
applicable to contracts made and to be performed in that State without regard to
principles of conflict of laws.

     3.3  ARBITRATION. An unresolved dispute or difference between the parties
arising out of or relating to this Agreement, or the breach thereof, shall be
settled by arbitration in accordance with the Commercial Arbitration Rules of
the American Arbitration Association and the Expedited Procedures thereof. The
award rendered by the arbitrator shall be final and binding upon the parties,
and judgment upon the award may be entered in any court having jurisdiction
thereof. The arbitration shall take place in New York, New York.

     3.4  NOTICE. All notices, statements, or requests provided for hereunder
shall be deemed to have been duly given when delivered by hand to an officer of
the other party, or when deposited with the U.S. Postal Service, as first class
certified or registered mail, postage prepaid, overnight courier service, telex
or telecopier, addressed

          (a)  If to ALLSTATE INVESTMENTS, to:

                       Allstate Investments, LLC
                       3075 Sanders Road
                       Northbrook, IL 60062-7127
                       Attention: Investment Law (suite G5A)
                       Phone: (847) 402-6146
                       Facsimile: (847) 402-6649

          with concurrent copy to:

                       Allstate Investments, LLC
                       3075 Sanders Road
                       Northbrook, IL 60062-7127
                       Attention: Investment Department (Suite G3A)
                       Phone: (847) 402-7633
                       Facsimile: (847) 402-3902

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          (b)  If to ALNY, to:

                       Allstate Life Insurance Company of New York
                       One Allstate Drive
                       Farmingville, NY 11738
                       Attention: James Brazda
                       Phone: (847) 402-5686
                       Facsimile: (847) 326-5070

or to such other persons or places as each party may from time to time designate
by written notice sent as aforesaid.

     3.5  ENTIRE AGREEMENT. This Agreement, together with the Service Agreement,
as amended herein, and together with such amendments to this Agreement as may
from time to time be executed in writing by the parties, constitutes the entire
agreement and understanding between the parties in respect of the transactions
contemplated hereby.

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     3.6  SECTION HEADINGS. Section headings contained herein are for reference
purposes only and shall not affect the meaning or interpretation of this
Agreement.

     3.7  COUNTERPARTS. This Agreement may be executed in separate counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.

          IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed in duplicate by their respective officers duly authorized to do so, as
of the date and year first above written.

                                             ALLSTATE INSURANCE COMPANY

                                             By:
                                                 ------------------------------
                                             Name:
                                             Title:

                                             ALLSTATE INVESTMENTS, LLC

                                             By:
                                                 ------------------------------
                                             Name:
                                             Title:

                                             ALLSTATE LIFE INSURANCE COMPANY OF
                                             NEW YORK

                                             By:
                                                 ------------------------------
                                             Name:
                                             Title:

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                                    EXHIBIT A

                 INVESTMENT OBJECTIVE, POLICIES AND RESTRICTIONS

ALLSTATE INVESTMENTS will have full discretion to invest and reinvest the funds
made available to it for that purpose by ALNY as follows:

INVESTMENT OBJECTIVES

ALNY's investment objective is to obtain as high a level of current interest
income as is consistent, in the view of ALLSTATE INVESTMENTS, with preservation
of investment capital. There are market risks inherent in all investments in
securities, and there can be no assurance that ALLSTATE INVESTMENTS will achieve
this objective. The primary objective of preserving capital will preclude
realization of the highest available income yields.

INVESTMENT POLICIES

ALLSTATE INVESTMENTS will seek to achieve the above-stated objective by
investing in a diversified portfolio of securities. In selecting securities for
this portfolio, ALLSTATE INVESTMENTS will seek the highest available yields
consistent with the rating standards and other policies stated herein.
Portfolio securities will be selected pursuant to the following fundamental
investment policies:
1.   CASH BALANCES. Cash balances occurring pending permanent investment will be
     invested in high grade, corporate commercial paper. The corporate paper
     must have the highest rating by one or more of the nationally recognized
     rating organizations. Other acceptable short-term investments include U.S.
     Treasury bills and notes, certificates of deposit, time deposits, bankers
     acceptances and money market funds.
2.   CORPORATE BONDS. The purchases of corporate bonds will include bonds,
     notes, debentures and other evidences of indebtedness issued, assumed or
     guaranteed by a corporation incorporated under the laws of the United
     States of America, of any state, district or territorial possession thereof
     or of the Dominion of Canada or any province thereof; provided that the
     bonds are rated class 1 or 2 by the Securities Valuation Office ("SVO") of
     the National Association of Insurance Commissioners ("NAIC").
3.   GOVERNMENT OBLIGATIONS. The purchase of government obligations will include
     bonds, notes, bills and other evidences of indebtedness issued, assumed or
     guaranteed by the U.S. Government, its agencies or instrumentalities or of
     any state or municipality thereof or of the Dominion of Canada or any
     province thereof; provided the bonds are rated class 1 or 2 by the SVO of
     the NAIC.
4.   MORTGAGE-BACKED SECURITIES. The purchase of mortgage-backed securities will
     include obligations issued by:
     A.   The Government National Mortgage Association (GNMA)
     B.   The Federal National Mortgage Association (FNMA)
     C.   The Federal Home Loan Mortgage Corporation (FHLMC)

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     D.   FHA and VA insured or guaranteed loans, or any other government
          guaranteed loans.

5.   EQUITY SECURITIES. Equity securities are defined to include preferred
     stocks, mutual funds shares or common stocks which are traded on a national
     stock exchange, provided that the preferred stocks are rated class 1 or 2
     by the SVO of the NAIC.

INVESTMENT RESTRICTIONS

In the course of its investment management activity for ALNY, ALLSTATE
INVESTMENTS MAY NOT engage in or execute transactions in any of the following:
1.   Borrow money for any purpose on behalf of ALNY.
2.   Pledge, mortgage or hypothecate the assets of ALNY.
3.   Purchase the securities of any non-government issuer if, as a result, more
     than 10% of the total assets of the portfolio would be invested in the
     securities of the issuer.
4.   Invest more than 25% of the portfolio, measured at the time of investment,
     in a single industry. For the purpose of this restriction, mortgage-backed
     securities do not constitute an industry.
5.   Enter into any investment which would violate the ALNY Insurance Law.
6.   Purchase or sell investments, other than portfolio investments listed in
     policies 1 through 5 under Investment Policies above, without the prior
     written approval of ALNY.

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                                   APPENDIX A

CONTACT PERSON(S) FOR ALLSTATE INVESTMENTS:

                       Allstate Investments, LLC
                       3075 Sanders Road
                       Northbrook, IL 60062-7127
                       Attention: Investment Law (suite G5A)
                       Phone: (847) 402-6146
                       Facsimile: (847) 402-6649

               with concurrent copy to:

                       Allstate Investments, LLC
                       3075 Sanders Road
                       Northbrook, IL 60062-7127
                       Attention: Investment Department (Suite G3A)
                       Phone: (847) 402-7633
                       Facsimile: (847) 402-3902

CONTACT PERSON(S) FOR ALNY:

                       Allstate Life Insurance Company of New York
                       One Allstate Drive
                       Farmingville, NY 11738
                       Attention: James Brazda
                       Phone: (847) 402-5686
                       Facsimile: (847) 326-5070