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

                          -----------------------

                                  FORM 10-K

                          -----------------------

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

                 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2005

                                     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)

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


  829 AMERIPRISE FINANCIAL CENTER, MINNEAPOLIS, MINNESOTA                  55474
  --------------------------------------------------------------           -------------------------------------------
  (Address of principal executive offices)                                 (Zip Code)
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     REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (612) 671-3131
                                                         --------------

      SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE

      SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: NONE

Indicate by check mark if the registrant is a well-known seasoned issuer,
as defined in Rule 405 of the Securities Act.                  Yes [ ]  No [X]

Indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or 15(d) of the Act.                    Yes [ ]  No [X]

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 if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [Not Applicable]

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

Indicate by check mark whether the registrant is a shell company (as defined
in Rule 12b-2 of the Exchange Act).                            Yes [ ]  No [X]

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

               Class                          Outstanding at March 9, 2006
               -----                          ----------------------------
Common Stock (par value $30 per share)              100,000 shares

All outstanding shares of the registrant are directly owned by Ameriprise
Financial, Inc.

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

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                                           TABLE OF CONTENTS
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FORM 10-K
ITEM NUMBER
PART I                                                                                             PAGE
<S>                                                                                                <C>
1.       Business.................................................................................   1
1A.      Risk Factors.............................................................................  10
1B.      Unresolved Staff Comments................................................................  19
2.       Properties...............................................................................  19
3.       Legal Proceedings........................................................................  19
4.       Submission of Matters to a Vote of Security Holders......................................  19
PART II
5.       Market for Registrant's Common Equity, Related Stockholder Matters
         and Issuer Purchases of Equity Securities................................................  20
6.       Selected Financial Data..................................................................  20
7.       Management's Discussion and Analysis of Consolidated Financial Condition and Results
         of Operations............................................................................  21
7A.      Quantitative and Qualitative Disclosures About Market Risk...............................  37
8.       Financial Statements and Supplementary Data..............................................  37
9.       Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.....  38
9A.      Controls and Procedures..................................................................  38
9B.      Other Information........................................................................  39
10.      Directors and Executive Officers of the Registrant.......................................  39
11.      Executive Compensation...................................................................  39
12.      Security Ownership of Certain Beneficial Owners and Management and Related
         Stockholder Matters......................................................................  39
13.      Certain Relationships and Related Transactions...........................................  39
PART III
14.      Principal Accounting Fees and Services...................................................  40
PART IV
15.      Exhibits, Financial Statement Schedules..................................................  41
         Signatures...............................................................................  42
         Index to Financial Statements............................................................  F-1
         Exhibit Index............................................................................  E-1
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                                   PART I
                                   ------
ITEM 1.  BUSINESS

                                INTRODUCTION
                                ------------

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

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

     o   American Enterprise Life Insurance Company (American Enterprise
         Life) is a stock life insurance company domiciled in Indiana, which
         holds Certificates of Authority in the District of Columbia and all
         states except New York. American Enterprise Life issues fixed and
         variable annuity contracts primarily through regional and national
         financial institutions and regional and/or independent
         broker-dealers. (In past years, American Enterprise Life issued a
         nominal number of variable universal life contracts.)

     o   American Partners Life Insurance Company (American Partners Life)
         is a stock life insurance company domiciled in Arizona, which holds
         Certificates of Authority in the District of Columbia and all
         states except New York and New Hampshire. American Partners Life
         markets annuity products directly to customers, generally persons
         holding an American Express(R) Card.

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

     o   American Centurion Life Assurance Company (American Centurion Life)
         is a stock life insurance company domiciled in New York, which
         holds Certificates of Authority in New York, Alabama and Delaware.
         American Centurion Life issues fixed and variable annuity contracts
         primarily through financial institutions and independent
         broker-dealers. American Centurion Life also markets annuity
         products directly, generally to persons holding an American
         Express(R) Card.

IDS Life Insurance Company also owns IDS REO 1, LLC, IDS REO 2, LLC and
American Enterprise REO 1, LLC which hold real estate investments. IDS Life
Insurance Company and its seven subsidiaries are referred to collectively in
this Form 10-K as "IDS Life".

Business sold through the retail distribution channel of Ameriprise
Financial Services, Inc., a subsidiary of Ameriprise Financial, for IDS Life
Insurance Company and IDS Life of New York represents the majority of IDS
Life's business, whereas business sold through third party distribution by
American Enterprise Life and American Centurion Life and business sold
directly to consumers by American Partners Life and American Centurion Life
represent a smaller portion of IDS Life's business. Ameriprise Financial
Services, Inc. serves as the distributor of variable products issued by the
four operating subsidiaries of IDS Life. IDS Life Insurance Company serves
as distributor for the variable products it issues.




                                     1

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

                      AMERIPRISE FINANCIAL'S NEW BRAND
                      --------------------------------

In connection with the separation, Ameriprise Financial launched a new brand
name strategy for its businesses. In October 2005, it began marketing
products, including insurance and annuities, under the RiverSource brand.
The transition of the insurance and annuity products to the RiverSource
brand is expected to be completed by the end of 2006.

Ameriprise Financial will streamline the organizational structure of its
insurance business by consolidating certain of its insurance subsidiaries at
year-end 2006. This organization will incorporate the new RiverSource
branding strategy into the names of Ameriprise Financial's insurance company
subsidiaries and is expected to result in certain expense and
capital-deployment efficiencies. It is expected that the formal legal entity
consolidation and legal entity name changes with respect to the insurance
company subsidiaries will not be complete until year-end 2006 due to the
time required to obtain all necessary state regulatory approvals.

                    ANNUITIES: PRODUCT FEATURES AND RISKS
                    -------------------------------------

IDS Life offers both fixed and variable annuity products to a broad range of
consumers through multiple distribution channels. Variable and fixed
annuities issued by IDS Life may be deferred, where assets accumulate until
the contract is surrendered, the contract owner (or in some contracts, the
annuitant) dies, or the contract owner or annuitant begins receiving
benefits under an annuity payout option; or immediate, where payments begin
within one year of issue and continue for life or for a fixed period of
time.

IDS Life is one of the largest issuers of annuities in the United States.
For the year ended December 31, 2005, on a consolidated basis, our variable
annuity products ranked 11th in new sales of variable annuities according to
VARDS. IDS Life had fixed and variable annuity cash sales in 2005 of $7.6
billion, up from 2004 as a result of a 41% increase in variable annuities,
partially offset by a decrease in fixed annuities. The relative proportion
between fixed and variable annuity sales is generally driven by the relative
performance of the equity and fixed income markets. In times of lackluster
performance in equity markets, fixed sales are generally stronger. In times
of superior performance in equity markets, variable sales are generally
stronger. The relative proportion between fixed and variable annuity sales
is also influenced by product design and other factors. IDS Life receives
fees charged on assets allocated to its separate accounts. Investment
management performance is critical to the profitability of the annuity
business.



                                     2

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VARIABLE ANNUITIES
A variable annuity provides a contract owner with investment returns linked
to the underlying investment options of the contract owner's choice. Most
variable annuity products in force offer a fixed account investment option
with guaranteed minimum interest crediting rates ranging up to 4.0% as of
December 31, 2005.

Contract purchasers can choose to add various optional benefit provisions to
meet their needs. These include enhanced guaranteed minimum death benefit
(GMDB), guaranteed minimum withdrawal benefit (GMWB), guaranteed minimum
income benefit (GMIB) and guaranteed minimum accumulation benefit (GMAB)
provisions. In general, these provisions can help protect contract owners
and beneficiaries from a shortfall in death or living benefits due to a
decline in the value of their underlying investment accounts.

Innovative features for annuity products have continued to evolve. These
features include GMDBs. Under the RiverSource Retirement Advisor Advantage
Plus(SM) Variable Annuities, the standard GMDB provides that if the contract
owner is age 75 or younger on the date the contract is issued, the
beneficiary will receive the greater of (i) contract value less any purchase
payment credits subject to recapture less a pro-rata portion of any rider
fees, or (ii) purchase payments minus adjusted partial surrenders. If the
contract owner is age 76 or older at contract issue, the beneficiary will
receive the contract value, less any purchase payment credits subject to
recapture and less a pro-rata portion of any rider fees.

Additional optional GMDBs are also available. For example, RiverSource
Retirement Advisor Advantage Plus(SM) Variable Annuity contract owners age 76
or older at contract issue may purchase the optional Return of Purchase
Payment Death Benefit for an additional charge which adds the return of
purchase payments less adjusted partial surrenders to the standard death
benefit. Contract owners may also purchase a maximum anniversary value death
benefit or a five-year maximum anniversary value death benefit for an
additional charge. These death benefit riders guarantee to pay the
beneficiary the maximum account value on any contract anniversary or any
fifth contract anniversary, plus subsequent purchase payments less adjusted
partial surrenders. IDS Life's contract owners also may purchase an
enhanced earnings death benefit or an enhanced earnings plus death benefit
for an additional charge. These death benefit riders are intended to provide
additional benefits to offset expenses after the contract owner's death.

Innovative features for annuity products also include the GMWB, designed to
protect the contract owner's principal by allowing the client to withdraw
the principal over a period of time, regardless of the investment
performance of the contract.

Variable annuity contract owners age 79 or younger at contract issue can
also obtain the principal-back guarantee by purchasing the optional GMAB
rider for an additional charge, which provides a guaranteed contract value
at the end of a ten-year waiting period. The guaranteed value is the total
amount of purchase payments made minus any withdrawals, regardless of the
investment performance of the contract.

American Enterprise Life and other subsidiaries of IDS Life also offer
variable annuities with a variety of GMDB features and certain optional
"living" benefits, i.e. GMWB, GMIB and GMAB. For example, American
Enterprise Life issues certain variable annuity contracts that contain a
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 that may be in excess of what
the contract account value can purchase at then-current annuity purchase
rates. American Enterprise Life bears the risk that protracted
under-performance of the financial markets could result in GMIB being higher
than what accumulated contract owner account balances would support.




                                     3

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The general account assets of IDS Life support the contractual obligations
under the guaranteed benefit riders IDS Life issues (see "General and
Variable Account Assets--The General Account" below). As a result, IDS Life
bears the risk that protracted under-performance of the financial markets
could result in guaranteed benefit payments being higher than what current
account values would support. IDS Life's exposure to risk from guaranteed
benefits generally will increase when equity markets decline.

IDS Life's largest-selling variable annuities are the RiverSource Retirement
Advisor Plus(SM) series of variable annuities, which include the RiverSource
Retirement Advisor Advantage Plus(SM) Variable Annuity and the RiverSource
Retirement Advisor Select Plus(SM) Variable Annuity (the Retirement Advisor
Plus(SM) Variable Annuities).

FIXED ANNUITIES
IDS Life's fixed annuity products provide a contract owner with a cash value
that increases by a fixed or indexed interest rate. Fixed rates are
periodically reset at the discretion of IDS Life subject to certain policy
terms establishing minimum guaranteed interest crediting rates. IDS Life's
earnings from fixed annuities are based upon the spread between rates earned
on assets purchased with fixed annuity deposits and the rates at which
interest is credited to its fixed annuity contracts.

IDS Life resets interest rates based on a number of factors, including
interest rate scenario models and risk/return measures. The fixed annuity
contracts in force provide guaranteed minimum interest crediting rates
ranging from 1.5% to 5.0% as of December 31, 2005. In 2003, and in response
to a declining interest rate environment, several states adopted an interim
regulation allowing for a guaranteed minimum interest crediting rate of 1.5%
and/or a model regulation providing for a guaranteed indexed rate and have
now adopted regulations that mirror the National Association of Insurance
Commissioners (NAIC) model regulation for a guaranteed index rate. In
response, IDS Life filed a number of contract changes in recent years to
implement lower minimum guarantees. IDS Life will continue to implement
contract changes as states continue to adopt the new model regulation or as
the interim regulation expires according to its terms.

                   INSURANCE: PRODUCT FEATURES AND RISKS
                   -------------------------------------

IDS Life issues a wide range of insurance products, each described below.
IDS Life's sales of individual life insurance in 2005, as measured by
scheduled annual premiums, excluding lump sum and excess premiums, consisted
of 89% variable universal life, 2% fixed universal life and 9% traditional
life. IDS Life issues only non-participating life insurance policies, which
do not pay dividends to policyholders from the insurers' earnings. One of
the major risks inherent in life insurance is the risk that mortality will
be greater than anticipated. As discussed below, reinsurance is critical for
IDS Life to mitigate this risk.

VARIABLE UNIVERSAL LIFE INSURANCE
IDS Life's best-selling life insurance products are variable universal life
insurance policies. Variable universal life insurance provides life
insurance coverage along with investment returns linked to underlying
investment accounts of the policyholder's choice. Options may include
Ameriprise Financial's Variable Portfolio Funds as well as funds of other
companies. Variable universal life insurance products in force offered a
fixed account investment option with guaranteed minimum interest crediting
rates ranging from 3.0% to 4.5% as of December 31, 2005. For the year
ended December 31, 2005, IDS Life ranked first in sales of variable
universal life based on total premiums (according to the Tillinghast
Towers-Perrin Value(TM) Survey). IDS Life's major source of revenue from
variable universal life insurance is cost of insurance and other charges.




                                     4

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IDS Life's variable life insurance products include RiverSource(SM) Variable
Universal Life IV and RiverSource(SM) Variable Universal Life IV - Estate
Series, which are individual flexible premium life insurance policies. The
Estate Series policy is available to policyholders with initial specified
insurance coverage of $1 million or more. IDS Life also issues RiverSource(SM)
Succession Select Variable Life Insurance (Succession Select), a flexible
premium survivorship variable life insurance policy that insures two lives.
Succession Select is often used for estate planning purposes. Finally, IDS
Life issues RiverSource(SM) Single Premium Variable Life, an individual single
premium variable life insurance policy.

FIXED UNIVERSAL LIFE INSURANCE AND TRADITIONAL WHOLE LIFE INSURANCE
Fixed universal life and traditional whole life insurance policies do not
subject the policyholder to the investment risks associated with variable
universal life insurance.

IDS Life's fixed universal life insurance products provide life insurance
coverage and cash value that increases by a fixed interest rate. The rate is
periodically reset at the discretion of the issuing company subject to
certain policy terms relative to minimum interest crediting rates. Universal
life insurance products in force provided guaranteed minimum interest
crediting rates ranging from 4.0% to 5.0% as of December 31, 2005.

IDS Life's universal life insurance products as of December 31, 2005
included Life Protection Plus, Life Protection Select and Life Protection
Select-Estate Series. The Estate Series policy is available to policyholders
with initial specified insurance coverage of $1 million or more. In January
2006, IDS Life introduced two new universal life products, RiverSource
Foundations(SM) Universal Life and RiverSource Foundations Protector(SM)
Universal Life. Both products are also available to policyholders as an
estate series when the initial specified insurance coverage is $1 million or
more. The guaranteed minimum interest crediting rate is 3.0%.

IDS Life also offers non-participating traditional whole life insurance,
which combines a death benefit with a cash value that generally increases
gradually in amount over a period of years and does not pay a dividend. IDS
Life has sold very little traditional whole life insurance in recent years.

TERM LIFE INSURANCE
IDS Life offers term life insurance. Term life insurance only provides a
death benefit, does not build up cash value and does not pay a dividend. The
policyholder chooses the term of coverage with guaranteed premiums at the
time of issue. During the chosen term, IDS Life cannot raise premium rates
even if claims experience were to deteriorate. At the end of the chosen
term, coverage may continue with higher premiums until the maximum age is
attained, at which point the policy expires with no value.

DISABILITY INCOME INSURANCE
IDS Life also issues disability income (DI) insurance. For the nine months
ended September 30, 2005, IDS Life was ranked as the eighth largest provider
of individual DI insurance based on premiums (according to LIMRA
International). DI insurance provides monthly benefits to individuals who
are unable to earn income at either their occupation at time of disability
("own occupation") or at any suitable occupation ("any occupation").
Depending upon occupational and medical underwriting criteria, applicants
for DI insurance can choose "own occupation" and "any occupation" coverage
for varying benefit periods up to age 65. In some states, applicants may
also choose various benefit riders to help them integrate individual DI
insurance benefits with social security or similar benefit plans and to help
them protect their DI insurance benefits from the risk of inflation.

LONG-TERM CARE INSURANCE
As of December 31, 2002, IDS Life generally discontinued underwriting
long-term care (LTC) insurance. Although new product sales were discontinued
in the fourth quarter of 2002, IDS Life retained 50% of the risk on existing
contracts and ceded the remaining 50% of the risk to General Electric
Capital Assurance Company (GECA), one of the Genworth Financial insurance
companies. In addition, in May 2003, IDS Life began outsourcing claims
administration on its existing block of LTC policies to GECA.


                                     5

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Beginning in 2004, IDS Life filed for approval to implement rate increases
on its existing block of nursing home-only indemnity LTC insurance policies.
Implementation of these rate increases began in early 2005, and approvals
have been received in over 45 states, covering over 83% of the eligible
premiums, with an average approved rate increase of 32.1%. Implementation is
expected to continue through 2006.

                     GENERAL AND VARIABLE ACCOUNT ASSETS
                     -----------------------------------

Depending on the life insurance and annuity product purchased, the assets of
IDS Life's policyholders and contractholders may be placed in the general
account of IDS Life (the general account) for fixed products and for the
fixed account options under certain variable products or, in the case of
variable life insurance and variable annuity products, in separate accounts
that invest in underlying investment options (the variable account).

THE GENERAL ACCOUNT
Assets in the general account support all obligations of IDS Life other than
those supported by the separate accounts. IDS Life bears the investment risk
of the general account assets.

In the general account, IDS Life, through its investment manager,
RiverSource Investments, LLC, primarily invests in fixed maturity securities
over a broad range of maturities for the purpose of providing a targeted
rate of return on its investments while controlling risk. The majority of
these fixed maturity securities are interest-bearing investments such as
government obligations, mortgage-backed obligations and various corporate
debt instruments. IDS Life does not invest in securities to generate trading
profits.

In accordance with regulatory investment guidelines, IDS Life Insurance
Company and its subsidiaries, through their respective boards of directors
or board of directors' investment committees or staff functions, review
models projecting different interest rate scenarios, risk/return measures,
and their effect on profitability. They also review the distribution of
assets in the portfolio by type and credit risk sector. The objective is to
structure the investment securities portfolio in the general account to meet
contractual obligations under the insurance and annuity products and achieve
targeted levels of profitability within defined risk parameters.

IDS Life has the discretion to set the rate of interest credited to contract
owners' accounts subject to each contract's guaranteed minimum interest
crediting rate. As of December 31, 2005, this rate varied among fixed
accounts and was as low as 1.5% and as high as 6.9%. To the extent the yield
on IDS Life's invested general account asset portfolio declines below its
target spread plus the minimum guarantee, IDS Life's profitability would be
negatively affected.

The interest rates credited to contract owners' fixed accounts generally
reset towards new business rates; therefore, margins may be negatively
impacted by increases in the general level of interest rates. Part of IDS
Life's strategy includes the use of derivatives, such as interest rate
swaptions, for risk management purposes. These derivatives help protect
margins by increasing investment returns if there is a sudden and severe
rise in interest rates, thereby lessening the impact of an increase in rates
credited to contract owners' fixed accounts. Conversely, in a low interest
rate environment, such as that experienced recently, margins may be
negatively impacted as the interest rates available on IDS Life's invested
assets approach guaranteed minimum interest rates on the insurance or
annuity contracts in force. This negative impact may be compounded by the
fact that many of these interest-bearing investments are callable or
pre-payable by the issuer and calls and prepayments are more likely to occur
in a low interest rate environment. In light of the interest rate
environment in 2003, when interest rates were at relative lows, IDS Life
imposed a fixed account allocation and transfer requirement for new variable
annuity sales in 2003. These requirements were relaxed slightly beginning in
2004 with the introduction of lower guaranteed minimum interest rates.




                                     6

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THE VARIABLE ACCOUNTS
Variable insurance and annuity products offer variable account investment
options. In addition, many of these products offer fixed account options.
Under the variable account option, contract owners bear the investment risk.
The variable accounts are registered as unit investment trusts under the
Investment Company Act of 1940. State insurance law prescribes that variable
accounts constitute a separate operation from the general account and as
such are only available to fund the liabilities of the separate accounts.
Under the subaccounts of each variable account, IDS Life credits or
charges income, capital gains and losses only to that subaccount.

Generally, the variable accounts consist of a number of subaccounts, each of
which invests in shares of a particular fund. Contract owners can allocate
their payments among these variable subaccounts. The underlying funds are
managed both by affiliated and unaffiliated third-party money managers.
These funds invest in portfolios containing a variety of securities
including common stocks, bonds, managed assets and/or short-term securities.
The value of the subaccounts fluctuates with the investment return of the
underlying funds in which the subaccounts invest.

IDS Life's major source of revenue from the variable annuities it issues is
the fees it receives, including mortality and expense risk and other fees,
including payments from its affiliate, RiverSource Investments, LLC for
providing certain sponsor and related servicing activity. In addition, IDS
Life also receives marketing and administrative support payments from the
affiliates of other companies' funds included as investment options in its
variable annuity and variable life insurance products. These fees vary based
on the level of variable account assets. Prior to the fourth quarter of
2003, these fees included investment advisory fees as IDS Life served as the
investment manager for affiliated variable portfolio mutual funds. In the
fourth quarter of 2003, Ameriprise Financial replaced IDS Life as the
investment manager and assumed these duties for the mutual funds and
retained IDS Life to provide certain underlying sponsor and related
services. At that time, IDS Life began receiving internal allocation
payments from Ameriprise Financial as compensation for providing these
non-investment advisory services. In the fourth quarter of 2005, RiverSource
Investments, LLC replaced Ameriprise Financial as the investment manager. As
a result, IDS Life now receives internal allocation payments as compensation
from RiverSource Investments, LLC for providing these non-investment
advisory services.

                                 COMPETITION
                                 -----------

IDS Life competes with other insurers and product manufacturers including
insurance companies, such as Hartford, Metlife, Lincoln National and
Nationwide, as well as certain banks, securities brokerage firms,
independent financial advisors and other financial intermediaries that
market insurance, annuities, mutual funds, retirement accounts and other
financial products.

Competitive factors affecting the sale of IDS Life's insurance and/or
annuity products include:

     o   financial strength ratings from agencies such as A.M. Best;
     o   the breadth, quality, design and pricing of products and services
         offered;
     o   guaranteed benefit features;
     o   the quality of underwriting;
     o   the effectiveness of advertising and promotion campaigns;
     o   reputation and recognition in the marketplace;
     o   distribution capabilities and compensation; and
     o   the quality of customer service.




                                     7

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                                 REGULATION
                                 ----------

The Minnesota Department of Commerce (Insurance Division), the Indiana
Department of Insurance, and the Arizona Department of Insurance
(collectively, and with the New York State Insurance Department, the
"Domiciliary Regulators") regulate IDS Life Insurance Company, American
Enterprise Life and American Partners Life, respectively. The New York State
Insurance Department regulates American Centurion Life and IDS Life of New
York.

In addition to being regulated by their Domiciliary Regulators, IDS Life
Insurance Company and its four life insurance subsidiaries are regulated by
each of the insurance regulators in the states where each is authorized to
transact the business of insurance. The other states also regulate such
matters as the licensing of sales personnel and, in some cases, the
marketing and contents of insurance policies and annuity contracts. The
primary purpose of such regulation and supervision is to protect the
interests of contractholders and policyholders. Financial regulation of IDS
Life is extensive and its financial and intercompany transactions (such as
intercompany dividends, capital contributions and investment activity) are
often subject to pre-notification and continuing evaluation by the
Domiciliary Regulators. Virtually all states require participation in
insurance guaranty associations, which assess insurance companies in order
to fund claims of policyholders and contractholders of insolvent insurance
companies.

Insurance companies have recently been the subject of increasing regulatory,
legislative and judicial scrutiny. Numerous state and federal regulatory
agencies have commenced investigations regarding sales and marketing
practices, compensation arrangements and anticompetitive activities, and
market timing and late trading in connection with insurance, annuity and
mutual fund products. IDS Life has been contacted by regulatory agencies for
information relating to some of these investigations and is cooperating with
those inquiries. IDS Life has reviewed its compensation arrangements and
other operations that may be affected by these regulatory investigations. In
addition, IDS Life is reviewing the legal precedents and new industry-wide
legislation, rules and regulations that may arise from ongoing
investigations.

At the federal level, there is periodic interest in enacting new regulations
relating to various aspects of the insurance industry, including taxation of
annuities and life insurance policies, accounting procedures, and the
treatment of persons differently because of gender, with respect to terms,
conditions, rates or benefits of an insurance policy. Adoption of any new
federal regulation in any of these areas could potentially have an adverse
effect upon IDS Life. Also, recent federal legislative proposals aimed at
the promotion of tax-advantaged savings may adversely impact IDS Life's
sales of annuity and life insurance products if enacted.

                         FINANCIAL STRENGTH RATINGS
                         --------------------------

IDS Life Insurance Company receives ratings from independent rating
agencies. Ratings are important to maintaining public confidence in IDS
Life. Lowering of IDS Life's ratings could have a material adverse effect on
its ability to market its products and could lead to increased surrenders.
Rating agencies continually evaluate the financial soundness and
claims-paying ability of insurance companies based on a number of different
factors.

More specifically, the ratings assigned are developed from an evaluation of
a company's balance sheet strength, operating performance and business
profile. Balance sheet strength reflects a company's ability to meet its
current and ongoing obligations to its policyholders and includes analysis
of a company's capital adequacy. The evaluation of operating performance
centers on the stability and sustainability of a company's source of
earnings. The analysis of business profile reviews a company's mix of
business, market position and depth and experience of management. The
ratings relate to an insurer's general account and not to the management or
performance of the variable accounts.




                                     8

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<PAGE>



Generally, IDS Life Insurance Company's four insurance subsidiaries do not
receive an individual rating, but receive the same rating as IDS Life
Insurance Company. IDS Life Insurance Company is currently rated "A+"
(Superior) by A.M. Best Company, Inc. and its claims-paying
ability/financial strength was rated "Aa3" (Excellent) by Moody's Investors
Service, Inc. (Moody's), "AA-" (Very Strong) by Fitch, and "AA-" (Very
Strong) by Standard & Poor's.

                                 REINSURANCE
                                 -----------

IDS Life reinsures a portion of the insurance risks associated with its life
and LTC insurance products through reinsurance agreements with unaffiliated
insurance companies. Reinsurance is used in order to limit losses, minimize
exposure to large risks, provide additional capacity for future growth and
to effect business-sharing arrangements. IDS Life evaluates the financial
condition of reinsurers to manage exposure to significant losses from
reinsurer insolvencies. IDS Life remains primarily liable as the direct
insurer on all risks reinsured.

Generally, IDS Life reinsures 90% of the death benefit liability related to
fixed and variable universal life and term life insurance products. IDS Life
began reinsuring risks at this level beginning in 2001 for term life
insurance and 2002 for variable and universal life insurance. Policies
issued prior to these dates are not subject to these same reinsurance
levels. The maximum amount of life insurance risk retained by IDS Life is
$750,000 on any policy insuring a single life and $1.5 million on any
flexible premium survivorship variable life policy. For existing LTC
policies, IDS Life retained 50% of the risk and the remaining 50% of the
risk was ceded to GECA. Risk on variable life and universal life policies is
reinsured on a yearly renewable term basis. Risk on recent term life and LTC
policies is reinsured on a coinsurance basis.

IDS Life retains all risk for new claims on DI contracts. Risk is currently
managed by limiting the amount of disability insurance written on any one
individual. IDS Life also retains all risk on accidental death benefit and
waiver of premium risk.

                             RISK-BASED CAPITAL
                             ------------------

The NAIC defines Risk-Based Capital (RBC) requirements for life insurance
companies. The RBC requirements are used by the NAIC and state insurance
regulators to identify companies that merit regulatory action designed to
protect policyholders. The NAIC RBC report is completed as of December 31
and filed annually, along with the statutory financial statements.

IDS Life Insurance Company would be subject to various levels of regulatory
intervention if its total adjusted statutory capital were to fall below the
RBC requirement. At the "company action level," defined as total adjusted
capital level between 100% and 75% of the RBC requirement, an insurer must
submit a plan for corrective action with its primary state regulator. The
"regulatory action level," which is between 75% and 50% of the RBC
requirement, subjects an insurer to examination, analysis and specific
corrective action prescribed by the primary state regulator. If a company's
total adjusted capital falls between 50% and 35% of its RBC requirement,
referred to as "authorized control level," the insurer's primary state
regulator may place the insurer under regulatory control. Insurers with
total adjusted capital below 35% of the requirement will be placed under
regulatory control.

At December 31, 2005, IDS Life Insurance Company's company action level RBC
was $751.0 million, and the corresponding total adjusted capital was
approximately $3.3 billion, which represents 435% of the company action
level RBC.

As described above, IDS Life Insurance Company maintains capital well in
excess of the company action level required by the Minnesota Department of
Commerce, its primary regulator.



                                     9

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ITEM 1A. RISK FACTORS

If any of the following risks and uncertainties develops into actual events,
these events could have a material adverse effect on IDS Life's business,
financial condition or results of operations. Based on current information,
the following information identifies the most significant risk factors
affecting IDS Life in each of these categories of risk. However, the risks
and uncertainties IDS Life faces are not limited to those described below.
Additional risks and uncertainties which are not presently known or which
are currently believed to be immaterial may also adversely affect IDS Life's
business.

                    RISKS RELATING TO IDS LIFE'S BUSINESS
                    -------------------------------------

INTEREST RATE FLUCTUATIONS COULD ADVERSELY AFFECT IDS LIFE'S BUSINESS AND
PROFITABILITY.

IDS Life's insurance and annuity products are sensitive to interest rate
fluctuations, and its future costs associated with such variations may
differ from its historical costs. In addition, interest rate fluctuations
could result in fluctuations in the valuation of certain minimum guaranteed
benefits contained in some of its variable annuity products.

During periods of increasing market interest rates, IDS Life must offer
higher crediting rates on interest-sensitive products, such as fixed
universal life insurance and fixed annuities, and it must increase crediting
rates on insurance and annuity products to keep these products competitive.
Because returns on invested assets may not increase as quickly as current
interest rates, IDS Life may have to accept a lower "spread," or the
difference between the returns it earns on the investments that support its
obligations under these products and the amounts that it must pay
policyholders and contractholders, and thus lower profitability or face a
decline in sales and greater loss of existing contracts and related assets.
In addition, increases in market interest rates may cause increased policy
surrenders, withdrawals from life insurance policies and annuity contracts
and requests for policy loans, as policyholders and contractholders seek to
shift assets to products with perceived higher returns. This process may
lead to an earlier than expected flow of cash out of the business. Also,
increases in market interest rates may result in extension of the maturity
of some of IDS Life's investment assets. These earlier outflows and asset
maturity extensions may require investment assets to be sold at a time when
the prices of those assets are lower because of the increase in market
interest rates, which may result in realized investment losses. Increases in
crediting rates, as well as surrenders and withdrawals, could have an
adverse effect on IDS Life's financial condition and results of operations.
An increase in policy surrenders and withdrawals also may require IDS Life
to accelerate amortization of deferred policy acquisition costs (DAC), which
would increase its expenses and reduce its net earnings.

During periods of falling interest rates, IDS Life's spread may be reduced.
Because IDS Life may adjust the interest rates it credits on most of these
products downward only at limited, pre-established intervals, and because
some of them have guaranteed minimum crediting rates, its spreads could
decrease and potentially become negative.

Interest rate fluctuations also could have an adverse effect on the results
of IDS Life's investment portfolio. During periods of declining market
interest rates, the interest IDS Life receives on variable interest rate
investments decreases. In addition, during those periods, IDS Life is forced
to reinvest the cash it receives as interest or return of principal on its
investments in lower-yielding high-grade instruments or in lower-credit
instruments to maintain comparable returns. Issuers of fixed income
securities also may decide to prepay their obligations in order to borrow at
lower market rates, which exacerbates the risk that IDS Life may have to
invest the cash proceeds of these securities in lower-yielding or
lower-credit instruments.

For additional information regarding the sensitivity of the fixed income
securities in IDS Life's investment portfolio to interest rate fluctuations,
see "Management's Discussion and Analysis of Financial Condition and Results
of Operations-- Risk Management."


                                     10

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<PAGE>

POOR INVESTMENT PERFORMANCE IN IDS LIFE'S PRODUCTS COULD ADVERSELY AFFECT
ITS FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

IDS Life believes that investment performance is an important factor in the
growth of its variable annuity and variable life insurance business. Poor
investment performance could impair revenues and earnings, as well as IDS
Life's prospects for growth, because:

     o   sales of variable products might decrease;

     o   existing clients might withdraw assets from IDS Life's variable
         products in favor of better performing products of other companies,
         which would result in lower revenues; and

     o   IDS Life's ability to attract funds from existing and new clients
         might diminish.

A DOWNGRADE OR A POTENTIAL DOWNGRADE IN IDS LIFE'S FINANCIAL STRENGTH
RATINGS COULD RESULT IN A LOSS OF BUSINESS AND ADVERSELY AFFECT ITS
FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Financial strength ratings, which various ratings organizations publish as a
measure of an insurance company's ability to meet contractholder and
policyholder obligations, are important to maintaining public confidence in
IDS Life's products, the ability to market its products and its competitive
position. Any downgrade in IDS Life's financial strength ratings, or the
announced potential for a downgrade, could have a significant adverse effect
on its financial condition and results of operations in many ways,
including:

     o   reducing new sales of insurance and annuity products;

     o   adversely affecting IDS Life's relationships with distributors of
         its products;

     o   materially increasing the number or amount of policy surrenders and
         withdrawals by contractholders and policyholders;

     o   requiring IDS Life to reduce prices for many of its products to
         remain competitive; and

     o   adversely affecting IDS Life's ability to obtain reinsurance or
         obtain reasonable pricing on reinsurance.

IF IDS LIFE IS UNABLE TO EFFECTIVELY MANAGE THE ECONOMICS OF CHANGES IN ITS
PRODUCT DISTRIBUTION MIX AND DISTRIBUTION CHANNELS, AND OTHER TRENDS
ADVERSELY AFFECTING SALES OF ITS PRODUCTS, ITS RESULTS OF OPERATIONS COULD
BE ADVERSELY AFFECTED.

Currently, Ameriprise Financial's branded advisor network distributes
annuity and insurance products issued almost exclusively by IDS Life. If
Ameriprise Financial's branded advisor distribution network is opened to
annuity and insurance products of other companies, IDS Life cannot assure
that there would not be a material adverse effect on its financial condition
and results of operations.

DOWNTURNS AND VOLATILITY IN EQUITY MARKETS COULD ADVERSELY AFFECT IDS LIFE'S
BUSINESS AND PROFITABILITY.

Significant downturns and volatility in equity markets could have an adverse
effect on IDS Life's financial condition and results of operations. Market
downturns and volatility may cause potential new purchasers to refrain from
purchasing IDS Life's variable annuities and variable universal life insurance
products that have returns linked to the performance of the equity markets.
Downturns may also cause contractholders in annuity products and
policyholders in insurance products to withdraw cash values from those
products.


                                     11

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<PAGE>

Additionally, downturns and volatility in equity markets can have an adverse
effect on IDS Life's revenues because the value of investments under
management will be reduced. Some of its variable annuity products contain
GMDB, GMWB, GMIB and GMAB riders. A significant market decline could result
in guaranteed minimum benefits being higher than what current account values
would support, which could have an adverse effect on IDS Life's financial
condition and results of operations.

For additional information regarding the sensitivity of IDS Life's business
results to equity market fluctuations, see "Management's Discussion and
Analysis of Financial Condition and Results of Operations--Risk Management."

DEFAULTS IN IDS LIFE'S FIXED INCOME SECURITIES PORTFOLIO WOULD ADVERSELY
AFFECT ITS EARNINGS.

Issuers of the fixed income securities that IDS Life owns may default on
principal and interest payments. At December 31, 2005 and 2004, 7% and 8%,
respectively, of IDS Life's investment portfolio had ratings below
investment grade. Moreover, economic downturns and corporate malfeasance
can increase the number of companies, including those with investment grade
ratings that default on their debt obligations, as occurred in 2001 and
2002. As of December 31, 2005, IDS Life had fixed income securities in or
near default (where the issuer had missed payment of principal or interest
or entered bankruptcy) with a fair value of $52.8 million. Default-related
declines in the value of IDS Life's fixed income securities portfolio could
cause its net earnings to decline and could weaken its capital position.

SOME OF IDS LIFE'S INVESTMENTS ARE RELATIVELY ILLIQUID.

IDS Life invests a portion of its owned assets in privately placed fixed
income securities, mortgage loans, policy loans, and real estate, among
others, all of which are relatively illiquid. These asset classes
represented approximately 16.8% of the carrying value of IDS Life's
investment portfolio as of December 31, 2005. If IDS Life requires
significant amounts of cash on short notice in excess of its normal cash
requirements, it may have difficulty selling these investments in a timely
manner, or be forced to sell them for an amount less than it would otherwise
have been able to realize, or both. For example, if an unexpected number of
contractholders of its annuity products exercise their surrender right and
IDS Life is unable to access other liquidity sources, it may have to quickly
liquidate assets. Any inability to quickly dispose of illiquid investments
could have an adverse effect on IDS Life's financial condition and results
of operations.

INTENSE COMPETITION COULD NEGATIVELY AFFECT IDS LIFE'S ABILITY TO MAINTAIN
OR INCREASE ITS MARKET SHARE AND PROFITABILITY.

IDS Life operates in an intensely competitive industry. IDS Life competes
based on a number of factors including name recognition, service, product
performance and features, price, perceived financial strength, and
claims-paying ratings. IDS Life's competitors include insurers and other
financial institutions. IDS Life may face competitors that have greater
market share, offer a broader range of products, have greater financial
resources or offer higher claims-paying ratings than IDS Life does.

IDS LIFE'S AFFILIATED DISTRIBUTOR MAY BE UNABLE TO ATTRACT AND RETAIN
FINANCIAL ADVISORS.

IDS Life is dependent on the branded financial advisors of its affiliated
distributor for a significant portion of the sales of its annuity and
insurance products. A significant number of its branded financial advisors
operate as independent contractors under a franchise agreement with its
affiliated distributor. There can be no assurance that IDS Life's affiliated
distributor will be successful in its efforts to recruit and retain new
advisors to its network. If IDS Life's affiliated distributor is unable to
attract and retain quality financial advisors, or its recruiting and
retention costs increase significantly, its financial condition and results
of operations could be materially adversely affected.


                                     12

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<PAGE>

IDS LIFE AND ITS AFFILIATES MAY BE UNABLE TO ATTRACT AND RETAIN KEY PERSONNEL.

IDS Life's continued success depends to a substantial degree on its and its
affiliates' ability to attract and retain qualified personnel to conduct its
business. The market for qualified talent is extremely competitive and has
grown more so in recent periods due to industry growth. There can be no
assurance that IDS Life will be successful in its efforts to recruit and
retain the required personnel. If IDS Life is unable to attract and retain
qualified individuals or its recruiting and retention costs increase
significantly, its operations and financial results could be materially
adversely affected.

IF THE COUNTERPARTIES TO IDS LIFE'S REINSURANCE ARRANGEMENTS OR TO THE
DERIVATIVE INSTRUMENTS IT USES TO HEDGE ITS BUSINESS RISKS DEFAULT, IDS LIFE
MAY BE EXPOSED TO RISKS IT HAD SOUGHT TO MITIGATE, WHICH COULD ADVERSELY
AFFECT ITS FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

IDS Life uses reinsurance to mitigate its risks in various circumstances.
See "Business--Reinsurance." Reinsurance does not relieve IDS Life of its
direct liability to its policyholders, even when the reinsurer is liable to
IDS Life. Accordingly, IDS Life bears credit risk with respect to its
reinsurers. IDS Life cannot provide assurance that its reinsurers will pay
the reinsurance recoverable owed to it now or in the future or that they
will pay these recoverables on a timely basis. A reinsurer's insolvency or
its inability or unwillingness to make payments under the terms of its
reinsurance agreement could have an adverse effect on IDS Life's financial
condition and results of operations that could be material.

In addition, IDS Life uses derivative instruments to hedge various business
risks. IDS Life enters into a variety of derivative instruments with a
number of counterparties. If IDS Life's counterparties fail to honor their
obligations under the derivative instruments, its hedges of the related risk
will be ineffective. That failure could have an adverse effect on its
financial condition and results of operations that could be material.

IDS LIFE'S BUSINESS IS HEAVILY REGULATED, AND CHANGES IN REGULATION MAY
REDUCE ITS PROFITABILITY AND LIMIT ITS GROWTH.

IDS Life operates in a highly regulated industry, and is required to obtain
and maintain licenses for its business in addition to being subject to
regulatory oversight. Regulators have significantly increased the level of
regulation in recent years and have several outstanding proposals for
additional regulation. Various regulatory and governmental bodies have the
authority to review its products and business practices and those of its
employees and to bring regulatory or other legal actions against IDS Life
if, in their view, its practices, or those of its employees are improper.

Compliance with applicable laws and regulations is time consuming and
personnel-intensive. Changes in these laws and regulations may increase
materially IDS Life's direct and indirect compliance and other expenses of
doing business. The costs of the compliance requirements IDS Life faces, and
the constraints they impose on its operations, could have a material adverse
effect on IDS Life's financial condition and results of operations. For a
further discussion of the regulatory framework in which IDS Life operates,
see "Business--Regulation." For more information regarding ongoing
investigations, see "Item 3--Legal Proceedings."

LEGAL AND REGULATORY ACTIONS ARE INHERENT IN IDS LIFE'S BUSINESS AND COULD
RESULT IN FINANCIAL LOSSES OR HARM ITS BUSINESS.

IDS Life is, and in the future may be, subject to legal and regulatory
actions in the ordinary course of its operations. Substantial legal
liability in legal or regulatory actions could have a material financial
effect or cause significant reputational harm, which in turn could seriously
harm its business prospects.


                                     13

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<PAGE>

COMPETITIVE AND REGULATORY PRESSURES MAY REQUIRE IDS LIFE TO REDUCE THE
LEVELS OF ITS FEES.

IDS Life's profit margins and earnings are dependent in part on its ability
to maintain current fee levels for the products and services that it offers.
Competition within the financial services industry could lead IDS Life to
reduce the fees that it charges its clients for products and services. See
the risk factor entitled "Intense competition could negatively affect IDS
Life's ability to maintain or increase its market share and profitability."
In addition, IDS Life may be required to reduce its fee levels, or
restructure the fees it charges, as a result of regulatory initiatives or
proceedings that are either industry-wide or specifically targeted at IDS
Life. See the risk factor entitled "IDS Life's business is heavily
regulated, and changes in regulation may reduce its profitability and limit
its growth" and "Item 3--Legal Proceedings" for more information regarding
this and other regulatory matters. Reductions or other changes in the fees
that IDS Life charges for its products and services could reduce its
revenues and earnings.

MISCONDUCT BY IDS LIFE'S EMPLOYEES AND ITS AFFILIATES' EMPLOYEES IS
DIFFICULT TO DETECT AND DETER AND COULD HARM IDS LIFE'S BUSINESS, RESULTS OF
OPERATIONS OR FINANCIAL CONDITION.

Misconduct by IDS Life's employees and its affiliates' employees could
result in violations of law, regulatory sanctions and/or serious
reputational or financial harm. Misconduct can occur in each of IDS Life's
businesses and could include:

     o   attempting to bind IDS Life to transactions that exceed authorized
         limits;

     o   hiding unauthorized or unsuccessful activities resulting in unknown
         and unmanaged risks or losses;

     o   improperly using, disclosing, or otherwise compromising
         confidential information;

     o   engaging in fraudulent or otherwise improper activity;

     o   engaging in unauthorized or excessive trading to the detriment of
         customers; or

     o   otherwise not complying with laws or IDS Life's control procedures.

IDS Life cannot always deter misconduct by employees and agents and the
precautions IDS Life takes to prevent and detect this activity may not be
effective in all cases. IDS Life also cannot provide assurance that
misconduct by employees and agents will not lead to a material adverse
effect on its business, results of operations or financial condition.

IF IDS LIFE'S RESERVES FOR FUTURE POLICY BENEFITS AND CLAIMS ARE INADEQUATE,
IT MAY BE REQUIRED TO INCREASE ITS RESERVE LIABILITIES, WHICH COULD
ADVERSELY AFFECT ITS RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

IDS Life establishes reserves as estimates of its liabilities for future
obligations under its products. Reserves do not represent an exact
calculation of liability, but rather are estimates of contract benefits and
related expenses IDS Life expects to incur over time. The assumptions and
estimates IDS Life makes in establishing reserves require certain judgments
about future experience and, therefore, are inherently uncertain. IDS Life
cannot determine with precision the actual amounts that it will pay for
contract benefits, the timing of payments, or whether the assets supporting
its stated reserves will increase to the levels it estimates before payment
of benefits or claims. IDS Life monitors its reserve levels continually. If
IDS Life were to conclude that its reserves are insufficient to cover actual
or expected contract benefits, it would be required to increase its reserves
and potentially incur income statement charges for the period in which it
makes the determination, which could adversely affect its results of
operations and financial condition. For more information on how IDS Life
sets its reserves, see Note 1 to the Consolidated Financial Statements.


                                     14

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<PAGE>

IDS LIFE MAY FACE LOSSES IF MORBIDITY RATES OR MORTALITY RATES DIFFER
SIGNIFICANTLY FROM ITS PRICING EXPECTATIONS.

IDS Life sets prices for its life, DI and LTC insurance and some annuity
products based upon expected claim payment patterns, derived from
assumptions IDS Life makes about the morbidity rates, or likelihood of
sickness, and the mortality rates, or likelihood of death, of its
policyholders and contractholders. The long-term profitability of these
products depends upon how IDS Life's actual experience compares with its
pricing assumptions. For example, if morbidity rates are higher, or
mortality rates are lower, than its pricing assumptions, IDS Life could be
required to make greater payments under DI and LTC insurance policies and
immediate annuity contracts than it had projected. The same holds true for
LTC policies IDS Life previously underwrote to the extent they are not fully
reinsured. If mortality rates are higher than its pricing assumptions, IDS
Life could be required to make greater payments under its life insurance
policies and annuity contracts with GMDBs than it had projected.

The risk that IDS Life's claims experience may differ significantly from its
pricing assumptions is particularly significant for its LTC insurance
products notwithstanding its ability to implement future price increases. As
with life insurance, LTC insurance policies provide for long-duration
coverage and its actual claims experience will emerge over many years.
However, as a relatively new product in the market, LTC insurance does not
have the extensive claims experience history of life insurance, and, as a
result, IDS Life's ability to forecast future claim rates for LTC insurance
is more limited than for life insurance. IDS Life has sought to moderate
these uncertainties to some extent by partially reinsuring LTC policies that
it had previously underwritten and by discontinuing underwriting LTC
insurance.

IDS LIFE MAY FACE LOSSES IF THERE ARE SIGNIFICANT DEVIATIONS FROM ITS
ASSUMPTIONS REGARDING THE FUTURE PERSISTENCY OF ITS INSURANCE POLICIES AND
ANNUITY CONTRACTS.

The prices and expected future profitability of IDS Life's insurance and
deferred annuity products are based in part upon expected patterns of
premiums, expenses and benefits, using a number of assumptions, including
those related to persistency, which is the probability that a policy or
contract will remain in force from one period to the next. The effect of
persistency on profitability varies for different products. For most of its
life insurance and deferred annuity products, actual persistency that is
lower than its persistency assumptions could have an adverse impact on
profitability, especially in the early years of a policy or contract,
primarily because IDS Life would be required to accelerate the amortization
of expenses it deferred in connection with the acquisition of the policy or
contract. For IDS Life's LTC insurance, actual persistency that is higher
than its persistency assumptions could have a negative impact on
profitability. If these policies remain in force longer than IDS Life
assumed, then IDS Life could be required to make greater benefit payments
than it had anticipated when it priced or partially reinsured these
products. Some of its LTC insurance policies have experienced higher
persistency and higher morbidity rates than IDS Life had assumed, which led
it to increase premium rates on certain of these policies.

Because IDS Life's assumptions regarding persistency experience are
inherently uncertain, reserves for future policy benefits and claims may
prove to be inadequate if actual persistency experience is different from
those assumptions. Although some of its products permit IDS Life to increase
premiums during the life of the policy or contract, IDS Life cannot
guarantee that these increases would be sufficient to maintain
profitability. Additionally, some of these pricing changes require
regulatory approval, which may not be forthcoming. Moreover, many of IDS
Life's products do not permit premium increases or limit those increases
during the life of the policy or contract. Significant deviations in
experience from pricing expectations regarding persistency could have an
adverse effect on the profitability of IDS Life's products.



                                     15

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IDS LIFE MAY BE REQUIRED TO ACCELERATE THE AMORTIZATION OF DAC, WHICH WOULD
INCREASE ITS EXPENSES AND REDUCE PROFITABILITY.

DAC represents the costs of acquiring new business, principally direct sales
commissions and other distribution and underwriting costs that have been
deferred on the sale of annuities and life, DI and LTC insurance. For
annuity and insurance products, IDS Life amortizes DAC over periods
approximating the lives of the related policy or contract, generally as a
percentage of premiums or estimated gross profits associated with that
policy or contract.

IDS Life's projections underlying the amortization of DAC require the use of
certain assumptions, including interest margins, mortality rates,
persistency, maintenance expense levels and client asset value growth rates
for variable products. IDS Life periodically reviews and, where appropriate,
adjusts its assumptions. When IDS Life changes its assumptions, it may be
required to accelerate the amortization of DAC or to record a charge to
increase benefit reserves.

As of December 31, 2005 and 2004, IDS Life had $4.0 billion and $3.6 billion
of DAC, respectively, and it amortized $315.9 million and $260.8 million,
respectively, of DAC as a current period expense for the years ended
December 31, 2005 and 2004, respectively. For more information regarding
DAC, see "Management's Discussion and Analysis of Financial Condition and
Results of Operations-Critical Accounting Policies."

STATE INSURANCE REGULATORS MAY ADOPT NEW RESERVE OR CAPITAL REQUIREMENTS,
POTENTIALLY IMPACTING IDS LIFE'S FINANCIAL STRENGTH RATINGS.

IDS Life must comply with statutory reserve and capital requirements. State
regulators are continually reviewing and updating these requirements. As of
December 31, 2005, IDS Life was subject to new capital requirements for
variable annuity contracts with guaranteed death or living benefits. These
new requirements had minimal impact on IDS Life's Consolidated Balance Sheet
in 2005, but that may not continue to be true in the event equity market
values fall in the future.

There is active discussion at the NAIC of moving to a principles-based
reserving system. This could change statutory reserve requirements
significantly, and it is not possible to estimate the impact at this time.

CHANGES IN U.S. FEDERAL INCOME TAX LAW COULD MAKE SOME OF IDS LIFE'S
PRODUCTS LESS ATTRACTIVE TO CLIENTS.

Many of the products IDS Life issues or on which its business is based
(including both insurance products and non-insurance products) enjoy
favorable treatment under current U.S. federal income tax law. Changes in
U.S. federal income tax law could make some of its products less attractive
to clients.

IDS LIFE'S RISK MANAGEMENT POLICIES AND PROCEDURES MAY NOT BE FULLY
EFFECTIVE IN MITIGATING ITS RISK EXPOSURE IN ALL MARKET ENVIRONMENTS OR
AGAINST ALL TYPES OF RISK.

IDS Life has devoted significant resources toward developing its risk
management policies and procedures and expects to continue to do so in the
future. Nonetheless, IDS Life's policies and procedures to identify, monitor
and manage risks may not be fully effective in mitigating its risk exposure
in all market environments or against all types of risk. Many of its methods
of managing risk and exposures are based upon its use of observed historical
market behavior or statistics based on historical models. As a result, these
methods may not accurately predict future exposures, which could be
significantly greater than what its models indicate. Other risk management
methods depend upon the evaluation of information regarding markets,
clients, catastrophe occurrence or other matters that is publicly available
or otherwise accessible to IDS Life, which may not always be accurate,
complete, up-to-date or properly evaluated. Management of operational, legal
and regulatory risks requires, among other things, policies and procedures
to properly record and verify a large number of transactions and events, and
these policies and procedures may not be fully effective in mitigating IDS
Life's risk exposure in all market environments or against all types of
risk.

                                     16
<PAGE>
IDS LIFE'S RESULTS OF OPERATIONS MAY BE ADVERSELY AFFECTED BY ECONOMIC AND
OTHER FACTORS.

IDS Life's financial condition and results of operations may be materially
affected by economic and other factors. Many such factors of a global or
localized nature include: political, economic and market conditions;
technological changes and events; inflation; investor sentiment and
confidence in the financial markets; terrorism events and armed conflicts;
and natural disasters such as weather catastrophes and widespread health
emergencies. In addition, during periods of unfavorable market or economic
conditions, the level of consumer investing and insuring activity may also
decrease, which may negatively impact the results of IDS Life's businesses.
Moreover, fluctuations in economic and market activity could impact the way
then-existing customers allocate their available resources, which could
affect IDS Life's persistency, surrender and product cash value loan
experience and could negatively impact its business.

IDS LIFE IS SUBJECT TO TAX CONTINGENCIES THAT COULD ADVERSELY AFFECT
RESERVES.

IDS Life is subject to the income tax laws of the U.S., its states and
municipalities and those of the foreign jurisdictions in which it has
significant business operations. These tax laws are complex and subject to
different interpretations by the taxpayer and the relevant governmental
taxing authorities. IDS Life must make judgments and interpretations about
the application of these inherently complex tax laws when determining the
provision for income taxes and must also make estimates about when in the
future certain items affect taxable income in the various tax
jurisdictions. Disputes over interpretations of the tax laws may be settled
with the taxing authority upon examination or audit.


  RISKS RELATING TO AMERIPRISE FINANCIAL'S SEPARATION FROM AMERICAN EXPRESS
  -------------------------------------------------------------------------

CLIENT ACQUISITION AND RETENTION MAY BE ADVERSELY AFFECTED BY IDS LIFE'S
SEPARATION FROM AMERICAN EXPRESS.

Although IDS Life generally operated independently of American Express'
other operations with respect to client services prior to the separation and
Distribution, IDS Life has relied on the American Express brand and
cardmember relationships in acquiring clients as part of its growth
strategy. As part of a marketing and branding arrangement between Ameriprise
Financial and American Express, IDS Life has a limited right to continue
until September 30, 2007 to market its products in a manner similar to the
methods it used prior to the separation. However, overall response rates,
marginal costs and profitability from these efforts may be negatively
affected as a result of the loss of this affiliation. IDS Life cannot
provide assurance that the clients it gained as a result of being affiliated
with American Express will not move some or all of their existing business
from IDS Life to another company. Loss of a significant portion of these
clients could negatively impact IDS Life's business.

AMERIPRISE FINANCIAL AND IDS LIFE HAVE EXPERIENCED INCREASED COSTS IN
CONNECTION WITH THE SEPARATION.

Ameriprise Financial is in the process of developing certain independent
facilities, systems, infrastructure and personnel to replace services it had
access to from American Express. Ameriprise Financial has also made
significant investments to develop its new brands and establish its ability,
and the ability of its subsidiaries, to operate without access to American
Express's operational and administrative infrastructure. These initiatives
have been costly to implement. In 2005 Ameriprise Financial developed an
allocation policy for separation costs resulting in the allocation of
certain costs to IDS Life that it considered to be a reasonable reflection
of separation costs benefiting IDS Life. These costs generally consist of
allocated financial advisor and employee retention program costs,
re-branding and marketing costs and costs to separate and reestablish
technology platforms related to the separation and Distribution of
Ameriprise Financial. IDS Life has incurred and been allocated approximately
$121.3 million in total pretax non-recurring separation costs through
December 31, 2005 and IDS Life expects to incur significant additional
separation costs. This risk has been greatly offset by the contribution of
capital from American Express to Ameriprise Financial, and in turn, from
Ameriprise Financial to IDS Life.

                                  17
<PAGE>
<PAGE>

As a stand-alone company, Ameriprise Financial, and hence, IDS Life do not
have the same purchasing power they had through American Express and, in
some cases, may not have as favorable terms or prices as those obtained
prior to the separation and Distribution, which could decrease its overall
profitability.

IDS LIFE MAY NOT HAVE SUFFICIENT CAPITAL GENERATION ABILITY TO MEET ITS
OPERATING AND REGULATORY CAPITAL REQUIREMENTS.

As a stand-alone company, Ameriprise Financial, and hence, IDS Life is
required to maintain higher capital ratios to retain its credit ratings. In
addition, IDS Life needs to cover volatility associated with variations in
its operating, risk-based and regulatory capital requirements, including
separation costs and contingent exposures, for example, in connection with
its ongoing legal and regulatory matters. See "Business--Risk-Based Capital"
for more information regarding capital requirements and see "Item 3--Legal
Proceedings" for more information regarding pending regulatory and legal
proceedings. Although Ameriprise Financial made a $650 million capital
contribution to IDS Life to cover, among other things, allocated separation
costs, IDS Life cannot be certain that this capital contribution will be
sufficient to cover all of the additional costs. If it is not sufficient,
IDS Life's financial condition could be adversely affected and its financial
strength ratings may be downgraded.

AS AMERIPRISE FINANCIAL BUILDS ITS INFORMATION TECHNOLOGY INFRASTRUCTURE AND
TRANSITIONS ITS DATA AND THAT OF ITS AFFILIATES, SUCH AS IDS LIFE, TO ITS
OWN SYSTEMS, IT COULD EXPERIENCE TEMPORARY BUSINESS INTERRUPTIONS AND INCUR
SUBSTANTIAL ADDITIONAL COSTS.

Ameriprise Financial, and hence, IDS Life is in the process of installing and
implementing information technology infrastructure to support its business
functions, including accounting and reporting, customer service and
distribution. IDS Life anticipates this will involve significant costs. IDS
Life may incur temporary interruptions in business operations if it cannot
transition effectively from American Express' existing technology
infrastructure (which covers hardware, applications, network, telephony,
databases, backup and recovery solutions), as well as the people and
processes that support them. IDS Life may not be successful in implementing
its new technology infrastructure and transitioning its data, and IDS Life
may incur substantially higher costs for implementation than currently
anticipated. IDS Life's failure to avoid operational interruptions as it
implements the new infrastructure and transitions its data, or its failure
to implement the new infrastructure and transition its data successfully,
could disrupt its business and have a material adverse effect on its
profitability. In addition, technology service failures could have adverse
regulatory consequences for IDS Life's business and make it vulnerable to
its competitors.

Ameriprise Financial, and hence, IDS Life continues to rely on American
Express' disaster recovery capabilities as part of its business continuity
processes. IDS Life will only have the right to use American Express'
disaster recovery resources for up to two years after the Distribution. IDS
Life will be required to develop and implement its own disaster recovery
infrastructure and develop business continuity for its operations, which it
anticipates will involve significant costs. IDS Life may not be successful
in developing stand-alone disaster recovery capabilities and business
continuity processes, and may incur substantially higher costs for
implementation than currently anticipated. IDS Life's failure to avoid
operational interruptions as it implements new business continuity
processes, or its failure to implement the new processes successfully, could
disrupt its business and have a material adverse effect on its profitability
in the event of a significant business disruption.

                                18



<PAGE>
<PAGE>
AMERIPRISE FINANCIAL'S SEPARATION FROM AMERICAN EXPRESS COULD INCREASE IDS
LIFE'S U.S. FEDERAL INCOME TAX COSTS.

Due to the separation, IDS Life will not be able to file a consolidated U.S.
federal income tax return with the other members of the Ameriprise Financial
affiliated group for five tax years following the Distribution. As a
consequence, during this period, net operating and capital losses, credits,
and other tax attributes generated by one group will not be available to
offset income earned or taxes owed by the other group for U.S. federal
income tax purposes. Any benefits relating to taxes arising from being part
of the larger American Express group may also not be available. As a result
of these and other inefficiencies, the aggregate amount of U.S. federal
income tax that IDS Life pays may increase and IDS Life may, in addition,
not be able to fully realize certain of its deferred tax assets.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 2.  PROPERTIES

IDS Life Insurance Company occupies office space in Minneapolis, Minnesota,
which is leased or owned by Ameriprise Financial. IDS Life Insurance Company
reimburses Ameriprise Financial for rent based on direct and indirect
allocation methods. IDS Life of New York and American Centurion Life rent
office space in Albany, New York. Facilities occupied by IDS Life are
believed to be adequate for the purposes for which they are used and are
well maintained.

ITEM 3.  LEGAL PROCEEDINGS

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

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

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

Item omitted pursuant to General Instructions I(2)(c) of Form 10-K.


                                     19

<PAGE>
<PAGE>


                                   PART II
                                   -------

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS
         AND ISSUER PURCHASES OF EQUITY SECURITIES

Not applicable.

ITEM 6.  SELECTED FINANCIAL DATA

Item omitted pursuant to General Instructions I(2)(a) of Form 10-K.

                               20
<PAGE>
<PAGE>


ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
         AND RESULTS OF OPERATIONS

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

The following discussion may contain forward-looking statements that reflect
IDS Life's plans, estimates and beliefs. Actual results could differ
materially from those discussed in forward-looking statements. Factors that
could cause or contribute to these differences include, but are not limited
to, those discussed under "Forward-Looking Statements" and "Item 1A-Risk
Factors" of this Form 10-K.

The following management's narrative analysis of the results of operations
is presented pursuant to General Instructions I(2)(a) of Form 10-K in lieu
of Management's Discussion and Analysis of Financial Condition and Results
of Operations.

The following information should be read in conjunction with IDS Life's
accompanying consolidated financial statements and related notes included
elsewhere in this Form 10-K.

Overview

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

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

     o  American Enterprise Life Insurance Company (American Enterprise Life)
        is a stock life insurance company domiciled in Indiana, which holds
        Certificates of Authority in the District of Columbia and all states
        except New York. American Enterprise Life issues fixed and variable
        annuity contracts primarily through regional and national financial
        institutions and regional and/or independent broker-dealers. (In
        past years, American Enterprise Life issued a nominal number of
        variable universal life contracts.)

     o  American Partners Life Insurance Company (American Partners Life) is a
        stock life insurance company domiciled in Arizona, which holds
        Certificates of Authority in the District of Columbia and all states
        except New York and New Hampshire. American Partners Life markets
        annuity products directly to customers, generally persons holding
        an American Express(R) Card.



                                     21

<PAGE>
<PAGE>

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

     o  American Centurion Life Assurance Company (American Centurion Life)
        is a stock life insurance company domiciled in New York, which holds
        Certificates of Authority in New York, Alabama and Delaware.
        American Centurion Life issues fixed and variable annuity contracts
        primarily through financial institutions and independent broker-
        dealers. American Centurion Life also markets annuity products
        directly, generally to persons holding an American Express(R)
        Card.

IDS Life Insurance Company also owns IDS REO 1, LLC, IDS REO 2, LLC and
American Enterprise REO 1, LLC which hold real estate investments. IDS Life
Insurance Company and its seven subsidiaries are referred to collectively
in this Form 10-K as "IDS Life".

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

RESULTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004
Income before taxes and accounting change declined 19% to $640.4 million for
the year ended December 31, 2005. The decrease primarily reflects separation
costs, higher other insurance and operating expenses and amortization of
deferred policy acquisition costs (DAC), partially offset by increased
mortality and expense risk and other fees, contractholder and policyholder
charges and net realized gain on investments.

Net income for the year ended December 31, 2004 reflects the $70.6 million
($108.6 million pretax) cumulative effect of accounting change as a result
of IDS Life's January 1, 2004 adoption of the American Institute of
Certified Public Accountants Statement of Position 03-1, "Accounting and
Reporting by Insurance Enterprises for Certain Nontraditional Long-Duration
Contracts and for Separate Accounts" (SOP 03-1). SOP 03-1 requires insurance
enterprises to establish liabilities for benefits that may become payable
under variable annuity death benefit guarantees or other insurance or
annuity contract provisions. See the "Recently Issued Accounting Standards"
section in Note 1 to the Consolidated Financial Statements regarding the
impact of adoption of SOP 03-1.

REVENUES
Total revenues increased $133.9 million or 4% primarily due to higher net
realized gain on investments, mortality and expense risk and other fees and
contractholder and policyholder charges compared to 2004.

Disability income (DI) and long-term care insurance (LTC) premiums increased
$11.5 million or 4% reflecting higher DI insurance in force levels.


                                     22

<PAGE>
<PAGE>
Net investment income increased $13.9 million or 1%. The increase reflects a
$13.9 million pretax gain for 2005 compared to a $27.9 million charge in
2004 all related to the liquidation of secured loan trusts (SLTs) offset by
lower interest on mortgage investments and lower mark-to-market gains on
trading securities and equity method investments in hedge funds.
Additionally, the average yield decreased compared to 2004, partially offset
by an increase in the average level of invested assets.

Contractholder and policyholder charges increased $22.8 million or 4% as a
result of a $13.2 million increase in the cost of insurance on higher
average variable and fixed universal life policies in force, as well as an
increase in surrender charges on annuities.

Mortality and expense risk and other fees increased $58.3 million or 14%
reflecting higher average market values of separate account assets due to
increased inflows and market appreciation.


Net realized gain on investments was $48.3 million in 2005 compared to $27.3
million in 2004. For the year ended December 31, 2005, $107.9 million of
total investment gains were partially offset by $59.6 million of impairments
and losses. Included in these total net investment gains and losses were
$107.8 million of gross realized gains and $38.6 million of gross realized
losses from sales of securities, as well as $19.4 million of
other-than-temporary impairment losses on investments, classified as
Available-for-Sale. Included in the net realized gain on investments
classified as Available-for-Sale for 2005 were gross realized gains and
losses of $39.2 million and $14.3 million, respectively, related to the sale
of all of IDS Life's retained interest in a collateralized debt obligations
(CDO) securitization trust.

For the year ended December 31, 2004, $49.5 million of total investment
gains were partially offset by $22.2 million of impairments and losses.
Included in these total net investment gains and losses were $48.4 million
of gross realized gains and $17.5 million of gross realized losses from
sales of securities, as well as $0.1 million of other-than-temporary
impairment losses on investments, classified as Available-for-Sale.

BENEFITS AND EXPENSES
Total benefits and expenses increased $285.9 million or 12%, reflecting
separation costs, an increase in DAC amortization expense and higher other
insurance and operating expenses, partially offset by lower interest
crediting rates.

Death and other benefits for traditional life insurance increased $4.7
million or 13% primarily due to increased in force levels.

Death and other benefits for DI and LTC insurance increased $8.6 million or
13% primarily due to increased DI in force levels.

Increase in liabilities for future policy benefits for DI and LTC insurance
increased $18.0 million or 15% primarily reflecting inclusion of a $13.3
million maintenance reserve adjustment for LTC insurance.

Interest credited to account values decreased $17.5 million or 2%, primarily
due to lower interest crediting rates and average accumulation values of
annuities, as well as the effect on equity indexed annuities of lower
appreciation in the Standard & Poor's (S&P) 500 during 2005 versus 2004.

                                    23

<PAGE>
<PAGE>
DAC amortization expense increased to $315.9 million in 2005 from $260.8
million in 2004. DAC amortization expense in 2005 was reduced by $67.0
million as a result of the annual DAC assessment performed in the third
quarter, while DAC amortization expense in 2004 was reduced by $65.7 million
in the first quarter as a result of lengthening amortization periods for
certain insurance and annuity products in conjunction with the adoption of
SOP 03-1 and by $23.7 million as a result of the annual DAC assessment in
the third quarter. Equity market conditions and other factors also resulted
in increased amortization of DAC in 2005 compared to 2004, particularly for
IDS Life's growing variable annuity business. See the "Deferred Policy
Acquisition Costs" section for further discussion of DAC and related third
quarter 2005 and 2004 adjustments.

Separation costs generally consist of allocated financial advisor and
employee retention program costs, re-branding and marketing costs and costs
to separate and reestablish technology platforms related to the separation
and Distribution of Ameriprise Financial. During 2005, IDS Life was
allocated and incurred $121.3 million in separation costs. See Note 1 to the
Consolidated Financial Statements for further discussion regarding the
separation and the allocation of costs to IDS Life.

Other insurance and operating expenses increased $87.3 million or 17%
reflecting increases in distribution costs and non-deferrable expenses
related to product management and higher business investment initiatives.

INCOME TAXES
IDS Life's effective tax rate declined to 28% in 2005 from 29% in 2004 which
resulted from relatively lower levels of pretax income compared to
tax-advantaged items in 2005. Additionally, the 2005 effective tax rate
reflects a $20 million tax expense and the 2004 effective tax rate reflects
a $20 million tax benefit applicable to prior years amendments.

RESULTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003
Pretax income rose 38% to $792.4 million for the year ended December 31,
2004. The increase primarily reflects increased net investment income,
mortality and expense risk and other fees, net realized gain on investments,
lower interest credited to account values and lower amortization of DAC,
partially offset by higher other insurance and operating expenses.

Net income for the year ended December 31, 2004 reflects the $70.6 million
($108.6 million pretax) impact of IDS Life's January 1, 2004 adoption of SOP
03-1. SOP 03-1 requires insurance enterprises to establish liabilities for
benefits that may become payable under variable annuity death benefit
guarantees or other insurance or annuity contract provisions. See the
"Recently Issued Accounting Standards" section in Note 1 to the Consolidated
Financial Statements regarding the impact of adoption of SOP 03-1.

REVENUES
Total revenues increased $162.0 million or 5% primarily due to higher net
investment income, mortality and expense risk and other fees and net
realized gain on investments compared to 2003.

Net investment income increased $72.3 million or 4%. Net investment income
for the year ended December 31, 2003 includes $77.3 million of amortization
expense of certain low income housing investments. See effective tax rate
discussion below.

Contractholder and policyholder charges increased $24.2 million or 5%
reflecting increased cost of insurance charges on variable universal life
products as well as an increase in the amount of surrender charges on
variable annuity products.



                                     24

<PAGE>
<PAGE>
Mortality and expense risk and other fees increased $39.8 million or 10%
reflecting higher average market values of separate account assets, and the
impact of the change from IDS Life to Ameriprise Financial as investment
manager of the internally managed proprietary funds during the fourth
quarter of 2003. Concurrent with the investment manager change, IDS Life
entered into an agreement with Ameriprise Financial to receive fees for the
services, other than investment management, that IDS Life continues to
provide the underlying proprietary mutual funds. IDS Life's administrative
service fees will vary with the market values of these proprietary mutual
funds. Prior to this change, IDS Life received management fees directly from
the proprietary funds and was party to an agreement with Ameriprise
Financial to compensate Ameriprise Financial for the investment sub-advisory
services Ameriprise Financial provided these proprietary funds. In addition
to IDS Life's administrative service fees, IDS Life receives mortality and
expense risk fees from the separate accounts based on the level of assets.

Net realized gain on investments was $27.3 million in 2004 compared to $4.4
million in 2003. For the year ended December 31, 2004, $49.5 million of
total investment gains were partially offset by $22.2 million of impairments
and losses. Included in these total net investment gains and losses were
$48.4 million of gross realized gains and $17.5 million of gross realized
losses from sales of securities, as well as $0.1 million of
other-than-temporary impairment losses on investments, classified as
Available-for-Sale.

For the year ended December 31, 2003, $257.0 million of total investment
gains were partially offset by $252.6 million of impairments and losses.
Included in these total net investment gains and losses were $255.3 million
of gross realized gains and $135.5 million of gross realized losses from
sales of securities, as well as $102.6 million of other-than-temporary
impairment losses on investments, classified as Available-for-Sale.


BENEFITS AND EXPENSES
Total benefits and expenses decreased $55.8 million or 2%, reflecting lower
interest crediting rates and the effect on equity indexed annuities of lower
appreciation in the S&P 500 during 2004 versus 2003, a reduction in DAC
amortization expense in conjunction with the adoption of SOP 03-1 and third
quarter DAC adjustments, partially offset by higher other insurance and
operating expenses.

Interest credited to account values decreased $114.1 million or 9%,
primarily due to lower interest crediting rates and the effect on equity
indexed annuities of lower appreciation in the S&P 500 during 2004 versus
2003, partially offset by higher average accumulation values of annuities
and in force levels of life insurance products.

DAC amortization expense decreased to $260.8 million in 2004 from $264.3
million in 2003. The decrease was primarily due to a $65.7 million
adjustment associated with the lengthening of amortization periods for
certain insurance and annuity products in conjunction with the adoption of
SOP 03-1, and approximately $23.7 million in net favorable DAC adjustments
in the third quarter of 2004 as a result of changes to DAC assumptions as
compared to a $1.8 million net favorable DAC adjustment in the third quarter
of 2003. See the "Deferred Policy Acquisition Costs" section for further
discussion of DAC and related third quarter 2004 and 2003 adjustments.

Other insurance and operating expenses increased $50.8 million or 11%
reflecting increases in distribution costs and non-deferrable expenses
related to product management and business reinvestment initiatives. These
increases were partially offset by a reduction related to the change in
investment manager of the proprietary mutual funds from IDS Life to
Ameriprise Financial. Effective with this change, the previously existing
arrangement under which IDS Life compensated Ameriprise Financial for
investment sub-advisory services was terminated.

INCOME TAXES
IDS Life's effective tax rate rose to 29% in 2004 from 12% in 2003 primarily
due to the impact of lower levels of tax-advantaged items in pretax income
during 2004, reduced low income housing credits as a result of the December
2003 distribution of substantially all of IDS Life's interests in low income
housing investments to Ameriprise Financial and the one-time effect of
favorable technical guidance related to the taxation of dividend income
recognized in 2003. For 2003 and prior years, IDS Life's federal income
taxes were reduced by credits arising from low income housing investments.


                                     25

<PAGE>
<PAGE>
DEFERRED POLICY ACQUISITION COSTS
DAC represents the costs of acquiring new business, principally direct sales
commissions and other distribution and underwriting costs that have been
deferred on the sale of annuity and life, DI and LTC insurance products.
These costs are deferred to the extent they are recoverable from future
profits. For annuity and insurance products, DAC is amortized over periods
approximating the lives of the business, generally as a percentage of
premiums or estimated gross profits or as a portion of product interest
margins depending on the product's characteristics.

For IDS Life's annuity and insurance products, the projections underlying
the amortization of DAC require the use of certain assumptions, including
interest margins, mortality and morbidity rates, persistency, maintenance
expense levels and client asset value growth rates for variable products.
Management routinely monitors a wide variety of trends in the business,
including comparisons of actual and assumed experience. The client asset
value growth rate is the rate at which contract values are assumed to
appreciate in the future. The rate is net of asset fees and anticipates a
blend of equity and fixed income investments. Management reviews and, where
appropriate, adjusts its assumptions with respect to client asset value
growth rates on a quarterly basis.

Management monitors other principal DAC amortization assumptions, such as
interest margin, mortality and morbidity rates, persistency, and maintenance
expense level assumptions, each quarter. Unless management identifies a
significant deviation over the course of the quarterly monitoring,
management reviews and updates these DAC amortization assumptions annually
in the third quarter of each year. When assumptions are changed, the
percentage of estimated gross profits used to amortize DAC might also
change. A change in the required amortization percentage is applied
retrospectively; an increase in amortization percentage will result in an
increase in DAC amortization expense while a decrease in amortization
percentage will result in a decrease in DAC amortization expense. The impact
on results of operations of changing assumptions can be either positive or
negative in any particular period and is reflected in the period in which
such changes are made. As a result of these reviews, IDS Life took actions
in both 2005 and 2004 that impacted the DAC balance and amortization
expense.

In the third quarter 2005, these actions resulted in a net $67.0 million DAC
amortization expense reduction consisting of the following:

     o   A $31.7 million reduction reflecting changes in previously assumed
         mortality rates;

     o   A $32.8 million reduction reflecting lower than previously assumed
         surrender rates and higher associated surrender charges;

     o   A $6.0 million reduction from improved average fee revenues;

     o   A $5.6 million reduction from the extension of the mean reversion
         period by one year; and

     o   A $9.1 million increase reflecting changes from previously assumed
         interest rate spreads, modeling changes, account maintenance
         expenses, and other miscellaneous items.

In the third quarter 2004, these actions resulted in a net $23.7 million DAC
amortization expense reduction consisting of the following:

     o   A $4.2 million reduction reflecting changes in previously assumed
         mortality rates;

     o   A $12.7 million reduction reflecting changes from previously
         assumed surrender and lapse rates;

     o   A $3.3 million reduction from the extension of the mean reversion
         period by one year; and

                                     26

<PAGE>
<PAGE>

     o   A $3.5 million reduction reflecting higher than previously assumed
         interest rate spreads and other miscellaneous items.

In the third quarter 2003, these actions resulted in a net $1.8 million DAC
amortization expense reduction reflecting:

     o   A $105.4 million reduction resulting from extending 10-15 year
         amortization periods for certain flex annuity contracts to 20 years
         based on current measurements of meaningful life;

     o   A $92.0 million increase resulting from the recognition of a
         premium deficiency on IDS Life's LTC products; and

     o   A $11.6 million net increase across IDS Life's universal life,
         variable universal life and annuity products, reflecting lower
         than previously assumed interest rate spreads, separate account
         fee rates and account maintenance expense.


During the first quarter of 2004 and in conjunction with the adoption of SOP
03-1, IDS Life (1) established additional liabilities for insurance benefits
that may become payable under variable annuity death benefit guarantees or
on certain variable universal life and single pay universal life insurance
contracts, which prior to January 1, 2004, were expensed when payable; and
(2) extended the time periods over which DAC associated with certain
insurance and annuity products are amortized to coincide with the liability
funding periods in order to establish the proper relationships between these
liabilities and DAC associated with the same contracts. As a result, IDS
Life recognized a $108.6 million pretax charge due to an accounting change
on establishing the future liability under death benefit guarantees and
recognized a $65.7 million pretax reduction in DAC amortization expense to
reflect the lengthening of the amortization periods for certain products
impacted by SOP 03-1.

DAC balances for various insurance and annuity products sold by IDS Life at
December 31 are set forth below:

<TABLE>
<CAPTION>
  (Millions)                                                                    2005          2004
  ---------------------------------------------------------------------------------------------------
  <S>                                                                      <C>           <C>
  Life, disability income and long-term care insurance                     $    1,920    $    1,766
  Annuities                                                                     2,116         1,872
  ---------------------------------------------------------------------------------------------------
  Total                                                                    $    4,036    $    3,638
  ---------------------------------------------------------------------------------------------------
</TABLE>

In addition to the DAC balances shown above and in conjunction with IDS
Life's adoption of SOP 03-1, sales inducement costs previously included in
DAC were reclassified from DAC and presented as a separate line item in the
consolidated balance sheets. Deferred sales inducement costs were $370
million and $303 million at December 31, 2005 and 2004, respectively. Sales
inducement costs consist of bonus interest credits and deposit credits added
to certain annuity contract values. These benefits are capitalized to the
extent they are incremental to amounts that would be credited on similar
contracts without the applicable feature. The amounts capitalized are
amortized using the same methodology and assumptions used to amortize DAC.

CRITICAL ACCOUNTING POLICIES
The accounting and reporting policies that IDS Life uses affect its
Consolidated Financial Statements. Certain accounting and reporting policies
are critical to an understanding of IDS Life's results of operations and
financial condition, and in some cases the application of these policies can
be significantly affected by the estimates, judgments and assumptions made
by management during the preparation of the consolidated financial
statements. The accounting and reporting policies IDS Life has identified as
fundamental to a full understanding of its results of operations and
financial condition are described below. See Note 1 to the Consolidated
Financial Statements for further information about IDS Life's accounting
policies.



                                     27

<PAGE>
<PAGE>

VALUATION OF INVESTMENTS
The most significant component of investments is Available-for-Sale
securities. Generally, IDS Life carries its Available-for-Sale securities at
fair value on the Consolidated Balance Sheets and records unrealized gains
(losses) in accumulated other comprehensive income (loss) within equity, net
of income tax provision (benefit) and net of adjustments in other asset and
liability balances, such as DAC, to reflect the expected impacts on their
carrying value had the unrealized gains (losses) been realized as of the
respective balance sheet date. At December 31, 2005, IDS Life had net
unrealized pretax losses on Available-for-Sale securities of $63.8 million.
IDS Life recognizes gains and losses in results of operations upon
disposition of the securities. IDS Life also recognizes losses in results of
operations when management determines that a decline in value is
other-than-temporary. This determination requires the exercise of judgment
regarding the amount and timing of recovery. Indicators of
other-than-temporary impairment for debt securities include issuer
downgrade, default or bankruptcy. IDS Life also considers the extent to
which amortized cost exceeds fair value and the duration of that difference,
and management's judgment about the issuer's current and prospective
financial condition, as well as its ability and intent to hold until
recovery. The fair value of approximately 96% of the investment portfolio
classified as Available-for-Sale as of December 31, 2005 is determined by
quoted market prices. As of December 31, 2005, there were $420.9 million in
gross unrealized losses that related to $17.9 billion of Available-for-Sale
securities, of which $4.3 billion has been in a continuous unrealized loss
position for 12 months or more. As part of IDS Life's ongoing monitoring
process, management determined that a majority of the gross unrealized
losses on these securities is attributable to changes in interest rates.
Additionally, because IDS Life has the ability as well as the intent to hold
these securities for a time sufficient to recover its amortized cost, IDS
Life concluded that none of these securities was other-than-temporarily
impaired at December 31, 2005.

DEFERRED POLICY ACQUISITION COSTS
DAC represents the costs of acquiring new business, principally direct sales
commissions and other distribution and underwriting costs that have been
deferred on the sale of annuity and life, DI and LTC insurance products.
These costs are deferred to the extent they are recoverable from future
profits. For annuity and insurance products, DAC is amortized over periods
approximating the lives of the business, principally as a percentage of
premiums or estimated gross profits or as a portion of product interest
margins depending on the product's characteristics.

For IDS Life's annuity and life, DI and LTC insurance products, the DAC
balances at any reporting date are supported by projections that show
management expects there to be adequate premiums or estimated gross profits
after that date to amortize the remaining DAC balances. These projections
are inherently uncertain because they require management to make assumptions
about financial markets, anticipated mortality and morbidity levels, and
policyholder behavior over periods extending well into the future.
Projection periods used for IDS Life's annuity products are typically 10 to
25 years, while projection periods for IDS Life's life, DI and LTC insurance
products are often 50 years or longer. Management regularly monitors
financial market conditions and actual policyholder behavior experience and
compares them to its assumptions.

For annuity and universal life insurance products, the assumptions made in
projecting future results and calculating the DAC balance and DAC
amortization expense are management's best estimates. Management is required
to update these assumptions whenever it appears that, based on actual
experience or other evidence, earlier estimates should be revised. When
assumptions are changed, the percentage of estimated gross profits used to
amortize DAC might also change. A change in the required amortization
percentage is applied retrospectively; an increase in amortization
percentage will result in a decrease in the DAC balance and an increase in
DAC amortization expense, while a decrease in amortization percentage will
result in an increase in the DAC balance and a decrease in DAC amortization
expense. The impact on results of operations of changing assumptions can be
either positive or negative in any particular period and is reflected in the
period in which such changes are made.


                                     28

<PAGE>
<PAGE>

For other life, DI and LTC insurance products, the assumptions made in
calculating the DAC balance and DAC amortization expense are consistent with
those used in determining the liabilities and therefore are intended to
provide for adverse deviations in experience and are revised only if
management concludes experience will be so adverse that DAC is not
recoverable. If management concludes that DAC is not recoverable, DAC is
reduced to the amount that is recoverable based on best estimate assumptions
and there is a corresponding expense recorded in the Consolidated Statements
of Income.

For annuity and life, DI and LTC insurance products, key assumptions
underlying these long-term projections include interest rates (both earning
rates on invested assets and rates credited to policyholder accounts),
equity market performance, mortality and morbidity rates and the rates at
which policyholders are expected to surrender their contracts, make
withdrawals from their contracts and make additional deposits to their
contracts. Assumptions about interest rates are the primary factor used to
project interest margins, while assumptions about rates credited to
policyholder accounts and equity market performance are the primary factors
used to project client asset value growth rates and assumptions about
surrenders, withdrawals and deposits comprise projected persistency rates.
Management must also make assumptions to project maintenance expenses
associated with servicing its annuity and insurance business during the DAC
amortization period.

The client asset value growth rate is the rate at which contract values are
assumed to appreciate in the future. The rate is net of asset fees and
anticipates a blend of equity and fixed income investments. Management
reviews and, where appropriate, adjusts its assumptions with respect to
client asset value growth rates on a quarterly basis. IDS Life uses a mean
reversion method as a monthly guideline in setting near-term client asset
value growth rates based on a long-term view of financial market performance
as well as actual historical performance. In periods when market performance
results in actual contract value growth at a rate that is different than
that assumed, IDS Life will reassess the near-term rate in order to continue
to project its best estimate of long-term growth. The near-term growth rate
is reviewed to ensure consistency with management's assessment of
anticipated equity market performance. Management is currently assuming a 7%
long-term client asset value growth rate. If IDS Life increased or decreased
its assumption related to this growth rate by 100 basis points, the impact
on annual DAC amortization expense would be a decrease or increase of
approximately $65 million.

Management monitors other principal DAC amortization assumptions, such as
persistency, mortality, morbidity, interest margin and maintenance expense
levels each quarter and, when assessed independently, each could impact IDS
Life's DAC balances. For example, if IDS Life increased or decreased its
interest margin on its universal life insurance and on the fixed portion of
its variable universal life insurance products by 10 basis points, the
impact on annual DAC amortization expense would be a decrease or increase of
approximately $5 million. Additionally, if IDS Life extended or reduced the
amortization periods one year for variable annuities to reflect changes in
premium paying persistency and/or surrender assumptions, the impact on
annual DAC amortization expense would be a decrease or increase of
approximately $30 million. The amortization impact of extending or reducing
the amortization period any additional years is not linear.

The analysis of DAC balances and the corresponding amortization is a dynamic
process that considers all relevant factors and assumptions described
previously. Unless management identifies a significant deviation over the
course of the quarterly monitoring, management reviews and updates these DAC
amortization assumptions annually in the third quarter of each year. An
assessment of sensitivity associated with changes in any single assumption
would not necessarily be an indicator of future results.

For details regarding the balances of and changes in DAC for the years ended
December 31, 2005, 2004 and 2003, see Note 4 to the Consolidated Financial
Statements.



                                     29

<PAGE>
<PAGE>

LIABILITIES FOR FUTURE POLICY BENEFITS

Fixed Annuities and Variable Annuity Guarantees
Liabilities for fixed and variable deferred annuities are equal to
accumulation values which are the cumulative gross deposits, credited
interest and fund performance less withdrawals and mortality and expense
risk charges.

The majority of the variable annuity contracts offered by IDS Life contain
guaranteed minimum death benefit (GMDB) provisions. When market values of
the client's accounts decline, the death benefit payable on a contract with
a GMDB may exceed the contract accumulation value. IDS Life also offers
variable annuities with death benefit provisions that gross up the amount
payable by a certain percentage of contract earnings; these are referred to
as gain gross-up (GGU) benefits. In addition, IDS Life offers contracts
containing guaranteed minimum withdrawal benefit (GMWB), guaranteed minimum
income benefit (GMIB), and guaranteed minimum accumulation benefit (GMAB)
provisions.

Effective January 1, 2004, liabilities for GMDB, GGU and GMIB benefits have
been established under SOP 03-1. Actuarial models to simulate various equity
market scenarios are used to project these benefits and contract assessments
and include making significant assumptions related to client asset value
growth rates, mortality, persistency and investment margins. These
assumptions, as well as their periodic review by management, are consistent
with those used for DAC purposes. Prior to the adoption of SOP 03-1, amounts
paid in excess of contract value were expensed. See the "Recently Issued
Accounting Standards" section in Note 1 to the Consolidated Financial
Statements for more information about these guaranteed benefits.

GMWB and GMAB provisions are considered embedded derivatives under Statement
of Financial Accounting Standards Board No. 133, "Accounting for Derivative
Instruments and Hedging Activities" (SFAS 133) and, accordingly, are carried
at fair value within future policy benefits for variable annuity guarantees
on the Consolidated Balance Sheets. The fair value of these embedded
derivatives is based on the present value of future benefits less applicable
fees charged for the provision. Changes in fair value are reflected in death
and other benefits for investment contracts and universal life-type
insurance within the Consolidated Statements of Income.

Liabilities for equity indexed deferred annuities issued in 1999 or later
are equal to the accumulation of host contract values covering guaranteed
benefits and the market value of embedded equity options. Liabilities for
equity indexed deferred annuities issued before 1999 are equal to the
present value of guaranteed benefits and the intrinsic value of index-based
benefits. Accounting for equity indexed deferred annuities issued before
1999 differs from those issued in 1999 and later due to the treatment of
embedded equity options within the contracts. Embedded equity options are
considered embedded derivatives under SFAS 133. However, SFAS 133 allowed
companies to elect whether to separately account for embedded derivatives
related to contracts issued prior to January 1, 1999. IDS Life elected not
to separately account for embedded derivatives related to contacts issued
prior to January 1, 1999.

Liabilities for fixed annuities in a benefit or payout status are based on
future estimated payments using established industry mortality tables and
interest rates, ranging from 4.6% to 9.5% at December 31, 2005, depending on
year of issue, with an average rate of approximately 6.0%.

Life, Disability Income and Long-Term Care Policies
Liabilities for life insurance claims that have been reported but have not
yet been paid (unpaid claim liabilities) are equal to the death benefits
payable under the policies. For DI and LTC claims, unpaid claim liabilities
are equal to benefit amounts due and accrued including the expense of
reviewing claims and making benefit payment determinations. Liabilities for
claims that have occurred but have not yet been reported are estimated based
on periodic analysis of the actual lag between when a claim occurs and when
it is reported. Where applicable, amounts recoverable from other insurers
who share in the risk of the products offered (reinsurers) are separately
recorded as receivables.


                                     30

<PAGE>
<PAGE>

Liabilities for fixed and variable universal life insurance are equal to
accumulation values which are the cumulative deposits, credited interest,
and fund performance less withdrawals and mortality and expense risk
charges. Liabilities for future benefits on term and whole life insurance
are based on the net level premium method, using anticipated premium
payments, mortality rates, policy persistency and interest rates earned on
the assets supporting the liability. Anticipated mortality rates are based
on established industry mortality tables, with modifications based on IDS
Life's experience. Anticipated policy premium payments and persistency rates
vary by policy form, issue age and policy duration. Anticipated interest
rates range from 4.0% to 10.0% at December 31, 2005, depending on policy
form, issue year and policy duration. IDS Life issues only non-participating
life insurance policies, which do not pay dividends to policyholders from
the insurers' earnings.

Liabilities for future policy benefits include both policy reserves and
claim reserves on DI and LTC products. Policy reserves are the amounts
needed to meet obligations for future claims and are based on the net level
premium method, using anticipated premium payments and morbidity, mortality,
policy persistency and discount rates. Anticipated morbidity and mortality
rates are based on established industry morbidity and mortality tables.
Anticipated policy persistency rates vary by policy form, issue age, policy
duration and, for DI policies, occupation class. Anticipated interest rates
for DI policy reserves are 7.5% at policy issue and grade to 5.0% over 5
years. Anticipated interest rates for LTC care policy reserves were 5.3% at
December 31, 2005 grading up to 9.4% over 40 years.

Claim reserves on DI and LTC products are the amounts needed to meet
obligations for continuing claim payments on already incurred claims. Claim
reserves are calculated based on claim continuance tables which estimate the
likelihood that an individual will continue to be eligible for benefits and
anticipated interest rates earned on assets supporting the reserves.
Anticipated claim continuance rates are based on established industry
tables. Anticipated interest rates for claim reserves for both DI and LTC
range from 3.0% to 8.0% at December 31, 2005, with an average rate of
approximately 4.9% at December 31, 2005.

DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES
The fair value of IDS Life's derivative financial instruments are determined
using either market quotes or valuation models that are based upon the net
present value of estimated future cash flows and incorporate current market
data inputs. In certain instances, the fair value includes structuring costs
incurred at the inception of the transaction. The accounting for the change
in the fair value of a derivative financial instrument depends on its
intended use and the resulting hedge designation, if any. IDS Life currently
designates derivatives as cash flow hedges or, in certain circumstances,
does not designate derivatives as accounting hedges.

For derivative financial instruments that qualify as cash flow hedges, the
effective portions of the gain or loss on the derivatives instruments are
reported in accumulated other comprehensive income (loss) and reclassified
into earnings when the hedged item or transactions impact earnings. Any
ineffective portion of the gain or loss is also reported currently in
earnings as a component of net investment income.

For derivative financial instruments that do not qualify for hedge
accounting, or are not designated as hedges, changes in fair value are
reported in current period earnings, generally as a component of net
investment income. These derivatives primarily provide economic hedges to
equity market exposures. An example includes options and futures that
economically hedge the equity components of certain annuities. For further
details on the types of derivatives IDS Life uses and how it accounted for
them, see Note 10 to the Consolidated Financial Statements.


                                     31

<PAGE>
<PAGE>

INCOME TAX ACCOUNTING
Income taxes, as reported in the Consolidated Financial Statements,
represent the net amount of income taxes that IDS Life expects to pay to or
receive from various taxing jurisdictions in connection with its operations.
IDS Life provides for income taxes based on amounts that it believes it will
ultimately owe. Inherent in the provision for income taxes are estimates and
judgments regarding the tax treatment of certain items and the realization
of certain offsets and credits. In the event that the ultimate tax treatment
of items or the realization of offsets or credits differs from IDS Life's
estimates, it may be required to significantly change the provision for
income taxes recorded in its Consolidated Financial Statements.

In connection with the provision for income taxes, the Consolidated
Financial Statements reflect certain amounts related to deferred tax assets
and liabilities, which result from temporary differences between the assets
and liabilities measured for financial statement purposes versus the assets
and liabilities measured for tax return purposes. Among IDS Life's deferred
tax assets is a significant deferred tax asset relating to capital losses
realized for tax return purposes and capital losses that have been
recognized for financial statement purposes but not yet for tax return
purposes. Under current U.S. federal income tax law, capital losses
generally must be used against capital gain income within five years of the
year in which the capital losses are recognized for tax purposes.

IDS Life will not be able to file a consolidated U.S. federal income tax
return with the other members of the Ameriprise Financial affiliated group
for five tax years following the Distribution, which will result in net
operating and capital losses, credits, and other tax attributes generated by
one group not being available to offset income earned or taxes owed by the
other group during the period of non-consolidation. This lack of
consolidation could affect IDS Life's ability to fully realize certain
deferred tax assets, including the capital losses referred to above.

IDS Life is required to establish a valuation allowance for any portion of
deferred tax assets that management believes will not be realized. It is
likely that management will need to identify and implement appropriate
planning strategies to ensure its ability to realize deferred tax assets
relating to capital losses and avoid the establishment of a valuation
allowance with respect to it. In the opinion of management, it is currently
more likely than not that IDS Life will realize the benefit of deferred tax
assets, including capital loss deferred tax assets, and, therefore, no such
valuation allowance has been established.

RECENT ACCOUNTING PRONOUNCEMENTS
For information regarding recent accounting pronouncements and their
expected impact on future consolidated results of operations or financial
condition, see Note 1 to the Consolidated Financial Statements.

FINANCIAL CONDITION

IDS Life's total assets and liabilities increased in 2005 primarily due to
higher separate account assets and liabilities, which increased as a result
of net client inflows and market appreciation.

Investments primarily include corporate debt securities and mortgage and
other asset-backed securities. At December 31, 2005, IDS Life's corporate
debt securities comprise a diverse portfolio with the largest
concentrations, accounting for approximately 68% of the portfolio, in the
following industries: banking and finance, utilities, and communications and
media. Investments also include $4.0 billion and $4.3 billion of mortgage
loans on real estate, policy loans and other investments at December 31,
2005 and 2004, respectively. Investments are principally funded by sales of
insurance and annuities and by reinvested income. Maturities of these
investment securities are largely matched with the expected future payments
of insurance and annuity obligations.

Investments include $2.1 billion and $2.2 billion of below investment grade
securities (excluding net unrealized appreciation and depreciation) at
December 31, 2005 and 2004, respectively. These investments represent 7% and
8% of IDS Life's investment portfolio at December 31, 2005 and 2004,
respectively.


                                     32

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<PAGE>

Separate account assets represent funds held for the exclusive benefit of
variable annuity contractholders and variable life insurance policyholders.
These assets are generally carried at market value, and separate account
liabilities are equal to separate account assets. IDS Life earns
administration and other fees from the related accounts. The increase in
separate account assets and liabilities to $37.9 billion as of December 31,
2005 compared to $32.5 billion as of December 31, 2004, resulted from net
inflows of $3.1 billion and market appreciation.

IDS Life holds reserves for current and future obligations that are related
to fixed annuities, certain guaranteed payments under variable annuities and
life, DI and LTC insurance. Reserves related to fixed annuities, guarantees
under variable annuities and life, DI and LTC insurance are reflected in
future policy benefits in the Consolidated Balance Sheets. Reserves for
fixed annuities and universal life contracts are equal to the underlying
contract accumulation values. Reserves for other life, DI and LTC insurance
products are based on various assumptions, including mortality rates,
morbidity rates and policy persistency.

LIQUIDITY AND CAPITAL RESOURCES

CAPITAL STRATEGY
The liquidity requirements of IDS Life are generally met by funds provided
by investment income, maturities and periodic repayments of investments,
deposits, premiums and proceeds from sales of investments as well as capital
contributions from Ameriprise Financial. The primary uses of funds are
policy benefits, commissions, other product-related acquisition and sales
inducement costs, operating expenses, policy loans, dividends to Ameriprise
Financial and investment purchases. IDS Life routinely reviews its sources
and uses of funds in order to meet its ongoing obligations. In connection
with the separation, IDS Life received a capital contribution of $650
million from Ameriprise Financial during the third quarter of 2005 to
support its current financial strength ratings and to cover the allocated
separation costs. During the fourth quarter of 2005, IDS Life approved and
paid dividends to Ameriprise Financial of $380 million. During the second
and fourth quarter of 2004, IDS Life approved and paid dividends to
Ameriprise Financial of $430 million and $500 million, respectively. IDS
Life expects to continue to maintain adequate capital to meet internal and
external RBC requirements.

FUNDING STRATEGY
At December 31, 2005 and 2004, IDS Life had outstanding reverse repurchase
agreements totaling $25.0 million and $47.0 million, respectively. The
reverse repurchase agreements are used strictly as short-term sources of
funds.

CONTRACTUAL COMMITMENTS
The contractual obligations identified in the table below include balance
sheet transactions that represent material expected or contractually
committed future obligations of IDS Life. Payments due by period as of
December 31, 2005 are as follows:

<TABLE>
<CAPTION>
                                                                          Payments due in year ending
----------------------------------------------------------------------------------------------------------------------------------
(Millions)                                          Total             2006           2007-            2009-            2011 and
                                                                                      2008             2010           thereafter
----------------------------------------------------------------------------------------------------------------------------------
<S>                                       <C>                  <C>            <C>              <C>              <C>
    Insurance and annuities (1)           $           53,467   $      3,715   $       7,264    $        6,859   $         35,629
----------------------------------------------------------------------------------------------------------------------------------
<FN>
(1) These scheduled payments are represented by reserves of approximately
    $32 billion at December 31, 2005 and are based on interest credited,
    mortality, morbidity, lapse, surrender and premium payment assumptions.
    Actual payment obligations may differ if experience varies from these
    assumptions. Separate account liabilities have been excluded as
    associated contractual obligations would be met by separate account
    assets.
</TABLE>




                                     33

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<PAGE>

OFF-BALANCE SHEET ARRANGEMENTS

Consolidated Variable Interest Entities
Assets consolidated as a result of the December 31, 2003 adoption of
Financial Accounting Standards Board Interpretation No. 46, "Consolidation
of Variable Interest Entities," as revised (FIN 46) were $907 million. The
consolidated assets consisted of $834 million of cash and $73 million of
derivatives, essentially all of which were restricted. The effect of
consolidating these assets on IDS Life's balance sheet was offset by IDS
Life's previously recorded carrying values of its investment in such
structures, which totaled $673 million, and $166 million of newly
consolidated liabilities.

The consolidation of FIN 46-related entities resulted in a cumulative effect
of accounting change that increased 2003 net income through a non-cash gain
of $44.5 million ($68.4 million pretax) related to the consolidation of
three SLTs. The initial gain related to the application of FIN 46 for the
SLTs had no cash flow effect on IDS Life. One SLT was liquidated in 2004,
resulting in a cumulative net pretax charge of $24.2 million during the year
ended December 31, 2004 and the other two SLTs were liquidated in 2004 and
2005 resulting in a $3.7 million pretax charge in 2004 and a $13.9 million
pretax gain in 2005. There is no remaining exposure related to these SLTs as
of December 31, 2005.

Retained Interest in Assets Transferred to Unconsolidated Entities
In 2001, IDS Life placed a majority of its rated CDO securities and related
accrued interest, as well as a relatively minor amount of other liquid
securities, having an aggregate book value of $675.3 million, into a
securitization trust. In return, IDS Life received $89.5 million in cash
(excluding transaction expenses) relating to sales to unaffiliated investors
and retained interests with allocated book amounts aggregating $585.8
million. During the second quarter of 2005, IDS Life sold all of its
retained interest in the CDO-related securitization trust and realized a net
pretax gain of $24.9 million. The carrying value of this retained interest
was $526.2 million at December 31, 2004, of which $389.9 million was
considered investment grade.

CONTINGENT LIQUIDITY PLANNING
Ameriprise Financial has developed a contingent funding plan that enables
IDS Life to meet client obligations during periods in which its clients
elect to withdraw funds from their annuity and insurance contracts.
Ameriprise Financial designed this plan to allow IDS Life to meet these
client withdrawals by selling or obtaining financing, through repurchase
agreements, of portions of its investment securities portfolio.

RISK MANAGEMENT

In accordance with regulatory investment guidelines, IDS Life Insurance
Company and its subsidiaries, through their respective boards of directors
or board of directors' investment committees or staff functions, review
models projecting different interest rate scenarios, risk/return measures,
and their effect on profitability. They also review the distribution of
assets in the portfolio by type and credit risk sector. The objective is to
structure the investment securities portfolio in the general account to meet
contractual obligations under the insurance and annuity products and achieve
targeted levels of profitability within defined risk parameters.

IDS Life has developed an asset/liability management approach with separate
investment objectives to support specific product liabilities, such as
insurance and annuities. As part of this approach, IDS Life develops
specific investment guidelines that are designed to optimize trade offs
between risk and return and help ensure IDS Life is able to support future
benefit payments under its insurance and annuity obligations. These same
objectives must be consistent with management's overall investment
objectives for the general account investment portfolio.


                                     34

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<PAGE>

IDS Life's owned investment securities are primarily invested in long-term
and intermediate-term fixed maturity securities to provide clients with a
competitive rate of return on their investments while controlling risk.
Investment in fixed maturity securities is designed to provide IDS Life with
a targeted margin between the yield earned on investments and the interest
rate credited to clients' accounts. IDS Life does not trade in securities to
generate short-term profits for its own account.

As part of IDS Life's investment process, management, with the assistance of
its investment advisors, conducts a quarterly review of investment
performance. The review process conducted by IDS Life's Investment Committee
involves the review of certain invested assets which the committee evaluates
to determine whether or not any investments are other-than-temporarily
impaired and/or which specific interest earning investments should be put on
an interest non-accrual basis.

IDS Life has two principal components of market risk: interest rate risk and
equity market risk. Interest rate risk results from investing in assets that
are somewhat longer and reset less frequently than the liabilities they
support. IDS Life manages interest rate risk through the use of a variety of
tools that include modifying the maturities of investments supporting its
fixed annuities and insurance products. Additionally, IDS Life enters into
derivative financial instruments, such as interest rate swaps, caps, floors
and swaptions, which change the interest rate characteristics of client
liabilities or investment assets. Because certain of its investment
activities are impacted by the value of its managed equity-based portfolios,
from time to time IDS Life enters into risk management strategies that may
include the use of equity derivative financial instruments, such as equity
options, to mitigate its exposure to volatility in the equity markets.

INTEREST RATE RISK
Interest rate exposures arise primarily with respect to the fixed account
portion of IDS Life's annuity and insurance products and its investment
portfolio. Such client liabilities and investment assets generally do not
create naturally offsetting positions as it relates to basis, repricing or
maturity characteristics. Rates credited to clients' accounts generally
reset at shorter intervals than the yield on underlying investments.
Further, the expected maturities on the investment assets may not align with
the surrender or other benefit payments from fixed annuity and insurance
products. Therefore, IDS Life's interest spread margins are affected by
changes in the general level of interest rates. The extent to which the
level of interest rates affects spread margins is managed primarily by a
combination of modifying the maturity structure of the investment portfolio
to more closely align with the client liability maturities, and the use of
derivative financial instruments to modify the interest rate risk
characteristics associated with certain client liabilities and investment
assets.

IDS Life has entered into swaptions or other interest floors and caps to
mitigate the impact of increasing interest rates related to the forecasted
interest payments of future annuity sales to clients. Such annuities
generally contain fixed interest rate provisions, which are set at the time
of the future issuance, and impact the total interest payment cash flows
related to the annuities. Therefore, this strategy allows IDS Life to "lock
in" interest rate risk associated with the forecasted annuity sale cash
flows at a specified market rate in the event that interest rates rise but
not "lock in" the interest rate risk in the event that interest rates
decline. The total notional of derivatives outstanding under this risk
management strategy was $1.2 billion as of December 31, 2005 and 2004. The
total fair value of these derivative financial instruments was $8.4 million
and $27.3 million as of December 31, 2005 and 2004, respectively. IDS Life
recognized $1.8 million of losses in the Consolidated Statements of Income
for the year ended December 31, 2005. No losses were recognized for the
years ended December 31, 2004 and 2003, respectively. No cash was paid for
the years ended December 31, 2005 and 2004. Total cash paid was $71.8
million for the year ended December 31, 2003.

The negative effect on IDS Life's pretax earnings of a 100 basis point
increase in interest rates, which assumes repricings and client behavior
based on the application of proprietary models, to the book of business for
years ended December 31, 2005 and 2004 would be approximately $27.4 million
and $15.5 million, respectively.


                                     35

<PAGE>
<PAGE>

EQUITY MARKET RISK
IDS Life has three primary exposures to the general level of equity markets.
One exposure is that IDS Life earns fees from variable annuity and variable
life insurance products. The amount of fees is generally based on the value
of the portfolios, and thus is subject to fluctuation with the general level
of equity market values. To reduce the sensitivity of IDS Life's fee
revenues to the general performance of equity markets, IDS Life may from
time to time enter into various combinations of financial instruments such
as equity market put and collar options that mitigate the negative effect on
fees that would result from a decline in the equity markets.

The second exposure is the equity risk related to certain annuity products
that pay interest based upon the relative change in the S&P 500 index. IDS
Life enters into options and futures contracts to economically hedge this
risk. These products generally have rates that are paid to clients based on
equity market performance, with minimum guarantees. The minimum guarantees
are provided by a portfolio of fixed income securities, while the equity
based return is provided by a portfolio of equity options and futures
constructed to replicate the return to the contractholder.

Finally, although IDS Life currently bears all risk related to GMDB, GMIB
and GMAB, IDS Life hedges its GMWB risk using structured option contracts
which are designed to mitigate economic risk and its exposure to income
statement volatility. Such annuities, which were first introduced in 2004,
typically have account values that are based on an underlying portfolio of
mutual funds which fluctuate based on equity market performance. The GMWB
guarantees that over a period no shorter than 14 years the client can
withdraw an amount equal to what has been paid into the contract, regardless
of the performance of the underlying funds. This option is an embedded
derivative that is accounted for at fair value, with changes in fair value
recorded through earnings. To economically hedge these changes in market
value, IDS Life may pursue a portfolio of equity future contracts
constructed to offset a portion of the changes in the option mark-to-market.

For all of IDS Life's economic equity risk hedges, the total notional of
derivatives outstanding under this risk management strategy was $854.1
million and $261.0 million as of December 31, 2005 and 2004, respectively.
The total net fair value of these derivative financial instruments was
$123.8 million and $26.9 million as of December 31, 2005 and 2004,
respectively. The total amounts recognized in the Consolidated Statements of
Income for these contracts were $9.1 million, $4.0 million and $7.0 million
for the years ended December 31, 2005, 2004 and 2003, respectively. Cash
(paid)/received related to these derivative financial instruments totaled
$(87.8) million, $4.4 million and $(3.1) million for the years ended
December 31, 2005, 2004 and 2003, respectively.

The negative effect on IDS Life's pretax earnings of a 10% decline in equity
markets would be approximately $51.3 million and $38.8 million based on
annuity and insurance business in force and index options as of December 31,
2005 and 2004, respectively.

IMPACT OF MARKET VOLATILITY ON RESULTS OF OPERATIONS
As described previously, various aspects of IDS Life's business are impacted
by equity market levels and other market-based events. Several areas in
particular involve DAC and deferred sales inducements, recognition of GMDB,
GMWB, GMIB and GMAB, asset management fees, and mortality and expense risk
and other fees. The direction and magnitude of the changes in equity markets
can increase or decrease amortization of DAC and deferred sales inducement
costs, incurred amounts under GMDB, GMWB, GMIB and GMAB and asset management
fees and mortality and expense risk and other fees and correspondingly
affect results of operations in any particular period.


                                     36

<PAGE>
<PAGE>

FORWARD-LOOKING STATEMENTS

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

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Items required under this section are included in "Management's Discussion
and Analysis of Financial Condition and Results of Operations - Risk
Management."

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

1.       Financial Statements.

See Index to Financial Statements at page F-1 hereof.



                                     37

<PAGE>
<PAGE>

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE

IDS Life's Consolidated Financial Statements for the years ended December
31, 2005, 2004 and 2003 have been audited by Ernst & Young LLP, IDS Life's
independent registered public accounting firm.

Through 2004, Ernst & Young LLP provided audit services to IDS Life as part
of the audit services it provided to American Express. In 2004, the Audit
Committee of American Express' Board of Directors determined to request
proposals from auditing firms for their 2005 audit. This request was made
pursuant to the American Express Audit Committee charter, which requires a
detailed review of the outside audit firm at least every ten years. At a
meeting held on November 22, 2004, the American Express Audit Committee
approved the future engagement of PricewaterhouseCoopers LLP as independent
registered public accountants for the fiscal year ending December 31, 2005
and dismissed Ernst & Young LLP for the 2005 fiscal year. This decision also
applied to IDS Life. Ernst & Young LLP continued as auditors of American
Express and IDS Life for the year ended December 31, 2004.

Ernst & Young LLP's reports on IDS Life's Consolidated Financial Statements
for the fiscal years ended December 31, 2004 and 2003, did not contain an
adverse opinion or a disclaimer of opinion and were not qualified or
modified as to uncertainty, audit scope, or accounting principles.

In connection with the audits of IDS Life's Consolidated Financial
Statements for each of the two fiscal years ended December 31, 2004 and
2003, there were no disagreements with Ernst & Young LLP on any matters of
accounting principles or practices, financial statement disclosure, or
auditing scope or procedure, which, if not resolved to the satisfaction of
Ernst & Young LLP, would have caused Ernst & Young LLP to make reference to
the matter in their report. During the two most recent fiscal years and
subsequent interim period proceeding the dismissal of Ernst & Young LLP,
there were no "reportable events" (as defined in Regulation S-K, Item
304(a)(1)(v)).

In connection with the Separation and Distribution from American Express, on
February 18, 2005, the Audit Committee of the Board of Directors of American
Express dismissed PricewaterhouseCoopers LLP and engaged Ernst & Young LLP
to be the independent registered public accountants of IDS Life for the year
ended December 31, 2005. PricewaterhouseCoopers LLP continues as the
independent registered public accountants for the Consolidated Financial
Statements of American Express for the 2005 fiscal year.

PricewaterhouseCoopers LLP did not issue any report on IDS Life's
Consolidated Financial Statements for either of the past two years. During
the period from November 22, 2004 and through February 18, 2005, there were
no disagreements between IDS Life and PricewaterhouseCoopers LLP on any
matter of accounting principles or practices, financial statement
disclosures, or auditing scope or procedures, which, if not resolved to the
satisfaction of PricewaterhouseCoopers LLP, would have caused
PricewaterhouseCoopers LLP to make reference to the matter in their report.
There have been no "reportable events," as defined in Item 304(a)(1)(v) of
Regulation S-K, during the period between November 22, 2004 to February 18,
2005.

ITEM 9A. CONTROLS AND PROCEDURES

DISCLOSURE CONTROLS AND PROCEDURES
IDS Life maintains disclosure controls and procedures (as defined in Rules
13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended
(the Exchange Act)) designed to provide reasonable assurance that the
information required to be reported in the Exchange Act filings is recorded,
processed, summarized and reported within the time periods specified and
pursuant to the regulations of the Securities and Exchange Commission,
including controls and procedures designed to ensure that this information
is accumulated and communicated to IDS Life's management, including its
Chief Executive Officer and Chief Financial Officer, as appropriate, to
allow timely decisions regarding the required disclosure. It should be noted
that, because of inherent limitations, IDS Life's disclosure controls and
procedures, however well designed and operated, can provide only reasonable,
and not absolute, assurance that the objectives of the disclosure controls
and procedures are met.

                                     38

<PAGE>
<PAGE>

IDS Life's management, with the participation of IDS Life's Chief Executive
Officer and Chief Financial Officer, has evaluated the effectiveness of IDS
Life's disclosure controls and procedures (as such term is defined in Rules
13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period
covered by this report. Based on such evaluation, IDS Life's Chief Executive
Officer and Chief Financial Officer have concluded that, as of the end of
such period, IDS Life's disclosure controls and procedures were effective
at a reasonable level of assurance as of December 31, 2005.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
American Express has historically provided a variety of corporate and other
support services for IDS Life, including information technology, treasury,
accounting, financial reporting, tax administration, human resources,
marketing, legal, procurement and other services. American Express will
continue to provide IDS Life with many of these services pursuant to a
transition services agreement for a transition period of up to two years
following the Distribution. IDS Life is now relying upon American Express as
a third party to perform these services, many of which may impact its
financial reporting processes. During this transition there have been some
changes in personnel and in relative responsibility for oversight of the
processes. IDS Life considers this a material change in internal control
over financial reporting.

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

ITEM 9B. OTHER INFORMATION

None.

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Item omitted pursuant to General Instructions I(2)(c) of Form 10-K.

ITEM 11. EXECUTIVE COMPENSATION

Item omitted pursuant to General Instructions I(2)(c) of Form 10-K.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
         RELATED STOCKHOLDER MATTERS

Item omitted pursuant to General Instructions I(2)(c) of Form 10-K.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Item omitted pursuant to General Instructions I(2)(c) of Form 10-K.



                                     39

<PAGE>
<PAGE>

                                  PART III
                                  --------

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

The Audit Committee of the Board of Directors of American Express has
appointed Ernst & Young LLP (Ernst & Young) as independent auditors to audit
the Consolidated Financial Statements of IDS Life for the years ended
December 31, 2005 and 2004.

FEES PAID TO THE REGISTRANT'S INDEPENDENT AUDITOR
The following table presents fees for professional services rendered by
Ernst & Young for the audit of IDS Life's financial statements for the years
ended December 31, 2005 and 2004 and other fees billed for other services
rendered by Ernst & Young during those periods.

<TABLE>
<CAPTION>
Thousands                                                                     2005                2004
---------------------------------------------------------------------------------------------------------------
<S>                                                                     <C>                 <C>
Audit Fees (1)                                                          $           1,423   $           1,434
Tax Fees (2)                                                                            -                   -
All Other Fees (3)                                                                      -                   -
---------------------------------------------------------------------------------------------------------------
Total                                                                   $           1,423   $           1,434
===============================================================================================================
<FN>
(1) Audit fees included audit work performed in the review and preparation
of the financial statements, as well as, services that generally only the
independent auditor can be expected to provide, such as comfort letters,
statutory audits, attest services, consents and assistance with and review
of documents filed with the Securities and Exchange Commission.
(2) Tax fees included all services performed by the independent auditor's
tax personnel.
(3) All other fees included miscellaneous out-of-pocket expenses.
</TABLE>

POLICY ON PRE-APPROVAL OF SERVICES PROVIDED BY INDEPENDENT AUDITOR
Pursuant to the requirements of the Sarbanes-Oxley Act of 2002, the terms of
the engagement of Ernst & Young are subject to the specific pre-approval of
the Audit Committee of Ameriprise Financial. All audit and permitted
non-audit services to be performed by Ernst & Young for IDS Life require
pre-approval by the Audit Committee of Ameriprise Financial in accordance
with pre-approval procedures established by the Audit Committee of
Ameriprise Financial. The procedures require all proposed engagements of
Ernst & Young for services to IDS Life of any kind to be directed to the
General Auditor of Ameriprise Financial, and then submitted for approval to
the Audit Committee of Ameriprise Financial prior to the beginning of any
services.

In 2005, 100% of the services provided by Ernst & Young for IDS Life were
pre-approved by the Audit Committee of American Express prior to the
Distribution and, thereafter, by the Audit Committee of Ameriprise
Financial.



                                     40

<PAGE>
<PAGE>

                                   PART IV
                                   -------

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES

     (a) (1)      Financial Statements

         See Index to Financial Statements on page F-1 hereof.

         (2)      Financial Statement Schedules

         See Index to Financial Statements on page F-1 hereof.
         All information on schedules to the Consolidated Financial
         Statements required by Rule 7-05 in Article 7 of Regulation S-X is
         included in the Consolidated Financial Statements or is not
         required. Therefore, all schedules have been omitted.

         (3)      Exhibits

         See Exhibit Index on pages E-1 through E-3 hereof.







                                     41

<PAGE>
<PAGE>

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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


March 9, 2006                  By  /s/ Mark E. Schwarzmann
-------------                      ------------------------------------------
Date                               Mark E. Schwarzmann, Chairman
                                   of the Board and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been duly signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

March 9, 2006                      /s/ Gumer C. Alvero
-------------                      ---------------------------------------------
Date                               Gumer C. Alvero, Director and Executive
                                   Vice President - Annuities

March 9, 2006                      /s/ Timothy V. Bechtold
-------------                      ---------------------------------------------
Date                               Timothy V. Bechtold, Director and President

March 9, 2006                      /s/ Arthur H. Berman
-------------                      ---------------------------------------------
Date                               Arthur H. Berman, Director

March 9, 2006                      /s/ Brian J. McGrane
-------------                      ---------------------------------------------
Date                               Brian J. McGrane, Director, Executive Vice
                                   President and Chief Financial Officer

March 9, 2006                      /s/ David K. Stewart
-------------                      ---------------------------------------------
Date                               David K. Stewart, Vice President and
                                   Controller

March 9, 2006                      /s/ Kevin E. Palmer
-------------                      ---------------------------------------------
Date                               Kevin E. Palmer, Director, Vice President and
                                   Chief Actuary

March 9, 2006                      /s/ Mark E. Schwarzmann
-------------                      ---------------------------------------------
Date                               Mark E. Schwarzmann, Director, Chairman
                                   of the Board and Chief Executive Officer






                                     42

<PAGE>
<PAGE>


<TABLE>
                                            IDS LIFE INSURANCE COMPANY
                                           INDEX TO FINANCIAL STATEMENTS
                        COVERED BY REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

                                                   (ITEM 14 (a))





<CAPTION>
                                                                                                       Page Number
<S>                                                                                                   <C>
CONSOLIDATED FINANCIAL STATEMENTS:

Report of Independent Registered Public Accounting Firm                                                    F-2

Consolidated Balance Sheets at December 31, 2005 and 2004                                                  F-3

Consolidated Statements of Income for each of the three years ended
December 31, 2005, 2004 and 2003                                                                           F-4

Consolidated Statements of Cash Flows for each of the three years
ended December 31, 2005, 2004 and 2003                                                                  F-5 to F-6

Consolidated Statements of Stockholder's Equity for each of the three
years ended December 31, 2005, 2004 and 2003                                                               F-7

Notes to Consolidated Financial Statements                                                             F-8 to F-38
</TABLE>



SCHEDULES:
All information on schedules to the Consolidated Financial Statements
required by Rule 7-05 in Article 7 of Regulation S-X is included in the
Consolidated Financial Statements and notes thereto or is not required.
Therefore, all schedules have been omitted.






                                    F-1

<PAGE>
<PAGE>

Report of Independent Registered Public Accounting Firm

The Board of Directors
IDS Life Insurance Company

We have audited the accompanying Consolidated Balance Sheets of IDS Life
Insurance Company (a wholly-owned subsidiary of Ameriprise Financial, Inc.)
as of December 31, 2005 and 2004, and the related Consolidated Statements of
Income, Stockholder's Equity, and Cash Flows for each of the three years in
the period ended December 31, 2005. These financial statements are the
responsibility of IDS Life Insurance Company's management. Our
responsibility is to express an opinion on these financial statements based
on our audits.

We conducted our audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards require
that we plan and perform the audits to obtain reasonable assurance about
whether the financial statements are free of material misstatement. We were
not engaged to perform an audit of the Company's internal control over
financial reporting. Our audits included consideration of internal control
over financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company's internal control over
financial reporting. Accordingly, we express no such opinion. An audit also
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the
overall financial statement presentation. We believe that our audits provide
a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of IDS Life
Insurance Company at December 31, 2005 and 2004, and the results of its
operations and its cash flows for each of the three years in the period
ended December 31, 2005, in conformity with U.S. generally accepted
accounting principles.

As discussed in Note 1 to the Consolidated Financial Statements, in 2004 IDS
Life Insurance Company adopted the provisions of the American Institute of
Certified Public Accountants' Statement of Position 03-1, "Accounting and
Reporting by Insurance Enterprises for Certain Nontraditional Long-Duration
Contracts and for Separate Accounts" and in 2003 adopted the provisions of
Financial Accounting Standards Board Interpretation No. 46 (revised December
2003), "Consolidation of Variable Interest Entities."



/s/ Ernst & Young LLP
Minneapolis, Minnesota
February 27, 2006


                                    F-2

<PAGE>
<PAGE>

<TABLE>
                                                   IDS LIFE INSURANCE COMPANY
                                                   CONSOLIDATED BALANCE SHEETS
                                                          December 31,
                                                 (Thousands, except share data)

<CAPTION>
                                                                                                 2005                 2004
                                                                                         ------------------    -----------------
<S>                                                                                      <C>                   <C>
ASSETS
Investments:
Available-for-Sale:
   Fixed maturities, at fair value (amortized cost: 2005, $27,817,021; 2004,
     $27,400,640)                                                                        $   27,753,174        $  28,131,195
   Preferred and common stocks, at fair value (cost: 2005, $13; 2004, $30,019)                       21               31,256
Mortgage loans on real estate, at cost (less allowance for loan losses: 2005, $41,347;
   2004, $45,347)                                                                             2,842,362            2,923,542
Policy loans                                                                                    605,212              588,574
Trading securities and other investments                                                        547,668              802,096
                                                                                         ------------------    -----------------
         Total investments                                                                   31,748,437           32,476,663

Cash and cash equivalents                                                                       233,589              131,427
Restricted cash                                                                                       -              535,821
Reinsurance recoverables                                                                        982,521              876,408
Amounts due from brokers                                                                          4,166                7,109
Other accounts receivable                                                                        62,930               52,527
Accrued investment income                                                                       328,567              351,522
Deferred policy acquisition costs                                                             4,035,879            3,637,956
Deferred sales inducement costs                                                                 370,166              302,997
Other assets                                                                                    220,371              186,003
Separate account assets                                                                      37,929,960           32,454,032
                                                                                         ------------------    -----------------

Total assets                                                                             $   75,916,586       $   71,012,465
                                                                                         ==================    =================

LIABILITIES AND STOCKHOLDER'S EQUITY
Liabilities:
Future policy benefits:
   Fixed annuities                                                                       $   26,126,068        $  26,978,596
   Variable annuity guarantees                                                                   29,550               32,955
   Universal life insurance                                                                   3,711,628            3,689,639
   Traditional life insurance                                                                   298,479              271,516
   Disability income and long-term care insurance                                             2,145,969            1,942,656
Policy claims and other policyholders' funds                                                     90,233               69,884
Amounts due to brokers                                                                           31,772              162,609
Deferred income taxes, net                                                                        9,099              141,202
Other liabilities                                                                               381,938              363,821
Separate account liabilities                                                                 37,929,960           32,454,032
                                                                                         ------------------    -----------------
         Total liabilities                                                                   70,754,696           66,106,910
                                                                                         ------------------    -----------------

Stockholder's equity:
   Capital stock, $30 par value;
    100,000 shares authorized, issued and outstanding                                             3,000                3,000
   Additional paid-in capital                                                                 2,020,388            1,370,388
   Retained earnings                                                                          3,269,206            3,190,474
   Accumulated other comprehensive (loss) income, net of tax:
     Net unrealized securities (losses) gains                                                   (90,632)             370,615
     Net unrealized derivative losses                                                           (40,072)             (28,922)
                                                                                         ------------------    -----------------
   Total accumulated other comprehensive (loss) income                                         (130,704)             341,693
                                                                                         ------------------    ------------------
         Total stockholder's equity                                                           5,161,890            4,905,555
                                                                                         ------------------    -----------------

Total liabilities and stockholder's equity                                               $   75,916,586        $  71,012,465
                                                                                         ==================    =================

See Notes to Consolidated Financial Statements.
</TABLE>

                                    F-3

<PAGE>
<PAGE>


<TABLE>
                                                   IDS LIFE INSURANCE COMPANY
                                                CONSOLIDATED STATEMENTS OF INCOME
                                                    Years ended December 31,
                                                           (Thousands)

<CAPTION>
                                                                      2005                   2004                   2003
                                                              -------------------    --------------------   -------------------
<S>                                                           <C>                    <C>                    <C>
REVENUES
   Premiums:
     Traditional life insurance                               $          74,751      $         68,335       $           64,890
     Disability income and long-term care insurance                     295,084               283,608                  284,111
                                                              -------------------    --------------------   -------------------

         Total premiums                                                 369,835               351,943                  349,001

   Net investment income                                              1,791,324             1,777,446                1,705,185
   Contractholder and policyholder charges                              577,159               554,344                  530,190
   Mortality and expense risk and other fees                            488,633               430,320                  390,516
   Net realized gain on investments                                      48,296                27,292                    4,445
                                                              -------------------    --------------------   -------------------

         Total revenues                                               3,275,247             3,141,345                2,979,337
                                                              -------------------    --------------------   -------------------

BENEFITS AND EXPENSES
   Death and other benefits:
     Traditional life insurance                                          41,550                36,843                   38,870
     Investment contracts and universal life-type insurance             232,816               227,664                  209,065
     Disability income and long-term care insurance                      75,864                67,261                   57,339
   Increase (decrease) in liabilities for future policy
     benefits:
     Traditional life insurance                                           4,638                 1,381                   (2,401)
     Disability income and long-term care insurance                     141,286               123,289                  142,532
   Interest credited to account values                                1,110,425             1,127,875                1,242,020
   Amortization of deferred policy acquisition costs                    315,882               260,778                  264,308
   Separation costs                                                     121,264                     -                        -
   Other insurance and operating expenses                               591,133               503,872                  453,065
                                                              -------------------    --------------------   -------------------

         Total benefits and expenses                                  2,634,858             2,348,963                2,404,798
                                                              -------------------    --------------------   -------------------

Income before income tax provision and accounting change                640,389               792,382                  574,539
Income tax provision                                                    181,657               226,177                   66,945
                                                              -------------------    --------------------   -------------------

Income before accounting change                                         458,732               566,205                  507,594
Cumulative effect of accounting change, net of tax                            -               (70,568)                  44,463
                                                              -------------------    --------------------   -------------------

Net income                                                    $         458,732      $        495,637       $          552,057
                                                              ===================    ====================   ===================



See Notes to Consolidated Financial Statements.
</TABLE>


                                     F-4

<PAGE>
<PAGE>


<TABLE>
                                                IDS LIFE INSURANCE COMPANY
                                           CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                 Years ended December 31,
                                                       (Thousands)

<CAPTION>
                                                                           2005               2004               2003
                                                                     ---------------    ----------------    ---------------
<S>                                                                  <C>                <C>                 <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income                                                           $       458,732    $      495,637      $       552,057
Adjustments to reconcile net income to net cash provided by (used
  in) operating activities:
  Cumulative effect of accounting change, net of tax                               -            70,568              (44,463)
  Amortization of deferred policy acquisition costs                          315,882           260,778              264,308
  Amortization of deferred sales inducement costs                             40,332            33,825               23,968
  Capitalization of deferred policy acquisition costs                       (632,743)         (533,842)            (516,928)
  Capitalization of deferred sales inducement costs                          (94,319)          (70,860)             (71,839)
  Amortization of premium, net                                                83,152            92,617              160,862
  Deferred income taxes                                                      122,264            70,574              (30,714)
  Policyholder and contractholder charges, non-cash                         (231,503)         (231,611)            (234,098)
  Net realized gain on investments                                           (48,296)          (27,292)              (4,445)
  Net realized gain on trading securities and equity method
     investments in hedge funds                                              (24,037)          (37,460)             (30,400)
Change in operating assets and liabilities:
  Trading securities and equity method investments in hedge funds,
     net                                                                     246,828             6,788             (358,200)
  Future policy benefits for traditional life, disability income
     and long-term care insurance                                            230,276           235,327              265,233
  Policy claims and other policyholders' funds                                20,349             1,973              (17,489)
  Policy loans, excluding universal life-type insurance:
     Repayment                                                                35,996            37,592               43,596
     Issuance                                                                (38,688)          (39,230)             (34,490)
  Reinsurance recoverables                                                  (106,113)         (121,894)            (121,004)
  Other accounts receivable                                                  (10,403)           15,895              (12,177)
  Accrued investment income                                                   22,955             3,852              (64,359)
  Other assets and liabilities, net                                           38,782           (12,765)            (130,066)
                                                                     ---------------    ----------------    ---------------

Net cash provided by (used in) operating activities                  $       429,446    $      250,472      $      (360,648)
                                                                     ---------------    ----------------    ---------------











<CAPTION>
See Notes to Consolidated Financial Statements.


                                    F-5



<PAGE>
<PAGE>


                                                IDS LIFE INSURANCE COMPANY
                                     CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
                                                 Years ended December 31,
                                                        (Thousands)

                                                                      2005                2004                 2003
                                                                 ---------------    -----------------    -----------------
<S>                                                              <C>                <C>                  <C>
CASH FLOWS FROM INVESTING ACTIVITIES
  Available-for-Sale securities:
     Sales                                                       $  3,124,154       $     1,603,285      $     12,232,235
     Maturities, sinking fund payments and calls                    2,241,829             1,931,070             4,152,088
     Purchases                                                     (5,780,183)           (4,392,522)          (20,527,995)
  Other investments, excluding policy loans:
     Sales, maturities, sinking fund payments and calls               652,831               690,333               621,163
     Purchases                                                       (542,610)             (402,235)             (438,336)
  Change in amounts due to and from brokers, net                     (127,894)              (71,415)           (3,261,601)
  Change in restricted cash                                           535,821               298,627                     -
                                                                 ---------------    -----------------    -----------------
         Net cash provided by (used in) investing activities          103,948              (342,857)           (7,222,446)
                                                                 ---------------    -----------------    -----------------

CASH FLOWS FROM FINANCING ACTIVITIES
  Activity related to investment contracts and universal
     life-type insurance:
     Considerations received                                        1,532,282             2,350,426             4,267,115
     Interest credited to account values                            1,110,425             1,127,875             1,242,020
     Surrenders and other benefits                                 (3,329,993)           (2,715,847)           (2,235,889)
  Universal life-type insurance policy loans:
     Repayment                                                         89,322                84,281                85,760
     Issuance                                                        (103,268)              (93,217)              (81,740)
  Capital contribution from Ameriprise Financial, Inc.                650,000                     -               282,061
  Cash dividend to Ameriprise Financial, Inc.                        (380,000)             (930,000)                    -
                                                                 ---------------    -----------------    -----------------
         Net cash (used in) provided by financing activities         (431,232)             (176,482)            3,559,327
                                                                 ---------------    -----------------    -----------------

  Net increase (decrease) in cash and cash equivalents                102,162              (268,867)           (4,023,767)
  Cash and cash equivalents at beginning of year                      131,427               400,294             4,424,061
                                                                 ---------------    -----------------    -----------------

  Cash and cash equivalents at end of year                       $    233,589       $       131,427      $        400,294
                                                                 ===============    =================    =================

  Supplemental disclosures:
     Income taxes paid                                           $     95,794       $       196,397      $        103,034
     Interest paid on borrowings                                 $        364       $           411      $          2,926
     Non-cash ownership transfer of net assets of American
       Express Corporation to Ameriprise Financial, Inc. in
       2003                                                      $          -       $             -      $        282,061




See Notes to Consolidated Financial Statements.
</TABLE>


                                    F-6

<PAGE>
<PAGE>


<TABLE>
                                                     IDS LIFE INSURANCE COMPANY
                                          CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY
                                            For the three years ended December 31, 2005
                                                            (Thousands)

<CAPTION>
                                                                                                                      Accumulated
                                                                                     Additional                          Other
                                                                       Capital        Paid-in          Retained      Comprehensive
                                                        Total           Stock         Capital          Earnings      Income (Loss)
------------------------------------------------------------------------------------------------------------------------------------
<S>                                                 <C>              <C>          <C>               <C>             <C>
Balances at December 31, 2002                       $  4,944,251     $    3,000   $     1,088,327   $   3,354,841   $      498,083
Comprehensive income:
    Net income                                           552,057                                          552,057
    Change in unrealized holding losses on
       securities, net                                   (90,695)                                                          (90,695)
    Change in unrealized derivative losses, net           (7,777)                                                           (7,777)
                                                   ----------------
    Total comprehensive income                           453,585
Capital contribution                                     282,061                          282,061
Non-cash dividend of American Express Corporation
    to Ameriprise Financial, Inc.                       (282,061)                                        (282,061)
------------------------------------------------------------------------------------------------------------------------------------

Balances at December 31, 2003                       $  5,397,836     $    3,000   $     1,370,388   $   3,624,837   $      399,611
Comprehensive income:
    Net income                                           495,637                                          495,637
    Change in unrealized holding losses on
       securities, net                                   (34,841)                                                          (34,841)
    Change in unrealized derivative losses, net          (23,077)                                                          (23,077)
                                                   ----------------
    Total comprehensive income                           437,719
Cash dividends to Ameriprise Financial, Inc.            (930,000)                                        (930,000)
------------------------------------------------------------------------------------------------------------------------------------

Balances at December 31, 2004                       $  4,905,555     $    3,000   $     1,370,388   $   3,190,474   $      341,693
Comprehensive loss:
    Net income                                           458,732                                          458,732
    Change in unrealized holding losses on
       securities, net                                  (461,247)                                                         (461,247)
    Change in unrealized derivative losses, net          (11,150)                                                          (11,150)
                                                   ----------------
    Total comprehensive loss                             (13,665)
Capital contribution from Ameriprise Financial,
   Inc.                                                  650,000                          650,000
Cash dividend to Ameriprise Financial, Inc.             (380,000)                                        (380,000)
------------------------------------------------------------------------------------------------------------------------------------

Balances at December 31, 2005                       $  5,161,890     $    3,000   $     2,020,388   $   3,269,206   $     (130,704)
====================================================================================================================================


See Notes to Consolidated Financial Statements.
</TABLE>

                                    F-7


<PAGE>
<PAGE>

                         IDS LIFE INSURANCE COMPANY
                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


   1. Nature of Business, Basis of Presentation and Summary of Significant
      --------------------------------------------------------------------
      Accounting Policies
      -------------------

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

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

     o   American Enterprise Life Insurance Company (American Enterprise
         Life) is a stock life insurance company domiciled in Indiana, which
         holds Certificates of Authority in the District of Columbia and all
         states except New York. American Enterprise Life issues fixed and
         variable annuity contracts primarily through regional and national
         financial institutions and regional and/or independent
         broker-dealers. (In past years, American Enterprise Life issued a
         nominal number of variable universal life contracts.)

     o   American Partners Life Insurance Company (American Partners Life)
         is a stock life insurance company domiciled in Arizona, which holds
         Certificates of Authority in the District of Columbia and all
         states except New York and New Hampshire. American Partners Life
         markets annuity products directly to customers, generally persons
         holding an American Express(R) Card.

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

     o   American Centurion Life Assurance Company (American Centurion Life)
         is a stock life insurance company domiciled in New York, which
         holds Certificates of Authority in New York, Alabama and Delaware.
         American Centurion Life issues fixed and variable annuity contracts
         primarily through financial institutions and independent
         broker-dealers. American Centurion Life also markets annuity
         products directly, generally to persons holding an American
         Express(R) Card.

     IDS Life Insurance Company also owns IDS REO 1, LLC, IDS REO 2, LLC and
     American Enterprise REO 1, LLC which hold real estate investments. IDS
     Life Insurance Company and its seven subsidiaries are referred to
     collectively in this Form 10-K as "IDS Life".



                                    F-8

<PAGE>
<PAGE>

                         IDS LIFE INSURANCE COMPANY
                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



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

     IDS Life's principal products are deferred annuities and universal life
     insurance which are issued primarily to individuals. It offers single
     premium and flexible premium deferred annuities on both a fixed and
     variable dollar basis. Immediate annuities are offered as well. IDS
     Life's fixed deferred annuities guarantee a relatively low annual
     interest rate during the accumulation period (the time before annuity
     payments begin). However, IDS Life has the option of paying a higher
     rate set at its discretion. In addition, persons owning one type of
     annuity may have their interest calculated based on an increase in a
     broad-based stock market index. IDS Life also offers variable
     annuities, including the RiverSource Retirement Advisor Advantage
     Plus(SM) Variable Annuity and the RiverSource Retirement Advisor Select
     Plus(SM) Variable Annuity. Life insurance products currently offered by
     IDS Life include universal life (fixed and variable, single life and
     joint life), single premium life, whole life and term products. Waiver
     of premium and accidental death benefit riders are generally available
     with these life insurance products. IDS Life also markets disability
     income (DI) insurance. Although IDS Life discontinued issuance of
     long-term care (LTC) insurance at the end of 2002, IDS Life retains
     risk on a large block of existing contracts, 50% of which are
     reinsured. In May 2003, IDS Life began outsourcing claims
     administration.

     Under IDS Life's variable life insurance and variable annuity products
     described above, the purchaser may choose among investment options that
     include IDS Life's "general account" as well as from a variety of
     portfolios including common stocks, bonds, managed assets and/or
     short-term securities.

     Basis of Presentation
     The accompanying Consolidated Financial Statements include the accounts
     of IDS Life Insurance Company, its wholly-owned subsidiaries and
     certain variable interest entities (VIEs). All significant intercompany
     accounts and transactions have been eliminated in consolidation.

     The accompanying Consolidated Financial Statements have been prepared
     in conformity with United States generally accepted accounting
     principles (GAAP) which vary in certain respects from reporting
     practices prescribed or permitted by state insurance regulatory
     authorities as described in Note 7. Certain prior year amounts have
     been reclassified to conform to the current year's presentation.

     The preparation of financial statements in conformity with GAAP
     requires management to make estimates and assumptions that affect the
     reported amounts of assets and liabilities and disclosure of contingent
     assets and liabilities at the date of the financial statements and the
     reported amounts of revenues and expenses during the reporting period.
     Actual results could differ from those estimates.


                                    F-9

<PAGE>
<PAGE>

                         IDS LIFE INSURANCE COMPANY
                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



     Principles of Consolidation
     IDS Life consolidates all non-variable interest entities in which it
     holds a greater than 50% voting interest, except for immaterial seed
     money investments in separate accounts, which are accounted for as
     trading securities. Entities in which IDS Life holds a greater than 20%
     but less than 50% voting interest are accounted for under the equity
     method. Additionally, other investments in hedge funds in which IDS
     Life holds an interest that is less than 50% are accounted for under
     the equity method. All other investments are accounted for under the
     cost method where IDS Life owns less than a 20% voting interest and
     does not exercise significant influence, or as Available-for-Sale
     securities, as applicable.

     IDS Life also consolidates all VIEs for which it is considered to be
     the primary beneficiary pursuant to Financial Accounting Standards
     Board (FASB) Interpretation No. 46, "Consolidation of Variable Interest
     Entities," as revised (FIN 46). The determination as to whether an
     entity is a VIE is based on the amount and characteristics of the
     entity's equity. In general, FIN 46 requires a VIE to be consolidated
     when an enterprise has a variable interest for which it is deemed to be
     the primary beneficiary, which means that it will absorb a majority of
     the VIEs expected losses, receive a majority of the VIEs expected
     residual return, or both. IDS Life liquidated its interest in all
     consolidated VIEs during 2004 and 2005 resulting in no consolidated
     VIEs as of December 31, 2005.

     Qualifying Special Purpose Entities (QSPEs) under Statement of
     Financial Accounting Standard (SFAS) No. 140, "Accounting for Transfers
     and Servicing of Financial Assets and Extinguishments of Liabilities,"
     are not consolidated. Such QSPEs include a securitization trust
     containing a majority of its rated collateralized debt obligations
     (CDOs), as described in Note 2. IDS Life sold all of its retained
     interest in this securitization trust in 2005.

     BALANCE SHEET

     INVESTMENTS
     Investments consist of the following:

     Available-for-Sale Securities
     Available-for-Sale securities are carried at fair value on the
     Consolidated Balance Sheets with unrealized gains (losses) recorded in
     accumulated other comprehensive income (loss) within equity, net of
     income tax provision (benefit) and net of adjustments in asset and
     liability balances, such as deferred policy acquisition costs (DAC), to
     reflect the expected impact on their carrying values had the unrealized
     gains (losses) been realized as of the respective balance sheet date.
     Gains and losses are recognized in results of operations upon
     disposition of the securities. In addition, losses are also recognized
     when management determines that a decline in value is
     other-than-temporary, which requires judgment regarding the amount and
     timing of recovery. Indicators of other-than-temporary impairment for
     debt securities include issuer downgrade, default or bankruptcy. IDS
     Life also considers the extent to which amortized cost exceeds fair
     value, the duration of that difference, and management's judgment about
     the issuer's current and prospective financial condition, as well as
     its ability and intent to hold until recovery. Other-than-temporary
     impairment charges are recorded in net realized gains (losses) on
     investments within the Consolidated Statements of Income. Fair value is
     generally based on quoted market prices.


                                    F-10

<PAGE>
<PAGE>

                         IDS LIFE INSURANCE COMPANY
                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



     Mortgage Loans on Real Estate, Net
     Mortgage loans on real estate reflect principal amounts outstanding
     less allowance for mortgage loan losses. The allowance for mortgage
     loan losses is measured as the excess of the loan's recorded investment
     over the present value of its expected principal and interest payments
     discounted at the loan's effective interest rate, or the fair value of
     collateral. Additionally, the level of the allowance for mortgage loan
     losses considers other factors, including historical experience and
     current economic and political conditions. Management regularly
     evaluates the adequacy of the allowance for mortgage loan losses and
     believes it is adequate to absorb estimated losses in the portfolio.

     IDS Life generally stops accruing interest on mortgage loans for which
     interest payments are delinquent more than three months. Based on
     management's judgment as to the ultimate collectibility of principal,
     interest payments received are either recognized as income or applied
     to the recorded investment in the loan.

     Policy Loans
     Policy loans are carried at the aggregate of the unpaid loan balances,
     which do not exceed the cash surrender values of the related policies.

     Trading Securities and Other Investments
     Included in trading securities and other investments are hedge fund
     investments, separate account seed money, syndicated loans and real
     estate. Separate account seed money is carried at fair market value
     with changes in value recognized in the Consolidated Statements of
     Income within net investment income. The carrying value of equity
     method investments in hedge funds reflects IDS Life's original
     investment and its share of earnings or losses of the hedge funds
     subsequent to the date of investment, and approximate fair value.
     Syndicated loans reflect amortized cost less allowance for losses. Real
     estate investments reflect properties acquired in satisfaction of debt
     and are carried at the lower of cost or the property's net realizable
     value.

     CASH AND CASH EQUIVALENTS
     IDS Life has defined cash equivalents to include highly liquid
     investments with original maturities of 90 days or less.

     RESTRICTED CASH
     As a result of the adoption of FIN 46 in 2003, IDS Life consolidated
     restricted cash held by secured loan trusts (SLTs) where such cash
     cannot be utilized for operations. The SLTs were liquidated in 2004 and
     2005.

     REINSURANCE
     IDS Life reinsures a portion of the insurance risks associated with its
     life and LTC insurance products through reinsurance agreements with
     unaffiliated insurance companies. Reinsurance is used in order to limit
     losses, minimize exposure to large risks, provide additional capacity
     for future growth and to effect business-sharing arrangements. IDS Life
     evaluates the financial condition of reinsurers to manage its
     exposure to significant losses from reinsurer insolvencies. IDS Life
     remains primarily liable as the direct insurer on all risks reinsured.


                                    F-11

<PAGE>
<PAGE>


                         IDS LIFE INSURANCE COMPANY
                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


     Generally, IDS Life reinsures 90% of the death benefit liability
     related to fixed and variable universal life and term life insurance
     products. IDS Life began reinsuring risks at this level beginning in
     2001 for term life insurance and 2002 for variable and universal life
     insurance. Policies issued prior to these dates are not subject to
     these same reinsurance levels. The maximum amount of life insurance
     risk retained by IDS Life is $750,000 on any policy insuring a single
     life and $1.5 million on any flexible premium survivorship variable
     life policy. For existing LTC policies, IDS Life retained 50% of the
     risk and the remaining 50% of the risk was ceded to General Electric
     Capital Assurance Company. Risk on variable life and universal life
     policies is reinsured on a yearly renewable term basis. Risk on recent
     term life and LTC policies is reinsured on a coinsurance basis.

     IDS Life retains all risk for new claims on DI contracts. Risk is
     currently managed by limiting the amount of disability insurance
     written on any one individual. IDS Life also retains all accidental
     death benefit and waiver of premium risk.

     DEFERRED POLICY ACQUISITION COSTS
     DAC represents the costs of acquiring new business, principally direct
     sales commissions and other distribution and underwriting costs that
     have been deferred on the sale of annuity and life, DI and LTC
     insurance products. These costs are deferred to the extent they are
     recoverable from future profits. For annuity and insurance products,
     DAC is amortized over periods approximating the lives of the business,
     generally as a percentage of premiums or estimated gross profits or as
     a portion of product interest margins depending on the product's
     characteristics.

     For IDS Life's annuity and insurance products, the projections
     underlying the amortization of DAC require the use of certain
     assumptions, including interest margins, mortality and morbidity rates,
     persistency, maintenance expense levels and customer asset value growth
     rates for variable products. Management routinely monitors a wide
     variety of trends in the business, including comparisons of actual and
     assumed experience. The customer asset value growth rate is the rate at
     which contract values are assumed to appreciate in the future. The rate
     is net of asset fees and anticipates a blend of equity and fixed income
     investments. Management reviews and, where appropriate, adjusts its
     assumptions with respect to client asset value growth rates on a
     quarterly basis.

     Management monitors other principal DAC assumptions, such as interest
     margin, mortality and morbidity rates, persistency 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 increase in DAC amortization
     expense while a decrease in amortization percentage will result in a
     decrease in DAC amortization expense. 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 in which such changes are made.


                                    F-12

<PAGE>
<PAGE>


                         IDS LIFE INSURANCE COMPANY
                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


     DEFERRED SALES INDUCEMENT COSTS
     Deferred sales inducement costs (DSIC) consist of bonus interest
     credits and deposit credits added to certain annuity contract values.
     These benefits are capitalized to the extent they are incremental to
     amounts that would be credited on similar contracts without the
     applicable feature. These costs were previously included in DAC and
     were reclassified as part of the adoption of the American Institute of
     Certified Public Accountants (AICPA) 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 amounts capitalized are amortized using the same methodology
     and assumptions used to amortize DAC.

     DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES
     Derivative instruments are classified on the Consolidated Balance
     Sheets at fair value within other assets or liabilities. The fair value
     of IDS Life's derivative financial instruments is determined using
     either market quotes or valuation models that are based upon the net
     present value of estimated future cash flows and incorporate current
     market data inputs. In certain instances, the fair value includes
     structuring costs incurred at the inception of the transaction. The
     accounting for the change in the fair value of a derivative instrument
     depends on its intended use and the resulting hedge designation, if
     any.

     For derivative financial instruments that qualify as cash flow hedges,
     the effective portions of the gain or loss on the derivative
     instruments are recorded in accumulated other comprehensive income
     (loss) and reclassified into earnings when the hedged item or
     transactions impact earnings. The amount that is reclassified into
     earnings is presented in the Consolidated Statements of Income with the
     hedged instrument or transaction impact. Any ineffective portion of the
     gain or loss is reported currently in earnings as a component of net
     investment income. If a hedge is no longer designated or is terminated
     prior to maturity, the amount previously recorded in accumulated other
     comprehensive income (loss) is recognized into earnings over the period
     that the hedged item impacts earnings. For any hedge relationships that
     are discontinued because the forecasted transaction is not expected to
     occur according to the original strategy, any related amounts
     previously recorded in accumulated other comprehensive income (loss)
     are recognized into earnings immediately.

     Derivative financial instruments that are entered into for hedging
     purposes are designated as such at the time that IDS Life enters into
     the contract. For all derivative financial instruments that are
     designated for hedging activities, IDS Life formally documents all of
     the hedging relationships between the hedge instruments and the hedged
     items at the inception of the relationships. Management also formally
     documents its risk management objectives and strategies for entering
     into the hedge transactions. IDS Life formally assesses, at inception
     and on a quarterly basis, whether derivatives designated as hedges are
     highly effective in offsetting the cash flows of hedged items. If it is
     determined that a derivative is not highly effective as a hedge, IDS
     Life will discontinue the application of hedge accounting. See Note 10
     for information regarding the cash flow hedges used by IDS Life.

     IDS Life currently has economic hedges that either do not qualify or
     are not designated for hedge accounting treatment under SFAS No. 133,
     "Accounting for Derivative Instruments and Hedging Activities" (SFAS 133).
     For derivative financial instruments that do not qualify for hedge
     accounting, or are not designated under SFAS 133 as hedges, changes in
     fair value are reported in current period earnings generally as a
     component of net investment income. See the "Derivatives Not Designated
     as Hedges" section of Note 10 which describes the types of economic
     hedges used by IDS Life.


                                    F-13

<PAGE>
<PAGE>


                         IDS LIFE INSURANCE COMPANY
                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


     SEPARATE ACCOUNT ASSETS AND LIABILITIES
     Separate account assets and liabilities are funds held for exclusive
     benefit of variable annuity contractholders and variable life insurance
     policyholders. IDS Life receives mortality and expense risk and other
     fees, including payments from its affiliate, RiverSource Investments,
     LLC for providing certain sponsor and related servicing activity, which
     are based on asset levels, guaranteed minimum death benefit (GMDB)
     fees and cost of insurance charges from the related accounts. In
     addition, IDS Life also receives marketing and administrative support
     payments from the affiliates of other companies' funds included as
     investment options in its variable annuity and variable life insurance
     products, which vary based on the level of variable assets. Prior to
     the fourth quarter of 2003, these fees included investment advisory
     fees as IDS Life served as the investment manager for affiliate
     variable portfolio mutual funds. In the fourth quarter of 2003,
     Ameriprise Financial replaced IDS Life as the investment manager and
     assumed these duties for the mutual funds and retained IDS Life to
     provide underlying sponsor and related services. At that time, IDS Life
     began receiving internal allocation fees from Ameriprise Financial as
     compensation for providing these non-investment advisory services. In
     the fourth quarter of 2005, RiverSource Investments, LLC replaced
     Ameriprise Financial as the investment manager. As a result, IDS Life
     now receives internal allocation payments as compensation from
     RiverSource Investments, LLC for providing these non-investment
     advisory services.

     IDS Life provides contractual mortality assurances to variable annuity
     contractholders that the net assets of the separate accounts will not
     be affected by future variations in the actual life expectancy
     experience of the annuitants and beneficiaries from the mortality
     assumptions implicit in the annuity contracts. IDS Life makes periodic
     fund transfers to, or withdrawals from, the separate account assets for
     such actuarial adjustments for variable annuities that are in the
     benefit payment period. IDS Life also guarantees that the rates at
     which administrative charges are deducted from contract funds will not
     exceed contractual maximums.

     For variable life insurance, IDS Life guarantees that the rates at
     which insurance charges and administrative charges are deducted from
     contract funds will not exceed contractual maximums.

     LIABILITIES FOR FUTURE POLICY BENEFITS AND CLAIMS

     Fixed Annuities and Variable Annuity Guarantees
     Liabilities for fixed and variable deferred annuities are equal to
     accumulation values which are the cumulative gross deposits, credited
     interest and fund performance less withdrawals and mortality and
     expense risk charges.

     The majority of the variable annuity contracts offered by IDS Life
     contain GMDB provisions. When market values of the customer's accounts
     decline, the death benefit payable on a contract with a GMDB may exceed
     the contract accumulation value. IDS Life also offers variable
     annuities with death benefit provisions that gross up the amount
     payable by a certain percentage of contract earnings. These are
     referred to as gain gross-up (GGU) benefits. In addition, IDS Life
     offers contracts containing guaranteed minimum withdrawal benefit
     (GMWB), guaranteed minimum income benefit (GMIB) and guaranteed minimum
     accumulation benefit (GMAB) provisions.


                                    F-14

<PAGE>
<PAGE>


                         IDS LIFE INSURANCE COMPANY
                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


     Effective January 1, 2004, liabilities for GMDB, GGU and GMIB benefits
     have been established under SOP 03-1. Actuarial models to simulate
     various equity market scenarios are used to project these benefits and
     contract assessments and include making significant assumptions related
     to customer asset value growth rates, mortality, persistency and
     investment margins. These assumptions, as well as their periodic review
     by management, are consistent with those used for DAC purposes. Prior
     to the adoption of SOP 03-1, amounts paid in excess of contract value
     were expensed when payable. See the "Recently Issued Accounting
     Standards" section below and Note 5 for more information about these
     guaranteed benefits.

     GMWB and GMAB provisions are considered embedded derivatives under SFAS
     133 and, accordingly, are carried at fair value within future policy
     benefits for variable annuity guarantees on the Consolidated Balance
     Sheets. The fair value of these embedded derivatives is based on the
     present value of future benefits less applicable fees charged for the
     provision. Changes in fair value are reflected in death and other
     benefits for investment contracts and universal life-type insurance
     within the Consolidated Statements of Income.

     Liabilities for equity indexed deferred annuities issued in 1999 or
     later are equal to the accumulation of host contract values covering
     guaranteed benefits and the market value of embedded equity options.
     Liabilities for equity indexed deferred annuities issued before 1999
     are equal to the present value of guaranteed benefits and the intrinsic
     value of index-based benefits. Accounting for equity indexed deferred
     annuities issued before 1999 differs from those issued in 1999 and
     later due to the treatment of embedded equity options within the
     contracts. Embedded equity options are considered embedded derivatives
     under SFAS 133. However, SFAS 133 allowed companies to elect whether to
     separately account for embedded derivatives which are part of contracts
     issued prior to January 1, 1999. IDS Life elected not to separately
     account for embedded derivatives related to contacts issued prior to
     January 1, 1999.

     Liabilities for fixed annuities in a benefit or payout status are based
     on future estimated payments using established industry mortality
     tables and interest rates, ranging from 4.6% to 9.5% at December 31,
     2005, depending on year of issue, with an average rate of approximately
     6.0%.

     Life, Disability Income and Long-Term Care Policies
     Liabilities for insurance claims that have been reported but have not
     yet been paid (unpaid claim liabilities) are equal to the death
     benefits payable under the policies. For DI and LTC claims, unpaid
     claim liabilities are equal to benefit amounts due and accrued
     including the expense of reviewing claims and making benefit payment
     determinations. Liabilities for claims that have been incurred but not
     reported are estimated based on periodic analysis of the actual lag
     between when a claim occurs and when it is reported. Where applicable,
     amounts recoverable from other insurers who share in the risk of the
     products offered (reinsurers) are separately recorded as receivables.

     Liabilities for fixed and variable universal life insurance are equal
     to accumulation values which are the cumulative gross deposits, credited
     interest, and fund performance less withdrawals and mortality and
     expense risk charges. Liabilities for future benefits on term and whole
     life insurance are based on the net level premium method, using
     anticipated premium payments, mortality rates, policy persistency and
     interest rates earned on the assets supporting the liability.
     Anticipated mortality rates are based on established industry mortality
     tables, with modifications based on IDS Life's experience. Anticipated
     policy premium payments and persistency rates vary by policy form,
     issue age and policy duration. Anticipated interest rates range from 4%
     to 10% at December 31, 2005, depending on policy form, issue year and
     policy duration. IDS Life issues only non-participating life insurance
     policies, which do not pay dividends to policyholders from the
     insurers' earnings.

                                    F-15

<PAGE>
<PAGE>


                         IDS LIFE INSURANCE COMPANY
                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


     Liabilities for future policy benefits include both policy reserves and
     claim reserves on DI and LTC products. Policy reserves are the amounts
     needed to meet obligations for future claims and are based on the net
     level premium method, using anticipated premium payments and morbidity,
     mortality, policy persistency and discount rates. Anticipated morbidity
     and mortality rates are based on established industry morbidity and
     mortality tables. Anticipated policy persistency rates vary by policy
     form, issue age, policy duration and, for DI policies, occupation
     class. Anticipated discount rates for DI policy reserves are 7.5% at
     policy issue and grade to 5% over 5 years. Anticipated discount rates
     for LTC policy reserves are currently 5.3% at December 31, 2005 grading
     up to 9.4% over 40 years.

     Claim reserves on DI and LTC products are the amounts needed to meet
     obligations for continuing claim payments on already incurred claims.
     Claim reserves are calculated based on claim continuance tables which
     estimate the likelihood that an individual will continue to be eligible
     for benefits and anticipated interest rates earned on assets supporting
     the reserves. Anticipated claim continuance rates are based on
     established industry tables. Anticipated interest rates for claim
     reserves for both DI and LTC range from 3.0% to 8.0% at December 31,
     2005, with an average rate of approximately 4.9%.

     REVENUES AND EXPENSES

     IDS Life's principal sources of revenue include premium revenues, net
     investment income, contractholder and policyholder charges and
     mortality and expense risk and other fees.

     Premium Revenues
     Premium revenues include premiums on traditional life, DI and LTC
     insurance products. Such premiums are recognized as revenue when due.

     Net Investment Income
     Net investment income predominantly consists of interest income earned
     on fixed maturity securities classified as Available-for-Sale, mortgage
     loans on real estate and policy loans, mark-to-market of trading
     securities and hedges on equity indexed annuities and GMWB, and
     allocated income from equity method investments in hedge funds.
     Interest income is accrued as earned using the effective interest
     method, which makes an adjustment of the yield for security premiums
     and discounts on all performing fixed maturity securities classified as
     Available-for-Sale, excluding structured securities, and mortgage loans
     on real estate so that the related security or loan recognizes a
     constant rate of return on the outstanding balance throughout its term.

     Contractholder and Policyholder Charges
     Contractholder and policyholder charges include certain charges
     assessed on annuities and fixed and variable universal life insurance,
     such as cost of insurance and administrative and surrender charges.
     Cost of insurance charges on fixed and variable universal life
     insurance are recognized as revenue when earned, whereas contract
     charges and surrender charges on annuities and universal and variable
     universal life insurance are recognized as revenue when collected.

     Mortality and Expense Risk and Other Fees
     Mortality and expense risk and other fees include risk, management and
     administration fees, which are generated directly and indirectly from
     IDS Life's separate account assets. IDS Life's management and other
     fees are generally computed as a contractual rate based on the
     underlying asset values and are generally received monthly.


                                    F-16

<PAGE>
<PAGE>


                         IDS LIFE INSURANCE COMPANY
                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


     Net Realized Gain (Loss) on Investments
     Realized gains and losses are recognized using the specific
     identification method, on a trade date basis, and charges are recorded
     when securities are determined to be other-than-temporarily impaired.

     Separation Costs
     During 2005, Ameriprise Financial developed an allocation policy for
     separation costs resulting in the allocation of certain costs to IDS
     Life that it considered to be a reasonable reflection of separation
     costs benefiting IDS Life. Separation costs generally consist of
     allocated financial advisor and employee retention program costs,
     re-branding and marketing costs and costs to separate and reestablish
     technology platforms related to the separation and Distribution of
     Ameriprise Financial.

     Income Taxes
     IDS Life's taxable income is included in the consolidated federal
     income tax return of American Express through September 30, 2005. IDS
     Life will file a separate consolidated life insurance company federal
     income tax return for five tax years following the Distribution
     including the period October 1, 2005 through December 31, 2005. IDS
     Life provides for income taxes based on the net amount of income taxes
     that it expects to pay or receive from various taxing jurisdictions in
     connection with its operations.

     RECENTLY ISSUED ACCOUNTING STANDARDS
     On November 3, 2005, the Financial Accounting Standards Board (FASB)
     issued FASB Staff Position (FSP) FAS 115-1 and FAS 124-1, "The Meaning
     of Other-Than-Temporary Impairment and Its Application to Certain
     Investments." FSP FAS 115-1 and FAS 124-1 address the determination as
     to when an investment is considered impaired, whether that impairment
     is other-than-temporary and the measurement of loss. It also includes
     accounting considerations subsequent to the recognition of an
     other-than-temporary impairment and requires certain disclosures about
     unrealized losses that have not been recognized as other-than-temporary
     impairments. FSP FAS 115-1 and FAS 124-1 are effective for reporting
     periods beginning after December 15, 2005. IDS Life anticipates the
     impact of FSP FAS 115-1 and FAS 124-1 on IDS Life's consolidated
     results of operations and financial condition will not be material.

     In September 2005, the AICPA issued Statement of Position 05-1,
     "Accounting by Insurance Enterprises for Deferred Acquisition Costs in
     Connection With Modifications or Exchanges of Insurance Contracts" (SOP
     05-1). SOP 05-1 provides guidance on accounting by insurance
     enterprises for DAC on internal replacements of insurance and
     investment contracts other than those specifically described in SFAS
     No. 97, "Accounting and Reporting by Insurance Enterprises for Certain
     Long-Duration Contracts and for Realized Gains and Losses from the Sale
     of Investments." SOP 05-1 is effective for internal replacements
     occurring in fiscal years beginning after December 15, 2006, with
     earlier adoption encouraged. IDS Life is currently evaluating the
     impact of SOP 05-1 on IDS Life's consolidated results of operations and
     financial condition.

     In May 2005, the FASB issued SFAS 154, "Accounting Changes and Error
     Corrections" (SFAS 154). This statement replaces APB Opinion No. 20,
     "Accounting Changes," and SFAS No. 3, "Reporting Accounting Changes in
     Interim Financial Statements" and changes the requirements for the
     accounting for and reporting of a change in accounting principle. SFAS
     154 is effective for accounting changes and corrections of errors made
     in fiscal years beginning after December 15, 2005. IDS Life does not
     anticipate SFAS 154 will materially impact its Consolidated Financial
     Statements upon its adoption on January 1, 2006.


                                    F-17

<PAGE>
<PAGE>


                         IDS LIFE INSURANCE COMPANY
                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


     In June 2004, the FASB issued FSP No. 97-1, "Situations in Which
     Paragraphs 17(b) and 20 of FASB Statement No. 97, Accounting and
     Reporting by Insurance Enterprises for Certain Long-Duration Contracts
     and for Realized Gains and Losses from the Sale of Investments (SFAS
     No. 97), Permit or Require Accrual of an Unearned Revenue Liability"
     (FSP 97-1). The implementation of SOP 03-1 raised a question regarding
     the interpretation of the requirements of SFAS No. 97 concerning when
     it is appropriate to record an unearned revenue liability. FSP 97-1
     clarifies that SFAS No. 97 is clear in its intent and language, and
     requires the recognition of an unearned revenue liability for amounts
     that have been assessed to compensate insurers for services to be
     performed over future periods. SOP 03-1 describes one situation, when
     assessments result in profits followed by losses, where an unearned
     revenue liability is required. SOP 03-1 does not amend SFAS No. 97 or
     limit the recognition of an unearned revenue liability to the situation
     described in SOP 03-1. The guidance in FSP 97-1 is effective for
     financial statements for fiscal periods beginning after June 18, 2004.
     The adoption of FSP 97-1 did not have a material impact on IDS Life's
     consolidated results of operations or financial condition.

     In July 2003, the AICPA issued SOP 03-1 effective for fiscal years
     beginning after December 15, 2003. SOP 03-1 provides guidance on
     separate account presentation and accounting for interests in separate
     accounts. Additionally, SOP 03-1 provides clarifying guidance as to the
     recognition of bonus interest and other sales inducement benefits and
     the presentation of any deferred amounts in the financial statements.
     Lastly, SOP 03-1 requires insurance enterprises to establish additional
     liabilities for benefits that may become payable under variable annuity
     death benefit guarantees or other insurance or annuity contract
     provisions. Where an additional liability is established, the
     recognition of this liability will then be considered in amortizing DAC
     and any DSIC associated with those insurance or annuity contracts.

     The adoption of SOP 03-1 as of January 1, 2004, resulted in a
     cumulative effect of accounting change that reduced 2004 results by
     $70.6 million ($108.6 million pretax). The cumulative effect of
     accounting change consisted of: (i) $42.9 million pretax from
     establishing additional liabilities for certain variable annuity
     guaranteed benefits ($32.8 million) and from considering these
     liabilities in valuing DAC and DSIC associated with those contracts
     ($10.1 million) and (ii) $65.7 million pretax from establishing
     additional liabilities for certain variable universal life and single
     pay universal life insurance contracts under which contractual cost of
     insurance charges are expected to be less than future death benefits
     ($92 million) and from considering these liabilities in valuing DAC
     associated with those contracts ($26.3 million offset). Prior to the
     adoption of SOP 03-1, amounts paid in excess of contract value were
     expensed when payable. IDS Life's accounting for separate accounts was
     already consistent with the provisions of SOP 03-1 and, therefore,
     there was no impact related to this requirement.

     The AICPA released a series of technical practice aids (TPAs) in
     September 2004, which provide additional guidance related to, among
     other things, the definition of an insurance benefit feature and the
     definition of policy assessments in determining benefit liabilities, as
     described within SOP 03-1. The TPAs did not have a material effect on
     IDS Life's calculation of liabilities that were recorded in the first
     quarter of 2004 upon adoption of SOP 03-1.


                                    F-18

<PAGE>
<PAGE>


                         IDS LIFE INSURANCE COMPANY
                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


     In January 2003, the FASB issued FIN 46, which addresses consolidation
     by business enterprises of VIEs and was subsequently revised in
     December 2003. The VIEs primarily impacted by FIN 46, which IDS Life
     consolidated as of December 31, 2003, relate to three SLTs, which were
     managed by an affiliate and partially owned by IDS Life. The
     consolidation of the three SLTs partially owned by IDS Life and managed
     by an affiliate, resulted in a cumulative effect of accounting change
     that increased 2003 net income through a non-cash gain of $44.5 million
     ($68.4 million pretax). The Company liquidated its interest in all
     consolidated VIEs during 2004 and 2005. See Note 3 for further
     discussion of consolidated VIEs.

   2. Investments
      -----------

     AVAILABLE-FOR-SALE SECURITIES

     Available-for-Sale securities at December 31, 2005 are distributed by
     type as presented below:

<TABLE>
<CAPTION>
     ---------------------------------------------------------------------------------------------------------------------
                                                                         Gross             Gross
                                                   Amortized          Unrealized         Unrealized            Fair
     (Thousands)                                      Cost              Gains              Losses              Value
     ---------------------------------------------------------------------------------------------------------------------
<S>                                            <C>                <C>                <C>                 <C>
     Fixed maturities:
     Corporate debt securities                 $     13,318,636   $        208,577   $       (198,774)   $    13,328,439
     Mortgage and other asset-backed
       securities                                    10,804,984             45,531           (158,784)        10,691,731
     Foreign corporate bonds and
        obligations                                   3,148,534             67,097            (54,721)         3,160,910
     U.S. Government and agencies obligations           300,337             16,207             (5,282)           311,262
     State and municipal obligations                    114,165              2,756             (3,262)           113,659
     Foreign government bonds and obligations           127,912             16,922               (114)           144,720
     Structured investments(a)                            2,453                  -                  -              2,453
     ---------------------------------------------------------------------------------------------------------------------
     Total fixed maturities                          27,817,021            357,090           (420,937)        27,753,174
     Preferred and common stocks                             13                  8                  -                 21
     ---------------------------------------------------------------------------------------------------------------------
        Total                                  $     27,817,034   $        357,098   $       (420,937)   $    27,753,195
     ---------------------------------------------------------------------------------------------------------------------
<FN>
     (a) Includes unconsolidated CDOs.
</TABLE>


                                    F-19

<PAGE>
<PAGE>

                         IDS LIFE INSURANCE COMPANY
                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


     Available-for-Sale securities at December 31, 2004 are distributed by
     type as presented below:

<TABLE>
<CAPTION>
     ---------------------------------------------------------------------------------------------------------------------
                                                                        Gross              Gross
                                                   Amortized         Unrealized          Unrealized            Fair
     (Thousands)                                      Cost             Gains               Losses              Value
     ---------------------------------------------------------------------------------------------------------------------
<S>                                            <C>                <C>                <C>                 <C>
     Fixed maturities:
     Corporate debt securities                 $     13,718,138   $        531,970   $        (36,990)   $    14,213,118
     Mortgage and other asset-backed
       securities                                     9,383,868            143,102            (30,487)         9,496,483
     Foreign corporate bonds and
        obligations                                   3,185,592            139,821            (14,178)         3,311,235
     U.S. Government and agencies obligations           330,540             15,181               (513)           345,208
     State and municipal obligations                    114,161              3,493             (2,569)           115,085
     Foreign government bonds and obligations           104,442             15,507               (552)           119,397
     Structured investments(a)                          563,899                  -            (33,230)           530,669
     ---------------------------------------------------------------------------------------------------------------------
     Total fixed maturities                          27,400,640            849,074           (118,519)        28,131,195
     Preferred and common stocks                         30,019              1,237                  -             31,256
     ---------------------------------------------------------------------------------------------------------------------
        Total                                  $     27,430,659   $        850,311   $       (118,519)   $    28,162,451
     ---------------------------------------------------------------------------------------------------------------------
<FN>
     (a) Includes unconsolidated CDOs.
</TABLE>

     At December 31, 2005 and 2004, fixed maturity securities, excluding net
     unrealized appreciation and depreciation, comprised approximately 87%
     of IDS Life's total investments. These securities are rated by Moody's
     Investors Service, Inc. (Moody's) and Standard & Poor's (S&P), except
     for approximately $1.0 billion of securities at both December 31, 2005
     and 2004 which are rated by RiverSource Investments, LLC's internal
     analysts using criteria similar to Moody's and S&P. Ratings on investment
     grade securities are presented using S&P's convention and, if the two
     agencies' ratings differ, the lower rating is used. A summary by rating
     (excluding net unrealized appreciation and depreciation) on December 31
     is as follows:

<TABLE>
<CAPTION>
     Rating                                                                   2005                  2004
     ---------------------------------------------------------------------------------------------------------
<S>                                                                           <C>                  <C>
     AAA                                                                        40%                   37%
     AA                                                                          6                     3
     A                                                                          20                    22
     BBB                                                                        26                    30
     Below investment grade                                                      8                     8
     ---------------------------------------------------------------------------------------------------------
         Total                                                                 100%                  100%
     ---------------------------------------------------------------------------------------------------------
</TABLE>

     At December 31, 2005 and 2004, approximately 47% and 61%, respectively,
     of the securities rated AAA are GNMA, FNMA and FHLMC mortgage-backed
     securities. No holdings of any other issuer were greater than 10% of
     stockholder's equity.


                                    F-20

<PAGE>
<PAGE>

                         IDS LIFE INSURANCE COMPANY
                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



     The following table provides information about Available-for-Sale
     securities with gross unrealized losses and the length of time that
     individual securities have been in a continuous unrealized loss
     position as of December 31, 2005:

<TABLE>
<CAPTION>
     ---------------------------------------------------------------------------------------------------------------------------
     (Thousands)                        Less than 12 months              12 months or more                    Total
     ---------------------------------------------------------------------------------------------------------------------------
                                        Fair         Unrealized         Fair        Unrealized        Fair         Unrealized
     Description of securities:         Value          Losses          Value          Losses          Value          Losses
     ---------------------------------------------------------------------------------------------------------------------------
<S>                                 <C>             <C>             <C>            <C>            <C>             <C>
     Corporate debt securities      $  6,184,289    $  (132,802)    $  1,618,552   $   (65,972)   $  7,802,841    $  (198,774)
     Mortgage and other
         asset-backed securities       6,001,482        (87,558)       2,059,075       (71,226)      8,060,557       (158,784)
     Foreign corporate bonds and
         obligations                   1,203,652        (31,308)         535,393       (23,413)      1,739,045        (54,721)
     U.S. Government and
         agencies obligations            148,584         (3,062)          72,844        (2,220)        221,428         (5,282)
     State and municipal
         obligations                      67,353         (2,589)          14,348          (673)         81,701         (3,262)
     Foreign government bonds
         and obligations                  13,344           (114)               -             -          13,344           (114)
     Structured investments                2,189              -                -             -           2,189              -
     ---------------------------------------------------------------------------------------------------------------------------
         Total                      $ 13,620,893    $  (257,433)    $  4,300,212   $  (163,504)   $ 17,921,105    $  (420,937)
     ---------------------------------------------------------------------------------------------------------------------------
</TABLE>

     The following table provides information about Available-for-Sale
     securities with gross unrealized losses and the length of time that
     individual securities have been in a continuous unrealized loss
     position as of December 31, 2004:

<TABLE>
<CAPTION>
     ------------------------------------------------------------------------------------------------------------------------------
     (Thousands)                         Less than 12 months              12 months or more                     Total
     ------------------------------------------------------------------------------------------------------------------------------
                                        Fair          Unrealized         Fair         Unrealized        Fair          Unrealized
     Description of securities:         Value           Losses           Value          Losses          Value           Losses
     ------------------------------------------------------------------------------------------------------------------------------
<S>                                 <C>             <C>              <C>             <C>           <C>              <C>
     Corporate debt securities      $    2,410,156  $     (20,461)   $      645,898  $   (16,529)  $     3,056,054  $     (36,990)
     Mortgage and other
         asset-backed securities         2,560,175        (17,686)          550,728      (12,801)        3,110,903        (30,487)
     Foreign corporate bonds               641,928         (6,571)          373,312       (7,607)        1,015,240        (14,178)
     U.S. Government and
         agencies obligations              159,904           (498)              533          (15)          160,437           (513)
     State and municipal
         obligations                             -              -            62,454       (2,569)           62,454         (2,569)
     Foreign government bonds
         and obligations                     1,002            (33)            9,008         (519)           10,010           (552)
     Structured investments                      -              -           526,190      (33,230)          526,190        (33,230)
     ------------------------------------------------------------------------------------------------------------------------------
         Total                      $    5,773,165  $     (45,249)   $    2,168,123  $   (73,270)  $     7,941,288  $    (118,519)
     ------------------------------------------------------------------------------------------------------------------------------
</TABLE>

     In evaluating potential other-than-temporary impairments, IDS Life
     considers the extent to which amortized costs exceeds fair value and
     the duration of that difference. A key metric in performing this
     evaluation is the ratio of fair value to amortized cost. The following
     table summarizes the unrealized losses by ratio of fair value to
     amortized cost as of December 31, 2005:

<TABLE>
<CAPTION>
     (Millions, except
     number of securities)        Less than 12 months                 12 months or more                       Total
     -------------------------------------------------------------------------------------------------------------------------------
                                                    Gross                                Gross                              Gross
     Ratio of Fair Value    Number of    Fair     Unrealized   Number of    Fair       Unrealized   Number of     Fair    Unrealized
     to Amortized Cost      Securities   Value      Losses     Securities   Value        Losses     Securities    Value    Losses
     -------------------------------------------------------------------------------------------------------------------------------
<S>                         <C>       <C>          <C>          <C>        <C>         <C>            <C>        <C>      <C>
     95% - 100%                645    $   13,200   $   (223)      213      $  3,971    $    (141)       858      $ 17,171 $   (364)
     90% - 95%                  36           340        (22)       24           321          (22)        60           661      (44)
     80% - 90%                   9            81        (12)        3             8           (1)        12            89      (13)
     -------------------------------------------------------------------------------------------------------------------------------
         Total                 690    $   13,621   $   (257)      240      $  4,300    $    (164)       930      $ 17,921 $   (421)
     -------------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                    F-21

<PAGE>
<PAGE>

                         IDS LIFE INSURANCE COMPANY
                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



     A majority of the gross unrealized losses related to corporate debt
     securities and substantially all of the gross unrealized losses related
     to mortgage and other asset-backed securities are attributable to
     changes in interest rates. A portion of the gross unrealized losses
     particularly related to corporate debt securities is also attributed
     to credit spreads and specific issuer credit events. As noted in the
     table above, a significant portion of the unrealized loss relates to
     securities that have a fair value to amortized cost ratio of 95% or
     above resulting in an overall 98% ratio of fair value to amortized cost
     for all securities with an unrealized loss. From an overall
     perspective, the gross unrealized losses are not concentrated in any
     individual industries or with any individual securities. However, the
     securities with a fair value to amortized cost ratio of 80%-90%
     primarily relate to the auto and paper industries. The largest
     unrealized loss associated with an individual issuer, excluding GNMA,
     FNMA and FHLMC mortgage-backed securities, is $6 million. The
     securities related to this issuer have a fair value to amortized cost
     ratio of 80%-90% and have been in an unrealized loss position for less
     than 12 months.

     IDS Life monitors the investments and metrics discussed previously on a
     quarterly basis to identify and evaluate investments that have
     indications of possible other-than-temporary impairment. See the
     Investments section of Note 1 for information regarding IDS Life's
     policy for determining when an investment's decline in value is
     other-than-temporary. As stated earlier, IDS Life's ongoing monitoring
     process has revealed that a significant portion of the gross unrealized
     losses on its Available-for-Sale securities are attributable to changes
     in interest rates. Additionally, IDS Life has the ability and intent to
     hold these securities for a time sufficient to recover its amortized
     cost and has, therefore, concluded that none are other-than-temporarily
     impaired at December 31, 2005.

     The change in net unrealized securities gains (losses) recognized in
     accumulated other comprehensive income includes three components, net
     of tax: (i) unrealized gains (losses) that arose from changes in market
     value of securities that were held during the period (holding gains
     (losses)), (ii) gains (losses) that were previously unrealized, but
     have been recognized in current period net income due to sales and
     other-than-temporary impairments of Available-for-Sale securities
     (reclassification of realized (gains) losses) and (iii) other items
     primarily consisting of adjustments in asset and liability balances,
     such as DAC, DSIC and annuity liabilities to reflect the expected
     impact on their carrying values had the unrealized gains (losses) been
     realized as of the respective consolidated balance sheet dates.

     The following table presents these components of other comprehensive
     income (loss), net of tax:

<TABLE>
<CAPTION>
     (Thousands)                                                     2005               2004                2003
     -------------------------------------------------------------------------------------------------------------------
<S>                                                             <C>                 <C>                 <C>
     Holding (losses) gains, net of tax of $260,090,
       $22,633, and $44,705, respectively                       $    (483,023)      $      42,034       $    (83,106)
     Reclassification of realized gains, net of tax of
       $18,381, $10,765, and $6,044, respectively                     (34,137)            (19,993)           (11,225)
     DAC, net of tax of $28,372, $3,179 and $1,958,
       respectively                                                    52,690               5,905              3,636
     DSIC, net of tax of $4,614, $3,538, and $0,
       respectively                                                     8,568              (6,571)                 -
     Fixed annuity liabilities, net of tax of $2,878,
       $30,270, and $0, respectively                                   (5,345)            (56,216)                 -
     -------------------------------------------------------------------------------------------------------------------
     Net unrealized securities losses                           $    (461,247)      $     (34,841)      $    (90,695)
     -------------------------------------------------------------------------------------------------------------------
</TABLE>


                                    F-22

<PAGE>
<PAGE>

                         IDS LIFE INSURANCE COMPANY
                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS




     The following is a distribution of Available-for-Sale securities by
     maturity as of December 31, 2005:

<TABLE>
<CAPTION>
                                                                 Amortized               Fair
    (Thousands)                                                    Cost                  Value
    -------------------------------------------------------------------------------------------------
<S>                                                          <C>                    <C>
    Due within 1 year                                        $         525,818      $       529,579
    Due after 1 through 5 years                                      4,288,859            4,301,151
    Due after 5 through 10 years                                    11,063,792           11,020,647
    Due after 10 years                                               1,131,115            1,207,613
    -------------------------------------------------------------------------------------------------
                                                                    17,009,584           17,058,990
    Mortgage and other asset-backed securities                      10,804,984           10,691,731
    Structured investments                                               2,453                2,453
    Preferred and common stocks                                             13                   21
    -------------------------------------------------------------------------------------------------
    Total                                                    $      27,817,034      $    27,753,195
    -------------------------------------------------------------------------------------------------
</TABLE>

     The expected payments on mortgage and other asset-backed securities and
     structured investments may not coincide with their contractual
     maturities. As such, these securities, as well as preferred and common
     stocks, were not included in the maturities distribution.

     The table below includes sales, maturities, and purchases of
     investments classified as Available-for-Sale for the years ended
     December 31:

<TABLE>
<CAPTION>
     (Thousands)                                 2005                    2004                   2003
     --------------------------------------------------------------------------------------------------------
<S>                                        <C>                    <C>                    <C>
     Sales                                 $       3,124,154      $       1,603,285      $       12,232,235
     Maturities, sinking fund payments
         and calls                         $       2,241,829      $       1,931,070      $        4,152,088
     Purchases                             $       5,780,183      $       4,392,522      $       20,527,995
     --------------------------------------------------------------------------------------------------------
</TABLE>

     Included in net realized gains and losses were gross realized gains and
     losses on sales of securities, as well as other-than-temporary losses
     on investments, classified as Available-for-Sale, using the specific
     identification method, as noted in the following table for the years
     ended December 31:

<TABLE>
<CAPTION>
     (Thousands)                                  2005                   2004                   2003
     ------------------------------------------------------------------------------------------------------
<S>                                         <C>                    <C>                   <C>
     Gross realized gains from sales        $        107,800       $         48,412      $        255,348
     Gross realized losses from sales       $        (38,602)      $        (17,524)     $       (135,465)
     Other-than-temporary impairments       $        (19,380)      $           (131)     $       (102,614)
     ------------------------------------------------------------------------------------------------------
</TABLE>

     The $19.4 million of other-than-temporary impairments in 2005 primarily
     related to corporate debt securities within the auto industry which were
     downgraded in 2005 and subsequently deteriorated throughout the year in
     terms of their fair value to amortized cost ratio. The $102.6 million
     of other-than-temporary impairments in 2003 consisted of $54.4 million
     related to corporate debt securities, $40.9 million related to IDS
     Life's interests in a CDO securitization trust which was sold in 2005
     as discussed below, and $7.3 million related to other securities. The
     other-than-temporary impairments related to corporate debt securities
     primarily resulted from continued operating difficulties and
     bankruptcies of certain large airline carriers and the related overall
     impact on the airline industry. The other-than-temporary impairments
     related to IDS Life's interests in the CDO securitization trust
     primarily resulted from defaults associated with a specific CDO within
     the securitization trust.


                                    F-23

<PAGE>
<PAGE>

                         IDS LIFE INSURANCE COMPANY
                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



     During the second quarter of 2005, IDS Life sold all of its retained
     interest in the CDO-related securitization trust and realized a net
     pretax gain of $24.9 million. The carrying value of this retained
     interest was $526.2 million at December 31, 2004, of which $389.9
     million was considered investment grade.

     At December 31, 2005 and 2004, bonds carried at $15.8 million were on
     deposit with various states as required by law.

     MORTGAGE LOANS ON REAL ESTATE AND SYNDICATED LOANS, NET

     The following is a summary of mortgage loans on real estate and
     syndicated loans at December 31:

<TABLE>
<CAPTION>
     (Thousands)                                                      2005                         2004
     ------------------------------------------------------------------------------------------------------------
<S>                                                            <C>                         <C>
     Mortgage loans on real estate                             $         2,883,709         $         2,968,889
     Less: allowance for loan losses                                       (41,347)                    (45,347)
     ------------------------------------------------------------------------------------------------------------
     Net mortgage loans                                        $         2,842,362         $         2,923,542
     ------------------------------------------------------------------------------------------------------------

     Syndicated loans                                          $           130,869         $           139,295
     Less: allowance for loan losses                                        (3,500)                     (3,500)
     ------------------------------------------------------------------------------------------------------------
     Net syndicated loans                                      $           127,369         $           135,795
     ------------------------------------------------------------------------------------------------------------
</TABLE>

     Mortgage loans are first mortgages on real estate. IDS Life holds the
     mortgage documents, which gives it the right to take possession of the
     property if the borrower fails to perform according to the terms of the
     agreements. Mortgage loan fundings are restricted by state insurance
     regulatory authorities to 80% or less of the market value of the real
     estate at the time of origination of the loan. Commitments to fund
     mortgages are made in the ordinary course of business. The estimated
     fair value of the mortgage commitments as of December 31, 2005 and 2004
     was not material.

     Syndicated loans, which are included as a component of other
     investments, represent loans in which a group of lenders provide funds
     to borrowers. There is usually one originating lender which retains a
     small percentage and syndicates the remainder.

     At December 31, 2005 and 2004, IDS Life's recorded investment in
     impaired mortgage loans on real estate was $14.0 million and $11.3
     million, respectively, with related allowances for mortgage loan losses
     of $4.0 million for both periods. During 2005 and 2004, the average
     recorded investment in impaired mortgage loans on real estate was $6.3
     million and $8.3 million, respectively. IDS Life recognized nil, $0.6
     million and $0.8 million of interest income related to impaired
     mortgage loans on real estate for the years ended December 31, 2005,
     2004 and 2003, respectively.

     The balances of and changes in the total allowance for mortgage loan
     losses as of and for the years ended December 31, are as follows:

<TABLE>
<CAPTION>
     (Thousands)                                         2005                    2004                    2003
     -----------------------------------------------------------------------------------------------------------------
<S>                                               <C>                     <C>                     <C>
     Balance, beginning of year                   $           45,347      $           47,197      $           44,312
     Provision for mortgage loan losses                            -                   9,500                  11,687
     Foreclosures, write-offs and loan sales                  (4,000)                (11,350)                 (8,802)
     -----------------------------------------------------------------------------------------------------------------
     Balance, end of year                         $           41,347      $           45,347      $           47,197
     -----------------------------------------------------------------------------------------------------------------
</TABLE>


                                    F-24

<PAGE>
<PAGE>

                         IDS LIFE INSURANCE COMPANY
                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



     Concentration of credit risk of mortgage loans on real estate by region
     at December 31 were:

<TABLE>
<CAPTION>
     (Thousands)                                        2005                                          2004
     --------------------------------------------------------------------------------------------------------------------------
                                           On Balance               Funding              On Balance               Funding
      Region                                  Sheet               Commitments              Sheet                Commitments
     --------------------------------------------------------------------------------------------------------------------------
<S>                                    <C>                  <C>                     <C>                   <C>
     South Atlantic                    $        594,022     $           10,900      $          588,764    $           24,115
     West North Central                         436,367                  6,200                 433,298                14,550
     East North Central                         406,714                      -                 509,752                 1,400
     Pacific                                    364,448                 26,750                 332,764                13,700
     Mountain                                   352,178                  8,725                 371,801                20,025
     Middle Atlantic                            257,625                 11,500                 270,509                 2,600
     West South Central                         215,467                 17,350                 191,410                     -
     New England                                164,047                 20,550                 198,297                 6,515
     East South Central                          92,841                  4,850                  72,294                 9,625
     --------------------------------------------------------------------------------------------------------------------------
                                              2,883,709                106,825               2,968,889                92,530
     Less: allowance for loan losses            (41,347)                     -                 (45,347)                    -
     --------------------------------------------------------------------------------------------------------------------------
        Total                          $      2,842,362     $          106,825      $        2,923,542    $           92,530
     --------------------------------------------------------------------------------------------------------------------------
</TABLE>

     Concentration of credit risk of mortgage loans on real estate by
     property type at December 31 were:

<TABLE>
<CAPTION>
     (Thousands)                                        2005                                             2004
     -----------------------------------------------------------------------------------------------------------------------------
                                             On Balance               Funding               On Balance               Funding
      Property type                            Sheet                Commitments                Sheet               Commitments
     -----------------------------------------------------------------------------------------------------------------------------
<S>                                    <C>                    <C>                      <C>                    <C>
     Office buildings                  $       1,048,566      $            36,000      $      1,087,700       $            5,840
     Department/retail stores                    703,811                   37,800               734,590                   40,075
     Apartments                                  454,024                   10,500               505,632                   24,875
     Industrial buildings                        453,503                   12,000               373,767                   15,615
     Hotels/motels                                92,335                    5,900               109,408                        -
     Medical buildings                            46,851                    2,700                46,960                        -
     Mixed use                                    39,318                        -                62,424                    4,200
     Nursing/retirement homes                      4,898                        -                 9,875                        -
     Other                                        40,403                    1,925                38,533                    1,925
     -----------------------------------------------------------------------------------------------------------------------------
                                               2,883,709                  106,825             2,968,889                   92,530
     Less: allowance for loan losses             (41,347)                       -               (45,347)                       -
     -----------------------------------------------------------------------------------------------------------------------------
        Total                          $       2,842,362      $           106,825      $      2,923,542       $           92,530
     -----------------------------------------------------------------------------------------------------------------------------
</TABLE>

     SOURCES OF INVESTMENT INCOME AND REALIZED GAINS (LOSSES) ON INVESTMENTS

     Net investment income for the years ended December 31 is summarized as
     follows:

<TABLE>
<CAPTION>
     (Thousands)                                                 2005                2004                 2003
     -----------------------------------------------------------------------------------------------------------------
<S>                                                        <C>                <C>                  <C>
     Income on fixed maturities                            $      1,448,882   $        1,450,919   $       1,423,560
     Income on mortgage loans on real estate                        196,840              221,022             247,001
     Trading securities and other investments                       163,814              138,468              63,983
     -----------------------------------------------------------------------------------------------------------------
                                                                  1,809,536            1,810,409           1,734,544
     Less: investment expenses                                       18,212               32,963              29,359
     -----------------------------------------------------------------------------------------------------------------
        Total                                              $      1,791,324   $        1,777,446   $       1,705,185
     -----------------------------------------------------------------------------------------------------------------
</TABLE>


                                    F-25

<PAGE>
<PAGE>

                         IDS LIFE INSURANCE COMPANY
                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



     Net realized gains (losses) on investments for the years ended December
     31 is summarized as follows:

<TABLE>
<CAPTION>
     (Thousands)                                                  2005                2004                2003
     -----------------------------------------------------------------------------------------------------------------
<S>                                                         <C>                <C>                 <C>
     Fixed maturities                                       $        49,818    $           30,757  $           17,269
     Mortgage loans on real estate                                   (1,627)               (3,048)            (10,865)
     Trading securities and other investments                           105                  (417)             (1,959)
     -----------------------------------------------------------------------------------------------------------------.
        Total                                               $        48,296    $           27,292  $            4,445
     -----------------------------------------------------------------------------------------------------------------
</TABLE>

3.   Variable Interest Entities
     --------------------------

     The VIEs for which IDS Life was considered the primary beneficiary and
     which were consolidated beginning December 31, 2003, relate to SLTs
     which were partially owned by IDS Life and managed by an affiliate. The
     consolidated SLTs provided returns to investors primarily based on the
     performance of an underlying portfolio of high-yield loans which were
     managed by an affiliate. IDS Life liquidated its interest in all three
     SLTs. One SLT was liquidated in 2004, and the other two SLTs were
     liquidated in 2005, resulting in a non-cash $27.9 million cumulative
     net pretax charge and a $13.9 million pretax gain during the years
     ended December 31, 2004 and 2005, respectively. There is no remaining
     exposure related to these SLTs as of December 31, 2005. The following
     table presents the consolidated assets, essentially all of which were
     restricted, and other balances related to these entities at December
     31:

<TABLE>
<CAPTION>
      (Millions)                                                                                   2004
     -----------------------------------------------------------------------------------------------------------
<S>                                                                                            <C>
      Restricted cash                                                                          $        536
      Derivative financial instruments (a)                                                               43
     -----------------------------------------------------------------------------------------------------------
      Total assets                                                                             $        579
      Total liabilities                                                                                 117
     -----------------------------------------------------------------------------------------------------------
      Net assets                                                                               $        462
     -----------------------------------------------------------------------------------------------------------
<FN>
     (a) Represents the estimated fair market value of the total return swap
     derivatives related to the consolidated SLTs which had a notional
     amount of $1.8 billion as of December 31, 2004.
</TABLE>

     IDS Life has other significant variable interests for which it is not
     considered the primary beneficiary and, therefore, does not
     consolidate. These interests are represented by carrying values of
     $2.5 million of CDO residual tranches managed by an affiliate where IDS
     Life is not the primary beneficiary. IDS Life's maximum exposure to
     loss as a result of its investment in CDO residual tranches is
     represented by the carrying value.


                                    F-26

<PAGE>
<PAGE>

                         IDS LIFE INSURANCE COMPANY
                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS




4.   Deferred Policy Acquisition Costs and Deferred Sales Inducement Costs
     ---------------------------------------------------------------------

     The balances of and changes in DAC as of and for the years ended
     December 31, were:

<TABLE>
<CAPTION>
     (Thousands)                                                    2005               2004                2003
     ----------------------------------------------------------------------------------------------------------------
<S>                                                            <C>                <C>               <C>
     Balance, beginning of year                                $    3,637,956      $   3,336,208      $   3,077,994
     Impact of SOP 03-1                                                     -             19,600                  -
     Capitalization of acquisition costs                              632,743            533,842            516,928
     Amortization, excluding impact of changes in
       assumptions                                                   (382,882)          (340,578)          (266,108)
     Amortization, impact of annual third quarter changes
       in DAC-related assumptions                                      67,000             23,700              1,800
     Amortization, impact of other quarter changes in
       DAC-related assumptions(a)                                           -             56,100                  -
     Impact of changes in net unrealized securities losses             81,062              9,084              5,594
     ----------------------------------------------------------------------------------------------------------------
     Balance, end of year                                      $    4,035,879      $   3,637,956      $   3,336,208
     ----------------------------------------------------------------------------------------------------------------
<FN>
     (a) Primarily relates to a $65.7 million reduction in DAC amortization
     expense to reflect the lengthening of the amortization periods for
     certain annuity and life insurance products impacted by IDS Life's
     adoption of SOP 03-1 on January 1, 2004, partially offset by a $9.6
     million increase in amortization expense due to a LTC DAC valuation
     system conversion.
</TABLE>

     The balances of and changes in DSIC as of and for the years ended
     December 31, were:

<TABLE>
<CAPTION>
     (Thousands)                                                    2005              2004              2003
     ----------------------------------------------------------------------------------------------------------------
<S>                                                            <C>                <C>               <C>
     Balance, beginning of year                                $      302,997     $     278,971     $     231,100
     Impact of SOP 03-1                                                     -            (2,900)                -
     Capitalization of sales inducements                               94,319            70,860            71,839
     Amortization                                                     (40,332)          (33,825)          (23,968)
     Impact of changes in net unrealized securities losses
       (gains)                                                         13,182           (10,109)                -
     ----------------------------------------------------------------------------------------------------------------
     Balance, end of year                                      $      370,166     $     302,997     $     278,971
     ----------------------------------------------------------------------------------------------------------------
</TABLE>

5.   Variable Annuity Guarantees
     ---------------------------

     This note discusses variable annuity guarantees for which liabilities
     are established under SOP 03-1, specifically GMDB, GGU and GMIB. See
     Note 10 for more information about guarantees for which liabilities are
     established under SFAS 133, specifically GMWB and GMAB.

     The majority of the variable annuity contracts offered by IDS Life
     contain GMDB provisions. When market values of the customer's accounts
     decline, the death benefit payable on a contract with a GMDB may exceed
     the contract accumulation value. IDS Life also offers GGU provisions on
     variable annuities with death benefit provisions and contracts
     containing GMIB provisions. If elected by the contract owner and after
     a stipulated waiting period from contract issuance, a GMIB guarantees a
     minimum lifetime annuity based on a specified rate of contract
     accumulation value growth and predetermined annuity purchase rates. IDS
     Life has established additional liabilities for these variable annuity
     death benefits and GMIB provisions.


                                    F-27

<PAGE>
<PAGE>

                         IDS LIFE INSURANCE COMPANY
                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



     The variable annuity death benefit liability is determined each period
     by estimating the expected value of death benefits in excess of the
     projected contract accumulation value and recognizing the excess over
     the estimated meaningful life based on expected assessments (e.g.,
     mortality and expense fees, contractual administrative charges and
     similar fees). Similarly, the GMIB liability is determined each period
     by estimating the expected value of annuitization benefits in excess of
     the projected contract accumulation value at the date of annuitization
     and recognizing the excess over the estimated meaningful life based on
     expected assessments.

     The majority of the GMDB contracts provide for six year reset contract
     values. In determining the additional liabilities for variable annuity
     death benefits and GMIB, IDS Life projects these benefits and contract
     assessments using actuarial models to simulate various equity market
     scenarios. Significant assumptions made in projecting future benefits
     and assessments relate to customer asset value growth rates, mortality,
     persistency and investment margins and are consistent with those used
     for DAC asset valuation for the same contracts. As with DAC, management
     will review, and where appropriate, adjust its assumptions each
     quarter. Unless management identifies a material deviation over the
     course of quarterly monitoring, management will review and update these
     assumptions annually in the third quarter of each year.





                                    F-28

<PAGE>
<PAGE>

                         IDS LIFE INSURANCE COMPANY
                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



     The following provides summary information related to variable annuity
     contracts for which IDS Life has established additional liabilities for
     death benefits and GMIB as of December 31:

<TABLE>
<CAPTION>
     ------------------------------------------------------------------------------------------------------------
     VARIABLE ANNUITY GMDB, GMIB AND GGU BY BENEFIT TYPE                          2005               2004
     ------------------------------------------------------------------------------------------------------------
     (Dollars in thousands)
     ------------------------------------------------------------------------------------------------------------
<S>                            <C>                                         <C>                 <C>
     Contracts with GMDB       Total Contract Value                        $       9,106,907   $      3,241,618
     Providing for Return of   Contract Value in Separate Accounts         $       7,409,865   $      1,727,415
     Premium                   Net Amount at Risk*                         $          16,727   $        110,922
                               Weighted Average Attained Age                              60                 62
     ------------------------------------------------------------------------------------------------------------
     Contracts with GMDB       Total Contract Value                        $      24,608,183   $     27,453,193
     Providing for Six Year    Contract Value in Separate Accounts         $      20,362,261   $     22,787,083
     Reset                     Net Amount at Risk*                         $         762,724   $      1,267,225
                               Weighted Average Attained Age                              61                 60
     ------------------------------------------------------------------------------------------------------------
     Contracts with GMDB       Total Contract Value                        $       5,129,201   $      4,039,358
     Providing for One Year    Contract Value in Separate Accounts         $       4,210,758   $      3,078,491
     Ratchet                   Net Amount at Risk*                         $          45,363   $         55,622
                               Weighted Average Attained Age                              61                 61
     ------------------------------------------------------------------------------------------------------------
     Contracts with Other      Total Contract Value                        $         993,152   $        494,668
     GMDB                      Contract Value in Separate Accounts         $         891,930   $        397,696
                               Net Amount at Risk*                         $          16,415   $         11,689
                               Weighted Average Attained Age                              59                 66
     ------------------------------------------------------------------------------------------------------------
     Contracts with GGU        Total Contract Value                        $         619,846   $        450,067
     Death Benefit             Contract Value in Separate Accounts         $         535,821   $        363,753
                               Net Amount at Risk*                         $          34,844   $         18,192
                               Weighted Average Attained Age                              61                 64
     ------------------------------------------------------------------------------------------------------------
     Contracts with GMIB       Total Contract Value                        $         792,578   $        603,251
                               Contract Value in Separate Accounts         $         711,759   $        517,596
                               Net Amount at Risk*                         $          15,970   $         11,886
                               Weighted Average Attained Age                              60                 59
     ------------------------------------------------------------------------------------------------------------
<FN>
     * Represents current death benefit less total contract value for GMDB,
     amount of gross up for GGU and accumulated guaranteed minimum benefit
     base less total contract value for GMIB and assumes the actuarially
     remote scenario that all claims become payable on the same day.

<CAPTION>
     ------------------------------------------------------------------------------------------------------------
     ADDITIONAL LIABILITIES AND INCURRED BENEFITS                             GMDB & GGU             GMIB
     ------------------------------------------------------------------------------------------------------------
<S>                            <C>                                         <C>                 <C>
     For the year ended        Liability balance at January 1              $          29,966   $          2,989
     December 31, 2005         Reported claims                             $          12,203   $              -
                               Liability balance at December 31            $          16,451   $          3,528
                               Incurred claims (reported + change in
                                 liability)                                $          (1,312)  $            539
     ------------------------------------------------------------------------------------------------------------
</TABLE>

     The additional liabilities for guaranteed benefits established under
     SOP 03-1 are supported by general account assets. Changes in these
     liabilities are included in death and other benefits in the
     Consolidated Statements of Income.

     Contract values in separate accounts were invested in various equity,
     bond and other funds as directed by the contractholder. No gains or
     losses were recognized on assets transferred to separate accounts for
     the periods presented.


                                    F-29

<PAGE>
<PAGE>

                         IDS LIFE INSURANCE COMPANY
                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



6.   Income Taxes
     ------------

     IDS Life qualifies as a life insurance company for federal income tax
     purposes. As such, IDS Life is subject to the Internal Revenue Code
     provisions applicable to life insurance companies.

     Provisions (benefits) for income taxes were:

<TABLE>
<CAPTION>
    (Thousands)                                                     2005              2004             2003
    ---------------------------------------------------------------------------------------------------------------
<S>                                                            <C>              <C>               <C>
    Federal income tax:
       Current                                                 $       55,766   $       159,783   $       91,862
       Deferred                                                       122,264            70,574          (30,714)
    ---------------------------------------------------------------------------------------------------------------
    Total federal income taxes                                        178,030           230,357           61,148
    State income taxes-current                                          3,627            (4,180)           5,797
    ---------------------------------------------------------------------------------------------------------------
    Income tax provision before accounting change              $      181,657   $       226,177   $       66,945
    ===============================================================================================================
</TABLE>

     The principal reasons that the aggregate income tax provision is
     different from that computed by using the U.S. statutory rate of 35%
     are as follows:

<TABLE>
<CAPTION>
                                                                      2005              2004             2003
    ---------------------------------------------------------------------------------------------------------------
<S>                                                                   <C>               <C>              <C>
    Tax at U.S. statutory rate                                        35.0%             35.0%            35.0%
    Changes in taxes resulting from:
         Tax-exempt interest and dividend income                      (9.7)             (3.1)           (10.6)
         State income taxes, net of federal benefit                    0.4              (0.4)             0.7
         Affordable housing credits                                      -                 -            (12.8)
         Taxes applicable to prior years                               3.2              (2.6)               -
         Other, net                                                   (0.5)             (0.4)            (0.6)
    ---------------------------------------------------------------------------------------------------------------
    Income tax provision before accounting change                     28.4%             28.5%            11.7%
    ===============================================================================================================
</TABLE>

     Deferred income tax assets and liabilities result from temporary
     differences between the assets and liabilities measured for U.S. GAAP
     reporting versus income tax return purposes. The significant components
     of IDS Life's deferred income tax assets and liabilities as of December
     31, 2005 and 2004 are reflected in the following table:

<TABLE>
<CAPTION>
     (Thousands)                                                              2005                   2004
    ---------------------------------------------------------------------------------------------------------------
<S>                                                                      <C>                    <C>
     Deferred income tax assets:
        Policy reserves                                                  $     1,101,836        $     1,035,300
        Other investments                                                         69,864                139,066
        Deferred taxes related to net securities and derivative
          unrealized losses                                                       70,379                      -
        Other                                                                     61,896                 55,556
    ---------------------------------------------------------------------------------------------------------------
     Total deferred income tax assets                                          1,303,975              1,229,922
    ---------------------------------------------------------------------------------------------------------------

     Deferred income tax liabilities:
       Deferred policy acquisition costs                                       1,154,402              1,116,235
       Deferred taxes related to net securities and derivative
          unrealized gains                                                             -                183,988
       Other                                                                     158,672                 70,901
    ---------------------------------------------------------------------------------------------------------------
     Total deferred income tax liabilities                                     1,313,074              1,371,124
    ---------------------------------------------------------------------------------------------------------------
     Deferred income tax liabilities, net                                $         9,099        $       141,202
    ---------------------------------------------------------------------------------------------------------------
</TABLE>


                                    F-30

<PAGE>
<PAGE>

                         IDS LIFE INSURANCE COMPANY
                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


     A portion of IDS Life's income earned prior to 1984 was not subject to
     current taxation but was accumulated, for tax purposes, in a
     "policyholders' surplus account." At December 31, 2005, IDS Life had a
     policyholders' surplus account balance of $1.1 million. The American
     Jobs Creation Act of 2004 which was enacted on October 22, 2004
     provides a two-year suspension of the tax on policyholders' surplus
     account distributions. IDS Life has made distributions of $19 million,
     which will not be subject to tax under the two-year suspension.
     Previously the policyholders' surplus account was only taxable if
     dividends to shareholders exceeded the shareholders' surplus account
     and/or IDS Life is liquidated. Deferred income taxes of $0.4 million
     have not been established as distributions of the remaining
     policyholders' surplus account are contemplated in 2006.

     IDS Life is required to establish a valuation allowance for any portion
     of the deferred income tax assets that management believes will not be
     realized. Included in IDS Life's deferred tax assets is a significant
     deferred tax asset relating to capital losses realized for tax return
     purposes and capital losses that have been recognized for financial
     statement purposes but not yet for tax return purposes. Under current
     U.S. federal income tax law, capital losses generally must be used
     against capital gain income within five years of the year in which the
     capital losses are recognized for tax purposes. IDS Life has $231
     million in capital loss carryforwards that expire December 31, 2009.
     The deferred tax benefit of these capital loss carryforwards is
     reflected in the other investments deferred tax assets, net of other
     related items. Based on analysis of IDS Life's tax position, management
     believes it is more likely than not that the results of future
     operations and implementation of tax planning strategies will generate
     sufficient taxable income to enable IDS Life to utilize all of its
     deferred tax assets. Accordingly, no valuation allowance for deferred
     tax assets has been established as of December 31, 2005 and 2004.

     As a result of the separation of Ameriprise Financial from American
     Express, IDS Life will be required to file a short period income tax
     return through September 30, 2005 which will be included as part of the
     American Express consolidated income tax return for the year ended
     December 31, 2005. Additionally, IDS Life and subsidiaries will not be
     able to file a consolidated U.S. federal income tax return with other
     members of the Ameriprise Financial affiliated group for five tax years
     following the Distribution. Therefore IDS Life will also be required
     to file a separate short period consolidated life insurance company
     income tax return for the period October 1, 2005 through December 31,
     2005.

     The items comprising other comprehensive income in the Consolidated
     Statements of Stockholder's Equity are presented net of the following
     income tax benefit amounts:

<TABLE>
<CAPTION>
     (Thousands)                                                     2005           2004           2003
     -------------------------------------------------------------------------------------------------------
<S>                                                              <C>             <C>            <C>
     Net unrealized securities losses                            $   248,363     $   18,761     $   48,791
     Net unrealized derivative losses                                  6,004         12,426          4,188
     -------------------------------------------------------------------------------------------------------
     Net income tax benefit                                      $   254,367     $   31,187     $   52,979
     -------------------------------------------------------------------------------------------------------
</TABLE>




                                    F-31

<PAGE>
<PAGE>

                         IDS LIFE INSURANCE COMPANY
                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



7.   Statutory Capital and Surplus
     -----------------------------

     Statutory capital and surplus available for distribution or dividends
     to Ameriprise Financial are limited to IDS Life Insurance Company's
     surplus as determined in accordance with accounting practices
     prescribed by state insurance regulatory authorities. IDS Life
     Insurance Company's statutory unassigned surplus aggregated $925.1
     million and $909.7 million as of December 31, 2005 and 2004,
     respectively. In addition, any dividend or distribution paid prior to
     December 24, 2006 (one year after IDS Life Insurance Company's most
     recent dividend payment) would require pre-notification to the
     Commissioner of Commerce of the State of Minnesota, who has the
     authority to disapprove and prevent payment thereof. From December 24,
     2006 to December 31, 2006, dividends or distributions in excess of
     $327.5 million would be subject to this same pre-notification and
     potential disapproval.

     Statutory net income for the years ended December 31 and capital and
     surplus as of December 31 are summarized as follows:

<TABLE>
<CAPTION>
     (Thousands)                                         2005                  2004                   2003
     ------------------------------------------------------------------------------------------------------------
<S>                                                 <C>                   <C>                   <C>
     Statutory net income                           $       341,235       $       379,950       $       432,063
     Statutory capital and surplus                        2,942,153             2,276,724             2,804,593
</TABLE>

     IDS Life Insurance Company and its wholly-owned life insurance
     subsidiaries are subject to regulatory capital requirements. Actual
     capital, determined on a statutory basis, and regulatory capital
     requirements for each of the life insurance entities as of December 31,
     2005 are as follows:

<TABLE>
<CAPTION>
                                                                                      Regulatory
                                                                                        Capital
     (Thousands)                                               Actual Capital(a)      Requirement
     -------------------------------------------------------------------------------------------------
<S>                                                         <C>                   <C>
     IDS Life Insurance Company                             $        3,270,285    $           750,975
     American Enterprise Life Insurance Company                        583,303                125,285
     IDS Life Insurance Company of New York                            246,001                 39,880
     American Partners Life Insurance Company                           67,382                 10,906
     American Centurion Life Assurance Company                          61,748                 12,654
     -------------------------------------------------------------------------------------------------
<FN>
     (a) Actual Capital, as defined by the NAIC for purposes of meeting
     regulatory capital requirements, includes statutory capital and
     surplus, plus certain statutory valuation reserves.
</TABLE>

8.   Related Party Transactions
     --------------------------

     IDS Life loans funds to Ameriprise Financial under a collateral loan
     agreement. There was no balance on the loan at December 31, 2005 and
     2004. This loan can be increased to a maximum of $75 million and pays
     interest at a rate equal to the preceding month's effective new money
     rate for IDS Life's permanent investments.




                                    F-32

<PAGE>
<PAGE>

                         IDS LIFE INSURANCE COMPANY
                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



     In connection with Ameriprise Financial being named the investment
     manager for the proprietary mutual funds used as investment options by
     IDS Life's variable annuity and variable life insurance contract owners
     in the fourth quarter of 2003, Ameriprise Financial received management
     fees from these funds. IDS Life continues to provide all fund
     management services, other than investment management, and entered into
     an administrative services agreement with Ameriprise Financial to be
     compensated for the services IDS Life provides. For the years ended
     December 31, 2005, 2004 and 2003, IDS Life received $55.7 million,
     $81.5 million, and $14.1 million, respectively, under the agreement
     with Ameriprise Financial. In the fourth quarter of 2005, RiverSource
     Investments, LLC replaced Ameriprise Financial as the investment
     manager. As a result, IDS Life's administrative service fees were
     payable from RiverSource Investments, LLC rather than Ameriprise
     Financial during the fourth quarter of 2005. For the year ended
     December 31, 2005, IDS Life received $19.5 million under the agreement
     with RiverSource Investments, LLC.

     IDS Life participates in the Ameriprise Financial Retirement Plan which
     covers all permanent employees age 21 and over who have met certain
     employment requirements. Company contributions to the plan are based on
     participants' age, years of service and total compensation for the
     year. Funding of retirement costs for this plan complies with the
     applicable minimum funding requirements specified by ERISA. IDS Life's
     share of the total net periodic pension cost was $0.9 million in 2005,
     $0.5 million in 2004, and $0.3 million in 2003.

     IDS Life also participates in the defined contribution pension plans of
     Ameriprise Financial which cover all employees who have met certain
     employment requirements. Company contributions to the plans are a
     percent of either each employee's eligible compensation or basic
     contributions. Costs of these plans charged to operations in 2005, 2004
     and 2003 were $3.2 million, $2.4 million, and $2.2 million,
     respectively.

     IDS Life participates in the defined benefit health care plans of
     Ameriprise Financial that provide health care and life insurance
     benefits to retired employees and retired financial advisors. The plans
     include participant contributions and service related eligibility
     requirements. Upon retirement, such employees are considered to have
     been employees of Ameriprise Financial. Ameriprise Financial expenses
     these benefits and allocates the expenses to its subsidiaries. The cost
     of these plans charged to operations in 2005, 2004 and 2003 was $1.1
     million, $0.5 million, and $2.1 million, respectively.

     Charges by Ameriprise Financial for use of joint facilities, technology
     support, marketing services and other services aggregated $725.2
     million, $600.6 million, and $549.2 million for 2005, 2004 and 2003,
     respectively. Certain of these costs are included in DAC. Expenses
     allocated to IDS Life may not be reflective of expenses that would have
     been incurred by IDS Life on a stand-alone basis.

     In connection with the separation, IDS Life received a capital
     contribution of $650 million from Ameriprise Financial during the third
     quarter of 2005 to support its current financial strength ratings and
     to cover the allocated separation costs. During the fourth quarter of
     2005, IDS Life approved and paid dividends to Ameriprise Financial of
     $380 million. During the second and fourth quarter of 2004, IDS Life
     approved and paid dividends to Ameriprise Financial of $430 million and
     $500 million, respectively. IDS Life expects to continue to maintain
     adequate capital to meet internal and external Risk-Based Capital
     requirements.

     Included in other liabilities at December 31, 2005 and 2004 are $7.6
     million and $30.1 million, respectively, payable to Ameriprise
     Financial for federal income taxes.


                                    F-33

<PAGE>
<PAGE>

                         IDS LIFE INSURANCE COMPANY
                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



9.   Reinsurance
     -----------

     At December 31, 2005, 2004 and 2003, traditional life and universal
     life insurance in force aggregated $160.1 billion, $147.5 billion and
     $131.1 billion, respectively, of which $86.3 billion, $70.9 billion and
     $53.8 billion, was reinsured at the respective year ends. IDS Life also
     reinsures a portion of the risks assumed under LTC policies. Under all
     reinsurance agreements, premiums ceded to reinsurers amounted to $174.9
     million, $159.6 million and $144.7 million and reinsurance recovered
     from reinsurers amounted to $105.6 million, $73.3 million and $60.3
     million, for the years ended December 31, 2005, 2004 and 2003,
     respectively. Reinsurance contracts do not relieve IDS Life from its
     primary obligation to policyholders. Life insurance in force is
     reported on a statutory basis.

10.  Derivative Financial Instruments and Hedging Activities
     -------------------------------------------------------

     Derivative financial instruments enable the end users to manage
     exposure to credit and various market risks. The value of such
     instruments is derived from an underlying variable or multiple
     variables, including equity, and interest rate indices or prices. IDS
     Life enters into various derivative financial instruments as part of
     its ongoing risk management activities. IDS Life does not engage in any
     derivative instrument trading activities. Credit risk associated with
     IDS Life's derivatives is limited to the risk that a derivative
     counterparty will not perform in accordance with the terms of the
     contract. To mitigate such risk, counterparties are all required to be
     preapproved. Additionally, IDS Life may, from time to time, enter into
     master netting agreements wherever practical. The following summarizes
     IDS Life's use of derivative financial instruments.

     Cash Flow Hedges
     IDS Life uses interest rate products, primarily interest rate
     swaptions, to hedge the risk of increasing interest rates on forecasted
     fixed annuity sales. During 2005, 2004 and 2003, no amounts were
     reclassified into earnings from accumulated other comprehensive income.
     Additionally, IDS Life does not expect to reclassify any material
     amounts from accumulated other comprehensive income to earnings during
     the next twelve months. Currently, the longest period of time over
     which IDS Life is hedging exposure to the variability in future cash
     flows is 13 years and relates to forecasted fixed annuity sales. There
     were losses of $1.8 million for the year ended December 31, 2005 and no
     gains or losses for the years ended December 31, 2004 and 2003 on
     derivative transactions or portions thereof that were ineffective as
     hedges or excluded from the assessment of hedge effectiveness.

     During 2005, 2004 and 2003, IDS Life recognized the following impacts
     in other comprehensive income related to its cash flow hedging
     activity, net of tax:

<TABLE>
<CAPTION>
      (Thousands)                                                 2005              2004              2003
      ----------------------------------------------------------------------------------------------------------
<S>                                                           <C>               <C>               <C>
      Holding losses, net of tax of $6,628, $11,901, and
        $3,663, respectively                                  $    (12,309)     $    (22,102)     $    (6,802)
      Reclassification for realized losses (gains), net of
        tax of $624, $525, and $525, respectively                    1,159              (975)            (975)
      ----------------------------------------------------------------------------------------------------------
      Net unrealized derivative losses                        $    (11,150)     $    (23,077)     $    (7,777)
      ----------------------------------------------------------------------------------------------------------
</TABLE>

     Derivatives Not Designated as Hedges
     IDS Life has economic hedges that either do not qualify or are not
     designated for hedge accounting treatment.


                                    F-34

<PAGE>
<PAGE>

                         IDS LIFE INSURANCE COMPANY
                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



     Certain annuity products have returns tied to the performance of equity
     markets. As a result of fluctuations in equity markets, the amount of
     expenses incurred by IDS Life related to equity-indexed annuities will
     positively or negatively impact earnings. As a means of economically
     hedging its obligations under the provisions of these products, IDS
     Life writes and purchases index options and occasionally enters into
     futures contracts. Purchased options used in conjunction with these
     products are reported in other assets and written options are included
     in other liabilities.

     Additionally, certain annuity products contain GMWB provisions, which
     guarantee the right to make limited partial withdrawals each contract
     year regardless of the volatility inherent in the underlying
     investments. The GMWB provision is considered an embedded derivative
     and is valued each period by estimating the present value of future
     benefits less applicable fees charged for the rider using actuarial
     models, which simulate various economic scenarios. IDS Life
     economically hedges the exposure related to the GMWB provision using
     various equity futures and structured derivatives.

     As of December 31, 2005 and 2004, the fair value of the purchased
     derivatives used in conjunction with these products was $124.6 million
     and $27.8 million, respectively. As of December 31, 2005 and 2004, the
     fair value of the written options was $(0.8) million and $(0.9)
     million, respectively. Futures contracts are settled daily by
     exchanging cash with the counterparty and gains and losses are reported
     in earnings.

     Embedded Derivatives
     As noted above, certain annuity products have returns tied to the
     performance of equity markets. The equity component of the annuity
     product obligations are considered embedded derivatives. Additionally,
     certain annuities contain GMWB and GMAB provisions, which are also
     considered embedded derivatives. The changes in fair value of the
     equity indexed annuities are recognized in interest credited to account
     values and the changes in fair value of the GMWB and GMAB features are
     recognized in death and other benefits for investment contracts and
     universal life-type insurance. The fair value of the embedded
     derivatives for equity indexed annuities is recognized in future policy
     benefits for fixed annuities and the fair value of the embedded options
     for GMWB and GMAB is recognized in future policy benefits for variable
     annuity guarantees in the Consolidated Balance Sheets. The total fair
     value of these instruments, excluding the host contract, was $47.9
     million and $34.6 million at December 31, 2005 and 2004, respectively.



                                    F-35

<PAGE>
<PAGE>

                         IDS LIFE INSURANCE COMPANY
                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



11.  Fair Value of Financial Instruments
     -----------------------------------

     The following table discloses fair value information for financial
     instruments. Certain items, such as life insurance obligations,
     employee benefit obligations, investments accounted for under the
     equity method, DAC and DSIC are not reflected in the table as they are
     not required to be disclosed in such table by SFAS No. 107, "Disclosure
     about Fair Value of Financial Instruments." The fair values of
     financial instruments are estimates based upon market conditions and
     perceived risks at December 31, 2005 and 2004 and require management
     judgment to estimate such values. These figures may not be indicative
     of future fair values. Additionally, management believes the value of
     excluded assets and liabilities is significant. The fair value of IDS
     Life, therefore, cannot be estimated by aggregating the amounts
     presented herein. The following table discloses carrying value and fair
     value information for financial instruments at December 31:

<TABLE>
<CAPTION>
                                                                2005                                 2004
     -------------------------------------------------------------------------------------------------------------------
                                                   Carrying             Fair             Carrying            Fair
     (Thousands)                                    Value               Value             Value              Value
     -------------------------------------------------------------------------------------------------------------------
<S>                                            <C>                <C>               <C>                <C>
     Financial Assets
     ----------------
     Assets for which carrying values
       approximate fair values                 $        233,589   $        233,589  $         667,248  $        667,248
     Available-for-Sale securities                   27,753,195         27,753,195         28,162,451        28,162,451
     Mortgage loans on real estate, net               2,842,362          2,976,688          2,923,542         3,149,986
     Policy loans                                       605,212            605,212            588,574           588,574
     Trading securities                                  23,956             23,956            168,055           168,055
     Other investments                                  127,369            131,475            135,795           140,428
     Separate account assets                         37,929,960         37,929,960         32,454,032        32,454,032
     Derivative financial instruments                   133,263            133,263             97,784            97,784

     Financial Liabilities
     ---------------------
     Liabilities for which carrying values
       approximate fair values                 $         25,000   $         25,000  $          47,000  $         47,000
     Fixed annuity reserves                          24,637,806         23,840,988         25,522,643        24,733,010
     Separate account liabilities                    33,154,528         31,742,503         28,284,118        27,164,063
     Derivative financial instruments                     6,941              6,941              4,290             4,290
     -------------------------------------------------------------------------------------------------------------------
</TABLE>

     As of December 31, 2005 and 2004, the carrying and fair values of
     off-balance sheet financial instruments are not material. See Note 2
     for carrying and fair value information regarding Available-for-Sale
     securities and mortgage loans on real estate (net of allowance for loan
     losses). The following methods were used to estimate the fair values of
     financial assets and financial liabilities:

     FINANCIAL ASSETS
     Assets for which carrying values approximate fair values include cash
     and cash equivalents, restricted cash and certain other assets. The
     carrying value approximates fair value due to the short-term nature of
     these instruments.

     Available-for-Sale securities are carried at fair value in the
     Consolidated Balance Sheets. Gains and losses are recognized in the
     results of operations upon disposition. In addition, impairment losses
     are recognized when management determines that a decline in value is
     other-than-temporary.


                                    F-36

<PAGE>
<PAGE>

                         IDS LIFE INSURANCE COMPANY
                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



     The fair value of mortgage loans on real estate, except those with
     significant credit deterioration, are estimated using discounted cash
     flow analysis, based on current interest rates for loans with similar
     terms to borrowers of similar credit quality. For loans with
     significant credit deterioration, fair values are based on estimates of
     future cash flows discounted at rates commensurate with the risk
     inherent in the revised cash flow projections, or for collateral
     dependent loans, on collateral values.

     The fair value of policy loans approximates carrying value.

     Trading securities are carried at fair value in the Consolidated
     Balance Sheets with changes in fair value recognized in current period
     earnings.

     Other investments include IDS Life's interest in syndicated loans,
     which are carried at amortized cost less allowance for losses in the
     Consolidated Balance Sheets. Fair values are based on quoted market
     prices.

     Separate account assets are carried at fair value in the Consolidated
     Balance Sheets.

     Derivative financial instruments are carried at fair value within other
     assets or other liabilities. The fair value of the derivative financial
     instruments are determined using either market quotes or valuation
     models that are based upon the net present value of estimated future
     cash flows and incorporate current market data inputs.

     FINANCIAL LIABILITIES
     Liabilities for which carrying values approximate fair values include
     certain other liabilities. The carrying value approximates fair value
     due to the short-term nature of these instruments.

     Fair values of fixed annuities in deferral status are estimated as the
     accumulated value less applicable surrender charges. For annuities in
     payout status, fair value is estimated using discounted cash flows
     based on current interest rates. The fair value of these reserves
     excludes life insurance related elements of $1.5 billion as of both
     December 31, 2005 and 2004. If the fair value of the fixed annuities
     were realized, the surrender charges received would be offset by the
     write off of the DAC and DSIC associated with the fixed annuities of
     $496.4 million and $534.4 million as of December 31, 2005 and 2004,
     respectively.

     Fair values of separate account liabilities, excluding life
     insurance-related elements of $4.8 billion and $4.2 billion at December
     31, 2005 and 2004, respectively, are estimated as the accumulated value
     less applicable surrender charges. If the fair value of the separate
     account liabilities were realized, the surrender charges received would
     be offset by the write off of the DAC and DSIC associated with separate
     account liabilities of $2.0 billion and $1.7 billion as of December 31,
     2005 and 2004, respectively.

                                     F-37

<PAGE>
<PAGE>

                         IDS LIFE INSURANCE COMPANY
                 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


12.  Commitments and Contingencies
     -----------------------------

     At December 31, 2005 and 2004, IDS Life had no commitments to purchase
     investments other than mortgage loan fundings (see Note 2).

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

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

     The IRS routinely examines IDS Life's federal income tax returns and
     recently completed its audit of IDS Life for the 1993 through 1996 tax
     years. The IRS is currently conducting an audit of IDS Life for the
     1997 through 2002 tax years. Management does not believe there will be
     a material adverse effect on IDS Life's consolidated financial condition
     or results of operations as a result of these audits.



                                    F-38

<PAGE>
<PAGE>

                                EXHIBIT INDEX
                                -------------

     The following exhibits are filed as part of this Annual Report or,
     where indicated, were already filed and are hereby incorporated by
     reference.

     3.1 Copy of Certificate of Incorporation of IDS Life Insurance Company
     filed electronically as Exhibit 3.1 to Post-Effective Amendment No. 5
     to Registration Statement No. 33-28976 is incorporated herein by
     reference.

     3.2 Copy of the Amended By-laws of IDS Life Insurance Company filed
     electronically as Exhibit 3.2 to Post-Effective Amendment No. 5 to
     Registration Statement No. 33-28976 is incorporated herein by
     reference.

     3.3 Copy of Resolution of the Board of Directors of IDS Life Insurance
     Company, dated May 5, 1989, establishing IDS Life Account MGA filed
     electronically as Exhibit 3.3 to Post-Effective Amendment No. 5 to
     Registration Statement No. 33-28976 is incorporated herein by
     reference.

     4.1 Copy of Non-tax qualified Group Annuity Contract, Form 30363C,
     filed electronically as Exhibit 4.1 to Post-Effective Amendment No. 5
     to Registration Statement No. 33-28976 is incorporated herein by
     reference.

     4.2 Copy of Non-tax qualified Group Annuity Certificate, Form 30360C,
     filed electronically as Exhibit 4.2 to Post-Effective Amendment No. 5
     to Registration Statement No. 33-28976 is incorporated herein by
     reference.

     4.3 Copy of Endorsement No. 30340C-GP to the Group Annuity Contract
     filed electronically as Exhibit 4.3 to Post-Effective Amendment No. 5
     to Registration Statement No. 33-28976 is incorporated herein by
     reference.

     4.4 Copy of Endorsement No. 30340C to the Group Annuity Certificate
     filed electronically as Exhibit 4.4 to Post-Effective Amendment No. 5
     to Registration Statement No. 33-28976 is incorporated herein by
     reference.

     4.5 Copy of Tax qualified Group Annuity Contract, Form 30369C, filed
     electronically as Exhibit 4.5 to Post-Effective Amendment No. 10 to
     Registration Statement No. 33-28976 is incorporated herein by
     reference.

     4.6 Copy of Tax qualified Group Annuity Certificate, Form 30368C, filed
     electronically as Exhibit 4.6 to Post-Effective Amendment No. 10 to
     Registration Statement No. 33-28976 is incorporated herein by
     reference.

     4.7 Copy of Group IRA Annuity Contract, Form 30372C, filed
     electronically as Exhibit 4.7 to Post-Effective Amendment No. 10 to
     Registration Statement No. 33-28976 is incorporated herein by
     reference.

     4.8 Copy of Group IRA Annuity Certificate, Form 30371C, filed
     electronically as Exhibit 4.8 to Post-Effective Amendment No. 10 to
     Registration Statement No. 33-28976 is incorporated herein by
     reference.

                                    E-1

<PAGE>
<PAGE>

     4.9 Copy of Non-tax qualified Individual Annuity Contract, Form 30365D,
     filed electronically as Exhibit 4.9 to Post-Effective Amendment No. 10
     to Registration Statement No. 33-28976 is incorporated herein by
     reference.

     4.10 Copy of Endorsement No. 30379 to the Individual Annuity Contract,
     filed electronically as Exhibit 4.10 to Post-Effective Amendment No. 10
     to Registration Statement No. 33-28976 is incorporated herein by
     reference.

     4.11 Copy of Tax qualified Individual Annuity Contract, Form 30370C,
     filed electronically as Exhibit 4.11 to Post-Effective Amendment No. 10
     to Registration Statement No. 33-28976 is incorporated herein by
     reference.

     4.12 Copy of Individual IRA Annuity Contract, Form 30373C, filed
     electronically as Exhibit 4.12 to Post-Effective Amendment No. 10 to
     Registration Statement No. 33-28976 is incorporated herein by
     reference.

     4.13 Copy of Endorsement No. 33007 filed electronically as Exhibit 4.13
     to Post-Effective Amendment No. 12 to Registration Statement No.
     33-28976 is incorporated herein by reference.

     4.14 Copy of Group Annuity Contract, Form 30363D, filed electronically
     as Exhibit 4.1 to Post-Effective Amendment No. 2 to Registration
     Statement No. 33-50968 is incorporated herein by reference.

     4.15 Copy of Group Annuity Certificate, Form 30360D, filed
     electronically as Exhibit 4.2 to Post-Effective Amendment No. 2 to
     Registration Statement No. 33-50968 is incorporated herein by
     reference.

     4.16 Form of Deferred Annuity Contract, Form 30365E, filed
     electronically as Exhibit 4.3 to Post-Effective Amendment No. 2 to
     Registration Statement No. 33-50968 is incorporated herein by
     reference.

     4.17 Copy of Group Deferred Variable Annuity Contract, Form 34660,
     filed electronically as Exhibit 4.1 to Post-Effective Amendment No. 2
     to Registration Statement No. 33-48701 is incorporated herein by
     reference.

     4.18 Copy of Non-tax qualified Group Annuity Contract, Form 33111,
     filed electronically as Exhibit 4.1 to Registration Statement No.
     333-42793 is incorporated herein by reference.

     4.19 Copy of Non-tax qualified Group Annuity Certificate, Form 33114,
     filed electronically as Exhibit 4.2 to Registration Statement No.
     333-42793 is incorporated herein by reference.

     4.20 Copy of Tax qualified Group Annuity Contract, Form 33112, filed
     electronically as Exhibit 4.3 to Registration Statement No. 333-42793
     is incorporated herein by reference.

     4.21 Copy of Tax qualified Group Annuity Certificate, Form 33115, filed
     electronically as Exhibit 4.4 to Registration Statement No. 333-42793
     is incorporated herein by reference.

     4.22 Copy of Group IRA Annuity Contract, Form 33113, filed
     electronically as Exhibit 4.5 to Registration Statement No. 333-42793
     is incorporated herein by reference.

                                    E-2

<PAGE>
<PAGE>

     4.23 Copy of Group IRA Annuity Certificate, Form 33116, filed
     electronically as Exhibit 4.6 to Registration Statement No. 333-42793
     is incorporated herein by reference.

     4.24 Copy of Non-tax qualified Individual Annuity Contract, Form 30484,
     filed electronically as Exhibit 4.7 to Post-Effective Amendment No. 1
     to Registration Statement No. 333-42793 is incorporated herein by
     reference.

     4.25 Copy of Tax qualified Individual Annuity Contract, Form 30485,
     filed electronically as Exhibit 4.8 to Post-Effective Amendment No. 1
     to Registration Statement No. 333-42793 is incorporated herein by
     reference.

     4.26 Copy of Individual IRA Contract, Form 30486, filed electronically
     as Exhibit 4.9 to Post-Effective Amendment No. 1 to Registration
     Statement No. 333-42793 is incorporated herein by reference.

     10.1 Copy of Gross Administrative Charge Agreement by and between
     American Express Financial Corporation and IDS Life Insurance Company,
     dated November 1, 2003 filed electronically as Exhibit 10 to the 2003
     Form 10-K is incorporated herein by reference.

     10.2 Copy of Gross Administrative Charge Agreement by and between
     Ameriprise Financial, Inc. and RiverSource Investments, LLC, dated
     October 1, 2005, filed electronically as Exhibit 10.1 to the Form 10-Q
     for the quarterly period ending September 30, 2005 is incorporated
     herein by reference.

     10.3 Copy of Investment Management and Services Agreement by and
     between IDS Life Insurance Company and RiverSource Investments, LLC,
     dated October 1, 2005, filed electronically as Exhibit 10.2 to the Form
     10-Q for the quarterly period ending September 30, 2005 is incorporated
     herein by reference.

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

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

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

<FN>
     * Filed electronically herewith.


                                    E-3