<PAGE>

We inadvertently filed Accession Number  0000820027-00-000280 on March 30, 2000,
under the wrong CIK  Number  0000926266  and the wrong  File  Number  811-07195.
Attached  is the 10-K filed  under the  correct  CIK Number  0001093644  and the
correct File Number 333-86297.

<PAGE>



                                  UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 10-K

(Mark One)

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

                   For the fiscal year ended December 31, 1999

                                       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 333-86297

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

                       INDIANA                            94-2786905
              (State or other jurisdiction of         (I.R.S. Employer
               incorporation or organization)          Identification No.)

       80 SOUTH EIGHTH STREET, MINNEAPOLIS, MINNESOTA       55440-0534
       (Address of principal executive offices)             (Zip Code)

(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 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]  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 PERMITTED ABBREVIATED NARRATIVE DISCLOSURE.

<PAGE>

                                     PART I
ITEM 1.  BUSINESS

American  Enterprise  Life  Insurance  Company  (the  Company)  is a stock  life
insurance company organized under the laws of the State of Indiana.  The Company
is a wholly owned subsidiary of IDS Life Insurance Company (IDS Life) which is a
wholly owned subsidiary of American Express Financial  Corporation  (AEFC). AEFC
is a wholly owned  subsidiary of American  Express  Company.  The Company serves
residents  of 48 states.  The Company  has assets at  December  31, 1999 of $4.6
billion.

The  Company's  principal  product  is  deferred  annuities,  which  are  issued
primarily to individuals, primarily through banks and financial institutions. It
offers single premium and annual premium deferred  annuities on both a fixed and
variable dollar basis. Immediate annuities are offered as well.

The Company's fixed annuity  contracts  guarantee a minimum interest rate during
the accumulation  period (the time before annuity payments begin),  although the
Company  has the option of paying a higher  rate  reflective  of current  market
rates.  The Company has also adopted a practice  whereby the higher current rate
is guaranteed  for a specified  period.  The Company also offers  fixed/variable
annuity  products  offering  the  purchaser  a choice  among  mutual  funds with
portfolios of equities, bonds, managed assets and/or short-term securities,  and
the Company's  general  account,  as the underlying  investment  vehicles.  With
respect to funds applied to the variable portion of the annuity,  the purchaser,
rather than the Company,  assumes the investment  risks and receives the rewards
inherent in the ownership of the  underlying  investment.  At December 31, 1999,
the  Company  had $4.1  billion  of fixed and  variable  annuities  in force,  a
decrease of 3 percent from the prior year end.

Assets held in separate accounts which fund the variable annuity product totaled
$221 million at December 31, 1999, a 79 percent increase from December 31, 1998.

American   Enterprise  Life  Insurance   Company  is  subject  to  comprehensive
regulation by the Indiana Department of Insurance.  The laws of the other states
in which the Company does  business  regulate  such matters as the  licensing of
sales  personnel  and,  in some cases,  the  marketing  and  contents of annuity
contracts.  The purpose of such  regulation  and  supervision  is  primarily  to
protect the  interests of  policyholders.  Recently  there has been an increased
focus on the variable annuity business by regulators.  In the United States, the
McCarran-Ferguson  Act provides  that the primary  regulation  of the  insurance
industry is left to the  individual  states.  Typically,  states  regulate  such
matters as company  licensing,  agent  licensing,  cancellation or nonrenewal of
policies,   minimum  health  insurance  policy  benefits,  life  insurance  cost
disclosure,  solicitation  and  replacement  practices,  unfair trade and claims
practices,  rates,  forms,  advertising,  investment  type and quality,  minimum
capital and surplus levels and changes in control.  Virtually all states mandate
participation  in  insurance  guaranty  associations,   which  assess  insurance
companies  in order to fund  claims  of  policyholders  of  insolvent  insurance
companies.  In addition  to state laws,  the Company is affected by a variety of
federal laws, and there is periodic  federal  interest in various aspects of the
insurance  industry  including taxation of variable annuities and life insurance
policies,  solvency  and  accounting  procedures,  as well as the  treatment  of
persons differently because of gender, with respect to terms, conditions,  rates
or benefits of an insurance  contract.  New federal  regulation  in any of these
areas could potentially have an adverse effect upon the Company.

<PAGE>

The annuity business is highly competitive and the Company's competitors consist
of both stock and mutual insurance  companies and other financial  institutions.
Competitive  factors  applicable  to the  business  of the  Company  include the
interest  rates  credited to its  products,  the charges  deducted from the cash
values of such products,  product  features,  compensation to distributors,  the
financial   strength  of  the   organization   and  the  services   provided  to
policyholders.

ITEM 2.  PROPERTIES

The Company occupies office space in Minneapolis,  Minnesota, which is leased by
AEFC.  The  Company  reimburses  AEFC for  rent  based on  direct  and  indirect
allocation  methods.  Facilities  occupied  by the  Company  are  believed to be
adequate for the purposes for which they are used and are well maintained.

<PAGE>

ITEM 3.  LEGAL PROCEEDINGS

A number of  lawsuits  have been  filed  against  life and  health  insurers  in
jurisdictions  in which the Company  and its  affiliates  do business  involving
insurers'  sales  practices,  alleged  agent  misconduct,  failure  to  properly
supervise  agents,  and other  matters.  IDS Life is a defendant  in three class
action lawsuits of this nature. The Company is a named defendant in one of these
suits,  Richard Thoreson and Elizabeth Thoresen vs. AEFC, American Partners Life
Insurance  Company,   American  Enterprise  Life  Insurance  Company,   American
Centurion  Life  Assurance  Company,  IDS Life  Insurance  Company  and IDS Life
Insurance  Company  of New York  which was  filed in  Minnesota  state  court in
October 1998. The action was brought by individuals  who purchased an annuity in
a  qualified  plan.  The  plaintiffs  allege  that  the  sale  of  annuities  in
tax-deferred  contributory  retirement  investment  plans (e.g.  IRA's) is never
appropriate.  The  plaintiffs  purport to  represent a class  consisting  of all
persons  who  made  similar  purchases.   The  plaintiffs  seek  damages  in  an
unspecified amount.

The Company is included as a party to preliminary  settlement of all three class
action lawsuits.  The Company believes this approach will put these cases behind
it and provide a fair outcome for its clients.  The Company's decision to settle
does not include any  admission of  wrongdoing.  The  settlement  did not have a
material impact on the Company's  financial position or results from operations.
Further,  the Company does not  anticipate  that any other lawsuits in which the
Company is a  defendant  will have a material  adverse  effect on its  financial
condition.


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

Not applicable.

<PAGE>

                                                 PART II


ITEM 5.    MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Not applicable.

ITEM 6.  SELECTED FINANCIAL DATA

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

<PAGE>

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

1999 Compared to 1998:

Net income increased 54 percent to $34 million in 1999,  compared to $22 million
in 1998.  Earnings growth resulted  primarily net realized gains of $6.6 million
in 1999, compared to net realized losses of $4.8 in 1998.

Income  before  income  taxes  totaled  $51 million in 1999,  compared  with $36
million in 1998.

Total investment  contract deposits received  decreased to $336 million in 1999,
compared with $348 million in 1998. This decrease is primarily due to a decrease
in sales of variable annuities in 1999.

Total revenues decreased to $338 million in 1999,  compared with $343 million in
1998. The decrease is primarily due to decreased net investment income which was
partially offset by an increase in realized gain on investments.  Net investment
income,  the largest  component of revenues,  decreased 5 percent from the prior
year, reflecting decreases in investments owned and investment yields.

Contractholder  charges  decreased 5 percent to $6.1  million in 1999,  compared
with $6.4 million in 1998, reflecting a decrease in fixed annuities inforce. The
Company  receives  mortality  and expense risk fees from the separate  accounts.
Mortality  and expense  risk fees  increased 77 percent to $2.3 million in 1999,
compared  with $1.3  million in 1998,  this  reflects  the  increase in separate
account assets.

Net realized  gain on  investments  was $6.6 million in 1999,  compared to a net
realized loss on  investments  of $4.8 million in 1998.  The net realized  gains
were primarily due to the sale of available for sale fixed maturity  investments
at a gain as well as a decrease in the  allowance for mortgage loan losses based
on management's regular evaluation of allowance adequacy.

Total  benefits and  expenses  decreased  slightly to $287 million in 1999.  The
largest  component  of  expenses,  interest  credited on  investment  contracts,
decreased to $209 million, reflecting a decrease in fixed annuities in force and
lower  interest  rates.   Amortization  of  deferred  policy  acquisition  costs
decreased to $43 million, compared to $54 million in 1998. This decrease was due
primarily  to  decreased  aggregate  amounts in force,  as well as the impact of
changing  prospective  assumptions  in 1998 based on actual lapse  experience on
certain fixed annuities.

Other operating expenses  increased 46 percent to $35 million in 1999,  compared
to $24  million in 1998.  This  increase  primarily  reflects  technology  costs
related to growth initiatives.

<PAGE>

1998 Compared to 1997:

Net income decreased 22 percent to $22 million in 1998,  compared to $28 million
in  1997.  The  decrease  in  earnings  resulted  primarily  from  increases  in
amortization of deferred policy acquisition costs.

Income  before  income  taxes  totaled  $36 million in 1998,  compared  with $45
million in 1997.

Total  premiums and  investment  contract  deposits  received  decreased to $348
million in 1998,  compared with $802 million in 1997. This decrease is primarily
due to a  decrease  in sales  of fixed  annuities  in 1998,  reflecting  the low
interest rate environment.

Total revenues increased to $343 million in 1998,  compared with $338 million in
1997.  The increase is primarily due to increases in net  investment  income and
contractholder   charges.  Net  investment  income,  the  largest  component  of
revenues,  increased 2 percent  from the prior  year,  reflecting  increases  in
investments owned and investment yields.

Contractholder  charges,  increased 12 percent to $6.4 million in 1998, compared
with $5.7 million in 1997. The Company receives  mortality and expense risk fees
from the separate accounts.

Total  benefits  and  expenses  increased  4.6 percent to $307  million in 1998,
compared with 293 million in 1997. The largest  component of expenses,  interest
credited on  contractholders  investment  contracts,  decreased to $229 million,
reflecting  a decrease in fixed  annuities  in force and lower  interest  rates.
Amortization  of deferred  policy  acquisition  costs  increased to $54 million,
compared to $37 million in 1997.  This  increase was due primarily to the impact
of changing prospective  assumptions based on actual lapse experience on certain
fixed annuities.

<PAGE>

Risk Management

The  sensitivity  analysis of the test of market risk discussed  below estimates
the  effects of  hypothetical  sudden and  sustained  changes in the  applicable
market  conditions on the ensuing year's  earnings based on year-end  positions.
The  market  changes,  assumed  to occur as of  year-end,  is a 100 basis  point
increase in market  interest rates.  Computations of the prospective  effects of
hypothetical  interest  rate  change  based on numerous  assumptions,  including
relative  levels of market  interest  rates as well as the  levels of assets and
liabilities.  The  hypothetical  changes and assumptions  will be different from
what  actually  occurs  in the  future.  Furthermore,  the  computations  do not
anticipate  actions that may be taken by management if the  hypothetical  market
changes actually occurred over time. As a result, actual earnings effects in the
future will differ from those quantified below.

The Company  primarily  invests in fixed income securities over a broad range of
maturities for the purpose of providing fixed annuity clients with a competitive
rate of return on their  investments  while  minimizing  risk,  and to provide a
dependable  and targeted  spread between the interest rate earned on investments
and the interest rate credited to  contractholders'  accounts.  The Company does
not invest in securities to generate trading profits.

The Company has an investment  committee that holds regularly scheduled meetings
and, when necessary,  special meetings. At these meetings, the committee reviews
models  projecting  different  interest  rate  scenarios  and  their  impact  on
profitability.  The objective of the  committee is to structure  the  investment
security portfolio based upon the type and behavior of products in the liability
portfolio so as to achieve targeted levels of profitability.

Rates  credited to  contractholders'  accounts  are  generally  reset at shorter
intervals than the maturity of underlying investments. Therefore, margins may be
negatively impacted by increases in the general level of interest rates. Part of
the  committee's  strategy  includes the purchase of some types of  derivatives,
such as interest  rate caps,  swaps and  floors,  for  hedging  purposes.  These
derivatives  protect  margins  by  increasing  investment  returns if there is a
sudden and severe rise in interest  rates,  thereby  mitigating the impact of an
increase in rates credited to contractholders' accounts.

The  negative  effect on the  Company's  pretax  earnings  of a 100 basis  point
increase in interest rates, which assumes repricings and customer behavior based
on the application of proprietary models to the book of business at December 31,
1999, would be appoximately $4.2 million.

<PAGE>

Liquidity and Capital Resources

The liquidity  requirements  of the Company are met by funds provided by annuity
considerations, investment income, proceeds from sales of investments as well as
maturities and periodic repayments of investment principal.

The  primary  uses of funds  are  policy  benefits,  commissions  and  operating
expenses, policy loans, and investment purchases.

The Company has an  available  line of credit with  American  Express  Financial
Corporation  aggregating  $50 million.  The line of credit is used strictly as a
short-term  source of funds. No borrowings were outstanding  under the agreement
at December 31,  1999.  At December 31,  1999,  outstanding  reverse  repurchase
agreements totaled $26 million.

At December 31, 1999,  investments in fixed  maturities  comprised 81 percent of
the  Company's  total  invested  assets.   Of  the  fixed  maturity   portfolio,
approximately  32 percent is  invested in GNMA,  FNMA and FHLMC  mortgage-backed
securities which are considered AAA/Aaa quality.

At December 31, 1999,  approximately 14 percent of the Company's  investments in
fixed  maturities were below investment  grade bonds.  These  investments may be
subject to a higher degree of risk than the  investment  grade issues because of
the borrower's  generally  greater  sensitivity to adverse economic  conditions,
such as recession or increasing  interest rates, and in certain  instances,  the
lack of an active secondary  market.  Expected returns on below investment grade
bonds reflect  consideration  of such factors.  The Company has identified those
fixed  maturities  for which a decline in fair value is  determined  to be other
than  temporary,  and has  written  them  down to fair  value  with a charge  to
earnings.

At December 31, 1999, net unrealized  depreciation  on fixed  maturities held to
maturity included $6.3 million of gross unrealized  appreciation and $29 million
of  gross  unrealized   depreciation.   Net  unrealized  depreciation  on  fixed
maturities  available  for  sale  included  $9.3  million  of  gross  unrealized
appreciation and $117 million of gross unrealized depreciation.

At December 31, 1999, the Company had an allowance for losses for mortgage loans
totaling $6.7 million.

The economy and other factors have caused a number of insurance  companies to go
under regulatory  supervision.  This circumstance has resulted in assessments by
state guaranty  associations  to cover losses to  policyholders  of insolvent or
rehabilitated  companies.  Some assessments can be partially recovered through a
reduction in future premium taxes in certain states. The Company  established an
asset for  guaranty  association  assessments  paid to those  states  allowing a
reduction in future premium taxes over a reasonable period of time. The asset is
being amortized as premium taxes are reduced. The Company has also estimated the
potential effect of future  assessments on the Company's  financial position and
results  of  operations  and  has  established  a  reserve  for  such  potential
assessments.  The Company  has adopted  Statement  of  Position  97-3  providing
guidance  when an  insurer  should  recognize  a  liability  for  guaranty  fund
assessments.  The SOP is effective for fiscal years beginning after December 15,
1998.  Adoption  did not have a  material  impact on the  Company's  results  of
operations or financial condition.

<PAGE>

The National Association of Insurance  Commissioners has established  risk-based
capital  standards to determine  the capital  requirements  of a life  insurance
company based upon the risks inherent in its operations. These standards require
the  computation  of a risk-based  capital  amount  which is then  compared to a
company's  actual total adjusted  capital.  The  computation  involves  applying
factors to various statutory financial data to address four primary risks: asset
default,  adverse insurance experience,  interest rate risk and external events.
These  standards  provide for regulatory  attention when the percentage of total
adjusted capital to authorized control level risk-based capital is below certain
levels.  As of December 31, 1999, the Company's total adjusted  capital was well
in excess of the levels requiring regulatory attention.


Year 2000 Issue

The  Company  is a wholly  owned  subsidiaryIDS  Life,  which is a wholly  owned
subsidiary of American Express Financial  Corporation (AEFC),  which is a wholly
owned  subsidiary of American  Express Company  (American  Express).  All of the
major  systems  used by the Company are  maintained  by AEFC and are utilized by
multiple  subsidiaries and affiliates of AEFC.  American Express coordinated the
Year 2000 (Y2K)  efforts on behalf of all of its  businesses  and  subsidiaries.
Representatives of AEFC participated in these efforts.

The Company,  to date, has not experienced any material systems failures related
to the Y2K rollover.  American Express' and AEFC's  remediation plan for the Y2K
issue is discussed in detail in American Express' 1998 10-K report and 1999 10-Q
reports.  American  Express  and AEFC will  continue  their Y2K  monitoring  and
address  any  issues  that may arise  from  internal  systems  or those of third
parties.  American  Express' and AEFC's  cumulative costs since inception of the
Y2K  initiative  were $505  million  and $67.7  million,  respectively,  through
December 31, 1999,  and are  expected to be  approximately  $10 million and $0.8
million,  respectively,  in 2000. The majority of these costs are managed by and
included in American Express'  Corporate and Other segment,  as most remediation
efforts are  related to systems  that are  maintained  by the  American  Express
Technologies organization.  Costs related to Y2K have not had a material adverse
effect on the Company's results of operations or financial condition.

<PAGE>

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Items required under this section are included in the Mangement's Discussion and
Analysis of  financial  condition  and results of  operations  under the section
titled risk management.

ITEM 8.      FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

1.  Financial Statements and Schedules Required under Regulation S-X.

     Index to financial statements

         The following   financial   statements  of  American   Enterprise  Life
             Insurance Company are included in Item 8:

         Report of Independent Auditors                                  17

         Balance Sheets at December 31, 1999 and 1998                    18

         Statements of Income for the years ended
                 December 31, 1999, 1998 and 1997                        19

         Statements of Stockholder's Equity for the years ended
             December 31, 1999, 1998 and 1997                            20

         Statements of Cash Flows for the years ended
                 December 31, 1999, 1998 and 1997                        21

         Notes to Financial Statements                                22-34

All information on schedules to the financial  statements  required by Article 7
of Regulation  S-X is included in the  financial  statements or is not required.
Therefore, all schedules have been omitted.

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

None.

<PAGE>

                                    PART III


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

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.

<PAGE>

                                     PART IV

ITEM 14.   EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

     (a)  (1)  Financial Statements

               See  Index  to  Financial   Statements  and  Financial  Statement
               Schedules on page 11.

          (2)  Financial Statement Schedules

               See  index  to  Financial   Statements  and  Financial  Statement
               Schedules.   All   information  on  schedules  to  the  financial
               statements required by Article 7 of Regulation S-X is included in
               the  financial  statements  or is not  required.  Therefore,  all
               schedules have been omitted.

          (3)  Exhibits

                    3.1  Amendment and Restatement of Articles of  Incorporation
                         of American  Enterprise Life dated July 29, 1986, filed
                         electronically   as   Exhibit   6.1  to   the   Initial
                         Registration Statement No. 33-54471,  filed on or about
                         July 5, 1994, is incorporated by reference.

                    3.2  Amended  By-laws of  American  Enterprise  Life,  filed
                         electronically   as   Exhibit   6.2  to   the   Initial
                         Registration Statement No. 33-54471,  filed on or about
                         July 5, 1994, is incorporated by reference.

                    3.3  Consent in writing in lieu of a meeting of the Board of
                         Directors of American Enterprise Life Insurance Company
                         establishing the American  Enterprise MVA Account dated
                         Aug. 18, 1999, filed  electronically  as Exhibit 3.3 to
                         Initial Registration Statement No. 333-86297,  filed on
                         or about Aug. 31, 1999, is incorporated by reference.

                    4.1  Form of  Deferred  Annuity  Contract  for the  American
                         Express Signature One Variable AnnuitySM (form 240180),
                         filed   electronically   as  Exhibit  4.1  to  American
                         Enterprise  Variable Annuity  Account's  Post-Effective
                         Amendment No. 1 to Registration Statement No. 333-85567
                         on form  N-4,  filed  on or  about  Dec.  7,  1999,  is
                         incorporated by reference.

                    4.2  Form of Deferred  Annuity  Contract for the Wells Fargo
                         AdvantageSM   Variable  Annuity  (form  44209),   filed
                         electronically  as Exhibit 4.1 to  American  Enterprise
                         Variable Annuity Account's  Pre-Effective Amendment No.
                         1 to Registration Statement No. 333-85567,  filed on or
                         about November 4, 1999, is incorporated by reference.

                    4.3  Form of Deferred  Annuity  Contract for the Wells Fargo
                         AdvantageSM Credit Variable Annuity (form 44210), filed
                         electronically  as Exhibit 4.2 to  American  Enterprise
                         Variable Annuity Account's  Pre-Effective Amendment No.
                         1 to Registration Statement No. 333-85567,  filed on or
                         about November 4, 1999, is incorporated by reference.

                    4.4  Form of  Deferred  Annuity  Contract  for the  American
                         Enterprise  Variable  Annuity filed  electronically  as
                         Exhibit 4.1 to American  Enterprise  Variable Account's
                         Pre-Effective Amendment No. 1 to Registration Statement
                         No.  333-92297 on Form N-4,  filed on or about Feb. 11,
                         2000, is incorporated by reference.

                    4.5  Form of  Enhanced  Death  Benefit  Rider  for the Wells
                         Fargo AdvantageSM  Variable Annuity and the Wells Fargo
                         AdvantageSM Credit Variable Annuity (form 44213), filed
                         electronically  as Exhibit 4.3 to  American  Enterprise
                         Variable Annuity Account's  Pre-Effective Amendment No.
                         1 to Registration  Statement No. 333-85567 on form N-4,
                         filed on or about Nov.  4,  1999,  is  incorporated  by
                         reference.

<PAGE>

                    4.6  Form of Guaranteed Minimum Income Benefit Rider for the
                         American Express  Signature One Variable  AnnuitySM (6%
                         Accumulation   Benefit  Base)  (form   240186),   filed
                         electronically  as Exhibit 4.2 to  American  Enterprise
                         Variable Annuity Account's Post-Effective Amendment No.
                         3 to Registration  Statement No. 333-85567 on form N-4,
                         filed on or about Feb. 11,  2000,  is  incorporated  by
                         reference.

                    4.7  Form of Guaranteed Minimum Income Benefit Rider for the
                         American Express Variable Annuity, filed electronically
                         as  Exhibit   4.4  to  American   Enterprise   Variable
                         Account's Pre-Effective Amendment No. 1 to Registration
                         Statement No.  333-92297 on Form N-4, filed on or about
                         Feb. 11, 2000, is incorporated by reference.

                    4.8  Form of Guaranteed Minimum Income Benefit Rider for the
                         Wells Fargo AdvantageSM  Variable Annuity and the Wells
                         Fargo AdvantageSM Credit Variable Annuity (form 44214),
                         filed   electronically   as  Exhibit  4.4  to  American
                         Enterprise  Variable  Annuity  Account's  Pre-Effective
                         Amendment No. 1 to Registration Statement No. 333-85567
                         on form  N-4,  filed  on or  about  Nov.  4,  1999,  is
                         incorporated by reference.

                    4.9  Form of 5%  Accumulation  Death  Benefit  Rider for the
                         American Express Signature One Variable AnnuitySM (form
                         240183),   filed   electronically  as  Exhibit  4.3  to
                         American    Enterprise   Variable   Annuity   Account's
                         Post-Effective   Amendment   No.   1  to   Registration
                         Statement No.  333-85567 on form N-4, filed on or about
                         Dec. 8, 1999, is incorporated by reference.

                    4.10 Form of 8%  Performance  Credit  Rider for the American
                         Express Signature One Variable AnnuitySM (form 240187),
                         filed   electronically   as  Exhibit  4.4  to  American
                         Enterprise  Variable Annuity  Account's  Post-Effective
                         Amendment No. 2 to Registration Statement No. 333-85567
                         on form  N-4,  filed  on or about  Dec.  30,  1999,  is
                         incorporated by reference.

                    4.11 Form of  Performance  Credit  Rider  for  the  American
                         Express  Variable  Annuity,   filed  electronically  as
                         Exhibit 4.2 to American  Enterprise  Variable Account's
                         Pre-Effective amendment No. 1 to Registration Statement
                         No.  333-92297 on Form N-4,  filed on or about Feb. 11,
                         2000, is incorporated by reference.

                    4.12 Form of  Roth  IRA  Endorsement  for  the  Wells  Fargo
                         AdvantageSM  Variable Annuity,  Wells Fargo AdvantageSM
                         Credit Variable Annuity, American Express Signature One
                         Variable   AnnuitySM  and  American   Express  Variable
                         Annuity (form 43094),  filed  electronically as Exhibit
                         4.2 to  Pre-Effective  Amendment No. 1 to  Registration
                         Statement  No.  333-74865,  filed on or about  Aug.  4,
                         1999, are incorporated by reference.

                    4.13 Form  of  SEP-IRA  for  the  Wells  Fargo   AdvantageSM
                         Variable  Annuity,   Wells  Fargo  AdvantageSM   Credit
                         Variable  Annuity,  and American Express  Signature One
                         Variable AnnuitySM (form 43412),  filed  electronically
                         as  Exhibit  4.3 to  Pre-Effective  Amendment  No. 1 to
                         Registration Statement No. 333-72777, filed on or about
                         July 8, 1999, is incorporated by reference.

                    4.14 Form of SEP-IRA for American  Express  Variable Annuity
                         (form  43433)  filed  electronically  as Exhibit 4.3 to
                         Pre-Effective Amendment No. 1 to Registration Statement
                         No.  333-74865  filed  on or about  Aug.  4,  1999,  is
                         incorporated by reference.

<PAGE>

                    4.15 Form of Disability  Waiver of  Withdrawal  Charge Rider
                         for the Wells Fargo  AdvantageSM  Variable  Annuity and
                         the Wells Fargo  AdvantageSM  Credit  Variable  Annuity
                         (form 44215),  filed  electronically  as Exhibit 4.5 to
                         American    Enterprise   Variable   Annuity   Account's
                         Pre-Effective Amendment No. 1 to Registration Statement
                         No.  333-85567  on form N-4,  filed on or about Nov. 4,
                         1999, is incorporated by reference.

                    4.16 Form of Unemployment Waiver of Withdrawal Charges Rider
                         for the Wells Fargo  AdvantageSM  Variable  Annuity and
                         the Wells Fargo  AdvantageSM  Credit  Variable  Annuity
                         (form 44216), to American  Enterprise  Variable Annuity
                         Account's Pre-Effective No. 1 Amendment to Registration
                         Statement No.  333-85567 on form N-4, filed on or about
                         Nov. 4, 1999, is incorporated by reference.

                    4.17 Form of TSA Endorsement for the Wells Fargo AdvantageSM
                         Variable Annuity and the Wells Fargo AdvantageSM Credit
                         Variable Annuity (form 43413),  filed electronically as
                         Exhibit  4.4  to  Pre-Effective   Amendment  No.  1  to
                         Registration Statement No. 333-72777, filed on or about
                         July 8, 1999, is incorporated by reference.

                    27.  Financial   data   schedule  is  filed   electronically
                         herewith.

     (b) Reports on Form 8-K filed in the fourth quarter of 1999

No reports on Form 8-K were  required to be filed by the Company for the quarter
ended December 31, 1999.

<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.

                   AMERICAN ENTERPRISE LIFE INSURANCE COMPANY
                                   Registrant


3/12/2000                            By   /s/ James E. Choat
Date                                      James E. Choat, President
                                          and Chief Executive Officer

3/12/2000                            By   /s/ Philip C. Wentzel
Date                                      Philip C. Wentzel, Vice President and
                                          Controller

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.

3/12/2000                            By   /s/ James E. Choat
Date                                      James E. Choat, President
                                          and Chief Executive Officer

3/12/2000                            By   /s/ Richard W. Kling
Date                                      Richard W. Kling, Chairman of the
                                          Board

3/12/2000                            By   /s/ Paula R. Meyer
Date                                      Paula R. Meyer, Executive Vice
                                          President, Assured Assets

3/12/2000                            By   /s/ William A. Stoltzmann
Date                                      William A. Stoltzmann, Vice President
                                          and Secretary

<PAGE>

Report of Independent Auditors

The Board of Directors
American Enterprise Life Insurance Company


We have audited the  accompanying  balance  sheets of American  Enterprise  Life
Insurance  Company (a wholly owned subsidiary of IDS Life Insurance  Company) as
of  December  31,  1999  and  1998,  and  the  related   statements  of  income,
stockholder's  equity and cash  flows for each of the three  years in the period
ended December 31, 1999. These financial  statements are the  responsibility  of
the 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 auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable  assurance about whether the financial  statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting  the amounts and  disclosures in the financial  statements.  An audit
also includes assessing the accounting principles used and significant estimates
made by  management,  as well as  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  financial  position of American  Enterprise  Life
Insurance  Company  at  December  31,  1999 and  1998,  and the  results  of its
operations  and its cash flows for each of the three  years in the period  ended
December 31, 1999, in conformity with accounting  principles  generally accepted
in the United States.





February 3, 2000
Minneapolis, Minnesota

<PAGE>

                   AMERICAN ENTERPRISE LIFE INSURANCE COMPANY
                                 BALANCE SHEETS
                                  December 31,
                       ($ thousands, except share amounts)
<TABLE>
<S>                                                              <C>              <C>

ASSETS                                                              1999              1998
------                                                           -----------      -----------

Investments:
  Fixed maturities:
    Held to maturity, at amortized cost (fair value:
       1999, $984,103; 1998, $1,126,732)                          $1,006,349       $1,081,193
    Available for sale, at fair value (amortized cost:
       1999, $2,411,799; 1998, $2,526,712)                         2,304,487        2,594,858
                                                                 -----------      -----------
                                                                   3,310,836        3,676,051

  Mortgage loans on real estate                                      785,253          815,806
  Other investments                                                   11,470           12,103
                                                                 -----------      -----------
          Total investments                                        4,107,559        4,503,960

Accounts receivable                                                      316              214
Accrued investment income                                             56,676           61,740
Deferred policy acquisition costs                                    180,288          196,479
Deferred income taxes                                                 37,501               --
Other assets                                                               9               43
Separate account assets                                              220,994          123,185
                                                                 -----------      -----------

          Total assets                                            $4,603,343       $4,885,621
                                                                  ==========       ==========

LIABILITIES AND STOCKHOLDER'S EQUITY

Liabilities:
  Future policy benefits for fixed annuities                      $3,921,513       $4,166,852
  Policy claims and other policyholders' funds                        12,097            7,389
  Deferred income taxes                                                   --           23,199
  Amounts due to brokers                                              25,215           54,347
  Other liabilities                                                   17,436           24,500
  Separate account liabilities                                       220,994          123,185
                                                                 -----------      -----------
          Total liabilities                                        4,197,255        4,399,472

Stockholder's equity:
  Capital stock, $100 par value per share;
    100,000 shares authorized,
    20,000 shares issued and outstanding                               2,000            2,000
  Additional paid-in capital                                         282,872          282,872
  Accumulated other comprehensive (loss) income:
     Net unrealized securities (losses) gains                        (69,753)          44,295
  Retained earnings                                                  190,969          156,982
                                                                 -----------      -----------
          Total stockholder's equity                                 406,088          486,149
                                                                 -----------      -----------

Total liabilities and stockholder's equity                        $4,603,343       $4,885,621
                                                                  ==========       ==========
</TABLE>

<PAGE>

                   AMERICAN ENTERPRISE LIFE INSURANCE COMPANY
                              STATEMENTS OF INCOME
                            Years ended December 31,
                                  ($ thousands)
<TABLE>
<S>                                                       <C>               <C>              <C>

                                                            1999              1998             1997
                                                          ---------         ---------        ---------

Revenues:
  Net investment income                                    $322,746          $340,219         $332,268
  Contractholder charges                                      6,069             6,387            5,688
  Mortality and expense risk fees                             2,269             1,275              641
  Net realized gain (loss) on investments                     6,565            (4,788)            (509)
                                                          ---------         ---------        ---------

          Total revenues                                    337,649           343,093          338,088
                                                          ---------         ---------        ---------

Benefits and expenses:
  Interest credited on investment contracts                 208,583           228,533          231,437
  Amortization of deferred policy acquisition costs          43,257            53,663           36,803
  Other operating expenses                                   35,147            24,476           24,890
                                                          ---------         ---------        ---------

          Total benefits and expenses                       286,987           306,672          293,130
                                                          ---------         ---------        ---------

Income before income taxes                                   50,662            36,421           44,958

Income taxes                                                 16,675            14,395           16,645
                                                          ---------         ---------        ---------

Net income                                                $  33,987         $  22,026        $  28,313
                                                          =========         =========        =========
</TABLE>

<PAGE>

                   AMERICAN ENTERPRISE LIFE INSURANCE COMPANY
                       STATEMENTS OF STOCKHOLDER'S EQUITY
                       Three years ended December 31, 1999
                                  ($ thousands)
<TABLE>
<CAPTION>

                                                                                                   Accumulated
                                                                                                     Other
                                                         Total                      Additional    Comprehensive
                                                     Stockholder's     Capital       Paid-In      (Loss) Income,     Retained
                                                         Equity         Stock         Capital        Net of Tax       Earnings
                                                     -------------    --------    ------------    ------------    -------------
<S>                                                  <C>              <C>         <C>             <C>             <C>
Balance, December 31, 1996                               $363,858       $2,000       $242,872        $ 12,343        $106,643
Comprehensive income:
     Net income                                            28,313           --             --              --          28,313
      Unrealized holding gains arising
           during the year, net of  taxes of
        ($19,891)                                          36,940           --             --          36,940              --
      Reclassification adjustment for losses
           included in net income, net of tax
           of ($126)                                          233           --             --             233              --
                                                     -------------                                ------------
     Other comprehensive income                            37,173           --             --          37,173              --
                                                     -------------
     Comprehensive income                                  65,486
Capital contribution from IDS Life                         40,000           --         40,000              --              --
                                                     -------------    --------    ------------    ------------    -------------

Balance, December 31, 1997                                469,344        2,000        282,872          49,516         134,956
Comprehensive income:
     Net income                                            22,026           --             --              --          22,026
     Unrealized holding losses arising
          during the year, net of taxes of $3,400          (6,314)          --             --          (6,314)             --
       Reclassification adjustment for losses
           included in net income, net of tax
           of ($588)                                        1,093           --             --           1,093              --
                                                     -------------                                ------------
     Other comprehensive loss                              (5,221)          --             --          (5,221)             --
                                                     -------------
     Comprehensive income                                  16,805
                                                     -------------    --------    ------------    ------------    -------------

Balance, December 31, 1998                                486,149        2,000        282,872          44,295         156,982
Comprehensive loss:
     Net income                                            33,987           --             --              --          33,987
     Unrealized holding losses arising
         during the year, net of taxes of $(59,231)      (110,001)          --             --        (110,001)             --
     Reclassification adjustment for gains
          included in net income, net of tax               (4,047)                                     (4,047)             --
          of $(2,179)                                -------------                                ------------
     Other comprehensive loss                            (114,048)          --             --        (114,048)             --
                                                     -------------
     Comprehensive loss                                   (80,061)
                                                     -------------    --------    ------------    ------------    -------------

Balance, December 31, 1999                               $406,088       $2,000       $282,872        $(69,753)       $190,969
                                                     =============    ========    ============    ============    =============
</TABLE>

<PAGE>
<TABLE>
<CAPTION>

                                         See accompanying notes.

                                AMERICAN ENTERPRISE LIFE INSURANCE COMPANY
                                         STATEMENTS OF CASH FLOWS
                                         Years ended December 31,
                                              ($ thousands)
<S>                                                                <C>           <C>           <C>
                                                                      1999          1998          1997
                                                                   -----------   -----------   -----------
Cash flows from operating activities:
  Net income                                                       $   33,987    $   22,026    $   28,313
  Adjustments to reconcile net income to net cash
    provided by (used in) operating activities:
      Change in accrued investment income                               5,064        (2,152)       (8,017)
      Change in accounts receivable                                      (102)          349         9,304
      Change in deferred policy acquisition costs, net                 16,191        28,022       (21,276)
      Change in other assets                                               34            74         4,840
      Change in policy claims and other policyholders' funds            4,708        (3,939)      (16,099)
      Deferred income tax (benefit) provision                             711        (9,591)       (2,485)
      Change in other liabilities                                      (7,064)        7,595         1,255
      Amortization of premium (accretion of discount), net              2,315           122        (2,316)
      Net realized (gain) loss on investments                          (6,565)        4,788           509
      Other, net                                                      (1,562)         2,544           959
                                                                   -----------   -----------   -----------

         Net cash provided by (used in) operating activities           47,717        49,838        (5,013)

Cash flows from investing activities:
    Fixed maturities held to maturity:
        Purchases                                                          --            --        (1,996)
        Maturities                                                     65,705        73,601        41,221
        Sales                                                           8,466        31,117        30,601
    Fixed maturities available for sale:
        Purchases                                                    (593,888)     (298,885)     (688,050)
        Maturities                                                    248,317       335,357       231,419
        Sales                                                         469,126        48,492        73,366
    Other investments:
        Purchases                                                     (28,520)     (161,252)     (199,593)
        Sales                                                          57,548        78,681        29,139
    Change in amounts due to brokers                                  (29,132)       19,412       (53,796)
                                                                   -----------   -----------   ------------

          Net cash provided by (used in) investing activities         197,622       126,523      (537,689)

Cash flows from financing activities:
 Activity related to investment contracts:
    Considerations received                                           299,899       302,158       783,339
    Surrenders and other benefits                                    (753,821)     (707,052)     (552,903)
    Interest credited to account balances                             208,583       228,533       231,437
    Capital contribution from parent                                       --            --        40,000
                                                                   -----------   -----------   -----------

          Net cash (used in) provided by financing activities        (245,339)     (176,361)      501,873
                                                                   -----------   -----------   -----------

Net decrease in cash and cash equivalents                                  --            --       (40,829)

Cash and cash equivalents at beginning of year                             --            --        40,829
                                                                   -----------   -----------   -----------

Cash and cash equivalents at end of year                           $       --    $       --    $      --
                                                                   ===========   ===========   ==========
                                         See accompanying notes.

</TABLE>

<PAGE>

1.   Summary of significant accounting policies

     Nature of business

     American  Enterprise  Life Insurance  Company (the Company) is a stock life
     insurance  company that is domiciled in Indiana and is licensed to transact
     insurance  business  in 48  states.  The  Company's  principal  product  is
     deferred  annuities,  which are issued primarily to individuals.  It offers
     single  premium and annual premium  deferred  annuities on both a fixed and
     variable dollar basis.
     Immediate annuities are offered as well.

     Basis of presentation

     The Company is a wholly-owned subsidiary of IDS Life Insurance Company (IDS
     Life),  which is a wholly owned  subsidiary of American  Express  Financial
     Corporation  (AEFC).  AEFC is a wholly owned subsidiary of American Express
     Company.  The  accompanying  financial  statements  have been  prepared  in
     conformity  with  accounting  principles  generally  accepted in the United
     States which vary in certain respects from reporting  practices  prescribed
     or permitted by the Indiana Department of Insurance (see Note 4).

     The  preparation  of financial  statements  in conformity  with  accounting
     principles  generally accepted in the United States 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.

     Investments

     Fixed  maturities  that the  Company has both the  positive  intent and the
     ability to hold to maturity are  classified as held to maturity and carried
     at amortized  cost. All other fixed  maturities are classified as available
     for  sale and  carried  at fair  value.  Unrealized  gains  and  losses  on
     securities  classified  as  available  for sale are  reported as a separate
     component of accumulated other comprehensive (loss) income, net of deferred
     income taxes.

     Realized investment gain or loss is determined on an identified cost basis.

     Prepayments  are  anticipated  on certain  investments  in  mortgage-backed
     securities in determining  the constant  effective  yield used to recognize
     interest  income.  Prepayment  estimates are based on information  received
     from brokers who deal in mortgage-backed securities.

     Mortgage  loans on real  estate  are  carried  at  amortized  cost  less an
     allowance  for  mortgage  loan  losses.  The  estimated  fair  value of the
     mortgage  loans is  determined  by a discounted  cash flow  analysis  using
     mortgage   interest  rates  currently  offered  for  mortgages  of  similar
     maturities.

<PAGE>

1.   Summary of significant accounting policies (continued)

     Impairment  of  mortgage  loans is  measured  as the  excess of the  loan's
     recorded  investment  over its  present  value of  expected  principal  and
     interest payments  discounted at the loan's effective interest rate, or the
     fair value of  collateral.  The amount of the  impairment is recorded in an
     allowance for mortgage loan losses.  The allowance for mortgage loan losses
     is  maintained  at a level that  management  believes is adequate to absorb
     estimated  losses in the portfolio.  The level of the allowance  account is
     determined  based on  several  factors,  including  historical  experience,
     expected  future  principal  and interest  payments,  estimated  collateral
     values,  and current and  anticipated  economic and  political  conditions.
     Management  regularly  evaluates the adequacy of the allowance for mortgage
     loan losses.

     The Company  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.

     The cost of interest rate caps and floors is amortized to investment income
     over the life of the contracts  and payments  received as a result of these
     agreements are recorded as investment  income when realized.  The amortized
     cost of interest rate caps and floors is included in other investments.

     When evidence  indicates a decline,  which is other than temporary,  in the
     underlying  value  or  earning  power  of  individual   investments,   such
     investments are written down to the fair value by a charge to income.

     Statements of cash flows

     The  Company  considers  investments  with a maturity  at the date of their
     acquisition  of  three  months  or  less  to  be  cash  equivalents.  These
     securities are carried  principally  at amortized  cost which  approximates
     fair value.

     Supplementary  information  to the  statements  of cash flows for the years
     ended December 31, is summarized as follows:

                                        1999            1998           1997
                                        ----            -----          ----
    Cash paid during the year for:
      Income taxes                      $22,007        $19,035       $19,456
      Interest on borrowings              2,187          5,437         1,832

     Contractholder charges

     Contractholder   charges  include  surrender  charges  and  fees  collected
     regarding the issue and administration of annuity contracts.

<PAGE>

1.   Summary of significant accounting policies (continued)

     Deferred policy acquisition costs

     The costs of acquiring new business, principally sales compensation, policy
     issue costs,  and certain  sales  expenses,  have been  deferred on annuity
     contracts. These costs are amortized using primarily the interest method.

     Amortization  of deferred  policy  acquisition  costs  requires  the use of
     assumptions  including  interest margins,  mortality  margins,  persistency
     rates,  maintenance  expense  levels and, for variable  products,  separate
     account  performance.   For  universal  life-type  insurance  and  deferred
     annuities,  actual  experience is reflected in the  Company's  amortization
     models monthly. As actual experience differs from the current  assumptions,
     management  considers  the need to change key  assumptions  underlying  the
     amortization  models  prospectively.  The  impact of  changing  prospective
     assumptions  is  reflected  in the period that such changes are made and is
     generally referred to as an unlocking  adjustment.  During 1998,  unlocking
     adjustments  resulted in a net increase in amortization of $11 million. Net
     unlocking adjustments in 1999 and 1997 were not significant.

     Liabilities for future policy benefits

     Liabilities  for  universal-life  type  insurance  and fixed  and  variable
     deferred annuities are accumulation values.

     Federal income taxes

     The Company's taxable income is included in the consolidated federal income
     tax return of American  Express  Company.  The Company  provides for income
     taxes on a separate return basis,  except that, under an agreement  between
     AEFC and American Express Company,  tax benefit is recognized for losses to
     the  extent  they can be used on the  consolidated  tax  return.  It is the
     policy of AEFC and its subsidiaries  that AEFC will reimburse  subsidiaries
     for all tax benefits.

     Included in other  liabilities at December 31, 1999 and 1998 are $2,147 and
     $3,504, respectively, payable to IDS Life for federal income taxes.

     Separate account business

     The separate  account assets and  liabilities  represent funds held for the
     exclusive  benefit of the variable  annuity  contract  owners.  The Company
     receives mortality and expense risk fees from the variable annuity separate
     accounts.

<PAGE>

1.    Summary of significant accounting policies (continued)

     The Company makes contractual  mortality assurances to the variable annuity
     contract  owners 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.  The Company 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.
     The Company also guarantees that the rates at which administrative fees are
     deducted from contract funds will not exceed contractual maximums.

      Accounting changes

     American  Institute of Certified Public  Accountants  (AICPA)  Statement of
     Position (SOP) 98-1,  "Accounting for Costs of Computer Software  Developed
     or Obtained for Internal  Use" became  effective  January 1, 1999.  The SOP
     requires the  capitalization  of certain costs  incurred  after the date of
     adoption to develop or obtain software for internal use.  Software utilized
     by the Company is owned by AEFC and  capitalized by AEFC. As a result,  the
     new  rule  did not have a  material  impact  on the  Company's  results  of
     operations or financial condition.

     Effective January 1, 1999, the Company adopted AICPA SOP 97-3, "Accounting
     by Insurance  and Other  Enterprises  for  Insurance-Related  Assessments,"
     providing guidance for the timing of recognition of liabilities  related to
     guaranty fund assessments.  The Company had historically carried balance in
     other  liabilities  on  the  balance  sheet  for  potential  guaranty  fund
     assessment exposure.  Adoption of the SOP did not have a material impact on
     the Company's results of operations or financial condition.

     In June 1998, the Financial  Accounting Standards Board issued Statement of
     Financial   Accounting   Standards  No.  133,  "Accounting  for  Derivative
     Instruments and Hedging  Activities,"  which is effective  January 1, 2001.
     This  Statement   establishes   accounting  and  reporting   standards  for
     derivative  instruments,  including certain derivative instruments embedded
     in other contracts, and for hedging activities.  It requires that an entity
     recognize all  derivatives  as either assets or  liabilities in the balance
     sheet and measure  those  instruments  at fair value.  The  accounting  for
     changes in the fair value of a  derivative  depends on the  intended use of
     the derivative and the resulting designation. The ultimate financial effect
     of the new  rule  will be  measured  based on the  derivatives  in place at
     adoption and cannot be estimated at this time.

<PAGE>

2.   Investments

     Fair values of  investments  in fixed  maturities  represent  quoted market
     prices and estimated values when quoted prices are not available. Estimated
     values are  determined by  established  procedures  involving,  among other
     things,  review of market  indices,  price  levels of current  offerings of
     comparable issues, price estimates and market data from independent brokers
     and financial files.

     The amortized  cost,  gross  unrealized  gains and losses and fair value of
     investments in fixed maturities at December 31, 1999 are as follows:
<TABLE>
<S>                                             <C>              <C>              <C>             <C>

                                                                   Gross           Gross
                                                Amortized        Unrealized       Unrealized        Fair
    Held to maturity                             Cost              Gains           Losses           Value
    ----------------                            ----------       --------         --------        ----------
    U.S. Government agency obligations          $    7,514       $     23         $    431        $    7,106
    State and municipal obligations                  3,002             44               --             3,046
    Corporate bonds and obligations                816,826          5,966           23,311           799,482
    Mortgage-backed securities                     179,007            296            4,834           174,469
                                                ----------       --------         --------        ----------
                                                $1,006,349       $  6,329         $ 28,576        $  984,103
                                                ==========       ========         ========        ==========

    Available for sale
    U.S. Government agency obligations          $    2,047   $         --         $     47        $    1,999
    State and municipal obligations                  2,250             --              190             2,060
    Corporate bonds and obligations              1,419,150          7,445           90,703         1,335,892
    Mortgage-backed securities                     988,352          1,929           25,746           964,536
                                                ------------     --------         --------        ----------
                                                $2,411,799       $  9,374         $116,686        $2,304,487
                                                ==========       ========         ========        ==========

     The amortized  cost,  gross  unrealized  gains and losses and fair value of
     investments in fixed maturities at December 31, 1998 are as follows:

                                                                   Gross           Gross
                                                 Amortized       Unrealized       Unrealized         Fair
    Held to maturity                               Cost            Gains           Losses            Value
    ----------------                            ----------       --------         --------        ----------
    U.S. Government agency obligations          $    8,652       $    423         $     --        $    9,075
    State and municipal obligations                  3,003            149               --             3,152
    Corporate bonds and obligations                877,140         48,822            6,670           919,292
    Mortgage-backed securities                     192,398          2,844               29           195,213
                                                ----------       --------         --------        ----------
                                                $1,081,193       $ 52,238         $  6,699        $1,126,732
                                                ==========       ========         ========        ==========

    Available for sale
    U.S. Government agency obligations          $    2,062       $    116         $     --        $    2,178
    Corporate bonds and obligations              1,472,814         69,990           34,103         1,508,701
    Mortgage-backed securities                   1,051,836         32,232               89         1,083,979
                                                ----------       --------         --------        ----------
                                                $2,526,712       $102,338          $34,192        $2,594,858
                                                ==========       ========          =======        ==========
</TABLE>

<PAGE>

2.   Investments (continued)

     The amortized  cost and fair value of  investments  in fixed  maturities at
     December  31,  1999 by  contractual  maturity  are  shown  below.  Expected
     maturities will differ from contractual  maturities  because  borrowers may
     have the  right  to call or  prepay  obligations  with or  without  call or
     prepayment penalties.

                                               Amortized            Fair
    Held to maturity                              Cost             Value

    Due in one year or less                    $    26,214        $   26,334
    Due from one to five years                     412,533           408,638
    Due from five to ten years                     331,187           320,146
    Due in more than ten years                      57,408            54,516
    Mortgage-backed securities                     179,007           174,469
                                             -------------     -------------
                                               $ 1,006,349        $  984,103
                                               ===========      ============

                                               Amortized            Fair
    Available for sale                            Cost             Value

    Due in one year or less                    $    46,937        $   47,236
    Due from one to five years                      75,233            73,525
    Due from five to ten years                   1,037,001           980,633
    Due in more than ten years                     264,276           238,557
    Mortgage-backed securities                     988,352           964,536
                                              ------------      ------------
                                                $2,411,799        $2,304,487

     During the years ended December 31, 1999, 1998 and 1997,  fixed  maturities
     classified  as held to maturity  were sold with  amortized  cost of $8,466,
     $31,117 and $29,561, respectively. Net gains and losses on these sales were
     not  significant.   The  sales  of  these  fixed  maturities  were  due  to
     significant deterioration in the issuers' creditworthiness.

     In addition, fixed maturities available for sale were sold during 1999 with
     proceeds of  $469,126  and gross  realized  gains and losses of $10,374 and
     $4,147  respectively.  Fixed maturities available for sale were sold during
     1998 with proceeds of $48,492 and gross realized gains and losses of $2,835
     and $4,516,  respectively.  Fixed  maturities  available for sale were sold
     during 1997 with proceeds of $73,366 and gross realized gains and losses of
     $1,081 and $1,440, respectively.

     At December 31, 1999,  bonds carried at $3,277 were on deposit with various
     states as required by law.

<PAGE>

2.   Investments (continued)

     At December 31, 1999,  investments in fixed maturities comprised 81 percent
     of the Company's  total  invested  assets.  These  securities  are rated by
     Moody's  and  Standard & Poor's  (S&P),  except for  securities  carried at
     approximately  $486 million which are rated by AEFC internal analysts using
     criteria  similar to Moody's  and S&P.  A summary of  investments  in fixed
     maturities, at amortized cost, by rating on December 31 is as follows:

           Rating                                    1999             1998
    ----------------------                       -----------       -----------
    Aaa/AAA                                       $1,168,144        $1,242,301
    Aa/AA                                             42,859            45,526
    Aa/A                                              52,416            60,019
    A/A                                              422,668           422,725
    A/BBB                                            189,072           228,656
    Baa/BBB                                          995,152         1,030,874
    Baa/BB                                            64,137            79,687
    Below investment grade                           483,700           498,117
                                                ------------      ------------
                                                  $3,418,148        $3,607,905

     At December  31, 1999,  approximately  94 percent of the  securities  rated
     Aaa/AAA were GNMA, FNMA and FHLMC mortgage-backed  securities.  No holdings
     of any other issuer were greater  than one percent of the  Company's  total
     investments in fixed maturities.

     At December 31, 1999,  approximately  19 percent of the Company's  invested
     assets were mortgage  loans on real estate.  Summaries of mortgage loans by
     region of the United States and by type of real estate are as follows:
<TABLE>
<CAPTION>

                                               December 31, 1999                        December 31, 1998
                                         -------------------------------       --------------------------------
<S>                                      <C>                 <C>                 <C>                <C>
                                          On Balance         Commitments         On Balance         Commitments
    Region                                   Sheet           to Purchase           Sheet            to Purchase
    ----------------------------------   -----------         -----------        ----------          -----------
    South Atlantic                          $194,325         $        --          $198,552             $    651
    Middle Atlantic                          118,699                  --           129,284                  520
    East North Central                       126,243                  --           134,165                2,211
    Mountain                                 103,751                  --           113,581                   --
    West North Central                       125,891                 513           119,380                9,626
    New England                               43,345                 802            46,103                   --
    Pacific                                   41,396                  --            43,706                   --
    West South Central                        31,153                  --            32,086                   --
    East South Central                         7,100                  --             7,449                   --
                                         -----------        ------------       -----------         ------------
                                             791,903               1,315           824,306               13,008
    Less allowance for losses                  6,650                  --             8,500                   --
                                         -----------        ------------       -----------         ------------
                                            $785,253            $  1,315          $815,806              $13,008
                                            ========            ========          ========              =======

<PAGE>

2.   Investments (continued)
                                               December 31, 1999                       December 31, 1998
                                          ------------------------------         ------------------------------
                                          On Balance         Commitments         On Balance         Commitments
              Property type                  Sheet            to Purchase          Sheet            to Purchase
                                          ----------      --------------        ----------         ------------
    Department/retail stores                $232,449        $     1,315           $253,380            $     781
    Apartments                               181,346                 --            186,030                2,211
    Office buildings                         202,132                 --            206,285                9,496
    Industrial buildings                      83,186                 --             82,857                  520
    Hotels/Motels                             43,839                 --             45,552                   --
    Medical buildings                         32,284                 --             33,103                   --
    Nursing/retirement homes                   6,608                 --              6,731                   --
    Mixed Use                                 10,059                 --             10,368                   --
                                          ----------      --------------        ----------         ------------
                                             791,903              1,315            824,306               13,008
    Less allowance for losses                  6,650                 --              8,500                   --
                                         -----------      --------------       -----------         ------------
                                            $785,253         $    1,315           $815,806              $13,008
                                            ========         ==========           ========              =======
</TABLE>

     Mortgage  loan  fundings  are  restricted  by  state  insurance  regulatory
     authorities to 80 percent or less of the market value of the real estate at
     the time of  origination  of the  loan.  The  Company  holds  the  mortgage
     document,  which gives it the right to take  possession  of the property if
     the  borrower  fails to perform  according  to the terms of the  agreement.
     Commitments  to  purchase  mortgages  are made in the  ordinary  course  of
     business. The fair value of the mortgage commitments is $nil.

     At December 31, 1999, the Company's  recorded  investment in impaired loans
     was $5,200 with an allowance of $1,250. At December 31, 1998, the Company's
     recorded investment in impaired loans was $1,932 with an allowance of $500.
     During 1999 and 1998, the average recorded investment in impaired loans was
     $5,399 and $2,736, respectively.

     The Company  recognized  $136,  $251 and $nil of interest income related to
     impaired  loans for the  years  ended  December  31,  1999,  1998 and 1997,
     respectively.

     The following table presents changes in the allowance for investment losses
related to all loans:
<TABLE>
<S>                                                <C>         <C>          <C>
                                                     1999        1998         1997
                                                     ----        ----         ----
    Balance, January 1                               $8,500      $3,718       $2,370
    Provision (reduction) for investment losses      (1,850)      4,782        1,805
    Loan payoffs                                         --          --         (457)
                                                     ------   ---------      -------
    Balance, December 31                             $6,650      $8,500       $3,718
                                                     ======      ======       ======

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

                                                     1999         1998        1997
                                                     -----        -----       ----
    Interest on fixed maturities                   $265,199    $285,260     $278,736
    Interest on mortgage loans                       63,721      65,351       55,085
    Interest on cash equivalents                        534         137          704
    Other                                            (1,755)     (2,493)       1,544
                                                   ---------- ----------   ----------
                                                    327,699     348,255      336,069
    Less investment expenses                          4,953       8,036        3,801
                                                   ---------  ----------   ----------
                                                   $322,746    $340,219     $332,268
                                                   ========    ========     ========
</TABLE>

<PAGE>

2.   Investments (continued)

     Net realized gain (loss) on investments  for the years ended December 31 is
summarized as follows:
<TABLE>
<S>                                                <C>          <C>          <C>
                                                      1999        1998         1997
                                                      ----        ----         ----
    Fixed maturities                               $  6,534     $   863      $ 1,638
    Mortgage loans                                   (1,650)     (4,816)      (1,348)
    Other investments                                (1,819)       (835)        (799)
                                                   ---------   --------      -------
                                                   $  3,065     $(4,788)     $  (509)
                                                   =========    =======      =======

     Changes in net unrealized  appreciation  (depreciation)  of investments for
     the years ended December 31 are summarized as follows:

                                                      1999       1998         1997
                                                     -----        -----       ----
    Fixed maturities available for sale           $(175,458)    $(8,032)     $57,188

3.    Income taxes

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

     The income tax expense  (benefit) for the years ended December 31, consists
of the following:

                                                     1999         1998        1997
                                                     ----         ----        ----
    Federal income taxes:
      Current                                      $ 15,531    $ 23,227      $17,668
      Deferred                                          711      (9,591)      (2,485)
                                                   --------    --------      -------
                                                     16,242      13,636       15,183

    State income taxes-current                          433         759        1,462
                                                   --------    --------      -------
    Income tax expense                             $ 16,675    $ 14,395      $16,645
                                                   ========    ========      =======
</TABLE>

     Increases  (decreases)  to the federal  income tax provision  applicable to
     pretax income based on the statutory rate, for the years ended December 31,
     are attributable to:
<TABLE>
<CAPTION>

                                                       1999                      1998                     1997
                                               ------------------       ------------------       ---------------------
                                               Provision    Rate        Provision    Rate        Provision       Rate
                                               ---------    -----       ---------    -----       ---------       -----
<S>                                            <C>          <C>           <C>        <C>          <C>           <C>
     Federal income taxes based
       on the statutory rate                    $17,731     35.0%         $13,972    35.0%        $15,735        35.0%
     Increases (decreases) are
      attributable to:
         Tax-excluded interest                      (14)      --              (35)   (0.1)            (41)       (0.1)
         State tax, net of federal benefit          281      0.5              493     1.2             956         2.1
         Reduction of mortgage loss
           reserve                               (1,225)    (2.4)              --       --             --          --
      Other, net                                    (98)    (0.2)             (35)       --            (5)         --
                                                 ------    -----         --------    ------          ----      ------
      Total income taxes                        $16,675     32.9 %        $14,395    36.1%        $16,645        37.0%
                                                =======     =====         =======    ====         =======        ====
</TABLE>

<PAGE>

3.   Income taxes (continued)

     Significant  components  of the  Company's  deferred  income tax assets and
     liabilities as of December 31 are as follows:

    Deferred income tax assets:                             1999          1998
                                                          -------       -------
    Policy reserves                                        $46,243      $51,298
    Unrealized losses on investments                        39,678           --
    Other                                                    1,070        2,214
                                                          --------     --------
         Total deferred income tax assets                   86,991       53,512
                                                          --------     --------

    Deferred income tax liabilities:
    Deferred policy acquisition costs                       49,490       52,908
    Unrealized gains on investments                             --       23,803
                                                          --------     --------
         Total deferred income tax liabilities              49,490       76,711
                                                          --------     --------
         Net deferred income tax assets (liabilities)      $37,501     ($23,199)
                                                           =======     ========

     The Company is required to establish a valuation  allowance for any portion
     of the  deferred  income tax assets that  management  believes  will not be
     realized. In the opinion of management, it is more likely than not that the
     Company  will  realize the benefit of the  deferred  income tax assets and,
     therefore, no such valuation allowance has been established.

4.   Stockholder's equity

     Retained  earnings  available for distribution as dividends to IDS Life are
     limited  to  the  Company's   surplus  as  determined  in  accordance  with
     accounting practices prescribed by state insurance regulatory  authorities.
     Statutory  unassigned surplus aggregated $58,223 and $45,716 as of December
     31,  1999 and  1998,  respectively.  In  addition,  dividends  in excess of
     $15,241 would require approval by the Insurance  Department of the state of
     Indiana.

     Statutory  net  income  and  stockholder's  equity as of  December  31, are
summarized as follows:

                                           1999           1998             1997
                                        ---------      ---------        -------
    Statutory net income                  $ 15,241       $ 37,902      $ 23,589
    Statutory stockholder's equity         343,094        330,588       302,264

5.   Related party transactions

     The Company has  purchased  interest  rate floors from IDS Life and entered
     into an interest rate swap with IDS Life to manage its exposure to interest
     rate risk.  The  interest  rate floors had a carrying  amount of $8,258 and
     $6,651 at December 31, 1999 and 1998, respectively.  The interest rate swap
     is an off balance sheet transaction.

     The Company has no  employees.  Charges by IDS Life for services and use of
     other  joint  facilities  aggregated  $38,931,  $28,482 and $24,535 for the
     years ended  December 31,  1999,  1998 and 1997,  respectively.  Certain of
     these costs are included in deferred policy acquisition costs.

<PAGE>

6.   Lines of credit

     The Company has an available line of credit with AEFC aggregating  $50,000.
     The rate for the line of credit is  established  by  reference  to  various
     indices plus 20 to 45 basis  points,  depending on the term.  There were no
     borrowings outstanding under this agreement at December 31, 1999 or 1998.

7.   Derivative financial instruments

     The  Company  enters  into  transactions   involving  derivative  financial
     instruments to manage its exposure to interest rate risk, including hedging
     specific transactions. The Company does not hold derivative instruments for
     trading   purposes.   The  Company  manages  risks  associated  with  these
     instruments as described below.

     Market risk is the possibility  that the value of the derivative  financial
     instruments  will  change due to  fluctuations  in a factor  from which the
     instrument  derives its value,  primarily an interest  rate. The Company is
     not impacted by market risk  related to  derivatives  held for  non-trading
     purposes beyond that inherent in cash market transactions.  Derivatives are
     largely  used to manage  risk  and,  therefore,  the cash  flow and  income
     effects of the  derivatives  are inverse to the  effects of the  underlying
     transactions.

     Credit risk is the possibility that the  counterparty  will not fulfill the
     terms  of the  contract.  The  Company  monitors  credit  risk  related  to
     derivative  financial  instruments through established approval procedures,
     including  setting  concentration  limits by  counterparty,  and  requiring
     collateral,   where   appropriate.   A  vast   majority  of  the  Company's
     counterparties are rated A or better by Moody's and Standard & Poor's.

     Credit  risk  related  to  interest  rate caps and  floors is  measured  by
     replacement cost of the contracts. The replacement cost represents the fair
     value of the instruments.

     The notional or contract  amount of a derivative  financial  instrument  is
     generally  used to calculate  the cash flows that are received or paid over
     the life of the agreement. Notional amounts are not recorded on the balance
     sheet. Notional amounts far exceed the related credit exposure.

     The Company's holdings of derivative financial instruments are as follows:
<TABLE>
<CAPTION>

                                            Notional         Carrying            Fair         Total Credit
    December 31, 1999                        Amount            Amount            Value          Exposure
    -----------------                       --------         --------           ------        ------------
    <S>                                    <C>                <C>              <C>               <C>
      Assets:
    Interest rate caps                     $  900,000         $  3,212         $  4,437          $  4,437
        Interest rate floors                2,000,000            8,258            2,251             2,251
     Off balance sheet assets:
        Interest rate swaps                 2,000,000               --           18,274            18,274
                                                             ---------         --------          --------
                                                               $11,470          $24,962           $24,962
                                                               =======          =======           =======

<PAGE>

7.   Derivative financial instruments (continued)

                                            Notional         Carrying            Fair         Total Credit
    December 31, 1998                        Amount            Amount            Value           Exposure
    -----------------                       --------         --------           ------        ------------
      Assets:
        Interest rate caps                 $  900,000         $  5,452         $  1,518          $  1,518
        Interest rate floors                1,000,000            6,651           17,798            17,798
      Off balance sheet liabilities:
        Interest rate swaps                 1,000,000               --          (33,500)               --
                                                             ---------        ----------         --------
                                                               $12,103        ($ 14,184)          $19,316
                                                               =======        ===========         =======
</TABLE>

     The fair values of  derivative  financial  instruments  are based on market
     values, dealer quotes or pricing models. All interest rate caps, floors and
     swaps will expire on various dates from 2000 to 2006.

     Interest  rate  caps,  floors  and swaps are used to manage  the  Company's
     exposure to interest rate risk.  These  instruments  are used  primarily to
     protect the margin between  interest  rates earned on  investments  and the
     interest rates credited to related annuity contract holders.

8.   Fair values of financial instruments

     The Company  discloses fair value  information for most on- and off-balance
     sheet  financial  instruments  for which it is practicable to estimate that
     value.  Fair  value  of life  insurance  obligations,  receivables  and all
     non-financial instruments, such as deferred acquisition costs are excluded.
     Off-balance sheet intangible assets are also excluded.  Management believes
     the value of excluded assets and liabilities is significant. The fair value
     of the Company,  therefore,  cannot be estimated by aggregating the amounts
     presented.
<TABLE>
<CAPTION>

                                                                                December 31,
                                                                    1999                          1998
                                                         --------------------------      --------------------------
                                                         Carrying          Fair          Carrying         Fair
    Financial Assets                                      Amount          Value           Amount          Value
    ----------------                                     ----------       ---------      ----------      ----------
<S>                                                      <C>              <C>            <C>             <C>
    Investments:
    Fixed maturities (Note 2):
       Held to maturity                                  $1,006,349        $984,103      $1,081,193      $1,126,732
       Available for sale                                 2,304,487       2,304,487       2,594,858       2,594,858
    Mortgage loans on real estate (Note 2)                  785,253         770,095         815,806         874,064
    Derivative financial instruments (Note 7)                11,470          24,962          12,103          19,316
    Separate account assets (Note 1)                        220,994         220,994         123,185         123,185

    Financial Liabilities
    Future policy benefits for fixed annuities           $3,905,849      $3,778,945      $4,152,059      $4,000,789
    Separate account liabilities                            220,994         209,942         123,185         115,879
    Derivative financial instruments (Note 7)                    --              --              --          33,500
</TABLE>

     At December 31, 1999 and 1998, the carrying amount and fair value of future
     policy  benefits  for  fixed  annuities   exclude  life   insurance-related
     contracts carried at $15,633 and $14,793,  respectively.  The fair value of
     these benefits is based on the status of the annuities at December 31, 1999
     and 1998.

<PAGE>

8.   Fair values of financial instruments (continued)

     The fair values of deferred annuities and separate account  liabilities are
     estimated as the carrying amount less  applicable  surrender  charges.  The
     fair value for annuities in non-life  contingent payout status is estimated
     as the present value of projected benefit payments at rates appropriate for
     contracts issued in 1999 and 1998.

9.   Commitments and contingencies

     In January  2000,  AEFC  reached an  agreement in principle to settle three
     class-action  lawsuits. The Company had been named as a co-defendant in one
     of these lawsuits.  It is expected the settlement will provide $215 million
     of benefits to more than 2 million participants. The agreement in principle
     to settle also  provides for release by class  members of all insurance and
     annuity  market  conduct  claims  dating  back to 1985 and is  subject to a
     number  of  contingencies   including  a  definitive  agreement  and  court
     approval.  The portion of the  settlement  allocated to the Company did not
     have a material impact on the Company's  financial position or results from
     operations.