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UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

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FORM 10-Q

Registrant meets the conditions set forth in General Instruction H (1)(a) and (b) of Form 10-Q and is therefore filing this Form with the reduced
disclosure format.

|ý                                                 | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 
|------------------------------------------------- | ----------------------------------------------------------------------------------------
|FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2003
|OR                                               
|o                                                 | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number: 333-100029

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ALLSTATE LIFE INSURANCE COMPANY
OF
NEW YORK(Exact name of registrant as specified in its charter)

|New York                                 |  | 36-2608394                          
|---------------------------------------- |  | ------------------------------------
|(State of Incorporation)                 |  | (I.R.S. Employer Identification No.)
|100 Motor Parkway
Hauppauge, New York    |  | 11788-5107                          
|(Address of principal executive offices) |  | (Zip Code)                          

Registrant's telephone number, including area code:631/357-8920

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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 ý    No o

Indicate
by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

Yes o    No ý

As
of October 31, 2003, the registrant had 100,000 common shares, $25 par value, outstanding, all of which are held by Allstate Life Insurance Company.

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ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
INDEX TO QUARTERLY REPORT ON FORM 10-Q
September 30, 2003

|PART I  |  | FINANCIAL INFORMATION                                                                                                       |  |   
|------- |  | --------------------------------------------------------------------------------------------------------------------------- |  | --
|Item 1. |  | Financial Statements                                                                                                        |  |   
|        |  | Condensed Statements of Operations for the Three-Month and Nine-Month Periods Ended September 30, 2003 and 2002 (unaudited) |  | 1 
|        |  | Condensed Statements of Financial Position as of September 30, 2003 (unaudited) and December 31, 2002                       |  | 2 
|        |  | Condensed Statements of Cash Flows for the Nine-Month Periods Ended September 30, 2003 and 2002 (unaudited)                 |  | 3 
|        |  | Notes to Condensed Financial Statements (unaudited)                                                                         |  | 4 
|        |  | Independent Accountants' Review Report                                                                                      |  | 9 
|Item 2. |  | Management's Discussion and Analysis of Financial Condition and Results of Operations                                       |  | 10
|Item 4. |  | Controls and Procedures                                                                                                     |  | 21
|PART II |  | OTHER INFORMATION                                                                                                           |  |   
|Item 1. |  | Legal Proceedings                                                                                                           |  | 21
|Item 6. |  | Exhibits and Reports on Form 8-K                                                                                            |  | 21

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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
CONDENSED STATEMENTS OF OPERATIONS

|                                                                  |                                                   | Three Months Ended
September 30, |        | Nine Months Ended
September 30, |  
|----------------------------------------------------------------- | ------------------------------------------------- | -------------------------------- | ------ | ------------------------------- | -
|
|
|Revenues                                                          |                                                   |                                  |        |                                 |  
|                                                                  | Premiums                                          |                                  | $      | 14,189                          |  
|                                                                  | Contract charges                                  |                                  |        | 12,721                          |  
|                                                                  | Net investment income                             |                                  |        | 66,612                          |  
|                                                                  | Realized capital gains and losses                 |                                  |        | (1,276                          | )
|                                                                  |                                                   |                                  |        |                                 |  
|                                                                  |                                                   |                                  | 92,246 |                                 |  
|                                                                  |                                                   |                                  |        |                                 |  
|Costs and expenses                                                |                                                   |                                  |        |                                 |  
|                                                                  | Contract benefits                                 |                                  |        | 38,278                          |  
|                                                                  | Interest credited to contractholder funds         |                                  |        | 26,557                          |  
|                                                                  | Amortization of deferred policy acquisition costs |                                  |        | 7,527                           |  
|                                                                  | Operating costs and expenses                      |                                  |        | 11,452                          |  
|                                                                  |                                                   |                                  |        |                                 |  
|                                                                  |                                                   |                                  | 83,814 |                                 |  
|                                                                  |                                                   |                                  |        |                                 |  
|Loss on disposition of operations                                 |                                                   |                                  | 4,312  |                                 |  
|Income (loss) from operations before income tax expense (benefit) |                                                   |                                  | 4,120  |                                 |  
|Income tax expense (benefit)                                      |                                                   |                                  | 1,267  |                                 |  
|                                                                  |                                                   |                                  |        |                                 |  
|Net income (loss)                                                 |                                                   | $                                | 2,853  |                                 | $
|                                                                  |                                                   |                                  |        |                                 |  

See
notes to condensed financial statements.

1

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ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
CONDENSED STATEMENTS OF FINANCIAL POSITION

|(in thousands, except par value data)                                               |                                                                                   | September 30,
2003                           |           | December 31,
2002
|----------------------------------------------------------------------------------- | --------------------------------------------------------------------------------- | -------------------------------------------- | --------- | -----------------
|
|Assets                                                                              |                                                                                   |                                              |           |                  
|Investments                                                                         |                                                                                   |                                              |           |                  
|                                                                                    | Fixed income securities, at fair value (amortized cost $3,754,573 and $3,283,274) |                                              | $         | 4,288,345        
|                                                                                    | Mortgage loans                                                                    |                                              |           | 369,365          
|                                                                                    | Short-term                                                                        |                                              |           | 140,580          
|                                                                                    | Policy loans                                                                      |                                              |           | 33,797           
|                                                                                    |                                                                                   |                                              |           |                  
|                                                                                    |                                                                                   | Total investments                            |           |                  
|Cash                                                                                |                                                                                   |                                              | 6,811     |                  
|Deferred policy acquisition costs                                                   |                                                                                   |                                              | 165,719   |                  
|Accrued investment income                                                           |                                                                                   |                                              | 46,560    |                  
|Reinsurance recoverables                                                            |                                                                                   |                                              | 4,234     |                  
|Current income taxes receivable                                                     |                                                                                   |                                              | 3,619     |                  
|Other assets                                                                        |                                                                                   |                                              | 22,054    |                  
|Separate Accounts                                                                   |                                                                                   |                                              | 588,452   |                  
|                                                                                    |                                                                                   |                                              |           |                  
|                                                                                    |                                                                                   | Total assets                                 |           | $                
|                                                                                    |                                                                                   |                                              |           |                  
|Liabilities                                                                         |                                                                                   |                                              |           |                  
|Contractholder funds                                                                |                                                                                   | $                                            | 2,545,399 |                  
|Reserve for life-contingent contract benefits                                       |                                                                                   |                                              | 1,642,679 |                  
|Deferred income taxes                                                               |                                                                                   |                                              | 95,381    |                  
|Other liabilities and accrued expenses                                              |                                                                                   |                                              | 226,577   |                  
|Payable to affiliates, net                                                          |                                                                                   |                                              | 3,237     |                  
|Reinsurance payable to parent                                                       |                                                                                   |                                              | 1,124     |                  
|Separate Accounts                                                                   |                                                                                   |                                              | 588,452   |                  
|                                                                                    |                                                                                   |                                              |           |                  
|                                                                                    |                                                                                   | Total liabilities                            |           |                  
|                                                                                    |                                                                                   |                                              |           |                  
|Commitments and Contingent Liabilities (Note 3)                                     |                                                                                   |                                              |           |                  
|Shareholder's equity                                                                |                                                                                   |                                              |           |                  
|Common stock, $25 par value, 100 thousand shares authorized, issued and outstanding |                                                                                   |                                              | 2,500     |                  
|Additional capital paid-in                                                          |                                                                                   |                                              | 55,787    |                  
|Retained income                                                                     |                                                                                   |                                              | 329,481   |                  
|Accumulated other comprehensive income:                                             |                                                                                   |                                              |           |                  
|                                                                                    | Unrealized net capital gains and losses                                           |                                              |           | 178,919          
|                                                                                    |                                                                                   |                                              |           |                  
|                                                                                    |                                                                                   | Total accumulated other comprehensive income |           |                  
|                                                                                    |                                                                                   |                                              |           |                  
|                                                                                    |                                                                                   | Total shareholder's equity                   |           |                  
|                                                                                    |                                                                                   |                                              |           |                  
|                                                                                    |                                                                                   | Total liabilities and shareholder's equity   |           | $                
|                                                                                    |                                                                                   |                                              |           |                  

See
notes to condensed financial statements.

2

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ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
CONDENSED STATEMENTS OF CASH FLOWS

|                                     |                                                                                   | Nine Months Ended
September 30,           |                                              
|------------------------------------ | --------------------------------------------------------------------------------- | ----------------------------------------- | ---------------------------------------------
|
|
|Cash flows from operating activities |                                                                                   |                                           |                                              
|                                     | Net income                                                                        |                                           | $                                            
|                                     | Adjustments to reconcile net income to net cash provided by operating activities: |                                           |                                              
|                                     |                                                                                   | Amortization and other non-cash items     |                                              
|                                     |                                                                                   | Realized capital gains and losses         |                                              
|                                     |                                                                                   | Interest credited to contractholder funds |                                              
|                                     | Changes in:                                                                       |                                           |                                              
|                                     |                                                                                   |                                           | Contract benefit and other insurance reserves
|                                     |                                                                                   |                                           | Deferred policy acquisition costs            
|                                     |                                                                                   |                                           | Income taxes payable                         
|                                     |                                                                                   |                                           | Other operating assets and liabilities       
|                                     |                                                                                   |                                           |                                              
|                                     |                                                                                   |                                           |                                              
|                                     |                                                                                   |                                           |                                              
|Cash flows from investing activities |                                                                                   |                                           |                                              
|                                     | Proceeds from sales of fixed income securities                                    |                                           |                                              
|                                     | Investment collections                                                            |                                           |                                              
|                                     |                                                                                   | Fixed income securities                   |                                              
|                                     |                                                                                   | Mortgage loans                            |                                              
|                                     | Investment purchases                                                              |                                           |                                              
|                                     |                                                                                   | Fixed income securities                   |                                              
|                                     |                                                                                   | Mortgage loans                            |                                              
|                                     | Change in short-term investments, net                                             |                                           |                                              
|                                     | Change in other investments, net                                                  |                                           |                                              
|                                     | Change in policy loans, net                                                       |                                           |                                              
|                                     |                                                                                   |                                           |                                              
|                                     |                                                                                   |                                           | Net cash used in investing activities        
|                                     |                                                                                   |                                           |                                              
|Cash flows from financing activities |                                                                                   |                                           |                                              
|                                     | Contractholder fund deposits                                                      |                                           |                                              
|                                     | Contractholder fund withdrawals                                                   |                                           |                                              
|                                     |                                                                                   |                                           |                                              
|                                     |                                                                                   | Net cash provided by financing activities |                                              
|                                     |                                                                                   |                                           |                                              
|Net (decrease) increase in cash      |                                                                                   |                                           | (14,875                                      
|Cash at beginning of period          |                                                                                   |                                           | 21,686                                       
|                                     |                                                                                   |                                           |                                              
|Cash at end of period                |                                                                                   | $                                         | 6,811                                        
|                                     |                                                                                   |                                           |                                              

See
notes to condensed financial statements.

3

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ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)

1.     Basis of Presentation

The accompanying condensed financial statements include the accounts of Allstate Life Insurance Company of New York (the "Company"), a wholly-owned subsidiary of
Allstate Life Insurance Company ("ALIC"), which is wholly-owned by Allstate Insurance Company ("AIC"), a wholly-owned subsidiary of The Allstate Corporation (the "Corporation").

The
condensed financial statements and notes as of September 30, 2003, and for the three-month and nine-month periods ended September 30, 2003 and 2002 are
unaudited. The condensed financial statements reflect all adjustments (consisting only of normal recurring accruals) which are, in the opinion of management, necessary for the fair presentation of the
financial position, results of operations and cash flows for the interim periods. These condensed financial statements and notes should be read in conjunction with the financial statements and notes
thereto included in the Allstate Life Insurance Company of New York Annual Report on Form 10-K for the year ended December 31, 2002. The results of operations for the interim
periods should not be considered indicative of results to be expected for the full year.

To
conform to the 2003 and year-end 2002 presentations, certain amounts in the prior year's condensed financial statements have been reclassified.

Non-cash
investment exchanges and modifications, which primarily reflect refinancings of fixed income securities, totaled $5 million for the nine months ended
September 30, 2002. There were no non-cash investment exchanges and modifications for the nine months ended September 30, 2003.

Adopted accounting standard

Statement of Financial Accounting Standards No. 149, "Amendment of Statement 133 on Derivative Instruments and Hedging Activities"

In
April 2003, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standard ("SFAS") No. 149, "Amendment of Statement 133 on
Derivative Instruments and Hedging Activities". The statement amends, clarifies and codifies financial accounting and reporting for derivative instruments, including certain derivative instruments
embedded in other contracts and utilized for hedging activities under SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities". While this statement applies primarily to
certain derivative contracts and embedded derivatives entered into or modified after June 30, 2003, it also codifies conclusions previously reached by the FASB at various dates on certain
implementation issues. The impact of adopting the provisions of this statement were not material to the Company's Condensed Statements of Operations or Financial Position.

Pending accounting standards

Statement of Position 03-01

In July 2003, the American Institute of Certified Public Accountants issued Statement of Position ("SOP") 03-01 entitled "Accounting and
Reporting by Insurance Enterprises for Certain Nontraditional Long-Duration Contracts and for Separate Accounts." The accounting guidance contained in the SOP addresses three areas:
separate accounts presentation and valuation, accounting for sales inducements such as bonus interest, and the classification and valuation of certain long duration liabilities. The effective date of
the SOP is for fiscal years beginning after December 15, 2003, with earlier adoption encouraged.

Based
on management's review of the SOP, the most significant impact to the Company is the provision of the SOP that requires the establishment of a liability in addition to the account
balance for contracts and contract features that provide guaranteed death or other insurance benefits and guaranteed income benefits. This liability will be determined based on models that involve
numerous estimates and subjective judgments, including those regarding expected market rates of return and volatility, contract surrender rates and mortality experience. The Company does not currently
recognize these liabilities. The Company is currently evaluating the provisions of the statement. The Company plans to adopt the
provisions of the statement no later than January 1, 2004. The effect of adoption may have a material impact on the Condensed Statements of Operations. However, the amounts may vary based on
market

4

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conditions.
Adoption is not expected to have a material impact on the Company's Condensed Statements of Financial Position.

Proposed standard

Emerging Issues Task Force Topic No. 03-01

The Emerging Issues Task Force ("EITF") discussed Topic No. 03-01, "The Meaning of Other-Than-Temporary Impairment and
Its Application to Certain Investments", which attempts to define other-than-temporary impairment and highlight its application to investment securities accounted for under
both SFAS No. 115, "Accounting for Certain Investments in Debt and Equity Securities" and Accounting Principles Board ("APB") Opinion No. 18, "The Equity Method of Accounting for
Investments in Common Stocks." The current issue summary, which has yet to be finalized, proposes that if, at the evaluation date, the fair value of an investment security is less than its carrying
value then an impairment exists for which a determination must be made as to whether that impairment is other-than-temporary. If it is determined that an impairment is
other-than-temporary, then an impairment loss should be recognized equal to the difference between the investment's carrying value and its fair value at the reporting date. In
recent deliberations, the EITF discussed different models to assess whether impairment is other-than-temporary for different types of investments (e.g. SFAS 115
marketable equity securities, SFAS 115 debt securities, and equity and cost method investments subject to APB Opinion No. 18). Due to the uncertainty of the final model or models that
may be adopted, the estimated impact to the Company's Condensed Statements of Operations and Financial Position is presently not determinable.

2.     Reinsurance

The Company purchases reinsurance to limit aggregate and single losses on large risks. The Company follows a comprehensive evaluation process involving credit
scoring and capacity to select reinsurers.
The Company continues to have primary liability as the direct insurer for risks reinsured. Estimating amounts of reinsurance recoverable is impacted by the uncertainties involved in the establishment
of loss reserves. Failure of reinsurers to honor their obligations could result in losses to the Company. The Company cedes a portion of the mortality risk on certain term life policies with a pool of
non-affiliated reinsurers. Additionally, the Company has a reinsurance agreement through which it primarily cedes re-investment related risk on its structured settlement
annuities to ALIC. Under the terms of the agreement, the Company pays a premium to ALIC that varies with the aggregate structured settlement annuity reserve balance. In return, ALIC guarantees that
the yield on the portion of the Company's investment portfolio that supports structured settlement annuity liabilities will not fall below contractually determined rates.

Amounts
recoverable from reinsurers are estimated based upon assumptions consistent with those used in establishing the liabilities related to the underlying reinsured contracts. No
single reinsurer had a material obligation to the Company nor is the Company's business substantially dependent upon any reinsurance contract. The effects of reinsurance on premiums and contract
charges are as follows:

|                              |               | Three Months Ended
September 30,                  |        | Nine Months Ended
September 30, |       
|----------------------------- | ------------- | ------------------------------------------------- | ------ | ------------------------------- | ------
|
|Premiums and contract charges |               |                                                   |        |                                 |       
|Direct                        |               | $                                                 | 28,874 |                                 | $     
|Assumednon-affiliate         |               |                                                   | 103    |                                 |       
|Ceded                         |               |                                                   |        |                                 |       
|                              | Affiliate     |                                                   |        | (1,128                          | )     
|                              | Non-affiliate |                                                   |        | (939                            | )     
|                              |               |                                                   |        |                                 |       
|                              |               | Premiums and contract charges, net of reinsurance |        | $                               | 26,910
|                              |               |                                                   |        |                                 |       

5

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The
effects of reinsurance on contract benefits are as follows:

|                      |               | Three Months Ended
September 30,      |        | Nine Months Ended
September30, |       
|--------------------- | ------------- | ------------------------------------- | ------ | ------------------------------ | ------
|
|Contract benefits     |               |                                       |        |                                |       
|Direct                |               | $                                     | 40,791 |                                | $     
|Assumednon-affiliate |               |                                       | 1      |                                |       
|Ceded                 |               |                                       |        |                                |       
|                      | Affiliate     |                                       |        | (1,312                         | )     
|                      | Non-affiliate |                                       |        | (1,202                         | )     
|                      |               |                                       |        |                                |       
|                      |               | Contract benefits, net of reinsurance |        | $                              | 38,278
|                      |               |                                       |        |                                |       

Excluded
from the table above are premiums ceded to ALIC of $647 thousand, $602 thousand, $1.9 million and $1.8 million for the three and nine month periods
ended September 30, 2003 and 2002, respectively, under the terms of the structured settlement annuity reinsurance agreement described above. These premiums are recorded as investment expense
and reflected in Net investment income in the Condensed Statements of Operations.

3.     Regulation, Legal Proceedings and Guarantees

Regulation

The Company is subject to changing social, economic and regulatory conditions. State and federal regulatory initiatives and proceedings have varied and have
included efforts to remove barriers preventing banks from engaging in the securities and insurance businesses, to change tax laws affecting the taxation of insurance companies and the tax treatment of
either insurance products or competing non-insurance products that may impact the relative desirability of various personal investment products and to expand overall regulation. The
ultimate changes and eventual effects, if any, of these initiatives are uncertain.

Legal proceedings

Legal proceedings involving Allstate agencies and AIC may impact the Company, even when the Company is not directly involved because the Company sells its
products through a variety of distribution channels including Allstate agencies. Consequently, information about the more significant of these proceedings is provided below.

AIC
is defending various lawsuits involving worker classification issues. These lawsuits include a number of putative class actions and one certified class action challenging the
overtime exemption claimed by AIC under the Fair Labor Standards Act or state wage and hour laws. These class actions mirror similar lawsuits filed recently against other carriers in the industry and
other employers. Another
lawsuit involves the worker classification of staff working in agencies. In this putative class action, plaintiffs seek damages under the Employee Retirement Income Security Act ("ERISA") and the
Racketeer Influenced and Corrupt Organizations Act alleging that agency secretaries were terminated as employees by AIC and rehired by agencies through outside staffing vendors for the purpose of
avoiding the payment of employee benefits. A putative nationwide class action filed by former employee agents also includes a worker classification issue; these agents are challenging certain
amendments to the Agents Pension Plan and are seeking to have exclusive agent independent contractors treated as employees for benefit purposes. AIC has been vigorously defending these and various
other worker classification lawsuits. The outcome of these disputes is currently uncertain.

AIC
is also defending certain matters relating to its agency program reorganization announced in 1999. These matters include an investigation by the U.S. Department of Labor and a
lawsuit filed in December 2001 by the U.S. Equal Employment Opportunity Commission ("EEOC") with respect to allegations of retaliation under the Age Discrimination in Employment Act, the
Americans with Disabilities Act and Title VII of the Civil Rights Act of 1964. A putative nationwide class action has also been filed by

6

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former
employee agents alleging various violations of ERISA, breach of contract and age discrimination. AIC has been vigorously defending these lawsuits and other matters related to its agency program
reorganization. In addition, AIC is defending certain matters relating to its life agency program reorganization announced in 2000. These matters include an investigation by the EEOC with respect to
allegations of age discrimination and retaliation. AIC is cooperating fully with the agency investigation and will continue to vigorously defend these and other claims related to the life agency
program reorganization. The outcome of these disputes is currently uncertain.

Various
other legal and regulatory actions are currently pending that involve the Company and specific aspects of its conduct of business. Like other members of the insurance industry,
the Company is the potential target of an increasing number of class action lawsuits and other types of litigation, some of which involve claims for substantial and/or indeterminate amounts (including
punitive and treble damages) and the outcomes of which are unpredictable. This litigation is based on a variety of issues including insurance and claim settlement practices. However, at this time,
based on their present status, it is the opinion of management that the ultimate liability, if any, in one or more of these other actions in excess of amounts currently reserved is not expected to
have a material effect on the results of operations, liquidity or financial position of the Company.

Guarantees

In the normal course of business, the Company provides standard indemnifications to counterparties in contracts in connection with numerous transactions,
including indemnifications for breaches of representations and warranties, taxes and certain other liabilities, such as third party lawsuits. The indemnification clauses are often standard contractual
terms and were entered into in the normal course of business based on an assessment that the risk of loss would be remote. The terms of the indemnifications vary in duration and nature. In many cases,
the maximum obligation is not explicitly stated and the contingencies triggering the obligation to indemnify have not occurred and are not expected to occur. Because the obligated amounts of the
indemnifications are not explicitly stated in many cases, the maximum amount of the obligation under such indemnifications is not determinable. Historically, the Company has not made any material
payments pursuant to these obligations.

In
addition, the Company indemnifies its directors, officers and other individuals serving at the request of the Company as a director or officer to the extent provided in its charter
and by-laws. Since these indemnifications are generally not subject to limitation with respect to duration or amount, the Company does not believe that it is possible to determine the
maximum potential amount due under these indemnifications.

The
aggregate liability balance related to all guarantees was not material as of September 30, 2003.

7

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4.     Other Comprehensive Income

The components of other comprehensive income on a pretax and after-tax basis are as follows:

|                                      |                                                             | Three Months Ended September 30, |        
|------------------------------------- | ----------------------------------------------------------- | -------------------------------- | -------
|
|
|Unrealized capital gains and losses   |                                                             |                                  |        
|                                      | Unrealized holding gains (losses) arising during the period |                                  | $      
|                                      | Less: reclassification adjustments                          |                                  |        
|                                      |                                                             |                                  |        
|Unrealized net capital gains (losses) |                                                             |                                  | (36,165
|                                      |                                                             |                                  |        
|Other comprehensive income (loss)     |                                                             | $                                | (36,165
|                                      |                                                             |                                  |        
|Net income                            |                                                             |                                  |        
|                                      |                                                             |                                  |        
|Comprehensive income (loss)           |                                                             |                                  |        
|                                      |                                                             |                                  |        

|                                      |                                                             | Nine Months Ended September 30, |       
|------------------------------------- | ----------------------------------------------------------- | ------------------------------- | ------
|
|
|Unrealized capital gains and losses   |                                                             |                                 |       
|                                      | Unrealized holding gains (losses) arising during the period |                                 | $     
|                                      | Less: reclassification adjustments                          |                                 |       
|                                      |                                                             |                                 |       
|Unrealized net capital gains (losses) |                                                             |                                 | 14,251
|                                      |                                                             |                                 |       
|Other comprehensive income (loss)     |                                                             | $                               | 14,251
|                                      |                                                             |                                 |       
|Net income                            |                                                             |                                 |       
|                                      |                                                             |                                 |       
|Comprehensive income                  |                                                             |                                 |       
|                                      |                                                             |                                 |       

5.     Disposition of operations

During the third quarter of 2003, the Company announced its intention to exit the Direct Response distribution business. Based on its decision to sell the
business, the Company has recorded an estimated loss on the disposition of $4.3 million ($2.7 million, after-tax).

8

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INDEPENDENT ACCOUNTANTS' REVIEW REPORT

To the Board of Directors and Shareholder of
Allstate Life Insurance Company of New York:

We have reviewed the accompanying condensed statement of financial position of Allstate Life Insurance Company of New York (the "Company", an affiliate of The
Allstate Corporation) as of September 30, 2003, and the related condensed statements of operations for the three-month and nine-month periods ended September 30, 2003 and
2002 and the condensed statements of cash flows for the nine-month periods ended September 30, 2003 and 2002. These financial statements are the responsibility of the Company's
management.

We
conducted our reviews in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists
principally of applying analytical procedures to financial data and of making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit
conducted in accordance with auditing standards generally accepted in the United States of America, the objective of which is the expression of an opinion regarding the financial statements taken as a
whole. Accordingly, we do not express such an opinion.

Based
on our reviews, we are not aware of any material modifications that should be made to such condensed financial statements for them to be in conformity with accounting principles
generally accepted in the United States of America.

We
have previously audited, in accordance with auditing standards generally accepted in the United States of America, the statement of financial position of Allstate Life Insurance
Company of New York as of December 31, 2002, and the related statements of operations and comprehensive income, shareholder's equity, and cash flows for the year then ended, not presented
herein. In our report dated February 5, 2003, we expressed an unqualified opinion on those financial statements. In our opinion, the information set forth in the accompanying condensed
statement of financial position as of December 31,
2002 is fairly stated, in all material respects, in relation to the statement of financial position from which it has been derived.

/s/
Deloitte & Touche LLP

Chicago,
Illinois
November 13, 2003

9

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Item 2.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FOR THE THREE-MONTH AND NINE-MONTH PERIODS ENDED SEPTEMBER 30, 2003
AND 2002

The following discussion highlights significant factors influencing results of operations and changes in financial position of Allstate Life Insurance Company of New York (the
"Company"). It should be read in conjunction with the condensed financial statements and notes thereto found under Part I. Item 1. contained herein, and with the discussion, analysis, financial
statements and notes thereto in Part I. Item 1. and Part II. Item 7. and Item 8. of the Allstate Life Insurance Company of New York Annual Report on Form 10-K for
2002. To conform to the 2003 and year-end 2002 presentation, certain prior year amounts have been reclassified.

Management has identified the Company as a single segment entity.

RESULTS OF OPERATIONS

Summarized financial data is presented in the following table.

|                                                |  | Three Months Ended
September 30, |           | Nine Months Ended
September 30, |  
|----------------------------------------------- |  | -------------------------------- | --------- | ------------------------------- | -
|
|Premiums                                        |  | $                                | 14,189    |                                 | $
|Contract charges                                |  |                                  | 12,721    |                                 |  
|Net investment income                           |  |                                  | 66,612    |                                 |  
|Contract benefits                               |  |                                  | 38,278    |                                 |  
|Interest credited to contractholder funds       |  |                                  | 26,557    |                                 |  
|Amortization of DAC                             |  |                                  | 7,925     |                                 |  
|Operating costs and expenses                    |  |                                  | 11,452    |                                 |  
|Income tax expense                              |  |                                  | 3,169     |                                 |  
|Loss on disposition of operations, after-tax    |  |                                  | (2,735    | )                               |  
|Realized capital gains and losses, after-tax(1) |  |                                  | (553      | )                               |  
|                                                |  |                                  |           |                                 |  
|Net income (loss)                               |  | $                                | 2,853     |                                 | $
|                                                |  |                                  |           |                                 |  
|Investments                                     |  | $                                | 4,832,087 |                                 | $
|Separate Accounts assets                        |  |                                  | 588,452   |                                 |  
|                                                |  |                                  |           |                                 |  
|Investments, including Separate Accounts assets |  | $                                | 5,420,539 |                                 | $
|                                                |  |                                  |           |                                 |  

---

REVENUES

|                                  |  | Three Months Ended
September 30, |        | Nine Months Ended
September 30, |  
|--------------------------------- |  | -------------------------------- | ------ | ------------------------------- | -
|
|Premiums                          |  | $                                | 14,189 |                                 | $
|Contract charges                  |  |                                  | 12,721 |                                 |  
|Net investment income             |  |                                  | 66,612 |                                 |  
|Realized capital gains and losses |  |                                  | (1,276 | )                               |  
|                                  |  |                                  |        |                                 |  
|Total revenues                    |  | $                                | 92,246 |                                 | $
|                                  |  |                                  |        |                                 |  

Total
revenues increased 23.4% in the third quarter of 2003 compared to the third quarter of 2002, due to higher Net investment income and lower net realized capital
losses. Total revenues rose 4.3% in the first nine months of 2003 compared to the first nine months of 2002. The increase was due to higher Net investment income, increased Contract charges and lower
net realized capital losses partially offset by decreased Premiums from immediate annuities with life contingencies.

10

---

OPERATIONS

Premiumsincluded in the Condensed Statements of Operations, represent premiums generated from traditional life,
immediate annuities with life contingencies, and other insurance products that have significant mortality or morbidity risk.

Contract chargesare generated from interest-sensitive life products, variable annuities, fixed annuities and other investment products
for which deposits are classified as Contractholder funds or Separate Accounts liabilities. Contract charges are assessed against these contractholder account values for maintenance, administration,
cost of insurance and surrender prior to contractually specified dates. As a result, changes in Contractholder funds and Separate Accounts are considered in the evaluation of growth and as indicators
of future levels of revenues.

The
following table summarizes premiums and contract charges by product.

|                 |                                                                | Three Months Ended
September 30, |                        | Nine Months Ended
September 30,
|---------------- | -------------------------------------------------------------- | -------------------------------- | ---------------------- | -------------------------------
|
|Premiums         |                                                                |                                  |                        |                                
|Life insurance   |                                                                |                                  |                        |                                
|                 | Traditional life                                               |                                  | $                      | 5,393                          
|                 | Other                                                          |                                  |                        | 2,037                          
|                 |                                                                |                                  |                        |                                
|                 |                                                                | Total life insurance             |                        |                                
|Annuities        |                                                                |                                  |                        |                                
|                 | Fixed annuitiesimmediate annuities with life contingencies    |                                  |                        | 6,759                          
|                 |                                                                |                                  |                        |                                
|                 |                                                                | Total annuities                  |                        |                                
|                 |                                                                |                                  |                        |                                
|                 |                                                                |                                  | Total Premiums         |                                
|Contract charges |                                                                |                                  |                        |                                
|Life insurance   |                                                                |                                  |                        |                                
|                 | Interest-sensitive life                                        |                                  |                        | 8,727                          
|                 |                                                                |                                  |                        |                                
|                 |                                                                | Total life insurance             |                        |                                
|Annuities        |                                                                |                                  |                        |                                
|                 | Fixed annuitiesdeferred                                       |                                  |                        | 467                            
|                 | Fixed annuitiesimmediate annuities without life contingencies |                                  |                        | 922                            
|                 | Variable annuities                                             |                                  |                        | 2,605                          
|                 |                                                                |                                  |                        |                                
|                 |                                                                | Total annuities                  |                        |                                
|                 |                                                                |                                  |                        |                                
|                 |                                                                |                                  | Total Contract charges |                                
|                 |                                                                |                                  |                        |                                
|                 |                                                                |                                  |                        | Premiums and contract charges  
|                 |                                                                |                                  |                        |                                

11

---

The
following table summarizes Premiums and contract charges by distribution channel.

|                 |                                                                      | Three Months Ended
September 30, |   | Nine Months Ended
September 30,
|---------------- | -------------------------------------------------------------------- | -------------------------------- | - | -------------------------------
|
|Premiums         |                                                                      |                                  |   |                                
|                 | Allstate agencies                                                    |                                  | $ | 5,310                          
|                 | Financial services firms (financial institutions and broker/dealers) |                                  |   |                               
|                 | Specialized brokers                                                  |                                  |   | 6,724                          
|                 | Independent agents                                                   |                                  |   | 476                            
|                 | Direct marketing                                                     |                                  |   | 1,679                          
|                 |                                                                      |                                  |   |                                
|                 |                                                                      | Total Premiums                   |   |                                
|Contract charges |                                                                      |                                  |   |                                
|                 | Allstate agencies                                                    |                                  |   | 8,789                          
|                 | Financial services firms (financial institutions and broker/dealers) |                                  |   | 2,961                          
|                 | Specialized brokers                                                  |                                  |   | 922                            
|                 | Independent agents                                                   |                                  |   | 49                             
|                 |                                                                      |                                  |   |                                
|                 |                                                                      | Total Contract charges           |   |                                
|                 |                                                                      |                                  |   |                                
|                 |                                                                      | Premiums and contract charges    |   | $                              
|                 |                                                                      |                                  |   |                                

Total
Premiums increased 5.2% to $14.2 million in the third quarter of 2003 from $13.5 million in the third quarter of 2002, due to an increase in sales of
immediate annuities with life contingencies. Sales of immediate annuities with life contingencies fluctuate due to consumer preference as well as market and competitive conditions, which drive the
level and mix of immediate annuities sold with or without life contingencies.

Total
Contract charges were $12.7 million in the third quarter of 2003 compared to $12.9 million in the third quarter of 2002. Higher fixed annuity contract charges were
more than offset by a decline in variable annuities and interest-sensitive life insurance contract charges. The variable annuity daily average account values during the third quarter of 2003 were
lower than the daily average account values during the third quarter of 2002, as poor equity market performance during the prior year and surrenders offset increases from new business and market
appreciation since March of 2003.

For
the first nine months of 2003, Premiums and Contract charges decreased 20.1% compared to the first nine months of 2002. The decrease is due to decreased sales of immediate annuities
with life contingencies resulting from competitive market conditions and lower variable annuity contract charges from lower average account values, partially offset by slightly higher traditional life
insurance premiums, and higher contract charges related to interest-sensitive life insurance and fixed annuities.

Contractholder
funds, included in the Condensed Statements of Financial Position represent interest-bearing liabilities arising from the sale of interest-sensitive life and fixed
annuities. The balance of the Contractholder funds is equal to the cumulative deposits received and interest credited to the contractholder less cumulative contract maturities, surrenders, withdrawals
and contract charges for mortality or administrative expenses.

12

---

The
following table shows the changes in Contractholder funds.

|                                             |                                             | Changes from July 1
to September 30, |           | Changes from January 1
to September 30, |  
|-------------------------------------------- | ------------------------------------------- | ------------------------------------ | --------- | --------------------------------------- | -
|
|Contractholder funds, beginning balance      |                                             | $                                    | 2,407,026 |                                         | $
|Deposits:                                    |                                             |                                      |           |                                         |  
|                                             | Fixed annuities (immediate and deferred)(1) |                                      |           | 146,433                                 |  
|                                             | Interest-sensitive life                     |                                      |           | 27,567                                  |  
|Interest credited                            |                                             |                                      | 26,557    |                                         |  
|Maturities, surrenders and other adjustments |                                             |                                      | (62,184   | )                                       |  
|                                             |                                             |                                      |           |                                         |  
|Contractholder funds, ending balance         |                                             | $                                    | 2,545,399 |                                         | $
|                                             |                                             |                                      |           |                                         |  

---

The
increase in Contractholder funds of $138.4 million for the three months ended September 30, 2003 compared to the $260.1 million increase during
the same period in 2002 is the result of fixed annuity deposits in both periods partially offset by a decrease in new deposits to the fixed portion of variable annuities. Deposits for the fixed
portion of variable annuities included in Contractholder funds decreased $107.9 million in the third quarter of 2003 compared to the same period in 2002.

For
the first nine months of 2003, the change in Contractholder funds compared to the first nine months of 2002 reflects trends consistent with those for the three months ended
September 30. Decreased deposits into variable annuity fixed account investment options and slightly higher surrenders and maturities were offset by fixed annuity deposits and increased
interest-sensitive life deposits from new business.

Separate
Accounts liabilities, included in the Condensed Statements of Financial Position, are legally segregated from the Company's general account assets and represent the
contractholders' claims to the related Separate Accounts assets. Separate Accounts liabilities primarily arise from the sale of variable annuities and variable life insurance. The balance of the
Separate Accounts liabilities is equal to the cumulative deposits received plus the investment performance of the related assets less the cumulative contract surrenders, withdrawals, net transfers
to/from the general account and cumulative contract charges for mortality or administrative expenses.

The
following table shows the changes in Separate Accounts.

|                                                 |  | Changes from July 1
to September 30, |         | Changes from January 1 to September 30, |  
|------------------------------------------------ |  | ------------------------------------ | ------- | --------------------------------------- | -
|
|Separate Accounts liabilities, beginning balance |  | $                                    | 575,684 |                                         | $
|Deposits                                         |  |                                      | 22,408  |                                         |  
|Investment results                               |  |                                      | 13,437  |                                         |  
|Contract charges                                 |  |                                      | (2,041  | )                                       |  
|Surrenders and other adjustments                 |  |                                      | (21,036 | )                                       |  
|                                                 |  |                                      |         |                                         |  
|Separate Accounts liabilities, ending balance    |  | $                                    | 588,452 |                                         | $
|                                                 |  |                                      |         |                                         |  

Increases
in Separate Accounts liabilities in the third quarter and first nine months of 2003 compared to the same periods in the prior year were primarily driven by
strong equity market performance resulting in improved investment results during both periods and lower transfers into the fixed account investment options and surrenders.

Net investment incomeincreased 13.7% in the third quarter and 14.9% in the first nine months of 2003

13

---

compared
to the same periods in the prior year. The increase in both periods was due to higher portfolio balances resulting from increased positive cash flows from product sales and deposits,
partially offset by lower portfolio yields. The lower portfolio yields were primarily due to investment purchases of fixed income securities with interest rates lower than the current portfolio
average. Investments as of September 30, 2003, excluding unrealized net capital gains on fixed income securities, increased 19.0% from September 30, 2002.

Analysis of net incomeis presented in the following table.

|                                             |  | Three Months Ended
September 30, |         | Nine Months Ended
September 30, |  
|-------------------------------------------- |  | -------------------------------- | ------- | ------------------------------- | -
|
|Investment margin                            |  | $                                | 16,015  |                                 | $
|Mortality margin                             |  |                                  | 6,222   |                                 |  
|Maintenance charges                          |  |                                  | 5,210   |                                 |  
|Surrender charges                            |  |                                  | 1,240   |                                 |  
|Amortization of DAC                          |  |                                  | (7,925  | )                               |  
|Operating costs and expenses                 |  |                                  | (11,452 | )                               |  
|Loss on disposition of operations, after-tax |  |                                  | (2,735  | )                               |  
|Income tax expense                           |  |                                  | (3,169  | )                               |  
|Realized capital gains and losses, after-tax |  |                                  | (553    | )                               |  
|                                             |  |                                  |         |                                 |  
|Net income (loss)                            |  | $                                | 2,853   |                                 | $
|                                             |  |                                  |         |                                 |  

Investment marginrepresents the excess of investment income earned over interest credited to policyholders and
contractholders and interest expense. Investment margin increased 41.5% in the third quarter of 2003 compared to the same period in 2002 and increased 30.4% in the first nine months of 2003 compared
to the first nine months of 2002.    Growth and management actions to reduce crediting rates where possible were partially offset by the decline in yields on assets supporting the
Company's capital, traditional and interest-sensitive life and certain investment contracts with fixed interest crediting rates.

The
following table summarizes the annualized weighted average investment yield, interest crediting rates and investment spreads for the three months ended September 30.

|                                                                    |  | Weighted Average
Investment Yield |   | Weighted Average
Interest Crediting Rate |   | Weighted Average
Investment Spread |  
|------------------------------------------------------------------- |  | --------------------------------- | - | ---------------------------------------- | - | ---------------------------------- | -
|
|Interest-sensitive life                                             |  | 6.6                               | % | 6.9                                      | % | 4.9                                | %
|Fixed annuitiesdeferred                                            |  | 6.0                               |   | 6.6                                      |   | 3.7                                |  
|Fixed annuitiesimmediate                                           |  | 7.6                               |   | 7.9                                      |   | 6.9                                |  
|Investments supporting capital, traditional life and other products |  | 6.2                               |   | 6.7                                      |   | N/A                                |  

14

---

The following table summarizes the annualized weighted average investment yield, interest crediting rates and investment spreads for the nine months ended September 30.

|                                                                    |  | Weighted Average
Investment Yield |   | Weighted Average
Interest Crediting Rate |   | Weighted Average
Investment Spread |  
|------------------------------------------------------------------- |  | --------------------------------- | - | ---------------------------------------- | - | ---------------------------------- | -
|
|Interest-sensitive life                                             |  | 6.7                               | % | 7.0                                      | % | 5.0                                | %
|Fixed annuitiesdeferred                                            |  | 6.1                               |   | 6.8                                      |   | 3.9                                |  
|Fixed annuitiesimmediate                                           |  | 7.7                               |   | 8.0                                      |   | 6.9                                |  
|Investments supporting capital, traditional life and other products |  | 6.3                               |   | 6.8                                      |   | N/A                                |  

The
decline in the weighted average investment spreads for the interest-sensitive life and immediate annuities were due to lower reinvestment yields than the portfolio average in both
periods.

The
following table summarizes Contractholder funds and the Reserve for life-contingent contract benefits associated with the weighted average investment yield and weighted
average interest crediting rates at September 30.

|(in thousands)                                                               |  | 2003 |           | 2002
|---------------------------------------------------------------------------- |  | ---- | --------- | ----
|Interest-sensitive life                                                      |  | $    | 293,087   |     
|Fixed annuitiesdeferred                                                     |  |      | 1,772,336 |     
|Fixed annuitiesimmediate                                                    |  |      | 1,827,784 |     
|                                                                             |  |      |           |     
|                                                                             |  |      | 3,893,207 |     
|FAS 115/133 market value adjustment                                          |  |      | 192,510   |     
|Life-contingent contracts and other                                          |  |      | 102,361   |     
|                                                                             |  |      |           |     
|Total Contractholder funds and Reserve for life-contingent contract benefits |  | $    | 4,188,078 |     
|                                                                             |  |      |           |     

The
following table summarizes investment margin by product group.

|                  |  | Three Months Ended
September 30, |        | Nine Months Ended
September 30,
|----------------- |  | -------------------------------- | ------ | -------------------------------
|
|Life insurance    |  | $                                | 2,565  |                                
|Annuities         |  |                                  | 13,450 |                                
|                  |  |                                  |        |                                
|Investment margin |  | $                                | 16,015 |                                
|                  |  |                                  |        |                                

Mortality margin, which represents premiums and cost of insurance charges less related policy benefits, was
$6.2 million or 23.7% lower in the third quarter of 2003 compared to the third quarter of 2002. The decrease in mortality margin is primarily due to higher death claims on life insurance
policies combined with lower death claims on immediate annuities with life contingencies. These decreases were partially offset by growth from new business and lower death benefits on variable
annuities. Variable annuity guaranteed minimum death benefits ("GMDB") payments of $.5 million in the third quarter of 2003 decreased $.2 million compared to the same period in 2002.
Variable annuity GMDB payments have decreased each quarter of 2003 as equity market improvements since the first quarter of 2003 have reduced the net amount at risk.

For
the first nine months of 2003, mortality margin was $14.8 million or 48.4% below the first nine months of 2002. The decline reflects the favorable mortality margin in the
first half of 2002 from favorable death claims on immediate annuities with life contingencies and the recognition of reinsurance recoverables arising from the tragic events of September 11,
2001. The strengthening of reserves on certain traditional

15

---

life
insurance policies in the second quarter of 2003 contributed significantly to the decline as did higher variable annuity death benefits in the first half of 2003. The GMDB payments in the first
nine months of 2003 were $2.5 million compared to $2.0 million in the first nine months of 2002.

The
following table summarizes mortality margin by product group.

|                 |  | Three Months Ended
September 30, |        | Nine Months Ended
September 30,
|---------------- |  | -------------------------------- | ------ | -------------------------------
|
|Life insurance   |  | $                                | 7,710  |                                
|Annuities        |  |                                  | (1,488 | )                              
|                 |  |                                  |        |                                
|Mortality margin |  | $                                | 6,222  |                                
|                 |  |                                  |        |                                

Amortization of DACdecreased 30.3% in the third quarter of 2003 compared to the same period in 2002 and increased 22.0% in the first nine
months of 2003 compared to the first nine months of 2002.
The decline in the third quarter compared to the same period of the prior year is primarily due to acceleration of amortization, commonly known as DAC unlocking, which was $6.3 million in the
third quarter of 2002, partially offset by the increased amortization related to and in proportion with the growth in the fixed and variable annuity investment margins. The increase for the nine
months ended September 30, 2003 compared to the same period in the prior year was primarily due to increased amortization due to growth of the investment margin partially offset by the
$4.9 million of DAC unlocking in the prior year period.

Operating costs and expensesincreased 48.9% during the third quarter of 2003 compared to the third quarter of 2002 and increased 2.2%
during the first nine months of 2003 compared to the same period of 2002. The increase in the third quarter of 2003 over the comparable period in the prior year is a result of certain distribution and
technology expenses, higher employee related benefit expenses and increased taxes licenses and fees. The increase in the first nine months of 2003 from the comparable period in 2002 was due to higher
employee related benefit expenses and increased taxes licenses and fees.

Loss on disposition of operationsresulted from the Company's recent announcement to exit the Direct Response distribution business. Based
on its decision to sell the business, the Company has recorded an estimated loss on the disposition of $2.7 million, after-tax.

Realized capital gains and lossesare presented in the following table. After-tax realized capital gains and losses are
presented net of the effects of DAC amortization to the extent that such amortization effects resulted from the recognition of realized capital gains and losses.

|                                             |  | Three Months Ended
September 30, |        | Nine Months Ended
September 30, |  
|-------------------------------------------- |  | -------------------------------- | ------ | ------------------------------- | -
|
|Investment write-downs                       |  | $                                | (295   | )                               | $
|Sales of fixed income securities             |  |                                  | (2,726 | )                               |  
|Valuation of derivative instruments          |  |                                  | 728    |                                 |  
|Settlement of derivative instruments         |  |                                  | 1,017  |                                 |  
|                                             |  |                                  |        |                                 |  
|Realized capital gains and losses, pretax    |  |                                  | (1,276 | )                               |  
|Reclassification of amortization of DAC      |  |                                  | 398    |                                 |  
|Income tax benefit                           |  |                                  | 325    |                                 |  
|                                             |  |                                  |        |                                 |  
|Realized capital gains and losses, after-tax |  | $                                | (553   | )                               | $
|                                             |  |                                  |        |                                 |  

16

---

For
further discussion of realized capital gains and losses, see "Investments".

INVESTMENTS

The composition of the investment portfolio at September 30, 2003 is presented in the following table.

|(in thousands)             |       | Investments |           | Percent
of total |     
|-------------------------- | ----- | ----------- | --------- | ---------------- | ----
|Fixed income securities(1) |       | $           | 4,288,345 |                  | 88.8
|Mortgage loans             |       |             | 369,365   |                  | 7.6 
|Short-term                 |       |             | 140,580   |                  | 2.9 
|Policy loans               |       |             | 33,797    |                  | 0.7 
|                           |       |             |           |                  |     
|                           | Total |             | $         | 4,832,087        |     
|                           |       |             |           |                  |     

---

Total
investments increased to $4.83 billion at September 30, 2003 from $4.20 billion at December 31, 2002 due to positive cash flows generated from operating
and financing activities, increased unrealized gains on fixed income securities generated in a lower interest rate environment and increased funds associated with securities lending.

Total
investment balances related to funds associated with securities lending increased to $181.6 million at September 30, 2003 from $160.0 million at
December 31, 2002.

The
Unrealized net capital gains on fixed income securities at September 30, 2003 were $533.8 million, an increase of $80.6 million or 17.8% since
December 31, 2002. The net unrealized gain for the fixed income portfolio totaled $533.8 million, comprised of $549.9 million of unrealized gains and $16.1 million of
unrealized losses at September 30, 2003, compared to a net unrealized gain for the fixed income portfolio totaling $453.1 million at December 31, 2002, comprised of
$479.5 million of unrealized gains and $26.4 million of unrealized losses. At September 30, 2003, the unrealized losses for the fixed income portfolio were concentrated in the
corporate fixed income portfolio. Corporate fixed income net unrealized gains totaled $259.8 million comprised of $272.1 million of unrealized gains and $12.3 million of
unrealized losses. The unrealized losses for the corporate fixed income portfolio were concentrated in the transportation, banking and utilities sectors. These sectors comprised $8.0 million or
65.2% of the unrealized losses and $122.9 million or 45.2%, of the unrealized gains in the corporate fixed income portfolio.

Approximately
95.9% of the Company's fixed income securities portfolio is rated investment grade, which is defined by the Company as a security having a rating from the National
Association of Insurance Commissioners ("NAIC") of 1 or 2, a Moody's equivalent rating of Aaa, Aa, A or Baa, a Standard & Poor's equivalent rating of AAA, AA, A or BBB, or a comparable Company
internal rating.

The
Company monitors the quality of its fixed income portfolio, in part, by categorizing certain investments as problem, restructured or potential problem. Problem fixed income
securities are securities in default with respect to principal and/or interest and/or securities issued by companies that have gone into bankruptcy subsequent to the Company's acquisition of the
security. Restructured fixed income securities have modified terms and conditions that were not at current market rates or terms at the time of the restructuring. Potential problem fixed income
securities are current with respect to contractual principal and/or interest, but because of other facts and circumstances, management has serious concerns regarding the borrower's ability to pay
future principal and interest in accordance with the contractual terms of the security, which causes management to believe these securities may be classified as problem or restructured in the future.

17

---

The
following table summarizes problem, restructured and potential problem fixed income securities.

|(in thousands)                    |  | September 30, 2003 |        | December 31, 2002 |  
|--------------------------------- |  | ------------------ | ------ | ----------------- | -
|
|Problem                           |  | $                  | 14,816 |                   | $
|Restructured                      |  |                    | 5,880  |                   |  
|Potential problem                 |  |                    | 12,732 |                   |  
|                                  |  |                    |        |                   |  
|Total net carrying value          |  | $                  | 33,428 |                   | $
|                                  |  |                    |        |                   |  
|Cumulative write-downs recognized |  | $                  | 6,938  |                   |  
|                                  |  |                    |        |                   |  

As
of September 30, 2003, the balance of fixed income securities that the Company categorizes as restructured or potential problem increased from the balance as of
year-end 2002 while the balance of fixed income securities categorized as problem decreased from the balance at year-end 2002. The increase in potential problem assets
primarily resulted from company-specific poor operating fundamentals in the utility sector. The Company evaluated each of these securities through its watch list process at September 30, 2003
and recorded write-downs on securities that are deemed to be other than temporarily impaired. Approximately $655 thousand of net unrealized losses at September 30, 2003 are related to
securities that the Company has included in the problem, restructured or potential problem categories. These securities represent 0.7% of the fixed income portfolio. The Company concluded, through its
watch list monitoring process, that these unrealized losses were temporary in nature. While these balances may increase in the future, particularly if economic conditions continue to be unfavorable,
management expects that the total amount of securities in these categories will remain a relatively low percentage of the total fixed income securities portfolio. The Company had no fixed income
securities categorized as restructured at December 31, 2002.

The
components of pretax realized capital gains and losses are described in the table on page 16. Sales of fixed income securities in the third quarter and first nine months of 2003
resulted from actions taken to reduce credit exposure to certain issuers or industries and to provide liquidity for the purchase of investments that better meet certain investment objectives. Sales
also include fees received from prepayments of fixed income securities and mortgage loans totaling $180 thousand and $201 thousand for the third quarter and first nine months of 2003,
respectively, compared to $1.6 million and $4.2 million for the same periods of 2002, respectively.

CAPITAL RESOURCES AND LIQUIDITY

Capital resourcesconsist of shareholder's equity. The following table summarizes the Company's capital resources.

|(in thousands)                                                       |                            | September 30,
2003 |         | December 31,
2002
|-------------------------------------------------------------------- | -------------------------- | ------------------ | ------- | -----------------
|Common stock, retained earnings and other shareholder's equity items |                            | $                  | 387,768 |                  
|Accumulated other comprehensive income                               |                            |                    | 178,919 |                  
|                                                                     |                            |                    |         |                  
|                                                                     | Total shareholder's equity |                    | $       | 566,687          
|                                                                     |                            |                    |         |                  

Shareholder's equityincreased $22.9 million in the first nine months of 2003 when compared to December 31,
2002 due to Net income of $13.6 million and to an increase of $9.3 million in Accumulated other comprehensive income.

18

---

Financial Ratings and StrengthIn June 2003, Standard & Poor's revised the insurance financial strength rating
of Allstate Life Insurance Company ("ALIC") and its rated subsidiaries and affiliates, including the Company, from AA+ to AA and revised the rating outlook from negative to stable. Standard &
Poor's stated that the rating change was due to several factors including their negative outlook on the life insurance industry, the recent decline in ALIC's Net income and their view that a
subsidiary's rating cannot exceed the rating of its parent. ALIC's rating is now the same rating as that of AIC, the parent of ALIC. Moody's and A.M. Best's insurance financial strength ratings
of the Company, ALIC and AIC remain unchanged. In reaffirming the A+ ratings of the Company, ALIC and AIC, A.M. Best assigned a positive rating outlook for these companies' ratings.

LiquidityThe Company's operations typically generate substantial positive cash flows from operations as most premiums and deposits are
received in advance of the time when claim and benefit payments are required. These positive operating cash flows are expected to continue to meet the liquidity requirements of the Company.

The
ability of the Company to pay dividends is dependent on business conditions, income, cash requirements of the Company and other relevant factors. The payment of shareholder dividends
by the Company without prior approval of the state insurance regulator in any calendar year is limited to formula amounts based on statutory surplus and statutory net gain from operations, determined
in accordance with statutory accounting practices, for the immediately preceding calendar year. In the twelve-month period ending September 30, 2003, the Company has not paid any dividends. The
maximum amount of dividends that the Company can distribute during 2003 without prior approval of the New York State Insurance Department is $16.3 million.

A
portion of the Company's diversified product portfolio, primarily fixed annuities and interest-sensitive life insurance products, is subject to surrender and withdrawal at the
discretion of contractholders and therefore represents a significant potential use of cash in each fiscal period. These surrenders and withdrawals for the three-month and nine-month
periods ended September 30, 2003 were $59.0 million and $141.3 million compared to $45.4 million and $127.7 million for the same periods last year. The total amount
of surrenders and withdrawals for the first nine months of 2003 represented 3.4% of the Reserve for life-contingent contract benefits and Contractholder funds balance at
September 30, 2003, compared to 3.8% in the first nine months of last year.

The
Company has entered into an inter-company loan agreement with the Corporation. The amount of inter-company loans available to the Company is at the discretion of the Corporation. The
maximum amount of loans the Corporation will have outstanding to its eligible subsidiaries at any given point in time is limited to $1.00 billion. No amounts were outstanding for the Company
under the inter-company loan agreement at September 30, 2003 or December 31, 2002.

RECENT DEVELOPMENTS



FORWARD-LOOKING STATEMENTS

This document contains "forward-looking statements" that anticipate results based on management's estimates, assumptions and plans that are subject to
uncertainty. These statements are made subject to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. The Company assumes no obligation to update any
forward-looking statements as a result of new information or future events or developments.

These
forward-looking statements do not relate strictly to historical or current facts and may be identified by their use of words like "plans," "seeks," "expects," "will," "should,"
"anticipates," "estimates," "intends," "believes," "likely," "targets" and other words with similar meanings. These statements may address, among

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other
things, the Company's strategy for growth, product development, regulatory approvals, market position, expenses, financial results and reserves. Management believes that these statements are
based on reasonable estimates, assumptions and plans. However, if the estimates, assumptions or plans underlying the forward-looking statements prove inaccurate or if other risks or uncertainties
arise, actual results could differ materially from those communicated in these forward-looking statements. Factors which could cause actual results to differ materially from those suggested by such
forward-looking statements, include but are not limited to those discussed or identified in this document (including the risk factor described below) and in the Company's public filings with the SEC.



RISK FACTOR

The following risk factor should be considered in addition to the risk factors identified in the Management's Discussion and Analysis of Financial Condition and
Results of Operations, under the heading "Forward-Looking Statements and Risk Factors Affecting The Company," in Part II Item 7 of the Company's Form 10-K filed March 31, 2003.



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Item 4. Controls and Procedures

With the participation of our principal executive officer and principal financial officer, we carried out an evaluation of the effectiveness of the design and
operation of our disclosure controls and procedures as of the end of the period covered by this report. Based upon this evaluation, the principal executive officer and the principal financial officer
concluded that our disclosure controls and procedures are effective in timely alerting them to material information required to be included in our periodic reports filed with the Securities and
Exchange Commission. However, the design of any system of controls and procedures is based in part upon assumptions about the likelihood of future events and there can be no assurance that any design
will succeed in achieving its stated goals under all potential future conditions, regardless of how remote. Our disclosure controls and procedures are designed to provide reasonable assurance of
achieving their objectives and are effective at the "reasonable assurance" level.

During
the last fiscal quarter, there have been no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect,
our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1.    Legal Proceedings

The discussion "Regulation, Legal Proceedings and Guarantees" in Part I, Item 1, Note 3 of this Form 10-Q is incorporated herein by
reference.

Item 6.    Exhibits and Reports on Form 8-K



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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.

|                  | Allstate Life Insurance Company of New York
(Registrant)
|----------------- | --------------------------------------------------------
|November 14, 2003 | By                                                      

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|Exhibit No. |  | Description                                                                                                                         
|----------- |  | ------------------------------------------------------------------------------------------------------------------------------------
|15          |  | Acknowledgement of awareness from Deloitte & Touche LLP dated November 13, 2003, concerning unaudited interim financial information.
|31.1        |  | Rule 15d-14(a) Certification of Principal Executive Officer                                                                         
|31.2        |  | Rule 15d-14(a) Certification of Principal Financial Officer                                                                         
|32          |  | Section 1350 Certifications                                                                                                         

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