FORM 10-Q

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

The 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.

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

                 For the quarterly period ended: March 31, 1998

                                       OR

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


Commission file number: 33-47245
                        33-65355


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


      NEW YORK                                        35-2608394
(State or other jurisdiction of                    (I.R.S. Employer
incorporation or organization)                      Identification No.)

                                One Allstate Drive
                             Farmingville, New York  11738
               (Address of principal executive offices)(Zip Code)

                                  800/256-9392
              (Registrant's telephone number, including area code)

                                 Not Applicable
              (Former name, former address and former fiscal year,
                          if changed since last report)

     Indicate  by check mark  whether the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.

Yes../X/..      No


     Indicate  the  number of shares of each of the  issuer's  classes of common
stock,  as of March 31, 1998;  there were 80,000 shares of common  capital stock
outstanding,  par value $25 per share all of which  shares are held by  Allstate
Life Insurance Company.

<PAGE>


                         PART I - FINANCIAL INFORMATION


Item  1.   FINANCIAL STATEMENTS

            Statements of Financial Position
            March 31, 1998(Unaudited) and December 31, 1997.................. 3

            Statements of Operations
            Three Months Ended March 31, 1998 and
            March 31, 1997 (Unaudited)....................................... 4

            Statements of Cash Flows
            Three Months Ended March 31, 1998 and
                  March 31, 1997 (Unaudited)................................. 5

            Notes to Financial Statements.................................... 6

Item  2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF
           FINANCIAL CONDITION AND RESULTS OF OPERATIONS..................... 9

Item  3.   QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT
              MARKET RISK*..................................................N/A


                           PART II - OTHER INFORMATION


Item 1.   LEGAL PROCEEDINGS..................................................14

Item 2.   CHANGES IN SECURITIES AND USE OF PROCEEDS*........................N/A

Item 3.   DEFAULTS UPON SENIOR SECURITIES*..................................N/A

Item 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS*..............N/A

Item 5.   OTHER INFORMATION..................................................14

Item 6.   EXHIBITS AND REPORTS ON FORM 8-K...................................14

SIGNATURE PAGE...............................................................15





*Omitted pursuant to General Instruction H(2) of Form 10-Q.

                                      -2-
<PAGE>
                  ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
                        STATEMENTS OF FINANCIAL POSITION

<TABLE>
<CAPTION>
                                                                March 31,         December 31,
($ in thousands)                                                  1998                1997
                                                           -----------------     ---------------
                                                              (Unaudited)
<S>                                                            <C>                <C>
ASSETS
Investments
   Fixed income securities, at fair value
     (amortized cost $1,543,133
     and $1,510,110)                                            $1,783,642        $1,756,257
Mortgage loans                                                     116,579           114,627
Policy loans                                                        28,017            27,600
Short-term                                                          36,214            13,513
                                                                ----------        ----------
          Total investments                                      1,964,452         1,911,997

Deferred acquisition costs                                          74,152            71,946
Accrued investment income                                           19,862            21,725
Reinsurance recoverables                                             1,754             1,726
Cash                                                                 2,503               393
Other assets                                                         4,782             6,167
Separate Accounts                                                  340,160           308,595
                                                                ----------        ----------
          Total assets                                          $2,407,665        $2,322,549
                                                                ==========        ==========

LIABILITIES
Reserve for life-contingent contract benefits                   $1,091,036        $1,084,409
Contractholder funds                                               625,967           607,474
Income taxes payable                                                 1,727             1,419
Deferred income taxes                                               17,546            16,990
Other liabilities and accrued expenses                              31,318            14,985
Net payable to affiliates                                            6,740             5,267
Separate Accounts                                                  340,160           308,595
                                                                ----------        ----------
          Total liabilities                                      2,114,494         2,039,139
                                                                ----------        ----------

SHAREHOLDER'S EQUITY
Common stock, $25 par value, 80,000 shares
   authorized, issued and outstanding                                2,000             2,000
Additional capital paid-in                                          45,787            45,787
Retained income                                                    178,280           171,144
Accumulated other comprehensive income:
   Unrealized net capital gains                                     67,104            64,479
                                                                ----------        ----------
          Total accumulated other comprehensive
              income                                                67,104            64,479
                                                                ----------        ----------

          Total shareholder's equity                               293,171           283,410
                                                                ----------        ----------
          Total liabilities and shareholder's equity            $2,407,665        $2,322,549
                                                                ==========        ==========


</TABLE>

See notes to financial statements.
                                      -3-
<PAGE>




                   ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
                            STATEMENTS OF OPERATIONS



<TABLE>
<CAPTION>
                                                                            Three Months Ended
                                                                               March 31,
                                                                 ---------------------------------------
($ in thousands)                                                        1998                  1997
                                                                        ----                  ----
                                                                               (Unaudited)

REVENUES
<S>                                                                   <C>                  <C>       
   Premiums (net of reinsurance ceded of $848 and $691)               $  18,583            $   20,661
   Contract charges                                                       8,088                 6,868
   Net investment income                                                 32,569                30,200
   Realized capital gains and losses                                      1,231                   (49)
                                                                      ---------            ----------
                                                                         60,471                57,680
                                                                      ---------            ----------

COSTS AND EXPENSES
   Contract benefits (net of reinsurance recoveries of
      $359 and $298)                                                     41,260                41,966
   Amortization of deferred acquisition costs                             2,085                 1,970
   Operating costs and expenses                                           6,011                 4,826
                                                                      ---------            ----------
                                                                         49,356                48,762
                                                                      ---------            ----------

INCOME FROM OPERATIONS BEFORE INCOME
    TAX EXPENSE                                                          11,115                 8,918
INCOME TAX EXPENSE                                                        3,979                 3,209
                                                                      ---------            ----------

NET INCOME                                                            $   7,136            $    5,709
                                                                      =========            ==========

</TABLE>



See notes to financial statements.

                                      -4-

<PAGE>



                   ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
                            STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>

                                                                                       Three Months Ended
                                                                                            March 31,
                                                                        --------------------------------------------------
                                                                                  1998                       1997
                                                                        -----------------------    -----------------------
($ in thousands)                                                                          (Unaudited)

CASH FLOWS FROM OPERATING ACTIVITIES
<S>                                                                            <C>                        <C>     
Net income                                                                     $  7,136                   $  5,709
Adjustments to reconcile net income to net cash
       provided by operating activities
           Amortization and other non-cash items                                 (8,220)                    (7,335)
           Realized capital gains and losses                                     (1,231)                        49
           Interest credited to contractholder funds                             10,035                      8,687
           Increase in reserve for life-contingent contract
               benefits and contractholder funds                                  8,662                     14,817
           Increase in deferred policy acquisition costs                         (2,464)                    (2,227)
           Decrease in accrued investment income                                  1,863                      2,028
           Change in deferred income taxes                                       (1,262)                    (1,782)
           Change in other operating assets and
               liabilities                                                        1,531                      5,197
                                                                               --------                   --------
                 Net cash provided by operating activities                       16,050                     25,143
                                                                               --------                   --------

CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sales of fixed income securities                                    5,278                          -
Investment collections
        Fixed income securities                                                  47,026                     22,483
        Mortgage loans                                                            1,986                        588
Investment purchases
        Fixed income securities                                                 (75,356)                   (62,140)
        Mortgage loans                                                           (4,000)                    (5,000)
Change in short-term investments, net                                            (4,353)                    16,706
Change in policy loans, net                                                        (417)                      (504)
                                                                               --------                   --------
                 Net cash used in investing activities                          (29,836)                   (27,867)
                                                                               --------                   --------

CASH FLOWS FROM FINANCING ACTIVITIES
Contractholder fund deposits                                                     28,429                     16,193
Contractholder fund withdrawals                                                 (12,533)                   (11,664)
                                                                               --------                   --------
                 Net cash provided by financing activities                       15,896                      4,529
                                                                               --------                   --------

NET INCREASE IN CASH                                                              2,110                      1,805
CASH AT BEGINNING OF YEAR                                                           393                      1,027
                                                                              ---------                  ---------
CASH AT END OF PERIOD                                                         $   2,503                  $   2,832
                                                                              =========                  =========

</TABLE>


See notes to financial statements.


                                      -5-
<PAGE>



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


1.   Basis of Presentation

          Allstate Life Insurance  Company of New York (the "Company") is wholly
     owned by a wholly owned subsidiary of Allstate  Insurance Company, a wholly
     owned subsidiary of The Allstate Corporation.

          The  financial  statements  and notes as of March 31, 1998 and for the
     three-month  periods  ended  March  31,  1998 and 1997 are  unaudited.  The
     interim 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  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 10K for 1997.  The  results of
     operations for the interim  periods should not be considered  indicative of
     results to be expected for the full year.

          Effective  January 1, 1998, the Company adopted Statement of Financial
     Accounting  Standards  ("SFAS")  No. 125,  "Accounting  for  Transfers  and
     Servicing of Financial Assets and  Extinguishment of Liabilities" under the
     guidance  of SFAS No.  127,  "Deferral  of the  Effective  Date of  Certain
     Provisions of FASB  Statement No. 125." As a result of this  adoption,  the
     company has recorded an asset and corresponding  liability representing the
     collateral  received in connection  with the Company's  securities  lending
     program. The cash collateral received is recorded in short-term investments
     with the offsetting  liability being reflected in other  liabilities in the
     statements of financial position.

          The Company has programs to lend  investment  portfolio  securities to
     qualified  institutions.  Such loans are secured by  collateral of at least
     102% of the  market  value of  domestic  securities  loaned and 105% of the
     market value of foreign securities loaned. The Company continues to receive
     income on the  securities  loaned and receives  additional  income from the
     lending  transaction.  Additionally,  any change in the market value of the
     securities  loaned is recognized  as unrealized  capital gains or losses of
     the Company.  At March 31, 1998, the cash collateral received in connection
     with the securities lending program was $22.3 million.

          In March 1998, the  Accounting  Standards  Executive  Committee of the
     AICPA issued Statement of Position ("SOP") 98-1,  "Accounting for the Costs
     of Computer  Software  Developed  or Obtained  for  Internal  Use." The SOP
     provides  guidance  on  accounting  for  the  costs  of  computer  software
     developed or obtained for internal  use.  Specifically,  certain  external,
     payroll  and  payroll  related  costs  should  be  capitalized  during  the
     application  development  state  of a  project  and  depreciated  over  the
     computer  software's useful life. The Company has adopted the SOP effective
     January 1, 1998.

                                      -6-
<PAGE>




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


2.   Comprehensive Income

          Effective  January 1, 1998, the Company adopted Statement of Financial
     Accounting   Standards   No.   130,   "Reporting   Comprehensive   Income."
     Comprehensive  Income is a  measurement  of all  changes  in  shareholders'
     equity that result from  transactions  and other economic events other than
     transactions with shareholders.  For the Company,  these changes consist of
     changes in unrealized gains and losses of the investment portfolio adjusted
     for  deferred  acquisition  costs and reserves  for life  insurance  policy
     benefits.  These amounts,  presented as other comprehensive  income, net of
     related  taxes,  are added to net income  which  results  in  comprehensive
     income.  The  cumulative  amount  of  these  changes  is  reported  in  the
     statements of financial position as accumulated other comprehensive income.

          The following  summarizes the components of other comprehensive income
     on a pretax and after-tax basis for the three-month periods ended March 31,


<TABLE>
<CAPTION>

($ in thousands)                                      1998                                      1997
                                                     Income                                    Income                    
                                                       tax         After-                       tax          After-
                                        Pretax       effect         tax         Pretax         effect          tax
                                        ------       ------        ------       ------         ------        ------

<S>                                     <C>          <C>           <C>          <C>            <C>           <C>
Unrealized capital gains 
  and losses:

Unrealized holding gains
    (losses) arising during
    the period                          (3,895)       1,362       (2,533)       (75,465)       26,413        (49,052)
Adjustments to unrealized  
  capital gains and losses  
  arising during the period:
    Deferred acquisition                  (258)          90         (168)           525          (184)           341
      costs
    Reserves for life insur-
      ance policy benefits               9,473       (3,315)       6,158         50,200       (17,570)        32,630
                                      --------     --------     --------       --------      --------      ---------
    Net  unrealized holding
      gains (losses) arising
      during the period                  5,320       (1,863)       3,457        (24,740)        8,659        (16,081)
                                      --------     --------     --------       --------      --------      ---------
Less:  reclassification adjust-
    ment for realized net
    capital gains included in
    net income                           1,281         (449)         832              3            (1)             2
                                      --------     --------     --------       --------      --------      ---------

Other comprehensive
income                                $  4,039     $ (1,414)    $  2,625       $(24,743)     $  8,660      $ (16,083)
                                      ========     ========     ========       ========      ========      =========

Comprehensive income                                            $  9,761                                   $ (10,374)
                                                                ========                                   =========

</TABLE>
                                      -7-
<PAGE>

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


4.   Regulation and Legal Proceedings

          The  Company's  insurance  businesses  are subject to the effects of a
     changing social, economic and regulatory environment. Public and regulatory
     initiatives  have varied and have included  efforts to adversely  influence
     and  restrict  premium  rates,  restrict  the  Company's  ability to cancel
     policies, impose underwriting standards and expand overall regulation.  The
     ultimate  changes and eventual  effects,  if any, of these  initiatives are
     uncertain.

          Various other legal and regulatory  actions are currently pending that
     involve the Company and specific aspects of its conduct of business. In the
     opinion of management,  the ultimate  liability,  if any, in one or more of
     these  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.






                                      -8-
<PAGE>

                   Allstate Life Insurance Company of New York
                      Management's Discussion and Analysis
                of Financial Condition and Results of Operations
 


     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
financial statements and related notes thereto found under items 7 and 8 of Part
II of the Allstate Life Insurance Company of New York Annual Report on Form 10-K
for the year ended December 31, 1997.

     The Company, which is wholly owned by a wholly owned subsidiary of Allstate
Insurance Company ("AIC"), an affiliate of The Allstate Corporation and, markets
a broad line of life  insurance  and annuity  products in the State of New York.
Life insurance  includes  traditional  products such as whole life and term life
insurance, as well as universal life and other interest-sensitive life products.
Annuities include deferred annuities,  such as variable annuities and fixed rate
single  and  flexible  premium  annuities,   and  immediate  annuities  such  as
structured  settlement  annuities.  The Company distributes its products using a
combination  of  Allstate   agents  which  include  life   specialists,   banks,
independent agents, brokers and direct response marketing.

<TABLE>
<CAPTION>

FINANCIAL HIGHLIGHTS
($ in thousands)
                                                                             Three Months
                                                                            Ended March 31,
                                                              ------------------------------------------
                                                                      1998                   1997
                                                              -------------------    -------------------

<S>                                                           <C>                    <C>            
Statutory premiums and deposits                               $        58,126        $        46,212
                                                              ===============        ===============

Investments                                                   $     1,964,452        $     1,597,065
Separate Account assets                                               340,160                261,685
                                                              ---------------        ---------------

Investments, including Separate Account assets                $     2,304,612        $     1,858,750
                                                              ===============        ===============

Premiums and contract charges                                 $        26,671        $        27,529

Net investment income                                                  32,569                 30,200

Contract benefits                                                      41,260                 41,966

Operating costs and expenses                                            8,084                  6,796
                                                              ---------------        ---------------

Income from operations                                                  9,896                  8,967

Income tax expense on operations                                        3,552                  3,226
                                                              ---------------        ---------------

Operating income                                                        6,344                  5,741

Net realized capital gains and losses, net of tax (1)                     792                    (32)
                                                              ---------------        ---------------

Net income                                                    $         7,136        $         5,709
                                                              ===============        ===============
</TABLE>


(1) After the effect of the related amortization of deferred policy acquisitions
costs.

                                      -9-
<PAGE>



                   Allstate Life Insurance Company of New York
                      Management's Discussion and Analysis
                of Financial Condition and Results of Operations



Premiums, deposits, contract charges and contract benefits

     Statutory  premiums  and  deposits,  include  premiums and deposits for all
products,  increased 25.8% for the three-month period ended March 31, 1998, over
the  comparable  period in 1997.  Increased  sales of variable  annuities,  life
insurance  policies and fixed annuities were partially  offset by fewer sales of
structured settlement annuities.

     Premiums  and  contract   charges  under  generally   accepted   accounting
principles  ("GAAP")  decreased 3.1%.  Under GAAP,  revenues exclude deposits on
most annuity  contracts and premiums on universal life insurance  policies,  and
will vary with the mix of products sold during the period.  The decrease in 1998
was primarily  attributable  to an increase in revenues from  universal life and
variable   annuity   products,   was  more  than   offset  by  lower   sales  of
life-contingent structured settlement annuities.

Operating income

     Pretax net  investment  income  increased 7.8% in the first quarter of 1998
from the comparable 1997 period  primarily due to investment  income earned on a
higher   investment   balance   partially  offset  by  lower  portfolio  yields.
Investments,  excluding  Separate  Account assets and unrealized  gains on fixed
income securities,  grew by 9.8%. The overall portfolio yield declined slightly,
as  proceeds  from  calls and  maturities  as well as  positive  cash flows from
operating  activities were invested in securities yielding less than the average
portfolio  rate.  In  low  interest  rate  environments,   funds  from  maturing
investments may be reinvested at lower interest rates than those which prevailed
when the funds were previously invested.

     Operating costs and expenses increased $1.3 million, or 18.9%, in the first
quarter of 1998 from the comparable  1997 period related to growth in the number
of customer policies and increased general expenses.

     Operating  income increased 10.5% during the first quarter of 1998 compared
with the  first  quarter  of 1997 as  income  generated  from  new and  existing
structured  settlement  annuity  business was  partially  offset by increases in
operating costs and expenses.

Realized capital gains and losses

     Net realized  capital  gains,  net of tax, were $792 thousand for the three
months  ended  March 31, 1998  primarily  due to capital  gains on fixed  income
securities,  principally the result of prepayments  received on privately-placed
corporate  obligations.  Net realized capital losses after-tax were $32 thousand
for the three months ended March 31, 1997,  primarily  due to losses on mortgage
loans.

                                      -10-
<PAGE>

                   Allstate Life Insurance Company of New York
                      Management's Discussion and Analysis
                of Financial Condition and Results of Operations





INVESTMENTS

     The composition of the investment portfolio at March 31, 1998, at financial
statement carrying values in the table below.

                                                                   Percent
($ in thousands)                                                   to total
                                                                   --------

Fixed income securities (1)         $        1,783,642                90.9%
Mortgage loans                                 116,579                 5.9
Policy loans                                    28,017                 1.4
Short-term                                      36,214                 1.8
                                    ------------------              ------

    Total                           $        1,964,452               100.0%
                                    ==================              ======


(1) Fixed income securities are carried at fair value.  Amortized cost for these
securities was $1,543,133 at March 31, 1998.


     Total  investments  increased to $1.96 billion at March 31, 1998 from $1.91
billion at December 31, 1997.  The increase in  investments  is primarily due to
amounts  invested from positive cash flows  generated  from  operations  and the
addition to short-term  investments of $22.3 million of collateral in connection
with a change in accounting  treatment for securities lending programs offset in
part by decreased  unrealized capital gains on the fixed income  securities.  At
March  31,  1998,  unrealized  capital  gains  on the  fixed  income  securities
portfolio were $240.5 million compared to $246.1 million at December 31, 1997.

Fixed income securities

     The   Company's   fixed   income   securities    portfolio    consists   of
privately-placed  securities,  U.S. government bonds,  publicly traded corporate
bonds,  mortgage-backed  securities,   asset-backed  securities  and  tax-exempt
municipal bonds. The Company generally holds its fixed income securities for the
long term, but has  classified all of these  securities as available for sale to
allow maximum flexibility in portfolio management.

     At  March  31,  1998,  substantially  all of  the  Company's  fixed  income
securities  portfolio is rated investment grade, which is defined by the Company
as a security having a National Association of Insurance  Commissioners ("NAIC")
rating of 1 or 2, a Moody's rating of Aaa, Aa, A or Baa, or a comparable Company
internal rating.

Short-term investments

     The Company's  short-term  investment portfolio was $36.2 million and $13.5
million at March 31,  1998 and  December  31,  1997,  respectively.  The Company
invests available cash balances in taxable short-term  securities having a final
maturity  date or  redemption  date of one year or less.  Included in short-term
securities  is $22.3 million and $4.0 million at March 31, 1998 and December 31,
1997,  respectively  of  collateral in connection  with the  securities  lending
programs.

                                      -11-
<PAGE>
                   Allstate Life Insurance Company of New York
                      Management's Discussion and Analysis
                of Financial Condition and Results of Operations




SEPARATE ACCOUNTS

     Separate Account assets and liabilities increased 10.2% from $308.6 million
at  December  31,  1997 to $340.2  million at March 31,  1998 due  primarily  to
favorable investment  performance of the Separate Account investment  portfolios
and sales of flexible premium deferred  variable  annuity  contracts,  partially
offset by variable annuity contract surrenders and withdrawals.


LIQUIDITY AND CAPITAL RESOURCES

Liquidity

     The Company's  principal  sources of funds are collections of principal and
interest from the investment portfolio and the receipt of premiums and deposits.
The primary uses of these funds are to purchase investments and pay policyholder
claims, benefits, contract maturities and surrenders, and operating costs.

     The maturity  structure of the  Company's  fixed income  securities,  which
represent  91.8% of the  Company's  total  investments,  is  managed to meet the
anticipated cash flow requirements of the underlying  liabilities.  A portion of
the Company's product portfolio,  primarily fixed deferred annuity and universal
life insurance products, is subject to discretionary surrender and withdrawal by
contractholders.  Management believes its assets are sufficiently liquid to meet
future  obligations  to its  life  and  annuity  contractholders  under  various
interest rate scenarios.


YEAR 2000

     The Company is heavily  dependent  upon  complex  computer  systems for all
phases of its operations, including customer service, insurance processing, risk
analysis  underwriting  and loss  reserving.  Since many of the Company's  older
computer software programs recognize only the last two digits of the year in any
date,  some software may fail to operate  properly in or after the year 1999, if
the software is not reprogrammed,  remediated or replaced,  ("Year 2000 Issue").
The Company  believes that many of its  counterparties  and suppliers  also have
Year 2000 Issues which could affect the Company.  In 1995,  AIC commenced a plan
intended to mitigate  and/or  prevent the adverse  effects of Year 2000  Issues.
These strategies  include normal development and enhancement of new and existing
systems, upgrades to operating systems already covered by maintenance agreements
and modifications to existing systems to make them Year 2000 compliant. The plan
also   includes  the  Company   actively   working   with  its  major   external
counterparties  and  suppliers  to  assess  their  compliance  efforts  and  the
Company's  exposure to them. The Company presently believes that it will resolve
the Year  2000  Issue in a timely  manner,  and the  financial  impact  will not
materially  affect its results of operations,  liquidity or financial  position.
Year 2000 costs are and will be expensed as incurred.

                                      -12-
<PAGE>
                   Allstate Life Insurance Company of New York
                      Management's Discussion and Analysis
                of Financial Condition and Results of Operations





PENDING ACCOUNTING STANDARDS

     SFAS No. 131 redefines how segments are determined and requires  additional
segment  disclosures  for  both  annual  and  quarterly  reporting.  Under  this
statement, segments are determined using the "management approach" for financial
statement  reporting.  The management approach is based on the way an enterprise
makes  operating  decisions  and assesses  performance  of its  businesses.  The
Company is  currently  reviewing  the  requirements  of this SFAS and has yet to
determine its impact on its current reporting segments. The requirements of this
statement will be adopted effective December 31, 1998.

     In December  1997,  the  Accounting  Standards  Executive  Committee of the
American Institute of Certified Public Accountants ("AICPA") issued Statement of
Position  ("SOP")  97-3,  "Accounting  by Insurance  and Other  Enterprises  for
Insurance-Related  Assessments."  The SOP provides  guidance  concerning when to
recognize  a  liability  for   insurance-related   assessments   and  how  those
liabilities  should be  measured.  Specifically,  insurance-related  assessments
should be recognized as liabilities when all of the following criteria have been
met: 1) an assessment has been imposed or it is probable that an assessment will
be imposed,  2) the event obligating an entity to pay an assessment has occurred
and  3)  the  amount  of  the  assessment  can  be  reasonably  estimated.   The
requirements  of this  standard  are  expected to be adopted in 1999 and are not
expected to have a material  impact on the results of operations,  cash flows or
financial position of the Company.


FORWARD-LOOKING STATEMENTS

     The statements contained in this Management's  Discussion and Analysis that
are not historical information are forward-looking  statements that are based on
management's  estimates,  assumptions and  projections.  The Private  Securities
Litigation Reform Act of 1995 provides a safe harbor under The Securities Act of
1933 and The Securities Exchange Act of 1934 for forward-looking statements.


                                      -13-
<PAGE>


                      PART II - OTHER INFORMATION



Item 1.  LEGAL PROCEEDINGS

     The  Company  and  its  Board  of  Directors  know  of  no  material  legal
     proceedings  pending  to  which  the  Company  is a party  or  which  would
     materially  affect the  Company.  The  Company is  involved  in pending and
     threatened  litigation in the normal course of its business in which claims
     for monetary  damages are asserted.  Management,  after  consultation  with
     legal counsel, does not anticipate the ultimate liability arising from such
     pending or threatened litigation to have a material effect on the financial
     condition of the Company.


Item 5.  OTHER INFORMATION

         Not applicable.


Item 6. EXHIBITS AND REPORTS ON FORM 8-K

  (a) Exhibits required by Item 601 of Regulation S-K

      (2)    None
      (3)(i) Articles of Incorporation*
        (ii) By-laws*
      (4)    Allstate Life Insurance Company of New York Single Premium Deferred
             Annuity  Contract**  Allstate  Life  Insurance  Company of New York
             Flexible Premium Deferred Annuity Contract*
     (10) None (11) None (15) None (18) None (19) None (22) None
     (23)(a) Consent of Independent Public Accountants***
         (b) Consent of Attorneys****
     (24)    None
     (27)    Financial Data Schedule
     (99)    None

 (b) Reports on 8-K

            No reports on Form 8-K were filed during the first quarter of 1998.


* Previously  filed in Form N-4  Registration  Statement No. 33-65381 dated June
28, 1996 and incorporated by reference.

** Previously filed in Form S-1 Registration Statement No. 33-47245 dated May 4,
1995 and incorporated by reference.

*** Previously filed in Form S-1  Registration  Statement No. 33-47245 dated May
1, 1997 and Form S-1 Registration Statement No. 33-65355 dated April 1, 1997 and
incorporated by reference.

****  Previously  filed  Form S-1  Registration  Statement  No.  33-47245  dated
November  13,  1992  abd  Form  S-1  Registration  Statement  No.33-65355  dated
September 20,1996 and incorporated by reference.


                                      -14-
<PAGE>


                              SIGNATURES



Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized, on the 14th day of May 1998.



                           ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
                           -------------------------------------------
                                  (Registrant)






/s/ LOUIS G. LOWER, II               CHAIRMAN OF THE BOARD OF DIRECTORS
------------------------               AND CHIEF EXECUTIVE OFFICER
 LOUIS G. LOWER, II                  (Principal Executive Officer)



/s/ KEITH A. HAUSCHILDT              ASSISTANT VICE PRESIDENT AND CONTROLLER
------------------------              (Chief Accounting Officer)
 KEITH A. HAUSCHILDT





                                      -15-