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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 JUNE 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

Former
address:One Allstate Drive, Farmingville, New York 11738

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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 July 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
June 30, 2003

|PART I  |  | FINANCIAL INFORMATION                                                                                                 |  |   
|------- |  | --------------------------------------------------------------------------------------------------------------------- |  | --
|Item 1. |  | Financial Statements                                                                                                  |  |   
|        |  | Condensed Statements of Operations for the Three-Month and Six-Month Periods Ended June 30, 2003 and 2002 (unaudited) |  | 1 
|        |  | Condensed Statements of Financial Position as of June 30, 2003 (unaudited) and December 31, 2002                      |  | 2 
|        |  | Condensed Statements of Cash Flows for the Six-Month Periods Ended June 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                                                                                               |  | 19
|PART II |  | OTHER INFORMATION                                                                                                     |  |   
|Item 1. |  | Legal Proceedings                                                                                                     |  | 20
|Item 6. |  | Exhibits and Reports on Form 8-K                                                                                      |  | 20

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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
June 30, |        | Six Months Ended
June 30, |  
|------------------------------------------------ | ------------------------------------------------- | --------------------------- | ------ | ------------------------- | -
|
|
|Revenues                                         |                                                   |                             |        |                           |  
|                                                 | Premiums                                          |                             | $      | 13,934                    |  
|                                                 | Contract charges                                  |                             |        | 13,682                    |  
|                                                 | Net investment income                             |                             |        | 64,723                    |  
|                                                 | Realized capital gains and losses                 |                             |        | 841                       |  
|                                                 |                                                   |                             |        |                           |  
|                                                 |                                                   |                             | 93,180 |                           |  
|                                                 |                                                   |                             |        |                           |  
|Costs and expenses                               |                                                   |                             |        |                           |  
|                                                 | Contract benefits                                 |                             |        | 43,046                    |  
|                                                 | Interest credited to contractholder funds         |                             |        | 27,277                    |  
|                                                 | Amortization of deferred policy acquisition costs |                             |        | 9,453                     |  
|                                                 | Operating costs and expenses                      |                             |        | 5,610                     |  
|                                                 |                                                   |                             |        |                           |  
|                                                 |                                                   |                             | 85,386 |                           |  
|                                                 |                                                   |                             |        |                           |  
|Income from operations before income tax expense |                                                   |                             | 7,794  |                           |  
|Income tax expense                               |                                                   |                             | 2,706  |                           |  
|                                                 |                                                   |                             |        |                           |  
|Net income                                       |                                                   | $                           | 5,088  |                           | $
|                                                 |                                                   |                             |        |                           |  

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)                                  |                                                                                   | June 30,
2003                                |           | December 31,
2002
|---------------------------------------------------------------------- | --------------------------------------------------------------------------------- | -------------------------------------------- | --------- | -----------------
|
|Assets                                                                 |                                                                                   |                                              |           |                  
|Investments                                                            |                                                                                   |                                              |           |                  
|                                                                       | Fixed income securities, at fair value (amortized cost $3,629,438 and $3,283,274) |                                              | $         | 4,268,701        
|                                                                       | Mortgage loans                                                                    |                                              |           | 362,435          
|                                                                       | Short-term                                                                        |                                              |           | 126,683          
|                                                                       | Policy loans                                                                      |                                              |           | 33,494           
|                                                                       |                                                                                   |                                              |           |                  
|                                                                       |                                                                                   | Total investments                            |           |                  
|Cash                                                                   |                                                                                   |                                              | 9,615     |                  
|Deferred policy acquisition costs                                      |                                                                                   |                                              | 147,999   |                  
|Accrued investment income                                              |                                                                                   |                                              | 44,547    |                  
|Reinsurance recoverables                                               |                                                                                   |                                              | 2,388     |                  
|Current income taxes receivable                                        |                                                                                   |                                              |          |                  
|Other assets                                                           |                                                                                   |                                              | 21,257    |                  
|Separate Accounts                                                      |                                                                                   |                                              | 575,684   |                  
|                                                                       |                                                                                   |                                              |           |                  
|                                                                       |                                                                                   | Total assets                                 |           | $                
|                                                                       |                                                                                   |                                              |           |                  
|Liabilities                                                            |                                                                                   |                                              |           |                  
|Contractholder funds                                                   |                                                                                   | $                                            | 2,407,026 |                  
|Reserve for life-contingent contract benefits                          |                                                                                   |                                              | 1,687,481 |                  
|Current income taxes payable                                           |                                                                                   |                                              | 459       |                  
|Deferred income taxes                                                  |                                                                                   |                                              | 106,893   |                  
|Other liabilities and accrued expenses                                 |                                                                                   |                                              | 220,752   |                  
|Payable to affiliates, net                                             |                                                                                   |                                              | 6,030     |                  
|Reinsurance payable to parent                                          |                                                                                   |                                              | 1,138     |                  
|Separate Accounts                                                      |                                                                                   |                                              | 575,684   |                  
|                                                                       |                                                                                   |                                              |           |                  
|                                                                       |                                                                                   | Total liabilities                            |           |                  
|                                                                       |                                                                                   |                                              |           |                  
|Commitments and Contingent Liabilities (Note 3)                        |                                                                                   |                                              |           |                  
|Shareholder's equity                                                   |                                                                                   |                                              |           |                  
|Common stock, $25 par value, 100,000 shares authorized and outstanding |                                                                                   |                                              | 2,500     |                  
|Additional capital paid-in                                             |                                                                                   |                                              | 55,787    |                  
|Retained income                                                        |                                                                                   |                                              | 326,628   |                  
|Accumulated other comprehensive income:                                |                                                                                   |                                              |           |                  
|                                                                       | Unrealized net capital gains and losses                                           |                                              |           | 202,425          
|                                                                       |                                                                                   |                                              |           |                  
|                                                                       |                                                                                   | 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

|                                     |                                                                                   | Six Months Ended June 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                                                       |                                           |                                              
|                                     |                                                                                   |                                           |                                              
|                                     |                                                                                   |                                           |                                              
|                                     |                                                                                   |                                           |                                              
|Cash flows from financing activities |                                                                                   |                                           |                                              
|                                     | Contractholder fund deposits                                                      |                                           |                                              
|                                     | Contractholder fund withdrawals                                                   |                                           |                                              
|                                     |                                                                                   |                                           |                                              
|                                     |                                                                                   |                                           |                                              
|                                     |                                                                                   |                                           |                                              
|Net decrease in cash                 |                                                                                   |                                           | (12,071                                      
|Cash at beginning of period          |                                                                                   |                                           | 21,686                                       
|                                     |                                                                                   |                                           |                                              
|Cash at end of period                |                                                                                   | $                                         | 9,615                                        
|                                     |                                                                                   |                                           |                                              

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 June 30, 2003, and for the three-month and six-month periods ended June 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 thousand for the six months ended
June 30, 2002. There were no non-cash investment exchanges and modifications for the six months ended June 30, 2003.

Pending accounting standards

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". The statement applies
only to certain derivative contracts and embedded derivatives entered into after June 30, 2003. The impact of adopting the provisions of the statement will not be material to the Company's
Condensed Statements of Operations or Financial Position.

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 applies to several of the Company's insurance
products and product features. The effective date of the SOP is for fiscal years beginning after December 15, 2003, with earlier adoption encouraged. If adopted early, the provisions of the SOP
must be applied as of the beginning of the fiscal year. Accordingly, if the SOP were adopted during an interim period of 2003, prior interim periods would be restated. A provision of the SOP 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. These
liabilities are not currently recognized by the Company, and their establishment may have a material impact on the Condensed Statements of Operations depending on the market conditions at the time of
adoption, but is not expected to have a material impact on the Company's Condensed Statements of Financial Position.

4

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Proposed standard

The Emerging Issues Task Force ("EITF") issued 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
its most 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. It 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
June 30,                       |        | Six months ended
June 30, |       
|----------------------------- | ------------- | ------------------------------------------------- | ------ | ------------------------- | ------
|
|Premiums and contract charges |               |                                                   |        |                           |       
|Direct                        |               | $                                                 | 29,565 |                           | $     
|Assumednon-affiliate         |               |                                                   | 64     |                           |       
|Ceded                         |               |                                                   |        |                           |       
|                              | Affiliate     |                                                   |        | (1,142                    | )     
|                              | Non-affiliate |                                                   |        | (871                      | )     
|                              |               |                                                   |        |                           |       
|                              |               | Premiums and contract charges, net of reinsurance |        | $                         | 27,616
|                              |               |                                                   |        |                           |       

5

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The
effects of reinsurance on contract benefits are as follows:

|                      |               | Three months ended
June 30,           |        | Six months ended
June 30, |       
|--------------------- | ------------- | ------------------------------------- | ------ | ------------------------- | ------
|
|Contract benefits     |               |                                       |        |                           |       
|Direct                |               | $                                     | 44,189 |                           | $     
|Assumednon-affiliate |               |                                       | 28     |                           |       
|Ceded                 |               |                                       |        |                           |       
|                      | Affiliate     |                                       |        | (45                       | )     
|                      | Non-affiliate |                                       |        | (1,126                    | )     
|                      |               |                                       |        |                           |       
|                      |               | Contract benefits, net of reinsurance |        | $                         | 43,046
|                      |               |                                       |        |                           |       

Excluded
from the table above are premiums ceded to ALIC of $633 thousand, $596 thousand, $1.3 million and $1.2 million for the three and six month periods
ended June 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 Statement 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
insurance products which 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. Examples of these lawsuits include a number of putative class actions 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
example 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

6

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

|                                      |                                                             | Six months ended June 30,
|------------------------------------- | ----------------------------------------------------------- | -------------------------
|
|
|Unrealized capital gains and losses   |                                                             |                          
|                                      | Unrealized holding gains (losses) arising during the period |                          
|                                      | Less: reclassification adjustments                          |                          
|                                      |                                                             |                          
|Unrealized net capital gains (losses) |                                                             |                          
|                                      |                                                             |                          
|Other comprehensive income (loss)     |                                                             | $                        
|                                      |                                                             |                          
|Net income                            |                                                             |                          
|                                      |                                                             |                          
|Comprehensive income                  |                                                             |                          
|                                      |                                                             |                          

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 June 30, 2003, and the related condensed statements of operations for the three-month and six-month periods ended June 30, 2003 and 2002 and the
condensed statements of cash flows for the six-month periods ended June 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
August 14, 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 SIX-MONTH PERIODS ENDED  JUNE 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 and key operating measures are presented in the following table.

|                                                |  | Three Months Ended
June 30, |           | Six Months Ended
June 30, |  
|----------------------------------------------- |  | --------------------------- | --------- | ------------------------- | -
|
|Premiums                                        |  | $                           | 13,934    |                           | $
|Contract charges                                |  |                             | 13,682    |                           |  
|Net investment income                           |  |                             | 64,723    |                           |  
|Contract benefits                               |  |                             | 43,046    |                           |  
|Interest credited to contractholder funds       |  |                             | 27,277    |                           |  
|Amortization of DAC                             |  |                             | 8,246     |                           |  
|Operating costs and expenses                    |  |                             | 5,610     |                           |  
|Income tax expense                              |  |                             | 2,838     |                           |  
|Realized capital gains and losses, after-tax(1) |  |                             | (234      | )                         |  
|                                                |  |                             |           |                           |  
|Net income                                      |  | $                           | 5,088     |                           | $
|                                                |  |                             |           |                           |  
|Investments                                     |  | $                           | 4,791,313 |                           | $
|Separate Accounts assets                        |  |                             | 575,684   |                           |  
|                                                |  |                             |           |                           |  
|Investments, including Separate Accounts assets |  | $                           | 5,366,997 |                           | $
|                                                |  |                             |           |                           |  

---

REVENUES

|                                  |  | Three Months Ended
June 30, |        | Six Months Ended
June 30, |  
|--------------------------------- |  | --------------------------- | ------ | ------------------------- | -
|
|Premiums                          |  | $                           | 13,934 |                           | $
|Contract charges                  |  |                             | 13,682 |                           |  
|Net investment income             |  |                             | 64,723 |                           |  
|Realized capital gains and losses |  |                             | 841    |                           |  
|                                  |  |                             |        |                           |  
|Total revenues                    |  | $                           | 93,180 |                           | $
|                                  |  |                             |        |                           |  

Total
revenues decreased 7.4% in the second quarter of 2003 compared to the second quarter of 2002. The decrease was due to decreased Premiums partly offset by increased
Net investment income. Total revenues decreased 3.3% in the first six months of 2003 compared to the first six months of 2002.

10

---

The
decrease was due to decreased Premiums and increased net realized capital losses partially offset by increased Net investment income and increased Contract charges.

OPERATIONS

Premiums, included in the Condensed Statements of Operations, represent premiums generated from traditional life
and other insurance products and immediate annuities with life contingencies which 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 the contractholder account balance for maintenance, administration,
cost of insurance and surrender prior to contractually specified dates.

The
following table summarizes Premiums and Contract charges.

|                 |                                                                | Three Months Ended
June 30, |                        | Six Months Ended
June 30,    
|---------------- | -------------------------------------------------------------- | --------------------------- | ---------------------- | -----------------------------
|
|Premiums         |                                                                |                             |                        |                              
|Life insurance   |                                                                |                             |                        |                              
|                 | Traditional life                                               |                             | $                      | 5,630                        
|                 | Other                                                          |                             |                        | 2,074                        
|                 |                                                                |                             |                        |                              
|                 |                                                                |                             | Total life insurance   |                              
|Annuities        |                                                                |                             |                        |                              
|                 | Fixed annuitiesimmediate annuities with life contingencies    |                             |                        | 6,230                        
|                 |                                                                |                             |                        |                              
|                 |                                                                | Total annuities             |                        |                              
|                 |                                                                |                             |                        |                              
|                 |                                                                |                             | Total Premiums         |                              
|Contract charges |                                                                |                             |                        |                              
|Life insurance   |                                                                |                             |                        |                              
|                 | Interest-sensitive life                                        |                             |                        | 9,957                        
|                 |                                                                |                             |                        |                              
|                 |                                                                | Total life insurance        |                        |                              
|Annuities        |                                                                |                             |                        |                              
|                 | Fixed annuitiesdeferred                                       |                             |                        | 474                          
|                 | Fixed annuitiesimmediate annuities without life contingencies |                             |                        | 916                          
|                 | Variable annuities                                             |                             |                        | 2,335                        
|                 |                                                                |                             |                        |                              
|                 |                                                                | Total annuities             |                        |                              
|                 |                                                                |                             |                        |                              
|                 |                                                                |                             | Total Contract charges |                              
|                 |                                                                |                             |                        |                              
|                 |                                                                |                             |                        | Premiums and Contract charges
|                 |                                                                |                             |                        |                              

Total
Premiums decreased 54.8% to $13.9 million in the second quarter of 2003 from $30.8 million in the second quarter of 2002, due primarily to reduced
sales of immediate annuities with life contingencies. The decline in sales of immediate annuities with life contingencies is due to consumer preference and market and competitive conditions that drive
the level and mix of immediate annuities sold with or without life contingencies.

Total
Contract charges were $13.7 million in the second quarter of 2003 compared to $12.3 million in the second quarter of 2002. Higher interest-sensitive life insurance
and fixed annuity contract charges offset a decline in variable annuities. Variable annuity average account values during the second quarter of 2003 were lower than the average account values during
the second quarter of 2002, as poor equity

11

---

market
performance during the prior year and surrenders offset increases from new business and market appreciation during the first six months of 2003.

For
the first six months of 2003, Premiums and Contract charges decreased 27.5% compared to the first six months of 2002. The decrease is due to decreased sales of immediate annuities
with life contingencies partially offset by increased sales of traditional life insurance, and higher contract charges related to interest-sensitive life insurance and fixed annuities.

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

|                 |                                                                      | Three Months Ended
June 30, |                               | Six Months Ended
June 30,
|---------------- | -------------------------------------------------------------------- | --------------------------- | ----------------------------- | -------------------------
|
|Premiums         |                                                                      |                             |                               |                          
|                 | Allstate agencies                                                    |                             | $                             | 5,545                    
|                 | Financial services firms (financial institutions and broker/dealers) |                             |                               | 34                       
|                 | Specialized brokers                                                  |                             |                               | 6,230                    
|                 | Independent agents                                                   |                             |                               | 380                      
|                 | Direct marketing                                                     |                             |                               | 1,745                    
|                 |                                                                      |                             |                               |                          
|                 |                                                                      |                             | Total Premiums                |                          
|Contract charges |                                                                      |                             |                               |                          
|                 | Allstate agencies                                                    |                             |                               | 10,152                   
|                 | Financial services firms (financial institutions and broker/dealers) |                             |                               | 2,577                    
|                 | Specialized brokers                                                  |                             |                               | 916                      
|                 | Independent agents                                                   |                             |                               | 37                       
|                 |                                                                      |                             |                               |                          
|                 |                                                                      |                             | Total Contract charges        |                          
|                 |                                                                      |                             |                               |                          
|                 |                                                                      |                             | Premiums and Contract charges |                          
|                 |                                                                      |                             |                               |                          

Policy and contractholder obligations, included on the Condensed Statements of Financial Position, reflect the trends in
the Company's product deposits and sales of insurance products. The following table shows the balances of these obligations.

|(in thousands)                                |  | June 30,
2003 |           | December 31,
2002 |   | June 30,
2002 |  | December 31,
2001
|--------------------------------------------- |  | ------------- | --------- | ----------------- | - | ------------- |  | -----------------
|Contractholder funds                          |  | $             | 2,407,026 |                   | $ | 2,051,429     |  | $                
|Reserve for life-contingent contract benefits |  |               | 1,687,481 |                   |   | 1,556,627     |  |                  
|Separate Accounts                             |  |               | 575,684   |                   |   | 537,204       |  |                  

The
following table shows changes in these obligations.

|                                              |  | Change from March 31
to June 30, |         | Change from prior
year-end to June 30, |  
|--------------------------------------------- |  | -------------------------------- | ------- | -------------------------------------- | -
|
|Contractholder funds                          |  | $                                | 217,196 |                                        | $
|Reserve for life-contingent contract benefits |  |                                  | 101,800 |                                        |  
|Separate Accounts                             |  |                                  | 60,262  |                                        |  

Contractholder
funds increased at a higher rate in the second quarter of 2003 and the first six months of 2003 compared to the same periods in the prior year primarily
due to higher fixed annuity deposits. The increase in Contractholder funds due to fixed annuities reflects deposits and interest credited to contracts, partially offset by surrenders and maturities of
in-force contracts during both periods. Fixed annuities include the Allstate® Treasury-Linked Annuity which was introduced in the

12

---

third
quarter of 2002, resulting in all 2003 deposits being incremental to those received in the prior year. Allstate® Treasury-Linked Annuity deposits were $27.8 million and
$28.6 million in the first and second quarters of 2003, respectively.

Reserve
for life-contingent contract benefits increased at a higher rate in the second quarter of 2003 and the first six months of 2003 compared to the same periods in the
prior year primarily due to new sales of immediate annuities with life contingencies and reserve increases resulting from aging of the in-force business, partially offset by benefit
payments.

Separate
Accounts increased in the second quarter of 2003 and in the first six months of 2003 after declining in the comparable periods last year. These increases were due to favorable
equity market performance partially offset by declines in new deposits.

Net investment incomeincreased 14.8% in the second quarter and 15.6% in the first six months of 2003, compared to the same periods last
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
portfolio balance as of June 30, 2003, excluding assets invested in Separate Accounts and unrealized net capital gains on fixed income securities, increased 25.1% from June 30, 2002.
Lower portfolio yields result when new investments are made at rates lower than the current portfolio yields reflecting the low interest rate environment.

Analysis of net incomeis presented in the following table.

|                                             |  | Three Months Ended
June 30, |        | Six Months Ended
June 30, |  
|-------------------------------------------- |  | --------------------------- | ------ | ------------------------- | -
|
|Investment margin                            |  | $                           | 15,393 |                           | $
|Mortality margin                             |  |                             | 279    |                           |  
|Maintenance charges                          |  |                             | 5,170  |                           |  
|Surrender charges                            |  |                             | 1,174  |                           |  
|Amortization of DAC                          |  |                             | (8,246 | )                         |  
|Operating costs and expenses                 |  |                             | (5,610 | )                         |  
|Income tax expense                           |  |                             | (2,838 | )                         |  
|Realized capital gains and losses, after-tax |  |                             | (234   | )                         |  
|                                             |  |                             |        |                           |  
|Net income                                   |  | $                           | 5,088  |                           | $
|                                             |  |                             |        |                           |  

Investment margin,which represents the excess of investment income earned over interest credited to policyholders and
contractholders, increased 25.0% in the second quarter of 2003 compared to the same period in 2002 and increased 25.1% in the first six months of 2003 compared to the first six months of 2002. For
both periods, the increase in the investment margin was due to an increase in invested assets from the 2002 level. Invested assets, excluding assets invested in Separate Accounts and unrealized net
capital gains on fixed income securities, grew 25.1% from June 30, 2002. The higher portfolio balance at June 30, 2003 is a result of product sales and deposits exceeding contract
benefits, maturities, surrenders and withdrawals during the previous 12 months and significantly more variable annuity deposits being invested by contractholders in the general account fixed
rate fund. The impact from the portfolio growth was partially offset by a decline in portfolio yields from lower market interest rates affecting the yields on new investments. Management actions to
reduce crediting rates on in-force contracts with discretionary crediting rates have partially offset the decline in the Company's investment portfolio yield. These actions, however, have
not been sufficient to offset the overall portfolio yield decline as crediting rates on certain of the Company's products cannot be adjusted and reductions in the yield on assets supporting the
Company's capital, immediate annuities, traditional life and other products directly impact investment margin.

13

---



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

|                                                                    |  | Weighted Average
Investment Yield |   | Weighted Average
Interest Crediting Rate |   | Weighted Average
Investment Spread |  
|------------------------------------------------------------------- |  | --------------------------------- | - | ---------------------------------------- | - | ---------------------------------- | -
|
|Interest-sensitive life                                             |  | 6.4                               | % | 6.9                                      | % | 5.0                                | %
|Fixed annuitiesdeferred                                            |  | 6.1                               |   | 7.0                                      |   | 3.9                                |  
|Fixed annuitiesimmediate                                           |  | 7.7                               |   | 8.0                                      |   | 6.9                                |  
|Investments supporting capital, traditional life and other products |  | 4.8                               |   | 5.9                                      |   | N/A                                |  

The
following table summarizes the annualized weighted average investment yield, interest crediting rates and investment spreads for the six months ended June 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                                            |  | 6.2                               |   | 6.9                                      |   | 4.0                                |  
|Fixed annuitiesimmediate                                           |  | 7.7                               |   | 8.0                                      |   | 6.9                                |  
|Investments supporting capital, traditional life and other products |  | 4.7                               |   | 6.0                                      |   | N/A                                |  

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 June 30.

|(in thousands)                                                               |  | 2003 |           | 2002
|---------------------------------------------------------------------------- |  | ---- | --------- | ----
|Interest-sensitive life                                                      |  | $    | 284,778   |     
|Fixed annuitiesdeferred                                                     |  |      | 1,651,308 |     
|Fixed annuitiesimmediate                                                    |  |      | 1,808,396 |     
|                                                                             |  |      |           |     
|                                                                             |  |      | 3,744,482 |     
|FAS 115/133 market value adjustment                                          |  |      | 250,610   |     
|Life-contingent contracts and other                                          |  |      | 99,415    |     
|                                                                             |  |      |           |     
|Total Contractholder funds and Reserve for life-contingent contract benefits |  | $    | 4,094,507 |     
|                                                                             |  |      |           |     

The
following table summarizes investment margin by product group.

|                  |  | Three Months Ended
June 30, |        | Six Months Ended
June 30,
|----------------- |  | --------------------------- | ------ | -------------------------
|
|Life insurance    |  | $                           | 2,226  |                          
|Annuities         |  |                             | 13,167 |                          
|                  |  |                             |        |                          
|Investment margin |  | $                           | 15,393 |                          
|                  |  |                             |        |                          

Mortality margin, which represents premiums and cost of insurance charges less related policy benefits, was $0.3 million or 97.3%
lower in the second quarter of 2003 compared to the second quarter of 2002. The decrease in mortality margin is primarily due to the strengthening of reserves for

14

---

certain
traditional life insurance policies and lower death claims on immediate annuities with life contingencies, partially offset by growth from new business. Variable annuity guaranteed minimum
death benefits ("GMDB") payments of $0.8 million in the second quarter of 2003 increased $0.3 million compared to the same period in 2002 and decreased $0.4 million compared to
the first quarter of 2003.

For
the first six months of 2003, mortality margin was $8.6 million or 58.2% below the first six months of 2002. The decline reflects the same factors that contributed to the
decrease in the second quarter of 2003. Also contributing to the decline was the favorable mortality margin in the first half of 2002 from higher death claims on immediate annuities with life
contingencies and the recognition of reinsurance recoverables arising from the tragic events of September 11, 2001. The GMDB payments in the first six
months of 2003 were $2.0 million compared to $1.3 million in the first six months of 2002. The increase in GMDB payments reflects poor equity market performance since June 30,
2002.

The
following table summarizes mortality margin by product group.

|                 |  | Three Months Ended
June 30, |        | Six Months Ended
June 30,
|---------------- |  | --------------------------- | ------ | -------------------------
|
|Life insurance   |  | $                           | 1,743  |                          
|Annuities        |  |                             | (1,463 | )                        
|                 |  |                             |        |                          
|Mortality margin |  | $                           | 280    |                          
|                 |  |                             |        |                          

Amortization of DACincreased 57.3% in the second quarter of 2003 compared to the same period in 2002 and 106.0% in the first six months
of 2003 compared to the first six months of 2002. DAC amortization has increased in proportion to the growth in fixed and variable annuity investment margins. Variable annuity investment margin has
grown as a significant portion of deposits on variable annuities during the prior twelve-month period has been invested in the general account fixed rate fund by the contractholders. While these funds
are invested in the general account by the contractholders, the Company earns investment margin rather than collecting contract charges.

Operating costs and expensesdecreased 33.0% during the second quarter of 2003 compared to the second quarter of 2002 and decreased 17.2%
during the first six months of 2003 compared to the same period of 2002. Reduced non-deferrable sales expenses and reinsurance costs offset an increase in advertising and employee expenses related to
pension and other benefit costs.

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
June 30, |        | Six Months Ended
June 30, |  
|-------------------------------------------------- |  | --------------------------- | ------ | ------------------------- | -
|
|Investment write-downs                             |  | $                           | (1,672 | )                         | $
|Sales of fixed income securities                   |  |                             | 1,527  |                           |  
|Valuation of derivative instruments                |  |                             | (396   | )                         |  
|Settlement of derivative instruments               |  |                             | 1,382  |                           |  
|                                                   |  |                             |        |                           |  
|Realized capital gains and losses, pretax          |  |                             | 841    |                           |  
|Reclassification of Amortization of DAC            |  |                             | (1,207 | )                         |  
|Income tax benefit (expense)                       |  |                             | 132    |                           |  
|                                                   |  |                             |        |                           |  
|Total realized capital gains and losses, after-tax |  | $                           | (234   | )                         | $
|                                                   |  |                             |        |                           |  

15

---

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

INVESTMENTS

The composition of the investment portfolio at June 30, 2003 is presented in the table below.

|(in thousands)             |       | Investments |           | Percent
of total |     
|-------------------------- | ----- | ----------- | --------- | ---------------- | ----
|Fixed income securities(1) |       | $           | 4,268,701 |                  | 89.1
|Mortgage loans             |       |             | 362,435   |                  | 7.6 
|Short-term                 |       |             | 126,683   |                  | 2.6 
|Policy loans               |       |             | 33,494    |                  | 0.7 
|                           |       |             |           |                  |     
|                           | Total |             | $         | 4,791,313        |     
|                           |       |             |           |                  |     

---

Total
investments increased to $4.79 billion at June 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 $174.0 million at June 30, 2003 from $160.0 million at December 31,
2002.

The
Unrealized net capital gains on fixed income securities at June 30, 2003 were $639.3 million, an increase of $186.2 million or 41.1% since December 31,
2002. The net unrealized gain for the fixed income portfolio totaled $639.3 million, comprised of $649.2 million of unrealized gains and $9.9 million of unrealized losses at
June 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 June 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 $304.6 million comprised of $313.5 million of unrealized gains and $8.9 million of unrealized losses. The unrealized losses for the
corporate fixed income portfolio were concentrated in the transportation and public utilities sectors. These sectors comprised $6.3 million or 71.3% of the unrealized losses and
$101.6 million or 32.4%, of the unrealized gains in the corporate fixed income portfolio.

Approximately
95.7% 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

16

---

the
contractual terms of the security, which causes management to believe these securities may be classified as problem or restructured in the future.

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

|(in thousands)                    |  | June 30, 2003 |        | December 31, 2002 |  
|--------------------------------- |  | ------------- | ------ | ----------------- | -
|
|Problem                           |  | $             | 21,924 |                   | $
|Restructured                      |  |               | 5,907  |                   |  
|Potential problem                 |  |               | 24,745 |                   |  
|                                  |  |               |        |                   |  
|Total net carrying value          |  | $             | 52,576 |                   | $
|                                  |  |               |        |                   |  
|Cumulative write-downs recognized |  | $             | 18,285 |                   |  
|                                  |  |               |        |                   |  

As
of June 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 as well as poor operating fundamentals and liquidity constraints in the transportation sector of the market in 2003. The Company
expects the eventual recovery of these securities but evaluated each security through its watch list process at June 30, 2003 and recorded write-downs where appropriate. Approximately
$2.9 million of net unrealized losses at June 30, 2003 are related to securities that the Company has included in the problem, restructured or potential problem categories. These
securities represent 1.1% of the fixed income portfolio. The Company concluded, through its watch list monitoring process, that these unrealized losses were temporary in nature. While it is possible
for these balances to increase in the future if economic conditions continue to be unfavorable, the total amount of securities in these categories is expected to 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 second quarter and first six 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.

CAPITAL RESOURCES AND LIQUIDITY

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

|(in thousands)                                                       |                            | June 30,
2003 |         | December 31,
2002
|-------------------------------------------------------------------- | -------------------------- | ------------- | ------- | -----------------
|Common stock, retained earnings and other shareholder's equity items |                            | $             | 384,915 |                  
|Accumulated other comprehensive income                               |                            |               | 202,425 |                  
|                                                                     |                            |               |         |                  
|                                                                     | Total shareholder's equity |               | $       | 587,340          
|                                                                     |                            |               |         |                  

Shareholder's equityincreased $43.5 million in the first half of 2003 when compared to December 31, 2002 due to an increase
of $32.8 million in Accumulated other comprehensive income and to Net income of $10.7 million.

17

---

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 ALIC and AIC remain
unchanged. In reaffirming the A+ ratings of ALIC and AIC, A.M. Best assigned a positive rating outlook for these companies' ratings

Liquidity

The 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 June 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 discretionary surrender and withdrawal
by contractholders. The total amount of surrenders and withdrawals for the three-month and six-month periods ended June 30, 2003 were $40.8 million and $82.3 million,
net of surrender charges, compared to $33.8 million and $82.3 million for the same periods last year. The total amount of surrenders and withdrawals for the first six months of 2003
represented 2.0% of the Reserve for life-contingent contract benefits and Contractholder funds balance at June 30, 2003, compared to 2.7% in the first six 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 June 30, 2003 or December 31, 2002.

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" in Part II Item 7 of the Company's Form 10-K filed on March 28, 2003.



18

---



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.

19

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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





20

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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)
|--------------- | --------------------------------------------------------
|August 14, 2003 | By                                                      

21

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|Exhibit No. |  | Description                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|----------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3(i)(A)     |  | Certificate of Amendment of the Restated Certificate of Incorporation of Allstate Life Insurance Company of New York dated November 3, 1995; Certificate of Amendment of the Restated Certificate of Incorporation of PM
Life Insurance Company dated January 27, 1984; Restated Certificate of Incorporation of PM Life Insurance Company dated May 16, 1978. Incorporated herein by reference to Exhibit 3(i) to Allstate Life Insurance Company of New York's
Annual Report on Form 10-K for 1998.
|3(i)(B)     |  | Certificate of Amendment of the Restated Charter of Allstate Life Insurance Company of New York dated December 17, 1999. Incorporated herein by reference to Exhibit 3(i)(A) to Allstate Life Insurance Company of New York's Quarterly Report
on Form 10-Q for quarter ended March 31, 2002.                                                                                                                                                                                                        
|3(i)(C)     |  | Certificate of Amendment of the Restated Certificate of Incorporation of Allstate Life Insurance Company of New York dated May 28, 2003.                                                                                                                                                                                                                                                                                                                                                             
|15          |  | Acknowledgement of awareness from Deloitte & Touche LLP dated August 14, 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 Certification                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

E-1

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