FORM 10-Q

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

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

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

                 For the quarterly period ended: June 30, 1999

                                       OR

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


Commission file number: 33-47245
                        33-65355



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


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

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

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

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

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

Yes../X/..      No


     Indicate  the  number of shares of each of the  issuer's  classes of common
stock,  as of June 30, 1999;  there were 80,000  shares of common  capital stock
outstanding,  par value $25 per share all of which  shares are held by  Allstate
Life Insurance Company.

<PAGE>


                         PART I - FINANCIAL INFORMATION


Item  1.   FINANCIAL STATEMENTS

            Statements of Financial Position
            June 30, 1999(Unaudited) and December 31, 1998.................. 3

            Statements of Operations
            Three Months Ended June 30, 1999 and and June 30, 1998 and
            Six Months Ended June 30, 1999 and June 30, 1998 (Unaudited).... 4

            Statements of Cash Flows
            Six Months Ended June 30, 1999 and
                  June 30, 1998 (Unaudited)................................. 5

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

Item  2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF
           FINANCIAL CONDITION AND RESULTS OF OPERATIONS.................... 10

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


                           PART II - OTHER INFORMATION


Item 1.   LEGAL PROCEEDINGS..................................................17

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

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

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

Item 5.   OTHER INFORMATION..................................................17

Item 6.   EXHIBITS AND REPORTS ON FORM 8-K...................................17

SIGNATURE PAGE...............................................................18





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

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


<TABLE>
<CAPTION>
                                                           JUNE 30,     DECEMBER 31,
                                                             1999           1998
                                                         ------------   ------------
($ in thousands)                                          (UNAUDITED)

<S>                                                      <C>            <C>

ASSETS
Investments
   Fixed income securities, at fair value
      (amortized cost $1,742,959 and $1,648,972) .....   $  1,899,368   $  1,966,067
   Mortgage loans ....................................        160,688        145,095
   Short-term ........................................         38,672         76,127
   Policy loans ......................................         30,392         29,620
                                                         ------------   ------------
         Total investments ...........................      2,129,120      2,216,909

Deferred acquisition costs ...........................         95,848         87,830
Accrued investment income ............................         22,485         22,685
Reinsurance recoverables .............................          1,992          2,210
Cash .................................................            700          3,117
Other assets .........................................         12,265          9,887
Separate Accounts ....................................        402,137        366,247
                                                         ------------   ------------
         TOTAL ASSETS ................................   $  2,664,547   $  2,708,885
                                                         ============   ============

LIABILITIES
Reserve for life-contingent contract benefits ........   $  1,137,543   $  1,208,104
Contractholder funds .................................        750,028        703,264
Current income taxes payable .........................         15,705         14,029
Deferred income taxes ................................         12,103         25,449
Other liabilities and accrued expenses ...............         36,453         23,463
Payable to affiliates, net ...........................          1,755         38,835
Separate Accounts ....................................        402,137        366,247
                                                         ------------   ------------
         TOTAL LIABILITIES ...........................      2,355,724      2,379,391
                                                         ------------   ------------

COMMITMENTS AND CONTINGENT LIABILITIES (NOTE 3)

SHAREHOLDER'S EQUITY
Common stock, $25 par value, 80,000 shares
      authorized, issued and outstanding .............          2,000          2,000
Additional capital paid-in ...........................         45,787         45,787
Retained income ......................................        211,351        198,801

Accumulated other comprehensive income:
    Unrealized net capital gains .....................         49,685         82,906
                                                         ------------   ------------
         TOTAL ACCUMULATED OTHER COMPREHENSIVE INCOME          49,685         82,906
                                                         ------------   ------------
         TOTAL SHAREHOLDER'S EQUITY ..................        308,823        329,494
                                                         ------------   ------------
         TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY ..   $  2,664,547   $  2,708,885
                                                         ============   ============


See notes to financial statements.

</TABLE>


                                       3
<PAGE>


                   ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
                            STATEMENTS OF OPERATIONS


<TABLE>
<CAPTION>
                                                      THREE MONTHS ENDED        SIX MONTHS ENDED
                                                           JUNE 30,                  JUNE 30,
                                                    ----------------------   ----------------------
($ in thousands)                                      1999         1998        1999         1998
                                                    ---------    ---------   ---------    ---------
                                                          (UNAUDITED)              (UNAUDITED)
<S>                                                 <C>          <C>         <C>          <C>

REVENUES
Premiums and contract charges (net of reinsurance
    ceded of $1,003 and $908; $2,167 and $1,757)    $  19,334    $  33,001   $  50,585    $  59,672
Net investment income ...........................      36,447       33,691      72,007       66,260
Realized capital gains and losses ...............      (1,101)       2,873        (748)       4,104
                                                    ---------    ---------   ---------    ---------
                                                       54,680       69,565     121,844      130,036
                                                    ---------    ---------   ---------    ---------

COSTS AND EXPENSES
Contract benefits (net of reinsurance recoveries
   of $245 and $143; $782 and $503) .............      37,733       47,561      86,213       88,821
Amortization of deferred acquisition costs ......       2,647        2,120       4,826        4,205
Operating costs and expenses ....................       5,201        6,154      11,342       12,165
                                                    ---------    ---------   ---------    ---------
                                                       45,581       55,835     102,381      105,191
                                                    ---------    ---------   ---------    ---------

INCOME FROM OPERATIONS BEFORE
   INCOME TAX EXPENSE ...........................       9,099       13,730      19,463       24,845
Income tax expense ..............................       3,234        4,884       6,913        8,863
                                                    ---------    ---------   ---------    ---------

NET INCOME ......................................   $   5,865    $   8,846   $  12,550    $  15,982
                                                    =========    =========   =========    =========











See notes to financial statements.

</TABLE>



                                       4
<PAGE>



                   ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
                            STATEMENTS OF CASH FLOWS


<TABLE>
<CAPTION>

                                                                SIX MONTHS ENDED
                                                                    JUNE 30,
                                                           ----------------------------
($ in thousands)                                               1999            1998
                                                           ------------    ------------
                                                                   (UNAUDITED)
<S>                                                        <C>             <C>

CASH FLOWS FROM OPERATING ACTIVITIES
Net income .............................................   $     12,550    $     15,982
Adjustments to reconcile net income to net cash
    provided by operating activities:
       Amortization and other non-cash items ...........        (18,264)        (17,177)
       Realized capital gains and losses ...............            748          (4,104)
       Interest credited to contractholder funds .......         15,107          27,813
       Changes in:
           Reserve for life-contingent contract benefits
               and contractholder funds ................         22,241          23,270
           Deferred acquisition costs ..................         (6,023)         (4,205)
           Accrued investment income ...................            200              84
           Income taxes payable ........................          6,219          14,235
           Other operating assets and liabilities ......           (269)        (15,440)
                                                           ------------    ------------
               Net cash provided by operating activities         32,509          40,458
                                                           ------------    ------------

CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sales of fixed income securities .........         65,333          53,721
Investment collections
       Fixed income securities .........................          6,259          78,609
       Mortgage loans ..................................          3,742           2,824
Investments purchases
       Fixed income securities .........................       (173,670)       (157,249)
       Mortgage loans ..................................        (21,803)        (21,794)
Change in short-term investments, net ..................         39,549         (22,867)
Change in policy loans, net ............................           (772)           (850)
                                                           ------------    ------------
               Net cash used in investing activities ...        (81,362)        (67,606)
                                                           ------------    ------------

CASH FLOWS FROM FINANCING ACTIVITIES
Contractholder fund deposits ...........................         76,906          60,743
Contractholder fund withdrawals ........................        (30,470)        (33,376)
                                                           ------------    ------------
               Net cash provided by financing activities         46,436          27,367
                                                           ------------    ------------

NET INCREASE (DECREASE) IN CASH ........................         (2,417)            219
CASH AT THE BEGINNING OF YEAR ..........................          3,117             393
                                                           ------------    ------------
CASH AT END OF YEAR ....................................   $        700    $        612
                                                           ============    ============



See notes to financial statements.

</TABLE>


                                       5
<PAGE>


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




1.   BASIS OF PRESENTATION

     The accompanying 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").  These  financial  statements  have been
     prepared in conformity with generally accepted accounting principles.

     The  financial  statements  and  notes  as of  June  30,  1999  and for the
     three month  and  six month  periods  ended  June  30,  1999  and  1998 are
     unaudited.  The financial  statements  reflect all adjustments  (consisting
     only of normal recurring accruals) which are, in the opinion of management,
     necessary for the fair presentation of the financial  position,  results of
     operations  and  cash  flows  for  the  interim  periods.  These  financial
     statements  and notes  should  be read in  conjunction  with the  financial
     statements  and notes  thereto  included  in the  Allstate  Life  Insurance
     Company of New York  Annual  Report on Form 10-K for 1998.  The  results of
     operations for the interim  periods should not be considered  indicative of
     results to be expected for the full year.

     Effective  January 1, 1999,  the  Company  adopted  Statement  of  Position
     ("SOP")  97-3,   "Accounting  by  Insurance  and  Other   Enterprises   for
     Insurance-Related  Assessments." The SOP provides guidance  concerning when
     to recognize a liability for  insurance-related  assessments  and how those
     liabilities should be measured. Specifically, insurance-related assessments
     should be recognized as liabilities when all of the following criteria have
     been met:  1) an  assessment  has been  imposed or it is  probable  that an
     assessment  will be imposed,  2) the event  obligating  an entity to pay an
     assessment  has  occurred  and  3) the  amount  of  the  assessment  can be
     reasonably  estimated.  The adoption of this  statement  had an  immaterial
     impact to the Company's results of operations and financial position.

     In July 1999, the Financial Accounting Standards Board ("FASB") delayed the
     effective date of Statement of Financial  Accounting  Standard ("SFAS") No.
     133, "Accounting for Derivative Instruments and Hedging Activities",  which
     replaces existing  pronouncements  and practices with a single,  integrated
     accounting framework for derivatives and hedging activities.  The delay was
     effected  through the issuance of SFAS No. 137, which extends the effective
     date of the SFAS No. 133  requirements to fiscal years beginning after June
     15, 2000. As such,  the Company  plans to adopt the  provisions of SFAS No.
     133 as of  January  1,  2001.  Based  on  existing  interpretations  of the
     requirements  of SFAS No. 133, the impact of adoption is not expected to be
     material to the results of operations or financial position of the Company.

     To conform with the 1999 presentation,  certain amounts in the prior years'
     financial statements and notes have been reclassified.



                                       6
<PAGE>


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


2.   COMPREHENSIVE INCOME

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

<TABLE>
<CAPTION>


                                                                THREE MONTHS ENDED JUNE 30,
                                    --------------------------------------------------------------------
       ($ in thousands)                          1999                                 1998
                                    --------------------------------    --------------------------------
                                                             AFTER-                              AFTER-
                                     PRETAX       TAX         TAX        PRETAX       TAX         TAX
                                    --------    --------    --------    --------    --------    --------
<S>                                 <C>         <C>         <C>         <C>         <C>         <C>

Unrealized capital
   gains and losses:
Unrealized holding (losses) gains
   arising during the period ....   $(76,626)   $ 26,819    $(49,807)   $ 48,364    $(16,928)   $ 31,436
Adjustments to  unrealized
   capital gains and losses
   arising  during the period:
      Deferred acquisition costs       1,800        (629)      1,171        (313)        110        (203)
      Reserves for life insurance
          policy benefits .......     63,192     (22,118)     41,074     (34,575)     12,101     (22,474)
                                    --------    --------    --------    --------    --------    --------

        Net unrealized holding
           (losses) gains arising
           during the period ....    (11,634)      4,072      (7,562)     13,476      (4,717)      8,759

Less:  reclassification
    adjustment for realized
    net capital (losses) gains
    included in net income ......     (1,116)        391        (725)      2,887      (1,011)      1,876
                                    --------    --------    --------    --------    --------    --------

Other comprehensive
    (loss) income ...............   $(10,518)   $  3,681      (6,837)   $ 10,589    $ (3,706)      6,883
                                    ========    ========                ========    ========

Net income ......................                              5,865                               8,846
                                                            --------                            --------
Comprehensive
    (loss) income ...............                           $   (972)                           $ 15,729
                                                            ========                            ========




</TABLE>



                                       7
<PAGE>


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



2.    COMPREHENSIVE INCOME (CONTINUED)

<TABLE>
<CAPTION>


                                                                SIX MONTHS ENDED JUNE 30,
                                    --------------------------------------------------------------------
       ($ in thousands)                          1999                                 1998
                                    --------------------------------    --------------------------------
                                                             AFTER-                              AFTER-
                                     PRETAX       TAX         TAX        PRETAX       TAX         TAX
                                    --------    --------    --------    --------    --------    --------
<S>                                 <C>         <C>         <C>         <C>         <C>         <C>

Unrealized capital
   gains and losses:
Unrealized holding (losses) gains
   arising during the period ....  $(161,448)   $ 56,507   $(104,941)   $ 44,009    $(15,403)   $ 28,606
Adjustments to  unrealized
   capital gains and losses
   arising  during the period:
      Deferred acquisition costs       1,997        (699)      1,298        (110)         38         (72)
      Reserves for life insurance
          policy benefits .......    107,580     (37,653)     69,927     (25,103)      8,786     (16,317)
                                    --------    --------    --------    --------    --------    --------

        Net unrealized holding
           (losses) gains arising
           during the period ....    (51,871)     18,155     (33,716)     18,796      (6,579)     12,217

Less:  reclassification
    adjustment for realized
    net capital (losses) gains
    included in net income ......       (762)        267        (495)      4,168      (1,459)      2,709
                                    --------    --------    --------    --------    --------    --------

Other comprehensive
    (loss) income ...............   $(51,109)   $ 17,888     (33,221)   $ 14,628    $ (5,120)      9,508
                                    ========    ========                ========    ========

Net income ......................                             12,550                              15,982
                                                            --------                            --------
Comprehensive
    (loss) income ...............                           $(20,671)                           $ 25,490
                                                            ========                            ========




</TABLE>



                                       8
<PAGE>



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



3.    COMMITMENTS AND CONTINGENT LIABILITIES

      REGULATION AND LEGAL PROCEEDINGS
      The Company is subject to the effects of a changing  social,  economic and
      regulatory environment.  Public and regulatory initiatives have varied and
      have included employee benefit regulations, removal of barriers preventing
      banks from  engaging in the  securities  and insurance  business,  tax law
      changes affecting the taxation of insurance  companies,  the tax treatment
      of  insurance  products  and its impact on the  relative  desirability  of
      various personal investment vehicles, and proposed legislation to prohibit
      the use of  gender  in  determining  insurance  rates  and  benefits.  The
      ultimate changes and eventual  effects,  if any, of these  initiatives are
      uncertain.

      Various  other legal and  regulatory  actions are  currently  pending that
      involve the Company and specific  aspects of its conduct of  business.  In
      the opinion of management,  the ultimate liability, if any, in one or more
      of these actions in excess of amounts  currently  reserved is not expected
      to have a material  effect on the  results  of  operations,  liquidity  or
      financial position of the Company.



                                       9
<PAGE>
                   ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS


     The following discussion highlights significant factors influencing results
     of operations and changes in financial  position of Allstate Life Insurance
     Company of New York (the "Company").  It should be read in conjunction with
     the financial  statements and related notes thereto found under items 7 and
     8 of Part II of the  Allstate  Life  Insurance  Company of New York  Annual
     Report on Form 10-K for the year ended December 31, 1998.

     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"),
     markets life insurance and savings  products in the State of New York. Life
     Insurance products include traditional life products such as whole life and
     term insurance,  as well as universal  life.  Savings  products  consist of
     fixed  annuity  products,  including  indexed,  market  value  adjusted and
     structured  settlement  annuities,  as  well  as  variable  annuities.  The
     Company's products are distributed through a combination of Allstate agents
     (which include life specialists),  banks, brokers and direct marketing. The
     Company has identified itself as a single segment entity.

     FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>

      ($ in thousands)                        THREE MONTHS ENDED           SIX MONTHS ENDED
                                                  JUNE 30,                     JUNE 30,
                                         --------------------------   --------------------------
                                             1999           1998          1999           1998
                                         -----------    -----------   -----------    -----------
<S>                                      <C>            <C>           <C>            <C>

      Statutory premiums and deposits    $    64,084    $    70,434   $   127,006    $   128,560
                                         ===========    ===========   ===========    ===========

      Investments ....................   $ 2,129,120    $ 2,074,042   $ 2,129,120    $ 2,074,042
      Separate Account assets ........       402,137        346,605       402,137        346,605
                                         -----------    -----------   -----------    -----------
      Investments, including Separate
        Account assets ...............   $ 2,531,257    $ 2,420,647   $ 2,531,257    $ 2,420,647
                                         ===========    ===========   ===========    ===========

      Premium and contract charges ...   $    19,334    $    33,001   $    50,585    $    59,672
      Net investment income ..........        36,447         33,691        72,007         66,260
      Contract benefits ..............        37,733         47,561        86,213         88,821
      Operating costs and expenses ...         7,848          7,862        16,168         15,946
                                         -----------    -----------   -----------    -----------

      Income from operations .........        10,200         11,269        20,211         21,165
      Income tax expense on operations         3,631          4,023         7,187          7,575
                                         -----------    -----------   -----------    -----------
      Operating income ...............         6,569          7,246        13,024         13,590
      Net realized capital losses and
        gains, after-tax (1) .........          (704)         1,600          (474)         2,392
                                         -----------    -----------   -----------    -----------
      Net income .....................   $     5,865    $     8,846   $    12,550    $    15,982
                                         ===========    ===========   ===========    ===========

</TABLE>

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

     Statutory  premiums  and  deposits  include  premiums  and deposits for all
     products.  For the three month  and six month  periods ended June 30, 1999,
     statutory  premiums and  deposits  were $64.1  million and $127.0  million,
     respectively,  compared to $70.4  million  and $128.6  million for the same
     periods in 1998.  For both periods ended June 30, 1999,  increases in sales
     of fixed and variable  annuities and life products were more than offset by
     lower structured settlement annuity sales.


                                       10
<PAGE>


                   ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS


      Under generally accepted accounting principles ("GAAP"),  revenues exclude
      deposits  on  most  annuity  contracts  and  premiums  on  universal  life
      insurance policies, and will vary with the mix of business sold during the
      period. For the second quarter of 1999 and the first half of 1999 premiums
      and  contract  charges  under GAAP were $19.3  million and $50.6  million,
      respectively,  compared to $33.0  million  and $59.7  million for the same
      periods  last  year.  Increases,  primarily  in  universal  life  contract
      charges,   were  more  than  offset  by  lower  premiums  from  structured
      settlement  annuities with life contingencies for both periods.  The lower
      sales of structured settlement annuities with life contingencies similarly
      impacted the reserve for life  contingent  contracts  reported in contract
      benefits.

      Pretax net investment  income increased 8.2% in the second quarter of 1999
      and 8.7% in the first half of 1999  compared  with the same  periods  last
      year  as  higher  investment  balances  were  partially  offset  by  lower
      investment yields and higher investment expenses.  Investments at June 30,
      1999,  excluding  Separate  Accounts and unrealized  gains on fixed income
      securities  grew 10.3% from the same  period last year.  Lower  investment
      yields are due, in part,  to the  investment  of  proceeds  from calls and
      maturities  and the  investment of positive cash flows from  operations in
      securities  yielding less than the average  portfolio  rate. In relatively
      low interest rate environments,  funds from called or maturing investments
      may be reinvested at interest rates lower than those which  prevailed when
      the funds were previously invested, resulting in lower investment yields.

      Operating  income for the second  quarter of 1999 was $6.6 million  versus
      $7.2  million  for the second  quarter of 1998.  Operating  income for the
      first  six months of 1999 was $13.0 million  compared to $13.6 million for
      the same period last year. For both periods in 1999, increases in contract
      charges and investment  income were more than offset by adverse  mortality
      experience.

      Realized   capital   losses,   after-tax,   were  $704  thousand  for  the
      three months  ended June 30,  1999,  compared to realized  capital  gains,
      after-tax, of $1.6 million for the same period last year. Realized capital
      losses during the second  quarter of 1999 were  generated from the sale of
      publicly-traded  and  privately-placed  corporate  obligations  which were
      intended to manage asset and liability  duration and facilitate  investing
      in higher  yielding  securities.  These  losses more than offset  realized
      capital  gains during the first  quarter of 1999.  Realized  capital gains
      during the second  quarter and first half of 1998 related to gains arising
      from the receipt of prepayments of fixed income securities.



                                       11
<PAGE>


                   ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS


      INVESTMENTS

      The composition of the investment portfolio at June 30, 1999, at financial
      statement carrying values, is presented in the table below:

                                                                PERCENT
      ($ in thousands)                                          TO TOTAL
                                                               ----------

      Fixed income securities (1)            $ 1,899,368          89.2%
      Mortgage loans                             160,688           7.6
      Policy loans                                30,392           1.4
      Short-term                                  38,672           1.8
                                             -----------          ------

          Total                               $2,129,120          100.0%
                                             ===========          ======


      (1) Fixed income securities are carried at fair value.  Amortized cost for
          these securities was $1,742,959 at June 30, 1999.

      Total  investments  were $2.13  billion at June 30, 1999 compared to $2.22
      billion  at  December  31,  1998.   Positive  cash  flows  generated  from
      operations were more than offset by lower unrealized gains on fixed income
      securities  and a decrease in  short-term  investments.  At June 30, 1999,
      unrealized  capital gains on the fixed income  securities  portfolio  were
      $156.4  million  compared to $317.1  million at  December  31,  1998.  The
      decrease in  short-term  investments  resulted  from the  settlement of an
      intercompany  payable. At June 30, 1999,  short-term  investments included
      $11.8  million of  collateral  received in  connection  with the Company's
      securities lending program.

      At  June  30,  1999,  substantially  all of  the  Company's  fixed  income
      securities  portfolio is rated investment  grade,  which is defined by the
      Company  as  a  security  having  a  National   Association  of  Insurance
      Commissioners ("NAIC") rating of 1 or 2, a Moody's rating of Aaa, Aa, A or
      Baa, or a comparable Company internal rating.

      SEPARATE ACCOUNTS

      Separate  Account  assets and  liabilities  increased to $402.1 million at
      June 30, 1999 from $366.2  million at December 31, 1998.  The increase was
      due  primarily to flexible  premium  deferred  variable  annuity sales and
      favorable  performance  of the  Separate  Account  investment  portfolios,
      partially offset by variable annuity contract surrenders and withdrawals.


                                       12
<PAGE>

                   ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS


      LIQUIDITY AND CAPITAL RESOURCES

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

      The maturity  structure of the Company's  fixed income  securities,  which
      represents  89.2% of the Company's total  investments,  is managed to meet
      the anticipated cash flow  requirements of the underlying  liabilities.  A
      portion of the  Company's  product  portfolio,  primarily  fixed  deferred
      annuity and universal life insurance products, is subject to discretionary
      surrender  and  withdrawal  by  contractholders.  Management  believes its
      assets are sufficiently  liquid to meet future obligations to its life and
      annuity contractholders under various interest rate scenarios.

      Surrenders  and  withdrawals  were $14.1 million and $25.4 million for the
      three and six month periods ended June 30, 1999, compared to $16.4 million
      and  $31.5  million  for  the  same  periods  in  1998.  As the  Company's
      interest-sensitive  life policies and annuity  contracts in force grow and
      age, the dollar amount of surrenders and withdrawals could increase.

      YEAR 2000

      The Company is  dependent  upon  certain  services  provided for it by the
      Corporation including  computer-related systems, and systems and equipment
      not typically  thought of as  computer-related  (referred to as "non-IT").
      For this  reason,  the  Company is reliant  upon the  Corporation  for the
      establishment and maintenance of its computer-related systems and non-IT.

      The  Corporation is heavily  dependent upon complex  computer  systems and
      equipment   for  all   phases  of  its   operations,   including   product
      distribution,  customer service, insurance processing,  underwriting, loss
      reserving,  investments  and other  enterprise  systems.  Since many older
      computer software programs  recognize only the last two digits of the year
      in any date,  some  software may fail to operate  properly in or after the
      year 1999 if the  software is not  reprogrammed,  remediated,  or replaced
      ("Year  2000").  Also,  many systems and equipment  that are not typically
      thought of as computer-related  (referred to as "non-IT") contain embedded
      hardware or software that may have a Year 2000  sensitive  component.  The
      Corporation  believes that many of its  counterparties  and suppliers also
      have  Year  2000  issues  and  non-IT   issues   which  could  affect  the
      Corporation.

      In 1995, the Corporation  commenced a plan consisting of four phases which
      are intended to mitigate  and/or  prevent the adverse  effects of the Year
      2000 issues on its systems and  equipment:  1) inventory and assessment of
      affected  systems and equipment,  2) remediation and compliance of systems
      and  equipment   through   strategies  that  include  the  replacement  or
      enhancement of existing  systems,  upgrades to operating  systems  already
      covered by maintenance agreements and modifications to existing systems to
      make them Year 2000  compliant,  3) testing of systems and equipment using
      clock-forward  testing  for both  current  and future  dates and for dates
      which trigger specific processing,  and 4) contingency planning to address
      possible  adverse  scenarios  and the  potential  financial  impact to the
      Corporation's results of operations, liquidity or financial position.


                                       13
<PAGE>


                   ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS


      The  Corporation  believes  that the  first  three  phases  of this  plan,
      assessment, remediation and testing, including clock-forward testing which
      was performed on the Corporation's  systems and equipment and non-IT,  are
      complete.  It is  expected  that the  implementation  and  rollout  of the
      remediated  personal  computer  environment  will continue into the fourth
      quarter of 1999.  In  addition,  some  systems  and  equipment  and non-IT
      related to discontinued  or non-critical  functions of the Corporation are
      planned to be abandoned by the end of 1999.

      The fourth  phase of this plan,  contingency  planning,  is  currently  in
      process.  Detailed  plans have been  created in the event that the systems
      and equipment or major  external  counterparties  and supplier  supporting
      critical  processes are not Year 2000 compliant in or after the year 1999.
      These plans,  created by each corporate  function and business unit of the
      Corporation, identify and document the risks associated with the Year 2000
      on their  business  processes.  Appropriate  plans have been  developed to
      mitigate  those  risks.  A  common  inclusion  in many of the  plans  is a
      description  of manual  processes and  personnel  needed in the event of a
      temporary   Year  2000   failure.   Contingency   plans   will  be  tested
      appropriately  by the  corporate  function  or  business  unit  for  their
      effective  operation and for achieving their desired results. In addition,
      during  the  third  quarter  of  1999,  the  Corporation's  management  is
      reviewing  all corporate  function and business  units' plans for accuracy
      and comprehensiveness.  Monitoring of these plans will continue throughout
      the end of 1999 and beyond, as needed.

      The  Corporation  has  considered   numerous  risk  scenarios  during  the
      contingency  planning phase.  Through this planning,  management  believes
      that  the  scenario  which  could  be  considered  the  worst  case,  is a
      widespread,  prolonged  failure of public utility  systems which would not
      only  cause   power   outages   for  the   Corporation,   but  also  cause
      telecommunications,  banking or external counterparty and supplier service
      outages.  While the  corporation  has assessed and will continue to assess
      data  on  the  utility,   telecommunication  and  banking  industries,  it
      acknowledges the possibility that a prolonged  widespread outage in any or
      all of these industries could lead to a worst case scenario.  However, the
      Corporation  does not consider  such  prolonged  widespread  outages to be
      reasonably  likely.  Therefore,  the  Corporation  has  focused  its  most
      reasonably  likely  worst case  scenario  contingency  planning on limited
      scale  outages in order to ensure the ability to deal with risks of likely
      scenarios.  Because the Corporation is prepared for outages on a localized
      basis as part of normal business operations, the Corporation considers the
      impacts of this most  reasonably  likely  scenario to be immaterial to the
      Corporation's results of operations, liquidity or financial position.

      The  Company  markets  its  products  through  a variety  of  distribution
      channels,  including a broad-based  network of exclusive agents (including
      life specialist),  banks, brokers and direct response marketing.  The core
      of the Company's distribution system, the exclusive agents, have had their
      systems  included  in  the  Corporation's   four  phase  plan,   therefore
      management believes that assessment, remediation, testing and the creation
      of  contingency  plans are complete for the exclusive  agency  operations'
      critical systems.

      The Company also markets some of its products through Dean Witter Reynolds
      Inc.  ("Dean  Witter"),  a wholly owned  subsidiary of Morgan Stanley Dean
      Witter. Management believes that its interactions and interfaces with Dean
      Witter  are Year 2000  compliant.  Therefore,  the  impacts  of Year 2000,
      related to this distribution  channel, is expected to be immaterial to the
      Company's results of operations, liquidity and financial position.

                                       14
<PAGE>
                   ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

      In addition,  the Company markets a portion of its products through banks,
      brokers and direct response  marketing.  These  distribution  channels are
      considered  major  external   counterparties   of  the  Corporation.   The
      Corporation is actively working with its major external counterparties and
      suppliers,  including public utility companies, to assess their compliance
      efforts and the Corporation's  exposure to both their Year 2000 issues and
      non-IT  issues.   This   assessment  has  included   soliciting   external
      counterparties  and suppliers,  evaluating  responses received and testing
      third party interfaces and interactions to determine compliance. Currently
      the  Corporation  has  solicited,  and has received  responses  from,  the
      majority of its  counterparties and suppliers.  These responses  generally
      state  that they  believe  they will be Year  2000  compliant  and that no
      transactions  will be  affected.  However,  certain  vendors  are  also in
      ongoing  assessment  and  testing  of  their  products  whereby  they  are
      currently  unable to identify all potential  problems in certain  products
      which are used by the  Corporation.  The  Corporation  believes that these
      vendors will make no statements  regarding their Year 2000 readiness other
      than  to  publish  declarations   addressing  specific  compliance  issues
      identified with their products.  The Corporation is working with these key
      vendors and has procedures in place to stay aware of any compliance issues
      encountered by these  vendors.  The  Corporation  has also decided to test
      certain interfaces and interactions to gain additional  assurance on third
      party  compliance.  Currently,  the  Corporation  does not have sufficient
      information to determine  whether all of its external  counterparties  and
      suppliers  will  be  Year  2000  compliant.  If they  are  not  Year  2000
      compliant,  the  Corporation  is not able to  determine  the impact of any
      consequent  losses on its results of  operations,  liquidity  or financial
      position.

      The Corporation may be exposed to the risk that the issuers of investments
      in its  portfolio  will be  adversely  impacted by Year 2000  issues.  The
      Corporation  assesses  the  impact  which  Year  2000  issues  have on the
      Corporation's  investments  as  part of due  diligence  for  proposed  new
      investments and in its ongoing review of all current  portfolio  holdings.
      Any  recommended  actions  with  respect  to  individual  investments  are
      determined by taking into account the potential impact of Year 2000 on the
      issuer.  Based  on its  current  review,  the  Corporation  believes  that
      although Year 2000 issues may temporarily  affect the market or individual
      issuers,  the potential  impact of Year 2000 on its  investment  portfolio
      will not be material.

      The  Corporation  presently  believes  that it will  resolve the Year 2000
      issue in a timely  manner.  Year 2000 costs are expensed as incurred.  The
      majority of the expenses  related to this project have been incurred as of
      June 30, 1999. The Corporation  estimates that  approximately $125 million
      in costs  will be  incurred  between  the  years of 1995 and  2000.  These
      amounts include costs directly related to fixing Year 2000 issues, such as
      modifying  software and hiring Year 2000  solution  providers,  as well as
      costs incurred to replace  certain  non-compliant  systems which would not
      have been otherwise replaced. A portion of these costs will be incurred by
      the Company on a pro rata basis of usage of the  computer-related  systems
      and equipment and non-IT,  as compared to the usage of all entities  which
      share these services with the Corporation.  These amounts are not expected
      to be material to the results of operations of the Company.

                                       15
<PAGE>

                   ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS


      FORWARD-LOOKING STATEMENTS

      The statements contained in this Management's Discussion and Analysis that
      are not historical  information  are  forward-looking  statements that are
      based on management's estimates,  assumptions and projections. The Private
      Securities  Litigation Reform Act of 1995 provides a safe harbor under The
      Securities  Act of  1933  and the  Securities  Exchange  Act of  1934  for
      forward-looking  statements. In order to comply with the terms of the safe
      harbor,  the Company notes several  important factors that could cause the
      Company's  actual results and experience  with respect to  forward-looking
      statements  to differ  materially  from the  anticipated  results or other
      expectations expressed in the Company's forward-looking statements:

      1. The Corporation  presently  believes that it will resolve the Year 2000
         issues affecting its computer  operations in a timely manner,  and that
         the costs  incurred  between  the  years of 1995 and 2000 in  resolving
         those issues will be approximately $125 million. However, the extent to
         which  the   computer   operations   of  the   Corporation's   external
         counterparties  and suppliers are adversely  affected  could,  in turn,
         affect   the   Corporation's   ability   to   communicate   with   such
         counterparties and suppliers,  could increase the cost of resolving the
         Year 2000 issues, and could materially affect the Corporation's results
         of operations in any period or periods.


                                      16




<PAGE>



                      PART II - OTHER INFORMATION



Item 1.  LEGAL PROCEEDINGS

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


Item 5.  OTHER INFORMATION

         Not applicable.

Item 6.  EXHIBITS AND REPORTS ON FORM 8-K

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


(2)  None

(3)(i) Restated  Certificate of Incorporation of Allstate Life Insurance Company
     of New York  (Incorporated  herein by reference to the Company's  Form 10-K
     Annual Report for the year ended December 31, 1998)

(3)(ii)  Amended  By-laws  of  Allstate  Life  Insurance  Company  of  New  York
     (Incorporated  herein by reference to the Company's Form 10-K Annual Report
     for the year ended December 31, 1998)

(4)  None

(10) None

(11) Not Required

(15) None

(18) None

(19) None

(22) None

(23) Not required

(24) Power of Attorney - Samuel H. Pilch

(27) Financial Data Schedule


 (b) Reports on 8-K

            No reports on Form 8-K were filed during the first quarter of 1999.




                                      17
<PAGE>


                              SIGNATURES



Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized, on the 13th day of August 1999.



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






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



/s/ SAMUEL H. PILCH                  CONTROLLER
------------------------             (Chief Accounting Officer)
 SAMUEL H. PILCH







                                       18
<PAGE>

Exhibit Index

Exhibit No.              Exhibit

(24)                Power of Attorney - Samuel H. Pilch

(27)                Financial Data Schedule