EVERGREEN VARIABLE ANNUITY TRUST
AMENDED AND RESTATED
PARTICIPATION AGREEMENT
THIS AMENDED AND RESTATED PARTICIPATION AGREEMENT ("Agreement") is made this
1st day of June, 2006 by and among the following parties:
o IDS LIFE INSURANCE COMPANY OF NEW YORK ("IDS Life of New York" or
"Company"), organized under the laws of the State of New York, on
its own behalf and on behalf of each of its separate accounts
named in Schedule A to this Agreement, as may be amended from time
to time (each account referred to as an "Account"); and
o EVERGREEN VARIABLE ANNUITY TRUST, an open-end management
investment company organized a Delaware business trust (the
"Trust").
WITNESSETH:
WHEREAS, the Trust is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act"),
and the offer and sale of its shares are registered under the Securities Act
of 1933, as amended (the "1933 Act"); and
WHEREAS, the Trust desires to act as an investment vehicle for separate
accounts established for variable life insurance policies and variable annuity
contracts to be offered by insurance companies that have entered into
participation agreements with the Trust (the "Participating Insurance
Companies"); and
WHEREAS, the beneficial interest in the Trust is divided into several
series of shares, each series representing an interest in a particular managed
portfolio of securities and other assets (the "Portfolios"); and
WHEREAS, the Trust has obtained an order from the Securities and
Exchange Commission ("Commission") granting Participating Insurance Companies
and their separate account(s) exemptions from the provisions of Section(s)
9(a), 13(a), 15(a) and 15(b) of the 1940 Act and Rules 6e-2(b)(15) and
6e-3(T)(b)(15) thereunder, to the extent necessary to permit shares of the
Trust to be sold to and held by variable annuity and variable life insurance
separate accounts of both affiliated and nonaffiliated life insurance
companies and certain qualified pension and retirement plans (the "Shared
Trust Exemptive Order"); and
WHEREAS, the Company has registered or will register under the 1933 Act,
unless exempt therefrom, certain variable life insurance policies and/or
variable annuity contracts identified by the form number(s) listed on Schedule
A, as may be amended from time to time (the "Contracts"); and
WHEREAS, the Company has registered or will register each Account,
unless exempt therefrom, as a unit investment trust under the 1940 Act; and
WHEREAS, each Account is a duly organized, validly existing segregated
asset account, established by resolution of the Board of Directors of the
Company on the date shown for that Account on Schedule A, to set aside and
invest assets attributable to the Contracts; and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase shares of the Portfolios at net
asset value on behalf of each Account to fund the Contracts;
NOW, THEREFORE, in consideration of their mutual promises, the parties
agree as follows:
ARTICLE A
AMENDMENT AND RESTATEMENT; FORM OF AGREEMENT
A.1. The Trust acknowledges the planned merger of American Centurion
Life Assurance Company ("American Centurion Life") with and into IDS Life of
New York (the "Merger") and the "intact transfer" (the "Transfer") of the
Accounts of American Centurion Life to IDS Life of New York by operation of
law and incident to the Merger, on December 31, 2006 at 10:59:59 p.m. Central
Time (the "Effective Time"), subject to all necessary regulatory approvals
being obtained in connection with the Merger and the Transfer, and the
re-naming of IDS Life of New York to RiverSource Life Insurance Co. of New
York simultaneously with the Merger. On and after the Effective Time, all
references in this Agreement and its Schedule to IDS Life of New York or
Company shall mean and refer to RiverSource Life Insurance Co. of New York.
A.2. This Agreement shall amend and supersede the following agreement
as of the date stated above between the Company named therein and the Trust
with respect to all investments by the Company and its Accounts prior to the
date of this Agreement, as though an identical separate agreement had been
executed by the parties hereto on the dates as indicated below:
o Evergreen Variable Annuity Trust Participation Agreement,
dated August 13, 2001, by and between IDS Life of New York
and the Trust, as amended by the following documents: (a)
Amendment to Evergreen Variable Annuity Trust Participation
Agreement dated November 7, 2002; and (b) Amendment to
Evergreen Variable Annuity Trust Participation Agreement
dated August 18, 2003.
ARTICLE I
SALE OF TRUST SHARES
1.1. The Trust shall make shares of its Portfolios available to the
Accounts at the net asset value next computed after receipt of such purchase
order by the Trust (or its agent), as
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established in accordance with the provisions of the then current prospectus
of the Trust. Shares of a particular Portfolio of the Trust shall be ordered
in such quantities and at such times as determined by the Company to be
necessary to meet the requirements of the Contracts. The trustees of the Trust
(the "Trustees") may refuse to sell shares of any Portfolio to any person or
suspend or terminate the offering of shares of any Portfolio if such action is
required by law or by regulatory authorities having jurisdiction or is, in the
sole discretion of the Trustees acting in good faith and in light of their
fiduciary duties under federal and any applicable state laws, necessary and in
the best interest of the shareholders of such Portfolio.
1.2. The Trust will redeem any full or fractional shares of any
Portfolio when requested by the Company on behalf of an Account at the net
asset value next computed after receipt by the Trust (or its agent) of the
request for redemption, as established in accordance with the provisions of
the then current prospectus of the Trust. Payment shall be made the same
business day that the Trust receives notice of the order in federal funds
initiated by wire by 2:00 p.m. New York time as long as the banking system is
open for business. If the banking system is closed, payment will be
transmitted the next day that the banking system is open for business. If
payment is received by Company after 2:00 p.m. New York time, the Trust shall,
upon Company's request, promptly reimburse Company for any charges, costs,
fees, interest or other expenses incurred in connection with advances,
borrowings, or overdrafts. In no event shall payment be delayed for more than
five (5) calendar days to enable the Company to pay redemption proceeds within
the period specified under the 1940 Act.
1.3. For the purposes of Sections 1.1. and 1.2., the Trust hereby
appoints the Company as its agent for the limited purpose of receiving and
accepting purchase and redemption orders resulting from investment in and
payments under the Contracts. Receipt by the Company shall constitute receipt
by the Trust provided that: (a) such orders are received by the Company in
good order prior to the close of the regular trading session of the New York
Stock Exchange, and (b) the Trust receives notice of such orders by 10:00
a.m., New York time, on the next following Business Day. "Business Day" shall
mean any day on which the New York Stock Exchange is open for trading. The
Trust will confirm receipt of each trade (ending share balances by account and
fund) by 1:00 p.m. New York time on the day the trade is placed with the Trust
(using a mutually agreed upon format).
1.4. The Company can give notice of purchase orders to the Trust by
2:00 p.m. New York time and its bank can initiate a wire transfer by 2:00 p.m.
New York time. The Company cannot, however, guarantee payment by 2:00 p.m. New
York time. Purchase orders that are transmitted to the Trust in accordance
with Section 1.3 shall be paid for on the same Business Day that the Trust
receives notice of the order. Payment shall be made in federal funds initiated
by wire by 2:00 p.m. New York time as long as the banking system is open for
business. If the banking system is closed, payment will be transmitted the
next day that the banking system is open for business.
1.5. The Trust shall furnish same-day notice, on or before ex-dividend
date (using a mutually agreed upon format), to the Company of any income
dividends or capital gain distributions payable on shares of any Portfolio.
The Company hereby elects to receive all such income dividends and capital
gain distributions as are payable on a Portfolio's shares in
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additional shares of that Portfolio. The Company reserves the right to revoke
this election and to receive all such income dividends and capital gain
distributions in cash. The Trust shall notify the Company of the number of
shares so issued as payment of such dividends and distributions. For each
calendar year Trust will provide Company with a dividend and capital gain
payment schedule.
1.6. The Trust shall make the net asset value per share for each
Portfolio available to the Company on a daily basis as soon as reasonably
practical after the net asset value per share is calculated and shall use its
best efforts to make such net asset value per share available by 6:30 p.m.,
New York time (using a mutually agreed upon format). The Trust will promptly
notify Company when and if the Trust does not communicate the net asset value
per share by 6:30 p.m. New York time, and the Trust and the Company will
mutually agree upon a final deadline for timely receipt of the net asset value
on such Business Day.
1.7. The Trust agrees that its shares will be sold only to
Participating Insurance Companies and their separate accounts and to certain
qualified pension and retirement plans to the extent permitted by the Shared
Trust Exemptive Order. No shares of any Portfolio will be sold directly to the
general public. The Company agrees that the Trust shares will be used only for
the purposes of funding the Contracts and Accounts listed in Schedule A, as
amended from time to time.
1.8. The Trust agrees that all Participating Insurance Companies shall
have the obligations and responsibilities regarding pass-through voting and
conflicts of interest corresponding to those contained in Section 2.12 and
Article IV of this Agreement.
1.9. In the event the Fund initiates (i) a reorganization as defined by
Section 2 of the 1940 Act, or (ii) changes the Fund's name or the name of a
Portfolio, the Fund will bear, or arrange for others to bear, the Company's
internal and out-of-pocket costs associated with the aforementioned actions
(each an "Event"), to the extent that such costs arise out of required
shareholder communications. The Fund or its designee also shall reimburse the
Company for other essential systems programming costs as the Parties to this
Agreement may agree in writing in advance of the occurrence of each such
Event, provided however, if the Fund or its designee fails to provide thirty
(30) days' advance notice of such Event to the Company in order to negotiate
such additional agreed upon amounts ahead of the occurrence of the Event, then
the Fund or its designee shall negotiate such additional agreed upon amounts
with the Company within the thirty (30) days immediately following the
occurrence of the Event and shall complete the reimbursement to the Company of
the agreed upon additional amounts within sixty (60) days after the Event
occurs. Company agrees to use its best efforts to minimize any costs incurred
and shall provide the Fund or its designated agent with acceptable
documentation of any such costs incurred.
ARTICLE II
OBLIGATIONS OF THE PARTIES
2.1. The Trust shall bear the costs of registering and qualifying the
Trust's shares, and of preparing and filing the Trust's prospectus,
registration statement, Trust sponsored proxy
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materials (or similar materials such as voting instruction solicitation
materials), reports to shareholders, and all statements and notices required
by federal or state law. The Trust shall pay all taxes on the issuance and/or
transfer of the Trust's shares.
2.2. The Trust shall provide the Company, at the Trust's expense, with
an electronic form acceptable to the Company of the Trust's current
prospectus, annual report and semi-annual reports. The Trust will render other
assistance as is reasonably necessary in order for the Company once each year
(or more frequently if the prospectus for the Trust is amended) to have the
prospectus, annual report or semi-annual report for the Trust printed together
in one document with other prospectuses, annual reports or semi-annual reports
(with the Trust bearing its proportionate share of the expense). The
prospectuses, annual report, semi-annual report, and any Trust sponsored proxy
material will be customized to include only those portions of the Trust in use
for each Contract. In addition, the prospectuses, annual report and
semi-annual report will be provided to the Company ten (10) Business Days
prior to the date on which they must be mailed. The Trust shall bear the
printing and mailing costs (or duplicating costs with respect to the statement
of additional information) associated with distributing the Trust's current
prospectus, statement of additional information, annual report, semi-annual
report, Trust sponsored proxy material or other shareholder communications,
including any amendments or supplements to any of the foregoing, to the extent
required to be provided by the Trust to its then-current shareholders,
including the Company. The Company shall bear any costs of preparing,
printing, recording, taping or disseminating sales literature or other
marketing materials or the costs of printing and mailing prospective Contract
purchasers copies of the Trust's prospectus, statement of additional
information, periodic reports or other printed materials.
2.3. The Company will bear the costs of registering and qualifying the
Accounts for sale, printing (or duplicating costs with respect to the
statement of additional information) and mailing costs associated with the
delivery of the Accounts' current prospectuses and statements of additional
information, private placement memoranda, annual and semi-annual reports,
Contracts, Contract applications, sales literature or other promotional
material, Account sponsored proxy materials and voting solicitation
instructions.
2.4. The Company will bear the responsibility and correlative expense
for administrative and support services for Contract owners. The Trust
recognizes the Company as the sole shareholder of shares of the Trust issued
under this Agreement.
2.5. The Company agrees and acknowledges that the Trust's adviser, is
the sole owner of the name and xxxx "Evergreen" and that all use of any
designation comprised in whole or in part of Evergreen (an "Evergreen Xxxx")
under this Agreement shall inure to the benefit of the Trust and its adviser.
Except as provided in Section 2.10, the Company shall not use any Evergreen
Xxxx on its own behalf or on behalf of the Accounts or Contracts in any
registration statement advertisement, sales literature or other materials
relating to the Accounts or Contracts without the prior written consent of the
Trust and its adviser. Upon termination of this Agreement for any reason, the
Company shall cease all use of any Evergreen Xxxx(s) as soon as reasonably
practicable.
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The Trust agrees and acknowledges that Company or its parent are the
sole owners of the name and marks "Ameriprise", "RiverSource", "American
Centurion Life" and "IDS Life of New York" and that all use of any designation
comprised in whole or in part of any of these marks (an "Xxxxxxxxxx Xxxx")
under this Agreement shall inure to the benefit of Company. Except as provided
in Section 2.6, the Trust shall not use any Xxxxxxxxxx Xxxx on its own behalf
or on behalf of the Trust in any registration statement, advertisement, sales
literature or other materials relating to the Trust without the prior written
consent of Company. Upon termination of this Agreement for any reason, the
Trust shall cease all use of any Xxxxxxxxxx Xxxx(s) as soon as reasonably
practicable.
2.6. The Company shall furnish, or cause to be furnished, to the Trust
or its designee, a copy of each Contract prospectus or statement of additional
information in which the Trust or its investment adviser is named prior to the
filing of such document with the Commission. The Company shall also furnish,
or shall cause to be furnished, to the Trust or its designee, each piece of
sales literature or other promotional material including private placement
memoranda, in which the Trust or its investment adviser is named, at least ten
Business Days prior to its use. No such material shall be used if the Trust or
its designee reasonably objects to such use within five Business Days after
receipt of such material.
2.7. The Company will provide to the Trust at least one complete copy
of each report, solicitation for voting instructions, application for
exemption, request for no-action relief, and any amendment to any of the above
(or any amendment to the registration statement, prospectus or statement of
additional information) that materially affect the Trust or its investment
adviser within 10 Business Days of the filing of the document with the
Commission, the NASD, or other regulatory authorities.
2.8. For purposes of this Article II, the phrase "sales literature or
other promotional material" includes, but is not limited to, advertisements,
newspapers, magazines, or other periodicals, radio, television, telephone or
tape recording, videotape display, signs or billboards, motion pictures, or
other public media, including, for example, on-line networks such as the
Internet or other electronic media, sales literature (i.e., any written
communication distributed or made generally available to customers or the
public, including brochures, circulars, research reports, market letters, form
letters, shareholder newsletters, seminar texts, reprints or excerpts of any
other advertisement, sales literature, or published article), educational or
training materials or other communications distributed or made generally
available to some or all agents or employees, and registration statements,
prospectuses, statements of additional information, shareholder reports and
proxy materials, and any other material constituting sales literature or
advertising under the rules of the NASD, the 1933 Act or the 0000 Xxx.
2.9. The Company shall not give any information or make any
representations or statements on behalf of the Trust or concerning the Trust
or its investment adviser in connection with the sale of the Contracts other
than information or representations contained in and accurately derived from
the registration statement, prospectus or statement of additional information
for the Trust shares (as such registration statement, prospectus and statement
of additional information may be amended or supplemented from time to time),
annual and semi-annual reports of the Trust, Trust-sponsored proxy statements,
in published reports for the Trust
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which are in the public domain or approved by the Trust for distribution, or
in sales literature or other promotional material approved by the Trust or its
designee, except as required by legal process or regulatory authorities or
with the written permission of the Trust or its designee.
2.10. The Trust shall furnish or cause to be furnished, to the Company
or its designee, a copy of each Trust prospectus or statement of additional
information in which the Company or the Accounts are named prior to the filing
of such document with the Commission. The Trust shall furnish, or shall cause
to be furnished, to the Company or its designee, each piece of sales
literature or other promotional material in which the Company or the Accounts
are named, at least ten Business Days prior to its use. No such material shall
be used if the Company or its designee reasonably objects to such use within
five Business Days after receipt of such material.
2.11. The Trust will provide to the Company at least one complete copy
of each report, solicitation for voting instructions, application for
exemption, request for no-action relief, and any amendment to any of the above
(or any amendment to the registration statement, prospectus or statement of
additional information, that materially affects the Trust and the Contracts
within 10 Business Days of the filing of the document with the Commission, the
NASD, or other regulatory authorities.
2.12. The Trust shall not give any information or make any
representations or statements on behalf of the Company or concerning the
Company, the Accounts or the Contracts other than information or
representations contained in and accurately derived from the registration
statement, prospectus, statement of additional information or private
placement memorandum for the Contracts (as such registration statement,
prospectus, statement of additional information or private placement
memorandum may be amended or supplemented from time to time), in published
reports for the Trust which are in the public domain or approved by the Trust
for distribution, or in materials approved by the Company for distribution
including sales literature or other promotional materials, except as required
by legal process or regulatory authorities or with the written permission of
the Company.
2.13. At the request of either party to this Agreement, the other party
will make available to the requesting party's independent auditors and/or
representatives of the appropriate regulatory agencies, all records, data and
access to operating procedures that may be reasonably requested.
2.14. So long as, and to the extent that the Commission interprets the
1940 Act to require pass-through voting privileges for variable contract
owners, the Company will provide pass-through voting privileges to owners of
policies, unless exempt therefrom, whose cash values are invested, through the
Accounts, in shares of the Trust and shall assist in the distribution of all
proxy material furnished by the Trust. With respect to each Account, the
Company will vote shares of the Trust held by the Account and for which no
timely voting instructions from policy owners are received in the same
proportion as those shares for which voting instructions are received. The
Company reserves the right to vote Trust shares held in any segregated asset
account in its own right, to the extent permitted by law. The Company and its
agents will in no way recommend or oppose or interfere with the solicitation
of proxies for Trust shares held by
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Contract owners without the prior written consent of the Trust, which consent
may be withheld in the Trust's sole discretion.
2.15. The Trust shall be responsible for calculating the performance
information for the Trust. The Trust agrees to provide the Company with
performance information on a timely basis to enable the Company to calculate
performance information on a timely basis to enable the Company to calculate
performance information for the Contracts in accordance with applicable state
and federal law. The Company shall be responsible for calculating the
performance information of the Contracts.
2.16. The Company acknowledges the Trust has adopted policies and
procedures reasonably designed to prevent frequent or excessive purchases,
exchanges and redemptions of the shares of Portfolios in quantities great
enough to disrupt orderly management of the corresponding Portfolio's
investment portfolio. These policies are disclosed in the Trust's prospectus.
The Trust acknowledges that the Company, on behalf of its Accounts, has
adopted policies and procedures reasonably designed to detect and deter
frequent transfers of Contract value among the subaccounts of the Accounts
including those investing in Portfolios available as investment options under
the Contracts. These policies and procedures are described in the current
prospectuses of the Accounts through which the Contracts are offered.
The Company will cooperate with the Trust's reasonable requests in
taking steps to deter and detect such transfers by any Contract owner. The
Company and the Trust have entered into a Shareholder Information Agreement
simultaneously with this Agreement and that agreement will govern the requests
by the Trust for such information.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1. The Company represents and warrants that it is an insurance
company duly organized and validly existing under the laws of the state
designated on the first page of this Agreement and that it has legally and
validly established, or will establish, each Account as a segregated asset
account under such law on the dates set forth in Schedule A.
3.2. The Company represents and warrants that it has registered or,
prior to any issuance or sale of the Contracts, will register each Account,
unless exempt therefrom, as a unit investment trust in accordance with the
provisions of the 1940 Act to serve as a segregated investment account for the
Contracts.
3.3. The Company represents and warrants that the Contracts are, or
will be, registered under the 1933 Act to the extent required by the 1933 Act
prior to any issuance or sale of the Contracts, the Contracts will be issued
and sold in compliance in all material respects with all applicable federal
and state law.
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3.4. The Trust represents and warrants that it is duly organized and
validly existing under the laws of the State of Delaware.
3.5. The Trust represents and warrants that the Trust shares offered
and sold pursuant to this Agreement will be registered under the 1933 Act,
that the Trust is and will remain registered under the 1940 Act prior to any
issuance or sale of such shares and for so long as such shares are sold. The
Trust shall amend its registration statement under the 1933 Act and the 1940
Act from time to time as required in order to effect the continuous offering
of its shares. The Trust shall register and qualify its shares for sale in
accordance with the laws of the various states only if and to the extent
deemed advisable by the Trust. The Trust agrees that it will furnish the
information required by state insurance laws so that the Company can obtain
the authority needed to issue the Contracts in the various states.
3.6. The Trust represents and warrants that the investments of each
Portfolio will comply with the diversification requirements set forth in
Section 817(h) of the Internal Revenue Code of 1986, as amended (the "Code"),
and the rules and regulations thereunder. In the event of a breach of this
Section 3.6 by the Trust, it will take all reasonable steps to: (1)
immediately notify the Company of such breach, and (2) adequately diversify
the Trust so as to achieve compliance within the grace period afforded by
Section 1.817-5(b) of the rules and regulations under the Code.
3.7. The Company represents that the Contracts are intended to be
treated as annuity or life insurance contracts under applicable provisions of
the Code and warrants and agrees that it will make every effort to maintain
such treatment and that it will notify the Trust immediately upon having a
reasonable basis for believing that the Contracts have ceased to be so treated
or that they might not be so treated in the future.
3.8. The Trust will comply with all provisions of the 1940 Act
requiring voting by shareholders, and in particular, the Trust either will
provide for annual meetings (except insofar as the Commission may interpret
Section 16 of the 1940 Act not to require such meetings) or, as the Trust
currently intends, to comply with Section 16(c) of the 1940 Act (although the
Trust is not one of the trusts described in Section 16(c) of that Act) as well
as with Sections 16(a) and, if and when applicable, 16(b). Further, the Trust
will act in accordance with the Commission's interpretation of the
requirements of Section 16(a) with respect to periodic elections of directors
and with whatever rules the Commission may promulgate with respect thereto.
3.9. In the event of an error in the computation of a Portfolio's net
asset value or any dividend or capital gain distribution (each, a "pricing
error"), the Trust shall notify the Company as soon as possible after the
discovery of the error. Such notification may be verbal, but shall be
confirmed promptly in writing. A pricing error shall be corrected in
accordance with the Trust's internal policies and procedures. If an adjustment
is necessary to correct a material error that occurred through no fault of the
Company and such adjustment has caused Contract owners to receive less than
the number of shares or redemption proceeds to which they are entitled, the
number of shares of the applicable Account will be adjusted and the amount of
any underpayments will be paid by the Trust the Company for crediting of such
amounts to the Contract owners' accounts. Upon notification by the Trust of
any overpayment due to a material
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error, the Company shall promptly remit to the Trust any overpayment that has
not been paid to Contract owners; however, the Trust acknowledges that the
Company will use reasonable efforts to seek reimbursement of overpayments from
any Contract owner who, because of a pricing error, may have underpaid for
shares credited to such Contract owner's account. The costs of correcting such
adjustments, including reasonable administrative costs, shall be borne by the
Trust unless the Company is at fault in which case such costs shall be borne
by the Company
3.10. The Company represents and warrants to the Trust, and the Trust
represents and warrants to the Company, that each shall comply with all the
applicable laws and regulations designed to prevent money laundering including
without limitation the International Money Laundering Abatement and
Anti-Terrorist Financing Act of 2001 (Title III of the USA PATRIOT ACT), and
if required by such laws or regulations will share information with each other
about individuals, entities, organizations and countries suspected of possible
terrorist or money laundering activities in accordance with Section 314(b) of
the USA PATRIOT ACT.
ARTICLE IV
POTENTIAL CONFLICTS
4.1. The parties acknowledge that the Trust's shares may be made
available for investment to other Participating Insurance Companies. In such
event, the Trustees will monitor the Trust for the existence of any material
irreconcilable conflict between the interests of the contract owners of all
Participating Insurance Companies. A material irreconcilable conflict may
arise for a variety of reasons, including: (a) an action by any state
insurance regulatory or other authority; (b) a change in applicable federal or
state insurance, tax, or securities laws or regulations, or a public ruling,
private letter ruling, no-action or interpretative letter, or any similar
action by insurance, tax, or securities regulatory authorities; (c) an
administrative or judicial decision in any relevant proceeding; (d) the manner
in which the investments of any Portfolio are being managed; (e) a difference
in voting instructions given by variable annuity contract and variable life
insurance contract owners; or (f) a decision by an insurer to disregard the
voting instructions of contract owners. The Trustees shall promptly inform the
Company if they determine that a material irreconcilable conflict exists and
the implications thereof. The Trustees shall have sole authority to determine
whether a material irreconcilable conflict exists and their determination
shall be binding upon the Company.
4.2. The Company agrees to promptly report any potential or existing
conflicts of which it is aware to the Trustees. The Company will assist the
Trustees in carrying out their responsibilities under the Shared Trust
Exemptive Order and this Article IV by providing the Trustees, upon reasonable
request, with all information reasonably necessary for them to consider any
issues raised including, but not limited to, information as to a decision by
the Company to disregard Contract owner voting instructions.
4.3. If it is determined by a majority of the Trustees, or a majority
of the disinterested Trustees, that a material irreconcilable conflict exists
that affects the interests of Contract owners, the Company shall, in
cooperation with other Participating Insurance Companies whose contract owners
are also affected, at its expense and to the extent reasonably practicable (as
determined by Company and the Trustees jointly) take whatever steps are
necessary to remedy or
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eliminate the material irreconcilable conflict, which steps could include: (a)
withdrawing the assets allocable to some or all of the Accounts (or
subaccounts of the Accounts) from the Trust or any Portfolio and reinvesting
such assets in a different investment medium, including (but not limited to)
another Portfolio of the Trust, or submitting the question of whether or not
such segregation should be implemented to a vote of all affected Contract
owners and, as appropriate, segregating the assets of any appropriate group
(i.e., annuity contract owners, life insurance contract owners, or variable
contract owners of one or more Participating Insurance Companies) that votes
in favor of such segregation, or offering to the affected Contract owners the
option of making such a change; and (b) establishing a new registered
management investment company or managed separate account and obtaining any
necessary approvals or orders of the Commission in connection therewith.
4.4. If a material irreconcilable conflict arises because of a decision
by the Company to disregard Contract owner voting instructions and that
decision represents a minority position or would preclude a majority vote, the
Company may be required, at the Trust's election, to withdraw the affected
Account's investment in the Trust and terminate this Agreement with respect to
such Account; provided, however, that such withdrawal and termination shall be
limited to the extent required by the foregoing material irreconcilable
conflict as determined by a majority of the disinterested Trustees. Any such
withdrawal and termination, assuming required regulatory approvals have been
received, must take place within six (6) months after the Trust gives written
notice that this provision is being implemented. Until the end of such six (6)
month period, the Trust shall continue to accept and implement orders by the
Company for the purchase and redemption of shares of the Trust.
4.5. If any material irreconcilable conflict arises because a
particular state insurance regulator's decision applicable to the Company
conflicts with the majority of other state regulators, then the Company will
withdraw the affected Account's investment in the Trust and terminate this
Agreement with respect to such Account within six (6) months after the Trust
gives written notice that it has determined that such decision has created a
material irreconcilable conflict; provided, however, that such withdrawal and
termination, assuming required regulatory approvals have been received, shall
be limited to the extent required by the foregoing material irreconcilable
conflict as determined by a majority of the disinterested Trustees. Until the
end of such six (6) month period, the Trust shall continue to accept and
implement orders by the Company for the purchase and redemption of shares of
the Trust.
4.6. For purposes of Sections 4.3 through 4.5 of this Agreement, a
majority of the disinterested Trustees shall determine whether any proposed
action adequately remedies any material irreconcilable conflict. The Company
shall not be required by Section 4.3 to establish a new funding medium for the
Contracts. In the event that the Trustees determine that any proposed action
does not adequately remedy any material irreconcilable conflict, then the
Company will withdraw the Account's investment in the Trust and terminate this
Agreement within six (6) months after the Trust gives written notice of the
foregoing determination; provided, however, that such withdrawal and
termination shall be limited to the extent required by any such material
irreconcilable conflict, as determined by a majority of the disinterested
Trustees.
11
4.7. The Company shall at least annually submit to the Trustees such
reports, materials or data as the Trustees may reasonably request so that the
Trustees may fully carry out the duties imposed upon them by the Shared Trust
Exemptive Order and this Article IV. Said reports, materials and data shall be
submitted more frequently if deemed appropriate by the Trustees.
4.8. If and to the extent that Rule 6e-2 and Rule 6e-3(T) are amended,
or Rule 6e-3 is adopted, to provide exemptive relief from any provision of the
1940 Act or the rules promulgated thereunder with respect to mixed and/or
shared funding (as defined in the Shared Trust Exemptive Order) on terms and
conditions materially different from those contained in the Shared Trust
Exemptive Order, then (a) the Trust and/or the Participating Insurance
Companies, as appropriate, shall take such steps as may be necessary to comply
with Rules 6e-2 and 6e-3(T), as amended, and Rule 6e-3, as adopted, to the
extent such rules are applicable, and (b) Sections 2.13, 3.8, 4.1, 4.2, 4.3,
4.4, and 4.5 of this Agreement will continue in effect only to the extent that
terms and conditions substantially identical to such Sections are contained in
such Rule(s) as so amended or adopted.
ARTICLE V
INDEMNIFICATION
5.1. The Company agrees to indemnify and hold harmless the Trust and
each person, if any, who controls the Trust within the meaning of Section 15
of the 1933 Act, and any Trustee, officer, employee or agent of the foregoing,
(collectively, the "Indemnified Parties" for purposes of this Section 5.1)
against any and all losses, claims, damages, liabilities (including amounts
paid in settlement with the written consent of the Company) or expenses
(including the reasonable costs of investigating or defending any alleged
loss, claim, damage, liability or expense and reasonable legal counsel fees
incurred in connection therewith) (collectively, "Losses"), to which the
Indemnified Parties may become subject under any statute or regulation, or at
common law or otherwise, insofar as such Losses:
(a) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in a registration
statement, prospectus or private placement memorandum for the Contracts or in
the Contracts themselves or in sales literature generated or approved by the
Company relating to the Contracts or Accounts (or any amendment or supplement
to any of the foregoing) (collectively, "Company Documents"), or arise out of
or are based upon the omission or the alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading, provided that this indemnity shall not
apply as to any Indemnified Party if such statement or omission or such
alleged statement or omission was made in reliance upon and was accurately
derived from written information furnished to the Company by or on behalf of
the Trust for use in Company Documents or otherwise for use in connection with
the sale of the Contracts or Trust shares; or
(b) arise out of or result from statements or representations
(other than statements or representations contained in and accurately derived
from Trust Documents as defined in Section 5.2.(a)) or wrongful conduct of the
Company or persons under its control, with respect to the sale, distribution
or acquisition of the Contracts or Trust shares; or
12
(c) arise out of or result from any untrue statement or alleged
untrue statement of a material fact contained in Trust Documents as defined in
Section 5.2.(a) or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading if such statement or omission was made in
reliance upon and accurately derived from written information furnished to the
Trust by or on behalf of the Company; or
(d) arise out of or result from any failure by the Company to
provide the services or furnish the materials required under the terms of this
Agreement; or
(e) arise out of or result from any material breach of any
representation, warranty or agreement made by the Company in this Agreement or
arise out of or result from any other material breach of this Agreement by the
Company; or
(f) arise out of or result from negligence or wrongful conduct
in the Company's administration of the Accounts or the Contracts.
5.2. The Trust agrees to indemnify and hold harmless the Company and
each person, if any, who controls the Company within the meaning of Section 15
of the 1933 Act, and any director, officer, partner, employee or agent of the
foregoing (collectively, the "Indemnified Parties" for purposes of this
Section 5.2.) against any and all losses, claims, damages, liabilities or
expenses (including the reasonable costs of investigating or defending any
alleged loss, claim, damage, liability (including amounts paid in settlement
with the written consent of the Trust) or expense and reasonable legal counsel
fees incurred in connection therewith) (collectively, "Losses"), to which the
Indemnified Parties may become subject under any statute or regulation, or at
common law or otherwise, insofar as such Losses:
(a) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the registration
statement or prospectus for the Trust (or any amendment or supplement
thereto), (collectively, "Trust Documents"), or arise out of or are based upon
the omission or the alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading, provided, that this indemnity shall not apply as to any
Indemnified Party if such statement or omission or such alleged statement or
omission was made in reliance upon and was accurately derived from written
information furnished to the Trust by or on behalf of the Company for use in
Trust Documents or otherwise for use in connection with the sale of the
Contracts or Trust shares; or
(b) arise out of or result from statements or representations
(other than statements or representations contained in and accurately derived
from Company Documents) or wrongful conduct of the Trust or persons under its
control, with respect to the sale, distribution or acquisition of the
Contracts or Trust shares; or
(c) arise out of or result from any untrue statement or alleged
untrue statement of a material fact contained in Company Documents or the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein
13
not misleading if such statement or omission was made in reliance upon and
accurately derived form written information furnished to the Company by or on
behalf of the Trust; or
(d) arise out of or result from any failure by the Trust to
provide the services or furnish the materials required under the terms of this
Agreement; or
(e) arise out of or result from any material breach of any
representation, warranty or agreement made by the Trust in this Agreement
(including a failure, whether unintentional or in good faith or otherwise, to
comply with the diversification requirements and procedures related thereto as
specified in Section 3.6 of this Agreement) or arise out of or result from any
other material breach of this Agreement by the Trust; or
(f) arise out of or result from negligence or wrongful conduct
in the Trust's administration of the Portfolios; or
(g) arise out of or result from the materially incorrect or
untimely calculation or reporting of the daily net asset value per share or
dividend or capital gain distribution rate.
5.3. Neither the Company nor the Trust shall be liable under the
indemnification provisions of Section 5.1 or 5.2, as applicable, with respect
to any Losses incurred or assessed against an indemnified party that arise
from such indemnified party's willful misfeasance, bad faith or gross
negligence in the performance of such indemnified party's duties or by reason
of such indemnified party's reckless disregard of obligations or duties under
this Agreement.
5.4. Neither the Company nor the Trust shall be liable under the
indemnification provisions of Section 5.1 or 5.2, as applicable, with respect
to any claim made against an indemnified party unless such indemnified party
shall have notified the other party in writing within a reasonable time after
the summons, or other first written notification, giving information of the
nature of the claim which shall have been served upon or otherwise received by
such indemnified party (or after such indemnified party shall have received
notice of service upon or other notification to any designated agent), but
failure to notify the party against whom indemnification is sought of any such
claim shall not relieve that party from any liability which it may have to the
indemnified party in the absence of Sections 5.1 and 5.2 except to the extent
that the indemnifying party has been prejudiced by such failure to give
notice.
5.5. In case any such action is brought against the indemnified
parties, the indemnifying party shall be entitled to participate, at its own
expense, in the defense of such action. The indemnifying party also shall be
entitled to assume the defense thereof, with consent of the indemnified party
and with counsel mutually agreed to by the parties. If the indemnifying party
assumes such defense, the indemnified party shall bear the fees and expenses
of any additional counsel retained by it, and the indemnifying party will not
be liable to the indemnified party under this Agreement for any legal or other
expenses subsequently incurred by such party independently in connection with
the defense thereof other than reasonable costs of investigation.
5.6. The Trust agrees that the obligations assumed by the Company shall
be limited in any case to the Company and its assets and the Trust shall not
seek satisfaction of any such
14
obligation from the shareholders of Company, the directors, officers,
employees or agents of the Company, or any of them. Except as expressly stated
herein, as between the parties, in no event will any party to this Agreement
be responsible to any other party for any incidental, indirect, consequential,
punitive or exemplary damages of any kind arising from this Agreement
including without limitation, lost revenues, loss of profits or loss of
business.
5.7. Any controversy or claim arising out of or relating to this
Agreement, or the breach thereto will be settled by arbitration administered
by the American Arbitration Association in accordance with its Commercial
Arbitration Rules and Title 9 of the U.S. Code. Judgment on the award rendered
by the arbitrators may be entered in any court having jurisdiction thereof.
The number of arbitrators will be three, one of whom will be appointed by the
Company or an affiliate; one of whom will be appointed by the Fund and/or the
Adviser or an affiliate; and the third of whom will be selected by mutual
agreement, if possible, within thirty (30) days of the selection of the second
arbitrator and thereafter by the administering authority. The place of
arbitration will be in the Commonwealth of Massachusetts. The arbitrators will
have no authority to award punitive damages or any other damages not measured
by the prevailing party's actual damages, and may not, in any event, make any
ruling, finding or award that does not conform to the terms and conditions of
this Agreement. Any party may make an application to the arbitrators seeking
injunctive relief to maintain the status quo until such time as the
arbitration award is rendered or the controversy is otherwise resolved. Any
party may apply to any court having jurisdiction hereof and seek injunctive
relief in order to maintain the status quo until such time as the arbitration
award is rendered or the controversy is otherwise resolved.
ARTICLE VI
TERMINATION
6.1. This Agreement shall continue in full force and effect until the
first to occur of:
(a) termination by any party for any reason with respect to some
or all of the Portfolios upon six (6) months' advance written notice from the
date of this Agreement or 90 days notice thereafter delivered to the other
party or, if later, upon receipt of any required exemptive relief or orders
from the Commission, unless otherwise agreed in a separate written agreement
among the parties; or
(b) termination by the Company by written notice to the Trust
with respect to any Portfolio based upon the Company's determination that
shares of such Portfolio are not reasonably available to meet the requirements
of the Contracts or not consistent with the Company's obligations to Contract
owners; provided, however, that such a termination shall apply only to the
Portfolio not reasonably available and the Trust shall have ten (10) Business
Days from the initial notification by the Company of the deficiency to correct
such deficiency. If not cured within ten (10) Business Days, termination is
automatically effective; or
(c) termination by the Company by written notice to the Trust
with respect to any Portfolio in the event such Portfolio's shares are not
registered, issued or sold in accordance with applicable state and/or federal
law or such law precludes the use of such shares as the underlying investment
media of the Contracts issued or to be issued by the Company; or
15
(d) termination by the Company by written notice to the Trust
with respect to any Portfolio in the event that the Trust ceases to qualify as
a Regulated Investment Company under Subchapter M of the Code or any
independent or resulting failure under Section 817 of the Code, or under any
successor or similar provision of either, or if the Company reasonably
believes that the Trust may fail to so qualify; or
(e) termination by the Trust by written notice to the Company if
the Trust shall determine, in its sole judgment exercised in good faith, that
the Company and/or its affiliated companies has suffered a material adverse
change in its business, operations, financial condition or prospects since the
date of this Agreement or is the subject of material adverse publicity and
that material adverse change or material adverse publicity will have a
material adverse impact upon the business and operations of the Company or the
Trust; but no such termination shall be effective under this subsection (e)
until the Company has been afforded a reasonable opportunity to respond to a
statement by the Trust concerning the reason for notice of termination
hereunder; or
(f) termination by the Company by written notice to the Trust if
the Company shall determine, in its sole judgment exercised in good faith,
that either the Trust or an investment adviser to the Trust has suffered a
material adverse change in its business, operations, financial condition or
prospects since the date of this Agreement or is the subject of material
adverse publicity and that material adverse change or material adverse
publicity will have a material adverse impact upon the business and operations
of the Trust; but no such termination shall be effective under this subsection
(f) until the Trust has been afforded a reasonable opportunity to respond to a
statement by the Company concerning the reason for notice of termination
hereunder; or
(g) termination by the Trust in the event that formal
administrative proceedings are instituted against the Company by the NASD, the
Commission, an insurance commissioner or any other regulatory body regarding
the Company's duties under this Agreement or related to the sale of the
Contracts, the operation of any Account, or the purchase of the Trust's
shares; provided, however, that the Trust determines in its sole judgment
exercised in good faith, that any such administrative proceedings will have a
material adverse effect upon the ability of the Company to perform its
obligations under this Agreement;
(h) termination by the Company in the event that formal
administrative proceedings are instituted against the Trust by the NASD, the
Commission, any state securities or insurance department or any other
regulatory body regarding the Trust's duties under this Agreement, provided,
however, that the Company determines in its sole judgment exercised in good
faith, that any such administrative proceedings will have a material adverse
effect upon the ability of the Trust to perform its obligations under this
Agreement;
(i) at the option of the Company, upon receipt of the Company's
written notice by the other parties, with respect to any Portfolio if the
Trust fails to meet the diversification requirements specified in Section 3.6
hereof or if the Company reasonably and in good faith believes the Trust may
fail to meet such requirements;
16
(j) at the option of the Company or the Trust upon a
determination by a majority of the Trustees, or a majority of the
disinterested Trustees, that an irreconcilable material conflict exists among
the interests of: (1) all contract owners of variable insurance products of
all separate accounts; or (2) the interests of the Participating Insurance
Companies investing in the Trust as set forth in Article IV of this Agreement;
or
(k) at the option of the Company or the Trust upon receipt of
any necessary regulatory approvals and/or the vote of the Contract owners
having an interest in the Account (or any subaccount) to substitute the shares
of another investment company for the corresponding Portfolio shares of the
Trust in accordance with the terms of the Contracts for which those Portfolio
shares had been selected to serve as the underlying investment media. The
Company will give sixty (60) days' prior written notice to the Trust of the
date of any proposed vote or other action taken to replace the Trust's shares
6.2. Notwithstanding any termination of this Agreement, the Trust
shall, at the option of the Company, continue to make available additional
shares of the Trust (or any Portfolio) pursuant to the terms and conditions of
this Agreement for all Contracts in effect on the effective date of
termination of this Agreement provided that the Company continues to pay the
costs set forth in Article II.
6.3. The provisions of Article V and Section 8.11 shall survive the
termination of this Agreement and the provisions of Article IV and Section
2.12 shall survive the termination of this Agreement as long as shares of the
Trust are held on behalf of Contract owners in accordance with Section 6.2.
ARTICLE VII
NOTICES
Any notice shall be sufficiently given when sent by registered or
certified mail to the other party at the address of such party set forth below
or at such other address as such party may from time to time specify in
writing to the other party.
If to the Trust:
---------------
Evergreen Funds
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000-0000
Attention: Legal Department
If to the Company:
-----------------
IDS Life Insurance Company of New York
1765 Ameriprise Financial Center
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attn: Vice President
17
With a copy to:
--------------
RiverSource Distributors, Inc.
50607 Ameriprise Financial Center
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attn: General Counsel's Office
ARTICLE VIII
MISCELLANEOUS
8.1. The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions hereof
or otherwise affect their construction or effect.
8.2. This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.
8.3. If any provision of this Agreement shall be held or made invalid
by a court decision, statute, rule or otherwise, the remainder of the
Agreement shall not be affected thereby.
8.4. This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the Commonwealth of
Massachusetts.
8.5. The parties to this Agreement acknowledge and agree that all
liabilities of the Trust arising directly or indirectly under this Agreement,
of any and every nature whatsoever, shall be satisfied solely out of the
assets of the Trust and that no Trustee, officer, agent or holder of shares of
beneficial interest of the Trust shall be personally liable for any such
liabilities.
8.6. Each party shall cooperate with each other party and all
appropriate governmental authorities (including without limitation the
Commission, the NASD and state insurance regulators) and shall permit such
authorities reasonable access to its books and records in connection with any
investigation or inquiry relating to this Agreement or the transactions
contemplated hereby.
8.7. The rights, remedies and obligations contained in this Agreement
are cumulative and are in addition to any and all rights, remedies and
obligations, at law or in equity, which the parties hereto are entitled to
under state and federal laws.
8.8. The parties to this Agreement acknowledge and agree that this
Agreement shall not be exclusive in any respect.
8.9. This Agreement shall be binding upon and inure to the benefit of
the parties and their respective successors and assigns, provided that no
party may assign this Agreement without the prior written consent of the other
party.
8.10. No provisions of this Agreement may be amended or modified in any
manner except by a written agreement properly authorized and executed by both
parties.
18
8.11. Notwithstanding anything to the contrary contained in this
Agreement, in addition to and not in lieu of other provisions in this
Agreement:
(a) "Confidential Information" includes but is not limited to
all proprietary and confidential information of the Company and its
subsidiaries, affiliates and licensees (collectively the "Protected Parties"
for purposes of this Section 8.11), including without limitation all
information regarding the customers of the Protected Parties; or the accounts,
account numbers, names, addresses, social security numbers or any other
personal identifier of such customers; or any information derived therefrom.
(b) The Trust shall not use or disclose Confidential Information
for any purpose other than to carry out the purpose for which Confidential
Information was provided to the Trust as set forth in the Agreement; and the
Trust agrees to cause all its employees, agents and representatives, or any
other party to whom the Trust may provide access to or disclose Confidential
Information to limit the use and disclosure of Confidential Information to
that purpose.
(c) The Trust acknowledges that all computer programs and
procedures or other information developed or used by the Protected Parties or
any of their employees or agents in connection with the Company's performance
of its duties under this Agreement are the valuable property of the Protected
Parties.
(d) The Trust agrees to implement appropriate measures designed
to ensure the security and confidentiality of Confidential Information, to
protect such information against any anticipated threats or hazards to the
security or integrity of such information, and to protect against unauthorized
access to, or use of, Confidential Information that could result in
substantial harm or inconvenience to any customer of the Protected Parties;
the Trust further agrees to cause all its agents, representatives or
subcontractors of, or any other party to whom the Trust may provide access to
or disclose Confidential Information to implement appropriate measures
designed to meet the objectives set forth in this Section 8.11.
(e) The Trust acknowledges that any breach of the agreements in
this Section 8.11. would result in immediate and irreparable harm to the
Protected Parties for which there would be no adequate remedy at law and agree
that in the event of such a breach, the Protected Parties will be entitled to
equitable relief by way of temporary and permanent injunctions, as well as
such other relief as any court of competent jurisdiction deems appropriate.
The provisions contained in this Section 8.11 will survive any termination of
this Agreement.
[Remainder of page intentionally left blank]
19
IN WITNESS WHEREOF, the parties have each caused this Agreement to be
executed in its name and on its behalf by its duly authorized representative
as of the date and year first above written.
IDS LIFE INSURANCE COMPANY OF EVERGREEN VARIABLE ANNUITY
NEW YORK TRUST
By: /s/ Xxxxxxx X. Xxxxx III By: /s/ Xxxxx X. Xxxxx
------------------------ ----------------------
Name: Xxxxxxx X. Xxxxx III Name: Xxxxx X. Xxxxx
Title: Vice President Title: Assistant Secretary
ATTEST:
By: /s/ Xxxxx Xxxxxx
------------------------
Name: Xxxxx Xxxxxx
Title: Assistant Secretary
20
SCHEDULE A
IDS Life Insurance Company of New York
Separate Accounts, Contracts and Designated Portfolios
------------------------------------------------------
NAME OF SEPARATE ACCOUNTS AND DATE
ESTABLISHED BY BOARD OF DIRECTORS:
IDS Life of New York Variable Annuity Account
Established April 17, 1996
(Effective January 2, 2007: RiverSource of New York Variable Annuity Account)
IDS Life of New York Account 8
Established September 12, 1985
(Effective January 2, 2007: RiverSource of New York Account 8)
CONTRACTS FUNDED BY IDS LIFE OF NEW YORK VARIABLE ANNUITY ACCOUNT:
-----------------------------------------------------------------
RiverSource Retirement Advisor 4 Advantage(SM) Variable Annuity
RiverSource Retirement Advisor 4 Select(SM) Variable Annuity
RiverSource Retirement Advisor 4 Access(SM) Variable Annuity
RiverSource Retirement Advisor Advantage Plus(SM) Variable Annuity
RiverSource Retirement Advisor Select Plus(SM) Variable Annuity
RiverSource Retirement Advisor Advantage(SM) Variable Annuity
RiverSource Retirement Advisor Select(SM) Variable Annuity
Designated Portfolios:
---------------------
VA Fundamental Large Cap Fund--Class 2
VA International Equity Fund--Class 2
CONTRACTS FUNDED BY IDS LIFE OF NEW YORK ACCOUNT 8:
--------------------------------------------------
RiverSource Single Premium Variable Life Insurance
RiverSource Succession Select Variable Life Insurance
RiverSource Variable Universal Life IV
RiverSource Variable Universal Life IV - Estate Series
Designated Portfolios:
---------------------
VA Fundamental Large Cap Fund--Class 2
21
