Allstate Life Insurance Co of New York – ‘10-Q’ for 6/30/02

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Quarterly Report   —   Form 10-Q
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10-Q        Allstate Life of New York 10Q                         25    132K 
 2: EX-10       Agreements                                           128    265K 

10-Q   —   Allstate Life of New York 10Q
Document Table of Contents

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 UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 FORM 10-Q

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

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

 For the quarterly period ended: June 30, 2002

OR

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

 Commission file number: 333-61846

 Allstate Life Insurance Company of New York
(Exact Name of Registrant as Specified in Its Charter)

    NEW YORK                        36-2608394
(State or Other Jurisdiction of         (I.R.S. Employer  
Incorporation or Organization)         Identification No.)

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

Registrant's telephone number, including area code: 516/451-5300

  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 [ ]                        

As of July 31, 2002, Registrant had 100,000 shares of common stock    
outstanding, par value $25 per share, all of which shares are held by Allstate  
Life Insurance Company.                                                         

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                   ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK                             
                     INDEX TO QUARTERLY REPORT ON FORM 10-Q                                
                                  JUNE 30, 2002                                            

PART I.  FINANCIAL INFORMATION                                                             

                                                                                           
Item 1.   Financial Statements                                                             

          Condensed Statements of Operations for the Three Month and Six Month Periods     
          Ended  June 30, 2002 and 2001 (unaudited)                                       3

          Condensed Statements of Financial Position as of June 30, 2002 (unaudited)       
          and December 31, 2001                                                           4

          Condensed Statements of Cash Flows for the Six Month Periods Ended               
          June 30, 2002 and 2001 (unaudited)                                              5

          Notes to Condensed Financial Statements (unaudited)                             6

Item 2.   Management's Discussion and Analysis of                                          
          Financial Condition and Results of Operations                                  10

PART II. OTHER INFORMATION                                                                 

Item 1.   Legal Proceedings                                                             23 

Item 6.   Exhibits and Reports on Form 8-K                                              23 

Signature Page                                                                          24 


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 PART 1. FINANCIAL INFORMATION
ITEM 1. CONDENSED FINANCIAL STATEMENTS

 ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
CONDENSED STATEMENTS OF OPERATIONS

                                                        [Enlarge/Download Table]

                                                           Three Months Ended            Six Months Ended       
                                                                June 30,                     June 30,           
                                                        --------------------------  ----------------------------
                                                        --------------------------  ----------------------------
(in thousands)                                             2002          2001           2002           2001     
                                                        -----------  -------------  -------------  -------------
                                                               (Unaudited)                  (Unaudited)         

                                                                                                                
REVENUES                                                                                                        
Premiums                                                $   30,230   $     26,779   $     52,774   $     46,993 
Contract charges                                            12,250         10,117         24,607         20,471 
Net investment income                                       56,953         50,209        111,381         98,695 
Realized capital gains and losses                            1,142         (3,229)        (1,465)        (2,452)
                                                        ----------   ------------   ------------   ------------ 
                                                           100,575         83,876        187,297        163,707 
                                                        ----------   ------------   ------------   ------------ 
COSTS AND EXPENSES                                                                                              
Contract benefits                                           44,673         45,584         90,500         85,056 
Interest credited to contractholder funds                   25,399         18,281         41,430         34,592 
Amortization of deferred policy acquisition costs            4,942          2,089          6,784          3,785 
Operating costs and expenses                                 8,372          8,050         18,514         15,794 
                                                        ----------   ------------   ------------   ------------ 
                                                            83,386         74,004        157,228        139,227 
                                                        ----------   ------------   ------------   ------------ 
INCOME FROM OPERATIONS BEFORE INCOME TAX EXPENSE AND                                                            
   CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE      17,189          9,872         30,069         24,480 
Income tax expense                                           5,945          3,402         10,352          8,457 
                                                        ----------   ------------   ------------   ------------ 
INCOME BEFORE CUMULATIVE EFFECT OF CHANGE IN                                                                    
   ACCOUNTING PRINCIPLE                                     11,244          6,470         19,717         16,023 
Cumulative effect of change in accounting for                                                                   
   derivative financial instruments, after-tax                   -              -              -          (147) 
                                                        ----------   ------------   ------------   ------------ 
NET INCOME                                              $   11,244   $      6,470   $     19,717   $     15,876 
                                                        ==========   ============   ============   ============ 


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                                  See notes to condensed financial statements.

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

                                                                                         June 30,        December 31,   
(in thousands, except par value data)                                                      2002              2001       
                                                                                      ---------------  -----------------
                                                                                      ---------------  -----------------
                                                                                       (Unaudited)                      
ASSETS                                                                                                                  
Investments                                                                                                             
                                                                                                                        
   Fixed income securities, at fair value (amortized cost $2,895,301 and $2,678,265)  $    3,138,531   $      2,894,461 
   Mortgage loans                                                                            271,259            242,727 
   Short-term                                                                                120,074             57,507 
   Policy loans                                                                               33,082             33,160 
                                                                                      --------------   ---------------- 
      Total investments                                                                    3,562,946          3,227,855 

Cash                                                                                           6,153              7,375 
Deferred policy acquisition costs                                                            176,408            156,615 
Accrued investment income                                                                     38,919             33,601 
Reinsurance recoverables                                                                       1,134              1,453 
Other assets                                                                                  13,680             13,800 
Separate Accounts                                                                            589,029            602,657 
                                                                                      --------------   ---------------- 
        TOTAL ASSETS                                                                  $    4,388,269   $      4,043,356 
                                                                                      ==============   ================ 

LIABILITIES                                                                                                             
Reserve for life-contingent contract benefits                                              1,378,722          1,317,816 
Contractholder funds                                                                       1,656,171          1,428,113 
Current income taxes payable                                                                   3,305              6,049 
Deferred income taxes                                                                         72,576             64,612 
Other liabilities and accrued expenses                                                       195,352            164,399 
Payable to affiliates, net                                                                     3,904                427 
Reinsurance payable to affiliate, net                                                            859                307 
Separate Accounts                                                                            589,029            602,657 
                                                                                      --------------   ---------------- 
        TOTAL LIABILITIES                                                             $    3,899,918   $      3,584,380 
                                                                                      --------------   ---------------- 
COMMITMENTS AND CONTINGENT LIABILITIES (NOTE 3)                                                                         

SHAREHOLDER'S EQUITY                                                                                                    
Common stock, $25 par value, 100,000 shares authorized, issued and outstanding                 2,500              2,500 
Additional capital paid-in                                                                    45,787             45,787 
Retained income                                                                              311,411            291,694 
Accumulated other comprehensive income:                                                                                 
   Unrealized net capital gains and losses                                                   128,653            118,995 
                                                                                      --------------   ---------------- 
        Total accumulated other comprehensive income                                         128,653            118,995 
                                                                                      --------------   ---------------- 
        TOTAL SHAREHOLDER'S EQUITY                                                           488,351            458,976 
                                                                                      --------------   ---------------- 
        TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY                                    $    4,388,269   $      4,043,356 
                                                                                      ==============   ================ 


                                  See notes to condensed financial statements.
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                   ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK                                               
                       CONDENSED STATEMENTS OF CASH FLOWS                                                    

                                                                                       Six Months Ended      
                                                                                           June 30,          
                                                                                   --------------------------
                                                                                   --------------------------
(in thousands)                                                                        2002          2001     
                                                                                   ------------  ------------
                                                                                          (Unaudited)        
CASH FLOWS FROM OPERATING ACTIVITIES                                                                         
                                                                                                             
Net income                                                                         $    19,717   $    15,876 
Adjustments to reconcile net income to net cash provided by operating activities:                            

          Amortization and other non-cash items                                        (24,000)      (24,681)
          Realized capital gains and losses                                              1,465         2,452 
          Interest credited to contractholder funds                                     41,430        34,592 
          Changes in:                                                                                        
             Life-contingent contract benefits and insurance reserves                   28,083        30,332 
             Deferred policy acquisition costs                                         (17,768)      (25,264)
             Income taxes payable                                                           20         7,849 
             Other operating assets and liabilities                                     (2,712)        3,569 
                                                                                   -----------    ---------- 
                Net cash provided by operating activities                               46,235        44,725 
                                                                                   -----------    ---------- 

CASH FLOWS FROM INVESTING ACTIVITIES                                                                         
Proceeds from sales of fixed income securities                                         129,851       122,378 
Investment collections                                                                                       
          Fixed income securities                                                       87,663        38,459 
          Mortgage loans                                                                13,113        11,376 
Investments purchases                                                                                        
          Fixed income securities                                                     (399,221)     (332,654)
          Mortgage loans                                                               (41,276)      (15,500)
Change in short-term investments, net                                                  (43,709)      (29,260)
Change in other investments, net                                                           788          (392)
Change in policy loans, net                                                                 78          (598)
                                                                                   -----------    ---------- 
                Net cash used in investing activities                                 (252,713)     (206,191)
                                                                                   -----------    ---------- 
CASH FLOWS FROM FINANCING ACTIVITIES                                                                         
Contractholder fund deposits                                                           286,469       261,791 
Contractholder fund withdrawals                                                        (81,213)     (101,172)
                                                                                   -----------    ---------- 
                Net cash provided by financing activities                              205,256       160,619 
                                                                                   -----------    ---------- 

NET DECREASE IN CASH                                                                    (1,222)        (847) 
CASH AT BEGINNING OF PERIOD                                                              7,375         2,162 
                                                                                   -----------    ---------- 
CASH AT END OF PERIOD                                                              $     6,153    $    1,315 
                                                                                   ===========    ========== 


                                  See notes to condensed financial statements.
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 ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
 NOTES TO FINANCIAL STATEMENTS
 (UNAUDITED)

1.   BASIS OF PRESENTATION                                                      

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

   The condensed financial statements and notes as of June 30, 2002, and for
the three-month and six-month periods ended June 30, 2002 and 2001, are         
unaudited. The condensed financial statements reflect all adjustments           
(consisting only of normal recurring accruals) which are, in the opinion of     
management, necessary for the fair presentation of the financial position,      
results of operations and cash flows for the interim periods. These condensed   
financial statements and notes should be read in conjunction with the financial 
statements and notes thereto included in the Allstate Life Insurance Company of 
New York Annual Report on Form 10-K for the year ended December 31, 2001. The   
results of operations for the interim periods should not be considered          
indicative of results to be expected for the full year.                         

 To conform with the 2002 and year-end 2001 presentations, certain prior
year amounts have been reclassified.                                            

NEW ACCOUNTING STANDARD                                                         

In June 2001, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standard ("SFAS") No. 142, "Goodwill and other
Intangible Assets", which eliminates the requirement to amortize goodwill, and  
requires that goodwill and separately identified intangible assets with         
indefinite lives be evaluated for impairment on an annual basis (or more        
frequently if impairment indicators arise) on a fair value basis. The Company   
adopted SFAS No. 142 effective January 1, 2002. The Company's 2001 results do   
not reflect the impact of the non-amortization provisions of SFAS No. 142. Had  
the Company adopted the non-amortization provisions on January 1, 2001, the     
impact would have been immaterial to Net income (goodwill totaled $160 thousand 
balance at June 30, 2002). During the second quarter of 2002, the Company       
completed the initial goodwill impairment test required by SFAS No. 142 and     
concluded that goodwill was not impaired.                                       

PENDING ACCOUNTING STANDARD                                                     

    On July 31, 2002, the AICPA issued an exposure draft Statement of Position
("SOP") entitled "Accounting and Reporting by Insurance Enterprises for Certain 
Nontraditional Long-Duration Contracts and for Separate Accounts". The          
accounting guidance contained in the proposed SOP applies to several of the     
Company's products and product features. The proposed effective date of the SOP 
is fiscal years beginning after December 15, 2003, with earlier adoption        
encouraged. Initial application should be as of the beginning of the fiscal     
year; therefore, if adopted during an interim period of 2003, prior interim     
periods should be restated. Most provisions of the proposed SOP will have a     
minimal impact to the Company, however, a provision that requires the           
establishment of a liability in addition to the account balance for contracts   
that contain death benefits may have a material impact on the condensed         
statement of operations depending on the market conditions at the time of       
adoption. Contracts affected are those that contain provisions wherein the      
amounts assessed against the contractholder each period for the insurance       
benefit feature are not proportionate to the insurance coverage provided for the
period. These contract provisions are commonly referred to as guaranteed minimum
death benefits.                                                                 

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 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:                                                           

                                                        [Enlarge/Download Table]


                                                                   Three Months Ended June 30,                            
                                           -----------------------------------------------------------------------------  
                                           --------------------------------------   -----------------------------------   
(in thousands)                                             2002                                     2001                  
                                           --------------------------------------    -----------------------------------  
                                           -----------    ----------   ----------    ----------   ---------    ---------  
                                                                        After-                                  After-    
                                             Pretax          Tax          tax         Pretax        Tax          tax      
                                           -----------    ----------   ----------    ----------   ---------    ---------  
                                           -----------    ----------   ----------    ----------   ---------    ---------  
UNREALIZED CAPITAL GAINS AND LOSSES                                                                                       
AND NET GAINS AND LOSSES ON DERIVATIVE                                                                                    
FINANCIAL INSTRUMENTS:                                                                                                    

                                                                                                                          
Unrealized holding gains (losses)                                                                                         
    arising during the period             $    23,800    $  (8,330)    $  15,470    $  (18,421)   $    6,448  $  (11,973) 
Less:  reclassification adjustments               (51)          18          (33)        (2,324)          814      (1,510) 
                                          -----------    ---------     --------     ----------    ----------  ----------  
Unrealized net capital gains (losses)          23,851       (8,348)       15,503       (16,097)        5,634     (10,463) 
   Net gains (losses) on derivative                                                                                       
   financial instruments arising during                                                                                   
   the period                                   1,193         (418)          775        (1,138)          398        (740) 
   Less: reclassification adjustments           1,193         (418)          775          (904)          316        (588) 
                                          -----------    ---------     ---------    ----------    ----------   ---------  
Net   (losses)   gains   on   derivative                                                                                  
financial instruments                               -            -             -          (234)           82        (152) 
                                          -----------    ---------     ---------    ----------    ----------   ---------  
Other comprehensive income (loss)         $    23,851    $  (8,348)       15,503    $  (16,331)   $    5,716     (10,615) 
                                          ===========    =========                  ==========    ==========              
Net income                                                                11,244                                   6,470  
                                                                       ---------                               ---------  
Comprehensive income (loss)                                            $  26,747                               $  (4,145) 
                                                                       =========                               =========  

                                                                    Six Months Ended June 30,                             
                                           -----------------------------------------------------------------------------  
                                           --------------------------------------    -----------------------------------  
                                                           2002                                     2001                  
                                           --------------------------------------    -----------------------------------  
                                           -----------    ----------   ----------    ----------   ---------    ---------  
(in thousands)                                                          After-                                  After-    
                                             Pretax          Tax          tax         Pretax        Tax          tax      
                                           -----------    ----------   ----------    ----------   ---------    ---------  
                                           -----------    ----------   ----------    ----------   ---------    ---------  
UNREALIZED CAPITAL GAINS AND LOSSES AND                                                                                   
NET GAINS AND LOSSES ON DERIVATIVE                                                                                        
FINANCIAL INSTRUMENTS:                                                                                                    

Unrealized holding gains (losses)                                                                                         
    arising during the period              $    14,127    $   (4,945)  $   9,182     $  (7,341)   $    2,570   $   (4,771)
Less:  reclassification adjustments               (732)          256        (476)       (2,059)          721       (1,338)
                                           -----------    ----------   ----------    ----------   ----------   ---------- 
Unrealized net capital gains (losses)           14,859        (5,201)      9,658        (5,282)        1,849       (3,433)
   Net gains (losses) on derivative                                                                                       
   financial instruments arising during                                                                                   
   the period                                      793          (278)        515          (392)          137         (255)
   Less: reclassification adjustments              793          (278)        515          (392)          137         (255)
                                           -----------    ----------   ---------     ---------    ----------   ---------- 
Net   gains   (losses)   on   derivative                                                                                  
financial instruments                                -             -           -             -             -            - 
                                           -----------    ----------   ---------     ---------    ----------   ---------- 
Other comprehensive income (loss)          $    14,859    $   (5,201)      9,658     $  (5,282)   $    1,849       (3,433)
                                           ===========    ==========                 =========    ==========              

Net income                                                                19,717                                   15,876 
                                                                       ---------                               ---------- 
Comprehensive income                                                   $  29,375                               $   12,443 
                                                                       =========                               ========== 

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

3.   REGULATION AND LEGAL PROCEEDINGS                                           

The Company's business is subject to the effects of a changing social,
economic and regulatory environment. State and federal regulatory initiatives   
have varied and have included employee benefit regulations, removal of barriers 
preventing banks from engaging in the securities and insurance businesses, 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 the overall expansion of regulation. The      
ultimate changes and eventual effects, if any, of these initiatives are         
uncertain.                                                                      

   The Company sells its products through a variety of distribution channels
including Allstate agencies. Consequently, the outcome of some legal proceedings
that involve AIC regarding the Allstate agencies may have an impact on the      
Company.                                                                        

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

     In addition, on August 6, 2002 a petition was filed with the National Labor
Relations Board ("NLRB") by the United Exclusive Allstate Agents, Office and    
Professional Employees International Union, seeking certification as the        
collective bargaining representative of all Allstate agents in the United       
States. AIC is opposing the petition on a number of grounds, including that the 
agents are independent contractors and, therefore, the NLRB lacks jurisdiction  
over the issue. The outcome is currently uncertain.                             

AIC is also defending certain matters relating to its agency program  
reorganization announced in 1999. These matters include an investigation by the 
U.S. Department of Labor and a lawsuit filed in December 2001 by the U.S. Equal 
Employment Opportunity Commission ("EEOC") with respect to allegations of       
retaliation under the Age Discrimination in Employment Act, the Americans with  
Disabilities Act and Title VII of the Civil Rights Act of 1964. A putative      
nationwide class action has also been filed by former employee agents alleging  
various violations of ERISA, breach of contract and age discrimination. AIC has 
been vigorously defending these lawsuits and other matters related to its agency
program reorganization. The outcome of these disputes is currently uncertain.   

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

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

4.   REINSURANCE                                                                

   The Company purchases reinsurance to limit aggregate and single losses on
large risks. The Company also cedes a portion of the mortality risk on certain  
term life policies with a pool of reinsurers. The Company continues to have     
primary liability as the direct insurer for risks reinsured. The Company follows
a comprehensive evaluation process involving credit scoring and capacity to     
select reinsurers. Estimating amounts of reinsurance recoverable is impacted by 
the uncertainties involved in the establishment of loss reserves. Failure of    
reinsurers to honor their obligations could result in losses to the Company.    

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

                                                        [Enlarge/Download Table]


                                                Three Months Ended            Six Months Ended      
                                                     June 30,                     June 30,          
                                             --------------------------   --------------------------
                                             -----------     ----------   ----------    ------------
(in thousands)                                  2002           2001         2002           2001     
                                             -----------     ----------   ----------    ------------
                                                                                                    
PREMIUMS AND CONTRACT CHARGES                                                                       
Direct                                       $   44,361      $  38,137    $   81,105    $   69,748  
Assumed - non-affiliate                             106            176           246           372  
Ceded                                                                                               
   Affiliate                                     (1,764)        (1,216)       (3,525)       (2,235) 
   Non-affiliate                                   (223)          (201)         (445)         (421) 
                                             ----------      ---------    ----------    ----------  
      Premiums and contract charges, net                                                            
         of reinsurance                      $   42,480      $  36,896    $   77,381    $   67,464  
                                             ==========      =========    ==========    ==========  

                                                Three Months Ended             Six Months Ended     
                                                     June 30,                     June 30,          
                                            ---------------------------   --------------------------
                                            ------------     ----------   ----------    ------------
(in thousands)                                 2002            2001         2002           2001     
                                            ------------     ----------   ----------    ------------
CONTRACT BENEFITS                                                                                   
Direct                                      $    45,013      $   46,284   $   91,617    $    85,997 
Assumed - non-affiliate                               4              24           45             26 
Ceded                                                                                               
   Affiliate                                        (37)           (436)        (566)          (490)
   Non-affiliate                                   (307)           (288)        (596)          (477)
                                            -----------      ----------   ----------    ----------- 
    Contract benefits, net of  reinsurance  $    44,673      $   45,584   $   90,500    $    85,056 
                                            ===========      ==========   ==========    =========== 


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 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
 RESULTS OF OPERATIONS FOR THE THREE AND SIX MONTH PERIODS
ENDED JUNE 30, 2002 AND 2001

     THE FOLLOWING DISCUSSION HIGHLIGHTS SIGNIFICANT FACTORS INFLUENCING RESULTS
OF OPERATIONS AND CHANGES IN FINANCIAL POSITION OF ALLSTATE LIFE INSURANCE      
COMPANY OF NEW YORK (THE "COMPANY"). IT SHOULD BE READ IN CONJUNCTION WITH THE  
CONDENSED FINANCIAL STATEMENTS AND RELATED NOTES THERETO FOUND UNDER PART I.    
ITEM 1. CONTAINED HEREIN AND WITH THE DISCUSSION, ANALYSIS, FINANCIAL STATEMENTS
AND NOTES THERETO IN PART I. ITEM 1. AND PART II. ITEM 7. AND ITEM 8. OF THE    
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK ANNUAL REPORT ON FORM 10-K FOR THE  
YEAR ENDED DECEMBER 31, 2001, WHICH INCLUDES A DISCUSSION OF THE COMPANY'S      
CRITICAL ACCOUNTING POLICIES. TO CONFORM WITH THE 2002 AND YEAR-END 2001        
PRESENTATION, CERTAIN PRIOR YEAR AMOUNTS HAVE BEEN RECLASSIFIED.                

OVERVIEW                                                                        
   The Company, a wholly owned subsidiary of Allstate Life Insurance Company
("ALIC"), which is a wholly owned subsidiary of Allstate Insurance Company      
("AIC"), a wholly owned subsidiary of The Allstate Corporation (the             
"Corporation"), markets a diversified group of products to meet consumers'      
lifetime needs in the areas of protection and retirement solutions in the state 
of New York through a combination of Allstate agencies, financial services      
firms, direct marketing and specialized brokers. The Company's products include 
term life; whole life; universal life; annuities such as fixed annuities, market
value adjusted annuities; variable annuities; immediate annuities; and other    
protection products such as accidental death and hospital indemnity.            

The Company has identified itself as a single segment entity.         

The assets and liabilities related to variable annuity contracts are  
legally segregated and reflected as Separate Accounts. The assets of the        
Separate Accounts are carried at fair value. Separate Accounts liabilities      
represent the contractholders' claims to the related assets and are carried at  
the fair value of the assets. Investment income and realized capital gains and  
losses of the Separate Accounts accrue directly to the contractholders and      
therefore are not included in the Company's condensed statements of operations. 
Revenues to the Company from the Separate Accounts consist of contract          
maintenance and administration fees and mortality, surrender and expense        
charges.                                                                        

Absent any contract provision wherein the Company guarantees either a 
minimum return or account value upon death, variable annuity contractholders    
bear the investment risk that the Separate Accounts' funds may not meet their   
stated objectives.                                                              

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 RESULTS OF OPERATIONS FOR THE THREE AND SIX MONTH PERIODS
ENDED JUNE 30, 2002 AND 2001

                                                        [Enlarge/Download Table]


FINANCIAL HIGHLIGHTS                                                                                                         

                                                                      Three Months Ended              Six Months Ended       
                                                                           June 30,                       June 30,           
                                                                  ---------------------------    --------------------------- 
                                                                  ------------    -----------    -----------    ------------ 
(in thousands)                                                        2002           2001           2002            2001     
                                                                  ------------    -----------    -----------    ------------ 
                                                                  ------------    -----------    -----------    ------------ 

                                                                                                                             
Statutory premiums and deposits                                   $    216,081    $   194,428    $   406,473    $    362,200 
                                                                  ============    ===========    ===========    ============ 

Investments                                                       $  3,562,946    $ 3,060,061    $ 3,562,946    $  3,060,061 
Separate Accounts Assets                                               589,029        582,462        589,029         582,462 
                                                                  ------------    -----------    -----------    ------------ 
Investments, including Separate Accounts Assets                   $  4,151,975    $ 3,642,523    $ 4,151,975    $  3,642,523 
                                                                  ============    ===========    ===========    ============ 

GAAP Premiums                                                     $     30,230 $       26,779    $    52,774    $     46,993 
Contract charges                                                        12,250         10,117         24,607          20,471 
Net investment income                                                   56,953         50,209        111,381          98,695 
Contract benefits                                                       44,673         45,584         90,500          85,056 
Interest credited to contractholder funds                               25,399         18,281         41,430          34,592 
Amortization of deferred policy acquisition costs ("DAC")                5,243          1,073          7,073           2,603 
Operating costs and expenses                                             8,372          8,050         18,514          15,794 

                                                                  ------------    -----------    -----------    ------------ 
Operating income before tax                                             15,746         14,117         31,245          28,114 
Income tax expense                                                       5,428          4,930         10,773           9,766 
                                                                  ------------    -----------    -----------    ------------ 
Operating income (1)                                                    10,318          9,187         20,472          18,348 
Realized capital gains and losses, after-tax(2)                            926         (2,717)          (755)         (2,325)
Cumulative effect of change in                                                                                               
  accounting principle, after-tax                                            -              -              -           (147) 
                                                                  ------------    -----------    -----------    ------------ 
Net income                                                        $     11,244    $     6,470    $    19,717    $     15,876 
                                                                  ============    ===========    ===========    ============ 

(1) For a complete definition of operating income, see the operating income                                                  
discussion beginning on page 13.                                                                                             

(2) RECONCILIATION OF REALIZED CAPITAL GAINS AND LOSSES                                                                      
                                                                 Three Months                   Six Months                   
                                                                Ended June 30,                Ended June 30,                 
                                                        ---------------------------    -----------------------------         
                                                        ------------     ----------    ------------     ------------         
               (in thousands)                                                                                                
                                                           2002            2001           2002             2001              
                                                        ------------     ----------    ------------     ------------         
                                                        ------------     ----------    ------------     ------------         
      Realized capital gains and losses                 $    1,142      $   (3,229)    $    (1,465)     $    (2,452)         
      Reclassification of Amortization  of DAC                 301          (1,016)            289           (1,182)         
      Reclassification of Income tax benefit (expense)        (517)          1,528             421            1,309          
                                                        ----------      ----------     -----------      -----------          
      Realized capital gains and losses, after-tax      $      926      $   (2,717)    $      (755)     $    (2,325)         
                                                        ==========      ==========     ===========      ===========          


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 RESULTS OF OPERATIONS FOR THE THREE AND SIX MONTH PERIODS
ENDED JUNE 30, 2002 AND 2001

STATUTORY PREMIUMS AND DEPOSITS                                                 

    Statutory premiums and deposits is a measure used by management to analyze
sales trends. Statutory premiums and deposits includes premiums on insurance    
policies and premiums and deposits on annuities determined in conformity with   
statutory accounting practices prescribed or permitted by the insurance         
regulatory authorities of the state of New York, and all other funds received   
from customers on deposit-type products which are accounted for by the Company  
as liabilities. The statutory accounting practices, and the Company's definition
of statutory premiums and deposits, differ in material aspects from GAAP. The   
Company's method of calculating statutory premiums and deposits may also be     
different from the method used by other companies and therefore comparability   
may be limited.                                                                 

   The following table summarizes statutory premiums and deposits by product
line:                                                                           

                                                        [Enlarge/Download Table]

                                           Three Months Ended            Six Months Ended      
                                                June 30,                     June 30,          
                                       ---------------------------  ---------------------------
                                       -----------    ------------  -----------    ------------
(in thousands)                            2002            2001         2002            2001    
                                       -----------    ------------  -----------    ------------
                                       -----------    ------------  -----------    ------------

                                                                                               
LIFE AND OTHER PRODUCTS                                                                        
     Interest-sensitive life           $    13,716    $     11,768   $   27,412    $     24,009
     Traditional life                        5,624           6,497       10,581          12,099
     Other                                   2,315           2,084        4,498           4,203
                                       -----------    ------------  -----------    ------------
       Total life and other products        21,655          20,349       42,491          40,311
                                       -----------    ------------  -----------    ------------

INVESTMENT PRODUCTS                                                                            
     Fixed annuities                        83,590          70,178      142,401         123,205
     Immediate annuities                    34,519          32,029       62,543          60,854
     Variable annuities                     76,317          71,872      159,038         137,830
                                       -----------    ------------  -----------    ------------

        Total investment products          194,426         174,079      363,982         321,889
                                       -----------    ------------  -----------    ------------
TOTAL STATUTORY PREMIUMS AND DEPOSITS  $   216,081    $    194,428   $  406,473    $    362,200
                                       ===========    ============  ===========    ============


For the second quarter of 2002, total statutory premiums and deposits 
increased 11.1% when compared to the same period last year. In the first six    
months of 2002, total statutory premiums and deposits increased 12.2% compared  
to the same period last year. For both periods the increase was primarily due to
an increase in sales of fixed annuities, variable annuities and                 
interest-sensitive life products. Fixed annuities increased due to marketing and
sales in the financial services channel. Variable annuities increased due to new
wholesaling initiatives through the banking channel and the financial services  
channel. Interest-sensitive life products increased due to increased marketing. 

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ENDED JUNE 30, 2002 AND 2001

GAAP PREMIUMS AND CONTRACT CHARGES                                              

    Under GAAP, premiums represent premium generated from traditional life and
other insurance products which have significant mortality or morbidity risk, and
contract charges generated from interest-sensitive life products, variable      
annuities, fixed annuities and other investment products for which deposits are 
classified as contractholder funds. Contract charges are assessed against the   
contractholder account balance for maintenance, administration, cost of         
insurance and early surrender. The following table summarizes GAAP premiums and 
contract charges:                                                               

                                                        [Enlarge/Download Table]


                                                      Three Months Ended          Six Months Ended     
                                                           June 30,                   June 30,         
                                                   -------------------------   ----------------------- 
(in thousands)                                        2002           2001        2002          2001    
                                                   ----------      ---------   ---------    ---------- 
                                                   ----------      ---------   ---------    ---------- 
                                                                                                       
PREMIUMS                                                                                               
   Traditional life                                $      5,459    $    6,084  $   10,560   $    11,740
   Immediate annuities with life contingencies(1)        22,476        18,571      37,722        31,011
   Other                                                  2,295         2,124       4,492         4,242
                                                   ------------    ----------  ----------   -----------
       Total premiums                              $     30,230    $   26,779  $   52,774   $    46,993
                                                   ============    ==========  ==========   ===========

CONTRACT CHARGES                                                                                       
    Interest-sensitive life                        $     9,069     $    6,827  $   17,959   $    13,707
    Variable annuities                                   2,549          2,324       5,286         4,596
    Investment contracts                                   632            966       1,362         2,168
                                                   -----------     ----------  ----------   -----------
       Total contract charges                      $    12,250     $   10,117  $   24,607   $    20,471
                                                   ===========     ==========  ==========   ===========

     (1) Under GAAP accounting requirements, only those immediate annuities with
life contingencies are recognized in premiums. Those without life contingencies,
or period certain, are directly recorded as liabilities and generate contract   
charges. Market conditions and consumer preferences drive the mix of immediate  
annuities sold with or without life contingencies.                              

 For the second quarter and the first six months of 2002, total premiums
increased 12.9% and 12.3%, respectively, compared to the same periods last year.
These increases were due to increased sales of immediate annuities with life    
contingencies partially offset by decreased premiums from traditional life      
products.                                                                       

   Total contract charges increased 21.1% for the second quarter of 2002 and
20.2% for the first six months of 2002, compared to the same periods last year. 
In both periods, the increases were due to increased contract charges on        
interest-sensitive life products from new business sales. Contract charges on   
variable annuities, which are generally calculated as a percentage of account   
value, increased compared to prior year periods due to growth from new sales    
partially offset by declines in account value as a result of market declines.   

OPERATING INCOME                                                                

     Operating income is a measure used by management to evaluate profitability.
Operating income is defined as Income before the cumulative effect of changes in
accounting principles, after-tax, and excluding the after-tax effects of        
realized capital gains and losses. In this management measure, the effects of   
realized capital gains and losses and certain other items have been excluded due
to the volatility between periods and because such data is often excluded when  
evaluating the overall financial performance and profitability of other         
insurers. These operating results should not be considered as a substitute for  
any GAAP measure of performance. A reconciliation of operating income to net    
income is provided in the table on page 11. The Company's method of calculating 
operating income may be different from the method used by other companies and   
therefore comparability may be limited.                                         

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ENDED JUNE 30, 2002 AND 2001

                                                        [Enlarge/Download Table]


                                       Three Months Ended            Six Months Ended      
                                            June 30,                     June 30,          
                                   ---------------------------   --------------------------
                                   -----------    ------------   -----------    -----------
(in thousands)                        2002           2001           2002           2001    
                                   -----------    ------------   -----------    -----------
                                   -----------    ------------   -----------    -----------

                                                                                           
Investment margin                 $    12,907    $     11,077   $    25,090    $    22,190 
Mortality margin                        9,722           6,283        19,361         13,134 
Maintenance charges                     5,580           4,992        10,177          9,326 
Surrender charges                       1,152             888         2,204          1,861 
DAC amortization                       (5,243)         (1,073)       (7,073)        (2,603)
Operating costs and expenses           (8,372)         (8,050)      (18,514)       (15,794)
Income tax expense on operations       (5,428)         (4,930)      (10,773)        (9,766)
                                  -----------    ------------   -----------    ----------- 
OPERATING INCOME                  $    10,318    $      9,187   $    20,472    $    18,348 
                                  ===========    ============   ===========    =========== 

     Operating income for the second quarter and six month period ended June 30,
2002 increased 12.3% and 11.6%, respectively, compared to the same periods last 
year. For both periods the increase in operating income was primarily due to    
increases in both the mortality and investment margins partially offset by      
increase in DAC amortization and operating expenses.                            

    Investment margin, which represents the excess of investment income earned
over interest credited to policyholders and contractholders, increased 16.5% in 
the second quarter of 2002 and 13.1% for the first six months of 2002 compared  
to the same periods last year. For both periods, the increase in investment     
margin was due to an increase in invested assets from the 2001 level. The growth
in invested assets was driven by sales of fixed and immediate annuities, less   
contract benefits and surrenders and withdrawals. The impact of this growth was 
partly offset by a decline in invested assets yields. Management actions taken  
in 2001 and the first half of 2002 to reduce crediting rates where contractually
allowed have partially offset the decline in invested asset yields.             

   Mortality margin, which represents premiums and cost of insurance charges
in excess of related policy benefits, increased 54.7% in the second quarter of  
2002 and 47.4% for the first six months of 2002 compared to the same periods    
last year. For both periods the increase in mortality margin was due to revenue 
growth on new business and lower death benefits on interest-sensitive products. 
Mortality and morbidity loss experience can cause benefit payments to fluctuate 
from period to period while underwriting and pricing guidelines utilize a       
long-term view of the trends in mortality and morbidity thereby causing period  
to period fluctuations in the mortality margin.                                 

DAC amortization for the Company is dependent on the nature of the    
insurance contract and requires judgment on both the period and rate of         
amortization. DAC amortization periods for products with significant mortality  
or morbidity risk are determined when the products are sold, and are related to 
the periods in which premiums are received on these products. Amortization is   
recognized in proportion to the pattern of expected gross profits for           
interest-sensitive life and investment products, which is dependent on expected 
investment returns and product profitability experience and the estimated lives 
of the contract periods. The estimated average lives of the contracts are       
considerably shorter than the stated amortization period due to withdrawals,    
surrenders and other policy terminations. The average long-term rate of assumed 
future investment yield of the Separate Accounts used in estimating expected    
gross margins is 8.0% plus 1.15% to 1.45% for fees at June 30, 2002. If actual  
results differ from estimated gross margins, DAC amortization is adjusted. Bonus
interest and other sales incentives are deferred and reflected as an offset     
contractholder funds.                                                           

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ENDED JUNE 30, 2002 AND 2001

                                                        [Enlarge/Download Table]


   The following table summarizes the DAC asset balance by product.                                             

               (in thousands)                       Amortization      June 30,      December 31,                
                                                       Period           2002            2001                    
                                                   ---------------- -------------- ---------------              
                                                   ---------------- -------------- ---------------              
                                                                                                                
               Traditional Life                       7-30 years    $      29,831  $       27,757               
               Other                                  various               3,531           3,946               
                                                                    -------------  --------------               
                                                                           33,362          31,703               

               Interest-sensitive life                30 years             61,608          59,574               
               Fixed annuity                          15 years             21,124          14,701               
               Variable annuity                       15 years             60,314          50,637               
                                                                    -------------  --------------               
                                                                          143,046         124,912               
                                                                    -------------  --------------               
               TOTAL DAC                                            $     176,408  $      156,615               
                                                                    =============  ==============               

     DAC amortization increased $4.2 million during the second quarter of 2002                                  
and $4.5 million during the first six months of 2002 compared to the same                                       
periods of 2001 due to overall growth in business and improved margins on                                       
investment and interest-sensitive life contracts.                                                               

     Operating costs and expenses increased 4.0% during the second quarter of                                   
2002 and 17.2% for the first six months of 2002 compared to the same periods                                    
last year due to distribution expenses incurred on new growth initiatives and                                   
administrative expenses.                                                                                        

NET INVESTMENT INCOME                                                                                           

     Pretax net investment income increased 13.4% in the second quarter of 2002                                 
compared to the same period in 2001. For the first six months of 2002, pretax                                   
net investment income increased 12.9% compared to the same period last year. The                                
increase was due to higher investment balances partially offset by slightly                                     
lower yields. At June 30, 2002 investment balances, excluding Separate Accounts                                 
and unrealized gains and losses on fixed income securities, increased 16.6%                                     
compared to June 30, 2001.                                                                                      

AFTER-TAX REALIZED CAPITAL GAINS AND LOSSES                                                                     

     After-tax realized capital gains were $926 thousand for the second quarter                                 
of 2002 compared to after-tax realized capital losses of $2.7 million in the                                    
same period last year. After-tax realized capital losses were $755 thousand for                                 
the first six months of 2002 compared to $2.3 million in the same period last                                   
year. After-tax realized capital gains and losses are presented net of the                                      
effects of DAC amortization, to the extent that such effects resulted from the                                  
recognition of realized capital gains and losses. The following table describes                                 
the factors impacting the realized capital gains and losses results:                                            

                                                           Three Months Ended             Six Months Ended      
                                                                June 30,                      June 30,          
                                                       ---------------------------    --------------------------
                                                       ----------      -----------    ----------    ------------
(in thousands)                                           2002             2001          2002           2001     
                                                       ----------      -----------    ----------    ------------
                                                       ----------      -----------    ----------    ------------
Portfolio trading                                      $      567      $      (593)   $     (322)   $      (422)
Investment write-downs                                       (599)            (896)       (1,127)          (896)
Valuation of derivative securities                            766             (579)          509           (251)
                                                       ----------      -----------    ----------    ----------- 
Subtotal                                                      734           (2,068)         (940)        (1,569)
Reclassification of amortization of DAC                       192             (649)          185           (756)
                                                       ----------      -----------    ----------    ----------- 
Total realized capital gains and losses, after-tax     $      926      $    (2,717)   $     (755)   $    (2,325)
                                                       ==========      ===========    ==========    =========== 

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ENDED JUNE 30, 2002 AND 2001

    Period to period fluctuations in realized capital gains and losses are the
result of timing of sales decisions reflecting management's decision on         
positioning the portfolio, as well as assessments of individual securities and  
overall market conditions.                                                      

INVESTMENTS                                                                     

 The composition of the Company's investment portfolio at June 30, 2002 is
presented in the following table:                                               
                                                       Percent
(in thousands)                                            to total    

Fixed income securities (1)               $3,138,531         88.1%    
Mortgage loans                               271,259          7.6     
Short-term                                   120,074          3.4     
Policy loans                                  33,082          0.9     
                                     ----------   ----------
Total                                 $3,562,946        100.0%
                                     ==========   ==========

(1)  Fixed income securities are carried at fair value. Amortized cost for these
     securities was $2.90 billion at June 30, 2002 and $2.68 billion at December
31, 2001.                                                             

 Total investments were $3.56 billion at June 30, 2002 compared to $3.23
billion at December 31, 2001. The increase was due to amounts invested from     
positive cash flows generated from operations and increased unrealized capital  
gains. At June 30, 2002, unrealized capital gains on the fixed income securities
portfolio were $243.2 million compared to $216.2 million at December 31, 2001.  

    At June 30, 2002, 97.5% of the Company's fixed income securities portfolio
was rated investment grade, which is defined by the Company as a security having
a rating from the National Association of Insurance Commissioners ("NAIC") of 1 
or 2, a Moody's rating of Aaa, Aa, A, Baa, or a comparable Company internal     
rating.                                                                         

     Total investment balances related to the collateral from securities lending
increased to $167.3 million at June 30, 2002 from $140.3 million at December 31,
2001.                                                                           

Commencing in late July 2002, deterioration of U.S. credit markets    
significantly escalated. For example, in July the Lehman Bothers U.S.           
Investment-Grade Credit Index under-performed U.S. Treasuries by 259 basis      
points, its second-worst month ever. In particular, the telecommunications,     
airlines, and energy sectors in which the Company has holdings have been        
adversely affected. This deterioration, along with reduced market liquidity,    
could also extend to other segments of the economy and is expected to lead to   
increased recognition of realized capital losses from investment write-downs and
portfolio trading in subsequent periods.                                        

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ENDED JUNE 30, 2002 AND 2001

SEPARATE ACCOUNTS                                                               

   Separate Accounts assets and liabilities decreased 2.3% to $589.0 million
at June 30, 2002 from December 31, 2001. The increase from additional deposits  
and transfers from the fixed account fund to variable Separate Accounts funds   
more than was offset by surrenders and withdrawals and unfavorable investment   
performance of the Separate Accounts investments portfolios due to equity market
conditions.                                                                     

CAPITAL RESOURCES AND LIQUIDITY                                                 

CAPITAL RESOURCES                                                               
The Company's capital resources consist of shareholder's equity. The  
following table summarizes the capital resources:                               

                                            June 30,        December 31,
(in thousands)                                  2002             2001       
                                            ------------    --------------
                                            ------------    --------------

Common stock and retained income             $   359,698     $     339,981  
Accumulated other comprehensive income           128,653           118,995  
                                           -----------     -------------
    Total shareholder's equity             $   488,351     $     458,976
                                           ===========     =============

SHAREHOLDER'S EQUITY                                                            
    Shareholder's equity increased in the first six months of 2002 compared to
December 31, 2001, due to net income and an increase in unrealized net capital  
gains.                                                                          

DEBT                                                                            
   The Company had no outstanding debt at June 30, 2002 and December 31, 2001.

FINANCIAL RATINGS AND STRENGTHS                                                 
    Financial strength ratings have become an increasingly important factor in
establishing the competitive position of insurance companies and, generally, may
be expected to have an effect on an insurance company's sales. On an ongoing    
basis, rating agencies review the financial performance and condition of        
insurers. A multiple level downgrade, while not expected, could have a material 
adverse effect on the Company's business, financial condition and results of    
operations. The Company's financial strength was rated Aa2, AA+, and A+ by      
Moody's, Standard & Poor's, and A.M. Best, respectively, at June 30, 2002.      

     In February 2002, Standard & Poor's affirmed its December 31, 2001 ratings.
Standard & Poor's revised its outlook for ALIC and its rated subsidiaries and   
affiliates, including the Company, to "negative" from "stable". This revision is
part of an ongoing life insurance industry review being conducted by Standard & 
Poor's. Moody's and A.M. Best reaffirmed their ratings and outlook for the      
Company.                                                                        

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ENDED JUNE 30, 2002 AND 2001

LIQUIDITY                                                                       
The principal sources of funds for the Company include the following          
activities:                                                                     

SOURCES OF FUNDS                                                      
Statutory premiums and deposits                                       
Reinsurance recoveries                                                
Receipts of principal, interest and dividends on investments          
Sales of investments                                                  
Capital contributions from ALIC                                       
Inter-company loans                                                   

The principal uses of funds for the Company include the following activities:   

USES OF FUNDS                                                         
Payment of contract benefits, maturities, surrenders and withdrawals  
Reinsurance cessions and payments                                     
Operating expenses                                                    
Purchase of investments                                               
Repayment of inter-company loans                                      
Dividends to ALIC                                                     

     Management believes that cash flows from operating and investing activities
of the Company are adequate to satisfy liquidity requirements of these          
operations based on the current liability structure and considering a variety of
reasonably foreseeable stress scenarios.                                        

The maturity structure of the Company's fixed income securities, which
represent 88.1% 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 diversified product portfolio, primarily fixed annuities and      
interest-sensitive life insurance products, is subject to discretionary         
surrenders and withdrawals by contractholders. Total surrenders and withdrawals 
for the three month period and six month period ended June 30, 2002 were $33.8  
million and $82.3 million compared with $23.2 million and $48.6 million for the 
same periods last year. 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. While the overall amount of surrenders may increase 
in the future, a significant increase in the level of surrenders relative to    
total contractholder account balances is not anticipated.                       

The Company has entered into an inter-company loan agreement with the 
Corporation. The amount of inter-company loans available to the Company is at   
the discretion of the Corporation. The maximum amount of loans the Corporation  
will have outstanding to all its eligible subsidiaries at any given point in    
time is limited to $1.00 billion. No amounts were outstanding for the Company   
under the inter-company loan agreement at June 30, 2002 and December 31, 2001,  
respectively.                                                                   

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ENDED JUNE 30, 2002 AND 2001

FORWARD-LOOKING STATEMENTS AND RISK FACTORS                                     

     This document contains "forward-looking statements" that anticipate results
based on management's plans that are subject to uncertainty. These statements   
are made subject to the safe-harbor provisions of the Private Securities        
Litigation Reform Act of 1995.                                                  

    Forward-looking statements do not relate strictly to historical or current
facts and may be identified by their use of words like "plans," "expects,"      
"will," "anticipates," "estimates," "intends," "believes," "likely," and other  
words with similar meanings. These statements may address, among other things,  
the Company's strategy for growth, product development, regulatory approvals,   
market position, expenses, financial results and reserves. Forward-looking      
statements are based on management's current expectations of future events. The 
Company cannot guarantee that any forward-looking statement will be accurate.   
However, we believe that our forward-looking statements are based on reasonable,
current expectations and assumptions. We assume no obligation to update any     
forward-looking statements as a result of new information or future events or   
developments.                                                                   

If the expectations or assumptions underlying our forward-looking     
statements prove inaccurate or if risks or uncertainties arise, actual results  
could differ materially from those communicated in these forward-looking        
statements. In addition to the normal risks of business, the Company is subject 
to significant risk factors, including those listed below which apply to it as  
an insurance business and provider of other financial services.                 

o    There is uncertainty involved in estimating the availability of reinsurance
     and the collectibility of reinsurance recoverables. This uncertainty arises
from a number of factors, including whether losses meet the qualifying
conditions of the reinsurance contracts and if the reinsurers have the
financial capacity and willingness to pay.                            

o    Currently, the Corporation is examining the potential exposure, if any, of 
  its insurance operations from acts of terrorism. The Corporation is also
examining how best to address this exposure, if any, considering the  
     interests of policyholders, shareholders, the lending community, regulators
and others. The Company does not have exclusions for terrorist events 
    included in its life insurance policies. In the event that a terrorist act
   occurs, the Company may be adversely impacted, depending on the nature of
     the event. With respect to the Company's investment portfolio, in the event
 that commercial insurance coverage for terrorism becomes unavailable or
    very expensive, there could be significant adverse impacts on some portion
  of the Company's portfolio, particularly in sectors such as airlines and
    real estate. For example, commercial mortgages or certain debt obligations
might be adversely affected due to the inability to obtain coverage to
 restore the related real estate or other property, thereby creating the
potential for increased default risk.                                 

o    Changes in market interest rates can have adverse effects on the Company's 
investment portfolio, investment income, product sales, results of    
   operations and retention of existing business. Increasing market interest
    rates have an adverse impact on the value of the investment portfolio, for
     example, by decreasing unrealized capital gains on fixed income securities.
Declining market interest rates could have an adverse impact on the   
     Company's investment income as the Company reinvests proceeds from positive
  cash flows from operations and from maturing and called investments into
  new investments that could be yielding less than the portfolio's average
    rate. Changes in interest rates could also reduce the profitability of the
Company's spread-based products, particularly interest-sensitive life,
     investment and structured financial products, as the difference between the
     amount that the Company is required to pay on such products and the rate of
    return earned on the general account investments could be reduced. Changes
in market interest rates as compared to rates offered on some of the  
     Company's products could make those products less attractive if competitive
investment margins are not maintained, leading to lower sales and/or  
changes in the level of surrenders and withdrawals on these products. 
Additionally, unanticipated surrenders could cause acceleration of    
     amortization of DAC and thereby increase expenses and reduce current period
    profitability. The Company seeks to limit its exposure to this risk on its
  products by offering a diverse group of products, periodically reviewing
 and revising crediting rates and providing for surrender charges in the
event of early withdrawal.                                            
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 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
 RESULTS OF OPERATIONS FOR THE THREE AND SIX MONTH PERIODS
ENDED JUNE 30, 2002 AND 2001

o    The Company amortizes DAC related to interest-sensitive life and investment
  contracts in proportion to gross profits over the estimated lives of the
contract periods. Periodically, the Company updates the assumptions   
underlying the estimated future gross profits, which include estimated
future contract charges, investment margins and expenses, in order to 
reflect actual and expected experience and its potential impact to the
    valuation of DAC. Updates to these assumptions could potentially result in
adjustment to the cumulative amortization of DAC. For example, reduced
    estimated future gross profits resulting from declines in contract charges
assessed against the Separate Accounts' balances invested in equity   
securities which have declined in value, could potentially result in  
   increased amortization of DAC. An adjustment, if any, may have a material
effect on results of operations.                                      

o    The impact of decreasing Separate Accounts balances resulting from volatile
market conditions, underlying fund performance and sales management   
performance could cause contract charges realized by the Company to   
decrease and lead to an increase of exposure to pay guaranteed minimum
   death benefits and could result in increased statutory reserves for these
benefits, reducing the Company's statutory capital and surplus. In    
   addition, it is possible that the assumptions and projections used by the
     Company in establishing prices for the guaranteed minimum death benefits on
variable annuities, particularly assumptions and projections about    
 investment performance, do not accurately anticipate the level of costs
that the Company will ultimately incur in providing those benefits,   
  resulting in adverse mortality trends that may have a material effect on
results of operations.                                                

o    Conditions in the U.S. and international stock markets can have an impact  
  on the Company's variable annuities sales. In general, sales of variable
annuities increase when the stock markets are generally rising over an
     extended period of time and decrease when stock markets are falling over an
extended period of time.                                              

o    In order to meet the anticipated cash flow requirements of its obligations 
to policyholders, from time to time the Company adjusts the effective 
    duration of investments, liabilities for contractholder funds and reserves
     for life-contingent contract benefits. Those adjustments may have an impact
on the value of the investment portfolio, investment income, interest 
credited on contractholder funds and the investment margin.           

o    Management believes the reserves for life-contingent contract benefits are 
  adequate to cover ultimate policy benefits, despite the underlying risks
  and uncertainties associated with their determination when payments will
not be made until well into the future. Reserves are based on many    
   assumptions and estimates, including estimated premiums received over the
assumed life of the policy, the timing of the event covered by the    
insurance policy, the amount of contract benefits to be paid and the  
   investment returns on the assets purchased with the premium received. The
Company periodically reviews and revises its estimates. If future     
experience differs from assumptions, it may have a material impact on 
results of operations.                                                

o    Under current U.S. tax law and regulations, deferred and immediate         
annuities and life insurance, including interest-sensitive products,  
     receive favorable policyholder tax treatment. Any legislative or regulatory
     changes that adversely alter this treatment are likely to negatively affect
   the demand for these products. In addition, recent changes in the federal
     estate tax laws will affect the demand for the types of life insurance used
in estate planning.                                                   

o    The Company is affiliated with various entities registered under the       
federal securities laws as broker-dealers, investment advisers and/or 
investment companies. These entities are subject to the regulatory    
jurisdiction of the Securities and Exchange Commission, the National  
    Association of Securities Dealers and /or, in some cases, state securities
    administrators. The laws regulating the securities products and activities
    of these entities are complex, numerous and subject to change. As with any
highly regulated industry, there is some degree of risk of regulatory 
non-compliance; however the Company has in place various legal and    
    compliance personnel, procedures and systems designed to reasonably assure
compliance with these requirements.                                   

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 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
 RESULTS OF OPERATIONS FOR THE THREE AND SIX MONTH PERIODS
ENDED JUNE 30, 2002 AND 2001

o    The Company distributes some of its products under agreements with other   
     members of the financial services industry that are not affiliated with the
   Company. Termination of one or more these agreements due to, for example,
changes in control of any of these entities, could have a detrimental 
effect on the Company's sales. This risk may be exacerbated due to the
enactment of the Gramm-Leach-Bliley Act of 1999, which eliminated many
federal and state law barriers to affiliations among banks, securities
firms, insurers and other financial service providers.                

o    While positive operating cash flows are expected to continue to meet the   
    Corporation's liquidity requirements, the Corporation's liquidity could be
constrained by a catastrophe which results in extraordinary losses, a 
   downgrade of the Corporation's current long-term debt rating of A1 and A+
    (from Moody's and Standard & Poor's, respectively) to non-investment grade
   status of below Baa3/BBB-, a downgrade in AIC's financial strength rating
from Aa2, AA and A+ (from Moody's, Standard & Poor's and A.M. Best,   
     respectively) to below Baa/BBB/B, or a downgrade in ALIC's or the Company's
  financial strength rating from Aa2, AA+ and A+ (from Moody's, Standard &
    Poor's and A.M. Best, respectively) to below Aa3/AA-/A-. In the event of a
     downgrade of the Corporations' rating, ALIC and its subsidiaries could also
experience a similar downgrade.                                       

o    The events of September 11, 2001, and the resulting disruption in the      
financial markets revealed weaknesses in the physical and operational 
 infrastructure that underlies the U.S. and worldwide financial systems.
    Those weaknesses did not impair the Company's liquidity in the wake of the
  September 11, 2001. However, if an event of similar or greater magnitude
occurred in the future and if the weaknesses in the physical and      
    operational infrastructure of the U.S. and worldwide financial systems are
not remedied, the Company could encounter significant difficulties in 
 transferring funds, buying and selling securities and engaging in other
financial transactions that support its liquidity.                    

o    Financial strength ratings have become an increasingly important factor in 
establishing the competitive position of insurance companies and,     
generally, may be expected to have an effect on an insurance company's
business. On an ongoing basis, rating agencies review the financial   
performance and condition of insurers and could downgrade or change a 
company's ratings due to, for example, a decline in the value of a    
company's investment portfolio or increased reserves due to additional
 death benefit exposure resulting from market declines. A multiple level
downgrade of either the Corporation, the Company or ALIC, while not   
expected, could have a material adverse effect on the Company's sales,
including the competitiveness of the Company's product offerings, its 
ability to market products, and its financial condition and results of
operations. Also, the rating agencies have a variety of policies and  
     practices regarding the relationships among ratings of affiliated entities.
     As such, the ratings of the Company or ALIC could be affected by changes in
ratings of AIC and/or the Corporation.                                

o    State insurance regulatory authorities require insurance companies to      
  maintain specified levels of statutory capital and surplus. In addition,
  competitive pressures require the Company to maintain financial strength
     ratings. These restrictions affect the Company's ability to pay shareholder
dividends to ALIC and use its capital in other ways.                  

o    The Company currently has Separate Account liabilities which contain death 
benefit features covered by the exposure draft Statement of Position  
 ("SOP") entitled "Accounting and Reporting by Insurance Enterprises for
    Certain Nontraditional Long-Duration Contracts and for Separate Accounts".
    The Company does not currently hold liabilities for death benefit features
    covered by the SOP. If adopted, the Company's establishment of liabilities
     with respect to the contracts could have a material impact on the statement
of operations, however the market values at the time of adoption will 
affect the amount of the liability required.                          

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 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
 RESULTS OF OPERATIONS FOR THE THREE AND SIX MONTH PERIODS
ENDED JUNE 30, 2002 AND 2001

o    A portion of the unrealized capital gains and losses included as a         
component of shareholder's equity relating to non-exchange traded     
     marketable investment securities accounted for at fair value are internally
developed using widely accepted valuation models and independent third
 party data as model inputs. A decrease in these values would negatively
   impact the Corporation's, ALIC's and the Company's debt-to-capital ratio.

o    Following enactment of the Gramm-Leach-Bliley Act of 1999, federal         
     legislation that allows mergers that combine commercial banks, insurers and
securities firms, state insurance regulators have been collectively   
     participating in a reexamination of the regulatory framework that currently
  governs the U.S. insurance business in an effort to determine the proper
     role of state insurance regulation in the U.S. financial services industry.
   In addition, members of Congress have introduced or discussed measures to
   permit optional federal chartering, and thus regulation, of some types of
     insurance business, such as life insurance and annuities. We cannot predict
    whether any state or federal measures will be adopted to change the nature
 or scope of the regulation of the insurance business or what affect any
such measures would have on the Company.                              

o    The Gramm-Leach-Bliley Act of 1999 permits mergers that combine commercial 
banks, insurers and securities firms under one holding company. Until 
   passage of the Gramm-Leach-Bliley Act, the Glass Steagall Act of 1933 had
     limited the ability of banks to engage in securities-related businesses and
the Bank Holding Company Act of 1956 had restricted banks from being  
   affiliated with insurers. With the passage of the Gramm-Leach-Bliley Act,
     bank holding companies may acquire insurers and insurance holding companies
may acquire banks. In addition, grandfathered unitary thrift holding  
 companies, including The Allstate Corporation, may engage in activities
  that are not financial in nature. The ability of banks to affiliate with
     insurers may materially adversely affect all of the Company's product lines
by substantially increasing the number, size and financial strength of
potential competitors.                                                

o    In some states, mutual insurance companies can convert to a hybrid         
structure known as a mutual holding company. This process converts    
    insurance companies owned by their policyholders to become stock insurance
companies owned (through one or more intermediate holding companies)  
    partially by their policyholders and partially by stockholders. Also, some
states permit the conversion of mutual insurance companies into stock 
insurance companies (demutualization). The ability of mutual insurance
companies to convert to mutual holding companies or to demutualize may
materially adversely affect all of our product lines by substantially 
increasing competition for capital in the financial services industry.

o    The impact of The Sarbanes-Oxley Act of 2002 on the business of the Company
is being evaluated but cannot be determined at this time.             

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PART II - Other Information                                                     

Item 1.  Legal Proceedings                                                      

      The discussion "Regulation and Legal Proceedings" in Part I, Item 1,
Note 4 of this Form 10-Q is incorporated herein by reference.                   

Item 6.  Exhibits and Reports on Form 8-K                                       

(a)  Exhibits                                                                   

An Exhibit Index has been filed as part of this report on page E-1.   

(b)  Reports on Form 8-K                                                        

None.                                                                 

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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.                                          

Dated August 13, 2002     ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK       
                     ---------------------------------------------
    (Registrant)

BY                /s/SAMUEL H. PILCH        
          ------------------

       Samuel H. Pilch
                           Group Vice President and Controller
                          (chief accounting officer and duly
                         authorized officer of registrant)

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                                                                [Download Table]

                                 Exhibit Index                                     

      EXHIBIT NO.                                           DESCRIPTION            

                                                                                   
10.1    Underwriting Agreement between Allstate Life Insurance Company of New York 
        and ALFS, Inc., effective October 1, 1996.                                 

10.2    Principal Underwriting Agreement between Allstate Life Insurance Company of
        New York and Allstate Distributors, L.L.C., effective May 1, 2000          

10.3    Service Agreement between Allstate Life Insurance Company and Allstate Life
        Insurance Company of New York, effective July 1, 1989.                     

10.4    Business Operations and Service Agreement between Allstate Life Insurance  
        Company of New York and Allstate Life Insurance Company effective October  
        1, 1997.                                                                   

10.5    Administrative Services Agreement between Allstate Life Insurance Company  
        of New York and Allstate Distributors, L.L.C. effective May 1, 2000.       

10.6    Reinsurance Agreement between Allstate Life Insurance Company and Allstate 
        Life Insurance Company of New York effective January 1, 1984 as amended by 
        Amendment No. 1 effective September 1, 1984, Amendment No.2 effective      
        January 1, 1987, Amendment No.3 effective October 1, 1988, Amendment No.4  
        effective January 1, 1994 and Amendment No.5 effective December 31, 1995.  

10.7    Agreement and Assumption Reinsurance Agreement between Allstate Life       
        Insurance Company and Allstate Life Insurance Company of New York effective
        July 1, 1984.                                                              

10.8    Reinsurance Agreement between Allstate Life Insurance Company and Allstate 
        Life Insurance Company of New York, effective January 1, 1986, as amended  
        by Amendment No.1 effective December 31, 1995 and Amendment No. 2 effective
        December 1, 1995.                                                          

10.9    Reinsurance Agreement between Allstate Life Insurance Company and Allstate 
        Life Insurance Company of New York, effective January 1,1991, as amended by
        Amendment No.1 effective December 31, 1995.                                


E-1 

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘10-Q’ Filing		Date		First		Last			Other Filings
		12/15/03		6
Filed on:		8/14/02							8-K
		8/13/02		24
		8/6/02		8
		7/31/02		1		6
For Period End:		6/30/02		1		22
		1/1/02		6
		12/31/01		6		18			10-K405
		9/11/01		21
		6/30/01		2		22			10-Q
		1/1/01		6
		5/1/00		25
		10/1/97		25
		10/1/96		25
		12/31/95		25					10-K
		12/1/95		25
		1/1/94		25
									List all Filings

3 Subsequent Filings that Reference this Filing

  As Of               Filer                 Filing    For·On·As Docs:Size             Issuer                      Filing Agent

 4/27/21  Allstate Life Ins Co. of New York S-1/A       4/26/21  110:22M                                    Workiva Inc Wde… FA01/FA
 4/21/21  Allstate Life Ins Co. of New York CORRESP¶    4/01/24    1:2.7M                                   Workiva Inc Wde… FA01/FA
 3/30/21  Allstate Life Ins Co. of New York S-1                  112:22M                                    Workiva Inc Wde… FA01/FA