Back to GetFilings.com
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year Commission file numbers
ended 33-1079, 33-58482 AND 333-09141
DECEMBER 31, 1996
-------------------
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
(Exact name of registrant as specified in its charter)
NEW YORK 04-2845273
(State or other (I.R.S. Employer
jurisdiction of Identification No.)
incorporation or
organization)
80 BROAD STREET, 10004
NEW YORK, NEW YORK
(Address of principal (Zip Code)
executive offices)
Registrant's telephone number, including area code (212) 943-3855
-------------------
Securities registered pursuant to Section 12(b) of the Act
Title of Each Class Name of Each Exchange
on which registered
NONE
Securities registered pursuant to Section 12(g) of the Act:
NONE
(Title of Class)
(Title of Class)
-------------------
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 ____
Registrant has no voting stock outstanding held by non-affiliates.
Registrant has 2,000 shares of common stock outstanding on March 28, 1997, all
of which are owned by Sun Life Assurance Company of Canada (U.S.).
THE REGISTRANT MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTION J (1) (A)
AND (B) FOR FORM 10-K AND IS THEREFORE FILING THIS FORM WITH THE REDUCED
DISCLOSURE FORMAT PERMITTED BY INSTRUCTION J.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PART I
ITEM 1. BUSINESS.
The Registrant is a stock life insurance company incorporated in the state of
New York on May 25, 1983 and currently transacts business only in the State of
New York.
The Registrant is a wholly-owned subsidiary of Sun Life Assurance Company of
Canada (U.S.) ("Sun Life of Canada (U.S.)"), One Sun Life Executive Park,
Wellesley Hills, Massachusetts 02181, a stock life insurance company
incorporated in Delaware. Sun Life of Canada (U.S.), in turn, is a wholly-owned
subsidiary of Sun Life Assurance Company of Canada, 150 King Street West,
Toronto, Ontario, Canada, a mutual life insurance company incorporated pursuant
to an Act of Parliament of Canada. The Registrant is engaged in the sale of
individual fixed and combination fixed/variable annuity contracts and group life
and health insurance contracts. These contracts are sold by insurance agents,
some of whom are registered representatives of national and regional stock
brokerage firms and brokers.
ITEM 2. PROPERTIES.
The Registrant owns no properties.
The Registrant occupies office space leased by it. The lease expires in
February, 2004.
ITEM 3. LEGAL PROCEEDINGS.
The Registrant is engaged in various kinds of routine litigation which, in
management's judgement, is not of material importance to its total assets.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Omitted pursuant to Instruction J (2) (c) to Form 10-K.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
The Registrant is a wholly-owned subsidiary of Sun Life Assurance Company of
Canada (U.S.) and as such there is no market for its common stock.
No dividends have been paid by the Registrant.
ITEM 6. SELECTED FINANCIAL DATA
Omitted pursuant to Instruction J (2) (a) to Form 10-K.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF
OPERATIONS.
FINANCIAL CONDITION
Omitted pursuant to Instruction J (2) (a) to Form 10-K.
RESULTS OF OPERATIONS
The Registrant had net income of $2,403,000 for 1996 as compared to $930,000 for
1995. An increase in group life and health insurance premiums, higher fees from
appreciating separate account assets and proportionally lower federal income
taxes in 1996, were offset by lower earnings on investments and a decrease in
fixed annuity deposits.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
Financial statements, in the form required by Regulation S-X, are set forth
below. The Registrant is not subject to the requirement to file supplementary
financial data specified by Item 302 of Regulation S-K.
2
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
(Wholly-owned subsidiary of Sun Life Assurance Company of Canada (U.S.))
STATUTORY STATEMENTS OF ADMITTED ASSETS, LIABILITIES AND CAPITAL STOCK AND
SURPLUS
DECEMBER 31,
--------------------------
1996 1995
------------ ------------
ADMITTED ASSETS
Bonds $ 81,649,792 $132,026,064
Mortgage loans 40,431,773 51,843,936
Real estate, net of encumbrances 1,377,041 0
Policy loans 651,332 476,194
Cash 107,821 1,267,905
Investment income due and accrued 1,737,199 3,255,286
Due from (to) separate accounts 1,689,278 (1,036,679)
Other assets 505,452 443,663
------------ ------------
General account assets 128,149,688 188,276,369
Unitized separate account assets 297,690,137 250,782,417
Non-unitized separate account assets 92,192,714 81,110,554
------------ ------------
Total assets $518,032,539 $520,169,340
------------ ------------
------------ ------------
LIABILITIES
Policy reserves $ 25,264,586 $ 23,548,885
Annuity and other deposits 61,747,147 129,743,536
Accrued expenses and taxes 532,957 376,573
Other liabilities 941,534 906,238
Due to (from) parent and
affiliates--net 2,014,355 (1,292,878)
Interest maintenance reserve 1,173,961 1,648,375
Asset valuation reserve 1,845,237 1,545,857
------------ ------------
General account liabilities 93,519,777 156,476,586
Unitized separate account
liabilities 297,517,405 250,617,786
Non-unitized separate account
liabilities 92,192,714 81,110,554
------------ ------------
Total liabilities 483,229,896 488,204,926
------------ ------------
CAPITAL STOCK AND SURPLUS
Capital stock--Par value $1,000:
Authorized, issued and
outstanding;
2,000 shares 2,000,000 2,000,000
Surplus 32,802,643 29,964,414
------------ ------------
Total capital stock and surplus 34,802,643 31,964,414
------------ ------------
Total liabilities, capital stock and
surplus $518,032,539 $520,169,340
------------ ------------
------------ ------------
SEE NOTES TO STATUTORY FINANCIAL STATEMENTS.
3
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
(Wholly-owned subsidiary of Sun Life Assurance Company of Canada (U.S.))
STATUTORY STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31,
----------------------------------------
1996 1995 1994
------------ ------------ ------------
INCOME
Premiums and annuity considerations $ 11,581,817 $ 11,731,623 $ 8,798,684
Deposit-type funds 72,121,136 73,714,439 67,198,340
Net investment income 12,313,903 18,450,106 21,947,153
Amortization of interest maintenance
reserve 704,763 753,351 750,567
Net gain from operations from
separate accounts 8,101 0 0
------------ ------------ ------------
96,729,720 104,649,519 98,694,744
------------ ------------ ------------
BENEFITS AND EXPENSES
Death benefits 2,964,690 2,589,934 2,269,435
Annuity benefits 7,175,995 6,606,801 6,567,874
Disability benefits and benefits
under accident and health policies 464,615 233,549 162,660
Surrender benefits and other fund
withdrawals 118,432,072 118,975,912 73,728,402
Increase (decrease) in aggregate
reserves for life and accident
health policies and contracts 1,550,701 3,022,081 (1,000,757)
Decrease in liability for premium
and other deposit funds (67,996,389) (71,733,008) (34,019,334)
------------ ------------ ------------
62,591,684 59,695,269 47,708,280
Commissions on premiums and annuity
considerations 3,047,358 3,212,849 2,921,526
General insurance expenses 6,093,131 5,716,492 5,391,935
Insurance taxes, licenses and fees 729,244 579,585 466,088
Net transfers to separate accounts 19,487,747 32,047,554 36,365,814
------------ ------------ ------------
91,949,164 101,251,749 92,853,643
------------ ------------ ------------
Net gain from operations before
federal income taxes 4,780,556 3,397,770 5,841,101
Federal income taxes incurred
(excluding tax on capital gains) 1,938,734 2,446,706 1,017,155
------------ ------------ ------------
Net gain from operations after
federal income taxes and before
realized capital losses 2,841,822 951,064 4,823,946
Net realized capital losses less
capital gains tax (439,101) (21,536) (469,115)
------------ ------------ ------------
NET INCOME $ 2,402,721 $ 929,528 $ 4,354,831
------------ ------------ ------------
------------ ------------ ------------
SEE NOTES TO STATUTORY FINANCIAL STATEMENTS.
4
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
(Wholly-owned subsidiary of Sun Life Assurance Company of Canada (U.S.))
STATUTORY STATEMENTS OF CHANGES IN CAPITAL STOCK AND SURPLUS
YEARS ENDED DECEMBER 31,
-------------------------------------
1996 1995 1994
----------- ----------- -----------
CAPITAL STOCK $ 2,000,000 $ 2,000,000 $ 2,000,000
----------- ----------- -----------
PAID-IN SURPLUS
Balance, beginning of year 28,750,000 28,750,000 28,750,000
Transfer from special contingency
reserve 750,000 0 0
----------- ----------- -----------
Balance, end of year 29,500,000 28,750,000 28,750,000
----------- ----------- -----------
SPECIAL CONTINGENCY RESERVE
Balance, beginning of year 750,000 750,000 750,000
Transfer to paid-in surplus (750,000) 0 0
----------- ----------- -----------
Balance, end of year 0 750,000 750,000
----------- ----------- -----------
UNASSIGNED SURPLUS
Balance, beginning of year 464,414 (90,931) (4,295,377)
Net income 2,402,721 929,528 4,354,831
Unrealized gains (losses) 702,000 (672,000) 0
Change in non-admitted assets 32,888 71,263 (139,468)
Earnings on and transfers of
separate account surplus 0 8,490 (150,603)
Change in asset valuation reserve (299,380) 218,064 139,686
----------- ----------- -----------
Balance, end of year 3,302,643 464,414 (90,931)
----------- ----------- -----------
TOTAL SURPLUS 32,802,643 29,964,414 29,409,069
----------- ----------- -----------
TOTAL CAPITAL STOCK AND SURPLUS $34,802,643 $31,964,414 $31,409,069
----------- ----------- -----------
----------- ----------- -----------
SEE NOTES TO STATUTORY FINANCIAL STATEMENTS.
5
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
(Wholly-owned subsidiary of Sun Life Assurance Company of Canada (U.S.))
STATUTORY STATEMENTS OF CASH FLOW
YEARS ENDED DECEMBER 31,
----------------------------------------
1996 1995 1994
------------ ------------ ------------
CASH PROVIDED
Premiums, annuity considerations and
deposit funds received $ 83,598,181 $ 85,243,958 $ 76,078,969
Net investment income received 14,106,521 19,808,090 22,786,790
------------ ------------ ------------
Total receipts 97,704,702 105,052,048 98,865,759
------------ ------------ ------------
Benefits paid 128,975,968 128,129,129 82,549,621
Insurance expenses and taxes paid 9,712,774 9,655,310 8,541,614
Net cash transfers to separate
accounts 22,213,704 29,702,679 36,637,408
Federal income tax payments
(excluding tax on capital gains) 2,909,899 2,125,541 242,155
------------ ------------ ------------
Total payments 163,812,345 169,612,659 127,970,798
------------ ------------ ------------
Net cash from operations (66,107,643) (64,560,611) (29,105,039)
------------ ------------ ------------
Proceeds from long-term investments
sold, matured or repaid (after
deducting taxes on capital gains
of $(112,405) for 1996, $324,248
for 1995 and $75,024 for 1994) 86,583,714 123,662,512 98,478,190
Other cash provided 4,654,856 444,240 2,649,519
------------ ------------ ------------
Total cash provided 91,238,570 124,106,752 101,127,709
------------ ------------ ------------
CASH APPLIED
Cost of long-term investments
acquired 28,654,582 51,631,901 68,372,127
Other cash applied 166,107 2,401,799 2,267,072
------------ ------------ ------------
Total cash applied 28,820,689 54,033,700 70,639,199
------------ ------------ ------------
Net change in cash and short-term
investments (3,689,762) 5,512,441 1,383,471
CASH AND SHORT-TERM INVESTMENTS:
BEGINNING OF YEAR 8,304,756 2,792,315 1,408,844
------------ ------------ ------------
END OF YEAR $ 4,614,994 $ 8,304,756 $ 2,792,315
------------ ------------ ------------
------------ ------------ ------------
SEE NOTES TO STATUTORY FINANCIAL STATEMENTS.
6
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
(Wholly-owned subsidiary of Sun Life Assurance Company of Canada (U.S.))
NOTES TO STATUTORY FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
1. DESCRIPTION OF THE BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
GENERAL--
Sun Life Insurance and Annuity Company of New York (the Registrant) is
incorporated as a life insurance company and is currently engaged in the sale of
individual fixed and variable annuities and group life and long- term disability
insurance. The parent company, Sun Life Assurance Company of Canada (U.S.) (Sun
Life of Canada (U.S.)), is a wholly-owned subsidiary of Sun Life Assurance
Company of Canada (Sun Life (Canada)), a mutual life insurance company.
The Registrant, which is domiciled in the State of New York, prepares its
financial statements in accordance with statutory accounting practices
prescribed or permitted by the State of New York Insurance Department.
Prescribed accounting practices include a variety of publications of the
National Association of Insurance Commissioners (NAIC), as well as New York
State laws, regulations and general administrative rules. Permitted accounting
practices encompass all accounting practices not so prescribed. The permitted
accounting practices adopted by the Registrant are not material to the financial
statements. Prior to 1996, statutory accounting practices were recognized by the
insurance industry and the accounting profession as generally accepted
accounting principles (GAAP) for mutual life insurance companies and stock life
insurance companies wholly owned by mutual life insurance companies. In April,
1993, the Financial Accounting Standards Board (FASB) issued an interpretation
(the Interpretation), that became effective in 1996, that has changed the
previous practice of mutual life insurance companies (and stock life insurance
companies that are wholly owned subsidiaries of mutual life insurance companies)
with respect to utilizing statutory basis financial statements for general
purposes, in that it will no longer allow such financial statements to be
described as having been prepared in conformity with GAAP. Consequently, these
financial statements prepared in conformity with statutory accounting practices
as described above, vary from and are not intended to present the Registrant's
financial position and results of operations and capital in conformity with
GAAP. (See Note 17 for further discussion relative to the Registrant's basis of
financial statement presentation.) The effects on the financial statements of
the variances between the statutory basis of accounting and GAAP, although not
reasonably determinable, are presumed to be material.
INVESTED ASSETS--
Bonds are carried at cost adjusted for amortization of premium or accrual of
discount. Mortgage loans acquired at a premium or discount are carried at
amortized values and other mortgage loans at the amounts of the unpaid balances.
Real estate investments are carried at the lower of cost, adjusted for
accumulated depreciation, or appraised value less encumbrances. Short-term
investments are carried at amortized cost which approximates fair value.
Depreciation of buildings and improvements is calculated using the straight-line
method over the estimated useful life of the property, generally three to
sixteen years.
POLICY AND CONTRACT RESERVES--
The reserves for group life insurance, group long-term disability insurance and
annuity contracts, developed by accepted actuarial methods, have been
established and maintained on the basis of published mortality and morbidity
tables using assumed interest rates and valuation methods that will provide
reserves at least as great as those required by law and contract provisions.
INCOME AND EXPENSES--
For group life, group long-term disability and annuity contracts, premiums are
recognized as revenues over the premium paying period, whereas commissions and
other costs applicable to the acquisition of new business are charged to
operations as incurred.
7
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
(Wholly-owned subsidiary of Sun Life Assurance Company of Canada (U.S.))
NOTES TO STATUTORY FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
1. DESCRIPTION OF THE BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (CONTINUED):
SEPARATE ACCOUNTS--
The Registrant has established unitized separate accounts applicable to
individual qualified and non-qualified variable annuity contracts.
Assets and liabilities of the separate accounts, representing net deposits and
accumulated net investment earnings less fees, held primarily for the benefit of
contract holders, are shown as separate captions in the financial statements.
Assets held in the separate accounts are carried at market values.
The Registrant has also established a non-unitized separate account for amounts
allocated to the fixed portion of a certain combination fixed/variable deferred
annuity contracts. The assets of this account are available to fund general
account liabilities and general account assets are available to fund liabilities
of this account.
Gains (losses) from mortality experience and investment experience, not
applicable to contract owners, are transferred to (from) the general account.
Accumulated gains (losses) that have not been transferred are recorded as
payable (receivable) to (from) the general account. Amounts payable to the
general account of the Registrant amounted to $1,689,000 in 1996. The amount
receivable from the general account of the Registrant was $1,037,000 in 1995.
CHANGES IN ACCOUNTING PRINCIPLES AND REPORTING--
During 1996 the Registrant changed its method of accounting and reporting for
deposits to and withdrawals from its unitized separate accounts. Previously,
deposits were recorded as direct increases in liabilities of the separate
accounts and withdrawals and benefits were recorded as direct decreases in that
liability. Effective for 1996 the Registrant recorded deposits as revenue in the
general account, withdrawals and benefits as expenses in the general account and
the transfer of those funds between the general account and the separate account
are reflected as an expense (income) item. Amounts presented for the years ended
December 31, 1995 and 1994 have been restated to conform to this presentation.
The effect of this change was to increase revenue and expenses by $54 million in
1996, $29 million in 1995 and $40 million in 1994, with no impact on net income
of the general account. This new method of reporting is consistent with the
accounting treatment for deposits and withdrawals and benefits of the
non-unitized separate account of the Registrant and is consistent with
prescribed statutory accounting practices.
The Registrant has also revised the format of its statutory statements of
operations, changes in capital stock and surplus and cash flow in order to to
match more exactly the presentation used in the preparation of its Annual
Statement. As a result, reclassifications have been made in the amounts as
reported in the 1995 and 1994 audited financial statements to conform to the
presentation used for the 1996 amounts. For 1995 and 1994, surplus as reported
in these financial statements differs from the amounts reported in the statutory
Annual Statement by an immaterial amount because prepaid items were reported as
non-admitted.
OTHER--
Preparation of the financial statements requires management to make estimates
and assumptions that affect the reported amounts of assets, liabilities,
revenues and expenses. Actual results could differ from those estimates.
8
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
(Wholly-owned subsidiary of Sun Life Assurance Company of Canada (U.S.))
NOTES TO STATUTORY FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
2. BONDS:
The amortized cost and estimated fair value of investments in debt securities as
of December 31, 1996 and 1995 are as follows:
DECEMBER 31, 1996
------------------------------------------
GROSS GROSS ESTIMATED
AMORTIZED UNREALIZED UNREALIZED FAIR
COST GAINS LOSSES VALUE
-------- ---------- -------- --------
(IN 000'S)
Long-term bonds:
United States government and
government agencies and authorities $ 9,075 $ 179 $ 0 $ 9,254
Foreign governments 530 14 0 544
Public utilities 19,997 434 8 20,423
Transportation 468 34 0 502
Finance 9,643 182 0 9,825
All other corporate bonds 37,430 1,149 33 38,546
-------- ---------- --- --------
Total long-term bonds 77,143 1,992 41 79,094
Short-term bonds:
U.S. Treasury Bills, bankers
acceptances and commercial paper 4,507 0 0 4,507
-------- ---------- --- --------
$81,650 $1,992 $41 $83,601
-------- ---------- --- --------
-------- ---------- --- --------
DECEMBER 31,1995
--------------------------------------------
GROSS GROSS ESTIMATED
AMORTIZED UNREALIZED UNREALIZED FAIR
COST GAINS LOSSES VALUE
-------- ---------- ---------- --------
(IN 000'S)
Long-term bonds:
United States government and
government agencies and authorities $ 11,243 $ 327 $ 10 $ 11,560
Foreign governments 1,824 157 0 1,981
Public utilities 39,018 1,249 20 40,247
Transportation 3,908 45 0 3,953
Finance 14,047 385 6 14,426
All other corporate bonds 54,949 2,700 0 57,649
-------- ---------- --- --------
Total long-term bonds 124,989 4,863 36 129,816
Short-term bonds:
U.S. Treasury Bills, bankers
acceptances and commercial paper 7,037 0 0 7,037
-------- ---------- --- --------
$132,026 $4,863 $ 36 $136,853
-------- ---------- --- --------
-------- ---------- --- --------
9
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
(Wholly-owned subsidiary of Sun Life Assurance Company of Canada (U.S.))
NOTES TO STATUTORY FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
2. BONDS (CONTINUED):
The amortized cost and estimated fair value of bonds at December 31, 1996 and
1995 by contractual maturity are shown below. Expected maturities will differ
from contractual maturities because borrowers may have the right to call or
prepay obligations with or without call and/or prepayment penalties.
DECEMBER 31, 1996
-----------------------
AMORTIZED ESTIMATED
COST FAIR VALUE
--------- ------------
(IN 000'S)
Maturities are:
Due in one year or less $ 22,247 $ 22,452
Due after one year through five
years 48,956 50,205
Due after five years through ten
years 3,279 3,415
Due after ten years 3,400 3,598
--------- ------------
Subtotal 77,882 79,670
Mortgage-backed securities 3,768 3,931
--------- ------------
$ 81,650 $ 83,601
--------- ------------
--------- ------------
DECEMBER 31, 1995
-----------------------
AMORTIZED ESTIMATED
COST FAIR VALUE
--------- ------------
(000'S)
Maturities are:
Due in one year or less $ 33,138 $ 33,410
Due after one year through five
years 70,212 72,833
Due after five years through ten
years 16,167 17,283
Due after ten years 6,765 7,289
--------- ------------
Subtotal 126,282 130,815
Mortgage-backed securities 5,744 6,038
--------- ------------
$132,026 $ 136,853
--------- ------------
--------- ------------
Proceeds from sales and maturities of investments in debt securities during
1996, 1995 and 1994 were $76,431,000, $111,448,000 and $85,719,000,
respectively. Gross gains of $537,000, $1,295,000 and $1,400,000 and gross
losses of $183,000, $335,000 and $464,000 were realized on such sales during
1996, 1995 and 1994, respectively.
A bond, included above, with an amortized cost of approximately $412,000 and
$399,000 at December 31, 1996 and 1995, respectively, was on deposit with the
Superintendent of Insurance of the State of New York as required by law.
10
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
(Wholly-owned subsidiary of Sun Life Assurance Company of Canada (U.S.))
NOTES TO STATUTORY FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
3. MORTGAGE LOANS:
The Registrant invests in commercial first mortgage loans throughout the United
States. The Registrant monitors the condition of the mortgage loans in its
portfolio. In those cases where mortgages have been restructured, appropriate
provisions have been made. In those cases where, in management's judgement, the
mortgage loans' values are impaired, appropriate losses are recorded.
The following table shows the geographic distribution of the mortgage portfolio.
DECEMBER 31,
----------------
1996 1995
------- -------
(IN 000'S)
New York $10,717 $14,264
California 4,884 5,076
Massachusetts 6,542 6,720
Ohio 3,445 4,748
Florida 3,795 4,020
All other 11,049 17,016
------- -------
$40,432 $51,844
------- -------
------- -------
As of December 31, 1996, the Registrant has restructured mortgage loans
totalling $3,545,000 against which there are provisions of $497,000.
4. INVESTMENT GAINS (LOSSES):
YEARS ENDED
DECEMBER 31,
-------------------
1996 1995 1994
----- ----- -----
(IN 000'S)
Realized losses:
Mortgage loans $(676) $ (1) $(722)
Real estate 0 (32) 0
----- ----- -----
$(676) $ (33) $(722)
----- ----- -----
----- ----- -----
Changes in unrealized gains (losses):
Mortgage loans $ 702 $(672) $ 0
----- ----- -----
----- ----- -----
Realized capital gains and losses on bonds and mortgages which relate to changes
in levels of interest rate risk are charged or credited to an interest
maintenance reserve (IMR) and amortized into income over the remaining
contractual life of the security sold. The gross realized capital gains credited
to the interest maintenance reserve were $354,000, $960,000 and $936,000 in
1996, 1995 and 1994, respectively. All gains are transferred net of applicable
income taxes.
11
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
(Wholly-owned subsidiary of Sun Life Assurance Company of Canada (U.S.))
NOTES TO STATUTORY FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
5. INVESTMENT INCOME:
Net investment income consisted of:
YEARS ENDED DECEMBER 31,
-------------------------
1996 1995 1994
------- ------- -------
(IN 000'S)
Interest income from bonds $ 8,576 $13,020 $15,562
Interest income from mortgage loans 4,252 5,882 6,875
Real estate investment income (loss) 376 (52) (85)
Other investment income (loss) (93) 170 117
------- ------- -------
Gross investment income 13,111 19,020 22,469
Investment expenses 797 570 522
------- ------- -------
$12,314 $18,450 $21,947
------- ------- -------
------- ------- -------
6. REINSURANCE:
The Registrant has agreements with Sun Life (Canada) which provide that Sun Life
(Canada) will reinsure the mortality and morbidity risks of the group life
insurance contracts and group long-term disability contracts issued by the
Registrant. Under these agreements, basic death benefits and long-term
disability benefits are reinsured on a yearly renewable term basis. The
agreements provide that Sun Life (Canada) will reinsure the mortality risks in
excess of $50,000 per policy for group life insurance contracts and $3,000 per
policy per month for the group long-term disability contracts ceded by the
Registrant. Reinsurance transactions under these agreements had the effect of
decreasing income from operations by $500,000 for the year ended December 31,
1996 and increasing income from operations by $652,000 and $222,000 for the
years ended December 31, 1995 and 1994, respectively.
The group life and long-term disability reinsurance agreements require that the
reinsurer provide funds in amounts equal to the reserves ceded.
The following are summarized proforma results of operations of the Registrant
for the years ended December 31, 1996, 1995 and 1994 before the effect of
reinsurance transactions with Sun Life (Canada).
YEARS ENDED DECEMBER 31,
-------------------------
1996 1995 1994
------- ------- -------
(IN 000'S)
Income:
Premiums, annuity deposits and other
revenues $85,947 $86,819 $76,681
Net investment income 13,019 19,204 22,698
------- ------- -------
Subtotal 98,966 106,023 99,379
------- ------- -------
Benefits and expenses:
Policyholder benefits 64,328 61,720 48,614
Other expenses 29,357 41,557 45,146
------- ------- -------
Subtotal 93,685 103,277 93,760
------- ------- -------
Income from operations $ 5,281 $ 2,746 $ 5,619
------- ------- -------
------- ------- -------
12
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
(Wholly-owned subsidiary of Sun Life Assurance Company of Canada (U.S.))
NOTES TO STATUTORY FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
7. WITHDRAWAL CHARACTERISTICS OF ANNUITY ACTUARIAL RESERVES AND DEPOSIT
LIABILITIES:
Withdrawal characteristics of general account and separate account annuity
reserves and deposits:
DECEMBER 31, 1996
--------------------
AMOUNT % OF TOTAL
-------- ----------
(IN 000'S)
Subject to discretionary withdrawal
--with market value adjustment $ 92,135 19.6%
--at book value less surrender charges
(surrender charge > 5%) 38,668 8.2%
--at book value (minimal or no charge
or adjustment) 318,886 67.9%
Not subject to discretionary withdrawal
provision 20,326 4.3%
-------- -----
Total annuity actuarial reserves and
deposit liabilities $470,015 100.0%
-------- -----
-------- -----
DECEMBER 31, 1995
--------------------
AMOUNT % OF TOTAL
-------- ----------
(IN 000'S)
Subject to discretionary withdrawal
--with market value adjustment $ 81,085 16.9%
--at book value less surrender charges
(surrender charge > 5%) 103,767 21.6%
--at book value (minimal or no charge
or adjustment) 275,075 57.3%
Not subject to discretionary withdrawal
provision 20,181 4.2%
-------- -----
Total annuity actuarial reserves and
deposit liabilities $480,108 100.0%
-------- -----
-------- -----
8. PENSION PLANS:
The Registrant participates with Sun Life (Canada) and Sun Life of Canada (U.S.)
in a non-contributory defined benefit pension plan covering essentially all
employees. The benefits are based on years of service and compensation.
The funding policy for the pension plan is to contribute an amount which at
least satisfies the minimum amount required by ERISA. The Registrant is charged
for its share of the pension cost based upon its covered participants. Pension
plan assets consist principally of a variable accumulation fund contract held in
a separate account of Sun Life (Canada).
The Registrant's share of the group's accrued pension cost at December 31, 1996,
1995 and 1994 was $178,000, $97,000 and $79,000, respectively. The Registrant's
share of net periodic pension cost was $81,000, $18,000 and $79,000 for the
years ended December 31, 1996, 1995 and 1994, respectively.
The Registrant also participates with Sun Life (Canada), Sun Life of Canada
(U.S.) and certain affiliates in a 401(k) savings plan for which substantially
all employees are eligible. The Registrant matches, up to specified amounts,
employees' contributions to the plan. Employer contributions were $27,000,
$21,000 and $17,000 for the years ended December 31, 1996, 1995 and 1994,
respectively.
13
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
(Wholly-owned subsidiary of Sun Life Assurance Company of Canada (U.S.))
NOTES TO STATUTORY FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
8. PENSION PLANS (CONTINUED):
OTHER POST-RETIREMENT BENEFIT PLANS
In addition to pension benefits, the Registrant provides certain health, dental
and life insurance benefits ("post-retirement benefits") for retired employees
and dependents. Substantially all employees may become eligible for these
benefits if they reach normal retirement age while working for the Registrant,
or retire early upon satisfying an alternate age plus service condition. Life
insurance benefits are generally set at a fixed amount.
Effective January 1, 1993, the Registrant began to accrue the estimated cost of
retiree benefit payments during the years the employee provides service. The
Registrant has elected to recognize a transition obligation of approximately
$52,000 over a period of ten years. The expense recognized in the financial
statements relative to this plan was $8,000 in 1996, $7,000 in 1995 and $5,000
in 1994. Effective June 5, 1996, the Registrant made certain changes regarding
eligibility and benefits to its post-retirement health benefits plans for
retirees on or after that date. The impact of these changes is a decrease of
1996 post-retirement costs of $13,000. The Registrant's post-retirement health
care plans currently are not funded.
9. FAIR VALUE OF FINANCIAL INSTRUMENTS:
The following table presents the carrying amounts and fair values of the
Registrant's financial instruments at December 31, 1996 and 1995:
1996 1995
----------------------------- -----------------------------
CARRYING CARRYING
AMOUNT FAIR VALUE AMOUNT FAIR VALUE
-------------- ------------ -------------- ------------
(IN 000'S)
ASSETS
Bonds $ 81,650 $ 83,601 $132,026 $ 136,853
Mortgages 40,432 41,196 51,844 53,718
-------------- ------------ -------------- ------------
Total $122,082 $ 124,797 $183,870 $ 190,571
-------------- ------------ -------------- ------------
-------------- ------------ -------------- ------------
LIABILITIES
Individual annuities $ 70,166 $ 68,830 $138,661 $ 137,463
-------------- ------------ -------------- ------------
-------------- ------------ -------------- ------------
The major methods and assumptions used in estimating the fair values of
financial instruments are as follows:
The fair values of short-term bonds are estimated to be the amortized cost. The
fair values of long-term bonds which are publicly traded are based upon market
prices or dealer quotes. For privately placed bonds, fair values are estimated
using prices for publicly traded bonds of similar credit risk, maturity,
repayment and liquidity characteristics.
The fair values of the Registrant's general account reserves and liabilities
under investment-type contracts (insurance and annuity contracts that do not
involve mortality or morbidity risks) are estimated using discounted cash flow
analyses or surrender values. Those contracts that are deemed to have short-term
guarantees have a carrying amount equal to the estimated market value.
The fair values of mortgages are estimated by discounting future cash flows
using current rates at which similar loans would be made to borrowers with
similar credit ratings and for the same remaining maturities.
14
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
(Wholly-owned subsidiary of Sun Life Assurance Company of Canada (U.S.))
NOTES TO STATUTORY FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
10. STATUTORY INVESTMENT VALUATION RESERVES:
The asset valuation reserve (AVR) provides a reserve for losses from investments
in bonds, mortgage loans, real-estate and other invested assets with related
increases or decreases being recorded directly to surplus.
Realized capital gains and losses on bonds and mortgages which relate to changes
in levels of interest rate risk are charged or credited to an IMR and amortized
into income over the remaining contractual life of the security sold.
The table shown below presents changes in the major elements of the AVR and IMR.
1996 1995
-------------- --------------
AVR IMR AVR IMR
------ ------ ------ ------
(IN 000'S) (IN 000'S)
Balance, beginning of year $1,546 $1,648 $1,764 $1,778
Realized capital gains (losses), net of
tax (439) 230 (22) 624
Amortization of investment gains 0 (704) 0 (754)
Unrealized investment gains (losses) 702 0 (672) 0
Required by formula 36 0 476 0
------ ------ ------ ------
Balance, end of year $1,845 $1,174 $1,546 $1,648
------ ------ ------ ------
------ ------ ------ ------
11. LIABILITY FOR UNPAID CLAIMS AND CLAIM ADJUSTMENT EXPENSE:
Activity in the liability for unpaid claims and claim adjustment expense is
summarized below (in 000's).
1996 1995 1994
------- ------- -------
Balance at January 1 $ 4,320 $ 2,322 $ 1,648
Claims Incurred 5,061 4,789 2,930
Claims Paid (3,252) (2,791) (2,256)
------- ------- -------
Balance at December 31 $ 6,129 $ 4,320 $ 2,322
------- ------- -------
------- ------- -------
The information presented above includes unpaid benefit claims and claim
adjustment expenses for the group life and group long-term disability contracts.
As of December 31, 1996 and 1995 the unpaid claim and claim adjustment liability
for these contracts is included in Policy Reserves.
12. FEDERAL INCOME TAXES:
The Registrant files a consolidated federal income tax return with Sun Life of
Canada (U.S.) and other affiliates. Federal income taxes are calculated as if
the Registrant filed a return as a separate company. No provision is recognized
for timing differences which may exist between financial statement and taxable
income. Such differences include reserves, depreciation and accrual of market
discount on bonds.
The Registrant made cash payments to Sun Life of Canada (U.S.) of $2,797,000,
$2,421,000 and $725,000 during 1996, 1995 and 1994, respectively.
15
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
(Wholly-owned subsidiary of Sun Life Assurance Company of Canada (U.S.))
NOTES TO STATUTORY FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
13. LEASE COMMITMENTS:
The Registrant leases two separate facilities for its annuity operations and
group sales office. Both leases commenced in March, 1994.
Future minimum lease commitments are as follows:
YEAR ENDING DECEMBER 31,
------------------------------ AMOUNT
------
(IN
000'S)
1997 $ 336
1998 336
1999 253
2000 237
2001 237
Thereafter 511
------
Total $1,910
------
------
Rent expense under these and prior leases in 1996, 1995 and 1994 amounted to
$336,000, $336,000 and $307,000, respectively.
14. CAPITAL STOCK AND SURPLUS:
On January 2, 1985, the Registrant issued 2,000 shares of common stock to Sun
Life of Canada (U.S.) for $6,000,000. Through December 31, 1996, Sun Life of
Canada (U.S.) has contributed an additional $25,500,000 to the Registrant's
capital, of which $750,000 was used to establish a special contingency reserve
in support of separate account business as required by New York Insurance Law.
As a result of the law being repealed, the Registrant is no longer required to
hold a special contingency reserve and has included the funds with paid-in
capital.
15. MANAGEMENT AND SERVICE CONTRACTS:
The Registrant has agreements with Sun Life (Canada) which provide that Sun Life
(Canada) will furnish to the Registrant, as requested, personnel as well as
certain investment, actuarial and administrative services on a cost
reimbursement basis. Expenses under these agreements amounted to approximately
$1,866,000 in 1996, $1,741,000 in 1995 and $1,559,000 in 1994.
16. RISK-BASED CAPITAL:
Effective December 31, 1993, the NAIC adopted risk-based capital requirements
for life insurance companies. The risk-based capital requirements provide a
method for measuring the minimum acceptable amount of adjusted capital that a
life insurer should have, as determined under statutory accounting practices,
taking into account the risk characteristics of its investments and products.
The Registrant has met the minimum risk-based capital requirements at December
31, 1996 and 1995.
17. ACCOUNTING POLICIES AND PRINCIPLES:
The financial statements of the Registrant have been prepared on the basis of
statutory accounting practices, which prior to 1996, were considered by the
insurance industry and the accounting profession to be in accordance with GAAP
for mutual life insurance companies. The primary differences between statutory
accounting and GAAP are described as follows. Statutory accounting practices do
not recognize the following assets or liabilities which are reflected under
GAAP: deferred acquisition costs, deferred federal income taxes and statutory
non-admitted assets. AVR and IMR are established under statutory accounting
16
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
(Wholly-owned subsidiary of Sun Life Assurance Company of Canada (U.S.))
NOTES TO STATUTORY FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
17. ACCOUNTING POLICIES AND PRINCIPLES (CONTINUED):
practices but not under GAAP. Methods for calculating real estate depreciation
and investment valuation allowances differ under statutory accounting practices
and GAAP. Premiums for investment type products are recognized as income for
statutory purposes and as deposits to policyholders' accounts for GAAP.
Because the Registrant's management uses financial information prepared in
conformity with accounting policies generally accepted in Canada in the normal
course of business, the management of the Registrant has determined that the
cost of complying with Statement No. 120 would exceed the benefits that the
Registrant, or the users of its financial statements, would experience.
Consequently, the Registrant has elected not to apply such standards in the
preparation of these financial statements.
17
INDEPENDENT AUDITORS' REPORT
TO THE BOARD OF DIRECTORS AND STOCKHOLDER
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
NEW YORK, NEW YORK
We have audited the accompanying statutory statements of admitted assets,
liabilities and capital stock and surplus of Sun Life Insurance and Annuity
Company of New York as of December 31, 1996 and 1995, and the related statutory
statements of operations, changes in capital stock and surplus and cash flow for
each of the three years in the period ended December 31, 1996. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
As described more fully in Notes 1 and 17 to the financial statements, the
Company prepared these financial statements using accounting practices
prescribed or permitted by the Insurance Department of the State of New York,
which practices differ from generally accepted accounting principles. The
effects on the financial statements of the variances between the statutory basis
of accounting and generally accepted accounting principles, although not
reasonably determinable, are presumed to be material.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the admitted assets, liabilities and capital stock and
surplus of Sun Life Insurance and Annuity Company of New York as of December 31,
1996 and 1995, and the results of its operations and its cash flow for each of
the three years in the period ended December 31, 1996 on the basis of accounting
described in Notes 1 and 17.
However, because of the effects of the matter discussed in the second preceding
paragraph, in our opinion, the financial statements referred to above do not
present fairly, in conformity with generally accepted accounting principles, the
financial position of Sun Life Insurance and Annuity Company of New York as of
December 31, 1996 and 1995 or the results of its operations or its cash flow for
each of the three years in the period ended December 31, 1996.
In our previous report dated February 7, 1996 we expressed an opinion that the
1995 and 1994 financial statements, prepared using accounting practices
prescribed or permitted by the Insurance Department of the State of New York,
presented fairly, in all material respects, the financial position of Sun Life
Insurance and Annuity Company of New York, as of December 31, 1995, and the
results of its operations and its cash flow for the years ended December 31,
1995 and 1994 in conformity with generally accepted accounting principles. As
described in Notes 1 and 17 to the financial statements, pursuant to provisions
of Statement of Financial Accounting Standards No. 120, ACCOUNTING AND REPORTING
BY MUTUAL LIFE INSURANCE ENTERPRISES AND BY INSURANCE ENTERPRISES FOR CERTAIN
LONG-DURATION PARTICIPATING CONTRACTS, financial statements of mutual life
insurance enterprises (and stock life insurance companies that are wholly owned
subsidiaries of mutual life insurance companies) for periods ending on or before
December 15, 1996, prepared using accounting practices prescribed or permitted
by insurance regulators are not considered presentations in conformity with
generally accepted accounting principles when presented for comparative purposes
with the enterprise's financial statements for periods subsequent to the
effective date of Statement No. 120. Accordingly, our present opinion on the
presentation of the 1995 and 1994 financial statements in accordance with
generally accepted accounting principles, as presented herein, is different from
that expressed in our previous report.
18
As management has stated in Note 17, because the Company's management uses
financial information prepared in accordance with accounting principles
generally accepted in Canada in the normal course of business, the management of
Sun Life Insurance and Annuity Company of New York has determined that the cost
of complying with Statement No. 120 would exceed the benefits that the Company,
or the users of its financial statements would experience. Consequently, the
Company has elected not to apply such standards in the preparation of these
financial statements.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
February 3, 1997
19
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
No events have occurred which are required to be reported by Item 304 of
Regulation S-K.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
Omitted pursuant to Instruction J (2) (c) to Form 10-K.
ITEM 11. EXECUTIVE COMPENSATION.
Omitted pursuant to Instruction J (2) (c) to Form 10-K.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
Omitted pursuant to Instruction J (2) (c) to Form 10-K.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Omitted pursuant to Instruction J (2) (c) to Form 10-K.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
(a) 1. Financial statements (set forth in Item 8):
-- Statutory Statements of Admitted Assets, Liabilities and Capital Stock
and Surplus as of December 31, 1996 and December 31, 1995.
-- Statutory Statements of Operations for each of the three years ended
December 31, 1996, December 31, 1995 and December 31, 1994.
-- Statutory Statements of Changes in Capital Stock and Surplus for each
of the three years ended December 31, 1996, December 31, 1995 and
December 31, 1994.
-- Statutory Statements of Cash Flow for each of the three years ended
December 31, 1996, December 31, 1995 and December 31, 1994.
-- Notes to Statutory Financial Statements, Years Ended December 31,
1996, 1995 and 1994.
-- Independent Auditors' Report.
(a) 2. Financial statement schedules (set forth below):
-- Schedule I--Summary of Investments, Other than Investments in
Affiliates.
-- Schedule VI--Summary of Reinsurance.
-- Independent Auditors' Report.
Financial statement schedules not included in this Form 10-K have been omitted
because the required information either is not applicable or is presented in the
consolidated financial statements or notes thereto.
20
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
SCHEDULE I
SUMMARY OF INVESTMENTS, OTHER THAN INVESTMENTS IN AFFILIATES
AMOUNT AT WHICH
SHOWN IN THE
TYPE OF INVESTMENT COST VALUE BALANCE SHEET
- --------------------------------------------------------------------- ---------- ---------- -----------------
(IN 000'S)
Bonds:
United States government and government agencies and authorities $ 9,075 $ 9,254 $ 9,075
Foreign governments 530 544 530
Public utilities 19,997 20,423 19,997
All other corporate bonds 47,541 48,873 47,541
---------- ---------- --------
Total bonds 77,143 79,094 77,143
---------- ---------- --------
Mortgage loans 40,432 -- 40,432
Real estate 1,377 -- 1,377
Policy loans 651 -- 651
Short-term investments 4,507 -- 4,507
---------- ---------- --------
Total investments $ 124,110 -- $ 124,110
---------- ---------- --------
---------- ---------- --------
21
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
SCHEDULE VI
SUMMARY OF REINSURANCE
CEDED TO
GROSS OTHER NET
AMOUNT COMPANIES AMOUNT
------------ ----------- ------------
(IN 000'S)
1996
Life Insurance In Force $ 3,044,368 $ 400,572 $ 2,643,796
------------ ----------- ------------
------------ ----------- ------------
Premiums
Life Insurance $ 7,506 $ 1,408 $ 6,098
Accident and Health 2,773 828 1,945
------------ ----------- ------------
Total Premiums $ 10,279 $ 2,236 $ 8,043
------------ ----------- ------------
------------ ----------- ------------
1995
Life Insurance In Force $ 1,963,789 $ 300,314 $ 1,663,475
------------ ----------- ------------
------------ ----------- ------------
Premiums
Life Insurance $ 5,848 $ 917 $ 4,931
Accident and Health 1,862 456 1,406
------------ ----------- ------------
Total Premiums $ 7,710 $ 1,373 $ 6,337
------------ ----------- ------------
------------ ----------- ------------
1994
Life Insurance In Force $ 1,699,729 $ 264,144 $ 1,435,585
------------ ----------- ------------
------------ ----------- ------------
Premiums
Life Insurance $ 4,524 $ 633 $ 3,891
Accident and Health 779 51 728
------------ ----------- ------------
Total Premiums $ 5,303 $ 684 $ 4,619
------------ ----------- ------------
------------ ----------- ------------
22
INDEPENDENT AUDITORS' REPORT
TO THE BOARD OF DIRECTORS AND STOCKHOLDER
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
NEW YORK, NEW YORK
We have audited the statutory statements of admitted assets, liabilities and
capital stock and surplus of Sun Life Insurance and Annuity Company of New York
(wholly-owned subsidiary of Sun Life Assurance Company of Canada (U.S.)) as of
December 31, 1996 and 1995 and the related statutory statements of operations,
changes in capital stock and surplus and cash flow for each of the three years
in the period ended December 31, 1996, and have issued our report thereon dated
February 3, 1997 (which report is included elsewhere in this Form 10-K). Our
audits also included the financial statement schedules listed in Item 14 (a) 2
in this Form 10-K. In our opinion, such financial statement schedules, when
considered in relation to the basic financial statements taken as a whole,
present fairly in all material respects, the information therein set forth.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
February 3, 1997
23
ITEM 14. CONTINUED
(a) 3 and (c). Exhibits:
The following Exhibits are incorporated herein by reference:
EXHIBIT NO.
- ---------------
1 Underwriting Agreement (Filed as Exhibit No. 1 to Registration Statement on Form S-1 (Reg. No.
33-1079)).
3 Declaration of Intent and Charter and By-Laws (filed as Exhibits 3(a) and 3(b), respectively, to the
Registration Statement on Form S-1 (Reg. No. 33-1079)).
4 Combination Fixed/Variable Group Annuity Contract and Certificate (filed as Exhibit 4 to Amendment
No. 1 to the Registration Statement on Form S-1 (Reg. No. 33-1079)); Combination Fixed/Variable
Single Premium Annuity Contract (filed as Exhibit 4 to the Registration Statement on Form S-1 (Reg.
No. 33-58482)); Combination Fixed/Variable Flexible Premium Annuity Contract (filed as Exhibit 4 to
the Registration Statement on Form N-4 of Sun Life (N.Y.) Variable Account C (Reg. No. 333-05037).
5 Opinion Re: Legality (filed as Exhibit 5 to Amendment No. 1 to the Registration Statement on Form S-1
(Reg. No. 33-1079); as Exhibit 5 to the Registration Statement on Form S-1 (Reg No. 33-58482)) and
as Exhibit 5 to the Registration Statement on Form S-2 (Reg. No. 333-09141).
6 Opinion Re: Tax Matters (filed as Exhibit 6 to Amendment No. 1 to the Registration Statement on Form
S-1 (Reg. No. 33-1079)).
24 Powers of Attorney (filed herewith).
27 Financial Data Schedule (file herwith).
(b) Reports on Form 8-K
No reports on Form 8-K have been filed during the last quarter.
(d) No additional financial statements are required to be filed.
24
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
SUN LIFE INSURANCE AND ANNUITY COMPANY
OF NEW YORK
(Registrant)
By:* /s/ JOHN D. MCNEIL
----------------------------------
John D. McNeil,
CHAIRMAN
Date: March 21, 1997
---------------------------------
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated.
*/s/ JOHN D. MCNEIL Chairman and Director
- ------------------------------------------- (Principal Executive Date: March 21, 1997
John D. McNeil Officer)
Vice President,
*/s/ ROBERT P. VROLYK Controller and Actuary
- ------------------------------------------- (Principal Financial & Date: March 20, 1997
Robert P. Vrolyk Accounting Officer)
*/s/ A. KEITH BRODKIN
- ------------------------------------------- Director Date: March 26, 1997
A. Keith Brodkin
*/s/ JOHN S. LANE
- ------------------------------------------- Director Date: March 21, 1997
John S. Lane
*/s/ DAVID D. HORN
- ------------------------------------------- Senior Vice President and Date: March 21, 1997
David D. Horn Director
*/s/ JOHN G. IRELAND
- ------------------------------------------- Director Date: March 26, 1997
John G. Ireland
*/s/ EDWARD M. LAMONT
- ------------------------------------------- Director Date: March 21, 1997
Edward M. Lamont
- ---------
* By Margaret Sears Mead pursuant to Power of Attorney filed herewith.
25
*/s/ DONALD A. STEWART
- ------------------------------------------- President and Director Date: March 21, 1997
Donald A. Stewart
*/s/ RICHARD B. BAILEY
- ------------------------------------------- Director Date: March 27, 1997
Richard B. Bailey
*/s/ FIORAVANTE G. PERROTTA
- ------------------------------------------- Director Date: March 21, 1997
Fioravante G. Perrotta
*/s/ RALPH F. PETERS
- ------------------------------------------- Director Date: March 20, 1997
Ralph F. Peters
*/s/ PAMELA T. TIMMINS
- ------------------------------------------- Director Date: March 24, 1997
Pamela T. Timmins
*/s/ ANGUS A. MACNAUGHTON
- ------------------------------------------- Director Date: March 20, 1997
Angus A. MacNaughton
*/s/ M. COLYER CRUM
- ------------------------------------------- Director Date: March 26, 1997
M. Colyer Crum
- ----------------------------
*By Margaret Sears Mead pursuant to Power of Attorney filed herewith
26