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As filed with the Securities and Exchange Commission on November 1, 1999
Registration Nos. 333-16501, 811-7935
___________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-4
Registration Statement under
The Securities Act of 1933
Pre-Effective Amendment No. ___
Post Effective Amendment No. 4
and/or
Registration Statement under
The Investment Company Act of 1940
Amendment No. 5
SEPARATE ACCOUNT NY-B
(Exact Name of Registrant)
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY
OF NEW YORK
(Name of Depositor)
230 Park Avenue, Suite 966
New York, New York 10169-0999
(212) 973-9647
(Address and Telephone Number of Depositor's Principal Offices)
Marilyn Talman, Esq. COPY TO:
First Golden American Life Insurance Stephen E. Roth, Esq.
Company of New York Sutherland Asbill &
1475 Dunwoody Drive Brennan LLP
West Chester, PA 19380 1275 Pennsylvania Avenue, N.W.
(610) 425-3516 Washington, D.C. 20004-2404
(Name and Address of Agent for Service of Process)
APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING:
A soon as practical after the effective date of the Registration Statement
IT IS PROPOSED THAT THIS FILING WILL BECOME EFFECTIVE:
[ ] immediately upon filing pursuant to paragraph (b) of Rule 485
[x] on November 10, 1999 pursuant to paragraph (b) of Rule 485
[ ] 60 days after filing pursuant to paragraph (a)(1) of Rule 485
[ ] on _________ pursuant to paragraph (a)(1) of Rule 485
IF APPROPRIATE, CHECK THE FOLLOWING BOX:
[ ] this Post-Effective Amendment designates a new effective date for
a previously filed Post-Effective Amendment.
TITLE OF SECURITIES BEING REGISTERED:
Deferred Combination Variable and Fixed Annuity Contracts
___________________________________________________________________________
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PART A
EXPLANATORY NOTE
This Registration Statement contains three separate Profiles
and Prospectuses for the DVA Plus Contract. This Amendment to the
Registration Statement contains only a single Profile and Prospectus
(Version 3) which is a variation of Version 1 and of the
DVA Plus Profile and Prospectus filed previously in Post-Effective
Amendment No. 3 to a Registration Statement on Form N-4 for Separate
Account NY-B filed with the Securities and Exchange Commission on
April 29, 1999 (File Nos. 333-16501, 811-7935). The distribution
system for the Contracts offered by each version of the Profile and
Prospectus is different. Version 1 offers twenty portfolios of The
GCG Trust and two portfolios of the PIMCO Variable Insurance Trust.
Version 2, which is no longer being offered, offered three portfolios
of The GCG Trust, four portfolios of the Travelers Series Fund
Inc., one portfolio of the Greenwich Street Series Fund, and five
portfolios of the Smith Barney Concert Allocation Series Inc.
Version 3 offers five portfolios of The Galaxy VIP fund in addition
to all portfolios offered in Version 1. Other than these
differences, Versions 1, 2 and 3 are substantially similar.
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ING VARIABLE ANNUITIES
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B OF FIRST GOLDEN AMERICAN LIFE INSURANCE
COMPANY OF NEW YORK
[begin shaded block]
PROFILE OF
GOLDENSELECT DVA PLUS
featuring The Galaxy VIP Fund
FIXED AND VARIABLE ANNUITY CONTRACT
November 12, 1999
[inset within shaded block]
This Profile is a summary of some of the more important points
that you should know and consider before purchasing the Contract.
The Contract is more fully described in the full prospectus which
accompanies this Profile. Please read the prospectus carefully.
[end inset within shaded block]
[end shaded block]
1.THE ANNUITY CONTRACT
The Contract offered in this prospectus is a deferred combination
variable and fixed annuity contract between you and First Golden
American Life Insurance Company of New York. It is offered
exclusively to customers of Fleet Financial Group, Inc. and its
affiliates. The Contract provides a means for you to invest on a
tax-deferred basis in (i) one or more of 27 mutual fund investment
portfolios through our Separate Account NY-B and/or (ii) in a fixed
account of First Golden with guaranteed interest periods. The 27
mutual fund portfolios are listed on page 3 below. We currently
offer guaranteed interest periods of 1, 3, 5, 7 and 10 years in the
fixed account. We set the interest rates in the fixed account
(which will never be less than 3%) periodically. We may credit a
different interest rate for each interest period. The interest
you earn in the fixed account as well as your principal is guaranteed
by First Golden as long as you do not take your money out before the
maturity date for the applicable interest period. If you withdraw
your money from the fixed account more than 30 days before the
applicable maturity date, we will apply a market value adjustment.
A market value adjustment could increase or decrease your contract
value and/or the amount you take out. Generally the investment
portfolios are designed to offer a better return than the fixed
account. However, this is NOT guaranteed. You may not make any
money, and you can even lose the money you invest.
The Contract, like all deferred variable annuity contracts, has two
phases: the accumulation phase and the income phase. The accumulation
phase is the period between the contract date and the date on which
you start receiving the annuity payments under your Contract. The
amounts you accumulate during the accumulation phase will determine
the amount of annuity payments you will receive. The income phase
begins on the annuity start date, which is the date you start receiving
regular annuity payments from your Contract.
You determine (1) the amount and frequency of premium payments, (2)
the investments, (3) transfers between investments, (4) the type of
annuity to be paid after the accumulation phase, (5) the beneficiary
who will receive the death benefits, (6) the type of death benefit,
and (7) the amount and frequency of withdrawals.
DVA PLUS PROFILE
Prospectus begins after
page 8 of this Profile
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2.YOUR ANNUITY PAYMENTS (THE INCOME PHASE)
Annuity payments are the periodic payments you will begin receiving
on the annuity start date. You may choose one of the following
annuity payment options:
[Table with Shaded Heading]
Annuity Options
|------------------------------------------------------------------------|
| Option 1 Income for a Payments are made for a specified |
| fixed period number of years to you |
| or your beneficiary. |
|------------------------------------------------------------------------|
| Option 2 Income for Payments are made for the rest of |
| life with a your life or longer for a specified |
| period certain period such as 10 or 20 years or |
| until the total amount used to buy |
| this option has been repaid. This |
| option comes with an added guarantee|
| that payments will continue to your |
| beneficiary for the remainder of |
| period if you should die during the |
| period. |
|------------------------------------------------------------------------|
| Option 3 Joint life income Payments are made for your life |
| and the life of another person |
| (usually your spouse). |
|------------------------------------------------------------------------|
| Option 4 Annuity plan Any other annuitization plan that we|
| choose to offer on the annuity |
| start date. |
|------------------------------------------------------------------------|
Annuity payments under Options 1, 2 and 3 are fixed. Annuity
payments under Option 4 may be fixed or variable. Once you elect an
annuity option and begin to receive payments, it cannot be changed.
3.PURCHASE (BEGINNING OF THE ACCUMULATION PHASE)
You may purchase the Contract with an initial payment of $10,000 or
more ($1,500 for a qualified Contract) up to and including age 85.
You may make additional payments of $500 or more ($250 for a
qualified Contract) at any time before you turn 85. Under certain
circumstances, we may waive the minimum initial and additional
premium payment requirement. Any initial or additional premium
payment that would cause the contract value of all annuities that you
maintain with us to exceed $1,000,000 requires our prior approval.
Who may purchase this Contract? Contracts offered by the prospectus
accompanying this Profile are available only to customers of Fleet
Financial Group, Inc. and its affiliates. The Contract may be purchased
by individuals as part of a personal retirement plan (a "non-qualified
Contract"), or as a Contract that qualifies for special tax treatment
when purchased as either an Individual Retirement Annuity (IRA) or in
connection with a qualified retirement plan (each a "qualified Contract").
The Contract is designed for people seeking long-term tax-deferred
accumulation of assets, generally for retirement or other long-term
purposes. The tax-deferred feature is more attractive to people in
high federal and state tax brackets. You should not buy this
Contract if you are looking for a short-term investment or if you
cannot risk getting back less money than you put in.
DVA PLUS PROFILE
2
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4.THE INVESTMENT PORTFOLIOS
You can direct your money into: (1) the fixed account with guaranteed
interest periods of 1, 3, 5, 7 and 10 years, and/or (2) into any one
or more of the following 27 mutual fund investment portfolios through
our Separate Account NY-B. The investment portfolios are described in
the prospectuses for The GCG Trust, The Galaxy VIP Fund and the PIMCO
Variable Insurance Trust. Keep in mind that while an investment in
the fixed account earns a fixed interest rate, an investment in any
investment portfolio, depending on market conditions, may cause you
to make or lose money. The investment portfolios available under
your Contract are:
<TABLE>
<S> <C> <C>
THE GCG TRUST
Liquid Asset Series Capital Growth Series Small Cap Series
Limited Maturity Bond Series Growth Series Real Estate Series
Global Fixed Income Series Value Equity Series Hard Assets Series
Total Return Series Research Series Managed Global Series
Equity Income Series Strategic Equity Series Developing World Series
Fully Managed Series Capital Appreciation Series Emerging Markets Series
Rising Dividends Series Mid-Cap Growth Series
THE GALAXY VIP FUND
Equity Fund Small Company Growth Fund High Quality Bond Fund
Growth and Income Fund Asset Allocation Fund
THE PIMCO TRUST
PIMCO High Yield Bond Portfolio
PIMCO StocksPLUS Growth and Income Portfolio
</TABLE>
5.EXPENSES
The Contract has insurance features and investment features, and there
are charges related to each. For the insurance features, the Company
deducts an annual contract administrative charge of $30, and if you
invest in an investment portfolio, a mortality and expense risk charge
and an asset-based administrative charge. The mortality and expense
risk charge and the asset-based administrative charge are deducted
daily directly from your contract value in the investment portfolios.
The mortality and expense risk charge (depending on the death benefit
you choose) and the asset-based administrative charge, on an annual
basis, are as follows:
STANDARD ANNUAL RATCHET ENHANCED
DEATH BENEFIT DEATH BENEFIT
Mortality & Expense Risk Charge.... 1.10% 1.25%
Asset-Based Administrative Charge.. 0.15% 0.15%
----- -----
Total.......................... 1.25% 1.40%
Each investment portfolio has charges for investment management fees
and other expenses. These charges, which vary by investment
portfolio, currently range from 0.59% to 1.83% annually (see
following table) of the portfolio's average daily net asset balance.
If you withdraw money from your Contract, or if you begin receiving
annuity payments, we may deduct a premium tax of 0%-3.5% to pay to
your state.
We deduct a surrender charge if you surrender your Contract or
withdraw an amount exceeding the free withdrawal amount. The free
withdrawal amount in any year is 15% of your contract value on the
date of the withdrawal less any prior withdrawals during that
contract year. The following table shows the schedule of the
surrender charge that will apply. The surrender charge is a percent
of each premium payment.
COMPLETE YEARS ELAPSED 0 | 1 | 2 | 3 | 4 | 5 | 6 | 7+
SINCE PREMIUM PAYMENT | | | | | | |
SURRENDER CHARGE 7% | 6% | 5% | 4% | 3% | 2% | 1% | 0%
DVA PLUS PROFILE
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The following table is designed to help you understand the Contract
charges. The "Total Annual Insurance Charges" column includes the
maximum mortality and expense risk charge, the asset-based
administrative charge, and reflects the annual contract administrative
charge as 0.04% (based on an average contract value of $70,000).
The "Total Annual Investment Portfolio Charges" column reflects the
portfolio charges for each portfolio and are based on actual expenses
as of December 31, 1998, except for (i) the portfolios that commenced
operations during 1998 where the charges have been annualized, and
(ii) the newly formed portfolios where the charges have been estimated.
The column "Total Annual Charges" reflects the sum of the previous two
columns. The columns under the heading "Examples" show you how much
you would pay under the Contract for a 1-year period and for a 10-year
period.
As required by the Securities and Exchange Commission, the examples
assume that you invested $1,000 in a Contract that earns 5% annually
and that you withdraw your money at the end of Year 1 or at the end
of Year 10. For Years 1 and 10, the examples show the total annual
charges assessed during that time and assume that you have elected
the Annual Ratchet Enhanced Death Benefit. For these examples, the
premium tax is assumed to be 0%.
[Table with shaded heading and shaded lines for readability]
TOTAL ANNUAL EXAMPLES:
TOTAL ANNUAL INVESTMENT TOTAL TOTAL CHARGES AT THE END OF:
INVESTMENT INSURANCE PORTFOLIO ANNUAL
PORTFOLIO CHARGES CHARGES CHARGES 1 YEAR 10 YEARS
THE GCG TRUST
Liquid Asset 1.44% 0.59% 2.03% $ 90.60 $235.85
Limited Maturity 1.44% 0.60% 2.04% $ 90.70 $236.89
Bond
Global Fixed Income 1.44% 1.60% 3.04% $100.70 $335.52
Total Return 1.44% 0.97% 2.41% $ 94.41 $274.63
Equity Income 1.44% 0.98% 2.42% $ 94.51 $275.63
Fully Managed 1.44% 0.98% 2.42% $ 94.51 $275.63
Rising Dividends 1.44% 0.98% 2.42% $ 94.51 $275.63
Capital Growth 1.44% 1.08% 2.52% $ 95.51 $185.56
Growth 1.44% 1.09% 2.53% $ 95.61 $286.55
Value Equity 1.44% 0.98% 2.42% $ 94.51 $275.63
Research 1.44% 0.94% 2.38% $ 94.11 $271.63
Mid-Cap Growth 1.44% 0.95% 2.39% $ 94.21 $272.63
Strategic Equity 1.44% 0.99% 2.43% $ 94.61 $276.63
Capital Appreciation 1.44% 0.98% 2.42% $ 94.21 $275.63
Small Cap 1.44% 0.99% 2.43% $ 94.61 $276.63
Real Estate 1.44% 0.99% 2.43% $ 94.61 $276.63
Hard Assets 1.44% 1.00% 2.44% $ 94.71 $277.63
Managed Global 1.44% 1.26% 2.70% $ 97.31 $303.18
Developing World 1.44% 1.83% 3.27% $102.98 $356.73
Emerging Markets 1.44% 1.83% 3.27% $102.98 $356.73
THE GALAXY VIP FUND
Equity 1.44% 1.05% 2.49% $ 95.21 $282.59
Growth & Income 1.44% 1.50% 2.94% $ 99.70 $326.13
Small Company Growth 1.44% 1.60% 3.04% $100.70 $335.52
Asset Allocation 1.44% 1.07% 2.51% $ 95.41 $284.58
High Quality Bond 1.44% 0.90% 2.34% $ 93.71 $267.60
THE PIMCO TRUST
PIMCO High Yield
Bond 1.44% 0.75% 2.19% $ 92.21 $252.37
PIMCO StocksPLUS
Growth and Income 1.44% 0.65% 2.09% $ 91.20 $242.08
DVA PLUS PROFILE
4
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The "Total Annual Investment Portfolio Charges" column above reflects
current expense reimbursements for applicable investment portfolios.
The 1 Year examples above include a 7% surrender charge. For more
detailed information, see the fee table in the prospectus for the
Contract.
6.TAXES
Under a qualified Contract, your premiums are generally pre-tax
contributions and accumulate on a tax-deferred basis. Premiums and
earnings are generally taxed as income when you make a withdrawal or
begin receiving annuity payments, presumably when you are in a lower
tax bracket.
Under a non-qualified Contract, premiums are paid with after-tax
dollars, and any earnings will accumulate tax-deferred. You will be
taxed on these earnings, but not on premiums, when you withdraw them
from the Contract.
For owners of most qualified Contracts, when you reach age 70 1/2
(or, in some cases, retire), you will be required by federal tax laws
to begin receiving payments from your annuity or risk paying a
penalty tax. In those cases, we can calculate and pay you the
minimum required distribution amounts. If you are younger than 59
1/2 when you take money out, in most cases, you will be charged a 10%
federal penalty tax on the amount withdrawn.
7.WITHDRAWALS
You can withdraw your money at any time during the accumulation
phase. You may elect in advance to take systematic withdrawals which
are described on page 8. Withdrawals above the free withdrawal
amount may be subject to a surrender charge. We will apply a market
value adjustment if you withdraw your money from the fixed account
more than 30 days before the applicable maturity date. Income taxes
and a penalty tax may apply to amounts withdrawn.
8.PERFORMANCE
The value of your Contract will fluctuate depending on the investment
performance of the portfolio(s) you choose. The following chart
shows average annual total return for each portfolio that was in
operation for the entire year of 1998. These numbers reflect the
deduction of the mortality and expense risk charge (based on the
Annual Ratchet Enhanced Death Benefit), the asset-based
administrative charge and the annual contract fee, but do not reflect
deductions for any surrender charges, if any. If surrender charges
were reflected, they would have the effect of reducing performance.
Please keep in mind that past performance is not a guarantee of
future results.
DVA PLUS PROFILE
5
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CALENDAR YEAR
INVESTMENT PORTFOLIO 1998
Managed by A I M Capital Management, Inc.
Capital Appreciation(1) 11.06
Strategic Equity(2 (0.61)
Managed by T. Rowe Price Associates, Inc.
Fully Managed 4.37
Equity Income(2) 6.70
Managed by Kayne Anderson Investment Management, LLC
Rising Dividends 12.50
Managed by EII Realty Securities, Inc.
Real Estate (14.70)
Managed by Eagle Asset Management, Inc.
Value Equity 0.09
Managed by Fred Alger Management, Inc.
Small Cap 19.25
Managed by Putnam Investment Management, Inc.
Emerging Markets (25.20)
Managed Global 27.46
Managed by ING Investment Management, LLC
Limited Maturity Bond 5.33
Liquid Asset 3.54
Managed by Alliance Capital Management L.P.
Capital Growth(2) 10.36
Managed by Janus Capital Corporation
Growth(2) 25.01
Managed by Massachusetts Financial Services Company
Mid-Cap Growth 21.05
Total Return 9.99
Research 21.29
Managed by Baring International Investment Limited
Global Fixed Income 10.25
Hard Assets(2) (30.61)
Developing World(2) --
Managed by Fleet Investment Advisors Inc.
Equity --
Growth and Income --
Small Company Growth --
Asset Allocation --
High Quality Bond --
Managed by Pacific Investment Management Company
PIMCO High Yield Bond --
PIMCO StocksPLUS Growth and Income --
_________________________
(1) Prior to April 1, 1999, a different firm managed the
Portfolio.
(2) Prior to March 1, 1999, a different firm managed the
Portfolio.
9.DEATH BENEFIT
You may choose (i) the Standard Death Benefit, or (ii) the Annual
Ratchet Enhanced Death Benefit. The Annual Ratchet Enhanced Death
Benefit is available only if the contract owner or the annuitant (if
the contract owner is not an individual) is not more than 79 years
old at the time of purchase. The Annual Ratchet Enhanced Death
Benefit may not be available where a Contract is held by joint owners.
The death benefit is payable when the first of the following persons
dies: the contract owner, joint owner, or annuitant (if a contract owner
is not an individual). Assuming you are the contract owner, if you die
during the accumulation phase, your beneficiary will receive a death
benefit unless the beneficiary is your surviving spouse and elects to
continue the Contract. The death benefit paid depends on the death
benefit you have chosen. The death benefit value is calculated at the
close of the business day on which we receive written
DVA PLUS PROFILE
6
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notice and due proof of death, as well as required claim
forms, at our Customer Service Center. If your beneficiary elects
to delay receipt of the death benefit until a date after the time
of your death, the amount of the benefit payable in the future
may be affected. If you die after the annuity start date and you
are the annuitant, your beneficiary will receive the death benefit
you chose under the annuity option then in effect.
The death benefit may be subject to certain mandatory distribution
rules required by federal tax law.
Under the STANDARD DEATH BENEFIT, if you die before the annuity start
date, your beneficiary will receive the greatest of:
1)the contract value;
2)the total premium payments made under the Contract after
subtracting any withdrawals; or
3)the cash surrender value.
Under the ANNUAL RATCHET ENHANCED DEATH BENEFIT, if you die before
the annuity start date, your beneficiary will receive the greatest
of:
1)the contract value;
2)the total premium payments made under the Contract after
subtracting any withdrawals;
3)the cash surrender value; or
4)the enhanced death benefit, which is determined as follows: On
each contract anniversary that occurs on or before the
contract owner turns age 80, we compare the prior enhanced
death benefit to the contract value and select the larger
amount as the new enhanced death benefit. On all other days,
the enhanced death benefit is the following amount: On a daily
basis we first take the enhanced death benefit from the
preceding day (which would be the initial premium if the
preceding day is the contract date), then we add additional
premiums paid since the preceding day, and then we subtract
any withdrawals made since the preceding day (including any
market value adjustment applied to such withdrawal), and then
we subtract for any associated surrender charges. That amount
becomes the new enhanced death benefit.
Note: In all cases described above, the amount of the death benefit
could be reduced by premium taxes owed and withdrawals not
previously deducted.
10.OTHER INFORMATION
FREE LOOK. If you cancel the Contract within 10 days after you
receive it, you will receive a full refund of your contract value.
We determine your contract value at the close of business on the day
we receive your written refund request. For purposes of the refund
during the free look period, we will include a refund of any charges
deducted from your contract value. Because of the market risks
associated with investing in the portfolios, the contract value
returned may be greater or less than the premium payment you paid.
TRANSFERS AMONG INVESTMENT PORTFOLIOS AND THE FIXED ACCOUNT. You
can make transfers among your investment portfolios and your
investment in the fixed account as frequently as you wish without any
current tax implications. The minimum amount for a transfer is $100.
There is currently no charge for transfers, and we do not limit the
number of transfers allowed. The Company may, in the future, charge
a $25 fee for any transfer after the twelfth transfer in a contract
year or limit the number of transfers allowed. Keep in mind that if
you transfer or otherwise withdraw your money from the fixed account
more than 30 days before the applicable maturity date, we will apply
a market value adjustment. A market value adjustment could increase
or decrease your contract value and/or the amount you transfer or
withdraw.
NO PROBATE. In most cases, when you die, the person you choose as
your beneficiary will receive the death benefit without going through
probate. See "Federal Tax Considerations--Taxation of Death Benefit
Proceeds" in the prospectus.
DVA PLUS PROFILE
7
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ADDITIONAL FEATURES. This Contract has other features you may be
interested in. These include:
Dollar Cost Averaging. This is a program that allows you to
invest a fixed amount of money in the investment portfolios each
month, which may give you a lower average cost per unit over
time than a single one-time purchase. Dollar cost averaging
requires regular investments regardless of fluctuating price
levels, and does not guarantee profits or prevent losses in a
declining market. This option is currently available only if
you have $1,200 or more in the Limited Maturity Bond or the
Liquid Asset investment portfolios or in the fixed account with
a 1-year guaranteed interest period. Transfers from the fixed
account under this program will not be subject to a market value
adjustment.
Systematic Withdrawals. During the accumulation phase, you
can arrange to have money sent to you at regular intervals
throughout the year. Within limits these withdrawals will not
result in any surrender charge. Withdrawals from your money in
the fixed account under this program are not subject to a market
value adjustment. Of course, any applicable income and penalty
taxes will apply on amounts withdrawn.
Automatic Rebalancing. If your contract value is $10,000 or
more, you may elect to have the Company automatically readjust
the money between your investment portfolios periodically to
keep the blend you select. Investments in the fixed account are
not eligible for automatic rebalancing.
11.INQUIRIES
If you need more information after reading this profile and the
prospectus, please contact us at:
CUSTOMER SERVICE CENTER
230 PARK AVENUE, SUITE 966
NEW YORK, NEW YORK 10169
(800) 963-9539
or your registered representative.
DVA PLUS PROFILE
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[begin shaded block]
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B OF FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY
OF NEW YORK
November 12, 1999
DEFERRED COMBINATION VARIABLE AND FIXED ANNUITY PROSPECTUS
GOLDENSELECT DVA PLUS
featuring THE GALAXY VIP FUND
[end shaded block]
- ----------------------------------------------------------------------
This prospectus describes GoldenSelect DVA Plus, an individual
deferred variable annuity contract (the "Contract") offered by First
Golden American Life Insurance Company of New York (the "Company,"
"we" or "our"). The Contract is available in connection with certain
retirement plans that qualify for special federal income tax
treatment ("qualified Contracts") as well as those that do not
qualify for such treatment ("non-qualified Contracts").
The Contract provides a means for you to invest your premium payments
in one or more of 27 mutual fund investment portfolios. You may also
allocate premium payments to our Fixed Account with guaranteed
interest periods. Your contract value will vary daily to reflect the
investment performance of the investment portfolio(s) you select and
any interest credited to your allocations in the Fixed Account. The
investment portfolios available under your Contract and the portfolio
managers are:
T. ROWE PRICE ASSOCIATES, INC. JANUS CAPITAL CORPORATION
Fully Managed Series Growth Series
Equity Income Series MASSACHUSETTS FINANCIAL SERVICES COMPANY
A I M CAPITAL MANAGEMENT, INC. Mid-Cap Growth Series
Capital Appreciation Series Total Return Series
Strategic Equity Series Research Series
KAYNE ANDERSON INVESTMENT ING INVESTMENT MANAGEMENT, LLC
MANAGEMENT, LLC (AN AFFILIATE)
Rising Dividends Series Limited Maturity Bond Series
EII REALTY SECURITIES, INC. Liquid Asset Series
Real Estate Series PUTNAM INVESTMENT MANAGEMENT, INC.
BARING INTERNATIONAL INVESTMENT Emerging Market Series
LIMITED(AN AFFILIATE) Managed Global Series
Hard Assets Series
Developing World Series FLEET INVESTMENT ADVISORS INC.
Global Fixed Income Series Equity Fund
EAGLE ASSET MANAGEMENT, INC. Growth and Income Fund
Value Equity Series Small Company Growth Fund
FRED ALGER MANAGEMENT, INC. Asset Allocation Fund
Small Cap Series High Quality Bond Fund
ALLIANCE CAPITAL MANAGEMENT L.P.
Capital Growth Series PACIFIC INVESTMENT MANAGEMENT COMPANY
PIMCO High Yield Bond Portfolio
PIMCO StocksPLUS Growth and
Income Portfolio
The above mutual fund investment portfolios are purchased and held by
corresponding divisions of our Separate Account NY-B. We refer to
the divisions as "subaccounts" and the money you place in the Fixed
Account's guaranteed interest periods as "Fixed Interest Allocations"
in this prospectus.
We will credit your Fixed Interest Allocation(s) with a fixed rate of
interest. We set the interest rates periodically. We will not set
the interest rate to be less than a minimum annual rate of 3%. You
may choose guaranteed interest periods of 1, 3, 5, 7 and 10 years.
The interest earned on your money as well as your principal is
guaranteed as long as you hold them until the maturity date. If you
take your money out from a Fixed Interest Allocation more than 30
days before the applicable maturity date, we will apply a market
value adjustment ("Market Value Adjustment"). A Market Value
Adjustment could increase or decrease your contract value and/or the
amount you take out. You bear the risk that you may receive less
than your principal if we take a Market Value Adjustment. You have a
right to return a Contract within 10 days after you receive it for a
full refund of the contract value (which may be more or less than the
premium payments you paid).
This prospectus provides information that you should know before
investing and should be kept for future reference. A Statement of
Additional Information, dated November 12, 1999, has been filed with
the Securities and Exchange Commission. It is available without charge
upon request. To obtain a copy of this document, write to our
Customer Service Center at 230 Park Avenue, Suite 966, New York, New
York 10169 or call (800) 963-9539, or access the SEC's website
(http://www.sec.gov). The table of contents of the Statement of
Additional Information ("SAI") is on the last page of this prospectus
and the SAI is made part of this prospectus by reference.
- ----------------------------------------------------------------------
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED
THESE SECURITIES OR PASSED UPON THE ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
AN INVESTMENT IN THE GCG TRUST, THE GALAXY VIP FUND, OR THE PIMCO TRUST
IS NOT A BANK DEPOSIT AND IS NOT INSURED OR GUARANTEED BY A BANK OR BY
THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY.
THIS PROSPECTUS MUST BE ACCOMPANIED BY A CURRENT PROSPECTUS FOR THE GCG
TRUST, THE GALAXY VIP FUND, AND THE PIMCO TRUST.
<PAGE>
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[Shaded Section Header]
- ----------------------------------------------------------------------
TABLE OF CONTENTS
- ----------------------------------------------------------------------
PAGE
Index of Special Terms 1
Fees and Expenses 2
Performance Information 6
Accumulation Unit 6
Net Investment Factor 7
Condensed Financial Information 7
Financial Statements 7
Performance Information 7
First Golden American Life Insurance Company 8
The Trusts 8
First Golden Separate Account NY-B 9
The Investment Portfolios 9
Investment Objectives 9
Investment Management and Advisory Fees 12
The Fixed Interest Allocation 13
Selecting a Guaranteed Interest Period 13
Guaranteed Interest Rates 13
Transfers from a Fixed Interest Allocation 14
Withdrawals from a Fixed Interest Allocation 14
Market Value Adjustment 14
The Annuity Contract 15
Contract Date and Contract Year 15
Annuity Start Date 16
Contract Owner 16
Annuitant 16
Beneficiary 17
Purchase and Availability of the Contract 17
Crediting of Premium Payments 17
Contract Value 18
Cash Surrender Value 18
Surrendering to Receive the Cash Surrender Value 19
Addition, Deletion or Substitution
of Subaccounts and Other Changes 19
The Fixed Account 19
Other Important Provisions 19
Withdrawals 20
Regular Withdrawals 20
Systematic Withdrawals 20
IRA Withdrawals 21
Transfers Among Your Investments 22
Dollar Cost Averaging 22
Automatic Rebalancing 23
Death Benefit Choices 24
Death Benefit During the Accumulation Phase 24
Standard Death Benefit 24
Annual Ratchet Enhanced Death Benefit 24
Death Benefit During the Income Phase 24
Charges and Fees 25
Charge Deduction Subaccount 25
Charges Deducted from the Contract Value 25
i
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- ----------------------------------------------------------------------
TABLE OF CONTENTS (CONTINUED)
- ----------------------------------------------------------------------
PAGE
Charges and Fees (continued)
Surrender Charge 25
Free Withdrawal Amount 25
Surrender Charge for Excess Withdrawals 25
Premium Taxes 26
Administrative Charge 26
Transfer Charge 26
Charges Deducted from the Subaccounts 26
Mortality and Expense Risk Charge 26
Asset-Based Administrative Charge 26
Trust Expenses 26
The Annuity Options 27
Annuitization of Your Contract 27
Selecting the Annuity Start Date 27
Frequency of Annuity Payments 28
The Annuity Options 28
Income for a Fixed Period 28
Income for Life with a Period Certain 28
Joint Life Income 28
Annuity Plan 28
Payment When Named Person Dies 28
Other Contract Provisions 29
Reports to Contract Owners 29
Suspension of Payments 29
In Case of Errors in Your Application 29
Assigning the Contract as Collateral 29
Contract Changes-Applicable Tax Law 29
Free Look 29
Group or Sponsored Arrangements 29
Selling the Contract 30
Other Information 30
Voting Rights 30
Year 2000 Problem 30
State Regulation 31
Legal Proceedings 31
Legal Matters 31
Experts 31
Federal Tax Considerations 31
More Information About First Golden American
Life Insurance Company 37
Unaudited Financial Statements of First Golden
American Life Insurance Company 51
Financial Statements of First Golden
American Life Insurance Company 58
Statement of Additional Information
Table of Contents 80
Appendix A
Condensed Financial Information A1
Appendix B
Market Value Adjustment Examples B1
Appendix C
Surrender Charge for Excess Withdrawals Example C1
ii
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INDEX OF SPECIAL TERMS
- ----------------------------------------------------------------------
The following special terms are used throughout this prospectus.
Refer to the page(s) listed for an explanation of each term:
SPECIAL TERM PAGE
Accumulation Unit 6
Annual Ratchet Enhanced Death Benefit 24
Annuitant 16
Annuity Start Date 16
Cash Surrender Value 18
Contract Date 15
Contract Owner 16
Contract Value 18
Contract Year 15
Fixed Interest Allocation 13
Free Withdrawal Amount 25
Market Value Adjustment 14
Net Investment Factor 7
Standard Death Benefit 24
The following terms as used in this prospectus have the same or
substituted meanings as the corresponding terms currently used in the
Contract:
TERM USED IN THIS PROSPECTUS CORRESPONDING TERM USED IN THE CONTRACT
Accumulation Unit Value Index of Investment Experience
Annuity Start Date Annuity Commencement Date
Contract Owner Owner or Certificate Owner
Contract Value Accumulation Value
Transfer Charge Excess Allocation Charge
Fixed Interest Allocation Fixed Allocation
Free Look Period Right to Examine Period
Guaranteed Interest Period Guarantee Period
Subaccount(s) Division(s)
Net Investment Factor Experience Factor
Regular Withdrawals Conventional Partial Withdrawals
Withdrawals Partial Withdrawals
1
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FEES AND EXPENSES
- ----------------------------------------------------------------------
CONTRACT OWNER TRANSACTION EXPENSES*
Surrender Charge:
COMPLETE YEARS ELAPSED 0 | 1 | 2 | 3 | 4 | 5 | 6 | 7+
SINCE PREMIUM PAYMENT | | | | | | |
| | | | | | |
SURRENDER CHARGE 7% | 6% | 5% | 4% | 3% | 2% | 1% | 0%
Transfer Charge None**
*If you invested in a Fixed Interest Allocation, a Market Value
Adjustment may apply to certain transactions. This may increase
or decrease your contract value and/or your transfer or
surrender amount.
**We may in the future charge $25 per transfer if you make more
than 12 transfers in a contract year.
ANNUAL CONTRACT ADMINISTRATIVE CHARGE
Administrative Charge.......................................$30
(We waive this charge if the total of your premium payments is
$100,000 or more, or if your contract value at the end of a
contract year is $100,000 or more.)
SEPARATE ACCOUNT NY-B ANNUAL CHARGES***
STANDARD ENHANCED DEATH BENEFIT
DEATH BENEFIT ANNUAL RATCHET
Mortality and Expense Risk Charge 1.10% 1.25%
Asset-Based Administrative Charge 0.15% 0.15%
----- -----
Total Separate Account Charges 1.25% 1.40%
***As a percentage of average assets in each subaccount. The
mortality and expense risk charge and the asset-based administrative
charge are deducted daily.
2
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THE GCG TRUST ANNUAL EXPENSES (as a percentage of the average daily net
assets of the portfolio):
[Table with Shaded Heading and Shaded lines for readability]
|---------------------------------------------------------------------------|
| OTHER TOTAL |
| EXPENSES(2) EXPENSES |
| MANAGEMENT AFTER EXPENSE AFTER EXPENSE |
| PORTFOLIO FEES(1) REIMBURSEMENT REIMBURSEMENT(3) |
|---------------------------------------------------------------------------|
| Liquid Asset 0.59% 0.00% 0.59% |
| Limited Maturity Bond 0.60% 0.00% 0.60% |
| Global Fixed Income 1.60% 0.00% 1.60%(3) |
| Total Return 0.94% 0.03% 0.97%(3) |
| Equity Income 0.98% 0.00% 0.98% |
| Fully Managed 0.98% 0.00% 0.98% |
| Rising Dividends 0.98% 0.00% 0.98% |
| Growth & Income 1.08% 0.00% 1.08% |
| Growth 1.08% 0.01% 1.09% |
| Value Equity 0.98% 0.00% 0.98% |
| Research 0.94% 0.00% 0.94% |
| Strategic Equity 0.98% 0.01% 0.99% |
| Capital Appreciation 0.98% 0.00% 0.98% |
| Mid-Cap Growth 0.94% 0.01% 0.95% |
| Small Cap 0.98% 0.01% 0.99% |
| Real Estate 0.98% 0.01% 0.99% |
| Hard Assets 0.98% 0.02% 1.00% |
| Managed Global 1.25% 0.01% 1.26% |
| Developing World 1.75% 0.08% 1.83% |
| Emerging Markets 1.75% 0.08% 1.83% |
|---------------------------------------------------------------------------|
(1)Fees decline as the total assets of certain combined portfolios
increase. See the prospectus for The GCG Trust for more information.
(2)Other expenses generally consist of independent trustees fees and
certain expenses associated with investing in international markets.
Other expenses are based on actual expenses for the year ended
December 31, 1998, except for portfolios that commenced operations in
1998 where the charges have been annualized.
(3)Total expenses are based on actual expenses for the fiscal year ended
December 31, 1998. Directed Services, Inc. is currently reimbursing
expenses to maintain total expenses at 0.97% for the Total Return
portfolio and 1.60% for the Global Fixed Income portfolio as shown.
Without this reimbursement, and based on actual reimbursements for
fiscal year ended December 31, 1998, total expenses would have been
0.98% for the Total Return portfolio and 1.74% for the Global Fixed
Income portfolio. This reimbursement agreement will remain in place
through December 31, 1999.
THE GALAXY VIP FUND ANNUAL EXPENSES (as a percentage of the average daily
net assets of the portfolio):
[Table with Shaded Heading]
|---------------------------------------------------------------------------|
| OTHER TOTAL |
| MANAGEMENT EXPENSES EXPENSES |
| FEE AFTER AFTER EXPENSE AFTER EXPENSE |
| PORTFOLIO FEE WAIVER(1) REIMBURSEMENT(1) REIMBURSEMENT(1) |
|---------------------------------------------------------------------------|
| |
| Equity 0.75% 0.30% 1.05% |
| Growth and Income 0.75% 0.75% 1.50% |
| Small Company Growth 0.75% 0.85% 1.60% |
| Asset Allocation 0.75% 0.32% 1.07% |
| High Quality Bond 0.40% 0.50% 0.90% |
|---------------------------------------------------------------------------|
(1)For the Equity, Asset Allocation and High Quality Bond portfolios,
total expenses are based on actual expenses for the fiscal year ended
December 31, 1998. For the Growth and Income and Small Company
Growth portfolios, total expenses are based on estimates for the
current year. Fleet Investment Advisors Inc. and/or the administrator
have agreed to waive certain fees and/or reimburse fund expenses of
0.35%, 6.09% and 0.20% for the Growth and Income, Small Company
Growth, and High Quality Bond portfolios, respectively, for the
current year. Without this agreement, and based on actual waivers
and reimbursements for the fiscal year ended December 31, 1998, total
expenses would have been 1.05%, 2.58%, 12.86%, 1.07% and 1.10% for
the Equity, Growth and Income, Small Company Growth, Asset Allocation
and High Quality Bond portfolios, respectively.
3
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THE PIMCO TRUST ANNUAL EXPENSES (as a percentage of the average daily
net assets of a portfolio):
[Table with Shaded Heading]
|---------------------------------------------------------------------------|
| OTHER TOTAL |
| EXPENSES EXPENSES |
| MANAGEMENT AFTER EXPENSE AFTER EXPENSE |
| PORTFOLIO FEES(1) REIMBURSEMENT(1) REIMBURSEMENT(1) |
|---------------------------------------------------------------------------|
| PIMCO High Yield Bond 0.50% 0.25%(2) 0.75% |
| PIMCO StocksPLUS Growth |
| and Income 0.40% 0.25% 0.65% |
|---------------------------------------------------------------------------|
(1)Total expenses are based on actual expenses for the fiscal year ended
December 31, 1998. PIMCO has agreed to waive and reimburse expenses
of the portfolios to the extent necessary in order to limit the
expenses to 0.75% and 0.65% of the PIMCO High Yield Bond portfolio
and PIMCO StocksPLUS Growth and Income portfolio, respectively.
Under the agreement, PIMCO may recoup these waivers and
reimbursements in future periods, not exceeding three years, provided
total expenses, including any such recoupment, do not exceed the
annual expense limit. Without this agreement, and based on actual
waivers and reimbursements for fiscal year ended December 31, 1998,
total expenses would have been 0.81% and 0.72%, respectively, for the
PIMCO High Yield Bond portfolio and the PIMCO StockPLUS Growth and
Income portfolio.
(2)Since the PIMCO High Yield Bond portfolio commenced operations on
April 30, 1998, other expenses as shown have been annualized for the
year ended December 31, 1998.
The purpose of the foregoing tables is to help you understand the various
costs and expenses that you will bear directly and indirectly. See the
prospectuses of The GCG Trust, The Galaxy VIP Fund, and the PIMCO Trust
for additional information on portfolio expenses.
Premium taxes (which currently range from 0% to 3.5% of premium payments)
may apply, but are not reflected in the tables above or in the examples
below.
4
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EXAMPLES:
In the following examples, surrender charges may apply if you choose
to annuitize within the first 5 contract years. The examples also
assume election of the Annual Ratchet Enhanced Death Benefit and are
based on an assumed 5% annual return.
If you surrender your Contract at the end of the applicable time
period, you would pay the following expenses for each $1,000 invested:
THE GCG TRUST 1 YEAR 3 YEARS 5 YEARS 10 YEARS
Liquid Asset $ 90.60 $113.66 $139.31 $235.85
Limited Maturity Bond $ 90.70 $113.96 $139.82 $236.89
Global Fixed Income $100.70 $143.91 $189.63 $335.52
Total Return $ 94.41 $125.15 $158.55 $274.63
Equity Income $ 94.51 $125.45 $159.05 $275.63
Fully Managed $ 94.51 $125.45 $159.05 $275.63
Rising Dividends $ 94.51 $125.45 $159.05 $275.63
Capital Growth $ 95.51 $128.45 $164.05 $285.56
Growth $ 95.61 $128.75 $164.55 $286.55
Value Equity $ 94.51 $125.45 $159.05 $275.63
Research $ 94.11 $124.25 $157.04 $271.63
Mid-Cap Growth $ 94.21 $124.55 $157.55 $272.63
Strategic Equity $ 94.61 $125.75 $159.55 $276.63
Capital Appreciation $ 94.51 $125.45 $159.05 $275.63
Small Cap $ 94.61 $125.75 $159.55 $276.63
Real Estate $ 94.61 $125.75 $159.55 $276.63
Hard Assets $ 94.71 $126.05 $160.05 $277.63
Managed Global $ 97.31 $133.83 $172.98 $303.18
Developing World $102.98 $150.67 $200.72 $356.73
Emerging Markets $102.98 $150.67 $200.72 $356.73
THE GALAXY VIP FUND
Equity $ 95.21 $127.55 $162.55 $282.59
Growth and Income $ 99.70 $140.96 $184.76 $326.13
Small Company Growth $100.70 $143.91 $189.63 $335.52
Asset Allocation $ 95.41 $128.15 $163.55 $284.58
High Quality Bond $ 93.71 $123.04 $155.03 $267.60
THE PIMCO TRUST
PIMCO High Yield Bond $ 92.21 $118.51 $147.46 $252.37
PIMCO StocksPLUS Growth
and Income $ 91.20 $115.48 $142.37 $242.08
5
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If you do not surrender your Contract or if you annuitize on the
annuity start date, you would pay the following expenses for each
$1,000 invested:
THE GCG TRUST 1 YEAR 3 YEARS 5 YEARS 10 YEARS
Liquid Asset $20.60 $ 63.66 $109.31 $235.85
Limited Maturity Bond $20.70 $ 63.96 $109.82 $236.89
Global Fixed Income $30.70 $ 93.91 $159.63 $335.52
Total Return $24.41 $ 75.15 $128.55 $274.63
Equity Income $24.51 $ 75.45 $129.05 $275.63
Fully Managed $24.51 $ 75.45 $129.05 $275.63
Rising Dividends $24.51 $ 75.45 $129.05 $275.63
Capital Growth $25.51 $ 78.45 $134.05 $285.56
Growth $25.61 $ 78.75 $134.55 $286.55
Value Equity $24.51 $ 75.45 $129.05 $275.63
Research $24.11 $ 74.25 $127.04 $271.63
Mid-Cap Growth $24.21 $ 74.55 $127.55 $272.63
Strategic Equity $24.61 $ 75.75 $129.55 $276.63
Capital Appreciation $24.51 $ 75.45 $129.05 $275.63
Small Cap $24.61 $ 75.75 $129.55 $276.63
Real Estate $24.61 $ 75.75 $129.55 $276.63
Hard Assets $24.71 $ 76.05 $130.05 $277.63
Managed Global $27.31 $ 83.83 $142.98 $303.18
Developing World $32.98 $100.67 $170.72 $356.73
Emerging Markets $32.98 $100.67 $170.72 $356.73
THE GALAXY VIP FUND
Equity $25.21 $ 77.55 $132.55 $282.59
Growth and Income $29.70 $ 90.96 $154.76 $326.13
Small Company Growth $30.70 $ 93.91 $159.63 $335.52
Asset Allocation $25.41 $ 78.15 $133.55 $284.58
High Quality Bond $23.71 $ 73.04 $125.03 $267.60
THE PIMCO TRUST
PIMCO High Yield Bond $22.21 $ 68.51 $117.46 $252.37
PIMCO StocksPLUS Growth
and Income $21.20 $ 65.48 $112.37 $242.08
The examples above reflect the annual administrative charge as an
annual charge of 0.04% of assets (based on an average contract value
of $70,000). If the Standard Death Benefit is elected instead of
the Annual Ratchet Enhanced Death Benefit used in the examples, the
actual expenses will be less than those represented in the examples.
THESE EXAMPLES SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR
FUTURE EXPENSES. ACTUAL EXPENSES MAY BE MORE OR LESS THAN THOSE
SHOWN SUBJECT TO THE TERMS OF YOUR CONTRACT.
[Shaded Section Header]
- ----------------------------------------------------------------------
PERFORMANCE INFORMATION
- ----------------------------------------------------------------------
ACCUMULATION UNIT
We use accumulation units to calculate the value of a Contract. Each
subaccount of Separate Account NY-B has its own accumulation unit
value. The accumulation units are valued each business day that the
New York Stock Exchange is open for trading. Their values may
increase or decrease from day to day according to a Net Investment
Factor, which is primarily based on the investment performance of the
applicable investment portfolio. Shares in the investment portfolios
are valued at their net asset value.
6
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<PAGE>
THE NET INVESTMENT FACTOR
The Net Investment Factor is an index number which reflects charges
under the Contract and the investment performance of the subaccount.
The Net Investment Factor is calculated as follows:
(1)We take the net asset value of the subaccount at the end of
each business day.
(2)We add to (1) the amount of any dividend or capital gains
distribution declared for the subaccount and reinvested in
such subaccount. We subtract from that amount a charge for
our taxes, if any.
(3)We divide (2) by the net asset value of the subaccount at the
end of the preceding business day.
(4)We then subtract the applicable daily mortality and expense
risk charge and the daily asset-based administrative charge
from each subaccount.
Calculations for the subaccounts are made on a per share basis.
CONDENSED FINANCIAL INFORMATION
Tables containing (i) the accumulation unit value history of each
subaccount of First Golden Separate Account NY-B offered this
prospectus and (ii) the total investment value history of each such
subaccount are presented in Appendix A - Condensed Financial
Information.
FINANCIAL STATEMENTS
The audited financial statements of Separate Account NY-B for the
years ended December 31, 1998 and 1997 are included in the Statement
of Additional Information. The unaudited condensed financial statements
of First Golden for the six months ended June 30, 1999 and the audited
financial statements of First Golden for the years ended December 31,
1998, 1997 and the period December 17, 1996 (commencement of operations)
through December 31, 1996 are included in this prospectus.
PERFORMANCE INFORMATION
From time to time, we may advertise or include in reports to contract
owners performance information for the subaccounts of Separate
Account NY-B, including the average annual total return performance,
yields and other nonstandard measures of performance. Such
performance data will be computed, or accompanied by performance data
computed, in accordance with standards defined by the SEC.
Except for the Liquid Asset subaccount, quotations of yield for the
subaccounts will be based on all investment income per unit (contract
value divided by the accumulation unit) earned during a given 30-day
period, less expenses accrued during such period. Information on
standard total average annual return performance will include average
annual rates of total return for 1, 5 and 10 year periods, or lesser
periods depending on how long the subaccount of Separate Account NY-B
has been in existence. We may show other total returns for periods
less than one year. Total return figures will be based on the actual
historic performance of the subaccounts of Separate Account NY-B,
assuming an investment at the beginning of the period, withdrawal of
the investment at the end of the period, and the deduction of all
applicable portfolio and contract charges. We may also show rates of
total return on amounts invested at the beginning of the period with
no withdrawal at the end of the period. Total return figures which
assume no withdrawals at the end of the period will reflect all
recurring charges, but will not reflect the surrender charge.
In addition, we may present historic performance data for the
investment portfolios since their inception reduced by some or
all of the fees and charges under the Contract. Such adjusted
historic performance includes data that precedes the inception dates
of the subaccounts of Separate Account NY-B. This data is designed
to show the performance that would have resulted if the Contract had
been in existence during that time.
Current yield for the Liquid Asset subaccount is based on income
received by a hypothetical investment over a given 7-day period, less
expenses accrued, and then "annualized" (i.e., assuming that the 7-
day yield would be received for 52 weeks). We calculate "effective
yield" for the Liquid Asset subaccount in a manner similar to that
used to calculate yield, but when annualized, the income earned by
the investment is assumed to be reinvested. The "effective yield"
will thus be slightly higher than the "yield" because of the
compounding effect of earnings. We calculate quotations of yield
for the remaining subaccounts on all investment income
7
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<PAGE>
per accumulation unit earned during a given 30-day period, after
subtracting fees and expenses accrued during the period.
We may compare performance information for a subaccount to: (i) the
Standard & Poor's 500 Stock Index, Dow Jones Industrial Average, Donoghue
Money Market Institutional Averages, or any other applicable market
indices, (ii) other variable annuity separate accounts or other
investment products tracked by Lipper Analytical Services (a widely used
independent research firm which ranks mutual funds and other investment
companies), or any other rating service, and (iii) the Consumer Price
Index (a measure for inflation) to determine the real rate of return of
an investment in the Contract. Our reports and promotional literature
may also contain other information, including the ranking of any
subaccount based on rankings of variable annuity separate accounts or
other investment products tracked by Lipper Analytical Services or by
similar rating services.
Performance information reflects only the performance of a
hypothetical contract and should be considered in light of other
factors, including the investment objective of the investment
portfolio and market conditions. Please keep in mind that past
performance is not a guarantee of future results.
[Shaded Section Header]
- ----------------------------------------------------------------------
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
- ----------------------------------------------------------------------
First Golden American Life Insurance Company of New York is a New
York stock life insurance company. First Golden is a wholly owned
subsidiary of Golden American Life Insurance Company ("Golden
American"). Golden American is a wholly owned subsidiary of
Equitable of Iowa Companies, Inc. ("Equitable of Iowa"). Equitable
of Iowa is wholly owned subsidiary of ING Groep N.V. ("ING"), a
global financial services holding company with approximately $461.8
billion in assets as of December 31, 1998. First Golden's financial
statements appear in this prospectus. First Golden is authorized to
do business in Delaware and New York.
Equitable of Iowa is the holding company for Golden American, Directed
Services, Inc. (the investment advisor of The GCG Trust and the
distributor of the Contracts) and other interests. Equitable of Iowa
and another ING affiliate own ING Investment Management, LLC, one of the
portfolio managers of The GCG Trust. ING also owns Baring International
Investment Limited, another portfolio manager of The GCG Trust.
Our principal office is located at 230 Park Avenue, Suite 966, New
York, New York 10169.
[Shaded Section Header]
- ----------------------------------------------------------------------
THE TRUSTS
- ----------------------------------------------------------------------
In this prospectus, we refer to The GCG Trust, The Galaxy VIP Fund and
the PIMCO Trust collectively as the "Trusts" and individually as a
"Trust."
The GCG Trust is a mutual fund whose shares are offered to separate
accounts funding variable annuity and variable life insurance policies
offered by First Golden and other affiliated insurance companies. The
GCG Trust may also sell its shares to separate accounts of insurance
companies, not affiliated with First Golden. Pending SEC approval,
shares of The GCG Trust may also be sold to certain qualified pension and
retirement plans. The principal address of The GCG Trust is 1475
Dunwoody Drive, West Chester, PA 19380.
The Galaxy VIP Fund is a mutual fund whose shares are offered to separate
accounts of various life insurance companies for variable annuity
contracts, including certain variable contracts of First Golden and its
affiliates. The principal office of The Galaxy VIP Fund is 4400 Computer
Drive, Westborough, MA 01581.
The PIMCO Trust is a mutual fund whose shares are available to separate
accounts of insurance companies, including First Golden, for both
variable annuity contracts and variable life insurance policies and by
8
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<PAGE>
qualified pension and retirement plans. The principal address of the
PIMCO Trust is 840 Newport Center Drive, Suite 300, Newport Beach, CA
92660.
In the event that, due to differences in tax treatment or other
considerations, the interests of contract owners of various contracts
participating in the Trusts conflict, we, the Boards of Trustees of The
GCG Trust, The Galaxy VIP Fund, and the PIMCO Trust, Directed Services,
Inc., Fleet Investment Advisors, Inc., Pacific Investment Management
Company and any other insurance companies participating in the Trusts
will monitor events to identify and resolve any material conflicts that
may arise.
YOU WILL FIND COMPLETE INFORMATION ABOUT THE GCG TRUST, THE GALAXY VIP
FUND, AND THE PIMCO TRUST IN THE ACCOMPANYING PROSPECTUS FOR EACH TRUST.
YOU SHOULD READ THEM CAREFULLY BEFORE INVESTING.
[Shaded Section Header]
- ----------------------------------------------------------------------
FIRST GOLDEN SEPARATE ACCOUNT NY-B
- ----------------------------------------------------------------------
First Golden Separate Account NY-B ("Account NY-B") was established as a
separate account of First Golden on June 13, 1996. It is registered with
the SEC as a unit investment trust under the Investment Company Act of
1940. Account NY-B is a separate investment account used for our
variable annuity contracts. We own all the assets in Account NY-B but
such assets are kept separate from our other accounts.
Account NY-B is divided in subaccounts. Each subaccount invests
exclusively in shares of one investment portfolio of The GCG Trust, The
Galaxy VIP Fund or the PIMCO Trust. Each investment portfolio has its
own distinct investment objectives and policies. Income, gains and
losses, realized or unrealized, of a portfolio are credited to or charged
against the corresponding subaccount of Account NY-B without regard to
any other income, gains or losses of the Company. Assets equal to the
reserves and other contract liabilities with respect to each are not
chargeable with liabilities arising out of any other business of the
Company. They may, however, be subject to liabilities arising from
subaccounts whose assets we attribute to other variable annuity contracts
supported by Account NY-B. If the assets in Account NY-B exceed the
required reserves and other liabilities, we may transfer the excess to
our general account. We are obligated to pay all benefits and make all
payments provided under the Contracts.
We currently offer other variable annuity contracts that invest in
Account NY-B but are not discussed in this prospectus. Account NY-B may
also invest in other investment portfolios which are not available under
your Contract.
[Shaded Section Header]
- ----------------------------------------------------------------------
THE INVESTMENT PORTFOLIOS
- ----------------------------------------------------------------------
During the accumulation phase, you may allocate your premium payments and
contract value to any of the investment portfolios listed in the section
below. YOU BEAR THE ENTIRE INVESTMENT RISK FOR AMOUNTS YOU ALLOCATE TO
THE INVESTMENT PORTFOLIO, AND YOU MAY LOSE YOUR PRINCIPAL.
INVESTMENT OBJECTIVES
The investment objective of each investment portfolio is set forth below.
You should understand that there is no guarantee that any portfolio will
meet its investment objective. Meeting objectives depends on various
factors, including, in certain cases, how well the portfolio managers
anticipate changing economic and market conditions. YOU CAN FIND MORE
DETAILED INFORMATION ABOUT THE INVESTMENT PORTFOLIOS IN THE PROSPECTUSES
FOR THE GCG TRUST, THE GALAXY FUND VIP FUND, AND THE PIMCO TRUST. YOU
SHOULD READ THESE PROSPECTUSES BEFORE INVESTING.
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[Shaded Table Header]
INVESTMENT PORTFOLIO INVESTMENT OBJECTIVE
------------------------------------------------------------------------
THE GCG TRUST
Liquid Asset Seeks high level of current income consistent with
the preservation of capital and liquidity.
Invests primarily in obligations of the U.S.
Government and its agencies and
instrumentalities, bank obligations,
commercial paper and short-term corporate debt
securities. All securities will mature in
less than one year.
----------------------------------------------------
Limited Maturity Seeks highest current income consistent with
Bond low risk to principal and liquidity.
Also seeks to enhance its total return through capital
appreciation when market factors, such as
falling interest rates and rising bond prices,
indicate that capital appreciation may be
available without significant risk to principal.
Invests primarily in diversified limited maturity debt
securities with average maturity dates of five
years or shorter and in no cases more than
seven years.
----------------------------------------------------
Global Fixed Seeks high total return.
Income
Invests primarily in high-grade fixed income
securities, both foreign and domestic.
----------------------------------------------------
Total Return Seeks above-average income (compared to a portfolio
entirely invested in equity securities)
consistent with the prudent employment of capital.
Invests primarily in a combination of equity
and fixed income securities.
----------------------------------------------------
Equity Income Seeks substantial dividend income as well as long-
term growth of capital.
Invests primarily in common stocks of well-
established companies paying above-average
dividends.
----------------------------------------------------
Fully Managed Seeks, over the long term, a high total investment
return consistent with the preservation of
capital and with prudent investment risk.
Invests primarily in the common stocks of
established companies believed by the
portfolio manager to have above-average
potential for capital growth.
----------------------------------------------------
Rising Dividends Seeks capital appreciation. A secondary
objective is dividend income.
Invests in equity securities that meet the
following quality criteria: regular dividend
increases; 35% of earnings reinvested
annually; and a credit rating of "A" to "AAA."
----------------------------------------------------
Capital Growth Seeks long-term total return.
Invests primarily in common stocks of
companies where the potential for change
(earnings acceleration) is significant.
----------------------------------------------------
Growth Seeks capital appreciation.
Invests primarily in common stocks of growth companies
that have favorable relationships between price/earnings
ratios and growth rates in sectors offering the
potential for above-average returns.
----------------------------------------------------
Value Equity Seeks capital appreciation. Dividend income
is a secondary objective.
Invests primarily in common stocks of domestic
and foreign issuers which meet quantitative
standards relating to financial soundness and
high intrinsic value relative to price.
----------------------------------------------------
Research Seeks long-term growth of capital and future income.
Invests primarily in common stocks or
securities convertible into common stocks of
companies believed to have better than average
prospects for long-term growth.
----------------------------------------------------
Strategic Equity Seeks capital appreciation.
Invests primarily in common stocks of medium-
and small-sized companies.
----------------------------------------------------
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Capital Seeks long-term capital growth.
Appreciation
Invests primarily in equity securities believed by
the portfolio manager to be undervalued.
----------------------------------------------------
Mid-Cap Growth Seeks long-term growth of capital.
Invests primarily in equity securities of
companies with medium market capitalization
which the portfolio manager believes have
above-average growth potential.
----------------------------------------------------
Small Cap Seeks long-term capital appreciation.
Invests primarily in equity securities of
companies that have a total market
capitalization within the range of companies
in the Russell 2000 Growth Index or the
Standard & Poor's Small-Cap 600 Index.
----------------------------------------------------
Real Estate Seeks capital appreciation. Current income is a
secondary objective.
Invests primarily in publicly traded real
estate equity securities.
----------------------------------------------------
Hard Assets Seeks long-term capital appreciation.
Invests primarily in hard asset securities.
Hard asset companies produce a commodity which
the portfolio manager is able to price on a
daily or weekly basis.
----------------------------------------------------
Managed Global Seeks capital appreciation. Current income is
only an incidental consideration.
Invests primarily in common stocks traded in
securities markets throughout the world.
----------------------------------------------------
Developing World Seeks capital appreciation.
Invests primarily in equity securities of
companies in developing or emerging countries.
----------------------------------------------------
Emerging Markets Seeks long-term capital appreciation.
Invests primarily in equity securities of
companies in at least six different emerging
market countries.
----------------------------------------------------
THE GALAXY VIP FUND
Equity Seeks long-term growth by investing in companies
that the portfolio manager believes have above-
average earnings potential.
Invests at least 75% of its total assets in common
stocks and securities convertible into common
stocks issued by U.S. companies.
----------------------------------------------------
Growth and Income Seeks to provide a relatively high total return
through long-term capital appreciation and current
income.
Invests at least 65% of its total assets in the
common stocks of U.S. companies with large market
capitalizations (generally over $2 billion) that
have prospects for above-average growth and
dividends.
----------------------------------------------------
Small Company Seeks capital appreciation.
Growth
Invests normally at least 65% of its total assets
in the equity securities, primarily common stocks,
of small companies that have market
capitalizations of $1.5 billion or less. The
portfolio invests primarily in the common stock of
U.S. companies, but may invest up to 20% of its
total assets in foreign equity securities.
----------------------------------------------------
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Asset Allocation Seeks a high total return by providing both a
current level of income that is greater than that
provided by the popular stock market averages, as
well as long-term growth in the value of the
portfolio's assets.
Invests in a mix of stocks and bonds that the
portfolio manager believes will produce both income
and long-term capital growth. This mix will
change from time to time as a result of economic
and market conditions. However, the portfolio
keeps at least 25% of its total assets in fixed
income investments, including debt securities and
preferred stocks, at all times.
----------------------------------------------------
High Quality Bond Seeks a high level of current income consistent
with prudent risk of capital.
Invests primarily in obligations issued or guar
anteed by the U.S. Government, its agencies and
instrumentalities, as well as in corporate debt
obligations such as notes and bonds. The
portfolio also invests in asset-backed and
mortgage-backed securities and in money market
instruments, such as commercial paper and bank
obligations. Normally, at least 65% of the
portfolio's total assets will be invested in high
quality debt obligations that have one of the top
two ratings assigned by Standard & Poor's Ratings
Group or Moody's Investors Services, Inc. or are
unrated securities determined by the portfolio
manager to be of comparable quality.
----------------------------------------------------
THE PIMCO TRUST
PIMCO High Yield Seeks to maximize total return, consistent with
Bond preservation of capital and
prudent investment management.
Invests in at least 65% of its assets in a
diversified portfolio of junk bonds rated at least
B by Moody's Investor Services, Inc. or Standard
& Poor's or, if unrated, determined by the
portfolio manager to be of comparable quality.
----------------------------------------------------
PIMCO StocksPLUS Seeks to achieve a total return which exceeds
Growth and the total return performance of the S&P 500.
Income
Invests primarily in common stocks, options,
futures, options on futures and swaps.
----------------------------------------------------
INVESTMENT MANAGEMENT AND ADVISORY FEES
The investment manager of The GCG Trust is Directed Services, Inc. The
GCG Trust pays Directed Services a monthly fee for its investment
advisory as well as administrative services. The monthly fee is based on
the average daily net assets of an investment portfolio, and in some
cases, the combined total assets of certain grouped portfolios. Directed
Services provides or procures, at its own expense, the services necessary
for the operation of the portfolios. Directed Services (and not The GCG
Trust) pays each portfolio manager a monthly fee for managing the assets
of a portfolio. For a list of the portfolio managers, see the front
cover of this prospectus. Directed Services does not bear the expense of
brokerage fees and other transactional expenses for securities, taxes (if
any) paid by a portfolio, interest on borrowing, fees and expenses of the
independent trustees, and extraordinary expenses, such as litigation or
indemnification expenses.
The investment advisor of The Galaxy VIP Fund is Fleet Investment
Advisors Inc. The Galaxy VIP Fund pays Fleet Investment Advisors a
monthly advisory fee based on the average daily net assets of each
investment portfolio. Each portfolio pays its own administrative costs.
Except for agreements to reimburse certain expenses of some portfolios,
Fleet Investment Advisors does not bear any portfolio expenses.
The investment advisor of the PIMCO Trust is Pacific Investment
Management Company ("PIMCO"). The PIMCO Trust pays PIMCO a monthly
advisory fee for its investment advisory services and a monthly
administrative fee based on the average daily net assets of an investment
portfolio for its administrative services. PIMCO provides or procures,
at its own expense, the services necessary for the operation of the
portfolios. PIMCO does not bear the expense of brokerage fees and other
transactional expenses for securities, taxes (if any) paid by a
portfolio, interest on borrowing, and extraordinary expenses, such as
litigation or indemnification expenses.
YOU CAN FIND MORE DETAILED INFORMATION ABOUT EACH PORTFOLIO'S ADVISORY
FEES IN THE PROSPECTUSES FOR EACH OF THE TRUSTS. YOU SHOULD READ THESE
PROSPECTUSES BEFORE INVESTING.
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[Shaded Section Header]
- ----------------------------------------------------------------------
THE FIXED INTEREST ALLOCATION
- ----------------------------------------------------------------------
You may allocate premium payments and transfer your contract value to
the guaranteed interest periods of our Fixed Account at any time
during the accumulation period. Every time you allocate money to the
Fixed Account, we set up a Fixed Interest Allocation for the
guaranteed interest period you select. We currently offer guaranteed
interest periods of 1, 3, 5, 7 and 10 years, although we may not
offer all these periods in the future. You may select one or more
guaranteed interest periods at any one time. We will credit your
Fixed Interest Allocation with a guaranteed interest rate for the
interest period you select, so long as you do not withdraw money from
that Fixed Interest Allocation before the end of the guaranteed
interest period. Each guaranteed interest period ends on its
maturity date which is the last day of the month in which the
interest period is scheduled to expire.
If you surrender, withdraw, transfer or annuitize your investment in
a Fixed Interest Allocation more than 30 days before the end of the
applicable guaranteed interest period, we will apply a Market Value
Adjustment to the transaction. A Market Value Adjustment could increase
or decrease the amount you surrender, withdraw, transfer or annuitize,
depending on current interest rates at the time of the transaction.
YOU BEAR THE RISK THAT YOU MAY RECEIVE LESS THAN YOUR PRINCIPAL IF WE
APPLY A MARKET VALUE ADJUSTMENT.
Assets supporting amounts allocated to the Fixed Account are
available to fund the claims of all classes of our customer, contract
owners and other creditors. Interests under your Contract relating
to the Fixed Account are registered under the Securities Act of 1933,
but the Fixed Account is not registered under the 1940 Act.
SELECTING A GUARANTEED INTEREST PERIOD
You may select one or more Fixed Interest Allocations with specified
guaranteed interest periods. A guaranteed interest period is the
period that a rate of interest is guaranteed to be credited to your
Fixed Interest Allocation. We may at any time decrease or increase
the number of guaranteed interest periods offered.
Your contract value in the Fixed Account is the sum of your Fixed
Interest Allocations and the interest credited as adjusted for any
withdrawals (including any Market Value Adjustment applied to such
withdrawals), transfers or other charges we may impose. Your Fixed
Interest Allocation will be credited with the guaranteed interest
rate in effect for the guaranteed interest period you selected when
we receive and accept your premium or reallocation of contract value.
We will credit interest daily at a rate, which yields the quoted
guaranteed interest rate.
GUARANTEED INTEREST RATES
Each Fixed Interest Allocation will have an interest rate that is
guaranteed as long as you do not take your money out until its maturity
date. We do not have a specific formula for establishing the guaranteed
interest rates for the different guaranteed interest periods. We
determine guaranteed interest rates at our sole discretion. To find out
the current guaranteed interest rate for a guaranteed interest period you
are interested in, please contact our Customer Service Center or your
registered representative. The determination may be influenced by the
interest rates on fixed income investments in which we may invest with
the amounts we receive under the Contracts. We will invest these amounts
primarily in investment-grade fixed income securities (i.e., rated by
Standard & Poor's rating system to be suitable for prudent investors)
although we are not obligated to invest according to any particular
strategy, except as may be required by applicable law. You will have no
direct or indirect interest in these investments. We will also consider
other factors in determining the guaranteed interest rates, including
regulatory and tax requirements, sales commissions and administrative
expenses borne by us, general economic trends and competitive factors.
We cannot predict the level of future interest rates but no Fixed
Interest Allocation will ever have a guaranteed interest rate of less
than 3% per year.
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We may from time to time at our discretion offer interest rate specials
for new premiums that are higher than the current base interest rate then
offered. Renewal rates for such rate specials will be based on the base
interest rate and not on the special rates initially declared.
TRANSFERS FROM A FIXED INTEREST ALLOCATION
You may transfer your contract value in a Fixed Interest Allocation
to one or more new Fixed Interest Allocations with new guaranteed
interest periods, or to any of the subaccounts of Account NY-B.
Unless you tell us the Fixed Interest Allocations from which such
transfers will be made, we will transfer amounts from your Fixed
Interest Allocations starting with the guaranteed interest period
nearest its maturity date, until we have honored your transfer request.
The minimum amount that you can transfer to or from any Fixed Interest
Allocation is $250. If a transfer request would reduce the contract
value remaining in a Fixed Interest Allocation to less than $100, we will
treat such transfer request as a request to transfer the entire contract
value in such Fixed Interest Allocation. Transfers from a Fixed Interest
Allocation may be subject to a Market Value Adjustment. If you have a
special Fixed Interest Allocation that was offered exclusively with our
dollar cost averaging program, cancelling dollar cost averaging will
cause a transfer of the entire contract value in such Fixed Interest
Allocation to the Liquid Asset subaccount, and such a transfer is subject
to a Market Value Adjustment.
On the maturity date of a guaranteed interest period, you may
transfer amounts from the applicable Fixed Interest Allocation to the
subaccount(s) and/or to new Fixed Interest Allocations with
guaranteed interest periods of any length we are offering at that
time. You may not, however, transfer amounts to any Fixed Interest
Allocation with a guaranteed interest period that extends beyond the
annuity start date.
At least 30 calendar days before a maturity date of any of your Fixed
Interest Allocations, or earlier if required by state law, we will
send you a notice of the guaranteed interest periods that are
available. You must notify us which subaccounts or new guaranteed
interest periods you have selected before the maturity date of your
Fixed Interest Allocations. If we do not receive timely instructions
from you, we will transfer the contract value in the maturing Fixed
Interest Allocation to a new Fixed Interest Allocation with a
guaranteed interest period that is the same as the expiring
guaranteed interest period. If such guaranteed interest period is
not available or would go beyond the annuity start date, we will
transfer your contract value in the maturing Fixed Interest
Allocation to the next shortest guaranteed interest period which does
not go beyond the annuity start date. If no such guaranteed interest
period is available, we will transfer the contract value to a
subaccount specially designated by the Company for such purpose.
Currently we use the Liquid Asset subaccount for such purpose.
WITHDRAWALS FROM A FIXED INTEREST ALLOCATION
During the accumulation phase, you may withdraw a portion of your
contract value in any Fixed Interest Allocation. You may make
systematic withdrawals of only the interest earned during the prior
month, quarter or year, depending on the frequency chosen, from a
Fixed Interest Allocation under our systematic withdrawal option.
Systematic withdrawals from a Fixed Interest Allocation are not
permitted if such Fixed Interest Allocation is currently
participating in the dollar cost averaging program. A withdrawal
from a Fixed Interest Allocation may be subject to a Market Value
Adjustment and, in some cases, a surrender charge. Be aware that
withdrawals may have federal income tax consequences, including a 10%
penalty tax.
If you tell us the Fixed Interest Allocation from which your
withdrawal will be made, we will assess the withdrawal against that
Fixed Interest Allocation. If you do not, we will assess your
withdrawal against the subaccounts in which you invested, unless the
withdrawal exceeds the contract value in the subaccounts. If there
is no contract value in those subaccounts, we will deduct your
withdrawal from your Fixed Interest Allocations starting with the
guaranteed interest periods nearest their maturity dates until we
have honored your request.
MARKET VALUE ADJUSTMENT
A Market Value Adjustment may decrease, increase or have no effect on
your contract value.We will apply a Market Value Adjustment (i) whenever
you withdraw or transfer money from a Fixed Interest Allocation
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(unless made within 30 days before the maturity date of the applicable
guaranteed interest period, or under the systematic withdrawal or dollar
cost averaging program) and (ii) if on the annuity start date a
guaranteed interest period for any Fixed Interest Allocation does not end
on or within 30 days of the annuity start date.
We determine the Market Value Adjustment by multiplying the amount you
withdraw, transfer or apply to an income plan by the following factor:
( 1+I )N/365
(---------) -1
(1+J+.0025)
Where,
o "I" is the Index Rate for a Fixed Interest Allocation on the
first day of the guaranteed interest period;
o "J" is the Index Rate for a new Fixed Interest Allocation with
a guaranteed interest period equal to the time remaining in
the guaranteed interest period, at the time of calculation; and
o "N" is the remaining number of days in the guaranteed interest
period at the time of calculation.
The Index Rate is the average of the Ask Yields for U.S. Treasury
Strips as quoted by a national quoting service for a period equal to
the applicable guaranteed interest period. The average currently is
based on the period starting from the 22nd day of the calendar month
two months prior to the month of the Index Rate determination and
ending the 21st day of the calendar month immediately before the
month of determination. We currently calculate the Index Rate once
each calendar month but have the right to calculate it more
frequently. The Index Rate will always be based on a period of at
least 28 days. If the Ask Yields are no longer available, we will
determine the Index Rate by using a suitable and approved, if
required, replacement method.
A Market Value Adjustment may be positive, negative or result in no
change. In general, if interest rates are rising, you bear the risk
that any Market Value Adjustment will likely be negative and reduce
your contract value. On the other hand, if interest rates are
falling, it is more likely that you will receive a positive Market
Value Adjustment that increases your contract value. In the event of
a full surrender, transfer or annuitization from a Fixed Interest
Allocation, we will add or subtract any Market Value Adjustment from
the amount surrendered, transferred or annuitized. In the event of a
partial withdrawal, transfer or annuitization, we will add or
subtract any Market Value Adjustment from the total amount withdrawn,
transferred or annuitized in order to provide the amount requested.
If a negative Market Value Adjustment exceeds your contract value in
the Fixed Interest Allocation, we will consider your request to be a
full surrender, transfer or annuitization of the Fixed Interest
Allocation.
Several examples which illustrate how the Market Value Adjustment
works are included in Appendix B.
[Shaded Section Header]
- ----------------------------------------------------------------------
THE ANNUITY CONTRACT
- ----------------------------------------------------------------------
The Contract described in this prospectus is a deferred combination
variable and fixed annuity contract. The Contract provides a means for
you to invest in one or more of the available mutual fund portfolios of
The GCG Trust, The Galaxy VIP Fund, and the PIMCO Trust funded by Account
NY-B. It also provides a means for you to invest in a Fixed Interest
Allocation through the Fixed Account.
CONTRACT DATE AND CONTRACT YEAR
The date the Contract became effective is the contract date.
Each 12-month period following the contract date is a contract year.
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ANNUITY START DATE
The annuity start date is the date you start receiving annuity
payments under your Contract. The Contract, like all deferred
variable annuity contracts, has two phases: the accumulation phase
and the income phase. The accumulation phase is the period between
the contract date and the annuity start date. The income phase
begins when you start receiving regular annuity payments from your
Contract on the annuity start date.
CONTRACT OWNER
You are the contract owner. You are also the annuitant unless
another annuitant is named in the application. You have the rights
and options described in the Contract. One or more persons may own
the Contract. If there are multiple owners named, the age of the
oldest owner will determine the applicable death benefit if such
death benefit is available for multiple owners.
The death benefit becomes payable when you die. In the case of a
sole contract owner who dies before the income phase begins, we will
pay the beneficiary the death benefit then due. The sole contract
owner's estate will be the beneficiary if no beneficiary has been
designated or the beneficiary has predeceased the contract owner. In
the case of a joint owner of the Contract dying before the income
phase begins, we will designate the surviving contract owner as the
beneficiary. This will override any previous beneficiary
designation.
If the contract owner is a trust and a beneficial owner of the trust
has been designated, the beneficial owner will be treated as the
contract owner for determining the death benefit. If a beneficial
owner is changed or added after the contract date, this will be
treated as a change of contract owner for determining the death
benefit. If no beneficial owner of the trust has been designated,
the availability of enhanced death benefits will be based on the age
of the annuitant at the time you purchase the Contract.
JOINT OWNER. For non-qualified Contracts only, joint owners may
be named in a written request before the Contract is in effect.
Joint owners may independently exercise transfers and other
transactions allowed under the Contract. All other rights of
ownership must be exercised by both owners. Joint owners own equal
shares of any benefits accruing or payments made to them. All rights
of a joint owner end at death of that owner if the other joint owner
survives. The entire interest of the deceased joint owner in the
Contract will pass to the surviving joint owner. The age of the
older owner will determine the applicable death benefit if Enhanced
Death Benefits are available for multiple owners.
ANNUITANT
The annuitant is the person designated by you to be the measuring
life in determining annuity payments. The annuitant's age determines
when the income phase must begin and the amount of the annuity
payments to be paid. You are the annuitant unless you choose to name
another person. The annuitant may not be changed after the Contract
is in effect.
The contract owner will receive the annuity benefits of the Contract
if the annuitant is living on the annuity start date. If the
annuitant dies before the annuity start date, and a contingent
annuitant has been named, the contingent annuitant becomes the
annuitant (unless the contract owner is not an individual, in which
case the death benefit becomes payable).
If there is no contingent annuitant when the annuitant dies before
the annuity start date, the contract owner will become the annuitant.
The contract owner may designate a new annuitant within 60 days of
the death of the annuitant.
If there is no contingent annuitant when the annuitant dies before
the annuity start date and the contract owner is not an individual,
we will pay the designated beneficiary the death benefit then due.
If a beneficiary has not been designated, or if there is no
designated beneficiary living, the contract owner will be the
beneficiary. If the annuitant was the sole contract owner and there
is no beneficiary designation, the annuitant's estate will be the
beneficiary.
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Regardless of whether a death benefit is payable, if the annuitant
dies and any contract owner is not an individual, distribution rules
under federal tax law will apply. You should consult your tax
advisor for more information if you are not an individual.
BENEFICIARY
The beneficiary is named by you in a written request. The
beneficiary is the person who receives any death benefit proceeds and
who becomes the successor contract owner if the contract owner (or
the annuitant if the contract owner is other than an individual) dies
before the annuity start date. We pay death benefits to the primary
beneficiary (unless there are joint owners, in which case death
proceeds are payable to the surviving owner(s)).
If the beneficiary dies before the annuitant or the contract owner,
the death benefit proceeds are paid to the contingent beneficiary, if
any. If there is no surviving beneficiary, we pay the death benefit
proceeds to the contract owner's estate.
One or more persons may be a beneficiary or contingent beneficiary.
In the case of more than one beneficiary, we will assume any death
benefit proceeds are to be paid in equal shares to the surviving
beneficiaries.
You have the right to change beneficiaries during the annuitant's
lifetime unless you have designated an irrevocable beneficiary.
When an irrevocable beneficiary has been designated, you and the
irrevocable beneficiary may have to act together to exercise some
of the rights and options under the Contract.
CHANGE OF CONTRACT OWNER OR BENEFICIARY. During the annuitant's
lifetime, you may transfer ownership of a non-qualified Contract.
A change in ownership may affect the amount of the death benefit and
the guaranteed death benefit. You may also change the beneficiary.
All requests for changes must be in writing and submitted to our
Customer Service Center in good order. The change will be effective
as of the day you sign the request. The change will not affect any
payment made or action taken by us before recording the change.
PURCHASE AND AVAILABILITY OF THE CONTRACT
We will issue a Contract only if both the annuitant and the contract
owner are not older than age 85.
The initial premium payment must be $10,000 or more ($1,500 for
qualified Contracts). You may make additional payments of $500 or
more ($250 for qualified Contracts) at any time after the free look
period before you turn age 85. Under certain circumstances, we may
waive the minimum premium payment requirement. We may also change
the minimum initial or additional premium requirements for certain
group or sponsored arrangements. Any initial or additional premium
payment that would cause the contract value of all annuities that you
maintain with us to exceed $1,000,000 requires our prior approval.
The Contracts offered by this prospectus are available only to customers
of Fleet Financial Group, Inc. and its affiliates.
CREDITING OF PREMIUM PAYMENTS
We will allocate your initial premium within 2 business days after
receipt, if the application and all information necessary for
processing the Contract are complete. Subsequent premium payments
will be credited to a Contract within 1 business day if they are
received in good order. In certain states we also accept initial and
additional premium payments by wire order. Wire transmittals must be
accompanied by sufficient electronically transmitted data. We may
retain premium payments for up to 5 business days while attempting to
complete an incomplete application. If the application cannot be
completed within this period, we will inform you of the reasons for
the delay. We will also return the premium payment immediately
unless you direct us to hold the premium payment until the
application is completed. Once the completed application is
received, we will allocate the payment to the subaccounts and/or
Fixed Interest Allocations specified by you within 2 business days.
We will make inquiry to discover any missing information related to
subsequent payments. For any subsequent premium payments, the
payment will be credited at the accumulation unit value next
determined after receipt of your premium payment.
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Once we allocate your premium payment to the subaccounts selected by
you, we convert the premium payment into accumulation units. We
divide the amount of the premium payment allocated to a particular
subaccount by the value of an accumulation unit for the subaccount to
determine the number of accumulation units of the subaccount to be
held in Account NY-B with respect to your Contract. The net
investment results of each subaccount vary with its investment
performance.
We may require that an initial premium designated for a subaccount of
Account NY-B or the Fixed Account be allocated to a subaccount
specially designated by the Company (currently, the Liquid Asset
subaccount) during the free look period. After the free look period,
we will convert your contract value (your initial premium plus any
earnings less any expenses) into accumulation units of the
subaccounts you previously selected. The accumulation units will be
allocated based on the accumulation unit value next computed for each
subaccount. Initial premiums designated for Fixed Interest
Allocations will be allocated to a Fixed Interest Allocation with the
guaranteed interest period you have chosen; however, in the future we
may allocate the premiums to the specially designated subaccount
during the free look period.
CONTRACT VALUE
We determine your contract value on a daily basis beginning on the
contract date. Your contract value is the sum of (a) the contract
value in the Fixed Interest Allocations, and (b) the contract value
in each subaccount in which you are invested.
CONTRACT VALUE IN FIXED INTEREST ALLOCATIONS. The contract value
in your Fixed Interest Allocations is the sum of premium payments
allocated to the Fixed Interest Allocations under the Contract, plus
contract value transferred to the Fixed Interest Allocations, plus
credited interest, minus any transfers and withdrawals from the Fixed
Interest Allocation (including any Market Value Adjustment applied to
such withdrawals), contract fees, and premium taxes.
CONTRACT VALUE IN THE SUBACCOUNTS. On the contract date, the
contract value in the subaccount in which you are invested is equal
to the initial premium paid and designated to be allocated to the
subaccount. On the contract date, we allocate your contract value to
each subaccount and/or a Fixed Interest Allocation specified by you,
unless the Contract is issued in a state that requires the return of
premium payments during the free look period, in which case, the
portion of your initial premium not allocated to a Fixed Interest
Allocation will be allocated to a subaccount specially designated by
the Company during the free look period for this purpose (currently,
the Liquid Asset subaccount).
On each business day after the contract date, we calculate the amount
of contract value in each subaccount as follows:
(1)We take the contract value in the subaccount at the end of the
preceding business day.
(2)We multiply (1) by the subaccount's Net Investment Factor
since the preceding business day.
(3)We add (1) and (2).
(4)We add to (3) any additional premium payments, and then add or
subtract any transfers to or from that subaccount.
(5)We subtract from (4) any withdrawals and any related charges,
and then subtract any contract fees and premium taxes.
CASH SURRENDER VALUE
The cash surrender value is the amount you receive when you surrender
the Contract. The cash surrender value will fluctuate daily based on
the investment results of the subaccounts in which you are invested
and interest credited to Fixed Interest Allocations and any Market
Value Adjustment. We do not guarantee any minimum cash surrender
value. On any date during the accumulation phase, we calculate the cash
surrender value as follows: we start with your contract value,
then we adjust for any Market Value Adjustment, then we deduct any
surrender charge, any charge for premium taxes, and any other charges
incurred but not yet deducted.
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SURRENDERING TO RECEIVE THE CASH SURRENDER VALUE
You may surrender the Contract at any time while the annuitant is living
and before the annuity start date. A surrender will be effective on the
date your written request and the Contract are received at our Customer
Service Center. We will determine and pay the cash surrender value at
the price next determined after receipt of all paperwork required in
order for us to process your surrender. Once paid, all benefits under
the Contract will be terminated. For administrative purposes, we will
transfer your money to a specially designated subaccount (currently the
Liquid Asset subaccount) prior to processing the surrender. This
transfer will have no effect on your cash surrender value. You may
receive the cash surrender value in a single sum payment or apply it
under one or more annuity options. We will usually pay the cash
surrender value within 7 days.
Consult your tax advisor regarding the tax consequences associated
with surrendering your Contract. A surrender made before you reach
age 59 1/2 may result in a 10% tax penalty. See "Federal Tax
Considerations" for more details.
ADDITION, DELETION OR SUBSTITUTION OF SUBACCOUNTS AND OTHER CHANGES
We may make additional subaccounts available to you under the
Contract. These subaccounts will invest in investment portfolios we
find suitable for your Contract.
We may amend the Contract to conform to applicable laws or
governmental regulations. If we feel that investment in any of the
investment portfolios has become inappropriate to the purposes of the
Contract, we may, with approval of the SEC (and any other regulatory
agency, if required) substitute another portfolio for existing and
future investments.
We also reserve the right to: (i) deregister Account NY-B under the
1940 Act; (ii) operate Account NY-B as a management company under the
1940 Act if it is operating as a unit investment trust; (iii) operate
Account NY-B as a unit investment trust under the 1940 Act if it is
operating as a managed separate account; (iv) restrict or eliminate
any voting rights as to Account NY-B; and (v) combine Account NY-B
with other accounts.
We will, of course, provide you with written notice before any of
these changes are effected.
THE FIXED ACCOUNT
The Fixed Account is a segregated asset account which contains the
assets that support a contract owner's Fixed Interest Allocations.
See "The Fixed Interest Allocations" for more information.
OTHER CONTRACTS
We offer other variable annuity contracts that also invest in the same
investment portfolios of the Trusts. These contracts have different
charges that could effect their performance, and many offer different
benefits more suitable to your needs. To obtain more information
about these other contracts, contact our Customer Service Center or
your registered representative.
OTHER IMPORTANT PROVISIONS
See "Withdrawals," "Transfers Among Your Investments," "Death Benefit
Choices," "Charges and Fees," "The Annuity Options" and "Other
Contract Provisions" in this prospectus for information on other
important provisions in your Contract.
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WITHDRAWALS
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Any time during the accumulation phase and before the death of the
annuitant, you may withdraw all or part of your money. Keep in mind
that if you request a withdrawal for more than 90% of the cash
surrender value, we will treat it as a request to surrender the
Contract. If any single withdrawal or the sum of withdrawals exceeds
the Free Withdrawal Amount, you will incur a surrender charge. The
Free Withdrawal Amount in any contract year is 15% of your contract
value on the date of withdrawal less any withdrawals during that
contract year.
You need to submit to us a written request specifying the Fixed
Interest Allocations or subaccounts from which amounts are to be
withdrawn, otherwise the withdrawal will be made on a pro rata basis
from all of the subaccounts in which you are invested. If there is
not enough contract value in the subaccounts, we will deduct the
balance of the withdrawal from your Fixed Interest Allocations
starting with the guaranteed interest periods nearest their maturity
dates until we have honored your request. We will apply a Market
Value Adjustment to any withdrawal from your Fixed Interest
Allocation taken more than 30 days before its maturity date. We will
determine the contract value as of the close of business on the day
we receive your withdrawal request at our Customer Service Center.
The contract value may be more or less than the premium payments
made.
For administrative purposes, we will transfer your money to a
specially designated subaccount (currently, the Liquid Asset
subaccount) prior to processing the withdrawal. This transfer will
not effect the withdrawal amount you receive.
We offer the following three withdrawal options:
REGULAR WITHDRAWALS
After the free look period, you may make regular withdrawals. Each
withdrawal must be a minimum of $100. We will apply a Market Value
Adjustment to any regular withdrawal from a Fixed Interest Allocation
that is taken more than 30 days before its maturity date.
SYSTEMATIC WITHDRAWALS
You may elect to receive automatic systematic withdrawal payments (1)
from the contract value in the subaccounts in which you are invested, or
(2) from the interest earned in your Fixed Interest Allocations.
Systematic withdrawals may be taken monthly, quarterly or annually. You
decide when you would like systematic payments to start as long as it
starts at least 28 days after your contract date. You also select the
date on which the systematic withdrawals will be made, but this date
cannot be later than the 28th day of the month. If you have elected to
receive systematic withdrawals but have not chosen a date, we will make
the withdrawals on the same calendar day of each month as your contract
date. If your contract date is after the 28th, your systematic
withdrawal will be made on the 28th day of each month.
Each systematic withdrawal amount must be a minimum of $100. The amount
of your systematic withdrawal can either be (1) a fixed dollar amount, or
(2) an amount based on a percentage of your contract value. Both forms
of systematic withdrawals are subject to the following maximum, which is
calculated on each withdrawal date:
MAXIMUM PERCENTAGE
FREQUENCY OF CONTRACT VALUE
Monthly 1.25%
Quarterly 3.75%
Annually 15.00%
If your systematic withdrawal is a fixed dollar amount and the amount to
be systematically withdrawn would exceed the applicable maximum
percentage of your contract value on any withdrawal date, we will
automatically reduce the amount withdrawn so that it equals such
percentage. Thus, your fixed dollar systematic withdrawals will never
exceed the maximum percentage. If you want fixed dollar systematic
withdrawals to exceed the maximum percentage and are willing to incur
associated surrender charges,
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consider the Fixed Dollar Systematic Withdrawal Feature which you may
add to your regular systematic withdrawal program.
If your systematic withdrawal is based on a percentage of your contract
value and the amount to be systematically withdrawn based on that
percentage would be less than $100, we will automatically increase the
amount to $100 as long as it does not exceed the maximum percentage. If
the systematic withdrawal would exceed the maximum percentage, we will
send the amount, and then automatically cancel your systematic withdrawal
option.
Systematic withdrawals from Fixed Interest Allocations are limited to
interest earnings during the prior month, quarter, or year, depending on
the frequency you chose. Systematic withdrawals are not subject to a
Market Value Adjustment, unless you have added the Fixed Dollar
Systematic Withdrawal Feature discussed below and the payments exceed
interest earnings. Systematic withdrawals from Fixed Interest
Allocations under the Fixed Dollar Systematic Withdrawal Feature are
available only in connection with Section 72(q) or 72(t) distributions.
A Fixed Interest Allocation may not participate in both the systematic
withdrawal option and the dollar cost averaging program at the same time.
You may change the amount or percentage of your systematic withdrawal
once each contract year or cancel this option at any time by sending
satisfactory notice to our Customer Service Center at least 7 days before
the next scheduled withdrawal date. The systematic withdrawal option may
commence in a contract year where a regular withdrawal has been taken but
you may not change the amount or percentage of your withdrawals in any
contract year during which you have previously taken a regular
withdrawal. You may not elect the systematic withdrawal option if you
are taking IRA withdrawals.
FIXED DOLLAR SYSTEMATIC WITHDRAWAL FEATURE. You may add the Fixed
Dollar Systematic Withdrawal Feature to your regular fixed dollar
systematic withdrawal program. This feature allows you to receive a
systematic withdrawal in a fixed dollar amount regardless of any
surrender charges or Market Value Adjustments. Systematic withdrawals
from Fixed Interest Allocations under the Fixed Dollar Systematic
Withdrawal Feature are available only in connection with Section 72(q) or
72(t) distributions. You choose the amount of the fixed systematic
withdrawals, which may total up to an annual maximum of 15% of your
contract value as determined on the day we receive your election of this
feature. The maximum limit will not be recalculated when you make
additional premium payments, unless you instruct us to do us. We will
assess a surrender charge on the withdrawal date if the systematic
withdrawal exceeds the maximum limit as calculated on the withdrawal
date. We will assess a Market Value Adjustment on the withdrawal date if
the systematic withdrawal from a Fixed Interest Allocation exceeds your
interest earnings on the withdrawal date. We will apply the surrender
charge and any Market Value Adjustment directly to your contract value
(rather than to the systematic withdrawal) so that the amount of each
systematic withdrawal remains fixed.
Flat dollar systematic withdrawals which are intended to satisfy the
requirements of Section 72(q) or 72(t) of the Tax Code may exceed the
maximum. Such withdrawals are subject to surrender charges and Market
Value Adjustment when they exceed the applicable free withdrawal amount.
IRA WITHDRAWALS
If you have a non-Roth IRA Contract and will be at least age 70 1/2
during the current calendar year, you may elect to have distributions
made to you to satisfy requirements imposed by Federal tax law. IRA
withdrawals provide payout of amounts required to be distributed by
the Internal Revenue Service rules governing mandatory distributions
under qualified plans. We will send you a notice before your
distributions commence. You may elect to take IRA withdrawals at
that time, or at a later date. You may not elect IRA withdrawals and
participate in systematic withdrawals at the same time. If you do
not elect to take IRA withdrawals, and distributions are required by
Federal tax law, distributions adequate to satisfy the requirements
imposed by Federal tax law may be made. Thus, if you are
participating in systematic withdrawals, distributions under that
option must be adequate to satisfy the mandatory distribution rules
imposed by federal tax law.
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You may choose to receive IRA withdrawals on a monthly, quarterly or
annual basis. Under this option, you may elect payments to start as
early as 28 days after the contract date. You select the day of the
month when the withdrawals will be made, but it cannot be later than
the 28th day of the month. If no date is selected, we will make the
withdrawals on the same calendar day of the month as the contract
date.
You may request that we calculate for you the amount that is required
to be withdrawn from your Contract each year based on the information
you give us and various choices you make. For information regarding
the calculation and choices you have to make, see the Statement of
Additional Information. The minimum dollar amount you can withdraw
is $100. When we determine the required IRA withdrawal amount for a
taxable year based on the frequency you select, if that amount is
less than $100, we will pay $100. At any time where the IRA
withdrawal amount is greater than the contract value, we will cancel
the Contract and send you the amount of the cash surrender value.
You may change the payment frequency of your IRA withdrawals once
each contract year or cancel this option at any time by sending us
satisfactory notice to our Customer Service Center at least 7 days
before the next scheduled withdrawal date.
An IRA withdrawal in excess of the amount allowed under systematic
withdrawals will be subject to a Market Value Adjustment.
CONSULT YOUR TAX ADVISER REGARDING THE TAX CONSEQUENCES ASSOCIATED
WITH TAKING WITHDRAWALS. You are responsible for determining that
withdrawals comply with applicable law. A withdrawal made before the
taxpayer reaches age 59 1/2 may result in a 10% penalty tax. See
"Federal Tax Considerations" for more details.
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TRANSFERS AMONG YOUR INVESTMENTS
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You may transfer your contract value among the subaccounts in which
you are invested and your Fixed Interest Allocations at the end of
the free look period until the annuity start date. We currently do
not charge you for transfers made during a contract year, but reserve
the right to charge $25 for each transfer after the twelfth transfer
in a contract year. We also reserve the right to limit the number of
transfers you may make and may otherwise modify or terminate transfer
privileges if required by our business judgement or in accordance
with applicable law. We will apply a Market Value Adjustment to
transfers from a Fixed Interest Allocation taken more than 30 days
before its maturity date unless the transfer is made under the dollar
cost averaging program.
Transfers will be based on values at the end of the business day in
which the transfer request is received at our Customer Service Center.
The minimum amount that you may transfer is $100 or, if less, your
entire contract value held in a subaccount or a Fixed Interest Allocation.
To make a transfer, you must notify our Customer Service Center and
all other administrative requirements must be met. Any transfer
request received after 4:00 p.m. eastern time or the close of the New
York Stock Exchange will be effected on the next business day.
Account NY-B and the Company will not be liable for following
instructions communicated by telephone that we reasonably believe to
be genuine. We require personal identifying information to process a
request for transfer made over the telephone.
DOLLAR COST AVERAGING
You may elect to participate in our dollar cost averaging program if
you have at least $1,200 of contract value in the (i) Limited
Maturity Bond subaccount or the Liquid Asset subaccount, or (ii) a
Fixed Interest Allocation with a 1-year guaranteed interest period.
These subaccounts or Fixed Interest Allocation serve as the source
accounts from which we will, on a monthly basis, automatically
transfer a set dollar amount of money to other subaccounts selected
by you.
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The dollar cost averaging program is designed to lessen the impact of
market fluctuation on your investment. Since we transfer the same
dollar amount to other subaccounts each month, more units of a
subaccount are purchased if the value of its unit is low and less
units are purchased if the value of its unit is high. Therefore, a
lower than average value per unit may be achieved over the long term.
However, we cannot guarantee this. When you elect the dollar cost
averaging program, you are continuously investing in securities
regardless of fluctuating price levels. You should consider your
tolerance for investing through periods of fluctuating price levels.
You elect the dollar amount you want transferred under this program.
Each monthly transfer must be at least $100. If your source account
is the Limited Maturity Bond subaccount, the Liquid Asset subaccount
or a 1-year Fixed Interest Allocation, the maximum amount that can be
transferred each month is your contract value in such source account
divided by 12. You may change the transfer amount once each contract
year.
Transfers from a Fixed Interest Allocation under the dollar cost
averaging program are not subject to a Market Value Adjustment.
If you do not specify the subaccounts to which the dollar amount of
the source account is to be transferred, we will transfer the money
to the subaccounts in which you are invested on a proportional basis.
The transfer date is the same day each month as your contract date.
If, on any transfer date, your contract value
in a source account is equal or less than the amount you have elected
to have transferred, the entire amount will be transferred and the
program will end. You may terminate the dollar cost averaging program
at any time by sending satisfactory notice to our Customer Service
Center at least 7 days before the next transfer date. A Fixed Interest
Allocation may not participate in the dollar cost averaging program
and in systematic withdrawals at the same time.
We may in the future offer additional subaccounts or withdraw any
subaccount or Fixed Interest Allocation to or from the dollar cost
averaging program, or otherwise modify, suspend or terminate this
program. Of course, such change will not affect any dollar cost
averaging programs in operation at the time.
AUTOMATIC REBALANCING
If you have at least $10,000 of contract value invested in the
subaccounts of Account NY-B, you may elect to have your investments
in the subaccounts automatically rebalanced. We will transfer funds
under your Contract on a quarterly, semi-annual, or annual calendar
basis among the subaccounts to maintain the investment blend of your
selected subaccounts. The minimum size of any allocation must be in
full percentage points. Rebalancing does not affect any amounts that
you have allocated to the Fixed Account. The program may be used in
conjunction with the systematic withdrawal option only if withdrawals
are taken pro rata. Automatic rebalancing is not available if you
participate in dollar cost averaging. Automatic rebalancing will not
take place during the free look period.
To participate in automatic rebalancing, send satisfactory notice to
our Customer Service Center. We will begin the program on the last
business day of the period in which we receive the notice. You may
cancel the program at any time. The program will automatically
terminate if you choose to reallocate your contract value among the
subaccounts or if you make an additional premium payment or partial
withdrawal on other than a pro rata basis. Additional premium
payments and partial withdrawals effected on a pro rata basis will
not cause the automatic rebalancing program to terminate.
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DEATH BENEFIT CHOICES
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DEATH BENEFIT DURING THE ACCUMULATION PHASE
During the accumulation phase, a death benefit is payable when either the
annuitant (when contract owner is not an individual), the contract owner
or the first of joint owners dies. Assuming you are the contract owner,
your beneficiary will receive a death benefit unless the beneficiary is
your surviving spouse and elects to continue the Contract. The death
benefit value is calculated at the close of the business day on which we
receive written notice and due proof of death, as well as any required
claims forms, at our Customer Service Center. If your beneficiary elects
to delay receipt of the death benefit until a date after the time of
death, the amount of the benefit payable in the future may be affected.
The proceeds may be received in a single sum or applied to any of the
annuity options. If we do not receive a request to apply the death
benefit proceeds to an annuity option, we will make a single sum
distribution. We will generally pay death benefit proceeds within 7 days
after our Customer Service Center has received sufficient information to
make the payment.
You may choose from the following 2 death benefit choices: (1) the
Standard Death Benefit Option; and (2) the Annual Ratchet Enhanced
Death Benefit Option. Once you choose a death benefit, it cannot be
changed. We may in the future stop or suspend offering any of the
enhanced death benefit options to new Contracts. A change in
ownership of the Contract may affect the amount of the death benefit
and the guaranteed death benefit.
STANDARD DEATH BENEFIT. You will automatically receive the
Standard Death Benefit unless you choose the Annual Ratchet Enhanced
Death Benefit. The Standard Death Benefit under the Contract is the
greatest of (i) your contract value; (ii) total premium payments less
any withdrawals; and (iii) the cash surrender value.
ANNUAL RATCHET ENHANCED DEATH BENEFIT. The Annual Ratchet Enhanced
Death Benefit under the Contract is the greatest of (i) the contract
value; (ii) total premium payments less any withdrawals; (iii) the
cash surrender value; and (iv) the enhanced death benefit as
calculated below.
|--------------------------------------------------------------------|
| |
| HOW THE ENHANCED DEATH BENEFIT IS CALCULATED |
| FOR THE ANNUAL RATCHET ENHANCED DEATH BENEFIT |
| |
|--------------------------------------------------------------------|
| On each contract anniversary that occurs on or before the |
| contract owner turns age 80, we compare the prior enhanced |
| death benefit to the contract value and select the larger |
| amount as the new enhanced death benefit. |
| On all other days, the enhanced death benefit is the amount |
| determined below. We first take the enhanced death benefit |
| from the preceding day (which would be the initial premium if |
| the valuation date is the contract date) and then we add |
| additional premiums paid since the preceding day, then we |
| subtract any withdrawals (including any Market Value |
| Adjustment applied to such withdrawals) since the preceding |
| day, then we subtract any associated surrender charges. That |
| amount becomes the new enhanced death benefit. |
|--------------------------------------------------------------------|
The Annual Ratchet Enhanced Death Benefit is available only at the
time you purchase your Contract and only if the contract owner or
annuitant (when the contract owner is other than an individual) is
not more than 79 years old at the time of purchase. The Annual
Ratchet Enhanced Death Benefit may not be available where a Contract
is held by joint owners.
DEATH BENEFIT DURING THE INCOME PHASE
If any contract owner or the annuitant dies after the annuity start
date, the Company will pay the beneficiary any certain benefit
remaining under the annuity in effect at the time.
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CHARGES AND FEES
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We deduct the charges described below to cover our cost and expenses,
services provided and risks assumed under the Contracts. We incur
certain costs and expenses for distributing and administrating the
Contracts, for paying the benefits payable under the Contracts and
for bearing various risks associated with the Contracts. The amount
of a charge will not always correspond to the actual costs
associated. For example, the surrender charge collected may not
fully cover all of the distribution expenses incurred by us with the
service or benefits provided. In the event there are any profits
from fees and charges deducted under the Contract, we may use such
profits to finance the distribution of contracts.
CHARGE DEDUCTION SUBACCOUNT
You may elect to have all charges against your contract value
deducted directly from a single subaccount designated by the Company.
Currently we use the Liquid Asset subaccount for this purpose. If
you do not elect this option, or if the amount of the charges is
greater than the amount in the designated subaccount, the charges
will be deducted as discussed below. You may cancel this option at
any time by sending satisfactory notice to our Customer Service
Center.
CHARGES DEDUCTED FROM THE CONTRACT VALUE
We deduct the following charges from your contract value:
SURRENDER CHARGE. We will deduct a contingent deferred sales
charge (a "surrender charge") if you surrender your Contract or if
you take a withdrawal in excess of the Free Withdrawal Amount during
the 7-year period from the date we receive and accept a premium
payment. The surrender charge is based on a percentage of each
premium payment. This charge is intended to cover sales expenses
that we have incurred. We may in the future reduce or waive the
surrender charge in certain situations and will never
charge more than the maximum surrender charges. The percentage of
premium payments deducted at the time of surrender or excess withdrawal
depends on the number of complete years that have elapsed since that
premium payment was made. We determine the surrender charge as a
percentage of each premium payment as follows:
COMPLETE YEARS ELAPSED 0 | 1 | 2 | 3 | 4 | 5 | 6 | 7+
SINCE PREMIUM PAYMENT | | | | | | |
SURRENDER CHARGE 7% | 6% | 5% | 4% | 3% | 2% | 1% | 0%
FREE WITHDRAWAL AMOUNT. The Free Withdrawal Amount in any
contract year is 15% of your contract value on the date of withdrawal
less any withdrawals during that contract year.
SURRENDER CHARGE FOR EXCESS WITHDRAWALS. We will deduct a
surrender charge for excess withdrawals. We consider a withdrawal to
be an "excess withdrawal" when the amount you withdraw in any
contract year exceeds the Free Withdrawal Amount. Where you are
receiving systematic withdrawals, any combination of regular
withdrawals taken and any systematic withdrawals expected to be
received in a contract year will be included in determining the
amount of the excess withdrawal. Such a withdrawal will be
considered a partial surrender of the Contract and we will impose a
surrender charge and any associated premium tax. We will deduct such
charges from the contract value in proportion to the contract value
in each subaccount or Fixed Interest Allocation from which the excess
withdrawal was taken. In instances where the excess withdrawal
equals the entire contract value in such subaccounts or Fixed
Interest Allocations, we will deduct charges proportionately from all
other subaccounts and Fixed Interest Allocations in which you are
invested. ANY WITHDRAWAL FROM A FIXED INTEREST ALLOCATION MORE THAN
30 DAYS BEFORE ITS MATURITY DATE WILL TRIGGER A MARKET VALUE ADJUSTMENT.
For the purpose of calculating the surrender charge for an excess
withdrawal: a) we treat premiums as being withdrawn on a first-in,
first-out basis; and b) amounts withdrawn which are not considered an
excess withdrawal are not considered a withdrawal of any premium
payments. We have included an example of how this works in Appendix
C. Although we treat premium payments as being withdrawn before
earnings
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for purpose of calculating the surrender charge for excess
withdrawals, the federal tax law treats earnings as withdrawn first.
PREMIUM TAXES. We may make a charge for state and local premium taxes
depending on your state of residence. The tax can range from 0% to 3.5%
of the premium payment. We have the right to change this amount to
conform with changes in the law or if you change your state of residence.
We deduct the premium tax from your contract value on the annuity start
date. However, some jurisdictions impose a premium tax at the time the
initial and additional premiums are paid, regardless of when the annuity
payments begin. In those states we may defer collection of the premium
taxes from your contract value and deduct it when you surrender the
Contract, when you take an excess withdrawal or on the annuity start
date.
ADMINISTRATIVE CHARGE. We deduct the annual administrative charge on
each Contract anniversary, or if you surrender your Contract prior to a
Contract anniversary, at the time we determine the cash surrender value
payable to you. The amount deducted is $30 per Contract. This charge is
waived if you have a contract value of $100,000 or more at the end of a
contract year or the sum of the premiums paid equals or exceeds $100,000.
We deduct the charge proportionately from all subaccounts in which you
are invested. If there is no contract value in those subaccounts, we
will deduct the charge from your Fixed Interest Allocations starting with
the guaranteed interest periods nearest their maturity dates until the
charge has been paid.
TRANSFER CHARGE. We currently do not deduct any charges for
transfers made during a contract year. We have the right, however,
to assess up to $25 for each transfer after the twelfth transfer in a
contract year. If such a charge is assessed, we would deduct the
charge from the subaccounts and the Fixed Interest Allocations from
which each such transfer is made in proportion to the amount being
transferred from each such subaccount and Fixed Interest Allocation
unless you have chosen to have all charges deducted from a single
subaccount. The charge will not apply to any transfers due to the
election of dollar cost averaging, automatic rebalancing and transfers
we make to and from any subaccount specially designated by the Company
for such purpose.
CHARGES DEDUCTED FROM THE SUBACCOUNTS
MORTALITY AND EXPENSE RISK CHARGE. The mortality and expense risk
charge is deducted each business day. The amount of the mortality and
expense charge depends on the death benefit you have elected. If you have
elected the Standard Death Benefit, the charge, on an annual basis, is
equal to 1.10% of the assets you have in each subaccount. The charge is
deducted on each business day at the rate of .003030% for each day since
the previous business day. If you have elected the Annual Ratchet
Enhanced Death Benefit, the charge, on an annual basis, is equal to 1.25%
of the assets you have in each subaccount. The charge is deducted each
business day at the rate of .003446% for each day since the previous
business day.
ASSET-BASED ADMINISTRATIVE CHARGE. The amount of the asset-based
administrative charge, on an annual basis, is equal to 0.15% of the
assets you have in each subaccount. The charge is deducted on each
business day at the rate of .000411% for each day since the previous
business day. The charge is deducted daily from your assets in each
subaccount in order to compensate First Golden for a portion of the
administrative expenses under the Contract.
TRUST EXPENSES
There are fees and charges deducted from each investment portfolio of
the Trusts. Please read the respective Trust prospectus for details.
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[Shaded Section Header]
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THE ANNUITY OPTIONS
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ANNUITIZATION OF YOUR CONTRACT
If the annuitant and contract owner are living on the annuity start
date, we will begin making payments to the contract owner under an
income plan. We will make these payments under the annuity option
chosen. You may change annuity option by making a written request to
us at least 30 days before the annuity start date. The amount of the
payments will be determined by applying your contract value adjusted
for any applicable Market Value Adjustment on the annuity start date
in accordance with the annuity option you chose.
You may also elect an annuity option on surrender of the Contract for
its cash surrender value or you may choose one or more annuity
options for the payment of death benefit proceeds while it is in
effect and before the annuity start date. If, at the time of the
contract owner's death or the annuitant's death (if the contract
owner is not an individual), no option has been chosen for paying
death benefit proceeds, the beneficiary may choose an annuity option
within 60 days. In all events, payments of death benefit proceeds
must comply with the distribution requirements of applicable federal
tax law.
The minimum monthly annuity income payment that we will make is $20.
We may require that a single sum payment be made if the contract
value is less than $2,000 or if the calculated monthly annuity income
payment is less than $20.
For each annuity option we will issue a separate written agreement
putting the annuity option into effect. Before we pay any annuity
benefits, we require the return of your Contract. If your Contract
has been lost, we will require that you complete and return the
applicable lost Contract form. Various factors will affect the level
of annuity benefits, such as the annuity option chosen, the
applicable payment rate used and the investment performance of the
portfolios and interest credited to the Fixed Interest Allocations.
Our current annuity options provide only for fixed payments. Fixed
annuity payments are regular payments, the amount of which is fixed
and guaranteed by us. Some fixed annuity options provide fixed
payments either for a specified period of time or for the life of the
annuitant. The amount of life income payments will depend on the
form and duration of payments you chose, the age of the annuitant or
beneficiary (and gender, where appropriate), the total contract value
applied to purchase a Fixed Interest Allocation, and the applicable
payment rate.
Our approval is needed for any option where:
(1)The person named to receive payment is other than the contract
owner or beneficiary;
(2)The person named is not a natural person, such as a
corporation; or
(3)Any income payment would be less than the minimum annuity
income payment allowed.
SELECTING THE ANNUITY START DATE
You select the annuity start date, which is the date on which the annuity
payments commence. The annuity start date must be at least 5 years from
the contract date but before the month immediately following the
annuitant's 90th birthday. If, on the annuity start date, a surrender
charge remains, the elected annuity option must include a period certain
of at least 5 years.
If you do not select an annuity start date, it will automatically
begin in the month following the annuitant's 90th birthday.
If the annuity start date occurs when the annuitant is at an advanced
age, such as over age 85, it is possible that the Contract will not be
considered an annuity for federal tax purposes. See "Federal Tax
Considerations" and the Statement of Additional Information. For a
Contract purchased in connection with a qualified plan, other than a Roth
IRA, distributions must commence not later than April 1st of the calendar
year following the calendar year in which you attain age 701/2 or, in
some cases, retire.
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Distributions may be made through annuitization or
withdrawals. You should consult your tax adviser for tax advice.
FREQUENCY OF ANNUITY PAYMENTS
You choose the frequency of the annuity payments. They may be
monthly, quarterly, semi-annually or annually. If we do not receive
written notice from you, we will make the payments monthly. There
may be certain restrictions on minimum payments that we will allow.
THE ANNUITY OPTIONS
We offer the 4 annuity options shown below. Payments under Options
1, 2 and 3 are fixed. Payments under Option 4 may be fixed or
variable. For a fixed annuity option, the contract value in the
subaccounts is transferred to the Company's general account.
OPTION 1. INCOME FOR A FIXED PERIOD. Under this option, we make
monthly payments in equal installments for a fixed number of years
based on the contract value on the annuity start date. We guarantee
that each monthly payment will be at least the amount stated in your
Contract. If you prefer, you may request that payments be made in
annual, semi-annual or quarterly installments. We will provide you
with illustrations if you ask for them. If the cash surrender value
or contract value is applied under this option, a 10% penalty tax may
apply to the taxable portion of each income payment until the
contract owner reaches age 59 1/2.
OPTION 2. INCOME FOR LIFE WITH A PERIOD CERTAIN. Payment is made
for the life of the annuitant in equal monthly installments and
guaranteed for at least a period certain such as 10 or 20 years.
Other periods certain may be available to you on request. You may
choose a refund period instead. Under this arrangement, income is
guaranteed until payments equal the amount applied. If the person
named lives beyond the guaranteed period, payments continue until his
or her death. We guarantee that each payment will be at least the
amount specified in the Contract corresponding to the person's age on
his or her last birthday before the annuity start date. Amounts for
ages not shown in the Contract are available if you ask for them.
OPTION 3. JOINT LIFE INCOME. This option is available when there
are 2 persons named to determine annuity payments. At least one of
the persons named must be either the contract owner or beneficiary of
the Contract. We guarantee monthly payments will be made as long as
at least one of the named persons is living. There is no minimum
number of payments. Monthly payment amounts are available if you ask
for them.
OPTION 4. ANNUITY PLAN. The contract value can be applied to any
other annuitization plan that we choose to offer on the annuity start
date.
PAYMENT WHEN NAMED PERSON DIES
When the person named to receive payment dies, we will pay any
amounts still due as provided in the annuity agreement between you
and First Golden. The amounts we will pay are determined as follows:
(1)For Option 1, or any remaining guaranteed payments under
Option 2, we will continue payments. Under Options 1 and 2,
the discounted values of the remaining guaranteed payments may
be paid in a single sum. This means we deduct the amount of
the interest each remaining guaranteed payment would have
earned had it not been paid out early. The discount interest
rate is never less than 3% for Option 1 and 3.50% for Option 2
per year. We will, however, base the discount interest rate
on the interest rate used to calculate the payments for
Options 1 and 2 if such payments were not based on the tables
in the Contract.
(2)For Option 3, no amounts are payable after both named persons
have died.
(3)For Option 4, the annuity option agreement will state the
amount we will pay, if any.
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OTHER CONTRACT PROVISIONS
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REPORTS TO CONTRACT OWNERS
We will send you a quarterly report within 31 days after the end of
each calendar quarter. The report will show the contract value, cash
surrender value, and the death benefit as of the end of the calendar
quarter. The report will also show the allocation of your contract
value and reflects the amounts deducted from or added to the contract
value since the last report. We will also send you copies of any
shareholder reports of the investment portfolios in which Account NY-
B invests, as well as any other reports, notices or documents we are
required by law to furnish to you.
SUSPENSION OF PAYMENTS
The Company reserves the right to suspend or postpone the date of any
payment or determination of values on any business day (1) when the New
York Stock Exchange is closed; (2) when trading on the New York Stock
Exchange is restricted; (3) when an emergency exists as determined by the
SEC so that the sale of securities held in Account NY-B may not
reasonably occur or so that the Company may not reasonably determine the
value of Account NY-B's net assets; or (4) during any other period when
the SEC so permits for the protection of security holders. We have the
right to delay payment of amounts from a Fixed Interest Allocation for up
to 6 months.
IN CASE OF ERRORS IN YOUR APPLICATION
If an age or sex given in the application or enrollment form is
misstated, the amounts payable or benefits provided by the Contract shall
be those that the premium payment would have bought at the correct age or
sex.
ASSIGNING THE CONTRACT AS COLLATERAL
You may assign a non-qualified Contract as collateral security for a loan
but you should understand that your rights and any beneficiary's rights
may be subject to the terms of the assignment. An assignment may have
federal tax consequences. You must give us satisfactory written notice
at our Customer Service Center in order to make or release an assignment.
We are not responsible for the validity of any assignment.
CONTRACT CHANGES APPLICABLE TAX LAW
We have the right to make changes in the Contract to continue to
qualify the Contract as an annuity. You will be given advance notice
of such changes.
FREE LOOK
You may cancel your Contract within your 10-day free look period. We
deem the free look period to expire 15 days after we mail the Contract to
you. To cancel, you need to send your Contract to our Customer Service
Center or to the agent from whom you purchased it. We will refund the
contract value. For purposes of the refund during the free look period,
we include a refund of any charges deducted from your contract value.
Because of the market risks associated with investing in the portfolios,
the contract value returned may be greater or less than the premium
payment you paid. We may, in our discretion, require that premiums
designated for investment in the subaccounts as well as premiums
designated for a Fixed Interest Allocation be allocated to the specially
designated subaccount during the free look period. Your Contract is void
as of the day we receive your Contract and your request. We determine
your contract value at the close of business on the day we receive your
written refund request. If you keep your Contract after the free look
period, we will put your money in the subaccount(s) chosen by you, based
on the accumulation unit value next computed for each subaccount, and/or
in the Fixed Interest Allocation chosen by you.
GROUP OR SPONSORED ARRANGEMENTS
For certain group or sponsored arrangements, we may reduce any
surrender, administration, and mortality and expense risk charges.
We may also change the minimum initial and additional premium
requirements, or offer an alternative or reduced death benefit.
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SELLING THE CONTRACT
Directed Services, Inc. is the principal underwriter and distributor of
the Contract as well as for other contracts issued through Account NY-B
and other separate accounts of First Golden and Golden American Life
Insurance Company. We pay Directed Services for acting as principal
underwriter under a distribution agreement, which in turn pays the
writing agent. The principal address of Directed Services is 1475
Dunwoody Drive, West Chester, Pennsylvania 19380.
Directed Services enters into sales agreements with broker-dealers
affiliated with Fleet Financial Group, Inc. to sell the Contracts through
registered representatives who are licensed to sell securities and
variable insurance products. These broker-dealers are registered with
the SEC and are members of the National Association of Securities
Dealers, Inc. Directed Services receives a maximum of 5.5% commission,
and passes through 100% of the commission to the broker-dealer whose
registered representative sold the contract.
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Underwriter Compensation
|-----------------------------------------------------------------------------|
| NAME OF PRINCIPAL | AMOUNT OF | OTHER |
| UNDERWRITER | COMMISSION TO BE PAID | COMPENSATION |
| | | |
| Directed Services, Inc. | Maximum of 5.5% | Reimbursement of any |
| | of any initial | covered expenses incurred |
| | or additional | by registered |
| | premium payments. | representatives in |
| | | connection with |
| | | the distribution |
| | | of the Contracts. |
|-----------------------------------------------------------------------------|
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OTHER INFORMATION
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VOTING RIGHTS
We will vote the shares of a Trust owned by Account NY-B according to
your instructions. However, if the Investment Company Act of 1940 or
any related regulations should change, or if interpretations of it or
related regulations should change, and we decide that we are
permitted to vote the shares of a Trust in our own right, we may
decide to do so.
We determine the number of shares that you have in a subaccount by
dividing the Contract's contract value in that subaccount by the net
asset value of one share of the portfolio in which a subaccount
invests. We count fractional votes. We will determine the number of
shares you can instruct us to vote 180 days or less before a Trust's
meeting. We will ask you for voting instructions by mail at least 10
days before the meeting. If we do not receive your instructions in
time, we will vote the shares in the same proportion as the
instructions received from all contracts in that subaccount. We will
also vote shares we hold in Account NY-B which are not attributable
to contract owners in the same proportion.
YEAR 2000 PROBLEM
Like other business organizations and individuals around the world,
First Golden and Account NY-B could be adversely affected if the
computer systems doing the accounts processing or on which First
Golden and/or Account NY-B relies do not properly process and
calculate date-related information related to the end of the year
1999. This is commonly known as the Year 2000 (or Y2K) Problem. The
management of First Golden is taking steps that it believes are
reasonably designed to address the Year 2000 Problem with respect to
the computer systems that it uses and to obtain satisfactory
assurances that comparable steps are being taken by its and Account
NY-B's major service providers. At this time, however, we cannot
guarantee that these steps will be sufficient to avoid any adverse
impact on First Golden and Account NY-B.
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STATE REGULATION
We are regulated by the Insurance Department of the State of New
York. We are also subject to the insurance laws and regulations of
all jurisdictions where we do business. The variable Contract
offered by this prospectus has been approved where required by those
jurisdictions. We are required to submit annual statements of our
operations, including financial statements, to the Insurance
Departments of the various jurisdictions in which we do business to
determine solvency and compliance with state insurance laws and
regulations.
LEGAL PROCEEDINGS
The Company and its parent, like other insurance companies, may be
involved in lawsuits, including class action lawsuits. In some class
action and other lawsuits involving insurers, substantial damages
have been sought and/or material settlement payments have been made.
We believe that currently there are no pending or threatened lawsuits
that are reasonably likely to have a materially adverse impact on the
Company or Account NY-B.
LEGAL MATTERS
The legal validity of the Contracts was passed on by Myles R.
Tashman, Esquire, Executive Vice President, General Counsel and
Secretary of First Golden. Sutherland Asbill & Brennan LLP of
Washington, D.C. has provided advice on certain matters relating to
federal securities laws.
EXPERTS
The audited financial statements of First Golden American Life Insurance
Company of New York and Account NY-B appearing in this prospectus or in
the Statement of Additional Information and Registration Statement have
been audited by Ernst & Young LLP, independent auditors, as set forth in
their reports thereon appearing in this prospectus or in the Statement
of Additional Information and in the Registration Statement and are
included or in reliance upon such reports given upon the authority of
such firm as experts in accounting and auditing.
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FEDERAL TAX CONSIDERATIONS
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The following summary provides a general description of the federal
income tax considerations associated with this Contract and does not
purport to be complete or to cover all tax situations. This
discussion is not intended as tax advice. You should consult your
counsel or other competent tax advisers for more complete
information. This discussion is based upon our understanding of the
present federal income tax laws. We do not make any representations
as to the likelihood of continuation of the present federal income
tax laws or as to how they may be interpreted by the IRS.
TYPES OF CONTRACTS: NON-QUALIFIED OR QUALIFIED
The Contract may be purchased on a non-tax-qualified basis or
purchased on a tax-qualified basis. Qualified Contracts are designed
for use by individuals whom premium payments are comprised solely of
proceeds from and/or contributions under retirement plans that are
intended to qualify as plans entitled to special income tax treatment
under Sections 401(a), 403(b), 408, or 408A of the Code. The
ultimate effect of federal income taxes on the amounts held under a
Contract, or annuity payments, depends on the type of retirement
plan, on the tax and employment status of the individual concerned,
and on our tax status. In addition, certain requirements must be
satisfied in purchasing a qualified Contract with proceeds from a tax-
qualified plan and receiving distributions from a qualified Contract
in order to continue receiving favorable tax treatment. Some
retirement plans are subject to distribution and other requirements
that are not incorporated into our Contract administration
procedures. Contract owners, participants and beneficiaries are
responsible for determining that contributions, distributions and
other transactions with respect to the Contract comply with
applicable law. Therefore, you should seek competent legal and tax
advice regarding the suitability of a Contract for your particular
situation. The following discussion assumes that qualified
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Contracts are purchased with proceeds from and/or contributions under
retirement plans that qualify for the intended special federal income
tax treatment.
TAX STATUS OF THE CONTRACTS
DIVERSIFICATION REQUIREMENTS. The Code requires that the
investments of a variable account be "adequately diversified" in
order for the Contracts to be treated as annuity contracts for
federal income tax purposes. It is intended that Account NY-B,
through the subaccounts, will satisfy these diversification
requirements.
In certain circumstances, owners of variable annuity contracts have
been considered for federal income tax purposes to be the owners of
the assets of the separate account supporting their contracts due to
their ability to exercise investment control over those assets. When
this is the case, the contract owners have been currently taxed on
income and gains attributable to the separate account assets. There
is little guidance in this area, and some features of the Contracts,
such as the flexibility of a contract owner to allocate premium
payments and transfer contract values, have not been explicitly
addressed in published rulings. While we believe that the Contracts
do not give contract owners investment control over Account NY-B
assets, we reserve the right to modify the Contracts as necessary to
prevent a contract owner from being treated as the owner of the
Account NY-B assets supporting the Contract.
REQUIRED DISTRIBUTIONS. In order to be treated as an annuity
contract for federal income tax purposes, the Code requires any non-
qualified Contract to contain certain provisions specifying how your
interest in the Contract will be distributed in the event of your
death. The non-qualified Contracts contain provisions that are
intended to comply with these Code requirements, although no
regulations interpreting these requirements have yet been issued. We
intend to review such provisions and modify them if necessary to
assure that they comply with the applicable requirements when such
requirements are clarified by regulation or otherwise.
OTHER RULES MAY APPLY TO QUALIFIED CONTRACTS.
The following discussion assumes that the Contracts will qualify as
annuity contracts for federal income tax purposes.
TAX TREATMENT OF ANNUITIES
IN GENERAL. We believe that if you are a natural person you will
generally not be taxed on increases in the value of a Contract until
a distribution occurs or until annuity payments begin. (For these
purposes, the agreement to assign or pledge any portion of the
contract value, and, in the case of a qualified Contract, any portion
of an interest in the qualified plan, generally will be treated as a
distribution.)
TAXATION OF NON-QUALIFIED CONTRACTS
NON-NATURAL PERSON. The owner of any annuity contract who is not
a natural person generally must include in income any increase in the
excess of the contract value over the "investment in the contract"
(generally, the premiums or other consideration paid for the
contract) during the taxable year. There are some exceptions to this
rule and a prospective contract owner that is not a natural person
may wish to discuss these with a tax adviser. The following
discussion generally applies to Contracts owned by natural persons.
WITHDRAWALS. When a withdrawal from a non-qualified Contract
occurs, the amount received will be treated as ordinary income
subject to tax up to an amount equal to the excess (if any) of the
contract value (unreduced by the amount of any surrender charge)
immediately before the distribution over the contract owner's
investment in the Contract at that time. The tax treatment of market
value adjustments is uncertain. You should consult a tax adviser if
you are considering taking a withdrawal from your Contract in
circumstances where a market value adjustment would apply.
In the case of a surrender under a non-qualified Contract, the amount
received generally will be taxable only to the extent it exceeds the
contract owner's investment in the Contract.
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PENALTY TAX ON CERTAIN WITHDRAWALS. In the case of a distribution
from a non-qualified Contract, there may be imposed a federal tax
penalty equal to 10% of the amount treated as income. In general,
however, there is no penalty on distributions:
o made on or after the taxpayer reaches age 59 1/2;
o made on or after the death of a contract owner;
o attributable to the taxpayer's becoming disabled; or
o made as part of a series of substantially equal periodic
payments for the life (or life expectancy) of the taxpayer.
Other exceptions may be applicable under certain circumstances and
special rules may be applicable in connection with the exceptions
enumerated above. A tax adviser should be consulted with regard to
exceptions from the penalty tax.
ANNUITY PAYMENTS. Although tax consequences may vary depending on
the payment option elected under an annuity contract, a portion of
each annuity payment is generally not taxed and the remainder is
taxed as ordinary income. The non-taxable portion of an annuity
payment is generally determined in a manner that is designed to allow
you to recover your investment in the Contract ratably on a tax-free
basis over the expected stream of annuity payments, as determined
when annuity payments start. Once your investment in the Contract
has been fully recovered, however, the full amount of each annuity
payment is subject to tax as ordinary income.
TAXATION OF DEATH BENEFIT PROCEEDS. Amounts may be distributed
from a Contract because of your death or the death of the annuitant.
Generally, such amounts are includible in the income of recipient as
follows: (i) if distributed in a lump sum, they are taxed in the
same manner as a surrender of the Contract, or (ii) if distributed
under a payment option, they are taxed in the same way as annuity
payments.
TRANSFERS, ASSIGNMENTS, EXCHANGES AND ANNUITY DATES OF A CONTRACT.
A transfer or assignment of ownership of a Contract, the designation
of an annuitant, the selection of certain dates for commencement of
the annuity phase, or the exchange of a Contract may result in
certain tax consequences to you that are not discussed herein. A
contract owner contemplating any such transfer, assignment or
exchange, should consult a tax advisor as to the tax consequences.
WITHHOLDING. Annuity distributions are generally subject to
withholding for the recipient's federal income tax liability.
Recipients can generally elect, however, not to have tax withheld
from distributions.
MULTIPLE CONTRACTS. All non-qualified deferred annuity contracts
that are issued by us (or our affiliates) to the same contract owner
during any calendar year are treated as one non-qualified deferred
annuity contract for purposes of determining the amount includible in
such contract owner's income when a taxable distribution occurs.
TAXATION OF QUALIFIED CONTRACTS
The Contracts are designed for use with several types of qualified
plans. The tax rules applicable to participants in these qualified
plans vary according to the type of plan and the terms and
contributions of the plan itself. Special favorable tax treatment
may be available for certain types of contributions and
distributions. Adverse tax consequences may result from:
contributions in excess of specified limits; distributions before age
59 1/2 (subject to certain exceptions); distributions that do not
conform to specified commencement and minimum distribution rules; and
in other specified circumstances. Therefore, no attempt is made to
provide more than general information about the use of the Contracts
with the various types of qualified retirement plans. Contract
owners, annuitants, and beneficiaries are cautioned that the rights
of any person to any benefits under these qualified retirement plans
may be subject to the terms and conditions of the plans themselves,
regardless of the terms and conditions of the Contract, but we shall
not be bound by the terms and conditions of such plans to the extent
such terms contradict the Contract, unless the Company consents.
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DISTRIBUTIONS. Annuity payments are generally taxed in the same
manner as under a non-qualified Contract. When a withdrawal from a
qualified Contract occurs, a pro rata portion of the amount received
is taxable, generally based on the ratio of the contract owner's
investment in the Contract (generally, the premiums or other
consideration paid for the Contract) to the participant's total
accrued benefit balance under the retirement plan. For Qualified
Contracts, the investment in the Contract can be zero. For Roth
IRAs, distributions are generally not taxed, except as described
below.
For qualified plans under Section 401(a) and 403(b), the Code
requires that distributions generally must commence no later than the
later of April 1 of the calendar year following the calendar year in
which the contract owner (or plan participant) (i) reaches age 70 1/2
or (ii) retires, and must be made in a specified form or manner. If
the plan participant is a "5 percent owner" (as defined in the Code),
distributions generally must begin no later than April 1 of the
calendar year following the calendar year in which the contract owner
(or plan participant) reaches age 70 1/2. For IRAs described in
Section 408, distributions generally must commence no later than the
later of April 1 of the calendar year following the calendar year in
which the contract owner (or plan participant) reaches age 70 1/2.
Roth IRAs under Section 408A do not require distributions at any time
before the contract owner's death.
WITHHOLDING. Distributions from certain qualified plans generally
are subject to withholding for the contract owner's federal income
tax liability. The withholding rates vary according to the type of
distribution and the contract owner's tax status. The contract owner
may be provided the opportunity to elect not to have tax withheld
from distributions. "Eligible rollover distributions" from section
401(a) plans and section 403(b) tax-sheltered annuities are subject
to a mandatory federal income tax withholding of 20%. An eligible
rollover distribution is the taxable portion of any distribution from
such a plan, except certain distributions that are required by the
Code or distributions in a specified annuity form. The 20% withholding
does not apply, however, if the contract owner chooses a "direct
rollover" from the plan to another tax-qualified plan or IRA.
Brief descriptions of the various types of qualified retirement plans
in connection with a Contract follow. We will endorse the Contract as
necessary to conform it to the requirements of such plan.
REQUIRED DISTRIBUTIONS UPON CONTRACT OWNER'S DEATH
We will not allow any payment of benefits provided under the Contract
which do not satisfy the requirements of Section 72(s) of the Code.
If any owner of a non-qualified Contract dies before the annuity
start date, the death benefit payable to the beneficiary will be
distributed as follows: (a) the death benefit must be completely
distributed within 5 years of the contract owner's date of death; or
(b) the beneficiary may elect, within the 1-year period after the
contract owner's date of death, to receive the death benefit in the
form of an annuity from us, provided that (i) such annuity is
distributed in substantially equal installments over the life of such
beneficiary or over a period not extending beyond the life expectancy
of such beneficiary; and (ii) such distributions begin not later than
1 year after the contract owner's date of death.
Notwithstanding (a) and (b) above, if the sole contract owner's
beneficiary is the deceased owner's surviving spouse, then such
spouse may elect to continue the Contract under the same terms as
before the contract owner's death. Upon receipt of such election
from the spouse at our Customer Service Center: (1) all rights of
the spouse as contract owner's beneficiary under the Contract in
effect prior to such election will cease; (2) the spouse will become
the owner of the Contract and will also be treated as the contingent
annuitant, if none has been named and only if the deceased owner was
the annuitant; and (3) all rights and privileges granted by the
Contract or allowed by First Golden will belong to the spouse as
contract owner of the Contract. This election will be deemed to have
been made by the spouse if such spouse makes a premium payment to the
Contract or fails to make a timely election as described in this
paragraph. If the owner's beneficiary is a nonspouse, the
distribution provisions described in subparagraphs (a) and (b) above,
will apply even if the annuitant and/or contingent annuitant are
alive at the time of the contract owner's death.
If we do not receive an election from a nonspouse owner's beneficiary
within the 1-year period after the contract owner's date of death, then
we will pay the death benefit to the owner's beneficiary in a cash
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payment within five years from date of death. We will determine
the death benefit as of the date we receive proof of death. We will
make payment of the proceeds on or before the end of the 5-year
period starting on the owner's date of death. Such cash payment will
be in full settlement of all our liability under the Contract.
If the contract owner dies after the annuity start date, we will
continue to distribute any benefit payable at least as rapidly as
under the annuity option then in effect. All of the contract owner's
rights granted under the Contract or allowed by us will pass to the
contract owner's beneficiary.
If the Contract has joint owners we will consider the date of death
of the first joint owner as the death of the contract owner and the
surviving joint owner will become the contract owner of the Contract.
CORPORATE AND SELF-EMPLOYED PENSION AND PROFIT SHARING PLANS
Section 401(a) of the Code permits corporate employers to establish
various types of retirement plans for employees, and permits self-
employed individuals to establish these plans for themselves and
their employees. These retirement plans may permit the purchase of
the Contracts to accumulate retirement savings under the plans.
Adverse tax or other legal consequences to the plan, to the
participant, or to both may result if this Contract is assigned or
transferred to any individual as a means to provide benefit payments,
unless the plan complies with all legal requirements applicable to
such benefits before transfer of the Contract. Employers intending
to use the Contract with such plans should seek competent advice.
INDIVIDUAL RETIREMENT ANNUITIES
Section 408 of the Code permits eligible individuals to contribute to
an individual retirement program known as an "Individual Retirement
Annuity" or "IRA." These IRAs are subject to limits on the amount
that can be contributed, the deductible amount of the contribution,
the persons who may be eligible, and the time when distributions
commence. Also, distributions from certain other types of qualified
retirement plans may be "rolled over" or transferred on a tax-
deferred basis into an IRA. There are significant restrictions on
rollover or transfer contributions from Savings Incentive Match Plans
(SIMPLE), under which certain employers may provide contributions to
IRAs on behalf of their employees, subject to special restrictions.
Employers may establish Simplified Employee Pension (SEP) Plans to
provide IRA contributions on behalf of their employees. Sales of the
Contract for use with IRAs may be subject to special requirements of
the IRS.
ROTH IRAS
Section 408A of the Code permits certain eligible individuals to
contribute to a Roth IRA. Contributions to a Roth IRA, which are
subject to certain limitations, are not deductible, and must be made
in cash or as a rollover or transfer from another Roth IRA or other
IRA. A rollover from or conversion of an IRA to a Roth IRA may be
subject to tax, and other special rules may apply. Distributions
from a Roth IRA generally are not taxed, except that, once aggregate
distributions exceed contributions to the Roth IRA, income tax and a
10% penalty tax may apply to distributions made (1) before age 59 1/2
(subject to certain exceptions) or (2) during the five taxable years
starting with the year in which the first contribution is made to the
Roth IRA.
TAX SHELTERED ANNUITIES
Section 403(b) of the Code allows employees of certain Section
501(c)(3) organizations and public schools to exclude from their
gross income the premium payments made, within certain limits, on a
Contract that will provide an annuity for the employee's retirement.
These premium payments may be subject to FICA (social security) tax.
Distributions of (1) salary reduction contributions made in years
beginning after December 31, 1988; (2) earnings on those
contributions; and (3) earnings on amounts held as of the last year
beginning before January 1, 1989, are not allowed prior to age 59
1/2, separation from service, death or disability. Salary reduction
contributions may also be distributed upon hardship, but would
generally be subject to penalties.
ENHANCED DEATH BENEFIT
The Contract includes an Enhanced Death Benefit that in some cases
may exceed the greater of the premium payments or the contract value.
The Internal Revenue Service has not ruled whether an Enhanced Death
Benefit could be characterized as an incidental benefit, the amount
of which is limited in any Code section
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401(a) pension or profit-sharing plan or Code section 403(b)
tax-sheltered annuity. Employers using the Contract may want to
consult their tax adviser regarding such information. Further, the
Internal Revenue Service has not addressed in a ruling of general
applicability whether a death benefit provision such as the Enhanced
Death Benefit provision in the Contract comports with IRA qualification
requirements.
OTHER TAX CONSEQUENCES
As noted above, the foregoing comments about the federal tax
consequences under the Contracts are not exhaustive, and special
rules are provided with respect to other tax situations not discussed
in this prospectus. Further, the federal income tax consequences
discussed herein reflect our understanding of current law, and the
law may change. Federal estate and state and local estate,
inheritance and other tax consequences of ownership or receipt of
distributions under a Contract depend on the individual circumstances
of each contract owner or recipient of the distribution. A competent
tax adviser should be consulted for further information.
POSSIBLE CHANGES IN TAXATION
Although the likelihood of legislative change is uncertain, there is
always the possibility that the tax treatment of the Contracts could
change by legislation or other means. It is also possible that any
change could be retroactive (that is, effective before the date of
the change). A tax adviser should be consulted with respect to
legislative developments and their effect on the Contract.
36
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<PAGE>
MORE INFORMATION ABOUT FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW
YORK
SELECTED FINANCIAL DATA
The following selected financial data prepared in accordance with generally
accepted accounting principles ("GAAP") for First Golden should be read in
conjunction with the financial statements and notes thereto included in this
Prospectus.
On October 24, 1997, PFHI Holdings, Inc. ("PFHI"), a wholly owned subsidiary
of ING Groep N.V. ("ING") and a Delaware corporation, acquired all of the
outstanding capital stock of First Golden's ultimate parent, Equitable of Iowa
Companies, pursuant to a merger agreement. For financial statement purposes,
the change in control of First Golden was accounted for as a purchase effective
October 25, 1997. This merger resulted in a new basis of accounting reflecting
estimated fair values of assets and liabilities at the merger date. As a result,
the GAAP financial data presented below for the period after October 24, 1997,
is presented on the Post-Merger new basis of accounting, while the financial
statements for October 24, 1997 and prior periods are presented on the
Pre-Merger historical cost basis of accounting.
<TABLE>
<CAPTION>
SELECTED GAAP BASIS
FINANCIAL DATA
(IN THOUSANDS)
-----------------------------------------------------------------
POST-MERGER | PRE-MERGER
----------------------------------------|------------------------
| FOR THE
FOR THE FOR THE | PERIOD FOR THE
PERIOD FOR THE PERIOD |JANUARY 1, PERIOD
JANUARY 1, YEAR OCTOBER 25, | 1997 DECEMBER 17,
1999 THROUGH ENDED 1997 THROUGH| THROUGH 1996 THROUGH
JUNE 30, DECEMBER 31, DECEMBER 31,|OCTOBER 24, DECEMBER 31,
1999 1998 1997 | 1997 1996
------------ ------------ ------------|----------- ------------
<S> <C> <C> <C> | <C> <C>
Annuity Product Charges.. $ 231 $ 239 $ 8 | $ 4 --
Net Income before |
Federal Income Tax..... $ 559 $ 1,277 $ 97 | $ 953 $ 65
Net Income............... $ 363 $ 775 $ 63 | $ 666 $ 42
Total Assets............. $72,411 $66,034 $33,927 | N/A $24,967
Total Liabilities........ $45,545 $38,924 $ 7,832 | N/A $ 24
Total Stockholder's |
Equity................. $26,866 $27,110 $26,095 | N/A $24,943
</TABLE>
The following selected financial data was prepared on the basis of statutory
accounting practices ("SAP"), which have been prescribed by the Department of
Insurance of the State of New York and the National Association of Insurance
Commissioners. These practices differ in certain respects from GAAP. The
selected financial data should be read in conjunction with the financial
statements and notes thereto included in this Prospectus, which describe
the differences between SAP and GAAP. See First Golden's Annual Report for
more detail.
<TABLE>
<CAPTION>
SELECTED STATUTORY
FINANCIAL DATA
(IN THOUSANDS)
----------------------------------------------
FOR THE PERIOD FOR THE YEARS
ENDED ENDED
-------------- ---------------------------
JUNE 30, DECEMBER 31, DECEMBER 31,
1999 1998 1997
------------ ------------ ------------
<S> <C> <C> <C>
Premiums and Annuity
Considerations............... $ 422 $ 9,005 $ 2,514
Net Income (Loss) before
Federal Income Tax........... $ 541 $ (938) $ 635
Net Income (Loss).............. $ 538 $ (966) $ 439
Total Assets................... $69,463 $62,469 $32,965
Total Liabilities.............. $44,574 $38,092 $ 7,541
Total Capital and Surplus...... $24,889 $24,377 $25,424
</TABLE>
37
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BUSINESS ENVIRONMENT
The current business and regulatory environment remains challenging for
the insurance industry. The variable annuity competitive environment is
intense and is dominated by a number of large variable product companies
with strong distribution, name recognition and wholesaling capabilities.
Increasing competition from traditional insurance carriers as well as banks
and mutual fund companies offer consumers many choices. However, overall
demand for variable products remains strong for several reasons including:
strong stock market performance over the last five years; relatively low
interest rates; an aging U. S. population that is increasingly concerned
about retirement and estate planning, as well as maintaining their standard
of living in retirement; and potential reductions in government and
employer-provided benefits at retirement as well as lower public confidence
in the adequacy of those benefits.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS.
The purpose of this section is to discuss and analyze First Golden American
Life Insurance Company of New York's ("First Golden" or "Company") results
of operations. In addition, some analysis and information regarding financial
condition and liquidity and capital resources has also been provided. This
analysis should be read jointly with the Company's financial statements,
related notes and the Cautionary Statement Regarding Forward-Looking
Statements, which appear elsewhere in this Prospectus.
RESULTS OF OPERATIONS
MERGER. On October 23, 1997, Equitable of Iowa Companies ("Equitable")
shareholders approved an Agreement and Plan of Merger ("Merger Agreement")
dated July 7, 1997 among Equitable, PFHI Holdings, Inc. ("PFHI") and ING
Groep N.V. ("ING"). On October 24, 1997, PFHI, a Delaware corporation,
acquired all of the outstanding capital stock of Equitable according to
the Merger Agreement. PFHI is a wholly owned subsidiary of ING, a global
financial services holding company based in The Netherlands. Equitable,
an Iowa corporation, in turn, owned all the outstanding capital stock of
Equitable Life Insurance Company of Iowa and Golden American Life Insurance
Company ("Golden American" or "Parent") and their wholly owned subsidiaries.
In addition, Equitable owned all the outstanding capital stock of Locust
Street Securities, Inc., Equitable Investment Services, Inc. (subsequently
dissolved), Directed Services, Inc., Equitable of Iowa Companies Capital
Trust, Equitable of Iowa Companies Capital Trust II and Equitable of Iowa
Securities Network, Inc. (subsequently renamed ING Funds Distributor, Inc.).
In exchange for the outstanding capital stock of Equitable, ING paid total
consideration of approximately $2.1 billion in cash and stock and assumed
approximately $400 million in debt. As a result of this transaction,
Equitable was merged into PFHI, which was simultaneously renamed Equitable
of Iowa Companies, Inc. ("EIC"), a Delaware corporation.
For financial statement purposes, the change in control of the Company
through the ING merger was accounted for as a purchase effective October 25,
1997. This merger resulted in a new basis of accounting reflecting estimated
fair values of assets and liabilities at the merger date. As a result, the
Company's financial statements for the periods after October 24, 1997 are
presented on the Post-Merger new basis of accounting. The financial
statements for October 24, 1997 and prior periods are presented on the Pre-
Merger historical cost basis of accounting.
The purchase price was allocated to EIC and its subsidiaries with $25.9
million allocated to the Company. Goodwill of $1.4 billion was established
for the excess of the merger cost over the fair value of the assets and
liabilities of EIC with $96,000 attributed to the Company. Goodwill resulting
from the merger is being amortized over 40 years on a straight-line basis.
The carrying value will be reviewed periodically for any indication of
impairment in value.
THE FIRST SIX MONTHS OF 1999 COMPARED TO THE SAME PERIOD OF 1998
PREMIUMS. First Golden reported variable annuity premiums of $5.1
million during the first six months of 1999 andas compared to $12.6
million for the first six months of 1998. This decrease was mainly
due to the discontinuance of a sales relationship with a distributor
that sold 62% of the Company's products during 1998. For the Company's
variable contracts, premiums collected are not reported as revenues,
but are reported as deposits to insurance liabilities. Revenues for
these products are recognized over time in the form of investment
income and product charges.
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<PAGE>
Premiums, net of reinsurance, for variable products from three
significant broker/dealers for the six months ended June 30, 1999
totaled $4.4 million, or 86% of total premiums ($10.7 million, or 84%,
from two significant broker/dealers for the six months ended June
30, 1998).
REVENUES. During the first six months of 1999 and 1998, product
charges totaled $231,000 and $77,000, respectively. This increase is
due to higher account balances associated with the Company's fixed
account option.andas compared to Net investment income was $1.0
million for the first six months of 1999. This is an increase of 20.7%
compared to net investment income of $867,000 for the first six months
of 1998 due to growth in invested assets from June 30, 1998. The
Company recognized realized losses of $30,000 during the first six
months of 1999 compared to $24,000 of realized gains recognized during
the first six months of 1998.
EXPENSES. The Company reported total insurance benefits and expenses
of $704,000 during the first six months of 1999 compared to $332,000
for the first six months of 1998. Interest credited to account
balances totaled $318,000 during the first six months of 1999 and
$128,000 for the same period in 1998. This increase is partially due
to the bonus interest on the fixed account increasing $95,000 to
$114,000 at June 30, 1999. The remaining increase in interest
credited relates to higher account balances associated with the
Company's fixed account option within the variable product.
Commissions decreased $455,000 in the first six months of 1999 from
$764,000 during the first six months of 1998. Changes in commissions
are generally related to changes in the level of variable product
sales. General expenses were $342,000 and $264,000 for the first six
months of 1999 and 1998, respectively. Most costs incurred as the
result of sales have been deferred, thus having very little impact on
current earnings.
The Company's deferred policy acquisition costs ("DPAC") was
eliminated and an asset of $132,000 representing value of purchased
insurance in force ("VPIF") was established for policies in force at
the merger date. First Golden deferred $546,000 of expenses associated
with the sale of variable annuity contracts for the six months ended
June 30, 1999. Expenses of $953,000 were deferred for the six months
ended June 30, 1998. These acquisition costs are amortized in
proportion to the expected gross profits. Amortization of DPAC was
$123,000 for the six months ended June 30, 1999 and $26,000 for the
six months ended June 30, 1998. The amortization of VPIF was $4,000
and $8,000 for the six months ended June 30, 1999 and 1998,
respectively. During the first six months of 1999, VPIF was adjusted
to reduce amortization by $1,000 to reflect changes in the assumptions
related to the timing of future gross profits. Based on current
conditions and assumptions as to the impact of future events on
acquired policies in force, the expected approximate net amortization
relating to VPIF as of June 30, 1999 is $6,000 for the remainder of
1999, $11,000 in 2000, $13,000 in 2001, $13,000 in 2002, $13,000 in
2003, and $11,000 in 2004. Actual amortization may vary based upon
changes in assumptions and experience.
Amortization of goodwill totaled $1,000 for the six months ended June
30, 1999, unchanged from the same period in 1998. Goodwill is being
amortized on a straight-line basis over 40 years.
INCOME. Net income was $363,000 for the first six months of 1999, a
decrease of $50,000, or 12.1%, from the same period in 1998.
Comprehensive loss for the first six months of 1999 was $244,000, a
decrease of $817,000 from comprehensive income of $573,000 during the
first six months of 1998.
1998 COMPARED TO 1997
The following analysis combines the Post-Merger and Pre-Merger activity for
1997 in order to compare to the results of 1998.
PREMIUMS. First Golden received policy approvals in New York on March 25,
1997 and in Delaware on December 23, 1997. The Company reported variable
annuity premiums of $29.2 million for the year ended December 31, 1998 and
$7.3 million for the year ended December 31, 1997.
39
<PAGE>
<PAGE>
For the Company's variable contracts, premiums collected are not reported as
revenues, but are reported as deposits to insurance liabilities. Revenues for
these products are recognized over time in the form of investment income and
product charges.
Premiums, net of reinsurance, for variable products from three significant
broker/dealers for the year ended December 31, 1998 totaled $27.5 million, or
94.4% of premiums ($6.9 million, or 94.5% from two significant broker/dealers
for the year ended December 31, 1997). One of these distributors sold 62.1%
of the Company's products in 1998 and 59.4% in 1997. This distributor has
discontinued the sales relationship by the end of 1998. The sales made by
this distributor are anticipated to be absorbed by other distribution
channels during 1999. Based on this assumption, the discontinuance of this
relationship is not anticipated to significantly impact the Company's sales
in 1999.
REVENUES. Product charges from variable annuities totaled $239,000 in
1998 and $12,000 in 1997 due to a full year's worth of sales in 1998,
compared to a partial year in 1997. Net investment income was $1.8
million for the year ended December 31, 1998. This was an increase of
6.3% compared to net investment income of $1.7 million for the year
ended December 31, 1997. The Company recognized a realized gain of
$24,000 from the sale of investments during the year ended December
31, 1998.
EXPENSES. The Company reported total insurance benefits and expenses
of $830,000 for the year ended December 31, 1998 and $698,000 for the
year ended December 31, 1997. Insurance benefits and expenses consisted
of interest credited to account balances, commissions, general expenses,
insurance taxes, amortization of deferred policy acquisition expenses,
goodwill and value of purchased insurance in force, net of deferred
policy acquisition costs. Interest credited to account balances was
$376,000 and $74,000 for the years ended December 31, 1998 and December
31, 1997, respectively. Commissions, general expenses and insurance
taxes were $1.8 million, $834,000 and $44,000, respectively, for the
year ended December 31, 1998. For the year ended December 31, 1997,
commissions, general expenses and insurance taxes were $408,000,
$585,000 and $109,000, respectively. Expenses have increased in 1998
due to higher sales. Most costs incurred as the result of new sales have
been deferred, thus having very little impact on earnings.
At the merger date, the Company's deferred policy acquisition costs ("DPAC")
was eliminated and an asset of $132,000 representing value of purchased
insurance in force ("VPIF") was established for policies in force at the
merger date. The Company deferred $2.3 million of expenses associated with
the sale of variable annuity contracts for the year ended December 31, 1998.
Expenses of $502,000 were deferred for the year ended December 31, 1997.
These acquisition costs are amortized in proportion to the expected gross
profits. Amortization of DPAC was $76,000 for the year ended December 31,
1998 and $20,000 for the year ended December 31, 1997. The amortization of
VPIF was $8,000 for the year ended December 31, 1998 and $3,000 for the
period October 25, 1997 through December 31, 1997. In 1998, VPIF was adjusted
to reduce amortization by $6,000 during 1998 to reflect changes in the
assumptions related to the timing of future gross profits. Based on current
conditions and assumptions as to the impact of future events on acquired
policies in force, the expected approximate net amortization relating to VPIF
as of December 31, 1998 is $10,000 in 1999, $12,000 in 2000, $13,000 in 2001,
$13,000 in 2002 and $12,000 in 2003. Actual amortization may vary based upon
changes in assumptions and experience.
Amortization of goodwill for the year ended December 31, 1998 was $2,000 and
during the period from the merger date to December 31, 1997 totaled
approximately $1,000. Goodwill is being amortized on a straight-line basis
over 40 years.
INCOME. Net income for the year ended December 31, 1998 was $775,000. This
was an increase of $46,000 from net income for the year ended December 31,
1997.
Comprehensive income for 1998 was $1,015,000, an increase of $320,000 from
$695,000 for 1997.
1997 COMPARED TO 1996
The following analysis combines the Post-Merger and Pre-Merger activity for
1997 in order to compare to the results of 1996. Such a comparison does not
recognize the impact of the purchase accounting and goodwill amortization
except for the period after October 24, 1997.
40
<PAGE>
<PAGE>
PREMIUMS. On March 25, 1997 and December 23, 1997, First Golden received
policy approvals in New York and Delaware, respectively. The Company reported
$7.3 million in variable annuity premiums during the year ending December 31,
1997.
Premiums, net of reinsurance, for variable products from two significant
broker/dealers for the year ended December 31, 1997, totaled $6.9 million, or
94.5% of premiums. One of these distributors sold 59.4% of the Company's
products in 1997 but indicated its intention to discontinue the sales
relationship by the end of 1998.
REVENUES. Product charges from variable annuities totaled $12,000 in 1997. Net
investment income was $1,735,000 and $65,000 for the year ending December 31,
1997 and for the period December 17, 1996 through December 31, 1996,
respectively.
EXPENSES. The Company reported total insurance benefits and expenses of
$698,000 for the year ending December 31, 1997. Insurance benefits and
expenses consisted of interest credited to account balances, commissions,
general expenses, insurance taxes, amortization of deferred policy acquisition
expenses, goodwill and present value of in force acquired, net of deferred
policy acquisition costs. Interest credited to account values was $74,000 for
the year ending December 31, 1997. For the year ending December 31, 1997,
commissions, general expenses and insurance taxes were $408,000, $585,000 and
$109,000, respectively.
The Company's deferred policy acquisition costs ("DPAC") was eliminated as of
the merger date and an asset of $132,000 representing present value of in
force acquired ("PVIF") was established for policies in force at the merger
date. First Golden deferred $502,000 of expenses associated with the sale of
variable annuity contracts for the year ending December 31, 1997. These
acquisition costs are amortized in proportion to the expected gross profits.
Amortization of deferred policy acquisition costs was $20,000 for the year
ending December 31, 1997. The amortization of PVIF for the period October 25,
1997 through December 31, 1997 was $3,000. Based on current conditions and
assumptions as to the impact of future events on acquired policies in force,
the expected approximate net amortization for the next five years, relating
to the PVIF as of December 31, 1997 is $19,000 in 1998, $18,000 in 1999,
$17,000 in 2000, $15,000 in 2001 and $13,000 in 2002. Actual amortization
may vary based upon changes in assumptions and experience.
Amortization of goodwill during the period from the merger date to December
31, 1997 totaled approximately $1,000. Goodwill is being amortized on a
straight-line basis over 40 years.
NET INCOME. Net income was $729,000 and $42,000 for the year ending December
31, 1997 and the period December 17, 1996 through December 31, 1997,
respectively.
FINANCIAL CONDITION
RATINGS. As of December 31, 1998, the Company's ratings were at A+ by
A.M. Best Company, AAA by Duff & Phelps Credit Rating Company, AA+ by
Standard & Poor's Rating Services and Aa2 by Moody's Investors Service.
INVESTMENTS. First Golden's assets are invested in accordance with
applicable laws. These laws govern the nature and the quality of
investments that may be made by life insurance companies and the
percentage of their assets that may be committed to any particular
type of investment. In general, these laws permit investments, within
specified limits subject to certain qualifications, in federal,
state, and municipal obligations, corporate bonds, preferred or
common stocks, real estate mortgages, real estate and certain other
investments.
First Golden purchases investments in accordance with investment guidelines
that take into account investment quality, liquidity and diversification, and
invests primarily in investment grade securities. All of First Golden's
assets except for variable separate account assets are available to meet its
obligations under the contracts.
41
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<PAGE>
All of the Company's investments are carried at fair value in the Company's
financial statements. The increase in the carrying value of the Company's
investment portfolio included changes in unrealized appreciation and
depreciation of fixed maturities as well as a decline in the cost basis of
these securities due to scheduled principal payments. Growth in the cost
basis of the Company's investment portfolio resulted from the investment
of premiums from the sale of the fixed account option of the Company's
variable insurance products. The Company manages the growth of its
insurance operations in order to maintain adequate capital ratios.
Fixed Maturities: At June 30, 1999, the Company had fixed maturities with an
amortized cost of $29.1 million and an estimated fair value of $28.6 million.
The Company classifies 100% of its securities as available for sale. Net
unrealized depreciation on fixed maturities of $491,000 was comprised of
gross appreciation of $13,000 and gross depreciation of $504,000. Net
unrealized holding losses on these securities, net of adjustments for VPIF,
DPAC, and deferred income taxes of $271,000, was included in stockholder's
equity at June 30, 1999.
The individual securities in the Company's fixed maturities portfolio (at
amortized cost) include investment grade securities, which include securities
issued by the U. S. government, its agencies, and corporations, that are
rated at least A- by Standard & Poor's Rating Services ("Standard & Poor's")
($16.9 million or 58.2%), that are rated BBB+ to BBB- by Standard & Poor's
($9.2 million or 31.5%), and below investment grade securities, which are
securities issued by corporations that are rated BB+ to BB- by Standard &
Poor's ($1.0 million or 3.5%). Securities not rated by Standard & Poor's
had a National Association of Insurance Commissioners ("NAIC") rating of
1 ($2.0 million or 6.8%).
Fixed maturities rated BBB+ to BBB- may have speculative characteristics
and changes in economic conditions or other circumstances are more likely
to lead to a weakened capacity of the issuer to make principal and interest
payments than is the case with higher rated fixed maturities.
At June 30, 1999, the amortized cost value of the Company's total investment
in below investment grade securities was $1.04 million, or 3.6%, of the
Company's investment portfolio. The Company intends to purchase additional
below investment grade securities, but does not expect the percentage of
its portfolio invested in such securities to exceed 10% of its investment
portfolio. At June 30, 1999, the yield at amortized cost on the Company's
below investment grade portfolio was 8.1% compared to 6.2% for the Company's
investment grade corporate bond portfolio. The Company estimates the fair
value of its below investment grade portfolio was $1.03 million, or 98.6%
of amortized cost value, at June 30, 1999.
Below investment grade securities have different characteristics than
investment grade corporate debt securities. Risk of loss upon default by the
borrower is significantly greater with respect to below investment grade
securities than with other corporate debt securities. Below investment grade
securities are generally unsecured and are often subordinated to other
creditors of the issuer. Also, issuers of below investment grade securities
usually have higher levels of debt and are more sensitive to adverse economic
conditions, such as a recession or increasing interest rates, than are issuers
of investment grade securities. The Company attempts to reduce the overall
risk in its below investment grade portfolio, as in all of its investments,
through careful credit analysis, strict investment policy guidelines, and
diversification by company and by industry.
The Company analyzes its investment portfolio, including below investment
grade securities, at least quarterly in order to determine if its ability to
realize its carrying value on any investment has been impaired. For debt
securities, if impairment in value is determined to be other than temporary
(i.e., if it is probable the Company will be unable to collect all amounts
due according to the contractual terms of the security), the cost basis of
the impaired security is written down to fair value, which becomes the new
cost basis. The amount of the write-down is included in earnings as a
realized loss. Future events may occur, or additional or updated information
may be received, which may necessitate future write-downs of securities in
the Company's portfolio. Significant write-downs in the carrying value of
investments could materially adversely affect the Company's net income in
future periods.
During the six months ended June 30, 1999, the amortized cost basis of the
Company's fixed maturities portfolio was reduced by $1.1 million as a result
of scheduled principal repayments. In total, net pre-tax
42
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<PAGE>
losses from sales, calls, and repayments of fixed maturity investments
amounted to $30,000 in the first six months of 1999.
At June 30, 1999, no fixed maturities were deemed to have impairments in
value that are other than temporary. At June 30, 1999, the Company had no
investment in default. The Company's fixed maturities portfolio had a
combined yield at amortized cost of 6.3% at June 30, 1999.
OTHER ASSETS. DPAC represents certain deferred costs of acquiring
insurance business, principally first year commissions and interest
bonuses and other expenses related to the production of new business
after the merger. The Company's DPAC was eliminated as of the merger
date and an asset of $132,000 representing VPIF was established for all
policies in force at the merger date. VPIF is amortized into income in
proportion to the expected gross profits of in force acquired business
in a manner similar to DPAC amortization. Any expenses which vary directly
with the sales of the Company's products are deferred and amortized.
At June 30, 1999, the Company had VPIF and DPAC balances of $123,000
and $2.9 million, respectively.
Goodwill totaling $96,000, representing the excess of the acquisition cost
over the fair value of net assets acquired, was established at the merger
date. Accumulated amortization of goodwill as of June 30, 1999 was
approximately $4,000.
At June 30, 1999, the Company had $34.9 million of separate account assets
compared to $26.7 million at December 31, 1998. The increase in separate
account assets resulted from market appreciation, increased transfer activity,
and sales of the Company's variable products, net of redemptions.
At June 30, 1999, the Company had total assets of $72.4 million, an increase
of 9.7% from December 31, 1998.
LIABILITIES. Future policy benefits decreased $1.3 million in the first
six months of 1999 to $9.6 million due mainly to net reallocations to the
Company's separate account. Policy reserves represent the premiums received
plus accumulated interest less mortality and administration charges. At
June 30, 1999, the Company had $34.9 million of separate account liabilities.
This is an increase of 30.6% over separate account liabilities as of December
31, 1998, and is primarily related to market appreciation, increased transfer
activity, and sales of the Company's variable products, net of redemptions.
The Company's total liabilities increased $6.6 million, or 17.0%, during the
first six months of 1999 and totaled $45.5 million at June 30, 1999. The
increase is primarily the result of an increase in separate account
liabilities.
The effects of inflation and changing prices on the Company's financial
position are not material since insurance assets and liabilities are both
primarily monetary and remain in balance. An effect of inflation, which
has been low in recent years, is a decline in stockholder's equity when
monetary assets exceed monetary liabilities.
LIQUIDITY AND CAPITAL RESOURCES
Liquidity is the ability of the Company to generate sufficient cash flows to
meet the cash requirements of its operating, investing, and financing
activities. The Company's principal sources of cash are variable annuity
premiums and product charges, investment income, and maturing investments.
Primary uses of these funds are payments of commissions and operating
expenses, investment purchases, as well as withdrawals and surrenders.
Net cash provided by operating activities was $427,000 in the first six
months of 1999 compared to net cash used in operations of $109,000 in
the same period of 1998. The operating cash flows result primarily from
an increase in annuity product charges and net investment income.
Net cash provided by investing activities was $4.5 million during the
first six months of 1999 compared to net cash provided by investing
activities of $1.5 million in the same period of 1998. This increase
is primarily due to greater redemptions of fixed maturities and increased
net sales of short-term
43
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<PAGE>
investments during the first six months of 1999. Redemptions of fixed
maturities reached $2.3 million in the first six months of 1999 versus
net purchases of $836,000 in the same period of 1998. Net sales of
short-term investments were $3.2 million in the first six months of
1999 versus $684,000 in the first six months of 1998.
Net cash used in financing activities was $1.6 million during the first
six months of 1999 compared to cash provided by financing activities of
$2.1 million during the same period in the prior year, a decrease of
$3.6 million. In the first six months of 1999, net fixed account deposits
were $416,000 compared to $2.3 million in the first six months of 1998.
In addition, net reallocations to the Company's separate account increased
to $1.9 million from $170,000 during the same period in 1998.
The Company's liquidity position is managed by maintaining adequate levels
of liquid assets, such as cash or cash equivalents and short-term investments.
Additional sources of liquidity include borrowing facilities to meet
short-term cash requirements. The Company has a $10.0 million revolving note
facility with SunTrust Bank, Atlanta. As of July 31, 1999, the SunTrust
Bank, Atlanta revolving note facility was extended to July 31, 2000.
Management believes that these sources of liquidity are adequate to meet
the Company's short-term cash obligations.
First Golden's principal office is located in New York, New York, where
certain of the Company's records are maintained. The 2,568 square feet
of office space is leased through 2001.
First Golden believes it will be able to fund the capital required for
projected new business primarily with existing capital and future capital
contributions from its Parent. First Golden expects to continue to receive
capital contributions from Golden American if necessary. It is ING's policy
to ensure adequate capital and surplus is provided for the Company and,
if necessary, additional funds will be contributed.
The Golden American Board of Directors has agreed by resolution to provide
funds as needed for the Company to maintain policyholders' surplus that
meets or exceeds the greater of: (1) the minimum capital adequacy standards
to maintain a level of capitalization necessary to meet A.M. Best Company's
guidelines for a rating one level less than the one originally given to First
Golden or (2) the New York State Insurance Department risk-based capital
minimum requirements as determined in accordance with New York statutory
accounting principles. No funds were transferred from Golden American during
the first six months of 1999 or 1998.
First Golden is required to maintain a minimum capital and surplus of not
less than $4 million under the provisions of the insurance laws of the
State of New York in which it became licensed to sell insurance products
on January 2, 1997.
Under the provisions of the insurance laws of the State of New York, First
Golden cannot distribute any dividends to its stockholder, Golden American,
unless a notice of its intent to declare a dividend and the amount of the
dividend has been filed with the New York Insurance Department at least
thirty days in advance of the proposed declaration. If the Superintendent
of the New York Insurance Department finds the financial condition of First
Golden does not warrant the distribution, the Superintendent may disapprove
the distribution by giving written notice to the Company within thirty days
after the filing. The management of First Golden does not anticipate paying
any dividends to its Parent during 1999.
The NAIC's risk-based capital requirements require insurance companies to
calculate and report information under a risk-based capital formula. These
requirements are intended to allow insurance regulators to monitor the
capitalization of insurance companies based upon the type and mixture of
risks inherent in the company's operations. The formula includes components
for asset risk, liability risk, interest rate exposure, and other factors.
The Company has complied with the NAIC's risk-based capital reporting
requirements. Amounts reported indicate the Company has total adjusted
capital which is significantly above all required capital levels.
Vulnerability from Concentrations: First Golden's operations consist of
one business segment, the sale of insurance products. First Golden is not
dependent upon any single customer, however, three
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<PAGE>
broker/dealers accounted for a significant portion of its sales volume in
the first six months of 1999. All premiums are generated from consumers
and corporations in the states of New York and Delaware.
Reinsurance: At June 30, 1999, First Golden had a reinsurance treaty with
an unaffiliated reinsurer covering a significant portion of the mortality
risks under its variable contracts. First Golden remains liable to the
extent its reinsurer does not meet its obligation under the reinsurance
agreement.
YEAR 2000 READINESS DISCLOSURE: Based on and in conjunction with a 1997 study
and an ongoing analysis of computer software and hardware, Golden American
has assessed the Company's exposure to the Year 2000 change of the century
date issue. Some of the Company's computer programs were originally written
using two digits rather than four to define a particular year. As a result,
these computer programs contain "time sensitive" software that may recognize
"00" as the year 1900 rather than the year 2000, which could cause system
failure or miscalculations resulting in disruptions to operations. These
disruptions could include, but are not limited to, a temporary inability to
process transactions. To a lesser extent, the Company depends on various non-
information technology systems, which could also fail or malfunction as a
result of the Year 2000.
Golden American has developed a plan for the Company to address the Year
2000 issue in a timely manner. The following schedule details the plan's
phases, progress towards completion, and estimated completion dates as of
July 31, 1999:
% Complete Actual/
as of Estimated
July 31, Completion
PHASES 1999 Dates
- -------------------------------------------------------------------------------
ASSESSMENT AND DEVELOPMENT of the steps to be taken to
address Year 2000 systems issues 100% 12/31/1997
REMEDIATION of business critical systems to address
Year 2000 issues 100% 2/28/1999
REMEDIATION of non-critical systems to address Year
2000 issues 98% 9/01/1999
TESTING of business critical systems 100% 3/05/1999
TESTING of non-critical systems and integrated testing
of hardware and infrastructure 98% 9/01/1999
POINT-TO-POINT TESTING of external interfaces with third
party computer systems that communicate with Company
systems 98% 9/01/1999
IMPLEMENTATION of tested business critical software
addressing Year 2000 systems issues 100% 3/05/1999
IMPLEMENTATION of tested non-critical software
addressing Year 2000 systems issues 98% 9/01/1999
CONTINGENCY PLAN 100% 6/30/1999
The Company's operations could be adversely affected if significant
customers, suppliers and other third parties, including underlying mutual
funds available through the Company's variable products, would be unable
to transact business in the Year 2000 and thereafter as a result of the
Year 2000 issue. To mitigate the effect of outside influences and other
dependencies relative to the Year 2000, Golden American has identified
and contacted these third parties on behalf of the Company to obtain
assurances that necessary steps are being taken to prepare for the
Year 2000. Golden American will continue these communications and
establish compliance checkpoints through the Year 2000 transition.
Management believes the Company's systems are or will be substantially
compliant by Year 2000. Golden American will bear all systems upgrade
costs to make the Company's system Year 2000 compliant. Management
expects some of Management expects some of Golden American's resources
to be utilized in 1999 to complete system upgrades.
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<PAGE>
Despite Golden American's efforts on behalf of the Company to modify
or replace "time sensitive" computer and information systems, the Company
could experience a disruption to its operations as a result of the Year
2000. Golden American has developed a contingency plan for
the Company to address any systems that may malfunction despite the
testing being performed. The contingency plan was completed on
June 30, 1999.
The Year 2000 project's progress is based on management's best estimates.
These estimates were derived using numerous assumptions of future events,
including the continued availability of resources, third party Year 2000
compliance, and other factors. There is no guarantee these estimates will be
achieved and actual results could materially differ from those anticipated.
Specific factors that might cause such material differences include, but are
not limited to, the availability and cost of trained personnel, the ability
to locate and correct all relevant computer codes, and other uncertainties.
It is the Company's intention to make every reasonable effort to achieve
business continuity through appropriate planning, testing, and establishing
contingency scenarios; however, the Company does not make any representations
because of many unknown factors beyond the control of the Company.
MARKET RISK AND RISK MANAGEMENT
Asset/liability management is integrated into many aspects of the Company's
operations, including investment decisions, product development and crediting
rates determination. As part of its risk management process, different
economic scenarios are modeled, including cash flow testing required for
insurance regulatory purposes, to determine that existing assets are adequate
to meet projected liability cash flows. Key variables include contractowner
behavior and the variable separate account's performance.
Contractowners bear the majority of the investment risks related to the
variable products. Therefore, the risks associated with the investments
supporting the variable separate account are assumed by contractowners, not
by the Company (subject to, among other things, certain minimum guarantees).
The Company's products also provide certain minimum death benefits that
depend on the performance of the variable separate account. Currently the
majority of death benefit risks are reinsured, which protects the Company
from adverse mortality experience and prolonged capital market decline.
A surrender, partial withdrawal, transfer or annuitization made prior to the
end of a guarantee period from the fixed account may be subject to a market
value adjustment. As the liabilities in the fixed account are subject to
market value adjustment, the Company does not face a material amount of
market risk volatility. The fixed account liabilities are supported by a
portfolio principally composed of fixed rate investments that can generate
predictable, steady rates of return. The portfolio management strategy for
the fixed account considers the assets available for sale. This enables the
Company to respond to changes in market interest rates, changes in prepayment
risk, changes in relative values of asset sectors and individual securities
and loans, changes in credit quality outlook and other relevant factors. The
objective of portfolio management is to maximize returns, taking into account
interest rate and credit risks as well as other risks. The Company's
asset/liability management discipline includes strategies to minimize
exposure to loss as interest rates and economic and market conditions change.
On the basis of these analyses, management believes there is no material
solvency risk to the Company. With respect to a 10% drop in equity values
from year-end 1998 levels, variable separate account funds, which represent
78% of the in force as of June 30, 1999, pass the risk in underlying fund
performance to the contractowner (except for certain minimum guarantees
that are mostly reinsured). With respect to interest rate movements up or
down 100 basis points from year-end 1998 levels, the remaining 22% of the
in force as of June 30, 1999 are fixed account funds and almost all of
these have market value adjustments which provide significant protection
against changes in interest rates.
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<PAGE>
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
Any forward-looking statements contained herein or in any other oral or
written statement by the Company or any of its officers, directors or
employees is qualified by the fact that actual results of the Company may
differ materially from such statement, among other risks and uncertainties
inherent in the Company's business, due to the following important factors:
1. Prevailing interest rate levels and stock market performance, which may
affect the ability of the Company to sell its products, the market value
and liquidity of the Company's investments and the lapse rate of the
Company's policies, notwithstanding product design features intended to
enhance persistency of the Company's products.
2. Changes in the federal income tax laws and regulations which may affect
the tax status of the Company's products.
3. Changes in the regulation of financial services, including bank sales and
underwriting of insurance products, which may affect the competitive
environment for the Company's products.
4. Increasing competition in the sale of the Company's products.
5. Other factors that could affect the performance of the Company,
including, but not limited to, market conduct claims, litigation,
insurance industry insolvencies, availability of competitive reinsurance
on new business, investment performance of the underlying portfolios of
the variable products, variable product design, and sales volume by
significant sellers of the Company's variable products.
6. To the extent third parties are unable to transact business in the Year
2000 and thereafter, the Company's operations could be adversely
affected.
OTHER INFORMATION
CERTAIN AGREEMENTS. On November 8, 1996, First Golden and Golden American
entered into an administrative service agreement pursuant to which Golden
American agreed to provide certain accounting, actuarial, tax, underwriting,
sales, management and other services to First Golden. Expenses incurred by
Golden American in relation to this service agreement will be reimbursed by
First Golden on an allocated cost basis. First Golden entered into a similar
agreement with another affiliate, Equitable Life Insurance Company of Iowa
("Equitable Life"), for additional services. For the years ended December 31,
1998 and 1997, First Golden incurred expenses of $248,000 and $24,000,
respectively, under the agreement with Golden American and $165,000 and
$29,000, respectively, under the agreement with Equitable Life.
Effective January 1, 1998, the Company entered into an asset management
agreement with ING Investment Management LLC ("ING IM"), an affiliate,
under which ING IM provides asset management and accounting services.
For the year ended December 31, 1998, the Company incurred expenses of
$56,000.
Prior to 1998, First Golden had an agreement with Equitable Investment
Services Inc., under which Equitable Investment Services, Inc. performed
investment advisory services. For the year ended December 31, 1997, First
Golden incurred expenses of $62,000 under this agreement which was
terminated as of December 31, 1997.
First Golden has an agreement with Golden American and DSI pursuant to which
First Golden has agreed to provide Golden American and DSI certain of its
personnel to perform management, administrative and clerical services and the
use of certain of its facilities. First Golden charges Golden American and DSI
for such expenses and all other general and administrative costs, first on the
basis of direct charges when identifiable, and second allocated based on the
estimated amount of time spent by First Golden's employees on behalf of Golden
American and DSI. For the year ended December 31, 1998, charges to Golden
American and DSI for these services were $210,000 and $75,000, respectively.
47
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<PAGE>
DISTRIBUTION AGREEMENT. First Golden has entered into agreements with DSI to
perform services related to the distribution of its products. DSI acts as the
principal underwriter (as defined in the Securities Act of 1933 and the
Investment Company Act of 1940, as amended) of the variable insurance products
issued by First Golden. For the years ended December 31, 1998 and 1997,
commissions paid by First Golden to DSI were $1,754,000 and $408,000,
respectively.
EMPLOYEES. During 1996, Golden American provided the support necessary for the
incorporation and licensing of First Golden. During 1998 and 1997, First
Golden had few direct employees due to its small size and will continue to
receive support pursuant to various management services from DSI, Golden
American and other affiliates as described above under "Certain Agreements."
The cost of these services are allocated to First Golden.
Certain officers of First Golden are also officers of Golden American and DSI,
and certain officers of First Golden are also officers of EIC, and/or Equitable
Life Insurance Company of Iowa. See "Directors and Executive Officers."
PROPERTIES. First Golden's principal office is located at 230 Park Avenue,
Suite 966, New York, New York 10169, where certain of the Company's records
are maintained. The 2,568 square feet of office space is leased for a 5 year
term.
DIRECTORS AND EXECUTIVE OFFICERS
NAME (AGE) POSITIONS(S) WITH THE COMPANY
---------- -----------------------------
[S] [C]
Barnett Chernow (49) Director and President
Myles R. Tashman (57) Director, Executive Vice President, General
Counsel and Secretary
James R. McInnis (51) Executive Vice President
R. Brock Armstrong (52) Director and Chairman
Carol V. Coleman (50) Director
Michael W. Cunningham (51) Director
Stephen J. Friedman (61) Director
Bernard Levitt (73) Director
Roger A. Martin (68) Director
Andrew Kalinowski (55) Director
David L. Jacobson (50) Senior Vice President and Assistant Secretary
Stephen J. Preston (42) Executive Vice President and Chief Actuary
Mary B. Wilkinson (43) Senior Vice President and Treasurer (Chief
Financial Officer)
Marilyn Talman (52) Vice President, Associate General Counsel and
Assistant Secretary
Each director is elected to serve for one year or until the next annual
meeting of shareholders or until his or her successor is elected. Some
directors and/or officers are directors and/or officers of First Golden's
insurance company affiliates. The principal positions of First Golden's
directors and senior executive officers for the past five years are listed
below:
Mr. Barnett Chernow became President of First Golden and Golden American in
April, 1998. From 1996 to 1998, Mr. Chernow served as Executive Vice President
of First Golden. From 1993 to 1998, Mr. Chernow also served as Executive Vice
President of Golden American. He was elected to serve as a director of First
Golden in June, 1996 and Golden American in April, 1998.
Mr. Myles R. Tashman is Executive Vice President, General Counsel, Secretary
and Director of First Golden. Since December, 1995, Mr. Tashman has also
served as Executive Vice President of Golden American, and since January,
1998, he has served as a director of Golden American. He was elected to
serve as a director of First Golden in June, 1996.
Mr. James R. McInnis became Executive Vice President of First Golden in
December, 1997. From 1982 through November, 1997, he was with the Endeavor
Group and held various offices, including President at the time of his
departure.
48
<PAGE>
<PAGE>
Mr. R. Brock Armstrong is a Director and Chairman of the Board of Directors of
First Golden, having been elected a Director in December, 1998 and as Chairman
in April, 1999. Mr. Armstrong was also elected to serve as a Director of Golden
American in April 1999. He was appointed to serve as President and Chairman
of The GCG Trust in February 1999 and President of Equitable Life Insurance
Company of Iowa in April 1999. He has also served as Group Executive of
ING Group since October 1998. Mr. Armstrong was Senior Vice President,
The Prudential Insurance Company of America, April 1997 to October 1998;
Executive Vice President, London Insurance Group, August 1994 to April 1997;
President and Chief Financial Officer of Security First Group, August 1991
to August 1994.
Ms. Carol V. Coleman is a Director of First Golden, having been first
appointed in December, 1997. She has been a financial recruiter with Vantage
Staffing since 1994.
Mr. Michael W. Cunningham became a Director of First Golden and Golden
American in April 1999. Also, he has served as a Director of Life
of Georgia and Security Life of Denver since 1995. Currently, he
serves as Executive Vice President and Chief Financial Officer of ING
North America Insurance Corporation, and has worked for them since
1991.
Mr. Stephen J. Friedman is a Director of First Golden, having been first
elected in June, 1996. Mr. Friedman is a partner of the law firm of
Debevoise & Plimpton in New York, NY since 1993.
Mr. Bernard Levitt is a Director of First Golden, having been first elected
in June, 1996. Until his retirement in 1990, Mr. Levitt was a life insurance
consultant with American Life Insurance Company of New York, since 1989.
Mr. Roger A. Martin is a Director of First Golden, having been first appointed
in June, 1996. From 1984 until his retirement in July, 1995, Mr. Martin was a
Vice President with Bear Sterns.
Mr. Andrew Kalinowski is a Director of First Golden, having been first
elected in June, 1996. Mr. Kalinowski has been a Principal and the President
of Upstate Special Risk Services, Incorporated since 1974. He also has been a
Principal, the Chief Marketing Officer and Vice President of LifeMark
Securities Corporation since 1983, a Principal, Vice President and Secretary
of LifeMark Associates, Incorporated since 1993, and is a Principal and Director
of LIFE Incorporated.
Mr. David L. Jacobson is Senior Vice President and Assistant Secretary of
First Golden. Since November, 1993, Mr. Jacobson has also served as Senior
Vice President and Assistant Secretary of Golden American. Since September,
1996, Mr. Jacobson has also served as Assistant Secretary of Equitable Life
Insurance Company of Iowa.
Mr. Stephen J. Preston is Executive Vice President and Chief Actuary of First
Golden. He also serves as Executive Vice President and Chief Actuary of
GOlden American, where he has served in several capacitites since 1993.
Ms. Mary Bea Wilkinson is Senior Vice President and Treasurer of First Golden.
From November, 1993 through 1996, Ms. Wilkinson served as Senior Vice
President, Assistant Secretary and Treasurer of Golden American.
Ms. Marilyn Talman is Vice President, Associate General Counsel and Assistant
Secretary of First Golden. Since April, 1996, Ms. Talman has also served as
Vice President, Associate General Counsel and Assistant Secretary for Golden
American. Since September, 1996, Ms. Talman has also served as Assistant
Secretary of Equitable Life Insurance Company of Iowa. From March, 1992
through March, 1994, she held various positions with Rodney Square
Management Corp. and was Vice President and General Counsel upon leaving.
COMPENSATION TABLES AND OTHER INFORMATION
The following sets forth information with respect to the Chief
Executive Officer of First Golden as well as the annual salary and
bonus for the next five highly compensated executive officers for the
fiscal years ended December 31, 1998 and 1997. Certain executive officers
of First Golden are also officers of Golden
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American and DSI. The salaries of such individuals are allocated among
First Golden, Golden American and DS pursuant to an arrangement among
these companies.
EXECUTIVE COMPENSATION TABLE
The following table sets forth information with respect to the annual
salary and bonus for Golden American's Chief Executive Officers and the
five other most highly compensated executive officers for the fiscal
years ended December 31, 1998 and 1997.
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
-------------------- ------------------------
RESTRICTED SECURITIES
NAME AND STOCK AWARDS UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS (/1/) /2/) OPTIONS COMPENSATION
- ------------------ ---- -------- ----------- ------------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Barnett Chernow,....... 1998 $284,171 $105,375 8,000
President 1997 $234,167 $ 31,859 $ 277,576 4,000
James R. McInnis,...... 1998 $250,004 $626,245 2,000
Executive Vice
President
Keith Glover,.......... 1998 $250,000 $145,120 3,900
Executive Vice
President
Myles R. Tashman,...... 1998 $189,337 $ 54,425 3,500
Executive Vice 1997 $181,417 $ 25,000 $ 165,512 5,000
President, General
Counsel and Secretary
Stephen J. Preston,.... 1998 $173.870 $ 32,152 3,500
Executive Vice 1997 $160,758 $ 16,470
President and Chief
Actuary
Terry L. Kendall,...... 1998 $145,237 $181,417
Former President and 1997 $362,833 $ 80,365 $ 644,844 16,000
CEO
</TABLE>
________________
(1) The amount shown relates to bonuses paid in 1998, 1997 and 1996.
(2) Restricted stock awards granted to executive officers vested on October
24, 1997 with the change in control of Equitable of Iowa. As of
December 31, 1998, no officer held any restricted stock.
Option Grants in Last Fiscal Year (1998)
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE VALUE AT
ASSUMED ANNUAL
% OF TOTAL RATES OF STOCK
NUMBER OF OPTIONS PRICE APPRECIATION
SECURITIES GRANTED TO FOR OPTION
UNDERLYING EMPLOYEES EXERCISE TERM (/3/)
OPTIONS IN FISCAL OR BASE EXPIRATION -------------------
NAME GRANTED (/1/) YEAR PRICE (/2/) DATE 5% 10%
- ---- ------------- ---------- ----------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Barnett Chernow......... 8,000 11.99 $60.518 5/26/2003 $164,016 $ 362,433
James R. McInnis........ 2,000 3.00 $60.518 5/26/2003 $ 41,004 $ 90,608
Keith Glover............ 3,900 5.85 $60.518 5/26/2003 $ 79,958 $ 176,686
Myles Tashman........... 3,500 5.25 $60.518 5/26/2003 $ 71,758 $ 158,564
Stephen J. Preston...... 3,500 5.25 $60.518 5/26/2003 $ 71,758 $ 158,564
</TABLE>
________________
(1) Stock appreciation rights granted on May 26, 1998 to the officers of
First Golden have a three-year vesting period and an expiration
date as shown.
(2) The base price was equal to the fair market value of ING's stock on
on the date of grant.
(3) Total dollar gains based on indicated rates of appreciation of share
price over a the five year term of the rights.
50
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[Shaded Section Header]
- -----------------------------------------------------------------------
UNAUDITED FINANCIAL STATEMENTS OF FIRST GOLDEN AMERICAN LIFE INSURANCE
COMPANY OF NEW YORK
- -----------------------------------------------------------------------
For the Six Months Ended June 30, 1999
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<PAGE>
First Golden American Life Insurance Company of New York
Condensed Statements of Operations (Unaudited)
(Dollars in thousands)
FOR THE SIX FOR THE SIX
MONTHS ENDED MONTHS ENDED
JUNE 30, 1999 JUNE 30, 1998
------------- -------------
REVENUES:
Annuity product charges $ 231 $ 77
Net investment income 1,046 867
Realized gains (losses) on investments (30) 24
Other income 16 --
------ ----
1,263 968
INSURANCE BENEFITS AND EXPENSES:
Annuity benefits:
Interest credited to account balances 318 128
Underwriting, acquisition, and
insurance expenses:
Commissions 309 764
General expenses 342 264
Insurance taxes, state licenses, and fees 153 94
Policy acquisition costs deferred (546) (953)
Amortization:
Deferred policy acquisition costs 123 26
Value of purchased insurance in force 4 8
Goodwill 1 1
------ ----
704 332
------ ----
Income before income taxes 559 636
Income taxes 196 223
------ ----
Net income $ 363 $413
====== ====
See accompanying notes.
52
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<PAGE>
First Golden American Life Insurance Company of New York
Condensed Balance Sheets (Unaudited)
(Dollars in thousands, except per share data)
JUNE 30, 1999 DECEMBER 31, 1998
------------- -----------------
ASSETS
Investments:
Fixed maturities, available for sale,
at fair value (cost: 1999-$29,064;
1998-$30,431) $28,573 $30,994
Short-term investments -- 3,231
------- -------
Total investments 28,573 34,225
Cash and cash equivalents 5,330 1,932
Due from affiliates 32 37
Accrued investment income 419 414
Deferred policy acquisition costs 2,869 2,347
Value of purchased insurance in force 123 117
Current income taxes recoverable -- 89
Property and equipment, less allowances for
depreciation of $23 in 1999 and $16 in 1998 48 48
Goodwill, less accumulated amortization of
$4 in 1999 and $3 in 1998 92 93
Other assets 28 15
Separate account assets 34,897 26,717
------- -------
Total assets $72,411 $66,034
======= =======
LIABILITIES AND STOCKHOLDER'S EQUITY
Policy liabilities and accruals:
Future policy benefits:
Annuity products $9,602 $10,830
Current income tax liability 36 --
Deferred income tax liability 710 850
Due to affiliates 73 17
Other liabilities 227 510
Separate account liabilities 34,897 26,717
------- -------
45,545 38,924
Commitments and contingencies
Stockholder's equity:
Preferred stock, par value $5,000 per share,
authorized 6,000 shares -- --
Common stock, par value $10 per share,
authorized, issued, and outstanding
200,000 shares 2,000 2,000
Additional paid-in capital 23,936 23,936
Accumulated other comprehensive income (loss) (271) 336
Retained earnings 1,201 838
------- -------
Total stockholder's equity 26,866 27,110
------- -------
Total liabilities and stockholder's equity $72,411 $66,034
======= =======
See accompanying notes.
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<PAGE>
First Golden American Life Insurance Company of New York
Condensed Statements of Cash Flows (Unaudited)
(Dollars in thousands)
FOR THE SIX FOR THE SIX
MONTHS ENDED MONTHS ENDED
JUNE 30, 1999 JUNE 30, 1998
------------- -------------
NET CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES $ 427 $ (109)
INVESTING ACTIVITIES
Sale, maturity or repayment of
fixed maturities - available for sale 2,285 836
Acquisition of fixed maturities
- available for sale (987) --
Short-term investments - net 3,231 684
Purchase of property and equipment (7) --
------- -------
Net cash provided by investing activities 4,522 1,520
FINANCING ACTIVITIES
Receipts from investment contracts
credited to account balances 416 2,377
Return of account balances on investment
contracts (80) (110)
Net reallocations to Separate Account (1,887) (170)
------- -------
Net cash provided by (used in) financing
activities (1,551) 2,097
------- -------
Increase in cash and cash equivalents 3,398 3,508
Cash and cash equivalents at beginning
of period 1,932 621
------- -------
Cash and cash equivalents at end of period $ 5,330 $ 4,129
======= =======
See accompanying notes.
54
<PAGE>
<PAGE>
First Golden American Life Insurance Company of New York
Notes to Condensed Financial Statements
June 30, 1999
1. BASIS OF PRESENTATION
The accompanying unaudited condensed financial statements have been
prepared in accordance with generally accepted accounting principles for
interim financial information and the instructions to Form 10-Q and
Article 10 of Regulation S-X. Accordingly, they do not include all of
the information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of
management, all adjustments considered necessary for a fair presentation
have been included. All adjustments were of a normal recurring nature,
unless otherwise noted in Management's Discussion and Analysis and the
Notes to Financial Statements. Operating results for the six months
ended June 30, 1999 are not necessarily indicative of the results that
may be expected for the year ending December 31, 1999. These financial
statements should be read in conjunction with the financial statements
and the related notes included in First Golden American Life Insurance
Company of New York's ("First Golden" or the "Company") annual report on
Form 10-K for the year ended December 31, 1998.
ORGANIZATION
First Golden is a stock life insurance company organized under the laws
of the State of New York and is a wholly owned subsidiary of Golden
American Life Insurance Company ("Golden American"). Golden American is
a wholly owned subsidiary of Equitable of Iowa Companies, Inc.
On October 24, 1997, PFHI Holdings, Inc. ("PFHI"), a Delaware
corporation, acquired all of the outstanding capital stock of Equitable
of Iowa Companies ("Equitable") according to the terms of an Agreement
and Plan of Merger dated July 7, 1997 among Equitable, PFHI, and ING
Groep N.V. ("ING"). PFHI is a wholly owned subsidiary of ING, a global
financial services holding company based in The Netherlands. As a result
of this transaction, Equitable was merged into PFHI, which was
simultaneously renamed Equitable of Iowa Companies, Inc., a Delaware
corporation.
FAIR VALUES
Estimated fair values of publicly traded fixed maturities for 1999 are as
reported by an independent pricing service.
STATUTORY
Net income for First Golden as determined in accordance with statutory
accounting practices was $538,000 and $39,000 for the six months ended
June 30, 1999 and 1998, respectively. Total statutory capital and
surplus was $24,889,000 at June 30, 1999 and $24,377,000 at December 31,
1998.
2. COMPREHENSIVE INCOME
As of January 1, 1998, the Company adopted the Statement of Financial
Accounting Standard ("SFAS") No. 130, "Reporting Comprehensive Income."
SFAS No. 130 establishes new rules for the reporting and display of
comprehensive income and its components; however, the adoption of this
statement had no impact on the Company's net income or stockholder's
equity. SFAS No. 130 requires unrealized gains or losses on the
Company's available for sale securities (net of adjustments for value of
purchased insurance in force ("VPIF"), deferred policy acquisition costs
("DPAC"), and deferred income taxes) to be included in other
comprehensive income.
Total comprehensive income (loss) for the second quarter of 1999 and 1998
amounted to $(226,000) and $379,000, respectively. During the first six
months of 1999 and 1998, total comprehensive income (loss) amounted to
$(244,000) and $573,000, respectively. Other comprehensive income (loss)
excludes net investment gains (losses) included in net income which
merely represent transfers from unrealized to realized gains and losses.
These amounts totaled $(40,000) and $32,000 during the first six months
of 1999 and 1998, respectively. Such amounts, which have been measured
through the date of sale, are net of income
55
<PAGE>
<PAGE>
First Golden American Life Insurance Company of New York
Notes to Condensed Financial Statements
June 30, 1999
2. COMPREHENSIVE INCOME (continued)
taxes and adjustments for VPIF and DPAC totaling $10,000 and $(8,000) for
the first six months of 1999 and 1998, respectively.
3. RELATED PARTY TRANSACTIONS
Directed Services, Inc. ("DSI"), an affiliate, acts as the principal
underwriter (as defined in the Securities Act of 1933 and the Investment
Company Act of 1940, as amended) and distributor of the variable
insurance products issued by the Company. DSI is authorized to enter
into agreements with broker/dealers to distribute the Company's variable
insurance products and appoint the broker/dealers as agents. The Company
paid commissions and expenses to DSI totaling $110,000 in the second
quarter and $309,000 for the first six months of 1999. For the second
quarter and first six months of 1998, the commissions and expenses were
$457,000 and $764,000, respectively.
The Company has an asset management agreement with ING Investment
Management LLC ("ING IM"), an affiliate, in which ING IM provides asset
management and accounting services. Under the agreement, the Company
records a fee based on the value of the assets under management. The fee
is payable quarterly. For the second quarters of 1999 and 1998, the
Company incurred fees of $16,000 and $14,000, respectively, under this
agreement. The Company incurred fees of $33,000 and $28,000 under this
agreement for the six months ending June 30, 1999 and 1998, respectively.
The Company has service agreements with Golden American and Equitable
Life Insurance Company of Iowa ("Equitable Life"), an affiliate, in which
Golden American and Equitable Life provide administrative and financial
related services. Under the agreement with Golden American, the Company
incurred expenses of $12,000 and $17,000 for the second quarters of 1999
and 1998, respectively, and $16,000 and $31,000 for the six months ended
June 30, 1999 and 1998, respectively. Under the agreement with Equitable
Life, the Company incurred expenses of $58,000 and $42,000 for the second
quarters of 1999 and 1998, respectively, and $98,000 and $82,000 for the
six months ended June 30, 1999 and 1998, respectively.
The Company provides resources and services to DSI. Revenues for these
services, which reduce general expenses incurred by the Company, totaled
$22,000 and $19,000 for the second quarters of 1999 and 1998,
respectively. For the six months ended June 30, 1999 and 1998, these
revenues were $54,000 and $38,000, respectively.
4. COMMITMENTS AND CONTINGENCIES
Reinsurance: At June 30, 1999, First Golden had a reinsurance treaty
with an unaffiliated reinsurer covering a significant portion of the
mortality risks under its variable contracts. First Golden remains
liable to the extent its reinsurer does not meet its obligations under
the reinsurance agreement. At June 30, 1999 and 1998, the Company had a
payable of $2,000 and $1,000, respectively, for reinsurance premiums.
Included in the accompanying financial statements are net considerations
to the reinsurer of $6,000 in the second quarter of 1999 and $8,000 for
the first six months of 1999. Also included are net considerations to
the reinsurer of $1,000 in the second quarter of 1998, and $3,000 for the
first six months of 1998.
Litigation: The Company, like other insurance companies, may be named or
otherwise involved in lawsuits, including class action lawsuits and
arbitrations. In some class action and other actions involving insurers,
substantial damages have been sought and/or material settlement or award
payments have been made. The Company currently believes no pending or
threatened lawsuits or actions exist that are reasonably likely to have a
material adverse impact on the Company.
Vulnerability from Concentrations: The Company has various
concentrations in its investment portfolio. The Company's asset growth,
net investment income, and cash flow are primarily generated from the
sale of variable annuities and associated future policy benefits.
Substantial changes in tax laws that would make
56
<PAGE>
<PAGE>
First Golden American Life Insurance Company of New York
Notes to Condensed Financial Statements
June 30, 1999
4. COMMITMENTS AND CONTINGENCIES (continued)
these products less attractive to consumers and extreme fluctuations in
interest rates or stock market returns, which may result in higher lapse
experience than assumed, could have a severe impact to the Company's
financial condition. Three broker/dealers, each having at least ten
percent of total sales, generated 86% of the Company's sales in the
six months ended June 30, 1999 (84% by two broker/dealers during the
same period in 1998). During 1998, 62% of the Company's sales resulted
from a relationship with one distributor. This relationship was
discontinued in 1999.
Revolving Note Payable: To enhance short-term liquidity, the Company has
established a revolving note payable effective July 27, 1998 and expiring
July 31, 1999, with SunTrust Bank, Atlanta (the "Bank"). The note was
approved by the Company's Board of Directors on September 29, 1998. The
total amount the Company may have outstanding is $10,000,000. The note
accrues interest at an annual rate equal to: (1) the cost of funds for
the Bank for the period applicable for the advance plus 0.25% or (2) a
rate quoted by the Bank to the Company for the advance. The terms of the
agreement require the Company to maintain the minimum level of Company
Action Level Risk Based Capital as established by applicable state law or
regulation. At June 30, 1999, the Company did not have any borrowings
under this agreement.
57
<PAGE>
<PAGE>
FINANCIAL STATEMENTS OF FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY
OF NEW YORK
REPORT OF INDEPENDENT AUDITORS
- ------------------------------------------------------------------------------
The Board of Directors and Stockholder
First Golden American Life Insurance Company of New York
We have audited the accompanying balance sheets of First Golden American Life
Insurance Company of New York as of December 31, 1998 and 1997, and the
related statements of operations, changes in stockholder's equity, and cash
flows for the year ended December 31, 1998 and for the periods from October 25,
1997 through December 31, 1997, January 1, 1997 through October 24, 1997, and
December 17, 1996 (commencement of operations) through 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 audit 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.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of First Golden American Life
Insurance Company of New York at December 31, 1998 and 1997, and the results
of its operations and its cash flows for the year ended December 31, 1998 and
for the periods from October 25, 1997 through December 31, 1997, January 1,
1997 through October 24, 1997, and December 17, 1996 through December 31,
1996, in conformity with generally accepted accounting principles.
/s/ Ernst & Young LLP
Des Moines, Iowa
February 12, 1999
58
<PAGE>
<PAGE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
BALANCE SHEETS
(Dollars in thousands, except per share data)
POST-MERGER
--------------------------------------
December 31, 1998 December 31, 1997
----------------- -----------------
ASSETS
Investments:
Fixed maturities, available for sale,
at fair value (cost: 1998 - $30,431;
1997 - $26,570) $30,994 $26,721
Short-term investments 3,231 799
------- -------
Total investments 34,225 27,520
Cash and cash equivalents 1,932 621
Due from affiliates 37 --
Accrued investment income 414 376
Deferred policy acquisition costs 2,347 189
Value of purchased insurance in force 117 126
Current income taxes recoverable 89 63
Property and equipment, less allowances
for depreciation of $16 in 1998 and
$3 in 1997 48 57
Goodwill, less accumulated amortization
of $3 in 1998 and $1 in 1997 93 95
Other assets 15 2
Separate account assets 26,717 4,878
------- -------
Total assets $66,034 $33,927
======= =======
59
<PAGE>
<PAGE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
BALANCE SHEETS - (CONTINUED)
(Dollars in thousands, except per share data)
POST-MERGER
--------------------------------------
December 31, 1998 December 31, 1997
----------------- -----------------
LIABILITIES AND STOCKHOLDER'S
EQUITY
Policy liabilities and accruals:
Future policy benefits:
Annuity products $10,830 $ 2,506
Deferred income tax liability 850 247
Due to affiliates 17 61
Other liabilities 510 140
Separate account liabilities 26,717 4,878
------- -------
38,924 7,832
Commitments and contingencies
Stockholder's equity:
Preferred stock, par value $5,000 per
share, authorized 6,000 shares -- --
Common stock, par value $10 per share,
authorized, issued and outstanding
200,000 shares 2,000 2,000
Additional paid-in capital 23,936 23,936
Accumulated other comprehensive income 336 96
Retained earnings 838 63
------- -------
Total stockholder's equity 27,110 26,095
------- -------
Total liabilities and stockholder's
equity $66,034 $33,927
======= =======
See accompanying notes.
60
<PAGE>
<PAGE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
STATEMENTS OF OPERATIONS
(Dollars in thousands)
<TABLE>
<CAPTION>
POST-MERGER PRE-MERGER
---------------------------| -----------------------------
For the period| For the period For the period
October 25,| January 1, December 17,
For the year 1997 | 1997 1996*
ended through | through through
December 31, December 31,| October 24, December 31,
1998 1997 | 1997 1996
------------ --------------| -------------- --------------
|
<S> <C> <C> <C> <C>
Revenues: |
Annuity product charges $ 239 $ 8 | $ 4 --
Net investment income 1,844 286 | 1,449 $ 65
Realized gains on investments 24 1 | -- --
-------- -------- | -------- --------
2,107 295 | 1,453 65
|
Insurance benefits and expenses: |
Annuity benefits: |
Interest credited to |
account balances 376 26 | 48 --
Underwriting, acquisition and |
insurance expenses: |
Commissions 1,754 141 | 267 --
General expenses 834 124 | 461 --
Insurance taxes 44 94 | 15 --
Policy acquisition costs |
deferred (2,264) (204)| (298) --
Amortization: |
Deferred policy acquisition |
costs 76 13 | 7 --
Value of purchased insurance |
in force 8 3 | -- --
Goodwill 2 1 | -- --
-------- -------- | -------- --------
830 198 | 500 --
-------- -------- | -------- --------
|
Income before income taxes 1,277 97 | 953 65
|
Income taxes 502 34 | 287 23
-------- -------- | -------- --------
|
Net income $ 775 $ 63 | $ 666 $ 42
======== ======== | ======== ========
</TABLE>
* Commencement of operations on December 17, 1996.
See accompanying notes.
61
<PAGE>
<PAGE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY
(Dollars in thousands)
<TABLE>
<CAPTION>
PRE-MERGER
--------------------------------------------------------------------------
Accumulated
Other
Additional Comprehensive Total
Common Paid-in Income Retained Stockholder's
Stock Capital (Loss) Earnings Equity
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Capitalization of Company
by issuance of common stock
and contribution of
paid-in capital* $2,000 $23,000 -- -- $25,000
Comprehensive loss:
Net income -- -- -- $42 42
Change in net unrealized
investment gains (losses) -- -- ($99) -- (99)
-------
Comprehensive loss (57)
------ ------- ----- ---- -------
Balance at December 31, 1996 2,000 23,000 (99) 42 24,943
Comprehensive income:
Net income -- -- -- 666 666
Change in net unrealized
investment gains (losses) -- -- (130) -- (130)
-------
Comprehensive income 536
------ ------- ----- ---- -------
Balance at October 24, 1997 $2,000 $23,000 ($229) $708 $25,479
====== ======= ===== ==== =======
<CAPTION>
POST-MERGER
--------------------------------------------------------------------------
Accumulated
Other
Additional Comprehensive Total
Common Paid-in Income Retained Stockholder's
Stock Capital (Loss) Earnings Equity
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Balance at October 25, 1997 $2,000 $23,936 -- -- $25,936
Comprehensive income:
Net income -- -- -- $63 63
Change in net unrealized
investment gains (losses) -- -- $96 -- 96
-------
Comprehensive income 159
------ ------- ----- ---- -------
Balance at December 31, 1997 2,000 23,936 96 63 26,095
Comprehensive income:
Net income -- -- -- 775 775
Change in net unrealized
investment gains (losses) -- -- 240 -- 240
-------
Comprehensive income 1,015
------ ------- ----- ---- -------
Balance at December 31, 1998 $2,000 $23,936 $336 $838 $27,110
====== ======= ===== ==== =======
</TABLE>
* Commencement of operations on December 17, 1996.
See accompanying notes.
62
<PAGE>
<PAGE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
STATEMENTS OF CASH FLOWS
(Dollars in thousands)
<TABLE>
<CAPTION>
POST-MERGER PRE-MERGER
------------ ------------ | ------------ ------------
For the | For the For the
period | period period
October 25, | January 1, December 17,
For the year 1997 | 1997 1996*
ended through | through through
December 31, December 31, | October 24, December 31,
1998 1997 | 1997 1996
------------ ------------ | ------------ ------------
<S> <C> <C> <C> <C>
OPERATING ACTIVITIES |
Net income $ 775 $ 63 | $ 666 $ 42
Adjustments to reconcile net income to net |
cash provided by (used in) operations: |
Adjustments related to annuity products: |
Interest credited to account balances 376 26 | 48 --
Charges for mortality and |
administration (11) -- | (1) --
Decrease (increase) in accrued |
investment income (38) 35 | (73) (58)
Policy acquisition costs deferred (2,264) (204) | (298) --
Amortization of deferred policy |
acquisition costs 76 13 | 7 --
Amortization of value of purchased |
insurance in force 8 3 | -- --
Net amortization of discount on |
short-term investments -- -- | -- (7)
Change in other assets, other liabilities |
and accrued income taxes 248 (625) | 739 24
Provision for depreciation |
and amortization 82 12 | 17 --
Provision for deferred income taxes 465 98 | 26 --
Realized gains on investments (24) (1) | -- --
-------- -------- | ------------ ------------
Net cash provided by (used in) |
operating activities (307) (580) | 1,131 1
|
INVESTING ACTIVITIES |
Sale, maturity or repayment of |
investments: |
Fixed maturities - available for sale 1,644 556 | 226 --
Short-term investments - net -- -- | -- 25,255
------------ ------------ | ------------ ------------
1,644 556 | 226 25,255
Acquisition of investments: |
Fixed maturities - available for sale (5,549) (2,635) | -- (24,653)
Short-term investments - net (2,432) (59) | (390) (25,598)
------------ ------------ | ------------ ------------
(7,981) (2,694) | (390) (50,251)
Purchase of property and equipment (4) (2) | (64) --
------------ ------------ | ------------ ------------
Net cash used in investing activities (6,341) (2,140) | (228) (24,996)
* Commencement of operations on December 17, 1996.
See accompanying notes.
63
<PAGE>
<PAGE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
STATEMENTS OF CASH FLOWS - (CONTINUED)
(Dollars in thousands)
</TABLE>
<TABLE>
<CAPTION>
POST-MERGER PRE-MERGER
------------ ------------ | ------------ ------------
For the | For the For the
period | period period
October 25, | January 1, December 17,
For the year 1997 | 1997 1996*
ended through | through through
December 31, December 31, | October 24, December 31,
1998 1997 | 1997 1996
------------ ------------ | ------------ ------------
<S> <C> <C> <C> <C>
FINANCING ACTIVITIES |
Capitalization of Company by issuance |
of common stock and contribution |
of paid-in capital -- -- | -- 25,000
Receipts from investment contracts |
credited to account balances 9,009 354 | 2,160 --
Return of account balances |
on investment contracts (178) (8) | (15) --
Net reallocations to Separate Account (872) (20) | (38) --
-------- -------- | -------- --------
Net cash provided by financing |
activities 7,959 326 | 2,107 25,000
-------- -------- | -------- --------
Increase (decrease) in cash and |
cash equivalents 1,311 (2,394) | 3,010 5
|
Cash and cash equivalents at |
beginning of period 621 3,015 | 5 --
-------- -------- | -------- --------
Cash and cash equivalents at end |
of period $ 1,932 $ 621 | $ 3,015 $ 5
======== ======== | ======== ========
|
SUPPLEMENTAL DISCLOSURE OF CASH FLOW |
INFORMATION |
Cash paid during the period for |
income taxes $99 -- | $283 --
</TABLE>
* Commencement of operations on December 17, 1996.
See accompanying notes.
64
<PAGE>
<PAGE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO FINANCIAL STATEMENTS
December 31, 1998
1. SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION
First Golden American Life Insurance Company of New York ("First Golden" or
"Company"), a wholly owned subsidiary of Golden American Life Insurance
Company ("Golden American" or "Parent"), was incorporated on May 24, 1996.
Golden American is a wholly owned subsidiary of Equitable of Iowa Companies,
Inc. On December 17, 1996, Golden American provided capitalization in the
amount of $25,000,000 to First Golden. First Golden commenced investment
operations on December 17, 1996. On January 2, 1997 and December 23, 1997,
First Golden became licensed as a life insurance company under the laws of
the states of New York and Delaware, respectively. First Golden received
policy approvals on March 25, 1997 and December 23, 1997 in New York and
Delaware, respectively. The Company's products are marketed by
broker/dealers, financial institutions and insurance agents. The Company's
primary customers are consumers and corporations. See Note 8 for further
information regarding related party transactions.
On October 24, 1997, PFHI Holdings, Inc. ("PFHI"), a Delaware corporation,
acquired all of the outstanding capital stock of Equitable of Iowa Companies
("Equitable") according to the terms of an Agreement and Plan of Merger
("Merger Agreement") dated July 7, 1997 among Equitable, PFHI and ING Groep
N.V. ("ING"). PFHI is a wholly owned subsidiary of ING, a global financial
services holding company based in The Netherlands. As a result of this
transaction, Equitable was merged into PFHI, which was simultaneously renamed
Equitable of Iowa Companies, Inc. ("EIC"), a Delaware corporation. See
Note 6 for additional information regarding the merger.
For financial statement purposes, the ING merger was accounted for as a
purchase effective October 25, 1997. The merger resulted in a new basis of
accounting reflecting estimated fair values of assets and liabilities. As a
result, the Company's financial statements for the periods after October 24,
1997 are presented on the Post-Merger new basis of accounting and financial
statements for October 24, 1997 and prior periods are presented on the Pre-
Merger historical cost basis of accounting.
INVESTMENTS
FIXED MATURITIES: The Company accounts for its investments under the
Statement of Financial Accounting Standards ("SFAS") No. 115, "Accounting for
Certain Investments in Debt and Equity Securities," which requires fixed
maturities to be designated as either "available for sale," "held for
investment" or "trading." Sales of fixed maturities designated as "available
for sale" are not restricted by SFAS No. 115. Available for sale securities
are reported at fair value and unrealized gains and losses on these
securities are included directly in stockholder's equity after adjustment for
related changes in value of purchased insurance in force ("VPIF"), deferred
policy acquisition costs ("DPAC") and deferred income taxes. At December 31,
1998 and 1997, all of the Company's fixed maturities are designated as
available for sale, although the Company is not precluded from designating
fixed maturities as held for investment or trading at some future date.
Securities determined to have a decline in value that is other than temporary
are written down to estimated fair value, which becomes the new cost basis by
a charge to realized losses in the Company's Statements of Operations.
Premiums and discounts are amortized/accrued utilizing a method which results
in a constant yield over the securities' expected lives. Amortization/accrual
of premiums and discounts on mortgage-backed securities incorporates a
prepayment assumption to estimate the securities' expected lives.
OTHER INVESTMENTS: Short-term investments are reported at cost, adjusted for
amortization of premiums and accrual of discounts.
65
<PAGE>
<PAGE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO FINANCIAL STATEMENTS
December 31, 1998
1. SIGNIFICANT ACCOUNTING POLICIES (continued)
REALIZED GAINS AND LOSSES: Realized gains and losses are determined on the
basis of specific identification and average cost methods for manager
initiated and issuer initiated disposals, respectively.
FAIR VALUES: Estimated fair values, as reported herein, of conventional
mortgage-backed securities not actively traded in a liquid market and
publicly traded fixed maturities are estimated using a third party pricing
system. This pricing system uses a matrix calculation assuming a spread over
U. S. Treasury bonds based upon the expected average lives of the securities.
Fair values of private placement bonds are estimated using a matrix that
assumes a spread (based on interest rates and a risk assessment of the bonds)
over U. S. Treasury bonds.
CASH AND CASH EQUIVALENTS
For purposes of the Statements of Cash Flows, the Company considers all
demand deposits and interest-bearing accounts not related to the investment
function to be cash equivalents. All interest-bearing accounts classified as
cash equivalents have original maturities of three months or less.
DEFERRED POLICY ACQUISITION COSTS
Certain costs of acquiring new insurance business, principally first year
commissions and other expenses related to the production of new business,
have been deferred. Acquisition costs for variable annuity products are being
amortized generally in proportion to the present value (using the assumed
crediting rate) of expected future gross profits. This amortization is
adjusted retrospectively when the Company revises its estimate of current or
future gross profits to be realized from a group of products. DPAC is
adjusted to reflect the pro forma impact of unrealized gains and losses on
fixed maturity securities the Company has designated as "available for sale"
under SFAS No. 115.
VALUE OF PURCHASED INSURANCE IN FORCE
As the result of the merger, a portion of the purchase price was allocated to
the right to receive future cash flows from the existing insurance contracts.
This allocated cost represents VPIF which reflects the value of those
purchased policies calculated by discounting actuarially determined expected
future cash flows at the discount rate determined by the purchaser.
Amortization of VPIF is charged to expense in proportion to expected gross
profits of the underlying business. This amortization is adjusted
retrospectively when the Company revises its estimate of current or future
gross profits to be realized from the insurance contracts acquired. VPIF is
adjusted to reflect the pro forma impact of unrealized gains and losses on
available for sale fixed maturities. See Note 6 for additional information on
VPIF resulting from the merger.
PROPERTY AND EQUIPMENT
Property and equipment primarily represent leasehold improvements and office
furniture and equipment and are not considered to be significant to the
Company's overall operations. Property and equipment are reported at cost
less allowances for depreciation. Depreciation expense is computed primarily
on the basis of the straight-line method over the estimated useful lives of
the assets.
GOODWILL
Goodwill was established as a result of the merger and is being amortized
over 40 years on a straight-line basis. See Note 6 for additional information
on the merger.
66
<PAGE>
<PAGE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO FINANCIAL STATEMENTS
December 31, 1998
1. SIGNIFICANT ACCOUNTING POLICIES (continued)
FUTURE POLICY BENEFITS
Future policy benefits for the fixed interest division of the variable
products are established utilizing the retrospective deposit accounting
method. Policy reserves represent the premiums received plus accumulated
interest, less mortality and administration charges. Interest credited to
these policies ranged from 3.95% to 7.10% during 1998 and 5.60% to 7.50%
during 1997.
SEPARATE ACCOUNT
Assets and liabilities of the separate account reported in the accompanying
Balance Sheets represent funds that are separately administered principally
for variable annuity contracts. Contractowners, rather than the Company, bear
the investment risk for the variable products. At the direction of the
contractowners, the separate account invests the premiums from the sale of
variable annuity products in shares of specified mutual funds. The assets and
liabilities of the separate account are clearly identified and segregated
from other assets and liabilities of the Company. The portion of the separate
account assets equal to the reserves and other liabilities of variable
annuity contracts cannot be charged with liabilities arising out of any other
business the Company may conduct.
Variable separate account assets are carried at fair value of the underlying
investments and generally represent contractowner investment values
maintained in the accounts. Variable separate account liabilities represent
account balances for the variable annuity contracts invested in the separate
account; the fair value of these liabilities is equal to their carrying
amount. Net investment income and realized and unrealized capital gains and
losses related to separate account assets are not reflected in the
accompanying Statements of Operations.
Product charges recorded by the Company from variable annuity products
consist of charges applicable to each contract for mortality and expense
risk, contract administration and surrender charges.
DEFERRED INCOME TAXES
Deferred tax assets or liabilities are computed based on the difference
between the financial statement and income tax bases of assets and
liabilities using the enacted marginal tax rate. Deferred tax assets or
liabilities are adjusted to reflect the pro forma impact of unrealized gains
and losses on fixed maturities the Company has designated as available for
sale under SFAS No. 115. Changes in deferred tax assets or liabilities
resulting from this SFAS No. 115 adjustment are charged or credited directly
to stockholder's equity. Deferred income tax expenses or credits reflected in
the Company's Statements of Operations are based on the changes in the
deferred tax asset or liability from period to period (excluding the SFAS No.
115 adjustment).
DIVIDEND RESTRICTIONS
Under the provisions of the insurance laws of the State of New York, First
Golden cannot distribute any dividends to its stockholder unless a notice of
its intention to declare a dividend and the amount of the dividend has been
filed at least thirty days in advance of the proposed declaration. If the
Superintendent finds the financial condition of the Company does not warrant
the distribution, the Superintendent may disapprove the distribution by
giving written notice to the Company within thirty days after the filing.
67
<PAGE>
<PAGE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO FINANCIAL STATEMENTS
December 31, 1998
1. SIGNIFICANT ACCOUNTING POLICIES (continued)
SEGMENT REPORTING
As of December 31, 1998, the Company adopted SFAS No. 131, "Disclosures about
Segments of an Enterprise and Related Information." SFAS No. 131 superseded
SFAS No. 14, "Financial Reporting for Segments of a Business Enterprise."
SFAS No. 131 establishes standards for the way public business enterprises
report information about operating segments in annual financial statements
and requires enterprises to report selected information about operating
segments in interim financial reports. SFAS No. 131 also establishes
standards for related disclosures about products and services, geographic
areas and major customers.
The Company manages its business as one segment, the sale of variable
products designed to meet customer needs for tax-advantaged methods of saving
for retirement and protection from unexpected death. Variable products are
sold to consumers and corporations throughout New York. The adoption of SFAS
No. 131 did not affect the results of operations or financial position of the
Company.
USE OF ESTIMATES
The preparation of the financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions affecting the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
Management is required to utilize historical experience and assumptions about
future events and circumstances in order to develop estimates of material
reported amounts and disclosures. Included among the material (or potentially
material) reported amounts and disclosures that require extensive use of
estimates and assumptions are (1) estimates of fair values of investments in
securities and other financial instruments, as well as fair values of
policyholder liabilities, (2) policyholder liabilities, (3) deferred policy
acquisition costs and value of purchased insurance in force, (4) fair values
of assets and liabilities recorded as a result of the merger transaction, (5)
asset valuation allowances, (6) deferred tax benefits (liabilities) and (7)
estimates for commitments and contingencies including legal matters, if a
liability is anticipated and can be reasonably estimated. Estimates and
assumptions regarding all of the preceding are inherently subject to change
and are reassessed periodically. Changes in estimates and assumptions could
materially impact the financial statements.
RECLASSIFICATIONS
Certain amounts in the financial statements for the periods ended within the
years ended December 31, 1997 and 1996 have been reclassified to conform to
the December 31, 1998 financial statement presentation.
2. BASIS OF FINANCIAL REPORTING
The financial statements of the Company differ from related statutory-basis
financial statements principally as follows: (1) acquisition costs of
acquiring new business are deferred and amortized over the life of the
policies rather than charged to operations as incurred; (2) an asset
representing the present value of future cash flows from insurance contracts
acquired was established as a result of the merger and is amortized and
charged to expense; (3) future policy benefit reserves for the fixed interest
division of the variable products are based on full account values, rather
than the greater of cash surrender value or amounts derived from discounting
methodologies utilizing statutory interest rates; (4) reserves are reported
before reduction for reserve credits related to reinsurance ceded and a
receivable is established, net of an allowance for uncollectible amounts, for
these credits rather than presented net of these credits; (5) fixed maturity
investments are designated as "available for sale" and valued at fair value
with
68
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<PAGE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO FINANCIAL STATEMENTS
December 31, 1998
1. BASIS OF FINANCIAL REPORTING (continued)
unrealized appreciation/depreciation, net of adjustments to value of
purchased insurance in force, deferred policy acquisition costs and deferred
income taxes (if applicable), credited/charged directly to stockholder's
equity rather than valued at amortized cost; (6) the carrying value of fixed
maturities is reduced to fair value by a charge to realized losses in the
Statements of Operations when declines in carrying value are judged to be
other than temporary, rather than through the establishment of a formula-
determined statutory investment reserve (carried as a liability), changes in
which are charged directly to surplus; (7) deferred income taxes are provided
for the difference between the financial statement and income tax bases of
assets and liabilities; (8) net realized gains or losses attributed to
changes in the level of interest rates in the market are recognized when the
sale is completed rather than deferred and amortized over the remaining life
of the fixed maturity security; (9) revenues for variable annuity products
consist of policy administration charges and surrender charges assessed
rather than premiums received; and (10) assets and liabilities are restated
to fair values when a change in ownership occurs, with provisions for
goodwill and other intangible assets, rather than continuing to be presented
at historical cost.
A reconciliation of net income and stockholder's equity as reported to
regulatory authorities under statutory accounting principles to equivalent
amounts reported under generally accepted accounting principles is as
follows:
POST-MERGER | PRE-MERGER
-------------------------- |-------------
|
Net Income | Net Income
-------------------------- |-------------
For the | For the
period | period
October 25, | January 1,
For the year 1997 | 1997
ended through | through
December 31, December 31, | October 24,
1998 1997 | 1997
------------ ------------ | ------------
(Dollars in thousands)
As reported under statutory |
accounting principles ($966) ($142) | $581
Interest maintenance reserve 14 1 | --
Asset valuation reserve -- -- | --
Future policy benefits 45 115 | (179)
Nonadmitted assets -- -- | --
Net unrealized appreciation of fixed |
maturities at fair value -- -- | --
Change in investment basis |
as result of merger (39) (1) | --
Deferred policy acquisition costs 2,188 191 | 291
Value of purchased insurance in force (8) (3) | --
Goodwill (2) (1) | --
Deferred income taxes (465) (98) | (26)
Other 8 1 | (1)
------- ------ | -------
As reported herein $775 $63 | $666
======= ====== =======
POST-MERGER
---------------------------
Stockholder's Equity
---------------------------
December 31, December 31,
1998 1997
------------- ------------
(Dollars in thousands)
As reported under statutory
accounting principles $24,377 $25,424
Interest maintenance reserve 15 1
Asset valuation reserve 96 54
Future policy benefits (16) (61)
Nonadmitted assets 43 2
Net unrealized appreciation of fixed
maturities at fair value 563 151
Change in investment basis
as result of merger 318 357
Deferred policy acquisition costs 2,347 189
Value of purchased insurance in force 117 126
Goodwill 93 95
Deferred income taxes (850) (247)
Other 7 4
-------- --------
As reported herein $27,110 $26,095
========= =========
69
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<PAGE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO FINANCIAL STATEMENTS
December 31, 1998
3. INVESTMENT OPERATIONS
INVESTMENT RESULTS
Major categories of net investment income are summarized below:
POST-MERGER | PRE-MERGER
---------------------------|---------------------------
For the | For the For the
period | period period
October 25,| January 1, December 17,
For the year 1997 | 1997 1996
ended through | through through
December 31, December 31,| October 24, December 31,
1998 1997 | 1997 1996
------------- ------------|------------- ------------
(Dollars in thousands)
[S] [C] [C] | [C] [C]
Fixed maturities $1,726 $294 | $1,449 $57
Short-term investments 157 13 | 30 9
Other, net -- -- | 2 --
------ ------ | ------ ------
Gross investment income 1,883 307 | 1,481 66
Less investment expenses (39) (21)| (32) (1)
------ ------ | ------ ------
Net investment income $1,844 $286 | $1,449 $65
====== ====== ====== ======
The change in unrealized appreciation (depreciation) on fixed maturities
designated as available for sale at fair value for the year ended
December 31, 1998, the period October 25, 1997 through December 31, 1997, the
period January 1, 1997 through October 24, 1997 and the period December 17,
1996 through December 31, 1996 were $412,000, $(212,000), $516,000 and
$(153,000), respectively.
At December 31, 1998 and December 31, 1997, amortized cost, gross unrealized
gains and losses and estimated fair values of fixed maturities, all of which
are designated as available for sale, are as follows:
POST-MERGER
-----------------------------------------------
Gross Gross Estimated
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
-----------------------------------------------
(Dollars in thousands)
December 31, 1998
- ----------------------------
U.S. government and
governmental agencies
and authorities $3,997 $118 ($3) $4,112
Public utilities 2,543 63 (4) 2,602
Corporate securities 20,351 426 (53) 20,724
Mortgage-backed securities 3,540 17 (1) 3,556
-------- -------- -------- --------
Total $30,431 $624 ($61) $30,994
======== ======== ======== ========
December 31, 1997
- ----------------------------
U.S. government and
governmental agencies
and authorities $3,033 $4 -- $3,037
Public utilities 1,000 10 -- 1,010
Corporate securities 17,921 160 ($32) 18,049
Mortgage-backed securities 4,616 9 -- 4,625
-------- -------- -------- --------
Total $26,570 $183 ($32) $26,721
======== ======== ======== ========
70
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<PAGE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO FINANCIAL STATEMENTS
December 31, 1998
3. INVESTMENT OPERATIONS (continued)
At December 31, 1998, net unrealized investment gains on fixed maturities
designated as available for sale totaled $563,000. Appreciation of $336,000
was included in stockholder's equity at December 31, 1998 (net of an
adjustment of $5,000 to VPIF, an adjustment of $32,000 to DPAC and deferred
income taxes of $190,000). Short-term investments with maturities of 30 days
or less have been excluded from the above schedules. Amortized cost
approximates fair values for these securities.
Amortized cost and estimated fair value of fixed maturities designated as
available for sale, by contractual maturity, at December 31, 1998 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 or prepayment penalties.
POST-MERGER
-----------------------------
Estimated
Amortized Fair
December 31, 1998 Cost Value
- -----------------------------------------------------------------------------
(Dollars in thousands)
Due after one year through five years $11,659 $11,800
Due after five years through ten years 15,232 15,638
--------- ---------
26,891 27,438
Mortgage-backed securities 3,540 3,556
--------- ---------
Total $30,431 $30,994
========== ==========
An analysis of sales, maturities and principal repayments of the Company's
fixed maturities portfolio is as follows:
Gross Gross Proceeds
Amortized Realized Realized from
Cost Gains Losses Sale
- -----------------------------------------------------------------------------
(Dollars in thousands)
POST-MERGER:
For the year ended December 31, 1998:
Scheduled principal repayments,
calls and tenders $1,080 -- -- $1,080
Sales 540 $24 -- 564
-------- -------- -------- -------
Total $1,620 $24 -- $1,644
======== ======== ======== =======
For the period October 25, 1997
through December 31, 1997:
Scheduled principal repayments,
calls and tenders $555 $1 -- $556
======== ======== ======== =======
PRE-MERGER:
For the period January 1, 1997
through October 24, 1997:
Scheduled principal repayments,
calls and tenders $226 -- -- $226
======== ======== ======== =======
71
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<PAGE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO FINANCIAL STATEMENTS
December 31, 1998
3. INVESTMENT OPERATIONS (continued)
For the period December 17, 1996 through December 31, 1996, the Company did
not have any sales, maturities or repayments of its fixed maturities
portfolio.
For the periods October 25, 1997 through December 31, 1997 and January 1,
1997 and October 24, 1997, the amortized cost basis of the Company's fixed
maturities portfolio was reduced by $43,000 and $226,000, respectively, as a
result of scheduled principal repayments.
INVESTMENT VALUATION ANALYSIS: The Company analyzes its investment portfolio
at least quarterly in order to determine if the carrying value of any
investment has been impaired. The carrying value of fixed maturities is
written down to fair value by a charge to realized losses when an impairment
in value appears to be other than temporary. During 1998, 1997 and 1996, no
investments were identified as having an impairment other than temporary.
INVESTMENTS ON DEPOSIT: At December 31, 1998 and 1997, affidavits of deposits
covering bonds with a par value of $400,000 were on deposit with regulatory
authorities pursuant to certain statutory requirements.
INVESTMENT DIVERSIFICATIONS: The Company's investment policies related to its
investment portfolio require diversification by asset type, company and
industry and set limits on the amount which can be invested in an individual
issuer. Such policies are at least as restrictive as those set forth by
regulatory authorities. The following percentages relate to holdings at
December 31, 1998 and December 31, 1997. Fixed maturities included
investments in basic industrials (40% in 1998, 31% in 1997), financial
companies (24% in 1998, 23% in 1997), various government bonds and government
or agency mortgage-backed securities (13% in 1998, 29% in 1997), conventional
mortgage-backed securities (11% in 1998) and consumer products (3% in 1998,
10% in 1997).
No investment in any person or its affiliates (other than bonds issued by
agencies of the United States government) exceed ten percent of stockholder's
equity at December 31, 1998.
4. COMPREHENSIVE INCOME
As of January 1, 1998, the Company adopted SFAS No. 130, "Reporting
Comprehensive Income." SFAS No. 130 establishes new rules for the reporting
and display of comprehensive income and its components; however, the adoption
of this statement had no impact on the Company's net income or stockholder's
equity. SFAS No. 130 requires unrealized gains or losses on the Company's
available for sale securities (net of VPIF, DPAC and deferred income taxes)
to be included in other comprehensive income. Prior to the adoption of SFAS
No. 130 unrealized gains or losses were reported separately in stockholder's
equity. Prior year financial statements have been reclassified to conform to
the requirements of SFAS No. 130.
Other comprehensive income excludes net investment gains (losses) included in
net income which merely represent transfers from unrealized to realized gains
and losses. These amounts totaled $16,000 in 1998. Such amounts, which have
been measured through the date of sale, are net of income taxes and
adjustments to VPIF and DPAC totaling $8,000 in 1998.
72
<PAGE>
<PAGE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO FINANCIAL STATEMENTS
December 31, 1998
5. FAIR VALUES OF FINANCIAL INSTRUMENTS
SFAS No. 107, "Disclosures about Fair Value of Financial Instruments,"
requires disclosure of estimated fair value of all financial instruments,
including both assets and liabilities recognized and not recognized in a
company's balance sheet, unless specifically exempted. SFAS No. 119,
"Disclosure about Derivative Financial Instruments and Fair Value of
Financial Instruments," requires additional disclosures about derivative
financial instruments. Most of the Company's investments, investment
contracts and debt fall within the standards' definition of a financial
instrument. In cases where quoted market prices are not available, estimated
fair values are based on estimates using present value or other valuation
techniques. Those techniques are significantly affected by the assumptions
used, including the discount rate and estimates of future cash flows.
Accounting, actuarial and regulatory bodies are continuing to study the
methodologies to be used in developing fair value information, particularly
as it relates to such things as liabilities for insurance contracts.
Accordingly, care should be exercised in deriving conclusions about the
Company's business or financial condition based on the information presented
herein.
The Company closely monitors the composition and yield of its invested
assets, the duration and interest credited on insurance liabilities and
resulting interest spreads and timing of cash flows. These amounts are taken
into consideration in the Company's overall management of interest rate risk,
which attempts to minimize exposure to changing interest rates through the
matching of investment cash flows with amounts expected to be due under
insurance contracts. These assumptions may not result in values consistent
with those obtained through an actuarial appraisal of the Company's business
or values that might arise in a negotiated transaction.
The following compares carrying values as shown for financial reporting
purposes with estimated fair values:
POST-MERGER
------------------------------------------------
December 31 1998 1997
- -------------------------------------------------------------------------------
Estimated Estimated
Carrying Fair Carrying Fair
Value Value Value Value
----------------------- -----------------------
(Dollars in thousands)
ASSETS
Fixed maturities, available
for sale $30,994 $30,994 $26,721 $26,721
Short-term investments 3,231 3,231 799 799
Cash and cash equivalents 1,932 1,932 621 621
Separate account assets 26,717 26,717 4,878 4,878
LIABILITIES
Annuity products 10,830 10,166 2,506 2,377
Separate account liabilities 26,717 26,717 4,878 4,878
The following methods and assumptions were used by the Company in estimating
fair values.
FIXED MATURITIES: Estimated fair values of conventional mortgage-backed
securities not actively traded in a liquid market and publicly traded fixed
maturities are estimated using a third party pricing system. This pricing
system uses a matrix calculation assuming a spread over U. S. Treasury bonds
based upon the expected average lives of the securities.
73
<PAGE>
<PAGE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO FINANCIAL STATEMENTS
December 31, 1998
5. FAIR VALUES OF FINANCIAL INSTRUMENTS (continued)
SHORT-TERM INVESTMENTS AND CASH AND CASH EQUIVALENTS: Carrying values
reported in the Company's historical cost basis balance sheet approximate
estimated fair value for these instruments due to their short-term nature.
SEPARATE ACCOUNT ASSETS: Separate account assets are reported at the quoted
fair values of the individual securities in the separate account.
ANNUITY PRODUCTS: Estimated fair values of the Company's liabilities for
future policy benefits for the fixed interest division of the variable
products are stated at cash surrender value, the cost the Company would incur
to extinguish the liability.
SEPARATE ACCOUNT LIABILITIES: Separate account liabilities are reported at
full account value in the Company's historical cost balance sheet. Estimated
fair values of separate account liabilities are equal to their carrying
amount.
6. MERGER
TRANSACTION: On October 23, 1997, Equitable's shareholders approved the
Merger Agreement dated July 7, 1997 among Equitable, PFHI and ING. On October
24, 1997, PFHI, a Delaware corporation, acquired all of the outstanding
capital stock of Equitable according to the Merger Agreement. PFHI is a
wholly owned subsidiary of ING, a global financial services holding company
based in The Netherlands. Equitable, an Iowa corporation, in turn, owned all
the outstanding capital stock of Equitable Life Insurance Company of Iowa and
Golden American and their wholly owned subsidiaries. In addition, Equitable
also owned all the outstanding capital stock of Locust Street Securities,
Inc., Equitable Investment Services, Inc. (subsequently dissolved), Directed
Services, Inc., Equitable of Iowa Companies Capital Trust, Equitable of Iowa
Companies Capital Trust II and Equitable of Iowa Securities Network, Inc.
(subsequently renamed ING Funds Distributor, Inc.). In exchange for the
outstanding capital stock of Equitable, ING paid total consideration of
approximately $2.1 billion in cash and stock plus the assumption of
approximately $400 million in debt. As a result of this transaction,
Equitable was merged into PFHI, which was simultaneously renamed Equitable of
Iowa Companies, Inc. ("EIC"), a Delaware corporation. All costs of the
merger, including expenses to terminate certain benefit plans, were paid by
EIC.
ACCOUNTING TREATMENT: The merger has been accounted for as a purchase
resulting in a new basis of accounting, reflecting estimated fair values for
assets and liabilities at October 24, 1997. The purchase price was allocated
to EIC and its subsidiaries with $25,936,000 allocated to the Company.
Goodwill was established for the excess of the merger cost over the fair
value of the net assets and attributed to EIC and its subsidiaries including
Golden American and First Golden. The amount of goodwill allocated to the
Company relating to the merger was $96,000 at the merger date and is being
amortized over 40 years on a straight-line basis. The carrying value of
goodwill will be reviewed periodically for any indication of impairment in
value.
VALUE OF PURCHASED INSURANCE IN FORCE: As part of the merger, a portion of
the acquisition cost was allocated to the right to receive future cash flows
from the insurance contracts existing with the Company at the merger date.
This allocated cost represents VPIF reflecting the value of those purchased
policies calculated by discounting the actuarially determined expected future
cash flows at the discount rate determined by ING.
74
<PAGE>
<PAGE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO FINANCIAL STATEMENTS
December 31, 1998
6. MERGER (continued)
An analysis of the VPIF asset is as follows:
POST-MERGER
--------------------------------------
For the period
October 25, 1997
For the year ended through
December 31, 1998 December 31, 1997
------------------ -----------------
(Dollars in thousands)
Beginning balance $126 $132
------ -------
Imputed interest 9 3
Amortization (23) (6)
Changes in assumptions of timing
of gross profits 6 --
------ -------
Net amortization (8) (3)
Adjustment for unrealized gains
on available for sale securities (1) (3)
------ -------
Ending balance $117 $126
====== =======
Interest is imputed on the unamortized balance of VPIF at a rate of 7.06% for
the year ended December 31, 1998 and 7.03% for the period October 25, 1997
through December 31, 1997. The amortization of VPIF, net of imputed interest,
is charged to expense. VPIF is adjusted for the unrealized gains (losses) on
available for sale securities; such changes are included directly in
stockholder's equity. Based on current conditions and assumptions as to the
impact of future events on acquired policies in force, the expected
approximate net amortization relating to VPIF as of December 31, 1998 is
$10,000 in 1999, $12,000 in 2000, $13,000 in 2001, $13,000 in 2002, and
$12,000 in 2003. Actual amortization may vary based upon changes in
assumptions and experience.
7. INCOME TAXES
The Company files a consolidated federal income tax return with Golden
American, also a life insurance company.
At December 31, 1998, the Company has a net operating loss ("NOL")
carryforward for federal income tax purposes of approximately $935,000 which
is available to offset future taxable income of the Company through the year
2018.
75
<PAGE>
<PAGE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO FINANCIAL STATEMENTS
December 31, 1998
7. INCOME TAXES (continued)
INCOME TAX EXPENSE
Income tax expense included in the financial statements is as follows:
POST-MERGER | PRE-MERGER
--------------------------- | ---------------------------
For the | For the For the
period | period period
October 25, | January 1, December 17,
For the year 1997 | 1997 1996
ended through | through through
December 31, December 31, | October 24, December 31,
1998 1997 | 1997 1996
------------ ------------ | ------------ -----------
(Dollars in thousands)
Current $37 ($64) | $261 $23
Deferred 465 98 | 26 --
------ ------ | ------ ------
$502 $34 | $287 $23
====== ====== ====== ======
The effective tax rate on income before income taxes is different from the
prevailing federal income tax rate. A reconciliation of this difference is as
follows:
POST-MERGER | PRE-MERGER
---------------------------|---------------------------
For the | For the For the
period | period period
October 25,| January 1, December 17,
For the year 1997 | 1997 1996
ended through | through through
December 31, December 31,| October 24, December 31,
1998 1997 | 1997 1996
------------- ----------- | ------------ ------------
(Dollars in thousands)
Income before income tax $1,277 $97 | $953 $65
======== ======== | ======== ========
Income tax at federal |
statutory rate $447 $34 | $334 $23
Tax effect (decrease) of: |
Compensatory stock option |
and restricted stock |
expense -- -- | (35) --
Other items 55 -- | (12) --
-------- -------- | -------- --------
Income tax expense $502 $34 | $287 $23
======== ======== ======== ========
76
<PAGE>
<PAGE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO FINANCIAL STATEMENTS
December 31, 1998
7. INCOME TAXES (continued)
DEFERRED INCOME TAXES
The tax effect of temporary differences giving rise to the Company's deferred
income tax assets and liabilities at December 31, 1998 and 1997 is as
follows:
POST-MERGER
------------------------------------
December 31, 1998 December 31, 1997
- ------------------------------------------------------------ -----------------
(Dollars in thousands)
[S] [C] [C]
Deferred tax assets:
Future policy benefits $11 $22
Net operating loss carryforwards 327 --
--------- ---------
338 22
Deferred tax liabilities:
Net unrealized appreciation of available for
sale fixed maturities (184) (51)
Fixed maturities (222) (134)
Deferred policy acquisition costs (714) (39)
Value of purchased insurance in force (41) (45)
Other (27) --
--------- ---------
(1,188) (269)
--------- ---------
Deferred income tax liability ($850) ($247)
========= =========
8. RELATED PARTY TRANSACTIONS
Directed Services, Inc. ("DSI") acts as the principal underwriter (as defined
in the Securities Act of 1933 and the Investment Company Act of 1940, as
amended) and distributor of the variable insurance products issued by the
Company. DSI is authorized to enter into agreements with broker/dealers to
distribute the Company's variable insurance products and appoint
representatives of the broker/dealers as agents. As of December 31, 1998, the
Company's variable insurance products were sold primarily through three
broker/dealer institutions. The Company paid commissions and expenses to DSI
totaling $1,754,000 for the year ended December 31, 1998. For the period
October 25, 1997 through December 31, 1997 and January 1, 1997 through
October 24, 1997, the commissions and expenses were $141,000 and $267,000,
respectively.
The Company has service agreements with Golden American and Equitable Life
Insurance Company of Iowa ("Equitable Life"), an affiliate, in which Golden
American and Equitable Life provide administrative and financial related
services. For the year ended December 31, 1998, the Company incurred expenses
of $248,000 and $165,000, respectively, from Golden American and Equitable
Life under these agreements. For the periods October 25, 1997 through
December 31, 1997, expenses incurred were $8,000 and $13,000, respectively,
from Golden American and Equitable Life. For the period January 1, 1997
through October 24, 1997, expenses incurred were $16,000 and $16,000,
respectively, from Golden American and Equitable Life.
The Company provides resources and services to Golden American and DSI.
Revenues for these services, which reduce general expenses incurred by the
Company, totaled $210,000 and $75,000 from Golden American and DSI,
respectively, for the year ended December 31, 1998.
77
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<PAGE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO FINANCIAL STATEMENTS
December 31, 1998
8. RELATED PARTY TRANSACTIONS (continued)
Effective January 1, 1998, the Company has an asset management agreement with
ING Investment Management LLC ("ING IM"), an affiliate, in which ING IM
provides asset management and accounting services. Under the agreement, the
Company records a fee based on the value of the assets under management. The
fee is payable quarterly. For the year ended December 31, 1998, the Company
incurred fees of $56,000 under this agreement.
Prior to 1998, the Company had a service agreement with Equitable Investment
Services, Inc. ("EISI"), an affiliate, in which EISI provided investment
management services. Payments for these services totaled $11,000 and $51,000
for the periods October 25, 1997 through December 31, 1997 and January 1,
1997 through October 24, 1997, respectively.
The Company had premiums, net of reinsurance, for variable products for the
year ended December 31, 1998, that totaled $94,000 from Locust Street
Securities, Inc. ("LSSI"), an affiliate. For the year ended December 31,
1997, the premiums, net of reinsurance, for variable products from LSSI
totaled $13,000.
On December 17, 1996, Golden American contributed $25,000,000 to First
Golden, $2,000,000 in common stock (200,000 shares at $10 per share) and
$23,000,000 of additional paid-in capital. All expenses related to the
incorporation and licensing of First Golden were incurred by Golden American.
The Golden American Board of Directors has agreed by resolution to provide
funds as needed for the Company to maintain policyholders' surplus that meets
or exceeds the greater of: (1) the minimum capital adequacy standards to
maintain a level of capitalization necessary to meet A.M. Best Company's
guidelines or one level less than the one originally given to First Golden,
or (2) the New York State Insurance Department risk-based capital minimum
requirements as determined in accordance with New York statutory accounting
principles. No funds were transferred from Golden American in 1998 or 1997.
9. COMMITMENTS AND CONTINGENCIES
REINSURANCE: At December 31, 1998, First Golden had a reinsurance treaty with
an unaffiliated reinsurer covering a significant portion of the mortality
risks under its variable contracts. First Golden remains liable to the extent
its reinsurer does not meet its obligation under the reinsurance agreement.
At December 31, 1998 and December 31, 1997, the Company has a payable of
$1,000 for reinsurance premiums. Included in the accompanying financial
statements are net considerations to the reinsurer of $9,000 and $1,000 for
the year ended December 31, 1998 and for the period October 25, 1997 through
December 31, 1997, respectively.
LITIGATION: The Company, like other insurance companies, may be named or
otherwise involved in lawsuits, including class action lawsuits. In some
class action and other lawsuits involving insurers, substantial damages have
been sought and/or material settlement payments have been made. The Company
currently believes no pending or threatened lawsuits exist that are
reasonably likely to have a material adverse impact on the Company.
VULNERABILITY FROM CONCENTRATIONS: The Company has various concentrations in
its investment portfolio (see Note 3 for further information). The Company's
asset growth, net investment income and cash flow are primarily generated
from the sale of variable products and associated future policy benefits.
Substantial changes in tax laws would make these products less attractive to
consumers and extreme fluctuations in interest rates or stock market returns
which may result in higher lapse experience than assumed could cause a severe
impact to the Company's financial condition. A significant portion of the
Company's sales is generated by three broker/dealers. One of these
distributors sold 62.1% of the Company's products in 1998. This distributor
has discontinued the sales relationship as of December 31, 1998.
78
<PAGE>
<PAGE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO FINANCIAL STATEMENTS
December 31, 1998
9. COMMITMENTS AND CONTINGENCIES (continued)
LEASES: The Company has a lease for its home office space which expires
December 31, 2001. The Company also leases certain other equipment under
operating leases which expire in 2000. Rent expense for the year ended
December 31, 1998 and the periods October 25, 1997 through December 31, 1997
and January 1, 1997 through October 24, 1997 was $95,000, $25,000 and
$34,000, respectively. At December 31, 1998, minimum rental payments due
under the operating leases are $83,000 in 1999, $82,000 in 2000 and $76,000
in 2001.
REVOLVING NOTE PAYABLE: To enhance short-term liquidity, the Company has
established a revolving note payable effective July 27, 1998 and expiring
July 31, 1999 with SunTrust Bank, Atlanta (the "Bank"). The note was approved
by the Company's Board of Directors on September 29, 1998. The total amount
the Company may have outstanding is $10,000,000. The note accrues interest at
an annual rate equal to: (1) the cost of funds for the Bank for the period
applicable for the advance plus 0.25% or (2) a rate quoted by the Bank to the
Company for the advance. The terms of the agreement require the Company to
maintain the minimum level of Company Action Level Risk Based Capital as
established by applicable state law or regulation. At December 31, 1998, the
Company did not have any borrowings under this agreement.
79
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<PAGE>
[Shaded Section Header]
- ----------------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION
- ----------------------------------------------------------------------
TABLE OF CONTENTS
ITEM PAGE
Introduction 1
Description of First Golden American
Life Insurance Company of New York 1
Safekeeping of Assets 1
The Administrator 1
Independent Auditors 2
Distribution of Contracts 2
Performance Information 3
IRA Withdrawal Option 9
Other Information 9
Financial Statements of Separate Account NY-B 10
Appendix Description of Bond Ratings A-1
80
<PAGE>
<PAGE>
- ---------------------------------------------------------------------
PLEASE TEAR OFF, COMPLETE AND RETURN THE FORM BELOW TO ORDER A FREE
STATEMENT OF ADDITIONAL INFORMATION FOR THE CONTRACTS OFFERED UNDER
THE PROSPECTUS. SEND THE FORM TO OUR CUSTOMER SERVICE CENTER AT THE
ADDRESS SHOWN ON THE PROSPECTUS COVER.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
PLEASE SEND ME A FREE COPY OF THE STATEMENT OF ADDITIONAL INFORMATION
FOR SEPARATE ACCOUNT NY-B.
Please Print or Type:
__________________________________________________
NAME
__________________________________________________
SOCIAL SECURITY NUMBER
__________________________________________________
STREET ADDRESS
__________________________________________________
CITY, STATE, ZIP
(105122 NY DVA PLUS 11/99)
81
<PAGE>
<PAGE>
This page intentionally left blank.
82
<PAGE>
<PAGE>
APPENDIX A
CONDENSED FINANCIAL INFORMATION
Except for the Equity, Growth and Income, Small Company Growth, Asset
Allocation and High Quality Bond subaccounts which commenced operations
as of the date of this prospectus (or soon after) the following tables give
(1) the accumulation unit value ("AUV"), (2) the total number of accumulation
units, and (3) the total accumulation unit value, for each subaccount of
First Golden Separate Account NY-B available under the Contract for the
indicated periods. The date on which the subaccount became available to
investors and the starting accumulation unit value are indicated on the
last row of each table. The Managed Global subaccount commenced operations
initially as a subaccount of another separate account, the Managed Global
Account of Separate Account D of First Golden; however, at the time of
conversion the value of an accumulation unit did not change. The Equity,
Growth and Income, Small Company Growth, Asset Allocation and High Quality
Bond subaccounts have starting accumulation unit values of $10.00.
LIQUID ASSET
[2-up table with shaded headers]
|-------------------------------------------------------------|
| STANDARD DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $14.54 2,755 $ 40 |
| 1997 14.02 -- -- |
| 5/6/97 13.67 -- -- |
|-------------------------------------------------------------|
|-------------------------------------------------------------|
| ANNUAL RATCHET DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $14.33 5,975 $ 85 |
| 1997 13.83 -- -- |
| 5/6/97 13.51 -- -- |
|-------------------------------------------------------------|
LIMITED MATURITY BOND
[2-up table with shaded headers]
|-------------------------------------------------------------|
| STANDARD DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $17.02 -- -- |
| 1997 16.13 -- -- |
| 5/6/97 15.43 -- -- |
|-------------------------------------------------------------|
|-------------------------------------------------------------|
| ANNUAL RATCHET DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $16.77 1,507 $ 25 |
| 1997 15.91 632 10 |
| 5/6/97 15.24 -- -- |
|-------------------------------------------------------------|
GLOBAL FIXED INCOME
[2-up table with shaded headers]
|-------------------------------------------------------------|
| STANDARD DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $13.17 -- -- |
| 5/1/98 12.17 -- -- |
|-------------------------------------------------------------|
|-------------------------------------------------------------|
| ANNUAL RATCHET DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $13.09 -- -- |
| 5/1/98 12.11 -- -- |
|-------------------------------------------------------------|
A1
<PAGE>
<PAGE>
TOTAL RETURN
[2-up table with shaded headers]
|-------------------------------------------------------------|
| STANDARD DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $17.83 4,266 $ 76 |
| 1997 16.18 -- -- |
| 5/6/97 14.36 -- -- |
|-------------------------------------------------------------|
|-------------------------------------------------------------|
| ANNUAL RATCHET DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $17.72 24,995 $ 443 |
| 1997 16.10 1,139 18 |
| 5/6/97 14.31 -- -- |
|-------------------------------------------------------------|
EQUITY INCOME
[2-up table with shaded headers]
|-------------------------------------------------------------|
| STANDARD DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $22.27 9,623 $ 214 |
| 1997 20.83 -- -- |
| 5/6/97 18.54 -- -- |
|-------------------------------------------------------------|
|-------------------------------------------------------------|
| ANNUAL RATCHET DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $21.94 6,014 $ 132 |
| 1997 20.55 1,243 26 |
| 5/6/97 18.32 -- -- |
|-------------------------------------------------------------|
FULLY MANAGED
[2-up table with shaded headers]
|-------------------------------------------------------------|
| STANDARD DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $20.84 2,619 $ 55 |
| 1997 19.93 -- -- |
| 5/6/97 17.95 -- -- |
|-------------------------------------------------------------|
|-------------------------------------------------------------|
| ANNUAL RATCHET DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $20.53 4,511 $ 93 |
| 1997 19.66 1,701 33 |
| 5/6/97 17.73 -- -- |
|-------------------------------------------------------------|
RISING DIVIDENDS
[2-up table with shaded headers]
|-------------------------------------------------------------|
| STANDARD DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $22.79 1,734 $ 40 |
| 1997 20.22 90 2 |
| 5/6/97 17.27 -- -- |
|-------------------------------------------------------------|
|-------------------------------------------------------------|
| ANNUAL RATCHET DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $22.61 34,310 $ 777 |
| 1997 20.09 8,223 165 |
| 5/6/97 17.18 -- -- |
|-------------------------------------------------------------|
A2
<PAGE>
<PAGE>
CAPITAL GROWTH
[2-up table with shaded headers]
|-------------------------------------------------------------|
| STANDARD DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $17.08 6,031 $ 103 |
| 1997 15.45 -- -- |
| 5/6/97 12.46 -- -- |
|-------------------------------------------------------------|
|-------------------------------------------------------------|
| ANNUAL RATCHET DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $17.01 20,311 $ 346 |
| 1997 15.41 334 5 |
| 5/6/97 12.44 -- -- |
|-------------------------------------------------------------|
GROWTH
[2-up table with shaded headers]
|-------------------------------------------------------------|
| STANDARD DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $16.36 8,287 $ 136 |
| 1997 13.06 -- -- |
| 5/6/97 12.47 -- -- |
|-------------------------------------------------------------|
|-------------------------------------------------------------|
| ANNUAL RATCHET DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $16.29 17,550 $ 286 |
| 1997 13.03 3,093 40 |
| 5/6/97 12.45 -- -- |
|-------------------------------------------------------------|
VALUE EQUITY
[2-up table with shaded headers]
|-------------------------------------------------------------|
| STANDARD DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $18.41 1,677 $ 31 |
| 1997 18.36 1,048 19 |
| 5/6/97 15.72 -- -- |
|-------------------------------------------------------------|
|-------------------------------------------------------------|
| ANNUAL RATCHET DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $18.31 4,464 $ 82 |
| 1997 18.28 1,056 19 |
| 5/6/97 15.66 -- -- |
|-------------------------------------------------------------|
RESEARCH
[2-up table with shaded headers]
|-------------------------------------------------------------|
| STANDARD DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $23.03 784 $ 18 |
| 1997 18.95 107 2 |
| 5/6/97 16.72 -- -- |
|-------------------------------------------------------------|
|-------------------------------------------------------------|
| ANNUAL RATCHET DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $22.89 11,228 $ 257 |
| 1997 18.87 403 8 |
| 5/6/97 16.66 -- -- |
|-------------------------------------------------------------|
A3
<PAGE>
<PAGE>
STRATEGIC EQUITY
[2-up table with shaded headers]
|-------------------------------------------------------------|
| STANDARD DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $14.30 2,037 $ 29 |
| 1997 14.36 -- -- |
| 5/6/97 11.96 -- -- |
|-------------------------------------------------------------|
|-------------------------------------------------------------|
| ANNUAL RATCHET DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $14.23 1,867 $ 27 |
| 1997 14.31 1,265 18 |
| 5/6/97 11.93 -- -- |
|-------------------------------------------------------------|
CAPITAL APPRECIATION
[2-up table with shaded headers]
|-------------------------------------------------------------|
| STANDARD DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $24.75 578 $ 14 |
| 1997 22.24 -- -- |
| 5/6/97 18.45 -- -- |
|-------------------------------------------------------------|
|-------------------------------------------------------------|
| ANNUAL RATCHET DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $24.50 4,903 $ 120 |
| 1997 22.05 734 16 |
| 5/6/97 18.31 -- -- |
|-------------------------------------------------------------|
MID-CAP GROWTH
[2-up table with shaded headers]
|-------------------------------------------------------------|
| STANDARD DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $22.60 2,041 $ 46 |
| 1997 18.64 -- -- |
| 5/6/97 15.76 -- -- |
|-------------------------------------------------------------|
|-------------------------------------------------------------|
| ANNUAL RATCHET DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $22.43 5,304 $ 119 |
| 1997 18.52 544 10 |
| 5/6/97 15.68 -- -- |
|-------------------------------------------------------------|
SMALL CAP
[2-up table with shaded headers]
|-------------------------------------------------------------|
| STANDARD DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $15.44 3,611 $ 56 |
| 1997 12.92 -- -- |
| 5/6/97 10.72 -- -- |
|-------------------------------------------------------------|
|-------------------------------------------------------------|
| ANNUAL RATCHET DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $15.37 9,917 $ 152 |
| 1997 12.88 3,434 44 |
| 5/6/97 10.70 -- -- |
|-------------------------------------------------------------|
A4
<PAGE>
<PAGE>
REAL ESTATE
[2-up table with shaded headers]
|-------------------------------------------------------------|
| STANDARD DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $22.07 356 $ 8 |
| 1997 25.82 -- -- |
| 5/6/97 21.31 -- -- |
|-------------------------------------------------------------|
|-------------------------------------------------------------|
| ANNUAL RATCHET DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $21.74 1,474 $ 32 |
| 1997 25.48 478 12 |
| 5/6/97 21.05 -- -- |
|-------------------------------------------------------------|
HARD ASSETS
[2-up table with shaded headers]
|-------------------------------------------------------------|
| STANDARD DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $14.50 -- -- |
| 1997 20.85 -- -- |
| 5/6/97 19.34 -- -- |
|-------------------------------------------------------------|
|-------------------------------------------------------------|
| ANNUAL RATCHET DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $14.28 1,007 $ 14 |
| 1997 20.57 238 5 |
| 5/6/97 19.11 -- -- |
|-------------------------------------------------------------|
MANAGED GLOBAL
[2-up table with shaded headers]
|-------------------------------------------------------------|
| STANDARD DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $15.02 2,440 $ 37 |
| 1997 11.76 -- -- |
| 5/6/97 11.24 -- -- |
|-------------------------------------------------------------|
|-------------------------------------------------------------|
| ANNUAL RATCHET DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $14.88 9,573 $ 142 |
| 1997 11.67 2,969 35 |
| 5/6/97 11.16 -- -- |
|-------------------------------------------------------------|
DEVELOPING WORLD
[2-up table with shaded headers]
|-------------------------------------------------------------|
| STANDARD DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $ 7.29 -- -- |
| 2/19/98 10.00 -- -- |
|-------------------------------------------------------------|
|-------------------------------------------------------------|
| ANNUAL RATCHET DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $ 7.28 -- -- |
| 5/1/98 10.00 -- -- |
|-------------------------------------------------------------|
A5
<PAGE>
<PAGE>
EMERGING MARKETS
[2-up table with shaded headers]
|-------------------------------------------------------------|
| STANDARD DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $6.56 -- -- |
| 1997 8.75 -- -- |
| 5/6/97 10.38 -- -- |
|-------------------------------------------------------------|
|-------------------------------------------------------------|
| ANNUAL RATCHET DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $6.51 2,918 $ 19 |
| 1997 8.70 1,812 16 |
| 5/6/97 10.33 -- -- |
|-------------------------------------------------------------|
PIMCO HIGH YIELD BOND
[2-up table with shaded headers]
|-------------------------------------------------------------|
| STANDARD DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $10.09 -- -- |
| 5/1/98 10.00 -- -- |
|-------------------------------------------------------------|
|-------------------------------------------------------------|
| ANNUAL RATCHET DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $10.08 -- -- |
| 5/1/98 10.00 -- -- |
|-------------------------------------------------------------|
PIMCO STOCKSPLUS GROWTH AND INCOME
[2-up table with shaded headers]
|-------------------------------------------------------------|
| STANDARD DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $11.12 -- $ -- |
| 5/1/98 10.00 -- -- |
|-------------------------------------------------------------|
|-------------------------------------------------------------|
| ANNUAL RATCHET DEATH BENEFIT |
|-------------------------------------------------------------|
| TOTAL # OF |
| ACCUMULATION |
| AUV AT UNITS AT TOTAL |
| YEAR END (AND YEAR END (AND AUV AT |
| AT BEGINNING OF AT BEGINNING OF YEAR END |
| FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) |
|-------------------------------------------------------------|
| 1998 $11.11 -- $ -- |
| 5/1/98 10.00 -- -- |
|-------------------------------------------------------------|
A6
<PAGE>
<PAGE>
APPENDIX B
MARKET VALUE ADJUSTMENT EXAMPLES
EXAMPLE #1: FULL SURRENDER EXAMPLE OF A NEGATIVE MARKET VALUE ADJUSTMENT
Assume $100,000 was allocated to a Fixed Interest Allocation with
a guaranteed interest period of 10 years, a guaranteed interest rate
of 7.5%, an initial Index Rate ("I") of 7%; that a full surrender is
requested 3 years into the guaranteed interest period; that the then
Index Rate for a 7 year guaranteed interest period ("J") is 8%; and
that no prior transfers or withdrawals affecting this Fixed Interest
Allocation have been made.
CALCULATE THE MARKET VALUE ADJUSTMENT
1. The contract value of the Fixed Interest Allocation on the date
of surrender is $124,230 ($100,000 x 1.075^3)
2. N = 2,555 ( 365 x 7 )
3. Market Value Adjustment = $124,230 X
(( 1.07 / 1.0825 ) ^ 2,555 / 365 - 1 ) = $9,700
Therefore, the amount paid to you on full surrender ignoring any
surrender charge is $114,530 ($124,230 - $9,700 ).
EXAMPLE #2: FULL SURRENDER EXAMPLE OF A POSITIVE MARKET VALUE ADJUSTMENT
Assume $100,000 was allocated to a Fixed Interest Allocation with
a guaranteed interest period of 10 years, a guaranteed interest rate
of 7.5%, an initial Index Rate ("I") of 7%; that a full surrender is
requested 3 years into the guaranteed interest period; that the then
Index Rate for a 7 year guaranteed interest period ("J") is 6%; and
that no prior transfers or withdrawals affecting this Fixed Interest
Allocation have been made.
CALCULATE THE MARKET VALUE ADJUSTMENT
1. The contract value of the Fixed Interest Allocation on the date
of surrender is $124,230 ($100,000 x 1.075^3)
2. N = 2,555 ( 365 x 7 )
3. Market Value Adjustment = $124,230 X
(( 1.07 / 1.0625 ) ^ 2,555 / 365 - 1 ) = $6,270
Therefore, the amount paid to you on full surrender ignoring any
surrender charge is $130,500 ($124,230 + $6,270 ).
EXAMPLE #3: WITHDRAWAL EXAMPLE OF A NEGATIVE MARKET VALUE ADJUSTMENT
Assume $200,000 was allocated to a Fixed Interest Allocation with
a guaranteed interest period of 10 years, a guaranteed interest rate
of 7.5%, an initial Index Rate ("I") of 7%; that a withdrawal of
$114,530 is requested 3 years into the guaranteed interest period;
that the then Index Rate ("J") for a 7 year guaranteed interest
period is 8%; and that no prior transfers or withdrawals affecting
this Fixed Interest Allocation have been made.
B1
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First calculate the amount that must be withdrawn from the Fixed
Interest Allocation to provide the amount requested.
1. The contract value of the Fixed Interest Allocation on the date
of withdrawal is $248,459 ( $200,000 x 1.075 ^3 )
2. N = 2,555 ( 365 x 7 )
3. Amount that must be withdrawn =
( $114,530 / ( 1.07 / 1.0825 ) ^ 2,555 / 365 - 1 ) = $124,230
Then calculate the Market Value Adjustment on that amount
4. Market Value Adjustment = $124,230 X
(( 1.07 / 1.0825 ) ^ 2,555 / 365 - 1 ) = $9,700
Therefore, the amount of the withdrawal paid to you ignoring any
surrender charge is $114,530, as requested. The Fixed Interest
Allocation will be reduced by the amount of the withdrawal, $114,530,
and also reduced by the Market Value Adjustment of $9,700, for a
total reduction in the Fixed Interest Allocation of $124,230.
EXAMPLE #4: WITHDRAWAL EXAMPLE OF A POSITIVE MARKET VALUE ADJUSTMENT
Assume $200,000 was allocated to a Fixed Interest Allocation with
a guaranteed interest period of 10 years, a guaranteed interest rate
of 7.5%, an initial Index Rate of 7%; that a withdrawal of $130,500
requested 3 years into the guaranteed interest period; that the then
Index Rate ("J") for a 7 year guaranteed interest period is 6%; and
that no prior transfers or withdrawals affecting this Fixed Interest
Allocation have been made.
First calculate the amount that must be withdrawn from the Fixed
Interest Allocation to provide the amount requested.
1. The contract value of Fixed Interest Allocation on the date of
surrender is $248,459 ( $200,000 x 1.075^3)
2. N = 2,555 ( 365 x 7 )
3. Amount that must be withdrawn =
( $130,500 / ( 1.07 / 1.0625 ) ^ 2,555 / 365 ) = $124,230
Then calculate the Market Value Adjustment on that amount
4. Market Value Adjustment = $124,230 X
(( 1.07 / 1.0625 ) ^ 2,555 / 365 - 1 ) = $6,270
Therefore, the amount of the withdrawal paid to you ignoring any
surrender charge is $130,500, as requested. The Fixed Interest
Allocation will be reduced by the amount of the withdrawal, $130,500,
but increased by the Market Value Adjustment of $6,270, for a total
reduction in the Fixed Interest Allocation of $124,230.
B2
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APPENDIX C
SURRENDER CHARGE FOR EXCESS WITHDRAWALS EXAMPLE
The following assumes you made an initial premium payment of $10,000
and additional premium payments of $10,000 in each of the second and
third contract years, for total premium payments under the Contract
of $30,000. It also assumes a withdrawal at the beginning of the
fourth contract year of 20% of the contract value of $35,000.
In this example, $5,250 ($35,000 x .15) is the maximum free
withdrawal amount that you may withdraw during the contract year
without a surrender charge. The total withdrawal would be $7,000
($35,000 x .20). Therefore, $1,750 ($7,000 - $5,250) is considered
an excess withdrawal of a part of the initial premium payment of
$10,000 and would be subject to a 4% surrender charge of $70 ($1,750
x .04). This example does not take into account any Market Value
Adjustment or deduction of any premium taxes.
C1
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ING VARIBALE ANNUITIES
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
First Golden American Life Insurance Company of New York is a stock
company domiciled in New York, New York
105122 NY DVA PLUS 11/99
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PART B
Statement of Additional Information
DVA PLUS
featuring
The Galaxy VIP Fund
DEFERRED COMBINATION VARIABLE
AND FIXED ANNUITY CONTRACT
ISSUED BY
SEPARATE ACCOUNT NY-B
("Account NY-B" or the "Account")
OF
FIRST GOLDEN AMERICAN LIFE INSURANCE
COMPANY OF NEW YORK
This Statement of Additional Information is not a prospectus. The
information contained herein should be read in conjunction with the
prospectus for the First Golden American Life Insurance Company of
New York deferred combination variable and fixed annuity contract
that is referred to herein.
The prospectus sets forth information that a prospective investor
ought to know before investing. For a copy of the prospectus, send a
written request to First Golden American Life Insurance Company of
New York, Customer Service Center, 230 Park Avenue, Suite 966, New
York, New York 10169-0999 or telephone 1-800-963-9539.
DATE OF PROSPECTUS AND
STATEMENT OF ADDITIONAL INFORMATION:
November 12, 1999
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TABLE OF CONTENTS
ITEM PAGE
Introduction 1
Description of First Golden American Life Insurance
Company of New York 1
Safekeeping of Assets 1
The Administrator 1
Independent Auditors 1
Distribution of Contracts 1
Performance Information 2
IRA Partial Withdrawal Option 6
Other Information 6
Financial Statements of Separate Account NY-B 6
Appendix - Description of Bond Ratings A-1
i
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INTRODUCTION
This Statement of Additional Information provides background
information regarding Account NY-B.
DESCRIPTION OF FIRST GOLDEN AMERICAN LIFE INSURANCE
COMPANY OF NEW YORK
First Golden American Life Insurance Company of New York ("First
Golden") is a stock life insurance company organized under the laws
of the State of New York. First Golden is a wholly owned subsidiary
of Golden American Life Insurance Company ("Golden American"). On
August 13, 1996, Equitable of Iowa Companies, Inc. (formerly
Equitable of Iowa Companies) ("Equitable of Iowa") acquired all of
the interest in Golden American and Directed Services, Inc. On
October 24, 1997, Equitable of Iowa and ING Groep N.V. ("ING")
completed a merger agreement, and Equitable of Iowa became a wholly
owned subsidiary of ING. ING, headquartered in The Netherlands, is a
global financial services holding company with over $461.8 billion in
assets as of December 31, 1998. As of December 31, 1998, First
Golden has approximately $66 million in total assets. First Golden
is licensed to do variable annuity business in the states of Delaware
and New York.
SAFEKEEPING OF ASSETS
First Golden American acts as its own custodian for Account NY-B.
THE ADMINISTRATOR
On November 8, 1996, First Golden and Golden American entered into an
administrative service agreement pursuant to which Golden American
agreed to provide certain accounting, actuarial, tax, underwriting,
sales, management and other services to Golden American. Expenses
incurred by Golden American in relation to this service agreement
will be reimbursed by First Golden on an allocated cost basis. First
Golden entered into a similar agreement with another affiliate,
Equitable Life Insurance Company of Iowa ("Equitable Life"), for
additional services. For the years ended December 31, 1998 and 1997,
First Golden incurred expenses of $248,000 and $24,000, respectively,
under the agreement with Golden American and $165,000 and $29,000,
respectively, under the agreement with Equitable Life.
Also on November 8, 1996, First Golden and Directed Services, Inc.
("DSI") entered into a service agreement pursuant to which First
Golden has agreed to provide DSI certain of its personnel to perform
management, administrative and clerical services and the use of certain
of its facilities. First Golden expects to charge DSI for such expenses
and all other general and administrative costs, first on the basis of
direct charges when identifiable, and second allocated based on the
estimated amount of time spent by First Golden's employees on behalf
of DSI. For the year ended December 31, 1998, charges to Golden American
and DSI for these services were $210,000 and $75,000, respectively.
INDEPENDENT AUDITORS
Ernst & Young LLP, independent auditors, performs annual audits of
First Golden and Account NY-B.
DISTRIBUTION OF CONTRACTS
The offering of contracts under the prospectus associated with this
Statement of Additional Information is continuous. DSI, an affiliate
of First Golden American, acts as the principal underwriter (as defined
in the Securities Act of 1933 and the Investment Company Act of 1940,
as amended) of the variable insurance products issued by First Golden
American. The variable insurance products were sold primarily through
two broker/dealer institutions during the year ended December 31, 1996,
through two broker/dealer institutions during the year ended December
31, 1997 and through two broker/dealer institutions during the year ended
December 31, 1998. For the years ended 1998, and 1997 commissions paid
by First Golden to DSI aggregated $1,754,000 and $408,000 respectively.
All commissions received by the distributor were passed through to the
broker-dealers who sold the contracts. DSI is located at 1475 Dunwoody
Drive, West Chester, Pennsylvania 19380-1478.
First Golden provides to DSI certain of its personnel to perform
management, administrative and clerical services and the use of
certain facilities. First Golden charges DSI for such expenses and
all other general and administrative costs, first on the basis of
direct charges when identifiable, and the remainder allocated based
on the estimated amount of time spent by First Golden's employees on
behalf of DSI. In the opinion of management, this method of
1
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cost allocation is reasonable. DSI paid to First Golden a fee calculated
as a percentage of average net assets in the variable separate
account of $75,000 for the year ended 1998.
PERFORMANCE INFORMATION
Performance information for the subaccounts of Account NY-B,
including yields, standard annual returns and other non-standard
measures of performance of all subaccounts, may appear in reports or
promotional literature to current or prospective owners. Such non-
standard measures of performance will be computed, or accompanied by
performance data computed, in accordance with standards defined by
the SEC. Negative values are denoted by parentheses. Performance
information for measures other than total return do not reflect sales
load which can have a maximum level of 6.5% of premium, and any
applicable premium tax that can range from 0% to 3.5%.
SEC STANDARD MONEY MARKET SUBACCOUNT YIELDS
Current yield for the Liquid Asset Subaccount will be based on the
change in the value of a hypothetical investment (exclusive of
capital changes or income other than investment income) over a
particular 7-day period, less a pro-rata share of subaccount expenses
accrued over that period (the "base period"), and stated as a
percentage of the investment at the start of the base period (the
"base period return"). The base period return is then annualized by
multiplying by 365/7, with the resulting yield figure carried to at
least the nearest hundredth of one percent. Calculation of
"effective yield" begins with the same "base period return" used in
the calculation of yield, which is then annualized to reflect weekly
compounding pursuant to the following formula:
EFFECTIVE YIELD = [(BASE PERIOD RETURN) +1)^365/7] - 1
The current yield and effective yield of the Liquid Asset Subaccount
for the 7-day period December 25, 1998 to December 31, 1998 were
3.25% and 3.30%, respectively.
SEC STANDARD 30-DAY YIELD FOR ALL SUBACCOUNTS
Quotations of yield for the remaining subaccounts will be based on
all investment income per Unit (contract value divided by the index
of investment experience) earned during a particular 30- day period,
less expenses accrued during the period ("net investment income"),
and will be computed by dividing net investment income by the value
of an accumulation unit on the last day of the period, according to
the following formula:
YIELD = 2 [ ((a - b) + 1)^6 - 1]
[ (------- ) ]
[ ( cd ) ]
Where:
[a] equals the net investment income earned during the
period by the Investment portfolio attributable to
shares owned by a subaccount
[b] equals the expenses accrued for the period (net of
reimbursements)
[c] equals the average daily number of units
outstanding during the period based on the index of
investment experience
[d] equals the value maximum offering price per index
of investment experience on the last day of the period
Yield on subaccounts of Account NY-B is earned from the increase in
net asset value of shares of the investment portfolio in which the
subaccount invests and from dividends declared and paid by the
investment portfolio, which are automatically reinvested in shares of
the investment portfolio.
SEC (SECURITIES AND EXCHANGE COMMISSION) STANDARD AVERAGE
ANNUAL TOTAL RETURN FOR ALL SUBACCOUNTS
Quotations of average annual total return for any subaccount will be
expressed in terms of the average annual compounded rate of return of
a hypothetical investment in a contract over a period of one, five
and ten years (or, if less, up to the life of the investment
portfolio), calculated pursuant to the formula:
2
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P(1+T)^n = ERV
Where:
(1) [P] equals a hypothetical initial premium payment
of $1,000
(2) [T] equals an average annual total return
(3) [n] equals the number of years
(4) [ERV] equals the ending redeemable value of a hypothetical
$1,000 initial premium payment made at the beginning of the
period (or fractional portion thereof)
All total return figures reflect the deduction of the maximum sales
load, the administrative charges, and the mortality and expense risk
charges. The SEC requires that an assumption be made that the
contract owner surrenders the entire contract at the end of the one,
five and ten year periods (or, if less, up to the life of the
security) for which performance is required to be calculated. This
assumption may not be consistent with the typical contract owner's
intentions in purchasing a contract and may adversely affect returns.
Quotations of total return may simultaneously be shown for other
periods, as well as quotations of total return that do not take into
account certain contractual charges such as sales load.
Except for the Equity, Growth and Income, Small Company Growth, Asset
Allocation and High Quality Bond subaccounts which had not commenced
operations as of December 31, 1998, Average Annual Total Return for
the subaccounts presented on a standardized basis, which includes
deductions for the mortality and expense risk charge, administrative
charge, contract charge and surrender charge for the year ending
December 31, 1998 were as follows:
Average Annual Total Return for Periods Ending 12/31/98 - Standardized
- --------------------------------------------------------------------------
One Year Five Year Inception
Period Ending Period Ending to Ending Inception
Subaccount 12/31/98 12/31/98 12/31/98 Date
- --------- ------------- ------------- --------- ---------
Equity Income 0.70% n/a 9.00% 1/25/89
Fully Managed -1.63% n/a 6.82% 1/25/89
Capital 5.06% n/a 17.86% 5/4/92
Appreciation
Rising Dividends 6.50% n/a 17.01% 10/4/93
Real Estate -20.70% n/a -0.54% 1/25/89
Hard Assets -36.61% n/a -18.97% 1/25/89
Value Equity -5.91% n/a 8.52% 1/1/95
Strategic Equity -6.61% n/a 9.22% 10/2/95
Small Cap 13.25% n/a 25.73% 1/2/96
Emerging Markets -31.20% n/a -28.13% 5/1/97
Managed Global 21.46% n/a 17.46% 5/1/97
Developing World n/a n/a -37.26%# 2/18/98
Research 15.29% n/a 20.34%* 10/7/94
Total Return 3.99%* n/a 11.71%* 10/7/94
Mid-Cap Growth 15.05% n/a 25.46%* 10/7/94
Capital Growth 4.37% n/a 19.69% 4/1/96
Growth 19.01% n/a 17.44% 4/1/96
Global Fixed Income 4.25%* n/a 4.29%* 10/7/94
PIMCO High Yield Bond n/a n/a -7.80%*# 5/1/98
PIMCO StocksPLUS n/a n/a 7.68%*# 5/1/98
Growth and Income
Limited Maturity -0.68% n/a 2.37% 1/25/89
Bond
Liquid Asset -2.46% n/a 0.02% 1/25/89
_________________________
* Total return calculation reflects partial waiver of fees and
expenses.
# Non-annualized.
3
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NON-STANDARD AVERAGE ANNUAL TOTAL RETURN FOR ALL SUBACCOUNTS
Quotations of non-standard average annual total return for any
subaccount will be expressed in terms of the average annual
compounded rate of return of a hypothetical investment in a contract
over a period of one, five and ten years (or, if less, up to the life
of the Investment portfolio), calculated pursuant to the formula:
[P(1+T)^n] = ERV
Where:
(1) [P] equals a hypothetical initial premium payment
of $1,000
(2) [T] equals an average annual total return
(3) [n] equals the number of years
(4) [ERV] equals the ending redeemable value of a
hypothetical $1,000 initial premium payment made at the
beginning of the period (or fractional portion thereof)
assuming certain loading and charges are zero.
All total return figures reflect the deduction of the mortality and
expense risk charge and the administrative charges, but not the
deduction of the maximum sales load and the annual contract fee.
Except for the Equity, Growth and Income, Small Company Growth, Asset
Allocation and High Quality Bond subaccounts which had not commenced
operations as of December 31, 1998, Average Annual Total Return for
the subaccounts presented on a non-standardized basis, which includes
deductions for the mortality and expense risk charge, administrative
charge, contract charge and surrender charge for the year ending
December 31, 1998, were as follows:
Average Annual Total Return for Periods Ending 12/31/98 - Non-Standardized
- --------------------------------------------------------------------------
One Year Five Year Inception
Period Ending Period Ending to Ending Inception
Subaccount 12/31/98 12/31/98 12/31/98 Date
- --------- ------------- ------------- --------- ---------
Equity Income 6.75% n/a 12.40% 1/25/89
Fully Managed 4.41% n/a 10.28% 1/25/89
Capital 11.10% n/a 21.10% 5/4/92
Appreciation
Rising Dividends 12.54% n/a 20.26% 10/4/93
Real Estate -14.66% n/a 3.08% 1/25/89
Hard Assets -30.57% n/a -14.84% 1/25/89
Value Equity 0.13% n/a 11.94% 1/1/95
Strategic Equity -0.57% n/a 12.62% 10/2/95
Small Cap 19.29% n/a 28.84% 1/2/96
Emerging Markets -25.15% n/a -23.67% 5/1/97
Managed Global 27.51% n/a 20.71% 5/1/97
Developing World n/a n/a -30.66%# 2/18/98
Research 21.33% n/a 23.54%* 10/7/94
Total Return 10.03%* n/a 15.07%* 10/7/94
Mid-Cap Growth 21.09% n/a 28.57%* 10/7/94
Capital Growth 10.41% n/a 22.91% 4/1/96
Growth 25.05% n/a 20.70% 4/1/96
Global Fixed Income 10.29%* n/a 7.80%* 10/7/94
PIMCO High Yield Bond n/a n/a 1.20%*# 5/1/98
PIMCO StocksPLUS n/a n/a 17.08%*# 5/1/98
Growth and Income
Limited Maturity 5.37% n/a 5.92% 1/25/89
Bond
Liquid Asset 3.58% n/a 3.62% 1/25/89
_________________________
* Total return calculation reflects partial waiver of fees and
expenses.
# Non-annualized.
4
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Performance information for a Subaccount may be compared, in reports
and promotional literature, to: (i) the Standard & Poor's 500 Stock
Index ("S&P 500"), Dow Jones Industrial Average ("DJIA"), Donoghue
Money Market Institutional Averages, or other indices that measure
performance of a pertinent group of securities so that investors may
compare a Subaccount's results with those of a group of securities
widely regarded by investors as representative of the securities
markets in general; (ii) other groups of variable annuity separate
accounts or other investment products tracked by Lipper Analytical
Services, a widely used independent research firm which ranks mutual
funds and other investment companies by overall performance,
investment objectives, and assets, or tracked by other services,
companies, publications, or persons who rank such investment
companies on overall performance or other criteria; and (iii) the
Consumer Price Index (measure for inflation) to assess the real rate
of return from an investment in the Contract. Unmanaged indices may
assume the reinvestment of dividends but generally do not reflect
deductions for administrative and management costs and expenses.
Performance information for any subaccount reflects only the
performance of a hypothetical contract under which accumulation on
which the calculations are based. Performance information should be
considered in light of the investment objectives and policies,
characteristics and quality of the portfolio of the investment
portfolio of the trust in which the Account NY-B Subaccounts invest,
and the market conditions during the given time period, and should
not be considered as a representation of what may be achieved in the
future.
Reports and promotional literature may also contain other information
including the ranking of any subaccount derived from rankings of
variable annuity separate accounts or other investment products
tracked by Lipper Analytical Services or by other rating services,
companies, publications, or other persons who rank separate accounts
or other investment products on overall performance or other
criteria.
PUBLISHED RATINGS
From time to time, the rating of First Golden as an insurance company
by A.M. Best Company may be referred to in advertisements or in
reports to contract owners. Each year A.M. Best Company reviews the
financial status of thousands of insurers, culminating in the
assignment of Best's Ratings. These ratings reflect their current
opinion of the relative financial strength and operating performance
of an insurance company in comparison to the norms of the life/health
insurance industry. Best's ratings range from A++ to F.
ACCUMULATION UNIT VALUE
The calculation of the Accumulation Unit Value ("AUV") is discussed
in the prospectus for the Contracts under "Accumulation Unit" and
"The Net Investment Factor". Note that in your, contract contract
value is referred to as Index of Investment Experience. The following
illustrations show a calculation of a new AUV and the purchase of Units
(using hypothetical examples). Note that the examples below are calculated
for a Contract issued with the Annual Ratchet Death Benefit Option,
the death benefit option with the highest mortality and expense risk
charge. The mortality and expense risk charge associated with the
Standard Death Benefit Option is lower than that used in the examples
and would result in higher AUV's or contract values.
ILLUSTRATION OF CALCULATION OF AUV
EXAMPLE 1.
1. AUV, beginning of period....................... $ 10.00
2. Value of securities, beginning of period....... $ 10.00
3. Change in value of securities.................. $ 0.10
4. Gross investment return (3) divided by (2)..... 0.01
5. Less daily mortality and expense charge........ 0.00003446
6. Less asset based administrative charge......... 0.00000411
7. Net investment return (4)minus (5) minus (6)... 0.00996164
8. Net investment factor (1.000000) plus (7)...... 1.00996164
9. AUV, end of period (1) multiplied by (8)....... 10.09961644
5
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ILLUSTRATION OF PURCHASE OF UNITS (ASSUMING NO STATE PREMIUM TAX)
EXAMPLE 2.
1. Initial Premium Payment............................ $ 1,000
2. AUV on effective date of purchase (see Example 1).. $ 10.00
3. Number of Units purchased [(1) divided by (2)]..... 100
4. AUV for valuation date following purchase (see
Example 1)......................................... $10.0996164
5. Contract value in account for valuation date
following purchase [(3) multiplied by (4)] $ 1,009.96
IRA PARTIAL WITHDRAWAL OPTION
If the contract owner has an IRA contract and will attain age 70 1/2
in the current calendar year, distributions will be made in
accordance with the requirements of Federal tax law. This option is
available to assure that the required minimum distributions from
qualified plans under the Internal Revenue Code (the "Code")are made.
Under the Code, distributions must begin no later than April 1st of
the calendar year following the calendar year in which the contract
owner attains age 70 1/2. If the required minimum distribution is
not withdrawn, there may be a penalty tax in an amount equal to 50%
of the difference between the amount required to be withdrawn and the
amount actually withdrawn. Even if the IRA Partial Withdrawal Option
is not elected, distributions must nonetheless be made in accordance
with the requirements of Federal tax law.
First Golden notifies the contract owner of these regulations with a
letter mailed on January 1st of the calendar year in which the
contract owner reaches age 70 1/2 which explains the IRA Partial
Withdrawal Option and supplies an election form. If electing this
option, the owner specifies whether the withdrawal amount will be
based on a life expectancy calculated on a single life basis
(contract owner's life only) or, if the contract owner is married, on
a joint life basis (contract owner's and spouse's lives combined).
The contract owner selects the payment mode on a monthly, quarterly
or annual basis. If the payment modes elected on the election form
is more frequent than annually, the payments in the first calendar
year in which the option is in effect will be based on the amount of
payment modes remaining when First Golden receives the completed
election form.
First Golden calculates the IRA Partial Withdrawal amount each year
based on the minimum distribution rules. We do this by dividing the
contract value by the life expectancy. In the first year withdrawals
begin, we use the contract value as of the date of the first payment.
Thereafter, we use the contract value on December 31st of each year.
The life expectancy is recalculated each year. Certain minimum
distribution rules govern payouts if the designated beneficiary is
other than the contract owner's spouse and the beneficiary is more
than ten years younger than the contract owner.
OTHER INFORMATION
Registration statements have been filed with the SEC under the
Securities Act of 1933, as amended, with respect to the Contracts
discussed in this Statement of Additional Information. Not all of
the information set forth in the registration statements, amendments
and exhibits thereto has been included in this Statement of
Additional Information. Statements contained in this Statement of
Additional Information concerning the content of the Contracts and
other legal instruments are intended to be summaries. For a complete
statement of the terms of these documents, reference should be made
to the instruments filed with the Securities and Exchange Commission.
FINANCIAL STATEMENTS OF SEPARATE ACCOUNT NY-B
The audited financial statements of Account NY-B are listed below and
are included in this Statement of Additional Information:
Report of Independent Auditors
Audited Financial Statements
Statement of Assets and Liability as of December 31, 1998
Statement of Operations for the year ended December 31, 1998
Statements of Changes in Net Assets for the year ended December
31, 1998 and the period ended December 31, 1997
Notes to Financial Statements
6
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FINANCIAL STATEMENTS
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY
OF NEW YORK
SEPARATE ACCOUNT NY-B
YEAR ENDED DECEMBER 31, 1998
AND FOR THE PERIOD MAY 19, 1997
(COMMENCEMENT OF OPERATIONS)
THROUGH DECEMBER 31, 1997
WITH REPORT OF INDEPENDENT AUDITORS
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD MAY 19, 1997 (COMMENCEMENT OF OPERATIONS)
THROUGH DECEMBER 31, 1997
TABLE OF CONTENTS
Report of Independent Auditors
Audited Financial Statements
Statement of Assets and Liability
Statement of Operations
Statements of Changes in Net Assets
Notes to Financial Statements
Report of Independent Auditors
The Board of Directors
First Golden American Life Insurance Company of New York
We have audited the accompanying statement of assets and liability of First
Golden American Life Insurance Company of New York Separate Account NY-B as
of December 31, 1998, and the related statements of operations for the year
then ended and the changes in net assets for the year ended December 31, 1998
and for the period May 19, 1997 (commencement of operations) through
December 31, 1997. These financial statements are the responsibility of the
Account'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 audit 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.
Our procedures included confirmation of securities owned as of December 31,
1998, by correspondence with the custodian. 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.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of First Golden American Life
Insurance Company of New York Separate Account NY-B at December 31, 1998, and
the results of its operations for the year then ended and the changes in its
net assets for the year ended December 31, 1998 and for the period May 19,
1997 (commencement of operations) through December 31, 1997 in conformity
with generally accepted accounting principles.
/S/ Ernst & Young LLP
Des Moines, Iowa
February 25, 1999
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENT OF ASSETS AND LIABILITY
DECEMBER 31, 1998
<TABLE>
<CAPTION>
COMBINED
_____________
<S> <C>
ASSETS
Investments at net asset value:
The GCG Trust:
Limited Maturity Bond Series,
2,366 shares (cost - $25,616) $25,271
Hard Assets Series,
1,498 shares (cost - $20,401) 14,380
All-Growth Series,
5,458 shares (cost - $68,098) 81,814
Real Estate Series,
2,939 shares (cost - $48,133) 39,913
Fully Managed Series,
9,667 shares (cost - $154,885) 147,228
Multiple Allocation Series,
27,326 shares (cost - $365,906) 346,218
Capital Appreciation Series,
7,432 shares (cost - $141,985) 134,444
Rising Dividends Series,
37,039 shares (cost - $810,250) 815,224
Emerging Markets Series,
2,844 shares (cost - $26,347) 19,001
Value Equity Series,
7,092 shares (cost - $119,569) 112,614
Strategic Equity Series,
4,343 shares (cost - $56,807) 55,684
Small Cap Series,
12,986 shares (cost - $186,284) 208,158
Managed Global Series,
12,624 shares (cost - $161,472) 179,130
Liquid Asset Series,
125,651 shares (cost - $125,651) 125,651
Mid-Cap Growth Series,
44,121 shares (cost - $758,268) 798,586
Growth & Income Series,
28,714 shares (cost - $420,714) 448,508
Research Series,
122,171 shares (cost - $2,343,717) 2,481,286
Total Return Series,
108,899 shares (cost - $1,721,481) 1,720,790
Value + Growth Series,
26,987 shares (cost - $389,543) 421,543
</TABLE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENT OF ASSETS AND LIABILITY
DECEMBER 31, 1998
(CONTINUED)
<TABLE>
<CAPTION>
COMBINED
_____________
<S> <C>
ASSETS - Continued
Greenwich Street Series Fund Inc.:
Appreciation Portfolio,
175,647 shares (cost - $3,476,049) $3,716,689
Smith Barney Concert Allocation Series Inc.:
Select High Growth Portfolio,
127,628 shares (cost - $1,494,093) 1,606,842
Select Growth Portfolio,
204,918 shares (cost - $2,379,516) 2,563,524
Select Balanced Portfolio,
306,820 shares (cost - $3,508,997) 3,660,367
Select Conservative Portfolio,
133,265 shares (cost - $1,505,801) 1,549,872
Select Income Portfolio,
13,570 shares (cost - 154,004) 157,141
Travelers Series Fund Inc.:
Smith Barney Money Market Portfolio,
2,287,109 shares (cost - $2,287,109) 2,287,109
Smith Barney Large Cap Value Portfolio,
108,632 shares (cost - $2,129,987) 2,195,458
Smith Barney International Equity Portfolio,
33,574 shares (cost - $469,875) 461,304
Smith Barney High Income Portfolio,
27,146 shares (cost - $351,610) 343,664
_____________
TOTAL ASSETS (cost - $25,702,168) 26,717,413
LIABILITY
Payable to First Golden American Life Insurance Company of
New York for charges and fees 18,211
_____________
TOTAL NET ASSETS $26,699,202
=============
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998, EXCEPT AS NOTED
<TABLE>
<CAPTION>
Limited
Maturity Hard All-
Bond Assets Growth
Division Division Division
______________________________________
<S> <C> <C> <C>
NET INVESTMENT INCOME (LOSS)
Income:
Dividends $4,057 $807 --
Capital gains distributions -- 518 $470
______________________________________
TOTAL INVESTMENT INCOME 4,057 1,325 470
Expenses:
Mortality and expense risk and
other charges 988 140 432
Annual administrative charges 44 14 34
Contingent deferred sales charges 8 -- 12
______________________________________
TOTAL EXPENSES 1,040 154 478
______________________________________
NET INVESTMENT INCOME (LOSS) 3,017 1,171 (8)
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on investments 1,392 (82) (177)
Net unrealized appreciation
(depreciation) of investments 203 (5,017) 14,043
______________________________________
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $4,612 ($3,928) $13,858
======================================
<FN>
(a) Commencement of operations, February 11, 1998
(b) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Real Fully Multiple
Estate Managed Allocation
Division Division Division
______________________________________
<S> <C> <C> <C>
NET INVESTMENT INCOME (LOSS)
Income:
Dividends $1,915 $4,319 $17,406
Capital gains distributions 3,602 8,029 18,777
______________________________________
TOTAL INVESTMENT INCOME 5,517 12,348 36,183
Expenses:
Mortality and expense risk and
other charges 335 1,241 1,880
Annual administrative charges 34 102 193
Contingent deferred sales charges 29 -- --
______________________________________
TOTAL EXPENSES 398 1,343 2,073
______________________________________
NET INVESTMENT INCOME (LOSS) 5,119 11,005 34,110
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on investments (57) 140 189
Net unrealized appreciation
(depreciation) of investments (8,862) (7,735) (18,339)
______________________________________
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS ($3,800) $3,410 $15,960
======================================
<FN>
(a) Commencement of operations, February 11, 1998
(b) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Capital Rising Emerging
Appreciation Dividends Markets
Division Division Division
______________________________________
<S> <C> <C> <C>
NET INVESTMENT INCOME (LOSS)
Income:
Dividends $1,695 $3,635 --
Capital gains distributions 9,864 26,986 --
______________________________________
TOTAL INVESTMENT INCOME 11,559 30,621 --
Expenses:
Mortality and expense risk and
other charges 1,035 6,073 $221
Annual administrative charges 99 367 8
Contingent deferred sales charges 27 74 --
______________________________________
TOTAL EXPENSES 1,161 6,514 229
______________________________________
NET INVESTMENT INCOME (LOSS) 10,398 24,107 (229)
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on investments (1,319) 9,972 (111)
Net unrealized appreciation
(depreciation) of investments (7,271) (683) (4,156)
______________________________________
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $1,808 $33,396 ($4,496)
======================================
<FN>
(a) Commencement of operations, February 11, 1998
(b) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Value Strategic Small
Equity Equity Cap
Division Division Division
______________________________________
<S> <C> <C> <C>
NET INVESTMENT INCOME (LOSS)
Income:
Dividends $2,451 $1,485 --
Capital gains distributions 902 2,075 --
______________________________________
TOTAL INVESTMENT INCOME 3,353 3,560 --
Expenses:
Mortality and expense risk and
other charges 1,136 436 $1,216
Annual administrative charges 93 30 118
Contingent deferred sales charges 227 -- 64
______________________________________
TOTAL EXPENSES 1,456 466 1,398
______________________________________
NET INVESTMENT INCOME (LOSS) 1,897 3,094 (1,398)
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on investments (1,535) 43 108
Net unrealized appreciation
(depreciation) of investments (3,654) (2,309) 22,839
______________________________________
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS ($3,292) $828 $21,549
======================================
<FN>
(a) Commencement of operations, February 11, 1998
(b) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Managed Liquid Mid-Cap
Global Asset Growth
Division Division(b) Division
______________________________________
<S> <C> <C> <C>
NET INVESTMENT INCOME (LOSS)
Income:
Dividends $2,457 $3,454 $31,084
Capital gains distributions 4,935 -- --
______________________________________
TOTAL INVESTMENT INCOME 7,392 3,454 31,084
Expenses:
Mortality and expense risk and
other charges 1,535 903 4,897
Annual administrative charges 126 65 629
Contingent deferred sales charges 131 4 383
______________________________________
TOTAL EXPENSES 1,792 972 5,909
______________________________________
NET INVESTMENT INCOME (LOSS) 5,600 2,482 25,175
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on investments (94) -- 1,857
Net unrealized appreciation
(depreciation) of investments 21,964 -- 43,328
______________________________________
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $27,470 $2,482 $70,360
======================================
<FN>
(a) Commencement of operations, February 11, 1998
(b) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Growth & Total
Income Research Return
Division Division Division
______________________________________
<S> <C> <C> <C>
NET INVESTMENT INCOME (LOSS)
Income:
Dividends $7,709 $122,748 $92,006
Capital gains distributions -- -- --
______________________________________
TOTAL INVESTMENT INCOME 7,709 122,748 92,006
Expenses:
Mortality and expense risk and
other charges 2,370 16,675 12,840
Annual administrative charges 98 2,191 1,186
Contingent deferred sales charges 68 1,110 268
______________________________________
TOTAL EXPENSES 2,536 19,976 14,294
______________________________________
NET INVESTMENT INCOME (LOSS) 5,173 102,772 77,712
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on investments (2,689) 3,010 682
Net unrealized appreciation
(depreciation) of investments 28,182 141,414 458
______________________________________
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $30,666 $247,196 $78,852
======================================
<FN>
(a) Commencement of operations, February 11, 1998
(b) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Select
Value + High
Growth Appreciation Growth
Division Division Division
______________________________________
<S> <C> <C> <C>
NET INVESTMENT INCOME (LOSS)
Income:
Dividends $15,295 $22,592 $7,182
Capital gains distributions -- 89,080 --
______________________________________
TOTAL INVESTMENT INCOME 15,295 111,672 7,182
Expenses:
Mortality and expense risk and
other charges 2,639 27,089 13,467
Annual administrative charges 205 3,339 2,037
Contingent deferred sales charges 194 4,310 6,420
______________________________________
TOTAL EXPENSES 3,038 34,738 21,924
______________________________________
NET INVESTMENT INCOME (LOSS) 12,257 76,934 (14,742)
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on investments (2,543) 1,129 3,082
Net unrealized appreciation
(depreciation) of investments 38,290 251,837 114,108
______________________________________
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $48,004 $329,900 $102,448
======================================
<FN>
(a) Commencement of operations, February 11, 1998
(b) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Select Select Select
Growth Balanced Conservative
Division Division Division
______________________________________
<S> <C> <C> <C>
NET INVESTMENT INCOME (LOSS)
Income:
Dividends $16,153 $34,434 $18,972
Capital gains distributions -- -- --
______________________________________
TOTAL INVESTMENT INCOME 16,153 34,434 18,972
Expenses:
Mortality and expense risk and
other charges 22,122 29,596 14,092
Annual administrative charges 2,513 1,809 611
Contingent deferred sales charges 3,681 10,390 51
______________________________________
TOTAL EXPENSES 28,316 41,795 14,754
______________________________________
NET INVESTMENT INCOME (LOSS) (12,163) (7,361) 4,218
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on investments 4,062 3,647 4,927
Net unrealized appreciation
(depreciation) of investments 174,548 143,123 36,419
______________________________________
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $166,447 $139,409 $45,564
======================================
<FN>
(a) Commencement of operations, February 11, 1998
(b) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Smith Smith
Barney Barney
Select Money Large Cap
Income Market Value
Division(a) Division Division
______________________________________
<S> <C> <C> <C>
NET INVESTMENT INCOME (LOSS)
Income:
Dividends $945 $54,079 $12,948
Capital gains distributions -- -- 32,373
______________________________________
TOTAL INVESTMENT INCOME 945 54,079 45,321
Expenses:
Mortality and expense risk and
other charges 901 14,886 16,479
Annual administrative charges 50 512 1,358
Contingent deferred sales charges -- -- 283
______________________________________
TOTAL EXPENSES 951 15,398 18,120
______________________________________
NET INVESTMENT INCOME (LOSS) (6) 38,681 27,201
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on investments 18 -- 1,374
Net unrealized appreciation
(depreciation) of investments 3,137 -- 53,676
______________________________________
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $3,149 $38,681 $82,251
======================================
<FN>
(a) Commencement of operations, February 11, 1998
(b) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Smith Smith
Barney Barney
International High
Equity Income
Division Division Combined
______________________________________
<S> <C> <C> <C>
NET INVESTMENT INCOME (LOSS)
Income:
Dividends -- $8,243 $488,071
Capital gains distributions -- 1,897 199,508
______________________________________
TOTAL INVESTMENT INCOME -- 10,140 687,579
Expenses:
Mortality and expense risk and
other charges $3,665 2,436 201,725
Annual administrative charges 366 243 18,474
Contingent deferred sales charges 370 929 29,033
______________________________________
TOTAL EXPENSES 4,401 3,608 249,232
______________________________________
NET INVESTMENT INCOME (LOSS) (4,401) 6,532 438,347
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on investments 297 289 27,611
Net unrealized appreciation
(depreciation) of investments (6,646) (9,106) 1,013,791
______________________________________
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS ($10,750) ($2,285) $1,479,749
======================================
<FN>
(a) Commencement of operations, February 11, 1998
(b) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
<TABLE>
<CAPTION>
Limited
Maturity
Bond
Division(n)
_____________
<S> <C>
NET ASSETS AT MAY 19, 1997 --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $600
Net realized gain (loss) on investments --
Net unrealized appreciation (depreciation) of investments (548)
_____________
Net increase (decrease) in net assets resulting from operations 52
Changes from principal transactions:
Purchase payments 10,001
Contract distributions and terminations --
Transfer payments from (to) Fixed Account and other Divisions --
_____________
Increase in net assets derived from principal transactions 10,001
_____________
Total increase 10,053
_____________
NET ASSETS AT DECEMBER 31, 1997 10,053
</TABLE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Limited
Maturity
Bond
Division(n)
_____________
<S> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $3,017
Net realized gain (loss) on investments 1,392
Net unrealized appreciation (depreciation) of investments 203
_____________
Net increase (decrease) in net assets resulting from operations 4,612
Changes from principal transactions:
Purchase payments 4,243
Contract distributions and terminations (5,921)
Transfer payments from (to) Fixed Account and other Divisions 12,241
_____________
Increase in net assets derived from principal transactions 10,563
_____________
Total increase 15,175
_____________
NET ASSETS AT DECEMBER 31, 1998 $25,228
=============
(a) Commencement of operations, May 19, 1997
(b) Commencement of operations, June 16, 1997
(c) Commencement of operations, July 1, 1997
(d) Commencement of operations, July 16, 1997
(e) Commencement of operations, August 4, 1997
(f) Commencement of operations, August 18, 1997
(g) Commencement of operations, September 2, 1997
(h) Commencement of operations, September 5, 1997
(i) Commencement of operations, September 18, 1997
(j) Commencement of operations, September 23, 1997
(k) Commencement of operations, September 24, 1997
(l) Commencement of operations, October 7, 1997
(m) Commencement of operations, October 8, 1997
(n) Commencement of operations, November 13, 1997
(o) Commencement of operations, December 3, 1997
(p) Commencement of operations, February 11, 1998
(q) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Hard
Assets
Division(o)
_____________
<S> <C>
NET ASSETS AT MAY 19, 1997 --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $902
Net realized gain (loss) on investments --
Net unrealized appreciation (depreciation) of investments (1,004)
_____________
Net increase (decrease) in net assets resulting from operations (102)
Changes from principal transactions:
Purchase payments 4,999
Contract distributions and terminations --
Transfer payments from (to) Fixed Account and other Divisions --
_____________
Increase in net assets derived from principal transactions 4,999
_____________
Total increase 4,897
_____________
NET ASSETS AT DECEMBER 31, 1997 4,897
</TABLE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Hard
Assets
Division(o)
_____________
<S> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $1,171
Net realized gain (loss) on investments (82)
Net unrealized appreciation (depreciation) of investments (5,017)
_____________
Net increase (decrease) in net assets resulting from operations (3,928)
Changes from principal transactions:
Purchase payments 10,986
Contract distributions and terminations --
Transfer payments from (to) Fixed Account and other Divisions 2,411
_____________
Increase in net assets derived from principal transactions 13,397
_____________
Total increase 9,469
_____________
NET ASSETS AT DECEMBER 31, 1998 $14,366
=============
(a) Commencement of operations, May 19, 1997
(b) Commencement of operations, June 16, 1997
(c) Commencement of operations, July 1, 1997
(d) Commencement of operations, July 16, 1997
(e) Commencement of operations, August 4, 1997
(f) Commencement of operations, August 18, 1997
(g) Commencement of operations, September 2, 1997
(h) Commencement of operations, September 5, 1997
(i) Commencement of operations, September 18, 1997
(j) Commencement of operations, September 23, 1997
(k) Commencement of operations, September 24, 1997
(l) Commencement of operations, October 7, 1997
(m) Commencement of operations, October 8, 1997
(n) Commencement of operations, November 13, 1997
(o) Commencement of operations, December 3, 1997
(p) Commencement of operations, February 11, 1998
(q) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
All-
Growth
Division(e)
_____________
<S> <C>
NET ASSETS AT MAY 19, 1997 --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $197
Net realized gain (loss) on investments 1
Net unrealized appreciation (depreciation) of investments (327)
_____________
Net increase (decrease) in net assets resulting from operations (129)
Changes from principal transactions:
Purchase payments 5,000
Contract distributions and terminations --
Transfer payments from (to) Fixed Account and other Divisions 3,429
_____________
Increase in net assets derived from principal transactions 8,429
_____________
Total increase 8,300
_____________
NET ASSETS AT DECEMBER 31, 1997 8,300
</TABLE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
All-
Growth
Division(e)
_____________
<S> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) ($8)
Net realized gain (loss) on investments (177)
Net unrealized appreciation (depreciation) of investments 14,043
_____________
Net increase (decrease) in net assets resulting from operations 13,858
Changes from principal transactions:
Purchase payments 52,783
Contract distributions and terminations (2,091)
Transfer payments from (to) Fixed Account and other Divisions 8,932
_____________
Increase in net assets derived from principal transactions 59,624
_____________
Total increase 73,482
_____________
NET ASSETS AT DECEMBER 31, 1998 $81,782
=============
(a) Commencement of operations, May 19, 1997
(b) Commencement of operations, June 16, 1997
(c) Commencement of operations, July 1, 1997
(d) Commencement of operations, July 16, 1997
(e) Commencement of operations, August 4, 1997
(f) Commencement of operations, August 18, 1997
(g) Commencement of operations, September 2, 1997
(h) Commencement of operations, September 5, 1997
(i) Commencement of operations, September 18, 1997
(j) Commencement of operations, September 23, 1997
(k) Commencement of operations, September 24, 1997
(l) Commencement of operations, October 7, 1997
(m) Commencement of operations, October 8, 1997
(n) Commencement of operations, November 13, 1997
(o) Commencement of operations, December 3, 1997
(p) Commencement of operations, February 11, 1998
(q) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Real
Estate
Division(a)
_____________
<S> <C>
NET ASSETS AT MAY 19, 1997 --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $703
Net realized gain (loss) on investments 6
Net unrealized appreciation (depreciation) of investments 642
_____________
Net increase (decrease) in net assets resulting from operations 1,351
Changes from principal transactions:
Purchase payments 8,370
Contract distributions and terminations --
Transfer payments from (to) Fixed Account and other Divisions 2,450
_____________
Increase in net assets derived from principal transactions 10,820
_____________
Total increase 12,171
_____________
NET ASSETS AT DECEMBER 31, 1997 12,171
</TABLE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Real
Estate
Division(a)
_____________
<S> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $5,119
Net realized gain (loss) on investments (57)
Net unrealized appreciation (depreciation) of investments (8,862)
_____________
Net increase (decrease) in net assets resulting from operations (3,800)
Changes from principal transactions:
Purchase payments 23,949
Contract distributions and terminations (1,942)
Transfer payments from (to) Fixed Account and other Divisions 9,503
_____________
Increase in net assets derived from principal transactions 31,510
_____________
Total increase 27,710
_____________
NET ASSETS AT DECEMBER 31, 1998 $39,881
=============
(a) Commencement of operations, May 19, 1997
(b) Commencement of operations, June 16, 1997
(c) Commencement of operations, July 1, 1997
(d) Commencement of operations, July 16, 1997
(e) Commencement of operations, August 4, 1997
(f) Commencement of operations, August 18, 1997
(g) Commencement of operations, September 2, 1997
(h) Commencement of operations, September 5, 1997
(i) Commencement of operations, September 18, 1997
(j) Commencement of operations, September 23, 1997
(k) Commencement of operations, September 24, 1997
(l) Commencement of operations, October 7, 1997
(m) Commencement of operations, October 8, 1997
(n) Commencement of operations, November 13, 1997
(o) Commencement of operations, December 3, 1997
(p) Commencement of operations, February 11, 1998
(q) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Fully
Managed
Division(a)
_____________
<S> <C>
NET ASSETS AT MAY 19, 1997 --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $2,352
Net realized gain (loss) on investments 12
Net unrealized appreciation (depreciation) of investments 78
_____________
Net increase (decrease) in net assets resulting from operations 2,442
Changes from principal transactions:
Purchase payments 26,106
Contract distributions and terminations --
Transfer payments from (to) Fixed Account and other Divisions 4,900
_____________
Increase in net assets derived from principal transactions 31,006
_____________
Total increase 33,448
_____________
NET ASSETS AT DECEMBER 31, 1997 33,448
</TABLE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Fully
Managed
Division(a)
_____________
<S> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $11,005
Net realized gain (loss) on investments 140
Net unrealized appreciation (depreciation) of investments (7,735)
_____________
Net increase (decrease) in net assets resulting from operations 3,410
Changes from principal transactions:
Purchase payments 75,951
Contract distributions and terminations (2,915)
Transfer payments from (to) Fixed Account and other Divisions 37,266
_____________
Increase in net assets derived from principal transactions 110,302
_____________
Total increase 113,712
_____________
NET ASSETS AT DECEMBER 31, 1998 $147,160
=============
(a) Commencement of operations, May 19, 1997
(b) Commencement of operations, June 16, 1997
(c) Commencement of operations, July 1, 1997
(d) Commencement of operations, July 16, 1997
(e) Commencement of operations, August 4, 1997
(f) Commencement of operations, August 18, 1997
(g) Commencement of operations, September 2, 1997
(h) Commencement of operations, September 5, 1997
(i) Commencement of operations, September 18, 1997
(j) Commencement of operations, September 23, 1997
(k) Commencement of operations, September 24, 1997
(l) Commencement of operations, October 7, 1997
(m) Commencement of operations, October 8, 1997
(n) Commencement of operations, November 13, 1997
(o) Commencement of operations, December 3, 1997
(p) Commencement of operations, February 11, 1998
(q) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Multiple
Allocation
Division(a)
_____________
<S> <C>
NET ASSETS AT MAY 19, 1997 --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $2,119
Net realized gain (loss) on investments 8
Net unrealized appreciation (depreciation) of investments (1,349)
_____________
Net increase (decrease) in net assets resulting from operations 778
Changes from principal transactions:
Purchase payments 22,315
Contract distributions and terminations --
Transfer payments from (to) Fixed Account and other Divisions 2,450
_____________
Increase in net assets derived from principal transactions 24,765
_____________
Total increase 25,543
_____________
NET ASSETS AT DECEMBER 31, 1997 25,543
</TABLE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Multiple
Allocation
Division(a)
_____________
<S> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $34,110
Net realized gain (loss) on investments 189
Net unrealized appreciation (depreciation) of investments (18,339)
_____________
Net increase (decrease) in net assets resulting from operations 15,960
Changes from principal transactions:
Purchase payments 102,392
Contract distributions and terminations (2,978)
Transfer payments from (to) Fixed Account and other Divisions 205,138
_____________
Increase in net assets derived from principal transactions 304,552
_____________
Total increase 320,512
_____________
NET ASSETS AT DECEMBER 31, 1998 $346,055
=============
(a) Commencement of operations, May 19, 1997
(b) Commencement of operations, June 16, 1997
(c) Commencement of operations, July 1, 1997
(d) Commencement of operations, July 16, 1997
(e) Commencement of operations, August 4, 1997
(f) Commencement of operations, August 18, 1997
(g) Commencement of operations, September 2, 1997
(h) Commencement of operations, September 5, 1997
(i) Commencement of operations, September 18, 1997
(j) Commencement of operations, September 23, 1997
(k) Commencement of operations, September 24, 1997
(l) Commencement of operations, October 7, 1997
(m) Commencement of operations, October 8, 1997
(n) Commencement of operations, November 13, 1997
(o) Commencement of operations, December 3, 1997
(p) Commencement of operations, February 11, 1998
(q) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Capital
Appreciation
Division(c)
_____________
<S> <C>
NET ASSETS AT MAY 19, 1997 --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $1,278
Net realized gain (loss) on investments 4
Net unrealized appreciation (depreciation) of investments (270)
_____________
Net increase (decrease) in net assets resulting from operations 1,012
Changes from principal transactions:
Purchase payments 15,165
Contract distributions and terminations --
Transfer payments from (to) Fixed Account and other Divisions --
_____________
Increase in net assets derived from principal transactions 15,165
_____________
Total increase 16,177
_____________
NET ASSETS AT DECEMBER 31, 1997 16,177
</TABLE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Capital
Appreciation
Division(c)
_____________
<S> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $10,398
Net realized gain (loss) on investments (1,319)
Net unrealized appreciation (depreciation) of investments (7,271)
_____________
Net increase (decrease) in net assets resulting from operations 1,808
Changes from principal transactions:
Purchase payments 106,557
Contract distributions and terminations (2,271)
Transfer payments from (to) Fixed Account and other Divisions 12,077
_____________
Increase in net assets derived from principal transactions 116,363
_____________
Total increase 118,171
_____________
NET ASSETS AT DECEMBER 31, 1998 $134,348
=============
(a) Commencement of operations, May 19, 1997
(b) Commencement of operations, June 16, 1997
(c) Commencement of operations, July 1, 1997
(d) Commencement of operations, July 16, 1997
(e) Commencement of operations, August 4, 1997
(f) Commencement of operations, August 18, 1997
(g) Commencement of operations, September 2, 1997
(h) Commencement of operations, September 5, 1997
(i) Commencement of operations, September 18, 1997
(j) Commencement of operations, September 23, 1997
(k) Commencement of operations, September 24, 1997
(l) Commencement of operations, October 7, 1997
(m) Commencement of operations, October 8, 1997
(n) Commencement of operations, November 13, 1997
(o) Commencement of operations, December 3, 1997
(p) Commencement of operations, February 11, 1998
(q) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Rising
Dividends
Division(a)
_____________
<S> <C>
NET ASSETS AT MAY 19, 1997 --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $3,038
Net realized gain (loss) on investments 51
Net unrealized appreciation (depreciation) of investments 5,657
_____________
Net increase (decrease) in net assets resulting from operations 8,746
Changes from principal transactions:
Purchase payments 146,447
Contract distributions and terminations --
Transfer payments from (to) Fixed Account and other Divisions 11,767
_____________
Increase in net assets derived from principal transactions 158,214
_____________
Total increase 166,960
_____________
NET ASSETS AT DECEMBER 31, 1997 166,960
</TABLE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Rising
Dividends
Division(a)
_____________
<S> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $24,107
Net realized gain (loss) on investments 9,972
Net unrealized appreciation (depreciation) of investments (683)
_____________
Net increase (decrease) in net assets resulting from operations 33,396
Changes from principal transactions:
Purchase payments 502,600
Contract distributions and terminations (30,903)
Transfer payments from (to) Fixed Account and other Divisions 142,849
_____________
Increase in net assets derived from principal transactions 614,546
_____________
Total increase 647,942
_____________
NET ASSETS AT DECEMBER 31, 1998 $814,902
=============
(a) Commencement of operations, May 19, 1997
(b) Commencement of operations, June 16, 1997
(c) Commencement of operations, July 1, 1997
(d) Commencement of operations, July 16, 1997
(e) Commencement of operations, August 4, 1997
(f) Commencement of operations, August 18, 1997
(g) Commencement of operations, September 2, 1997
(h) Commencement of operations, September 5, 1997
(i) Commencement of operations, September 18, 1997
(j) Commencement of operations, September 23, 1997
(k) Commencement of operations, September 24, 1997
(l) Commencement of operations, October 7, 1997
(m) Commencement of operations, October 8, 1997
(n) Commencement of operations, November 13, 1997
(o) Commencement of operations, December 3, 1997
(p) Commencement of operations, February 11, 1998
(q) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Emerging
Markets
Division(e)
_____________
<S> <C>
NET ASSETS AT MAY 19, 1997 --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) ($68)
Net realized gain (loss) on investments (15)
Net unrealized appreciation (depreciation) of investments (3,190)
_____________
Net increase (decrease) in net assets resulting from operations (3,273)
Changes from principal transactions:
Purchase payments 17,317
Contract distributions and terminations --
Transfer payments from (to) Fixed Account and other Divisions 1,717
_____________
Increase in net assets derived from principal transactions 19,034
_____________
Total increase 15,761
_____________
NET ASSETS AT DECEMBER 31, 1997 15,761
</TABLE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Emerging
Markets
Division(e)
_____________
<S> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) ($229)
Net realized gain (loss) on investments (111)
Net unrealized appreciation (depreciation) of investments (4,156)
_____________
Net increase (decrease) in net assets resulting from operations (4,496)
Changes from principal transactions:
Purchase payments 3,608
Contract distributions and terminations --
Transfer payments from (to) Fixed Account and other Divisions 4,120
_____________
Increase in net assets derived from principal transactions 7,728
_____________
Total increase 3,232
_____________
NET ASSETS AT DECEMBER 31, 1998 $18,993
=============
(a) Commencement of operations, May 19, 1997
(b) Commencement of operations, June 16, 1997
(c) Commencement of operations, July 1, 1997
(d) Commencement of operations, July 16, 1997
(e) Commencement of operations, August 4, 1997
(f) Commencement of operations, August 18, 1997
(g) Commencement of operations, September 2, 1997
(h) Commencement of operations, September 5, 1997
(i) Commencement of operations, September 18, 1997
(j) Commencement of operations, September 23, 1997
(k) Commencement of operations, September 24, 1997
(l) Commencement of operations, October 7, 1997
(m) Commencement of operations, October 8, 1997
(n) Commencement of operations, November 13, 1997
(o) Commencement of operations, December 3, 1997
(p) Commencement of operations, February 11, 1998
(q) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Value
Equity
Division(d)
_____________
<S> <C>
NET ASSETS AT MAY 19, 1997 --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $3,043
Net realized gain (loss) on investments 2
Net unrealized appreciation (depreciation) of investments (3,301)
_____________
Net increase (decrease) in net assets resulting from operations (256)
Changes from principal transactions:
Purchase payments 38,774
Contract distributions and terminations --
Transfer payments from (to) Fixed Account and other Divisions --
_____________
Increase in net assets derived from principal transactions 38,774
_____________
Total increase 38,518
_____________
NET ASSETS AT DECEMBER 31, 1997 38,518
</TABLE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Value
Equity
Division(d)
_____________
<S> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $1,897
Net realized gain (loss) on investments (1,535)
Net unrealized appreciation (depreciation) of investments (3,654)
_____________
Net increase (decrease) in net assets resulting from operations (3,292)
Changes from principal transactions:
Purchase payments 71,576
Contract distributions and terminations (7,632)
Transfer payments from (to) Fixed Account and other Divisions 13,355
_____________
Increase in net assets derived from principal transactions 77,299
_____________
Total increase 74,007
_____________
NET ASSETS AT DECEMBER 31, 1998 $112,525
=============
(a) Commencement of operations, May 19, 1997
(b) Commencement of operations, June 16, 1997
(c) Commencement of operations, July 1, 1997
(d) Commencement of operations, July 16, 1997
(e) Commencement of operations, August 4, 1997
(f) Commencement of operations, August 18, 1997
(g) Commencement of operations, September 2, 1997
(h) Commencement of operations, September 5, 1997
(i) Commencement of operations, September 18, 1997
(j) Commencement of operations, September 23, 1997
(k) Commencement of operations, September 24, 1997
(l) Commencement of operations, October 7, 1997
(m) Commencement of operations, October 8, 1997
(n) Commencement of operations, November 13, 1997
(o) Commencement of operations, December 3, 1997
(p) Commencement of operations, February 11, 1998
(q) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Strategic
Equity
Division(a)
_____________
<S> <C>
NET ASSETS AT MAY 19, 1997 --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $755
Net realized gain (loss) on investments 10
Net unrealized appreciation (depreciation) of investments 1,186
_____________
Net increase (decrease) in net assets resulting from operations 1,951
Changes from principal transactions:
Purchase payments 13,676
Contract distributions and terminations --
Transfer payments from (to) Fixed Account and other Divisions 2,450
_____________
Increase in net assets derived from principal transactions 16,126
_____________
Total increase 18,077
_____________
NET ASSETS AT DECEMBER 31, 1997 18,077
</TABLE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Strategic
Equity
Division(a)
_____________
<S> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $3,094
Net realized gain (loss) on investments 43
Net unrealized appreciation (depreciation) of investments (2,309)
_____________
Net increase (decrease) in net assets resulting from operations 828
Changes from principal transactions:
Purchase payments --
Contract distributions and terminations --
Transfer payments from (to) Fixed Account and other Divisions 36,747
_____________
Increase in net assets derived from principal transactions 36,747
_____________
Total increase 37,575
_____________
NET ASSETS AT DECEMBER 31, 1998 $55,652
=============
(a) Commencement of operations, May 19, 1997
(b) Commencement of operations, June 16, 1997
(c) Commencement of operations, July 1, 1997
(d) Commencement of operations, July 16, 1997
(e) Commencement of operations, August 4, 1997
(f) Commencement of operations, August 18, 1997
(g) Commencement of operations, September 2, 1997
(h) Commencement of operations, September 5, 1997
(i) Commencement of operations, September 18, 1997
(j) Commencement of operations, September 23, 1997
(k) Commencement of operations, September 24, 1997
(l) Commencement of operations, October 7, 1997
(m) Commencement of operations, October 8, 1997
(n) Commencement of operations, November 13, 1997
(o) Commencement of operations, December 3, 1997
(p) Commencement of operations, February 11, 1998
(q) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Small
Cap
Division(b)
_____________
<S> <C>
NET ASSETS AT MAY 19, 1997 --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) ($142)
Net realized gain (loss) on investments 13
Net unrealized appreciation (depreciation) of investments (965)
_____________
Net increase (decrease) in net assets resulting from operations (1,094)
Changes from principal transactions:
Purchase payments 39,418
Contract distributions and terminations --
Transfer payments from (to) Fixed Account and other Divisions 5,883
_____________
Increase in net assets derived from principal transactions 45,301
_____________
Total increase 44,207
_____________
NET ASSETS AT DECEMBER 31, 1997 44,207
</TABLE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Small
Cap
Division(b)
_____________
<S> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) ($1,398)
Net realized gain (loss) on investments 108
Net unrealized appreciation (depreciation) of investments 22,839
_____________
Net increase (decrease) in net assets resulting from operations 21,549
Changes from principal transactions:
Purchase payments 79,797
Contract distributions and terminations (3,119)
Transfer payments from (to) Fixed Account and other Divisions 65,610
_____________
Increase in net assets derived from principal transactions 142,288
_____________
Total increase 163,837
_____________
NET ASSETS AT DECEMBER 31, 1998 $208,044
=============
(a) Commencement of operations, May 19, 1997
(b) Commencement of operations, June 16, 1997
(c) Commencement of operations, July 1, 1997
(d) Commencement of operations, July 16, 1997
(e) Commencement of operations, August 4, 1997
(f) Commencement of operations, August 18, 1997
(g) Commencement of operations, September 2, 1997
(h) Commencement of operations, September 5, 1997
(i) Commencement of operations, September 18, 1997
(j) Commencement of operations, September 23, 1997
(k) Commencement of operations, September 24, 1997
(l) Commencement of operations, October 7, 1997
(m) Commencement of operations, October 8, 1997
(n) Commencement of operations, November 13, 1997
(o) Commencement of operations, December 3, 1997
(p) Commencement of operations, February 11, 1998
(q) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Managed
Global
Division(b)
_____________
<S> <C>
NET ASSETS AT MAY 19, 1997 --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $2,340
Net realized gain (loss) on investments --
Net unrealized appreciation (depreciation) of investments (4,306)
_____________
Net increase (decrease) in net assets resulting from operations (1,966)
Changes from principal transactions:
Purchase payments 32,435
Contract distributions and terminations --
Transfer payments from (to) Fixed Account and other Divisions 4,167
_____________
Increase in net assets derived from principal transactions 36,602
_____________
Total increase 34,636
_____________
NET ASSETS AT DECEMBER 31, 1997 34,636
</TABLE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Managed
Global
Division(b)
_____________
<S> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $5,600
Net realized gain (loss) on investments (94)
Net unrealized appreciation (depreciation) of investments 21,964
_____________
Net increase (decrease) in net assets resulting from operations 27,470
Changes from principal transactions:
Purchase payments 85,280
Contract distributions and terminations (7,541)
Transfer payments from (to) Fixed Account and other Divisions 39,165
_____________
Increase in net assets derived from principal transactions 116,904
_____________
Total increase 144,374
_____________
NET ASSETS AT DECEMBER 31, 1998 $179,010
=============
(a) Commencement of operations, May 19, 1997
(b) Commencement of operations, June 16, 1997
(c) Commencement of operations, July 1, 1997
(d) Commencement of operations, July 16, 1997
(e) Commencement of operations, August 4, 1997
(f) Commencement of operations, August 18, 1997
(g) Commencement of operations, September 2, 1997
(h) Commencement of operations, September 5, 1997
(i) Commencement of operations, September 18, 1997
(j) Commencement of operations, September 23, 1997
(k) Commencement of operations, September 24, 1997
(l) Commencement of operations, October 7, 1997
(m) Commencement of operations, October 8, 1997
(n) Commencement of operations, November 13, 1997
(o) Commencement of operations, December 3, 1997
(p) Commencement of operations, February 11, 1998
(q) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Liquid
Asset
Division(q)
_____________
<S> <C>
NET ASSETS AT MAY 19, 1997 --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) --
Net realized gain (loss) on investments --
Net unrealized appreciation (depreciation) of investments --
_____________
Net increase (decrease) in net assets resulting from operations --
Changes from principal transactions:
Purchase payments --
Contract distributions and terminations --
Transfer payments from (to) Fixed Account and other Divisions --
_____________
Increase in net assets derived from principal transactions --
_____________
Total increase --
_____________
NET ASSETS AT DECEMBER 31, 1997 --
</TABLE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Liquid
Asset
Division(q)
_____________
<S> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $2,482
Net realized gain (loss) on investments --
Net unrealized appreciation (depreciation) of investments --
_____________
Net increase (decrease) in net assets resulting from operations 2,482
Changes from principal transactions:
Purchase payments 404,872
Contract distributions and terminations (4,052)
Transfer payments from (to) Fixed Account and other Divisions (277,715)
_____________
Increase in net assets derived from principal transactions 123,105
_____________
Total increase 125,587
_____________
NET ASSETS AT DECEMBER 31, 1998 $125,587
=============
(a) Commencement of operations, May 19, 1997
(b) Commencement of operations, June 16, 1997
(c) Commencement of operations, July 1, 1997
(d) Commencement of operations, July 16, 1997
(e) Commencement of operations, August 4, 1997
(f) Commencement of operations, August 18, 1997
(g) Commencement of operations, September 2, 1997
(h) Commencement of operations, September 5, 1997
(i) Commencement of operations, September 18, 1997
(j) Commencement of operations, September 23, 1997
(k) Commencement of operations, September 24, 1997
(l) Commencement of operations, October 7, 1997
(m) Commencement of operations, October 8, 1997
(n) Commencement of operations, November 13, 1997
(o) Commencement of operations, December 3, 1997
(p) Commencement of operations, February 11, 1998
(q) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Mid-Cap
Growth
Division(b)
_____________
<S> <C>
NET ASSETS AT MAY 19, 1997 --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $2,668
Net realized gain (loss) on investments 14
Net unrealized appreciation (depreciation) of investments (3,010)
_____________
Net increase (decrease) in net assets resulting from operations (328)
Changes from principal transactions:
Purchase payments 17,788
Contract distributions and terminations --
Transfer payments from (to) Fixed Account and other Divisions 61,644
_____________
Increase in net assets derived from principal transactions 79,432
_____________
Total increase 79,104
_____________
NET ASSETS AT DECEMBER 31, 1997 79,104
</TABLE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Mid-Cap
Growth
Division(b)
_____________
<S> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $25,175
Net realized gain (loss) on investments 1,857
Net unrealized appreciation (depreciation) of investments 43,328
_____________
Net increase (decrease) in net assets resulting from operations 70,360
Changes from principal transactions:
Purchase payments 165,922
Contract distributions and terminations (9,513)
Transfer payments from (to) Fixed Account and other Divisions 492,058
_____________
Increase in net assets derived from principal transactions 648,467
_____________
Total increase 718,827
_____________
NET ASSETS AT DECEMBER 31, 1998 $797,931
=============
(a) Commencement of operations, May 19, 1997
(b) Commencement of operations, June 16, 1997
(c) Commencement of operations, July 1, 1997
(d) Commencement of operations, July 16, 1997
(e) Commencement of operations, August 4, 1997
(f) Commencement of operations, August 18, 1997
(g) Commencement of operations, September 2, 1997
(h) Commencement of operations, September 5, 1997
(i) Commencement of operations, September 18, 1997
(j) Commencement of operations, September 23, 1997
(k) Commencement of operations, September 24, 1997
(l) Commencement of operations, October 7, 1997
(m) Commencement of operations, October 8, 1997
(n) Commencement of operations, November 13, 1997
(o) Commencement of operations, December 3, 1997
(p) Commencement of operations, February 11, 1998
(q) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Growth &
Income
Division(e)
_____________
<S> <C>
NET ASSETS AT MAY 19, 1997 --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $385
Net realized gain (loss) on investments 1
Net unrealized appreciation (depreciation) of investments (388)
_____________
Net increase (decrease) in net assets resulting from operations (2)
Changes from principal transactions:
Purchase payments --
Contract distributions and terminations --
Transfer payments from (to) Fixed Account and other Divisions 5,150
_____________
Increase in net assets derived from principal transactions 5,150
_____________
Total increase 5,148
_____________
NET ASSETS AT DECEMBER 31, 1997 5,148
</TABLE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Growth &
Income
Division(e)
_____________
<S> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $5,173
Net realized gain (loss) on investments (2,689)
Net unrealized appreciation (depreciation) of investments 28,182
_____________
Net increase (decrease) in net assets resulting from operations 30,666
Changes from principal transactions:
Purchase payments 294,490
Contract distributions and terminations (9,417)
Transfer payments from (to) Fixed Account and other Divisions 127,530
_____________
Increase in net assets derived from principal transactions 412,603
_____________
Total increase 443,269
_____________
NET ASSETS AT DECEMBER 31, 1998 $448,417
=============
(a) Commencement of operations, May 19, 1997
(b) Commencement of operations, June 16, 1997
(c) Commencement of operations, July 1, 1997
(d) Commencement of operations, July 16, 1997
(e) Commencement of operations, August 4, 1997
(f) Commencement of operations, August 18, 1997
(g) Commencement of operations, September 2, 1997
(h) Commencement of operations, September 5, 1997
(i) Commencement of operations, September 18, 1997
(j) Commencement of operations, September 23, 1997
(k) Commencement of operations, September 24, 1997
(l) Commencement of operations, October 7, 1997
(m) Commencement of operations, October 8, 1997
(n) Commencement of operations, November 13, 1997
(o) Commencement of operations, December 3, 1997
(p) Commencement of operations, February 11, 1998
(q) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Research
Division(d)
_____________
<S> <C>
NET ASSETS AT MAY 19, 1997 --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $5,891
Net realized gain (loss) on investments (9)
Net unrealized appreciation (depreciation) of investments (3,845)
_____________
Net increase (decrease) in net assets resulting from operations 2,037
Changes from principal transactions:
Purchase payments 31,272
Contract distributions and terminations --
Transfer payments from (to) Fixed Account and other Divisions 225,882
_____________
Increase in net assets derived from principal transactions 257,154
_____________
Total increase 259,191
_____________
NET ASSETS AT DECEMBER 31, 1997 259,191
</TABLE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Research
Division(d)
_____________
<S> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $102,772
Net realized gain (loss) on investments 3,010
Net unrealized appreciation (depreciation) of investments 141,414
_____________
Net increase (decrease) in net assets resulting from operations 247,196
Changes from principal transactions:
Purchase payments 360,909
Contract distributions and terminations (45,655)
Transfer payments from (to) Fixed Account and other Divisions 1,657,534
_____________
Increase in net assets derived from principal transactions 1,972,788
_____________
Total increase 2,219,984
_____________
NET ASSETS AT DECEMBER 31, 1998 $2,479,175
=============
(a) Commencement of operations, May 19, 1997
(b) Commencement of operations, June 16, 1997
(c) Commencement of operations, July 1, 1997
(d) Commencement of operations, July 16, 1997
(e) Commencement of operations, August 4, 1997
(f) Commencement of operations, August 18, 1997
(g) Commencement of operations, September 2, 1997
(h) Commencement of operations, September 5, 1997
(i) Commencement of operations, September 18, 1997
(j) Commencement of operations, September 23, 1997
(k) Commencement of operations, September 24, 1997
(l) Commencement of operations, October 7, 1997
(m) Commencement of operations, October 8, 1997
(n) Commencement of operations, November 13, 1997
(o) Commencement of operations, December 3, 1997
(p) Commencement of operations, February 11, 1998
(q) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Total
Return
Division(d)
_____________
<S> <C>
NET ASSETS AT MAY 19, 1997 --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $7,181
Net realized gain (loss) on investments 11
Net unrealized appreciation (depreciation) of investments (1,149)
_____________
Net increase (decrease) in net assets resulting from operations 6,043
Changes from principal transactions:
Purchase payments 17,715
Contract distributions and terminations --
Transfer payments from (to) Fixed Account and other Divisions 225,115
_____________
Increase in net assets derived from principal transactions 242,830
_____________
Total increase 248,873
_____________
NET ASSETS AT DECEMBER 31, 1997 248,873
</TABLE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Total
Return
Division(d)
_____________
<S> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $77,712
Net realized gain (loss) on investments 682
Net unrealized appreciation (depreciation) of investments 458
_____________
Net increase (decrease) in net assets resulting from operations 78,852
Changes from principal transactions:
Purchase payments 512,655
Contract distributions and terminations (22,799)
Transfer payments from (to) Fixed Account and other Divisions 902,063
_____________
Increase in net assets derived from principal transactions 1,391,919
_____________
Total increase 1,470,771
_____________
NET ASSETS AT DECEMBER 31, 1998 $1,719,644
=============
(a) Commencement of operations, May 19, 1997
(b) Commencement of operations, June 16, 1997
(c) Commencement of operations, July 1, 1997
(d) Commencement of operations, July 16, 1997
(e) Commencement of operations, August 4, 1997
(f) Commencement of operations, August 18, 1997
(g) Commencement of operations, September 2, 1997
(h) Commencement of operations, September 5, 1997
(i) Commencement of operations, September 18, 1997
(j) Commencement of operations, September 23, 1997
(k) Commencement of operations, September 24, 1997
(l) Commencement of operations, October 7, 1997
(m) Commencement of operations, October 8, 1997
(n) Commencement of operations, November 13, 1997
(o) Commencement of operations, December 3, 1997
(p) Commencement of operations, February 11, 1998
(q) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Value +
Growth
Division(k)
_____________
<S> <C>
NET ASSETS AT MAY 19, 1997 --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) ($168)
Net realized gain (loss) on investments (15)
Net unrealized appreciation (depreciation) of investments (6,290)
_____________
Net increase (decrease) in net assets resulting from operations (6,473)
Changes from principal transactions:
Purchase payments 46,752
Contract distributions and terminations --
Transfer payments from (to) Fixed Account and other Divisions --
_____________
Increase in net assets derived from principal transactions 46,752
_____________
Total increase 40,279
_____________
NET ASSETS AT DECEMBER 31, 1997 40,279
</TABLE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Value +
Growth
Division(k)
_____________
<S> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $12,257
Net realized gain (loss) on investments (2,543)
Net unrealized appreciation (depreciation) of investments 38,290
_____________
Net increase (decrease) in net assets resulting from operations 48,004
Changes from principal transactions:
Purchase payments 224,415
Contract distributions and terminations (14,318)
Transfer payments from (to) Fixed Account and other Divisions 122,959
_____________
Increase in net assets derived from principal transactions 333,056
_____________
Total increase 381,060
_____________
NET ASSETS AT DECEMBER 31, 1998 $421,339
=============
(a) Commencement of operations, May 19, 1997
(b) Commencement of operations, June 16, 1997
(c) Commencement of operations, July 1, 1997
(d) Commencement of operations, July 16, 1997
(e) Commencement of operations, August 4, 1997
(f) Commencement of operations, August 18, 1997
(g) Commencement of operations, September 2, 1997
(h) Commencement of operations, September 5, 1997
(i) Commencement of operations, September 18, 1997
(j) Commencement of operations, September 23, 1997
(k) Commencement of operations, September 24, 1997
(l) Commencement of operations, October 7, 1997
(m) Commencement of operations, October 8, 1997
(n) Commencement of operations, November 13, 1997
(o) Commencement of operations, December 3, 1997
(p) Commencement of operations, February 11, 1998
(q) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Appre-
ciation
Division(h)
_____________
<S> <C>
NET ASSETS AT MAY 19, 1997 --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $18,921
Net realized gain (loss) on investments 5
Net unrealized appreciation (depreciation) of investments (11,197)
_____________
Net increase (decrease) in net assets resulting from operations 7,729
Changes from principal transactions:
Purchase payments 16,390
Contract distributions and terminations --
Transfer payments from (to) Fixed Account and other Divisions 332,433
_____________
Increase in net assets derived from principal transactions 348,823
_____________
Total increase 356,552
_____________
NET ASSETS AT DECEMBER 31, 1997 356,552
</TABLE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Appre-
ciation
Division(h)
_____________
<S> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $76,934
Net realized gain (loss) on investments 1,129
Net unrealized appreciation (depreciation) of investments 251,837
_____________
Net increase (decrease) in net assets resulting from operations 329,900
Changes from principal transactions:
Purchase payments 246,628
Contract distributions and terminations (104,211)
Transfer payments from (to) Fixed Account and other Divisions 2,884,568
_____________
Increase in net assets derived from principal transactions 3,026,985
_____________
Total increase 3,356,885
_____________
NET ASSETS AT DECEMBER 31, 1998 $3,713,437
=============
(a) Commencement of operations, May 19, 1997
(b) Commencement of operations, June 16, 1997
(c) Commencement of operations, July 1, 1997
(d) Commencement of operations, July 16, 1997
(e) Commencement of operations, August 4, 1997
(f) Commencement of operations, August 18, 1997
(g) Commencement of operations, September 2, 1997
(h) Commencement of operations, September 5, 1997
(i) Commencement of operations, September 18, 1997
(j) Commencement of operations, September 23, 1997
(k) Commencement of operations, September 24, 1997
(l) Commencement of operations, October 7, 1997
(m) Commencement of operations, October 8, 1997
(n) Commencement of operations, November 13, 1997
(o) Commencement of operations, December 3, 1997
(p) Commencement of operations, February 11, 1998
(q) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Select
High
Growth
Division(l)
_____________
<S> <C>
NET ASSETS AT MAY 19, 1997 --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) ($694)
Net realized gain (loss) on investments (21)
Net unrealized appreciation (depreciation) of investments (1,359)
_____________
Net increase (decrease) in net assets resulting from operations (2,074)
Changes from principal transactions:
Purchase payments 25,235
Contract distributions and terminations --
Transfer payments from (to) Fixed Account and other Divisions 186,535
_____________
Increase in net assets derived from principal transactions 211,770
_____________
Total increase 209,696
_____________
NET ASSETS AT DECEMBER 31, 1997 209,696
</TABLE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Select
High
Growth
Division(l)
_____________
<S> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) ($14,742)
Net realized gain (loss) on investments 3,082
Net unrealized appreciation (depreciation) of investments 114,108
_____________
Net increase (decrease) in net assets resulting from operations 102,448
Changes from principal transactions:
Purchase payments 29,101
Contract distributions and terminations (103,262)
Transfer payments from (to) Fixed Account and other Divisions 1,366,959
_____________
Increase in net assets derived from principal transactions 1,292,798
_____________
Total increase 1,395,246
_____________
NET ASSETS AT DECEMBER 31, 1998 $1,604,942
=============
(a) Commencement of operations, May 19, 1997
(b) Commencement of operations, June 16, 1997
(c) Commencement of operations, July 1, 1997
(d) Commencement of operations, July 16, 1997
(e) Commencement of operations, August 4, 1997
(f) Commencement of operations, August 18, 1997
(g) Commencement of operations, September 2, 1997
(h) Commencement of operations, September 5, 1997
(i) Commencement of operations, September 18, 1997
(j) Commencement of operations, September 23, 1997
(k) Commencement of operations, September 24, 1997
(l) Commencement of operations, October 7, 1997
(m) Commencement of operations, October 8, 1997
(n) Commencement of operations, November 13, 1997
(o) Commencement of operations, December 3, 1997
(p) Commencement of operations, February 11, 1998
(q) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Select
Growth
Division(i)
_____________
<S> <C>
NET ASSETS AT MAY 19, 1997 --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) ($1,426)
Net realized gain (loss) on investments (11)
Net unrealized appreciation (depreciation) of investments 9,460
_____________
Net increase (decrease) in net assets resulting from operations 8,023
Changes from principal transactions:
Purchase payments 217,030
Contract distributions and terminations (200)
Transfer payments from (to) Fixed Account and other Divisions 476,090
_____________
Increase in net assets derived from principal transactions 692,920
_____________
Total increase 700,943
_____________
NET ASSETS AT DECEMBER 31, 1997 700,943
</TABLE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Select
Growth
Division(i)
_____________
<S> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) ($12,163)
Net realized gain (loss) on investments 4,062
Net unrealized appreciation (depreciation) of investments 174,548
_____________
Net increase (decrease) in net assets resulting from operations 166,447
Changes from principal transactions:
Purchase payments 192,819
Contract distributions and terminations (81,738)
Transfer payments from (to) Fixed Account and other Divisions 1,582,676
_____________
Increase in net assets derived from principal transactions 1,693,757
_____________
Total increase 1,860,204
_____________
NET ASSETS AT DECEMBER 31, 1998 $2,561,147
=============
(a) Commencement of operations, May 19, 1997
(b) Commencement of operations, June 16, 1997
(c) Commencement of operations, July 1, 1997
(d) Commencement of operations, July 16, 1997
(e) Commencement of operations, August 4, 1997
(f) Commencement of operations, August 18, 1997
(g) Commencement of operations, September 2, 1997
(h) Commencement of operations, September 5, 1997
(i) Commencement of operations, September 18, 1997
(j) Commencement of operations, September 23, 1997
(k) Commencement of operations, September 24, 1997
(l) Commencement of operations, October 7, 1997
(m) Commencement of operations, October 8, 1997
(n) Commencement of operations, November 13, 1997
(o) Commencement of operations, December 3, 1997
(p) Commencement of operations, February 11, 1998
(q) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Select
Balanced
Division(j)
_____________
<S> <C>
NET ASSETS AT MAY 19, 1997 --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) ($1,777)
Net realized gain (loss) on investments 5
Net unrealized appreciation (depreciation) of investments 8,247
_____________
Net increase (decrease) in net assets resulting from operations 6,475
Changes from principal transactions:
Purchase payments 103,562
Contract distributions and terminations (600)
Transfer payments from (to) Fixed Account and other Divisions 730,435
_____________
Increase in net assets derived from principal transactions 833,397
_____________
Total increase 839,872
_____________
NET ASSETS AT DECEMBER 31, 1997 839,872
</TABLE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Select
Balanced
Division(j)
_____________
<S> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) ($7,361)
Net realized gain (loss) on investments 3,647
Net unrealized appreciation (depreciation) of investments 143,123
_____________
Net increase (decrease) in net assets resulting from operations 139,409
Changes from principal transactions:
Purchase payments 265,944
Contract distributions and terminations (162,374)
Transfer payments from (to) Fixed Account and other Divisions 2,575,782
_____________
Increase in net assets derived from principal transactions 2,679,352
_____________
Total increase 2,818,761
_____________
NET ASSETS AT DECEMBER 31, 1998 $3,658,633
=============
(a) Commencement of operations, May 19, 1997
(b) Commencement of operations, June 16, 1997
(c) Commencement of operations, July 1, 1997
(d) Commencement of operations, July 16, 1997
(e) Commencement of operations, August 4, 1997
(f) Commencement of operations, August 18, 1997
(g) Commencement of operations, September 2, 1997
(h) Commencement of operations, September 5, 1997
(i) Commencement of operations, September 18, 1997
(j) Commencement of operations, September 23, 1997
(k) Commencement of operations, September 24, 1997
(l) Commencement of operations, October 7, 1997
(m) Commencement of operations, October 8, 1997
(n) Commencement of operations, November 13, 1997
(o) Commencement of operations, December 3, 1997
(p) Commencement of operations, February 11, 1998
(q) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Select
Conservative
Division(m)
_____________
<S> <C>
NET ASSETS AT MAY 19, 1997 --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) ($1,439)
Net realized gain (loss) on investments (11)
Net unrealized appreciation (depreciation) of investments 7,652
_____________
Net increase (decrease) in net assets resulting from operations 6,202
Changes from principal transactions:
Purchase payments 11,009
Contract distributions and terminations (1,648)
Transfer payments from (to) Fixed Account and other Divisions 641,485
_____________
Increase in net assets derived from principal transactions 650,846
_____________
Total increase 657,048
_____________
NET ASSETS AT DECEMBER 31, 1997 657,048
</TABLE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Select
Conservative
Division(m)
_____________
<S> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $4,218
Net realized gain (loss) on investments 4,927
Net unrealized appreciation (depreciation) of investments 36,419
_____________
Net increase (decrease) in net assets resulting from operations 45,564
Changes from principal transactions:
Purchase payments 30,578
Contract distributions and terminations (21,156)
Transfer payments from (to) Fixed Account and other Divisions 837,276
_____________
Increase in net assets derived from principal transactions 846,698
_____________
Total increase 892,262
_____________
NET ASSETS AT DECEMBER 31, 1998 $1,549,310
=============
(a) Commencement of operations, May 19, 1997
(b) Commencement of operations, June 16, 1997
(c) Commencement of operations, July 1, 1997
(d) Commencement of operations, July 16, 1997
(e) Commencement of operations, August 4, 1997
(f) Commencement of operations, August 18, 1997
(g) Commencement of operations, September 2, 1997
(h) Commencement of operations, September 5, 1997
(i) Commencement of operations, September 18, 1997
(j) Commencement of operations, September 23, 1997
(k) Commencement of operations, September 24, 1997
(l) Commencement of operations, October 7, 1997
(m) Commencement of operations, October 8, 1997
(n) Commencement of operations, November 13, 1997
(o) Commencement of operations, December 3, 1997
(p) Commencement of operations, February 11, 1998
(q) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Select
Income
Division(p)
_____________
<S> <C>
NET ASSETS AT MAY 19, 1997 --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) --
Net realized gain (loss) on investments --
Net unrealized appreciation (depreciation) of investments --
_____________
Net increase (decrease) in net assets resulting from operations --
Changes from principal transactions:
Purchase payments --
Contract distributions and terminations --
Transfer payments from (to) Fixed Account and other Divisions --
_____________
Increase in net assets derived from principal transactions --
_____________
Total increase --
_____________
NET ASSETS AT DECEMBER 31, 1997 --
</TABLE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Select
Income
Division(p)
_____________
<S> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) ($6)
Net realized gain (loss) on investments 18
Net unrealized appreciation (depreciation) of investments 3,137
_____________
Net increase (decrease) in net assets resulting from operations 3,149
Changes from principal transactions:
Purchase payments 10
Contract distributions and terminations (1,383)
Transfer payments from (to) Fixed Account and other Divisions 155,315
_____________
Increase in net assets derived from principal transactions 153,942
_____________
Total increase 157,091
_____________
NET ASSETS AT DECEMBER 31, 1998 $157,091
=============
(a) Commencement of operations, May 19, 1997
(b) Commencement of operations, June 16, 1997
(c) Commencement of operations, July 1, 1997
(d) Commencement of operations, July 16, 1997
(e) Commencement of operations, August 4, 1997
(f) Commencement of operations, August 18, 1997
(g) Commencement of operations, September 2, 1997
(h) Commencement of operations, September 5, 1997
(i) Commencement of operations, September 18, 1997
(j) Commencement of operations, September 23, 1997
(k) Commencement of operations, September 24, 1997
(l) Commencement of operations, October 7, 1997
(m) Commencement of operations, October 8, 1997
(n) Commencement of operations, November 13, 1997
(o) Commencement of operations, December 3, 1997
(p) Commencement of operations, February 11, 1998
(q) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Smith
Barney
Money
Market
Division(f)
_____________
<S> <C>
NET ASSETS AT MAY 19, 1997 --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $6,589
Net realized gain (loss) on investments --
Net unrealized appreciation (depreciation) of investments --
_____________
Net increase (decrease) in net assets resulting from operations 6,589
Changes from principal transactions:
Purchase payments 3,856,873
Contract distributions and terminations --
Transfer payments from (to) Fixed Account and other Divisions (3,283,025)
_____________
Increase in net assets derived from principal transactions 573,848
_____________
Total increase 580,437
_____________
NET ASSETS AT DECEMBER 31, 1997 580,437
</TABLE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Smith
Barney
Money
Market
Division(f)
_____________
<S> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $38,681
Net realized gain (loss) on investments --
Net unrealized appreciation (depreciation) of investments --
_____________
Net increase (decrease) in net assets resulting from operations 38,681
Changes from principal transactions:
Purchase payments 16,185,163
Contract distributions and terminations (1,865)
Transfer payments from (to) Fixed Account and other Divisions (14,516,270)
_____________
Increase in net assets derived from principal transactions 1,667,028
_____________
Total increase 1,705,709
_____________
NET ASSETS AT DECEMBER 31, 1998 $2,286,146
=============
(a) Commencement of operations, May 19, 1997
(b) Commencement of operations, June 16, 1997
(c) Commencement of operations, July 1, 1997
(d) Commencement of operations, July 16, 1997
(e) Commencement of operations, August 4, 1997
(f) Commencement of operations, August 18, 1997
(g) Commencement of operations, September 2, 1997
(h) Commencement of operations, September 5, 1997
(i) Commencement of operations, September 18, 1997
(j) Commencement of operations, September 23, 1997
(k) Commencement of operations, September 24, 1997
(l) Commencement of operations, October 7, 1997
(m) Commencement of operations, October 8, 1997
(n) Commencement of operations, November 13, 1997
(o) Commencement of operations, December 3, 1997
(p) Commencement of operations, February 11, 1998
(q) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Smith
Barney
Large Cap
Value
Division(g)
_____________
<S> <C>
NET ASSETS AT MAY 19, 1997 --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) ($1,020)
Net realized gain (loss) on investments 12
Net unrealized appreciation (depreciation) of investments 11,795
_____________
Net increase (decrease) in net assets resulting from operations 10,787
Changes from principal transactions:
Purchase payments 35,736
Contract distributions and terminations (310)
Transfer payments from (to) Fixed Account and other Divisions 286,757
_____________
Increase in net assets derived from principal transactions 322,183
_____________
Total increase 332,970
_____________
NET ASSETS AT DECEMBER 31, 1997 332,970
</TABLE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Smith
Barney
Large Cap
Value
Division(g)
_____________
<S> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $27,201
Net realized gain (loss) on investments 1,374
Net unrealized appreciation (depreciation) of investments 53,676
_____________
Net increase (decrease) in net assets resulting from operations 82,251
Changes from principal transactions:
Purchase payments 99,461
Contract distributions and terminations (33,049)
Transfer payments from (to) Fixed Account and other Divisions 1,712,477
_____________
Increase in net assets derived from principal transactions 1,778,889
_____________
Total increase 1,861,140
_____________
NET ASSETS AT DECEMBER 31, 1998 $2,194,110
=============
(a) Commencement of operations, May 19, 1997
(b) Commencement of operations, June 16, 1997
(c) Commencement of operations, July 1, 1997
(d) Commencement of operations, July 16, 1997
(e) Commencement of operations, August 4, 1997
(f) Commencement of operations, August 18, 1997
(g) Commencement of operations, September 2, 1997
(h) Commencement of operations, September 5, 1997
(i) Commencement of operations, September 18, 1997
(j) Commencement of operations, September 23, 1997
(k) Commencement of operations, September 24, 1997
(l) Commencement of operations, October 7, 1997
(m) Commencement of operations, October 8, 1997
(n) Commencement of operations, November 13, 1997
(o) Commencement of operations, December 3, 1997
(p) Commencement of operations, February 11, 1998
(q) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Smith
Barney
Inter-
national
Equity
Division(h)
_____________
<S> <C>
NET ASSETS AT MAY 19, 1997 --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) ($255)
Net realized gain (loss) on investments (8)
Net unrealized appreciation (depreciation) of investments (1,925)
_____________
Net increase (decrease) in net assets resulting from operations (2,188)
Changes from principal transactions:
Purchase payments 2,279
Contract distributions and terminations --
Transfer payments from (to) Fixed Account and other Divisions 81,637
_____________
Increase in net assets derived from principal transactions 83,916
_____________
Total increase 81,728
_____________
NET ASSETS AT DECEMBER 31, 1997 81,728
</TABLE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Smith
Barney
Inter-
national
Equity
Division(h)
_____________
<S> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) ($4,401)
Net realized gain (loss) on investments 297
Net unrealized appreciation (depreciation) of investments (6,646)
_____________
Net increase (decrease) in net assets resulting from operations (10,750)
Changes from principal transactions:
Purchase payments 44,293
Contract distributions and terminations (8,720)
Transfer payments from (to) Fixed Account and other Divisions 354,375
_____________
Increase in net assets derived from principal transactions 389,948
_____________
Total increase 379,198
_____________
NET ASSETS AT DECEMBER 31, 1998 $460,926
=============
(a) Commencement of operations, May 19, 1997
(b) Commencement of operations, June 16, 1997
(c) Commencement of operations, July 1, 1997
(d) Commencement of operations, July 16, 1997
(e) Commencement of operations, August 4, 1997
(f) Commencement of operations, August 18, 1997
(g) Commencement of operations, September 2, 1997
(h) Commencement of operations, September 5, 1997
(i) Commencement of operations, September 18, 1997
(j) Commencement of operations, September 23, 1997
(k) Commencement of operations, September 24, 1997
(l) Commencement of operations, October 7, 1997
(m) Commencement of operations, October 8, 1997
(n) Commencement of operations, November 13, 1997
(o) Commencement of operations, December 3, 1997
(p) Commencement of operations, February 11, 1998
(q) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Smith
Barney
High
Income
Division(h)
_____________
<S> <C>
NET ASSETS AT MAY 19, 1997 --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) ($183)
Net realized gain (loss) on investments 5
Net unrealized appreciation (depreciation) of investments 1,160
_____________
Net increase (decrease) in net assets resulting from operations 982
Changes from principal transactions:
Purchase payments 3,252
Contract distributions and terminations --
Transfer payments from (to) Fixed Account and other Divisions 49,480
_____________
Increase in net assets derived from principal transactions 52,732
_____________
Total increase 53,714
_____________
NET ASSETS AT DECEMBER 31, 1997 53,714
</TABLE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Smith
Barney
High
Income
Division(h)
_____________
<S> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $6,532
Net realized gain (loss) on investments 289
Net unrealized appreciation (depreciation) of investments (9,106)
_____________
Net increase (decrease) in net assets resulting from operations (2,285)
Changes from principal transactions:
Purchase payments 5,132
Contract distributions and terminations (18,198)
Transfer payments from (to) Fixed Account and other Divisions 305,058
_____________
Increase in net assets derived from principal transactions 291,992
_____________
Total increase 289,707
_____________
NET ASSETS AT DECEMBER 31, 1998 $343,421
=============
(a) Commencement of operations, May 19, 1997
(b) Commencement of operations, June 16, 1997
(c) Commencement of operations, July 1, 1997
(d) Commencement of operations, July 16, 1997
(e) Commencement of operations, August 4, 1997
(f) Commencement of operations, August 18, 1997
(g) Commencement of operations, September 2, 1997
(h) Commencement of operations, September 5, 1997
(i) Commencement of operations, September 18, 1997
(j) Commencement of operations, September 23, 1997
(k) Commencement of operations, September 24, 1997
(l) Commencement of operations, October 7, 1997
(m) Commencement of operations, October 8, 1997
(n) Commencement of operations, November 13, 1997
(o) Commencement of operations, December 3, 1997
(p) Commencement of operations, February 11, 1998
(q) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Combined
_____________
<S> <C>
NET ASSETS AT MAY 19, 1997 --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $51,790
Net realized gain (loss) on investments 70
Net unrealized appreciation (depreciation) of investments 1,454
_____________
Net increase (decrease) in net assets resulting from operations 53,314
Changes from principal transactions:
Purchase payments 4,764,916
Contract distributions and terminations (2,758)
Transfer payments from (to) Fixed Account and other Divisions 58,831
_____________
Increase in net assets derived from principal transactions 4,820,989
_____________
Total increase 4,874,303
_____________
NET ASSETS AT DECEMBER 31, 1997 4,874,303
</TABLE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998 AND
FOR THE PERIOD ENDED DECEMBER 31, 1997, EXCEPT AS NOTED
(CONTINUED)
<TABLE>
<CAPTION>
Combined
_____________
<S> <C>
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) $438,347
Net realized gain (loss) on investments 27,611
Net unrealized appreciation (depreciation) of investments 1,013,791
_____________
Net increase (decrease) in net assets resulting from operations 1,479,749
Changes from principal transactions:
Purchase payments 20,182,114
Contract distributions and terminations (709,023)
Transfer payments from (to) Fixed Account and other Divisions 872,059
_____________
Increase in net assets derived from principal transactions 20,345,150
_____________
Total increase 21,824,899
_____________
NET ASSETS AT DECEMBER 31, 1998 $26,699,202
=============
(a) Commencement of operations, May 19, 1997
(b) Commencement of operations, June 16, 1997
(c) Commencement of operations, July 1, 1997
(d) Commencement of operations, July 16, 1997
(e) Commencement of operations, August 4, 1997
(f) Commencement of operations, August 18, 1997
(g) Commencement of operations, September 2, 1997
(h) Commencement of operations, September 5, 1997
(i) Commencement of operations, September 18, 1997
(j) Commencement of operations, September 23, 1997
(k) Commencement of operations, September 24, 1997
(l) Commencement of operations, October 7, 1997
(m) Commencement of operations, October 8, 1997
(n) Commencement of operations, November 13, 1997
(o) Commencement of operations, December 3, 1997
(p) Commencement of operations, February 11, 1998
(q) Commencement of operations, March 12, 1998
</TABLE>
See accompanying notes.
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
NOTE 1 - ORGANIZATION
First Golden American Life Insurance Company of New York Separate Account NY-
B (the "Account") was established by First Golden American Life Insurance
Company of New York ("First Golden") to support the operations of variable
annuity contracts ("Contracts"). First Golden is a wholly owned subsidiary of
Golden American Life Insurance Company ("Golden American"), a wholly owned
subsidiary of Equitable of Iowa Companies, Inc. First Golden is primarily
engaged in the issuance of variable insurance products and is licensed as a
stock life insurance company in the states of New York and Delaware.
Operations of the Account commenced on May 19, 1997. The Account is
registered as a unit investment trust with the Securities and Exchange
Commission under the Investment Company Act of 1940, as amended. First
Golden provides for variable accumulation and benefits under the contracts by
crediting annuity considerations to one or more divisions within the Account
or the Fixed Separate Account, which is not part of the Account, as directed
by the Contractowners. The portion of the Account's assets applicable to
Contracts will not be chargeable with liabilities arising out of any other
business First Golden may conduct, but obligations of the Account, including
the promise to make benefit payments, are obligations of First Golden. The
assets and liabilities of the Account are clearly identified and
distinguished from the other assets and liabilities of First Golden.
At December 31, 1998, the Account had, under GoldenSelect Contracts ("DVA
Plus"), nineteen investment divisions: Limited Maturity Bond, Hard Assets,
All-Growth, Real Estate, Fully Managed, Multiple Allocation, Capital
Appreciation, Rising Dividends, Emerging Markets, Value Equity, Strategic
Equity, Small Cap, Managed Global, Liquid Asset, Mid-Cap Growth (formerly
OTC), Growth & Income, Research, Total Return, and Value + Growth. The
Account also had, under Empire PrimElite Contracts ("Empire DVA"), thirteen
investment divisions: Appreciation, Select High Growth, Select Growth,
Select Balanced, Select Conservative, Select Income, Smith Barney Money
Market, Smith Barney Large Cap Value (formerly Smith Barney Income and
Growth), Smith Barney International Equity, Smith Barney High Income, Mid-Cap
Growth, Research, and Total Return Divisions (collectively with the divisions
noted above, "Divisions"). The assets in each Division are invested in
shares of a designated series ("Series," which may also be referred to as a
"Portfolio") of mutual funds of The GCG Trust, the Greenwich Street Series
Fund Inc., the Smith Barney Concert Allocation Series Inc. or the Travelers
Series Fund Inc. (the "Trusts"). At December 31, 1998, the following
divisions were available under GoldenSelect Contracts but did not have
investments: Global Fixed Income, Developing World, Growth Opportunities,
PIMCO High Yield Bond, and PIMCO StocksPLUS Growth and Income.
Prior to August 14, 1998, the Account also had certain investment divisions
available from the Equi-Select Series Trust. In an effort to consolidate
operations, First Golden requested permission from the Securities and
Exchange Commission ("SEC") to substitute shares of each Portfolio of the
Equi-Select Series Trust with shares of a similar Series of The GCG Trust. On
August 14, 1998, after approval from the SEC, shares of each Portfolio of the
Equi-Select Series Trust were substituted with shares of a similar Series of
The GCG Trust. The consolidation resulted in the following Series being
substituted from The GCG Trust:
<TABLE>
<CAPTION>
Equi-Select Series Trust The GCG Trust
Investment Division Investment Division
___________________________ ___________________________
<S> <S>
OTC Mid-Cap Growth
Research Research
Total Return Total Return
Value + Growth Value + Growth
</TABLE>
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of the significant accounting policies of the
Account:
USE OF ESTIMATES: The preparation of the financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results could differ from those
estimates.
INVESTMENTS: Investments are made in shares of a Series or Portfolio of the
Trusts and are valued at the net asset value per share of the respective
Series or Portfolio of the Trusts. Investment transactions in each Series or
Portfolio of the Trusts are recorded on the trade date. Distributions of net
investment income and capital gains from each Series or Portfolio of the
Trusts are recognized on the ex-distribution date. Realized gains and losses
on redemptions of the shares of the Series or Portfolio of the Trusts are
determined on the specific identification basis.
FEDERAL INCOME TAXES: Operations of the Account form a part of, and are
taxed with, the total operations of First Golden which is taxed as a life
insurance company under the Internal Revenue Code. Earnings and realized
capital gains of the Account attributable to the Contractowners are excluded
in the determination of the federal income tax liability of First Golden.
NOTE 3 - CHARGES AND FEES
There are two different death benefit options referred to as Standard and
Annual Ratchet. Under the terms of the Contracts, certain charges are
allocated to the Contracts to cover First Golden's expenses in connection
with the issuance and administration of the Contracts. Following is a
summary of these charges:
MORTALITY AND EXPENSE RISK CHARGES: First Golden assumes mortality and
expense risks related to the operations of the Account and, in accordance
with the terms of the Contracts, deducts a daily charge from the assets of
the Account. Daily charges are deducted at annual rates of 1.10% and 1.25%
of the assets attributable to the Standard and Annual Ratchet, respectively,
to cover these risks.
ASSET BASED ADMINISTRATIVE CHARGES: A daily charge at an annual rate of .15%
of assets attributable to the Contracts is deducted daily.
ADMINISTRATIVE CHARGES: An administrative charge of $30 per Contract year is
deducted from the accumulation value of the Contracts to cover ongoing
administrative expenses. The charge is incurred at the beginning of the
Contract processing period and deducted at the end of the Contract processing
period.
CONTINGENT DEFERRED SALES CHARGES: A contingent deferred sales charge
("Surrender Charge") is imposed as a percentage of each premium payment if
the Contract is surrendered or an excess partial withdrawal is taken during
the seven-year period from the date a premium payment is received. The
Surrender Charge is imposed at a rate of 7% during the first year of purchase
declining to 6%, 5%, 4%, 3%, 2% and 1% in the second, third, fourth, fifth,
sixth, and seventh years, respectively.
PREMIUM TAXES: For certain Contracts, premium taxes are deducted, where
applicable, from the accumulation value of each Contract. The amount and
timing of the payment by First Golden depends on the annuitant's state of
residence and currently ranges up to 3.5% of premiums.
FEES WAIVED: Certain charges and fees for various types of Contracts may be
waived by First Golden. Currently no charges and fees are being waived.
NOTE 4 - PURCHASES AND SALES OF INVESTMENT SECURITIES
The aggregate cost of purchases and proceeds from sales of investments were
as follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
___________________________
1998
___________________________
PURCHASES SALES
___________________________
<S> <C> <C>
The GCG Trust:
Limited Maturity Bond Series $235,270 $221,658
Hard Assets Series 14,708 134
All-Growth Series 61,539 1,900
Real Estate Series 38,778 2,124
Fully Managed Series 124,010 2,642
Multiple Allocation Series 343,055 4,237
Capital Appreciation Series 162,917 36,070
Rising Dividends Series 719,476 80,558
Emerging Markets Series 7,711 210
Value Equity Series 87,808 8,564
Strategic Equity Series 40,224 370
Small Cap Series 144,977 3,999
Managed Global Series 128,677 6,075
Liquid Asset Series 568,535 442,884
Mid-Cap Growth Series 696,570 22,376
Growth & Income Series 507,147 89,281
Research Series 2,125,108 47,761
Total Return Series 1,522,048 51,457
Value + Growth Series 374,316 28,818
Greenwich Street Series Fund Inc.:
Appreciation Portfolio 3,149,672 42,817
Smith Barney Concert Allocation Series Inc.:
Select High Growth Portfolio 1,463,771 184,149
Select Growth Portfolio 1,748,031 64,469
Select Balanced Portfolio 2,896,438 223,104
Select Conservative Portfolio 952,350 101,016
Select Income Portfolio 156,208 2,222
Travelers Series Fund Inc.:
Smith Barney Money Market Portfolio 10,349,942 8,643,728
Smith Barney Large Cap Value Portfolio 1,832,568 25,463
Smith Barney International Equity Portfolio 393,338 7,523
Smith Barney High Income Portfolio 339,882 41,154
___________________________
COMBINED $31,185,074 $10,386,763
===========================
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
___________________________
1997
___________________________
PURCHASES SALES
___________________________
<S> <C> <C>
The GCG Trust:
Limited Maturity Bond Series $10,631 $19
Hard Assets Series 5,914 5
All-Growth Series 8,651 16
Real Estate Series 11,586 56
Fully Managed Series 33,599 234
Multiple Allocation Series 27,006 115
Capital Appreciation Series 16,510 57
Rising Dividends Series 161,798 489
Emerging Markets Series 19,032 60
Value Equity Series 41,962 104
Strategic Equity Series 16,993 93
Small Cap Series 45,283 98
Managed Global Series 39,096 132
Liquid Asset Series -- --
Mid-Cap Growth Series 82,349 146
Growth & Income Series 5,553 17
Research Series 263,917 548
Total Return Series 250,608 411
Value + Growth Series 46,747 144
Greenwich Street Series Fund Inc.:
Appreciation Portfolio 368,564 504
Smith Barney Concert Allocation Series Inc.:
Select High Growth Portfolio 211,682 272
Select Growth Portfolio 692,561 658
Select Balanced Portfolio 833,531 1,520
Select Conservative Portfolio 652,178 2,627
Select Income Portfolio -- --
Travelers Series Fund Inc.:
Smith Barney Money Market Portfolio 2,759,578 2,178,683
Smith Barney Large Cap Value Portfolio 322,245 749
Smith Barney International Equity Portfolio 83,926 155
Smith Barney High Income Portfolio 52,776 188
___________________________
COMBINED $7,064,276 $2,188,100
===========================
</TABLE>
NOTE 5 - SUMMARY OF CHANGES FROM UNIT TRANSACTIONS
Contractowners' transactions shown in the following table reflect gross
inflows ("Purchases") and outflows ("Sales") in units for each Division.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
__________________________
1998
__________________________
PURCHASES SALES
__________________________
<S> <C> <C>
Limited Maturity Bond Division 13,900 13,026
Hard Assets Division 769 --
All-Growth Division 4,825 105
Real Estate Division 1,438 86
Fully Managed Division 5,510 80
Multiple Allocation Division 14,526 132
Capital Appreciation Division 6,319 1,571
Rising Dividends Division 31,350 3,619
Emerging Markets Division 1,106 1
Value Equity Division 4,502 464
Strategic Equity Division 2,640 1
Small Cap Division 10,361 265
Managed Global Division 9,472 429
Liquid Asset Division 39,492 30,763
Mid-Cap Growth Division 32,310 1,029
Growth & Income Division 31,543 5,535
Research Division 97,017 2,517
Total Return Division 84,907 3,335
Value + Growth Division 24,811 2,069
Appreciation Division 206,044 6,065
Select High Growth Division 126,910 15,947
Select Growth Division 149,805 4,774
Select Balanced Division 253,839 19,620
Select Conservative Division 82,952 7,887
Select Income Division 13,837 123
Smith Barney Money Market Division 1,056,277 908,145
Smith Barney Large Cap Value Division 96,558 1,398
Smith Barney International Equity Division 26,616 367
Smith Barney High Income Division 24,173 2,838
__________________________
COMBINED 2,453,809 1,032,191
==========================
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
__________________________
1997
__________________________
PURCHASES SALES
__________________________
<S> <C> <C>
Limited Maturity Bond Division 632 --
Hard Assets Division 238 --
All-Growth Division 582 --
Real Estate Division 478 --
Fully Managed Division 1,701 --
Multiple Allocation Division 1,243 --
Capital Appreciation Division 734 --
Rising Dividends Division 8,313 --
Emerging Markets Division 1,812 --
Value Equity Division 2,104 --
Strategic Equity Division 1,265 --
Small Cap Division 3,434 --
Managed Global Division 2,969 --
Liquid Asset Division -- --
Mid-Cap Growth Division 4,268 --
Growth & Income Division 334 --
Research Division 13,748 11
Total Return Division 15,456 --
Value + Growth Division 3,093 --
Appreciation Division 25,446 7
Select High Growth Division 19,327 6
Select Growth Division 63,499 17
Select Balanced Division 76,003 54
Select Conservative Division 59,484 150
Select Income Division -- --
Smith Barney Money Market Division 259,338 206,454
Smith Barney Large Cap Value Division 18,764 22
Smith Barney International Equity Division 6,021 4
Smith Barney High Income Division 3,916 5
__________________________
COMBINED 594,202 206,730
==========================
</TABLE>
NOTE 6 - NET ASSETS
Investments at net asset value less the payable to First Golden American Life
Insurance Company of New York for charges and fees at December 31, 1998
consisted of the following:
<TABLE>
<CAPTION>
Limited
Maturity Hard All- Real
Bond Assets Growth Estate
Division Division Division Division
_____________________________________________________
<S> <C> <C> <C> <C>
Unit transactions $20,564 $18,396 $68,053 $42,330
Accumulated net investment
income (loss) and net
realized gain (loss) on
investments 5,009 1,991 13 5,771
Net unrealized appreciation
(depreciation) of
investments (345) (6,021) 13,716 (8,220)
_____________________________________________________
$25,228 $14,366 $81,782 $39,881
=====================================================
</TABLE>
<TABLE>
<CAPTION>
Fully Multiple Capital Rising
Managed Allocation Appreciation Dividends
Division Division Division Division
_____________________________________________________
<S> <C> <C> <C> <C>
Unit transactions $141,308 $329,317 $131,528 $772,760
Accumulated net investment
income (loss) and net
realized gain (loss) on
investments 13,509 36,426 10,361 37,168
Net unrealized appreciation
(depreciation) of
investments (7,657) (19,688) (7,541) 4,974
_____________________________________________________
$147,160 $346,055 $134,348 $814,902
=====================================================
</TABLE>
<TABLE>
<CAPTION>
Emerging Value Strategic Small
Markets Equity Equity Cap
Division Division Division Division
_____________________________________________________
<S> <C> <C> <C> <C>
Unit transactions $26,762 $116,073 $52,873 $187,589
Accumulated net investment
income (loss) and net
realized gain (loss) on
investments (423) 3,407 3,902 (1,419)
Net unrealized appreciation
(depreciation) of
investments (7,346) (6,955) (1,123) 21,874
_____________________________________________________
$18,993 $112,525 $55,652 $208,044
=====================================================
</TABLE>
<TABLE>
<CAPTION>
Managed Liquid Mid-Cap Growth &
Global Asset Growth Income
Division Division Division Division
_____________________________________________________
<S> <C> <C> <C> <C>
Unit transactions $153,506 $123,105 $727,899 $417,753
Accumulated net investment
income (loss) and net
realized gain (loss) on
investments 7,846 2,482 29,714 2,870
Net unrealized appreciation
(depreciation) of
investments 17,658 -- 40,318 27,794
_____________________________________________________
$179,010 $125,587 $797,931 $448,417
=====================================================
</TABLE>
<TABLE>
<CAPTION>
Total Value +
Reseach Return Growth Appreciation
Division Division Division Division
_____________________________________________________
<S> <C> <C> <C> <C>
Unit transactions $2,229,942 $1,634,749 $379,808 $3,375,808
Accumulated net investment
income (loss) and net
realized gain (loss) on
investments 111,664 85,586 9,531 96,989
Net unrealized appreciation
(depreciation) of
investments 137,569 (691) 32,000 240,640
_____________________________________________________
$2,479,175 $1,719,644 $421,339 $3,713,437
=====================================================
</TABLE>
<TABLE>
<CAPTION>
Select Select Select Select
High Growth Growth Balanced Conservative
Division Division Division Division
_____________________________________________________
<S> <C> <C> <C> <C>
Unit transactions $1,504,568 $2,386,677 $3,512,749 $1,497,544
Accumulated net investment
income (loss) and net
realized gain (loss) on
investments (12,375) (9,538) (5,486) 7,695
Net unrealized appreciation
(depreciation) of
investments 112,749 184,008 151,370 44,071
_____________________________________________________
$1,604,942 $2,561,147 $3,658,633 $1,549,310
=====================================================
</TABLE>
<TABLE>
<CAPTION>
Smith Smith Smith
Barney Barney Barney
Select Money Large Cap International
Income Market Value Equity
Division Division Division Division
_____________________________________________________
<S> <C> <C> <C> <C>
Unit transactions $153,942 $2,240,876 $2,101,072 $473,864
Accumulated net investment
income (loss) and net
realized gain (loss) on
investments 12 45,270 27,567 (4,367)
Net unrealized appreciation
(depreciation) of
investments 3,137 -- 65,471 (8,571)
_____________________________________________________
$157,091 $2,286,146 $2,194,110 $460,926
=====================================================
</TABLE>
<TABLE>
<CAPTION>
Smith
Barney
High
Income
Division Combined
__________________________
<S> <C> <C>
Unit transactions $344,724 $25,166,139
Accumulated net investment
income (loss) and net
realized gain (loss) on
investments 6,643 517,818
Net unrealized appreciation
(depreciation) of
investments (7,946) 1,015,245
__________________________
$343,421 $26,699,202
==========================
</TABLE>
NOTE 7 - UNIT VALUES
Accumulation unit value information (which is based on total assets) for
units outstanding by Contract type as of December 31, 1998 was as follows:
<TABLE>
<CAPTION>
TOTAL UNIT
DIVISION/CONTRACT UNITS UNIT VALUE VALUE
_______________________________________________________________________________
<S> <C> <C> <C>
LIMITED MATURITY BOND
Contracts in accumulation period:
DVA PLUS - Annual Ratchet 1,506 $16.77 $25,271
HARD ASSETS
Contracts in accumulation period:
DVA PLUS - Annual Ratchet 1,007 14.28 14,380
ALL-GROWTH
Contracts in accumulation period:
DVA PLUS - Standard 98 15.66 1,539
DVA PLUS - Annual Ratchet 5,204 15.43 80,275
______________
81,814
REAL ESTATE
Contracts in accumulation period:
DVA PLUS - Standard 356 22.07 7,857
DVA PLUS - Annual Ratchet 1,474 21.74 32,056
______________
39,913
FULLY MANAGED
Contracts in accumulation period:
DVA PLUS - Standard 2,619 20.84 54,594
DVA PLUS - Annual Ratchet 4,512 20.53 92,634
______________
147,228
MULTIPLE ALLOCATION
Contracts in accumulation period:
DVA PLUS - Standard 9,623 22.27 214,273
DVA PLUS - Annual Ratchet 6,014 21.94 131,945
______________
346,218
CAPITAL APPRECIATION
Contracts in accumulation period:
DVA PLUS - Standard 578 24.75 14,312
DVA PLUS - Annual Ratchet 4,904 24.50 120,132
______________
134,444
RISING DIVIDENDS
Contracts in accumulation period:
DVA PLUS - Standard 1,734 22.79 39,507
DVA PLUS - Annual Ratchet 34,310 22.61 775,717
______________
815,224
</TABLE>
<TABLE>
<CAPTION>
TOTAL UNIT
DIVISION/CONTRACT UNITS UNIT VALUE VALUE
_______________________________________________________________________________
<S> <C> <C> <C>
EMERGING MARKETS
Contracts in accumulation period:
DVA PLUS - Annual Ratchet 2,917 $6.51 $19,001
VALUE EQUITY
Contracts in accumulation period:
DVA PLUS - Standard 1,678 18.41 30,885
DVA PLUS - Annual Ratchet 4,464 18.31 81,729
______________
112,614
STRATEGIC EQUITY
Contracts in accumulation period:
DVA PLUS - Standard 2,037 14.30 29,124
DVA PLUS - Annual Ratchet 1,867 14.23 26,560
______________
55,684
SMALL CAP
Contracts in accumulation period:
DVA PLUS - Standard 3,612 15.44 55,752
DVA PLUS - Annual Ratchet 9,918 15.37 152,406
______________
208,158
MANAGED GLOBAL
Contracts in accumulation period:
DVA PLUS - Standard 2,440 15.02 36,651
DVA PLUS - Annual Ratchet 9,572 14.88 142,479
______________
179,130
LIQUID ASSET
Contracts in accumulation period:
DVA PLUS - Standard 2,755 14.54 40,063
DVA PLUS - Annual Ratchet 5,974 14.33 85,588
______________
125,651
MID-CAP GROWTH
Contracts in accumulation period:
DVA PLUS - Standard 2,042 22.60 46,154
DVA PLUS - Annual Ratchet 5,304 22.43 118,939
Empire DVA - Standard 5,635 22.60 127,380
Empire DVA - Annual Ratchet 22,568 22.43 506,113
______________
798,586
</TABLE>
<TABLE>
<CAPTION>
TOTAL UNIT
DIVISION/CONTRACT UNITS UNIT VALUE VALUE
_______________________________________________________________________________
<S> <C> <C> <C>
GROWTH & INCOME
Contracts in accumulation period:
DVA PLUS - Standard 6,031 $17.08 $103,003
DVA PLUS - Annual Ratchet 20,311 17.01 345,505
______________
448,508
RESEARCH
Contracts in accumulation period:
DVA PLUS - Standard 784 23.03 18,057
DVA PLUS - Annual Ratchet 11,227 22.89 257,003
Empire DVA - Standard 25,978 23.03 598,234
Empire DVA - Annual Ratchet 70,248 22.89 1,607,992
______________
2,481,286
TOTAL RETURN
Contracts in accumulation period:
DVA PLUS - Standard 4,266 17.83 76,042
DVA PLUS - Annual Ratchet 24,995 17.72 442,845
Empire DVA - Standard 11,145 17.83 198,699
Empire DVA - Annual Ratchet 56,622 17.72 1,003,204
______________
1,720,790
VALUE + GROWTH
Contracts in accumulation period:
DVA PLUS - Standard 8,286 16.36 135,579
DVA PLUS - Annual Ratchet 17,549 16.29 285,964
______________
421,543
APPRECIATION
Contracts in accumulation period:
Empire DVA - Standard 73,470 16.53 1,214,748
Empire DVA - Annual Ratchet 151,948 16.47 2,501,941
______________
3,716,689
SELECT HIGH GROWTH
Contracts in accumulation period:
Empire DVA - Standard 29,056 12.36 359,169
Empire DVA - Annual Ratchet 101,228 12.33 1,247,673
______________
1,606,842
</TABLE>
<TABLE>
<CAPTION>
TOTAL UNIT
DIVISION/CONTRACT UNITS UNIT VALUE VALUE
_______________________________________________________________________________
<S> <C> <C> <C>
SELECT GROWTH
Contracts in accumulation period:
Empire DVA - Standard 30,896 $12.32 $380,776
Empire DVA - Annual Ratchet 177,617 12.29 2,182,748
______________
2,563,524
SELECT BALANCED
Contracts in accumulation period:
Empire DVA - Standard 73,693 11.83 871,589
Empire DVA - Annual Ratchet 236,475 11.79 2,788,778
______________
3,660,367
SELECT CONSERVATIVE
Contracts in accumulation period:
Empire DVA - Standard 48,704 11.55 562,685
Empire DVA - Annual Ratchet 85,695 11.52 987,187
______________
1,549,872
SELECT INCOME
Contracts in accumulation period:
Empire DVA - Standard 2,546 11.49 29,244
Empire DVA - Annual Ratchet 11,168 11.45 127,897
______________
157,141
SMITH BARNEY MONEY MARKET
Contracts in accumulation period:
Empire DVA - Standard 35,357 11.43 404,147
Empire DVA - Annual Ratchet 165,659 11.37 1,882,962
______________
2,287,109
SMITH BARNEY LARGE CAP VALUE
Contracts in accumulation period:
Empire DVA - Standard 36,973 19.35 715,300
Empire DVA - Annual Ratchet 76,929 19.24 1,480,158
______________
2,195,458
SMITH BARNEY INTERNATIONAL EQUITY
Contracts in accumulation period:
Empire DVA - Standard 8,768 14.35 125,840
Empire DVA - Annual Ratchet 23,498 14.28 335,464
______________
461,304
</TABLE>
<TABLE>
<CAPTION>
TOTAL UNIT
DIVISION/CONTRACT UNITS UNIT VALUE VALUE
_______________________________________________________________________________
<S> <C> <C> <C>
SMITH BARNEY HIGH INCOME
Contracts in accumulation period:
Empire DVA - Standard 9,401 $13.66 $128,417
Empire DVA - Annual Ratchet 15,845 13.58 215,247
______________
343,664
____________ ______________
COMBINED 1,809,090 $26,717,413
============ ==============
</TABLE>
<PAGE>
<PAGE>
APPENDIX: DESCRIPTION OF BOND RATINGS
Excerpts from Moody's Investors Service, Inc. ("Moody's) description
of its bond ratings:
Aaa: Judged to be the best quality; they carry the smallest degree of
investment risk.
Aa: Judged to be of high quality by all standards; together with the
Aaa group, they comprise what are generally known as high grade
bonds.
A: Possess many favorable investment attributes and are to be
considered as "upper medium grade obligations."
Baa: Considered as medium grade obligations, i.e., they are neither
highly protected nor poorly secured; interest payments and
principal security appear adequate for the present but certain
protective elements may be lacking or may be characteristically
unreliable over any great length of time.
Ba: Judged to have speculative elements; their future cannot be
considered as well assured.
B: Generally lack characteristics of the desirable investment.
Caa: Are of poor standing; such issues may be in default or there may
be present elements of danger with respect to principal or
interest.
Ca: Speculative in a high degree; often in default.
C: Lowest rate class of bonds; regarded as having extremely poor
prospects.
Moody's also applies numerical indicators 1, 2 and 3 to rating
categories. The modifier 1 indicates that the security is in the
higher end of its rating category; 2 indicates a mid-range ranking;
and 3 indicates a ranking toward the lower end of the category.
Excerpts from Standard & Poor's Rating Group ("Standard & Poor's")
description of its bond ratings:
AAA: Highest grade obligations; capacity to pay interest and repay
principal is extremely strong.
AA: Also qualify as high grade obligations; a very strong capacity
to pay interest and repay principal and differs from AAA issues
only in small degree.
A: Regarded as upper medium grade; they have a strong capacity to
pay interest and repay principal although it is somewhat more
susceptible to the adverse effects of changes in circumstances
and economic conditions than debt in higher rated categories.
BBB: Regarded as having an adequate capacity to pay interest and
repay principal; whereas it normally exhibits adequate
protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity
than in higher rated categories this group is the lowest which
qualifies for commercial bank investment.
BB, B,
CCC,
CC: Predominantly speculative with respect to capacity to pay
interest and repay principal in accordance with terms of the
obligation: BB indicates the lowest degree of speculation and
CC the highest.
Standard & Poor's applies indicators "+," no character, and "-" to
its rating categories. The indicators show relative standing within
the major rating categories.
A-1
<PAGE>
<PAGE>
PART C -- OTHER INFORMATION
ITEM 24: FINANCIAL STATEMENTS AND EXHIBITS
FINANCIAL STATEMENTS
(a) (1) All financial statements are included in either the Prospectus
or the Statement of Additional Information, as indicated therein.
(2) Schedules I and III follow. All other schedules to the consolidated
financial statements required by Article 7 of Regulation S-X are
omitted because they are not applicable or because the information
is included elsewhere in the consolidated financial statements or
notes thereto.
- ----------------------------------------------------------------------------
SCHEDULE I
SUMMARY OF INVESTMENTS
OTHER THAN INVESTMENTS IN RELATED PARTIES
(Dollars in thousands)
<TABLE>
<CAPTION>
Balance
Sheet
December 31, 1998 Cost 1 Value Amount
_______________________________________________________________________________
<S> <C> <C> <C>
TYPE OF INVESTMENT
Fixed maturities, available for sale:
Bonds:
United States government and govern-
mental agencies and authorities $3,997 $4,112 $4,112
Public utilities 2,543 2,602 2,602
Corporate securities 20,351 20,724 20,724
Mortgage-backed securities 3,540 3,556 3,556
_______________________________________
Total fixed maturities, available
for sale 30,431 30,994 30,994
Short-term investments 3,231 3,231
___________ ___________
Total investments $33,662 $34,225
=========== ===========
<FN>
Note 1: Cost is defined as amortized cost for bonds and short-term investments
adjusted for amortization of premiums and accrual of discounts.
</TABLE>
<PAGE>
<PAGE>
SCHEDULE III
SUPPLEMENTARY INSURANCE INFORMATION
(Dollars in thousands)
<TABLE>
<CAPTION>
Column Column Column Column Column Column
A B C D E F
________________________________________________________________________________
Future
Policy Other
De- Benefits, Policy
ferred Losses, Claims Insur-
Policy Claims Un- and ance
Acqui- and earned Bene- Premiums
sition Loss Revenue fits and
Segment Costs Expenses Reserve Payable Charges
________________________________________________________________________________
POST-MERGER
________________________________________________________________________________
<S> <C> <C> <C> <C> <C>
Year ended December 31, 1998:
Life insurance $2,347 $10,830 -- -- $239
Period October 25, 1997
through December 31, 1997:
Life insurance $189 $2,506 -- -- $8
PRE-MERGER
________________________________________________________________________________
Period January 1, 1997
through October 24, 1997:
Life insurance N/A N/A N/A N/A $4
Period December 17, 1996
through December 31, 1996:
Life insurance -- -- -- -- --
</TABLE>
<PAGE>
<PAGE>
SCHEDULE III
SUPPLEMENTARY INSURANCE INFORMATION - CONTINUED
(Dollars in thousands)
<TABLE>
<CAPTION>
Column Column Column Column Column Column
A G H I J K
________________________________________________________________________________
Amorti-
Benefits zation
Claims, of
Losses Deferred
Net and Policy Other
Invest- Settle- Acqui- Opera-
ment ment sition ting Premiums
Segment Income Expenses Costs Expenses Written
________________________________________________________________________________
POST-MERGER
________________________________________________________________________________
<S> <C> <C> <C> <C> <C>
Year ended December 31, 1998:
Life insurance $1,844 $376 $76 $378 --
Period October 25, 1997
through December 31, 1997:
Life insurance $286 $26 $13 $159 --
PRE-MERGER
________________________________________________________________________________
Period January 1, 1997
through October 24, 1997:
Life insurance $1,449 $48 $7 $445 --
Period December 17, 1996
through December 31, 1996:
Life insurance $65 -- -- -- --
</TABLE>
<PAGE>
<PAGE>
EXHIBITS
(b) (1) Resolution of the board of directors of the Depositor
authorizing the establishment of the Registrant /1
(2) Custodial Agreement between Registrant and the Bank
of New York /2
(3) (a) Distribution Agreement between the
Depositor and Directed Services, Inc /1
(b) Dealers Agreement /1
(4) (a) Individual Deferred Combination Variable and Fixed
Annuity Contract /2
(b) Individual Deferred Combination Variable and Fixed
Annuity Contract /2
(c) Individual Retirement Annuity Rider Page /1
(d) Schedule Page to the DVA Plus NY Contract
featuring The Galaxy VIP Fund
(5) (a) Individual Deferred Combination Variable and Fixed
Annuity Application /2
(b) Individual Deferred Combination Variable and Fixed
Annuity Application /2
(6) (a) Articles of Incorporation of First Golden
American Life Insurance Company of New York /1
(b) By-Laws of First Golden American Life Insurance
Company of New York /1
(c) Resolution of board of directors for Powers of Attorney /2
(7) Not applicable
(8) (a) Services Agreement, dated November 8, 1996, between
Directed Services, Inc. and First Golden American Life
Insurance Company of New York /1
(b) Administrative Services Agreement, dated November 8, 1996,
between First Golden American Life Insurance Company of New
York and Golden American Life Insurance /1
(c) Administrative Services Agreement between First Golden
American Life Insurance Company of New York and Equitable
Life Insurance Company of Iowa /2
(d) Participation Agreement between Depositor and the Travelers
Series Fund Inc /2
(e) Participation Agreement between Depositor and the Greenwich
Street Series /2
(f) Participation Agreement between Depositor and the
Smith Barney Concert Allocation Series Inc /2
(g) Participation Agreement between Depositor and PIMCO Variable
Insurance Trust /2
(h) Asset Management Agreement, dated March 30, 1998,
between First Golden and ING Investment Management LLC /2
(i) Revolving Note Payable between First Golden and SunTrust
Bank as of July 27, 1998 and expiring July 31, 1999 /2
(j) Revolving Note Payable between First Golden and SunTrust
Bank as of July 31, 1999 and expiring July 31, 2000
(k) Form of Participation Agreement between First Golden
American Life Insurance Company of New York and
The Galaxy VIP Fund
(9) Opinion and Consent of Myles R. Tashman, Esq. /2
(10) (a) Consent of Sutherland Asbill & Brennan LLP
(b) Consent of Ernst & Young, LLP Independent Auditors
(c) Consent of Myles R. Tashman
(11) Not applicable
(12) Not applicable
(13) Schedule of Performance Data /1
(14) Not applicable
(15) Powers of Attorney
(16) Subsidiaries of ING Groep N.V. /2
________________________
/1 Incorporated by reference to Pre-Effective Amendment No. 1 to the
Registration Statement for Separate Account NY-B filed with the
Securities and Exchange Commission on March 18, 1997.
/2 Incorporated by reference to Post-Effective Amendment No. 3 to the
Registration Statement for Separate Account NY-B filed with the
Securities and Exchange Commission on April 29, 1999.
<PAGE>
<PAGE>
ITEM 25: DIRECTORS AND OFFICERS OF THE DEPOSITOR
Principal Positions and Offices
Name Business Address with Depositor
R. Brock Armstrong Equitable Life of Iowa Director and Chairman
909 Locust Street
Des Moines, IA 50309
Barnett Chernow Golden American Life Ins. Co. President and
1475 Dunwoody Drive Director
West Chester, PA 19380
Myles R. Tashman Golden American Life Ins. Co. Executive Vice President
1475 Dunwoody Drive General Counsel,
West Chester, PA 19380 Secretary and Director
Carol V. Coleman 5 Flint Ave Director
Larchmont, NY 10538
Stephen J. Friedman Debevoise and Plimpton Director
875 Third Avenue
New York, NY 10022
Andrew Kalinowski Upstate Special Risk/Life Director
Mark
8 Tobey Village Office Park
Pittsford, NY 14534
Bernard Levitt 2603 N.W. 13th Street Director
Delray Beach, FL 33445
Roger A. Martin Lawrence O'Donnell Marcus, Director
L.L.P.
61 Broadway, Suite 2324
New York, NY 10006
Michael W. Cunningham ING Insurance Operations Director
5780 Powers Ferry Road
Atlanta, GA 30327-4390
James R. McInnis Golden American Life Ins. Co. Executive Vice President
1475 Dunwoody Drive
West Chester, PA 19380
Stephen J. Preston Golden American Life Ins. Co. Executive Vice President
1475 Dunwoody Drive and Chief Actuary
West Chester, PA 19380
David L. Jacobson Golden American Life Ins. Co. Senior Vice President
1475 Dunwoody Drive and Assistant Secretary
West Chester, PA 19380
Mary Bea Wilkinson First Golden American Life Senior Vice President
Ins. Co. of New York and Treasurer
230 Park Avenue, Suite 966
New York, NY 10169
E. Robert Koster Golden American Life Ins. Co. Senior Vice President
1475 Dunwoody Drive and Chief Financial
West Chester, PA 19380 Officer
Marilyn Talman Golden American Life Ins. Co. Vice President,
1475 Dunwoody Drive Associate General Counsel
West Chester, PA 19380 and Assistant Secretary
<PAGE>
<PAGE>
ITEM 26: PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE DEPOSITOR OR
REGISTRANT
The Depositor does not directly or indirectly control any person.
The following persons control or are under common control with the Depositor:
DIRECTED SERVICES, INC. ("DSI") - This corporation is a general business
corporation organized under the laws of the State of New York, and is wholly
owned by ING Groep N.V. ("ING"). The primary purpose of DSI is to act as
a broker-dealer in securities. It acts as the principal underwriter and
distributor of variable insurance products including variable annuities as
required by the SEC. The contracts are issued by the Depositor. DSI also has
the power to carry on a general financial, securities, distribution, advisory
or investment advisory business; to act as a general agent or broker for
insurance companies and to render advisory, managerial, research and
consulting services for maintaining and improving managerial efficiency and
operation. DSI is also registered with the SEC as an investment adviser.
Golden American Life Insurance Company ("Golden American") - This corporation
is a stock life insurance company organized under the laws of the State of
Delaware. The primary purpose of Golden American is to offer variable annuity
and variable life insurance contracts. Golden American is a wholly owned
subsidiary of EIC and is authorized to do business in the District of
Columbia and all all states except New York.
The registrant is a segregated asset account of the Company and is
therefore owned and controlled by the Company. All of the Company's
outstanding stock is owned and controlled by ING. Various companies
and other entities controlled by ING may therefore be considered to be
under common control with the registrant or the Company. Such other
companies and entities, together with the identity of their controlling
persons (where applicable), are set forth on the organizational chart
in Exhibit 16.
<PAGE>
<PAGE>
Item 27: Number of Contractowners
There are 217 qualified contract owners and 703 non-qualified contract
owners as of October 31, 1999.
ITEM 28: INDEMNIFICATION
First Golden shall indemnify (including therein the prepayment of expenses)
any person who is or was a director, officer or employee, or who is or was
serving at the request of First Golden as a director, officer or employee
of another corporation, partnership, joint venture, trust or other enterprise
for expenses (including attorney's fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by him with respect to any
threatened, pending or completed action, suit or proceedings against him by
reason of the fact that he is or was such a director, officer or employee to
the extent and in the manner permitted by law.
First Golden may also, to the extent permitted by law, indemnify any other
person who is or was serving First Golden in any capacity. The Board of
Directors shall have the power and authority to determine who may be indemnified
under this paragraph and to what extent (not to exceed the extent provided in
the above paragraph) any such person may be indemnified.
First Golden may purchase and maintain insurance on behalf of any such person
or persons to be indemnified under the provision in the above paragraphs,
against any such liability to the extent permitted by law.
Insofar as indemnification for liabilities arising under the Securities Act of
1933, as amended, may be permitted to directors, officers and controlling
persons of the Registrant, as provided above or otherwise, the Registrant has
been advised that in the opinion of the SEC such indemnification by the
Depositor is against public policy, as expressed in the Securities Act of 1933,
and therefore may be unenforceable. In the event that a claim of such
indemnification (except insofar as it provides for the payment by the Depositor
of expenses incurred or paid by a director, officer or controlling person in
the successful defense of any action, suit or proceeding) is asserted against
the Depositor by such director, officer or controlling person and the SEC is
still of the same opinion, the Depositor or Registrant will, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question of whether such
indemnification by the Depositor is against public policy as expressed by the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
ITEM 29: PRINCIPAL UNDERWRITER
(a) At present, Directed Services, Inc. ("DSI"), the Registrant's Distributor,
also serves as principal underwriter for all contracts issued by Golden
American. DSI is the principal underwriter for Separate Account A, Separate
Account B, Equitable Life Insurance Company of Iowa Separate Account A, First
Golden American Life Insurance Company of New York Separate Account NY-B,
Alger Separate Account A of Golden American and The GCG Trust.
(b) The following information is furnished with respect to the principal
officers and directors of Directed Services, Inc., the Registrant's
Distributor. The principal business address for each officer and director
following is 1475 Dunwoody Drive, West Chester, PA 19380-1478, unless
otherwise noted.
Name and Principal Positions and Offices
Business Address with Underwriter
- ------------------- ---------------------
James R. McInnis President
Barnett Chernow Director and Executive Vice President
Myles R. Tashman Director, Executive Vice President,
Secretary and General Counsel
R. Lawrence Roth Director
VESTAX Capital Corporation
1931 Georgetown Road
Hudeson, OH 44236
Stephen J. Preston Executive Vice President
Jodie Schult Treasurer
Equitable of Iowa Companies
909 Locust Street
Des Moines, IA 50309
David L. Jacobson Senior Vice President
(c)
1998 Net
Name of Underwriting Compensation
Principal Discounts and on Brokerage
Underwriter Commissions Redemption Commissions Compensation
----------- ----------- ---------- ----------- ------------
DSI $1,754,000 $0 $0 $0
<PAGE>
<PAGE>
ITEM 30: LOCATION OF ACCOUNTS AND RECORDS
Accounts and records are maintained by First Golden American Life Insurance
Company of New York at 230 Park Avenue, New York, NY, by Golden American Life
Insurance Company and Directed Services, Inc. at 1475 Dunwoody Drive, West
Chester, PA 19380 and by Equitable Life Insurance Company of Iowa, an
affiliate, at 909 Locust Street, Des Moines, IA 50309.
ITEM 31: MANAGEMENT SERVICES
None.
ITEM 32: UNDERTAKINGS
(a) Registrant hereby undertakes to file a post-effective amendment to this
registration statement as frequently as it is necessary to ensure that the
audited financial statements in the registration statement are never
more that 16 months old so long as payments under the variable annuity
contracts may be accepted.
(b) Registrant hereby undertakes to include either (1) as part of any
application to purchase a contract offered by the prospectus, a space that an
applicant can check to request a Statement of Additional Information, or (2) a
post card or similar written communication affixed to or included in the
prospectus that the applicant can remove to send for a Statement of Additional
Information; and,
(c) Registrant hereby undertakes to deliver any Statement of Additional
Information and any financial statements required to be made available under
this Form promptly upon written or oral request.
(d) First Golden American Life Insurance Company of New York hereby represents
that the fees and charges deducted under the Contract, in the aggregate,
are reasonable in relation to the services rendered, the expenses expected
to be incurred, and the risks assumed by First Golden American Life Insurance
Company of New York.
REPRESENTATIONS
1. The account meets definition of a "separate account" under federal
securities laws.
<PAGE>
<PAGE>
SIGNATURES
As required by the Securities Act of 1933 and the Investment Company Act
of 1940, the Registrant certifies that it meets the requirements of Securities
Act Rule 485(b) for effectiveness of this Registration Statement and has
caused this Registration Statement to be signed on its behalf in the City
of West Chester, and the Commonwealth of Pennsylvania, on the 1st day of
November, 1999.
SEPARATE ACCOUNT NY-B
(Registrant)
By: FIRST GOLDEN AMERICAN LIFE
INSURANCE COMPANY OF NEW YORK
(Depositor)
By: -----------------------------
Barnett Chernow*
President and Director
Attest: /s/Marilyn Talman
---------------------------
Marilyn Talman
Vice President, Associate General Counsel
and Assistant Secretary of Depositor
As required by the Securities Act of 1933, this Registration Statement
has been signed below by the following persons in the capacities
indicated on November 1, 1999.
Signature Title
--------- -----
------------------ President and Director
Barnett Chernow* of Depositor
------------------- Senior Vice President and
E. Robert Koster* Chief Financial Officer
DIRECTORS OF DEPOSITOR
---------------------
R. Brock Armstrong*
--------------------- ------------------
Myles R. Tashman* Bernard Levitt*
--------------------- ------------------
Michael W. Cunningham* Roger A. Martin*
--------------------- ------------------
Stephen J. Friedman* Andrew Kalinowski*
--------------------- ------------------
Carol V. Coleman* Barnett Chernow*
By: /s/Marilyn Talman , Attorney-in-Fact
------------------
Marilyn Talman
_______________________
*Executed by Marilyn Talman on behalf of those indicated pursuant to
Power of Attorney.
<PAGE>
<PAGE>
EXHIBIT INDEX
ITEM EXHIBIT PAGE #
4(d) Schedule Page to the DVA Plus-NY Contract EX-99.B4D
featuring The Galaxy VIP Fund
8(j) Revolving Note Payable between First Golden
and SunTrust Bank as of July 31, 1999 and
expiring July 31, 2000 EX-99.B8J
8(k) Form of Participation Agreement between
First Golden American Life Insurance
Company of New York and The Galaxy VIP Fund EX-99.B8K
10(a) Consent of Sutherland Asbill & Brennan LLP EX-99.B10A
10(b) Consent of Ernst & Young LLP, Independent Auditors EX-99.B10B
10(c) Consent of Myles R. Tashman, Esq. EX-99.B10C
15 Powers of Attorney EX-99.B15
<PAGE>
<PAGE>
<PAGE>
<PAGE>
EXHIBIT 4(d)
THE SCHEDULE
THE VARIABLE SEPARATE ACCOUNTS
|-----------------------------------------------------------------------|
|-----------------------------------------------------------------------|
| Annuitant Owner |
| MARK HARMON MARK HARMON |
|-----------------------------------------------------------------------|
| |
| Initial Premium Annuity Option Annuity |
| Commencement Date |
| |
| $120,000.00 LIFE 10 YEAR AUGUST 1, 2049 |
| CERTAIN |
|-----------------------------------------------------------------------|
| Separate Account(s) Contract Number |
| SEPARATE ACCOUNT B I000001-FP (Q) |
|-----------------------------------------------------------------------|
DIVISIONS INVESTING IN SHARES OF A MUTUAL FUND
Separate Account B (the "Account") is a unit investment trust
Separate Account, organized in and governed by the laws of the State
of Delaware, our state of domicile. The Account is divided into
Divisions. Each Division listed below invests in shares of the
mutual fund portfolio (the "Series") designated. Each portfolio is a
part of The GCG Trust managed by Directed Services, Inc.
SERIES SERIES
------ ------
Equity Income Real Estate
Fully Managed Hard Assets
Value Equity Limited Maturity Bond
Small Cap Liquid Asset
Capital Appreciation Strategic Equity
Rising Dividends Managed Global
Mid-Cap Growth Research
Total Return Growth
Capital Growth Global Fixed Income
Emerging Markets Developing World
The Division listed below invests in shares of the mutual fund
portfolio (the "Portfolio") designated. The portfolios are a part of
the PIMCO Trust managed by Pacific Investment Managment Company.
PORTFOLIO
---------
High Yield Bond
StocksPlus Growth and Income
The Divisions below invests in shares of the mutual fund portfolio
(the "Portfolio") designated. Each portfolio is a part of The Galaxy
VIP fund, managed by Fleet Investment Advisors, Inc.
PORTFOLIO
---------
Equity
Small Company Growth
Asset Allocation
Growth & Income
High Quality Bond
GA-IA-1037-02/97 3B
<PAGE>
<PAGE>
<PAGE>
<PAGE>
EXHIBIT 8(j)
SINGLE PAYMENT NOTE
$10,000,000 As of July 31, 1999
For value received, the Obligor promises to pay to the order of
SunTrust Bank, Atlanta (the "Bank"), on July 31, 2000, or at such
earlier date as hereinafter provided, the principal sum of
TEN MILLION DOLLARS ($10,000,000)
or such lesser amount of loans as may from time to time, at the
Bank's sole discretion, be advanced or, upon repayment, readvanced by
the Bank hereunder together with interest from the date hereof on the
unpaid principal balance at such annual rate or rates of interest as
shall be computed and paid in accordance with the terms and
conditions hereinafter set forth.
This note evidences the obligation of the Obligor to repay,
with interest, any and all present and future indebtedness of the
Obligor for loans at any time hereafter made or extended by the Bank
hereunder up to the aggregate principal amount of $10,000,000 at any
time outstanding. The payment of any indebtedness evidenced by this
note shall not affect the enforceability of this note as to any
future, different or other indebtedness evidenced hereby.
The Obligor acknowledges and agrees that Southland Life
Insurance Company ("Southland"), Life Insurance Company of Georgia
("LICG"), ING America Life Corporation ("America Life"), Security
Life of Denver Insurance Company ("Security Life"), First Columbine
Life Insurance Company (hereinafter "Columbine"), Midwestern United
Life Insurance Company ("Midwestern"), First ING Life Insurance
Company of New York ("First ING New York"), United Life and Annuity
Insurance Company ("United Life"), Ameribest Life Insurance Company,
("Ameribest"), Equitable Life Insurance Company of Iowa ("Equitable
Life"), USG Annuity and Life Insurance Company ("USG"), Golden
American Life Insurance Company ("Golden American"), Equitable
American Insurance Company ("Equitable American"), Locust Street
Securities, Inc. ("Locust Street"), Equitable of Iowa Companies, Inc.
("Equitable of Iowa"), and the Obligor are all direct or indirect
subsidiaries of ING America Insurance Holdings, Inc. ("America
Holdings") or ING Insurance International B.V. ("ING International").
On the date that this note is being executed, LICG, Security Life,
America Life, Southland, Equitable Life, USG, and America Holdings
are executing separate notes to the Bank in the maximum principal
amount of $100,000,000 each; Golden American, Columbine and United
Life are executing separate notes to the Bank in the maximum
principal amount of $75,000,000 each; Equitable of Iowa is executing
a separate note to the Bank in the maximum principal amount of
$50,000,000; First ING New York, Locust Street and Ameribest are
executing separate notes to the Bank in the maximum principal amount
of $10,000,000 each; Midwestern is executing a separate note to the
Bank in the maximum principal amount of $30,000,000; and Equitable
American is executing a separate note to the Bank in the maximum
principal amount of $25,000,000, each of which notes are
substantially similar to this note (the "Affiliate Notes"). Obligor
agrees that the aggregate unpaid principal balance from time to time
outstanding on this note plus the aggregate unpaid principal balance
from time to time outstanding on the Affiliate Notes will at no time
exceed $150,000,000. Obligor will not request any disbursement of
principal under this note if, after such disbursement, the unpaid
principal balance of this note plus the aggregate unpaid principal of
the Affiliate Notes will exceed $150,000,000.
If the Obligor desires a disbursement of principal hereunder
(an "Advance") the Obligor shall give the Bank written or telephonic
notice of the amount of such Advance and the period of time from one
(1) day to thirty (30) days that such Advance shall be outstanding
(the "Interest Period"), provided, however, (a) if any Interest
Period would otherwise end on a day which is not a day on which the
Bank and commercial banks in New York, New York, are open for
business (a "Business Day"), that Interest Period shall be extended
through the next succeeding day which is a Business Day, and (b) no
Interest Period shall extend beyond the maturity date of this note.
Such written or telephonic notice with respect to the amount of an
Advance and the Interest Period to be
1
<PAGE>
<PAGE>
applicable thereto shall be given to the Bank by the Obligor before
one o'clock p.m. Atlanta time, on the first Business Day of the
applicable Interest Period. All telephonic notices shall be promptly
confirmed in writing.
The Obligor shall pay interest upon each Advance from the date
of disbursement through the last day of the applicable Interest
Period (including the date of disbursement but excluding the date of
repayment) at a rate per annum, calculated on the basis of a 360 day
year and upon the actual number of days elapsed, equal to either of
the following rates of interest as selected by the Obligor: (1) the
per annum rate of interest equal to the cost of funds of Bank for the
Interest Period applicable to such Advance for amounts substantially
similar to the amount of such Advance plus .25% all as determined by
Bank in accordance with its usual practices in determining its cost
of funds (the "Cost of Funds Rate") or (2) a per annum rate of
interest that would be applicable to the requested Advance as quoted
by the Bank to the Obligor (the "Quoted Rate"). Unpaid interest
accruing at either of such rates will be due and payable on the last
Business Day of the applicable Interest Period. The Bank will advise
the Obligor of the Cost of Funds Rate and the Quoted Rate that will
be applicable to a requested Advance before 1:30 p.m. Atlanta time on
the Business Day that the Bank receives a request for an Advance from
the Obligor. The Obligor will advise the Bank as to whether the
Obligor has selected the Cost of Funds Rate or the Quoted Rate before
2:00 p.m. Atlanta time on the Business Day that the Bank receives a
request for an Advance from the Obligor. Any telephonic selection of
interest rates by the Obligor will promptly be confirmed in writing.
The Bank will promptly disburse the amount of an Advance to the
Obligor upon receiving notice of the Obligor's interest rate
selection. Unpaid interest accruing at such interest rate will be
due and payable on the last Business Day of the applicable Interest
Period.
The Obligor shall repay the entire outstanding principal
balance of each Advance on the last Business Day of the Interest
Period applicable thereto.
The Obligor may on any Business Day renew an outstanding
Advance into an Advance with the same or different Interest Period,
provided that the Bank must be advised of the Obligor's election to
renew the Advance and the Interest Period applicable to such renewal
before one o'clock p.m. on the last Business Day of the then current
Interest Period. The interest rate to be applicable to the renewal
of any Advance shall be selected in the same manner that the interest
rate is selected at the time an Advance is made. Any such renewal
shall be at the Bank's sole discretion.
If no Interest Period has been elected for any Advance or for
any principal balance outstanding hereunder, or if such election
shall not be timely, then the Interest Period with respect thereto
shall be deemed to be one day and the applicable interest rate shall
be the Cost of Funds Rate.
No prepayment of any Advance shall be permissible during the
Interest Period applicable thereto.
Should the Obligor fail for any reason to pay this note in full
on the maturity date or on the date of acceleration of payment, the
Obligor further promises to pay interest on the unpaid amount from
such date until the date of final payment at a Default Rate equal to
the Prime Rate plus 4%. Should legal action or an attorney at law be
utilized to collect any amount due hereunder, the Obligor further
promises to pay all costs of collection, plus reasonable attorney's
fees. All amounts due hereunder may be paid at any office of Bank.
The principal balance of this note shall conclusively be deemed to be
the unpaid principal balance appearing on the Bank's records unless
such records are manifestly in error.
As security for the payment of this and any other liability of
the Obligor to the holder, direct or contingent, irrespective of the
nature of such liability or the time it arises, the Obligor hereby
grants a security interest to the holder in all property of the
Obligor in or coming into the possession, control or custody of the
holder, or in which the holder has or hereafter acquires a lien,
security interest, or other right. Upon default, holder may, without
notice, immediately take possession of and then sell or otherwise
dispose of the collateral, signing any necessary documents as
Obligor's attorney in fact, and apply the proceeds against any
liability of Obligor to holder. Upon demand, the Obligor will
furnish such additional collateral, and execute any appropriate
documents related thereto, deemed necessary by the holder for its
security. The Obligor further authorizes the holder, without notice,
to set-off any deposit or account and apply any indebtedness due or
to become due from the holder to the Obligor in satisfaction of any
liability described in this paragraph, whether or not matured. The
holder may, without notice, transfer or register any property
constituting security for this note into its or its nominee name with
or without any indication of its security interest therein.
This note shall immediately mature and become due and payable,
without notice or demand, upon the appointment of a receiver for the
Obligor or upon the filing of any petition or the commencement of any
proceeding
2
<PAGE>
<PAGE>
by the Obligor for relief under any bankruptcy or
insolvency laws, or any law relating to the relief of debtors,
readjustment of indebtedness, debtor reorganization, or composition
or extension of debt. Furthermore, this note shall, at the option of
the holder, immediately mature and become due and payable, without
notice or demand, upon the happening of any one or more of the
following events; (1) nonpayment on the due date of any amount due
hereunder; (2) failure of the Obligor to perform any other material
obligation to the holder; (3) if the Obligor shall fail to make any
payment as and when such payment is due upon any obligation for
borrowed money other than the obligation owing pursuant to this Note,
and by reason thereof such obligation becomes due prior to its stated
maturity or prior to its regularly scheduled dates of payment; (4) a
reasonable belief on the part of the holder that the Obligor is
unable to pay its obligations when due or is otherwise insolvent; (5)
the filing of any petition or the commencement of any proceeding
against the Obligor for relief under bankruptcy or insolvency laws,
or any law relating to the relief of debtors, readjustment of
indebtedness, debtor reorganization, or composition or extension of
debt, which petition or proceeding is not dismissed within 60 days of
the date of filing thereof; (6) the suspension of the transaction of
the usual business of the Obligor, or the dissolution, liquidation or
transfer to another party of a significant portion of the assets of
the Obligor and any such action shall have a material adverse effect
on the ability of the Obligor to repay the unpaid principal balance
hereof; (7) a reasonable belief on the part of the holder that the
Obligor has made a representation or warranty in connection with any
loan by or other transaction with the holder and such representation
or warranty was false in any material respect; (8) the issuance or
filing of any levy, attachment, garnishment, or lien against the
property of the Obligor which shall remain unpaid or undischarged for
a period of thirty (30) days and such failure to pay shall have a
material adverse effect on the ability of the Obligor to repay the
unpaid principal balance hereof; (9) the failure of the Obligor to
satisfy any judgment, penalty or fine imposed by a court or
administrative agency of any government and such judgment, penalty,
or fine shall remain unpaid, unstayed on appeal, undischarged or
undismissed for a period of thirty (30) days; (10) failure of the
Obligor, after demand, to furnish financial information or to permit
inspection of any books or records during Obligor's normal business
hours; (11) Golden American shall no longer own 100% of the
outstanding voting stock of the Obligor; or (12) the Obligor shall
fail to maintain the minimum level of Company Action Level Risk Based
Capital as established by applicable state law or regulation.
The failure or forbearance of the holder to exercise any right
hereunder, or otherwise granted by law or another agreement, shall
not affect or release the liability of the Obligor, and shall not
constitute a waiver of such right unless so stated by the holder in
writing. The Obligor agrees that the holder shall have no
responsibility for the collection or protection of any property
securing this note, and expressly consents that the holder may from
time to time, without notice, extend the time for payment of this
note, or any part thereof, waive its rights with respect to any
property or indebtedness without releasing the Obligor from any
liability to the holder. This note is governed by Georgia law.
The term "Obligor" means First Golden American Life Insurance
Company of New York. The term "Prime Rate", if used herein, shall
mean that rate of interest designated by Bank from time to time as
its "Prime Rate" which rate is not necessarily the Bank's best rate.
The term "holder" means Bank and any subsequent transferee or
endorsee hereof.
PRESENTMENT AND NOTICE OF DISHONOR ARE HEREBY WAIVED BY THE OBLIGOR
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
BY: /s/ David S. Pendergrass
----------------------------
David S. Pendergrass
3
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EXHIBIT 8(k)
PARTICIPATION AGREEMENT
-----------------------
AMONG
FIRST GOLDEN AMERICAN LIFE INSURANCE
COMPANY OF NEW YORK
THE GALAXY VIP FUND,
FLEET INVESTMENT ADVISORS INC.
AND
FIRST DATA DISTRIBUTORS, INC.
THIS AGREEMENT, dated as of the 1st day of October, 1999, by and
among First Golden American Life Insurance Company of New York (the "Company"),
a life insurance company organized under the laws of the State of Delaware, on
its own behalf and on behalf of each separate account of the Company set
forth on Schedule A hereto as may be amended from time to time (each
such account hereinafter referred to as the "Account"), The Galaxy VIP
Fund (the "Fund"), a management investment company and business trust
organized under the laws of the Commonwealth of Massachusetts, Fleet
Investment Advisors Inc.(the "Adviser"), a corporation organized under
the laws of the State of New York, and First Data Distributors,
Inc. (the "Distributor"), a corporation organized under the laws of the
[State of Delaware/Commonwealth of Massachusetts].
WHEREAS, the Fund engages in business as an open-end management
investment company and is available to act as the investment vehicle for
separate accounts established for variable life insurance and variable
annuity contracts (the "Variable Insurance Products") to be offered by
insurance companies which have entered into participation agreements
with the Fund, Adviser and Distributor ("Participating Insurance
Companies");
WHEREAS, the shares of beneficial interest of the Fund are divided
into several series of shares, each designated a "Portfolio" and
representing the interest in a particular managed portfolio of
securities and other assets;
WHEREAS, the Fund has obtained an order from the Securities and
Exchange Commission (the "SEC") granting Participating Insurance
Companies and variable annuity and variable life insurance separate
accounts exemptions from the provisions of sections 9(a), 13(a), 15(a),
and 15(b) of the Investment Company Act of 1940, as amended, (the "1940
Act") and Rules 6e-2(b)(15) and 6e-3(T)(b)(15) thereunder, if and to the
extent necessary to permit shares of the Fund to be sold to and held by
variable annuity and variable life insurance separate accounts of both
affiliated and unaffiliated life insurance companies (the "Mixed and
Shared Funding Exemptive Order"), and the parties to this Agreement
agree to comply with the conditions or undertakings specified in the
Mixed and Shared Funding Exemptive Order to the extent applicable to
each such party;
WHEREAS, the Fund is registered as an open-end management
investment company under the 1940 Act and shares of the Portfolios are
registered under the Securities Act of 1933, as amended (the "1933
Act");
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WHEREAS, the Adviser, which serves as investment adviser to the
Fund, is duly registered as an investment adviser under the federal
Investment Advisers Act of 1940, as amended;
WHEREAS, the Company has registered or will register certain
variable annuity contracts (the "Contracts") under the 1933 Act;
WHEREAS, the Account is a duly organized, validly existing
segregated asset account, established by the Company under the insurance
laws of the State of Delaware, to set aside and invest assets
attributable to the Contracts;
WHEREAS, the Company has registered the Account as a unit
investment trust under the 1940 Act;
WHEREAS, the Company has issued or will issue certain variable life
insurance and/or variable annuity contracts supported wholly or
partially by the Account (the "Contracts"), and said Contracts are
listed in Schedule A hereto, as it may be amended from time to time by
mutual written agreement;
WHEREAS, the Distributor, which serves as distributor to the Fund,
is registered as a broker dealer with the SEC under the Securities
Exchange Act of 1934, as amended (the "1934 Act"), and is a member in
good standing of the National Association of Securities Dealers, Inc.
(the "NASD"); and
WHEREAS, to the extent permitted by applicable insurance laws and
regulations, the Company intends to purchase shares in the Portfolios
listed in Schedule B hereto, as it may be amended from time to time by
mutual written agreement (the "Designated Portfolios") on behalf of the
Account to fund the aforesaid Contracts, and the Distributor is
authorized to sell such shares to the Account at net asset value;
NOW, THEREFORE, in consideration of their mutual promises, the
Company, the Fund, the Adviser, and the Distributor agree as follows:
ARTICLE I. Sale of Fund Shares
-------------------
1.1. The Fund agrees to sell to the Company those shares of the
Designated Portfolios that each Account or the appropriate subaccount of
each Account orders, executing such orders on a daily basis at the net
asset value next computed after receipt and acceptance by the Fund or
its designee of the order for the shares of the Fund. For purposes of
this Section 1.1, the Company will be the designee of the Fund for
receipt of such orders from each Account or the appropriate subaccount
of each Account and receipt by such designee will constitute receipt by
the Fund; provided that the Fund receives notice of such order by 10:00
a.m. Eastern Time on the next following business day ("T+1"). "Business
Day" will mean any day on which the New York Stock Exchange is open for
trading and on which the Fund calculates its net asset value pursuant to
the rules of the SEC.
1.2. The Company will pay for Fund shares on T+1 that an order to
purchase Fund shares is made in accordance with Section 1.1 above.
Payment will be in federal funds transmitted by wire. This wire
transfer will be initiated by 12:00 p.m. Eastern Time.
1.3. The Fund agrees to make shares of the Designated Portfolios
available indefinitely for purchase at the applicable net asset value
per share by Participating Insurance Companies and their separate
accounts on those days on which the Fund calculates its Designated
Portfolio net asset value pursuant to rules of the SEC and the Fund
shall use reasonable efforts to calculate such net asset value on each
day the New York Stock Exchange is open for trading; provided, however,
that the Board of
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Trustees of the Fund (the "Fund Board") may refuse to
sell shares of any Portfolio to any person, or suspend or terminate the
offering of shares of any Portfolio if such action is required by law or
by regulatory authorities having jurisdiction or is, in the sole
discretion of the Fund Board, acting in good faith and in light of its
fiduciary duties under federal and any applicable state laws, necessary
in the best interests of the shareholders of such Portfolio.
1.4. On each Business Day on which the Fund calculates its net
asset value, the Company will aggregate and calculate the net purchase
or redemption orders for each Account or the appropriate subaccount of
each Account maintained by the Fund in which contract owner assets are
invested. Net orders will only reflect orders that the Company has
received prior to the close of regular trading on the New York Stock
Exchange, Inc. (the "NYSE") (currently 4:00 p.m., Eastern Time) on that
Business Day. Orders that the Company has received after the close of
regular trading on the NYSE will be treated as though received on the
next Business Day. Each communication of orders by the Company will
constitute a representation that such orders were received by it prior
to the close of regular trading on the NYSE on the Business Day on which
the purchase or redemption order is priced in accordance with Rule 22c-1
under the 1940 Act. Other procedures relating to the handling of orders
will be in accordance with the prospectus and statement of information
of the relevant Designated Portfolio or with oral or written
instructions that the Distributor or the Fund will forward to the
Company from time to time.
1.5. The Fund agrees that shares of the Fund will be sold only to
Participating Insurance Companies and their separate accounts, qualified
pension and retirement plans or such other persons as are permitted
under applicable provisions of the Internal Revenue Code of 1986, as
amended, (the "Internal Revenue Code"), and regulations promulgated
thereunder, the sale to which will not impair the tax treatment
currently afforded the Contracts. No shares of any Portfolio will be
sold to the general public except as set forth in this Section 1.5.
1.6. The Fund agrees to redeem for cash, upon the Company's
request, any full or fractional shares of the Fund held by the Company,
executing such requests on a daily basis at the net asset value next
computed after receipt and acceptance by the Fund or its agent of the
request for redemption. For purposes of this Section 1.6, the Company
will be the designee of the Fund for receipt of requests for redemption
from each Account or the appropriate subaccount of each Account and
receipt by such designee will constitute receipt by the Fund, provided
the Fund receives notice of request for redemption by 10:00 a.m. Eastern
Time on the next following Business Day. Payment will be in federal
funds transmitted by wire to the Company's account as designated by the
Company in writing from time to time, on the same Business Day the Fund
receives notice of the redemption order from the Company. The Fund
reserves the right to delay payment of redemption proceeds, but in no
event may such payment be delayed longer than the period permitted by
the 1940 Act. The Fund will not bear any responsibility whatsoever for
the proper disbursement or crediting of redemption proceeds; the Company
alone will be responsible for such action. If notification of
redemption is received after 10:00 a.m. Eastern Time, payment for
redeemed shares will be made on the next following Business Day.
1.7. The Company agrees to purchase and redeem the shares of the
Designated Portfolios offered by the then current prospectus of the Fund
in accordance with the provisions of such prospectus.
1.8. Issuance and transfer of the Fund's shares will be by book
entry only. Stock certificates will not be issued to the Company or any
Account. Purchase and redemption orders for Fund shares will be
recorded in an appropriate title for each Account or the appropriate
subaccount of each Account.
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1.9. The Fund will furnish same day notice (by telecopier, followed
by written confirmation) to the Company of the declaration of any
income, dividends or capital gain distributions payable on each
Designated Portfolio's shares. The Company hereby elects to receive all
such dividends and distributions as are payable on the Designated
Portfolio shares in the form of additional shares of that Designated
Portfolio. The Fund will notify the Company of the number of shares so
issued as payment of such dividends and distributions. The Company
reserves the right to revoke this election upon reasonable prior notice
to the Fund and to receive all such dividends and distributions in cash.
1.10. The Fund will make the net asset value per share for each
Designated Portfolio available to the Company on a daily basis as soon
as reasonably practical after the net asset value per share is
calculated and will use its best efforts to make such net asset value
per share available by 6:00 p.m., Eastern Time, but in no event later
than 7:00 p.m., Eastern Time, each business day.
1.11. In the event adjustments are required to correct any
error in the computation of the net asset value of the Fund's shares,
the Fund or the Distributor will notify the Company as soon as
practicable after discovering the need for those adjustments that result
in an aggregate reimbursement of $150 or more to any one subaccount of
each Account maintained by a Designated Portfolio unless notified
otherwise by the Company (or, if greater, results in an adjustment of
$10 or more to each contractowner's account). Any such notice will
state for each day for which an error occurred the incorrect price, the
correct price and, to the extent communicated to the Fund's
shareholders, the reason for the price change. The Company may send
this notice or a derivation thereof (so long as such derivation is
approved in advance by the Distributor or the Adviser) to contractowners
whose accounts are affected by the price change. The parties will
negotiate in good faith to develop a reasonable method for effecting
such adjustments. The Fund shall provide the Company, on behalf of the
Account or the appropriate subaccount of each Account, with a prompt
adjustment to the number of shares purchased or redeemed to reflect the
correct share net asset value.
1.12.
(a) The parties hereto acknowledge that the arrangement
contemplated by this Agreement is not exclusive; the Fund's shares
may be sold to other insurance companies (subject to Section 1.8
hereof) and the cash value of the Contracts may be invested in
other investment companies, provided, however, that until this
Agreement is terminated pursuant to Article X, the Company shall
promote the Designated Portfolios on the same basis as other
funding vehicles available under the Contracts and funding vehicles
other than those listed on Schedule B to this Agreement may be
available for the investment of the cash value of the Contracts.
(b) The Company shall not, without prior notice to the
Advisor and the Distributor (unless otherwise required by
applicable law), take any action to operate the Account as a
management investment company under the 1940 Act.
(c) The Company shall not, without prior notice to the
Advisor and the Distributor (unless otherwise required by
applicable law), induce Contract owners to change or modify the
Fund or change the Fund's distributor or investment adviser.
(d) The Company shall not, without prior notice to the Fund,
induce Contract owners to vote on any matter submitted for
consideration by the shareholders of the Fund in a manner other
than as recommended by the Fund Board.
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ARTICLE II. Representations and Warranties
------------------------------
2.1. The Company represents and warrants that the Contracts are or
will be registered under the 1933 Act and that the Contracts will be
issued and sold in compliance with all applicable federal and state
laws, including state insurance suitability requirements. The Company
further represents and warrants that it is an insurance company duly
organized and in good standing under applicable law and that it has
legally and validly established each Account as a separate account under
applicable state law and has registered the Account as a unit investment
trust in accordance with the provisions of thin 1940 Act to serve as a
segregated investment account for the Contracts, and that it will
maintain such registration for so long as any Contracts are outstanding.
The Company will amend the registration statement under the 1933 Act for
the Contracts and the registration statement under the 1940 Act for the
Account from time to time as required in order to effect the continuous
offering of the Contracts or as may otherwise be required by applicable
law. The Company will register and qualify the Contracts for sale in
accordance with the securities laws of the various states only if and to
the extent deemed necessary by the Company.
2.2. The Company represents that the Contracts are currently and at
the time of issuance will be treated as endowment, annuity or life
insurance contracts under applicable provisions of the Internal Revenue
Code, and that it will make every effort to maintain such treatment and
that it will notify the Fund and the Adviser immediately upon having a
reasonable basis for believing that the Contracts have ceased to be so
treated or that they might not be so treated in the future.
2.3. The Company represents and warrants that it will not purchase
shares of the Designated Portfolios with assets derived from
tax-qualified retirement plans except, indirectly, through Contracts
purchased in connection with such plans.
2.4. The Fund represents and warrants that Fund shares of the
Designated Portfolios sold pursuant to this Agreement will be registered
under the 1933 Act and duly authorized for issuance in accordance with
applicable law and that the Fund is and will remain registered under the
1940 Act for as long as such shares of the Designated Portfolios are
outstanding. The Fund will amend the registration statement for its
shares under the 1933 Act and the 1940 Act from time to time as required
in order to effect the continuous offering of its shares. The Fund will
register and qualify the shares of the Designated Portfolios for sale in
accordance with the laws of the various states only if and to the extent
deemed advisable by the Fund.
2.5. The Fund represents that it is currently qualified as a
Regulated Investment Company under Subchapter M of the Internal Revenue
Code, and that it will make every effort to maintain such qualification
(under Subchapter M or any successor or similar provision) and that it
will notify the Company immediately upon having a reasonable basis for
believing that it has ceased to so qualify or that it might not so
qualify in the future.
2.6. The Fund represents and warrants that in performing the
services described in this Agreement, the Fund will comply with all
applicable laws, rules and regulations. The Fund makes no representation
as to whether any aspect of its operations (including, but not limited
to, fees and expenses and investment policies, objectives and
restrictions) complies with the insurance laws and regulations of any
state. The Fund and the Distributor agree that upon request they will
use their best efforts to furnish the information required by state
insurance laws so that the Company can obtain the authority needed to
issue the Contracts in the various states.
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2.7. The Fund currently does not intend to make any payments to
finance distribution expenses pursuant to Rule 12b-1 under the 1940 Act,
although it reserves the right to make such payments in the future. To
the extent that it decides to finance distribution expenses pursuant to
Rule 12b-1 the Fund undertakes to have its Fund Board formulate and
approve any plan under Rule 12b-1 to finance distribution expenses in
accordance with the 1940 Act.
2.8. The Distributor represents and warrants that it will
distribute the Fund shares of the Designated Portfolios in accordance
with all applicable federal and state securities laws including, without
limitation, the 1933 Act, the 1934 Act and the 1940 Act.
2.9. The Fund represents that it is lawfully organized and validly
existing under the laws of the Commonwealth of Massachusetts and that it
does and will comply in all material respects with applicable provisions
of the 1940 Act.
2.10. The Distributor represents and warrants that it is and
will remain duly registered under all applicable federal and state
securities laws and that it will perform its obligations for the Fund in
accordance in all material respects with any applicable state and
federal securities laws.
2.11. The Fund and the Distributor represent and warrant that
all of their trustees, officers, employees, investment advisers, and
other individuals/entities having access to the funds and/or securities
of the Fund are and continue to be at all times covered by a blanket
fidelity bond or similar coverage for the benefit of the Fund in an
amount not less than the minimal coverage as required currently by Rule
17g-(1) of the 1940 Act or related provisions as may be promulgated from
time to time. The aforesaid bond includes coverage for larceny and
embezzlement and is issued by a reputable bonding company.
ARTICLE III. Prospectuses and Proxy Statements; Voting
-----------------------------------------
3.1. The Fund or the Distributor will provide the Company, at the
Fund's or its affiliate's expense, with as many copies of the current
Fund prospectus for the Designated Portfolios as the Company may
reasonably request for distribution, at the Company's expense, to
prospective contractowners and applicants. The Fund or the Distributor
will provide, at the Fund's or its affiliate's expense, as many copies
of said prospectus as necessary for distribution, at the Company's
expense, to existing contractowners. The Fund or the Distributor will
provide the copies of said prospectus to the Company or to its mailing
agent. If requested by the Company in lieu thereof, the Fund or the
Distributor will provide such documentation, including a computer
diskette or a final copy of a current prospectus set in type at the
Fund's or its affiliate's expense, and such other assistance as is
reasonably necessary in order for the Company at least annually (or more
frequently if the Fund prospectus is amended more frequently) to have
the Fund's prospectus and the prospectuses of other mutual funds in
which assets attributable to the Contracts may be invested printed
together in one document, in which case the Fund or its affiliate will
bear its reasonable share of expenses as described above, allocated
based on the proportionate number of pages of the Fund's and other
fund's respective portions of the document.
3.2. The Fund or the Distributor will provide the Company, at the
Fund's or its affiliate's expense, with as many copies of the statement
of additional information as the Company may reasonably request for
distribution, at the Company's expense, to prospective contractowners
and applicants. The Fund or the Distributor will provide, at the Fund's
or its affiliate's expense, as many copies of said statement of
additional information as necessary for distribution, at the Company's
expense, to any existing contractowner who requests such statement or
whenever state or federal law otherwise requires that such
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statement be
provided. The Fund or the Distributor will provide the copies of said
statement of additional information to the Company or to its mailing
agent.
3.3. The Fund or the Distributor, at the Fund's or its affiliate's
expense, will provide the Company or its mailing agent with copies of
its proxy material, if any, reports to shareholders and other
communications to shareholders in such quantity as the Company will
reasonably require. The Company will distribute this proxy material,
reports and other communications to existing contract owners and
tabulate the votes.
3.4. If and to the extent required by law the Company will:
(a) solicit voting instructions from contractowners;
(b) vote the shares of the Designated Portfolios held in the
Account in accordance with instructions received from
contractowners; and
(c) vote shares of the Designated Portfolios held in the
Account for which no timely instructions have been received, as
well as shares it owns, in the same proportion as shares of such
Designated Portfolio for which instructions have been received from
the Company's contractowners;
so long as and to the extent that the SEC continues to interpret the
1940 Act to require pass-through voting privileges for variable
contractowners. Except as set forth above, the Company reserves the
right to vote Fund shares held in any segregated asset account in its
own right, to the extent permitted by law. The Company will be
responsible for assuring that each of its separate accounts
participating in the Fund calculates voting privileges in a manner
consistent with all legal requirements, including the Mixed and Shared
Funding Exemptive Order.
3.5. The Fund will comply with all provisions of the 1940 Act
requiring voting by shareholders, and in particular, the Fund either
will provide for annual meetings (except insofar as the SEC may
interpret Section 16 of the 1940 Act not to require such meetings) or,
as the Fund currently intends to comply with Section 16(c) of the 1940
Act (although the Fund is not one of the trusts described in Section
16(c) of that Act) as well as with Sections 16(a) and, if and when
applicable, 16(b). Further, the Fund will act in accordance with the
SEC's interpretation of the requirements of Section 16(a) with respect
to periodic elections of trustees and with whatever rules the SEC may
promulgate with respect thereto.
ARTICLE IV. Sales Material and Information
------------------------------
4.1. The Distributor will provide the Company on a timely basis
with investment performance information for each Designated Portfolio in
which the Company maintains a subaccount of the Account, including total
return for the preceding calendar month and calendar quarter, the
calendar year to date, and the prior one-year, five-year, and ten year
(or life of the Fund) periods. The Company may, based on the SEC
mandated information supplied by the Distributor, prepare communications
for contractowners ("Contractowner Materials"). The Company will
provide copies of all Contractowner Materials concurrently with their
first use for the Distributor's internal recordkeeping purposes. It is
understood that neither the Distributor nor any Designated Portfolio
will be responsible for errors or omissions in, or the content of,
Contractowner Materials except to the extent that the error or omission
resulted from information provided by or on behalf of the Distributor or
the Designated Portfolio. Any printed information that is furnished to
the Company pursuant to this Agreement other than each Designated
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Portfolio's prospectus or statement of additional information (or
information supplemental thereto), periodic reports and proxy
solicitation materials is the Distributor's sole responsibility and not
the responsibility of any Designated Portfolio or the Fund. The Company
agrees that the Portfolios, the shareholders of the Portfolios and the
officers and governing Board of the Fund will have no liability or
responsibility to the Company in these respects.
4.2. The Company will not give any information or make any
representations or statements on behalf of the Fund or concerning the
Fund in connection with the sale of the Contracts other than the
information or representations contained in the registration statement,
prospectus or statement of additional information for Fund shares, as
such registration statement, prospectus and statement of additional
information may be amended or supplemented from time to time, or in
reports or proxy statements for the Fund, or in published reports for
the Fund which are in the public domain or approved by the Fund or the
Distributor for distribution, or in sales literature or other material
provided by the Fund, Adviser or by the Distributor, except with
permission of the Distributor. Any piece of sales literature or other
promotional material intended to be used by the Company which requires
the permission of the Distributor prior to use will be furnished by
Company to the Distributor, or its designee, at least ten (10) business
days prior to its use. No such material will be used if the Distributor
reasonably objects to such use within five (5) business days after
receipt.
Nothing in this Section 4.2 will be construed as preventing the Company
or its employees or agents from giving advice on investment in the Fund.
4.3. The Fund, the Adviser or the Distributor will furnish, or will
cause to be furnished, to the Company or its designee, each piece of
sales literature or other promotional material in which the Company or
its Account is named, at least ten (10) business days prior to its use.
No such material will be used if the Company reasonably objects to such
use within five (5) business days after receipt of such material.
4.4. The Fund, the Adviser and the Distributor will not give any
information or make any representations or statements on behalf of the
Company or concerning the Company, each Account, or the Contracts other
than the information or representations contained in a registration
statement, prospectus or statement of additional information for the
Contracts, as such registration statement, prospectus and statement of
additional information may be amended or supplemented from time to time,
or in published reports for each Account or the Contracts which are in
the public domain or approved by the Company for distribution to
contractowners, or in sales literature or other material provided by the
Company, except with permission of the Company. The Company agrees to
respond to any request for approval on a prompt and timely basis.
4.5. The Fund will provide to the Company at least one complete
copy of all registration statements, prospectuses, statements of
additional information, reports, proxy statements, sales literature and
other promotional materials, applications for exemptions, requests for
no-action letters, and all amendments to any of the above, that relate
to the Fund or its shares, contemporaneously with the filing of such
document with the SEC, the NASD or other regulatory authority.
4.6. The Company will provide to the Fund at least one complete
copy of all registration statements, prospectuses, statements of
additional information, reports, solicitations for voting instructions,
sales literature and other promotional materials, applications for
exemptions, requests for no action letters, and all amendments to any of
the above, that relate to the Contracts or each Account,
contemporaneously with the filing of such document with the SEC, the
NASD or other regulatory authority.
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4.7. For purposes of this Article IV, the phrase "sales literature
or other promotional material" includes, but is not limited to,
advertisements (such as material published, or designed for use in, a
newspaper, magazine, or other periodical, radio, television, telephone
or tape recording, videotape display, signs or billboards, motion
pictures, or other public media, (e.g., on-line networks such as the
Internet or other electronic messages), sales literature (i.e., any
written communication distributed or made generally available to
customers or the public, including brochures, circulars, research
reports, market letters, form letters, seminar texts, reprints or
excerpts of any other advertisements sales literature, or published
article), educational or training materials or other communications
distributed or made generally available to some or all agents or
employees, registration statements, prospectuses, statements of
additional information, shareholder reports, and proxy materials and any
other material constituting sales literature or advertising under the
NASD rules, the 1933 Act or the 1940 Act.
4.8. The Fund and the Distributor hereby consent to the Company's
use of the names Fleet Investment Advisors Inc., The Galaxy VIP Fund,
the portfolio names designated on Schedule B or other designated names
as may be used from time to time in connection with the marketing of the
Contracts, subject to the terms of Sections 4.1 and 4.2 of this
Agreement. Such consent will terminate with the termination of this
Agreement.
ARTICLE V. Fees and Expenses
-----------------
5.1. The Fund, the Adviser and the Distributor will pay no fee or
other compensation to the Company under this Agreement except if the
Fund or any Designated Portfolio adopts and implements a plan pursuant
to Rule 12b-1 under the 1940 Act to finance distribution expenses, then,
subject to obtaining any required exemptive orders or other regulatory
approvals, the Fund may make payments to the Company or to the
underwriter for the Contracts if and in such amounts agreed to by the
Fund in writing.
5.2. All expenses incident to performance by the Fund of this
Agreement will be paid by the Fund to the extent permitted by law. The
Fund will bear the expenses for the cost of registration and
qualification of the Fund's shares; preparation and filing of the Fund's
prospectus, statement of additional information and registration
statement, proxy materials and reports; setting in type and printing the
Fund's prospectus; setting in type and printing proxy materials and
reports by it to contractowners (including the costs of printing a Fund
prospectus that constitutes an annual report); the preparation of all
statements and notices required by any federal or state law; all taxes
on the issuance or transfer of the Fund's shares; any expenses permitted
to be paid or assumed by the Fund pursuant to a plan, if any, under Rule
12b-1 under the 1940 Act; and all other expenses set forth in Article
III of this Agreement.
ARTICLE VI. Diversification and Qualification
---------------------------------
6.1. The Adviser will ensure that the Fund will at all times invest
money from the Contracts in such a manner as to ensure that the
Contracts will be treated as variable annuity contracts under the
Internal Revenue Code and the regulations issued thereunder. Without
limiting the scope of the foregoing, the Fund will comply with Section
817(h) of the Internal Revenue Code and Treasury Regulation 1.817-5, as
amended from time to time, relating to the diversification requirements
for variable annuity, endowment, or life insurance contracts and any
amendments or other modifications to such Section or Regulation. In the
event of a breach of this Article VI by the Fund, it will take all
reasonable steps: (a) to notify the Company of such breach; and (b) to
adequately diversify the Fund so as to achieve compliance within the
grace period afforded by Treasury Regulation 1.817-5.
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6.2. The Fund represents that it is or will be qualified as a
Regulated Investment Company under Subchapter M of the Internal Revenue
Code, and that it will make every effort to maintain such qualification
(under Subchapter M or any successor or similar provisions) and that it
will notify the Company immediately upon having a reasonable basis for
believing that it has ceased to so qualify or that it might not so
qualify in the future.
6.3. The Company represents that the Contracts are currently, and
at the time of issuance shall be, treated as life insurance or annuity
insurance contracts, under applicable provisions of the Internal Revenue
Code, and that it will make every effort to maintain such treatment, and
that it will notify the Fund and the Distributor immediately upon having
a reasonable basis for believing the Contracts have ceased to be so
treated or that they might not be so treated in the future. The Company
agrees that any prospectus offering a contract that is a "modified
endowment contract" as that term is defined in Section 7702A of the
Internal Revenue Code (or any successor or similar provision), shall
identify such contract as a modified endowment contract.
ARTICLE VII. Potential Conflicts
-------------------
7.1. The Fund Board will monitor the Fund for the existence of any
material irreconcilable conflict between the interests of the Contract
owners of all separate accounts investing in the Fund. An
irreconcilable material conflict may arise for a variety of reasons,
including: (a) an action by any state insurance regulatory authority;
(b) a change in applicable federal or state insurance, tax, or
securities laws or regulations, or a public ruling, private letter
ruling, no-action or interpretative letter, or any similar action by
insurance, tax, or securities regulatory authorities; (c) an
administrative or judicial decision in any relevant proceeding; (d) the
manner in which the investments of any Portfolio are being managed; (e)
a difference in voting instructions given by variable annuity contract
and variable life insurance contract owners; or (f) a decision by an
insurer to disregard the voting instructions of contract owners. The
Fund Board shall promptly inform the Company if it determines that an
irreconcilable material conflict exists and the implications thereof.
7.2. The Company will report any potential or existing conflicts of
which it is aware to the Fund Board. The Company will assist the Fund
Board in carrying out its responsibilities under the Mixed and Shared
Funding Exemptive Order, by providing the Fund Board with all information
reasonably necessary for the Fund Board to consider any issues raised.
This includes, but is not limited to, an obligation by the Company to
inform the Fund Board whenever Contract owner voting instructions are
disregarded.
7.3. If it is determined by a majority of the Fund Board, or a
majority of its disinterested members, that a material irreconcilable
conflict exists, the Company and other Participating Insurance Companies
shall, at their expense and to the extent reasonably practicable (as
determined by a majority of the disinterested Fund Board members), take
whatever steps are necessary to remedy or eliminate the irreconcilable
material conflict, up to and including: (1) withdrawing the assets
allocable to some or all of the separate accounts from the Fund or any
Portfolio and reinvesting such assets in a different investment medium,
including (but not limited to) another Portfolio of the Fund, or
submitting the question whether such segregation should be implemented
to a vote of all affected contract owners and, as appropriate,
segregating the assets of any appropriate group (i.e., annuity contract
owners, life insurance contract owners, or variable contract owners of
one or more Participating Insurance Companies) that votes in favor of
such segregation, or offering to the affected contract owners the option
of making such a change; and (2) establishing a new registered management
investment company or managed separate account.
- 10 -
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<PAGE>
7.4. If a material irreconcilable conflict arises because of a
decision by the Company to disregard Contract owner voting instructions
and that decision represents a minority position or would preclude a
majority vote, the Company may be required, at the Fund's election, to
withdraw the Account's investment in the Fund and terminate this
Agreement with respect to each Account; provided, however, that such
withdrawal and termination shall be limited to the extent required by
the foregoing material irreconcilable conflict as determined by a
majority of the disinterested members of the Fund Board. Any such
withdrawal and termination must take place within six (6) months after
the Fund gives written notice that this provision is being implemented,
and until the end of that six month period the Fund shall continue to
accept and implement orders by the Company for the purchase (and
redemption) of shares of the Fund.
7.5. If a material irreconcilable conflict arises because a
particular state insurance regulator's decision applicable to the
Company conflicts with the majority of other state regulators, then the
Company will withdraw the affected Account's investment in the Fund and
terminate this Agreement with respect to such Account within six months
after the Fund Board informs the Company in writing that it has
determined that such decision has created an irreconcilable material
conflict; provided, however, that such withdrawal and termination shall be
limited to the extent required by the foregoing material irreconcilable
conflict as determined by a majority of the disinterested members of the
Fund Board. Until the end of the foregoing six month period, the Fund
shall continue to accept and implement orders by the Company for the
purchase (and redemption) of shares of the Fund.
7.6. For purposes of Section 7.3 through 7.6 of this Agreement, a
majority of the disinterested members of the Fund Board shall determine
whether any proposed action adequately remedies any irreconcilable
material conflict, but in no event will the Fund be required to
establish a new funding medium for the Contracts. The Company shall not
be required by Section 7.3 to establish a new funding medium for the
Contract if an offer to do so has been declined by vote of a majority of
Contract owners materially adversely affected by the irreconcilable
material conflict. In the event that the Fund Board determines that any
proposed action does not adequately remedy any irreconcilable material
conflict, then the Company will withdraw the Account's investment in the
Fund and terminate this Agreement within six (6) months after the Fund
Board informs the Company in writing of the foregoing determination;
provided, however, that such withdrawal and termination shall be limited
to the extent required by any such material irreconcilable conflict as
determined by a majority of the disinterested members of the Fund Board.
7.7. If and to the extent the Mixed and Shared Funding Exemption
Order or any amendment thereto contains terms and conditions different
from Sections 3.4, 3.5, 3.6, 7.1, 7.2, 7.3, 7.4, and 7.5 of this
Agreement, then the Fund and/or the Participating Insurance Companies,
as appropriate, shall take such steps as may be necessary to comply with
the Mixed and Shared Funding Exemptive Order, and Sections 3.4, 3.5,
3.6, 7.1, 7.2, 7.3, 7.4 and 7.5 of this Agreement shall continue in
effect only to the extent that terms and conditions substantially
identical to such Sections are contained in the Mixed and Shared Funding
Exemptive Order or any amendment thereto. If and to the extent that
Rule 6e-2 and Rule 6e-3(T) are amended, or Rule 6e-3 is adopted, to
provide exemptive relief from any provision of the 1940 Act or the rules
promulgated thereunder with respect to mixed or shared funding (as
defined in the Mixed and Shared Funding Exemptive Order) on terms and
conditions materially different from those contained in the Mixed and
Shared Funding Exemptive Order, then (a) the Fund and/or the
Participating Insurance Companies, as appropriate, shall take such steps
as may be necessary to comply with Rules 6e-2 and 6e-3(T), as amended,
and Rule 6e-3, as adopted, to the extent such rules are applicable; and
(b) Sections 3.5, 3.6, 7.1., 7.2, 7.3, 7.4, and 7.5 of this Agreement
shall continue in effect only to the
- 11 -
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<PAGE>
extent that terms and conditions
substantially identical to such Sections are contained in such Rule(s)
as so amended or adopted.
ARTICLE VIII. Indemnification
---------------
8.1. Indemnification By The Company
------------------------------
(a) The Company agrees to indemnify and hold harmless the
Fund, the Adviser, the Distributor, and each person, if any, who
controls or is associated with the Fund, the Adviser or the
Distributor within the meaning of such terms under the federal
securities laws and any director, trustee, officer, partner,
employee or agent of the foregoing (collectively, the "Indemnified
Parties" for purposes of this Section 8.1) against any and all
losses, claims, expenses, damages, liabilities (including amounts
paid in settlement with the written consent of the Company) or
litigation (including reasonable legal and other expenses), to
which the Indemnified Parties may become subject under any statute,
regulation, at common law or otherwise, insofar as such losses,
claims, damages, liabilities or expenses (or actions in respect
thereof) or settlements:
(1) arise out of or are based upon any untrue statements
or alleged untrue statements of any material fact contained in
the registration statement, prospectus or statement of
additional information for the Contracts or contained in the
Contracts or sales literature or other promotional material
for the Contracts (or any amendment or supplement to any of
the foregoing), or arise out of or are based upon the omission
or the alleged omission to state therein a material fact
required to be stated or necessary to make such statements not
misleading in light of the circumstances in which they were
made; provided that this agreement to indemnify will not apply
as to any Indemnified Party if such statement or omission or
such alleged statement or omission was made in reliance upon
and in conformity with written information furnished to the
Company by the Fund, the Adviser or the Distributor for use in
the registration statement, prospectus or statement of
additional information for the Contracts or in the Contracts
or sales literature (or any amendment or supplement) or
otherwise for use in connection with the sale of the Contracts
or Fund shares; or
(2) arise out of or as a result of statements or
representations by or on behalf of the Company or wrongful
conduct of the Company or persons under its control, with
respect to the sale or distribution of the Contracts or Fund
shares; or
(3) arise out of any untrue statement or alleged untrue
statement of a material fact contained in the Fund
registration statement, prospectus, statement of additional
information or sales literature or other promotional material
of the Fund (or amendment or supplement) or the omission or
alleged omission to state therein a material fact required to
be stated therein or necessary to make such statements not
misleading in light of the circumstances in which they were
made, if such a statement or omission was made in reliance
upon and in conformity with information furnished to the Fund
by or on behalf of the Company or persons under its control;
or
(4) arise as a result of any failure by the Company to
provide the services and furnish the materials under the terms
of this Agreement; or
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<PAGE>
(5) arise out of any material breach of any
representation and/or warranty made by the Company in this
Agreement or arise out of or result from any other material
breach by the Company of this Agreement;
except to the extent provided in Sections 8.1(b) and 8.3 hereof.
This indemnification will be in addition to any liability that the
Company otherwise may have.
(b) No party will be entitled to indemnification under
Section 8.1(a) to the extent such loss, claim, damage, liability or
litigation is due to the willful misfeasance, bad faith, or gross
negligence in the performance of such party's duties under this
Agreement, or by reason of such party's reckless disregard of its
obligations or duties under this Agreement by the party seeking
indemnification.
(c) The Indemnified Parties promptly will notify the Company
of the commencement of any litigation, proceedings, complaints or
actions by regulatory authorities against them in connection with
the issuance or sale of the Fund shares or the Contracts or the
operation of the Fund.
8.2. Indemnification By The Adviser, the Fund and the Distributor
------------------------------------------------------------
(a) The Adviser, the Fund and the Distributor, in each case
solely to the extent relating to such party's responsibilities
hereunder, agree to indemnify and hold harmless the Company and
each person, if any, who controls or is associated with the Company
within the meaning of such terms under the federal securities laws
and any director, trustee, officer, partner, employee or agent of
the foregoing (collectively, the "Indemnified Parties" for purposes
of this Section 8.2) against any and all losses, claims, expenses,
damages, liabilities (including amounts paid in settlement with the
written consent of the Adviser) or litigation (including reasonable
legal and other expenses) to which the Indemnified Parties may
become subject under any statute, regulation, at common law or
otherwise, insofar as such losses, claims, damages, liabilities or
expenses (or actions in respect thereof) or settlements:
(1) arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact contained in
the registration statement, prospectus or statement of
additional information for the Fund or sales literature or
other promotional material of the Fund (or any amendment or
supplement to any of the foregoing), or arise out of or are
based upon the omission or the alleged omission to state
therein a material fact required to be stated or necessary to
make such statements not misleading in light of the
circumstances in which they were made; provided that this
agreement to indemnify will not apply as to any Indemnified
Party if such statement or omission or such alleged statement
or omission was made in reliance upon and in conformity with
information furnished to the Adviser, the Distributor or the
Fund by or on behalf of the Company for use in the
registration statement, prospectus or statement of additional
information for the Fund or in sales literature of the Fund
(or any amendment or supplement thereto) or otherwise for use
in connection with the sale of the Contracts or Fund shares;
or
(2) arise out of or as a result of statements or
representations or wrongful conduct of the Adviser, the Fund
or the Distributor or persons under the control of the
Adviser, the Fund or the Distributor respectively, with
respect to the sale of the Fund shares; or
- 13 -
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<PAGE>
(3) arise out of any untrue statement or alleged untrue
statement of a material fact contained in a registration
statement, prospectus, statement of additional information or
sales literature or other promotional material covering the
Contracts (or any amendment or supplement thereto), or the
omission or alleged omission to state therein a material fact
required to be stated or necessary to make such statement or
statements not misleading in light of the circumstances in
which they were made, if such statement or omission was made
in reliance upon and in conformity with written information
furnished to the Company by the Adviser, the Fund or the
Distributor or persons under the control of the Adviser, the
Fund or the Distributor; or
(4) arise as a result of any failure by the Fund, the
Adviser or the Distributor to provide the services and furnish
the materials under the terms of this Agreement (including a
failure, whether unintentional or in good faith or otherwise,
to comply with the diversification requirements and procedures
related thereto specified in Article VI of this Agreement); or
(5) arise out of or result from any material breach of
any representation and/or warranty made by the Adviser, the
Fund or the Distributor in this Agreement, or arise out of or
result from any other material breach of this Agreement by the
Adviser the Fund or the Distributor;
except to the extent provided in Sections 8.2(b) and 8.3 hereof.
This indemnification will be in addition to any liability that the
Fund, Adviser or the Distributor otherwise may have.
(b) No party will be entitled to indemnification under
Section 8.2(a) to the extent such loss, claim, damage, liability or
litigation is due to the willful misfeasance, bad faith, or gross
negligence in the performance of such party's duties under this
Agreement, or by reason of such party's reckless disregard of its
obligations or duties under this Agreement by the party seeking
indemnification.
(c) The Indemnified Parties will promptly notify the Adviser,
the Fund and the Distributor of the commencement of any litigation,
proceedings, complaints or actions by regulatory authorities
against them in connection with the issuance or sale of the
Contracts or the operation of the account.
8.3. Indemnification Procedure
-------------------------
Any person obligated to provide indemnification under this Article
VIII ("Indemnifying Party" for the purpose of this Section 8.3) will not
be liable under the indemnification provisions of this Article VIII with
respect to any claim made against a party entitled to indemnification
under this Article VIII ("Indemnified Party" for the purpose of this
Section 8.3) unless such Indemnified Party will have notified the
Indemnifying Party in writing within a reasonable time after the summons
or other first legal process giving information of the nature of the
claim will have been served upon such Indemnified Party (or after such
party will have received notice of such service on any designated
agent), but failure to notify the Indemnifying Party of any such claim
will not relieve the Indemnifying Party from any liability which it may
have to the Indemnified Party against whom such action is brought
otherwise than on account of the indemnification provision of this
Article VIII, except to the extent that the failure to notify results in
the failure of actual notice to the Indemnifying Party and such
Indemnifying Party is damaged solely as a result of failure to give such
notice. In case any such action is brought against the Indemnified
Party, the
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<PAGE>
<PAGE>
Indemnifying Party will be entitled to participate, at its
own expense, in the defense thereof. The Indemnifying Party also will
be entitled to assume the defense thereof, with counsel satisfactory to
the party named in the action. After notice from the Indemnifying Party
to the Indemnified Party of the Indemnifying Party's election to assume
the defense thereof, the Indemnified Party will bear the fees and
expenses of any additional counsel retained by it, and the Indemnifying
Party will not be liable to such party under this Agreement for any
legal or other expenses subsequently incurred by such party
independently in connection with the defense thereof other than
reasonable costs of investigation, unless: (a) the Indemnifying Party
and the Indemnified Party will have mutually agreed to the retention of
such counsel; or (b) the named parties to any such proceeding (including
any impleaded parties) include both the Indemnifying Party and the
Indemnified Party and representation of both parties by the same counsel
would be inappropriate due to actual or potential differing interests
between them. The Indemnifying Party will not be liable for any
settlement of any proceeding effected without its written consent but if
settled with such consent or if there is a final judgment for the
plaintiff, the Indemnifying Party agrees to indemnify the Indemnified
Party from and against any loss or liability by reason of such
settlement or judgment. A successor by law of the parties to this
Agreement will be entitled to the benefits of the indemnification
contained in this Article VIII. The indemnification provisions
contained in this Article VIII will survive any termination of this
Agreement.
ARTICLE IX. Applicable Law
--------------
9.1 This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the State of
Delaware.
9.2 This Agreement shall be subject to the provisions of the 1933,
1934 and 1940 Acts, and the rules and regulations and rulings
thereunder, including such exemptions from those statutes, rules and
regulations as the SEC may grant (including, but not limited to, any
Mixed and Shared Funding Exemptive Order) and the terms hereof shall be
interpreted and construed in accordance therewith. If, in the future,
the Mixed and Shared Funding Exemptive Order should no longer be
necessary under applicable law, then Article VII shall no longer apply.
ARTICLE X. Termination
-----------
10.1. This Agreement will terminate:
(a) at the option of any party, with or without cause, with
respect to some or all of the Designated Portfolios, upon sixty
(60) days' advance written notice to the other parties or, if
later, upon receipt of any required exemptive relief or orders from
the SEC, unless otherwise agreed in a separate written agreement
among the parties; or
(b) at the option of the Company, upon receipt of the
Company's written notice by the other parties, with respect to any
Designated Portfolio if shares of the Designated Portfolio are not
reasonably available to meet the requirements of the Contracts as
determined in good faith by the Company; or
(c) at the option of the Company, upon receipt of the
Company's written notice by the other parties, with respect to any
Designated Portfolio in the event any of the Designated Portfolio's
shares are not registered, issued or sold in accordance with
applicable state and/or Federal law or such law precludes the use
of such shares as the underlying investment media of the Contracts
issued or to be issued by Company; or
- 15 -
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<PAGE>
(d) at the option of the Fund, upon receipt of the Fund's
written notice by the other parties, upon institution of formal
proceedings against the Company by the NASD, the SEC, the insurance
commission of any state or any other regulatory body regarding the
Company's duties under this Agreement or related to the sale of the
Contracts, the administration of the Contracts, the operation of
the Account, or the purchase of the Fund shares, provided that the
Fund determines in its sole judgment, exercised in good faith, that
any such proceeding would have a material adverse effect on the
Company's ability to perform its obligations under this Agreement;
or
(e) at the option of the Company, upon receipt of the
Company's written notice by the other parties, upon institution of
formal proceedings against the Fund, Adviser or the Distributor by
the NASD, the SEC, or any state securities or insurance department
or any other regulatory body, provided that the Company determines
in its sole judgment, exercised in good faith, that any such
proceeding would have a material adverse effect on the Fund's or
the Distributor's ability to perform its obligations under this
Agreement; or
(f) at the option of the Company, upon receipt of the
Company's written notice by the other parties, if the Fund ceases
to qualify as a Regulated Investment Company under Subchapter M of
the Internal Revenue Code, or under any successor or similar
provision, or if the Company reasonably and in good faith believes
that the Fund may fail to so qualify; or
(g) at the option of the Company, upon receipt of the
Company's written notice by the other parties, with respect to any
Designated Portfolio if the Fund fails to meet the diversification
requirements specified in Article VI hereof or if the Company
reasonably and in good faith believes the Fund may fail to meet
such requirements; or
(h) at the option of any party to this Agreement, upon
written notice to the other parties, upon another party's material
breach of any provision of this Agreement which material breach is
not cured within thirty (30) days of said notice; or
(i) at the option of the Company, if the Company determines
in its sole judgment exercised in good faith, that either the Fund,
the Adviser or the Distributor has suffered a material adverse
change in its business, operations or financial condition since the
date of this Agreement or is the subject of material adverse
publicity which is likely to have a material adverse impact upon
the business and operations of the Company, such termination to be
effective sixty (60) days' after receipt by the other parties of
written notice of the election to terminate; or
(j) at the option of the Fund or the Distributor, if the Fund
or the Distributor respectively, determines in its sole judgment
exercised in good faith, that the Company has suffered a material
adverse change in its business, operations or financial condition
since the date of this Agreement or is the subject of material
adverse publicity which is likely to have a material adverse impact
upon the business and operations of the Fund or the Adviser, such
termination to be effective sixty (60) days' after receipt by the
other parties of written notice of the election to terminate; or
(k) at the option of the Company or the Fund upon receipt of
any necessary regulatory approvals and/or the vote of the
contractowners having an interest in the Account (or any
subaccount) to substitute the shares of another investment company
for the corresponding Designated Portfolio shares of the Fund in
accordance with the terms of the Contracts for which those
Designated Portfolio shares had been selected to serve as the
underlying investment media.
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<PAGE>
The Company will give sixty (60) days'
prior written notice to the Fund of the date of any proposed vote
or other action taken to replace the Fund's shares; or
(l) at the option of the Company or the Fund upon a
determination by a majority of the Fund Board, or a majority of the
disinterested Fund Board members, that an irreconcilable material
conflict exists among the interests of: (1) all contractowners of
variable insurance products of all separate accounts; or (2) the
interests of the Participating Insurance Companies investing in the
Fund as set forth in Article VII of this Agreement; or
(m) at the option of the Fund in the event any of the
Contracts are not issued or sold in accordance with applicable
federal and/or state law. Termination will be effective
immediately upon such occurrence without notice.
10.2. Notice Requirement. No termination of this Agreement
-------------------
will be effective unless and until the party terminating this Agreement
gives prior written notice to all other parties of its intent to
terminate, which notice will set forth the basis for the termination.
10.3. Effect of Termination. Notwithstanding any termination
----------------------
of this Agreement, the Fund and the Distributor will, at the option of
the Company, continue to make available additional shares of the Fund
pursuant to the terms and conditions of this Agreement, for all
Contracts in effect on the effective date of termination of this
Agreement ( hereinafter referred to as "Existing Contracts.") .
Specifically, without limitation, the owners of the Existing Contracts
will be permitted to reallocate investments in the Portfolios (as in
effect on such date), redeem investments in the Portfolios and/or invest
in the Portfolios upon the making of additional purchase payments under
the Existing Contracts.
10.4. Surviving Provisions. Notwithstanding any termination of
---------------------
this Agreement, each party's obligations under Article VIII to indemnify
other parties will survive and not be affected by any termination of
this Agreement. In addition, each party's obligations under
Section 12.7 will survive and not be affected by any termination of this
Agreement. Finally, with respect to Existing Contracts, all provisions
of this Agreement also will survive and not be affected by any
termination of this Agreement.
ARTICLE XI. Notices
-------
11.1. Any notice shall be sufficiently given when sent by
registered or certified mail to the other party at the address of such
party set forth below or at such other address as such party may from
time to time specify in writing to the other party.
If to the Fund: THE GALAXY VIP FUND
[c/o ]
4400 Computer Drive
Westborough, MA 01581-9896
If to the Company: First Golden American Life Insurance Company of New York
c/o Myles Tashman
Executive Vice President and General Counsel
1475 Dunwoody Drive
West Chester, PA 19380-1478
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<PAGE>
If to Adviser: Fleet Investment Advisers Inc.
[c/o ]
4400 Computer Drive
Westborough, MA 01581-9896
If to Distributor: First Data Distributors, Inc.
[c/o ]
4400 Computer Drive
Westborough, MA 01581-9896
ARTICLE XII. Miscellaneous
-------------
12.1. All persons dealing with the Fund must look solely to the
property of the Fund for the enforcement of any claims against the Fund
as neither the directors, trustees, officers, partners, employees,
agents or shareholders assume any personal liability for obligations
entered into on behalf of the Fund. No Portfolio or series of the Fund
will be liable for the obligations or liabilities of any other Portfolio
or series.
12.2. The Fund, the Adviser and the Distributor acknowledge
that the identities of the customers of the Company or any of its
affiliates except for customers of the Adviser or its affiliates
(collectively the "Company Protected Parties" for purposes of
this Section 12.2), information maintained regarding those customers,
and all computer programs and procedures or other information developed
or used by the Company Protected Parties or any of their employees or
agents in connection with the Company's performance of its duties under
this Agreement are the valuable property of the Company Protected
Parties. The Fund, the Adviser and the Distributor agree that if they
come into possession of any list or compilation of the identities of or
other information about the Company Protected Parties' customers, or any
other information or property of the Company Protected Parties, other
than such information as is publicly available or as may be
independently developed or compiled by the Fund, the Adviser or the
Distributor from information supplied to them by the Company Protected
Parties' customers who also maintain accounts directly with the Fund,
the Adviser or the Distributor, the Fund, the Adviser and the
Distributor will hold such information or property in confidence and
refrain from using, disclosing or distributing any of such information
or other property except: (a) with the Company's prior written consent;
or (b) as required by law or judicial process. The Company acknowledges
that the identities of the customers of the Fund, the Adviser, the
Distributor or any of their affiliates (collectively the "Adviser
Protected Parties" for purposes of this Section 12.2), information
maintained regarding those customers, and all computer programs and
procedures or other information developed or used by the Adviser
Protected Parties or any of their employees or agents in connection with
the Fund's, the Adviser's or the Distributor's performance of their
respective duties under this Agreement are the valuable property of the
Adviser Protected Parties. The Company agrees that if it comes into
possession of any list or compilation of the identities of or other
information about the Adviser Protected Parties' customers, or any other
information or property of the Adviser Protected Parties, other than
such information as is publicly available or as may be independently
developed or compiled by the Company from information supplied to them
by the Adviser Protected Parties' customers who also maintain accounts
directly with the Company, the Company will hold such information or
property in confidence and refrain from using, disclosing or
distributing any of such information or other property except: (a) with
the Fund's, the Adviser's or the Distributor's prior written consent; or
(b) as required by law or judicial process. Each party acknowledges
that any breach of the agreements in this Section 12.2 would result in
immediate and irreparable harm to the other parties for which there
would be no adequate remedy at law and agree that in the event of such a
breach, the other parties will be entitled to equitable relief by way of
temporary and permanent injunctions, as well as such other relief as any
court of competent jurisdiction deems appropriate.
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12.3. The captions in this Agreement are included for
convenience of reference only and in no way define or delineate any of
the provisions hereof or otherwise affect their construction or effect.
12.4. This Agreement may be executed simultaneously in two or
more counterparts, each of which taken together will constitute one and
the same instrument.
12.5. If any provision of this Agreement will be held or made
invalid by a court decision, statute, rule or otherwise, the remainder
of the Agreement will not be affected thereby.
12.6. This Agreement will not be assigned by any party hereto
without the prior written consent of all the parties.
12.7. Each party to this Agreement will maintain all records
required by law, including records detailing the services it provides.
Such records will be preserved, maintained and made available to the
extent required by law and in accordance with the 1940 Act and the rules
thereunder. Each party to this Agreement will cooperate with each other
party and all appropriate governmental authorities (including without
limitation the SEC, the NASD and state insurance regulators) and will
permit each other and such authorities reasonable access to its books
and records in connection with any investigation or inquiry relating to
this Agreement or the transactions contemplated hereby. Upon request by
the Fund or the Distributor, the Company agrees to promptly make copies
or, if required, originals of all records pertaining to the performance
of services under this Agreement available to the Fund or the
Distributor, as the case may be. The Fund agrees that the Company will
have the right to inspect, audit and copy all records pertaining to the
performance of services under this Agreement pursuant to the
requirements of any state insurance department. Each party also agrees
to promptly notify the other parties if it experiences any difficulty in
maintaining the records in an accurate and complete manner. This
provision will survive termination of this Agreement.
12.8. Each party represents that the execution and delivery of
this Agreement and the consummation of the transactions contemplated
herein have been duly authorized by all necessary corporate or board
action, as applicable, by such party and when so executed and delivered
this Agreement will be the valid and binding obligation of such party
enforceable in accordance with its terms.
12.9. The parties to this Agreement may amend the schedules to
this Agreement from time to time to reflect changes in or relating to
the Contracts, the Accounts or the Designated Portfolios of the Fund or
other applicable terms of this Agreement.
12.10. The rights, remedies and obligations contained in this
Agreement are cumulative and are in addition to any and all rights.
12.11. The parties to this Agreement acknowledge and agree that
all liabilities of the Fund arising, directly or indirectly, under this
agreement, will be satisfied solely out of the assets of the Fund and that
no trustee, officer, agent or holder of shares of beneficial interest of
the Fund will be personally liable for any such liabilities.
- 19 -
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IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed in its name and on its behalf by its duly
authorized representative and its seal to be hereunder affixed hereto as
of the date specified below:
FIRST GOLDEN AMERICAN LIFE INSURANCE
COMPANY OF NEW YORK:
By: __________________________
Title: _______________________
Date: ________________________
THE GALAXY VIP FUND:
By: __________________________
Title: _______________________
Date: ________________________
FLEET INVESTMENT ADVISORS INC :
By: __________________________
Title: _______________________
Date: ________________________
FIRST DATA DISTRIBUTORS, INC.
By: __________________________
Title: _______________________
Date: ________________________
- 20 -
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SCHEDULE A
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
CONTRACTS AND SEPARATE ACCOUNT(S)
CONTRACT(S):
Deferred Combination Variable and Fixed Annuity
Contract - DVA Plus featuring The Galaxy VIP
Fund
SEPARATE ACCOUNT(S):
Separate Account NY-B of First Golden American Life
Insurance Company of New York
SCHEDULE B
THE GALAXY VIP FUND
DESIGNATED PORTFOLIOS
PORTFOLIOS:
Equity Fund
Growth and Income Fund
Small Company Growth Fund
Asset Allocation Fund
High Quality Bond Fund
Schedule Date: October 1, 1999
- 21 -
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EXHIBIT 10(a)
Sutherland
Asbill & 1275 Pennsylvania Ave., NW
Brennan LLP Washington, DC 20004-2415
Attorneys at Law Tel: (202) 383-0100
Fax: (202) 637-3593
www.sablaw.com
STEPHEN E. ROTH
DIRECT LINE: (202) 383-0158
Internet: [email protected]
October 28, 1999
VIA EDGARLINK
- -------------
Board of Directors
First Golden American Life Insurance Company of New York
230 Park Avenue, Suite 966
New York, NY 10017
Ms. Coleman and Gentlemen:
We hereby consent to the reference to our name under the
caption "Legal Matters" in the Prospectus filed as part of the
Post-Effective Amendment No. 4 to the registration statement on
Form N-4 for the Separate Account NY-B (File No. 333-16501). In
giving this consent, we do not admit that we are in the category
of persons whose consent is required under Section 7 of the
Securities Act of 1933.
Very truly yours,
SUTHERLAND ASBILL & BRENNAN LLP
By: /s/Stephen E. Roth
------------------
Stephen E. Roth
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EXHIBIT 10(b)
Exhibit 10(b) - Consent of Ernst & Young LLP, Independent Auditors
We consent to the reference to our firm under the captions
"Independent Auditors", "Experts" and "Financial Statements" and to
the use of our reports dated February 12, 1999, with respect to the
financial statements of First Golden American Life Insurance Company
of New York, and February 25, 1999, with respect to the financial
statements of Separate Account NY-B, included in Post-Effective
Amendment No. 4 to the Registration Statement (Form N-4 No. 333-16501)
and related Prospectuses of Separate Account NY-B.
Our audits also included the financial statement schedules of First
Golden American Life Insurance Company of New York included in Item
24(a)(2). These schedules are the responsibility of the Company's
management. Our responsibility is to express an opinion based on our
audits. In our opinion, the financial statement schedules referred to
above, when considered in relation to the basic financial statements
taken as a whole, present fairly in all material respects the
information set forth therein.
/s/ Ernst & Young LLP
Des Moines, Iowa
October 25, 1999
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EXHIBIT 10(c)
Exhibit 10(c) - Consent of Myles R. Tashman
ING VARIABLE ANNUITIES
MYLES R. TASHMAN
Executive Vice President,
General Counsel and Secretary
November 1, 1999
Members of the Board of Directors
Golden American Life Insurance Company
1475 Dunwoody Drive
West Chester, PA 19380-1478
Ms. Emory and Gentlemen:
I hereby consent to the filing of this consent as an exhibit to the
registration statement and to the use of my Opinon and Consent as
Exhibit 9 incorporated by reference in this registration statement.
I also consent to the reference to my name under the heading "Legal
Matters" in the prospectus contained in said registration statement.
In giving this consent I do not thereby admit that I come within the
category of persons whose consent is required under Section 7 of the
Securities Act of 1933 or the Rules and Regulations of the Securities
and Exchange Commission thereunder.
Sincerely,
/s/ Myles R. Tashman
First Golden American Life Insurance Company of New York
230 Park Avenue, Suite 966 Tel: 212-973-9647
New York, New York 10169 Fax: 212-297-0645
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EXHIBIT 15
First Golden American Life Insurance Company of New York
230 Park Avenue, Suite 966, New York, New York 10169
Phone: (212) 973-9647
Fax: (212) 297-0645
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that the undersigned, being duly
elected Directors and/or Officers of First Golden American Life
Insurance Company of New York ("First Golden"), constitute and
appoint Myles R. Tashman, and Marilyn Talman, and each of them, his
or her true and lawful attorneys-in-fact and agents with full power
of substitution and resubstitution for him or her in his or her name,
place and stead, in any and all capacities, to sign the following
First Golden registration statements, and current amendments to
registration statements, and to file the same, with all exhibits
thereto, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents full power and authority to do and
perform each and every act and thing requisite and necessary to be
done, as fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and affirming all that said
attorneys-in-fact and agents, or any of them, or his or her
substitute or substitutes, may lawfully do or cause to be done by
virtue thereof:
Post-Effective Amendment designated #4 to Separate Account NY-B
of First Golden's Registration Statement on Form N-4 (Nos. 333-
16501; 811-7935)
Amendment designated #1 to First Golden's Registration Statement
on Form S-1 (No. 333-77385)
SIGNATURE TITLE DATE
- --------- ----- ----
/s/ R. Brock Armstrong
- ------------------------- Director and Chairman October 28, 1999
R. Brock Armstrong
/s/ Barnett Chernow
- ------------------------- Director and President October 14, 1999
Barnett Chernow
/s/ Myles R. Tashman
- ------------------------- Director, Executive October 12, 1999
Myles R. Tashman Vice President, General
Counsel and Secretary
/s/ E. Robert Koster
- ------------------------- Senior Vice President October 12, 1999
E. Robert Koster and Chief Financial
Officer
/s/ Carol V. Coleman
- ------------------------- Director October 15, 1999
Carol V. Coleman
/s/ Stephen J. Friedman
- ------------------------- Director October 18, 1999
Stephen J. Friedman
/s/ Andrew Kalinowski
- ------------------------- Director October 15, 1999
Andrew Kalinowski
/s/ Bernard Levitt
- ------------------------- Director October 14, 1999
Bernard Levitt
/s/ Roger A. Martin
- ------------------------- Director October 19, 1999
Roger A. Martin
/s/ Michael W. Cunningham
- ------------------------- Director October 29, 1999
Michael W. Cunningham
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