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As filed with the Securities and Exchange Commission on September 13, 2000
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. 6
and/or
Registration Statement under
The Investment Company Act of 1940
Amendment No. 7
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)
Myles R. Tashman, 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 September 29, 2000 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 Amendment to a Registration Statement contains only a single
Profile, Prospectus and Statement of Additional Information for the
DVA Plus Contract.
The Registration Statement normally contains 3 separate Profiles,
Prospectuses and Statements of Additional Information. The distribution
system for the Contracts offered by each version of the Profile,
Prospectus and Statement of Additional Information is different.
Version 1 offers 32 portfolios. Version 2, which is no longer being
offered, offered three portfolios which are also offered in Versions 1
and 3 and ten additional mutual fund portfolios. Version 3 offers five
different mutual fund portfolios in addition to 27 portfolios offered
in Version 1. Other than these differences, Versions 1, 2 and 3 are
substantially similar.
The Profiles, Prospectuses and Statements of Additional Information
describing the First Golden DVA PLUS Contract (Version 2 and 3 named
Empire PrimElite and DVA Plus featuring The Galaxy VIP Fund) are not
effected by this Post-Effective Amendment and are not included in this
Post-Effective Amendment No. 6. They were last filed with the Securities
Exchange Commission as part of Registrant's Post-Effective Amendment
No. 5 on April 26, 2000.
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| First Golden American Life Insurance Company of New York
| Separate Account NY-B of First Golden American Life Insurance
| Company of New York ING VARIABLE ANNUITIES
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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
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PROFILE OF
GOLDENSELECT DVA PLUS/R/
DEFERRED COMBINATION VARIABLE AND FIXED ANNUITY CONTRACT
OCTOBER 2, 2000
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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.
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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 ("First Golden"). The Contract provides a means for you to
invest on a tax-deferred basis in (i) one or more of 32 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 32 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
DVA PLUS PROFILE PROSPECTUS BEGINS AFTER
108206 PAGE 9 OF THIS PROFILE
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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.
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>
<CAPTION>
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ANNUITY OPTIONS
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<S> <C> <C>
Option 1 Income for a Payments are made for a specified number of years to you
fixed period or your beneficiary.
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Option 2 Income for Payments are made for the rest of your life or longer for a
life with a specified period such as 10 or 20 years or until the total
period certain 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 such period if you
should die during the period.
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Option 3 Joint life income Payments are made for your life and the life of another
person (usually your spouse).
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Option 4 Annuity plan Any other annuitization plan that we choose to offer on the
annuity start date.
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</TABLE>
Annuity payments under Options 1, 2 and 3 are fixed. Annuity payments under
Option 4 may be fixed or variable. If variable and subject to the Investment
Company Act of 1940, it will comply with the requirements of such Act. 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? 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").
IRAs and other qualified plans already have the tax-deferral feature found in
this Contract. For an additional cost, the Contract provides other benefits
including death benefits and the ability to receive a lifetime income. See
"Expenses" in this profile.
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.
108206 2 DVA PLUS PROFILE
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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 32 mutual fund investment portfolios through our Separate Account
NY-B. The investment portfolios are described in the prospectuses for The GCG
Trust, the PIMCO Variable Insurance Trust, ING Variable Insurance Trust and The
Prudential Series Fund, Inc. 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>
<CAPTION>
<S> <C> <C>
THE GCG TRUST
Liquid Asset Series Rising Dividends Series Special Situations Series
Limited Maturity Bond Series Diversified Mid-Cap Series Strategic Equity Series
Global Fixed Income Series Managed Global Series Mid-Cap Growth Series
Fully Managed Series Large Cap Value Series Small Cap Series
Total Return Series All Cap Series Growth Series
Asset Allocation Growth Series Research Series Real Estate Series
Equity Income Series Capital Appreciation Series Hard Assets Series
Investors Series Growth and Income Series Developing World Series
Value Equity Series Capital Growth Series Emerging Markets Series
THE PIMCO VARIABLE INSURANCE TRUST
PIMCO High Yield Bond Portfolio
PIMCO StocksPLUS Growth and Income Portfolio
ING VARIABLE INSURANCE TRUST
ING Global Brand Names Fund
PRUDENTIAL SERIES FUND
Prudential Jennison Portfolio
SP Jennison International Growth 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 0.56% to 1.75% 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.
108206 3 DVA PLUS PROFILE
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COMPLETE YEARS ELAPSED 0 | 1 | 2 | 3 | 4 | 5 | 6 | 7+
SINCE PREMIUM PAYMENT | | | | | | |
SURRENDER CHARGE 7% | 6% | 5% | 4% | 3% | 2% | 1% | 0%
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 $77,000). The "Total Annual Investment Portfolio Charges" column
reflects the portfolio charges for each portfolio and are based on actual
expenses as of December 31, 1999, except for the (i) portfolios that commenced
operations during 2000; and (ii) 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%.
108206 4 DVA PLUS PROFILE
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<TABLE>
<CAPTION>
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TOTAL ANNUAL EXAMPLES:
TOTAL ANNUAL INVESTMENT TOTAL ---------
INSURANCE PORTFOLIO ANNUAL TOTAL CHARGES AT THE END OF:
INVESTMENT PORTFOLIO CHARGES CHARGES CHARGES 1 YEAR 10 YEARS
------------------------------------------------------------------------------------------------
THE GCG TRUST
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Liquid Asset 1.44% 0.56% 2.00% $ 90 $ 233
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Limited Maturity Bond 1.44% 0.57% 2.01% $ 90 $ 234
------------------------------------------------------------------------------------------------
Global Fixed Income 1.44% 1.60% 3.04% $ 101 $ 336
------------------------------------------------------------------------------------------------
Fully Managed 1.44% 0.97% 2.41% $ 94 $ 275
------------------------------------------------------------------------------------------------
Total Return 1.44% 0.91% 2.35% $ 94 $ 269
------------------------------------------------------------------------------------------------
Asset Allocation Growth 1.44% 1.01% 2.45% $ 95 $ 279
------------------------------------------------------------------------------------------------
Equity Income 1.44% 0.96% 2.40% $ 94 $ 274
------------------------------------------------------------------------------------------------
Investors 1.44% 1.01% 2.45% $ 95 $ 279
------------------------------------------------------------------------------------------------
Value Equity 1.44% 0.96% 2.40% $ 94 $ 274
------------------------------------------------------------------------------------------------
Rising Dividends 1.44% 0.96% 2.40% $ 94 $ 274
------------------------------------------------------------------------------------------------
Diversified Mid-Cap 1.44% 1.01% 2.45% $ 95 $ 279
------------------------------------------------------------------------------------------------
Managed Global 1.44% 1.25% 2.69% $ 97 $ 302
------------------------------------------------------------------------------------------------
Large Cap Value 1.44% 1.01% 2.45% $ 95 $ 279
------------------------------------------------------------------------------------------------
All Cap 1.44% 1.01% 2.45% $ 95 $ 279
------------------------------------------------------------------------------------------------
Research 1.44% 0.91% 2.35% $ 94 $ 269
------------------------------------------------------------------------------------------------
Capital Appreciation 1.44% 0.96% 2.40% $ 94 $ 274
------------------------------------------------------------------------------------------------
Growth and Income 1.44% 1.11% 2.55% $ 96 $ 289
------------------------------------------------------------------------------------------------
Capital Growth 1.44% 1.05% 2.49% $ 95 $ 283
------------------------------------------------------------------------------------------------
Strategic Equity 1.44% 0.96% 2.40% $ 94 $ 274
------------------------------------------------------------------------------------------------
Special Situations 1.44% 1.11% 2.55% $ 96 $ 289
------------------------------------------------------------------------------------------------
Mid-Cap Growth 1.44% 0.91% 2.35% $ 94 $ 269
------------------------------------------------------------------------------------------------
Small Cap 1.44% 0.96% 2.40% $ 94 $ 274
------------------------------------------------------------------------------------------------
Growth 1.44% 1.04% 2.48% $ 95 $ 282
------------------------------------------------------------------------------------------------
Real Estate 1.44% 0.96% 2.40% $ 94 $ 274
------------------------------------------------------------------------------------------------
Hard Assets 1.44% 0.96% 2.40% $ 94 $ 274
------------------------------------------------------------------------------------------------
Developing World 1.44% 1.75% 3.19% $ 102 $ 349
------------------------------------------------------------------------------------------------
Emerging Markets 1.44% 1.75% 3.19% $ 102 $ 349
------------------------------------------------------------------------------------------------
THE PIMCO VARIABLE INSURANCE TRUST
PIMCO High Yield Bond 1.44% 0.75% 2.19% $ 92 $ 252
------------------------------------------------------------------------------------------------
PIMCO StocksPLUS
Growth and Income 1.44% 0.65% 2.09% $ 91 $ 242
------------------------------------------------------------------------------------------------
ING VARIABLE INSURANCE TRUST
ING Global Brand Names 1.44% 1.23% 2.67% $ 97 $ 300
------------------------------------------------------------------------------------------------
THE PRUDENTIAL SERIES FUND, INC.
Prudential Jennison 1.44% 1.03% 2.47% $ 95 $ 281
------------------------------------------------------------------------------------------------
SP Jennison
International Growth 1.44% 1.64% 3.08% $ 101 $ 339
------------------------------------------------------------------------------------------------
</TABLE>
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.
108206 5 DVA PLUS PROFILE
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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 9.
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
calendar years of 1998 and 1999. 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 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.
6 DVA PLUS PROFILE
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<TABLE>
<CAPTION>
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CALENDAR YEAR
INVESTMENT PORTFOLIO 1999 1998
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<S> <C> <C>
Managed by A I M Capital Management, Inc.
Capital Appreciation(1) 22.86% 11.06%
Strategic Equity(2) 54.02% -0.61%
--------------------------------------------------------------------------------
Managed by Alliance Capital Management L.P.
Capital Growth (2) 23.76% 10.37%
--------------------------------------------------------------------------------
Managed by Baring International Investment Limited
Developing World(2) 59.36% --
Emerging Markets(5) 82.68% -25.19%
Global Fixed Income -9.94% 10.25%
Hard Assets(2) 21.62% -30.61%
--------------------------------------------------------------------------------
Managed by Capital Guardian Trust Company
Large Cap Value -- --
Managed Global(3) 60.98% 27.47%
Small Cap (3) 48.46% 19.25%
--------------------------------------------------------------------------------
Managed by Eagle Asset Management, Inc.
Value Equity -0.93% 0.09%
--------------------------------------------------------------------------------
Managed by Fidelity Management & Research Company
Asset Allocation Growth -- --
Diversified Mid-Cap -- --
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Managed by ING Investment Management, LLC
Limited Maturity Bond -0.32% 5.33%
Liquid Asset 3.23% 3.54%
--------------------------------------------------------------------------------
Managed by Janus Capital Corporation
Growth(2) 75.61% 25.01%
Growth and Income -- --
Special Situations -- --
--------------------------------------------------------------------------------
Managed by Kayne Anderson Investment Management, LLC
Rising Dividends 14.22% 12.50%
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Managed by Massachusetts Financial Services Company
Mid-Cap Growth 76.52% 21.06%
Research 22.45% 21.29%
Total Return 1.89% 9.99%
--------------------------------------------------------------------------------
Managed by The Prudential Investment Corporation
Real Estate(4) -5.19% -14.70%
--------------------------------------------------------------------------------
Managed by Salomon Brothers Asset Management, Inc.
All Cap -- --
Investors -- --
--------------------------------------------------------------------------------
Managed by T. Rowe Price Associates, Inc.
Equity Income(2) -2.15% 6.71%
Fully Managed 5.39% 4.37%
--------------------------------------------------------------------------------
Managed by Pacific Investment Management Company
PIMCO High Yield Bond 1.54% --
PIMCO StocksPLUS Growth and Income 18.14% --
--------------------------------------------------------------------------------
Managed by ING Investment Management Advisors B.V.
ING Global Brand Names -- --
--------------------------------------------------------------------------------
Managed by Jennison Associates LLC
Prudential Jennison Portfolio -- --
SP Jennison International Growth -- --
--------------------------------------------------------------------------------
</TABLE>
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(1) Prior to April 1, 1999, a different firm managed the Portfolio.
(2) Prior to March 1, 1999, a different firm managed the Portfolio.
(3) Prior to February 1, 2000, a different firm managed the Portfolio.
(4) Prior to April 28, 2000, a different firm managed the Portfolio.
(5) Prior to March 15, 2000, a different firm managed the Portfolio.
108206 7 DVA PLUS PROFILE
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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 less than 80 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 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 you paid.
108206 8 DVA PLUS PROFILE
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<PAGE>
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.
ADDITIONAL FEATURES. This Contract has other features that may interest
you. 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.
108206 9 DVA PLUS PROFILE
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FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B OF FIRST GOLDEN AMERICAN LIFE INSURANCE
COMPANY OF NEW YORK
DEFERRED COMBINATION VARIABLE AND FIXED ANNUITY PROSPECTUS
GOLDENSELECT DVA PLUS
--------------------------------------------------------------------------------
OCTOBER 2, 2000
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 ("First Golden," 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 32 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 listed on the back of this cover.
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
("SAI"), dated October 2, 2000, has been filed with the Securities and Exchange
Commission ("SEC"). 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 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 PIMCO VARIABLE INSURANCE TRUST, ING VARIABLE
INSURANCE TRUST OR THE PRUDENTIAL SERIES FUND, INC. 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 PIMCO VARIABLE INSURANCE TRUST, ING VARIABLE INSURANCE TRUST AND THE
PRUDENTIAL SERIES FUND, INC.
--------------------------------------------------------------------------------
THE INVESTMENT PORTFOLIOS AND THE MANAGERS ARE LISTED ON THE BACK OF THIS COVER.
--------------------------------------------------------------------------------
FG-DVAP-108206
<PAGE>
<PAGE>
The investment portfolios available under your Contract and the portfolio
managers are:
A I M CAPITAL MANAGEMENT, INC.
Capital Appreciation Series
Strategic Equity Series
ALLIANCE CAPITAL MANAGEMENT L. P.
Capital Growth Series
BARING INTERNATIONAL INVESTMENT LIMITED (AN AFFILIATE)
Developing World Series
Emerging Markets Series
Global Fixed Income Series
Hard Assets Series
CAPITAL GUARDIAN TRUST COMPANY
Large Cap Value Series
Managed Global Series
Small Cap Series
EAGLE ASSET MANAGEMENT, INC.
Value Equity Series
FIDELITY MANAGEMENT & RESEARCH COMPANY
Asset Allocation Growth Series
Diversified Mid-Cap Series
ING INVESTMENT MANAGEMENT, LLC (AN AFFILIATE)
Limited Maturity Bond Series
Liquid Asset Series
JANUS CAPITAL CORPORATION
Growth Series
Growth and Income Series
Special Situations Series
KAYNE ANDERSON INVESTMENT MANAGEMENT, LLC
Rising Dividends Series
MASSACHUSETTS FINANCIAL SERVICES COMPANY
Mid-Cap Growth Series
Research Series
Total Return Series
THE PRUDENTIAL INVESTMENT CORPORATION
Real Estate Series
SALOMON BROTHERS ASSET MANAGEMENT, INC
All Cap Series
Investors Series
T. ROWE PRICE ASSOCIATES, INC.
Equity Income Series
Fully Managed Series
PACIFIC INVESTMENT MANAGEMENT COMPANY
PIMCO High Yield Bond Portfolio
PIMCO StocksPLUS Growth and Income Portfolio
ING INVESTMENT MANAGEMENT ADVISORS B.V. (AN AFFILIATE)
ING Global Brand Names Fund
JENNISON ASSOCIATES LLC
Prudential Jennison Portfolio
SP Jennison International Growth 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.
FG-DVAP-108206
<PAGE>
<PAGE>
--------------------------------------------------------------------------------
TABLE OF CONTENTS
--------------------------------------------------------------------------------
PAGE
Index of Special Terms 1
Fees and Expenses 2
Performance Information 8
Accumulation Unit 8
Net Investment Factor 8
Condensed Financial Information 8
Financial Statements 8
Performance Information 8
First Golden American Life Insurance Company of New York 9
The Trusts 10
First Golden Separate Account NY-B 10
The Investment Portfolios 11
Investment Objectives 11
Investment Management Fees and Other Expenses 15
The Fixed Interest Allocation 16
Selecting a Guaranteed Interest Period 16
Guaranteed Interest Rates 16
Transfers from a Fixed Interest Allocation 17
Withdrawals from a Fixed Interest Allocation 17
Market Value Adjustment 17
The Annuity Contract 18
Contract Date and Contract Year 18
Annuity Start Date 19
Contract Owner 19
Annuitant 19
Beneficiary 20
Purchase and Availability of the Contract 20
Crediting of Premium Payments 20
Administrative Procedures 21
Contract Value 21
Cash Surrender Value 22
Surrendering to Receive the Cash Surrender Value 22
The Subaccounts 22
Addition, Deletion or Substitution of Subaccounts
and Other Changes 22
The Fixed Account 23
Other Important Provisions 23
Withdrawals 23
Regular Withdrawals 24
Systematic Withdrawals 24
IRA Withdrawals 25
Transfers Among Your Investments 26
Transfers by Third Parties 26
Dollar Cost Averaging 26
Automatic Rebalancing 27
Death Benefit Choices 27
Death Benefit During the Accumulation Phase 27
Standard Death Benefit 28
Annual Ratchet Enhanced Death Benefit 28
Death Benefit During the Income Phase 28
Required Distributions upon Contract Owner's Death 28
FG-DVAP-108206 i
<PAGE>
<PAGE>
--------------------------------------------------------------------------------
TABLE OF CONTENTS (CONTINUED)
--------------------------------------------------------------------------------
PAGE
Charges and Fees 29
Charge Deduction Subaccount 29
Charges Deducted from the Contract Value 29
Surrender Charge 29
Free Withdrawal Amount 30
Surrender Charge for Excess Withdrawals 30
Premium Taxes 30
Administrative Charge 30
Transfer Charge 30
Charges Deducted from the Subaccounts 30
Mortality and Expense Risk Charge 30
Asset-Based Administrative Charge 31
Trust Expenses 31
The Annuity Options 31
Annuitization of Your Contract 31
Selecting the Annuity Start Date 32
Frequency of Annuity Payments 32
The Annuity Options 32
Income for a Fixed Period 32
Income for Life with a Period Certain 32
Joint Life Income 32
Annuity Plan 33
Payment When Named Person Dies 33
Other Contract Provisions 33
Reports to Contract Owners 33
Suspension of Payments 33
In Case of Errors in Your Application 33
Assigning the Contract as Collateral 33
Contract Changes-Applicable Tax Law 34
Free Look 34
Group or Sponsored Arrangements 34
Selling the Contract 34
Other Information 35
Voting Rights 35
State Regulation 35
Legal Proceedings 35
Legal Matters 35
Experts 35
Federal Tax Considerations 36
More Information About First Golden American Life
Insurance Company of New York 41
Unaudited Financial Statements of First Golden American
Life Insurance Company of New York.....................56
Financial Statements of First Golden American Life
Insurance Company of New York 63
Statement of Additional Information
Table of Contents 86
Appendix A
Condensed Financial Information A1
Appendix B
Market Value Adjustment Examples B1
Appendix C
Surrender Charge for Excess Withdrawals Example C1
FG-DVAP-108206 ii
<PAGE>
<PAGE>
--------------------------------------------------------------------------------
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 8
Annual Ratchet Enhanced Death Benefit 28
Annuitant 19
Annuity Start Date 19
Cash Surrender Value 22
Contract Date 18
Contract Owner 19
Contract Value 21
Contract Year 18
Fixed Interest Allocation 16
Free Withdrawal Amount 30
Market Value Adjustment 17
Net Investment Factor 8
Standard Death Benefit 28
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
FG-DVAP-108206 1
<PAGE>
<PAGE>
--------------------------------------------------------------------------------
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.
FG-DVAP-108206 2
<PAGE>
<PAGE>
THE GCG TRUST ANNUAL EXPENSES (as a percentage of the average daily net assets
of a portfolio):
--------------------------------------------------------------------------------
MANAGEMENT OTHER TOTAL
PORTFOLIO FEE(1) EXPENSES(2) EXPENSES(3)
--------------------------------------------------------------------------------
Liquid Asset 0.56% 0.00% 0.56%
--------------------------------------------------------------------------------
Limited Maturity Bond 0.56% 0.01% 0.57%
--------------------------------------------------------------------------------
Global Fixed Income 1.60% 0.00% 1.60%
--------------------------------------------------------------------------------
Fully Managed 0.96% 0.01% 0.97%
--------------------------------------------------------------------------------
Total Return 0.91% 0.00% 0.91%
--------------------------------------------------------------------------------
Asset Allocation Growth 1.00% 0.01% 1.01%
--------------------------------------------------------------------------------
Equity Income 0.96% 0.00% 0.96%
--------------------------------------------------------------------------------
Investors 1.00% 0.01% 1.01%
--------------------------------------------------------------------------------
Value Equity 0.96% 0.00% 0.96%
--------------------------------------------------------------------------------
Rising Dividends 0.96% 0.00% 0.96%
--------------------------------------------------------------------------------
Diversified Mid-Cap 1.00% 0.01% 1.01%
--------------------------------------------------------------------------------
Managed Global 1.25% 0.00% 1.25%
--------------------------------------------------------------------------------
Large Cap Value 1.00% 0.01% 1.01%
--------------------------------------------------------------------------------
All Cap 1.00% 0.01% 1.01%
--------------------------------------------------------------------------------
Research 0.91% 0.00% 0.91%
--------------------------------------------------------------------------------
Capital Appreciation 0.96% 0.00% 0.96%
--------------------------------------------------------------------------------
Growth and Income 1.10% 0.01% 1.11%
--------------------------------------------------------------------------------
Capital Growth 1.04% 0.01% 1.05%
--------------------------------------------------------------------------------
Strategic Equity 0.96% 0.00% 0.96%
--------------------------------------------------------------------------------
Special Situations 1.10% 0.01% 1.11%
--------------------------------------------------------------------------------
Mid-Cap Growth 0.91% 0.00% 0.91%
--------------------------------------------------------------------------------
Small Cap 0.96% 0.00% 0.96%
--------------------------------------------------------------------------------
Growth 1.04% 0.00% 1.04%
--------------------------------------------------------------------------------
Real Estate 0.96% 0.00% 0.96%
--------------------------------------------------------------------------------
Hard Assets 0.96% 0.00% 0.96%
--------------------------------------------------------------------------------
Developing World 1.75% 0.00% 1.75%
--------------------------------------------------------------------------------
Emerging Markets 1.75% 0.00% 1.75%
--------------------------------------------------------------------------------
(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, 1999, except for (i) portfolios that commenced
operations in 2000; and (ii) newly formed portfolios where the
charges have been estimated.
(3) Total Expenses are based on actual expenses for the fiscal year ended
December 31, 1999.
FG-DVAP-108206 3
<PAGE>
<PAGE>
THE PIMCO VARIABLE INSURANCE TRUST ANNUAL EXPENSES (as a percentage of the
average daily net assets of a portfolio):
--------------------------------------------------------------------------------
MANAGEMENT OTHER TOTAL
PORTFOLIO FEE(1) EXPENSES(1) EXPENSES(1)
--------------------------------------------------------------------------------
PIMCO High Yield Bond 0.25% 0.50% 0.75%
--------------------------------------------------------------------------------
PIMCO StocksPLUS Growth and Income 0.40% 0.25% 0.65%
--------------------------------------------------------------------------------
(1) PIMCO has contractually agreed to reduce total annual portfolio
operating expenses to the extent they would exceed, due to the payment
of organizational expenses and Trustees' fees, 0.65% and 0.75% for the
High Yield Bond and the StocksPLUS Growth and Income Portfolios,
respectively, of average daily net assets. Without such reductions,
total annual operating expenses for the fiscal year ended December 31,
1999 would have remained unchanged for both Portfolios. Under the
Expense Limitation Agreement, PIMCO may recoup any such waivers and
reimbursements in future periods, not exceeding three years, provided
total expenses, including such recoupment, do not exceed the annual
expense limit. The fees expressed are restated as of April 1, 2000.
ING VARIABLE INSURANCE TRUST ANNUAL EXPENSES (as a percentage of the average
daily net assets of the portfolio):
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------
OTHER TOTAL EXPENSES
MANAGEMENT 12B-1 FEE(3) EXPENSES AFTER FEE WAIVER
FEE AFTER AFTER AFTER EXPENSE AND EXPENSE
PORTFOLIO FEE WAIVER(1)(2) FEE WAIVER REIMBURSEMENT(1)(2) REIMBURSEMENT(1)(2)
---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ING Global Brand Names 0.30% 0.15% 0.78% 1.23%
---------------------------------------------------------------------------------------------------------
</TABLE>
(1) Since the portfolio had not commenced operations as of December 31,
1999, expenses as shown are based on estimates of the portfolio's
operating expenses for the portfolio's first fiscal year.
(2) ING Mutual Funds Management Co. LLC, the investment manager, has
entered into an expense limitation contract with the portfolio, under
which it will limit expenses of the portfolio as shown, excluding
interest, taxes, brokerage, and extraordinary expenses through
December 31, 2000. Fee waiver and/or reimbursements by the investment
manager may vary in order to achieve such contractually obligated
Total Expenses. Without this contract, and based on estimates for the
fiscal year ending December 31, 2000, total expenses are estimated to
be 2.03% for the portfolio.
(3) Pursuant to a Plan of Distribution adopted by the portfolio under Rule
12b-1 under the Investment Company Act of 1940, the portfolio pays its
distributor an annual fee of up to 0.25% of average daily net assets
attributable to portfolio shares. The distribution fee may be used
by the distributor for the purpose of financing any activity which
is primarily intended to result in the sale of shares of the
portfolio. For more information see the portfolio's Statement
of Additional Information.
THE PRUDENTIAL SERIES FUND ANNUAL EXPENSES (as a percentage of the average daily
net assets of the portfolio):
--------------------------------------------------------------------------------
MANAGEMENT OTHER TOTAL
PORTFOLIO FEE 12B-1 FEE(1) EXPENSES(2) EXPENSE(2)
--------------------------------------------------------------------------------
Prudential Jennison 0.60% 0.25% 0.18% 1.03%
--------------------------------------------------------------------------------
SP Jennison International 0.85% 0.25% 0.54% 1.64%
Growth
--------------------------------------------------------------------------------
(1) The 12b-1 fees for the Prudential Jennison Portfolio and the
SP Jennison International Growth Portfolio are imposed to enable
the portfolios to recover certain sales expenses, including
compensation to broker-dealers, the cost of printing prospectuses
for delivery to prospective investors and advertising costs for
each portfolio. Over a long period of time, the total amount of
12b-1 fees paid may exceed the amount of sales charges imposed
by the product.
FG-DVAP-108206 4
<PAGE>
<PAGE>
(2) Since the SP Jennison International Portfolio had not commenced
operations as of December 31, 1999, expenses as shown are based
on estimates of the portfolio's operating expenses for the
portfolio's first fiscal year.
The purpose of the foregoing tables is to help you understand the various costs
and expenses that you will bear directly and indirectly. The tables reflect
expenses of Separate Account NY-B as well as the expenses of the investment
portfolios. See the prospectuses of The GCG Trust, the PIMCO Variable Insurance
Trust, ING Variable Insurance Trust and The Prudential Series Fund, Inc. for
additional information on management or advisory fees and in some cases other
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.
FG-DVAP-108206 5
<PAGE>
<PAGE>
EXAMPLES:
In the following examples, surrender charges may apply if you choose to
annuitize within the first 7 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 $113 $138 $233
--------------------------------------------------------------------------------
Limited Maturity Bond $ 90 $113 $138 $234
--------------------------------------------------------------------------------
Global Fixed Income $101 $144 $190 $336
--------------------------------------------------------------------------------
Fully Managed $ 94 $125 $159 $275
--------------------------------------------------------------------------------
Total Return $ 94 $123 $156 $269
--------------------------------------------------------------------------------
Asset Allocation Growth $ 95 $126 $161 $279
--------------------------------------------------------------------------------
Equity Income $ 94 $125 $158 $274
--------------------------------------------------------------------------------
Investors $ 95 $126 $161 $279
--------------------------------------------------------------------------------
Value Equity $ 94 $125 $158 $274
--------------------------------------------------------------------------------
Rising Dividends $ 94 $125 $158 $274
--------------------------------------------------------------------------------
Diversified Mid-Cap $ 95 $126 $161 $279
--------------------------------------------------------------------------------
Managed Global $ 97 $134 $172 $302
--------------------------------------------------------------------------------
Large Cap Value $ 95 $126 $161 $279
--------------------------------------------------------------------------------
All Cap $ 95 $126 $161 $279
--------------------------------------------------------------------------------
Research $ 94 $123 $156 $269
--------------------------------------------------------------------------------
Capital Appreciation $ 94 $125 $158 $274
--------------------------------------------------------------------------------
Growth and Income $ 96 $129 $166 $289
--------------------------------------------------------------------------------
Capital Growth $ 95 $128 $163 $283
--------------------------------------------------------------------------------
Strategic Equity $ 94 $125 $158 $274
--------------------------------------------------------------------------------
Special Situations $ 96 $129 $166 $289
--------------------------------------------------------------------------------
Mid-Cap Growth $ 94 $123 $156 $269
--------------------------------------------------------------------------------
Small Cap $ 94 $125 $158 $274
--------------------------------------------------------------------------------
Growth $ 95 $127 $162 $282
--------------------------------------------------------------------------------
Real Estate $ 94 $125 $158 $274
--------------------------------------------------------------------------------
Hard Assets $ 94 $125 $158 $274
--------------------------------------------------------------------------------
Developing World $102 $148 $197 $349
--------------------------------------------------------------------------------
Emerging Markets $102 $148 $197 $349
--------------------------------------------------------------------------------
THE PIMCO VARIABLE INSURANCE TRUST
PIMCO High Yield Bond $ 92 $119 $147 $252
--------------------------------------------------------------------------------
PIMCO StocksPLUS Growth
and Income $ 91 $115 $142 $242
--------------------------------------------------------------------------------
ING VARIABLE INSURANCE TRUST
ING Global Brand Names $ 97 $133 $171 $300
--------------------------------------------------------------------------------
THE PRUDENTIAL SERIES FUND, INC
Prudential Jennison $ 95 $127 $162 $281
--------------------------------------------------------------------------------
SP Jennison International Growth $101 $145 $192 $339
--------------------------------------------------------------------------------
FG-DVAP-108206 6
<PAGE>
<PAGE>
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 $ 63 $108 $233
--------------------------------------------------------------------------------
Limited Maturity Bond $ 20 $ 63 $108 $234
--------------------------------------------------------------------------------
Global Fixed Income $ 31 $ 94 $160 $336
--------------------------------------------------------------------------------
Fully Managed $ 24 $ 75 $129 $275
--------------------------------------------------------------------------------
Total Return $ 24 $ 73 $126 $269
--------------------------------------------------------------------------------
Asset Allocation Growth $ 25 $ 76 $131 $279
--------------------------------------------------------------------------------
Equity Income $ 24 $ 75 $128 $274
--------------------------------------------------------------------------------
Investors $ 25 $ 76 $131 $279
--------------------------------------------------------------------------------
Value Equity $ 24 $ 75 $128 $274
--------------------------------------------------------------------------------
Rising Dividends $ 24 $ 75 $128 $274
--------------------------------------------------------------------------------
Diversified Mid-Cap $ 25 $ 76 $131 $279
--------------------------------------------------------------------------------
Managed Global $ 27 $ 84 $142 $302
--------------------------------------------------------------------------------
Large Cap Value $ 25 $ 76 $131 $279
--------------------------------------------------------------------------------
All Cap $ 25 $ 76 $131 $279
--------------------------------------------------------------------------------
Research $ 24 $ 73 $126 $269
--------------------------------------------------------------------------------
Capital Appreciation $ 24 $ 75 $128 $274
--------------------------------------------------------------------------------
Growth and Income $ 26 $ 79 $136 $289
--------------------------------------------------------------------------------
Capital Growth $ 25 $ 78 $133 $283
--------------------------------------------------------------------------------
Strategic Equity $ 24 $ 75 $128 $274
--------------------------------------------------------------------------------
Special Situations $ 26 $ 79 $136 $289
--------------------------------------------------------------------------------
Mid-Cap Growth $ 24 $ 73 $126 $269
--------------------------------------------------------------------------------
Small Cap $ 24 $ 75 $128 $274
--------------------------------------------------------------------------------
Growth $ 25 $ 77 $132 $282
--------------------------------------------------------------------------------
Real Estate $ 24 $ 75 $128 $274
--------------------------------------------------------------------------------
Hard Assets $ 24 $ 75 $128 $274
--------------------------------------------------------------------------------
Developing World $ 32 $ 98 $167 $349
--------------------------------------------------------------------------------
Emerging Markets $ 32 $ 98 $167 $349
--------------------------------------------------------------------------------
THE PIMCO VARIABLE INSURANCE TRUST
PIMCO High Yield Bond $ 22 $ 69 $117 $252
--------------------------------------------------------------------------------
PIMCO StocksPLUS Growth
and Income $ 21 $ 65 $112 $242
--------------------------------------------------------------------------------
ING VARIABLE INSURANCE TRUST
ING Global Brand Names $ 27 $ 83 $141 $300
--------------------------------------------------------------------------------
THE PRUDENTIAL SERIES FUND, INC.
Prudential Jennison $ 25 $ 77 $132 $281
--------------------------------------------------------------------------------
SP Jennison International Growth $ 31 $ 95 $162 $339
--------------------------------------------------------------------------------
The examples above reflect the annual administrative charge as an annual charge
of 0.04% of assets (based on an average contract value of $77,000). 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.
FG-DVAP-108206 7
<PAGE>
<PAGE>
--------------------------------------------------------------------------------
PERFORMANCE INFORMATION
--------------------------------------------------------------------------------
ACCUMULATION UNIT
We use accumulation units to calculate the value of a Contract. Each subaccount
of Separate Account NY-B of First Golden ("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.
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 Separate Account NY-B offered in 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 year ended
December 31, 1999 are included in the Statement of Additional Information. The
unaudited consolidated financial statements of First Golden for six months
ended June 30, 2000 and audited consolidated financial statements of First
Golden for the years ended December 31, 1999, 1998 and 1997 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 Account
NY-B has been in existence. We may show other total returns for periods of 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
FG-DVAP-108206 8
<PAGE>
<PAGE>
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 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.
--------------------------------------------------------------------------------
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
--------------------------------------------------------------------------------
First Golden American Life Insurance Company of New York ("First Golden") was
incorporated on May 24, 1996 as 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 based in The Netherlands. 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 Co. LLC, one of the portfolio managers of The GCG
Trust and the ING Variable Insurance Trust. ING also owns Baring International
Investment Limited, another portfolio manager of The GCG Trust and ING
Investment Management Advisors B.V., a portfolio manager of the ING
Variable Insurance Trust.
Our principal office is located at 230 Park Avenue, Suite 966, New York, New
York 10169.
FG-DVAP-108206 9
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--------------------------------------------------------------------------------
THE TRUSTS
--------------------------------------------------------------------------------
In this prospectus, we refer to The GCG Trust, the PIMCO Variable Insurance
Trust, ING Variable Insurance Trust and The Prudential Series Fund, Inc.
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 PIMCO Variable Insurance 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 to qualified pension and retirement plans. The principal address of
the PIMCO Variable Insurance Trust is 840 Newport Center Drive, Suite 300,
Newport Beach, CA 92660.
ING Variable Insurance Trust is also a mutual fund whose shares are offered to
separate accounts funding variable annuity contracts offered by insurance
companies such as First Golden and Golden American. Pending SEC approval, shares
of ING Variable Insurance Trust may also be sold to variable annuity and
variable life insurance policies offered by other insurance companies, both
affiliated and unaffiliated with First Golden. The address of ING Variable
Insurance Trust is 1475 Dunwoody Drive, West Chester, PA 19380.
The Prudential Series Fund Inc. is a fund whose shares are available to
separate accounts funding variable annuity and variable life insurance polices
offered by The Prudential Insurance Company of America, its affiliated insurers
and other life insurance companies not affiliated with Prudential, including
Golden American. The address of the Prudential Series Fund is 751 Broad Street,
Newark, NJ 07102.
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 PIMCO Variable
Insurance Trust, and ING Variable Insurance Trust, the Board of Directors of The
Prudential Series Fund, Inc., and the management of Directed Services, Inc.,
Pacific Investment Management Company, ING Mutual Funds Management Co. LLC, The
Prudential Insurance Corporation, 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 MORE COMPLETE INFORMATION ABOUT THE GCG TRUST, THE PIMCO VARIABLE
INSURANCE TRUST, ING VARIABLE INSURANCE TRUST AND THE PRUDENTIAL SERIES FUND,
INC. IN THE ACCOMPANYING PROSPECTUS FOR EACH TRUST. YOU SHOULD READ THEM
CAREFULLY BEFORE INVESTING.
--------------------------------------------------------------------------------
FIRST GOLDEN SEPARATE ACCOUNT NY-B
--------------------------------------------------------------------------------
First Golden Separate Account NY-B ("Separate 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 ("1940
Act"). Separate Account NY-B is a separate investment account used for our
variable annuity contracts. We own all the assets in Separate Account NY-B but
such assets are kept separate from our other accounts.
Separate Account NY-B is divided in subaccounts. Each subaccount invests
exclusively in shares of one investment portfolio of The GCG Trust, the PIMCO
Variable Insurance Trust, ING Variable Insurance Trust or The Prudential Series
Fund, Inc. 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
FG-DVAP-108206 10
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corresponding subaccount of Separate 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 Separate Account NY-B. If the assets
in Separate 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
Separate Account NY-B but are not discussed in this prospectus. Separate
Account NY-B may also invest in other investment portfolios which are not
available under your Contract.
--------------------------------------------------------------------------------
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 PIMCO VARIABLE
INSURANCE TRUST, ING VARIABLE INSURANCE TRUST AND THE PRUDENTIAL SERIES FUND,
INC. YOU SHOULD READ THESE PROSPECTUSES BEFORE INVESTING. TO OBTAIN FREE COPIES
OF THESE PROSPECTUSES, PLEASE WRITE TO OUR CUSTOMER SERVICE CENTER AT P.O. BOX
2700, WEST CHESTER, PENNSYLVANIA 19380 OR CALL (800) 366-0066 OR ACCESS THE
SEC'S WEBSITE (http://www.sec.gov).
<TABLE>
<CAPTION>
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INVESTMENT PORTFOLIO INVESTMENT OBJECTIVE
--------------------------------------------------------------------------------------------
THE GCG TRUST
<S> <C>
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 Bond Seeks highest current income consistent with 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 Income Seeks high total return.
Invests primarily in high-grade fixed income securities,
both foreign and domestic.
------------------------------------------------------------
FG-DVAP-108206 11
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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.
------------------------------------------------------------
Total Return Seeks above-average income (compared to a portfolio entirely
invested in equity securities) consistent with the prudent
employment of capital. Growth of capital and income is a
secondary goal.
Invests primarily in a combination of equity and fixed
income securities.
------------------------------------------------------------
Asset Allocation Growth Seeks to maximize total return over the long-term by
allocating assets among stocks, bonds, short-term
instruments and other investments.
Allocates investments primarily in a neutral mix over
time of 70% of its assets in stocks, 25% of its assets
in bonds, and 5% of its assets in short-term and money
market investments.
--------------------------------------------------------
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.
------------------------------------------------------------
Investors Seeks long-term growth of capital. Current income is a
secondary objective.
Invests primarily in equity securities of U.S. companies and
to a lesser degree, debt securities.
------------------------------------------------------------
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.
------------------------------------------------------------
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."
------------------------------------------------------------
Diversified Mid-Cap Seeks long-term growth of capital.
Normally invests at least 65% of its total assets in
common stocks of companies with medium market
capitalizations.
--------------------------------------------------------
Managed Global Seeks capital appreciation. Current income is only an
incidental consideration.
Invests primarily in common stocks traded in securities
markets throughout the world.
------------------------------------------------------------
Large Cap Value Seeks long-term growth of capital and income.
Invests primarily in equity and equity-related securities of
companies with market capitalization greater than $1 billion.
------------------------------------------------------------
FG-DVAP-108206 12
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--------------------------------------------------------------------------------------------
INVESTMENT PORTFOLIO INVESTMENT OBJECTIVE
--------------------------------------------------------------------------------------------
All Cap Seeks capital appreciation through investment in securities
which the portfolio manager believes have above-average
capital appreciation potential.
Invests primarily in equity securities of U.S. companies of
any size.
------------------------------------------------------------
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.
------------------------------------------------------------
Capital Appreciation Seeks long-term capital growth.
Invests primarily in equity securities believed by the
portfolio manager to be undervalued.
------------------------------------------------------------
Growth and Income Seeks long-term capital growth and current income.
Normally invests up to 75% of its assets in equity
securities selected primarily for their growth
potential and at least 25% of its assets in securities
the portfolio manager believes have income potential.
--------------------------------------------------------
Capital Growth Seeks long-term total return.
Invests primarily in common stocks of companies where the
potential for change (earnings acceleration) is significant.
------------------------------------------------------------
Strategic Equity Seeks capital appreciation.
Invests primarily in common stocks of medium- and
small-sized companies.
------------------------------------------------------------
Special Situations Seeks capital appreciation.
Invests primarily in common stocks selected for their
capital appreciation potential. The Portfolio
emphasizes "special situation" companies that the
portfolio manager believes have been overlooked or
undervalued by other investors.
--------------------------------------------------------
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.
------------------------------------------------------------
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.
------------------------------------------------------------
Real Estate Seeks capital appreciation. Current income is a secondary
objective.
Invests primarily in publicly traded real estate equity
securities.
------------------------------------------------------------
FG-DVAP-108206 13
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--------------------------------------------------------------------------------------------
INVESTMENT PORTFOLIO INVESTMENT OBJECTIVE
--------------------------------------------------------------------------------------------
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.
------------------------------------------------------------
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 PIMCO VARIABLE INSURANCE TRUST
PIMCO High Yield Bond Seeks to maximize total return, consistent with preservation
of capital and prudent investment management.
Invests 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
Growth and Income Seeks to achieve a total return which exceeds the total
return performance of the S&P 500.
Invests primarily in common stocks, options, futures,
options on futures and swaps.
------------------------------------------------------------
ING VARIABLE INSURANCE TRUST
ING Global Brand Names Seeks to provide investors with long-term capital
Fund appreciation.
Invests at least 65% of its total assets in equity
securities of companies that have a well recognized
franchise, a global presence and derive most of their
revenues from sales of consumer goods.
THE PRUDENTIAL SERIES FUND INC.
Prudential Jennison Seeks long-term growth of capital.
Invests primarily in companies that have shown growth in
earnings and sales, high return on equity and assets or
other strong financial data and are also attractively valued
in the opinion of the manager. Dividend income from
investments will be incidental.
------------------------------------------------------------
SP Jennison
International Growth Seeks long-term growth of capital.
Invests primarily in equity-related securities of
issuers located in at least five different foreign
countries.
--------------------------------------------------------
</TABLE>
FG-DVAP-108206 14
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INVESTMENT MANAGEMENT FEES AND OTHER EXPENSES
Directed Services, Inc. ("Directed Services") serves as the overall manager to
each portfolio of the GCG Trust. The GCG Trust pays Directed Services a monthly
fee for its investment advisory and management 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 has retained portfolio managers to manage the assets of each portfolio
of the GCG Trust. 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, based on the annual rates of the average daily net
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.
Pacific Investment Management Company ("PIMCO") serves as investment advisor to
each portfolio of the PIMCO Variable Insurance Trust. PIMCO provides the overall
business management and administrative services necessary for each portfolio's
operation. PIMCO provides or procures, at its own expense, the services and
information necessary for the proper conduct of business and ordinary operation
of each portfolio. The PIMCO Variable Insurance Trust pays PIMCO a monthly
advisory fee and a separate monthly administrative fee per year, each fee based
on the average daily net assets of each of the investment portfolios, for
managing the assets of the portfolios and for administering the PIMCO Variable
Insurance Trust. 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, fees and expenses of the independent trustees, and
extraordinary expenses, such as litigation or indemnification expenses.
ING Mutual Funds Management Co. LLC ("ING") serves as the overall manager of ING
Variable Insurance Trust. ING supervises all aspects of the Trust's operations
and provides investment advisory services to the portfolios of the Trust,
including engaging portfolio managers, as well as monitoring and evaluating the
management of the assets of each portfolio by its portfolio manager. ING, as
well as each portfolio manager it engages, is a wholly owned indirect subsidiary
of ING Groep N.V.
The Prudential Insurance Company of America ("Prudential") and its subsidiary
Prudential Investments Fund Management LLC ("PIFM") serve as the overall
investment advisors to the Prudential Series Fund. Prudential and PIFM are
responsible for the management of the Prudential Series Fund and provide
investment advice and related services. For the Prudential Jennison Portfolio
and SP Jennison International Growth Portfolio, Prudential and PIFM engage
Jennison Associates LLC to serve as sub-adviser and to provide day-to-day
management. Prudential and PIFM pay the sub-adviser out of the fee they
receive from the Prudential Series Fund.
Each portfolio deducts portfolio management fees and charges from the amounts
you have invested in the portfolios. In addition, three portfolios deduct a
distribution or 12b-1 fee, which is used to finance any activity that is
primarily intended to result in the sale of shares of the applicable portfolio.
For 1999, total portfolio fees and charges ranged from 0.56% to 1.75%. See "Fees
and Expenses" in this prospectus.
We may receive compensation from the investment advisors, administrators and
distributors or directly from the portfolios in connection with administrative,
distribution or other services and cost savings attributable to our services.
It is anticipated that such compensation will be based on assets of the
particular portfolios attributable to the Contract. The compensation paid by
advisors, administrators or distributors may vary.
YOU CAN FIND MORE DETAILED INFORMATION ABOUT EACH PORTFOLIO'S ADVISORY FEES IN
THE PROSPECTUS FOR EACH TRUST. YOU SHOULD READ THESE PROSPECTUSES BEFORE
INVESTING.
FG-DVAP-108206 15
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--------------------------------------------------------------------------------
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 customers, 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.
FG-DVAP-108206 16
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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 Separate 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,
canceling 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
FG-DVAP-108206 17
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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:
N/365
((1+I)/(1+J+.0025)) -1
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 is currently 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.
--------------------------------------------------------------------------------
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 PIMCO
Variable Insurance Trust, ING Variable Insurance Trust and The Prudential Series
Fund, Inc., funded by Separate 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.
FG-DVAP-108206 18
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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.
IRAs and other qualified plans already have the tax-deferral feature found in
this Contract. For an additional cost, the Contract provides other benefits
including death benefits and the ability to receive a lifetime income. See "Fees
and Expenses" in this prospectus.
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 we receive all information necessary. 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.
We will allocate your initial payment according to the instructions you
specified. If a subaccount is not available or requested in error, we will
make inquiry about a replacement subaccount. If we are unable to
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reach you or your representative, we will consider the application incomplete.
For initial premium payments, the payment will be credited at the accumulation
unit value next determined after we receive your premium payment and the
completed application. Once the completed application is received, we
will allocate the payment to the subaccount(s) 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. We will allocate the subsequent payment(s) pro rata according to the
current variable subaccount allocation unless you specify otherwise. Any fixed
allocation(s) will not be considered in the pro rata calculations. If a
subaccount is no longer available or requested in error, we will allocate the
subsequent payment(s) proportionally among the other subaccount(s) in your
current allocation or your allocation instructions. For any subsequent premium
payments, the payment will be credited at the accumulation unit value next
determined after receipt of your premium payment.
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 Separate 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 Separate
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.
ADMINISTRATIVE PROCEDURES
We may accept a request for Contract service in writing, by telephone, or other
approved electronic means, subject to our administrative procedures, which vary
depending on the type of service requested and may include proper completion of
certain forms, providing appropriate identifying information, and/or other
administrative requirements. We will process your request at the accumulation
value next determined only after you have met all administrative requirements.
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).
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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.
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.
THE SUBACCOUNTS
Each of the 32 subaccounts of Separate Account NY-B offered under this
prospectus invests in an investment portfolio with its own distinct investment
objectives and policies. Each subaccount of Separate Account NY-B invests in
a corresponding portfolio of the GCG Trust, a corresponding portfolio of the
PIMCO Variable Insurance Trust, a corresponding portfolio of the ING Variable
Insurance Trust, or a corresponding portfolio of the Prudential Series Fund,
Inc.
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. If you have elected the dollar
cost averaging, systematic withdrawals, or automatic rebalancing programs or
if you have other outstanding instructions, and we substitute or
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otherwise eliminate a portfolio which is subject to those instructions, we will
execute your instructions using the substituted or proposed replacement
portfolio, unless you request otherwise.
We also reserve the right to: (i) deregister Separate Account NY-B under the
1940 Act; (ii) operate Separate Account NY-B as a management company under
the 1940 Act if it is operating as a unit investment trust; (iii) operate
Separate 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 Separate Account NY-B; and (v) combine Separate 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 contract
owner, 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 affect the withdrawal amount
you receive.
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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, 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. If you submit a subsequent premium payment after you have
applied for systematic withdrawals, we will not adjust future withdrawals under
the systematic withdrawal program unless you specifically request that we do so.
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
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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 so. 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 Internal Revenue Code (the "Code")
may exceed the maximum. Such withdrawals are subject to surrender charges and
Market Value Adjustment when they exceed the applicable maximum percentage.
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 ("IRS")
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.
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 SAI. 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 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
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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 judgment 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. Separate Account NY-B and the Company will
not be liable for following instructions communicated by telephone or other
approved electronic means that we reasonably believe to be genuine. We
require personal identifying information to process a request for transfer
made over the telephone.
TRANSFERS BY THIRD PARTIES
As a convenience to you, we currently allow you to give third parties the
right to effect transfers on your behalf. However, when the third party
makes transfers for many contract owners, the result can be simultaneous
transfers involving large amounts of account values. Such transfers can
disrupt the orderly management of the investment portfolios available to
the Contract, can result in higher costs to contract owners, and may not
be compatible with the long term goals of contract owners. Therefore, we
may at any time exercise our business judgment and limit transfers made
by a third party.
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.
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.
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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
Separate 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. For more
information on required distributions under federal income tax laws, you should
see "Required Distributions upon Contract Owner's Death."
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
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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.
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HOW THE ENHANCED DEATH BENEFIT IS CALCULATED
FOR THE ANNUAL RATCHET ENHANCED DEATH BENEFIT
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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.
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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 less than 80 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.
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
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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 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.
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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%
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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 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 your contract
value is $100,000 or more at the end of a contract year or the total of your
premium payments is $100,000 or more or under other conditions established by
First Golden. 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
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.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. Each portfolio deducts portfolio management fees and charges from the
amounts you have invested in the portfolios. In addition, three portfolios
deduct 12b-1 fees. For 1999, total portfolio fees and charges ranged from
0.56% to 1.75%. See "Fees and Expenses" in this Prospectus for details.
Additionally, we may receive compensation from the investment advisers,
administrators or distributors of the portfolios in connection with
administrative, distribution, or other services and cost savings experienced by
the investment advisers, administrators or distributors. It is anticipated that
such compensation will be based on assets of the particular portfolios
attributable to the Contract. Some advisers, administrators or distributors may
pay us more than others.
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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 the 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
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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 SAI. 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 70 1/2 or, in some cases, retire. 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
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living. There is no minimum number of payments. Monthly payment amounts are
available if you ask for them.
OPTION 4. ANNUITY PLAN. Under this option, your contract value can be
applied to any other annuitization plan that we choose to offer on the annuity
start date. Annuity payments under Option 4 may be fixed or variable. If
variable and subject to the 1940 Act, it will comply with the requirements of
such Act.
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. You have 30
days to notify our Customer Service Center of any errors or discrepancies in the
report or in any confirmation notices. We will also send you copies of any
shareholder reports of the investment portfolios in which Separate 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 Separate Account NY-B may not reasonably occur or so that the Company
may not reasonably determine the value of Separate 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 gender 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 gender.
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 should consult a tax adviser for tax advice. You must give us
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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 and the investment
is allocated to a subaccount specially designated by the Company, 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.
SELLING THE CONTRACT
Directed Services, Inc. is the principal underwriter and distributor of the
Contract as well as for other contracts issued through Separate 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 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 6.75% commission, and passes through
100% of the commission to the broker-dealer whose registered representative sold
the contract.
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UNDERWRITER COMPENSATION
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NAME OF PRINCIPAL AMOUNT OF OTHER
UNDERWRITER COMMISSION TO BE PAID COMPENSATION
Directed Services, Inc. Maximum of 6.75% Reimbursement of any
of any initial covered expenses incurred
or additional by registered
premium payments except representatives in
when combined with some connection with
annual trail commissions. the distribution
of the Contracts
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Certain sales agreements may provide for a combination of a certain percentage
of commission at the time of sale and an annual trail commission (which when
combined could exceed 6.75% of total premium payments).
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OTHER INFORMATION
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VOTING RIGHTS
We will vote the shares of a Trust owned by Separate Account NY-B according to
your instructions. However, if the 1940 Act 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 shareholder 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 Separate Account NY-B which are not attributable to contract owners in the
same proportion.
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 Separate 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 Golden American and Account 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 incorporated by reference 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 for
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 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 Separate Account NY-B, through the subaccounts, will satisfy these
diversification requirements.
INVESTOR CONTROL. 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 Separate 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 Separate 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.
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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.
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
FG-DVAP-108206 37
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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 conditions 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.
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.
FG-DVAP-108206 38
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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 purchaser 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 IRA
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. A 10% penalty may apply to amounts
attributable to a conversion from an IRA if they are distributed during the
five taxable years beginning with the year in which the conversion was made.
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 IRS 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 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 IRS 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
FG-DVAP-108206 39
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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). You should consult a tax adviser
with respect to legislative developments and their effect on the Contract.
FG-DVAP-108206 40
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--------------------------------------------------------------------------------
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.
SELECTED GAAP BASIS FINANCIAL DATA
(IN THOUSANDS)
POST-MERGER
---------------------------------------------------------
For the Period For the Period
January 1, For the Year For the Year October 25,
2000 through Ended Ended 1997 through
June 30, December 31, December 31, December 31,
2000 1999 1998 1997
------------ ------------- ------------ --------------
Annuity Product
Charges............. $ 599 $ 556 $ 239 $ 8
Net Income before
Federal Income Tax.. $ 222 $ 1,380 $ 1,277 $ 97
Net Income........... $ 133 $ 811 $ 775 $ 63
Total Assets......... $94,757 $83,078 $66,034 $33,927
Total Liabilities.... $65,876 $56,420 $38,924 $ 7,832
Total Stockholder's
Equity............ $28,881 $26,658 $27,110 $26,095
PRE-MERGER
-------------------------------
For the Period For the Period
January 1,1997 August 14,
through 1996 through
October 24, December 31,
1997 1996
------------- --------------
Annuity Product
Charges............. $ 4 --
Net Income before
Federal Income Tax.. $953 $ 65
Net Income........... $666 $ 42
Total Assets......... N/A $24,967
Total Liabilities.... N/A $ 24
Total Stockholder's
Equity............ N/A $24,943
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.
FG--DVAP-108206 41
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<TABLE>
<CAPTION>
SELECTED STATUTORY FINANCIAL DATA
(IN THOUSANDS)
------------------------------------------------------------------------
For The Years Ended
------------------------------------------------------------------------
June 30, 2000 December 31, 1999 December 31, 1998 December 31, 1997
------------- ----------------- ----------------- -----------------
<S> <C> <C> <C> <C>
Premiums and Annuity
Considerations............ $ -- $ -- $ 9,005 $ 2,514
Net Income (Loss) before
Federal Income Tax........ $ 41 $ 1,629 $ (938) $ 635
Net Income (Loss).......... $ (35) $ 790 $ (966) $ 439
Total Assets............... $91,525 $80,009 $62,469 $32,965
Total Liabilities.......... $64,491 $54,927 $38,092 $ 7,541
Total Capital and Surplus.. $27,034 $25,082 $24,377 $25,424
BUSINESS ENVIRONMENT
The current business and regulatory environment presents many challenges
to the insurance industry. The variable annuity competitive environment
remains intense and is dominated by a number of large highly rated
insurance companies. Increasing competition from traditional insurance
carriers as well as banks and mutual fund companies offers consumers many
choices. However, overall demand for variable products remains strong for
several reasons including: strong stock market performance over the last
four years; relatively low interest rates; an aging U. S. population that
is increasingly concerned about retirement, estate planning, and
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 the
"Company") results of operations. In addition, some analysis and
information regarding financial condition and liquidity and capital
resources is provided. This analysis should be read jointly with the
financial statements, the related notes, and the Cautionary Statement
Regarding Forward-Looking Statements, which appear elsewhere in this
report.
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
FG--DVAP-108206 42
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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.
FIRST SIX MONTHS OF 2000 COMPARED TO THE SAME PERIOD IN 1999
PREMIUMS. The Company reported $10.6 million in variable annuity premiums
during the first six months of 2000 compared to $5.1 million for the
first six months of 1999. For the Company's variable contracts, premiums
collected are not reported as revenues, but 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 two significant
broker/dealers, each having at least ten percent of total sales, for the
six months ended June 30, 2000 totaled $9.0 million, or 85% of total
premiums ($4.4 million, or 86%, from three significant broker/dealers for
the six months ended June 30, 1999).
REVENUES. During the first six months of 2000 and 1999, product charges
totaled $599,000 and $231,000, respectively. This increase is mainly due
to higher account balances associated with the Company's variable account
option. Net investment income was $907,000 for the first six months of
2000 compared to $1,046,000 for the first six months of 1999. This is a
decrease of 13.3% which resulted from a decrease in 2000 in fixed
maturities and increase in short-term investments compared to June 30,
1999. The Company recognized realized losses of $431,000 during the first
six months of 2000 compared to realized losses of $30,000 during the
first six months of 1999. This increase resulted from additional losses
on the sale of bonds in 2000.
EXPENSES. The Company reported total insurance benefits and expenses of
$868,000 during the first six months of 2000 compared to $580,000 for
first six months of 1999. Interest credited to account balances totaled
$410,000 during the first six months of 2000 and $318,000 for the same
period in 1999. The increase in interest credited relates to higher
credited rates associated with the Company's fixed account option within
the variable product.
Commissions increased $356,000 in the first six months of 2000 from
$309,000 during the first six months of 1999. Changes in commissions are
generally related to changes in the level of variable product sales.
General expenses were $402,000 and $342,000 for the first six months of
2000 and 1999, respectively. Most costs incurred as the result of new
sales have been deferred, thus having very little impact on current
earnings.
First Golden deferred $839,000 of expenses associated with the sale of
variable annuity contracts for the six months ended June 30, 2000.
Expenses of $546,000 were deferred for the six months ended June 30,
1999. These acquisition costs are amortized in proportion to the expected
gross profits. Amortization of deferred policy acquisition costs ("DPAC")
was $192,000 for the six months ended June 30, 2000 and $123,000 for the
six months ended June 30, 1999. The amortization of value of purchased
insurance in force ("VPIF") was $(1,000) and $4,000 for the six months
ended June 30, 2000 and 1999, respectively. During the first six months
of 2000, VPIF was adjusted by $4,000 to reflect changes in the
assumptions related to the timing of future gross profits. 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, 2000 is
$6,000 for the remainder of 2000, $9,000 in 2001, $9,000 in 2002, $8,000
in 2003, $6,000 in 2004, and $5,000 in 2005. Actual amortization may vary
based upon changes in assumptions and experience.
FG--DVAP-108206 43
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INCOME. Net income was $133,000 for the first six months of 2000, a
decrease of $230,000, or 63.1%, from the same period in 1999.
Comprehensive income for the first six months of 2000 was $110,000, an
increase of $354,000 from comprehensive loss of $244,000 during the first
six months of 1999.
1999 COMPARED TO 1998
PREMIUMS. The Company reported variable annuity premiums of $11.7
million for the year ended December 31, 1999 and $29.2 million for the
year ended December 31, 1998. This decrease was mainly due to the
discontinuance of a sales relationship with a distributor that sold 62.1%
of the Company's products during 1998. This distributor discontinued the
sales relationship as of July, 1999 for new business.
For the Company's variable contracts, premiums collected are not reported
as revenues, but as deposits to insurance liabilities. Revenues for these
products are recognized over time in the form of investment spread and
product charges.
Premiums, net of reinsurance, for variable products from three
significant broker/dealers, each having at least ten percent of total
sales, for the year ended December 31, 1999 totaled $10.6 million, or
90.6% of premiums compared to $27.5 million, or 94.4% from three
significant broker/dealers for the year ended December 31, 1998.
REVENUES. Product charges from variable annuities totaled $556,000 in
1999 and $239,000 in 1998. This increase is due to higher account
balances associated with the Company's fixed account and separate account
options. Net investment income was $2.1 million for the year ended
December 31, 1999. This was an increase of 16.4% compared to net
investment income of $1.8 million for the year ended December 31, 1998.
The Company recognized realized losses of $166,000 during 1999 compared
to a realized gain of $24,000 from the sale of investments during 1998.
EXPENSES. The Company reported total insurance benefits and expenses of
$1.2 million for the year ended December 31, 1999 and $830,000 for the
year ended December 31, 1998. Insurance benefits and expenses consisted
of interest credited to account balances, benefit claims incurred in
excess of account balances, commissions, general expenses, insurance
taxes, state licenses, and fees, 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 $590,000 and $376,000 for the years ended
December 31, 1999 and December 31, 1998, respectively. This increase is
primarily due to higher average account balances associated with the
Company's fixed account option within the variable product.
Commissions, general expenses, and insurance taxes, state licenses, and
fees were $697,000, $362,000 and $128,000, respectively, for the year
ended December 31, 1999. For the year ended December 31, 1998,
commissions, general expenses, and insurance taxes, state licenses, and
fees were $1.8 million, $834,000 and $44,000, 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.
The Company deferred $879,000 of expenses associated with the sale of
variable annuity contracts for the year ended December 31, 1999. Expenses
of $2.3 million were deferred for the year ended December 31, 1998. These
acquisition costs are amortized in proportion to the expected gross
profits. Amortization of DPAC was $201,000 and $76,000 for the years
ended December 31, 1999 and 1998, respectively. The amortization of VPIF
was $35,000 for the year ended December 31, 1999 and $8,000 for the year
ended December 31, 1998. During 1999 and 1998, VPIF was adjusted to
increase amortization by $3,000 and $6,000, respectively, 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, 1999 is $12,000 in 2000,
$10,000 in 2001, $9,000 in 2002, $8,000 in 2003, and $7,000 in 2004.
Actual amortization may vary based upon changes in assumptions and
experience.
FG--DVAP-108206 44
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INCOME. Net income for the year ended December 31, 1999 was $811,000.
This was an increase of $36,000 from net income for the year ended
December 31, 1998.
Comprehensive loss for 1999 was $452,000, a decrease of approximately
$1.5 million from $1.0 million for 1998.
FINANCIAL CONDITION
RATINGS. Currently, the Company's ratings are A+ by A.M. Best Company,
AAA by Duff & Phelps Credit Rating Company, and AA+ by Standard & Poor's
Rating Services ("Standard & Poor's").
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.
All of the Company's investments are carried at fair value in the
Company's financial statements. The change in the carrying value of the
Company's investment portfolio includes 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.
The Company manages the growth of insurance operations in order to
maintain adequate capital ratios.
FIXED MATURITIES. At June 30, 2000, the Company had fixed maturities with
an amortized cost of $27.8 million and an estimated fair value of $26.7
million. At December 31, 1999, the Company had fixed maturities with an
amortized cost of $29.2 million and an estimated fair value of $28.1
million. The Company classifies 100% of its securities as available for
sale.
At June 30, 2000, net unrealized depreciation on fixed maturities of
$1,040,000 was comprised of gross appreciation of $20,000 and gross
depreciation of $1,060,000. Net unrealized holding losses on these
securities, net of adjustments for VPIF, DPAC, and deferred income taxes
of $618,000, were included in stockholder's equity at June 30, 2000.
At December 31, 1999, net unrealized depreciation on fixed maturities of
$1.1 million was comprised entirely of gross depreciation. Net unrealized
holding losses on these securities, net of adjustments for VPIF, DPAC,
and deferred income taxes of $603,000 was included in stockholder's
equity at December 31, 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 ($19.2 million or 69.0%
at June 30, 2000 and $18.6 million or 63.6% at December 31, 1999), that
are rated BBB+ to BBB- by Standard & Poor's ($6.6 million or 23.7% at
June 30, 2000 and $9.1 million or 31.1% at December 31, 1999), 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 3.7% at
June 30, 2000 and $1.5 million or 5.3% at December 31, 1999). Securities
not rated by Standard & Poor's had a National Association of Insurance
Commissioners ("NAIC") rating of 1 ($1.0 million or 3.6% at June 30,
2000).
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.
The Company intends to
FG--DVAP-108206 45
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purchase additional below investment grade
securities, but it does not expect the percentage of its portfolio
invested in such securities to exceed 10% of its investment portfolio.
At June 30, 2000, the yield at amortized cost on the Company's below
investment grade portfolio was 8.1% compared to 6.4% for the Company's
investment grade corporate bond portfolio. At December 31, 1999, the
yield at amortized cost on the Company's below investment grade portfolio
was 7.3% compared to 6.7% for the Company's investment grade corporate
bond portfolio. The Company estimates the fair value of its below
investment grade portfolio was $960,000, or 92.5% of amortized cost
value, at June 30, 2000 ($1.4 million, or 94.0% of amortized cost value,
at December 31, 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 the
Company's ability to realize the 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, 2000 and for the year ended December
31, 1999, the amortized cost basis of the Company's fixed maturities
portfolio was reduced by $7.0 million and $10.8 million, respectively, as
a result of sales, maturities, and scheduled principal repayments. In
total, net pre-tax losses from sales, calls, and repayments of fixed
maturities amounted to $431,000 in the first six months of 2000 and
$166,000 in the year ended December 31, 1999.
At June 30, 2000 and December 31, 1999, no fixed maturities were deemed
to have impairments in value that are other than temporary. At June 30,
2000 and December 31, 1999, the Company had no investment in default. The
Company's fixed maturities portfolio had a combined yield at amortized
cost of 6.5% at June 30, 2000 and December 31, 1999.
OTHER ASSETS. DPAC represents certain deferred costs of acquiring new
insurance business, principally first year commissions, interest bonuses,
and other expenses related to production after October 24, 1997 ("ING
merger date"). The Company's DPAC was eliminated as of the ING merger
date and an asset of $132,000 representing VPIF was established for all
policies in force at the ING merger date. VPIF is amortized into income
in proportion to the expected gross profits of in force acquired 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, 2000, the Company had VPIF and DPAC balances of $97,000 and $3.8
million, respectively ($102,000 and $3.2 million, respectively at
December 31, 1999).
Goodwill totaling $96,000, representing the excess of the acquisition
cost over the fair value of net assets acquired, was established as a
result of the merger with ING. Accumulated amortization of goodwill as of
June 30, 2000 and December 31, 1999 was approximately $6,000 and $5,000,
respectively.
Other assets increased $108,000 during the first six months of 2000
primarily due to an increase in receivables.
FG--DVAP-108206 46
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<PAGE>
At June 30, 2000, the Company had $56.6 million of separate account
assets compared to $47.2 million at December 31, 1999. The increase in
separate account assets resulted from market appreciation, transfers from
the fixed account, and sales of the Company's variable products, net of
redemptions.
At December 31, 1999, the Company had $47.2 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, 2000, the Company had total assets of $94.8 million, an
increase of 14.1% from December 31, 1999. At December 31, 1999, the
Company had total assets of $83.1 million, an increase of 25.8% over
total assets at December 31, 1998.
LIABILITIES. Future policy benefits increased $204,000 in the first six
months of 2000 to $7.8 million reflecting premium growth in the Company's
fixed account option of the variable product, net of transfers to the
separate account. Policy reserves represent the premiums received plus
accumulated interest less mortality and administration charges. At June
30, 2000, the Company had $56.6 million of separate account liabilities.
This is an increase of 19.9% over separate account liabilities as of
December 31, 1999, and is primarily related to market appreciation,
transfers from the fixed account, and sales of the Company's variable
products, net of redemptions.
Future policy benefits decreased $3.2 million during 1999 to $7.6
million, due to net reallocations to the Company's separate account.
Policy reserves represent the premiums received plus accumulated interest
less mortality and administration charges. At December 31, 1999, the
Company had $47.2 million of separate account liabilities. This is an
increase of 76.7% 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 annuity products, net of
redemptions.
Other liabilities decreased $136,000 from December 31, 1999, due mainly
to a decrease in accrued payables. Other liabilities decreased $187,000
during 1999. The decrease results primarily due to a decrease in
outstanding checks and accounts payable.
The Company's total liabilities increased $9.5 million, or 16.8%, during
the first six months of 2000 and totaled $65.9 million at June 30, 2000.
The Company's total liabilities increased $17.3 million, or 45.0%, during
1999 and totaled $56.4 million at December 31, 1999. These increases are
primarily the result of increases 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, maturing investments,
and capital contributions. Primary uses of these funds are payments of
commissions and operating expenses, investment purchases, repayment of
debt, as well as withdrawals and surrenders.
Net cash provided by operating activities was $442,000 in the first six
months of 2000 compared to net cash provided by operations of $427,000 in
the same period of 1999. The increase in operating cash flows results
primarily from an increase in annuity product charges.
Net cash provided by operating activities was $892,000 in 1999 compared
to net cash used in operations of $307,000 in 1998. The operating cash
flows result primarily from an increase in annuity product charges, net
investment income, and decreased commission expense.
FG--DVAP-108206 47
<PAGE>
<PAGE>
Net cash used in investing activities was $2.2 million during the first
six months of 2000 compared to net cash provided in investing activities
of $4.5 million in the same period of 1999. The decrease results
primarily from increased net purchases of short-term investments of $3.2
million in the first six months of 2000 versus net sales of $3.2 million
in the first six months of 1999, increased purchases of fixed maturities
of $5.6 million in the first six months of 2000 compared to $987,000 in
the same period of 1999, which were offset by increased sales of $6.5
million in the first six months of 2000 compared to $2.3 million in the
same period of 1999.
Net cash provided by investing activities was $1.9 million during 1999 as
compared to $6.3 million net cash used in investing activities in 1998.
This increase is primarily due to greater net sales of fixed maturities.
Net sales of fixed maturities were $1.0 million in 1999 versus net
purchases of fixed maturities of $3.9 million in 1998.
Net cash provided in financing activities was $2.0 million during the
first six months of 2000 compared to cash used in financing activities of
$1.6 million during the same period in the prior year, an increase of
$3.6 million. The increase is primarily due to the $2.1 million capital
contribution from Golden American and a $1.3 million increase in receipts
from investments contracts credited to account balances.
Net cash used in financing activities was $3.7 million during 1999 as
compared to net cash provided by financing activities of $8.0 million
during the prior year. In 1999, net cash used in financing activities was
impacted by net fixed account deposits of $780,000 compared to $8.8
million in 1998. The change was also impacted by net reallocations to the
Company's separate account, which increased to $4.6 million from $872,000
during the prior year.
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, which expired on
July 31, 2000. As of July 31, 2000, the SunTrust Bank, Atlanta revolving
note facility was extended to July 30, 2001. Management believes 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 2000 or
during the years 1999 or 1998.
First Golden is required to maintain a minimum capital and surplus of not
less than $6 million under the provisions of the insurance laws of the
State of New York.
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 dividends to its Parent during
2000.
FG--DVAP-108206 48
<PAGE>
<PAGE>
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 a 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 well 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, two broker/dealers accounted
for a significant portion of its sales volume in the first six months of
2000 (three broker/dealers in the year 1999). One distributor sold 62.1%
of the Company's products in 1998. This distributor discontinued the
sales relationship as of July, 1999 for new business. Premiums are
primarily generated from consumers and corporations in the state of New
York.
Reinsurance: At December 31, 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.
The reinsurance treaty that covered the nonstandard minimum guaranteed
death benefits for new business has been terminated for business issued
after December 31, 1999. The Company is currently pursuing alternative
reinsurance arrangements for new business issued after December 31, 1999.
There can be no assurance that such alternative arrangements will be
available. Any reinsurance covering business in force at December 31,
1999 will continue to apply in the future.
Impact of Year 2000: In prior years, the Company discussed the nature
and progress of Golden American's plans for the Company to become Year
2000 ready. In late 1999, Golden American completed remediation and
testing of the Company's systems. As a result of those planning and
implementation efforts, the Company experienced no significant
disruptions in mission critical information technology and non-
information technology systems and believes those systems successfully
responded to the Year 2000 date change. Golden American incurred all
expenses during 1999 in connection with remediating the Company's
systems. The Company is not aware of any material problems resulting from
Year 2000 issues, either with its products, its internal systems, or the
products and services of third parties. Golden American will continue to
monitor the Company's mission critical computer applications and those of
suppliers and vendors throughout the Year 2000 to ensure that any latent
Year 2000 matters that may arise are addressed promptly.
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 annuity 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
FG--DVAP-108206 49
<PAGE>
<PAGE>
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 June 30, 2000 levels, variable separate account funds, which
represent 88% of the in force, pass the risk in underlying fund
performance to the contractowner (except for certain minimum guarantees).
With respect to interest rate movements up or down 100 basis points from
year end 1999 levels, the remaining 12% of the in force are fixed account
funds and almost all of these have market value adjustments which provide
significant protection against changes in interest rates.
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, fee
revenue, 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.
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 six months ended June 30, 2000 and for the
years ended December 31, 1999 and 1998, First Golden incurred expenses of
$190,000, $137,000 and $248,000, respectively, under the agreement with
Golden American and $178,000, $142,000 and $165,000, 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
FG--DVAP-108206 50
<PAGE>
<PAGE>
services.
For the six months ended June 30, 2000 and for the years ended December
31, 1999 and 1998, the Company incurred expenses of $40,000, $73,000 and
$56,000, respectively. 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 six months ended June 30, 2000 and for the years ended December
31, 1999 and 1998, charges to Golden American for these services were
$294,000, $269,000 and $210,000, respectively, and charges to DSI for
these services were $108,000, $387,000 and $75,000, respectively.
The Company provides resources and services to Security Life of Denver
Insurance Company ("Security Life"), an affiliate, and Southland Life
Insurance Company ("Southland"), another affiliate. For the year ended
December 31, 1999, charges for these services were $149,000 to Security
Life and $63,000 to Southland.
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 six months ended June
30, 2000 and for the years ended December 31, 1999 and 1998, commissions
paid by First Golden to DSI were $665,000, $697,000 and $1,754,000,
respectively.
EMPLOYEES. During 1996, Golden American provided the support necessary
for the incorporation and licensing of First Golden. During 1999 and
1998, 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 which ends in the year 2001.
FG--DVAP-108206 51
<PAGE>
<PAGE>
DIRECTORS AND EXECUTIVE OFFICERS
NAME (AGE) POSITION(S) WITH THE COMPANY
----------------------- ----------------------------------------------
Barnett Chernow (50) Director, Chairman and President
Myles R. Tashman (57) Director, Executive Vice President, General
Counsel and Secretary
James R. McInnis (52) Executive Vice President
E. Robert Koster (41) Senior V.P. and Chief Financial Officer
Carol V. Coleman (50) Director
Michael W. Cunningham (51) Director
Stephen J. Friedman (62) Director
Bernard Levitt (74) Director
Roger A. Martin (68) Director
Andrew Kalinowski (55) Director
Phillip R. Lowery (46) Director
Mark A. Tullis (44) 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
Marilyn Talman (53) 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 is Executive Vice President of First Golden since
December, 1997. From 1982 through November, 1997, he was with the
Endeavor Group and held several offices, including President at the time
of his departure.
Mr. E. Robert Koster was elected Senior Vice President and Chief
Financial Officer of First Golden and Golden American in September 1998.
From August, 1984 to September, 1998 he has held various positions with
ING companies in The Netherlands.
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
appointed in June, 1996. Mr. Friedman is a partner of the law firm of
Debevoise & Plimpton in New York, NY since 1993.
FG--DVAP-108206 52
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<PAGE>
Mr. Bernard Levitt is a Director of First Golden, having been first
appointed 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
appointed 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 a Principal and Director of LIFE Incorporated.
Mr. Phillip R. Lowery became a Director of First Golden in December 1999
and Golden American in April 1999. He has served as Executive Vice
President and Chief Actuary for ING Americas Region since 1990.
Mr. Mark A. Tullis became a Director of First Golden and Golden American
in December 1999. He has served as Executive Vice President, Strategy
and Operations for ING Americas Region since September, 1999. From June,
1994 to August, 1999, he was with Pimerica, serving as Executive Vice
President at the time of his departure.
Mr. David L. Jacobson was elected Senior Vice President and Assistant
Secretary of First Golden in June, 1996. 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 joined Golden American in December, 1993 as Senior
Vice President, Chief Actuary and Controller. He became an Executive Vice
President and Chief Actuary in June, 1998. He was elected Senior Vice
President and Chief Actuary of First Golden in June, 1996 and elected
Executive Vice President in June, 1998.
Ms. Mary Bea Wilkinson was elected Senior Vice President and Treasurer of
First Golden in June 1996. From November, 1993 through 1996, Ms.
Wilkinson served as Senior Vice President, Assistant Secretary and
Treasurer of Golden American.
Ms. Marilyn Talman was elected Vice President, Associate General Counsel
and Assistant Secretary of First Golden in June, 1996. 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, 1996, she held various
positions with Rodney Square Management Corp. and was Vice President and
General Counsel upon leaving.
COMPENSATION TABLE 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, 1999. Certain executive officers of First Golden are
also officers of Golden American and DSI. The salaries of such
individuals are allocated among First Golden, Golden American and DS
pursuant to an arrangement among these companies.
FG--DVAP-108206 53
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<PAGE>
EXECUTIVE COMPENSATION TABLE
The following table sets forth information with respect to the annual
salary and bonus for First Golden's Chief Executive Officer, the four
other most highly compensated executive officers and the two most highly
compensated former executive officers for the fiscal year ended December
31, 1999.
</TABLE>
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
------------------- -----------------------
RESTRICTED SECURITIES
NAME AND STOCK AWARDS UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS 1 OPTIONS 2 OPTIONS COMPENSATION 3
------------------ ---- ------ ------- --------- ------- --------------
<S> <C> <C> <C> <C> <C> <C>
Barnett Chernow,.......... 1999 $ 300,009 $ 698,380 6,950 $ 20,464 4
President 1998 $ 284,171 $ 105,375 8,000
1997 $ 234,167 $ 31,859 $ 277,576 4,000
James R. McInnis.......... 1999 $ 250,007 $ 955,646 5,550 $ 15,663 4
Executive Vice 1998 $ 250,004 $ 626,245 2,000
President
Myles R. Tashman.......... 1999 $ 199,172 $ 293,831 1,800 $ 14,598 4
Executive Vice 1998 $ 189,337 $ 54,425 3,500
President, General 1997 $ 181,417 $ 25,000 $ 165,512 5,000
Counsel and Secretary
Stephen J. Preston........ 1999 $ 198,964 $ 235,002 2,050 $ 12,564 4
Executive Vice 1998 $ 173,870 $ 32,152 3,500
President and Chief 1997 $ 160,758 $ 16,470
Actuary
Mary Bea Wilkinson........ 1999 $ 158,088 $ 191,968 1,425 $ 11,736 4
Senior Vice 1998 $ 110,484 $ 30,747
President 1997 $ 141,233 $ 14,466
R. Brock Armstrong........ 1999 $ 500,014 $ 500,000 10,175 $ 23,921 4
Former Chief
Executive Officer
Keith Glover.............. 1999 $ 87,475 $ 761,892 $558,541 4,5
Former Executive 1998 $ 250,000 $ 145,120 3,900
Vice President
</TABLE>
--------------------
1 The amount shown relates to bonuses paid in 1999, 1998, and 1997.
2 Restricted stock awards granted to executive officers vested on October 24,
1997 with the change in control of Equitable of Iowa.
3 Other compensation for 1999 includes reimbursements to named employee for
participation in company sponsored programs such as tuition reimbursement,
PC purchase assistance program, and other miscellaneous payments or
reimbursements. For 1999, Mr. Chernow received $2,464; Mr. McInnis received
$636; Mr. Tashman received $2,598; Mr. Preston received $564; Ms. Wilkinson
received $1,196; Mr. Armstrong received $1,421; and Mr. Glover received
$3,089;
4 Other compensation for 1999 includes a business allowance for each named
executive which is required to be applied to specific business expenses of
the named executive.
5 In connection with the termination of his employment, Mr. Glover received
payments and benefits totaling $555,452.
FG--DVAP-108206 54
<PAGE>
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE VALUE AT
% OF TOTAL ASSUMED ANNUAL
NUMBER OF OPTIONS RATES OF STOCK
SECURITIES GRANTED TO PRICE APPRECIATION
UNDERLYING EMPLOYEES EXERCISE FOR OPTION 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.......... 2,000 3.18 $54.210 01/04/2004 $ 29,954 $ 66,191
4,950 7.86 $54.210 04/01/2009 $ 168,757 $ 427,664
James R. McInnis......... 2,550 4.05 $54.210 04/01/2009 $ 86,936 $ 220,312
3,000 4.77 $55.070 10/01/2009 $ 103,900 $ 263,302
Myles R. Tashman......... 1,800 2.86 $54.210 04/01/2009 $ 61,366 $ 155,514
Stephen J. Preston....... 2,050 3.26 $54.210 04/01/2009 $ 69,889 $ 177,113
Mary Bea Wilkinson....... 1,425 2.26 $54.210 04/01/2009 $ 48,582 $ 123,115
R. Brock Armstrong....... 10,175 16.16 $54.210 04/01/2009 $ 346,890 $ 879,087
</TABLE>
--------------------
1 Stock appreciation rights granted in 1999 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 the
date of grant.
3 Total dollar gains based on indicated rates of appreciation of share price
over the total term of the rights.
FG--DVAP-108206 55
<PAGE>
<PAGE>
--------------------------------------------------------------------------
UNAUDITED FINANCIAL STATEMENTS OF FIRST GOLDEN AMERICAN LIFE
INSURANCE COMPANY OF NEW YORK
--------------------------------------------------------------------------
For the Six Months Ended June 30, 2000
FG--DVAP-108206 56
<PAGE>
<PAGE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
CONDENSED BALANCE SHEETS (UNAUDITED)
(Dollars in thousands, except per share data)
<TABLE>
<CAPTION>
June 30, 2000 December 31, 1999
-----------------------------------------------
<S> <C> <C>
ASSETS
Investments:
Fixed maturities, available for sale, at fair value
(cost: 2000-$27,765; 1999-$29,178) $26,725 $28,095
Short-term investments 5,517 2,309
-----------------------------------------------
Total investments 32,242 30,404
Cash and cash equivalents 1,256 1,026
Due from affiliates 116 539
Accrued investment income 411 443
Deferred policy acquisition costs 3,784 3,198
Value of purchased insurance in force 97 102
Property and equipment, less allowances for
depreciation of $32 in 2000 and $31 in 1999 34 41
Goodwill, less accumulated amortization of $6 in 2000
and $5 in 1999 90 91
Other assets 127 19
Separate account assets 56,600 47,215
-----------------------------------------------
Total assets $94,757 $83,078
===============================================
LIABILITIES AND STOCKHOLDER'S EQUITY
Policy liabilities and accruals:
Future policy benefits:
Annuity products $7,787 $7,583
Current income tax liability 590 557
Deferred income tax liability 666 610
Revolving note payable -- 100
Due to affiliates 46 32
Other liabilities 187 323
Separate account liabilities 56,600 47,215
-----------------------------------------------
65,876 56,420
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 26,049 23,936
Accumulated other comprehensive loss (950) (927)
Retained earnings 1,782 1,649
-----------------------------------------------
Total stockholder's equity 28,881 26,658
-----------------------------------------------
Total liabilities and stockholder's equity $94,757 $83,078
===============================================
</TABLE>
See accompanying notes.
FG--DVAP-108206 57
<PAGE>
<PAGE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED)
(Dollars in thousands)
<TABLE>
<CAPTION>
For the Six For the Six
Months Ended Months Ended
June 30, 2000 June 30, 1999
-------------------------------------------------
<S> <C> <C>
Revenues:
Annuity product charges $599 $231
Net investment income 907 1,046
Realized losses on investments (431) (30)
Other income 15 16
-------------------------------------------------
1,090 1,263
Insurance benefits and expenses:
Annuity benefits:
Interest credited to account balances 410 318
Underwriting, acquisition, and insurance expenses:
Commissions 665 309
General expenses 402 342
Insurance taxes, state licenses, and fees 38 29
Policy acquisition costs deferred (839) (546)
Amortization:
Deferred policy acquisition costs 192 123
Value of purchased insurance in force (1) 4
Goodwill 1 1
-------------------------------------------------
868 580
-------------------------------------------------
Income before income taxes 222 683
Income taxes 89 320
-------------------------------------------------
Net income $133 $363
=================================================
</TABLE>
See accompanying notes.
FG--DVAP-108206 58
<PAGE>
<PAGE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
(Dollars in thousands)
<TABLE>
<CAPTION>
For the Six For the Six
Months Ended Months Ended
June 30, 2000 June 30, 1999
----------------------------------------------
<S> <C> <C>
NET CASH PROVIDED BY OPERATING ACTIVITIES $442 $427
INVESTING ACTIVITIES
Sale, maturity, or repayment of fixed maturities - available for sale 6,523 2,285
Acquisition of fixed maturities - available for sale (5,571) (987)
Short-term investments - net (3,208) 3,231
Purchase of property and equipment -- (7)
Sale of property and equipment 6 --
----------------------------------------------
Net cash provided by (used in) investing activities (2,250) 4,522
FINANCING ACTIVITIES
Proceeds from revolving note payable 100 --
Repayment of revolving note payable (200) --
Receipts from investment contracts credited to account balances 1,751 416
Return of account balances on investment contracts (133) (80)
Net reallocations to Separate Account (1,593) (1,887)
Contribution from parent 2,113 --
----------------------------------------------
Net cash provided by (used in) financing activities 2,038 (1,551)
----------------------------------------------
Increase in cash and cash equivalents 230 3,398
Cash and cash equivalents at beginning of period 1,026 1,932
----------------------------------------------
Cash and cash equivalents at end of period $1,256 $5,330
==============================================
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the period for interest $11 --
</TABLE>
See accompanying notes.
FG--DVAP-108206 59
<PAGE>
<PAGE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
June 30, 2000
1. SIGNIFICANT ACCOUNTING POLICIES
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.
This Form is being filed with the reduced disclosure format specified in General
Instruction H (1) and (2) of Form 10-Q. Accordingly, the financial statements 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, 2000
are not necessarily indicative of the results that may be expected for the year
ending December 31, 2000. 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, 1999.
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. ("EIC"). EIC is an indirect
wholly owned subsidiary of ING Groep N.V., a global financial services holding
company based in The Netherlands.
STATUTORY
Net income (loss) for First Golden as determined in accordance with statutory
accounting practices was $(35,000) and $538,000 for the six months ended June
30, 2000 and 1999, respectively. Total statutory capital and surplus was
$27,034,000 at June 30, 2000 and $25,082,000 at December 31, 1999.
RECLASSIFICATIONS
Certain amounts in the June 30, 1999 and March 31, 2000 financial statements
have been reclassified to conform to the June 30, 2000 financial statement
presentation.
2. COMPREHENSIVE INCOME
Comprehensive income includes all changes in stockholder's equity during a
period except those resulting from investments by and distributions to the
stockholder. Other comprehensive income (loss) for the second quarter of 2000
and 1999 amounted to $41,000 and $(226,000), respectively. Other comprehensive
income (loss) for the first six months of 2000 and 1999 amounted to $110,000 and
$(244,000), 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
$(233,000) and $(40,000) during the first six months of 2000 and 1999,
respectively. Such amounts, which have been measured through the date of sale,
are net of income taxes and adjustments for value of purchased insurance in
force and deferred policy acquisition costs totaling $(94,000) and $10,000 for
the second quarters of 2000 and 1999, respectively, and $(198,000) and $10,000
for the first six months of 2000 and 1999, respectively.
3. INVESTMENTS
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 June 30,
2000 and December 31, 1999. Fixed maturities included investments in industrials
(36% in 2000, 48% in 1999), financial companies (30% in 2000, 29% in 1999), and
various government bonds and government or agency mortgage-backed securities
(27% in 2000, 14% in 1999).
FG--DVAP-108206 60
<PAGE>
<PAGE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
June 30, 2000
4. 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 representatives
of the broker/dealers as agents. The Company paid commissions to DSI totaling
$344,000 and $110,000 in the second quarter of 2000 and 1999, respectively. For
the first six months of 2000 and 1999, the commissions and expenses were
$665,000 and $309,000, 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 managed by ING IM. The fee is payable quarterly. For the
second quarters of 2000 and 1999, the Company incurred fees of $20,000 and
$16,000, respectively, under this agreement. For the first six months of 2000
and 1999, the Company incurred fees of $40,000 and $33,000, 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. Under the agreement with Golden American, the Company incurred
expenses of $69,000 and $12,000 for the second quarters of 2000 and 1999,
respectively, and $190,000 and $16,000 for the six months ended June 30, 2000
and 1999, respectively. Under the agreement with Equitable Life, the Company
incurred expenses of $87,000 and $58,000 for the second quarters of 2000 and
1999, respectively, and $178,000 and $98,000 for the six months ended June 30,
2000 and 1999, respectively.
The Company provides resources and services to DSI. Revenues for these services,
which reduce general expenses incurred by the Company, totaled $56,000 and
$22,000 for the second quarters of 2000 and 1999, respectively. For the six
months ended June 30, 2000 and 1999, these revenues were $108,000 and $54,000,
respectively.
The Company provides resources and services to Golden American. Revenues for
these services, which reduce general expenses incurred by the Company, totaled
$146,000 for the second quarter of 2000 and $294,000 for the first six months of
2000.
The Company had premiums, net of reinsurance, for variable insurance products
for the second quarter and first six months of 2000 totaled $25,000 and $27,000,
respectively, from Locust Street Securities, Inc., an affiliate, and $0 and
$11,000, respectively, from Vestax Securities Corporation, an affiliate.
In the first quarter of 2000, the Company received a $2,113,000 capital
contribution from Golden American.
5. COMMITMENTS AND CONTINGENCIES
Reinsurance: At June 30, 2000, First Golden had a reinsurance treaty with an
unaffiliated reinsurer covering a significant portion of the mortality risks
under its variable contracts as of December 31, 1999. First Golden remains
liable to the extent that the reinsurer does not meet its obligations under the
reinsurance agreement. At June 30, 2000 and December 31, 1999, the Company had a
payable of $1,000 and $4,000, respectively, for reinsurance premiums. Included
in the accompanying financial statements are net considerations to the reinsurer
of $15,000 and $6,000 in the second quarter of 2000 and 1999, respectively, and
$24,000 and $8,000 for the six months ended June 30, 2000 and 1999,
respectively. Also included are net policy benefits to the reinsurer of $5,000
in the second quarter and first six months of 2000.
FG--DVAP-108206 61
<PAGE>
<PAGE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
June 30, 2000
5. COMMITMENTS AND CONTINGENCIES (continued)
The reinsurance treaty that covered the nonstandard minimum guaranteed death
benefits for new business was terminated for business issued after December 31,
1999. The Company is currently pursuing alternative reinsurance arrangements for
new business after December 31, 1999. There can be no assurance that such
alternative arrangements will be available. Any reinsurance covering business in
force at December 31, 1999 will continue to apply in the future.
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. As of June 30, 2000, the Company had three investments
(other than bonds issued by agencies of the United States government) each
exceeding ten percent of stockholder's equity. 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 and separate account
liabilities. Substantial changes in tax laws that 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
have a severe impact to the Company's financial condition. Two broker/dealers,
each having at least ten percent of total sales, generated 75% and 85% of the
Company's sales in the quarter and six months ended June 30, 2000, respectively
(77% and 86% by three broker/dealers during the same periods in 1999).
Revolving Note Payable: To enhance short-term liquidity, the Company established
a revolving note payable effective July 31, 1999 and expiring July 31, 2000 with
SunTrust Bank, Atlanta (the "Bank"). 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, 2000, the Company did not have any borrowings under
this agreement. At December 31, 1999, the Company had borrowings of $100,000
under this agreement.
FG--DVAP-108206 62
<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, 1999 and 1998, and the related
statements of operations, changes in stockholder's equity, and cash flows for
the years ended December 31, 1999 and 1998 and for the periods from October 25,
1997 through December 31, 1997 and January 1, 1997 through October 24, 1997.
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 auditing standards generally accepted
in the United States. 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, 1999 and 1998, and the results of
its operations and its cash flows for the years ended December 31, 1999 and 1998
and for the periods from October 25, 1997 through December 31, 1997 and January
1, 1997 through October 24, 1997, in conformity with accounting principles
generally accepted in the United States.
s/Ernst & Young LLP
Des Moines, Iowa
February 4, 2000
FG--DVAP-108206 63
<PAGE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
BALANCE SHEETS
(Dollars in thousands, except per share data)
POST-MERGER
------------ ------------
December 31, December 31,
1999 1998
------------ ------------
ASSETS
Investments:
Fixed maturities, available for sale,
at fair value (Cost: 1999 - $29,178;
1998 - $30,431)........................ $28,095 $30,994
Short-term investments.................... 2,309 3,231
------- -------
Total investments........................... 30,404 34,225
Cash and cash equivalents................... 1,026 1,932
Due from affiliates......................... 539 37
Accrued investment income................... 443 414
Deferred policy acquisition costs........... 3,198 2,347
Value of purchased insurance in force....... 102 117
Property and equipment, less allowances
for depreciation of $31 in 1999 and
$16 in 1998.............................. 41 48
Goodwill, less accumulated amortization
of $5 in 1999 and $3 in 1998............. 91 93
Current income taxes recoverable............ -- 89
Other assets................................ 19 15
Separate account assets..................... 47,215 26,717
------- -------
Total assets................................ $83,078 $66,034
======= ========
See accompanying notes.
FG--DVAP-108206 64
<PAGE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
BALANCE SHEETS - CONTINUED
(Dollars in thousands, except per share data)
POST-MERGER
------------ ------------
December 31, December 31,
1999 1998
------------ ------------
LIABILITIES AND STOCKHOLDER'S EQUITY
Policy liabilities and accruals:
Future policy benefits:
Annuity products....................... $ 7,583 $10,830
Current income taxes payable................ 557 --
Deferred income tax liability............... 610 850
Revolving note payable...................... 100 --
Due to affiliates........................... 32 17
Other liabilities........................... 323 510
Separate account liabilities................ 47,215 26,717
------- -------
56,420 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).......................... (927) 336
Retained earnings........................ 1,649 838
------- -------
Total stockholder's equity.................. 26,658 27,110
------- -------
Total liabilities and stockholder's
equity.................................... $83,078 $66,034
======= =======
See accompanying notes.
FG--DVAP-108206 65
<PAGE>
<TABLE>
<CAPTION>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
STATEMENTS OF OPERATIONS
(Dollars in thousands)
POST-MERGER | PRE-MERGER
-----------------------------------------------------------
For the period | For the period
October 25, | January 1,
For the year For the year 1997 | 1997
ended ended through | through
December 31, December 31, December 31, | October 24,
1999 1998 1997 | 1997
-----------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues |
Annuity product charges........... $556 $239 $8 | $4
Net investment income............. 2,147 1,844 286 | 1,449
Realized gains (losses) on
investments.... (166) 24 1 | --
Other income...................... 63 -- -- | --
------ ------ ------ | ------
2,600 2,107 295 | 1,453
|
Insurance benefits and expenses: |
Annuity benefits: |
Interest credited to account |
balances.................... 590 376 26 | 48
Benefit claims incurred in |
excess of account balances.. 72 -- -- | --
Underwriting, acquisition, and |
insurance expenses: |
Commissions.................... 697 1,754 141 | 267
General expenses............... 362 834 124 | 461
Insurance taxes, state |
licenses, and fees.......... 128 44 94 | 15
Policy acquisition costs |
deferred.................... (879) (2,264) (204) | (298)
Amortization: |
Deferred policy acquisition |
costs......... 201 76 13 | 7
Value of purchased insurance |
in force................... 35 8 3 | --
Goodwill..................... 2 2 1 | --
------ ------ ------ | ------
1,208 830 198 | 500
|
Interest expense.................... 12 -- -- | --
------ ------ ------ | ------
1,220 830 198 | 500
------ ------ ------ | ------
|
Income before income taxes.......... 1,380 1,277 97 | 953
|
Income taxes........................ 569 502 34 | 287
------ ------ ------ | ------
|
Net income.......................... $ 811 $775 $63 | $666
====== ====== ====== | ======
</TABLE>
See accompanying notes.
FG--DVAP-108206 66
<PAGE>
<TABLE>
<CAPTION>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY
(Dollars in thousands)
Accumulated
Additional Other Total
Common Paid-in Comprehensive Retained Stockholder's
Stock Capital Income (Loss) Earnings Equity
------------------------------------------------------------
PRE-MERGER
------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Balance at January 1, 1997..... $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
====== ======= ======= ====== =======
-----------------------------------------------------------
POST-MERGER
-----------------------------------------------------------
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
Comprehensive income:
Net income................... -- -- -- 811 811
Change in net unrealized
investment gains (losses). -- -- (1,263) -- (1,263)
-------
Comprehensive income........... (452)
------ ------- ------ ------ -------
Balance at December 31,1999.... $2,000 $23,936 $(927) $1,649 $26,658
====== ======= ====== ====== =======
</TABLE>
See accompanying notes.
FG--DVAP-108206 67
<PAGE>
<TABLE>
<CAPTION>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
STATEMENTS OF CASH FLOWS
(Dollars in thousands)
POST-MERGER | PRE-MERGER
----------------------------------------------------|----------------
For the period | For the period
October 25, | January 1,
For the year For the year 1997 | 1997
ended ended through | through
December 31, December 31, December 31, | October 24,
1999 1998 1997 | 1997
----------------------------------------------------|---------------
<S> <C> <C> <C> <C>
OPERATING ACTIVITIES |
|
Net income.............................................. $811 $775 $63 | $666
Adjustments to reconcile net income to net cash |
provided by (used in) operations: |
Adjustments related to annuity products: |
Interest credited to account balances.............. 590 376 26 | 48
Charges for mortality and administration........... (11) (11) -- | (1)
Decrease (increase) in accrued investment income...... (29) (38) 35 | (73)
Policy acquisition costs deferred..................... (879) (2,264) (204) | (298)
Amortization of deferred policy acquisition costs..... 201 76 13 | 7
Amortization of value of purchased insurance in force. 35 8 3 | --
Change in other assets, due to/from affiliates, other |
liabilities, and accrued income taxes.............. (32) 248 (625) | 739
Provision for depreciation and amortization........... 90 82 12 | 17
Provision for deferred income taxes................... (50) 465 98 | 26
Realized gains (losses) on investments................ 166 (24) (1) | --
----------------------------------------------------|----------------
Net cash provided by (used in) operating activities..... 892 (307) (580) | 1,131
|
INVESTING ACTIVITIES |
|
Sale, maturity, or repayment of investments: |
Fixed maturities - available for sale................. 10,849 1,644 556 | 226
Short-term investments - net.......................... 922 -- -- | --
----------------------------------------------------|----------------
11,771 1,644 556 | 226
Acquisition of investments: |
Fixed maturities - available for sale................. (9,835) (5,549) (2,635) | --
Short-term investments - net.......................... -- (2,432) (59) | (390)
----------------------------------------------------|----------------
(9,835) (7,981) (2,694) | (390)
|
Purchase of property and equipment...................... (8) (4) (2) | (64)
----------------------------------------------------|----------------
Net cash provided by (used in) investing activities..... 1,928 (6,341) (2,140) | (228)
</TABLE>
See accompanying notes.
FG--DVAP-108206 68
<PAGE>
<TABLE>
<CAPTION>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
STATEMENTS OF CASH FLOWS - CONTINUED
(Dollars in thousands)
POST-MERGER | PRE-MERGER
---------------------------------------------------|-----------------
For the period | For the period
October 25, | January 1,
For the year For the year 1997 | 1997
ended ended through | through
December 31, December 31, December 31, | October 24,
1999 1998 1997 | 1997
---------------------------------------------------|-----------------
<S> <C> <C> <C> <C>
FINANCING ACTIVITIES |
|
Proceeds from revolving note payable.................... $13,000 -- -- | --
Repayment of revolving note payable..................... (12,900) -- -- | --
Receipts from investment contracts credited to account |
balances.............................................. 1,008 $9,009 $354 | $2,160
Return of account balances on investment contracts...... (228) (178) (8)| (15)
Net reallocations to separate account................... (4,606) (872) (20)| (38)
---------------------------------------------------|-----------------
Net cash provided by (used in) financing activities..... (3,726) 7,959 326 | 2,107
---------------------------------------------------|-----------------
|
Increase (decrease) in cash and cash equivalents........ (906) 1,311 (2,394)| 3,010
|
Cash and cash equivalents at beginning of period........ 1,932 621 3,015 | 5
---------------------------------------------------|----------------
Cash and cash equivalents at end of period.............. $1,026 $1,932 $621 | $3,015
===================================================|=================
|
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION |
Cash paid during the period for: |
Interest............................................. $1 -- -- | --
Income taxes......................................... -- $99 -- | $283
</TABLE>
See accompanying notes.
FG--DVAP-108206 69
<PAGE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO FINANCIAL STATEMENTS
December 31, 1999
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
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 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, 1999 and 1998, 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 and other asset-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.
Realized Gains and Losses: Realized gains and losses are determined on the basis
of specific identification.
Fair Values: Estimated fair values, as reported herein, of conventional
mortgage-backed securities not actively traded in a liquid market are estimated
using a third party pricing process. This pricing process uses a matrix
calculation assuming a spread over U. S. Treasury bonds based upon the expected
average lives of
FG--DVAP-108206 70
<PAGE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO FINANCIAL STATEMENTS
December 31, 1999
1. SIGNIFICANT ACCOUNTING POLICIES (continued)
the securities. Estimated fair values of publicly traded fixed maturities are
reported by an independent pricing service. 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 accompanying 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, interest bonuses, 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
maturities 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 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.
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 4.10% to 6.00% during 1999, 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
FG--DVAP-108206 71
<PAGE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO FINANCIAL STATEMENTS
December 31, 1999
1. SIGNIFICANT ACCOUNTING POLICIES (continued)
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, 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 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.
SEGMENT REPORTING
The Company manages its business as one segment, the sale of variable products
designed to meet customer needs for tax-advantaged saving for retirement and
protection from death. Variable products are sold to consumers and corporations
throughout New York.
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
FG--DVAP-108206 72
<PAGE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO FINANCIAL STATEMENTS
December 31, 1999
1. SIGNIFICANT ACCOUNTING POLICIES (continued)
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 items are inherently subject to change and are reassessed
periodically. Changes in estimates and assumptions could materially impact the
financial statements.
RECLASSIFICATIONS
Certain amounts for the periods ended in the 1998 and 1997 financial statements
have been reclassified to conform to the 1999 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 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.
FG--DVAP-108206 73
<PAGE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO FINANCIAL STATEMENTS
December 31, 1999
2. BASIS OF FINANCIAL REPORTING (continued)
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 follows:
<TABLE>
<CAPTION>
| PRE-
POST-MERGER | MERGER
------------------------------------------------|---------------
Net Income | Net Income
------------------------------------------------|---------------
For the period |For the period
For the year For the year October 25, | January 1,
ended ended 1997 through | 1997 through
December 31, December 31, December 31 | October 24,
1999 1998 1997 | 1997
------------------------------------------------|---------------
(Dollars in thousands)
<S> <C> <C> <C> <C>
|
As reported under statutory |
accounting principles......... $790 $(966) $(142)| $581
Interest maintenance reserve.... (52) 14 1 | --
Asset valuation reserve......... -- -- -- | --
Future policy benefits.......... (681) 45 115 | (179)
Nonadmitted assets.............. -- -- -- | --
Net unrealized appreciation |
(depreciation) of fixed |
maturities at fair value...... -- -- -- | --
Change in investment basis as |
result of merger.............. (118) (39) (1)| --
Deferred policy acquisition |
costs......................... 678 2,188 191 | 291
Value of purchased insurance in |
force......................... (35) (8) (3)| --
Current income taxes |
payable....................... 193 -- -- | --
Goodwill........................ (2) (2) (1)| --
Deferred income taxes........... 50 (465) (98)| (26)
Other........................... (12) 8 1 | (1)
------------------------------------------------|---------------
As reported herein.............. $811 $775 $63 | $666
================================================================
</TABLE>
FG--DVAP-108206 74
<PAGE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO FINANCIAL STATEMENTS
December 31, 1999
2. BASIS OF FINANCIAL REPORTING (continued)
<TABLE>
<CAPTION>
POST-MERGER
---------------------------------
Stockholder's Equity
---------------------------------
December 31, December 31,
1999 1998
---------------------------------
(Dollars in thousands)
<S> <C> <C>
As reported under statutory
accounting principles......... $25,082 $24,377
Interest maintenance reserve.... -- 15
Asset valuation reserve......... 145 96
Future policy benefits.......... (697) (16)
Nonadmitted assets.............. 41 43
Net unrealized appreciation
(depreciation) of fixed
maturities at fair value...... (1,083) 563
Change in investment basis as
result of merger.............. 200 318
Deferred policy acquisition
costs......................... 3,198 2,347
Value of purchased insurance in
force......................... 102 117
Current income taxes
payable....................... 193 --
Goodwill........................ 91 93
Deferred income taxes........... (610) (850)
Other........................... (4) 7
---------------------------------
As reported herein.............. $26,658 $27,110
=================================
</TABLE>
FG--DVAP-108206 75
<PAGE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO FINANCIAL STATEMENTS
December 31, 1999
3. INVESTMENT OPERATIONS
INVESTMENT RESULTS
Major categories of net investment income are summarized below:
<TABLE>
<CAPTION>
POST-MERGER | PRE-MERGER
-----------------------------------------------------|-------------------
For the period | For the period
For the year For the year October 25, | January 1,
ended ended 1997 through | 1997 through
December 31, December 31, December 31, | October 24,
1999 1998 1997 | 1997
-----------------------------------------------------|-------------------
(DOLLARS IN THOUSANDS) |
|
<S> <C> <C> <C> <C>
Fixed maturities............. $1,901 $1,726 $294 | $1,449
Short-term investments....... 148 157 13 | 30
Other, net................... 171 -- -- | 2
-----------------------------------------------------|-------------------
Gross investment income...... 2,220 1,883 307 | 1,481
Less investment expenses..... (73) (39) (21) | (32)
-----------------------------------------------------|-------------------
Net investment income........ $2,147 $1,844 $286 | $1,449
=========================================================================
</TABLE>
The change in unrealized appreciation (depreciation) on fixed maturities
designated as available for sale at fair value for the year ended December 31,
1999, the year ended December 31, 1998, the period October 25, 1997 through
December 31, 1997, and the period January 1, 1997 through October 24, 1997 were
$(1,646,000), $412,000, $(212,000), and $516,000, respectively.
At December 31, 1999 and December 31, 1998, amortized cost, gross unrealized
gains and losses, and estimated fair values of fixed maturities, all of which
are designated as available for sale, follows:
<TABLE>
<CAPTION>
POST-MERGER
---------------------------------------------------
Gross Gross Estimated
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
---------- ---------- ---------- ---------
(Dollars in thousands)
<S> <C> <C> <C> <C>
December 31, 1999
-----------------------------
U.S. government and
governmental agencies
and authorities............ $3,486 -- $(88) $3,398
Public utilities.............. 2,030 -- (77) 1,953
Corporate securities.......... 21,994 -- (910) 21,084
Mortgage-backed securities.... 1,556 -- (8) 1,548
Other asset-backed securities. 112 -- -- 112
------- ------ ------- -------
Total......................... $29,178 -- $(1,083) $28,095
======= ====== ======= =======
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
======= ====== ======= =======
</TABLE>
FG--DVAP-108206 76
<PAGE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO FINANCIAL STATEMENTS
December 31, 1999
3. INVESTMENT OPERATIONS (continued)
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.
At December 31, 1999, net unrealized investment losses on fixed maturities
designated as available for sale totaled $1,083,000. Depreciation of $603,000
was included in stockholder's equity at December 31, 1999 (net of adjustments of
$16,000 to VPIF, $141,000 to DPAC, and $324,000 to deferred income taxes). 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 adjustments of
$5,000 to VPIF, $32,000 to DPAC, and $190,000 to deferred income taxes).
Amortized cost and estimated fair value of fixed maturities designated as
available for sale, by contractual maturity, at December 31, 1999 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
------------------------------------
Amortized Estimated
December 31, 1999 Cost Fair Value
-----------------------------------------------------------------------------
(Dollars in thousands)
Due in one year or less.................. $1,690 $1,616
Due after one year through five years.... 11,465 11,107
Due after five years through ten years... 14,355 13,712
------------------------------------
27,510 26,435
Mortgage-backed securities............... 1,556 1,548
Other asset-backed securities............ 112 112
------------------------------------
Total ................................... $29,178 $28,095
====================================
FG--DVAP-108206 77
<PAGE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO FINANCIAL STATEMENTS
December 31, 1999
3. INVESTMENT OPERATIONS (continued)
An analysis of sales, maturities, and principal repayments of the Company's
fixed maturities portfolio follows:
<TABLE>
<CAPTION>
Gross Gross Proceeds
Amortized Realized Realized from
Cost Gains Losses Sale
------------------------------------------------------------------------------------------
(Dollars in thousands)
<S> <C> <C> <C> <C>
POST-MERGER:
For the year ended December 31, 1999:
Scheduled principal repayments, calls,
and tenders........................... $2,385 -- -- $2,385
Sales................................... 8,630 $4 $(170) 8,464
-----------------------------------------------
Total................................... $11,015 $4 $(170) $10,849
===============================================
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
===============================================
</TABLE>
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 1999, 1998, and 1997, no investments were
identified as having an impairment other than temporary.
Investments on Deposit: At December 31, 1999 and 1998, 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, 1999 and December 31, 1998. Fixed maturities included investments in
industrials (48% in 1999, 40% in 1998), financial companies (29% in 1999, 24% in
1998), various government bonds and government or agency mortgage-backed
securities (14% in 1999, 13% in 1998), and conventional mortgage-backed
securities (6% in 1999, 11% in 1998).
FG--DVAP-108206 78
<PAGE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO FINANCIAL STATEMENTS
December 31, 1999
3. INVESTMENT OPERATIONS (continued)
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, 1999.
4. COMPREHENSIVE INCOME
Comprehensive income includes all changes in stockholder's equity during a
period except those resulting from investments by and distributions to the
stockholder. 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 $(108,000) and $16,000 in
1999 and 1998, respectively. Such amounts, which have been measured through the
date of sale, are net of income taxes and adjustments to VPIF and DPAC totaling
$(58,000) and $8,000 in 1999 and 1998, respectively.
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.
FG--DVAP-108206 79
<PAGE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO FINANCIAL STATEMENTS
December 31, 1999
5. FAIR VALUES OF FINANCIAL INSTRUMENTS (continued)
The following compares carrying values as shown for financial reporting purposes
with estimated fair values:
<TABLE>
<CAPTION>
POST-MERGER
-----------------------------------------------
December 31, 1999 December 31, 1998
------------------------ ---------------------
Carrying Estimated Carrying Estimated
Value Fair Value Value Fair Value
---------- ----------- -------- ----------
(Dollars in thousands)
<S> <C> <C> <C> <C>
ASSETS
Fixed maturities, available for sale.. $28,095 $28,095 $30,994 $30,994
Short-term investments................ 2,309 2,309 3,231 3,231
Cash and cash equivalents............. 1,026 1,026 1,932 1,932
Separate account assets............... 47,215 47,215 26,717 26,717
LIABILITIES
Annuity products....................... 7,583 7,170 10,830 10,166
Revolving note payable................. 100 100 -- --
Separate account liabilities........... 47,215 47,215 26,717 26,717
</TABLE>
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 process. This pricing
process uses a matrix calculation assuming a spread over U. S. Treasury bonds
based upon the expected average lives of the securities.
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.
Revolving note payable: Carrying value reported in the Company's historical cost
basis balance sheet approximates estimated fair value for this instrument, as
the agreement carries a variable interest rate provision.
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.
FG--DVAP-108206 80
<PAGE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO FINANCIAL STATEMENTS
December 31, 1999
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 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. 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.
An analysis of the VPIF asset follows:
<TABLE>
<CAPTION>
POST-MERGER
-----------------------------------------------------
For the period
October 25,
For the year For the year 1997
ended ended through
December 31, December 31, December 31,
1999 1998 1997
-----------------------------------------------------
(Dollars in thousands)
<S> <C> <C> <C>
Beginning balance................. $117 $126 $132
-----------------------------------------------------
Imputed interest.................. 8 9 3
Amortization...................... (40) (23) (6)
Changes in assumptions of
timing of gross profits......... (3) 6 --
-----------------------------------------------------
Net amortization.................. (35) (8) (3)
Adjustment for unrealized gains
(losses) on available for
sale securities................ 20 (1) (3)
-----------------------------------------------------
Ending balance.................... $102 $117 $126
=====================================================
</TABLE>
FG--DVAP-108206 81
<PAGE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO FINANCIAL STATEMENTS
December 31, 1999
6. MERGER (continued)
Interest is imputed on the unamortized balance of VPIF at a rate of 7.33% for
the year ended December 31, 1999, 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, 1999 is $12,000 in 2000, $10,000 in 2001, $9,000 in 2002, $8,000
in 2003, and $7,000 in 2004. 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.
INCOME TAX EXPENSE
Income tax expense included in the financial statements follows:
<TABLE>
<CAPTION>
POST-MERGER | PRE-MERGER
-------------------------------------------------------|--------------------
For the period | For the period
October 25, | January 1,
For the year For the year 1997 | 1997
ended ended through | through
December 31, December 31, December 31, | October 24,
1999 1998 1997 | 1997
-------------------------------------------------------|--------------------
(Dollars in thousands) |
|
<S> <C> <C> <C> <C>
Current.... $619 $37 $(64)| $261
Deferred... (50) 465 98 | 26
-------------------------------------------------------|--------------------
$569 $502 $34 | $287
============================================================================
</TABLE>
The effective tax rate on income before income taxes is different from the
prevailing federal income tax rate. A reconciliation of this difference follows:
<TABLE>
<CAPTION>
POST-MERGER | PRE-MERGER
----------------------------------------------------|-------------------
For the period | For the period
October 25, | January 1,
For the year For the year 1997 | 1997
ended ended through | through
December 31, December 31, December 31, | October 24,
1999 1998 1997 | 1997
----------------------------------------------------|-------------------
(Dollars in thousands) |
|
<S> <C> <C> <C> | <C>
Income before income taxes............ $1,380 $1,277 $97 | $953
====================================================|===================
|
Income tax at federal statutory rate.. $483 $447 $34 | $334
Tax effect (decrease) of: |
Compensatory stock option and |
Restricted stock expense......... -- -- -- | (35)
Other items......................... 86 55 -- | (12)
----------------------------------------------------|-------------------
Income tax expense.................... $569 $502 $34 | $287
========================================================================
</TABLE>
FG--DVAP-108206 82
<PAGE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO FINANCIAL STATEMENTS
December 31, 1999
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, 1999 and 1998 follows:
POST-MERGER
-----------------------
December 31 December 31
1999 1998
----------- -----------
(Dollars in thousands)
Deferred tax assets:
Future policy benefits................... $560 $11
Net unrealized depreciation of
available for sale fixed maturities.... 324 --
Net operating loss carryforwards......... -- 327
------ ------
884 338
Deferred tax liabilities:
Net unrealized appreciation of
available for sale fixed maturities.... -- (184)
Fixed maturities......................... (68) (222)
Investment income........................ (117) --
Deferred policy acquisition costs ....... (913) (714)
Value of purchased insurance in force.... (30) (41)
Other.................................... (42) (27)
------ ------
(1,170) (1,188)
------ ------
Valuation allowance.......................... (324) --
------ ------
Deferred income tax liability................ $(610) $(850)
====== ======
At December 31, 1999, the Company reported, for financial statement purposes,
unrealized losses on certain investments which have not been recognized for tax
purposes. The Company has established a valuation allowance against the deferred
income tax assets associated with the unrealized depreciation on fixed
maturities available for sale as the Company is uncertain as to whether the
capital losses, if ever realized, could be utilized to offset future capital
gains.
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 annuity 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, 1999, the Company's variable
annuity products were sold primarily through broker/dealer institutions. The
Company paid commissions and expenses to DSI totaling $697,000 and $1,754,000
for the years ended December 31, 1999 and 1998, respectively. 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.
FG--DVAP-108206 83
<PAGE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO FINANCIAL STATEMENTS
December 31, 1999
8. RELATED PARTY TRANSACTIONS (continued)
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 $137,000, $248,000, $8,000, and $16,000 for the years ended December
31, 1999 and 1998, the period October 25, 1997 through December 31, 1997, and
the period January 1, 1997 through October 24, 1997, respectively. Under the
agreement with Equitable Life, the Company incurred expenses of $142,000,
$165,000, $13,000, and $16,000 for the years ended December 31, 1999 and 1998,
the period October 25, 1997 through December 31, 1997, and the period January 1,
1997 through October 24, 1997, respectively.
The Company provides resources and services to Golden American and DSI. Revenues
for these services, which reduce general expenses incurred by the Company,
totaled $269,000 and $210,000 from Golden American, for the years ended December
31, 1999 and 1998, respectively. Revenues for these services, which reduce
general expenses incurred by the Company, totaled $387,000 and $75,000 from DSI
for the years ended December 31, 1999 and 1998, respectively.
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 years ended December 31, 1999 and 1998, the Company
incurred fees of $73,000 and $56,000, respectively, 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 provides resources and services to Security Life of Denver Insurance
Company ("Security Life"), an affiliate, and Southland Life Insurance Company
("Southland"), an affiliate. For the year ended December 31, 1999, charges for
these services were $149,000 to Security Life and $63,000 to Southland.
The Company had premiums, net of reinsurance, for variable annuity products for
the year ended December 31, 1999 and 1998, that totaled $2,000 and $94,000,
respectively, 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.
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 1999, 1998, or 1997. On January 31, 2000,
Golden American provided a cash capital contribution of $2,100,000 to First
Golden.
FG--DVAP-108206 84
<PAGE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO FINANCIAL STATEMENTS
December 31, 1999
9. COMMITMENTS AND CONTINGENCIES
Reinsurance: At December 31, 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. At
December 31, 1999 and December 31, 1998, the Company has a payable of $4,000 and
$1,000, respectively, for reinsurance premiums. Included in the accompanying
financial statements are net considerations to the reinsurer of $27,000, $9,000,
and $1,000 for the years ended December 31, 1999 and 1998 and for the period
October 25, 1997 through December 31, 1997, respectively. In addition, the
accompanying financial statements contain net policy benefits recoveries of
$7,000 for the year ended December 31, 1999.
The reinsurance treaty that covered the nonstandard minimum guaranteed death
benefits for new business has been terminated for business issued after December
31, 1999. The Company is currently pursuing alternative reinsurance arrangements
for new business issued after December 31, 1999. There can be no assurance that
such alternative arrangements will be available. Any reinsurance covering
business in force at December 31, 1999 will continue to apply in the future.
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 lawsuits 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 (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 annuities 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, each having at least ten percent of total
sales. One of these distributors sold 62.1% of the Company's products in 1998.
This relationship was discontinued as of July, 1999 for new business.
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 years ended December 31, 1999 and
1998 and the periods October 25, 1997 through December 31, 1997 and January 1,
1997 through October 24, 1997 was $158,000, $95,000, $25,000, and $34,000,
respectively. At December 31, 1999, minimum rental payments due under the
operating leases are $82,000 in 2000 and $76,000 in 2001.
Revolving Note Payable: To enhance short-term liquidity, the Company established
a revolving note payable effective July 31, 1999 and expiring July 31, 2000 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. Under this agreement, the Company incurred interest expense of
$12,000 in 1999. At December 31, 1999, the Company had borrowings of $100,000
under this agreement.
FG--DVAP-108206 85
--------------------------------------------------------------------------------
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.................................................... 1
Distribution of Contracts............................................... 2
Performance Information................................................. 2
IRA Withdrawal Option................................................... 8
Other Information....................................................... 8
Financial Statements of Separate Account NY-B .......................... 9
FG-DVAP-108206 86
<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
108206 NY DVA PLUS 10/00
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
FG-DVAP-108206 87
<PAGE>
<PAGE>
This page intentionally left blank.
FG-DVAP-108206
<PAGE>
<PAGE>
APPENDIX A
CONDENSED FINANCIAL INFORMATION
Except for the Asset Allocation Growth, Diversified Mid-Cap, Growth and Income,
Special Situations, Investors, Large Cap Value, All Cap, ING Global Brand
Names, Prudential Jennison and SP Jennison International Growth subaccounts
which had not commenced operations as of December 31, 1999, 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.
LIQUID ASSET
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
STANDARD DEATH BENEFIT ANNUAL RATCHET DEATH BENEFIT
----------------------------------------------------------------------------------------------------------------------
TOTAL # OF TOTAL # OF
ACCUMULATION ACCUMULATION
AUV AT UNITS AT TOTAL AUV AT UNITS AT TOTAL
YEAR END (AND YEAR END (AND AUV AT YEAR END (AND YEAR END (AND AUV AT
AT BEGINNING OF AT BEGINNING OF YEAR END AT BEGINNING OF AT BEGINNING OF YEAR END
FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS)
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1999 $ 15.04 11,408 $ 172 $ 14.79 22,393 $ 331
1998 14.54 2,755 40 14.33 5,974 86
1997 14.02 -- -- 13.83 -- --
5/6/97 13.67 -- -- 13.51 -- --
----------------------------------------------------------------------------------------------------------------------
</TABLE>
LIMITED MATURITY BOND
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
STANDARD DEATH BENEFIT ANNUAL RATCHET DEATH BENEFIT
----------------------------------------------------------------------------------------------------------------------
TOTAL # OF TOTAL # OF
ACCUMULATION ACCUMULATION
AUV AT UNITS AT TOTAL AUV AT UNITS AT TOTAL
YEAR END (AND YEAR END (AND AUV AT YEAR END (AND YEAR END (AND AUV AT
AT BEGINNING OF AT BEGINNING OF YEAR END AT BEGINNING OF AT BEGINNING OF YEAR END
FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS)
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1999 $ 17.00 6,379 $ 108 $ 16.72 7,746 $ 130
1998 17.02 -- -- 16.77 1,506 25
1997 16.13 -- -- 15.91 632 10
5/6/97 15.43 -- -- 15.24 -- --
----------------------------------------------------------------------------------------------------------------------
</TABLE>
GLOBAL FIXED INCOME
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
STANDARD DEATH BENEFIT ANNUAL RATCHET DEATH BENEFIT
----------------------------------------------------------------------------------------------------------------------
TOTAL # OF TOTAL # OF
ACCUMULATION ACCUMULATION
AUV AT UNITS AT TOTAL AUV AT UNITS AT TOTAL
YEAR END (AND YEAR END (AND AUV AT YEAR END (AND YEAR END (AND AUV AT
AT BEGINNING OF AT BEGINNING OF YEAR END AT BEGINNING OF AT BEGINNING OF YEAR END
FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS)
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1999 $ 11.88 822 $ 10 $ 11.79 2,216 $ 26
1998 13.17 -- -- 13.09 -- --
5/1/98 12.17 -- -- 12.11 -- --
----------------------------------------------------------------------------------------------------------------------
</TABLE>
FG-DVAP-108206 A1
<PAGE>
<PAGE>
FULLY MANAGED
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
STANDARD DEATH BENEFIT ANNUAL RATCHET DEATH BENEFIT
----------------------------------------------------------------------------------------------------------------------
TOTAL # OF TOTAL # OF
ACCUMULATION ACCUMULATION
AUV AT UNITS AT TOTAL AUV AT UNITS AT TOTAL
YEAR END (AND YEAR END (AND AUV AT YEAR END (AND YEAR END (AND AUV AT
AT BEGINNING OF AT BEGINNING OF YEAR END AT BEGINNING OF AT BEGINNING OF YEAR END
FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS)
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1999 $ 22.01 13,633 $ 300 $ 21.65 11,023 $ 239
1998 20.84 2,619 55 20.53 4,512 93
1997 19.93 -- -- 19.66 1,701 33
5/6/97 17.95 -- -- 17.73 -- --
----------------------------------------------------------------------------------------------------------------------
</TABLE>
TOTAL RETURN
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
STANDARD DEATH BENEFIT ANNUAL RATCHET DEATH BENEFIT
----------------------------------------------------------------------------------------------------------------------
TOTAL # OF TOTAL # OF
ACCUMULATION ACCUMULATION
AUV AT UNITS AT TOTAL AUV AT UNITS AT TOTAL
YEAR END (AND YEAR END (AND AUV AT YEAR END (AND YEAR END (AND AUV AT
AT BEGINNING OF AT BEGINNING OF YEAR END AT BEGINNING OF AT BEGINNING OF YEAR END
FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS)
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1999 $ 18.20 32,717 $ 595 $ 18.06 123,053 $ 2,222
1998 17.83 15,411 275 17.72 81,617 1,446
1997 16.18 2,430 39 16.10 13,026 209
5/6/97 14.36 -- -- 14.31 -- --
----------------------------------------------------------------------------------------------------------------------
</TABLE>
EQUITY INCOME
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
STANDARD DEATH BENEFIT ANNUAL RATCHET DEATH BENEFIT
----------------------------------------------------------------------------------------------------------------------
TOTAL # OF TOTAL # OF
ACCUMULATION ACCUMULATION
AUV AT UNITS AT TOTAL AUV AT UNITS AT TOTAL
YEAR END (AND YEAR END (AND AUV AT YEAR END (AND YEAR END (AND AUV AT
AT BEGINNING OF AT BEGINNING OF YEAR END AT BEGINNING OF AT BEGINNING OF YEAR END
FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS)
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1999 $ 21.83 12,749 $ 278 $ 21.47 15,934 $ 342
1998 22.27 9,623 214 21.94 6,014 132
1997 20.83 -- -- 20.55 1,243 26
5/6/97 18.54 -- -- 18.32 -- --
----------------------------------------------------------------------------------------------------------------------
</TABLE>
VALUE EQUITY
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
STANDARD DEATH BENEFIT ANNUAL RATCHET DEATH BENEFIT
----------------------------------------------------------------------------------------------------------------------
TOTAL # OF TOTAL # OF
ACCUMULATION ACCUMULATION
AUV AT UNITS AT TOTAL AUV AT UNITS AT TOTAL
YEAR END (AND YEAR END (AND AUV AT YEAR END (AND YEAR END (AND AUV AT
AT BEGINNING OF AT BEGINNING OF YEAR END AT BEGINNING OF AT BEGINNING OF YEAR END
FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS)
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1999 $ 18.28 5,400 $ 99 $ 18.14 15,606 $ 283
1998 18.41 1,678 31 18.31 4,464 82
1997 18.36 1,048 19 18.28 1,056 19
5/6/97 15.72 -- -- 15.66 -- --
----------------------------------------------------------------------------------------------------------------------
</TABLE>
FG-DVAP-108206 A2
<PAGE>
<PAGE>
RISING DIVIDENDS
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
STANDARD DEATH BENEFIT ANNUAL RATCHET DEATH BENEFIT
----------------------------------------------------------------------------------------------------------------------
TOTAL # OF TOTAL # OF
ACCUMULATION ACCUMULATION
AUV AT UNITS AT TOTAL AUV AT UNITS AT TOTAL
YEAR END (AND YEAR END (AND AUV AT YEAR END (AND YEAR END (AND AUV AT
AT BEGINNING OF AT BEGINNING OF YEAR END AT BEGINNING OF AT BEGINNING OF YEAR END
FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS)
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1999 $ 26.07 13,823 $ 360 $ 25.83 79,175 $ 2,045
1998 22.79 1,734 40 22.61 34,310 776
1997 20.22 90 2 20.09 8,223 165
5/6/97 17.27 -- -- 17.18 -- --
----------------------------------------------------------------------------------------------------------------------
</TABLE>
MANAGED GLOBAL
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
STANDARD DEATH BENEFIT ANNUAL RATCHET DEATH BENEFIT
----------------------------------------------------------------------------------------------------------------------
TOTAL # OF TOTAL # OF
ACCUMULATION ACCUMULATION
AUV AT UNITS AT TOTAL AUV AT UNITS AT TOTAL
YEAR END (AND YEAR END (AND AUV AT YEAR END (AND YEAR END (AND AUV AT
AT BEGINNING OF AT BEGINNING OF YEAR END AT BEGINNING OF AT BEGINNING OF YEAR END
FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS)
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1999 $ 24.23 9,519 $ 231 $ 23.97 31,419 $ 753
1998 15.02 2,440 37 14.88 9,572 142
1997 11.76 -- -- 11.67 2,969 35
5/6/97 11.24 -- -- 11.16 -- --
----------------------------------------------------------------------------------------------------------------------
</TABLE>
RESEARCH
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
STANDARD DEATH BENEFIT ANNUAL RATCHET DEATH BENEFIT
----------------------------------------------------------------------------------------------------------------------
TOTAL # OF TOTAL # OF
ACCUMULATION ACCUMULATION
AUV AT UNITS AT TOTAL AUV AT UNITS AT TOTAL
YEAR END (AND YEAR END (AND AUV AT YEAR END (AND YEAR END (AND AUV AT
AT BEGINNING OF AT BEGINNING OF YEAR END AT BEGINNING OF AT BEGINNING OF YEAR END
FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS)
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1999 $ 28.25 32,639 $ 921 $ 28.04 122,839 $ 3,444
1998 23.03 26,762 616 22.89 20,466 1,865
1997 18.95 4,095 78 18.87 9,642 182
5/6/97 16.72 -- -- 16.66 -- --
----------------------------------------------------------------------------------------------------------------------
</TABLE>
CAPITAL APPRECIATION
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
STANDARD DEATH BENEFIT ANNUAL RATCHET DEATH BENEFIT
----------------------------------------------------------------------------------------------------------------------
TOTAL # OF TOTAL # OF
ACCUMULATION ACCUMULATION
AUV AT UNITS AT TOTAL AUV AT UNITS AT TOTAL
YEAR END (AND YEAR END (AND AUV AT YEAR END (AND YEAR END (AND AUV AT
AT BEGINNING OF AT BEGINNING OF YEAR END AT BEGINNING OF AT BEGINNING OF YEAR END
FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS)
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1999 $ 30.46 11,524 $ 351 $ 30.11 15,289 $ 460
1998 24.75 578 14 24.50 4,904 120
1997 22.24 -- -- 22.05 734 16
5/6/97 18.45 -- -- 18.31 -- --
----------------------------------------------------------------------------------------------------------------------
</TABLE>
FG-DVAP-108206 A3
<PAGE>
<PAGE>
CAPITAL GROWTH
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
STANDARD DEATH BENEFIT ANNUAL RATCHET DEATH BENEFIT
----------------------------------------------------------------------------------------------------------------------
TOTAL # OF TOTAL # OF
ACCUMULATION ACCUMULATION
AUV AT UNITS AT TOTAL AUV AT UNITS AT TOTAL
YEAR END (AND YEAR END (AND AUV AT YEAR END (AND YEAR END (AND AUV AT
AT BEGINNING OF AT BEGINNING OF YEAR END AT BEGINNING OF AT BEGINNING OF YEAR END
FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS)
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1999 $ 21.18 9,819 $ 208 $ 21.06 53,276 $ 1,122
1998 17.08 6,031 103 17.01 20,311 346
1997 15.45 -- -- 15.41 334 5
5/6/97 12.46 -- -- 12.44 -- --
----------------------------------------------------------------------------------------------------------------------
</TABLE>
STRATEGIC EQUITY
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
STANDARD DEATH BENEFIT ANNUAL RATCHET DEATH BENEFIT
----------------------------------------------------------------------------------------------------------------------
TOTAL # OF TOTAL # OF
ACCUMULATION ACCUMULATION
AUV AT UNITS AT TOTAL AUV AT UNITS AT TOTAL
YEAR END (AND YEAR END (AND AUV AT YEAR END (AND YEAR END (AND AUV AT
AT BEGINNING OF AT BEGINNING OF YEAR END AT BEGINNING OF AT BEGINNING OF YEAR END
FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS)
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1999 $ 22.06 6,034 $ 133 $ 21.92 11,085 $243
1998 14.30 2,037 29 14.23 1,867 27
1997 14.36 -- -- 14.31 1,265 18
5/6/97 11.96 -- -- 11.93 -- --
----------------------------------------------------------------------------------------------------------------------
</TABLE>
MID-CAP GROWTH
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
STANDARD DEATH BENEFIT ANNUAL RATCHET DEATH BENEFIT
----------------------------------------------------------------------------------------------------------------------
TOTAL # OF TOTAL # OF
ACCUMULATION ACCUMULATION
AUV AT UNITS AT TOTAL AUV AT UNITS AT TOTAL
YEAR END (AND YEAR END (AND AUV AT YEAR END (AND YEAR END (AND AUV AT
AT BEGINNING OF AT BEGINNING OF YEAR END AT BEGINNING OF AT BEGINNING OF YEAR END
FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS)
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1999 $ 39.97 11,889 $ 475 $ 39.59 47,634 $ 1,896
1998 22.60 7,677 173 22.43 27,872 625
1997 18.64 1,402 26 18.52 2,866 53
5/6/97 15.76 -- -- 15.68 -- --
----------------------------------------------------------------------------------------------------------------------
</TABLE>
SMALL CAP
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
STANDARD DEATH BENEFIT ANNUAL RATCHET DEATH BENEFIT
----------------------------------------------------------------------------------------------------------------------
TOTAL # OF TOTAL # OF
ACCUMULATION ACCUMULATION
AUV AT UNITS AT TOTAL AUV AT UNITS AT TOTAL
YEAR END (AND YEAR END (AND AUV AT YEAR END (AND YEAR END (AND AUV AT
AT BEGINNING OF AT BEGINNING OF YEAR END AT BEGINNING OF AT BEGINNING OF YEAR END
FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS)
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1999 $ 22.96 2,466 $ 57 $ 22.82 51,013 $ 1,164
1998 15.44 3,612 56 15.37 9,918 152
1997 12.92 -- -- 12.88 3,434 44
5/6/97 10.72 -- -- 10.70 -- --
----------------------------------------------------------------------------------------------------------------------
</TABLE>
FG-DVAP-108206 A4
<PAGE>
<PAGE>
GROWTH
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
STANDARD DEATH BENEFIT ANNUAL RATCHET DEATH BENEFIT
----------------------------------------------------------------------------------------------------------------------
TOTAL # OF TOTAL # OF
ACCUMULATION ACCUMULATION
AUV AT UNITS AT TOTAL AUV AT UNITS AT TOTAL
YEAR END (AND YEAR END (AND AUV AT YEAR END (AND YEAR END (AND AUV AT
AT BEGINNING OF AT BEGINNING OF YEAR END AT BEGINNING OF AT BEGINNING OF YEAR END
FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS)
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1999 $ 28.78 27,730 $ 798 $ 28.62 197,439 $ 5,651
1998 16.36 8,286 136 16.29 17,549 286
1997 13.06 -- -- 13.03 3,093 40
5/6/97 12.47 -- -- 12.45 -- --
----------------------------------------------------------------------------------------------------------------------
</TABLE>
REAL ESTATE
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
STANDARD DEATH BENEFIT ANNUAL RATCHET DEATH BENEFIT
----------------------------------------------------------------------------------------------------------------------
TOTAL # OF TOTAL # OF
ACCUMULATION ACCUMULATION
AUV AT UNITS AT TOTAL AUV AT UNITS AT TOTAL
YEAR END (AND YEAR END (AND AUV AT YEAR END (AND YEAR END (AND AUV AT
AT BEGINNING OF AT BEGINNING OF YEAR END AT BEGINNING OF AT BEGINNING OF YEAR END
FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS)
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1999 $ 20.96 356 $ 7 $ 20.62 1,581 $ 33
1998 22.07 356 8 21.74 1,474 32
1997 25.82 -- -- 25.48 478 12
5/6/97 21.31 -- -- 21.05 -- --
----------------------------------------------------------------------------------------------------------------------
</TABLE>
HARD ASSETS
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
STANDARD DEATH BENEFIT ANNUAL RATCHET DEATH BENEFIT
----------------------------------------------------------------------------------------------------------------------
TOTAL # OF TOTAL # OF
ACCUMULATION ACCUMULATION
AUV AT UNITS AT TOTAL AUV AT UNITS AT TOTAL
YEAR END (AND YEAR END (AND AUV AT YEAR END (AND YEAR END (AND AUV AT
AT BEGINNING OF AT BEGINNING OF YEAR END AT BEGINNING OF AT BEGINNING OF YEAR END
FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS)
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1999 $ 17.66 -- -- $ 17.37 525 $ 9
1998 14.50 -- -- 14.28 1,007 14
1997 20.85 -- -- 20.57 238 5
5/6/97 19.34 -- -- 19.11 -- --
----------------------------------------------------------------------------------------------------------------------
</TABLE>
DEVELOPING WORLD
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
STANDARD DEATH BENEFIT ANNUAL RATCHET DEATH BENEFIT
----------------------------------------------------------------------------------------------------------------------
TOTAL # OF TOTAL # OF
ACCUMULATION ACCUMULATION
AUV AT UNITS AT TOTAL AUV AT UNITS AT TOTAL
YEAR END (AND YEAR END (AND AUV AT YEAR END (AND YEAR END (AND AUV AT
AT BEGINNING OF AT BEGINNING OF YEAR END AT BEGINNING OF AT BEGINNING OF YEAR END
FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS)
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1999 $11.64 -- -- $ 11.61 13,214 $153
1998 7.29 -- -- 7.28 -- --
2/19/98 10.00 -- -- 10.00 -- --
----------------------------------------------------------------------------------------------------------------------
</TABLE>
FG-DVAP-108206 A5
<PAGE>
<PAGE>
EMERGING MARKETS
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
STANDARD DEATH BENEFIT ANNUAL RATCHET DEATH BENEFIT
----------------------------------------------------------------------------------------------------------------------
TOTAL # OF TOTAL # OF
ACCUMULATION ACCUMULATION
AUV AT UNITS AT TOTAL AUV AT UNITS AT TOTAL
YEAR END (AND YEAR END (AND AUV AT YEAR END (AND YEAR END (AND AUV AT
AT BEGINNING OF AT BEGINNING OF YEAR END AT BEGINNING OF AT BEGINNING OF YEAR END
FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS)
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1999 $ 12.01 523 $ 6 $ 11.90 5,437 $ 65
1998 6.56 -- -- 6.51 2,917 19
1997 8.75 -- -- 8.70 1,812 16
5/6/97 10.38 -- -- 10.33 -- --
----------------------------------------------------------------------------------------------------------------------
</TABLE>
PIMCO HIGH YIELD BOND
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
STANDARD DEATH BENEFIT ANNUAL RATCHET DEATH BENEFIT
----------------------------------------------------------------------------------------------------------------------
TOTAL # OF TOTAL # OF
ACCUMULATION ACCUMULATION
AUV AT UNITS AT TOTAL AUV AT UNITS AT TOTAL
YEAR END (AND YEAR END (AND AUV AT YEAR END (AND YEAR END (AND AUV AT
AT BEGINNING OF AT BEGINNING OF YEAR END AT BEGINNING OF AT BEGINNING OF YEAR END
FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS)
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1999 $ 10.27 1,835 $ 19 $ 10.24 2,126 $ 22
1998 10.09 -- -- 10.08 -- --
5/1/98 10.00 -- -- 10.00 -- --
----------------------------------------------------------------------------------------------------------------------
</TABLE>
PIMCO STOCKSPLUS GROWTH AND INCOME
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
STANDARD DEATH BENEFIT ANNUAL RATCHET DEATH BENEFIT
----------------------------------------------------------------------------------------------------------------------
TOTAL # OF TOTAL # OF
ACCUMULATION ACCUMULATION
AUV AT UNITS AT TOTAL AUV AT UNITS AT TOTAL
YEAR END (AND YEAR END (AND AUV AT YEAR END (AND YEAR END (AND AUV AT
AT BEGINNING OF AT BEGINNING OF YEAR END AT BEGINNING OF AT BEGINNING OF YEAR END
FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS) FOLLOWING YEAR) FOLLOWING YEAR) (IN THOUSANDS)
----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1999 $ 13.16 1,205 $ 16 $ 13.13 23,566 $ 309
1998 11.12 -- -- 11.11 -- --
5/1/98 10.00 -- -- 10.00 -- --
----------------------------------------------------------------------------------------------------------------------
</TABLE>
FG-DVAP-108206 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 3
$124,230 ($100,000 x 1.075 )
2. N = 2,555 ( 365 x 7 )
3. Market Value Adjustment =
2,555/365
$124,230 x [((1.07/1.0825) ) -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 3
$124,230 ($100,000 x 1.075 )
2. N = 2,555 ( 365 x 7 )
3. Market Value Adjustment =
2,555/365
$124,230 x [(( 1.07/1.0625) ) -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.
FG-DVAP-108206 B1
<PAGE>
<PAGE>
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 3
$248,459 ( $200,000 x 1.075 )
2. N = 2,555 ( 365 x 7 )
3. Amount that must be withdrawn =
2,555/365
[ $114,530 / (( 1.07/1.0825) )] = $124,230
Then calculate the Market Value Adjustment on that amount.
4. Market Value Adjustment =
2,555/365
$124,230 x [(( 1.07/1.0825) ) -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 3
$248,459 ( $200,000 x 1.075 )
2. N = 2,555 ( 365 x 7 )
3. Amount that must be withdrawn =
2,555/365
[ $130,500 / (( 1.07/1.0625) )] = $124,230
Then calculate the Market Value Adjustment on that amount.
4. Market Value Adjustment =
2,555/365
$124,230 x [(( 1.07/1.0625) ) -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.
FG-DVAP-108206 B2
<PAGE>
<PAGE>
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.
FG-DVAP-108206 C1
<PAGE>
<PAGE>
ING VARIABLE 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.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
108206 NY DVA PLUS 10/02/00
<PAGE>
<PAGE>
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ING VARIABLE 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. |
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108206 DVA Plus (NY) 10/02/2000 |
<PAGE>
<PAGE>
PART B
STATEMENT OF ADDITIONAL INFORMATION
<PAGE>
<PAGE>
Statement of Additional Information
DVA PLUS
DEFERRED COMBINATION VARIABLE
AND FIXED ANNUITY CONTRACT
ISSUED BY
SEPARATE ACCOUNT NY-B
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 which 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:
October 2, 2000
<PAGE>
<PAGE>
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................................................ 2
Performance Information.................................................. 2
IRA Partial Withdrawal Option............................................ 8
Other Information........................................................ 8
Financial Statements of Separate Account NY-B............................ 9
<PAGE>
<PAGE>
INTRODUCTION
This Statement of Additional Information provides background information
regarding Separate 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 approximately $495 billion in assets as of December 31, 1999. As of
December 31, 1999, First Golden has approximately $83.1 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 Separate 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, 1999 and 1998, First
Golden incurred expenses of $137,000 and $248,000, respectively, under the
agreement with Golden American and $142,000 and $165,000, respectively, under
the agreement with Equitable Life.
Also on November 8, 1996, First Golden and 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, 1999 and 1998, charges to Golden American for these services
were $269,000 and $210,000, respectively, and charges to DSI for these services
were $387,000 and $75,000, respectively.
INDEPENDENT AUDITORS
Ernst & Young LLP, independent auditors, performs annual audits of First Golden
and Separate Account NY-B.
1
<PAGE>
<PAGE>
DISTRIBUTION OF CONTRACTS
The offering of contracts under the prospectus associated with this Statement of
Additional Information is continuous. Directed Services, Inc., 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, 1997, through two broker/dealer institutions
during the year ended December 31, 1998 and through three broker/dealer
institutions during the year ended December 31, 1999. For the years ended 1999,
and 1998 commissions paid by First Golden to Directed Services, Inc. aggregated
$697,000 and $1,754,000, respectively. All commissions received by the
distributor were passed through to the broker-dealers who sold the contracts.
Directed Services, Inc. is located at 1475 Dunwoody Drive, West Chester,
Pennsylvania 19380-1478.
PERFORMANCE INFORMATION
Performance information for the subaccounts of Separate 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, 1999 to December 31, 1999 were 4.14% and 4.23%,
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 x [((a - b)/(c x d) + 1)^6 - 1]
2
<PAGE>
<PAGE>
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 accumulation unit value
[d] equals the value (maximum offering price) per accumulation unit
value on the last day of the period
Yield on subaccounts of Separate 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 10 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)
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 10 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 Asset Allocation Growth, Diversified Mid-Cap, Growth and Income,
Special Situations, All Cap, Investors, Large Cap Value, ING Global Brand Names,
Prudential Jennison and SP Jennison International Growth subaccounts which had
not commenced operations as of December 31, 1999, 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, 1999 were as
follows:
3
<PAGE>
<PAGE>
Average Annual Total Return for Periods Ending 12/31/99 - Standardized
----------------------------------------------------------------------
<TABLE>
<CAPTION>
From Inception
1 Year 5 Years 10 Years Inception Date
THE GCG TRUST
<S> <C> <C> <C> <C> <C>
Liquid Asset -3.77% n/a n/a 1.67%* 5/1/97
Limited Maturity Bond -7.32% n/a n/a 1.73%* 5/1/97
Global Fixed Income -16.93% n/a n/a -1.11%* 5/1/97
Fully Managed -1.61% n/a n/a 6.75%* 5/1/97
Total Return -5.11% n/a n/a 8.31%* 5/1/97
Asset Allocation Growth n/a n/a n/a n/a 10/2/00
Equity Income -9.15% n/a n/a 5.00%* 5/1/97
Investors n/a n/a n/a 5.22% 2/1/00
Value Equity -7.93% n/a n/a 16.51% 5/1/97
Rising Dividends 7.22% n/a n/a 33.30% 5/1/97
Diversified Mid-Cap n/a n/a n/a n/a 10/2/00
Managed Global 53.98% n/a n/a 37.59%* 5/1/97
Large Cap n/a n/a n/a n/a 2/1/00
All Cap n/a n/a n/a n/a 2/1/00
Research 15.45% n/a n/a 21.79%* 5/1/97
Capital Appreciation 15.86% n/a n/a 20.39%* 5/1/97
Growth and Income n/a n/a n/a n/a 10/2/00
Capital Growth 16.76% n/a n/a 21.91% 5/1/97
Strategic Equity 47.02% n/a n/a 25.36% 5/1/97
Special Situations n/a n/a n/a n/a 10/2/00
Mid-Cap Growth 69.52% n/a n/a 43.76%* 5/1/97
Small Cap 41.46% n/a n/a 34.73% 5/1/97
Growth 68.61% n/a n/a 37.89%* 5/1/97
Real Estate -12.19% n/a n/a -2.02%* 5/1/97
Hard Assets 14.60% n/a n/a -4.69%* 5/1/97
Developing World 52.36% n/a n/a 5.25% 2/18/98
Emerging Markets 75.68% n/a n/a 4.11% 5/1/97
THE PIMCO TRUST
High Yield Bond -5.46%* n/a n/a -2.20%* 5/1/98
StocksPLUS Growth and Income 11.13%* n/a n/a 14.43%* 5/1/98
ING VARIABLE INSURANCE TRUST
ING Global Brand Names n/a n/a n/a n/a 5/1/00
THE PRUDENTIAL SERIES FUND, INC.
Prudential Jennison n/a n/a n/a n/a 5/1/00
SP Jennison International Growth n/a n/a n/a n/a 10/2/00
</TABLE>
-------------------------
* Total return calculation reflects partial waiver of fees and expenses.
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 10 years
(or, if less, up to the life of the Investment portfolio), calculated pursuant
to the formula:
[P(1+T)^n] = ERV
4
<PAGE>
<PAGE>
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 Asset Allocation Growth, Diversified Mid-Cap, Growth and Income,
Special Situations, All Cap, Investors, Large Cap Value, ING Global Brand Names,
Prudential Jennison and SP Jennison International Growth subaccounts which had
not commenced operations as of December 31, 1999, 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, 1999 were as follows:
5
<PAGE>
<PAGE>
Average Annual Total Return for Periods Ending 12/31/99 - Non-Standardized
--------------------------------------------------------------------------
<TABLE>
<CAPTION>
From Inception
1 Year 5 Years 10 Years Inception Date
THE GCG TRUST
<S> <C> <C> <C> <C>
Liquid Asset 3.27% n/a n/a 3.49%* 5/1/97
Limited Maturity Bond -0.28% n/a n/a 3.55%* 5/1/97
Global Fixed Income -9.90% n/a n/a 0.79%* 5/1/97
Fully Managed 5.43% n/a n/a 8.43%* 5/1/97
Total Return 1.93% n/a n/a 9.96%* 5/1/97
Asset Allocation Growth n/a n/a n/a n/a 10/2/00
Equity Income -2.11% n/a n/a 6.73%* 5/1/97
Investors n/a n/a n/a n/a 2/1/00
Value Equity -0.89% n/a n/a 6.95% 5/1/97
Rising Dividends 14.26% n/a n/a 17.97% 5/1/97
Diversified Mid-Cap n/a n/a n/a n/a 10/2/00
Managed Global 61.02% n/a n/a 34.47%* 5/1/97
Large Cap n/a n/a n/a n/a 2/1/00
All Cap n/a n/a n/a n/a 2/1/00
Research 22.49% n/a n/a 23.14%* 5/1/97
Capital Appreciation 22.90% n/a n/a 21.77%* 5/1/97
Growth and Income n/a n/a n/a n/a 10/2/00
Capital Growth 23.80% n/a n/a 23.27% 5/1/97
Strategic Equity 54.06% n/a n/a 26.66% 5/1/97
Special Situations n/a n/a n/a n/a 10/2/00
Mid-Cap Growth 76.56% n/a n/a 44.80%* 5/1/97
Small Cap 48.50% n/a n/a 35.88% 5/1/97
Growth 75.65% n/a n/a 39.00%* 5/1/97
Real Estate -5.15% n/a n/a -0.09%* 5/1/97
Hard Assets 21.64% n/a n/a -2.67%* 5/1/97
Developing World 59.40% n/a n/a 8.32% 2/18/98
Emerging Markets 82.72% n/a n/a 5.87% 5/1/97
THE PIMCO TRUST
High Yield Bond 1.58%* n/a n/a 1.43%* 5/1/98
StocksPLUS Growth and Income 18.17%* n/a n/a 17.70%* 5/1/98
ING VARIABLE INSURANCE TRUST
ING Global Brand Names n/a n/a n/a n/a 5/1/00
THE PRUDENTIAL SERIES FUND, INC.
Prudential Jennison n/a n/a n/a n/a 5/1/00
SP Jennison International Growth n/a n/a n/a n/a 10/2/00
</TABLE>
-------------------------
* Total return calculation reflects partial waiver of fees and expenses.
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
6
<PAGE>
<PAGE>
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 Separate 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 Measurement of Investment Experience. 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
7
<PAGE>
<PAGE>
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
8
<PAGE>
<PAGE>
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 Separate Account NY-B are listed below and
are included in this Statement of Additional Information:
Report of Independent Auditors
Audited Financial Statements
Statement of Net Assets as of December 31, 1999
Statements of Operations for the year ended December 31, 1999
Statements of Changes in Net Assets for the year ended December
31, 1999 and 1998
Notes to Financial Statements
9
<PAGE>
<PAGE>
FINANCIAL STATEMENTS
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY
OF NEW YORK
SEPARATE ACCOUNT NY-B
YEAR ENDED DECEMBER 31, 1999
WITH REPORT OF INDEPENDENT AUDITORS
<PAGE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 1999
TABLE OF CONTENTS
Report of Independent Auditors................................................1
Audited Financial Statements
Statement of Net Assets.......................................................2
Statements of Operations......................................................3
Statements of Changes in Net Assets...........................................9
Notes to Financial Statements................................................15
<PAGE>
Report of Independent Auditors
The Board of Directors and Participants
First Golden American Life Insurance Company of New York
We have audited the accompanying statement of net assets of First Golden
American Life Insurance Company of New York Separate Account NY-B (comprised of
the Limited Maturity Bond, Hard Assets, All-Growth, Real Estate, Fully Managed,
Equity Income, Capital Appreciation, Rising Dividends, Emerging Markets, Value
Equity, Strategic Equity, Small Cap, Managed Global, Liquid Asset, Mid-Cap
Growth, Capital Growth, Research, Total Return, Growth, Global Fixed Income,
Developing World, PIMCO High Yield Bond, PIMCO StocksPLUS Growth and Income,
Appreciation, Select High Growth, Select Growth, Select Balanced, Select
Conservative, Select Income, Smith Barney Money Market, Smith Barney Large Cap
Value, Smith Barney International Equity, and Smith Barney High Income
Divisions) as of December 31, 1999, and the related statements of operations and
the changes in net assets for the periods as disclosed in the financial
statements. 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 auditing standards generally accepted
in the United States. 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, 1999, by
correspondence with the mutual funds' transfer agents. 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 of First Golden American Life
Insurance Company of New York Separate Account NY-B at December 31, 1999, and
the results of its operations and the changes in its net assets for the periods
described above, in conformity with accounting principles generally accepted in
the United States.
Des Moines, Iowa
February 25, 2000
1
<PAGE>
<TABLE>
<CAPTION>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF NET ASSETS
DECEMBER 31, 1999
ASSETS COMBINED
--------------------
<S> <C>
Investments at net asset value:
The GCG Trust:
Limited Maturity Bond Series, 22,837 shares (cost - $244,185)..................... $237,962
Hard Assets Series, 774 shares (cost - $8,531).................................... 9,108
All-Growth Series, 6,500 shares (cost - $114,299)................................. 163,552
Real Estate Series, 3,306 shares (cost - $50,977)................................. 40,071
Fully Managed Series, 35,790 shares (cost - $564,123)............................. 538,639
Equity Income Series, 55,204 shares (cost - $717,983)............................. 620,495
Capital Appreciation Series, 40,527 shares (cost - $770,596)...................... 811,347
Rising Dividends Series, 96,849 shares (cost - $2,257,887)........................ 2,405,727
Emerging Markets Series, 5,794 shares (cost - $56,438)............................ 70,978
Value Equity Series, 24,603 shares (cost - $393,447).............................. 381,841
Strategic Equity Series, 18,852 shares (cost - $275,782).......................... 376,096
Small Cap Series, 52,081 shares (cost - $1,045,933)............................... 1,220,774
Managed Global Series, 49,279 shares (cost - $747,627)............................ 983,600
Liquid Asset Series, 502,868 shares (cost - $502,868)............................. 502,868
Mid-Cap Growth Series, 79,796 shares (cost - $1,635,314).......................... 2,361,168
Capital Growth Series, 71,808 shares (cost - $1,195,412).......................... 1,329,879
Research Series, 175,994 shares (cost - $3,543,016)............................... 4,366,418
Total Return Series, 178,326 shares (cost - $2,840,725)........................... 2,817,746
Growth Series, 234,593 shares (cost - $4,731,376)................................. 6,448,964
Global Fixed Income Series, 3,568 shares (cost - $37,407)......................... 35,899
Developing World Series, 13,271 shares (cost - $142,315).......................... 153,417
PIMCO Variable Insurance Trust:
PIMCO High Yield Bond Portfolio, 4,423 shares (cost - $41,656).................... 40,604
PIMCO StocksPLUS Growth and Income Portfolio, 23,991 shares
(cost - $326,118)............................................................... 325,313
Greenwich Street Series Fund Inc.:
Appreciation Portfolio, 227,675 shares (cost - $4,665,532)........................ 5,325,309
Smith Barney Concert Allocation Series Inc.:
Select High Growth Portfolio, 120,353 shares (cost - $1,448,022).................. 1,889,359
Select Growth Portfolio, 223,709 shares (cost - $2,682,476)....................... 3,176,344
Select Balanced Portfolio, 332,525 shares (cost - $3,858,420)..................... 4,106,503
Select Conservative Portfolio, 165,255 shares (cost - $1,883,414)................. 1,935,109
Select Income Portfolio, 35,410 shares (cost - $403,534).......................... 398,713
Travelers Series Fund Inc.:
Smith Barney Money Market Portfolio, 651,960 shares (cost - $651,960)............. 651,960
Smith Barney Large Cap Value Portfolio, 122,991 shares (cost - $2,438,947)........ 2,399,560
Smith Barney International Equity Portfolio, 30,841 shares (cost - $439,898)...... 708,424
Smith Barney High Income Portfolio, 31,520 shares (cost - $399,165)............... 380,762
--------------------
TOTAL NET ASSETS (cost - $41,115,383)............................................. $47,214,509
====================
See accompanying notes.
2
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1999, EXCEPT AS NOTED
LIMITED
MATURITY HARD ALL- REAL FULLY EQUITY
BOND ASSETS GROWTH ESTATE MANAGED INCOME
DIVISION DIVISION DIVISION DIVISION DIVISION DIVISION
------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NET INVESTMENT INCOME (LOSS)
Income:
Dividends ....................... $8,082 $83 $24,364 $1,664 $20,869 $30,117
Capital gains distributions ..... -- -- 6,417 1,115 18,294 33,255
------------------------------------------------------------------------------------
TOTAL INVESTMENT INCOME .......... 8,082 83 30,781 2,779 39,163 63,372
Expenses:
Mortality and expense risk and
other charges ................. 1,473 230 1,848 565 4,907 6,159
Annual administrative charges ... 36 2 7 2 55 43
Contingent deferred sales charges 27 -- 39 215 -- --
------------------------------------------------------------------------------------
TOTAL EXPENSES ................... 1,536 232 1,894 782 4,962 6,202
------------------------------------------------------------------------------------
NET INVESTMENT INCOME (LOSS) ..... 6,546 (149) 28,887 1,997 34,201 57,170
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Net realized gain (loss) on
investments ................... (171) (3,598) 28,525 (1,532) 711 (1,008)
Net unrealized appreciation
(depreciation) of investments . (5,878) 6,598 35,537 (2,686) (17,827) (77,800)
------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS ........ $497 $2,851 $92,949 $(2,221) $17,085 $(21,638)
====================================================================================
<FN>
(a) Commencement of operations, January 21, 1999.
(b) Commencement of operations, February 24, 1999.
(c) Commencement of operations, June 21, 1999.
(d) Commencement of operations, October 15, 1999.
</FN>
See accompanying notes.
3
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1999, EXCEPT AS NOTED
(CONTINUED)
CAPITAL
APPREC- RISING EMERGING VALUE STRATEGIC SMALL
IATION DIVIDENDS MARKETS EQUITY EQUITY CAP
DIVISION DIVISION DIVISION DIVISION DIVISION DIVISION
-----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NET INVESTMENT INCOME (LOSS)
Income:
Dividends ....................... $14,853 $11,666 $632 $2,171 $401 $22,342
Capital gains distributions ..... 78,395 48,022 -- 4,305 1,042 10,083
-----------------------------------------------------------------------------------
TOTAL INVESTMENT INCOME .......... 93,248 59,688 632 6,476 1,443 32,425
Expenses:
Mortality and expense risk and
other charges ................. 6,093 22,360 442 2,320 2,328 4,952
Annual administrative charges ... 4 138 3 14 17 10
Contingent deferred sales charges 1,782 1,659 -- 160 202 326
-----------------------------------------------------------------------------------
TOTAL EXPENSES ................... 7,879 24,157 445 2,494 2,547 5,288
-----------------------------------------------------------------------------------
NET INVESTMENT INCOME (LOSS) ..... 85,369 35,531 187 3,982 (1,104) 27,137
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Net realized gain (loss) on
investments ................... 5,171 25,624 (108) (3,825) 7,780 34,207
Net unrealized appreciation
(depreciation) of investments . 48,292 142,866 21,886 (4,651) 101,437 152,967
-----------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS ........ $138,832 $204,021 $21,965 $(4,494) $108,113 $214,311
===================================================================================
<FN>
(a) Commencement of operations, January 21, 1999.
(b) Commencement of operations, February 24, 1999.
(c) Commencement of operations, June 21, 1999.
(d) Commencement of operations, October 15, 1999.
</FN>
See accompanying notes.
4
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1999, EXCEPT AS NOTED
(CONTINUED)
MANAGED LIQUID MID-CAP CAPITAL TOTAL
GLOBAL ASSET GROWTH GROWTH RESEARCH RETURN
DIVISION DIVISION DIVISION DIVISION DIVISION DIVISION
--------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NET INVESTMENT INCOME (LOSS)
Income:
Dividends ....................... $47,377 $27,537 $186,537 $69,176 $51,338 $78,562
Capital gains distributions ..... 81,504 -- 10,492 2,087 18,579 10,921
--------------------------------------------------------------------------------------
TOTAL INVESTMENT INCOME .......... 128,881 27,537 197,029 71,263 69,917 89,483
Expenses:
Mortality and expense risk and
other charges ................. 6,545 8,007 17,001 13,527 45,393 31,114
Annual administrative charges ... 46 -- 147 52 274 90
Contingent deferred sales charges 93 8 1,765 11 8,739 3,187
--------------------------------------------------------------------------------------
TOTAL EXPENSES ................... 6,684 8,015 18,913 13,590 54,406 34,391
--------------------------------------------------------------------------------------
NET INVESTMENT INCOME (LOSS) ..... 122,197 19,522 178,116 57,673 15,511 55,092
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Net realized gain (loss) on
investments ................... 12,409 -- 37,274 123,518 49,575 10,698
Net unrealized appreciation
(depreciation) of investments . 218,315 -- 685,536 106,673 685,833 (22,288)
--------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS ........ $352,921 $19,522 $900,926 $287,864 $750,919 $43,502
======================================================================================
<FN>
(a) Commencement of operations, January 21, 1999.
(b) Commencement of operations, February 24, 1999.
(c) Commencement of operations, June 21, 1999.
(d) Commencement of operations, October 15, 1999.
</FN>
See accompanying notes.
5
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1999, EXCEPT AS NOTED
(CONTINUED)
PIMCO
GLOBAL STOCKSPLUS
FIXED DEVELOPING PIMCO HIGH GROWTH AND APPRE-
GROWTH INCOME WORLD YIELD BOND INCOME CIATION
DIVISION DIVISION(a) DIVISION(d) DIVISION(b) DIVISION(c) DIVISION
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NET INVESTMENT INCOME (LOSS)
Income:
Dividends ....................... $65,864 $506 $4,322 $1,650 $15,133 $34,538
Capital gains distributions ..... 5,774 -- -- -- 10,373 77,617
-----------------------------------------------------------------------------------------
TOTAL INVESTMENT INCOME .......... 71,638 506 4,322 1,650 25,506 112,155
Expenses:
Mortality and expense risk and
other charges ................. 26,319 306 141 272 1,204 66,551
Annual administrative charges ... 117 -- 4 2 -- 387
Contingent deferred sales charges 1,785 -- -- -- -- 15,421
-----------------------------------------------------------------------------------------
TOTAL EXPENSES ................... 28,221 306 145 274 1,204 82,359
-----------------------------------------------------------------------------------------
NET INVESTMENT INCOME (LOSS) ..... 43,417 200 4,177 1,376 24,302 29,796
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Net realized gain (loss) on
investments ................... 40,070 (243) 23 (34) (4) 58,669
Net unrealized appreciation
(depreciation) of investments . 1,685,588 (1,508) 11,102 (1,052) (805) 419,137
-----------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS ........ $1,769,075 $(1,551) $15,302 $290 $23,493 $507,602
=========================================================================================
<FN>
(a) Commencement of operations, January 21, 1999.
(b) Commencement of operations, February 24, 1999.
(c) Commencement of operations, June 21, 1999.
(d) Commencement of operations, October 15, 1999.
</FN>
See accompanying notes.
6
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1999, EXCEPT AS NOTED
(CONTINUED)
SELECT
HIGH SELECT SELECT SELECT SELECT
GROWTH GROWTH BALANCED CONSERVATIVE INCOME
DIVISION DIVISION DIVISION DIVISION DIVISION
------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET INVESTMENT INCOME (LOSS)
Income:
Dividends ....................... $8,415 $30,756 $71,263 $42,709 $8,385
Capital gains distributions ..... 25,293 57,588 108,357 26,405 1,781
-----------------------------------------------------------------------
TOTAL INVESTMENT INCOME .......... 33,708 88,344 179,620 69,114 10,166
Expenses:
Mortality and expense risk and
other charges ................. 23,706 41,199 54,134 25,024 4,099
Annual administrative charges ... -- 69 22 105 3
Contingent deferred sales charges 5,005 9,384 2,186 2,986 --
-----------------------------------------------------------------------
TOTAL EXPENSES ................... 28,711 50,652 56,342 28,115 4,102
-----------------------------------------------------------------------
NET INVESTMENT INCOME (LOSS) ..... 4,997 37,692 123,278 40,999 6,064
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Net realized gain (loss) on
investments ................... 60,963 69,352 40,676 5,157 (4)
Net unrealized appreciation
(depreciation) of investments . 328,588 309,860 96,713 7,624 (7,958)
-----------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS ........ $394,548 $416,904 $260,667 $53,780 $(1,898)
=======================================================================
<FN>
(a) Commencement of operations, January 21, 1999.
(b) Commencement of operations, February 24, 1999.
(c) Commencement of operations, June 21, 1999.
(d) Commencement of operations, October 15, 1999.
</FN>
See accompanying notes.
7
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1999, EXCEPT AS NOTED
(CONTINUED)
SMITH SMITH SMITH SMITH
BARNEY BARNEY BARNEY BARNEY
MONEY LARGE CAP INTERNATIONAL HIGH
MARKET VALUE EQUITY INCOME
DIVISION DIVISION DIVISION DIVISION COMBINED
---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET INVESTMENT INCOME (LOSS)
Income:
Dividends ....................... $46,382 $28,748 $1,487 $26,502 $984,431
Capital gains distributions ..... -- 61,645 -- -- 699,344
---------------------------------------------------------------------------
TOTAL INVESTMENT INCOME .......... 46,382 90,393 1,487 26,502 1,683,775
Expenses:
Mortality and expense risk and
other charges ................. 13,599 33,251 6,715 5,122 476,906
Annual administrative charges ... -- 101 43 1 1,794
Contingent deferred sales charges 4,572 4,367 851 1,430 66,200
---------------------------------------------------------------------------
TOTAL EXPENSES ................... 18,171 37,719 7,609 6,553 544,900
---------------------------------------------------------------------------
NET INVESTMENT INCOME (LOSS) ..... 28,211 52,674 (6,122) 19,949 1,138,875
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Net realized gain (loss) on
investments ................... -- 16,020 9,157 (6,820) 618,232
Net unrealized appreciation
(depreciation) of investments . -- (104,858) 277,097 (10,457) 5,083,881
---------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS ........ $28,211 $(36,164) $280,132 $2,672 $6,840,988
===========================================================================
<FN>
(a) Commencement of operations, January 21, 1999.
(b) Commencement of operations, February 24, 1999.
(c) Commencement of operations, June 21, 1999.
(d) Commencement of operations, October 15, 1999.
</FN>
See accompanying notes.
8
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998, EXCEPT AS NOTED
LIMITED
MATURITY HARD ALL- REAL FULLY EQUITY
BOND ASSETS GROWTH ESTATE MANAGED INCOME
DIVISION DIVISION DIVISION DIVISION DIVISION DIVISION
-----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSETS AT JANUARY 1, 1998 ................ $10,053 $4,897 $8,300 $12,171 $33,448 $25,543
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) ............. 3,017 1,171 (8) 5,119 11,005 34,110
Net realized gain (loss) on investments .. 1,392 (82) (177) (57) 140 189
Net unrealized appreciation (depreciation)
of investments ......................... 203 (5,017) 14,043 (8,862) (7,735) (18,339)
-----------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations .............. 4,612 (3,928) 13,858 (3,800) 3,410 15,960
Changes from principal transactions:
Purchase payments ........................ 4,243 10,986 52,783 23,949 75,951 102,392
Contract distributions and terminations .. (5,921) -- (2,091) (1,942) (2,915) (2,978)
Transfer payments from (to) Fixed Account
and other Divisions .................... 12,241 2,411 8,932 9,503 37,266 205,138
-----------------------------------------------------------------------------------
Increase in net assets derived from
principal transactions ................. 10,563 13,397 59,624 31,510 110,302 304,552
-----------------------------------------------------------------------------------
Total increase ............................. 15,175 9,469 73,482 27,710 113,712 320,512
-----------------------------------------------------------------------------------
NET ASSETS AT DECEMBER 31, 1998 .............. 25,228 14,366 81,782 39,881 147,160 346,055
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ............. 6,546 (149) 28,887 1,997 34,201 57,170
Net realized gain (loss) on investments .. (171) (3,598) 28,525 (1,532) 711 (1,008)
Net unrealized appreciation (depreciation)
of investments ......................... (5,878) 6,598 35,537 (2,686) (17,827) (77,800)
-----------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations .............. 497 2,851 92,949 (2,221) 17,085 (21,638)
Changes from principal transactions:
Purchase payments ........................ 19,412 154 212 107 288,781 144,601
Contract distributions and terminations .. (1,897) -- (1,475) (5,274) (12,450) (3,093)
Transfer payments from (to) Fixed Account
and other Divisions .................... 194,722 (8,263) (9,916) 7,578 98,063 154,570
-----------------------------------------------------------------------------------
Increase (decrease) in net assets derived
from principal transactions ............ 212,237 (8,109) (11,179) 2,411 374,394 296,078
-----------------------------------------------------------------------------------
Total increase (decrease) .................. 212,734 (5,258) 81,770 190 391,479 274,440
-----------------------------------------------------------------------------------
NET ASSETS AT DECEMBER 31, 1999 .............. $237,962 $9,108 $163,552 $40,071 $538,639 $620,495
===================================================================================
<FN>
(a) Commencement of operations, February 11, 1998.
(b) Commencement of operations, March 12, 1998.
(c) Commencement of operations, January 21, 1999.
(d) Commencement of operations, February 24, 1999.
(e) Commencement of operations, June 21, 1999.
(f) Commencement of operations, October 15, 1999.
</FN>
See accompanying notes.
9
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998, EXCEPT AS NOTED
(CONTINUED)
CAPITAL RISING EMERGING VALUE STRATEGIC SMALL
APPRECIATION DIVIDENDS MARKETS EQUITY EQUITY CAP
DIVISION DIVISION DIVISION DIVISION DIVISION DIVISION
------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSETS AT JANUARY 1, 1998 ................ $16,177 $166,960 $15,761 $38,518 $18,077 $44,207
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) ............. 10,398 24,107 (229) 1,897 3,094 (1,398)
Net realized gain (loss) on investments .. (1,319) 9,972 (111) (1,535) 43 108
Net unrealized appreciation (depreciation)
of investments ......................... (7,271) (683) (4,156) (3,654) (2,309) 22,839
------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations .............. 1,808 33,396 (4,496) (3,292) 828 21,549
Changes from principal transactions:
Purchase payments ........................ 106,557 502,600 3,608 71,576 -- 79,797
Contract distributions and terminations .. (2,271) (30,903) -- (7,632) -- (3,119)
Transfer payments from (to) Fixed Account
and other Divisions .................... 12,077 142,849 4,120 13,355 36,747 65,610
------------------------------------------------------------------------------------
Increase in net assets derived from
principal transactions ................. 116,363 614,546 7,728 77,299 36,747 142,288
------------------------------------------------------------------------------------
Total increase ............................. 118,171 647,942 3,232 74,007 37,575 163,837
------------------------------------------------------------------------------------
NET ASSETS AT DECEMBER 31, 1998 .............. 134,348 814,902 18,993 112,525 55,652 208,044
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ............. 85,369 35,531 187 3,982 (1,104) 27,137
Net realized gain (loss) on investments .. 5,171 25,624 (108) (3,825) 7,780 34,207
Net unrealized appreciation (depreciation)
of investments ......................... 48,292 142,866 21,886 (4,651) 101,437 152,967
------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations .............. 138,832 204,021 21,965 (4,494) 108,113 214,311
Changes from principal transactions:
Purchase payments ........................ 468,603 833,819 17,090 101,843 38,186 336,813
Contract distributions and terminations .. (35,181) (68,076) (402) (11,027) (3,582) (11,372)
Transfer payments from (to) Fixed Account
and other Divisions .................... 104,745 621,061 13,332 182,994 177,727 472,978
------------------------------------------------------------------------------------
Increase (decrease) in net assets derived
from principal transactions ............ 538,167 1,386,804 30,020 273,810 212,331 798,419
------------------------------------------------------------------------------------
Total increase (decrease) .................. 676,999 1,590,825 51,985 269,316 320,444 1,012,730
------------------------------------------------------------------------------------
NET ASSETS AT DECEMBER 31, 1999 .............. $811,347 $2,405,727 $70,978 $381,841 $376,096 $1,220,774
====================================================================================
<FN>
(a) Commencement of operations, February 11, 1998.
(b) Commencement of operations, March 12, 1998.
(c) Commencement of operations, January 21, 1999.
(d) Commencement of operations, February 24, 1999.
(e) Commencement of operations, June 21, 1999.
(f) Commencement of operations, October 15, 1999.
</FN>
See accompanying notes.
10
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998, EXCEPT AS NOTED
(CONTINUED)
MANAGED LIQUID MID-CAP CAPITAL TOTAL
GLOBAL ASSET GROWTH GROWTH RESEARCH RETURN
DIVISION DIVISION(B) DIVISION DIVISION DIVISION DIVISION
-----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSETS AT JANUARY 1, 1998 ................ $34,636 -- $79,104 $5,148 $259,191 $248,873
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) ............. 5,600 $2,482 25,175 5,173 102,772 77,712
Net realized gain (loss) on investments .. (94) -- 1,857 (2,689) 3,010 682
Net unrealized appreciation (depreciation)
of investments ......................... 21,964 -- 43,328 28,182 141,414 458
-----------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations .............. 27,470 2,482 70,360 30,666 247,196 78,852
Changes from principal transactions:
Purchase payments ........................ 85,280 404,872 165,922 294,490 360,909 512,655
Contract distributions and terminations .. (7,541) (4,052) (9,513) (9,417) (45,655) (22,799)
Transfer payments from (to) Fixed Account
and other Divisions .................... 39,165 (277,715) 492,058 127,530 1,657,534 902,063
-----------------------------------------------------------------------------------
Increase in net assets derived from
principal transactions ................. 116,904 123,105 648,467 412,603 1,972,788 1,391,919
-----------------------------------------------------------------------------------
Total increase ............................. 144,374 125,587 718,827 443,269 2,219,984 1,470,771
-----------------------------------------------------------------------------------
NET ASSETS AT DECEMBER 31, 1998 .............. 179,010 125,587 797,931 448,417 2,479,175 1,719,644
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ............. 122,197 19,522 178,116 57,673 15,511 55,092
Net realized gain (loss) on investments .. 12,409 -- 37,274 123,518 49,575 10,698
Net unrealized appreciation (depreciation)
of investments ......................... 218,315 -- 685,536 106,673 685,833 (22,288)
-----------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations .............. 352,921 19,522 900,926 287,864 750,919 43,502
Changes from principal transactions:
Purchase payments ........................ 205,637 922,298 261,909 914,015 631,122 519,903
Contract distributions and terminations .. (12,035) (22,343) (50,924) (19,737) (190,642) (84,670)
Transfer payments from (to) Fixed Account
and other Divisions .................... 258,067 (542,196) 451,326 (300,680) 695,844 619,367
-----------------------------------------------------------------------------------
Increase (decrease) in net assets derived
from principal transactions ............ 451,669 357,759 662,311 593,598 1,136,324 1,054,600
-----------------------------------------------------------------------------------
Total increase (decrease) .................. 804,590 377,281 1,563,237 881,462 1,887,243 1,098,102
-----------------------------------------------------------------------------------
NET ASSETS AT DECEMBER 31, 1999 .............. $983,600 $502,868 $2,361,168 $1,329,879 $4,366,418 $2,817,746
===================================================================================
<FN>
(a) Commencement of operations, February 11, 1998.
(b) Commencement of operations, March 12, 1998.
(c) Commencement of operations, January 21, 1999.
(d) Commencement of operations, February 24, 1999.
(e) Commencement of operations, June 21, 1999.
(f) Commencement of operations, October 15, 1999.
</FN>
See accompanying notes.
11
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998, EXCEPT AS NOTED
(CONTINUED)
PIMCO
STOCKSPLUS
GLOBAL FIXED DEVELOPING PIMCO HIGH GROWTH AND
GROWTH INCOME WORLD YIELD BOND INCOME APPRECIATION
DIVISION DIVISION(C) DIVISION(F) DIVISION(D) DIVISION(E) DIVISION
-----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSETS AT JANUARY 1, 1998 ................ $40,279 -- -- -- -- $356,552
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) ............. 12,257 -- -- -- -- 76,934
Net realized gain (loss) on investments .. (2,543) -- -- -- -- 1,129
Net unrealized appreciation (depreciation)
of investments ......................... 38,290 -- -- -- -- 251,837
-----------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations .............. 48,004 -- -- -- -- 329,900
Changes from principal transactions:
Purchase payments ........................ 224,415 -- -- -- -- 246,628
Contract distributions and terminations .. (14,318) -- -- -- -- (104,211)
Transfer payments from (to) Fixed Account
and other Divisions .................... 122,959 -- -- -- -- 2,884,568
-----------------------------------------------------------------------------------
Increase in net assets derived from
principal transactions ................. 333,056 -- -- -- -- 3,026,985
-----------------------------------------------------------------------------------
Total increase ............................. 381,060 -- -- -- -- 3,356,885
-----------------------------------------------------------------------------------
NET ASSETS AT DECEMBER 31, 1998 .............. 421,339 -- -- -- -- 3,713,437
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ............. 43,417 $200 $4,177 $1,376 $24,302 29,796
Net realized gain (loss) on investments .. 40,070 (243) 23 (34) (4) 58,669
Net unrealized appreciation (depreciation)
of investments ......................... 1,685,588 (1,508) 11,102 (1,052) (805) 419,137
----------- ----------- ----------- ----------- ----------- -----------
Net increase (decrease) in net assets
resulting from operations .............. 1,769,075 (1,551) 15,302 290 23,493 507,602
Changes from principal transactions:
Purchase payments ........................ 2,761,610 13,873 55,587 3,169 285,521 321,209
Contract distributions and terminations .. (82,730) (467) -- -- (137) (353,244)
Transfer payments from (to) Fixed Account
and other Divisions .................... 1,579,670 24,044 82,528 37,145 16,436 1,136,305
----------- ----------- ----------- ----------- ----------- -----------
Increase (decrease) in net assets derived
from principal transactions ............ 4,258,550 37,450 138,115 40,314 301,820 1,104,270
----------- ----------- ----------- ----------- ----------- -----------
Total increase (decrease) .................. 6,027,625 35,899 153,417 40,604 325,313 1,611,872
----------- ----------- ----------- ----------- ----------- -----------
NET ASSETS AT DECEMBER 31, 1999 .............. $6,448,964 $35,899 $153,417 $40,604 $325,313 $5,325,309
=========== =========== =========== =========== =========== ===========
<FN>
(a) Commencement of operations, February 11, 1998.
(b) Commencement of operations, March 12, 1998.
(c) Commencement of operations, January 21, 1999.
(d) Commencement of operations, February 24, 1999.
(e) Commencement of operations, June 21, 1999.
(f) Commencement of operations, October 15, 1999.
</FN>
See accompanying notes.
12
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998, EXCEPT AS NOTED
(CONTINUED)
SELECT
HIGH SELECT SELECT SELECT SELECT
GROWTH GROWTH BALANCED CONSERVATIVE INCOME
DIVISION DIVISION DIVISION DIVISION DIVISION(a)
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSETS AT JANUARY 1, 1998 ................ $209,696 $700,943 $839,872 $657,048 --
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) ............. (14,742) (12,163) (7,361) 4,218 $(6)
Net realized gain (loss) on investments .. 3,082 4,062 3,647 4,927 18
Net unrealized appreciation (depreciation)
of investments ......................... 114,108 174,548 143,123 36,419 3,137
------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations .............. 102,448 166,447 139,409 45,564 3,149
Changes from principal transactions:
Purchase payments ........................ 29,101 192,819 265,944 30,578 10
Contract distributions and terminations .. (103,262) (81,738) (162,374) (21,156) (1,383)
Transfer payments from (to) Fixed Account
and other Divisions .................... 1,366,959 1,582,676 2,575,782 837,276 155,315
------------------------------------------------------------------------------
Increase in net assets derived from
principal transactions ................. 1,292,798 1,693,757 2,679,352 846,698 153,942
------------------------------------------------------------------------------
Total increase ............................. 1,395,246 1,860,204 2,818,761 892,262 157,091
------------------------------------------------------------------------------
NET ASSETS AT DECEMBER 31, 1998 .............. 1,604,942 2,561,147 3,658,633 1,549,310 157,091
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ............. 4,997 37,692 123,278 40,999 6,064
Net realized gain (loss) on investments .. 60,963 69,352 40,676 5,157 (4)
Net unrealized appreciation (depreciation)
of investments ......................... 328,588 309,860 96,713 7,624 (7,958)
------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations .............. 394,548 416,904 260,667 53,780 (1,898)
Changes from principal transactions:
Purchase payments ........................ 55,479 166,612 64,932 13,232 138
Contract distributions and terminations .. (165,439) (219,182) (89,122) (75,642) (4,004)
Transfer payments from (to) Fixed Account
and other Divisions .................... (171) 250,863 211,393 394,429 247,386
------------------------------------------------------------------------------
Increase (decrease) in net assets derived
from principal transactions ............ (110,131) 198,293 187,203 332,019 243,520
------------------------------------------------------------------------------
Total increase (decrease) .................. 284,417 615,197 447,870 385,799 241,622
------------------------------------------------------------------------------
NET ASSETS AT DECEMBER 31, 1999 .............. $1,889,359 $3,176,344 $4,106,503 $1,935,109 $398,713
==============================================================================
<FN>
(a) Commencement of operations, February 11, 1998.
(b) Commencement of operations, March 12, 1998.
(c) Commencement of operations, January 21, 1999.
(d) Commencement of operations, February 24, 1999.
(e) Commencement of operations, June 21, 1999.
(f) Commencement of operations, October 15, 1999.
</FN>
See accompanying notes.
13
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998, EXCEPT AS NOTED
(CONTINUED)
SMITH
SMITH SMITH BARNEY SMITH
BARNEY BARNEY INTER- BARNEY
MONEY LARGE CAP NATIONAL HIGH
MARKET VALUE EQUITY INCOME
DIVISION DIVISION DIVISION DIVISION COMBINED
------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSETS AT JANUARY 1, 1998 ................ $580,437 $332,970 $81,728 $53,714 $4,874,303
INCREASE IN NET ASSETS
Operations:
Net investment income (loss) ............. 38,681 27,201 (4,401) 6,532 438,347
Net realized gain (loss) on investments .. -- 1,374 297 289 27,611
Net unrealized appreciation (depreciation)
of investments ......................... -- 53,676 (6,646) (9,106) 1,013,791
------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations .............. 38,681 82,251 (10,750) (2,285) 1,479,749
Changes from principal transactions:
Purchase payments ........................ 16,185,163 99,461 44,293 5,132 20,182,114
Contract distributions and terminations .. (1,865) (33,049) (8,720) (18,198) (709,023)
Transfer payments from (to) Fixed Account
and other Divisions .................... (14,516,270) 1,712,477 354,375 305,058 872,059
------------------------------------------------------------------------------
Increase in net assets derived from
principal transactions ................. 1,667,028 1,778,889 389,948 291,992 20,345,150
------------------------------------------------------------------------------
Total increase ............................. 1,705,709 1,861,140 379,198 289,707 21,824,899
------------------------------------------------------------------------------
NET ASSETS AT DECEMBER 31, 1998 .............. 2,286,146 2,194,110 460,926 343,421 26,699,202
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment income (loss) ............. 28,211 52,674 (6,122) 19,949 1,138,875
Net realized gain (loss) on investments .. -- 16,020 9,157 (6,820) 618,232
Net unrealized appreciation (depreciation)
of investments ......................... -- (104,858) 277,097 (10,457) 5,083,881
------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations .............. 28,211 (36,164) 280,132 2,672 6,840,988
Changes from principal transactions:
Purchase payments ........................ 1,227,624 81,924 37,165 32,993 10,825,573
Contract distributions and terminations .. (57,927) (128,005) (17,915) (28,838) (1,756,832)
Transfer payments from (to) Fixed Account
and other Divisions .................... (2,832,094) 287,695 (51,884) 30,514 4,605,578
------------------------------------------------------------------------------
Increase (decrease) in net assets derived
from principal transactions ............ (1,662,397) 241,614 (32,634) 34,669 13,674,319
------------------------------------------------------------------------------
Total increase (decrease) .................. (1,634,186) 205,450 247,498 37,341 20,515,307
------------------------------------------------------------------------------
NET ASSETS AT DECEMBER 31, 1999 .............. $651,960 $2,399,560 $708,424 $380,762 $47,214,509
==============================================================================
<FN>
(a) Commencement of operations, February 11, 1998.
(b) Commencement of operations, March 12, 1998.
(c) Commencement of operations, January 21, 1999.
(d) Commencement of operations, February 24, 1999.
(e) Commencement of operations, June 21, 1999.
(f) Commencement of operations, October 15, 1999.
</FN>
See accompanying notes.
14
</TABLE>
<PAGE>
FIRST GOLDEN AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT NY-B
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
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 First Golden
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, 1999, the Account had, under First Golden's GoldenSelect
Contracts ("DVA Plus"), twenty-three investment divisions: Limited Maturity
Bond, Hard Assets, All-Growth, Real Estate, Fully Managed, Equity Income
(formerly Multiple Allocation), Capital Appreciation, Rising Dividends, Emerging
Markets, Value Equity, Strategic Equity, Small Cap, Managed Global, Liquid
Asset, Mid-Cap Growth, Capital Growth (formerly Growth & Income), Research,
Total Return, Growth (formerly Value + Growth), Global Fixed Income, Developing
World, PIMCO High Yield Bond, and PIMCO StocksPLUS Growth and Income. The
Account also had, under First Golden's 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, 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, PIMCO
Variable Insurance Trust, Greenwich Street Series Fund Inc., Smith Barney
Concert Allocation Series Inc., or Travelers Series Fund Inc. (the "Trusts"). At
December 31, 1999, the Growth Opportunities division was available under
GoldenSelect Contracts but did not have investments.
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:
Equi-Select Series Trust The GCG Trust
Investment Division Investment Division
-------------------------------- ------------------------------------------
OTC Mid-Cap Growth
Research Research
Total Return Total Return
Value + Growth Growth (formerly Value + Growth)
15
<PAGE>
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.
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.
16
<PAGE>
NOTE 4 - PURCHASES AND SALES OF INVESTMENT SECURITIES
The aggregate cost of purchases and proceeds from sales of investments follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
---------------------------------------------------------------------
1999 1998
------------------------------- ---------------------------------
PURCHASES SALES PURCHASES SALES
------------------------------- ---------------------------------
<S> <C> <C> <C> <C>
The GCG Trust:
Limited Maturity Bond Series.......................... $233,217 $14,477 $235,270 $221,658
Hard Assets Series.................................... 5,536 13,808 14,708 134
All-Growth Series..................................... 129,198 111,522 61,539 1,900
Real Estate Series.................................... 10,197 5,821 38,778 2,124
Fully Managed Series.................................. 424,061 15,534 124,010 2,642
Equity Income Series.................................. 362,784 9,699 343,055 4,237
Capital Appreciation Series........................... 790,040 166,600 162,917 36,070
Rising Dividends Series............................... 1,594,116 172,103 719,476 80,558
Emerging Markets Series............................... 30,981 782 7,711 210
Value Equity Series................................... 331,388 53,685 87,808 8,564
Strategic Equity Series............................... 284,056 72,861 40,224 370
Small Cap Series...................................... 1,008,740 183,298 144,977 3,999
Managed Global Series................................. 616,769 43,023 128,677 6,075
Liquid Asset Series................................... 1,562,563 1,185,346 568,535 442,884
Mid-Cap Growth Series................................. 1,029,322 189,550 696,570 22,376
Capital Growth Series................................. 1,595,773 944,593 507,147 89,281
Research Series....................................... 1,448,811 299,087 2,125,108 47,761
Total Return Series................................... 1,461,416 352,870 1,522,048 51,457
Growth Series......................................... 4,493,415 191,652 374,316 28,818
Global Fixed Income Series............................ 42,195 4,545 -- --
Developing World Series............................... 142,412 120 -- --
PIMCO Variable Insurance Trust:
PIMCO High Yield Bond Portfolio....................... 42,460 770 -- --
PIMCO StocksPLUS Growth and Income Portfolio.......... 327,316 1,194 -- --
Greenwich Street Series Fund Inc.:
Appreciation Portfolio................................ 1,564,618 433,804 3,149,672 42,817
Smith Barney Concert Allocation Series Inc.:
Select High Growth Portfolio.......................... 223,352 330,386 1,463,771 184,149
Select Growth Portfolio............................... 689,556 455,948 1,748,031 64,469
Select Balanced Portfolio............................. 763,119 454,372 2,896,438 223,104
Select Conservative Portfolio......................... 486,134 113,678 952,350 101,016
Select Income Portfolio............................... 259,067 9,533 156,208 2,222
Travelers Series Fund Inc.:
Smith Barney Money Market Portfolio................... 1,081,672 2,716,821 10,349,942 8,643,728
Smith Barney Large Cap Value Portfolio................ 439,349 146,409 1,832,568 25,463
Smith Barney International Equity Portfolio........... 54,415 93,549 393,338 7,523
Smith Barney High Income Portfolio.................... 118,610 64,235 339,882 41,154
------------------------------- ---------------------------------
COMBINED................................................. $23,646,658 $8,851,675 $31,185,074 $10,386,763
=============================== =================================
17
</TABLE>
<PAGE>
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
------------------------------------------------------------
1999 1998
---------------------------- ----------------------------
PURCHASES SALES PURCHASES SALES
---------------------------- ----------------------------
<S> <C> <C> <C> <C>
Limited Maturity Bond Division................................ 13,464 845 13,900 13,026
Hard Assets Division.......................................... 326 808 769 --
All-Growth Division........................................... 5,921 6,103 4,825 105
Real Estate Division.......................................... 350 243 1,438 86
Fully Managed Division........................................ 18,110 585 5,510 80
Equity Income Division........................................ 13,318 272 14,526 132
Capital Appreciation Division................................. 27,498 6,167 6,319 1,571
Rising Dividends Division..................................... 64,466 7,512 31,350 3,619
Emerging Markets Division..................................... 3,087 44 1,106 1
Value Equity Division......................................... 19,220 4,356 4,502 464
Strategic Equity Division..................................... 17,663 4,448 2,640 1
Small Cap Division............................................ 51,164 11,215 10,361 265
Managed Global Division....................................... 31,115 2,189 9,472 429
Liquid Asset Division......................................... 105,019 79,947 39,492 30,763
Mid-Cap Growth Division....................................... 31,808 7,834 32,310 1,029
Capital Growth Division....................................... 85,918 49,165 31,543 5,535
Research Division............................................. 61,611 14,370 97,017 2,517
Total Return Division......................................... 79,305 20,563 84,907 3,335
Growth Division............................................... 210,644 11,310 24,811 2,069
Global Fixed Income Division.................................. 3,383 345 -- --
Developing World Division..................................... 13,214 -- -- --
PIMCO High Yield Bond Division................................ 4,011 50 -- --
PIMCO StocksPLUS Growth and Income Division................... 24,782 11 -- --
Appreciation Division......................................... 88,587 24,412 206,044 6,065
Select High Growth Division................................... 15,526 23,775 126,910 15,947
Select Growth Division........................................ 48,429 33,657 149,805 4,774
Select Balanced Division...................................... 50,092 36,248 253,839 19,620
Select Conservative Division.................................. 36,505 8,389 82,952 7,887
Select Income Division........................................ 21,716 529 13,837 123
Smith Barney Money Market Division............................ 100,813 246,386 1,056,277 908,145
Smith Barney Large Cap Value Division......................... 19,242 6,966 96,558 1,398
Smith Barney International Equity Division.................... 3,938 6,242 26,616 367
Smith Barney High Income Division............................. 7,159 4,766 24,173 2,838
---------------------------- ----------------------------
COMBINED...................................................... 1,277,404 619,752 2,453,809 1,032,191
============================ ============================
18
</TABLE>
<PAGE>
NOTE 6 - NET ASSETS
Investments at net asset value at December 31, 1999 consisted of the following:
<TABLE>
<CAPTION>
LIMITED
MATURITY HARD ALL- REAL FULLY
BOND ASSETS GROWTH ESTATE MANAGED
DIVISION DIVISION DIVISION DIVISION DIVISION
--------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Unit transactions................... $232,801 $10,287 $56,874 $44,741 $515,702
Accumulated net investment income
(loss) and net realized gain (loss)
on investments.................... 11,384 (1,756) 57,425 6,236 48,421
Net unrealized appreciation
(depreciation) of investments..... (6,223) 577 49,253 (10,906) (25,484)
--------------------------------------------------------------------------------------
$237,962 $9,108 $163,552 $40,071 $538,639
======================================================================================
</TABLE>
<TABLE>
<CAPTION>
EQUITY CAPITAL RISING EMERGING VALUE
INCOME APPRECIATION DIVIDENDS MARKETS EQUITY
DIVISION DIVISION DIVISION DIVISION DIVISION
--------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Unit transactions................... $625,395 $669,695 $2,159,564 $56,782 $389,883
Accumulated net investment income
(loss) and net realized gain (loss)
on investments.................... 92,588 100,901 98,323 (344) 3,564
Net unrealized appreciation
(depreciation) of investments..... (97,488) 40,751 147,840 14,540 (11,606)
--------------------------------------------------------------------------------------
$620,495 $811,347 $2,405,727 $70,978 $381,841
======================================================================================
</TABLE>
<TABLE>
<CAPTION>
STRATEGIC SMALL MANAGED LIQUID MID-CAP
EQUITY CAP GLOBAL ASSET GROWTH
DIVISION DIVISION DIVISION DIVISION DIVISION
--------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Unit transactions................... $265,204 $986,008 $605,175 $480,864 $1,390,210
Accumulated net investment income
(loss) and net realized gain (loss)
on investments.................... 10,578 59,925 142,452 22,004 245,104
Net unrealized appreciation
(depreciation) of investments..... 100,314 174,841 235,973 -- 725,854
--------------------------------------------------------------------------------------
$376,096 $1,220,774 $983,600 $502,868 $2,361,168
======================================================================================
</TABLE>
<TABLE>
<CAPTION>
CAPITAL GLOBAL FIXED
GROWTH RESEARCH TOTAL RETURN GROWTH INCOME
DIVISION DIVISION DIVISION DIVISION DIVISION
--------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Unit transactions................... $1,011,351 $3,366,266 $2,689,349 $4,638,358 $37,450
Accumulated net investment income
(loss) and net realized gain (loss)
on investments.................... 184,061 176,750 151,376 93,018 (43)
Net unrealized appreciation
(depreciation) of investments..... 134,467 823,402 (22,979) 1,717,588 (1,508)
--------------------------------------------------------------------------------------
$1,329,879 $4,366,418 $2,817,746 $6,448,964 $35,899
======================================================================================
19
</TABLE>
<PAGE>
NOTE 6 - NET ASSETS (CONTINUED)
<TABLE>
<CAPTION>
PIMCO
STOCKSPLUS
DEVELOPING PIMCO HIGH GROWTH AND SELECT
WORLD YIELD BOND INCOME APPRECIATION HIGH GROWTH
DIVISION DIVISION DIVISION DIVISION DIVISION
--------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Unit transactions................... $138,115 $40,314 $301,820 $4,480,078 $1,394,437
Accumulated net investment income
(loss) and net realized gain (loss)
on investments.................... 4,200 1,342 24,298 185,454 53,585
Net unrealized appreciation
(depreciation) of investments..... 11,102 (1,052) (805) 659,777 441,337
--------------------------------------------------------------------------------------
$153,417 $40,604 $325,313 $5,325,309 $1,889,359
======================================================================================
</TABLE>
<TABLE>
<CAPTION>
SMITH
SELECT SELECT SELECT SELECT BARNEY
GROWTH BALANCED CONSERVATIVE INCOME MONEY MARKET
DIVISION DIVISION DIVISION DIVISION DIVISION
--------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Unit transactions................... $2,584,970 $3,699,952 $1,829,563 $397,462 $578,479
Accumulated net investment income
(loss) and net realized gain (loss)
on investments.................... 97,506 158,468 53,851 6,072 73,481
Net unrealized appreciation
(depreciation) of investments..... 493,868 248,083 51,695 (4,821) --
--------------------------------------------------------------------------------------
$3,176,344 $4,106,503 $1,935,109 $398,713 $651,960
======================================================================================
</TABLE>
<TABLE>
<CAPTION>
SMITH SMITH
SMITH BARNEY BARNEY BARNEY
LARGE CAP INTERNATIONAL HIGH
VALUE EQUITY INCOME
DIVISION DIVISION DIVISION COMBINED
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
Unit transactions................... $2,342,686 $441,230 $379,393 $38,840,458
Accumulated net investment income
(loss) and net realized gain (loss)
on investments.................... 96,261 (1,332) 19,772 2,274,925
Net unrealized appreciation
(depreciation) of investments..... (39,387) 268,526 (18,403) 6,099,126
---------------------------------------------------------------------
$2,399,560 $708,424 $380,762 $47,214,509
=====================================================================
20
</TABLE>
<PAGE>
NOTE 7 - UNIT VALUES
Accumulation unit value information for units outstanding, by Contract type, as
of December 31, 1999 follows:
<TABLE>
<CAPTION>
EXTENDED
DIVISION/CONTRACT UNITS UNIT VALUE VALUE
-------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
LIMITED MATURITY BOND
Contracts in accumulation period:
DVA PLUS - Standard 6,379 $17.00 $108,433
DVA PLUS - Annual Ratchet 7,746 16.72 129,529
---------------
237,962
HARD ASSETS
Contracts in accumulation period:
DVA PLUS - Annual Ratchet 525 17.37 9,108
ALL-GROWTH
Contracts in accumulation period:
DVA PLUS - Standard 98 32.46 3,181
DVA PLUS - Annual Ratchet 5,022 31.93 160,371
---------------
163,552
REAL ESTATE
Contracts in accumulation period:
DVA PLUS - Standard 356 20.96 7,463
DVA PLUS - Annual Ratchet 1,581 20.62 32,608
---------------
40,071
FULLY MANAGED
Contracts in accumulation period:
DVA PLUS - Standard 13,633 22.01 300,015
DVA PLUS - Annual Ratchet 11,023 21.65 238,624
---------------
538,639
EQUITY INCOME
Contracts in accumulation period:
DVA PLUS - Standard 12,749 21.83 278,319
DVA PLUS - Annual Ratchet 15,934 21.47 342,176
---------------
620,495
CAPITAL APPRECIATION
Contracts in accumulation period:
DVA PLUS - Standard 11,524 30.46 351,008
DVA PLUS - Annual Ratchet 15,289 30.11 460,339
---------------
811,347
RISING DIVIDENDS
Contracts in accumulation period:
DVA PLUS - Standard 13,823 26.07 360,434
DVA PLUS - Annual Ratchet 79,175 25.83 2,045,293
---------------
2,405,727
EMERGING MARKETS
Contracts in accumulation period:
DVA PLUS - Standard 523 12.01 6,280
DVA PLUS - Annual Ratchet 5,437 11.90 64,698
---------------
70,978
21
</TABLE>
<PAGE>
NOTE 7 - UNIT VALUES (CONTINUED)
<TABLE>
EXTENDED
DIVISION/CONTRACT UNITS UNIT VALUE VALUE
-------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
VALUE EQUITY
Contracts in accumulation period:
DVA PLUS - Standard 5,400 $18.28 $98,702
DVA PLUS - Annual Ratchet 15,606 18.14 283,139
---------------
381,841
STRATEGIC EQUITY
Contracts in accumulation period:
DVA PLUS - Standard 6,034 22.06 133,111
DVA PLUS - Annual Ratchet 11,085 21.92 242,985
---------------
376,096
SMALL CAP
Contracts in accumulation period:
DVA PLUS - Standard 2,466 22.96 56,620
DVA PLUS - Annual Ratchet 51,013 22.82 1,164,154
---------------
1,220,774
MANAGED GLOBAL
Contracts in accumulation period:
DVA PLUS - Standard 9,519 24.23 230,606
DVA PLUS - Annual Ratchet 31,419 23.97 752,994
---------------
983,600
LIQUID ASSET
Contracts in accumulation period:
DVA PLUS - Standard 11,408 15.04 171,572
DVA PLUS - Annual Ratchet 22,393 14.79 331,296
---------------
502,868
MID-CAP GROWTH
Contracts in accumulation period:
DVA PLUS - Standard 5,029 39.97 200,991
DVA PLUS - Annual Ratchet 20,524 39.59 812,641
Empire DVA - Standard 6,860 39.97 274,170
Empire DVA - Annual Ratchet 27,110 39.59 1,073,366
---------------
2,361,168
CAPITAL GROWTH
Contracts in accumulation period:
DVA PLUS - Standard 9,819 21.18 207,943
DVA PLUS - Annual Ratchet 53,276 21.06 1,121,936
---------------
1,329,879
RESEARCH
Contracts in accumulation period:
DVA PLUS - Standard 4,336 28.25 122,494
DVA PLUS - Annual Ratchet 42,718 28.04 1,197,765
Empire DVA - Standard 28,303 28.25 799,572
Empire DVA - Annual Ratchet 80,121 28.04 2,246,587
---------------
4,366,418
22
</TABLE>
<PAGE>
NOTE 7 - UNIT VALUES (CONTINUED)
<TABLE>
<CAPTION>
EXTENDED
DIVISION/CONTRACT UNITS UNIT VALUE VALUE
-------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
TOTAL RETURN
Contracts in accumulation period:
DVA PLUS - Standard 21,350 $18.20 $388,548
DVA PLUS - Annual Ratchet 59,347 18.06 1,071,798
Empire DVA - Standard 11,367 18.20 206,868
Empire DVA - Annual Ratchet 63,706 18.06 1,150,532
---------------
2,817,746
GROWTH
Contracts in accumulation period:
DVA PLUS - Standard 27,730 28.78 798,100
DVA PLUS - Annual Ratchet 197,439 28.62 5,650,864
---------------
6,448,964
GLOBAL FIXED INCOME
Contracts in accumulation period:
DVA PLUS - Standard 822 11.88 9,769
DVA PLUS - Annual Ratchet 2,216 11.79 26,130
---------------
35,899
DEVELOPING WORLD
Contracts in accumulation period:
DVA PLUS - Annual Ratchet 13,214 11.61 153,417
PIMCO HIGH YIELD BOND
Contracts in accumulation period:
DVA PLUS - Standard 1,835 10.27 18,837
DVA PLUS - Annual Ratchet 2,126 10.24 21,767
---------------
40,604
PIMCO STOCKSPLUS GROWTH AND INCOME
Contracts in accumulation period:
DVA PLUS - Standard 1,205 13.16 15,863
DVA PLUS - Annual Ratchet 23,566 13.13 309,450
---------------
325,313
APPRECIATION
Contracts in accumulation period:
Empire DVA - Standard 76,186 18.47 1,406,817
Empire DVA - Annual Ratchet 213,407 18.36 3,918,492
---------------
5,325,309
SELECT HIGH GROWTH
Contracts in accumulation period:
Empire DVA - Standard 23,981 15.54 372,586
Empire DVA - Annual Ratchet 98,054 15.47 1,516,773
---------------
1,889,359
SELECT GROWTH
Contracts in accumulation period:
Empire DVA - Standard 40,969 14.28 584,901
Empire DVA - Annual Ratchet 182,316 14.21 2,591,443
---------------
3,176,344
23
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NOTE 7 - UNIT VALUES (CONTINUED)
EXTENDED
DIVISION/CONTRACT UNITS UNIT VALUE VALUE
------------------------------------------------- --------------------------- --------------------- ----- ---------------
<S> <C> <C> <C>
SELECT BALANCED
Contracts in accumulation period:
Empire DVA - Standard 77,274 $12.72 $982,802
Empire DVA - Annual Ratchet 246,738 12.66 3,123,701
---------------
4,106,503
SELECT CONSERVATIVE
Contracts in accumulation period:
Empire DVA - Standard 49,301 11.95 588,998
Empire DVA - Annual Ratchet 113,214 11.89 1,346,111
---------------
1,935,109
SELECT INCOME
Contracts in accumulation period:
Empire DVA - Standard 22,717 11.44 259,924
Empire DVA - Annual Ratchet 12,184 11.39 138,789
---------------
398,713
SMITH BARNEY MONEY MARKET
Contracts in accumulation period:
Empire DVA - Standard 12,604 11.82 149,030
Empire DVA - Annual Ratchet 42,839 11.74 502,930
---------------
651,960
SMITH BARNEY LARGE CAP VALUE
Contracts in accumulation period:
Empire DVA - Standard 39,627 19.11 757,216
Empire DVA - Annual Ratchet 86,551 18.98 1,642,344
---------------
2,399,560
SMITH BARNEY INTERNATIONAL EQUITY
Contracts in accumulation period:
Empire DVA - Standard 6,006 23.78 142,796
Empire DVA - Annual Ratchet 23,956 23.61 565,628
---------------
708,424
SMITH BARNEY HIGH INCOME
Contracts in accumulation period:
Empire DVA - Standard 10,584 13.84 146,431
Empire DVA - Annual Ratchet 17,055 13.74 234,331
---------------
380,762
------------- ---------------
COMBINED 2,466,742 $47,214,509
============= ===============
24
</TABLE>
<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, 1999 COST 1 VALUE AMOUNT
---------------------------------------------- -------------- ------------ ---------------
<S> <C> <C> <C>
TYPE OF INVESTMENT
Fixed maturities, available for sale:
Bonds:
United States government and governmental
agencies and authorities................ $3,486 $3,398 $3,398
Public utilities........................... 2,030 1,953 1,953
Corporate securities....................... 21,994 21,084 21,084
Mortgage-backed securities................. 1,556 1,548 1,548
Other asset-backed securities.............. 112 112 112
------------- ------------ ---------------
Total fixed maturities, available for sale.... 29,178 28,095 28,095
Short-term investments........................ 2,309 2,309
-------------- ---------------
Total investments............................. $31,487 $30,404
============== ===============
</TABLE>
Note 1: Cost is defined as amortized cost for bonds and short-term investments
adjusted for amortization of premiums and accrual of discounts.
<PAGE>
<PAGE>
SCHEDULE III
SUPPLEMENTARY INSURANCE INFORMATION
(Dollars in thousands)
<TABLE>
<CAPTION>
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F
------------------- ----------- ---------- ---------- ----------- ----------
FUTURE
POLICY
BENEFITS, OTHER
LOSSES, POLICY
DEFERRED CLAIMS CLAIMS INSURANCE
POLICY AND UNEARNED AND PREMIUMS
ACQUISITION LOSS REVENUE BENEFITS AND
SEGMENT COSTS EXPENSES RESERVE PAYABLE CHARGES
-----------------------------------------------------------------------------
POST-MERGER
-----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
YEAR ENDED DECEMBER 31, 1999:
LIFE INSURANCE $3,198 $7,583 -- -- $556
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
</TABLE>
SCHEDULE III
SUPPLEMENTARY INSURANCE INFORMATION
(Dollars in thousands)
<TABLE>
<CAPTION>
COLUMN A COLUMN G COLUMN H COLUMN I COLUMN J COLUMN K
----------------------------- ---------- ----------- --------- ----------
AMORTIZA-
BENEFITS TION OF
CLAIMS, DEFERRED
LOSSES POLICY
NET AND ACQUI- OTHER
NVESTMENT SETTLEMENT SITION OPERATING PREMIUMS
SEGMENT INCOME EXPENSES COSTS EXPENSES WRITTEN
-------------------------------------------------------------------------
POST-MERGER
-------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
YEAR ENDED DECEMBER 31, 1999:
LIFE INSURANCE $2,147 $590 $201 $417 --
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 --
</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 (4)
(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 (3)
(k) Renewal of Revolving Note Payable between First Golden and
SunTrust Bank as of July 31, 2000 and expiring July 31, 2001
(l) Participation Agreement between First Golden American Life
Insurance Company of New York and The Galaxy VIP Fund (4)
(m) Participation Agreement between First Golden American Life
Insurance Company of New York and Prudential Series Fund (4)
(n) Participation Agreement between First Golden American Life
Insurance Company of New York and ING Variable
Insurance Trust (4)
(o) Form of Amended Schedule Page to the Participation
Agreement between First Golden American and Prudential
Series Fund, Inc.
(9) Opinion and Consent of Myles R. Tashman, Esq. (1)
(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) Not applicable
(14) Not applicable
(15) Powers of Attorney
(16) Subsidiaries of ING Groep N.V. (4)
<PAGE>
<PAGE>
(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.
(3) Incorporated by reference to Post-Effective Amendment No. 4 to the
Registration Statement for Separate Account NY-B filed with the
Securities and Exchange Commission on November 1, 1999.
(4) Incorporated by reference to Post-Effective Amendment No. 5 to the
Registration Statement for Separate Account NY-B filed with the
Securities and Exchange Commission on April 26, 2000.
<PAGE>
<PAGE>
ITEM 25: DIRECTORS AND OFFICERS OF THE DEPOSITOR
Principal Positions and Offices
Name Business Address with Depositor
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
Mark A. Tullis ING Insurance Operations Director
5780 Powers Ferry Road
Atlanta, GA 30327-4390
Phillip R. Lowery ING Insurance Operations Director
5780 Powers Ferry Road
Atlanta, GA 30327-4390
David S. Pendergrass ING Insurance Operations Vice President and
5780 Powers Ferry Road Treasurer
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
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 Equitable of Iowa Companies 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.
The subsidiaries of ING, as of December 31, 1999 are incorporated by
reference to the April 26, 2000 filing.
<PAGE>
<PAGE>
Item 27: Number of Contractowners
As of August 31, 2000, there are 257 qualified contract owners and
792 non-qualified contract owners in First Golden American's Separate
Account NY-B.
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
David S. Pendergrass Vice President and Treasurer
ING Insurance Operations
5780 Powers Ferry Road
Atlanta, GA 30327-4390
David L. Jacobson Senior Vice President
(c)
1999 Net
Name of Underwriting Compensation
Principal Discounts and on Brokerage
Underwriter Commissions Redemption Commissions Compensation
----------- ----------- ---------- ----------- ------------
DSI $697,165 $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 this 13th day of
September, 2000.
SEPARATE ACCOUNT NY-B
(Registrant)
By: FIRST GOLDEN AMERICAN LIFE
INSURANCE COMPANY OF NEW YORK
(Depositor)
By: -----------------------------
Barnett Chernow*
President and Director
Attest: /s/ Myles R. Tashman
---------------------
Myles R. Tashman
Executive Vice President, General Counsel
and 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 September 13, 2000.
Signature Title
--------- -----
------------------ President and Director
Barnett Chernow* of Depositor
------------------- Senior Vice President and
E. Robert Koster* Chief Financial Officer
DIRECTORS OF DEPOSITOR
--------------------- ------------------
Myles R. Tashman* Bernard Levitt*
--------------------- ------------------
Michael W. Cunningham* Roger A. Martin*
--------------------- ------------------
Stephen J. Friedman* Andrew Kalinowski*
--------------------- ------------------
Carol V. Coleman* Phillip R. Lowery*
---------------------
Mark A. Tullis*
By: /s/ Myles R. Tashman, Attorney-in-Fact
------------------
Myles R. Tashman
_______________________
*Executed by Myles R. Tashman on behalf of those indicated pursuant to
Power of Attorney.
<PAGE>
<PAGE>
EXHIBIT INDEX
ITEM EXHIBIT PAGE #
8(k) Renewal of Revolving Note Payable btwn FGALIC and
SunTrust Bank EX-99.B8K
8(o) Form of Amended Schedule Page to Participation
Agreement btwn FGALIC and Prudential Series
Fund, Inc. EX-99.B8O
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>
