PERSPECTIVE (R)
FIXED AND VARIABLE ANNUITY
ISSUED BY JACKSON NATIONAL LIFE INSURANCE COMPANY OF NEW YORK AND JNLNY SEPARATE
ACCOUNT I
o Individual, flexible premium deferred annuity
o 4 guaranteed accounts which offer an interest rate that is guaranteed by
Jackson National Life Insurance Company of New York (Jackson National NY)
o Investment divisions which purchase shares of the following series of
mutual funds:
JNL SERIES TRUST
JNL/Alger Growth Series
JNL/Alliance Growth Series
JNL/Eagle Core Equity Series
JNL/Eagle SmallCap Equity Series
JNL/Janus Aggressive Growth Series
JNL/Janus Balanced Series
JNL/Janus Capital Growth Series
JNL/Janus Global Equities Series
JNL/J.P. Morgan Enhanced S&P(R) 500 Stock Index Series
JNL/Putnam Growth Series
JNL/Putnam International Equity Series
JNL/Putnam Midcap Growth Series
JNL/Putnam Value Equity Series
JNL/S&P Conservative Growth Series I
JNL/S&P Moderate Growth Series I
JNL/S&P Aggressive Growth Series I
JNL/S&P Very Aggressive Growth Series I
JNL/S&P Equity Growth Series I
JNL/S&P Equity Aggressive Growth Series I
PPM America/JNL Balanced Series
PPM America/JNL High Yield Bond Series
PPM America/JNL Money Market Series
Salomon Brothers/JNL Global Bond Series
Salomon Brothers/JNL U.S. Government & Quality Bond Series
T. Rowe Price/JNL Established Growth Series
T. Rowe Price/JNL Mid-Cap Growth Series
T. Rowe Price/JNL Value Series
Please read this prospectus before you purchase a Perspective Fixed and Variable
Annuity. It contains important information about the contract that you ought to
know before investing. You should keep this prospectus on file for future
reference.
To learn more about the Perspective Fixed and Variable Annuity contract, you can
obtain a free copy of the Statement of Additional Information (SAI) dated May 1,
2000, by calling Jackson National NY at (800) 599-5651 or by writing Jackson
National NY at: Annuity Service Center, P.O. Box 0809, Denver, Colorado
80263-0809. The SAI has been filed with the Securities and Exchange Commission
(SEC) and is legally a part of this prospectus. The Table of Contents of the SAI
appears at the end of this prospectus. The SEC maintains a website
(http://www.sec.gov) that contains the SAI, material incorporated by reference
and other information regarding registrants that file electronically with the
SEC.
THE SEC HAS NOT APPROVED OR DISAPPROVED THE PERSPECTIVE FIXED AND VARIABLE
ANNUITY OR PASSED UPON THE ADEQUACY OF THIS PROSPECTUS. IT IS A CRIMINAL OFFENSE
TO REPRESENT OTHERWISE.
NOT FDIC INSURED
MAY LOSE VALUE
NO BANK GUARANTEE
MAY 1, 2000
<PAGE>
TABLE OF CONTENTS
Key Facts .................................................................1
Fee Table .................................................................3
The Annuity Contract ......................................................6
The Company ...............................................................6
The Guaranteed Accounts ...................................................6
The Separate Account ......................................................6
Investment Divisions ......................................................7
Contract Charges ..........................................................9
Purchases .................................................................10
Transfers .................................................................11
Access to Your Money ......................................................12
Income Payments (The Income Phase) ........................................12
Death Benefit .............................................................14
Taxes .....................................................................14
Other Information .........................................................16
Table of Contents of the Statement of Additional Information ..............18
Appendix A ................................................................A-1
<PAGE>
KEY FACTS
ANNUITY SERVICE CENTER: 1 (800) 599-5651
Mail Address: P.O. Box 0809, Denver, Colorado 80263-0809
Delivery Address: 8055 East Tufts Avenue, Second Floor,
Denver, Colorado 80237
INSTITUTIONAL MARKETING
GROUP SERVICE CENTER: 1 (800) 777-7779
Mail Address: P.O. Box 30386, Lansing, Michigan 48909-9692
Delivery Address: 5901 Executive Drive, Lansing, Michigan
48911 Attn: IMG
HOME OFFICE: 2900 Westchester Avenue, Purchase, New York
10577
THE ANNUITY CONTRACT The fixed and variable annuity contract
offered by Jackson National NY provides a
means for investing on a tax-deferred basis
in the guaranteed accounts of Jackson
National NY and the investment divisions.
The contract is intended for retirement
savings or other long-term investment
purposes and provides for a death benefit
and income options.
INVESTMENT OPTIONS You can put money into any of the guaranteed
accounts and/or the investment divisions but
you may not put your money in more than
eighteen of the investment options plus the
guaranteed accounts during the life of your
contract.
EXPENSES The contract has insurance features and
investment features, and there are costs
related to each.
Jackson National NY makes a deduction for
its insurance charges which is equal to
1.40% of the daily value of the contracts
invested in the investment divisions. During
the accumulation phase, Jackson National NY
deducts a $30 annual contract maintenance
charge from your contract.
If you take your money out of the contract,
Jackson National NY may assess a withdrawal
charge. The withdrawal charge starts at 7%
in the first year and declines 1% a year to
0% after 7 years.
There are also investment charges which
range, on an annual basis, from .20% to
1.18% of the average daily value of the
series, depending on the series.
<PAGE>
PURCHASES Under most circumstances, you can buy a
contract for $5,000 or more ($2,000 or more
for a qualified plan contract). You can add
$500 ($50 under the automatic payment plan)
or more at any time during the accumulation
phase.
ACCESS TO YOUR MONEY You can take money out of your contract
during the accumulation phase. Withdrawals
may be subject to a withdrawal charge. You
may also have to pay income tax and a tax
penalty on any money you take out.
INCOME PAYMENTS You may choose to receive regular income
from your annuity. During the income phase,
you have the same investment choices you had
during the accumulation phase.
DEATH BENEFIT If you die before moving to the income
phase, the person you have chosen as your
beneficiary will receive a death benefit.
FREE LOOK You may return your contract to the selling
agent or to Jackson National NY within
twenty days after receiving it. Jackson
National NY will return the contract value
in the investment portfolios plus any fees
and expenses deducted from the premium
allocated to the investment portfolios plus
the full amount of premium you allocated to
the guaranteed accounts. We will determine
the contract value in the investment
portfolios as of the date you mail the
contract to us or the date you return it to
the selling agent. Jackson National NY will
return premium payments where required by
law.
TAXES The Internal Revenue Code provides that you
will not be taxed on the earnings on the
money held in your contract until you take
money out (this is referred to as
tax-deferral). There are different rules as
to how you will be taxed depending on how
you take the money out and whether your
contract is non-qualified or purchased as
part of a qualified plan.
<PAGE>
FEE TABLE
OWNER TRANSACTION EXPENSES1
Withdrawal Charge (as a percentage of premium payments):
Contribution Year of Premium Payment 1 2 3 4 5 6 7 Thereafter
Charge 7% 6% 5% 4% 3% 2% 1% 0%
Transfer Fee:
$25 for each transfer in excess of 15 in a contract year
Contract Maintenance Charge:
$30 per contract per year
SEPARATE ACCOUNT ANNUAL EXPENSES (as a percentage of average account value)
Mortality and Expense Risk Charges 1.25%
Administration Charge .15%
-----
Total Separate Account Annual Expenses 1.40%
SERIES ANNUAL EXPENSES
(as a percentage of the series average net assets)
<TABLE>
<CAPTION>
Management
and Total Series
Administrative Other Annual
Fee Expenses Expenses
- ----------------------------------------------------------------- --------------- ------------- --------------
<S> <C> <C> <C>
JNL/Alger Growth Series ......................................... 1.07% 0% 1.07%
JNL/Alliance Growth Series ...................................... .88% 0% .88%
JNL/Eagle Core Equity Series .................................... .99% 0% .99%
JNL/Eagle SmallCap Equity Series ................................ 1.05% 0% 1.05%
JNL/Janus Aggressive Growth Series .............................. 1.01% 0% 1.01%
JNL/Janus Balanced Series ....................................... 1.05% 0% 1.05%
JNL/Janus Capital Growth Series ................................. 1.03% 0% 1.03%
JNL/Janus Global Equities Series ................................ 1.06% 0% 1.06%
JNL/J.P. Morgan Enhanced S&P 500(R)Stock Index Series ........... .90% 0% .90%
JNL/Putnam Growth Series ........................................ .97% 0% .97%
JNL/Putnam International Equity Series .......................... 1.18% 0% 1.18%
JNL/Putnam Midcap Growth Series ................................. 1.05% 0% 1.05%
JNL/Putnam Value Equity Series .................................. .98% 0% .98%
JNL/S&P Conservative Growth Series I* ........................... .20% 0% .20%
JNL/S&P Moderate Growth Series I* ............................... .20% 0% .20%
JNL/S&P Aggressive Growth Series I* ............................. .20% 0% .20%
JNL/S&P Very Aggressive Growth Series I* ........................ .20% 0% .20%
JNL/S&P Equity Growth Series I* ................................. .20% 0% .20%
JNL/S&P Equity Aggressive Growth Series I* ...................... .20% 0% .20%
PPM America/JNL Balanced Series ................................. .82% 0% .82%
PPM America/JNL High Yield Bond Series .......................... .82% 0% .82%
PPM America/JNL Money Market Series ............................. .70% 0% .70%
Salomon Brothers/JNL Global Bond Series ......................... .95% 0% .95%
Salomon Brothers/JNL U.S. Government & Quality Bond Series ...... .80% 0% .80%
T. Rowe Price/JNL Established Growth Series ..................... .93% 0% .93%
T. Rowe Price/JNL Mid-Cap Growth Series ......................... 1.03% 0% 1.03%
T. Rowe Price/JNL Value Series .................................. 1.00% 0% 1.00%
- -----------------------------------------------------------------------------------------------------
</TABLE>
Certain Series pay Jackson National Financial Services, LLC, the adviser, an
Administrative Fee of .10% for certain services provided to the JNL Series Trust
by Jackson National Financial Services, LLC. The JNL/S&P Series do not pay an
Administrative Fee. The Total Series Annual Expenses reflect the inclusion of
the Administrative Fee.
- --------
1 See "Contract Charges"
<PAGE>
* Underlying Series Expenses. The expenses shown above are the annual operating
expenses for the JNL/S&P Series. Because the JNL/S&P Series invest in other
Series of the JNL Series Trust, the JNL/S&P Series will indirectly bear their
pro rata share of fees and expenses of the underlying Series in addition to the
expenses shown.
The total annual operating expenses for each JNL/S&P Series (including both the
annual operating expenses for the JNL/S&P Series and the annual operating
expenses for the underlying investment divisions) could range from .90% to
1.38%. The table below shows estimated total annual operating expenses for each
of the JNL/S&P Series based on the pro rata share of expenses that the JNL/S&P
Series would bear if they invested in a hypothetical mix of underlying
investment divisions. The adviser believes the expenses shown below to be a
likely approximation of the expenses the JNL/S&P Series will incur based on the
actual mix of underlying investment divisions. The expenses shown below include
both the annual operating expenses for the JNL/S&P Series and the annual
operating expenses for the underlying investment divisions. The actual expenses
of each JNL/S&P Series will be based on the actual mix of underlying investment
divisions in which it invests. The actual expenses may be greater or less than
those shown.
JNL/S&P Conservative Growth Series I......................... 1.144%
JNL/S&P Moderate Growth Series I............................. 1.163%
JNL/S&P Aggressive Growth Series I........................... 1.193%
JNL/S&P Very Aggressive Growth Series I...................... 1.200%
JNL/S&P Equity Growth Series I............................... 1.208%
JNL/S&P Equity Aggressive Growth Series I.................... 1.204%
EXAMPLES. You would pay the following expenses on a $1,000 investment, assuming
a 5% annual return on assets:
(a) if you surrender your contract at the end of each time period;
(b) if you do not surrender your contract.
<TABLE>
<CAPTION>
Time Periods
- -------------------------------------------------------------------------------- ------- --------- -------- ---------
1 3 5 10
year years years years
- -------------------------------------------------------------------------------- ------- --------- -------- ---------
<S> <C> <C> <C> <C>
JNL/Alger Growth Division (a) $ 25 $ 78 $133 $283
(b) 95 128 163 283
JNL/Alliance Growth Division (a) 23 72 123 263
(b) 93 122 153 263
JNL/Eagle Core Equity Division (a) 24 75 129 275
(b) 94 125 159 275
JNL/Eagle SmallCap Equity Division (a) 25 77 132 281
(b) 95 127 162 281
JNL/Janus Aggressive Growth Division (a) 25 76 130 277
(b) 95 126 160 277
JNL/Janus Balanced Division (a) 25 77 132 281
(b) 95 127 162 281
JNL/Janus Capital Growth Division (a) 25 76 131 279
(b) 95 126 161 279
JNL/Janus Global Equities Division (a) 25 77 132 282
(b) 95 127 162 282
JNL/J.P. Morgan Enhanced S&P(R)500 Stock Index Division (a) 23 72 123 263
(b) 93 122 153 263
JNL/Putnam Growth Division (a) 24 75 128 273
(b) 94 125 158 273
JNL/Putnam International Equity Division (a) 26 81 138 293
(b) 96 131 168 293
JNL/Putnam Midcap Growth Division (a) 25 77 132 281
(b) 95 127 162 281
JNL/Putnam Value Equity Division (a) 24 75 128 274
(b) 94 125 158 274
JNL/S&P Conservative Growth Division I (a) 16 51 88 192
(b) 86 101 118 192
JNL/S&P Moderate Growth Division I (a) 16 51 88 192
(b) 86 101 118 192
JNL/S&P Aggressive Growth Division I (a) 16 51 88 192
(b) 86 101 118 192
JNL/S&P Very Aggressive Growth Division I (a) 16 51 88 192
(b) 86 101 118 192
JNL/S&P Equity Growth Division I (a) 16 51 88 192
(b) 86 101 118 192
JNL/S&P Equity Aggressive Growth Division I (a) 16 51 88 192
(b) 86 101 118 192
PPM America/JNL Balanced Division (a) 23 70 120 257
(b) 93 120 150 257
PPM America/JNL High Yield Bond Division (a) 23 70 120 257
(b) 93 120 150 257
PPM America/JNL Money Market Division (a) 22 66 114 245
(b) 92 116 144 245
Salomon Brothers/JNL Global Bond Division (a) 24 74 127 271
(b) 94 124 157 271
Salomon Brothers/JNL U.S. Government & Quality Bond Division (a) 23 69 119 255
(b) 93 119 149 255
T. Rowe Price/JNL Established Growth Division (a) 24 73 126 269
(b) 94 123 156 269
T. Rowe Price/JNL Mid-Cap Growth Division (a) 25 76 131 279
(b) 95 126 161 279
T. Rowe Price/JNL Value Division (a) 25 75 129 276
(b) 95 125 159 276
- -------------------------------------------------------------------------------- ------- --------- -------- ---------
</TABLE>
<PAGE>
EXPLANATION OF FEE TABLE AND EXAMPLES. The purpose of the Fee Table and Examples
is to assist you in understanding the various costs and expenses that you will
bear directly or indirectly. The Fee Table reflects the expenses of the separate
account and the series. Premium taxes may also apply.
The Examples reflect the contract maintenance charge which is determined by
dividing the total amount of such charges expected to be collected during the
year by the total estimated average net assets of the investment divisions.
THE EXAMPLES DO NOT REPRESENT PAST OR FUTURE EXPENSES. THE ACTUAL EXPENSES THAT
YOU INCUR MAY BE GREATER OR LESS THAN THOSE SHOWN.
FINANCIAL STATEMENTS. An accumulation unit value history is contained in
Appendix A.
You can find the following financial statements in the SAI:
o the financial statements of the Separate Account for the year ended
December 31, 1999
o the financial statements of Jackson National NY for the year ended December
31, 1999
The Separate Account's financial statements for the year ended December 31,
1999, and the financial statements of Jackson National NY for the year ended
December 31, 1999, have been audited by KPMG LLP, independent accountants.
THE ANNUITY CONTRACT
The fixed and variable annuity contract offered by Jackson National NY is a
contract between you, the owner, and Jackson National NY, an insurance company.
The contract provides a means for investing on a tax-deferred basis in
guaranteed accounts and investment divisions. The contract is intended for
retirement savings or other long-term investment purposes and provides for a
death benefit and guaranteed income options.
The contract, like all deferred annuity contracts, has two phases: (1) the
accumulation phase, and (2) the income phase. During the accumulation phase,
earnings accumulate on a tax-deferred basis and are taxed as income when you
make a withdrawal. Under qualified plans earnings also accumulate on a
tax-deferred basis.
The contract offers guaranteed accounts. The guaranteed accounts offer an
interest rate that is guaranteed by Jackson National NY for the duration of the
guaranteed account period. While your money is in a guaranteed account, the
interest your money earns and your principal are guaranteed by Jackson National
NY. The value of a guaranteed account may be reduced if you make a withdrawal
prior to the end of the guaranteed account period, but will never be less than
the premium payments accumulated at 3% per year. If you choose to have your
annuity payments come from the guaranteed accounts, your payments will remain
level throughout the entire income phase.
The contract also offers investment divisions. The investment divisions are
designed to offer a higher return than the guaranteed accounts. HOWEVER, THIS IS
NOT GUARANTEED. IT IS POSSIBLE FOR YOU TO LOSE YOUR MONEY. If you put money in
the investment divisions, the amount of money you are able to accumulate in your
contract during the accumulation phase depends upon the performance of the
investment divisions you select. The amount of the income payments you receive
during the income phase also will depend, in part, on the performance of the
investment divisions you choose for the income phase.
As the owner, you can exercise all the rights under the contract. You and your
spouse can be joint owners. You can assign the contract at any time during your
lifetime but Jackson National NY will not be bound until it receives written
notice of the assignment. An assignment may be a taxable event.
THE COMPANY
Jackson National NY is a stock life insurance company organized under the laws
of the state of New York in July 1995. Its legal domicile and principal business
address is 2900 Westchester Avenue, Purchase, New York 10577. Jackson National
NY is admitted to conduct life insurance and annuity business in the states of
New York and Michigan. Jackson National NY is ultimately a wholly-owned
subsidiary of Prudential plc (London, England).
Jackson National NY has responsibility for administration of the contracts and
the Separate Account. We maintain records of the name, address, taxpayer
identification number and other pertinent information for each contract owner
and the number and type of contracts issued to each contract owner, and records
with respect to the value of each contract.
THE GUARANTEED ACCOUNTS
If you select a guaranteed account, your money will be placed with Jackson
National NY's other assets. The guaranteed accounts are not registered with the
SEC and the SEC does not review the information we provide to you about the
guaranteed accounts. Your contract contains a more complete description of the
guaranteed accounts.
THE SEPARATE ACCOUNT
The JNLNY Separate Account I was established by Jackson National NY on September
12, 1997, pursuant to the provisions of New York law, as a segregated asset
account of the company. The separate account meets the definition of a "separate
account" under the federal securities laws and is registered with the SEC as a
unit investment trust under the Investment Company Act of 1940, as amended.
The assets of the separate account legally belong to Jackson National NY and the
obligations under the contracts are obligations of Jackson National NY. However,
the contract assets in the separate account are not chargeable with liabilities
arising out of any other business Jackson National NY may conduct. All of the
income, gains and losses resulting from these assets are credited to or charged
against the contracts and not against any other contracts Jackson National NY
may issue.
The separate account is divided into investment divisions. Jackson National NY
does not guarantee the investment performance of the separate account or the
investment divisions.
INVESTMENT DIVISIONS
You can put money in any or all of the investment divisions; however, you may
not allocate your money to more than eighteen investment options plus the
guaranteed accounts during the life of your contract. The investment divisions
purchase shares of the following series of mutual funds:
JNL Series Trust
JNL/Alger Growth Series
JNL/Alliance Growth Series
JNL/Eagle Core Equity Series
JNL/Eagle SmallCap Equity Series
JNL/Janus Aggressive Growth Series
JNL/Janus Balanced Series
JNL/Janus Capital Growth Series
JNL/Janus Global Equities Series
JNL/J.P. Morgan Enhanced S&P 500(R) Stock Index Series
JNL/Putnam Growth Series
JNL/Putnam International Equity Series
JNL/Putnam Midcap Growth Series
JNL/Putnam Value Equity Series
JNL/S&P Conservative Growth Series I
JNL/S&P Moderate Growth Series I
JNL/S&P Aggressive Growth Series I
JNL/S&P Very Aggressive Growth Series I
JNL/S&P Equity Growth Series I
JNL/S&P Equity Aggressive Growth Series I
PPM America/JNL Balanced Series
PPM America/JNL High Yield Bond Series
PPM America/JNL Money Market Series
Salomon Brothers/JNL Global Bond Series
Salomon Brothers/JNL U.S. Government & Quality Bond Series
T. Rowe Price/JNL Established Growth Series
T. Rowe Price/JNL Mid-Cap Growth Series
T. Rowe Price/JNL Value Series
The series are described in the attached prospectus for the JNL Series Trust.
Jackson National Financial Services, LLC serves as investment adviser for all of
the series. The sub-adviser for each series is listed in the following table:
Sub-Adviser Series
- ----------- ------
Alliance Capital Management L.P. JNL/Alliance Growth Series
Fred Alger Management, Inc. JNL/Alger Growth Series
Eagle Asset Management, Inc. JNL/Eagle Core Equity Series
JNL/Eagle SmallCap Equity Series
Janus Capital Corporation JNL/Janus Aggressive Growth Series
JNL/Janus Balanced Series
JNL/Janus Capital Growth Series
JNL/Janus Global Equities Series
J.P. Morgan Investment Management Inc. JNL/J.P. Morgan Enhanced S&P 500(R)
Stock Index Series
Putnam Investment Management, Inc. JNL/Putnam Growth Series
JNL/Putnam International Equity Series
JNL/Putnam Midcap Growth Series
JNL/Putnam Value Equity Series
Standard & Poor's Investment
Advisory Services, Inc. JNL/S&P Conservative Growth Series I
JNL/S&P Moderate Growth Series I
JNL/S&P Aggressive Growth Series I
JNL/S&P Very Aggressive Growth
Series I
JNL/S&P Equity Growth Series I
JNL/S&P Equity Aggressive Growth
Series I
PPM America, Inc. PPM America/JNL Balanced Series
PPM America/JNL High Yield Bond Series
PPM America/JNL Money Market Series
Salomon Brothers Asset Management Inc Salomon Brothers/JNL Global Bond
Series
Salomon Brothers/JNL U.S. Government &
Quality Bond Series
T. Rowe Price Associates, Inc. T. Rowe Price/JNL Established Growth
Series
T. Rowe Price/JNL Mid-Cap Growth
Series
T. Rowe Price/JNL Value Series
The investment objectives and policies of certain of the investment divisions
are similar to the investment objectives and policies of other mutual funds that
certain of the investment sub-advisers manage. Although the objectives and
policies may be similar, the investment results of the investment division may
be higher or lower than the result of such other mutual funds. We cannot
guarantee, and make no representation, that the investment results of similar
funds will be comparable even though the funds have the same investment
advisers.
An investment division's performance may be affected by risks specific to
certain types of investments, such as foreign securities, derivative
investments, non-investment grade debt securities, initial public offerings
(IPOs) or companies with relatively small market capitalizations. IPOs and other
investment techniques may have a magnified performance impact on an investment
division with a small asset base. An investment division may not experience
similar performance as its assets grow.
Depending on market conditions, you can make or lose money in any of the
investment divisions. You should read the prospectus for the JNL Series Trust
carefully before investing. Additional investment divisions may be available in
the future.
VOTING RIGHTS. To the extent required by law, Jackson National NY will obtain
from you and other owners of the contracts instructions as to how to vote when
the series solicits proxies in conjunction with a vote of shareholders. When
Jackson National NY receives instructions, we will vote all the shares Jackson
National NY owns in proportion to those instructions.
SUBSTITUTION. Jackson National NY may be required to substitute an investment
division with another division. We will not do this without any required
approval of the SEC. Jackson National NY will give you notice of such
transactions.
CONTRACT CHARGES
There are charges and other expenses associated with the contracts that reduce
the return on your investment in the contract. These charges may be a lesser
amount where required by state law or as described below, but will not be
increased. These charges and expenses are:
INSURANCE CHARGES. Each day Jackson National NY makes a deduction for its
insurance charges. We do this as part of our calculation of the value of the
accumulation units and annuity units. On an annual basis, this charge equals
1.40% of the daily value of the contracts invested in an investment division,
after expenses have been deducted.
This charge is for the mortality risks, expense risks and administrative
expenses assumed by Jackson National NY. The mortality risks that Jackson
National NY assumes arise from our obligations under the contracts:
o to make income payments for the life of the annuitant during the income phase;
o to waive the withdrawal charge in the event of your death; and o to provide
both a standard and an enhanced death benefit prior to the income date.
The expense risk that Jackson National NY assumes is the risk that our actual
cost of administering the contracts and the investment divisions will exceed the
amount that we receive from the administration charge and the contract
maintenance charge.
CONTRACT MAINTENANCE CHARGE. During the accumulation phase, Jackson National NY
deducts a $30 annual contract maintenance charge on each anniversary of the date
on which your contract was issued. If you make a complete withdrawal from your
contract, the contract maintenance charge will also be deducted. This charge is
for administrative expenses.
Jackson National NY will not deduct this charge, if when the deduction is to be
made, the value of your contract is $50,000 or more. Jackson National NY may
discontinue this practice at any time.
TRANSFER FEE. A transfer fee of $25 will apply to transfers in excess of 15 in a
contract year. Jackson National NY may waive the transfer fee in connection with
pre-authorized automatic transfer programs, or may charge a lesser fee where
required by state law.
WITHDRAWAL CHARGE. During the accumulation phase, you can make withdrawals from
your contract.
o At any time during the accumulation phase, you may withdraw premiums which
are not subject to a withdrawal charge (premiums in your annuity for seven
years or longer and not previously withdrawn).
o Once every year, you may withdraw the greater of earnings or 10% of
premiums paid (not yet withdrawn).
Withdrawals in excess of that will be charged a withdrawal charge starting at 7%
in the first year and declining 1% a year to 0% after 7 years. The withdrawal
charge compensates us for costs associated with selling the contracts.
For purposes of the withdrawal charge, Jackson National NY treats withdrawals as
coming from the oldest premium payment first. If you make a full withdrawal, the
withdrawal charge is based on premiums remaining in the contract. If you
withdraw only part of the value of your contract, we deduct the withdrawal
charge from the remaining value in your contract.
Note: For tax purposes, withdrawals are considered to have come from the last
money into the contract. Thus, for tax purposes, earnings are considered to come
out first.
Jackson National NY does not assess the withdrawal charge on any payments paid
out as (1) income payments, (2) death benefits, or (3) withdrawals necessary to
satisfy the minimum distribution requirements of the Internal Revenue Code.
Jackson National NY may reduce or eliminate the amount of the withdrawal charge
when the contract is sold under circumstances which reduce its sales expense.
Some examples are: the purchase of a contract by a large group of individuals or
an existing relationship between Jackson National NY and a prospective
purchaser. Jackson National NY may not deduct a withdrawal charge under a
contract issued to an officer, director, agent or employee of Jackson National
NY or any of its affiliates.
OTHER EXPENSES. Jackson National NY pays the operating expenses of the Separate
Account.
There are deductions from and expenses paid out of the assets of the series.
These expenses are described in the attached prospectus for the JNL Series
Trust.
PREMIUM TAXES. Some governmental entities charge premium taxes or other similar
taxes. Jackson National NY is responsible for the payment of these taxes and may
make a deduction from the value of the contract for them. Premium taxes
generally range from 0% to 4% depending on the state. New York does not
currently impose a premium tax on annuity premiums.
INCOME TAXES. Jackson National NY will make a deduction from the contract for
any income taxes which it incurs because of the contract. Currently, we are not
making any such deduction.
DISTRIBUTION OF CONTRACTS. Jackson National Life Distributors, Inc. is located
at 401 Wilshire Boulevard, Suite 1200, Santa Monica, California 90401 and serves
as the distributor of the contracts. Jackson National Life Distributors, Inc.
and Jackson National NY are wholly-owned subsidiaries of Jackson National Life
Insurance Company.
Commissions will be paid to broker-dealers who sell the contracts. While
commissions may vary, they are not expected to exceed 8% of any premium payment.
Under certain circumstances, Jackson National NY may pay bonuses, overrides, and
marketing allowances, in addition to the standard commissions. While overrides
may vary, they are not expected to exceed .25% of any premium payment. Jackson
National NY may under certain circumstances where permitted by applicable law,
pay a bonus to a contract purchaser to the extent the broker-dealer waives its
commission. Jackson National NY may use any of its corporate assets to cover the
cost of distribution, including any profit from the contract insurance charges.
PURCHASES
MINIMUM INITIAL PREMIUM:
o $5,000 under most circumstances
o $2,000 for a qualified plan contract
o The maximum we accept without our prior approval is $1 million.
MINIMUM ADDITIONAL PREMIUMS:
o $500
o $50 under the automatic payment plan
o You can pay additional premiums at any time during the accumulation phase.
The minimum that you may allocate to a guaranteed account or investment division
is $100. There is a $100 minimum balance requirement for each guaranteed account
and investment division.
When you purchase a contract, Jackson National NY will allocate your premium to
one or more of the guaranteed accounts and/or the investment divisions you have
selected. Your allocations must be in whole percentages ranging from 0% to 100%.
Jackson National NY will allocate additional premiums in the same way unless you
tell us otherwise.
There may be more than eighteen investment options available under the contract;
however, you may not allocate your money to more than eighteen investment
options plus the guaranteed accounts during the life of your contract.
Jackson National NY will issue your contract and allocate your first premium
within 2 business days after we receive your first premium and all information
required by us for purchase of a contract. If we do not receive all of the
required information, we will contact you to get the necessary information. If
for some reason Jackson National NY is unable to complete this process within 5
business days, we will either return your money or get your permission to keep
it until we receive all of the required information.
The Jackson National NY business day closes when the New York Stock Exchange
closes, usually 4:00 p.m. Eastern time.
ACCUMULATION UNITS. The contract value allocated to the investment divisions
will go up or down depending on the performance of the divisions. In order to
keep track of the value of your contract, Jackson National NY uses a unit of
measure called an accumulation unit. (An accumulation unit is similar to a share
of a mutual fund.) During the income phase it is called an annuity unit.
Every business day Jackson National NY determines the value of an accumulation
unit for each of the investment divisions. This is done by:
1. determining the total amount of money invested in the particular
investment division;
2. subtracting any insurance charges and any other charges, such as
taxes;
3. dividing this amount by the number of outstanding accumulation units.
The value of an accumulation unit may go up or down from day to day.
When you make a premium payment, Jackson National NY credits your contract with
accumulation units. The number of accumulation units credited is determined at
the close of Jackson National NY's business day by dividing the amount of the
premium allocated to any investment division by the value of the accumulation
unit for that investment division.
TRANSFERS
You can transfer money among the guaranteed accounts and the investment
divisions during the accumulation phase. During the income phase, you can
transfer money between investment divisions.
You can make 15 transfers every year during the accumulation phase without
charge. The minimum amount that you can transfer is $100 (unless the transfer is
made under a pre-authorized automatic transfer program). If the remaining value
in a guaranteed account or investment division would be less than $100 after a
transfer, you must transfer the entire value or you may not make the transfer.
TELEPHONE TRANSACTIONS. You may make transfers by telephone, unless you elect
not to have this privilege. When authorizing a transfer, you must complete your
telephone call by the close of Jackson National NY's business day (usually 4:00
p.m. Eastern time) in order to receive that day's accumulation unit value for an
investment division.
Jackson National NY has procedures which are designed to provide reasonable
assurance that telephone authorizations are genuine. Our procedures include
requesting identifying information and tape recording telephone communications.
Jackson National NY and its affiliates disclaim all liability for any claim,
loss or expense resulting from any alleged error or mistake in connection with a
telephone transfer which was not properly authorized by you. However, if Jackson
National NY fails to employ reasonable procedures to ensure that all telephone
transfers are properly authorized, we may be held liable for such losses.
Jackson National NY reserves the right to modify or discontinue at any time and
without notice the acceptance of instructions from someone other than you and/or
the telephone transfer privilege.
ACCESS TO YOUR MONEY
You can have access to the money in your contract:
o by making either a partial or complete withdrawal, or
o by electing to receive income payments.
Your beneficiary can have access to the money in your contract when a death
benefit is paid.
When you make a complete withdrawal you will receive:
1. the value of the contract on the day you made the withdrawal;
2. less any premium tax;
3. less any contract maintenance charge; and
4. less any withdrawal charge.
Except in connection with the systematic withdrawal program, you must withdraw
at least $500 or, if less, the entire amount in the guaranteed account or
investment division from which you are making the withdrawal. After your
withdrawal, you must have at least $100 left in the guaranteed account or
investment division.
Your withdrawal request must be in writing. Jackson National will accept
withdrawal requests submitted via facsimile. There are risks associated with not
requiring original signatures in order to disburse contract holder monies.
INCOME TAXES, TAX PENALTIES AND CERTAIN RESTRICTIONS MAY APPLY TO ANY WITHDRAWAL
YOU MAKE.
There are limitations on withdrawals from qualified plans. See "Taxes."
SYSTEMATIC WITHDRAWAL PROGRAM. You can arrange to have money automatically sent
to you periodically while your contract is still in the accumulation phase. You
will have to pay taxes on money you receive. In addition, withdrawals you make
before you reach 59 1/2 may be subject to a 10% tax penalty.
We reserve the right to charge a fee for participation or to discontinue
offering this program in the future.
SUSPENSION OF WITHDRAWALS OR TRANSFERS. Jackson National NY may be required to
suspend or delay withdrawals or transfers from an investment division when:
a) the New York Stock Exchange is closed (other than customary weekend and
holiday closings);
b) trading on the New York Stock Exchange is restricted;
c) an emergency exists so that it is not reasonably practicable to dispose of
securities in the Separate Account or determine the division value of its
assets; or,
d) the SEC, by order, may permit for the protection of owners.
The applicable rules and regulations of the SEC will govern whether the
conditions described in (b) and/or (c) exist.
Jackson National NY has reserved the right to defer payment for a withdrawal or
transfer from the guaranteed accounts for the period permitted by law, but not
more than six months.
INCOME PAYMENTS (THE INCOME PHASE)
The income phase occurs when you begin receiving regular payments from your
contract. The income date is the month and year in which those payments begin.
The income date must be at least one year after your contract is issued. You can
choose the income date and an income option. The income options are described
below.
If you do not choose an income option, we will assume that you selected Option 3
which provides a life annuity with 120 months of guaranteed payments.
You can change the income date or income option at any time before the income
date. You must give us 7 days notice. Income payments must begin by your 90th
birthday under a non-qualified contract (or an earlier date under a qualified
contract if required by law).
At the income date, you can choose whether payments will come from the
guaranteed accounts, the investment divisions or both. Unless you tell us
otherwise, your income payments will be based on the investment allocations that
were in place on the income date.
You can choose to have income payments made monthly, quarterly, semi-annually,
or annually. However, if you have less than $2,000 to apply toward an income
option and state law permits, Jackson National NY may provide your payment in a
single lump sum. Likewise, if your first income payment would be less than $20
and state law permits, Jackson National NY may set the frequency of payments so
that the first payment would be at least $20.
INCOME PAYMENTS FROM INVESTMENT DIVISIONS. If you choose to have any portion of
your income payments come from the investment division(s), the dollar amount of
your payment will depend upon three things:
1. the value of your contract in the investment division(s) on the income
date;
2. the 3% assumed investment rate used in the annuity table for the
contract; and
3. the performance of the investment divisions you selected.
Jackson National NY calculates the dollar amount of the first income payment
that you receive from the investment divisions. We then use that amount to
determine the number of annuity units that you hold in each investment division.
The amount of each subsequent income payment is determined by multiplying the
number of annuity units that you hold in an investment division by the annuity
unit value for that investment division.
The number of annuity units that you hold in each investment division does not
change unless you reallocate your contract value among the investment divisions.
The annuity unit value of each investment division will vary based on the
investment performance of the series. If the actual investment performance
exactly matches the assumed rate at all times, the amount of each income payment
will remain equal. If the actual investment performance exceeds the assumed
rate, your income payments will increase. Similarly, if the actual investment
performance is less than the assumed rate, your income payments will decrease.
INCOME OPTIONS. The annuitant is the person whose life we look to when we make
income payments. (Each description assumes that you are the owner and
annuitant.)
Option 1 - Life Income. This income option provides monthly payments for
your life.
Option 2 - Joint and Survivor Annuity. This income option provides monthly
payments for your life and for the life of another person (usually your spouse)
selected by you.
Option 3 - Life Annuity With 120 or 240 Monthly Payments Guaranteed. This
income option provides monthly payments for the annuitant's life, but with
payments continuing to you or your beneficiary, as applicable, for the remainder
of 10 or 20 years (as you select) if the annuitant dies before the end of the
selected period. If the beneficiary does not want to receive the payments, a
single lump sum may be requested, which will be equal to the present value of
the remaining payments (as of the date of proof of death) discounted at the
assumed investment rate for a variable annuity payout option.
Option 4 - Income for a Specified Period. This income option provides
monthly payments for any number of years from 5 to 30. However, you may elect to
receive a single lump sum payment which will be equal to the present value of
the remaining payments (as of the date of proof of death) discounted at the
assumed investment rate for a variable annuity payout option.
Additional Options - Other income options may be made available by Jackson
National NY.
DEATH BENEFIT
The death benefit is calculated as of the date we receive complete claim forms
and proof of death from the beneficiary of record.
DEATH OF OWNER BEFORE THE INCOME DATE. If you die before moving to the income
phase, the person you have chosen as your beneficiary will receive a death
benefit. If you have a joint owner, the death benefit will be paid when the
first joint owner dies and the surviving joint owner will be treated as the
beneficiary. Any other beneficiary designated will be treated as a contingent
beneficiary. A contingent beneficiary is entitled to receive payment only after
the beneficiary dies.
The death benefit equals the greatest of:
1. current contract value;
2. the total premiums paid prior to your death, minus the sum of:
a. withdrawals and withdrawal charges, and
b. premium taxes;
3. the greatest anniversary value prior to your 86th birthday. The
anniversary value is the contract value on the first day of a
contract year, less any withdrawals and withdrawal charges, plus any
additional premiums since that day.
The entire death benefit must be paid within 5 years of the date of death unless
the beneficiary elects to have the death benefit payable under an income option.
The death benefit payable under an income option must be paid over the
beneficiary's lifetime or for a period not extending beyond the beneficiary's
life expectancy. Payments must begin within one year of the date of death.
Unless the beneficiary chooses to receive the death benefit in a single sum, the
beneficiary must elect an income option within the 60 day period beginning with
the date Jackson National NY receives proof of death. If the beneficiary chooses
to receive the death benefit in a single sum and all the necessary requirements
are met, Jackson National NY will pay the death benefit within 7 days. If the
beneficiary is your spouse, he/she can continue the contract in his/her own name
at the then current contract value.
DEATH OF OWNER ON OR AFTER THE INCOME DATE. If you or a joint owner die on or
after the income date, any remaining payments under the income option elected
will continue at least as rapidly as under the method of distribution in effect
at the date of death.
DEATH OF ANNUITANT. If the annuitant is not an owner or joint owner and the
annuitant dies before the income date, you can name a new annuitant. If you do
not name a new annuitant within 30 days of the death of the annuitant, you will
become the annuitant. However, if the owner is a non-natural person (for
example, a corporation), then the death of the annuitant will be treated as the
death of the owner, and a new annuitant may not be named.
If the annuitant dies on or after the income date, any remaining payments will
be as provided for in the income option selected. Any remaining payments will be
paid at least as rapidly as under the method of distribution in effect at the
annuitant's death.
TAXES
THE FOLLOWING IS GENERAL INFORMATION AND IS NOT INTENDED AS TAX ADVICE TO ANY
INDIVIDUAL. YOU SHOULD CONSULT YOUR OWN TAX ADVISER. A FURTHER DISCUSSION
REGARDING TAXES IS INCLUDED IN THE SAI.
The Internal Revenue Code (Code) provides that you will not be taxed on the
earnings on the money held in your contract until you take money out (this is
referred to as the tax-deferral that is provided by the contract or the
qualified plan). There are different rules as to how you will be taxed depending
on how you take the money out and the type of contract you have (non-qualified
or qualified).
NON-QUALIFIED CONTRACTS - GENERAL TAXATION. You will not be taxed on increases
in the value of your contract until a distribution (either as a withdrawal or as
an income payment) occurs. When you make a withdrawal you are taxed on the
amount of the withdrawal that is earnings. For income payments, a portion of
each income payment is treated as a partial return of your premium and will not
be taxed. The remaining portion of the income payment will be treated as
ordinary income. How the income payment is divided between taxable and
non-taxable portions depends on the period over which income payments are
expected to be made. Income payments received after you have received all of
your investment in the contract are treated as income.
If a non-qualified contract is owned by a non-natural person (e.g., corporation
or certain other entities other than a trust holding the contract as an agent
for a natural person), the contract will generally not be treated as an annuity
for tax purposes.
QUALIFIED AND NON-QUALIFIED CONTRACTS. If you purchase the contract as an
individual and not under any pension plan, specially sponsored program or an
individual retirement annuity, your contract is referred to as a non-qualified
contract.
If you purchase the contract under a pension plan, specially sponsored program,
or an individual retirement annuity, your contract is referred to as a qualified
contract. Examples of qualified plans are: Individual Retirement Annuities
(IRAs), Tax-Sheltered Annuities (sometimes referred to as 403(b) contracts), and
pension and profit-sharing plans, which include 401(k) plans and H.R. 10 Plans.
A qualified contract will not provide any necessary or additional tax deferral
if it is used to fund a qualified plan that is tax deferred. However, the
contract has features and benefits other than tax deferral that may make it an
appropriate investment for a qualified plan. You should consult your tax adviser
regarding these features and benefits prior to purchasing a qualified contract.
WITHDRAWALS - NON-QUALIFIED CONTRACTS. If you make a withdrawal from your
contract, the Code generally treats the withdrawal as first coming from earnings
and then from your premium payments. Withdrawn earnings are includible in
income. Additional information is provided in the SAI
The Code also provides that any amount received under an annuity contract which
is included in income may be subject to a 10% penalty. Some withdrawals will be
exempt from the penalty. They include any amounts: (1) paid on or after the
taxpayer reaches age 59 1/2; (2) paid after you die; (3) paid if the taxpayer
becomes totally disabled (as that term is defined in the Code); (4) paid in a
series of substantially equal payments made annually (or more frequently) for
life or a period not exceeding life expectancy; (5) paid under an immediate
annuity; or (6) which come from premiums made prior to August 14, 1982.
WITHDRAWALS - QUALIFIED CONTRACTS. There are special rules that govern qualified
contracts. We have provided an additional discussion in the SAI.
WITHDRAWALS - TAX-SHELTERED ANNUITIES. The Code limits the withdrawal of amounts
attributable to purchase payments made under a salary reduction agreement from
Tax-Sheltered Annuities. Withdrawals can only be made when an owner: (1) reaches
age 59 1/2; (2) leaves his/her job; (3) dies; (4) becomes disabled (as that term
is defined in the Code); or (5) in the case of hardship. However, in the case of
hardship, the owner can only withdraw the premium and not any earnings.
WITHDRAWALS - ROTH IRAS. Beginning in 1998, individuals may purchase a new type
of non-deductible IRA, known as a Roth IRA. Qualified distributions from Roth
IRAs are entirely federal income tax free. A qualified distribution requires
that the individual has held the Roth IRA for at least five years and, in
addition, that the distribution is made either after the individual reaches age
59 1/2, on account of the individual's death or disability, or as qualified
first-time home purchase, subject to $10,000 lifetime maximum, for the
individual, or for a spouse, child, grandchild, or ancestor.
WITHDRAWALS - INVESTMENT ADVISER FEES. The Internal Revenue Service has, through
a series of Private Letter Rulings, held that the payment of investment adviser
fees from an IRA or a Tax-Sheltered Annuity is permissible under certain
circumstances and will not be considered a distribution for income tax purposes.
The Rulings require that in order to receive this favorable tax treatment, the
annuity contract must, under a written agreement, be solely liable (not jointly
with the contract owner) for payment of the adviser's fee and the fee must
actually be paid from the annuity contract to the adviser. Withdrawals from
non-qualified contracts for the payment of investment adviser fees will be
considered taxable distributions from the contract.
DEATH BENEFITS. Any death benefits paid under the contract are taxable to the
beneficiary. The rules governing the taxation of payments from an annuity
contract, as discussed above, generally apply to the payment of death benefits
and depend on whether the death benefits are paid as a lump sum or as annuity
payments. Estate taxes may also apply.
ASSIGNMENT. An assignment may be a taxable event. If the contract is issued
pursuant to a qualified plan, there may be limitations on your ability to assign
the contract.
DIVERSIFICATION. The Code provides that the underlying investments for a
variable annuity must satisfy certain diversification requirements in order to
be treated as an annuity contract. Jackson National NY believes that the
underlying investments are being managed so as to comply with these
requirements.
OWNER CONTROL. Neither the Code nor the Treasury Regulations issued to date
provide guidance as to the circumstances under which you, because of the degree
of control you exercise over the underlying investments, and not Jackson
National NY would be considered the owner of the shares of the investment
divisions. If you are considered to be the owner of the shares, it will result
in the loss of the favorable tax treatment for the contract.
It is unknown to what extent owners are permitted to select investment
divisions, to make transfers among the investment divisions or the number and
type of investment divisions owners may select from without being considered the
owner of the shares.
If any guidance is provided which is considered a new position, then the
guidance would generally be applied prospectively. However, if such guidance is
considered not to be a new position, it may be applied retroactively. This would
mean that you, as the owner of the contract, could be treated as the owner of
the investment divisions. Due to the uncertainty in this area, Jackson National
NY reserves the right to modify the contract in an attempt to maintain favorable
tax treatment.
OTHER INFORMATION
DOLLAR COST AVERAGING. You can arrange to automatically have a regular amount of
money periodically transferred into the investment divisions from the guaranteed
accounts or any of the other investment divisions. This theoretically gives you
a lower average cost per unit over time than you would receive if you made a one
time purchase. The more volatile investment divisions may not result in lower
average costs and such divisions may not be an appropriate source of dollar cost
averaging transfers in volatile markets. Certain restrictions may apply.
Jackson National NY does not currently charge for participation in this program.
We may do so in the future.
REBALANCING. You can arrange to have Jackson National NY automatically
reallocate money between investment divisions periodically to keep the blend you
select.
Jackson National NY does not currently charge for participation in this program.
We may do so in the future.
FREE LOOK. You may return your contract to the selling agent or Jackson National
NY within twenty days after receiving it. Jackson National NY will return the
contract value in the investment divisions plus any fees and expenses deducted
from the premiums allocated to the investment divisions plus the full amount of
premiums you allocated to the guaranteed accounts. We will determine the
contract value in the investment divisions as of the date you mail the contract
to us or the date you return it to the selling agent. Jackson National NY will
return premium payments where required by law.
ADVERTISING. From time to time, Jackson National NY may advertise several types
of performance for the investment divisions.
o Total return is the overall change in the value of an investment in an
investment division over a given period of time.
o Standardized average annual total return is calculated in accordance
with SEC guidelines.
o Non-standardized total return may be for periods other than those
required or may otherwise differ from standardized average annual
total return. For example, if a series has been in existence longer
than the investment division, we may show non-standardized performance
for periods that begin on the inception date of the series, rather
than the inception date of the investment division.
o Yield refers to the income generated by an investment over a given period
of time.
Performance will be calculated by determining the percentage change in the value
of an accumulation unit by dividing the increase (decrease) for that unit by the
value of the accumulation unit at the beginning of the period. Performance will
reflect the deduction of the insurance charges and may reflect the deduction of
the contract maintenance charge and withdrawal charge. The deduction of the
contract maintenance and/or the withdrawal charge would reduce the percentage
increase or make greater any percentage decrease.
MARKET TIMING AND ASSET ALLOCATION SERVICES. Market timing and asset allocation
services must comply with Jackson National NY's administrative systems, rules
and procedures.
MODIFICATION OF THE CONTRACT. Only the President, Vice President, Secretary or
Assistant Secretary of Jackson National NY may approve a change to or waive a
provision of the contract. Any change or waiver must be in writing. Jackson
National NY may change the terms of the contract in order to comply with changes
in applicable law, or otherwise as deemed necessary by Jackson National NY.
LEGAL PROCEEDINGS.
There are no material legal proceedings, other than ordinary routine litigation
incidental to the business, to which Jackson National Life Insurance Company
NY is a party.
QUESTIONS. If you have questions about your contract, you may call or write to
us at:
o Jackson National Life NY Annuity Service Center: (800) 599-5651, P.O. Box
0809, Denver, Colorado 80263-0809
o Institutional Marketing Group Service Center: (800) 777-7779, P.O. Box
30386, Lansing, Michigan 48909-9692.
<PAGE>
TABLE OF CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION
General Information and History .......................................... 2
Services ................................................................. 2
Purchase of Securities Being Offered ..................................... 3
Underwriters ............................................................. 3
Calculation of Performance ............................................... 3
Additional Tax Information ...............................................10
Income Payments; Net Investment Factor ...................................20
Financial Statements .....................................................22
<PAGE>
APPENDIX A
CONDENSED FINANCIAL INFORMATION
Accumulation Unit Values
The following table shows accumulation unit values at the beginning and end of
the periods indicated as well as the number of accumulation units outstanding
for each division as of the end of the periods indicated. This information has
been taken from the Separate Account's financial statements. The Separate
Account's financial statements for the period ended December 31, 1999 have been
audited by KPMG LLP, independent accountants. The Separate Account's financial
statements for the period ended December 31, 1998, have been audited by
PricewaterhouseCoopers LLP, independent accountants. This information should be
read together with the Separate Account's financial statements and related notes
which are in the SAI.
INVESTMENT PORTFOLIOS DECEMBER 31, DECEMBER 31,
1999 1998 (A)
- --------------------------------------------------------------------------------
JNL/Alger Growth Division
Accumulation unit value:
Beginning of period 10.74 $10.00
End of period 14.17 $10.74
Accumulation units outstanding
at the end of period 587,023 3,613
JNL/Alliance Growth Division
Accumulation unit value:
Beginning of period N/A(b) N/A(b)
End of period N/A(b) N/A(b)
Accumulation units outstanding
at the end of period N/A(b) N/A(b)
JNL/Eagle Core Equity Division
Accumulation unit value:
Beginning of period 10.00 N/A(b)
End of period 11.81 N/A(b)
Accumulation units outstanding
at the end of period 71,996 N/A(b)
JNL/Eagle SmallCap Equity Division
Accumulation unit value:
Beginning of period 10.00 N/A(b)
End of period 12.28 N/A(b)
Accumulation units outstanding
at the end of period 75,042 N/A(b)
JNL/Janus Aggressive Growth Division
Accumulation unit value:
Beginning of period 10.00 $10.00
End of period 16.90 $10.00
Accumulation units outstanding
at the end of period 875,270 0
<PAGE>
INVESTMENT PORTFOLIOS DECEMBER 31, DECEMBER 31,
1999 1998 (A)
- --------------------------------------------------------------------------------
JNL/Janus Balanced Division
Accumulation unit value:
Beginning of period N/A(b) N/A(b)
End of period N/A(b) N/A(b)
Accumulation units outstanding
at the end of period N/A(b) N/A(b)
JNL/Janus Capital Growth Division
Accumulation unit value:
Beginning of period 11.34 $10.00
End of period 25.05 $11.34
Accumulation units outstanding
at the end of period 640,394 398
JNL/Janus Global Equities Division
Accumulation unit value:
Beginning of period 10.61 $10.00
End of period 17.21 $10.61
Accumulation units outstanding
at the end of period 289,871 2,772
JNL/Putnam Growth Division
Accumulation unit value:
Beginning of period 10.85 $10.00
End of period 13.85 $10.85
Accumulation units outstanding
at the end of period 423,138 0
JNL/Putnam International Equity Division (c)
Accumulation unit value:
Beginning of period 10.15 $10.00
End of period 13.23 $10.15
Accumulation units outstanding
at the end of period 106,235 0
JNL/Putnam Midcap Growth Division
Accumulation unit value:
Beginning of period N/A(b) N/A(b)
End of period N/A(b) N/A(b)
Accumulation units outstanding
at the end of period N/A(b) N/A(b)
<PAGE>
INVESTMENT DIVISIONS DECEMBER 31, DECEMBER 31,
1999 1998 (A)
- --------------------------------------------------------------------------------
JNL/Putnam Value Equity Division
Accumulation unit value:
Beginning of period 9.98 $10.00
End of period 9.74 $9.98
Accumulation units outstanding
at the end of the period 541,720 991
JNL/S&P Conservative Growth Division I
Accumulation unit value:
Beginning of period 10.00 N/A(b)
End of period 11.00 N/A(b)
Accumulation units outstanding
at the end of period 112,158 N/A(b)
JNL/S&P Moderate Growth Division I
Accumulation unit value:
Beginning of period 10.00 N/A(b)
End of period 11.76 N/A(b)
Accumulation units outstanding
at the end of period 107,947 N/A(b)
JNL/S&P Aggressive Growth Division I
Accumulation unit value:
Beginning of period 10.00 N/A(b)
End of period 12.11 N/A(b)
Accumulation units outstanding
at the end of period 99,418 N/A(b)
JNL/S&P Very Aggressive Growth Division I
Accumulation unit value:
Beginning of period 10.00 N/A(b)
End of period 12.80 N/A(b)
Accumulation units outstanding
at the end of period 15,526 N/A(b)
JNL/S&P Equity Growth Division I
Accumulation unit value:
Beginning of period 10.00 N/A(b)
End of period 13.23 N/A(b)
Accumulation units outstanding
at the end of period 110,742 N/A(b)
JNL/S&P Equity Aggressive Growth Division I
Accumulation unit value:
Beginning of period 10.00 N/A(b)
End of period 13.37 N/A(b)
Accumulation units outstanding
at the end of period 47,070 N/A(b)
PPM America/JNL Balanced Division
Accumulation unit value:
Beginning of period 10.00 $10.00
End of period 9.86 $10.00
Accumulation units outstanding
at the end of period 189,390 0
PPM America/JNL High Yield Bond Division
Accumulation unit value:
Beginning of period 10.02 $10.00
End of period 9.99 $10.02
Accumulation units outstanding
at the end of period 183,384 1,014
<PAGE>
INVESTMENT DIVISIONS DECEMBER 31, DECEMBER 31,
1999 1998 (A)
- --------------------------------------------------------------------------------
PPM America/JNL Money Market Division
Accumulation unit value:
Beginning of period 10.02 $10.00
End of period 10.33 $10.02
Accumulation units outstanding
at the end of period 110,543 200
Salomon Brothers/JNL Global Bond Division
Accumulation unit value:
Beginning of period 10.00 $10.00
End of period 10.11 $10.00
Accumulation units outstanding
at the end of the period 53,100 0
Salomon Brothers/JNL U.S. Government &
Quality Bond Division
Accumulation unit value:
Beginning of period 10.09 $10.00
End of period 9.70 $10.09
Accumulation units outstanding
at the end of period 157,802 1,005
T. Rowe Price/JNL Established Growth Division
Accumulation unit value:
Beginning of period 10.00 $10.00
End of period 12.50 $10.00
Accumulation units outstanding
at the end of period 268,215 0
T. Rowe Price/JNL Mid-Cap Growth Division
Accumulation unit value:
Beginning of period 10.95 $10.00
End of period 12.97 $10.95
Accumulation units outstanding
at the end of period 170,064 0
T. Rowe Price/JNL Value Division
Accumulation unit value:
Beginning of period N/A(b) N/A(b)
End of period N/A(b) N/A(b)
Accumulation units outstanding
at the end of period N/A(b) N/A(b)
(a) The Separate Account commenced operations on November 27, 1998.
(b) These investment divisions had not commenced operations as of the date
indicated.
(c) Prior to May 1, 2000, the JNL/Putnam International Equity Division was the
T. Rowe Price/JNL International Equity Investment Division and the
management fee was 1.08%.
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
MAY 1, 2000
INDIVIDUAL DEFERRED FIXED AND VARIABLE ANNUITY CONTRACTS
ISSUED BY THE JNLNY SEPARATE ACCOUNT I
OF JACKSON NATIONAL LIFE INSURANCE COMPANY OF NEW YORK
This Statement of Additional Information is not a prospectus. It contains
information in addition to and more detailed than set forth in the Prospectus
and should be read in conjunction with the Prospectus dated May 1, 2000. The
Prospectus may be obtained from Jackson National Life Insurance Company of New
York by writing P.O. Box 378002, Denver, Colorado 80237-8002, or calling
1-800-599-5651. Not all investment divisions described in this SAI may be
available for investment.
TABLE OF CONTENTS
PAGE
General Information and History...............................................2
Services......................................................................2
Purchase of Securities Being Offered..........................................3
Underwriters..................................................................3
Calculation of Performance....................................................3
Additional Tax Information...................................................10
Income Payments; Net Investment Factor ......................................20
Financial Statements ........................................................22
<PAGE>
GENERAL INFORMATION AND HISTORY
JNLNY Separate Account I (Separate Account) is a separate investment account of
Jackson National Life Insurance Company of New York (Jackson National NY). In
September 1997, the company changed its name from First Jackson National Life
Insurance Company to its present name. Jackson National NY is a wholly-owned
subsidiary of Jackson National Life Insurance Company, and is ultimately a
wholly-owned subsidiary of Prudential plc, London, England, a life insurance
company in the United Kingdom.
The JNL/First Trust The S&P Target 10 Division is not sponsored, endorsed, sold
or promoted by Standard & Poor's, a division of The McGraw-Hill Companies, Inc.
(S&P). S&P makes no representation or warranty, express or implied, to the
owners of the Division or any member of the public regarding the advisability of
investing in securities generally or in the Division particularly or the ability
of the S&P 500 Index to track general stock market performance. S&P's only
relationship to the Licensee is the licensing of certain trademarks and trade
names of S&P and of the S&P 500 Index which are determined, composed and
calculated by S&P without regard to the Licensee or the Division. S&P has no
obligation to take the needs of the Licensee or the owners of the Division into
consideration in determining, composing or calculating the S&P 500 Index. S&P is
not responsible for and has not participated in the determination of the prices
and amount of the Division or the timing of the issuance or sale of the Division
or in the determination or calculation of the equation by which the Division is
to be converted into cash. S&P has no obligation or liability in connection with
the administration, marketing or trading of the Division.
S&P DOES NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THE S&P 500 INDEX
OR ANY DATA INCLUDED THEREIN AND S&P SHALL HAVE NO LIABILITY FOR ANY ERRORS,
OMISSIONS, OR INTERRUPTIONS THEREIN. S&P MAKES NO WARRANTY, EXPRESS OR IMPLIED,
AS TO RESULTS TO BE OBTAINED BY LICENSEE, OWNERS OF THE DIVISION, OR ANY OTHER
PERSON OR ENTITY FROM THE USE OF THE S&P 500 INDEX OR ANY DATA INCLUDED THEREIN.
S&P MAKES NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIMS ALL
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH
RESPECT TO THE S&P 500 INDEX OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY
OF THE FOREGOING, IN NO EVENT SHALL S&P HAVE ANY LIABILITY FOR ANY SPECIAL,
PUNITIVE, INDIRECT, OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS), EVEN IF
NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.
SERVICES
Jackson National NY is the custodian of the assets of the Separate Account. The
custodian has custody of all cash of the Separate Account and attends to the
collection of proceeds of shares of the underlying funds bought and sold by the
Separate Account.
Effective October 15, 1999, KPMG LLP, 303 East Wacker Drive, Chicago, Illinois
60601, assumed responsibility for certain of the audit and reporting functions
previously provided by PricewaterhouseCoopers LLP to Jackson National NY. These
changes were put into effect by Jackson National NY as of the date referenced
above. Neither Jackson National NY nor the Separate Account has received an
adverse opinion, nor were there any disagreements with PricewaterhouseCoopers
LLP. Blazzard, Grodd & Hasenauer, P.C. of Westport, Connecticut has provided
advice on certain matters relating to the federal securities and income tax laws
in connection with the contracts described in the Prospectus.
PURCHASE OF SECURITIES BEING OFFERED
The contracts will be sold by licensed insurance agents in states where the
contracts may be lawfully sold. The agents will be registered representatives of
broker-dealers that are registered under the Securities Exchange Act of 1934 and
members of the National Association of Securities Dealers, Inc. (NASD).
UNDERWRITERS
The contracts are offered continuously and are distributed by Jackson National
Life Distributors, Inc. (JNLD), 401 Wilshire Boulevard, Suite 1200, Santa
Monica, California 90401. JNLD is a subsidiary of Jackson National Life
Insurance Company.
No underwriting commissions are paid by Jackson National NY to JNLD.
CALCULATION OF PERFORMANCE
When Jackson National NY advertises performance for an investment division
(except the PPM America/JNL Money Market Division), we will include quotations
of standardized average annual total return to facilitate comparison with
standardized average annual total return advertised by other variable annuity
separate accounts. Standardized average annual total return for an investment
division will be shown for periods beginning on the date the investment division
first invested in the corresponding series. We will calculate standardized
average annual total return according to the standard methods prescribed by
rules of the Securities and Exchange Commission.
Standardized average annual total return for a specific period is calculated by
taking a hypothetical $1,000 investment in an investment division at the
offering on the first day of the period ("initial investment"), and computing
the ending redeemable value ("redeemable value") of that investment at the end
of the period. The redeemable value is then divided by the initial investment
and expressed as a percentage, carried to at least the nearest hundredth of a
percent. Standardized average annual total return is annualized and reflects the
deduction of the insurance charges and the contract maintenance charge. The
redeemable value also reflects the effect of any applicable withdrawal charge
that may be imposed at the end of the period. No deduction is made for premium
taxes which may be assessed by certain states.
The standardized average annual total returns for each investment division
(except the PPM America/JNL Money Market Division) for the periods indicated are
as follows (more recent returns may be more or less than the stated returns due
to market volatility):
<TABLE>
<CAPTION>
Date of Initial
Investment in
One Year Period Corresponding
Ended Series to
December 31, 1999 December 31, 1999*
----------------- ------------------
<S> <S> <C>
JNL/Alger Growth Division .............................................. N/A 33.98%
JNL/Alliance Growth Division ........................................... N/A N/A
JNL/Eagle Core Equity Division ......................................... N/A 10.95%
JNL/Eagle SmallCap Equity Division ..................................... N/A 15.74%
JNL/Janus Aggressive Growth Division ................................... N/A 61.88%
JNL/Janus Balanced Division ............................................ N/A N/A
JNL/Janus Capital Growth Division ...................................... N/A 135.94%
JNL/Janus Global Equities Division ..................................... N/A 58.83%
JNL/Putnam Growth Division ............................................. N/A 29.16%
JNL/Putnam International Equity Division ............................... N/A 23.70%
JNL/Putnam Mid-Cap Growth Division ..................................... N/A N/A
JNL/Putnam Value Equity Division ....................................... N/A -7.97%
JNL/S&P Conservative Growth Division I ................................. N/A 2.86%
JNL/S&P Moderate Growth Division I ..................................... N/A 10.52%
JNL/S&P Aggressive Growth Division I ................................... N/A 14.03%
JNL/S&P Very Aggressive Growth Division I .............................. N/A 20.88%
JNL/S&P Equity Growth Division I ....................................... N/A 25.24%
JNL/S&P Equity Aggressive Growth Division I ............................ N/A 26.62%
PPM America/JNL Balanced Division ...................................... N/A -8.52%
PPM America/JNL High Yield Bond Division ............................... N/A -5.68%
Salomon Brothers/JNL Global Bond Division .............................. N/A -6.00%
Salomon Brothers/JNL U.S. Government & Quality
Bond Division .................................................... N/A -8.37%
T. Rowe Price/JNL Established Growth Division .......................... N/A 17.88%
T. Rowe Price/JNL Mid-Cap Growth Division .............................. N/A 21.32%
T. Rowe Price/JNL Value Division ....................................... N/A N/A
JNL/First Trust The Dow(SM) Target 5 Division .......................... N/A N/A
JNL/First Trust The Dow(SM) Target 10 Division ......................... N/A N/A
JNL/First Trust The S&P(R)Target 10 Division ........................... N/A N/A
JNL/First Trust Global Target 15 Division .............................. N/A N/A
JNL/First Trust Target 25 Division ..................................... N/A N/A
JNL/First Trust Target Small-Cap Division .............................. N/A N/A
JNL/First Trust Technology Sector Division ............................. N/A N/A
JNL/First Trust Pharmaceutical/Healthcare Sector Division .............. N/A N/A
JNL/First Trust Financial Sector Division .............................. N/A N/A
JNL/First Trust Energy Sector Division ................................. N/A N/A
JNL/First Trust Leading Brands Sector Division ......................... N/A N/A
JNL/First Trust Communications Sector Division ......................... N/A N/A
</TABLE>
* The JNL/Alger Growth Division commenced operations on December 17, 1998, the
JNL/Eagle Core Equity Division commenced operations on March 22, 1999, the
JNL/Eagle Small Cap Equity Division commenced operations April 22, 1999, the
JNL/Janus Aggressive Growth Division commenced operations on January 29, 1999,
the JNL/Janus Capital Growth Division commenced operations on December 17, 1998,
JNL/Janus Global Equities Division commenced operations on November 27, 1998,
the JNL/Putnam Growth Division commenced operations on November 27, 1998, the
JNL/Putnam International Equity Division commenced operations on November 27,
1998, the JNL/Putnam Value Equity Division commenced operations on November 27,
1998, the JNL/S&P Conservative Growth Division I commenced operations on April
22, 1999, the JNL/S&P Moderate Growth Division I commenced operations on April
20, 1999, the JNL/S&P Aggressive Growth Division I commenced operations on May
10, 1999, the JNL/S&P Very Aggressive Growth Division I commenced operations on
May 13, 1999, the JNL/S&P Equity Growth Division I commenced operations on April
20, 1999, the JNL/S&P Equity Aggressive Growth Division I commenced operations
on April 20, 1999, the PPM America/JNL Balanced Division commenced operations on
January 21, 1999, the PPM America/JNL High Yield Bond Division commenced
operations on November 27, 1998, the Salomon Brothers/JNL Global Bond Division
commenced operations on January 21, 1999, the Salomon Brothers/JNL U.S.
Government & Quality Bond Division commenced operations on November 27, 1998,
the T. Rowe Price/JNL Established Growth Division commenced operations on
February 9, 1999, the T. Rowe Price/JNL Mid-Cap Growth Division commenced
operations on November 27, 1998. Each of the JNL/Alliance Growth Division, the
JNL/Janus Balanced Division, the JNL/Putnam Mid-Cap Growth Division, the T. Rowe
Price/JNL Value Division, the JNL/First Trust The Dow(SM) Target 5 Division, the
JNL/First Trust The Dow(SM) Target 10 Division, the JNL/First Trust The S&P(R)
Target 10 Division, the JNL/First Trust Global Target 15 Division, the JNL/First
Trust Target 25 Division, the JNL/First Trust Target Small-Cap Division, the
JNL/First Trust Technology Sector Division, the JNL/First Trust
Pharmaceutical/Healthcare Sector Division, the JNL/First Trust Financial Sector
Division, the JNL/First Trust Energy Sector Division, the JNL/First Trust
Leading Brands Sector Division, and the JNL/First Trust Communications Sector
Division had not commenced operations as of December 31, 1999.
Jackson National NY may also advertise non-standardized total return.
Non-standardized total return may be for periods other than those required to be
presented or may otherwise differ from standardized average annual total return.
The contract is designed for long term investment, therefore Jackson National NY
believes that non-standardized total return that does not reflect the deduction
of any applicable withdrawal charge may be useful to investors. Reflecting the
deduction of the withdrawal charge decreases the level of performance
advertised. Non-standardized total return may also assume a larger initial
investment which more closely approximates the size of a typical contract.
The non-standardized total returns that each investment division (except the PPM
America/JNL Money Market Division) would have achieved if it had been invested
in the corresponding series for the periods indicated, calculated in a manner
similar to standardized average annual total return but assuming a hypothetical
initial investment of $10,000 and without deducting the contract maintenance
charge or the withdrawal charge, are as follows (more recent returns may be more
or less than the stated returns due to market volatility):
<TABLE>
<CAPTION>
Commencement of
Operations of
One Year Period Corresponding
Ended Division to
December 31, 1999 December 31, 1999
----------------- -----------------
<S> <C> <C>
JNL/Alger Growth Division(2) 31.94% 25.31%
JNL/Eagle Core Equity Division(3) 21.83% 22.24%
JNL/Eagle SmallCap Equity Division(3) 17.61% 17.43%
JNL/Janus Aggressive Growth Division(1) 91.73% 40.13%
JNL/Janus Capital Growth Division(1) 121.08% 42.08%
JNL/Janus Global Equities Division(1) 62.29% 34.55%
JNL/Putnam Growth Division(1) 27.69% 28.72%
JNL/Putnam International Equity Division(1) 30.37% 13.21%
JNL/Putnam Value Equity Division(1) -2.42% 15.33%
JNL/S&P Conservative Growth Division I(5) 17.86% 12.25%
JNL/S&P Moderate Growth Division I(5) 24.95% 17.09%
JNL/S&P Aggressive Growth Division I(5) 33.50% 23.28%
JNL/S&P Very Aggressive Growth Division I(5) 46.79% 31.92%
JNL/S&P Equity Growth Division I(5) 41.19% 25.95%
JNL/S&P Equity Aggressive Growth Division I(5) 43.19% 27.85%
PPM America/JNL Balanced Division(1) -1.49% 10.08%
PPM America/JNL High Yield Bond Division(1) -0.32% 5.01%
Salomon Brothers/JNL Global Bond Division(1) 0.45% 6.29%
Salomon Brothers/JNL U.S. Government & Quality
Bond Division*1) -6.86% 3.95%
T. Rowe Price/JNL Established Growth Division(1) 20.08% 24.98%
T. Rowe Price/JNL Mid-Cap Growth Division(1) 18.46% 22.68%
</TABLE>
1 Corresponding series commenced operations on May 15, 1995.
2 Corresponding series commenced operations on October 16, 1995.
3 Corresponding series commenced operations on September 16, 1996.
4 Corresponding series commenced operations on March 2, 1998.
5 Each of the corresponding series to the JNL/S&P Conservative Growth
Division I commenced operations on April 9, 1998; the JNL/S&P Moderate
Growth Division I commenced operations on April 8, 1998; the JNL/S&P
Aggressive Growth Division I commenced operations on April 8, 1998; the
JNL/S&P Very Aggressive Growth Division I commenced operations on April 1,
1998; the JNL/S&P Equity Growth Division I commenced operations on April
13, 1998; and the JNL/S&P Equity Aggressive Growth Division I commenced
operations on April 15, 1998.
Each of the JNL/Alliance Growth Division, the JNL/Janus Balanced Division, the
JNL/Putnam Mid-Cap Growth Division, the T. Rowe Price/JNL Value Division, the
JNL/First Trust The Dow(SM) Target 5 Division, the JNL/First Trust The Dow(SM)
Target 10 Division, the JNL/First Trust The S&P(R) Target 10 Division, the
JNL/First Trust Global Target 15 Division, the JNL/First Trust Target 25
Division, the JNL/First Trust Target Small-Cap Division, the JNL/First Trust
Technology Sector Division, the JNL/First Trust Pharmaceutical/Healthcare Sector
Division, the JNL/First Trust Financial Sector Division, the JNL/First Trust
Energy Sector Division, the JNL/First Trust Leading Brands Sector Division, and
the JNL/First Trust Communications Sector Division had not commenced operations
as of December 31, 1999.
Prior to May 1, 1997, the corresponding series to the PPM America/JNL Balanced
Division was sub-advised by Phoenix Investment Counsel, Inc., the corresponding
series to the JNL/Putnam Growth Series was sub-advised by Phoenix Investment
Counsel, Inc., and the corresponding series to the JNL/Putnam Value Equity
Series was sub-advised by PPM America, Inc.
Prior to May 1, 2000, the corresponding series to the JNL/Putnam International
Equity Division was the T. Rowe Price/JNL International Equity Investment
Division and the corresponding series was sub-advised by Rowe Price-Fleming
International, Inc.
Standardized average annual total return quotations will be current to the last
day of the calendar quarter preceding the date on which an advertisement is
submitted for publication. Both standardized average annual total return
quotations and non-standardized total return quotations will be based on rolling
calendar quarters and will cover at least periods of one, five, and ten years,
or a period covering the time the investment division has been in existence, if
it has not been in existence for one of the prescribed periods. If the
corresponding series has been in existence for longer than the investment
division, the non-standardized total return quotations will show the investment
performance the investment division would have achieved (reduced by the
applicable charges) had it been invested in the series for the period quoted.
Standardized average annual total return is not available for periods before the
investment division was in existence.
Quotations of standardized average annual total return and non-standardized
total return are based upon historical earnings and will fluctuate. Any
quotation of performance should not be considered a guarantee of future
performance. Factors affecting the performance of an investment division and its
corresponding series include general market conditions, operating expenses and
investment management. An owner's withdrawal value upon surrender of a contract
may be more or less than original cost.
Jackson National NY may advertise the current annualized yield for a 30-day
period for an investment division. The annualized yield of an investment
division refers to the income generated by the investment division over a
specified 30-day period. Because this yield is annualized, the yield generated
by an investment division during the 30-day period is assumed to be generated
each 30-day period. The yield is computed by dividing the net investment income
per accumulation unit earned during the period by the price per unit on the last
day of the period, according to the following formula:
a-b 6
YIELD = 2[(---+1) -1]
cd
Where:
a = net investment income earned during the period by the Series
attributable to shares owned by the investment division.
b = expenses for the investment division accrued for the period (net
of reimbursements).
c = the average daily number of accumulation units outstanding during
the period.
d = the maximum offering price per accumulation unit on the last day
of the period.
Net investment income will be determined in accordance with rules established by
the Securities and Exchange Commission. Accrued expenses will include all
recurring fees that are charged to all contracts.
The yield for the 30-day period ended December 31, 1999 for each of the
referenced investment divisions is as follows:
PPM America/JNL Balanced Series ...................................... 2.20%
PPM America/JNL High Yield Bond Series ............................... 7.98%
Salomon Brothers/JNL Global Bond Series .............................. 6.26%
Salomon Brothers/JNL U.S. Government & Quality Bond Series ........... 4.51%
Because of the charges and deductions imposed by the Separate Account, the yield
for an investment division will be lower than the yield for the corresponding
series. The yield on amounts held in the investment divisions normally will
fluctuate over time. Therefore, the disclosed yield for any given period is not
an indication or representation of future yields or rates of return. An
investment division's actual yield will be affected by the types and quality of
portfolio securities held by the series and the series operating expenses.
Any current yield quotations of the PPM America/JNL Money Market Division,
subject to Rule 482 under the Securities Act of 1933, will consist of a seven
calendar day historical yield, carried at least to the nearest hundredth of a
percent. We may advertise yield for the Division based on different time
periods, but we will accompany it with a yield quotation based on a seven day
calendar period. The PPM America/JNL Money Market Division's yield will be
calculated by determining the net change, exclusive of capital changes, in the
value of a hypothetical pre-existing account having a balance of one
accumulation unit at the beginning of the base period, subtracting a
hypothetical charge reflecting deductions from contracts, and dividing the net
change in account value by the value of the account at the beginning of the
period to obtain a base period return and multiplying the base period return by
(365/7). The PPM America/JNL Money Market Division's effective yield is computed
similarly but includes the effect of assumed compounding on an annualized basis
of the current yield quotations of the Division. The PPM America/JNL Money
Market Division's yield and effective yield for the seven day period ended
December 31, 1999 were 3.97% and 4.05%, respectively.
The PPM America/JNL Money Market Division's yield and effective yield will
fluctuate daily. Actual yields will depend on factors such as the type of
instruments in the series' portfolio, portfolio quality and average maturity,
changes in interest rates, and the series' expenses. Although the investment
division determines its yield on the basis of a seven calendar day period, it
may use a different time period on occasion. The yield quotes may reflect the
expense limitations described in the series' Prospectus or Statement of
Additional Information. There is no assurance that the yields quoted on any
given occasion will be maintained for any period of time and there is no
guarantee that the net asset values will remain constant. It should be noted
that neither a contract owner's investment in the PPM America/JNL Money Market
Division nor that Division's investment in the PPM America/JNL Money Market
Series, is guaranteed or insured. Yields of other money market funds may not be
comparable if a different base or another method of calculation is used.
ADDITIONAL TAX INFORMATION
NOTE: INFORMATION CONTAINED HEREIN SHOULD NOT BE SUBSTITUTED FOR THE ADVICE OF A
PERSONAL TAX ADVISER. JACKSON NATIONAL NY DOES NOT MAKE ANY GUARANTEE REGARDING
THE TAX STATUS OF ANY CONTRACT OR ANY TRANSACTION INVOLVING THE CONTRACTS.
PURCHASERS BEAR THE COMPLETE RISK THAT THE CONTRACTS MAY NOT BE TREATED AS
"ANNUITY CONTRACTS" UNDER FEDERAL INCOME TAX LAWS. IT SHOULD BE FURTHER
UNDERSTOOD THAT THE FOLLOWING DISCUSSION IS NOT EXHAUSTIVE AND THAT SPECIAL
RULES NOT DESCRIBED IN THE PROSPECTUS MAY BE APPLICABLE IN CERTAIN SITUATIONS.
MOREOVER, NO ATTEMPT HAS BEEN MADE TO CONSIDER ANY APPLICABLE STATE OR OTHER TAX
LAWS.
General
Section 72 of the Internal Revenue Code of 1986, as amended (the "Code"),
governs taxation of annuities in general. An individual owner is not taxed on
increases in the value of a contract until distribution occurs, either in the
form of a withdrawal or as annuity payments under the annuity option elected.
For a withdrawal received as a total surrender (total redemption or a death
benefit), the recipient is taxed on the portion of the payment that exceeds the
cost basis of the contract. For a payment received as a partial withdrawal,
federal tax liability is generally determined on a last-in, first-out basis,
meaning taxable income is withdrawn before the cost basis of the contract is
withdrawn. For contracts issued in connection with non-qualified plans, the cost
basis is generally the premiums, while for contracts issued in connection with
qualified plans there may be no cost basis. The taxable portion of a withdrawal
is taxed at ordinary income tax rates. Tax penalties may also apply.
For annuity payments, a portion of each payment in excess of an exclusion amount
is includable in taxable income. The exclusion amount for payments based on a
fixed annuity option is determined by multiplying the payment by the ratio that
the cost basis of the contract (adjusted for any period certain or refund
feature) bears to the expected return under the contract. The exclusion amount
for payments based on a variable annuity option is determined by dividing the
cost basis of the contract (adjusted for any period certain or refund guarantee)
by the number of years over which the annuity is expected to be paid. Payments
received after the investment in the contract has been recovered (i.e. when the
total of the excludable amounts equals the investment in the contract) are fully
taxable. The taxable portion is taxed at ordinary income tax rates. For certain
types of qualified plans there may be no cost basis in the contract within the
meaning of Section 72 of the Code. Owners, annuitants and beneficiaries under
the contracts should seek competent financial advice about the tax consequences
of distributions.
Jackson National NY is taxed as a life insurance company under the Code. For
federal income tax purposes, the Separate Account is not a separate entity from
Jackson National NY and its operations form a part of Jackson National NY.
Withholding Tax on Distributions
The Code generally requires Jackson National NY (or, in some cases, a plan
administrator) to withhold tax on the taxable portion of any distribution or
withdrawal from a contract. For "eligible rollover distributions" from contracts
issued under certain types of qualified plans, 20% of the distribution must be
withheld, unless the payee elects to have the distribution "rolled over" to
another eligible plan in a direct transfer. This requirement is mandatory and
cannot be waived by the owner.
An "eligible rollover distribution" is the estimated taxable portion of any
amount received by a covered employee from a plan qualified under Section 401(a)
or 403(a) of the Code, or from a tax sheltered annuity qualified under Section
403(b) of the Code (other than (1) a series of substantially equal annuity
payments for the life (or life expectancy) of the employee, or joint lives (or
joint life expectancies) of the employee, and his or her designated beneficiary,
or for a specified period of ten years or more; (2) minimum distributions
required to be made under the Code); and (3) hardship withdrawals. Failure to
"rollover" the entire amount of an eligible rollover distribution (including an
amount equal to the 20% portion of the distribution that was withheld) could
have adverse tax consequences, including the imposition of a penalty tax on
premature withdrawals, described later in this section.
Withdrawals or distributions from a contract other than eligible rollover
distributions are also subject to withholding on the estimated taxable portion
of the distribution, but the owner may elect in such cases to waive the
withholding requirement. If not waived, withholding is imposed (1) for periodic
payments, at the rate that would be imposed if the payments were wages, or (2)
for other distributions, at the rate of 10%. If no withholding exemption
certificate is in effect for the payee, the rate under (1) above is computed by
treating the payee as a married individual claiming 3 withholding exemptions.
Generally, the amount of any payment of interest to a non-resident alien of the
United States shall be subject to withholding of a tax equal to thirty (30%)
percent of such amount or, if applicable, a lower treaty rate. A payment may not
be subject to withholding where the recipient sufficiently establishes that such
payment is effectively connected to the recipient's conduct of a trade or
business in the United States and such payment is included in recipient's gross
income.
Diversification -- Separate Account Investments
Section 817(h) of the Code imposes certain diversification standards on the
underlying assets of variable annuity contracts. The Code provides that a
variable annuity contract will not be treated as an annuity contract for any
period (and any subsequent period) for which the investments are not adequately
diversified, in accordance with regulations prescribed by the United States
Treasury Department ("Treasury Department"). Disqualification of the contract as
an annuity contract would result in imposition of federal income tax to the
owner with respect to earnings allocable to the contract prior to the receipt of
payments under the contract. The Code contains a safe harbor provision which
provides that annuity contracts such as the contracts meet the diversification
requirements if, as of the close of each calendar quarter, the underlying assets
meet the diversification standards for a regulated investment company, and no
more than 55% of the total assets consist of cash, cash items, U.S. government
securities and securities of other regulated investment companies.
The Treasury Department has issued Regulations establishing diversification
requirements for the mutual funds underlying variable contracts. The Regulations
amplify the diversification requirements for variable contracts set forth in the
Code and provide an alternative to the safe harbor provision described above.
Under the Regulations, a mutual fund will be deemed adequately diversified if
(1) no more than 55% of the value of the total assets of the mutual fund is
represented by any one investment; (2) no more than 70% of the value of the
total assets of the mutual fund is represented by any two investments; (3) no
more than 80% of the value of the total assets of the mutual fund is represented
by any three investments; and (4) no more than 90% of the value of the total
assets of the mutual fund is represented by any four investments.
Jackson National NY intends that each series of the JNL Series Trust will be
managed by its respective investment adviser in such a manner as to comply with
these diversification requirements.
The Treasury Department has indicated that the diversification Regulations do
not provide guidance regarding the circumstances in which contract owner control
of the investments of the Separate Account will cause the contract owner to be
treated as the owner of the assets of the Separate Account, thereby resulting in
the loss of favorable tax treatment of the contract. At this time it cannot be
determined whether additional guidance will be provided and what standards may
be contained in such guidance.
The amount of owner control which may be exercised under the contract is
different in some respects from the situations addressed in published rulings
issued by the Internal Revenue Service in which it was held that the policy
owner was not the owner of the assets of the separate account. It is unknown
whether these differences, such as the owner's ability to transfer among
investment choices or the number and type of investment choices available, would
cause the owner to be considered as the owner of the assets of the Separate
Account resulting in the imposition of federal income tax to the owner with
respect to earnings allocable to the contract prior to receipt of payments under
the contract.
Multiple Contracts
The Code provides that multiple annuity contracts which are issued within a
calendar year to the same contract owner by one company or its affiliates are
treated as one annuity contract for purposes of determining the tax consequences
of any distribution. Such treatment may result in adverse tax consequences
including more rapid taxation of the distributed amounts from such multiple
contracts. For purposes of this rule, contracts received in a Section 1035
exchange will be considered issued in the year of the exchange. Owners should
consult a tax adviser prior to purchasing more than one annuity contract in any
calendar year.
Partial 1035 Exchanges
Section 1035 of the Code provides that an annuity contract may be exchanged in a
tax-free transaction for another annuity contract. Historically, it was presumed
that only the exchange of an entire contract, as opposed to a partial exchange,
would be accorded tax-free status. In 1998 in Conway vs. Commissioner, the Tax
Court held that the direct transfer of a portion of an annuity contract into
another annuity contract qualified as a non-taxable exchange. On November 22,
1999, the Internal Revenue Service filed an Action on Decision which indicated
that it acquiesced in the Tax Court decision in Conway. However, in its
acquiesence with the decision of the Tax Court, the Internal Revenue Service
stated that it will challenge transactions where taxpayers enter into a series
of partial exchanges and annuitizations as part of a design to avoid application
of the 10% premature distribution penalty or other limitations imposed on
annuity contracts under the Code. In the absence of further guidance from the
Internal Revenue Service it is unclear what specific types of partial exchange
designs and transactions will be challenged by the Internal Revenue Service. Due
to the uncertainty in this area owners should consult their own tax advisers
prior to entering into a partial exchange of an annuity contract.
Contracts Owned by Other than Natural Persons
Under Section 72(u) of the Code, the investment earnings on premiums for
contracts will be taxed currently to the owner if the owner is a non-natural
person, e.g., a corporation or certain other entities. Such contracts generally
will not be treated as annuities for federal income tax purposes. However, this
treatment is not applied to contracts held by a trust or other entity as an
agent for a natural person nor to contracts held by certain qualified plans.
Purchasers should consult their own tax counsel or other tax adviser before
purchasing a contract to be owned by a non-natural person.
Tax Treatment of Assignments
An assignment or pledge of a contract may have tax consequences, and may also be
prohibited by ERISA in some circumstances. Owners should, therefore, consult
competent legal advisers should they wish to assign or pledge their contracts.
Death Benefits
Any death benefits paid under the Contact are taxable to the beneficiary. The
rules governing the taxation of payments from an annuity contract, as discussed
above, generally apply to the payment of death benefits and depend on whether
the death benefits are paid as a lump sum or as annuity payments. Estate taxes
may also apply.
Qualified Plans
The contracts offered by the Prospectus are designed to be suitable for use
under various types of qualified plans. Taxation of owners in each qualified
plan varies with the type of plan and terms and conditions of each specific
plan. Owners, annuitants and beneficiaries are cautioned that benefits under a
qualified plan may be subject to the terms and conditions of the plan,
regardless of the terms and conditions of the contracts issued to fund the plan.
Tax Treatment of Withdrawals
Non-Qualified Plans
Section 72 of the Code governs treatment of distributions from annuity
contracts. It provides that if the contract value exceeds the aggregate premiums
made, any amount withdrawn not in the form of an annuity payment will be treated
as coming first from the earnings and then, only after the income portion is
exhausted, as coming from the principal. Withdrawn earnings are included in a
taxpayer's gross income. Section 72 further provides that a 10% penalty will
apply to the income portion of any distribution. The penalty is not imposed on
amounts received: (1) after the taxpayer reaches 59 1/2; (2) upon the death of
the owner; (3) if the taxpayer is totally disabled as defined in Section
72(m)(7) of the Code; (4) in a series of substantially equal periodic payments
made at least annually for the life (or life expectancy) of the taxpayer or for
the joint lives (or joint life expectancies) of the taxpayer and his
beneficiary; (5) under an immediate annuity; or (6) which are allocable to
premium payments made prior to August 14, 1982.
With respect to (4) above, if the series of substantially equal periodic
payments is modified before the later of your attaining age 59 1/2 or 5 years
from the date of the first periodic payment, then the tax for the year of the
modification is increased by an amount equal to the tax which would have been
imposed (the 10% penalty tax) but for the exception, plus interest for the tax
years in which the exception was used.
Qualified Plans
In the case of a withdrawal under a qualified contract, a ratable portion of the
amount received is taxable, generally based on the ratio of the individual's
cost basis to the individual's total accrued benefit under the retirement plan.
Special tax rules may be available for certain distributions from a qualified
contract. Section 72(t) of the Code imposes a 10% penalty tax on the taxable
portion of any distribution from qualified retirement plans, including contracts
issued and qualified under Code Sections 401 (Pension and Profit Sharing plans),
403(b) (tax-sheltered annuities) and 408 and 408A (IRAs). To the extent amounts
are not included in gross income because they have been rolled over to an IRA or
to another eligible qualified plan, no tax penalty will be imposed.
The tax penalty will not apply to the following distributions: (1) if
distribution is made on or after the date on which the owner or annuitant (as
applicable) reaches age 59 1/2; (2) distributions following the death or
disability of the owner or annuitant (as applicable) (for this purpose
"disability" is defined in Section 72(m)(7) of the Code); (3) after separation
from service, distributions that are part of substantially equal periodic
payments made not less frequently than annually for the life (or life
expectancy) of the owner or annuitant (as applicable) or the joint lives (or
joint life expectancies) of such owner or annuitant (as applicable) and his or
her designated beneficiary; (4) distributions to an owner or annuitant (as
applicable) who has separated from service after he has attained age 55; (5)
distributions made to the owner or annuitant (as applicable) to the extent such
distributions do not exceed the amount allowable as a deduction under Code
Section 213 to the owner or annuitant (as applicable) for amounts paid during
the taxable year for medical care; (6) distributions made to an alternate payee
pursuant to a qualified domestic relations order; (7) distributions made on
account of an IRS levy upon the qualified contracts; (8) distributions from an
IRA for the purchase of medical insurance (as described in Section 213(d)(1)(D)
of the Code) for the contract owner or annuitant (as applicable) and his or her
spouse and dependents if the contract owner or annuitant (as applicable) has
received unemployment compensation for at least 12 weeks(this exception will no
longer apply after the contract owner or annuitant (as applicable) has been
re-employed for at least 60 days); (9) distributions from an Individual
Retirement Annuity made to the owner or annuitant (as applicable) to the extent
such distributions do not exceed the qualified higher education expenses (as
defined in Section 72(t)(7) of the Code) of the owner or annuitant (as
applicable) for the taxable year; and (10) distributions from an Individual
Retirement Annuity made to the owner or annuitant (as applicable) which are
qualified first-time home buyer distributions (as defined in Section 72(t)(8) of
the Code). The exception stated in items (4) and (6) above do not apply in the
case of an IRA. The exception stated in (3) above applies to an IRA without the
requirement that there be a separation from service.
With respect to (3) above, if the series of substantially equal periodic
payments is modified before the later of your attaining age 59 1/2 or 5 years
from the date of the first periodic payment, then the tax for the year of the
modification is increased by an amount equal to the tax which would have been
imposed (the 10% penalty tax) but for the exception, plus interest for the tax
years in which the exception was used.
Withdrawals of amounts attributable to contributions made pursuant to a salary
reduction agreement (in accordance with Section 403(b)(11) of the Code) are
limited to the following: when the owner attains age 59 1/2, separates from
services, dies, becomes disabled (within the meaning of Section 72(m)(7) of the
Code), or in the case of hardship. Hardship withdrawals do not include any
earnings on salary reduction contributions. These limitations on withdrawals
apply to: (1) salary reduction contributions made after December 31, 1988; (2)
income attributable to such contributions; and (3) income attributable to
amounts held as of December 31, 1988. The limitations on withdrawals do not
affect rollovers or exchanges between certain qualified plans. Tax penalties may
also apply. While the foregoing limitations only apply to certain contracts
issued in connection with Section 403(b) qualified plans, all owners should seek
competent tax advice regarding any withdrawals or distributions.
The taxable portion of a withdrawal or distribution from contracts issued under
certain types of plans may, under some circumstances, be "rolled over" into
another eligible plan so as to continue to defer income tax on the taxable
portion. Effective January 1, 1993, such treatment is available for an "eligible
rollover distribution" made by certain types of plans (as described above under
"Taxes -- Withholding Tax on Distributions") that is transferred within 60 days
of receipt into another eligible plan or an IRA, or an individual retirement
account described in section 408(a) of the Code. Plans making such eligible
rollover distributions are also required, with some exceptions specified in the
Code, to provide for a direct transfer of the distribution to the transferee
plan designated by the recipient.
Amounts received from IRAs may also be rolled over into other IRAs, individual
retirement accounts or certain other plans, subject to limitations set forth in
the Code.
Generally, distributions from a qualified plan must commence no later than April
1 of the calendar year following the year in which the employee attains the
later of age 70 1/2 or the date of retirement. In the case of an IRA,
distribution must commence no later than April 1 of the calendar year following
the year in which the owner attains age 70 1/2. Required distributions must be
over a period not exceeding the life or life expectancy of the individual or the
joint lives or life expectancies of the individual and his or her designated
beneficiary. If the required minimum distributions are not made, a 50% penalty
tax is imposed as to the amount not distributed.
Types of Qualified Plans
The Contracts offered herein are designed to be suitable for use under various
types of Qualified Plans. Taxation of participants in each Qualified Plan varies
with the type of plan and terms and conditions of each specific plan. Owners,
Annuitants and Beneficiaries are cautioned that benefits under a Qualified Plan
may be subject to the terms and conditions of the plan regardless of the terms
and conditions of the Contracts issued pursuant to the plan. Some retirement
plans are subject to distribution and other requirements that are not
incorporated into the Company's administrative procedures. The Company is not
bound by the terms and conditions of such plans to the extent such terms
conflict with the terms of a Contract, unless the Company specifically consents
to be bound. Owners, Annuitants and Beneficiaries are responsible for
determining that contributions, distributions and other transactions with
respect to the Contracts comply with applicable law.
A Qualified Contract will not provide any necessary or additional tax deferral
if it is used to fund a Qualified Plan that is tax deferred. However, the
Contract has features and benefits other than tax deferral that may make it an
appropriate investment for a Qualified Plan. Following are generally
descriptions of the types of Qualified Plans with which the Contracts may be
used. Such descriptions are not exhaustive and are for general informational
purposes only. The tax rules regarding Qualified Plans are very complex and will
have differing applications depending on individual facts and circumstances.
Each purchaser should obtain competent tax advice prior to purchasing a Contract
issued under a Qualified Plan.
Contracts issued pursuant to Qualified Plans include special provisions
restricting Contract provisions that may otherwise be available as described
herein. Generally, Contract issued pursuant to Qualified Plans are not
transferable except upon surrender or annuitization. Various penalty and excise
taxes may apply to contributions or distributions made in violation of
applicable limitations. Furthermore, certain withdrawal penalties and
restrictions may apply to surrenders from Qualified Contracts. (See "Tax
Treatment of Withdrawals - Qualified Contracts" below.)
On July 6, 1983, the Supreme Court decided in Arizona Governing Committee v.
Norris that optional annuity benefits provided under an employer's deferred
compensation plan could not, under Title VII of the Civil Rights Act of 1964,
vary between men and women. The Contracts sold by the Company in connection with
certain Qualified Plans will utilize tables which do not differentiate on the
basis of sex. Such annuity tables will also be available for use in connection
with certain non-qualified deferred compensation plans.
(a) Tax-Sheltered Annuities
Section 403(b) of the Code permits the purchase of "tax-sheltered
annuities" by public schools and certain charitable, educational and
scientific organizations described in Section 501(c) (3) of the Code.
These qualifying employers may make contributions to the contracts for
the benefit of their employees. Such contributions are not included in
the gross income of the employee until the employee receives
distributions from the contract. The amount of contributions to the
tax-sheltered annuity is limited to certain maximums imposed by the
Code. Furthermore, the Code sets forth additional restrictions
governing such items as transferability, distributions,
non-discrimination and withdrawals. Employee loans are not allowed
under these contracts. Any employee should obtain competent tax advice
as to the tax treatment and suitability of such an investment.
(b) Individual Retirement Annuities
Section 408(b) of the Code permits eligible individuals to contribute
to an individual retirement program known as an "Individual Retirement
Annuity" ("IRA"). Under applicable limitations, certain amounts may be
contributed to an IRA which will be deductible from the individual's
taxable income. These IRAs are subject to limitations on eligibility,
contributions, transferability and distributions. Sales of contracts
for use with IRAs are subject to special requirements imposed by the
Code, including the requirement that certain informational disclosure
be given to persons desiring to establish an IRA. Purchasers of
contracts to be qualified as IRAs should obtain competent tax advice as
to the tax treatment and suitability of such an investment.
(c) Roth IRAs
Section 408A of the Code provides that beginning in 1998, individuals
may purchase a new type of non-deductible IRA, known as a Roth IRA.
Purchase payments for a Roth IRA are limited to a maximum of $2,000 per
year and are not deductible from taxable income. Lower maximum
limitations apply to individuals with adjusted gross incomes between
$95,000 and $110,000 in the case of single taxpayers, between $150,000
and $160,000 in the case of married taxpayers filing joint returns, and
between $0 and $10,000 in the case of married taxpayers filing
separately. An overall $2,000 annual limitation continues to apply to
all of a taxpayer's IRA contributions, including Roth IRAs and non-Roth
IRAs.
Qualified distributions from Roth IRAs are free from federal income
tax. A qualified distribution requires that the individual has held the
Roth IRA for at least five years and, in addition, that the
distribution is made either after the individual reaches age 59 1/2, on
the individual's death or disability, or as a qualified first-time home
purchase, subject to a $10,000 lifetime maximum, for the individual, a
spouse, child, grandchild, or ancestor. Any distribution which is not a
qualified distribution is taxable to the extent of earnings in the
distribution. Distributions are treated as made from contributions
first and therefore no distributions are taxable until distributions
exceed the amount of contributions to the Roth IRA. The 10% penalty tax
and the regular IRA exceptions to the 10% penalty tax apply to taxable
distributions from a Roth IRA.
Amounts may be rolled over from one Roth IRA to another Roth IRA.
Furthermore, an individual may make a rollover contribution from a
non-Roth IRA to a Roth IRA, unless the individual has adjusted gross
income over $100,000 or the individual is a married taxpayer filing a
separate return. The individual must pay tax on any portion of the IRA
being rolled over that represents income or a previously deductible IRA
contribution. There are no similar limitations on rollovers from a Roth
IRA to another Roth IRA.
(d) Pension and Profit-Sharing Plans
Sections 401(a) and 401(k) of the Code permit employers, including
self-employed individuals, to establish various types of retirement
plans for employees. These retirement plans may permit the purchase of
the contracts to provide benefits under the plan. Contributions to the
plan for the benefit of employees will not be included in the gross
income of the employee until distributed from the plan. The tax
consequences to owners may vary depending upon the particular plan
design. However, the Code places limitations on all plans on such items
as amount of allowable contributions; form, manner and timing of
distributions; vesting and non-forfeitability of interests;
nondiscrimination in eligibility and participation; and the tax
treatment of distributions, transferability of benefits, withdrawals
and surrenders. Purchasers of contracts for use with pension or profit
sharing plans should obtain competent tax advice as to the tax
treatment and suitability of such an investment.
(e) Non-Qualified Deferred Compensation Plans -- Section 457
Under Code provisions, employees and independent contracts performing
services for state and local governments and other tax-exempt
organizations may participate in Deferred Compensation Plans Under
Section 457 of the Code. The amounts deferred under a Plan which meets
the requirements of Section 457 of the Code are not taxable as income
to the participant until paid or otherwise made available to the
participant or beneficiary. As a general rule, the maximum amount which
can be deferred in any one year is the lesser of $8,000 or 33 1/3
percent of the participant's includible compensation. However, in
limited circumstances, the plan may provided for additional catch-up
contributions in each of the last three years before normal retirement
age. Furthermore, the Code provides additional requirements and
restrictions regarding eligibility and distributions.
All of the assets and income of a Plan established by governmental
employer after August 20, 1996, must be held in trust for the exclusive
benefit of participants and their beneficiaries. For this purpose,
custodial accounts and certain annuity contracts are treated as trusts.
Plans that were in existence on August 20, 1996 may be amended to
satisfy the trust and exclusive benefit requirement any time prior to
January 1, 1999, and must be amended not later than that date to
continue to receive favorable tax treatment. The requirement of a trust
does not apply to amounts under a Plan of a tax-exempt
(non-governmental) employer. In addition, the requirement of a trust
does not apply to amounts under a Plan of a governmental employer if
the Plan is not an eligible plan within the meaning of section 457(b)
of the Code. In the absence of such a trust, amounts under the plan
will be subject to the claims of the employer's general creditor's.
In general, distributions from a Plan are prohibited under section 457
of the Code unless made after the participation employee:
o attains age 70 1/2,
o separates from service,
o dies, or
o suffers an unforeseeable financial emergency as defined in the Code.
Under present federal tax law, amounts accumulated in a Plan under
section 457 of the Code cannot be transferred or rolled over on a
tax-deferred basis except for certain transfers to other Plans under
section 457.
INCOME PAYMENTS; NET INVESTMENT FACTOR
See "Income Payments (The Income Phase)" in the Prospectus.
The net investment factor is an index applied to measure the net investment
performance of an investment division from one valuation date to the next. Since
the net investment factor may be greater or less than or equal to one, and the
factor that offsets the 3% investment rate assumed is slightly less than one,
the value of an annuity unit (which changes with the product of that factor) and
the net investment may increase, decrease or remain the same.
The net investment factor for any investment division for any valuation period
during the accumulation and annuity phases is determined by dividing (a) by (b)
and then subtracting (c) from the result where:
(a) is the net result of:
(1) the net asset value of a series share held in the
investment division determined as of the valuation
date at the end of the valuation period, plus
(2) the per share amount of any dividend or other
distribution declared by the series if the
"ex-dividend" date occurs during the valuation
period, plus or minus
(3) a per share credit or charge with respect to any
taxes paid or reserved for by Jackson National NY
during the valuation period which are determined by
Jackson National NY to be attributable to the
operation of the investment division (no federal
income taxes are applicable under present law);
(b) is the net asset value of the series share held in the
investment division determined as of the valuation date at the
end of the preceding valuation period; and
(c) is the asset charge factor determined by Jackson National NY
for the valuation period to reflect the charges for assuming
the mortality and expense risks and the administration charge.
<PAGE>
JNLNY SEPARATE ACCOUNT - I
[GRAPHIC OMITTED]
FINANCIAL STATEMENTS
DECEMBER 31, 1999
<PAGE>
INDEPENDENT AUDITORS' REPORT
To Jackson National Life Insurance Company of New York and
Contract Owners of JNLNY Separate Account - I
We have audited the accompanying statement of assets and liabilities of each of
the twenty-two portfolios comprising JNLNY Separate Account - I, including the
schedule of investments as of December 31, 1999, and the related statements of
operations and changes in net assets for each of the periods indicated. These
financial statements are the responsibility of the Separate Account's
management. Our responsibility is to express an opinion on these financial
statements based on our audit. The accompanying financial statements of JNLNY
Separate Account - I as of December 31, 1998, were audited by other auditors
whose report thereon dated February 17, 1999, expressed an unqualified opinion
on those statements.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides 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 the twenty-two portfolios
comprising JNLNY Separate Account - I as of December 31, 1999 and the results of
its operations and changes in net assets for each of the periods indicated, in
conformity with generally accepted accounting principles.
/s/ KPMG, LLP
February 2, 2000
<PAGE>
JNLNY SEPARATE ACCOUNT - I
Statement of Assets and Liabilities
December 31, 1999
<TABLE>
<CAPTION>
PORTFOLIOS
------------------------------------------------------------------------
JNL/JANUS JNL/JANUS JNL/JANUS JNL/EAGLE
AGGRESSIVE CAPITAL GLOBAL JNL/ALGER CORE
GROWTH GROWTH EQUITIES GROWTH EQUITY
-------------- ------------- -------------- ------------- --------------
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments in JNL Series Trust,
at market value
(See Schedule of Investments) ..................... $ 14,790,700 $ 16,042,990 $ 4,989,717 $ 8,318,586 $ 849,933
Due from Jackson National Life
Insurance Company of New York ..................... 19,269 12,918 8,612 8,612 -
Receivable for investments sold .................... 567 615 191 319 33
-------------- ------------- -------------- ------------- --------------
Total Assets ..................................... 14,810,536 16,056,523 4,998,520 8,327,517 849,966
LIABILITIES:
Payable for investments purchased .................. 19,269 12,918 8,612 8,612 -
Due to Jackson National Life
Insurance Company of New York ..................... 567 615 191 319 33
-------------- ------------- -------------- ------------- --------------
Total Liabilities ................................ 19,836 13,533 8,803 8,931 33
-------------- ------------- -------------- ------------- --------------
NET ASSETS ............................................ $ 14,790,700 $ 16,042,990 $ 4,989,717 $ 8,318,586 $ 849,933
============== ============= ============== ============= ==============
TOTAL NET ASSETS REPRESENTED BY:
Number of units outstanding ........................ 875,270 640,394 289,871 587,023 71,996
============== ============= ============== ============= ==============
Unit value (net assets divided by
units outstanding) ................................ $ 16.90 $ 25.05 $ 17.21 $ 14.17 $ 11.81
============== ============= ============== ============= ==============
</TABLE>
<TABLE>
<CAPTION>
---------------------------
JNL/EAGLE
SMALLCAP JNL/PUTNAM
EQUITY GROWTH
-------------- -------------
<S> <C> <C>
ASSETS:
Investments in JNL Series Trust,
at market value
(See Schedule of Investments) ..................... $ 921,804 $ 5,859,449
Due from Jackson National Life
Insurance Company of New York ..................... - 6,351
Receivable for investments sold .................... 35 225
-------------- -------------
Total Assets ..................................... 921,839 5,866,025
LIABILITIES:
Payable for investments purchased .................. -- 6,351
Due to Jackson National Life
Insurance Company of New York ..................... 35 225
-------------- -------------
Total Liabilities ................................ 35 6,576
-------------- -------------
NET ASSETS ............................................ $ 921,804 $ 5,859,449
============== =============
TOTAL NET ASSETS REPRESENTED BY:
Number of units outstanding ........................ 75,042 423,138
============== =============
Unit value (net assets divided by
units outstanding) ................................ $ 12.28 $ 13.85
============== =============
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
------------------------------------------------------------------------
PPM PPM
JNL/PUTNAM PPM AMERICA/JNL AMERICA/JNL SALOMON
VALUE AMERICA/JNL HIGH YIELD MONEY BROTHERS/JNL
EQUITY BALANCED BOND MARKET GLOBAL BOND
-------------- -------------- -------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments in JNL Series Trust,
at market value
(See Schedule of Investments) ..................... $ 5,276,409 $ 1,867,141 $ 1,831,873 $ 1,142,352 $ 536,862
Due from Jackson National Life
Insurance Company of New York ..................... - 35,704 - - -
Receivable for investments sold .................... 202 70 70 44 21
-------------- -------------- -------------- ------------- -------------
Total Assets ..................................... 5,276,611 1,902,915 1,831,943 1,142,396 536,883
LIABILITIES:
Payable for investments purchased .................. - 35,704 - - -
Due to Jackson National Life
Insurance Company of New York ..................... 202 70 70 44 21
-------------- -------------- -------------- ------------- -------------
Total Liabilities ................................ 202 35,774 70 44 21
-------------- -------------- -------------- ------------- -------------
NET ASSETS ............................................ $ 5,276,409 $ 1,867,141 $ 1,831,873 $ 1,142,352 $ 536,862
============== ============== ============== ============= =============
TOTAL NET ASSETS REPRESENTED BY:
Number of units outstanding ........................ 541,720 189,390 183,384 110,543 53,100
============== ============== ============== ============= =============
Unit value (net assets divided by
units outstanding) ................................ $ 9.74 $ 9.86 $ 9.99 $ 10.33 $ 10.11
============== ============== ============== ============= =============
</TABLE>
<TABLE>
<CAPTION>
--------------------------------------------------------------
T. ROWE
SALOMON T. ROWE PRICE/JNL T. ROWE
BROTHERS/JNL PRICE/JNL INTERNATIONAL PRICE/JNL
U.S. GOVERNMENT ESTABLISHED EQUITY MID-CAP
& QUALITY BOND GROWTH INVESTMENT GROWTH
----------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
ASSETS:
Investments in JNL Series Trust,
at market value
(See Schedule of Investments) ..................... $ 1,530,200 $ 3,352,196 $ 1,405,994 $ 2,205,560
Due from Jackson National Life
Insurance Company of New York ..................... - - 6,351 -
Receivable for investments sold .................... 59 129 54 85
----------------- -------------- -------------- --------------
Total Assets ..................................... 1,530,259 3,352,325 1,412,399 2,205,645
LIABILITIES:
Payable for investments purchased .................. - - 6,351 -
Due to Jackson National Life
Insurance Company of New York ..................... 59 129 54 85
----------------- -------------- -------------- --------------
Total Liabilities ................................ 59 129 6,405 85
----------------- -------------- -------------- --------------
NET ASSETS ............................................ $ 1,530,200 $ 3,352,196 $ 1,405,994 $ 2,205,560
================= ============== ============== ==============
TOTAL NET ASSETS REPRESENTED BY:
Number of units outstanding ........................ 157,802 268,215 106,235 170,064
================= ============== ============== ==============
Unit value (net assets divided by
units outstanding) ................................ $ 9.70 $ 12.50 $ 13.23 $ 12.97
================= ============== ============== ==============
</TABLE>
<PAGE>
JNLNY SEPARATE ACCOUNT - I
Statement of Assets and Liabilities (continued)
December 31, 1999
<TABLE>
<CAPTION>
PORTFOLIOS
--------------------------------------------------------------------------------------
JNL/S&P JNL/S&P
JNL/S&P JNL/S&P JNL/S&P VERY JNL/S&P EQUITY
CONSERVATIVE MODERATE AGGRESSIVE AGGRESSIVE EQUITY AGGRESSIVE
GROWTH I GROWTH I GROWTH I GROWTH I GROWTH I GROWTH I
-------------- ------------- -------------- ------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments in JNL Series Trust,
at market value
(See Schedule of Investments) ....... $ 1,233,318 $ 1,269,710 $ 1,204,311 $ 198,709 $ 1,465,535 $ 629,427
Due from Jackson National Life
Insurance Company of New York ....... - 6,351 - - - -
Receivable for investments sold ...... 47 48 46 8 56 24
-------------- ------------- -------------- ------------- -------------- --------------
Total Assets ....................... 1,233,365 1,276,109 1,204,357 198,717 1,465,591 629,451
LIABILITIES:
Payable for investments purchased .... - 6,351 - - - -
Due to Jackson National Life
Insurance Company of New York ....... 47 48 46 8 56 24
-------------- ------------- -------------- ------------- -------------- --------------
Total Liabilities .................. 47 6,399 46 8 56 24
-------------- ------------- -------------- ------------- -------------- --------------
NET ASSETS .............................. $ 1,233,318 $ 1,269,710 $ 1,204,311 $ 198,709 $ 1,465,535 $ 629,427
============== ============= ============== ============= ============== ==============
TOTAL NET ASSETS REPRESENTED BY:
Number of units outstanding .......... 112,158 107,947 99,418 15,526 110,742 47,070
============== ============= ============== ============= ============== ==============
Unit value (net assets divided by
units outstanding) .................. $ 11.00 $ 11.76 $ 12.11 $ 12.80 $ 13.23 $ 13.37
============== ============= ============== ============= ============== ==============
</TABLE>
See accompanying notes to financial statements.
<PAGE>
JNLNY SEPARATE ACCOUNT - I
Statement of Operations
For the period ended December 31, 1999
<TABLE>
<CAPTION>
PORTFOLIOS
------------------------------------------------------------------------
JNL/JANUS JNL/JANUS JNL/JANUS JNL/EAGLE
AGGRESSIVE CAPITAL GLOBAL JNL/ALGER CORE
GROWTH1 GROWTH EQUITIES GROWTH EQUITY2
-------------- ------------- -------------- ------------- --------------
<S> <C> <C> <C> <C> <C>
NET REALIZED GAIN FROM SALES
OF INVESTMENTS:
Proceeds from sales .............................. $ 964,091 $ 1,204,393 $ 361,798 $ 476,094 $ 95,812
Cost of investments sold ......................... 833,041 1,008,343 333,971 454,014 94,263
-------------- ------------- -------------- ------------- --------------
Net realized gain from sales
of investments .................................. 131,050 196,050 27,827 22,080 1,549
CHANGE IN NET UNREALIZED GAIN ON
INVESTMENTS:
Unrealized gain beginning of
period .......................................... - 424 1,305 1,561 -
Unrealized gain end of period .................... 4,269,576 5,509,435 1,260,427 1,225,259 95,424
-------------- ------------- -------------- ------------- --------------
Change in net unrealized gain on
investments ..................................... 4,269,576 5,509,011 1,259,122 1,223,698 95,424
-------------- ------------- -------------- ------------- --------------
NET GAIN ON INVESTMENTS ............................. 4,400,626 5,705,061 1,286,949 1,245,778 96,973
EXPENSES:
Administrative charge ............................ 7,097 6,494 1,876 4,336 401
Mortality and expense risk charge ................ 59,140 54,115 15,632 36,131 3,340
-------------- ------------- -------------- ------------- --------------
TOTAL EXPENSES .................................. 66,237 60,609 17,508 40,467 3,741
-------------- ------------- -------------- ------------- --------------
INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS ........................ $ 4,334,389 $ 5,644,452 $ 1,269,441 $ 1,205,311 $ 93,232
============== ============= ============== ============= ==============
</TABLE>
<TABLE>
<CAPTION>
----------------------------
JNL/EAGLE
SMALLCAP JNL/PUTNAM
EQUITY3 GROWTH
-------------- -------------
NET REALIZED GAIN FROM SALES
OF INVESTMENTS:
<S> <C> <C>
Proceeds from sales .............................. $ 54,398 $ 551,536
Cost of investments sold ......................... 53,684 514,669
-------------- -------------
Net realized gain from sales
of investments .................................. 714 36,867
CHANGE IN NET UNREALIZED GAIN ON
INVESTMENTS:
Unrealized gain beginning of
period .......................................... - -
Unrealized gain end of period .................... 113,145 1,002,641
-------------- -------------
Change in net unrealized gain on
investments ..................................... 113,145 1,002,641
-------------- -------------
NET GAIN ON INVESTMENTS ............................. 113,859 1,039,508
EXPENSES:
Administrative charge ............................ 385 3,313
Mortality and expense risk charge ................ 3,208 27,608
-------------- -------------
TOTAL EXPENSES .................................. 3,593 30,921
-------------- -------------
INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS ........................ $ 110,266 $ 1,008,587
============== =============
</TABLE>
- -------------------------------------
1 Period from January 29, 1999 (commencement of operations).
2 Period from March 22, 1999 (commencement of operations).
3 Period from April 22, 1999 (commencement of operations).
See accompanying notes to the financial statements.
<PAGE>
JNLNY SEPARATE ACCOUNT - I
Statement of Operations (continued)
For the period ended December 31, 1999
<TABLE>
<CAPTION>
PORTFOLIOS
------------------------------------------------------------------------
PPM PPM
JNL/PUTNAM PPM AMERICA/JNL AMERICA/JNL SALOMON
VALUE AMERICA/JNL HIGH YIELD MONEY BROTHERS/JNL
EQUITY BALANCED1 BOND MARKET GLOBAL BOND1
-------------- ------------- -------------- ------------- --------------
<S> <C> <C> <C> <C> <C>
NET REALIZED GAIN (LOSS) FROM SALES
OF INVESTMENTS:
Proceeds from sales ................................ $ 582,582 $ 64,134 $ 466,354 $ 2,265,562 $ 33,453
Cost of investments sold ........................... 622,500 65,431 467,029 2,249,906 33,257
-------------- ------------- -------------- ------------- --------------
Net realized gain (loss) from
sales of investments .............................. (39,918) (1,297) (675) 15,656 196
CHANGE IN NET UNREALIZED GAIN
(LOSS) ON
INVESTMENTS:
Unrealized gain beginning of
period ............................................ 53 - 39 4 -
Unrealized gain (loss) end of
period ............................................ (276,222) (34,756) 3,965 8,210 10,419
-------------- ------------- -------------- ------------- --------------
Change in net unrealized gain
(loss) on investments ............................. (276,275) (34,756) 3,926 8,206 10,419
-------------- ------------- -------------- ------------- --------------
NET GAIN (LOSS) ON INVESTMENTS ........................ (316,193) (36,053) 3,251 23,862 10,615
EXPENSES:
Administrative charge .............................. 3,091 1,256 1,389 757 353
Mortality and expense risk charge .................. 25,757 10,465 11,574 6,310 2,940
-------------- ------------- -------------- ------------- --------------
TOTAL EXPENSES .................................... 28,848 11,721 12,963 7,067 3,293
-------------- ------------- -------------- ------------- --------------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS .......................... $ (345,041) $ (47,774) $ (9,712) $ 16,795 $ 7,322
============== ============= ============== ============= ==============
</TABLE>
<TABLE>
<CAPTION>
------------------------------
SALOMON
BROTHERS/JNL T. ROWE
U.S. PRICE/JNL
GOVERNMENT & ESTABLISHED
QUALITY BOND GROWTH2
--------------- --------------
<S> <C> <C>
NET REALIZED GAIN (LOSS) FROM SALES
OF INVESTMENTS:
Proceeds from sales ................................ $ 291,695 $ 980,232
Cost of investments sold ........................... 291,721 929,562
--------------- --------------
Net realized gain (loss) from
sales of investments .............................. (26) 50,670
CHANGE IN NET UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Unrealized gain beginning of
period ............................................ 44 -
Unrealized gain (loss) end of
period ............................................ (5,978) 442,034
--------------- --------------
Change in net unrealized gain
(loss) on investments ............................. (6,022) 442,034
--------------- --------------
NET GAIN (LOSS) ON INVESTMENTS ........................ (6,048) 492,704
EXPENSES:
Administrative charge .............................. 1,152 2,383
Mortality and expense risk charge .................. 9,603 19,857
--------------- --------------
TOTAL EXPENSES .................................... 10,755 22,240
--------------- --------------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS .......................... $ (16,803) $ 470,464
=============== ==============
</TABLE>
- -----------------------------
1 Period from January 21, 1999 (commencement of operations).
2 Period from February 9, 1999 (commencement of operations).
3 Period from April 20, 1999 (commencement of operations).
4 Period from April 22, 1999 (commencement of operations).
5 Period from May 10, 1999 (commencement of operations).
6 Period from May 13, 1999 (commencement of operations).
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
------------------------------------------------------------------------
T. ROWE
PRICE/JNL T. ROWE
INTERNATIONAL PRICE/JNL JNL/S&P JNL/S&P JNL/S&P
EQUITY MID-CAP CONSERVATIVE MODERATE AGGRESSIVE
INVESTMENT GROWTH GROWTH I(4) GROWTH I(3) GROWTH I(5)
-------------- -------------- -------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
NET REALIZED GAIN (LOSS) FROM SALES
OF INVESTMENTS:
Proceeds from sales ................................ $ 71,889 $ 399,177 $ 101,966 $ 91,090 $ 26,507
Cost of investments sold ........................... 68,969 378,331 103,233 88,656 23,573
-------------- -------------- -------------- ------------- -------------
Net realized gain (loss) from
sales of investments .............................. 2,920 20,846 (1,267) 2,434 2,934
CHANGE IN NET UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Unrealized gain beginning of
period ............................................ - - - - -
Unrealized gain (loss) end of
period ............................................ 265,461 308,059 118,207 177,161 209,745
-------------- -------------- -------------- ------------- -------------
Change in net unrealized gain
(loss) on investments ............................. 265,461 308,059 118,207 177,161 209,745
-------------- -------------- -------------- ------------- -------------
NET GAIN (LOSS) ON INVESTMENTS ........................ 268,381 328,905 116,940 179,595 212,679
EXPENSES:
Administrative charge .............................. 718 1,308 594 634 568
Mortality and expense risk charge .................. 5,983 10,902 4,949 5,282 4,733
-------------- -------------- -------------- ------------- -------------
TOTAL EXPENSES .................................... 6,701 12,210 5,543 5,916 5,301
-------------- -------------- -------------- ------------- -------------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS .......................... $ 261,680 $ 316,695 $ 111,397 $ 173,679 $ 207,378
============== ============== ============== ============= =============
</TABLE>
<TABLE>
<CAPTION>
--------------------------------------------
JNL/S&P JNL/S&P
VERY JNL/S&P EQUITY
AGGRESSIVE EQUITY AGGRESSIVE
GROWTH I(6) GROWTH I(3) GROWTH I(3)
--------------- -------------- -------------
<S> <C> <C> <C>
NET REALIZED GAIN (LOSS) FROM SALES
OF INVESTMENTS:
Proceeds from sales ................................ $ 1,192 $ 21,361 $ 18,870
Cost of investments sold ........................... 1,074 18,522 18,876
--------------- -------------- -------------
Net realized gain (loss) from
sales of investments .............................. 118 2,839 (6)
CHANGE IN NET UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Unrealized gain beginning of
period ............................................ - - -
Unrealized gain (loss) end of
period ............................................ 39,033 289,771 140,134
--------------- -------------- -------------
Change in net unrealized gain
(loss) on investments ............................. 39,033 289,771 140,134
--------------- -------------- -------------
NET GAIN (LOSS) ON INVESTMENTS ........................ 39,151 292,610 140,128
EXPENSES:
Administrative charge .............................. 83 617 237
Mortality and expense risk charge .................. 689 5,142 1,975
--------------- -------------- -------------
TOTAL EXPENSES .................................... 772 5,759 2,212
--------------- -------------- -------------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS .......................... $ 38,379 $ 286,851 $ 137,916
=============== ============== =============
</TABLE>
<PAGE>
JNLNY SEPARATE ACCOUNT - I
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
PORTFOLIOS
------------------------------------------------------------------------
JNL/JANUS
AGGRESSIVE JNL/JANUS JNL/JANUS
GROWTH CAPITAL GROWTH GLOBAL EQUITIES
-------------- ---------------------------------------------------------
PERIOD FROM PERIOD FROM PERIOD FROM
JANUARY 29, DECEMBER 17, NOVEMBER 27,
1999* TO YEAR ENDED 1998* TO YEAR ENDED 1998* TO
DECEMBER 31, DECEMBER DECEMBER 31, DECEMBER 31, DECEMBER
31, 31,
1999 1999 1998 1999 1998
-------------- ------------- -------------- -------------- -------------
<S> <C> <C> <C> <C> <C>
OPERATIONS:
Net realized gain (loss) from
sales of investments ............................... $ 131,050 $ 196,050 $ - $ 27,827 $ -
Change in net unrealized gain
(loss) on investments .............................. 4,269,576 5,509,011 424 1,259,122 1,305
Administrative charge ............................... (7,097) (6,494) - (1,876) (2)
Mortality and expense risk charge ................... (59,140) (54,115) (2) (15,632) (20)
-------------- ------------- -------------- -------------- -------------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS ........................... 4,334,389 5,644,452 422 1,269,441 1,283
NET DEPOSITS INTO (WITHDRAWALS FROM)
SEPARATE ACCOUNT (NOTE 6) ........................... 10,456,311 10,394,024 4,092 3,690,871 28,122
-------------- ------------- -------------- -------------- -------------
Increase in net assets .............................. 14,790,700 16,038,476 4,514 4,960,312 29,405
NET ASSETS:
Beginning of period ................................. - 4,514 - 29,405 -
-------------- ------------- -------------- -------------- -------------
End of period ....................................... $ 14,790,700 $ 16,042,990 $ 4,514 $ 4,989,717 $ 29,405
============== ============= ============== ============== =============
</TABLE>
<TABLE>
<CAPTION>
----------------------------
JNL/ALGER GROWTH
----------------------------
PERIOD FROM
DECEMBER 17,
YEAR ENDED 1998* TO
DECEMBER 31, DECEMBER
31,
1999 1998
-------------- -------------
<S> <C> <C>
OPERATIONS:
Net realized gain (loss) from
sales of investments ............................... $ 22,080 $ 1
Change in net unrealized gain
(loss) on investments .............................. 1,223,698 1,561
Administrative charge ............................... (4,336) (2)
Mortality and expense risk charge ................... (36,131) (14)
-------------- -------------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS ........................... 1,205,311 1,546
NET DEPOSITS INTO (WITHDRAWALS FROM)
SEPARATE ACCOUNT (NOTE 6) ........................... 7,074,470 37,259
-------------- -------------
Increase in net assets .............................. 8,279,781 38,805
NET ASSETS:
Beginning of period ................................. 38,805 -
-------------- -------------
End of period ....................................... $ 8,318,586 $ 38,805
============== =============
</TABLE>
- --------------------------------------
* Commencement of operations.
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
-----------------------------------------------------------
JNL/EAGLE
JNL/EAGLE SMALLCAP JNL/PUTNAM
CORE EQUITY EQUITY GROWTH
-------------- -------------- ----------------------------
PERIOD FROM PERIOD FROM PERIOD FROM
MARCH 22, APRIL 22, NOVEMBER 27,
1999* TO 1999* TO YEAR ENDED 1998* TO
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1999 1999 1999 1998
-------------- -------------- -------------- -------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net realized gain (loss) from
sales of investments ............................... $ 1,549 $ 714 $ 36,867 $ 688
Change in net unrealized gain
(loss) on investments .............................. 95,424 113,145 1,002,641 -
Administrative charge ............................... (401) (385) (3,313) (1)
Mortality and expense risk charge ................... (3,340) (3,208) (27,608) (9)
-------------- -------------- -------------- -------------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS ........................... 93,232 110,266 1,008,587 678
NET DEPOSITS INTO (WITHDRAWALS FROM)
SEPARATE ACCOUNT (NOTE 6) ........................... 756,701 811,538 4,850,862 (678)
-------------- -------------- -------------- -------------
Increase in net assets .............................. 849,933 921,804 5,859,449 -
NET ASSETS:
Beginning of period ................................. - - - -
-------------- -------------- -------------- -------------
End of period ....................................... $ 849,933 $ 921,804 $ 5,859,449 $ -
============== ============== ============== =============
</TABLE>
<TABLE>
<CAPTION>
------------------------------------------------------------------------
PPM
JNL/PUTNAM AMERICA/JNL PPM AMERICA/JNL
VALUE EQUITY BALANCED HIGH YIELD BOND
-------------- -------------- ------------------------------------------
PERIOD FROM PERIOD FROM PERIOD FROM
NOVEMBER 27, JANUARY 21, NOVEMBER 27,
YEAR ENDED 1998* TO 1999* TO YEAR ENDED 1998* TO
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1999 1998 1999 1999 1998
-------------- -------------- -------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
OPERATIONS:
Net realized gain (loss) from
sales of investments ............................... $ (39,918) $ 21 $ (1,297) $ (675) $ -
Change in net unrealized gain
(loss) on investments .............................. (276,275) 53 (34,756) 3,926 39
Administrative charge ............................... (3,091) (2) (1,256) (1,389) (1)
Mortality and expense risk charge ................... (25,757) (17) (10,465) (11,574) (8)
-------------- -------------- -------------- ------------- -------------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS ........................... (345,041) 55 (47,774) (9,712) 30
NET DEPOSITS INTO (WITHDRAWALS FROM)
SEPARATE ACCOUNT (NOTE 6) ........................... 5,611,560 9,835 1,914,915 1,831,428 10,127
-------------- -------------- -------------- ------------- -------------
Increase in net assets .............................. 5,266,519 9,890 1,867,141 1,821,716 10,157
NET ASSETS:
Beginning of period ................................. 9,890 - - 10,157 -
-------------- -------------- -------------- ------------- -------------
End of period ....................................... $ 5,276,409 $ 9,890 $ 1,867,141 $ 1,831,873 $ 10,157
============== ============== ============== ============= =============
</TABLE>
<PAGE>
JNLNY SEPARATE ACCOUNT - I
Statements of Changes in Net Assets (continued)
<TABLE>
<CAPTION>
PORTFOLIOS
---------------------------------------------------------------------------------------
T. ROWE
SALOMON SALOMON BROTHERS/JNL PRICE/JNL
PPM AMERICA/JNL BROTHERS/JNL U.S. GOVERNMENT & ESTABLISHED
MONEY MARKET GLOBAL BOND QUALITY BOND GROWTH
---------------------------- -------------- ---------------------------- --------------
PERIOD FROM PERIOD FROM PERIOD FROM PERIOD FROM
DECEMBER 17, JANUARY 21, NOVEMBER 27, FEBRUARY 9,
YEAR ENDED 1998* TO 1999* TO YEAR ENDED 1998* TO 1999* TO
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1999 1998 1999 1999 1998 1999
-------------- ------------- -------------- -------------- ------------- --------------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net realized gain (loss) from
sales of investments ............... $ 15,656 $ - $ 196 $ (26) $ - $ 50,670
Change in net unrealized gain
(loss) on investments .............. 8,206 4 10,419 (6,022) 44 442,034
Administrative charge ............... (757) - (353) (1,152) (1) (2,383)
Mortality and expense risk charge ... (6,310) (1) (2,940) (9,603) (8) (19,857)
-------------- ------------- -------------- -------------- ------------- --------------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS ........... 16,795 3 7,322 (16,803) 35 470,464
NET DEPOSITS INTO (WITHDRAWALS FROM)
SEPARATE ACCOUNT (NOTE 6) ........... 1,123,554 2,000 529,540 1,536,867 10,101 2,881,732
-------------- ------------- -------------- -------------- ------------- --------------
Increase in net assets .............. 1,140,349 2,003 536,862 1,520,064 10,136 3,352,196
NET ASSETS:
Beginning of period ................. 2,003 - - 10,136 - -
-------------- ------------- -------------- -------------- ------------- --------------
End of period ....................... $ 1,142,352 $ 2,003 $ 536,862 $ 1,530,200 $ 10,136 $ 3,352,196
============== ============= ============== ============== ============= ==============
</TABLE>
- --------------------------------------
* Commencement of operations.
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------
T. ROWE PRICE/JNL JNL/S&P JNL/S&P
INTERNATIONAL EQUITY T. ROWE PRICE/JNL CONSERVATIVE MODERATE
INVESTMENT MID CAP GROWTH GROWTH I GROWTH I
----------------------------- ---------------------------- -------------- -------------
PERIOD FROM PERIOD FROM PERIOD FROM PERIOD FROM
NOVEMBER 27, NOVEMBER 27, APRIL 22 APRIL 20,
YEAR ENDED 1998* TO YEAR ENDED 1998* TO 1999* TO 1999* TO
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1999 1998 1999 1998 1999 1999
-------------- -------------- -------------- ------------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net realized gain (loss) from
sales of investments ............... $ 2,920 $ 22 $ 20,846 $ 92 $ (1,267) $ 2,434
Change in net unrealized gain
(loss) on investments .............. 265,461 - 308,059 - 118,207 177,161
Administrative charge ............... (718) - (1,308) - (594) (634)
Mortality and expense risk charge ... (5,983) (2) (10,902) (2) (4,949) (5,282)
-------------- -------------- -------------- ------------- -------------- -------------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS ........... 261,680 20 316,695 90 111,397 173,679
NET DEPOSITS INTO (WITHDRAWALS FROM)
SEPARATE ACCOUNT (NOTE 6) ........... 1,144,314 (20) 1,888,865 (90) 1,121,921 1,096,031
-------------- -------------- -------------- ------------- -------------- -------------
Increase in net assets .............. 1,405,994 - 2,205,560 - 1,233,318 1,269,710
NET ASSETS:
Beginning of period ................. - - - - - -
-------------- -------------- -------------- ------------- -------------- -------------
End of period ....................... $ 1,405,994 $ - $ 2,205,560 $ - $ 1,233,318 $ 1,269,710
============== ============== ============== ============= ============== =============
</TABLE>
-----------------------------
JNL/S&P JNL/S&P
AGGRESSIVE VERY
GROWTH I AGGRESSIVE
------------- ---------------
PERIOD FROM PERIOD FROM
MAY 10, MAY 13,
1999* TO 1999* TO
DECEMBER 31, DECEMBER 31,
1999 1999
------------- ---------------
OPERATIONS:
Net realized gain (loss) from
sales of investments ............... $ 2,934 $ 118
Change in net unrealized gain
(loss) on investments .............. 209,745 39,033
Administrative charge ............... (568) (83)
Mortality and expense risk charge ... (4,733) (689)
-------------- --------------
INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS ........... 207,378 38,379
NET DEPOSITS INTO (WITHDRAWALS FROM)
SEPARATE ACCOUNT (NOTE 6) ........... 996,933 160,330
-------------- --------------
Increase in net assets .............. 1,204,311 198,709
NET ASSETS:
Beginning of period ................. - -
-------------- --------------
End of period ....................... $ 1,204,311 $ 198,709
============== ==============
<PAGE>
JNLNY SEPARATE ACCOUNT - I
Statements of Changes in Net Assets (continued)
PORTFOLIOS
----------------------------
JNL/S&P
JNL/S&P EQUITY
EQUITY AGGRESSIVE
GROWTH I GROWTH I
-------------- -------------
PERIOD FROM PERIOD FROM
APRIL 20, APRIL 20,
1999* TO 1999* TO
DECEMBER 31, DECEMBER 31,
1999 1999
-------------- -------------
OPERATIONS:
Net realized gain (loss) from
sales of investments ........................ $ 2,839 $ (6)
Change in net unrealized gain on
investments ................................. 289,771 140,134
Administrative charge ........................ (617) (237)
Mortality and expense risk charge ............ (5,142) (1,975)
-------------- -------------
INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS .............................. 286,851 137,916
NET DEPOSITS INTO
SEPARATE ACCOUNT (NOTE 6) .................... 1,178,684 491,511
-------------- -------------
Increase in net assets ....................... 1,465,535 629,427
NET ASSETS:
Beginning of period .......................... - -
-------------- -------------
End of period ................................ $ 1,465,535 $ 629,427
============== =============
- --------------------------------------
* Commencement of operations.
See accompanying notes to financial statements.
<PAGE>
JNLNY SEPARATE ACCOUNT - I
Schedule of Investments
December 31, 1999
<TABLE>
<CAPTION>
NUMBER MARKET
OF SHARES COST VALUE
--------------- --------------- ---------------
<S> <C> <C> <C>
JNL SERIES TRUST
- ----------------
JNL/Janus Aggressive Growth ....................................... 370,045 $ 10,521,124 $ 14,790,700
JNL/Janus Capital Growth .......................................... 367,790 10,533,555 16,042,990
JNL/Janus Global Equities ......................................... 139,807 3,729,290 4,989,717
JNL/Alger Growth .................................................. 363,098 7,093,327 8,318,586
JNL/Eagle Core Equity ............................................. 46,017 754,509 849,933
JNL/Eagle SmallCap Equity ......................................... 54,320 808,659 921,804
JNL/Putnam Growth ................................................. 205,956 4,856,808 5,859,449
JNL/Putnam Value Equity ........................................... 314,446 5,552,631 5,276,409
PPM America/JNL Balanced .......................................... 148,186 1,901,897 1,867,141
PPM America/JNL High Yield Bond ................................... 180,836 1,827,908 1,831,873
PPM America/JNL Money Market ...................................... 1,142,352 1,134,142 1,142,352
Salomon Brothers/JNL Global Bond .................................. 52,377 526,443 536,862
Salomon Brothers/JNL U.S. Government & Quality Bond ............... 147,703 1,536,178 1,530,200
T. Rowe Price/JNL Established Growth .............................. 154,479 2,910,162 3,352,196
T. Rowe Price/JNL International Equity Investment ................. 83,740 1,140,533 1,405,994
T. Rowe Price/JNL Mid-Cap Growth .................................. 93,022 1,897,501 2,205,560
JNL/S&P Conservative Growth I ..................................... 99,062 1,115,111 1,233,318
JNL/S&P Moderate Growth I ......................................... 94,613 1,092,549 1,269,710
JNL/S&P Aggressive Growth I ....................................... 81,982 994,566 1,204,311
JNL/S&P Very Aggressive Growth I .................................. 11,963 159,676 198,709
JNL/S&P Equity Growth I ........................................... 96,353 1,175,764 1,465,535
JNL/S&P Equity Aggressive Growth I ................................ 40,452 489,293 629,427
</TABLE>
See accompanying notes to financial statements.
<PAGE>
JNLNY SEPARATE ACCOUNT - I
Notes to Financial Statements
NOTE 1 - ORGANIZATION
Jackson National Life Insurance Company of New York ("JNLNY")
established JNLNY Separate Account - I (the "Separate Account") on
September 12, 1997. The Separate Account commenced operations on
November 27, 1998, and is registered under the Investment Company Act
of 1940 as a unit investment trust. The Separate Account receives and
invests net premiums for individual flexible premium variable annuity
contracts issued by JNLNY. The contracts can be purchased on a non-tax
qualified basis or in connection with certain plans qualifying for
favorable federal income tax treatment. The Separate Account currently
consists of twenty two Portfolios, each of which invests in the
following series of the JNL Series Trust:
JNL/Janus Aggressive Growth Series
JNL/Janus Capital Growth Series
JNL/Janus Global Equities Series
JNL/Alger Growth Series
JNL/Eagle Core Equity Series
JNL/Eagle SmallCap Equity Series
JNL/Putnam Growth Series
JNL/Putnam Value Equity Series
PPM America/JNL Balanced Series
PPM America/JNL High Yield Bond Series
PPM America/JNL Money Market Series
Salomon Brothers/JNL Global Bond Series
Salomon Brothers/JNL U.S. Government & Quality Bond Series
T. Rowe Price/JNL Established Growth Series
T. Rowe Price/JNL International Equity Investment Series
T. Rowe Price/JNL Mid-Cap Growth Series
JNL/S&P Conservative Growth Series I
JNL/S&P Moderate Growth Series I
JNL/S&P Aggressive Growth Series I
JNL/S&P Very Aggressive Growth Series I
JNL/S&P Equity Growth Series I
JNL/S&P Equity Aggressive Growth Series I
Jackson National Financial Services, LLC, a wholly-owned subsidiary of
JNL, serves as investment adviser for all the series of the JNL Series
Trust.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed
by the Separate Account in the preparation of its financial statements.
The policies are in conformity with generally accepted accounting
principles.
<PAGE>
JNLNY SEPARATE ACCOUNT - I
Notes to Financial Statements (continued)
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ
from those estimates.
Investments
The Separate Account's investments in the corresponding series
of the JNL Series Trust are stated at the net asset values of
the respective series. The average cost method is used in
determining the cost of the shares sold on withdrawals by the
Separate Account. Investments in JNL Series Trust are recorded
on trade date. The Separate Account does not record dividend
income as the Series follow the accounting practice known as
consent dividending, whereby all net investment income and
realized gains are treated as being distributed to the
Separate Account and are immediately reinvested in the Series.
Federal Income Taxes
The operations of the Separate Account are included in the
federal income tax return of JNLNY, which is taxed as a "life
insurance company" under the provisions of the Internal
Revenue Code. Under current law, no federal income taxes are
payable with respect to the Separate Account. Therefore, no
federal income tax has been provided.
NOTE 3 - POLICY CHARGES
Charges are deducted from the Separate Account to compensate JNLNY for
providing the insurance benefits set forth in the contracts,
administering the contracts, distributing the contracts, and assuming
certain risks in connection with the contracts.
Contract Maintenance Charge
An annual contract maintenance charge of $30 is charged
against each contract to reimburse JNLNY for expenses incurred
in establishing and maintaining records relating to the
contract. The contract maintenance charge is assessed on each
anniversary of the contract date that occurs on or prior to
the annuity date. The charge is deducted by redeeming units.
For the period ended December 31, 1999, $9 in contract
maintenance charges were assessed.
<PAGE>
JNLNY SEPARATE ACCOUNT - I
Notes to Financial Statements (continued)
NOTE 3 - POLICY CHARGES (CONTINUED)
Transfer Fee Charge
A transfer fee of $25 will apply to transfers made by
policyholders between the Portfolios and between the
Portfolios and the general account in excess of 15 transfers
in a contract year. JNLNY may waive the transfer fee in
connection with pre-authorized automatic transfer programs, or
in those states where a lesser fee is required
This fee will be deducted from contract values which remain in
the portfolio(s) from which the transfers were made. If such
remaining contract value is insufficient to pay the transfer
fee, then the fee will be deducted from transferred contract
values. For the period ended December 31, 1999, no transfer
fees were assessed.
Surrender or Contingent Deferred Sales Charge
During the first seven contract years, certain contracts
include a provision for a charge upon the surrender or partial
surrender of the contract. The amount assessed under the
contract terms, if any, depends upon the cost associated with
distributing the particular contracts. The amount, if any, is
determined based on a number of factors, including the amount
withdrawn, the contract year of surrender, or the number and
amount of withdrawals in a calendar year. The surrender
charges are assessed by JNLNY and withheld from the proceeds
of the withdrawals. For the period ended December 31, 1999,
$59,659 in surrender charges were assessed.
Insurance Charges
JNLNY deducts a daily charge from the assets of the Separate
Account equivalent to an annual rate of 1.25% for the
assumption of mortality and expense risks. The mortality risk
assumed by JNLNY is that the insured may receive benefits
greater than those anticipated by JNLNY. The expense risk
assumed by JNLNY is that the costs of administering the
contracts of the Separate Account will exceed the amount
received from the Administration Charge and the Contract
Maintenance Charge.
JNLNY deducts a daily charge for administrative expenses from
the net assets of the Separate Account equivalent to an annual
rate of 0.15%. The administration charge is designed to
reimburse JNLNY for administrative expenses related to the
Separate Account and the issuance and maintenance of
contracts.
<PAGE>
JNLNY SEPARATE ACCOUNT - I
Notes to Financial Statements (continued)
NOTE 4 - PURCHASES AND SALES OF INVESTMENTS
For the period ended December 31, 1999, purchases and proceeds from
sales of investments in the JNL Series Trust are as follows:
<TABLE>
<CAPTION>
PROCEEDS
PURCHASES FROM SALES
---------------- ----------------
<S> <C> <C>
JNL SERIES TRUST
----------------
JNL/Janus Aggressive Growth .................................. $ 11,354,165 $ 964,091
JNL/Janus Capital Growth ..................................... 11,537,808 1,204,393
JNL/Janus Global Equities .................................... 4,035,161 361,798
JNL/Alger Growth ............................................. 7,510,097 476,094
JNL/Eagle Core Equity ........................................ 848,772 95,812
JNL/Eagle SmallCap Equity .................................... 862,343 54,398
JNL/Putnam Growth ............................................ 5,371,477 551,536
JNL/Putnam Value Equity ...................................... 6,165,294 582,582
PPM America/JNL Balanced ..................................... 1,967,328 64,134
PPM America/JNL High Yield Bond .............................. 2,284,819 466,354
PPM America/JNL Money Market ................................. 3,382,049 2,265,562
Salomon Brothers/JNL Global Bond ............................. 559,700 33,453
Salomon Brothers/JNL U.S. Government & Quality Bond .......... 1,817,807 291,695
T. Rowe Price/JNL Established Growth ......................... 3,839,724 980,232
T. Rowe Price/JNL International Equity Investment ............ 1,209,502 71,889
T. Rowe Price/JNL Mid-Cap Growth ............................. 2,275,832 399,177
JNL/S&P Conservative Growth I ................................ 1,218,344 101,966
JNL/S&P Moderate Growth I .................................... 1,181,205 91,090
JNL/S&P Aggressive Growth I .................................. 1,018,139 26,507
JNL/S&P Very Aggressive Growth I ............................. 160,750 1,192
JNL/S&P Equity Growth I ...................................... 1,194,286 21,361
JNL/S&P Equity Aggressive Growth I ........................... 508,169 18,870
</TABLE>
<PAGE>
JNLNY SEPARATE ACCOUNT - I
Notes to Financial Statements (continued)
NOTE 5 - ACCUMULATION OF UNIT ACTIVITY
The following is a reconciliation of unit activity for the periods ended
December 31, 1999 and 1998:
<TABLE>
<CAPTION>
UNITS UNITS UNITS
OUTSTANDING UNITS UNITS OUTSTANDING UNITS UNITS OUTSTANDING
PORTFOLIO: AT ISSUED REDEEMED AT 12/31/98 ISSUED REDEEMED AT 12/31/99
11/27/98*
------------ ----------- ----------- ----------- ------------ ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
JNL/Janus Aggressive Growth ........ - - - - 944,377 (69,107) 875,270
JNL/Janus Capital Growth ........... - 398 - 398 706,188 (66,192) 640,394
JNL/Janus Global Equities .......... - 2,772 - 2,772 314,705 (27,606) 289,871
JNL/Alger Growth ................... - 3,613 - 3,613 618,803 (35,393) 587,023
JNL/Eagle Core Equity .............. - - - - 80,670 (8,674) 71,996
JNL/Eagle SmallCap Equity .......... - - - - 79,550 (4,508) 75,042
JNL/Putnam Growth .................. - 1,010 (1,010) - 465,765 (42,627) 423,138
JNL/Putnam Value Equity ............ - 1,985 (994) 991 597,018 (56,289) 541,720
PPM America/JNL Balanced ........... - - - - 194,718 (5,328) 189,390
PPM America/JNL High Yield Bond .... - 1,014 - 1,014 227,715 (45,345) 183,384
PPM America/JNL Money Market ....... - 200 - 200 331,245 (220,902) 110,543
Salomon Brothers/JNL Global Bond ... - - - - 56,117 (3,017) 53,100
Salomon Brothers/JNL U.S. Government
& Quality Bond .................... - 1,005 - 1,005 185,284 (28,487) 157,802
T. Rowe Price/JNL Established Growth - - - - 352,527 (84,312) 268,215
T. Rowe Price/JNL International
Equity Investment .................. - 253 (253) - 112,234 (5,999) 106,235
T. Rowe Price/JNL Mid-Cap Growth ... - 253 (253) - 203,921 (33,857) 170,064
JNL/S&P Conservative Growth I ...... - - - - 122,036 (9,878) 112,158
JNL/S&P Moderate Growth I .......... - - - - 116,170 (8,223) 107,947
JNL/S&P Aggressive Growth I ........ - - - - 101,278 (1,860) 99,418
JNL/S&P Very Aggressive Growth I ... - - - - 15,562 (36) 15,526
JNL/S&P Equity Growth I ............ - - - - 111,989 (1,247) 110,742
JNL/S&P Equity Aggressive Growth I . - - - - 48,686 (1,616) 47,070
</TABLE>
- --------------------------------------
* Commencement of operations of JNLNY Separate Account - I.
<PAGE>
JNLNY SEPARATE ACCOUNT - I
Notes to Financial Statements (continued)
NOTE 6 - RECONCILIATION OF GROSS AND NET DEPOSITS INTO THE SEPARATE ACCOUNT
Deposits into the Separate Account purchase shares of the JNL Series
Trust. Net deposits represent the amounts available for investment in
such shares after the deduction of applicable policy charges. The
following is a summary of net deposits made for the period ended
December 31, 1999.
<TABLE>
<CAPTION>
PORTFOLIOS
----------------------------------------------------------------------------------
JNL/JANUS
AGGRESSIVE
GROWTH JNL/JANUS CAPITAL GROWTH JNL/JANUS GLOBAL EQUITIES
--------------- ------------------------------- -------------------------------
PERIOD FROM PERIOD FROM PERIOD FROM
JANUARY 29, NOVEMBER 27, NOVEMBER 27,
1999* TO YEAR ENDED 1998* TO YEAR ENDED 1998* TO
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1999 1999 1998 1999 1998
--------------- --------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
Proceeds from units issued ..................... $ 9,975,043 $ 9,685,030 $ 2,000 $ 3,356,528 $ 24,100
Value of units redeemed ........................ (406,009) (327,959) - (56,388) -
Transfers between portfolios and between
portfolios and general account .............. 903,491 1,049,810 2,092 390,734 4,022
--------------- --------------- --------------- --------------- ---------------
Total gross deposits net of
transfers to general account ................ 10,472,525 10,406,881 4,092 3,690,874 28,122
DEDUCTIONS:
Policyholder charges ........................... 16,214 12,857 - 3 -
--------------- --------------- --------------- --------------- ---------------
Net deposits from (withdrawals by)
policyholders ............................... $ 10,456,311 $ 10,394,024 $ 4,092 $ 3,690,871 $ 28,122
=============== =============== =============== =============== ===============
</TABLE>
- --------------------------------------------
* Commencement of operations.
<PAGE>
JNLNY SEPARATE ACCOUNT - I
Notes to Financial Statements (continued)
NOTE 6 - RECONCILIATION OF GROSS AND NET DEPOSITS INTO THE SEPARATE ACCOUNT
(CONTINUED)
<TABLE>
<CAPTION>
PORTFOLIOS
-------------------------------------------------------------------
JNL/EAGLE
JNL/EAGLE SMALLCAP
JNL/ALGER GROWTH CORE EQUITY EQUITY
--------------- --------------- --------------- ---------------
PERIOD FROM PERIOD FROM PERIOD FROM
NOVEMBER 27, MARCH 22, APRIL 22,
YEAR ENDED 1998* TO 1999* TO 1999* TO
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1999 1998 1999 1999
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Proceeds from units issued ................................ $ 6,809,365 $ 17,500 $ 783,979 $ 761,880
Value of units redeemed ................................... (81,873) - (1,229) (1,862)
Transfers between portfolios and between
portfolios and general account ......................... 347,321 19,759 (26,049) 51,520
--------------- --------------- --------------- ---------------
Total gross deposits net of
transfers to general account ........................... 7,074,813 37,259 756,701 811,538
DEDUCTIONS:
Policyholder charges ...................................... 343 - - -
--------------- --------------- --------------- ---------------
Net deposits from (withdrawals by)
policyholders .......................................... $ 7,074,470 $ 37,259 $ 756,701 $ 811,538
=============== =============== =============== ===============
</TABLE>
<TABLE>
<CAPTION>
-------------------------------
JNL/PUTNAM GROWTH
-------------------------------
PERIOD FROM
NOVEMBER 27,
YEAR ENDED 1998* TO
DECEMBER 31, DECEMBER 31,
1999 1998
--------------- ---------------
<S> <C> <C>
Proceeds from units issued ................................ $ 4,643,977 $ 10,100
Value of units redeemed ................................... (227,729) -
Transfers between portfolios and between
portfolios and general account ......................... 444,655 (10,778)
--------------- ---------------
Total gross deposits net of
transfers to general account ........................... 4,860,903 (678)
DEDUCTIONS:
Policyholder charges ...................................... 10,041 -
--------------- ---------------
Net deposits from (withdrawals by)
policyholders .......................................... $ 4,850,862 $ (678)
=============== ===============
</TABLE>
- --------------------------------------------
* Commencement of operations.
<PAGE>
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------
PPM AMERICA/ PPM AMERICA/JNL
JNL/PUTNAM VALUE EQUITY JNL BALANCED HIGH YIELD BOND
-------------------------------- --------------- -------------------------------
PERIOD FROM PERIOD FROM PERIOD FROM
NOVEMBER 27, JANUARY 21, NOVEMBER 27,
YEAR ENDED 1998* TO 1999* TO YEAR ENDED 1998* TO
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1999 1998 1999 1999 1998
---------------- --------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
Proceeds from units issued ................... $ 4,731,136 $ 19,650 $ 1,815,632 $ 1,821,673 $ 10,050
Value of units redeemed ...................... (44,723) - (15,024) (42,479) -
Transfers between portfolios and between
portfolios and general account ............ 925,282 (9,815) 114,698 52,234 77
---------------- --------------- --------------- --------------- ---------------
Total gross deposits net of
transfers to general account .............. 5,611,695 9,835 1,915,306 1,831,428 10,127
DEDUCTIONS:
Policyholder charges ......................... 135 - 391 - -
---------------- --------------- --------------- --------------- ---------------
Net deposits from (withdrawals by)
policyholders ............................. $ 5,611,560 $ 9,835 $ 1,914,915 $ 1,831,428 $ 10,127
================ =============== =============== =============== ===============
</TABLE>
<TABLE>
<CAPTION>
-------------------------------
PPM AMERICA/JNL
MONEY MARKET
-------------------------------
PERIOD FROM
NOVEMBER 27,
YEAR ENDED 1998* TO
DECEMBER 31, DECEMBER 31,
1999 1998
--------------- ---------------
<S> <C> <C>
Proceeds from units issued ................... $ 2,159,270 $ 2,000
Value of units redeemed ...................... (175,732) -
Transfers between portfolios and between
portfolios and general account ............ (859,909) -
--------------- ---------------
Total gross deposits net of
transfers to general account .............. 1,123,629 2,000
DEDUCTIONS:
Policyholder charges ......................... 75 -
--------------- ---------------
Net deposits from (withdrawals by)
policyholders ............................. $ 1,123,554 $ 2,000
=============== ===============
</TABLE>
<PAGE>
JNLNY SEPARATE ACCOUNT - I
Notes to Financial Statements (continued)
NOTE 6 - RECONCILIATION OF GROSS AND NET DEPOSITS INTO THE SEPARATE ACCOUNT
(CONTINUED)
<TABLE>
<CAPTION>
PORTFOLIOS
------------------------------------------------------------------
T. ROWE
SALOMON PRICE/JNL
BROTHERS/JNL SALOMON BROTHERS/JNL ESTABLISHED
GLOBAL BOND U.S. GOVERNMENT & QUALITY BOND GROWTH
--------------- ------------------------------- ---------------
PERIOD FROM PERIOD FROM PERIOD FROM
JANUARY 21, NOVEMBER 27, FEBRUARY 9,
1999* TO YEAR ENDED 1998* TO 1999* TO
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1999 1999 1998 1999
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Proceeds from units issued ........................ $ 497,741 $ 1,618,171 $ 10,050 $ 3,279,570
Value of units redeemed ........................... (8,398) (19,978) - (209,124)
Transfers between portfolios and between
portfolios and general account ................. 40,197 (61,326) 51 (179,068)
--------------- --------------- --------------- ---------------
Total gross deposits net of
transfers to general account ................... 529,540 1,536,867 10,101 2,891,378
DEDUCTIONS:
Policyholder charges .............................. - - - 9,646
--------------- --------------- --------------- ---------------
Net deposits from (withdrawals by)
policyholders .................................. $ 529,540 $ 1,536,867 $ 10,101 $ 2,881,732
=============== =============== =============== ===============
</TABLE>
- --------------------------------------------
* Commencement of operations.
<PAGE>
<TABLE>
<CAPTION>
------------------------------------------------------------------
T. ROWE PRICE/JNL
INTERNATIONAL T. ROWE PRICE/JNL
EQUITY INVESTMENT MID-CAP GROWTH
-------------------------------- -------------------------------
PERIOD FROM PERIOD FROM
NOVEMBER 27, NOVEMBER 27,
YEAR ENDED 1998* TO YEAR ENDED 1998* TO
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1999 1998 1999 1998
---------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Proceeds from units issued ........................ $ 641,341 $ 2,525 $ 1,847,156 $ 2,525
Value of units redeemed ........................... (6,247) - (170,191) -
Transfers between portfolios and between
portfolios and general account ................. 509,220 (2,545) 221,863 (2,615)
---------------- --------------- --------------- ---------------
Total gross deposits net of
transfers to general account ................... 1,144,314 (20) 1,898,828 (90)
DEDUCTIONS:
Policyholder charges .............................. - - 9,963 -
---------------- --------------- --------------- ---------------
Net deposits from (withdrawals by)
policyholders .................................. $ 1,144,314 $ (20) $ 1,888,865 $ (90)
================ =============== =============== ===============
</TABLE>
<TABLE>
<CAPTION>
--------------------------------------------------------------------
JNL/S&P
JNL/S&P JNL/S&P JNL/S&P VERY
CONSERVATIVE MODERATE AGGRESSIVE AGGRESSIVE
GROWTH I GROWTH I GROWTH I GROWTH I
--------------- --------------- --------------- ---------------
PERIOD FROM PERIOD FROM PERIOD FROM PERIOD FROM
APRIL 22, APRIL 20, MAY 10, MAY 13,
1999* TO 1999* TO 1999* TO 1999* TO
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1999 1999 1999 1999
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Proceeds from units issued ........................ $ 1,141,871 $ 1,140,120 $ 1,017,621 $ 148,718
Value of units redeemed ........................... (1,203) (14,478) (21,171) (382)
Transfers between portfolios and between
portfolios and general account ................. (18,747) (29,611) 483 11,994
--------------- --------------- --------------- ---------------
Total gross deposits net of
transfers to general account ................... 1,121,921 1,096,031 996,933 160,330
DEDUCTIONS:
Policyholder charges .............................. - - - -
--------------- --------------- --------------- ---------------
Net deposits from (withdrawals by)
policyholders .................................. $ 1,121,921 $ 1,096,031 $ 996,933 $ 160,330
=============== =============== =============== ===============
</TABLE>
<PAGE>
JNLNY SEPARATE ACCOUNT - I
Notes to Financial Statements (continued)
NOTE 6 - RECONCILIATION OF GROSS AND NET DEPOSITS INTO THE SEPARATE ACCOUNT
(CONTINUED)
PORTFOLIOS
-----------------------------
JNL/S&P
JNL/S&P EQUITY
EQUITY AGRESSIVE
GROWTH I GROWTH I
-------------- -------------
PERIOD FROM PERIOD FROM
APRIL 20, APRIL 20,
1999* TO 1999* TO
DECEMBER 31, DECEMBER
31,
1999 1999
-------------- -------------
Proceeds from units issued .................... $ 1,048,642 $ 492,616
Value of units redeemed ....................... (14,511) (540)
Transfers between portfolios and between
portfolios and general account ............. 144,553 (565)
-------------- -------------
Total gross deposits net of
transfers to general account ............... 1,178,684 491,511
DEDUCTIONS:
Policyholder charges .......................... - -
-------------- -------------
Net deposits from (withdrawals by)
policyholders .............................. $ 1,178,684 $ 491,511
============== =============
- --------------------------------------------
* Commencement of operations.
<PAGE>
JACKSON NATIONAL LIFE INSURANCE
COMPANY OF NEW YORK
[GRAPHIC OMITTED]
FINANCIAL STATEMENTS
DECEMBER 31, 1999
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholder of
Jackson National Life Insurance Company of New York
We have audited the accompanying balance sheet of Jackson National Life
Insurance Company of New York as of December 31, 1999 and the related statements
of income, stockholder's equity and comprehensive income, and cash flows for the
year then ended. 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 audit. The accompanying statements of Jackson
National Life Insurance Company of New York as of December 31, 1998 and 1997,
were audited by other auditors whose report thereon dated February 19, 1999,
expressed an unqualified opinion on those statements.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining on a test basis evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides 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 Jackson National Life Insurance
Company of New York as of December 31, 1999, and the results of its operations
and its cash flows for the year then ended in conformity with generally accepted
accounting principles.
February 2, 2000
<PAGE>
Jackson National Life Insurance Company of New York
(a wholly owned subsidiary of Jackson National Life Insurance Company)
Financial Statements.
BALANCE SHEET
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DECEMBER 31,
ASSETS 1999 1998
------------------- ------------------
<S> <C> <C>
Investments:
Fixed maturities available for sale (amortized
cost: 1999, $68,805,183; 1998, $5,963,201) $ 67,908,242 $ 5,977,820
Cash and short-term investments 14,643,874 1,920,324
------------------- ------------------
Total investments 82,552,116 7,898,144
Accrued investment income 1,149,063 77,935
Deferred acquisition costs 10,508,000 107,000
Furniture and equipment 233,998 283,118
State tax recoverable 45,000 67,200
Federal income tax recoverable - 174,802
Deferred income taxes 509,170 108,674
Reinsurance recoverable 138,176 6,702
Other assets 155,539 287
Variable annuity assets 77,023,997 104,912
------------------- ------------------
Total assets $172,315,059 $ 8,828,774
=================== ==================
LIABILITIES AND STOCKHOLDER'S EQUITY
LIABILITIES
Policy reserves and liabilities
Reserves for future policy benefits $ 121,256 $ 3,869
Deposits on investment contracts 75,110,492 705,839
General expenses payable 125,238 100,156
Payable to parent 1,098,264 32,158
Other liabilities 2,301,472 46,631
Variable annuity liabilities 77,023,997 104,912
------------------- ------------------
Total liabilities 155,780,719 993,565
------------------- ------------------
STOCKHOLDER'S EQUITY
Capital stock, $1,000 par value; 2,000 shares
authorized, issued and outstanding 2,000,000 2,000,000
Additional paid-in capital 16,000,000 6,000,000
Accumulated other comprehensive income (loss) (436,762) 9,502
Retained earnings (deficit) (1,028,898) (174,293)
------------------- ------------------
Total stockholder's equity 16,534,340 7,835,209
------------------- ------------------
Total liabilities and stockholder's equity $172,315,059 $ 8,828,774
=================== ==================
</TABLE>
See accompanying notes to financial statements.
<PAGE>
JACKSON NATIONAL LIFE INSURANCE COMPANY OF NEW YORK
(A WHOLLY OWNED SUBSIDIARY OF JACKSON NATIONAL LIFE INSURANCE COMPANY)
FINANCIAL STATEMENTS
INCOME STATEMENT
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
1999 1998 1997
------------------ ------------------ ------------------
<S> <C> <C> <C>
REVENUES
Premiums and other considerations $ 13,874 $ 2,275 $ -
Net investment income 1,536,382 582,397 469,601
Net realized investment gains - 70,414 -
Fee income:
Mortality charges 1,151 - -
Expense charges 2,054 - -
Surrender charges 62,034 - -
Variable annuity fees 364,384 90 -
------------------ ------------------ ------------------
Total fee income 429,623 90 -
Other income 190,575 7,686 -
------------------ ------------------ ------------------
Total revenues 2,170,454 662,862 469,601
------------------ ------------------ ------------------
BENEFITS AND EXPENSES
Interest credited on deposit liabilities 1,261,745 14,059 -
Increase in reserves, net of reinsurance
recoverables 11,379 747 -
Commissions 9,226,887 52,601 -
General and administrative expenses 2,967,330 1,534,101 116,215
Taxes, licenses and fees 193,918 (31,137) 51,651
Deferral of policy acquisition costs (10,372,000) (110,000) -
Amortization of acquisition costs 196,000 3,000 -
------------------ ------------------ ------------------
Total benefits and expenses 3,485,259 1,463,371 167,866
------------------ ------------------ ------------------
Pretax income (loss) (1,314,805) (800,509) 301,735
Income tax expense (benefit) (460,200) (280,200) 105,607
------------------ ------------------ ------------------
NET INCOME (LOSS) $ (854,605) $ (520,309) $ 196,128
================== ================== ==================
</TABLE>
See accompanying notes to financial statements.
<PAGE>
JACKSON NATIONAL LIFE INSURANCE COMPANY OF NEW YORK
(A WHOLLY OWNED SUBSIDIARY OF JACKSON NATIONAL LIFE INSURANCE COMPANY)
FINANCIAL STATEMENTS
STATEMENT OF STOCKHOLDER'S EQUITY AND COMPREHENSIVE INCOME
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
1999 1998 1997
----------------- ------------------ -------------------
<S> <C> <C> <C>
CAPITAL STOCK
Beginning and end of year $ 2,000,000 $ 2,000,000 $ 2,000,000
----------------- ------------------ -------------------
ADDITIONAL PAID-IN CAPITAL
Beginning of year 6,000,000 6,000,000 6,000,000
Capital contribution 10,000,000 - -
----------------- ------------------ -------------------
End of year 16,000,000 6,000,000 6,000,000
----------------- ------------------ -------------------
ACCUMULATED OTHER COMPREHENSIVE INCOME
Beginning of year 9,502 65,881 (2,843)
Net unrealized gain (loss) on investments,
net of tax of $(240,296) in 1999, $(30,357) in 1998,
and $37,005 in 1997 (446,264) (56,379) 68,724
----------------- ------------------ -------------------
End of year (436,762) 9,502 65,881
----------------- ------------------ -------------------
RETAINED EARNINGS (DEFICIT)
Beginning of year (174,293) 346,016 149,888
Net income (loss) (854,605) (520,309) 196,128
----------------- ------------------ -------------------
End of year (1,028,898) (174,293) 346,016
----------------- ------------------ -------------------
TOTAL STOCKHOLDER'S EQUITY $16,534,340 $ 7,835,209 $ 8,411,897
================= ================== ===================
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
1999 1998 1997
------------------ ------------------ -------------------
<S> <C> <C> <C>
COMPREHENSIVE INCOME (LOSS)
Net Income (loss) $ (854,605) $ (520,309) $ 196,128
Net unrealized holding gains (losses) arising during
the period, net of tax of $(240,296) in 1999,
$(12,076) in 1998, and $37,005 in 1997 (446,264) (22,429) 68,724
Reclassification adjustment for gains included in net
income, net of tax of $(18,281) in 1998 - (33,950) -
------------------ ------------------ -------------------
COMPREHENSIVE INCOME (LOSS) $ (1,300,869) $ (576,688) $ 264,852
================== ================== ===================
</TABLE>
See accompanying notes to financial statements.
<PAGE>
JACKSON NATIONAL LIFE INSURANCE COMPANY OF NEW YORK
(A WHOLLY OWNED SUBSIDIARY OF JACKSON NATIONAL LIFE INSURANCE COMPANY)
FINANCIAL STATEMENTS
STATEMENT OF CASH FLOWS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
1999 1998 1997
------------------ ------------------- -------------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (854,605) $ (520,309) $ 196,128
Adjustments to reconcile net income (loss) to net
cash provided by (used in) operating activities:
Net realized investment gains - (70,414) -
Interest credited on deposit liabilities 1,261,745 14,059 -
Amortization of discount and premium on
investments (25,921) 2,374 1,155
Other charges (65,239) - -
Change in:
Deferred income taxes (160,200) (113,791) -
Accrued investment income (1,071,128) (8,944) (28,385)
Deferred acquisition costs (10,176,000) (107,000) -
Federal income taxes recoverable 174,802 (166,409) 14,207
Other assets and liabilities, net 3,248,314 (242,520) (69,575)
------------------ ------------------- -------------------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES (7,668,232) (1,212,954) 113,530
------------------ ------------------- -------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Sales and maturities of:
Fixed maturities available for sale 1,642,676 7,302,300 -
Purchases of:
Fixed maturities available for sale (64,458,803) (4,954,688) (7,739,134)
------------------ ------------------- -------------------
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES (62,816,127) 2,347,612 (7,739,134)
------------------ ------------------- -------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Policyholder's account balances:
Deposits 137,196,675 802,091 -
Withdrawals (2,476,840) (9,811) -
Net transfers to separate accounts (61,511,926) (100,500) -
Capital contribution from Parent 10,000,000 - -
------------------ ------------------- -------------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 83,207,909 691,780 -
------------------ ------------------- -------------------
NET INCREASE (DECREASE) IN CASH AND SHORT-TERM
INVESTMENTS 12,723,550 1,826,438 (7,625,604)
CASH AND SHORT-TERM INVESTMENTS, BEGINNING OF PERIOD 1,920,324 93,886 7,719,490
------------------ ------------------- -------------------
CASH AND SHORT-TERM INVESTMENTS, END OF PERIOD $14,643,874 $ 1,920,324 $ 93,886
================== =================== ===================
</TABLE>
See accompanying notes to financial statements.
<PAGE>
JACKSON NATIONAL LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
- --------------------------------------------------------------------------------
1. NATURE OF OPERATIONS
Jackson National Life Insurance Company of New York, (the "Company" or "JNL/NY")
is wholly owned by Jackson National Life Insurance Company, ("JNL" or the
"Parent") a wholly owned subsidiary of Brooke Life Insurance Company ("Brooke
Life") which is ultimately a wholly owned subsidiary of Prudential plc
("Prudential"), London, England. JNL/NY is licensed to sell group and individual
annuity products, including immediate and deferred annuities, guaranteed
investment contracts, variable annuities, and individual life insurance products
in the states of New York, Delaware and Michigan. Product sales commenced in the
second quarter of 1998.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The accompanying financial statements have been prepared in accordance with
generally accepted accounting principles ("GAAP"). Certain prior year
amounts have been reclassified to conform with the current year
presentation.
The preparation of the financial statements in conformity with generally
accepted accounting principles requires the use of estimates and
assumptions that affect the amounts reported in the financial statements
and the accompanying notes. Actual results may differ from those estimates.
COMPREHENSIVE INCOME
Effective January 1, 1998, JNL/NY adopted Statement of Financial Accounting
Standards No. 130, Reporting Comprehensive Income ("SFAS 130"). SFAS 130
establishes standards for reporting and presentation of comprehensive
income and its components in the financial statements. Comprehensive income
includes all changes in stockholder's equity (except those arising from
transactions with owners/shareholders) and, in the Company's case, includes
net income and net unrealized gains/(losses) on securities. SFAS 130
requires additional disclosures in the financial statements, but it has no
impact on the Company's financial position or net income.
INVESTMENTS
Cash and short-term investments which primarily include commercial paper
and money market instruments are carried at cost. These investments have
maturities of three months or less and are considered cash equivalents for
reporting cash flows.
Fixed maturities include bonds and mortgage-backed securities. All fixed
maturities are considered available for sale and are carried at aggregate
market value.
Realized gains and losses on the sale of investments are recognized in
income at the date of sale and are determined using the specific cost
identification method. Acquisition premiums and discounts on investments
are amortized to investment income using call or maturity dates. The
changes in unrealized gains or losses of investments classified as
available for sale, net of tax and the effect of the deferred acquisition
cost adjustment, are excluded from net income and included as a component
of comprehensive income and stockholder's equity.
<PAGE>
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
DEFERRED ACQUISITION COSTS
Certain costs of acquiring new business, principally commissions and
certain costs associated with policy issue and underwriting which vary with
and are primarily related to the production of new business, have been
capitalized as deferred acquisition costs. Deferred acquisition costs are
increased by interest thereon and amortized in proportion to anticipated
premium revenues for traditional life policies and in proportion to
estimated gross profits for annuities and interest-sensitive life products.
As certain fixed maturity securities available for sale are carried at
aggregate fair value, an adjustment is made to deferred acquisition costs
equal to the change in amortization that would have occurred if such
securities had been sold at their stated aggregate fair value and the
proceeds reinvested at current yields. The change in this adjustment is
included with the change in fair value of fixed maturity securities
available for sale, net of tax, that is credited or charged directly to
stockholder's equity and is a component of other comprehensive income.
Deferred acquisition costs have been increased by $225,000 at December 31,
1999 to reflect this credit. There was no adjustment at December 31, 1998.
FEDERAL INCOME TAXES
The Company provides deferred income taxes on the temporary differences
between the tax and financial statement basis of assets and liabilities.
The Company files a consolidated federal income tax return with Jackson
National Life Insurance Company and Brooke Life. For tax years ending
December 31, 1997 and prior, the Company filed a federal income tax return
on a separate company basis. The Company has entered into a written tax
sharing agreement which is generally based on separate return calculations.
Intercompany balances are settled on a quarterly basis.
POLICY RESERVES AND LIABILITIES
RESERVES FOR FUTURE POLICY BENEFITS:
For traditional life insurance contracts, reserves for future policy
benefits are determined using the net level premium method and assumptions
as of the issue date as to mortality, interest, policy lapsation and
expenses plus provisions for adverse deviations. Mortality assumptions
range from 30% to 135% of the 1975-1980 Basic Select and Ultimate tables
depending on underwriting classification and policy duration. Interest rate
assumptions range from 6.0% to 8.0%. Lapse and expense assumptions are
based on the Parent's experience.
DEPOSITS ON INVESTMENT CONTRACTS:
For the company's interest-sensitive life contracts, reserves approximate
the policyholder's accumulation account. For deferred and variable annuity
contracts, the reserve is the policyholder's account value.
VARIABLE ANNUITY ASSETS AND LIABILITIES
The assets and liabilities resulting from individual variable annuity
contracts which aggregated $77,023,997 and $104,912 at December 31, 1999
and 1998, respectively, are segregated in a separate account. The Company
receives fees for assuming mortality and expense risks and other
administrative fees related to the issuance and maintenance of the
contracts. Such fees are recorded as earned and included in fee income in
the income statement.
REVENUE AND EXPENSE RECOGNITION
Premiums for traditional life insurance are reported as revenues when due.
Benefits, claims and expenses are associated with earned revenues in order
to recognize profit over the lives of the contracts. This association is
accomplished by provisions for future policy benefits and the deferral and
amortization of acquisition costs.
<PAGE>
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Deposits on interest-sensitive life products and investment contracts,
principally universal life contracts and deferred annuities, are treated as
policyholder deposits and excluded from revenue. Revenues consist primarily
of investment income and charges assessed against the policyholder's
account value for mortality charges, surrenders and administrative
expenses. Surrender benefits are treated as repayments of the policyholder
account. Annuity benefit payments are treated as reductions to the
policyholder account. Death benefits in excess of the policyholder account
are recognized as an expense when incurred. Expenses consist primarily of
the interest credited to the policyholder deposit. Underwriting expenses
are associated with gross profit in order to recognize profit over the life
of the business. This is accomplished by deferral and amortization of
acquisition costs.
3. FAIR VALUE OF FINANCIAL INSTRUMENTS
The following summarizes the basis used by the Company in estimating its
fair value disclosures for financial instruments:
CASH AND SHORT-TERM INVESTMENTS:
Carrying value is considered to be a reasonable estimate of fair value.
FIXED MATURITIES:
Fair values are based on quoted market prices, if available. For securities
that are not actively traded, fair values are estimated using independent
pricing services or analytically determined values.
VARIABLE ANNUITY ASSETS:
Variable annuity assets are carried at the market value of the underlying
securities.
ANNUITY RESERVES:
Fair values for immediate annuities, without mortality features, are
derived by discounting the estimated cash flows using current interest
rates with similar maturities. Fair values for deferred annuities are based
on surrender value. The carrying value and fair value of such annuities
approximated $74,975,238 and $71,375,168, respectively, at December 31,
1999 and $705,839 and $642,314, respectively, at December 31, 1998.
VARIABLE ANNUITY LIABILITIES:
Fair value of contracts in the accumulation phase is based on account value
less surrender charges. Fair value of contracts in the payout phase is
based on the present value of future cash flows at assumed interest rates.
The fair value approximated $72,530,323 and $97,875 at December 31, 1999
and 1998, respectively.
4. INVESTMENTS
Investments are comprised primarily of fixed-income securities, primarily
publicly-traded industrial, mortgage-backed and government bonds. The
Company's investments resulted primarily from the capital investment by its
parent and deposits related to interest sensitive individual annuity
products, on which it has committed to pay a declared rate of interest. The
Company's strategy of investing in fixed-income securities aims to ensure
matching of the asset yield with the interest-sensitive insurance
liabilities and to earn a stable return on its investments.
<PAGE>
4. INVESTMENTS (CONTINUED)
FIXED MATURITIES
The following table sets forth fixed maturity investments at December 31,
1999, classified by rating categories as assigned by nationally recognized
statistical rating organizations or the National Association of Insurance
Commissioners ("NAIC"). For purposes of the table, if not otherwise rated
higher by a nationally recognized statistical rating organization, NAIC
Class 1 investments are included in the A rating and Class 2 in the BBB
rating.
PERCENT OF TOTAL
INVESTMENT RATING ASSETS
-------------------------
AAA 7.4%
A 4.0
BBB 28.1
-------------------------
Total fixed maturities 39.5
Other assets 60.5
-------------------------
Total assets 100.0%
=========================
The amortized cost and estimated fair value of fixed maturities are as
follows:
<TABLE>
<CAPTION>
GROSS GROSS ESTIMATED
AMORTIZED UNREALIZED UNREALIZED FAIR
DECEMBER 31, 1999 COST GAINS LOSSES VALUE
-------------------------------- --------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C>
U.S. Treasury securities $ 5,969,089 $ - $ 325,339 $ 5,643,750
Public utilities 3,412,842 - 62,692 3,350,150
Corporate securities 52,281,180 18,291 481,250 51,818,221
Mortgage-backed securities 7,142,072 - 45,951 7,096,121
--------------- ---------------- ---------------- ----------------
Total $68,805,183 $ 18,291 $ 915,232 $67,908,242
=============== ================ ================ ================
</TABLE>
<TABLE>
<CAPTION>
GROSS GROSS ESTIMATED
AMORTIZED UNREALIZED UNREALIZED FAIR
DECEMBER 31, 1998 COST GAINS LOSSES VALUE
--------------------------------- ---------------- ---------------- --------------- ----------------
<S> <C> <C> <C> <C>
U.S. Treasury securities $ 5,963,201 $ 33,854 $ 19,235 $ 5,977,820
---------------- ---------------- --------------- ----------------
Total $ 5,963,201 $ 33,854 $ 19,235 $ 5,977,820
================ ================ =============== ================
</TABLE>
<PAGE>
4. INVESTMENTS (CONTINUED)
The amortized cost and estimated fair value of fixed maturities at December
31, 1999, by contractual maturity, are shown below. Expected maturities
will differ from contractual maturities because borrowers may have the
right to call or prepay obligations with or without early redemption
penalties.
Fixed maturities:
<TABLE>
<CAPTION>
AMORTIZED ESTIMATED
COST FAIR VALUE
--------------------- ---------------------
<S> <C> <C>
Due after 1 year through 5 years $ 43,951,849 $ 43,354,469
Due after 5 years through 10 years 17,711,262 17,457,652
Mortgage-backed securities 7,142,072 7,096,121
--------------------- ---------------------
Total $ 68,805,183 $ 67,908,242
===================== =====================
</TABLE>
Acquisition discounts and premiums on mortgage-backed securities are
amortized over the estimated redemption period using the effective interest
method. Effective yields, which are used to calculate premium/discount
amortization, are adjusted periodically to reflect payments to date and
anticipated future payments.
Resulting adjustments to carrying values are included in investment income.
Fixed maturities with a carrying value of $500,000 and $1,041,870 were on
deposit with the State of New York at December 31, 1999 and 1998,
respectively, as required by state insurance law.
5. INVESTMENT INCOME AND REALIZED GAINS AND LOSSES
All investment income for 1999, 1998, and 1997 related to interest income
on short-term investments and fixed maturity securities. Investment
expenses totaled $36,915, $15,338, and $2,000 in 1999, 1998 and 1997,
respectively. Gross realized investment gains in 1998 totaled $70,414.
There were no realized investment losses in 1998. No realized gains or
losses were recognized in either 1999 or 1997.
6. REINSURANCE
The Company cedes reinsurance to other insurance companies in order to
limit losses from large exposures; however, if the reinsurer is unable to
meet its obligations, the originating issuer of the coverage retains the
liability. The maximum amount of life insurance risk retained by the
Company on any one life is generally $100,000. Amounts not retained are
ceded to other companies on a yearly renewable-term or a coinsurance basis.
The effect of reinsurance on premiums and other considerations is as
follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
1999 1998
<S> <C> <C>
Direct Premiums $ 216,094 $ 9,961
Ceded 202,220 7,686
Net premiums $ 13,874 $ 2,275
================ ================
- ----------------------------------------------------------------------------------------------------
</TABLE>
Components of the reinsurance recoverable asset are as follows:
<TABLE>
<CAPTION>
DECEMBER 31,
1999 1998
---------------- ----------------
<S> <C> <C>
Ceded reserves $ 109,130 $ 3,122
Ceded - other 29,046 3,580
================ ================
Total $ 138,176 $ 6,702
================ ================
</TABLE>
<PAGE>
7. FEDERAL INCOME TAXES
The components of the provision for federal income taxes are as follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
1999 1998 1997
----------------- ----------------- ----------------
<S> <C> <C> <C>
Current tax expense (benefit) $ (300,000) $ (166,409) $ 105,607
Deferred tax (benefit) (160,200) (113,791) -
----------------- ----------------- ----------------
Provision for income taxes $ (460,200) $ (280,200) $ 105,607
================= ================= ================
</TABLE>
The federal income tax provisions differ from the amounts determined by
multiplying pretax income by the statutory federal income tax rate of 35%
for 1999, 1998 and 1997 as follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
1999 1998 1997
----------------- ----------------- ----------------
<S> <C> <C> <C>
Income taxes at statutory rate $ (460,182) $ (280,178) $ 105,607
Other (18) (22) -
----------------- ----------------- ----------------
Provision for income taxes $ (460,200) $ (280,200) $ 105,607
================= ================= ================
Effective tax rate 35.0% 35.0% 35.0%
================= ================= ================
</TABLE>
Federal income taxes of $474,802 were recovered from JNL in 1999. There
were no federal income taxes paid in 1998. In 1997, federal income taxes
paid were $91,400.
The tax effects of significant temporary differences that give rise to
deferred tax assets and liabilities are as follows:
<TABLE>
<CAPTION>
DECEMBER 31,
1999 1998
---------------- ----------------
<S> <C> <C>
GROSS DEFERRED TAX ASSET
Net operating loss carryforward $ - $ 152,291
Policy reserves and other insurance items 3,353,556 -
Net unrealized losses on available for sale securities 313,950 -
Other 11,143
---------------- ----------------
Total deferred tax asset 3,678,649 152,291
---------------- ----------------
GROSS DEFERRED TAX LIABILITY
Deferred acquisition costs (3,169,479) (38,500)
Net unrealized gains on available for sale securities - (5,117)
---------------- ----------------
Total deferred tax liability (3,169,479) (43,617)
---------------- ----------------
Net deferred tax asset $ 509,170 $ 108,674
================ ================
</TABLE>
Management believes that it is more likely than not that the results of
future operations will generate sufficient taxable income to realize the
deferred tax asset.
<PAGE>
8. CONTINGENCIES
The Company is involved in no litigation that would have a material adverse
affect on the Company's financial condition or results of operations.
9. STOCKHOLDER'S EQUITY
The declaration of dividends which can be paid by the Company is regulated
by New York Insurance Law. The Company must file a notice of its intention
to declare a dividend and the amount thereof with the superintendent at
least thirty days in advance of any proposed dividend declaration. No
dividends were paid to JNL in 1999, 1998 or 1997.
Statutory capital and surplus of the Company was $12,182,135 and $7,538,428
at December 31, 1999 and 1998, respectively. Statutory net income (loss) of
the Company was $(5,061,575), $(599,045) and $196,128 in 1999, 1998 and
1997, respectively.
10. LEASE OBLIGATION
The Company is party to a cancelable operating lease agreement under which
it occupies office space. Rent expense totaled $108,480 in 1999 and 1998.
The future lease obligations relating to this lease are as follows:
2000 $ 108,932
2001 111,192
2002 112,096
2003 116,616
2004 117,520
Thereafter 345,780
------------
Total $ 912,136
===========
11. RELATED PARTY TRANSACTIONS
The Company's investment portfolio is managed by PPM America, Inc. ("PPM"),
a registered investment advisor and ultimately a wholly owned subsidiary of
Prudential. The Company paid $10,450 and $7,498 to PPM for investment
advisory services during 1999 and 1998, respectively.
The Company has a service agreement with its parent, JNL, under which JNL
provides certain administrative services. Administrative fees were $450,536 and
$29,758 during 1999 and 1998, respectively.
