<PAGE>
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT D
STATEMENT OF CONDITION-- June 30, 1997
<TABLE>
<CAPTION>
ASSETS
Investments in mutual funds: Shares Cost Value
------------- ------------- -------------
<S> <C> <C> <C>
Massachusetts Investors Trust ("MIT")*.................................... 2,874,867 $ 37,407,392 $ 49,163,474
Massachusetts Investors Growth Stock Fund ("MIG")*........................ 1,179,406 12,451,717 14,856,724
MFS Total Return Fund ("MTR")*............................................ 2,778,173 39,012,218 44,652,635
MFS Growth Opportuities Fund ("MGO")*..................................... 288,264 3,559,799 4,313,508
MFS Bond Fund ("MFB")*.................................................... 349,683 4,505,295 4,632,504
MFS World Governments Fund ("MWG")*....................................... 245,861 2,773,346 2,712,979
MFS/Sun Life Series Trust:
Capital Appreciation Series ("CAS")..................................... 1,481,230 44,570,591 55,671,952
Government Securities Series ("GSS").................................... 1,645,205 20,762,297 20,244,052
High Yield Series ("HYS")............................................... 1,048,729 9,056,346 9,545,709
Money Market Series ("MMS")............................................. 12,704,008 12,704,008 12,704,008
------------- -------------
$ 186,803,009 $ 218,497,545
-------------
-------------
LIABILITIES:
Payable to sponsor.......................................................... (350)
-------------
Net Assets........................................................................................... $ 218,497,195
-------------
-------------
</TABLE>
NET ASSETS:
<TABLE>
<CAPTION>
Applicable to Owners of
Deferred Variable Annuity Contracts Reserve for
------------------------------------------ Variable
Units Unit Value Value Annuities Total
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
MIT-Level 2................... 801,777 $ 40.1719 $ 32,201,377 -- $ 32,201,377
MIT-Level 3................... 329,192 40.4500 13,240,555 -- 13,240,555
MIT-Level 4................... 124,445 29.8938 3,721,541 -- 3,721,541
MIG-Level 2................... 244,625 37.6441 9,208,958 -- 9,208,958
MIG-Level 3................... 132,118 41.5858 5,493,453 -- 5,493,453
MIG-Level 4................... 7,230 21.4293 154,314 -- 154,314
MTR-Level 2................... 940,600 30.7462 28,862,157 -- 28,862,157
MTR-Level 3................... 384,877 28.0223 10,770,657 -- 10,770,657
MTR-Level 4................... 234,945 21.3832 5,019,821 -- 5,019,821
MGO-Level 2................... 112,387 30.5085 3,445,575 -- 3,445,575
MGO-Level 3................... 24,107 32.7442 791,840 -- 791,840
MGO-Level 4................... 3,413 21.8251 76,093 -- 76,093
MFB-Level 2................... 101,761 19.9719 2,061,543 -- 2,061,543
MFB-Level 3................... 44,299 20.2034 908,802 -- 908,802
MFB-Level 4................... 98,855 16.6976 1,662,159 -- 1,662,159
MWG-Level 2................... 68,332 21.1561 1,445,476 -- 1,445,476
MWG-Level 3................... 67,687 18.7241 1,267,504 -- 1,267,504
CAS-Level 2................... 717,499 40.8177 29,279,397 126,692 29,406,089
CAS-Level 3................... 423,269 43.4046 18,366,703 8,348 18,375,051
CAS-Level 4................... 186,688 42.3077 7,892,048 -- 7,892,048
GSS-Level 2................... 418,286 19.0868 7,981,280 3,211 7,984,491
GSS-Level 3................... 231,096 18.5676 4,292,326 5,423 4,297,749
GSS-Level 4................... 434,652 18.3076 7,960,112 -- 7,960,112
HYS-Level 2................... 165,692 23.2550 3,853,249 2,866 3,856,115
HYS-Level 3................... 92,280 21.6520 1,997,783 4,970 2,002,753
HYS-Level 4................... 174,007 21.1694 3,686,863 -- 3,686,863
MMS-Level 2................... 414,395 15.5364 6,432,942 2,761 6,435,703
MMS-Level 3................... 176,452 14.4584 2,549,718 -- 2,549,718
MMS-Level 4................... 262,386 14.1784 3,718,678 -- 3,718,678
------------ ------------ ------------
Net Assets............................................. $218,342,924 $ 154,271 $218,497,195
------------ ------------ ------------
------------ ------------ ------------
</TABLE>
* Investments are made in Class A shares of the Fund
See notes to financial statements
1
<PAGE>
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT D
STATEMENTS OF OPERATIONS-- Six Months Ended June 30, 1997
<TABLE>
<CAPTION>
MIT MIG MTR MGO MFB MWG
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
INCOME AND EXPENSES:
Dividend income and capital
gain distributions
received................... $ 280,054 $ -- $ 899,994 $ -- $ 171,656 $ --
Mortality and expense risk
charges.................... 290,949 81,801 276,194 25,277 26,694 16,509
------------ ------------ ------------ ------------ ------------ ------------
Net investment income
(expense).................. $ (10,895) $ (81,801) $ 623,800 $ (25,277) $ 144,962 $ (16,509)
------------ ------------ ------------ ------------ ------------ ------------
REALIZED AND UNREALIZED GAINS
(LOSSES):
Realized gains (losses) on
investment transactions:
Proceeds from sales....... $ 15,617,639 $ 3,288,078 $ 12,988,439 $ 1,001,175 $ 1,240,892 $ 501,186
Cost of investments
sold..................... 11,869,717 3,140,333 11,140,385 802,529 1,237,319 519,868
------------ ------------ ------------ ------------ ------------ ------------
Net realized gains
(losses)............... $ 3,747,922 $ 147,745 $ 1,848,054 $ 198,646 $ 3,573 $ (18,682)
------------ ------------ ------------ ------------ ------------ ------------
Net unrealized appreciation
(depreciation) on
investments:
End of period............. $ 11,756,082 $ 2,405,007 $ 5,640,417 $ 753,709 $ 127,209 $ (60,367)
Beginning of period....... 7,387,121 (734,918) 3,660,194 339,931 131,161 (5,732)
------------ ------------ ------------ ------------ ------------ ------------
Change in unrealized
appreciation
(depreciation)......... $ 4,368,961 $ 3,139,925 $ 1,980,223 $ 413,778 $ (3,952) $ (54,635)
------------ ------------ ------------ ------------ ------------ ------------
Realized and
unrealized gains
(losses)............. $ 8,116,883 $ 3,287,670 $ 3,828,277 $ 612,424 $ (379) $ (73,317)
------------ ------------ ------------ ------------ ------------ ------------
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS....... $ 8,105,988 $ 3,205,869 $ 4,452,077 $ 587,147 $ 144,583 $ (89,826)
------------ ------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------ ------------
<CAPTION>
CAS GSS HYS MMS
Sub-Account Sub-Account Sub-Account Sub-Account Total
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
INCOME AND EXPENSES:
Dividend income and capital
gain distributions
received................... $ 4,746,174 $ 1,501,158 $ 647,242 $ 295,766 $ 8,542,044
Mortality and expense risk
charges.................... 296,519 122,734 50,864 67,605 1,255,146
------------ ------------ ------------ ------------ ------------
Net investment income
(expense).................. $ 4,449,655 $ 1,378,424 $ 596,378 $ 228,161 $ 7,286,898
------------ ------------ ------------ ------------ ------------
REALIZED AND UNREALIZED GAINS
(LOSSES):
Realized gains (losses) on
investment transactions:
Proceeds from sales....... $ 7,484,706 $ 5,658,293 $ 1,146,409 $ 6,096,866 $ 55,023,683
Cost of investments
sold..................... 5,355,360 5,617,425 1,063,039 6,096,866 46,842,841
------------ ------------ ------------ ------------ ------------
Net realized gains
(losses)............... $ 2,129,346 $ 40,868 $ 83,370 $ -- $ 8,180,842
------------ ------------ ------------ ------------ ------------
Net unrealized appreciation
(depreciation) on
investments:
End of period............. $ 11,101,361 $ (518,245) $ 489,363 $ -- $ 31,694,536
Beginning of period....... 10,533,155 452,216 666,274 -- 22,429,402
------------ ------------ ------------ ------------ ------------
Change in unrealized
appreciation
(depreciation)......... $ 568,206 $ (970,461) $ (176,911) $ -- $ 9,265,134
------------ ------------ ------------ ------------ ------------
Realized and
unrealized gains
(losses)............. $ 2,697,552 $ (929,593) $ (93,541) $ -- $ 17,445,976
------------ ------------ ------------ ------------ ------------
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS....... $ 7,147,207 $ 448,831 $ 502,837 $ 228,161 $ 24,732,874
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
</TABLE>
See notes to financial statements
2
<PAGE>
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT D
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
MIT MIG
Sub-Account Sub-Account
----------------------------- -----------------------------
Six Months Six Months
Ended Year Ended Ended Year Ended
June 30, December 31, June 30, December 31,
1997 1996 1997 1996
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income (expense)................................... $ (10,895) $ 4,320,604 $ (81,801) $ 3,076,432
Net realized gains (losses)....................................... 3,747,922 1,322,346 147,745 (187,382)
Net unrealized gains (losses)..................................... 4,368,961 4,752,859 3,139,925 (390,114)
------------- ------------- ------------- -------------
Increase in net assets from operations........................ $ 8,105,988 $ 10,395,809 $ 3,205,869 $ 2,498,936
------------- ------------- ------------- -------------
PARTICIPANT TRANSACTIONS:
Accumulation Activity:
Purchase payments received...................................... $ 4,228,930 $ 8,484,377 $ 846,857 $ 2,166,246
Net transfers between Sub-Accounts and Fixed Account............ (358,705) 818,874 (325,693) 44,987
Withdrawals, surrenders and account fees........................ (13,307,737) (15,324,516) (2,460,190) (3,595,513)
------------- ------------- ------------- -------------
Net accumulation activity..................................... $ (9,437,512) $ (6,021,265) $ (1,939,026) $ (1,384,280)
------------- ------------- ------------- -------------
Annuitization Activity:
Adjustments to annuity reserve.................................. $ -- $ 214 $ -- $ --
------------- ------------- ------------- -------------
Net annuitization activity.................................... $ -- $ 214 $ -- $ --
------------- ------------- ------------- -------------
Decrease in net assets from participant transactions........ $ (9,437,512) $ (6,021,051) $ (1,939,026) $ (1,384,280)
------------- ------------- ------------- -------------
Increase (decrease) in net assets......................... $ (1,331,524) $ 4,374,758 $ 1,266,843 $ 1,114,656
NET ASSETS
Beginning of period............................................... 50,494,997 46,120,239 13,589,882 12,475,226
------------- ------------- ------------- -------------
End of period..................................................... $ 49,163,473 $ 50,494,997 $ 14,856,725 $ 13,589,882
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
<CAPTION>
MTR
Sub-Account
-----------------------------
Six Months
Ended Year Ended
June 30, December 31,
1997 1996
------------- -------------
<S> <C> <C>
OPERATIONS:
Net investment income (expense)................................... $ 623,800 $ 4,866,763
Net realized gains (losses)....................................... 1,848,054 2,787,930
Net unrealized gains (losses)..................................... 1,980,223 (1,349,654)
------------- -------------
Increase in net assets from operations........................ $ 4,452,077 $ 6,305,039
------------- -------------
PARTICIPANT TRANSACTIONS:
Accumulation Activity:
Purchase payments received...................................... $ 3,877,062 $ 9,144,366
Net transfers between Sub-Accounts and Fixed Account............ (1,149,875) (1,402,954)
Withdrawals, surrenders and account fees........................ (12,056,055) (17,519,924)
------------- -------------
Net accumulation activity..................................... $ (9,328,868) $ (9,778,512)
------------- -------------
Annuitization Activity:
Adjustments to annuity reserve.................................. $ -- $ 217
------------- -------------
Net annuitization activity.................................... $ -- $ 217
------------- -------------
Decrease in net assets from participant transactions........ $ (9,328,868) $ (9,778,295)
------------- -------------
Increase (decrease) in net assets......................... $ (4,876,791) $ (3,473,256)
NET ASSETS
Beginning of period............................................... 49,529,426 53,002,682
------------- -------------
End of period..................................................... $ 44,652,635 $ 49,529,426
------------- -------------
------------- -------------
</TABLE>
<TABLE>
<CAPTION>
MGO MFB
Sub-Account Sub-Account
----------------------------- -----------------------------
Six Months Six Months
Ended Year Ended Ended Year Ended
June 30, December 31, June 30, December 31,
1997 1996 1997 1996
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income (expense)................................... $ (25,277) $ 408,265 $ 144,962 $ 336,345
Net realized gains (losses)....................................... 198,646 255,782 3,573 (79,670)
Net unrealized gains (losses)..................................... 413,778 185,013 (3,952) (109,340)
------------- ------------- ------------- -------------
Increase (decrease) in net assets from operations:............ $ 587,147 $ 849,060 $ 144,583 $ 147,335
------------- ------------- ------------- -------------
PARTICIPANT TRANSACTIONS:
Accumulation Activity:
Purchase payments received...................................... $ 365,390 $ 757,184 $ 369,035 $ 822,947
Net transfers between Sub-Accounts and Fixed Account............ (165,070) 361 (233,014) (213,342)
Withdrawals, surrenders and account fees........................ (768,940) (1,699,049) (1,047,428) (1,301,908)
------------- ------------- ------------- -------------
Net accumulation activity..................................... $ (568,620) $ (941,504) $ (911,407) $ (692,303)
------------- ------------- ------------- -------------
Increase (decrease) in net assets......................... $ 18,527 $ (92,444) $ (766,824) $ (544,968)
NET ASSETS:
Beginning of period............................................... 4,294,981 4,387,425 5,399,328 5,944,296
------------- ------------- ------------- -------------
End of period..................................................... $ 4,313,508 $ 4,294,981 $ 4,632,504 $ 5,399,328
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
<CAPTION>
MWG
Sub-Account
-----------------------------
Six Months
Ended Year Ended
June 30, December 31,
1997 1996
------------- -------------
<S> <C> <C>
OPERATIONS:
Net investment income (expense)................................... $ (16,509) $ 43,609
Net realized gains (losses)....................................... (18,682) (231,857)
Net unrealized gains (losses)..................................... (54,635) 306,316
------------- -------------
Increase (decrease) in net assets from operations:............ $ (89,826) $ 118,068
------------- -------------
PARTICIPANT TRANSACTIONS:
Accumulation Activity:
Purchase payments received...................................... $ 212,759 $ 490,349
Net transfers between Sub-Accounts and Fixed Account............ (247,901) (178,620)
Withdrawals, surrenders and account fees........................ (282,905) (1,256,945)
------------- -------------
Net accumulation activity..................................... $ (318,047) $ (945,216)
------------- -------------
Increase (decrease) in net assets......................... $ (407,873) $ (827,148)
NET ASSETS:
Beginning of period............................................... 3,120,853 3,948,001
------------- -------------
End of period..................................................... $ 2,712,980 $ 3,120,853
------------- -------------
------------- -------------
</TABLE>
See notes to financial statements
3
<PAGE>
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT D
STATEMENTS OF CHANGES IN NET ASSETS-- continued
<TABLE>
<CAPTION>
CAS GSS HYS
Sub-Account Sub-Account Sub-Account
----------------------------- ----------------------------- -----------------------------
Six Months Six Months Six Months
Ended Year Ended Ended Year Ended Ended Year Ended
June 30, December 31, June 30, December 31, June 30, December 31,
1997 1996 1997 1996 1997 1996
------------- ------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income....... $ 4,449,655 $ 3,233,560 $ 1,378,424 $ 1,046,631 $ 596,378 $ 596,805
Net realized gains.......... 2,129,346 2,669,928 40,868 307,873 83,370 145,630
Net unrealized gains
(losses)................... 568,206 2,455,689 (970,461) (1,354,993) (176,911) 179,227
------------- ------------- ------------- ------------- ------------- -------------
Increase (decrease) in
net assets from
operations:............ $ 7,147,207 $ 8,359,177 $ 448,831 $ (489) $ 502,837 $ 921,662
------------- ------------- ------------- ------------- ------------- -------------
PARTICIPANT TRANSACTIONS:
Accumulation Activity:
Purchase payments
received................. $ 3,536,757 $ 6,939,855 $ 1,581,663 $ 3,634,713 $ 689,009 $ 1,337,369
Net transfers between
Sub-Accounts and Fixed
Account.................. 6,372 1,007,214 (997,753) (2,176,253) (176,245) (690,101)
Withdrawals, surrenders
and account fees......... (4,950,316) (7,071,186) (4,521,876) (5,692,379) (655,641) (1,364,716)
------------- ------------- ------------- ------------- ------------- -------------
Net accumulation
activity............... $ (1,407,187) $ 875,883 $ (3,937,966) $ (4,233,919) $ (142,877) $ (717,448)
------------- ------------- ------------- ------------- ------------- -------------
Annuitization Activity:
Annuitizations............ $ -- $ 102,853 $ -- $ -- $ -- $ --
Annuity payments and
contract charges......... (5,595) (8,376) (1,009) (2,033) (898) (1,716)
Adjustments to annuity
reserve.................. (6,658) 365 (57) (82) (17) (40)
------------- ------------- ------------- ------------- ------------- -------------
Net annuitization
activity............... $ (12,253) $ 94,842 $ (1,066) $ (2,115) $ (915) $ (1,756)
------------- ------------- ------------- ------------- ------------- -------------
Increase (decrease) in
net assets from
participant
transactions......... $ (1,419,440) $ 970,725 $ (3,939,032) $ (4,236,034) $ (143,792) $ (719,204)
------------- ------------- ------------- ------------- ------------- -------------
Increase (decrease)
in net assets...... $ 5,727,767 $ 9,329,902 $ (3,490,201) $ (4,236,523) $ 359,045 $ 202,458
NET ASSETS:
Beginning of period......... 49,945,421 40,615,519 23,732,553 27,969,076 9,186,686 8,984,228
------------- ------------- ------------- ------------- ------------- -------------
End of period............... $ 55,673,188 $ 49,945,421 $ 20,242,352 $ 23,732,553 $ 9,545,731 $ 9,186,686
------------- ------------- ------------- ------------- ------------- -------------
------------- ------------- ------------- ------------- ------------- -------------
<CAPTION>
MMS
Sub-Account Total
----------------------------- -----------------------------
Six Months Six Months
Ended Year Ended Ended Year Ended
June 30, December 31, June 30, December 31,
1997 1996 1997 1996
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income....... $ 228,161 $ 521,549 $ 7,286,898 $ 18,450,563
Net realized gains.......... -- -- 8,180,842 6,990,580
Net unrealized gains
(losses)................... -- -- 9,265,134 4,675,003
------------- ------------- ------------- -------------
Increase (decrease) in
net assets from
operations:............ $ 228,161 $ 521,549 $ 24,732,874 $ 30,116,146
------------- ------------- ------------- -------------
PARTICIPANT TRANSACTIONS:
Accumulation Activity:
Purchase payments
received................. $ 808,182 $ 2,033,183 $ 16,515,644 $ 35,810,589
Net transfers between
Sub-Accounts and Fixed
Account.................. 2,208,739 2,860,850 (1,439,145) 71,016
Withdrawals, surrenders
and account fees......... (3,865,213) (7,496,733) (43,916,301) (62,322,869)
------------- ------------- ------------- -------------
Net accumulation
activity............... $ (848,292) $ (2,602,700) $ (28,839,802) $ (26,441,264)
------------- ------------- ------------- -------------
Annuitization Activity:
Annuitizations............ $ -- $ -- $ -- $ 102,853
Annuity payments and
contract charges......... (111) (222) (7,613) (12,347)
Adjustments to annuity
reserve.................. (5) (16) (6,737) 658
------------- ------------- ------------- -------------
Net annuitization
activity............... $ (116) $ (238) $ (14,350) $ 91,164
------------- ------------- ------------- -------------
Increase (decrease) in
net assets from
participant
transactions......... $ (848,408) $ (2,602,938) $ (28,854,152) ($ 26,350,100)
------------- ------------- ------------- -------------
Increase (decrease)
in net assets...... $ (620,247) $ (2,081,389) $ (4,121,278) $ 3,766,046
NET ASSETS:
Beginning of period......... 13,324,346 15,405,735 222,618,473 218,852,427
------------- ------------- ------------- -------------
End of period............... $ 12,704,099 $ 13,324,346 $ 218,497,195 $ 222,618,473
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
</TABLE>
See notes to financial statements
4
<PAGE>
NOTES TO FINANCIAL STATEMENTS
(1) ORGANIZATION
Sun Life of Canada (U.S.) Variable Account D (the "Variable Account"), a
separate account of Sun Life Assurance Company of Canada (U.S.), the Sponsor,
was established on August 20, 1985 as a funding vehicle for the variable portion
of group combination fixed/variable annuities. The Variable Account is
registered with the Securities and Exchange Commission under the Investment
Company Act of 1940 as a unit investment trust.
The assets of the Variable Account are divided into Sub-Accounts. Each
Sub-Account is invested in shares of a specific mutual fund or series thereof
selected by contract owners from among available mutual funds (the "Funds")
advised by Massachusetts Financial Services Company (MFS), a wholly-owned
subsidiary of the Sponsor.
(2) SIGNIFICANT ACCOUNTING POLICIES
GENERAL
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.
INVESTMENT VALUATIONS
Investments in the Funds are recorded at their net asset value. Realized gains
and losses on sales of shares of the Funds are determined on the identified cost
basis. Dividend income and capital gain distributions received by the
Sub-Accounts are reinvested in additional Fund shares and are recognized on the
ex-dividend date.
Exchanges between Sub-Accounts requested by contract owners are recorded in the
new Sub-Account upon receipt of the redemption proceeds.
FEDERAL INCOME TAX STATUS
The operations of the Variable Account are part of the operations of the Sponsor
and are not taxed separately; the Variable Account is not taxed as a regulated
investment company. The Sponsor qualifies for the federal income tax treatment
granted to life insurance companies under Subchapter L of the Internal Revenue
Code. Under existing federal income tax law, investment income and capital gains
earned by the Variable Account on contract owner reserves are not subject to
tax.
5
<PAGE>
SUN LIFE (N.Y.) VARIABLE ACCOUNT D
NOTES TO FINANCIAL STATEMENTS -- continued
(3) CONTRACT CHARGES
A mortality and expense risk charge is deducted from the Variable Account at the
end of each valuation period for the mortality and expense risks assumed by the
Sponsor. These deductions are transferred periodically to the Sponsor. The rate
of this deduction varies based on total purchase payments credited to all
participants' accounts under a contract as follows:
<TABLE>
<CAPTION>
Mortality
and Expense
Level Purchase Payments Risk Charge
- ---------- ------------------------- ------------
<S> <C> <C>
1 up to $250,000 1.30%
2 $250,000 to 1,499,999 1.25%
3 $1,500,000 to 4,999,999 1.10%
4 $5,000,000 and over 0.95%
</TABLE>
Since 1987 the Sponsor has reduced the Level 1 mortality and expense risk charge
to 1.25% and, therefore, has been accounting for all Level 1 units as Level 2
units.
Each year on the account anniversary, an account administration fee is deducted
from the participant's account to cover administrative expenses relating to the
contract and the participant's account. The amount of the fee varies from $12 to
$25 and is based on total purchase payments credited to all participants'
accounts under a contract. After the annuity commencement date the account fee
is deducted pro rata from each annuity payment made during the year.
The Sponsor does not deduct a sales charge from purchase payments. However, a
withdrawal charge (contingent deferred sales charge) may be deducted to cover
certain expenses relating to the sale of the contract. In no event shall the
aggregate withdrawal charges exceed 6% of the purchase payments made under the
contract.
(4) ANNUITY RESERVES
Annuity reserves are calculated using the 1983 Individual Annuitant Mortality
Table and an assumed interest rate of 4%. Required adjustments to the reserve
are accomplished by transfers to or from the Sponsor.
6
<PAGE>
SUN LIFE (N.Y.) VARIABLE ACCOUNT D
NOTES TO FINANCIAL STATEMENTS -- continued
(5) UNIT ACTIVITY FROM PARTICIPANT TRANSACTIONS
<TABLE>
<CAPTION>
Units Transferred
Units Outstanding Between Sub-Accounts Units Withdrawn,
Beginning of Period Units Purchased and Fixed Account Surrendered and Annuitized
-------------------------- -------------------------- -------------------------- --------------------------
Six Months Six Months Six Months Six Months
Ended Year Ended Ended Year Ended Ended Year Ended Ended Year Ended
June 30, December 31, June 30, December 31, June 30, December 31, June 30, December 31,
Sub-Accounts 1997 1996 1997 1996 1997 1996 1997 1996
- ----------- ----------- ------------ ----------- ------------ ----------- ------------ ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
MIT-Level 2 1,035,562 1,325,017 76,122 213,227 (79,518) (137,127) (230,389) (365,555)
MIT-Level 3 374,426 317,412 29,704 54,820 59,486 146,277 (134,424) (144,083)
MIT-Level 4 101,111 59,347 13,928 20,336 12,056 22,513 (2,650) (1,085)
MIG-Level 2 286,668 382,429 14,786 52,364 (10,943) (39,167) (45,886) (108,958)
MIG-Level 3 146,881 108,010 9,618 23,827 2,354 35,946 (26,735) (20,902)
MIG-Level 4 7,527 4,837 607 696 (449) 2,133 (455) (139)
MTR-Level 2 1,220,754 1,642,626 78,267 250,489 (65,653) (147,071) (292,768) (525,290)
MTR-Level 3 447,243 423,134 34,987 71,193 34,875 116,241 (132,228) (163,325)
MTR-Level 4 212,122 177,310 33,714 56,047 (7,403) (16,491) (3,488) (4,744)
MGO-Level 2 128,456 172,600 9,227 26,515 (4,615) (6,753) (20,681) (63,906)
MGO-Level 3 27,750 21,847 3,148 3,963 (380) 5,491 (6,411) (3,551)
MGO-Level 4 3,601 2,467 477 684 (657) 578 (8) (128)
MFB-Level 2 119,172 157,192 7,464 20,762 (4,669) (16,500) (20,206) (42,282)
MFB-Level 3 74,041 78,816 3,897 8,920 (2,722) 11,059 (30,917) (24,754)
MFB-Level 4 98,114 90,684 8,961 17,356 (5,378) (7,565) (2,842) (2,361)
MWG-Level 2 80,813 128,962 4,201 11,616 (9,566) (8,539) (7,116) (51,226)
MWG-Level 3 70,547 67,461 6,652 13,383 (2,486) 28 (7,026) (10,325)
MWG-Level 4 -- -- -- -- -- -- -- --
CAS-Level 2 779,654 834,945 44,948 117,027 (40,613) (21,021) (66,490) (151,297)
CAS-Level 3 408,890 362,964 30,517 62,771 41,979 36,328 (58,117) (53,173)
CAS-Level 4 178,569 143,089 16,257 27,585 (3,724) 15,496 (4,414) (7,601)
GSS-Level 2 496,576 726,698 30,153 87,437 (42,047) (142,794) (66,396) (174,765)
GSS-Level 3 344,849 309,543 24,400 48,880 17,103 109,394 (155,256) (122,968)
GSS-Level 4 454,901 494,152 31,647 66,642 (28,881) (86,710) (23,015) (19,183)
HYS-Level 2 177,022 213,240 11,493 27,922 (11,188) (20,980) (11,635) (43,160)
HYS-Level 3 97,148 99,034 3,464 8,703 8,009 5,818 (16,341) (16,407)
HYS-Level 4 163,622 160,381 17,420 31,305 (4,387) (19,915) (2,648) (8,149)
MMS-Level 2 364,557 530,592 34,344 84,555 139,587 139,608 (124,093) (390,198)
MMS-Level 3 281,464 265,443 8,193 31,809 18,883 88,273 (132,088) (104,061)
MMS-Level 4 271,307 296,406 11,620 23,924 (15,597) (34,336) (4,944) (14,687)
<CAPTION>
Units Outstanding
End of Period
--------------------------
Six Months
Ended Year Ended
June 30, December 31,
Sub-Account 1997 1996
- ----------- ----------- ------------
<S> <C> <C>
MIT-Level 2 801,777 1,035,562
MIT-Level 3 329,192 374,426
MIT-Level 4 124,445 101,111
MIG-Level 2 244,625 286,668
MIG-Level 3 132,118 146,881
MIG-Level 4 7,230 7,527
MTR-Level 2 940,600 1,220,754
MTR-Level 3 384,877 447,243
MTR-Level 4 234,945 212,122
MGO-Level 2 112,387 128,456
MGO-Level 3 24,107 27,750
MGO-Level 4 3,413 3,601
MFB-Level 2 101,761 119,172
MFB-Level 3 44,299 74,041
MFB-Level 4 98,855 98,114
MWG-Level 2 68,332 80,813
MWG-Level 3 67,687 70,547
MWG-Level 4 -- --
CAS-Level 2 717,499 779,654
CAS-Level 3 423,269 408,890
CAS-Level 4 186,688 178,569
GSS-Level 2 418,286 496,576
GSS-Level 3 231,096 344,849
GSS-Level 4 434,652 454,901
HYS-Level 2 165,692 177,022
HYS-Level 3 92,280 97,148
HYS-Level 4 174,007 163,622
MMS-Level 2 414,395 364,557
MMS-Level 3 176,452 281,464
MMS-Level 4 262,386 271,307
</TABLE>
7
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Participants in Sun Life of Canada (U.S.) Variable Account D
and the Board of Directors of Sun Life Assurance Company of Canada (U.S.):
We have audited the accompanying statement of condition of Sun Life of Canada
(U.S.) Variable Account D (the "Variable Account") as of June 30, 1997, the
related statements of operations for the six months then ended and the
statements of changes in net assets for the six months ended June 30, 1997 and
the year ending December 31, 1996. These financial statements are the
responsibility of management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures included
confirmation of securities held at June 30, 1997 by correspondence with the
custodian. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of the Variable Account as of June 30, 1997,
the results of its operations and the changes in its net assets for the
respective stated periods in conformity with generally accepted accounting
principles.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
August 8, 1997
8
<PAGE>
COMPASS-G
SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT D
DIRECTORS AND OFFICERS OF
ST
SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
JOHN D. McNEIL, Chairman and Director
PROFESSIONALLY MANAGED COMBINATION
DONALD A. STEWART, President and Director
FIXED/VARIABLE GROUP ANNUITY
DAVID D. HORN, Senior Vice President
and
FOR QUALIFIED AND NON-QUALIFIED
General Manager and Director
RETIREMENT PLANS
---------------------------------------------
S. CAESAR RABOY, Senior Vice President and
SEMI-ANNUAL REPORT, JUNE 30, 1997
Deputy General Manager and Director
RICHARD B. BAILEY, Director
A. KEITH BRODKIN, Director
M. COLYER CRUM, Director
JOHN S. LANE, Director
ANGUS A. MacNAUGHTON, Director
MARGARET SEARS MEAD, Assistant Vice President
and Secretary
L. BROCK THOMSON, Vice President and
Treasurer
SUN LIFE ASSURANCE COMPANY
OF CANADA (U.S.)
ANNUITY SERVICE MAILING ADDRESS:
Sun Life Annuity Service Center
P.O. Box 1024, Boston, Massachusetts 02103
GENERAL DISTRIBUTOR
Clarendon Insurance Agency, Inc.
[LOGO]
500 Boylston Street, Boston, Massachusetts 02116
LEGAL COUNSEL
Covington & Burling
1201 Pennsylvania Avenue, N.W.
P.O. Box 7566, Washington, D.C. 20044
AUDITORS
Deloitte & Touche LLP
125 Summer Street, Boston, Massachusetts 02110
ACCOUNT INFORMATION
For account information, call toll free: 1-800-752-7218 anytime from a
touch-tone telephone.
To speak with a customer service representative,
please call toll free 1-800-752-7215 from
8 a.m. to 6 p.m. Eastern time.
This report is prepared for the general information of
contract owners and participants. It is authorized for
distribution to prospective purchasers only if
preceded
ISSUED BY
SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
or accompanied by an effective prospectus.
A WHOLLY OWNED SUBSIDIARY OF
COG-3-8/97
SUN LIFE ASSURANCE COMPANY OF CANADA
