<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended March 31, 1998 Commission File Number 2-99959
-------------- -------
SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 04-2461439
- --------------------------------------------- ------------------------
(State or other jurisdiction of incorporation (IRS Employer I. D. No.)
or organization)
One Sun Life Executive Park, Wellesley Hills, MA. 02181
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (781) 237-6030
--------------
NONE
- --------------------------------------------------------------------------------
Former name, former address, and former fiscal year, if changed since last
report.
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the Registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
(1) Yes |X| No |_|
(2) Yes |X| No |_|
Registrant has no voting stock outstanding held by non-affiliates.
Registrant has 5,900 shares of common stock outstanding on May 14, 1998, all of
which are owned by Sun Life of Canada (U.S.) Holdings, Inc.
<PAGE>
SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
INDEX
<TABLE>
<CAPTION>
Page
PART I: Financial Information Number
--------------------- ------
<S> <C>
Item 1: Financial Statements:*
Balance Sheets -
March 31, 1998 and December 31, 1997 3
Statements of Operations -
Three Months Ended
March 31, 1998 and March 31, 1997 4
Statements of Capital Stock and Surplus -
Three Months Ended
March 31, 1998 and March 31, 1997 5
Statements of Cash Flows -
Three Months Ended
March 31, 1998 and March 31, 1997 6
Notes to Unaudited Financial Statements 7
Item 2: Management's Discussion and Analysis of
Financial Condition and Results of Operations 9
Item 3. Quantitative and Qualitative Disclosures About Market Risk 12
Part II: Other Information
Item 4: Submission of Matters to a Vote of Security Holders 13
Item 6: Exhibits and Reports on Form 8-K 14
</TABLE>
*The balance sheet at December 31, 1997 has been taken from the audited
financial statements at that date. All other statements are unaudited.
-2-
<PAGE>
ITEM 1: FINANCIAL STATEMENTS
Sun Life Assurance Company of Canada (U.S.)
(Wholly-owned subsidiary of
Sun Life of Canada (U.S.) Holdings, Inc.)
Statutory Statements of Admitted Assets, Liabilities and
Capital Stock and Surplus
(in 000's)
<TABLE>
<CAPTION>
March 31, December 31,
1998 1997
------------ ------------
<S> <C> <C>
Admitted assets
Bonds $ 2,036,126 $ 1,910,699
Common stocks 121,270 117,229
Mortgage loans on real estate 613,685 684,035
Properties acquired in satisfaction of debt 21,734 22,475
Investment real estate 78,090 78,426
Policy loans 41,354 40,348
Cash & short-term investments 336,634 544,418
Other invested assets 54,723 55,716
Life insurance premiums and annuity considerations due & uncollected 8,944 9,203
Investment income due and accrued 41,363 39,279
Receivable from parent, subsidiaries and affiliates 0 28,825
Funds withheld on reinsurance assumed 1,013,930 982,653
Other assets 1,759 1,841
------------ ------------
General account assets 4,369,612 4,515,147
Separate account assets
Unitized 10,471,722 9,068,021
Non-unitized 2,247,644 2,343,877
------------ ------------
Total admitted assets $ 17,088,978 $ 15,927,045
============ ============
Liabilities
Aggregate reserve for life policies and contracts $ 2,217,312 $ 2,188,243
Supplementary contracts 2,315 2,247
Policy and contract claims 3,107 2,460
Provision for policyholders' dividends and coupons payable 34,000 32,500
Liability for premium and other deposit funds 1,333,484 1,450,705
Surrender values on cancelled policies 151 215
Interest maintenance reserve 34,368 33,830
Commissions to agents due or accrued 4,125 2,826
General expenses due or accrued 3,617 7,202
Transfers from Separate Accounts due or accrued (307,222) (284,078)
Taxes, licenses and fees due or accrued, excluding FIT 119 105
Federal income taxes due or accrued 60,297 58,073
Unearned investment income 23 34
Amounts withheld or retained by company as agent or trustee 360 47
Remittances and items not allocated 1,672 1,363
Borrowed money 0 110,142
Asset valuation reserve 46,870 47,605
Payable to parent, subsidiaries, and affiliates 26,988 0
Payable for securities 44,432 27,104
Other liabilities 14,530 1,959
------------ ------------
General account liabilities 3,520,548 3,682,582
Separate account liabilities
Unitized 10,471,542 9,067,891
Non-unitized 2,247,644 2,343,877
------------ ------------
Total liabilities 16,239,734 15,094,350
------------ ------------
Common capital stock 5,900 5,900
------------ ------------
Surplus notes 565,000 565,000
Gross paid in and contributed surplus 199,355 199,355
Unassigned funds 78,989 62,440
------------ ------------
Surplus 843,344 826,795
------------ ------------
Total common capital stock and surplus 849,244 832,695
------------ ------------
Total liabilities, capital stock and surplus $ 17,088,978 $ 15,927,045
============ ============
</TABLE>
See notes to unaudited statutory financial statements.
-3-
<PAGE>
Sun Life Assurance Company of Canada (U.S.)
(Wholly-owned subsidiary of
Sun Life of Canada (U.S.) Holdings, Inc.)
Statutory Statements of Operations
(in 000's)
<TABLE>
<CAPTION>
Three Months Ended March 31,
Income 1998 1997
--------- ---------
<S> <C> <C>
Premiums and annuity considerations $ 63,769 $ 59,954
Deposit-type funds 475,605 554,524
Considerations for supplementary contracts
without life contingencies and dividend accumulations 298 368
Net investment income 49,603 71,984
Amortization of interest maintenance reserve 571 92
Net gain from operations from Separate Accounts Statement 1 0
Other income 26,002 21,877
--------- ---------
Total 615,849 708,799
--------- ---------
Benefits and expenses
Death benefits 7,943 2,512
Annuity benefits 35,038 34,869
Surrender benefits and other fund withdrawals 457,081 404,816
Interest on policy or contract funds 67 43
Payments on supplementary contracts
without life contingencies and of dividend accumulations 252 204
Increase in aggregate reserves for life and accident and health policies and contracts 29,070 29,961
Decrease in liability for premium and other deposit funds (117,221) (89,927)
Increase in reserve for supplementary contracts
without life contingencies and for dividend and coupon accumulations 68 189
--------- ---------
Total 412,298 382,667
Commissions on premiums and annuity considerations (direct business only) 29,778 34,008
Commissions and expense allowances on reinsurance assumed 4,242 4,042
General insurance expenses 12,014 8,804
Insurance taxes, licenses and fees, excluding federal income taxes 2,153 2,178
Decrease in loading on and cost of collection in excess of loading
on deferred and uncollected premiums (50) (78)
Net transfers to Separate Accounts 123,394 234,725
--------- ---------
Total 583,829 666,346
--------- ---------
Net gain from operations before dividends to policyholders and FIT 32,020 42,453
Dividends to policyholders 9,790 6,623
--------- ---------
Net gain from operations after dividends to policyholders and before FIT 22,230 35,830
Federal income tax expense (benefit) (excluding tax on capital gains) 8,119 (405)
--------- ---------
Net gain from operations after dividends to policyholders and FIT
and before realized capital gains 14,111 36,235
Net realized capital gains less capital gains tax and transferred to the IMR 814 240
--------- ---------
Net income $ 14,925 $ 36,475
========= =========
</TABLE>
See notes to unaudited statutory financial statements.
-4-
<PAGE>
Sun Life Assurance Company of Canada (U.S.)
(Wholly-owned subsidiary of
Sun Life of Canada (U.S.) Holdings, Inc.)
Statutory Statements of Changes in Capital Stock and Surplus
(in 000's)
<TABLE>
<CAPTION>
Three Months Ended March 31,
1998 1997
--------- ---------
<S> <C> <C>
Capital and surplus, Beginning of period $ 832,695 $ 567,143
--------- ---------
Net income 14,925 36,475
Change in net unrealized capital gains 396 (1,641)
Change in non-admitted assets and related items 447 (45)
Change in asset valuation reserve 733 (1,441)
Other changes in surplus in Separate Accounts Statement 48 1
--------- ---------
Net change in capital and surplus for the period 16,549 33,349
--------- ---------
Capital and surplus, End of period $ 849,244 $ 600,492
========= =========
</TABLE>
See notes to unaudited statutory financial statements.
-5-
<PAGE>
Sun Life Assurance Company of Canada (U.S.)
(Wholly-owned subsidiary of
Sun Life of Canada (U.S.) Holdings, Inc.)
Statutory Statements of Cash Flow
<TABLE>
<CAPTION>
(in 000's) Three Months Ended March 31,
1998 1997
--------- ---------
<S> <C> <C>
Cash Provided
Premiums, annuity considerations and deposit funds received $ 539,684 $ 615,473
Considerations for supplementary contracts and dividend
accumulations received 298 368
Net investment income received 60,680 86,051
Other income received 28,973 21,878
--------- ---------
Total receipts 629,635 723,770
--------- ---------
Benefits paid (other than dividends) 499,732 440,922
Insurance expenses and taxes paid (other than federal income and
capital gains taxes) 49,495 44,931
Net cash transfers to Separate Accounts 146,539 258,041
Dividends paid to policyholders 8,290 6,623
Federal income tax (recoveries) payments (excluding tax on capital gains) 4,098 (1,937)
Other - net 67 44
--------- ---------
Total payments 708,221 748,624
--------- ---------
Net cash from operations (78,586) (24,854)
--------- ---------
Proceeds from long-term investments sold, matured or repaid
(after deducting taxes on capital gains of $1,797 for 1997,
$92 for 1997) 370,476 257,351
Other cash provided 87,052 900
--------- ---------
Total cash provided 457,528 258,251
--------- ---------
Cash Applied
Cost of long-term investments acquired 428,604 121,423
Other cash applied 158,122 50,338
--------- ---------
Total cash applied 586,726 171,761
--------- ---------
Net change in cash and short-term investments (207,784) 61,636
Cash and short-term investments:
Beginning of period 544,418 90,059
--------- ---------
End of period $ 336,634 $ 151,695
========= =========
</TABLE>
See notes to unaudited statutory financial statements.
-6-
<PAGE>
Notes to Unaudited Financial Statements
(1) General
In management's opinion all adjustments, which include only normal recurring
adjustments, necessary for a fair presentation of the financial statements have
been made.
(2) Management and Service Contracts
The Company has an agreement with its ultimate parent, Sun Life Assurance
Company of Canada ("SLOC") which provides that SLOC will furnish, as
requested , personnel as well as certain services and facilities on a
cost-reimbursement basis. Expenses under this agreement amounted to
approximately $4,284,000 and $3,163,000 for the three month period in 1998
and in 1997.
(3) Investments in Subsidiaries
The following is combined unaudited summarized financial information of the
subsidiaries as of March 31, 1998 and 1997 and for the three months then ended:
<TABLE>
<CAPTION>
(000's) 1998 1997
<S> <C> <C>
Intangible assets $ 0 $ 9,711
Other assets 1,250,119 1,429,635
Liabilities (1,128,842) (1,294,034)
----------- -----------
Total net assets 121,277 145,312
=========== ===========
Total revenue 62,467 207,550
Operating expenses (59,936) (186,875)
Income tax expense (1,065) (9,559)
----------- -----------
Net income $ 1,466 $ 11,116
=========== ===========
</TABLE>
-7-
<PAGE>
SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
Notes to Unaudited Financial Statements (continued)
In determining the equity in income of subsidiaries for the periods, the Company
has excluded expenses of approximately $1,105,000 in 1998 and $7,457,000 in
1997, representing payables to the Company in lieu of federal income taxes.
(4) Investment Income
Net investment income consisted of:
<TABLE>
<CAPTION>
Three Months Ended
(000's) March 31,
1998 1997
-------- --------
<S> <C> <C>
Interest income from bonds 46,523 42,815
Income from investment in common stocks of
affiliates 0 11,601
Interest income from mortgage loans 14,380 21,319
Real estate investment income 3,967 2,844
Interest income from policy loans 534 625
Other (191) 442
-------- --------
Gross investment income 65,213 79,646
Interest on surplus notes and borrowed money 12,454 5,426
Investment expenses 3,156 2,236
-------- --------
$ 49,603 $ 71,984
======== ========
</TABLE>
-8-
<PAGE>
ITEM 2:
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Financial Condition
March 31, 1998
Assets
The general account invested assets declined by $149.7 million for the three
months ended March 31, 1998 due to maturities of pension and annuity contracts.
This trend is expected to continue as current product sales are directed to the
unitized and non-unitized separate accounts.
The Company's bond holdings consist of a diversified portfolio of both public
and private issues. It is the Company's policy to acquire only investment grade
securities and the overall quality of the bond portfolio remains high. At March
31, 1998, 4.7% of the Company's bond holdings were rated below investment grade
(i.e. below NAIC rating "1" or "2").
The mortgage loan portfolio of $613.7 million at March 31, 1998 represents 18.6%
of cash and invested assets, down from 19.8% at December 31, 1997. The Company
underwrites commercial mortgages with a maximum loan to value ratio of 75%. The
Company, as a rule, invests in properties that are almost fully leased. The
portfolio is diversified by region and type. The level of arrears in the
portfolio remains substantially below the industry average. At March 31, 1998,
The Company's portfolio did not contain any mortgage loans which were 60 days or
more in arrears.
Liabilities
The majority of the Company's liabilities consist of reserves for life insurance
and annuity contracts and deposit funds. The liability for premium and other
deposits continued to decline due to net maturities of the contracts associated
with these liabilities. During the three months ended March 31, 1998 the Company
repaid its $110 million short-term note payable to its parent, Sun Life of
Canada (U.S.) Holdings, Inc. ("Life Holdco").
Capital and Surplus
The total capital stock and surplus of the Company at March 31, 1998 was $849.2
million. The Company's management considers its surplus position to be adequate.
On May 6, 1998 the Company paid a dividend of $45 million to Life Holdco.
-9-
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (continued)
Liquidity
The Company's cash inflow consists primarily of premiums on insurance and
annuity products, income from investments, repayments of investment principal
and sales of investments. The Company's cash outflow is primarily to meet death
and other maturing insurance and annuity contract obligations, to pay out on
contract terminations, to fund investment commitments and to pay normal
operating expenses and taxes. Cash outflows are met from the normal net cash
inflows.
The Company segments its business internally in order to better manage projected
cash inflows and outflows within each segment. Targets for money market holdings
are established for each segment, which in the aggregate meet the day to day
cash needs of the Company. If greater liquidity is required, government issued
bonds, which are highly liquid, are sold to provide necessary funds. Government
and publicly traded bonds comprise 56% of the Company's long-term bond holdings.
Management believes that the Company's sources of liquidity are more than
adequate to meet its anticipated needs.
Results of Operations
Three months Ended March 31, 1998 and 1997
Net Income
Net income from operations after dividends and before federal income taxes
decreased by $13.6 million for the three months ended March 31, 1998 as
compared to the same period in 1997. Surplus earnings from the Company's
investment in subsidiaries decreased by $11.6 million primarily due to the
transfer of the investment in Massachusetts Financial Services Company
("MFS") to the Company's parent via a dividend in December 1997. The 1997
results of operations included dividends from MFS of $11.0 million. Net
income associated with the reinsurance agreements with SLOC decreased by $5.2
million in 1998 due to increasing death claims paid on the closed block of
business. Prior to reinsurance, earnings from the life line of business
remained relatively flat. The remaining earnings increase of approximately
$3.2 million is attributed to the Company's retirement products and services
lines of business, which markets combination fixed/variable annuities. This
increase in earnings reflects profits being generated from the large in-force
block of annuity business held in both the general account and the separate
accounts. Strong market performance in the separate accounts in 1997 and the
first quarter of 1998 generated a significant increase in mortality and
expense fees, which are calculated as a percentage of net assets. The net
assets held in the unitized separate accounts increased by over 32% at the
beginning of 1998 as compared to the same period in 1997. These additional
fees cover the increased general expenses associated with growing the
business. In addition the decreased sales in 1998 result in lower strain
which contributes to the increased earnings.
-10-
<PAGE>
SUN LIFE INSURANCE COMPANY OF CANADA (U.S.)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (continued)
Income
Total income decreased $92.9 million for the period ended March 31, 1998 as
compared to the same period in 1997. Reinsurance had the effect of increasing
income by approximately $6.0 million. Deposits from sales of combination
fixed/variable annuities decreased by $78.9 million, reflecting the
heightened competition of the dollar cost averaging program for annuities.
Several other insurance companies offer similar programs to that of the
Company's and some offer bonus rates of interest in excess of those offered
by the Company. Under the dollar cost averaging program, deposits are made
into the fixed portion of the annuity contract and receive a bonus rate of
interest for the policy year. During the year, the fixed deposit is exchanged
to the variable portion of the contract in equal periodic installments. Net
investment income and amortization of the interest maintenance reserve
decreased by $21.9 million due to a decline in general account invested
assets, an increase in interest expense from surplus notes and a decrease in
the dividends from subsidiaries. General account invested assets decreased by
$390.1 million during the calendar year 1997 due to guaranteed interest
contract and annuity maturities exceeding fixed annuity sales. The issuance
of $250 million of 8.625% surplus notes in December 1997 resulted in a net
decrease in invested assets of $140 million for the year. General account
invested assets decreased by $149.7 million in the first quarter of 1998
again due to maturities of contracts exceeding fixed annuity sales.
Benefits and Expenses
Benefits and expenses after dividends to policyholders decreased by $79.3
million for the period ended March 31, 1998 as compared to the same period in
1997. Reinsurance had the effect of increasing benefits and expenses by $11.2
million. Death benefits on reinsurance assumed increased by $ 6.0 million in
1998 as compared to 1997 due to a few large claims. Deaths, annuity payments and
surrender benefits and other fund withdrawals increased by $57.9 million,
reflecting surrenders and withdrawals from mostly separate account contracts for
which the surrender charge period has expired. Sales of this particular annuity
block of business issued seven years prior totaled over $104 million.. The
change in the liability for premium and other deposit funds decreased by $27.3
million, reflecting the increase in surrenders of the contracts described above.
Commissions decreased by $4.2 million, reflecting the decrease in total sales of
combination fixed/variable annuities. General insurance expenses increased by
$3.2 million, reflecting increased staff, rent expense, higher guaranty fund
assessments and allocations from SLOC associated with the growth in business .
Net transfers to the separate accounts decreased by $111.3 million, reflecting
decreased exchange activity out of the general account into the separate
accounts due to the maturing block of annuity business as well as the decrease
in sales.
Year 2000 Compliance
The Company's business, financial condition, and results of operations could be
materially and adversely affected by the failure of its systems and applications
(or those either provided or operated by third-parties) to properly operate or
manage dates beyond the year 1999. However, the Company has investigated the
nature and extent of the work necessary to render its computer systems capable
of processing beyond the turn of the century ("Year 2000 compliant"), and has
made substantial progress toward achieving this goal, including upgrading and/or
replacing existing systems. The Company expects that its principal systems will
be Year 2000 compliant by the end of 1998, leaving 1999 for extensive testing.
While it is believed that these efforts do involve substantial costs, the
Company closely monitors associated costs and continues to evaluate associated
risks based on actual testing. Based on available information, the Company
believes that it will be able to manage its total Year 2000 transition without a
material adverse effect on its business operations, financial condition, or
results of operations.
-11-
<PAGE>
SUN LIFE INSURANCE COMPANY OF CANADA (U.S.)
ITEM 3:
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK
The following discussion about the Company's risk management activities includes
"forward-looking statements" that involve risk and uncertainties.
Assets within the general account are segmented by product or groups of
products. This allows the Company to better manage assets relative to
liabilities. Asset management for each segment is conducted within the context
of any investment policy, reviewed each quarter with business unit managers to
ensure that investment policy remains appropriate, taking into account a
segment's liability characteristics. The review of investment policy includes
cash flow estimates, liquidity requirements and targets for asset mix, duration
and quality.
Market risks associated with investment portfolios supporting products that are
funded by separate accounts where results are not guaranteed and where the
policyholder assumes the risks are not included in this discussion.
All of the Company's assets are held for other than trading purposes and
generally fixed interest rate liabilities are supported by well diversified
portfolios of fixed interest investments including publicly issued and privately
placed bonds and commercial mortgage loans. Public bonds can include Treasuries,
corporates, money market instruments, Mortgage Backed Securities. Credit risk is
managed by the Company's underwriting standards which have resulted in high
average quality portfolios. For example, the Company does not purchase below
investment grade securities. Also, as a result of investment policy, there is no
foreign currency, commodity or equity price risk exposure in the portfolios.
However, changes in the level of domestic interest rates will impact the market
value of fixed interest assets and liabilities. The management of interest rate
risk exposure and immunization strategies are discussed below.
Immunization strategies which minimize the loss from wide fluctuations in
interest rates are pursued in segments where the bulk of the liabilities arise
from the sale of products containing interest rate guarantees for certain terms.
These strategies are supported by investment and asset liability analytical
software acquired from outside vendors. The significant features of the
immunization framework include: an economic or market value basis for both
assets and liabilities; an option pricing methodology; the use of effective
duration and convexity to measure price sensitivity; the use of key rate
durations (KRDs) to capture interest rate exposure to different parts of the
yield curve and manage non-parallel curve movements; and active portfolio
management, including the use of derivatives (e.g. interest rate swaps) for
portfolio restructuring.
An Interest Rate Risk Committee meets monthly and after reviewing the
duration reports for various portfolios, market conditions and forecasts, the
committee develops asset management strategies for interest sensitive
portfolios. These strategies may involve managing assets to small intentional
mismatches, either at the total effective duration level or at certain KRDs
but, in any event, the overall duration gap between interest sensitive assets
and liabilities is managed within a tolerance range of +/- 0.25 effective
duration.
The estimates presented here are from computer model simulations which,
because they are predictions about the future, contain a certain degree of
uncertainty. For example, there are algorithms for assumptions about
policyholder behavior and asset cash flows and consequently estimates of
duration and market values which may or may not represent what actually will
occur. Also there is no provision in the estimates to incorporate any
management decisions which might be taken to mitigate against adverse
results. The Company is sufficiently comfortable with its interest rate risk
management process to feel the exposure to interest rate changes will not
materially affect the near-term financial position, results of operations or
cash flows of the Company.
-12-
<PAGE>
ITEM 3:
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK (continued)
The Company's fixed interest investments had an aggregate fair value at March
31, 1998 of $3,113.5 million. A portion of the Company's general account
liabilities of $3,520.5 million are categorized as financial instruments. The
portion of the liabilities so categorized had a carrying value of $1,842.0
million and a fair value of $1,872.8 million at March 31, 1998. Using
modeling and analytical software, the Company performed sensitivity analysis
of its financial instruments at March 31, 1998. Assuming an immediate
increase of 100 basis points in interest rates the net hypothetical decrease
in the fair value of the Company's assets is estimated to be $121.0 million.
A corresponding decrease in the fair value of the liabilities categorized as
financial instruments is estimated to be $52.0 million at March 31, 1998.
PART II: OTHER INFORMATION
ITEM 4:
SUBMISSION OF MATTERS TO A VOTE OF
SECURITY HOLDERS
(a) The annual meeting of stockholders of the Company was held on February 5,
1998.
(b) The following directors of the Company were re-elected unanimously at the
annual meeting:
John D. McNeil
Donald A. Stewart
S. Caesar Raboy
David D. Horn
Richard B. Bailey
M. Colyer Crum
John S. Lane
Angus A. MacNaughton
The following director was elected unanimously at the annual meeting:
C. James Prieur
(c) Not applicable
-13-
<PAGE>
ITEM 6:
EXHIBITS AND REPORTS ON FORM 8-K
(a) The following Exhibits are incorporated herein by reference unless otherwise
indicated:
Exhibit No.
- -----------
27 Financial Data Schedule (filed herewith)
(b) The Company filed a report on Form 8-K on January 8, 1998 describing in Item
2 (Acquisition or Disposition of Assets) the transfer in the form of a
dividend of its subsidiary, Massachusetts Financial Services Company to its
parent, Sun Life of Canada (U.S.) Holdings, Inc.
The report included:
Unaudited Pro Forma Condensed Statutory Statement of Admitted Assets,
Liabilities and Capital Stock and Surplus at September 30, 1997.
Unaudited Pro Forma Condensed Statutory Statement of Operations at December
31, 1996
Unaudited Pro Forma Condensed Statutory Statement of Operations at September
30, 1997
-14-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Sun Life Assurance Company of Canada (U.S.)
(Registrant)
Date May 14, 1998 s/Margaret S. Mead
--------------------------------
Margaret S. Mead
Secretary
Date May 14, 1998 s/Robert P. Vrolyk
--------------------------------
Robert P. Vrolyk
Vice President and Actuary
Chief Financial Officer
-15-
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 7
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALLANCE
SHEET AND STATEMENT OF OPERATIONS FOUND ON PAGES 3 AND 5 OF THE COMPANY'S FORM
10-Q FOR THE YEAR-TO-DATE.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<DEBT-HELD-FOR-SALE> 0
<DEBT-CARRYING-VALUE> 2,036,126
<DEBT-MARKET-VALUE> 2,148,327
<EQUITIES> 121,270
<MORTGAGE> 613,685
<REAL-ESTATE> 99,824
<TOTAL-INVEST> 3,303,616
<CASH> 336,634
<RECOVER-REINSURE> 0
<DEFERRED-ACQUISITION> 0
<TOTAL-ASSETS> 17,088,978
<POLICY-LOSSES> 2,219,627
<UNEARNED-PREMIUMS> 0
<POLICY-OTHER> 3,258
<POLICY-HOLDER-FUNDS> 1,333,484
<NOTES-PAYABLE> 0
0
0
<COMMON> 5,900
<OTHER-SE> 843,344
<TOTAL-LIABILITY-AND-EQUITY> 17,083,078
539,672
<INVESTMENT-INCOME> 50,174
<INVESTMENT-GAINS> 814
<OTHER-INCOME> 26,002
<BENEFITS> 545,482
<UNDERWRITING-AMORTIZATION> 0
<UNDERWRITING-OTHER> 33,970
<INCOME-PRETAX> 23,044
<INCOME-TAX> 8,119
<INCOME-CONTINUING> 14,925
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</TABLE>
