<PAGE>
As filed with the Securities and Exchange Commission on April 22, 1998
Registration No. 2-95002
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-4
POST-EFFECTIVE AMENDMENT NO. 17
to
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 |X|
and
AMENDMENT NO. 17
to
REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940 |X|
SUN LIFE (N.Y.) VARIABLE ACCOUNT A
(Exact Name of Registrant)
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
(Name of Depositor)
80 Broad Street
New York, New York 10004
(Address of Depositor's
Principal Executive Offices)
Depositor's Telephone Number: (212) 943-3855
Margaret Hankard, Senior Associate Counsel
c/o Sun Life Assurance Company of Canada (U.S.)
Retirement Products and Services
One Copley Place
Boston, Massachusetts 02116
(Name and Address of Agent for Service)
Copies of Communications to:
David N. Brown, Esq.
Covington & Burling
1201 Pennsylvania Avenue, N.W.
P.O. Box 7566
Washington, D.C. 20044
|X| It is proposed that this filing will become effective on May 1, 1998
pursuant to paragraph (b) of Rule 485.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
C1 (NY)
<PAGE>
SUN LIFE (N.Y.) VARIABLE ACCOUNT A
Amendment No. 17 to Form N-4
Cross Reference Sheet Required by Rule 495(a) under
The Securities Act of 1933
Item Number in Form N-4 Location in Prospectus; Caption
- ----------------------- -------------------------------
Part A
- ------
1. Cover Page Cover Page
2. Definitions Definitions
3. Synopsis Synopsis; Expense Summary
4. Condensed Financial Condensed Financial Information
Information
5. General Description of A Word About the Company,
Registrant, Depositor the Variable Account and the
and Portfolio Companies Funds
6. Deductions Contract Charges; Cash Withdrawals
7. General Description of Purchase Payments and Contract
Variable Annuity Contracts Values During Accumulation
Period; Other Contractual
Provisions
8. Annuity Period Annuity Provisions
9. Death Benefit Death Benefit
10. Purchases and Contract Purchase Payments and Contract
Value Values During Accumulation
Period
11. Redemptions Cash Withdrawals
12. Taxes Federal Tax Status
13. Legal Proceedings Legal Proceedings
14. Table of Contents of the Table of Contents for Statement
Statement of Additional of Additional Information
Information
<PAGE>
Location in Statement of
Item Number in Form N-4 Additional Information; Caption
- ----------------------- -------------------------------
Part B
- ------
15. Cover Page Cover Page
16. Table of Contents Table of Contents
17. General Information and General Information
History
18. Services Other Contractual Provisions*
19. Purchase of Securities Purchase Payments and Contract
Being Offered Values During Accumulation
Period*
20. Underwriters Distribution of the Contracts*
21. Calculation of Performance Not Applicable
Data
22. Annuity Payments Annuity Provisions
23. Financial Statements Financial Statements
* In the Prospectus.
<PAGE>
PART A
INFORMATION REQUIRED IN A PROSPECTUS
Attached hereto and made a part hereof is the Prospectus
dated May 1, 1998.
<PAGE>
PROSPECTUS
MAY 1, 1998
COMPASS I
The individual flexible payment deferred annuity contracts (the "Contracts")
offered by this Prospectus are designed for use in connection with retirement
plans which meet the requirements of Sections 401 or 408 (excluding Section
408(b)) of the Internal Revenue Code. The Contracts are issued by Sun Life
Insurance and Annuity Company of New York (the "Company"). The Company's Annuity
Service Mailing Address is 80 Broad Street, New York, New York 10004.
The Owner of a Contract may elect to have Contract values accumulated on a
fixed basis in the Fixed Account (which is part of the Company's general account
and pays interest at a guaranteed fixed rate) or on a variable basis in Sun Life
(N.Y.) Variable Account A (the "Variable Account"), a separate account of the
Company, or divided among the Fixed Account and Variable Account. The Variable
Account uses its assets to purchase, at their net asset value, Class A shares in
one or more of the following mutual funds selected by the Owner from among a
group of mutual funds advised by Massachusetts Financial Services Company, an
affiliate of Sun Life Assurance Company of Canada (U.S.):
MFS-Registered Trademark- Money Market Fund; MFS-Registered Trademark-
Government Money Market Fund; MFS-Registered Trademark- World Governments Fund;
MFS-Registered Trademark- Bond Fund; MFS-Registered Trademark- High Income Fund;
MFS-Registered Trademark- Total Return Fund; Massachusetts Investors Trust;
MFS-Registered Trademark- Research Fund; Massachusetts Investors Growth Stock
Fund; MFS-Registered Trademark- Growth Opportunities Fund; and
MFS-Registered Trademark- Emerging Growth Fund (the "Mutual Fund(s)" or
"Fund(s)"). If the Owner elects certain forms of an annuity as a retirement
benefit, payments may be funded from either the Fixed Account or the Variable
Account or from both of the Fixed Account and the Variable Account. Contract
values allocated to the Variable Account and annuity payments elected on a
variable basis will vary to reflect the investment performance of the Funds
selected by the Owner.
This Prospectus sets forth information about the Contracts and the Variable
Account that a prospective purchaser of a Contract should know before investing.
Additional information about the Contracts and the Variable Account has been
filed with the Securities and Exchange Commission in a Statement of Additional
Information dated May 1, 1998 (the "Statement of Additional Information"), which
is incorporated herein by reference. The Statement of Additional Information is
available from the Company without charge upon written request to the above
address or by telephoning (212) 943-3855 or (800) 447-7569. The Table of
Contents for the Statement of Additional Information is shown on page 19 of this
Prospectus.
THE CONTRACTS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED BY,
ANY BANK, AND ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THIS PROSPECTUS IS VALID ONLY WHEN ACCOMPANIED BY THE CURRENT PROSPECTUSES OF
THE MUTUAL FUNDS.
THIS PROSPECTUS SHOULD BE READ AND RETAINED FOR FUTURE REFERENCE.
<PAGE>
PROSPECTUS ISSUED BY
MAY 1, 1998 SUN LIFE INSURANCE AND ANNUITY COMPANY OF
COMBINATION FIXED/VARIABLE NEW YORK
ANNUITY FOR QUALIFIED Annuity Service Mailing Address:
RETIREMENT PLANS 80 Broad Street
New York, New York 10004
GENERAL DISTRIBUTOR
Clarendon Insurance Agency, Inc.
One Sun Life Executive Park
Wellesley, Massachusetts 02181
AUDITORS
Deloitte & Touche LLP
125 Summer Street
Boston, Massachusetts 02110
ISSUED IN CONNECTION
WITH SUN LIFE (N.Y.)
VARIABLE ACCOUNT A
CO1NY-1 5/98
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
Definitions 2
Synopsis 3
Expense Summary 4
Condensed Financial Information--Accumulation Unit Values 6
Financial Statements 6
A Word About the Company, the Variable Account and the Funds 7
Purchase Payments and Contract Values During Accumulation Period 9
Cash Withdrawals 10
Death Benefit 11
Contract Charges 12
Annuity Provisions 14
Other Contractual Provisions 16
Federal Tax Status 17
Distribution of the Contracts 19
Legal Proceedings 19
Owner Inquiries 19
Table of Contents for Statement of Additional Information 19
</TABLE>
DEFINITIONS
The following terms as used in this Prospectus have the indicated meanings:
ACCUMULATION ACCOUNT: An account established for the Contract to which net
Purchase Payments are credited in the form of Accumulation Units.
ACCUMULATION UNIT: A unit of measure used in the calculation of the value of the
Accumulation Account. There are two types of Accumulation Units: Variable
Accumulation Units and Fixed Accumulation Units.
ANNUITANT: The person or persons named in the Contract and on whose life the
first annuity payment is made.
ANNUITY COMMENCEMENT DATE: The date on which the first annuity payment is made.
ANNUITY UNIT: A unit of measure used in the calculation of the amount of the
second and each subsequent Variable Annuity payment.
BENEFICIARY: The person who has the right to the death benefit set forth in the
Contract.
CONTRACT YEARS and CONTRACT ANNIVERSARIES: The first Contract Year shall be the
period of 12 months plus a part of a month as measured from the date the
Contract is issued to the first day of the calendar month which follows the
calendar month of issue. All Contract Years and Contract Anniversaries
thereafter shall be 12 month periods based upon such first day of the calendar
month which follows the calendar month of issue.
DUE PROOF OF DEATH: An original certified copy of an official death certificate,
or an original certified copy of a decree of a court of competent jurisdiction
as to the finding of death, or any other proof of death satisfactory to the
Company.
FIXED ACCOUNT: Those assets of the Company which are allocated to a non-unitized
separate account established in conformance with New York law.
FIXED ANNUITY: An annuity with payments which do not vary as to dollar amount.
OWNER: The person, persons or entity entitled to the ownership rights stated in
the Contract and in whose name or names the Contract is issued. The Owner must
be the trustee or custodian of a retirement plan which meets the requirements of
Section 401 or Section 408 (excluding Section 408(b)) of the Internal Revenue
Code.
PAYEE: The recipient of payments under the Contract. The term may include an
Annuitant or a Beneficiary who becomes entitled to benefits upon the death of
the Annuitant.
2
<PAGE>
PURCHASE PAYMENT (PAYMENT): An amount paid to the Company by the Owner or on the
Owner's behalf as consideration for the benefits provided by the Contract.
SUB-ACCOUNT: That portion of the Variable Account which invests in shares of a
specific Mutual Fund.
VALUATION PERIOD: The period of time from one determination of Accumulation Unit
and Annuity Unit values to the next subsequent determination of such values.
VARIABLE ANNUITY: An annuity with payments which vary as to dollar amount in
relation to the investment performance of specified Sub-Accounts of the Variable
Account.
SYNOPSIS
Purchase Payments are allocated to Sub-Accounts of the Variable Account or
to the Fixed Account or to both Sub-Accounts and the Fixed Account as selected
by the Owner. Purchase Payments must total at least $300 for the first Contract
Year and each Purchase Payment must be at least $25 (see "Purchase Payments" on
page 9). Subject to certain conditions, during the accumulation period the Owner
may, without charge, transfer amounts among the Sub-Accounts and between the
Sub-Accounts and the Fixed Account (see "Transfers/Conversions of Accumulation
Units" on page 10).
No sales charge is deducted from Purchase Payments; however, if any portion
of a Contract's Accumulation Account is surrendered, the Company will, with
certain exceptions, deduct a 5% withdrawal charge (i.e., a contingent deferred
sales charge) to cover certain expenses relating to the sale of the Contract. A
portion of the Accumulation Account may be withdrawn each year by the Owner
without the assessment of a withdrawal charge, and after a Purchase Payment has
been held by the Company for five years it may be withdrawn without charge.
Also, no withdrawal charge is assessed upon annuitization or upon the transfers/
conversions described above (see "Cash Withdrawals" on page 10 and "Withdrawal
Charges" on page 13).
In the event of the death of the Annuitant prior to the Annuity Commencement
Date, the Company will pay a death benefit to the Beneficiary. If the death of
the Annuitant occurs on or after the Annuity Commencement Date, no death benefit
will be payable under the Contract except as may be provided under the annuity
option elected (see "Death Benefit" on page 11).
On each Contract Anniversary and on surrender of the Contract for full
value, the Company will deduct a contract maintenance charge of $30 from the
Accumulation Account to reimburse it for administrative expenses related to the
issuance and maintenance of the Contracts. After the Annuity Commencement Date
such charge will be deducted pro rata from each annuity payment made during the
year (see "Contract Maintenance Charge" on page 12).
The Company also deducts, at the end of each Valuation Period, a mortality
and expense risk charge equal to an annual rate of 1.30% of the daily net assets
of the Variable Account, for mortality and expense risks assumed by the Company
(see "Mortality and Expense Risk Charge" on page 13).
Premium taxes payable to any governmental entity will be charged against the
Contracts (see "Premium Taxes" on page 14).
Annuity payments will begin on the Annuity Commencement Date. The Owner
selects the Annuity Commencement Date, the frequency of payments, and the
annuity option (see "Annuity Provisions" on page 14).
If the Owner is not satisfied with the Contract, it may be returned to the
Company at the Company's Annuity Service Mailing Address within ten days after
it was delivered to the Owner. When the Company receives the returned Contract
it will be canceled and the full amount of any Purchase Payment(s) received by
the Company will be refunded.
ANY PERSON CONTEMPLATING THE PURCHASE OF A CONTRACT SHOULD CONSULT A
QUALIFIED TAX ADVISER.
3
<PAGE>
EXPENSE SUMMARY
The purpose of the following table and Examples is to help Owners and
prospective purchasers of the Contracts to understand the costs and expenses
that are borne, directly and indirectly, by Owners. The table reflects expenses
of the Variable Account as well as of the Funds. The expense information for
certain Funds has been restated to reflect current fees. The information set
forth should be considered together with the narrative provided in this
Prospectus under the heading "Contract Charges", and the Funds' prospectuses.
<TABLE>
<CAPTION>
CONTRACT OWNER TRANSACTION
EXPENSES MCM MCG MWG MFB MFH MTR MIT MFR MIG MGO MEG
- --------------------------------- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Sales Load Imposed on
Purchases...................... 0 0 0 0 0 0 0 0 0 0 0
Deferred Sales Load (as a
percentage of Purchase
Payments withdrawn)(1)
Years Payment in Account
0-5.......................... 5% 5% 5% 5% 5% 5% 5% 5% 5% 5% 5%
More than 5.................. 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Exchange Fee..................... 0 0 0 0 0 0 0 0 0 0 0
ANNUAL CONTRACT FEE $30 per contract
- ---------------------------------
SEPARATE ACCOUNT ANNUAL EXPENSES
- ---------------------------------
(AS A PERCENTAGE OF AVERAGE SEPARATE ACCOUNT ASSETS)
Mortality and Expense Risk
Fees........................... 1.30% 1.30% 1.30% 1.30% 1.30% 1.30% 1.30% 1.30% 1.30% 1.30% 1.30%
Other Account Fees and
Expenses....................... 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Total Separate Account Annual
Expenses....................... 1.30% 1.30% 1.30% 1.30% 1.30% 1.30% 1.30% 1.30% 1.30% 1.30% 1.30%
FUND ANNUAL EXPENSES
- ---------------------------------
(AS A PERCENTAGE OF FUND AVERAGE NET ASSETS)
Management Fees.................. 0.48% 0.45% 0.75% 0.41% 0.46% 0.38% 0.22% 0.41% 0.63% 0.39% 0.71%
Other Expenses(2)................ 0.32% 0.42% 0.60% 0.59% 0.55% 0.55% 0.52% 0.55% 0.08% 0.45% 0.50%
Total Fund Annual Expenses....... 0.80% 0.87% 1.35% 1.00% 1.01% 0.93% 0.74% 0.96% 0.71% 0.84% 1.21%
<FN>
- ------------------------------
(1) A portion of the Accumulation Account value may be withdrawn each year
without imposition of any withdrawal charge. After a Purchase Payment has
been held by the Company for five years it may be withdrawn free of any
withdrawal charge.
(2) Other expenses for all of the Funds except MCM and MCG include annualized
fees assessed under the Distribution Plans adopted pursuant to Section
12(b) of the Investment Company Act of 1940 and Rule 12b-1 thereunder (see
the Funds' prospectuses). The Distribution Plans commenced on the following
dates: MTR and MWG, October 1, 1989, MIT, January 2, 1991 and MFB, MFH,
MFR, MIG, MGO and MEG, March 1, 1991.
</TABLE>
4
<PAGE>
EXAMPLES
If you surrender your Contract at the end of the applicable time period, you
would pay the following expenses on a $1,000 investment, assuming a 5% annual
return on assets:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
MCM......................................................... $66 $111 $158 $243
MCG......................................................... $67 $113 $161 $250
MWG......................................................... $72 $127 $186 $298
MFB......................................................... $68 $117 $168 $264
MFH......................................................... $68 $117 $169 $265
MTR......................................................... $68 $115 $164 $256
MIT......................................................... $66 $109 $155 $237
MFR......................................................... $68 $116 $166 $260
MIG......................................................... $65 $108 $153 $234
MGO......................................................... $67 $112 $160 $247
MEG......................................................... $70 $123 $179 $285
</TABLE>
If you do NOT surrender your Contract, or if you annuitize at the end of the
applicable time period, you would pay the following expenses on a $1,000
investment, assuming a 5% annual return on assets:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
MCM......................................................... $21 $66 $113 $243
MCG......................................................... $22 $68 $116 $250
MWG......................................................... $27 $82 $141 $298
MFB......................................................... $23 $72 $123 $264
MFH......................................................... $23 $72 $124 $265
MTR......................................................... $23 $70 $119 $256
MIT......................................................... $21 $64 $110 $237
MFR......................................................... $23 $71 $121 $260
MIG......................................................... $20 $63 $108 $234
MGO......................................................... $22 $67 $115 $247
MEG......................................................... $25 $78 $134 $285
</TABLE>
THE EXAMPLES SHOULD NOT BE CONSIDERED TO BE REPRESENTATIONS OF PAST OR
FUTURE EXPENSES, AND ACTUAL EXPENSES MAY BE GREATER OR LOWER THAN THOSE SHOWN.
5
<PAGE>
CONDENSED FINANCIAL INFORMATION--ACCUMULATION UNIT VALUES
The following information should be read in conjunction with the Variable
Account's financial statements appearing in the Statement of Additional
Information, all of which has been audited by Deloitte & Touche LLP, independent
certified public accountants.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------------------------------------------------------------------------
1988 1989 1990 1991 1992 1993 1994 1995 1996 1997
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
MIT
Unit Value:
Beginning of period $12.2525 $12.3567 $17.9399 $17.7020 $22.3383 $23.6826 $25.7230 $25.1346 $34.5590 $42.9716
End of period $13.3567 $17.9399 $17.7020 $22.3383 $23.6826 $25.7230 $25.1346 $34.5590 $42.9716 $55.8438
Units outstanding at end of
period 24,079 18,059 23,308 22,137 21,171 23,251 25,279 25,203 24,506 24,219
MIG
Unit Value:
Beginning of period $11.5459 $11.8676 $15.9079 $14.9744 $21.8361 $22.9454 $25.9289 $23.8756 $30.2725 $36.6834
End of period $11.8676 $15.9079 $14.9744 $21.8361 $22.9454 $25.9289 $23.8756 $30.2725 $36.6834 $53.6803
Units outstanding at end of
period 12,819 6,177 14,928 18,959 21,778 20,003 19,021 12,814 13,106 13,024
MTR
Unit Value:
Beginning of period $13.0197 $14.7873 $17.9608 $17.3225 $20.8151 $22.6179 $25.7135 $24.7000 $30.9611 $35.0672
End of period $14.7873 $17.9608 $17.3225 $20.8151 $22.6179 $25.7135 $24.7000 $30.9611 $35.0672 $41.7612
Units outstanding at end of
period 77,528 83,644 105,351 122,995 105,130 100,003 95,322 77,949 72,563 67,638
MGO
Unit Value:
Beginning of period $11.2662 $12.1191 $15.3740 $14.5083 $17.5663 $18.6739 $21.3516 $20.2091 $26.8309 $32.2614
End of period $12.1191 $15.3740 $14.5083 $17.5663 $18.6739 $21.3516 $20.2091 $26.8309 $32.2614 $39.2762
Units outstanding at end of
period 59,322 32,002 23,091 7,814 7,596 20,275 6,457 7,521 6,814 6,582
MFR
Unit Value:
Beginning of period $10.2625 $11.1713 $13.9068 $12.9030 $16.9193 $18.5632 $22.3111 $22.0234 $30.1208 $37.0227
End of period $11.1713 $13.9068 $12.9030 $16.9193 $18.5632 $22.3111 $22.0234 $30.1208 $37.0227 $44.0450
Units outstanding at end of
period 9,279 1,860 2,302 3,637 3,541 3,440 5,906 6,052 7,287 9,945
MFB
Unit Value:
Beginning of period $11.8545 $12.6812 $14.2070 $14.9228 $17.5506 $18.4205 $20.7162 $19.4313 $23.2931 $23.8984
End of period $12.6812 $14.2070 $14.9228 $17.5506 $18.4205 $20.7162 $19.4313 $23.2931 $23.8984 $26.0312
Units outstanding at end of
period 30,198 43,783 52,660 49,168 59,308 59,624 47,921 43,111 43,293 25,870
MCM
Unit Value:
Beginning of period $11.0070 $11.6337 $12.5003 $13.2940 $13.8510 $14.0872 $14.2395 $14.5535 $15.1238 $15.6386
End of period $11.6337 $12.5003 $13.2940 $13.8510 $14.0872 $14.2395 $14.5535 $15.1238 $15.6386 $16.1968
Units outstanding at end of
period 58,936 125,280 113,082 80,068 26,714 21,912 38,136 28,742 21,921 17,324
MCG
Unit Value:
Beginning of period $10.9982 $11.5847 $12.4222 $13.1982 $13.7487 $13.9727 $14.0931 $14.3669 $14.9190 $15.4092
End of period $11.5847 $12.4222 $13.1982 $13.7487 $13.9727 $14.0931 $14.3669 $14.9190 $15.4092 $15.9182
Units outstanding at end of
period 5,011 4,950 6,250 10,342 7,125 5,435 5,367 5,691 6,013 4,440
MFH
Unit Value:
Beginning of period $11.3760 $12.6152 $12.2288 $ 9.8993 $14.7896 $17.0996 $20.1025 $19.3115 $22.3502 $24.8670
End of period $12.6152 $12.2288 $ 9.8993 $14.7896 $17.0996 $20.1025 $19.3115 $22.3502 $24.8670 $27.8588
Units outstanding at end of
period 78,918 35,214 31.130 26,855 27,382 22,861 22,721 18,087 16,765 13,294
MWG
Unit Value:
Beginning of period $16.3472 $16.8375 $17.8619 $20.7841 $23.3014 $23.3104 $27.2305 $25.1262 $28.6388 $29.7910
End of period $16.8375 $17.8619 $20.7841 $23.3014 $23.3104 $27.2305 $25.1262 $28.6388 $29.7910 $29.5139
Units outstanding at end of
period 12,427 9,960 11,639 17,538 24,774 28,203 25,643 17,846 15,694 12,546
MEG
Unit Value:
Beginning of period $11.2093 $12.7010 $15.7599 $13.7736 $23.1493 $24.5860 $30.7913 $31.8775 $44.4187 $50.3336
End of period $12.7010 $15.7599 $13.7736 $23.1493 $24.5860 $30.7913 $31.8775 $44.4187 $50.3336 $59.9380
Units outstanding at end of
period 15,943 15,689 14,879 9,376 13,562 17,136 18,402 19,750 19,504 16,548
</TABLE>
FINANCIAL STATEMENTS
Financial Statements of the Variable Account and the Company are included in
the Statement of Additional Information.
6
<PAGE>
A WORD ABOUT THE COMPANY, THE VARIABLE ACCOUNT AND THE FUNDS
THE COMPANY
Sun Life Insurance and Annuity Company of New York (the "Company") is a
stock life insurance company incorporated under the laws of New York on May 25,
1983. Its Home Office is located at 80 Broad Street, New York, New York 10004.
The Company is a wholly-owned subsidiary of Sun Life Assurance Company of
Canada (U.S.) ("Sun Life of Canada (U.S.)"), a stock life insurance company
incorporated in Delaware and having its Executive Office at One Sun Life
Executive Park, Wellesley Hills, Massachusetts 02181. Sun Life of Canada (U.S.),
is an indirect wholly-owned subsidiary of Sun Life Assurance Company of Canada,
150 King Street West, Toronto, Ontario, Canada, a mutual life insurance company
incorporated in Canada in 1865.
THE VARIABLE ACCOUNT
Sun Life (N.Y.) Variable Account A (the "Variable Account") was established
as a separate account of the Company on December 3, 1984 pursuant to a
resolution of its Board of Directors. The Variable Account meets the definition
of a separate account under the federal securities laws and is registered with
the Securities and Exchange Commission as a unit investment trust under the
Investment Company Act of 1940. Under New York insurance law and under the
Contract, the income, gains or losses of the Variable Account are credited to or
charged against the assets of the Variable Account without regard to the other
income, gains or losses of the Company. Although the assets maintained in the
Variable Account will not be charged with any liabilities arising out of any
other business conducted by the Company, all obligations arising under the
Contracts, including the promise to make annuity payments, are general corporate
obligations of the Company.
The assets of the Variable Account are divided into Sub-Accounts. Each
Sub-Account invests exclusively in shares of one of the Funds described below.
THE MUTUAL FUNDS
All amounts allocated to the Variable Account will be used to purchase at
their net asset value Class A Fund shares as designated by the Owner. Any and
all distributions made by the Funds with respect to the shares held by the
Variable Account will be reinvested to purchase additional Class A Fund shares
at their net asset value. Deductions from the Variable Account for cash
withdrawals, annuity payments, death benefits, administrative charges, contract
charges against the assets of the Variable Account for the assumption of
mortality and expense risks and any applicable taxes will, in effect, be made by
redeeming the number of Fund shares at their net asset value equal in total
value to the amount to be deducted. The Variable Account will be fully invested
in Fund shares at all times.
A summary of the investment objectives of each Fund follows. More detailed
information may be found in the current prospectuses of the Funds and in their
Statements of Additional Information. A prospectus for each Fund must accompany
this Prospectus and should be read in conjunction herewith.
MFS-REGISTERED TRADEMARK- MONEY MARKET FUND ("MCM") and
MFS-REGISTERED TRADEMARK- GOVERNMENT MONEY MARKET FUND ("MCG")
MCM and MCG will seek as high a level of current income as is considered
consistent with the preservation of capital and liquidity. MCM and MCG are
separate series of MFS Series Trust IV. Each represents a separate diversified
portfolio with separate investment policies.
MCM will invest primarily in short-term money market instruments, including
U.S. Government securities and repurchase agreements collateralized by such
securities, obligations of the larger banks, prime commercial paper and high
quality corporate obligations.
MCG will invest only in short-term securities issued or guaranteed by the
U.S. Treasury or agencies or instrumentalities of the U.S. Government and in
repurchase agreements collateralized by such securities.
7
<PAGE>
MFS-REGISTERED TRADEMARK- WORLD GOVERNMENTS FUND ("MWG")
MWG will seek preservation and growth of capital, and moderate current
income through a professionally managed, internationally diversified portfolio
consisting primarily of debt securities, and, to a lesser extent, equity
securities.
MFS-REGISTERED TRADEMARK- BOND FUND ("MFB")
MFB will invest a major portion of its assets in "investment grade" debt
securities. Its primary investment objective is to provide as high a level of
current income as is believed to be consistent with prudent investment risk. A
secondary objective is to protect shareholders' capital.
MFS-REGISTERED TRADEMARK- HIGH INCOME FUND ("MFH")
MFH will seek high current income by investing primarily in a diversified
portfolio of fixed income securities, some of which may involve equity features.
Capital growth, if any, is a consideration incidental to the investment
objective of high current income. Securities offering the high current income
sought by the Fund (commonly known as "junk bonds") are ordinarily in the lower
rating categories of recognized rating agencies or are unrated and generally
involve greater volatility of price and risk of principal and income than
securities in the higher rating categories. Accordingly, an investment in the
Fund may not be appropriate for all investors.
MFS-REGISTERED TRADEMARK- TOTAL RETURN FUND ("MTR")
MTR will seek to obtain above-average income consistent with what the Fund's
management believes to be prudent employment of capital. While current income is
the primary objective, the Fund believes that there also should be a reasonable
opportunity for growth of capital and income, since many securities offering a
better-than-average yield may also possess growth potential. Under normal market
conditions, MTR will invest at least 25% of its assets in fixed income
securities and at least 40% but no more than 75% of its assets in equity
securities.
MASSACHUSETTS INVESTORS TRUST ("MIT")
MIT will seek to provide reasonable current income and long-term growth of
capital and income. The Fund is believed to constitute a conservative medium for
that portion of capital which an investor wishes to have invested in securities
considered to be of high or improving investment quality. The assets of the Fund
are normally invested in common stocks or securities convertible into common
stocks. However, the Fund may hold its assets in cash or invest in commercial
paper, repurchase agreements or other forms of debt securities either to provide
reserves for future purchases of common stock or as a defensive measure in
certain economic environments.
MFS-REGISTERED TRADEMARK- RESEARCH FUND ("MFR")
MFR will seek to provide long-term growth of capital and future income by
investing a substantial proportion of its assets in the common stocks or
securities convertible into common stocks of companies believed to possess
better than average prospects for long-term growth. A smaller proportion of the
assets may be invested in bonds, short-term obligations, preferred stocks or
common stocks whose principal characteristic is income production rather than
growth. Such securities may also offer opportunities for growth of capital as
well as income.
MASSACHUSETTS INVESTORS GROWTH STOCK FUND ("MIG")
MIG will seek to provide long-term growth of capital and future income
rather than current income by investing (except for working cash balances,) in
the common stocks, or securities convertible into common stocks, of companies
believed by the Fund's management to possess better-than-average prospects for
long-term growth. Emphasis is placed on the selection of progressive,
well-managed companies.
8
<PAGE>
MFS-REGISTERED TRADEMARK- GROWTH OPPORTUNITIES FUND ("MGO")
MGO (formerly Massachusetts Capital Development Fund ("MCD")) will seek
growth of capital. Dividend income, if any, is a consideration incidental to the
objective of capital growth. The Fund maintains a flexible approach towards
types of companies as well as types of securities, depending upon the economic
environment and the relative attractiveness of the various securities markets.
Generally, emphasis is placed upon companies believed to possess above average
growth opportunities.
MFS-REGISTERED TRADEMARK- EMERGING GROWTH FUND ("MEG")
MEG will seek long-term growth of capital by investing primarily in common
stocks of small and medium-sized companies that are early in their life cycle,
but which have the potential to become major enterprises i.e., emerging growth
companies). Investments in emerging growth companies are generally more volatile
in price and involve higher risk than investments in more established companies.
PURCHASE PAYMENTS AND CONTRACT VALUES
DURING ACCUMULATION PERIOD
PURCHASE PAYMENTS
All Purchase Payments are to be paid to the Company at its Annuity Service
Mailing Address. Purchase Payments may be made annually, semi-annually,
quarterly, monthly or on any other frequency acceptable to the Company. Unless
the Contract has been surrendered, Purchase Payments may be made at any time
during the life of the Annuitant and before the Annuity Commencement Date. The
amount of Purchase Payments may vary; however, Purchase Payments must total at
least $300 for the first Contract Year, and each Purchase Payment must be at
least $25. In addition, the prior approval of the Company is required before it
will accept a Purchase Payment which would cause the value of a Contract's
Accumulation Account to exceed $1,000,000. If the value of a Contract's
Accumulation Account exceeds $1,000,000, no additional Purchase Payments will be
accepted without the Company's prior approval.
Completed contract application forms, together with the initial Purchase
Payment, are forwarded to the Company. Upon acceptance, the Contract is issued
to the Owner and the initial Purchase Payment is credited to the Contract in the
form of Accumulation Units. The initial Purchase Payment must be applied within
two business days of receipt of a completed application. The Company may retain
the Purchase Payment for up to five business days while attempting to complete
an incomplete application. If the application cannot be made complete within
five business days, the applicant will be informed of the reasons for the delay
and the Purchase Payment will be returned immediately, unless the applicant
specifically consents to the Company's retaining the Purchase Payment until the
application is made complete. Thereafter, the Purchase Payment must be applied
within two business days. All subsequent Purchase Payments will be applied using
the Accumulation Unit values for the Valuation Period during which the Purchase
Payment is received by the Company.
The Company will establish an Accumulation Account for each Contract. The
Contract's Accumulation Account value for any Valuation Period is equal to the
variable accumulation value, if any, plus the fixed accumulation value, if any,
for that Valuation Period. The variable accumulation value is equal to the sum
of the value of all Variable Accumulation Units credited to the Contract's
Accumulation Account.
Each net Purchase Payment will be allocated to either the Fixed Account (see
Appendix A to the Statement of Additional Information for a description of the
Fixed Account) or to Sub-Accounts of the Variable Account or to both
Sub-Accounts and the Fixed Account in accordance with the allocation factors
specified by the Owner in the application or as subsequently changed. Upon
receipt of a Purchase Payment, all or that portion, if any, of the net Purchase
Payment to be allocated to the Sub-Accounts will be credited to the Accumulation
Account in the form of Variable Accumulation Units. The number of particular
Variable Accumulation Units to be credited is determined by dividing the dollar
amount allocated to the particular Sub-Account by the Variable Accumulation Unit
value for the particular Sub-Account for the Valuation Period during which the
Purchase Payment is received.
The Variable Accumulation Unit value for each Sub-Account was established at
$10.00 for the first Valuation Period of the particular Sub-Account. The
Variable Accumulation Unit value for the particular Sub-
9
<PAGE>
Account for any subsequent Valuation Period is determined by methodology which
is the mathematical equivalent of multiplying the Variable Accumulation Unit
value for the particular Sub-Account for the immediately preceding Valuation
Period by the Net Investment Factor for the particular Sub-Account for such
subsequent Valuation Period. The Variable Accumulation Unit value for each
Sub-Account for any Valuation Period is determined at the end of the particular
Valuation Period and may increase, decrease or remain constant from Valuation
Period to Valuation Period, depending upon the investment performance of the
Fund in which the Sub-Account is invested and the expenses and charges deducted
from the Variable Account.
NET INVESTMENT FACTOR
The Net Investment Factor is an index applied to measure the investment
performance of a Sub-Account from one Valuation Period to the next. The Net
Investment Factor may be greater than, less than or equal to one; therefore, the
value of a Variable Accumulation Unit may increase, decrease or remain the same.
The Net Investment Factor for any Sub-Account for any Valuation Period 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 Fund share held in the Sub-Account
determined as of the end of the Valuation Period, plus
(2) the per share amount of any dividend or other distribution declared
by the Fund issuing the shares held in the Sub-Account 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 the Company during the Valuation Period which are
determined by the Company to be attributable to the operation of the
Sub-Account (no federal income taxes are applicable under present
law);
(b) is the net asset value of a Fund share held in the Sub-Account
determined as of the end of the preceding Valuation Period; and
(c) is the risk charge factor determined by the Company for the Valuation
Period to reflect the charge for assuming the mortality and expense
risks.
TRANSFERS/CONVERSIONS OF ACCUMULATION UNITS
During the accumulation period, the Owner may convert the value of a
designated number of Fixed Accumulation Units then credited to a Contract's
Accumulation Account into Variable Accumulation Units in particular Sub-Accounts
having an equal aggregate value, or convert the value of a designated number of
Variable Accumulation Units into other Variable Accumulation Units and/or Fixed
Accumulation Units having an equal aggregate value. These transfers/conversions
are subject to the following conditions: (1) conversions involving Fixed
Accumulation Units may be made only during the 45 day period before and the 45
day period after each Contract Anniversary; (2) not more than 12 conversions may
be made in any Contract Year; and (3) the value of Accumulation Units converted
may not be less than $1,000 unless all of the Fixed Accumulation Units or all of
the Variable Accumulation Units of a particular Sub-Account credited to the
Accumulation Account are being converted. In addition, these
transfers/conversions shall be subject to such terms and conditions as may be
imposed by the applicable Fund or Funds. The conversion will be made using the
Accumulation Unit values for the Valuation Period during which the request for
conversion is received by the Company. Conversions may be made pursuant to
telephoned instructions.
CASH WITHDRAWALS
At any time before the Annuity Commencement Date and during the lifetime of
the Annuitant, the Owner may elect to receive a cash withdrawal payment from the
Company. Any such election shall specify the
10
<PAGE>
amount of the withdrawal and will be effective on the date that it is received
by the Company. For withdrawals in excess of $5,000, the Company may require a
signature guarantee. The withdrawal will result in the cancellation of
Accumulation Units with an aggregate value equal to the dollar amount of the
cash withdrawal payment plus, if applicable, the contract maintenance charge and
any withdrawal charge. Unless instructed to the contrary, the Company will
cancel Fixed Accumulation Units and Variable Accumulation Units of the
particular Sub-Accounts on a pro rata basis, reflecting the existing composition
of the Contract's Accumulation Account. If a partial withdrawal is requested
which would leave an Accumulation Account value of less than the contract
maintenance charge, then such partial withdrawal will be treated as a full
surrender.
Under certain conditions, the Company will assess a withdrawal charge if a
cash withdrawal payment is made. The amount of any withdrawal charge and the
conditions under which the charge will apply are discussed under "Withdrawal
Charges".
Any cash withdrawal payment will be paid within seven days from the date the
election becomes effective, except as the Company may be permitted to defer such
payment in accordance with the Investment Company Act of 1940. Deferment is
currently permissible only (1) for any period (a) during which the New York
Stock Exchange is closed other than customary weekend and holiday closings, or
(b) during which trading on the New York Stock Exchange is restricted as
determined by the Securities and Exchange Commission, (2) for any period during
which an emergency exists as a result of which (a) disposal of securities held
by the Funds is not reasonably practicable, or (b) it is not reasonably
practicable to determine the value of the net assets of the Funds, or (3) for
such other periods as the Securities and Exchange Commission may by order permit
for the protection of security holders.
Since the Contracts will be issued only in connection with retirement plans
which meet the requirements of Section 401 or Section 408 (excluding Section
408(b)) of the Internal Revenue Code, reference should be made to the terms of
the particular retirement plan for any limitations or restrictions on cash
withdrawals. The tax consequences of a cash withdrawal payment should be
carefully considered (see "Federal Tax Status").
DEATH BENEFIT
In the event of the death of the Annuitant prior to the Annuity Commencement
Date, the Company will pay a death benefit to the Beneficiary. If the death of
the Annuitant occurs on or after the Annuity Commencement Date, no death benefit
will be payable under the Contract except as may be provided under the annuity
option elected.
During the lifetime of the Annuitant and prior to the Annuity Commencement
Date, the Owner may elect to have the value of the Accumulation Account applied
under one or more annuity options to effect a Variable Annuity or a Fixed
Annuity or a combination of both for the Beneficiary as Payee after the death of
the Annuitant. If no election of a method of settlement of the death benefit by
the Owner is in effect on the date of death of the Annuitant, the Beneficiary
may elect (a) to receive the death benefit in the form of a cash payment; or (b)
to have the value of the Accumulation Account applied under one or more of the
annuity options (on the Annuity Commencement Date described under "Payment of
Death Benefit") to effect a Variable Annuity or a Fixed Annuity or a combination
of both for the Beneficiary as Payee. If an election by the Beneficiary is not
received by the Company within 60 days following the date Due Proof of Death of
the Annuitant and any required release or consent is received, the Beneficiary
will be deemed to have elected a cash payment as of the last day of the 60 day
period.
In all cases, no Owner or Beneficiary shall be entitled to exercise any
rights that would adversely affect the treatment of the Contract as an annuity
contract under the Internal Revenue Code.
Reference should be made to the terms of the particular retirement plan and
any applicable legislation for any limitations or restrictions on the election
of a method of settlement and payment of the death benefit under the Contract.
11
<PAGE>
PAYMENT OF DEATH BENEFIT
If the death benefit is to be paid in cash to the Beneficiary, payment will
be made within seven days of the date the election becomes effective or is
deemed to become effective, except as the Company may be permitted to defer such
payment in accordance with the Investment Company Act of 1940 under the
circumstances described under "Cash Withdrawals." If the death benefit is to be
paid in one sum to the Owner, or to the estate of the deceased Annuitant,
payment will be made within seven days of the date Due Proof of Death of the
Annuitant and the Beneficiary is received. If settlement under one or more of
the annuity options is elected by the Owner, the Annuity Commencement Date will
be the first day of the second calendar month following receipt of Due Proof of
Death of the Annuitant and the Beneficiary, if any. In the case of an election
by the Beneficiary, the Annuity Commencement Date will be the first day of the
second calendar month following the effective date of the election. An Annuity
Commencement Date later than that described above may be elected by an Owner or
Beneficiary, provided that such date is (a) the first day of a calendar month,
and (b) not later than the first day of the first month following the 85th
birthday of the Beneficiary or other Payee designated by the Owner, as the case
may be, unless otherwise restricted by the particular retirement plan or by
applicable law (see "Annuity Commencement Date").
AMOUNT OF DEATH BENEFIT
The death benefit is equal to the greatest of: (1) the value of the
Contract's Accumulation Account; (2) total Purchase Payments made under the
Contract reduced by all withdrawals; or (3) the value of the Contract's
Accumulation Account on the fifth (5th) Contract Anniversary, adjusted for any
Purchase Payments or cash withdrawal payments made and contract charges assessed
subsequent to such fifth (5th) Contract Anniversary. The Accumulation Unit
values used in determining the amount of the death benefit under (1) above will
be the values for the Valuation Period during which Due Proof of Death of the
Annuitant is received by the Company if settlement is elected by the Owner under
one or more of the annuity options or, if no such election by the Owner is in
effect, either the values for the Valuation Period during which an election by
the Beneficiary is effective or the values for the Valuation Period during which
Due Proof of Death of both the Annuitant and the designated Beneficiary is
received by the Company if the death benefit is to be paid in one lump sum to
the deceased Owner/Annuitant's estate.
CONTRACT CHARGES
Contract charges may be assessed under the Contracts as follows:
CONTRACT MAINTENANCE CHARGE
On each Contract Anniversary and on surrender of the Contract for full value
on other than the Contract Anniversary, the Company will deduct from the
Accumulation Account a contract maintenance charge of $30 to reimburse it for
administrative expenses relating to the issuance and maintenance of the
Contract. The contract maintenance charge will be deducted in equal amounts from
the Fixed Account and each Sub-Account in which the Owner has Accumulation Units
at the time of such deduction. On the Annuity Commencement Date the value of the
Contract's Accumulation Account will be reduced by a proportionate amount of the
contract maintenance charge to reflect the time elapsed between the last
Contract Anniversary and the day before the Annuity Commencement Date. After the
Annuity Commencement Date, the contract maintenance charge will be deducted pro
rata from each annuity payment made during the year. The Company does not expect
to make a profit from the contract maintenance charge.
The amount of the contract maintenance charge may not be increased by the
Company. The Company reserves the right to reduce the amount of the contract
maintenance charge for groups of participants with individual Contracts under an
employer's retirement program in situations in which the size of the group and
established administrative efficiencies contribute to a reduction in
administrative expenses.
12
<PAGE>
MORTALITY AND EXPENSE RISK CHARGE
The mortality and expense risks assumed by the Company are the risks that
Annuitants may live for a longer period of time than estimated by the Company in
establishing the guaranteed annuity rates incorporated into the Contract, and
the risk that administrative charges assessed under the Contracts may be
insufficient to cover actual administrative expenses incurred by the Company.
For assuming these risks, the Company makes a deduction from the Variable
Account at the end of each Valuation Period during both the accumulation period
and after annuity payments begin at an effective annual rate of 1.30%. The rate
of this deduction may be changed annually but in no event will it exceed 1.30%
on an annual basis. If the deduction is insufficient to cover the actual cost of
the mortality and expense risk undertaking, the Company will bear the loss.
Conversely, if the deduction proves more than sufficient, the excess would be
profit to the Company and would be available for any proper corporate purpose
including, among other things, payment of distribution expenses. If the
withdrawal charges described below prove insufficient to cover expenses
associated with the distribution of the Contracts, the deficiency will be met
from the Company's general corporate funds, which may include amounts derived
from the mortality and expense risk charges.
For the year ended December 31, 1997, mortality and expense risk charges
were the only expenses of the Variable Account.
WITHDRAWAL CHARGES
No sales charges are deducted from Purchase Payments. However, a withdrawal
charge (i.e., a contingent deferred sales charge), when applicable, will be
assessed to reimburse the Company for certain expenses relating to the
distribution of the Contracts, including commissions, costs of preparation of
sales literature and other promotional costs and acquisition expenses.
A portion of the Accumulation Account value may be withdrawn each year
without imposition of any withdrawal charge, and after a Purchase Payment has
been held by the Company for five years it may be withdrawn free of any
withdrawal charge. In addition, no withdrawal charge is assessed upon
annuitization or upon the transfer of Accumulation Account values among the
Sub-Accounts or between the Sub-Accounts and the Fixed Account.
All other full or partial withdrawals are subject to a withdrawal charge
equal to 5% of the amount withdrawn which is subject to the charge. The charge
will be applied as follows:
(1) Old Payments, new Payments and accumulated value: With respect to a
particular Contract Year, "new Payments" are those Payments made in that
Contract Year or in the four immediately preceding Contract Years; "old
Payments" are those Payments not defined as new Payments; and "accumulated
value" is the value of the Accumulation Account less the sum of old and new
Payments.
(2) Order of liquidation: To effect a full surrender or partial
withdrawal, the oldest previously unliquidated Payment will be deemed to
have been liquidated first, then the next oldest, and so forth. Once all old
and new Payments have been withdrawn, additional amounts withdrawn will be
attributed to accumulated value.
(3) Maximum free withdrawal amount: The maximum amount that can be
withdrawn without a withdrawal charge in a Contract Year is equal to the sum
of (a) any old Payments not already liquidated and (b) 10% of any new
Payments, irrespective of whether these new Payments have been liquidated.
(4) Amount subject to withdrawal charge: The amount subject to the
withdrawal charge will be the excess, if any, of (a) amounts liquidated from
old and new Payments over (b) the remaining maximum free withdrawal amount
at the time of the withdrawal.
In no event shall the aggregate withdrawal charges assessed against a
Contract exceed 5% of the aggregate Purchase Payments made under such Contract.
(See Appendix C in the Statement of Additional Information for examples of
withdrawals and withdrawal charges.)
13
<PAGE>
PREMIUM TAXES
A deduction, when applicable, is made for premium or similar state or local
taxes. Currently, no premium taxes are applicable in the State of New York;
however, if an Owner or Payee is other than a New York State resident, a premium
tax ranging from 0% to 2.25% may be assessed, depending on the state of
residence. It is currently the Company's policy to deduct the tax from the
amount applied to provide an annuity at the time annuity payments commence;
however, the Company reserves the right to deduct such taxes on or after the
date they are incurred.
CHARGES OF THE FUNDS
The Variable Account purchases shares of the Funds at net asset value. The
net asset values of these shares reflect investment management fees, Rule 12b-1
(i.e. distribution plan) fees and expenses (including, but not limited to,
compensation of trustees/directors, governmental expenses, interest charges,
taxes, fees of auditors, legal counsel, transfer agent and custodian,
transactional expenses and brokerage commissions) already deducted from the
assets of the Funds. These fees and expenses are more fully described in the
Funds' prospectuses and Statements of Additional Information.
ANNUITY PROVISIONS
ANNUITY COMMENCEMENT DATE
Annuity payments under a Contract will begin on the Annuity Commencement
Date which is selected by the Owner at the time the Contract is applied for. The
Annuity Commencement Date may be changed by the Owner as provided in the
Contract; however the new Annuity Commencement Date must be the first day of a
month and not later than the first day of the first month following the
Annuitant's 85th birthday, unless otherwise limited or restricted by the
particular retirement plan or by applicable law. In most situations, current law
requires that the Annuity Commencement Date be no later than April 1 following
the year the Annuitant reaches age 70 1/2 and the terms of the particular
retirement plan may impose additional limitations. The Annuity Commencement Date
may also be changed by an election of an annuity option as described under
"Death Benefit."
On the Annuity Commencement Date the Contract's Accumulation Account will be
canceled and its adjusted value will be applied to provide an annuity. The
adjusted value will be equal to the value of the Accumulation Account for the
Valuation Period which ends immediately preceding the Annuity Commencement Date,
reduced by any applicable premium or similar taxes and a proportionate amount of
the contract maintenance charge (see "Contract Maintenance Charge"). No cash
withdrawals will be permitted after the Annuity Commencement Date except as may
be available under the annuity option elected.
ANNUITY OPTIONS
Unless restricted by the particular retirement plan or any applicable
legislation, during the lifetime of the Annuitant and prior to the Annuity
Commencement Date the Owner may elect one or more of the annuity options
described below or such other settlement option as may be agreed to by the
Company for the Annuitant as Payee. Annuity options may also be elected by the
Owner or the Beneficiary as provided under "Death Benefit." The Owner may not
change any election after 30 days prior to the Annuity Commencement Date, and no
change of annuity option is permitted after the Annuity Commencement Date. If no
election is in effect on the 30th day prior to the Annuity Commencement Date,
Annuity Option B, for a Life Annuity with 120 monthly payments certain, will be
deemed to have been elected.
Any election may specify the proportion of the adjusted value of the
Contract's Accumulation Account to be applied to the Fixed Account and the
Sub-Accounts. In the event the election does not so specify, then the portion of
the adjusted value of the Accumulation Account to be applied to the Fixed
Account and the Sub-Accounts will be determined on a pro rata basis from the
composition of the Accumulation Account on the Annuity Commencement Date.
14
<PAGE>
Annuity Options A, B and C are available to provide either a Fixed Annuity
or a Variable Annuity. Annuity Options D and E are available only to provide a
Fixed Annuity.
Annuity Option A. Life Annuity: Monthly payments during the lifetime of the
Payee. This option offers a higher level of monthly payments than Annuity Option
B or Annuity Option C because no further payments are payable after the death of
the Payee and there is no provision for a death benefit payable to a
Beneficiary.
Annuity Option B. Life Annuity with 60, 120, 180 or 240 Monthly Payments
Certain: Monthly payments during the lifetime of the Payee and in any event for
60, 120, 180 or 240 months certain as elected. The election of a longer period
certain results in smaller monthly payments than would be the case if a shorter
period certain were elected.
Annuity Option C. Joint and Survivor Annuity: Monthly payments payable
during the joint lifetime of the Payee and a designated second person and during
the lifetime of the survivor. During the lifetime of the survivor, variable
monthly payments, if any, will be determined using the percentage chosen at the
time of the election of this option of the number of each type of Annuity Unit
credited to the Contract and each fixed monthly payment, if any, will be equal
to the same percentage of the fixed monthly payment payable during the joint
lifetime of the Payee and the designated second person.
Annuity Option D. Fixed Payments for a Specified Period Certain: Fixed
monthly payments for a specified period of time, three years or more but not
exceeding 30 years, as elected.
Annuity Option E. Fixed Payments: The amount applied to provide fixed
payments in accordance with this option will be held by the Company at interest.
Fixed payments will be made in such amounts and at such times as may be agreed
upon with the Company and will continue until the amount held by the Company
with interest is exhausted. Interest will be credited yearly on the amount
remaining unpaid at a rate which shall be determined by the Company from time to
time but which shall not be less than 4% per year compounded annually. The rate
so determined may be changed by the Company at any time; however, the rate may
not be reduced more frequently than once during each calendar year.
DETERMINATION OF ANNUITY PAYMENTS
The dollar amount of the first variable annuity payment will be determined
in accordance with the annuity payment rates found in the Contract which are
based on an assumed interest rate of 4% per year. All variable annuity payments
other than the first are determined by means of Annuity Units credited to the
Contract. The number of Annuity Units to be credited in respect of a particular
Sub-Account is determined by dividing that portion of the first variable annuity
payment attributable to that Sub-Account by the Annuity Unit value of that
Sub-Account for the Valuation Period which ends immediately preceding the
Annuity Commencement Date. The number of Annuity Units of each particular
Sub-Account credited to the Contract then remains fixed unless an exchange of
Annuity Units is made as described below. The dollar amount of each variable
annuity payment after the first may increase, decrease or remain constant
depending on the investment performance of the Sub-Accounts.
The Statement of Additional Information contains detailed disclosure
regarding the method of determining the amount of each variable annuity payment
and calculating the value of a Variable Annuity Unit, as well as hypothetical
examples of such calculations.
EXCHANGE OF VARIABLE ANNUITY UNITS
After the Annuity Commencement Date, the Payee may exchange the value of a
designated number of Variable Annuity Units of particular Sub-Accounts then
credited to the Contract for other Variable Annuity Units, the value of which
would be such that the dollar amount of an annuity payment made on the date of
the exchange would be unaffected by the fact of the exchange. Exchanges may be
made only between Sub-Accounts of the Variable Account. Twelve such exchanges
may be made within each Contract Year.
15
<PAGE>
ANNUITY PAYMENT RATES
The Contract contains annuity payment rates for each Annuity Option
described above. The rates show, for each $1,000 applied, the dollar amount of
(a) the first monthly variable annuity payment based on the assumed interest
rate of 4%; and (b) the monthly fixed annuity payment, when this payment is
based on the minimum guaranteed interest rate of 4% per year. The annuity
payment rates may vary according to the annuity option elected and the adjusted
age of the Payee. Over a period of time, if the Sub-Accounts achieve a net
investment return exactly equal to the assumed interest rate of 4%, the amount
of each variable annuity payment would remain constant. However if the
Sub-Accounts achieve a net investment result greater than 4%, the amount of each
variable annuity payment would increase; conversely, a net investment result
less than 4% would decrease the amount of each variable annuity payment.
OTHER CONTRACTUAL PROVISIONS
OWNER
The Owner is entitled to exercise all Contract rights and privileges without
the consent of the Beneficiary or any other person. Such rights and privileges
may be exercised only during the lifetime of the Annuitant and prior to the
Annuity Commencement Date, except as otherwise provided in the Contract. The
Annuitant becomes the Owner on and after the Annuity Commencement Date. The
Beneficiary becomes the Owner on the death of the Annuitant. In some qualified
plans the Owner of the Contract is a Trustee and the Trust authorizes the
Annuitant/participant to exercise certain Contract rights and privileges.
Transfer of ownership of a Contract is governed by the laws and regulations
applicable to the retirement or deferred compensation plan for which the
Contract was issued. Subject to the foregoing, a Contract may not be sold,
assigned, transferred, discounted or pledged as collateral for a loan or as
security for the performance of an obligation or for any other purpose to any
person other than the Company.
Subject to the rights of an irrevocably designated Beneficiary, the Owner
may change or revoke the designation of a Beneficiary at any time while the
Annuitant is living. Reference should be made to the terms of the particular
retirement plan and any applicable legislation for any restrictions on the
beneficiary designation.
VOTING OF FUND SHARES
The Company will vote Fund shares held by the Sub-Accounts at meetings of
shareholders of the Funds or in connection with similar solicitations, but will
follow voting instructions received from persons having the right to give voting
instructions. Fund shares for which no timely voting instructions are received
will be voted by the Company in the same proportion as the shares for which
instructions are received from persons having such voting rights. The Owner is
the person having the right to give voting instructions prior to the Annuity
Commencement Date. On or after the Annuity Commencement Date the Payee is the
person having such voting rights.
Owners of Contracts may be subject to other voting provisions of the
particular retirement plan. Employees who contribute to retirement plans which
are funded by the Contracts are entitled to instruct the Owners as to how to
instruct the Company to vote the Fund shares attributable to their
contributions. Such plans may also provide the additional extent, if any, to
which the Owners shall follow voting instructions of persons with rights under
the plans.
The number of particular Fund shares as to which each such person is
entitled to give instructions will be determined by the Company on a date not
more than 90 days prior to each such meeting. Prior to the Annuity Commencement
Date, the number of particular Fund shares as to which voting instructions may
be given to the Company is determined by dividing the value of all of the
Variable Accumulation Units of the particular Sub-Account credited to the
Contract's Accumulation Account by the net asset value of one share of a
particular Fund as of the same date. On or after the Annuity Commencement Date,
the number of
16
<PAGE>
shares of a particular Fund as to which such instructions may be given by a
Payee is determined by dividing the reserve held by the Company in the
particular Sub-Account for the Contract by the net asset value of a particular
Fund share as of the same date.
SUBSTITUTED SECURITIES
Shares of any of the Funds may not always be available for purchase by the
Variable Account or the Company may decide that further investment in any such
Fund's shares is no longer appropriate in view of the purposes of the Variable
Account. In either event, shares of another registered open-end investment
company may be substituted (i) for Fund shares already purchased by the Variable
Account and (ii) as the security to be purchased in the future; provided that
any such substitutions have been approved by the Securities and Exchange
Commission and the Superintendent of Insurance of the State of New York. In the
event of any substitution pursuant to this provision, the Company may make
appropriate endorsement to the Contract to reflect the substitution.
MODIFICATION
Upon notice to the Owner, or to the Payee during the annuity period, the
Contract may be modified by the Company, but only if such modification (i) is
necessary to make the Contract or the Variable Account comply with any law or
regulation issued by a governmental agency to which the Company is subject or
(ii) is necessary to assure continued qualification of the Contract under the
Internal Revenue Code or other federal or state laws relating to retirement
annuities or annuity contracts or (iii) is necessary to reflect a change in the
operation of the Variable Account or the Sub-Accounts or (iv) provides
additional Variable Account and/or fixed accumulation options. In the event of
any such modification, the Company may make appropriate endorsement to the
Contract to reflect such modification.
CHANGE IN OPERATION OF VARIABLE ACCOUNT
At the Company's election and subject to the prior approval of the
Superintendent of Insurance of the State of New York (the "Superintendent of
Insurance") and to any necessary vote by persons having the right to give
instructions with respect to the voting of Fund shares held by the Sub-Accounts,
the Variable Account may be operated as a management company under the
Investment Company Act of 1940 or it may be deregistered under the Investment
Company Act of 1940 in the event registration is no longer required.
Deregistration of the Variable Account requires an order by the Securities and
Exchange Commission. In the event of any change in the operation of the Variable
Account pursuant to this provision, the Company, subject to the prior approval
of the Superintendent of Insurance may make appropriate endorsement to the
Contract to reflect the change and take such other action as may be necessary
and appropriate to effect the change.
SPLITTING UNITS
The Company reserves the right to split or combine the value of Variable
Accumulation Units, Fixed Accumulation Units, Annuity Units or any of them. In
effecting any such change of unit values, strict equity will be preserved and no
change will have a material effect on the benefits or other provisions of the
Contract.
FEDERAL TAX STATUS
INTRODUCTION
The Contracts described in this Prospectus are designed for use by
retirement plans under the provisions of Sections 401 or 408 (excluding Section
408(b)) of the Internal Revenue Code (the "Code"). The ultimate effect of
federal income taxes on the value of the Contract's Accumulation Account, on
annuity payments and on the economic benefit to the Owner, the Annuitant, the
Payee or the Beneficiary may depend upon the type of retirement plan for which
the Contract is purchased and upon the tax and employment status of the
individual concerned.
17
<PAGE>
The following discussion of the treatment of the Contracts and of the
Company under the federal income tax laws is general in nature, is based upon
the Company's understanding of current federal income tax laws, and is not
intended as tax advice. Congress has the power to enact legislation affecting
the tax treatment of annuity contracts, and such legislation could be applied
retroactively to Contracts purchased before the date of enactment. A more
detailed discussion of the federal tax status of the Contracts is contained in
the Statement of Additional Information. Any person contemplating the purchase
of a Contract should consult a qualified tax adviser. THE COMPANY DOES NOT MAKE
ANY GUARANTEE REGARDING ANY TAX STATUS, FEDERAL, STATE OR LOCAL, OF ANY CONTRACT
OR ANY TRANSACTION INVOLVING THE CONTRACTS.
TAX TREATMENT OF THE COMPANY
Under existing federal income tax laws, the income of the Variable Account,
to the extent that it is applied to increase reserves under the Contracts, is
not taxable to the Company.
TAXATION OF ANNUITIES IN GENERAL
The Contracts offered by this Prospectus are designed for use in connection
with retirement plans. All or a portion of the contributions to such plans will
be used to make Purchase Payments under the Contracts. Generally, no tax is
imposed on the increase in the value of a Contract until a distribution occurs.
Monthly annuity payments made as retirement distributions, and lump-sum payments
or cash withdrawals (when permitted by the applicable retirement plan) under a
Contract are generally taxable to the Annuitant as ordinary income to the extent
that such payments are not deemed to come from the Owner's previously taxed
investment in the Contract. Distributions made prior to age 59 1/2 generally are
subject to a 10% penalty tax, although this tax will not apply in certain
circumstances. Owners, Annuitants, Payees and Beneficiaries should seek
qualified advice about the tax consequences of distributions, withdrawals,
rollovers and payments under the retirement plans in connection with which the
Contracts are purchased.
In certain circumstances the Company is required to withhold and remit to
the U.S. Government part of the taxable portion of each distribution made under
a Contract.
RETIREMENT PLANS
The Contracts described in this Prospectus are designed for use with the
following types of qualified retirement plans:
(1) Pension and Profit-Sharing Plans established by business employers
and certain associations, as permitted by Sections 401(a) and 401(k) of the
Code, including those purchasers who would have been covered under the rules
governing old H.R. 10 (Keogh) Plans; and
(2) Individual Retirement Accounts ("IRAs") permitted by Sections 219
and 408 of the Code (excluding IRAs established as "Individual Retirement
Annuities" under Section 408(b); including Simplified Employee Pensions
established by employers pursuant to Section 408(k) and Simple Retirement
Accounts established pursuant to Section 408(p)).
The tax rules applicable to participants in such retirement plans vary
according to the type of plan and its terms and conditions. Therefore, no
attempt is made herein to provide more than general information about the use of
the Contracts with the various types of retirement plans. Participants in such
plans as well as Owners, Annuitants, Payees and Beneficiaries are cautioned that
the rights of any person to any benefits under these plans are subject to the
terms and conditions of the plans themselves, regardless of the terms and
conditions of the Contracts. The Company will provide purchasers of Contracts
used in connection with IRAs with such supplemental information as may be
required by the Internal Revenue Service or other appropriate agency. Any person
contemplating the purchase of a Contract should consult a qualified tax adviser.
18
<PAGE>
DISTRIBUTION OF THE CONTRACTS
The Contracts will be sold by licensed insurance agents in the State of New
York. Such agents will be registered representatives of broker-dealers
registered under the Securities Exchange Act of 1934 who are members of the
National Association of Securities Dealers, Inc. The Contracts will be
distributed by Clarendon Insurance Agency, Inc., One Sun Life Executive Park,
Wellesley, Massachusetts 02181, a wholly-owned subsidiary of Sun Life Assurance
Company of Canada (U.S.), the Company's parent company. Commissions and other
distribution expenses will be paid by the Company and will not be more than
5.31% of Purchase Payments.
LEGAL PROCEEDINGS
There are no pending legal proceedings affecting the Variable Account. The
Company is engaged in various kinds of routine litigation which, in management's
judgment, is not of material importance to the Company's total assets or
material with respect to the Variable Account.
OWNER INQUIRIES
All Owner inquiries should be directed to the Company at its Annuity Service
Mailing Address shown on the cover of this Prospectus.
TABLE OF CONTENTS FOR STATEMENT OF ADDITIONAL INFORMATION
<TABLE>
<S> <C>
General Information....................................................................
Annuity Provisions.....................................................................
Other Contractual Provisions...........................................................
Federal Tax Status.....................................................................
Administration of the Contracts........................................................
Distribution of the Contracts..........................................................
Accountants............................................................................
Financial Statements...................................................................
Appendix A -- The Fixed Account........................................................
Appendix B -- Illustrative Examples of Calculation of Variable Accumulation Unit Value,
Variable Annuity Unit Value and Variable Annuity Payments.............................
Appendix C -- Withdrawals and Withdrawal Charges.......................................
</TABLE>
This Prospectus sets forth information about the Contracts and the Variable
Account that a prospective purchaser of a Contract should know before investing.
Additional information about the Contracts and the Variable Account has been
filed with the Securities and Exchange Commission in a Statement of Additional
Information dated May 1, 1998 which is incorporated herein by reference. The
Statement of Additional Information is available upon request and without charge
from Sun Life Insurance and Annuity Company of New York. To receive a copy,
return the request form printed below to the address shown or telephone the
Company at (212) 943-3855 or (800) 447-7569.
19
<PAGE>
- --------------------------------------------------------------------------------
To: Sun Life Insurance and Annuity Company of New York
80 Broad Street
New York, New York 10004
Please send me a Statement of Additional Information for
Compass I-Sun Life (N.Y.) Variable Account A.
Name ------------------------------------------
Address
------------------------------------------
------------------------------------------
City ------------------------- State ------------ Zip --------------
Telephone --------------------------------------------
20
<PAGE>
SUN LIFE INSURANCE AND ANNUITY COMPANY
OF NEW YORK
Annuity Service Mailing Address:
80 Broad Street
New York, New York 10004
GENERAL DISTRIBUTOR
Clarendon Insurance Agency, Inc.
One Sun Life Executive Park
Wellesley Hills, Massachusetts 02181
AUDITORS
Deloitte & Touche LLP
125 Summer Street
Boston, Massachusetts 02110
CO1NY-13 5/98
<PAGE>
MAY 1, 1998
COMPASS I
STATEMENT OF ADDITIONAL INFORMATION
SUN LIFE (N.Y.) VARIABLE ACCOUNT A
TABLE OF CONTENTS
<TABLE>
<S> <C>
General Information....................................................... 2
Annuity Provisions........................................................ 2
Other Contractual Provisions.............................................. 3
Federal Tax Status........................................................ 4
Administration of the Contracts........................................... 5
Distribution of the Contracts............................................. 6
Legal Matters............................................................. 6
Accountants............................................................... 6
Financial Statements...................................................... 7
Appendix A -- The Fixed Account...........................................
Appendix B -- Illustrative Examples of Calculation of Variable
Accumulation Unit Value, Variable Annuity Unit Value and Variable Annuity
Payments.................................................................
Appendix C -- Withdrawals and Withdrawal Charges..........................
</TABLE>
This Statement of Additional Information sets forth information which may be
of interest to prospective purchasers of Compass I Combination Fixed/Variable
Annuity Contracts (the "Contracts") issued by Sun Life Insurance and Annuity
Company of New York (the "Company") in connection with Sun Life (N.Y.) Variable
Account A (the "Variable Account") which is not necessarily included in the
Prospectus dated May 1, 1998. This Statement of Additional Information should be
read in conjunction with the Prospectus, a copy of which may be obtained without
charge from the Company at its Annuity Service Mailing Address, 80 Broad Street,
New York, New York 10004 or by telephoning (212) 943-3855 or (800) 447-7569.
The terms used in this Statement of Additional Information have the same
meanings as in the Prospectus.
- --------------------------------------------------------------------------------
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND IS AUTHORIZED
FOR DISTRIBUTION TO PROSPECTIVE PURCHASERS ONLY IF PRECEDED OR ACCOMPANIED BY A
CURRENT PROSPECTUS.
<PAGE>
GENERAL INFORMATION
THE COMPANY
Sun Life Insurance and Annuity Company of New York (the "Company") is a
stock life insurance company incorporated under the laws of New York on May 25,
1983. Its Home Office is located at 80 Broad Street, New York, New York 10004.
The Company is a wholly-owned subsidiary of Sun Life Assurance Company of
Canada (U.S.) ("Sun Life of Canada (U.S.)"), a stock life insurance company
incorporated in Delaware and having its Executive Office at One Sun Life
Executive Park, Wellesley Hills, Massachusetts 02181. Sun Life of Canada (U.S.)
in turn, is an indirect wholly-owned subsidiary of Sun Life Assurance Company of
Canada ("Sun Life (Canada)"), 150 King Street West, Toronto, Ontario, Canada, a
mutual life insurance company incorporated in Canada in 1865.
THE VARIABLE ACCOUNT
Sun Life (N.Y.) Variable Account A (the "Variable Account") is a separate
account of the Company, meets the definition of a separate account under the
federal securities laws and is registered with the Securities and Exchange
Commission as a unit investment trust under the Investment Company Act of 1940.
THE FIXED ACCOUNT
If the Owner elects to have Contract values accumulated on a fixed basis,
Purchase Payments are allocated to the Fixed Account, which consists of all
assets of the Company other than those allocated to separate accounts of the
Company. Because of exemptive and exclusionary provisions, that part of the
Contract relating to the Fixed Account is not registered under the Securities
Act of 1933 ("1933 Act") and the Fixed Account is not registered as an
investment company under the Investment Company Act of 1940 ("1940 Act").
Accordingly, neither the Fixed Account, nor any interests therein, are subject
to the provisions or restrictions of the 1933 Act or the 1940 Act, and the staff
of the Securities and Exchange Commission has not reviewed the disclosures in
this Statement of Additional Information with respect to that portion of the
Contract relating to the Fixed Account. Disclosures regarding the fixed portion
of the Contract and the Fixed Account, however, may be subject to certain
generally applicable provisions of the federal securities laws relating to the
accuracy and completeness of statements made herein (see "Fixed Account" in
Appendix A).
ANNUITY PROVISIONS
DETERMINATION OF ANNUITY PAYMENTS
On the Annuity Commencement Date the Contract's Accumulation Account will be
cancelled and its adjusted value will be applied to provide a Variable Annuity
or a Fixed Annuity or a combination of both. The adjusted value will be equal to
the value of the Accumulation Account for the Valuation Period which ends
immediately preceding the Annuity Commencement Date, reduced by any applicable
premium or similar taxes and a proportionate amount of the contract maintenance
charge to reflect the time elapsed between the last Contract Anniversary and the
day before the Annuity Commencement Date.
The dollar amount of the first variable annuity payment will be determined
in accordance with the annuity payment rates found in the Contract which are
based on an assumed interest rate of 4% per year. All variable annuity payments
other than the first are determined by means of Annuity Units credited to the
Contract. The number of Annuity Units to be credited in respect of a particular
Sub-Account is determined by dividing that portion of the first variable annuity
payment attributable to that Sub-Account by the Annuity Unit value of that
Sub-Account for the Valuation Period which ends immediately preceding the
Annuity Commencement Date. The number of Annuity Units of each particular
Sub-Account credited to the Contract then remains fixed unless an exchange of
Annuity Units is made as described in the Prospectus. The dollar amount of each
variable annuity payment after the first may increase, decrease or remain
constant, and is
2
<PAGE>
equal to the sum of the amounts determined by multiplying the number of Annuity
Units of a particular Sub-Account credited to the Contract by the Annuity Unit
value for the particular Sub-Account for the Valuation Period which ends
immediately preceding the due date of each subsequent payment.
For a description of fixed annuity payments, see Appendix A.
For a hypothetical example of the calculation of a variable annuity payment,
see Appendix B.
ANNUITY UNIT VALUE
The Annuity Unit value for each Sub-Account was established at $10.00 for
the first Valuation Period of the particular Sub-Account. The Annuity Unit value
for the particular Sub-Account for any subsequent Valuation Period is determined
by multiplying the Annuity Unit value for the particular Sub-Account for the
immediately preceding Valuation Period by the Net Investment Factor (see "Net
Investment Factor" in the Prospectus) for the particular Sub-Account for the
current Valuation Period and then multiplying that product by a factor to
neutralize the assumed interest rate of 4% per year used to establish the
annuity payment rates found in the Contract. The factor is 0.99989255 for a one
day Valuation Period.
For a hypothetical example of the calculation of the value of a Variable
Annuity Unit, see Appendix B.
OTHER CONTRACTUAL PROVISIONS
RIGHT TO RETURN CONTRACT
The Owner should read the Contract carefully as soon as it is received. If
the Owner wishes to return the Contract, it must be returned to the Company at
its Annuity Service Mailing Address within ten days after it was delivered to
the Owner. When the Company receives the returned Contract, it will be cancelled
and the full amount of any Purchase Payment(s) received by the Company will be
refunded.
Under the Internal Revenue Code, an Owner establishing an Individual
Retirement Account must be furnished with a disclosure statement containing
certain information about the Contract and applicable legal requirements. This
statement must be furnished on or before the date the Individual Retirement
Account is established. If the Owner is furnished with such disclosure statement
before the 7th day preceding the date the Individual Retirement Account is
established, the Owner will not have any right of revocation. If the disclosure
statement is furnished after the 7th day preceding the establishment of the
Individual Retirement Account, then the Owner may revoke the Contract any time
within seven days after the issue date. Upon such revocation, the Company will
refund all Purchase Payment(s) made by the Owner. The foregoing right of
revocation with respect to an Individual Retirement Account is in addition to
the return privilege set forth in the preceding paragraph. The Company will
allow an Owner establishing an Individual Retirement Account a "ten day free
look," notwithstanding the provisions of the Internal Revenue Code.
OWNER AND CHANGE OF OWNERSHIP
The Contract shall belong to the Owner or to the successor to the Owner or
the transferee of the Owner. All rights and privileges under the Contract may be
exercised by the Owner, the successor to the Owner or transferee of the Owner
without the consent of the Beneficiary or any other person. Such rights and
privileges may be exercised only during the lifetime of the Annuitant and prior
to the Annuity Commencement Date, except as otherwise provided in the Contract.
The Annuitant becomes the Owner on and after the Annuity Commencement Date. The
Beneficiary becomes the Owner upon the death of the Annuitant. In some qualified
plans the Owner of the Contract is a trustee and the trust authorizes the
Annuitant/participant to exercise certain contract rights and privileges.
Ownership of the Contract may not be transferred except to: (1) the
Annuitant; (2) a trustee or successor trustee of a pension or profit sharing
trust which is qualified under Section 401 of the Internal Revenue Code; (3) the
trustee of an individual retirement account plan qualified under Section 408 of
the Internal Revenue Code for the benefit of the Owner; or (4) as otherwise
permitted from time to time by laws and regulations governing the retirement or
deferred compensation plans for which the Contract may be
3
<PAGE>
issued. Subject to the foregoing, the Contract may not be sold, assigned,
transferred, discounted or pledged as collateral for a loan or as security for
the performance of an obligation or for any other purpose to any person other
than the Company. A change of Contract ownership will not be binding upon the
Company until written notification of such change is received by the Company.
Once received by the Company, the change will be effective as of the date on
which the request for change was signed by the Owner but the change will be
without prejudice to the Company on account of any payment made or any action
taken by the Company prior to receiving the change. The Company may require that
the signature of the Owner be guaranteed by a member firm of the New York,
American, Boston, Midwest, Philadelphia or Pacific Stock Exchange, or by a
commercial bank (not a savings bank) which is a member of the Federal Deposit
Insurance Corporation or, in certain cases, by a member firm of the National
Association of Securities Dealers, Inc. which has entered into an appropriate
agreement with the Company.
DESIGNATION AND CHANGE OF BENEFICIARY
The Beneficiary designation contained in the Contract application will
remain in effect until changed. The interest of any Beneficiary is subject to
the particular Beneficiary surviving the Annuitant.
Subject to the rights of an irrevocably designated Beneficiary, the Owner
(or the Annuitant, as permitted by the Owner) may change or revoke the
designation of a Beneficiary at any time while the Annuitant is living by filing
with the Company a written beneficiary designation or revocation in such form as
the Company may require. The change or revocation will not be binding upon the
Company until it is received by the Company. When it is so received the change
or revocation will be effective as of the date on which the beneficiary
designation or revocation was signed by the Owner or the Annuitant, as
applicable.
Reference should be made to the terms of the particular retirement plan and
any applicable legislation for any restrictions on the beneficiary designation.
CUSTODIAN
The Company is custodian of the assets of the Variable Account. The Company,
as custodian, will purchase Fund shares at net asset value in connection with
amounts allocated to the particular Sub-Account in accordance with the
instructions of the Owner and will redeem Fund shares at net asset value for the
purpose of meeting the contractual obligations of the Variable Account, paying
charges relative to the Variable Account or making adjustments for annuity
reserves held in the Variable Account.
FEDERAL TAX STATUS
INTRODUCTION
The Contracts described in this Prospectus are designed for use by
retirement plans under the provisions of Sections 401 or 408 (excluding Section
408(b)) of the Internal Revenue Code (the "Code"). The ultimate effect of
federal income taxes on the value of the Contract's Accumulation Account, on
annuity payments and on the economic benefit to the Owner, the Annuitant, the
Payee or the Beneficiary may depend upon the type of retirement plan for which
the Contract is purchased and upon the tax and employment status of the
individual concerned. The discussion contained herein is general in nature, is
based upon the Company's understanding of federal income tax laws as currently
interpreted, and is not intended as tax advice. Congress has the power to enact
legislation affecting the tax treatment of annuity contracts, and such
legislation could be applied retroactively to Contracts purchased before the
date of enactment. Any person contemplating the purchase of a Contract should
consult a qualified tax adviser. THE COMPANY DOES NOT MAKE ANY GUARANTEE
REGARDING THE TAX STATUS OF ANY CONTRACT OR ANY TRANSACTION INVOLVING THE
CONTRACTS.
TAX TREATMENT OF THE COMPANY AND THE VARIABLE ACCOUNT
The Company is taxed as a life insurance company under the Code. Although
the operations of the Variable Account are accounted for separately from other
operations of the Company for purposes of federal income taxation, the Variable
Account is not separately taxable as a regulated investment company
4
<PAGE>
or otherwise as a taxable entity separate from the Company. Under existing
federal income tax laws, the income and capital gains of the Variable Account to
the extent applied to increase reserves under the Contracts are not taxable to
the Company.
TAXATION OF ANNUITIES IN GENERAL
A participant in a retirement plan is the individual on whose behalf a
Contract is issued. Certain federal income tax advantages are available to
participants in retirement plans which meet the requirements of Section 401 or
Section 408 (excluding Section 408(b)) of the Code. The Contracts offered by
this Prospectus are designed for use in connection with such retirement plans
and accordingly all or a portion of the contributions to such plans will be used
to make Purchase Payments under the Contracts. Monthly annuity payments made as
retirement distributions under a Contract are generally taxable to the Annuitant
as ordinary income under Section 72 of the Code. Distributions prior to age
59 1/2 generally are subject to a 10% penalty tax, although this tax will not
apply in certain circumstances. Certain distributions, known as "eligible
rollover distributions," if rolled over to certain other qualified retirement
plans (either directly or after being distributed to the Owner or the Payee),
are not taxable until distributed from the plan to which they are rolled over.
In general, an eligible rollover distribution is any taxable distribution other
than a distribution that is part of a series of payments made for life or for a
specified period of ten years or more.
Owners, Annuitants, Payees and Beneficiaries should seek qualified advice
about the tax consequences of distributions, withdrawals, rollovers and payments
under the retirement plans in connection with which the Contracts are purchased.
The Company will withhold and remit to the U.S. Government a part of the
taxable portion of each distribution made under a Contract issued in connection
with an individual retirement account unless the Owner or Payee provides his or
her taxpayer identification number to the Company and notifies the Company (in
the manner prescribed) before the time of the distribution that he or she
chooses not to have any amounts withheld.
In the case of distributions from a Contract (other than a Contract issued
for use with an individual retirement account), the Company or the plan
administrator must withhold and remit to the U.S. government 20% of each
distribution that is an eligible rollover distribution (as defined above) unless
the Owner or Payee elects to make a direct rollover of the distribution to
another qualified retirement plan that is eligible to receive the rollover. If a
distribution from a Contract is not an eligible rollover distribution, then the
Owner or Payee can choose not to have amounts withheld as described above for
individual retirement accounts.
Amounts withheld from any distribution may be credited against the Owner's
or Payee's federal income tax liability for the year of the distribution.
The Tax Reform Act of 1984 authorizes the Internal Revenue Service to
promulgate regulations that prescribe investment diversification requirements
for segregated asset accounts underlying certain variable annuity contracts.
These regulations do not affect the tax treatment of qualified contracts, such
as the Contracts offered by this Prospectus.
Due to the complex nature and frequent revisions of the federal income tax
laws affecting retirement plans, a person contemplating the purchase of a
Contract for use in connection with a retirement plan, the distribution or
surrender of a Contract held under a retirement plan, or the election of an
annuity option provided in a Contract should consult a qualified tax adviser.
ADMINISTRATION OF THE CONTRACTS
The Company performs certain administrative functions relating to the
Contracts and the Variable Account. These functions include maintaining the
books and records of the Variable Account and the Sub-Accounts, and maintaining
records of the name, address, taxpayer identification number, Contract number,
type of contract issued to each owner, the status of the Accumulation Account
under each Contract, and other pertinent information necessary to the
administration and operation of the Contracts. The Company has entered into
service agreements with its parent, Sun Life Assurance Company of Canada (U.S.)
and with
5
<PAGE>
Sun Life Assurance Company of Canada under which the latter have agreed to
provide the Company with certain services on a cost reimbursement basis. These
services include, but are not limited to, accounting and investment services,
systems support and development, pricing, product development, actuarial, legal
and compliance functions, marketing services and staff training.
DISTRIBUTION OF THE CONTRACTS
The offering of the Contracts is continuous. The Contracts will be sold by
licensed insurance agents in the State of New York. Such agents will be
registered representatives of broker-dealers registered under the Securities
Exchange Act of 1934 who are members of the National Association of Securities
Dealers, Inc. The Contracts will be distributed by Clarendon Insurance Agency,
Inc. ("Clarendon"), One Sun Life Executive Park, Wellesley Hills, Massachusetts
02181, a wholly-owned subsidiary of Sun Life of Canada (U.S.). Commissions and
other distribution compensation will be paid by the Company and will not be more
than 5.31% of Purchase Payments. During 1995, 1996 and 1997, approximately
$4,000, $3,000 and $6,400, respectively, was paid to and retained by Clarendon
in connection with the distribution of the Contracts.
ACCOUNTANTS
Deloitte & Touche LLP, 125 Summer Street, Boston, Massachusetts 02110, are
the Variable Account's independent certified public accountants providing
auditing and other professional services.
6
<PAGE>
SUN LIFE (N.Y.) VARIABLE ACCOUNT A
STATEMENT OF CONDITION
<TABLE>
<CAPTION>
DECEMBER 31, 1997
----------------------------------------
SHARES COST VALUE
------------ ------------ ------------
<S> <C> <C> <C>
ASSETS:
Investments in mutual funds:
Massachusetts Investors Trust ("MIT")
Class A 77,156 $ 1,017,897 $ 1,351,607
Massachusetts Investors Growth Stock
Fund ("MIG") Class A 56,043 609,561 696,146
MFS Total Return Fund ("MTR") Class A 174,737 2,358,548 2,764,376
MFS Growth Opportunities Fund ("MGO")
Class A 18,654 224,567 259,666
MFS Research Fund ("MFR") Class A 20,573 352,661 438,049
MFS Bond Fund ("MFB") Class A 50,195 651,802 683,432
MFS Money Market Fund ("MCM") 280,662 280,662 280,662
MFS Government Money Market Fund
("MCG") 70,666 70,666 70,666
MFS High Income Fund ("MFH") Class A 66,478 339,707 367,643
MFS World Governments Fund ("MWG")
Class A 34,461 403,963 373,678
MFS Emerging Growth Fund ("MEG") Class
A 27,273 652,461 986,812
------------ ------------ ------------
NET ASSETS $ 6,962,495 $ 8,272,737
------------ ------------
------------ ------------
</TABLE>
<TABLE>
<CAPTION>
UNITS UNIT VALUE VALUE
--------- ---------- ------------
<S> <C> <C> <C>
NET ASSETS APPLICABLE TO OWNERS OF DEFERRED
VARIABLE ANNUITY CONTRACTS:
MIT 24,219 $ 55.8438 $ 1,351,607
MIG 13,024 53.6803 696,146
MTR 67,638 41.7612 2,764,376
MGO 6,582 39.2762 259,666
MFR 9,945 44.0450 438,049
MFB 25,870 26.0312 683,432
MCM 17,324 16.1968 280,662
MCG 4,440 15.9182 70,666
MFH 13,294 27.8588 367,643
MWG 12,546 29.5139 373,678
MEG 16,548 59.9380 986,812
------------
NET ASSETS $ 8,272,737
------------
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
7
<PAGE>
SUN LIFE (N.Y.) VARIABLE ACCOUNT A
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1997
----------------------------------------------------------------------------------------
MIT MIG MTR MGO MFR MFB
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 $ 104,180 $ 106,496 $ 271,434 $ 32,149 $ 19,376 $ 54,236
Mortality and expense risk
charges 15,811 7,540 34,992 3,178 4,942 9,999
------------- ------------- ------------- ------------- ------------- -------------
Net investment income 88,369 98,956 236,442 28,971 14,434 44,237
------------- ------------- ------------- ------------- ------------- -------------
REALIZED AND UNREALIZED GAINS
(LOSSES):
Realized gains (losses) on
investment transactions:
Proceeds from sales 217,199 68,722 439,289 20,303 46,369 625,325
Cost of investments sold 178,678 72,046 336,187 13,929 29,173 660,926
------------- ------------- ------------- ------------- ------------- -------------
Net realized gains
(losses) 38,521 (3,324) 103,102 6,374 17,196 (35,601)
------------- ------------- ------------- ------------- ------------- -------------
Net Unrealized Appreciation
(Depreciation) on Investments:
End of year 333,710 86,585 405,828 35,099 85,388 31,630
Beginning of year 142,622 (32,234) 329,636 22,925 52,320 (26,014)
------------- ------------- ------------- ------------- ------------- -------------
Change in unrealized
appreciation 191,088 118,819 76,192 12,174 33,068 57,644
------------- ------------- ------------- ------------- ------------- -------------
Realized and unrealized gains 229,609 115,495 179,294 18,548 50,264 22,043
------------- ------------- ------------- ------------- ------------- -------------
INCREASE IN NET ASSETS FROM
OPERATIONS $ 317,978 $ 214,451 $ 415,736 $ 47,519 $ 64,698 $ 66,280
------------- ------------- ------------- ------------- ------------- -------------
------------- ------------- ------------- ------------- ------------- -------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
8
<PAGE>
SUN LIFE (N.Y.) VARIABLE ACCOUNT A
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1997
----------------------------------------------------------------------------------------
MCM MCG MFH MWG MEG
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT TOTAL
------------- ------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
INCOME AND EXPENSES:
Dividend income and capital gain
distributions received $ 14,581 $ 3,453 $ 35,579 $ 16,348 $ 9,252 $ 667,084
Mortality and expense risk
charges 3,939 984 5,371 5,435 12,460 104,651
------------- ------------- ------------- ------------- ------------- -------------
Net investment income
(loss) 10,642 2,469 30,208 10,913 (3,208) 562,433
------------- ------------- ------------- ------------- ------------- -------------
REALIZED AND UNREALIZED GAINS
(LOSSES):
Realized gains (losses) on
investment transactions:
Proceeds from sales 265,304 27,494 101,755 162,413 314,261 2,288,434
Cost of investments sold 265,304 27,494 100,464 179,549 181,324 2,045,074
------------- ------------- ------------- ------------- ------------- -------------
Net realized gains
(losses) -- -- 1,291 (17,136) 132,937 243,360
------------- ------------- ------------- ------------- ------------- -------------
Net Unrealized Appreciation
(Depreciation) on Investments:
End of year -- -- 27,936 (30,285) 334,351 1,310,242
Beginning of year -- -- 13,479 (31,188) 296,679 768,225
------------- ------------- ------------- ------------- ------------- -------------
Change in unrealized
appreciation -- -- 14,457 903 37,672 542,017
------------- ------------- ------------- ------------- ------------- -------------
Realized and unrealized gains
(losses) -- -- 15,748 (16,233) 170,609 785,377
------------- ------------- ------------- ------------- ------------- -------------
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS $ 10,642 $ 2,469 $ 45,956 $ (5,320) $ 167,401 $ 1,347,810
------------- ------------- ------------- ------------- ------------- -------------
------------- ------------- ------------- ------------- ------------- -------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
9
<PAGE>
SUN LIFE (N.Y.) VARIABLE ACCOUNT A
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
MIT MIG MTR
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------------------ ----------------------- ------------------------
YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31,
------------------------ ----------------------- ------------------------
1997 1996 1997 1996 1997 1996
---------- ---------- --------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income (expense) $ 88,369 $ 93,649 $ 98,956 $ 109,259 $ 236,442 $ 244,417
Net realized gains (losses) 38,521 6,420 (3,324) 1,331 103,102 60,205
Net unrealized gains (losses) 191,088 116,255 118,819 (23,684) 76,192 4,956
---------- ---------- --------- ---------- ---------- ----------
Increase (decrease) in net assets
from operations 317,978 216,324 214,451 86,906 415,736 309,578
---------- ---------- --------- ---------- ---------- ----------
CONTRACT OWNER TRANSACTIONS:
Accumulation Activity:
Purchase payments received 54,860 59,276 26,278 22,225 91,990 61,458
Net transfers between
Sub-Accounts and Fixed Accounts 75,536 (8,441) 20,971 18,419 114,657 (42,651)
Withdrawals, surrenders and account
fees (149,210) (85,209) (44,311) (35,098) (398,900) (200,379)
---------- ---------- --------- ---------- ---------- ----------
Net contract owner activity (18,814) (34,374) 2,938 5,546 (192,253) (181,572)
---------- ---------- --------- ---------- ---------- ----------
Increase (decrease) in net assets 299,164 181,950 217,389 92,452 223,483 128,006
NET ASSETS:
Beginning of year 1,052,443 870,493 478,757 386,305 2,540,893 2,412,887
---------- ---------- --------- ---------- ---------- ----------
End of year $1,351,607 $1,052,443 $ 696,146 $ 478,757 $2,764,376 $2,540,893
---------- ---------- --------- ---------- ---------- ----------
---------- ---------- --------- ---------- ---------- ----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
10
<PAGE>
SUN LIFE (N.Y.) VARIABLE ACCOUNT A
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
MGO MFR MFB
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
------------------------ ------------------------ ------------------------
YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31,
------------------------ ------------------------ ------------------------
1997 1996 1997 1996 1997 1996
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income (expense) $ 28,971 $ 21,254 $ 14,434 $ 10,751 $ 44,237 $ 58,696
Net realized gains (losses) 6,374 12,751 17,196 10,682 (35,601) (546)
Net unrealized gains (losses) 12,174 10,378 33,068 23,132 57,644 (31,879)
---------- ---------- ---------- ---------- ---------- ----------
Increase (decrease) in net assets
from operations 47,519 44,383 64,698 44,565 66,280 26,271
---------- ---------- ---------- ---------- ---------- ----------
CONTRACT OWNER TRANSACTIONS:
Accumulation Activity:
Purchase payments received 4,030 4,745 15,074 7,123 191,747 30,397
Net transfers between
Sub-Accounts and Fixed Accounts (357) 21,023 130,826 61,532 (159,325) (4,412)
Withdrawals, surrenders and account
fees (12,299) (51,946) (42,302) (25,750) (459,087) (21,523)
---------- ---------- ---------- ---------- ---------- ----------
Net contract owner activity (8,626) (26,178) 103,598 42,905 (426,665) 4,462
---------- ---------- ---------- ---------- ---------- ----------
Increase (decrease) in net assets 38,893 18,205 168,296 87,470 (360,385) 30,733
NET ASSETS:
Beginning of year 220,773 202,568 269,753 182,283 1,043,817 1,013,084
---------- ---------- ---------- ---------- ---------- ----------
End of year $ 259,666 $ 220,773 $ 438,049 $ 269,753 $ 683,432 $1,043,817
---------- ---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- ----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
11
<PAGE>
SUN LIFE (N.Y.) VARIABLE ACCOUNT A
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
MCM MCG MFH
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
----------------------- ----------------------- -----------------------
YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31,
----------------------- ----------------------- -----------------------
1997 1996 1997 1996 1997 1996
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income (expense) $ 10,642 $ 11,357 $ 2,469 $ 2,862 $ 30,208 $ 30,770
Net realized gains (losses) -- -- -- -- 1,291 (1,897)
Net unrealized gains (losses) -- -- -- -- 14,457 14,638
--------- --------- --------- --------- --------- ---------
Increase (decrease) in net assets
from operations 10,642 11,357 2,469 2,862 45,956 43,511
--------- --------- --------- --------- --------- ---------
CONTRACT OWNER TRANSACTIONS:
Accumulation Activity:
Purchase payments received 20,251 17,561 2,302 4,996 1,698 2,296
Net transfers between
Sub-Accounts and Fixed Accounts (82,830) (69,648) (20,869) -- -- (1,081)
Withdrawals, surrenders and
account fees (10,040) (51,178) (5,892) (107) (96,943) (32,317)
--------- --------- --------- --------- --------- ---------
Net contract owner activity (72,619) (103,265) (24,459) 4,889 (95,245) (31,102)
--------- --------- --------- --------- --------- ---------
Increase (decrease) in net assets (61,977) (91,908) (21,990) 7,751 (49,289) 12,409
NET ASSETS:
Beginning of year 342,639 434,547 92,656 84,905 416,932 404,523
--------- --------- --------- --------- --------- ---------
End of year $ 280,662 $ 342,639 $ 70,666 $ 92,656 $ 367,643 $ 416,932
--------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- ---------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
12
<PAGE>
SUN LIFE (N.Y.) VARIABLE ACCOUNT A
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
MWG MEG
SUB-ACCOUNT SUB-ACCOUNT TOTAL
----------------------- ----------------------- --------------------------
YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31,
----------------------- ----------------------- --------------------------
1997 1996 1997 1996 1997 1996
--------- --------- --------- --------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income (expense) $ 10,913 $ 6,496 $ (3,208) $ (807) $ 562,433 $ 588,704
Net realized gains (losses) (17,136) (7,467) 132,937 49,734 243,360 131,213
Net unrealized gains (losses) 903 20,174 37,672 75,648 542,017 209,618
--------- --------- --------- --------- ------------ ------------
Increase (decrease) in net assets
from operations (5,320) 19,203 167,401 124,575 1,347,810 929,535
--------- --------- --------- --------- ------------ ------------
CONTRACT OWNER TRANSACTIONS:
Accumulation Activity:
Purchase payments received 66,047 9,585 27,670 26,289 501,947 245,951
Net transfers between Sub-Accounts
and Fixed Accounts (82,359) (33,415) 43,886 28,955 40,136 (29,719)
Withdrawals, surrenders and account
fees (75,626) (38,748) (229,670) (75,899) (1,524,280) (618,154)
--------- --------- --------- --------- ------------ ------------
Net contract owner activity (91,938) (62,578) (158,114) (20,655) (982,197) (401,922)
--------- --------- --------- --------- ------------ ------------
Increase (decrease) in net assets (97,258) (43,375) 9,287 103,920 365,613 527,613
NET ASSETS:
Beginning of year 470,936 514,311 977,525 873,605 7,907,124 7,379,511
--------- --------- --------- --------- ------------ ------------
End of year $ 373,678 $ 470,936 $ 986,812 $ 977,525 $ 8,272,737 $ 7,907,124
--------- --------- --------- --------- ------------ ------------
--------- --------- --------- --------- ------------ ------------
</TABLE>
See notes to financial statements.
13
<PAGE>
SUN LIFE (N.Y.) VARIABLE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS
(1) ORGANIZATION:
Sun Life (N.Y.) Variable Account A (the "Variable Account"), a separate account
of Sun Life Insurance and Annuity Company of New York (the "Sponsor"), a wholly
owned subsidiary of Sun Life Assurance Company of Canada (U.S.), was established
on December 3, 1984 as a funding vehicle for individual 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 selected by contract
owners from among available mutual funds (the "Funds") advised by Massachusetts
Financial Services Company ("MFS"), an affiliate 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.
(3) CONTRACT CHARGES:
A mortality and expense risk charge based on the value of the Variable Account
is deducted from the Variable Account at the end of each valuation period for
the mortality and expense risks assumed by the Sponsor. The deduction is at an
effective annual rate of 1.3%.
Each year on the contract anniversary, a contract maintenance charge ("Account
Fee") of $30 is deducted from each contract's accumulation account to cover
administrative expenses relating to the 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 5% of the purchase payments made under the
contract.
14
<PAGE>
SUN LIFE (N.Y.) VARIABLE ACCOUNT A
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(4) UNIT ACTIVITY FROM CONTRACT OWNER TRANSACTIONS:
<TABLE>
<CAPTION>
MIT MIG MTR
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
-------------------- -------------------- --------------------
YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31,
-------------------- -------------------- --------------------
1997 1996 1997 1996 1997 1996
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Units outstanding, beginning of year 24,506 25,203 13,107 12,814 72,562 77,949
Units purchased 1,081 1,571 531 664 2,518 1,916
Units transferred between
Sub-Accounts and Fixed Accounts 1,654 (220) 446 613 3,183 (1,286)
Units withdrawn and surrendered (3,022) (2,048) (1,060) (984) (10,625) (6,017)
--------- --------- --------- --------- --------- ---------
Units outstanding, end of year 24,219 24,506 13,024 13,107 67,638 72,562
--------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- ---------
</TABLE>
<TABLE>
<CAPTION>
MGO MFR MFB
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
-------------------- -------------------- --------------------
YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31,
-------------------- -------------------- --------------------
1997 1996 1997 1996 1997 1996
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Units outstanding, beginning of year 6,814 7,521 7,286 6,052 43,291 43,111
Units purchased 111 162 341 215 8,049 1,322
Units transferred between
Sub-Accounts and Fixed Accounts (10) 828 3,373 1,743 (6,684) (189)
Units withdrawn and surrendered (333) (1,697) (1,055) (724) (18,786) (953)
--------- --------- --------- --------- --------- ---------
Units outstanding, end of year 6,582 6,814 9,945 7,286 25,870 43,291
--------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- ---------
<CAPTION>
MCM MCG MFH
SUB-ACCOUNT SUB-ACCOUNT SUB-ACCOUNT
-------------------- -------------------- --------------------
YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31,
-------------------- -------------------- --------------------
1997 1996 1997 1996 1997 1996
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Units outstanding, beginning of year 21,922 28,742 6,013 5,691 16,765 18,087
Units purchased 1,276 1,141 147 329 65 99
Units transferred between
Sub-Accounts and Fixed Accounts (5,243) (4,598) (1,349) -- -- (46)
Units withdrawn and surrendered (631) (3,363) (371) (7) (3,536) (1,375)
--------- --------- --------- --------- --------- ---------
Units outstanding, end of year 17,324 21,922 4,440 6,013 13,294 16,765
--------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- ---------
</TABLE>
<TABLE>
<CAPTION>
MWG MEG
SUB-ACCOUNT SUB-ACCOUNT
-------------------- --------------------
YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
-------------------- --------------------
1997 1996 1997 1996
--------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Units outstanding, beginning of year 15,694 17,846 19,505 19,750
Units purchased 2,245 334 476 539
Units transferred between
Sub-Accounts and Fixed Accounts (2,790) (1,137) 844 606
Units withdrawn and surrendered (2,603) (1,349) (4,277) (1,390)
--------- --------- --------- ---------
Units outstanding, end of year 12,546 15,694 16,548 19,505
--------- --------- --------- ---------
--------- --------- --------- ---------
</TABLE>
15
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Contract Owners participating in Sun Life (N.Y.) Variable Account A and
the Board of Directors of Sun Life Insurance and Annuity Company of New York:
We have audited the accompanying statement of condition of Sun Life (N.Y.)
Variable Account A (the "Variable Account") as of December 31, 1997, the related
statement of operations for the year then ended, and the statements of changes
in net assets for the years ended December 31, 1997 and 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 as of December 31, 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 December 31,
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
February 6, 1998
16
<PAGE>
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
(Wholly-owned subsidiary of Sun Life Assurance Company of Canada (U.S.))
STATUTORY STATEMENTS OF ADMITTED ASSETS, LIABILITIES AND CAPITAL STOCK AND
SURPLUS
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------
1997 1996
------------ ------------
<S> <C> <C>
ADMITTED ASSETS
General Account Assets:
Bonds $ 61,703,336 $ 77,142,619
Mortgage loans on real estate 25,787,001 40,431,773
Properties acquired in satisfaction
of debt -- 1,377,041
Policy loans 636,277 651,332
Cash and short-term investments 10,120,237 4,614,994
Life insurance premiums and annuity
considerations due and uncollected 791,011 421,112
Accident and health premiums due and
unpaid 158,858 69,672
Investment income due and accrued 1,083,939 1,737,199
Other assets 497,790 14,668
------------ ------------
General account assets 100,778,449 126,460,410
Separate Account Assets:
Unitized 406,430,585 303,896,114
Non-unitized 116,889,545 87,676,015
------------ ------------
Total Admitted Assets $624,098,579 $518,032,539
------------ ------------
------------ ------------
LIABILITIES
General Account Liabilities:
Aggregate reserve for life policies
and contracts $ 22,374,626 $ 20,404,586
Aggregate reserve for accident and
health policies 7,414,000 4,185,000
Policy and contract claims 1,912,737 1,107,333
Liability for premium and other
deposit funds 31,341,254 61,747,147
Interest maintenance reserve 885,581 1,173,961
Commissions to agents due or accrued 521,106 217,449
General expenses due or accrued 415,105 218,624
Transfers from Separate Accounts due
or accrued (7,224,058) (1,689,278)
Taxes, licenses and fees due or
accrued 114,986 96,884
Federal income taxes due or accrued 1,000,000 400,000
Asset valuation reserve 1,346,335 1,845,237
Payable to parent, subsidiaries and
affiliates 1,266,475 1,614,355
Other liabilities 810,594 509,201
------------ ------------
General account liabilities 62,178,741 91,830,499
Separate Account Liabilities:
Unitized 406,249,110 303,723,382
Non-unitized 116,889,545 87,676,015
------------ ------------
Total liabilities 585,317,396 483,229,896
------------ ------------
CAPITAL STOCK AND SURPLUS
Capital Stock--Par value $1,000;
authorized issued and outstanding;
2,000 shares 2,000,000 2,000,000
------------ ------------
Gross paid in and contributed
surplus 29,500,000 29,500,000
Group life contingency reserve fund 180,457 118,381
Unassigned funds 7,100,726 3,184,262
------------ ------------
Total Surplus 36,781,183 32,802,643
------------ ------------
Capital Stock and Surplus 38,781,183 34,802,643
------------ ------------
Total liabilities, capital stock and
surplus $624,098,579 $518,032,539
------------ ------------
------------ ------------
</TABLE>
SEE NOTES TO STATUTORY FINANCIAL STATEMENTS.
17
<PAGE>
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
(Wholly-Owned Subsidiary of Sun Life Assurance Company Of Canada (U.S.))
STATUTORY STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
----------------------------------------
1997 1996 1995
------------ ------------ ------------
<S> <C> <C> <C>
INCOME:
Premiums and annuity considerations $ 16,670,915 $ 11,581,817 $ 11,731,623
Deposit-type funds 122,789,862 72,121,136 73,714,439
Net investment income 8,824,668 12,313,903 18,450,106
Amortization of interest maintenance
reserve 519,001 704,763 753,351
Net gain from operations from
Separate Accounts 8,743 8,101 --
------------ ------------ ------------
Total Income 148,813,189 96,729,720 104,649,519
------------ ------------ ------------
BENEFITS AND EXPENSES:
Death benefits 4,916,746 2,881,367 2,589,934
Annuity benefits 5,439,091 7,175,995 6,606,801
Disability benefits and benefits
under accident and health policies 939,635 464,615 233,549
Surrender benefits and other fund
withdrawals 111,623,776 118,432,072 118,975,912
Interest on policy or contract funds 75,069 83,323 --
Increase in aggregate reserves for
life and accident and health
policies and contracts 5,199,040 1,550,701 3,022,081
Decrease in liability for premium
and other deposit funds (30,405,893) (67,996,389) (71,733,008)
------------ ------------ ------------
Total Benefits 97,787,464 62,591,684 59,695,269
Commissions on premiums and annuity
considerations (direct business
only) 5,582,738 3,047,358 3,212,849
General insurance expenses 7,687,478 6,093,131 5,716,492
Insurance taxes, licenses and fees,
excluding federal income taxes 788,386 729,244 579,585
Net transfers to Separate Accounts 31,479,097 19,487,747 32,047,554
------------ ------------ ------------
Total Benefits and Expenses 143,325,163 91,949,164 101,251,749
------------ ------------ ------------
Net gain from operations before
dividends to policyholders and
federal income taxes 5,488,026 4,780,556 3,397,770
Federal income taxes incurred
(excluding tax on capital gains) 2,315,259 1,938,734 2,446,706
------------ ------------ ------------
Net gain from operations after
dividends to policyholders and
federal income taxes and before
realized capital gains 3,172,767 2,841,822 951,064
Net realized capital gains (losses)
less capital gains tax and
transferred to the interest
maintenance reserve 183,262 (439,101) (21,536)
------------ ------------ ------------
NET INCOME $ 3,356,029 $ 2,402,721 $ 929,528
------------ ------------ ------------
------------ ------------ ------------
</TABLE>
SEE NOTES TO STATUTORY FINANCIAL STATEMENTS.
18
<PAGE>
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
(Wholly-Owned Subsidiary of Sun Life Assurance Company Of Canada (U.S.))
STATUTORY STATEMENTS OF CHANGES IN CAPITAL STOCK AND SURPLUS
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-------------------------------------
1997 1996 1995
----------- ----------- -----------
<S> <C> <C> <C>
CAPITAL AND SURPLUS, BEGINNING OF YEAR $34,802,643 $31,964,414 $31,409,069
----------- ----------- -----------
Net income 3,356,029 2,402,721 929,528
Change in net unrealized capital
gains (losses) 138,000 702,000 (672,000)
Change in nonadmitted assets and
related items (14,391) 32,888 71,263
Change in asset valuation reserve 498,902 (299,380) 226,554
----------- ----------- -----------
Net change in capital and surplus
for the year 3,978,540 2,838,229 555,345
----------- ----------- -----------
CAPITAL AND SURPLUS, END OF YEAR $38,781,183 $34,802,643 $31,964,414
----------- ----------- -----------
----------- ----------- -----------
</TABLE>
SEE NOTES TO STATUTORY FINANCIAL STATEMENTS.
19
<PAGE>
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
(Wholly-owned subsidiary of Sun Life Assurance Company of Canada (U.S.))
STATUTORY STATEMENTS OF CASH FLOW
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
----------------------------------------
1997 1996 1995
------------ ------------ ------------
<S> <C> <C> <C>
CASH PROVIDED
Premiums, annuity considerations and
deposit funds received $139,005,632 $ 83,598,181 $ 85,243,958
Net investment income 9,707,801 14,106,521 19,808,090
------------ ------------ ------------
Total receipts 148,713,433 97,704,702 105,052,048
------------ ------------ ------------
Benefits paid 122,170,301 128,975,968 128,129,129
Insurance expenses and taxes paid 13,540,362 9,712,774 9,655,310
Net cash transfers to separate
accounts 37,013,877 22,213,704 29,702,679
Federal income tax payments
(excluding tax on capital gains) 1,715,259 2,909,899 2,125,541
------------ ------------ ------------
Total payments 174,439,799 163,812,345 169,612,659
Net cash from operations (25,726,366) (66,107,643) (64,560,611)
Proceeds from long-term investments
sold, matured or repaid (after
deducting taxes on capital gains of
$222,860 for 1997, $(112,405) for
1996 and $324,248 for 1995) 59,132,310 86,583,714 123,662,512
Other cash provided 325,543 4,654,856 444,240
------------ ------------ ------------
Total cash provided 59,457,853 91,238,570 124,106,752
------------ ------------ ------------
CASH APPLIED
Cost of long-term investments
acquired 27,369,138 28,654,582 51,631,901
Other cash applied 857,106 166,107 2,401,799
------------ ------------ ------------
Total cash applied 28,226,244 28,820,689 54,033,700
------------ ------------ ------------
Net change in cash and short-term
investments 5,505,243 (3,689,762) 5,512,441
CASH AND SHORT-TERM INVESTMENTS:
BEGINNING OF YEAR 4,614,994 8,304,756 2,792,315
------------ ------------ ------------
END OF YEAR $ 10,120,237 $ 4,614,994 $ 8,304,756
------------ ------------ ------------
------------ ------------ ------------
</TABLE>
SEE NOTES TO STATUTORY FINANCIAL STATEMENTS.
20
<PAGE>
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
(Wholly-Owned Subsidiary of Sun Life Assurance Company Of Canada (U.S.))
NOTES TO STATUTORY FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
1. DESCRIPTION OF THE BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
GENERAL--
Sun Life Insurance and Annuity Company of New York (the "Company") is
incorporated as a life insurance company and is currently engaged in the sale of
individual fixed and variable annuities and group life and long-term disability
insurance. The parent company, Sun Life Assurance Company of Canada (U.S.) (Sun
Life of Canada (U.S.)), is ultimately a wholly-owned subsidiary of Sun Life
Assurance Company of Canada (Sun Life (Canada)), a mutual life insurance
company.
The Company, which is domiciled in the State of New York, prepares its financial
statements in accordance with statutory accounting practices prescribed or
permitted by the Insurance Department of the State of New York. Prescribed
accounting practices include a variety of publications of the National
Association of Insurance Commissioners ("NAIC"), as well as New York State laws,
regulations and general administrative rules. Permitted accounting practices
encompass all accounting practices not so prescribed. The permitted accounting
practices adopted by the Company are not material to the financial statements.
Prior to 1996, statutory accounting practices were recognized by the insurance
industry and the accounting profession as generally accepted accounting
principles ("GAAP") for mutual life insurance companies and stock life insurance
companies wholly owned by mutual life insurance companies. In April of 1993, the
Financial Accounting Standards Board ("FASB") issued an interpretation (the
"Interpretation") which became effective in 1996 that has changed the previous
practice of mutual life insurance companies (and stock life insurance companies
that are wholly owned subsidiaries of mutual life insurance companies) with
respect to utilizing statutory basis financial statements for general purposes,
in that it will no longer allow such financial statements to be described as
having been prepared in conformity with GAAP. Consequently, these financial
statements prepared in conformity with statutory accounting practices as
described above, vary from and are not intended to present the Company's
financial position, results of operations or cash flow in conformity with GAAP.
(See Note 16 for further discussion relative to the Company's basis of financial
statement presentation.) The effects on the financial statements of the
variances between the statutory basis of accounting and GAAP, although not
reasonably determinable, are presumed to be material.
INVESTED ASSETS--
Bonds are carried at cost adjusted for amortization of premium or accrual of
discount. Mortgage loans acquired at a premium or discount are carried at
amortized values and other mortgage loans at the amounts of the unpaid balances.
Real estate investments are carried at the lower of cost, adjusted for
accumulated depreciation, or appraised value less encumbrances. Short-term
investments are carried at amortized cost which approximates fair value.
Depreciation of buildings and improvements is calculated using the straight-line
method over the estimated useful life of the property, generally three to
sixteen years.
POLICY AND CONTRACT RESERVES--
The reserves for group life insurance, group long-term disability insurance and
annuity contracts, developed by accepted actuarial methods, have been
established and maintained on the basis of published mortality and morbidity
tables using assumed interest rates and valuation methods that will provide
reserves at least as great as those required by law and contract provisions.
INCOME AND EXPENSES--
For group life, group long-term disability and annuity contracts, premiums are
recognized as revenues over the premium paying period, whereas commissions and
other costs applicable to the acquisition of new business are charged to
operations as incurred.
21
<PAGE>
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
(Wholly-Owned Subsidiary of Sun Life Assurance Company Of Canada (U.S.))
NOTES TO STATUTORY FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
1. DESCRIPTION OF THE BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (CONTINUED):
SEPARATE ACCOUNTS--
The Company has established unitized separate accounts applicable to individual
qualified and non-qualified variable annuity contracts.
Assets and liabilities of the separate accounts, representing net deposits and
accumulated net investment earnings less fees, held primarily for the benefit of
contract holders, are shown as separate captions in the statutory financial
statements. Assets held in the separate accounts are carried at market values.
The Company has also established a non-unitized separate account for amounts
allocated to the fixed portion of a certain combination fixed/variable deferred
annuity contract. The assets of this account are available to fund general
account liabilities and general account assets are available to fund liabilities
of this account.
Gains (losses) from mortality experience and investment experience of the
separate accounts, not applicable to contract owners, are transferred to (from)
the general account. Accumulated gains (losses) that have not been transferred
are recorded as payable (receivable) to (from) the general account. Transfers
from separate accounts due or accrued amounted to $7,224,000 in 1997 and
$1,689,000 in 1996.
OTHER--
Preparation of the financial statements requires management to make estimates
and assumptions that affect the reported amounts of assets, liabilities,
revenues and expenses. Actual results could differ from those estimates.
Certain 1996 and 1995 amounts have been reclassified to conform to amounts as
presented in 1997.
2. BONDS:
Investments in debt securities are as follows:
<TABLE>
<CAPTION>
DECEMBER 31, 1997
------------------------------------------
GROSS GROSS ESTIMATED
AMORTIZED UNREALIZED UNREALIZED FAIR
COST GAINS LOSSES VALUE
-------- ---------- -------- --------
(IN 000'S)
<S> <C> <C> <C> <C>
Long-term bonds:
United States Government and
government agencies and authorities $15,005 $ 311 -$ $15,316
Foreign governments 523 16 - 539
Public utilities 12,126 341 - 12,467
Finance 4,026 80 - 4,106
All other corporate bonds 30,023 696 16 30,703
-------- ---------- -------- --------
Total long-term bonds 61,703 1,444 16 63,131
-------- ---------- -------- --------
Short-term bonds:
U.S. Treasury Bills, bankers
acceptances and commercial paper 9,406 - - 9,406
-------- ---------- -------- --------
$71,109 $1,444 $16 $72,537
-------- ---------- -------- --------
-------- ---------- -------- --------
</TABLE>
22
<PAGE>
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
(Wholly-Owned Subsidiary of Sun Life Assurance Company Of Canada (U.S.))
NOTES TO STATUTORY FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
2. BONDS (CONTINUED):
<TABLE>
<CAPTION>
DECEMBER 31, 1996
--------------------------------------------
GROSS GROSS ESTIMATED
AMORTIZED UNREALIZED UNREALIZED FAIR
COST GAINS LOSSES VALUE
-------- ---------- ---------- --------
(IN 000'S)
<S> <C> <C> <C> <C>
Long-term bonds:
United States Government and
government agencies and authorities $ 9,075 $ 179 $- $ 9,254
Foreign governments 530 14 - 544
Public utilities 19,997 434 8 20,423
Transportation 468 34 - 502
Finance 9,643 182 - 9,825
All other corporate bonds 37,430 1,149 33 38,546
-------- ---------- ----- --------
Total long-term bonds 77,143 1,992 41 79,094
Short-term bonds:
U.S. Treasury Bills, bankers
acceptances and commercial paper 4,507 - - 4,507
-------- ---------- ----- --------
$81,650 $1,992 $ 41 $83,601
-------- ---------- ----- --------
-------- ---------- ----- --------
</TABLE>
The amortized cost and estimated fair value of bonds at December 31, 1997 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 call and/or prepayment penalties.
<TABLE>
<CAPTION>
DECEMBER 31, 1997
-----------------------
AMORTIZED ESTIMATED
COST FAIR VALUE
--------- ------------
(IN 000'S)
<S> <C> <C>
Maturities are:
Due in one year or less $21,723 $ 21,825
Due after one year through five
years 33,228 34,015
Due after five years through ten
years 2,386 2,499
Due after ten years 6,162 6,471
--------- ------------
Subtotal 63,499 64,810
--------- ------------
Mortgage-backed securities 7,610 7,727
--------- ------------
$71,109 $ 72,537
--------- ------------
--------- ------------
</TABLE>
Proceeds from sales and maturities of investments in debt securities during
1997, 1996 and 1995 were $42,986,000, $76,431,000 and $111,448,000,
respectively. Gross gains of $395,000, $537,000 and $1,295,000 and gross losses
of $40,000, $183,000 and $335,000 were realized on such sales during 1997, 1996
and 1995, respectively.
A bond, included above, with an amortized cost of approximately $408,000 and
$412,000 at December 31, 1997 and 1996, respectively, was on deposit with the
Superintendent of Insurance of the State of New York as required by law.
23
<PAGE>
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
(Wholly-Owned Subsidiary of Sun Life Assurance Company Of Canada (U.S.))
NOTES TO STATUTORY FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
3. MORTGAGE LOANS:
The Company invests in commercial first mortgage loans throughout the United
States. The Company monitors the condition of the mortgage loans in its
portfolio. In those cases where mortgages have been restructured, appropriate
allowances for losses have been made. In those cases where, in management's
judgment, the mortgage loans' values are impaired, appropriate losses are
recorded.
The following table shows the geographic distribution of the mortgage loan
portfolio at December 31:
<TABLE>
<CAPTION>
1997 1996
------- -------
(IN 000'S)
<S> <C> <C>
New York $ 4,375 $10,717
California 4,672 4,884
Massachusetts 2,556 6,542
Ohio 1,308 3,445
Florida 3,313 3,795
All other 9,563 11,049
------- -------
$25,787 $40,432
------- -------
------- -------
</TABLE>
As of December 31, 1997, the Company has restructured mortgage loans totaling
$960,000 against which there are allowances for losses of $250,000.
4. INVESTMENT GAINS (LOSSES):
<TABLE>
<CAPTION>
YEARS ENDED
DECEMBER 31,
-------------------
1997 1996 1995
----- ----- -----
(IN 000'S)
<S> <C> <C> <C>
Realized capital gains (losses):
Mortgage loans $ (6) $(676) $ (1)
Real estate 288 - (32)
----- ----- -----
282 (676) (33)
----- ----- -----
----- ----- -----
Changes in unrealized capital gains
(losses) on mortgage loans $ 138 $ 702 $(672)
----- ----- -----
----- ----- -----
</TABLE>
Realized capital gains and losses on bonds and mortgages which relate to changes
in levels of interest rate risk are charged or credited to an interest
maintenance reserve ("IMR") and amortized into income over the remaining
contractual life of the security sold. The gross realized capital gains credited
to the interest maintenance reserve were $355,000, $354,000 and $960,000 in
1997, 1996 and 1995, respectively. All gains are transferred net of applicable
income taxes.
24
<PAGE>
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
(Wholly-Owned Subsidiary of Sun Life Assurance Company Of Canada (U.S.))
NOTES TO STATUTORY FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
5. NET INVESTMENT INCOME:
Net investment income consisted of the following for:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-------------------------
1997 1996 1995
------- ------- -------
(IN 000'S)
<S> <C> <C> <C>
Interest income from bonds $ 5,622 $ 8,576 $13,020
Interest income from mortgage loans 3,279 4,252 5,882
Real estate investment income (loss) 483 376 (52)
Other investment income (loss) 170 (93) 170
------- ------- -------
Gross investment income 9,554 13,111 19,020
Investment expenses 729 797 570
------- ------- -------
Net investment income $ 8,825 $12,314 $18,450
------- ------- -------
------- ------- -------
</TABLE>
6. REINSURANCE:
The Company has agreements with Sun Life (Canada) which provide that Sun Life
(Canada) will reinsure the mortality and morbidity risks of the group life
insurance contracts and group long-term disability contracts issued by the
Company. Under these agreements, basic death benefits and long-term disability
benefits are reinsured on a yearly renewable term basis. The agreements provide
that Sun Life (Canada) will reinsure the mortality risks in excess of $50,000
per policy for group life insurance contracts and $3,000 per policy per month
for the group long-term disability contracts ceded by the Company. Reinsurance
transactions under these agreements had the effect of increasing income from
operations by $139,000 for the year ended December 31, 1997, decreasing income
from operations by $500,000 for the year ended December 31, 1996 and increasing
income from operations by $652,000 for the year ended December 31, 1995.
The group life and long-term disability reinsurance agreements require that the
reinsurer provide funds in amounts equal to the reserves ceded.
The following are summarized proforma results of operations of the Company for
the years ended December 31, 1997, 1996 and 1995 before the effect of
reinsurance transactions with Sun Life (Canada).
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
---------------------------
1997 1996 1995
-------- ------- --------
(IN 000'S)
<S> <C> <C> <C>
Income:
Premiums, annuity deposits and other
revenues $142,915 $85,947 $ 86,819
Net investment income 9,343 13,019 19,204
-------- ------- --------
Subtotal 152,258 98,966 106,023
-------- ------- --------
Benefits and expenses:
Policyholder benefits 101,371 64,328 61,720
Other expenses 45,538 29,357 41,557
-------- ------- --------
Subtotal 146,909 93,685 103,277
-------- ------- --------
Income from operations $ 5,349 $ 5,281 $ 2,746
-------- ------- --------
-------- ------- --------
</TABLE>
25
<PAGE>
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
(Wholly-Owned Subsidiary of Sun Life Assurance Company Of Canada (U.S.))
NOTES TO STATUTORY FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
7. WITHDRAWAL CHARACTERISTICS OF ANNUITY ACTUARIAL RESERVES AND DEPOSIT
LIABILITIES:
Withdrawal characteristics of general account and separate account annuity
reserves and deposits:
<TABLE>
<CAPTION>
DECEMBER 31, 1997
--------------------
AMOUNT % OF TOTAL
-------- ----------
(IN 000'S)
<S> <C> <C>
Subject to discretionary withdrawal:
--with market value adjustment $120,764 21.40%
--at book value less surrender charges
(surrender charge > 5%) 13,811 2.40
--at book value (minimal or no charge
or adjustment) 410,484 72.70
Not subject to discretionary withdrawal
provision 19,972 3.50
-------- ----------
Total annuity actuarial reserves and
deposit liabilities $565,031 100.00%
-------- ----------
-------- ----------
<CAPTION>
DECEMBER 31, 1996
--------------------
AMOUNT % OF TOTAL
-------- ----------
(IN 000'S)
<S> <C> <C>
Subject to discretionary withdrawal:
--with market value adjustment $ 92,135 19.60%
--at book value less surrender charges
(surrender charge > 5%) 38,668 8.20
--at book value (minimal or no
surrender charge or adjustment) 318,886 67.90
Not subject to discretionary withdrawal
provision 20,326 4.30
-------- ----------
Total annuity actuarial reserves and
deposit liabilities $470,015 100.00%
-------- ----------
-------- ----------
</TABLE>
8. RETIREMENT PLANS:
The Company participates with Sun Life (Canada) and Sun Life of Canada (U.S.) in
a noncontributory defined benefit pension plan covering essentially all
employees. The benefits are based on years of service and compensation.
The funding policy for the pension plan is to contribute an amount which at
least satisfies the minimum amount required by ERISA; the plan is currently
fully funded. The Company is charged for its share of the pension cost based
upon its covered participants. Pension plan assets consist principally of a
variable accumulation fund contract held in a separate account of Sun Life
(Canada).
The Company's share of the group's accrued pension cost at December 31, 1997,
1996 and 1995 was $211,000, $178,000 and $97,000, respectively. The Company's
share of net periodic pension cost was $33,000, $81,000 and $18,000 for the
years ended December 31, 1997, 1996 and 1995, respectively.
The Company also participates with Sun Life (Canada), Sun Life of Canada (U.S.)
and certain affiliates in a 401(k) savings plan for which substantially all
employees are eligible. The Company matches, up to specified amounts, employees'
contributions to the plan. Employer contributions were $28,000, $27,000 and
$21,000 for the years ended December 31, 1997, 1996 and 1995, respectively.
OTHER POST-RETIREMENT BENEFIT PLANS
In addition to pension benefits, the Company provides certain health, dental and
life insurance benefits ("post-retirement benefits") for retired employees and
dependents. Substantially all employees may become eligible for these benefits
if they reach normal retirement age while working for the Company, or retire
26
<PAGE>
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
(Wholly-Owned Subsidiary of Sun Life Assurance Company Of Canada (U.S.))
NOTES TO STATUTORY FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
8. RETIREMENT PLANS (CONTINUED):
early upon satisfying an alternate age plus service condition. Life insurance
benefits are generally set at a fixed amount. The expense recognized in the
financial statements relative to this plan was $16,000 in 1997, $8,000 in 1996
and $7,000 in 1995.
9. FAIR VALUE OF FINANCIAL INSTRUMENTS:
The following table presents the carrying amounts and fair values of the
Company's financial instruments at December 31, 1997 and 1996:
<TABLE>
<CAPTION>
1997 1996
----------------------------- -----------------------------
CARRYING CARRYING
AMOUNT FAIR VALUE AMOUNT FAIR VALUE
-------------- ------------ -------------- ------------
(IN 000'S)
<S> <C> <C> <C> <C>
ASSETS:
Bonds $ 71,109 $ 72,537 $ 81,650 $ 83,601
Mortgages 25,787 26,557 40,432 41,196
------- ------------ -------------- ------------
Total $ 98,896 $ 99,094 $122,082 $ 124,797
------- ------------ -------------- ------------
------- ------------ -------------- ------------
LIABILITIES:
Individual annuities $ 40,479 $ 38,177 $ 70,166 $ 68,830
------- ------------ -------------- ------------
------- ------------ -------------- ------------
</TABLE>
The major methods and assumptions used in estimating the fair values of
financial instruments are as follows:
The fair values of short-term bonds are estimated to be the amortized cost. The
fair values of long-term bonds which are publicly traded are based upon market
prices or dealer quotes. For privately placed bonds, fair values are estimated
using prices for publicly traded bonds of similar credit risk, maturity,
repayment and liquidity characteristics.
The fair values of the Company's general account reserves and liabilities under
investment-type contracts (insurance and annuity contracts that do not involve
mortality or morbidity risks) are estimated using discounted cash flow analyses
or surrender values. Those contracts that are deemed to have short-term
guarantees have a carrying amount equal to the estimated market value.
The fair values of mortgages are estimated by discounting future cash flows
using current rates at which similar loans would be made to borrowers with
similar credit ratings and for the same remaining maturities.
10. STATUTORY INVESTMENT VALUATION RESERVES:
The asset valuation reserve ("AVR") provides a reserve for losses from
investments in bonds, mortgage loans, real-estate and other invested assets with
related increases or decreases being recorded directly to surplus.
Realized capital gains and losses on bonds and mortgages which relate to changes
in levels of interest rate risk are charged or credited to an IMR and amortized
into income over the remaining contractual life of the security sold.
27
<PAGE>
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
(Wholly-Owned Subsidiary of Sun Life Assurance Company Of Canada (U.S.))
NOTES TO STATUTORY FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
10. STATUTORY INVESTMENT VALUATION RESERVES (CONTINUED):
The table shown below presents changes in the major elements of the AVR and IMR.
<TABLE>
<CAPTION>
1997 1996
-------------- --------------
AVR IMR AVR IMR
------ ------ ------ ------
(IN 000'S) (IN 000'S)
<S> <C> <C> <C> <C>
Balance, beginning of year $1,845 $1,174 $1,546 $1,648
Net realized capital gains (losses), net
of tax 183 231 (439) 230
Amortization of net investment gains - (519) - (704)
Unrealized investment gains 138 - 702 -
Required by formula (820) - 36 -
------ ------ ------ ------
Balance, end of year $1,346 $ 886 $1,845 $1,174
------ ------ ------ ------
------ ------ ------ ------
</TABLE>
11. LIABILITY FOR UNPAID CLAIMS AND CLAIM ADJUSTMENT EXPENSES:
Activity in the liability for unpaid claims and claim adjustment expense is
summarized below (in 000's).
<TABLE>
<CAPTION>
1997 1996 1995
------- ------- -------
<S> <C> <C> <C>
Balance, January 1 $ 6,129 $ 4,320 $ 2,322
Claims incurred 9,008 5,061 4,789
Claims paid (4,898) (3,252) (2,791)
------- ------- -------
Balance, December 31 $10,239 $ 6,129 $ 4,320
------- ------- -------
------- ------- -------
</TABLE>
The information presented above includes unpaid benefit claims and claim
adjustment expenses for the group life and group long-term disability contracts.
As of December 31, 1997, the unpaid claim and claim adjustment liability for
these contracts is included in Policy Reserves.
12. FEDERAL INCOME TAXES:
The Company files a consolidated federal income tax return with Sun Life of
Canada (U.S.) and other affiliates. Federal income taxes are calculated as if
the Company filed a return as a separate company. No provision is recognized for
timing differences which may exist between financial statement and taxable
income. Such differences include reserves, depreciation and accrual of market
discount on bonds. The Company made cash payments to Sun Life of Canada (U.S.)
of $1,938,000, $2,797,000 and $2,421,000 during 1997, 1996 and 1995,
respectively.
13. LEASE COMMITMENTS:
The Company leases two separate facilities for its annuity operations and group
sales office. Both leases commenced in March 1994.
28
<PAGE>
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
(Wholly-Owned Subsidiary of Sun Life Assurance Company Of Canada (U.S.))
NOTES TO STATUTORY FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
13. LEASE COMMITMENTS (CONTINUED):
Future minimum lease commitments are as follows:
<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31,
------------------------------ AMOUNT
------
(IN
000'S)
<S> <C>
1998 $ 354
1999 305
2000 237
2001 237
2002 237
Thereafter 275
------
Total $1,645
------
------
</TABLE>
Rent expense under these and prior leases in 1997, 1996 and 1995 amounted to
$348,000, $336,000 and $336,000, respectively.
14. MANAGEMENT AND SERVICE CONTRACTS:
The Company has agreements with Sun Life (Canada) which provide that Sun Life
(Canada) will furnish to the Company, as requested, personnel as well as certain
investment, actuarial and administrative services on a cost reimbursement basis.
Expenses under these agreements amounted to approximately $1,155,000 in 1997,
$1,866,000 in 1996 and $1,741,000 in 1995.
15. RISK-BASED CAPITAL:
Effective December 31, 1993, the NAIC adopted risk-based capital requirements
for life insurance companies. The risk-based capital requirements provide a
method for measuring the minimum acceptable amount of adjusted capital that a
life insurer should have, as determined under statutory accounting practices,
taking into account the risk characteristics of its investments and products.
The Company has met the minimum risk-based capital requirements at December 31,
1997 and 1996.
16. ACCOUNTING POLICIES AND PRINCIPLES:
The financial statements of the Company have been prepared on the basis of
statutory accounting practices which, prior to 1996, were considered by the
insurance industry and the accounting profession to be in accordance with GAAP
for mutual life insurance companies. The primary differences between statutory
accounting and GAAP are described as follows. Statutory accounting practices do
not recognize the following assets or liabilities which are reflected under
GAAP; deferred acquisition costs, deferred federal income taxes and statutory
non admitted assets. AVR and IMR are established under statutory accounting
practices but not under GAAP. Methods for calculating real estate depreciation
and investment valuation allowances differ under statutory accounting practices
and GAAP. Premiums for investment-type products are recognized as income for
statutory purposes and as deposits to policyholders' accounts for GAAP.
Because the Company's management uses financial information prepared in
conformity with accounting policies generally accepted in Canada in the normal
course of business, the management of the Company has determined that the cost
of complying with Statement No. 120 would exceed the benefits that the Company,
or the users of its financial statements, would experience. Consequently, the
Company has elected not to apply such standards in the preparation of these
financial statements.
29
<PAGE>
INDEPENDENT AUDITORS' REPORT
TO THE BOARD OF DIRECTORS
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
We have audited the accompanying statutory statements of admitted assets,
liabilities and capital stock and surplus of Sun Life Insurance and Annuity
Company of New York ("the Company") as of December 31, 1997 and 1996, and the
related statutory statements of operations, changes in capital stock and
surplus, and cash flow for each of the three years in the period ended December
31, 1997. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
As described more fully in Notes 1 and 16 to the financial statements, the
Company prepared these financial statements using accounting practices
prescribed or permitted by the Insurance Department of the State of New York,
which practices differ from generally accepted accounting principles. The
effects on the financial statements of the variances between the statutory basis
of accounting and generally accepted accounting principles, although not
reasonably determinable, are presumed to be material.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the admitted assets, liabilities and capital stock and
surplus of Sun Life Insurance and Annuity Company of New York as of December 31,
1997 and 1996, and the results of its operations and its cash flow for each of
the three years in the period ended December 31, 1997 on the basis of accounting
described in Notes 1 and 16.
However, because of the effects of the matter discussed in the second preceding
paragraph, in our opinion, the statutory financial statements referred to above
do not present fairly, in conformity with generally accepted accounting
principles, the financial position of Sun Life Insurance and Annuity Company of
New York as of December 31, 1997 and 1996 or the results of its operations or
its cash flow for each of the three years in the period ended December 31, 1997.
As management has stated in Note 16, because the Company's management uses
financial information prepared in accordance with accounting principles
generally accepted in Canada in the normal course of business, the management of
Sun Life Insurance and Annuity Company of New York has determined that the cost
of complying with Statement No. 120, Accounting and Reporting by Mutual Life
Insurance Enterprises and by Insurance Enterprises for Certain Long-Duration
Participating Contracts, would exceed the benefits that the Company, or the
users of its financial statements would experience. Consequently, the Company
has elected not to apply such standards in the preparation of these financial
statements.
DELOITTE & TOUCHE LLP
February 5, 1998
30
<PAGE>
APPENDIX A
THE FIXED ACCOUNT
THAT PORTION OF THE CONTRACT RELATING TO THE FIXED ACCOUNT IS NOT REGISTERED
UNDER THE SECURITIES ACT OF 1933 ("1933 ACT") AND THE FIXED ACCOUNT IS NOT
REGISTERED AS AN INVESTMENT COMPANY UNDER THE INVESTMENT COMPANY ACT OF 1940
("1940 ACT"). ACCORDINGLY, NEITHER THE FIXED ACCOUNT NOR ANY INTERESTS THEREIN
ARE SUBJECT TO THE PROVISIONS OR RESTRICTIONS OF THE 1933 ACT OR THE 1940 ACT,
AND THE DISCLOSURE IN THIS APPENDIX A HAS NOT BEEN REVIEWED BY THE STAFF OF THE
SECURITIES AND EXCHANGE COMMISSION. HOWEVER, THE FOLLOWING DISCLOSURE ABOUT THE
FIXED ACCOUNT MAY BE SUBJECT TO CERTAIN GENERALLY APPLICABLE PROVISIONS OF THE
FEDERAL SECURITIES LAWS REGARDING THE ACCURACY AND COMPLETENESS OF DISCLOSURE.
A WORD ABOUT THE FIXED ACCOUNT
The Fixed Account consists of those assets of the Company which are
allocated to a non-unitized separate account established in conformance with New
York law. Any portion of the net Purchase Payment allocated by the Owner to a
Guarantee Period(s) will become part of the Fixed Account. Any obligations of
the Fixed Account will be paid first from those assets which are allocated to
the Fixed Account and the excess, if any, will be paid from the Company's
general account. The Company will invest the assets of the Fixed Account in
those assets chosen by the Company and allowed by applicable law. Investment
income from such Fixed Account assets will be allocated between the Company and
the contracts participating in the Fixed Account, in accordance with the terms
of such contracts.
Annuity payments made to Annuitants under the Contracts will not be affected
by the mortality experience (death rate) of persons receiving such payments or
of the general population. The Company assumes this "mortality risk" by virtue
of annuity rates incorporated in the Contract which cannot be changed. In
addition, the Company guarantees that it will not increase charges for
maintenance of the Contracts regardless of its actual expenses.
Investment income from the Fixed Account allocated to the Company includes
compensation for mortality and expense risks borne by the Company in connection
with Fixed Account Contracts. The Company expects to derive a profit from this
compensation. The amount of such investment income allocated to the Contracts
will vary from year to year in the sole discretion of the Company. However, the
Company guarantees that it will credit interest at a rate of not less than 4%
per year, compounded annually, to amounts allocated to the Fixed Account under
the Contracts. The Company may credit interest at a rate in excess of 4% per
year; however, the Company is not obligated to credit any interest in excess of
4% per year. There is no specific formula for the determination of excess
interest credits. Such credits, if any, will be determined by the Company based
on information as to expected investment yields. Some of the factors that the
Company may consider in determining whether to credit interest to amounts
allocated to the Fixed Account and the amount thereof are general economic
trends, rates of return currently available and anticipated on the Company's
investments, regulatory and tax requirements and competitive factors. ANY
INTEREST CREDITED TO AMOUNTS ALLOCATED TO THE FIXED ACCOUNT IN EXCESS OF 4% PER
YEAR WILL BE DETERMINED IN THE SOLE DISCRETION OF THE COMPANY. THE OWNER ASSUMES
THE RISK THAT INTEREST CREDITED TO FIXED ACCOUNT ALLOCATIONS MAY NOT EXCEED THE
MINIMUM GUARANTEE OF 4% FOR ANY GIVEN YEAR.
The Company is aware of no statutory limitations on the maximum amount of
interest it may credit, and the Board of Directors has set no limitations.
However, inherent in the Company's exercise of discretion in this regard is the
equitable allocation of distributable earnings and surplus among its various
policyholders and contract owners and to its sole stockholder.
Excess interest, if any, will be credited on the fixed accumulation value.
The Company guarantees that, at any time, the fixed accumulation value will not
be less than the amount of Purchase Payments allocated to the Fixed Account,
plus interest at the rate of 4% per year, compounded annually, plus any
additional interest
31
<PAGE>
which the Company may, in its discretion, credit to the Fixed Account, less the
sum of all administrative or withdrawal charges, any applicable premium taxes,
and less any amounts surrendered. If the Owner surrenders the Contract, the
amount available from the Fixed Account will be reduced by any applicable
withdrawal charge (see "Withdrawal Charges" in the Prospectus). In no event will
the portion of the contract maintenance charge that is deducted from the Fixed
Account cause the Contract's fixed accumulation value (adjusted for any cash
withdrawals) to increase by less than 4% per year.
If on any Contract Anniversary the rate at which the Company credits
interest to amounts allocated to the Fixed Account under the Contract is less
than 80% of the average discount rate on 52-week United States Treasury Bills
for the most recent auction prior to the Contract Anniversary on which the
declared interest rate becomes applicable, then during the 45-day period after
the Contract Anniversary the Owner may elect to receive the value of the
Contract's Accumulation Account without assessment of a withdrawal charge. Such
withdrawal may, however, result in adverse tax consequences (see "Federal Tax
Status").
The Company reserves the right to defer the payment of amounts withdrawn
from the Fixed Account for a period not to exceed six months from the date
written request for such withdrawal is received by the Company.
FIXED ACCUMULATION VALUE
(1) CREDITING FIXED ACCUMULATION UNITS
Upon receipt of a Purchase Payment by the Company, all or that portion, if
any, of the net Purchase Payment to be allocated to the Fixed Account in
accordance with the allocation factor will be credited to the Accumulation
Account in the form of Fixed Accumulation Units. The number of Fixed
Accumulation Units to be credited is determined by dividing the dollar amount
allocated to the Fixed Account by the Fixed Accumulation Unit value for the
Contract for the Valuation Period during which the Purchase Payment is received
by the Company.
(2) FIXED ACCUMULATION UNIT VALUE
A Fixed Accumulation Unit value is established at $10.00 for the first
Valuation Period of the calendar month in which the Contract is issued and will
increase for each successive Valuation Period as interest is accrued. All
Contracts issued in a particular calendar month and at a particular rate of
interest, as specified in advance by the Company from time to time, will use the
same series of Fixed Accumulation Unit values throughout the first Contract
Year.
At the first Contract Anniversary the Fixed Accumulation Units credited to a
Contract's Accumulation Account will be exchanged for a second type of Fixed
Accumulation Unit with an equal aggregate value. The value of this second type
of Fixed Accumulation Unit will increase for each Valuation Period during each
Contract Year as interest is accrued at a rate which shall have been determined
by the Company prior to the first day of each Contract Year.
The Company will credit interest to the Contract's Fixed Accumulation
Account at a rate of not less than 4% per year, compounded annually. Once the
rate applicable to a specific Contract is established by the Company, it may not
be changed for the balance of the Contract Year. Additional Payments made during
the Contract Year will be credited with interest for the balance of the Contract
Year at the rate applicable at the beginning of that Contract Year. The Fixed
Accumulation Unit value for the Contract for any Valuation Period is the value
determined as of the end of such Valuation Period.
(3) FIXED ACCUMULATION VALUE
The fixed accumulation value of a Contract, if any, for any Valuation Period
is equal to the value of the Fixed Accumulation Units credited to the
Accumulation Account for such Valuation Period.
32
<PAGE>
LOANS FROM THE FIXED ACCOUNT
Loans will be permitted from the Contract's Fixed Accumulation Account (to
the extent permitted by the retirement plan for which the Contract is
purchased). The maximum loan amount is the amount determined under the Company's
maximum loan formula for qualified plans. The minimum loan amount is $1,000.
Loans will be secured by a security interest in the Contract. Loans are subject
to applicable retirement program legislation and their taxation is determined
under the federal income tax laws. The amount borrowed will be transferred to a
fixed minimum guarantee accumulation account in the Company's general account
where it will accrue interest at a specified rate below the then current loan
interest rate. Generally, loans must be repaid within five years.
The amount of the death benefit, the amount payable on a full surrender and
the amount applied to provide an annuity on the Annuity Commencement Date will
be reduced to reflect any outstanding loan balance (plus accrued interest
thereon). Partial withdrawals may be restricted by the maximum loan limitation.
FIXED ANNUITY PAYMENTS
The dollar amount of each fixed annuity payment will be determined in
accordance with the annuity payment rates found in the Contract which are based
on a minimum guaranteed interest rate of 4% per year, or, if more favorable to
the Payee(s), in accordance with the Single Premium Immediate Settlement Rates
published by the Company and in use on the Annuity Commencement Date.
APPENDIX B
ILLUSTRATIVE EXAMPLE OF VARIABLE ACCUMULATION UNIT VALUE CALCULATIONS
Suppose the net asset value of a Fund share at the end of the current
Valuation Period is $18.38; at the end of the immediately preceding Valuation
Period is $18.32; the Valuation Period is one day; no dividends or distributions
caused Fund shares to go "ex-dividend" during the current Valuation Period.
$18.38 divided by $18.32 is 1.00327511. Subtracting the one day risk factor for
mortality and expense risks of .00003539 (the daily equivalent of the current
charge of 1.3% on an annual basis) gives a net investment factor of 1.00323972.
If the value of the Variable Accumulation Unit for the immediately preceding
Valuation Period had been 14.5645672, the value for the current Valuation Period
would be 14.6117523 (14.5645672 x 1.00323972).
ILLUSTRATIVE EXAMPLE OF VARIABLE ANNUITY UNIT CALCULATIONS
Suppose the circumstances of the first example exist, and the value of an
Annuity Unit for the immediately preceding Valuation Period had been 12.3456789.
If the first variable annuity payment is determined by using an annuity payment
based on an assumed interest rate of 4% per year, the value of the Annuity Unit
for the current Valuation Period would be 12.3843446 (12.3456789 x 1.00323972 x
0.99989255).
ILLUSTRATIVE EXAMPLE OF VARIABLE ANNUITY PAYMENT CALCULATIONS
Suppose that the Accumulation Account of a deferred Contract is credited
with 8,765.4321 Variable Accumulation Units of a particular Sub-Account but is
not credited with any Fixed Accumulation Units; that the Variable Accumulation
Unit value and the Annuity Unit value for the particular Sub-Account for the
Valuation Period which ends immediately preceding the Annuity Commencement Date
are 14.5645672 and 12.3456789, respectively; that the annuity payment rate for
the age and option elected is $6.78 per $1,000; and that the Annuity Unit value
on the day prior to the second variable annuity payment date is 12.3843446. The
first variable annuity payment would be $865.57(8,765.4321 x 14.5645672 x 6.78
divided by 1,000). The number of Annuity Units credited would be 70.1112
($865.57 divided by 12.3456789) and the second variable annuity payment would be
$868.28 (70.1112 x 12.3843446).
33
<PAGE>
APPENDIX C
WITHDRAWALS AND WITHDRAWAL CHARGES
Suppose, for example, that the initial Purchase Payment under a Contract was
$2,000, and that $2,000 Purchase Payments were made on each Contract Anniversary
thereafter. The maximum free withdrawal amount would be $200, $400, $600, $800,
and $1,000 in Contract Years 1, 2, 3, 4, and 5, respectively; these amounts are
determined as 10% of the new Payments (as new Payments are defined in each
Contract Year).
In years after the 5th the maximum free withdrawal amount will be increased
by any old Payments which have not already been liquidated. Continuing the
example, consider a partial withdrawal of $4,500 made during the 7th Contract
Year. Let us consider this withdrawal under two sets of circumstances, first
where there were no previous partial withdrawals, and second where there had
been an $800 cash withdrawal payment made in the 5th Contract Year.
1. In the first instance, there were no previous partial withdrawals.
The maximum free withdrawal amount in the 7th Contract Year is then
$5,000, which consists of $4,000 in old Payments ($2,000 from each of
the first two Contract Years) and $1,000 as 10% of the new Payments
in years 3-7. Because the $4,500 partial withdrawal is less than the
maximum free withdrawal amount of $5,000, no withdrawal charge would
be imposed.
This withdrawal would liquidate the Purchase Payments which were made
in Contract Years 1 and 2, and would liquidate $500 of the Purchase
Payment which was made in Contract Year 3.
2. In the second instance, an $800 cash withdrawal payment had been made
in the 5th Contract Year. Because the cash withdrawal payment was
less than the $1,000 maximum free withdrawal amount in the 5th
Contract year, no surrender charge would have been imposed. The $800
cash withdrawal payment would have liquidated $800 of the Purchase
Payment in the 1st Contract Year.
As a consequence, the maximum free withdrawal amount in the 7th
Contract Year is only $4,200, consisting of $3,200 in old Payments
($1,200 remaining from year 1 and $2,000 from year 2) and $1,000 as
10% of new Payments. A $4,500 partial withdrawal exceeds the maximum
free withdrawal amount by $300. Therefore the amount subject to the
withdrawal charge is $300 and the withdrawal charge is $300 X 0.05,
or $15. The amount of the cash withdrawal payment is the $4,500
partial withdrawal, minus the $15 withdrawal charge, or $4,485. The
$4,500 partial withdrawal would be charged to the Contract's
Accumulation Account in the form of cancelled Accumulation Units.
This withdrawal would liquidate the remaining $1,200 from the
Purchase Payment in Contract Year 1, the full $2,000 Purchase Payment
from Contract Year 2, and $1,300 of the Payment from Contract Year 3.
Suppose that the Owner of the Contract wanted to make a full surrender of
the Contract in year 7 instead of a $4,500 partial withdrawal. The consequences
would be as follows:
1. In the first instance, where there were no previous cash withdrawal
payments, we know from above that the maximum free withdrawal amount
in the 7th Contract Year is $5,000. The sum of the old and new
Payments not previously liquidated is $14,000 ($2,000 from each
Contract Year). The amount subject to the withdrawal charge is thus
$9,000. The withdrawal charge on full surrender would then be $9,000
X 0.05 or $450.
2. In the second instance, where $800 had previously been withdrawn, we
know from above that the maximum free withdrawal amount in the 7th
Contract Year is $4,200. The sum of old and new Payments not
previously liquidated is $14,000 less the $800 which was previously
liquidated, or $13,200. The amount subject to the withdrawal charge
is still $9,000 ($13,200-$4,200). The withdrawal charge on full
surrender would thus be the same as in the first example.
34
<PAGE>
SUN LIFE INSURANCE AND ANNUITY COMPANY
OF NEW YORK
Annuity Service Mailing Address:
80 Broad Street
New York, New York 10004
GENERAL DISTRIBUTOR
Clarendon Insurance Agency, Inc.
One Sun Life Executive Park
Wellesley Hills, Massachusetts 02181
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
CO1NY-13 5/98
<PAGE>
PART C
OTHER INFORMATION
Item 24. FINANCIAL STATEMENTS AND EXHIBITS
(a) The following Financial Statements are included in this
Amendment to the Registration Statement:
Included in Part A:
A. Condensed Financial Information--Accumulation Unit Values.
Included in Part B:
A. Financial Statements of the Registrant:
1. Statement of Condition, December 31, 1997;
2. Statement of Operations, Year Ended December 31, 1997;
3. Statements of Changes in Net Assets, Years Ended
December 31, 1997 and 1996;
4. Notes to Financial Statements; and
5. Independent Auditors' Report.
B. Financial Statements of the Depositor:
1. Statutory Statements of Admitted Assets, Liabilities and
Capital Stock and Surplus, December 31, 1997 and 1996;
2. Statutory Statements of Operations, Years Ended December 31,
1997, 1996 and 1995;
3. Statutory Statements of Changes in Capital Stock and Surplus,
Years Ended December 31, 1997, 1996 and 1995;
4. Statutory Statements of Cash Flow, Years Ended December 31,
1997, 1996 and 1995;
5. Notes to Statutory Financial Statements; and
6. Independent Auditors' Report.
<PAGE>
(b) The following Exhibits are incorporated by reference
in this Amendment to the Registration Statement, unless
otherwise indicated:
(1) Resolution of the Board of Directors of the Depositor
dated December 3, 1984, authorizing the establishment of the
Registrant*;
(2) Not applicable;
(3) (a) Marketing Coordination Agreement between the Depositor, MFS
Fund Distributors, Inc. and Clarendon Insurance Agency, Inc.*;
(b)(i) Specimen Sales Operations and General Agent
Agreement*;
(b)(ii) Specimen Broker-Dealer Supervisory and Service Agreement*;
(b)(iii) Specimen Broker-Dealer Supervisory and Agreement*;
(4) Form of Flexible Payment Deferred Combination Variable and
Fixed Annuity Contract**;
(5) Form of Application used with the variable annuity
contract filed as Exhibit (4)**;
(6) Declaration of Intent and Charter and the By-laws of
the Depositor*;
(7) Not Applicable;
(8) Not Applicable;
(9) Previously filed;
<PAGE>
(10) Consent of Deloitte & Touche**;
(11) None;
(12) Not Applicable;
(13) Not Applicable;
(14) Not Applicable;
(15) Powers of Attorney**;
_________________
* Incorported herein by reference to Post-Effective Amendment No. 2 to the
Registration Statement on Form N-4 of the Registrant, File No. 33-41629
** Filed herewith
Item 25. DIRECTORS AND OFFICERS OF THE DEPOSITOR
Name and Principal Positions and Offices
Business Address with the Depositor
- ----------------- ----------------------
John D. McNeil Chairman and Director
150 King Street West
Toronto, Ontario
Canada M5H 1J9
Donald A. Stewart President and Director
150 King Street West
Toronto, Ontario
Canada M5H 1J9
David D. Horn Director
56 Pinckney Street
Boston, Massachusetts 02114
John S. Lane Director
150 King Street West
Toronto, Ontario
Canada M5H 1J9
Richard B. Bailey Director
500 Boylston Street
Boston, Massachusetts 02116
M. Colyer Crum Director
104 Westcliff Road
Weston, Massachusetts 02193
John G. Ireland Director
280 Steamboat Road
Greenwich, Connecticut 06830
<PAGE>
Name and Principal Positions and Offices
Business Address with the Depositor
- ------------------ -----------------------
Edward M. Lamont Director
1234 Moores Hill Road
Syosset, New York 11791
Angus A. MacNaughton Director
Metro Tower, Suite 1170
950 Tower Lane
Foster City, California 94404-2121
Peter R. O'Flinn Director
LeBouef, Lamb, Greene and MacRae
125 West 55th Street
New York, New York 10019
Fioravante G. Perrotta, Esq. Director
13 Clarke Lane
Essex, Connecticut 06426
Ralph F. Peters Director
66 Strimples Mill Road
Stockton, New Jersey
Frederick B. Whittemore Director
1221 Avenue of the Americas
New York, New York 10020
Robert P. Vrolyk Vice President, Controller
One Sun Life Executive Park and Actuary
Wellesley Hills, Massachusetts 02181
S. Caesar Raboy Senior Vice President
One Sun Life Executive Park and Director
Wellesley Hills, Massachusetts 02181
Michael A. Cohen Vice President and
80 Broad Street Regional Manager
New York, New York 10004
C. James Prieur Senior Vice President and Director
One Sun Life Executive Park
Wellesley Hills, Massachusetts 02181
L. Brock Thomson Vice President
One Sun Life Executive Park and Treasurer
Wellesley Hills, Massachusetts 02181
Margaret Sears Mead Assistant Vice President and Secretary
One Sun Life Executive Park
Wellesley Hills, Massachusetts 02181
<PAGE>
Item 26. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH
THE DEPOSITOR OR REGISTRANT
No person is directly or indirectly controlled by the Registrant. The
Registrant is a separate account of Sun Life Insurance and Annuity Company of
New York which is a wholly-owned subsidiary of Sun Life Assurance Company of
Canada (U.S.). Sun Life Assurance Company of Canada (U.S.) is an indirect
wholly-owned subsidiary of Sun Life Assurance Company of Canada.
The following is a list of all corporations directly or
indirectly controlled by or under common control with Sun Life
Assurance Company of Canada, showing the state or other sovereign
power under the laws of which each is organized and the
percentage ownership of voting securities giving rise to the control
relationship:
<PAGE>
<TABLE>
<CAPTION>
Percent of
State or Country Ownership
or Jurisdiction of Voting
of Incorporation Securities
---------------- ----------
Sun Life Assurance Company of Canada Canada 100%
- --------------------------------------------------------------------------------
<C> <S> <S>
Sun Life Assurance Company of Canada --
U.S. Operations Holdings, Inc. ................. Delaware 100%
Sun Life Assurance Company of Canada (U.K.)
Limited ........................................ United Kingdom 100%
Sun Life of Canada Investment Management Limited . Canada 100%
Sun Life of Canada Benefit Management Limited .... Canada 100%
Spectrum United Holdings, Inc..................... Canada 100%
Sun Canada Financial Co. ......................... Delaware 100%
Sun Life of Canada (U.S.) Holdings, Inc. ......... Delaware 0%*
Sun Life of Canada (U.S.) Financial Services
Holdings, Inc. ................................. Delaware 0%*
Sun Life Assurance Company of Canada (U.S.) ...... Delaware 0%**
Sun Life Insurance and Annuity Company of
New York ....................................... New York 0%**
Sun Life of Canada (U.S.) Distributors, Inc. ..... Delaware 0%****
Sun Benefit Services Company, Inc. ............... Delaware 0%****
Sun Life of Canada (U.S.) SPE 97-1, Inc. ......... Delaware 0%****
Massachusetts Financial Services Company ......... Delaware 0%***
New London Trust, F.S.B........................... Federally Chartered 0%****
Massachusetts Casualty Insurance Company.......... Massachusetts 0%****
Clarendon Insurance Agency, Inc. ................. Massachusetts 0%*****
MFS Service Center, Inc........................... Delaware 0%*****
MFS/Sun Life Series Trust ........................ Massachusetts 0%******
Sun Capital Advisers, Inc. ....................... Delaware 0%****
MFS International, Ltd. .......................... Ireland 0%*****
MFS Institutional Advisers, Inc. ................. Delaware 0%*****
MFS Fund Distributors, Inc. ...................... Delaware 0%*****
MFS Retirement Services, Inc. .................... Delaware 0%*****
Sun Life Financial Services Limited............... Bermuda 0%****
</TABLE>
- -----------------
* 100% of the issued and outstanding voting securities of
Sun Life of Canada (U.S.) Holdings, Inc. and Sun Life of
Canada (U.S.) Financial Services Holdings, Inc. is owned
by Sun Life Assurance Company of Canada -- U.S. Operations
Holdings, Inc.
** 100% of the issued and outstanding voting securities of
Sun Life Assurance Company of Canada (U.S.) Holdings, Inc.
*** 93.6% of the issued and outstanding voting securities of
Massachusetts Financial Services Company is owned by
Sun Life of Canada (U.S.) Financial Services Holdings, Inc.
**** 100% of the issued and outstanding voting securities of
New London Trust, F.S.B., Sun Life Insurance and Annuity
Company of New York, Sun Life of Canada (U.S.) Distributors,
Inc., Sun Benefit Services Company, Inc., Sun Life of Canada
(U.S.) SPE 97-1, Inc., Clarendon Insurance Agency, Inc.,
Sun Capital Advisers, Inc., Sun Life Financial Services
Limited and Massachusetts Casualty Insurance Company is
owned by Sun Life Assurance Company of Canada (U.S.).
***** 100% of the issued and outstanding voting securities of
MFS Service Center, Inc., MFS International, Ltd., MFS
Institutional Advisers, Inc., MFS Fund Distributors, Inc.,
and MFS Retirement Services, Inc. is owned by Massachusetts
Financial Services Company.
****** 100% of the issued and outstanding voting securities of MFS/Sun
Life Series Trust is owned by separate accounts of Sun Life
Assurance Company of Canada (U.S.) and Sun Life Insurance and
Annuity Company of New York.
<PAGE>
Omitted from the list are subsidiaries of Sun Life Assurance
Company of Canada which, considered in the aggregate, would not
constitute a "significant subsidiary" (as that term is defined in
Rule 8b-2 under Section 8 of the Investment Company Act of 1940)
of Sun Life Assurance Company of Canada.
None of the companies listed is a subsidiary of the
Registrant, therefore the only financial statements being filed
are those of Sun Life Insurance and Annuity Company of New York.
Item 27. NUMBER OF CONTRACT OWNERS
As of February 28, 1998 there were 181 qualified contracts, all of
which were established pursuant to qualified plans.
Item 28. INDEMNIFICATION
Article 5, Section 5.6 of the By-laws of Sun Life Insurance
and Annuity Company of New York, a copy of which was filed as
Exhibit A.(6)(b) to the Registration Statement of the Registrant
on Form N-8B-2 (File No. 811-4184), provides for indemnification
of directors, officers and employees of Sun Life Insurance and
Annuity Company of New York.
Insofar as indemnification for liability arising under the
Securities Act of 1933 may be permitted to directors, officers
and controlling persons of Sun Life Insurance and Annuity Company of
New York pursuant to the certificate of incorporation, by-laws,
or otherwise, Sun Life (N.Y.) has been advised that in the opinion
of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by Sun Life
(N.Y.) of expenses incurred or paid by a director, officer, or
controlling person of Sun Life (N.Y.) in the successful defense
of any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities
being registered, Sun Life (N.Y.) will, unless in the opinion of
their counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by them is against public
policy as expressed in the Act and will be governed by the final
adjudication of such issue.
<PAGE>
Item 29. PRINCIPAL UNDERWRITERS
(a) Clarendon Insurance Agency, Inc., which is a wholly-
owned subsidiary of Sun Life Assurance Company of Canada (U.S.),
acts as general distributor for the Registrant, Sun Life of Canada
(U.S.) Variable Accounts C, D, E, F and G, Sun Life (N.Y.)
Variable Accounts B and C and Money Market Variable Account, High
Yield Variable Account, Capital Appreciation Variable Account,
Government Securities Variable Account, World Governments
Variable Account, Total Return Variable Account and Managed Sectors
Variable Account.
Name and Principal Positions and Offices
Business Address* with Underwriter
- ------------------ ----------------------
Jane M Mancini......... President and Director
S. Caesar Raboy........ Director
C. James Prieur........ Director
Robert P. Vrolyk....... Director
L. Brock Thomson....... Vice President and Treasurer
Roy P. Creedon......... Secretary
Margaret Sears Mead.... Assistant Secretary
Donald E. Kaufman...... Vice President
Cynthia M. Orcutt...... Vice President
Laurie Lennox.......... Vice President
Peter A. Marion........ Tax Officer
- -----------------
* The principal business address of all directors and officers
of the principal underwriter except Ms. Mancini and Ms. Lennox
is One Sun Life Executive Park, Wellesley Hills, Massachusetts
02181. The principal business address of Ms. Mancini and Ms.
Lennox is One Copley Place Boston, Massachusetts 02116.
(c) Inapplicable.
Item 30. LOCATION OF ACCOUNTS AND RECORDS
Accounts, books and other documents required to be
maintained by Section 31(a) of the Investment Company Act of 1940
and the Rules promulgated thereunder are maintained by Sun Life
Insurance and Annuity Company of New York, in whole or in part,
at its Home Office at 80 Broad Street, New York, New York 10004,
or at the offices of Sun Life Assurance Company of Canada (U.S.)
at One Copley Place, Boston Massachusetts 02116 and One Sun Life
Executive Park, Wellesley Hills, Massachusetts 02181, or at the
offices of Clarendon Insurance Agency, Inc. at One Sun Life
Executive Park, Wellesley Hills, Massachusetts 02116.
Item 31. MANAGEMENT SERVICES
Not applicable.
Item 32. UNDERTAKINGS
Representation with respect to Section 26(e) of the Investment Company
Act of 1940.
Sun Life Insurance and Annuity Company of New York represents
that the fees and charges deducted under the contract, in the aggregate, are
resasonable in relation to the services rendered, the expenses expected to be
incurred and the risks assumed by the insurance company.
<PAGE>
SIGNATURES
As required by the Securities Act of 1933 and the Invest-
ment Company Act of 1940, the Registrant certifies that it meets
all of the requirements for effectiveness of this Amendment to its
Registration Statement pursuant to Rule 485(b) under the Securities
Act of 1933 and has caused this Amendment to its Registration Statement
to be signed on its behalf in the City of Boston and Commonwealth of
Massachusetts on the 22nd day of April, 1998.
Sun Life (N.Y.)
Variable Account A
(Registrant)
Sun Life Insurance and Annuity
Company of New York
(Depositor)
By:* /s/ JOHN D. McNEIL
-------------------------
John D. McNeil
Chairman
Attest: /s/ MARGARET HANKARD
-----------------------
Margaret Hankard
Senior Associate Counsel
As required by the Securities Act of 1933, this Amendment to
the Registration Statement has been signed below by the following
persons in the capacities with the Depositor, Sun Life Insurance
and Annuity Company of New York, and on the dates indicated.
Signatures Title Date
---------- ----- ----
Chairman and
Director
(Principal
* /s/ JOHN D. McNEIL Executive Officer) April 22, 1998
- -----------------------------
John D. McNeil
- -----------------------------
* By Margaret Hankard pursuant to Power of Attorney filed herewith.
<PAGE>
Signatures Title Date
---------- ----- ----
Vice President, Controller
and Actuary (Principal
Financial &
* /s/ ROBERT P. VROLYK Accounting Officer) April 22, 1998
- -------------------------------
Robert P. Vrolyk
President
* /s/ DONALD A. STEWART and Director April 22, 1998
- -------------------------------
Donald A. Stewart
* /s/ RICHARD B. BAILEY Director April 22, 1998
- -------------------------------
Richard B. Bailey
* /s/ DAVID D. HORN Director April 22, 1998
- -------------------------------
David D. Horn
* /s/ JOHN S. LANE Director April 22, 1998
- -------------------------------
John S. Lane
* /s/ JOHN G. IRELAND Director April 22, 1998
- -------------------------------
John G. Ireland
* /s/ EDWARD M. LAMONT Director April 22, 1998
- -------------------------------
Edward M. Lamont
* /s/ FIORAVANTE G. PERROTTA Director April 22, 1998
- --------------------------------
Fioravante G. Perrotta
* /s/ RALPH F. PETERS Director April 22, 1998
- --------------------------------
Ralph F. Peters
* /s/ S. CAESAR RABOY Director April 22, 1998
- --------------------------------
S. Caesar Raboy
- -----------------------------
* By Margaret Hankard pursuant to Power of Attorney filed herewith.
<PAGE>
Signatures Title Date
---------- ----- ----
Director
- -------------------------------
Peter R. O'Flinn
* /s/ ANGUS A. MacNAUGHTON Director April 22, 1998
- -------------------------------
Angus A. MacNaughton
* /s/ M. COLYER CRUM Director April 22, 1998
- -------------------------------
M. Colyer Crum
* /s/ FREDERICK B. WHITTEMORE Director April 22, 1998
- -------------------------------
Frederick B. Whittemore
* /s/ C. JAMES PRIEUR Senior Vice President April 22, 1998
- ------------------------------- and Director
C. James Prieur
- -----------------------------
* By Margaret Hankard pursuant to Power of Attorney filed herewith.
<PAGE>
SunLife Sun Life Insurance and Annuity Company of New York
(N.Y.) A Wholly-Owned Subsidiary of Sun Life Assurance
Company of Canada (U.S.)
Home Office: Annuity Service Mailing Address:
67 Broad Street 67 Broad Street
New York, New York 10004 25th Floor
New York, New York 10004
C[LOGO]MPASS-I
Sun Life Insurance and Annuity Company of New York (the "Company") will
make monthly annuity payments to the Annuitant commencing on the Annuity
Commencement Date, by applying the adjusted value of the Accumulation Account of
the Contract in accordance with the Settlement Provisions. If the Annuitant dies
while the Contract is in effect and before the Annuity Commencement Date, the
Company will pay a death benefit to the Beneficiary upon receipt of due proof of
death of the Annuitant.
All payments will be made to the persons and in the manner set forth in
this Contract. Provisions and endorsements printed or written by the Company on
the following pages form part of the Contract.
Signed by the Company at its Home Office, New York, New York on the Issue
Date.
/s/ John D. McNeil /s/ Bonnie S. Angus
John D. McNeil Bonnie S. Angus
President Secretary
Flexible Payment Deferred Combination Variable and Fixed Annuity Contract
Sun Life (N.Y.) Variable Account A
Nonparticipating
ALL PAYMENTS AND VALUES PROVIDED BY THIS CONTRACT WHEN BASED ON THE
INVESTMENT EXPERIENCE
OF A VARIABLE ACCOUNT ARE VARIABLE AND ARE NOT GUARANTEED AS TO DOLLAR AMOUNT
USE OF CONTRACT. This Contract is available for retirement and deferred
compensation plans which qualify for special tax treatment under Internal
Revenue Code Sections 401, 408(a), 408(c) and 457.
RIGHT TO RETURN CONTRACT.
Please read this Contract. If not satisfied with it, the Owner may, within 10
days after its receipt, return it by delivering or mailing it to the Annuity
Service Mailing Address indicated above. Immediately upon receipt of the
Contract by the Company, the Contract will be deemed void as though it had never
been applied for, and the Purchase Payment(s) paid will be refunded to the
Owner.
The smallest annual rate of investment return which would have to be earned on
the assets of the Variable Account so that the dollar amount of variable annuity
payments will not decrease is 4.0%.
Explicit charges against the assets of the
Variable Account are a mortality risk charge and an expense risk charge which
are assessed at an effective annual rate 0.80% and 0.50%, respectively, and
deducted from the Variable Account at the end of each Valuation Period.
IMPORTANT NOTICE
It is not necessary to employ any person to collect any payment or benefit
provided by this Contract. When you require help or advice, write directly to
the Company at its Annuity Service Mailing Address. This Contract contains many
benefits. In your own best interest you should consult the Company if anyone
advises you to surrender this Contract or to replace it with a new contract.
NYVA85Q-MFS-1
<PAGE>
TABLE OF CONTENTS
Page
- --------------------------------------------------------------------------------
Contract Specifications Page 4
- --------------------------------------------------------------------------------
Application
- --------------------------------------------------------------------------------
Definitions 5
- --------------------------------------------------------------------------------
Fixed and Variable Accounts 6
Fixed Account 6
Variable Account and Sub-Accounts 6
Ownership of Assets 7
Investments of the Sub-Accounts 7
Substitution 7
- --------------------------------------------------------------------------------
Purchase Payments 7
Payments 7
Amount 7
Contract Continuation 7
Net Purchase Payments and Their Allocation 8
Limitations on Allocations to Fixed Account 8
- --------------------------------------------------------------------------------
Contract Values During Accumulation Period 8
Accumulation Account 8
Crediting Variable Accumulation Units 8
Variable Accumulation Unit Value 8
Variable Accumulation Value 9
Net Investment Factor 9
Crediting Fixed Accumulation Units 9
Fixed Accumulation Unit Value 9
Fixed Accumulation Value 10
Conversion of Accumulation Units 10
Contract Maintenance Charge 10
- --------------------------------------------------------------------------------
Cash Withdrawals and Withdrawal Charges 11
Cash Withdrawals 11
Withdrawal Charges 11
- --------------------------------------------------------------------------------
Death Benefit 12
Death Benefit Provided by the Contract 12
Election and Effective Date of Election 12
Payment of Death Benefit 12
Amount of Death Benefit 13
- --------------------------------------------------------------------------------
Settlement Provisions 13
General 13
Election and Effective Date of Election 13
Determination of Amount 14
Effect of Annuity Commencement Date on Accumulation Account 14
Annuity Commencement Date 14
Fixed Annuity Payments 14
2
<PAGE>
TABLE OF CONTENTS - (Continued)
Page
Settlement Provisions (cont.)
Variable Annuity Payments 14
Annuity Unit Value 15
Exchange of Annuity Units 15
Contract Maintenance Charge 15
Description of Annuity Options 15
Annuity Payment Rates 16
- --------------------------------------------------------------------------------
Ownership Provisions 18
Owner 18
Change of Ownership 18
Voting of Fund Shares 18
Periodic Reports 19
- --------------------------------------------------------------------------------
Beneficiary Provision 19
Designation and Change of Beneficiary 19
- --------------------------------------------------------------------------------
General Provisions 19
Contract 19
Currency 19
Determination of Values 19
Guarantees 19
Incontestability 20
Misstatement of Age 20
Modification 20
Nonparticipating 20
Payments and Values 20
Payments by the Company 20
Proof of Age 20
Proof of Survival 20
Splitting Units 20
- --------------------------------------------------------------------------------
Table of Fixed Accumulation Account Values 21
- --------------------------------------------------------------------------------
3
<PAGE>
DEFINITIONS
ACCUMULATION ACCOUNT: An account established for the Contract to which Net
Purchase Payments are credited in the form of Accumulation Units.
ACCUMULATION PERIOD: The period before the Annuity Commencement Date and
during the lifetime of the Annuitant.
ACCUMULATION UNIT: A unit of measure used in the calculation of the value
of the Accumulation Account. There are two types of Accumulation Units:
Variable Accumulation Units and Fixed Accumulation Units.
ANNUITANT: The person or persons named in the Application and on whose
life the first annuity payment is to be made. If more than one person is so
named, due to the Owner's designation of a "Co-Annuitant", all provisions of the
Contract which are based on the death of the "Annuitant" will be based on the
date of death of the last survivor of the persons so named. By example, the
death benefit of the Contract will become due only upon the death, prior to the
Annuity Commencement Date, of the last survivor of the persons so named.
Collectively, these persons are referred to in this Contract as "Annuitants."
Each Annuitant is as specified in the Application, unless changed.
ANNUITY COMMENCEMENT DATE: The date on which the first annuity payment is
to be made. It is the date specified in the Application, unless changed.
ANNUITY OPTION: The method for making annuity payments. The Annuity
Option is specified in the Application, unless changed.
ANNUITY UNIT: A unit of measure used in the calculation of the amount of
the second and each subsequent variable annuity payment from the Variable
Account.
BENEFICIARY: The person who has the right to the death benefit set forth
in the Contract. The Beneficiary is specified in the Application, unless
changed.
CONTRACT YEARS AND CONTRACT ANNIVERSARIES: The first Contract Year shall
be the period of twelve (12) months plus a part of a month as measured from the
Issue Date to the first day of the calendar month which follows the calendar
month of issue. All Contract Years and Anniversaries thereafter shall be twelve
(12) month periods based upon such first day of the calendar month which follows
the calendar month of issue. If, by example, the Issue Date of this Contract is
in March, the first Contract Year will be determined from the Issue Date but
will end on the last day of March in the following year: all other Contract
Years and all Contract Anniversaries will be measured from April 1.
DUE PROOF OF DEATH: An original certified copy of an official death
certificate, an original certified copy of a decree of a Court of competent
jurisdiction as to the finding of death, or any other proof satisfactory to the
Company.
FIXED ACCOUNT: The Fixed Account consists of all assets of the Company
other than those allocated to a separate account of the Company.
FIXED ANNUITY: An annuity based on life contingencies with payments which
do not vary as to dollar amount.
INITIAL ANNUAL INTEREST RATE PERCENTAGE: The annual rate of increase,
during the first Contract Year, of Fixed Accumulation Unit Values.
ISSUE DATE: The date on which the Contract becomes effective.
OWNER: The person, persons or entity entitled to the ownership rights
stated in the Contract and in whose name or names the Contract is issued. The
Owner must be the trustee or custodian of a retirement plan which meets the
requirements of Section 401, Section 408 (excluding Section 408(b)), or Section
457 of the Internal Revenue Code. The Owner is specified in the Application,
unless changed.
PAYEE: The recipient of annuity payments under the Contract. The term
includes an Annuitant or a Beneficiary who becomes entitled to benefits upon the
death of the Annuitant.
5
<PAGE>
PURCHASE PAYMENT (PAYMENT): An amount paid to the Company by the Owner or
on the Owner's behalf as consideration for the benefits provided by the
Contract.
SUB-ACCOUNT: That portion of the Variable Account which invests in shares
of a specific mutual fund.
SUCCESSOR BENEFICIARY: The person or persons named to become the
Beneficiary if the Beneficiary is not alive. The Successor Beneficiary is
specified in the Application, unless changed.
SUCCESSOR OWNER: The person, persons or entity named to become the Owner
if the Owner dies prior to the Annuity Commencement Date. The Owner's right to
name a Successor Owner may be restricted under the provisions of the retirement
plan or deferred compensation plan for which this Contract is issued. The
Successor Owner is specified in the Application, unless changed.
VALUATION PERIOD: The period of time from one determination of
Accumulation Unit and Annuity Unit values to the next subsequent determination
of these values. Such determination shall be made as of the close of the New
York Stock Exchange on each day the Exchange is open for trading and on such
other days on which there is a sufficient degree of trading in the portfolio
securities of the Variable Account so that the values of the Variable Account's
Accumulation Units and Annuity Units might be materially affected.
VARIABLE ACCOUNT: A separate account of the Company described in this
Contract consisting of assets set aside by the Company, the investment
performance of which is kept separate from that of the general assets of the
Company.
VARIABLE ANNUITY: An annuity based on life contingencies with payments
which vary as to dollar amount in relation to the investment performance of
specified Sub-Accounts of the Variable Account.
FIXED AND VARIABLE ACCOUNTS
Fixed Account
The Fixed Account consists of all assets of the Company other than those
allocated to any separate account of the Company.
Variable Account and Sub-Accounts
The Variable Account to which the variable accumulation values and
variable annuity payments, if any, under this Contract relate is entitled "Sun
Life (N.Y.) Variable Account A". It was established by the Company on December
3, 1984, pursuant to a resolution of its Board of Directors and is registered as
a unit investment trust under the Investment Company Act of 1940. That portion
of the assets of the Variable Account equal to the reserves and other contract
liabilities with respect to the Variable Account shall not be chargeable with
liabilities arising out of any other business the Company may conduct.
The assets of the Variable Account are divided into Sub-Accounts. Each
Sub-Account invests in shares of a specific mutual fund. The values of the
Variable Accumulation Units and the Annuity Units described in this Contract
reflect the investment performance of the Sub-Accounts.
At the Company's election and subject to the prior approval of the
Superintendent of Insurance of the State of New York, and to any necessary vote
by persons having the right to give instructions with respect to the voting of
mutual fund shares held by the Sub-Accounts, the Variable Account may be
operated as a management company under the Investment Company Act of 1940 or it
may be deregistered under the Investment Company Act of 1940 in the event
registration is no longer required. In the event of any change in the operation
of the Variable Account pursuant to this provision, the Company, subject to the
prior approval of the Superintendent of Insurance of the State of New York, may
make appropriate endorsement in this and other contracts providing benefits
which vary in accordance with the investment performance of the Sub-Accounts to
reflect the change and take such other action as may be necessary and
appropriate to effect the change.
6
<PAGE>
Ownership of Assets
The Company shall have exclusive and absolute ownership and control of its
assets, including all assets of the Sub-Accounts.
Investments of the Sub-Accounts
Any amounts allocated to a Sub-Account will be used to purchase shares of
a mutual fund ("Fund") as specified on the Application or as subsequently
changed, at the net asset value next computed following receipt by the Company
of the Purchase Payment to which the particular amount allocated is
attributable. The Funds available on the Issue Date are shown on the Contract
Specifications Page; more Funds may be subsequently added. The Funds are
open-end investment companies or "mutual funds" registered under the Investment
Company Act of 1940. Any and all distributions made by a Fund with respect to
the Fund shares held by a Sub-Account will be reinvested to purchase additional
shares of that Fund at net asset value. Deductions from the Sub-Accounts will,
in effect, be made by redeeming a number of Fund shares at net asset value equal
in total value to the amount to be deducted. The Sub-Accounts will be fully
invested at all times.
Substitution
Shares of any of the Funds may not always be available for purchase by the
Sub-Accounts or the Company may decide that further investment in any such
Fund's shares is no longer appropriate in view of the purposes of the Variable
Account. In either event, shares of another registered open-end investment
company may be substituted both for Fund shares already purchased by the
Sub-Account and/or as the security to be purchased in the future, provided that
any such substitution has been approved by the Securities and Exchange
Commission and the Superintendent of Insurance of the State of New York. In the
event of any substitution pursuant to this provision, the Company may make
appropriate endorsement in this and other contracts providing benefits which
vary in accordance with the investment performance of the Sub-Accounts to
reflect the substitution.
PURCHASE PAYMENTS
Payments
All Purchase Payments are to be paid to the Company at its Annuity Service
Mailing Address. Unless the Owner has surrendered the Contract, Purchase
Payments may be made at any time during the life of the Annuitant and before the
Annuity Commencement Date.
Amount
The Initial Purchase Payment is shown on the Contract Specifications Page.
Subsequent Payments may vary. Each Purchase Payment must be at least $25. The
Company will not accept Purchase Payments which, on an annualized basis, are
less than $300 for the first Contract Year. In addition, the prior approval of
the Company is required before the Company will accept a Purchase Payment which
would cause the value of the Accumulation Account to exceed $1,000,000; if the
value of an Accumulation Account exceeds $1,000,000, no additional Purchase
Payments will be accepted without the prior approval of the Company.
Contract Continuation
The Contract shall automatically be continued in full force during the
lifetime of the Annuitant until the Annuity Commencement Date or until it is
surrendered. The Contract will not be in default, even if no additional Purchase
Payments are made.
7
<PAGE>
Net Purchase Payments and Their Allocation
The Net Purchase Payment is that portion of a Purchase Payment which
remains after deduction of any applicable premium or similar tax. Each Net
Purchase Payment will be allocated, upon receipt by the Company at its Annuity
Service Mailing Address, either to Sub-Accounts or to the Fixed Account or to
both Sub-Accounts and the Fixed Account in accordance with the allocation
factors specified in the Application or as subsequently changed.
The allocation factors for Net Purchase Payments between the Fixed Account
and the Variable Account and among the Sub-Accounts of the Variable Account may
be changed by the Owner at any time by giving written notice of the change to
the Company at its Annuity Service Mailing Address. Any change will take effect
with the first Purchase Payment received with or after the receipt of the notice
of the change by the Company and will continue in effect until subsequently
changed.
Limitations on Allocations to Fixed Account
The amount of Net Purchase Payments which can be allocated to the Fixed
Account in any Contract Year may not exceed $50,000. This limit will be reduced
by the amount of all conversions (as described below in the section entitled
"Conversion of Accumulation Units") from the Variable Account to the Fixed
Account in the same Contract Year.
If the limit described in the previous paragraph is reached during a
Contract Year then no additional allocations or conversions to the Fixed Account
will be accepted in that Contract Year and, unless instructions to the contrary
are received from the Owner, the Company will, temporarily for the balance of
the Contract Year, allocate any Net Purchase Payments which would otherwise have
been allocated to the Fixed Account to a Sub-Account of the Variable Account
which invests only in shares of a mutual fund which invests exclusively in
short-term securities issued or guaranteed by the U.S. Treasury or agencies or
instrumentalities of the U.S. government.
CONTRACT VALUES DURING ACCUMULATION PERIOD
Accumulation Account
The Company will establish an Accumulation Account for the Contract and
will maintain the Accumulation Account during the Accumulation Period. The
Accumulation Account Value for any Valuation Period is equal to the Variable
Accumulation Value, if any, plus the Fixed Accumulation Value, if any, for that
Valuation Period.
Crediting Variable Accumulation Units
Upon receipt of a Purchase Payment by the Company at its Annuity Service
Mailing Address, all or that portion, if any, of the Net Purchase Payment which
is allocated to Sub-Accounts will be credited to the Accumulation Account in the
form of Variable Accumulation Units. The number of particular Variable
Accumulation Units to be credited is determined by dividing the dollar amount
allocated to the particular Sub-Account by the Variable Accumulation Unit Value
for the particular Sub-Account for the Valuation Period during which the
Purchase Payment is received by the Company at its Annuity Service Mailing
Address.
Variable Accumulation Unit Value
The Variable Accumulation Unit Value for each Sub-Account was established
at $10.00 for the first Valuation Period of the particular Sub-Account. The
Variable Accumulation Unit Value for the particular Sub-Account for any
subsequent Valuation Period is determined by methodology which is the
mathematical equivalent of multiplying the Variable Accumulation Unit Value for
the particular Sub-Account for the immediately preceding Valuation Period by
the Net Investment Factor for the particular
8
<PAGE>
Sub-Account for such subsequent Valuation Period. The Variable Accumulation Unit
Value for each Sub-Account for any Valuation Period is the value determined as
of the end of the particular Valuation Period and may increase, decrease or
remain constant from Valuation Period to Valuation Period.
Variable Accumulation Value
The Variable Accumulation Value of the Contract, if any, for any Valuation
Period is equal to the sum of the Variable Accumulation Values of each
Sub-Account credited to the Accumulation Account for such Valuation Period. The
Variable Accumulation Value of each Sub-Account is determined by multiplying the
number of Variable Accumulation Units, if any, credited to each Sub-Account by
the Variable Accumulation Unit Value of the particular Sub-Account for such
Valuation Period.
Net Investment Factor
The Net Investment Factor is an index applied to measure the investment
performance of a Sub-Account from one Valuation Period to the next. The Net
Investment Factor may be greater, or less than or equal to one; therefore the
value of a Variable Accumulation Unit may increase, decrease or remain the same.
The Net Investment Factor for any Sub-Account for any Valuation Period 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 Fund share held in the Sub-Account
determined as of the end of the Valuation Period, plus
(2) the per share amount of any dividend or other distribution
declared by the Fund issuing the shares held in the Sub-Account 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 the Company during the Valuation Period which are
determined by the Company to be attributable to the operation of the
Sub-Account;
(b) is the net asset value of a Fund share held in the Sub-Account
determined as of the end of the preceding Valuation Period; and
(c) is the risk charge factor determined by the Company for the Valuation
Period to reflect the charge for assuming the mortality and expense risks.
The risk charge factor for any Valuation Period is equal to the daily risk
charge factor multiplied by the number of 24 hour periods in the Valuation
Period. The daily risk charge factor will be determined by the Company annually,
but in no event may it exceed the Maximum Daily Risk Charge Factor specified on
the Contract Specifications Page.
Crediting Fixed Accumulation Units
Upon receipt of a Purchase Payment by the Company at its Annuity Service
Mailing Address, all or that portion, if any, of the Net Purchase Payment which
is allocated to the Fixed Account will be credited to the Accumulation Account
in the form of Fixed Accumulation Units. The number of Fixed Accumulation Units
to be credited is determined by dividing the dollar amount allocated to the
Fixed Account by the Fixed Accumulation Unit Value for the Contract for the
Valuation Period during which the Purchase Payment is received by the Company at
its Annuity Service Mailing Address.
Fixed Accumulation Unit Value
A Fixed Accumulation Unit Value is established at $10.00 for the first
Valuation Period of the calendar month in which the Issue Date occurs, and will
increase for each successive Valuation Period as
9
<PAGE>
interest is accrued. All contracts whose Issue Dates occur in the same calendar
month and which are issued at a particular rate of interest, as specified in
advance by the Company from time to time, will use the same series of Fixed
Accumulation Unit Values throughout their first Contract Year.
At the first Contract Anniversary, the Fixed Accumulation Units credited
to the Accumulation Account will be exchanged for a second type of Fixed
Accumulation Unit with an equal aggregate value. The value of this second type
of Fixed Accumulation Unit will increase for each Valuation Period during each
Contract Year as interest is accrued at a rate which shall have been determined
by the Company prior to the first day of each Contract Year.
The rate at which interest accrues to the Fixed Accumulation Value of the
Contract will be determined by the Company, at its discretion, before the
beginning of each Contract Year; however, this rate will not be less than 4% per
annum compounded annually. Once set, the rate applicable to the Contract may not
be changed by the Company for the balance of the Contract Year. Additional
Payments made during the Contract Year will be credited with interest for the
balance of the Contract Year at the rate applicable at the beginning of that
Contract Year. The Fixed Accumulation Unit Value for the Contract for any
Valuation Period is the value determined as of the end of such period.
Fixed Accumulation Value
The Fixed Accumulation Value of the Contract, if any, for any Valuation
Period is equal to the value of the Fixed Accumulation Units credited to the
Accumulation Account for such Valuation Period. The Fixed Accumulation Value is
determined by multiplying the number of Fixed Accumulation Units, if any,
credited to the Accumulation Account by the Fixed Accumulation Unit Value for
such Valuation Period.
Conversion of Accumulation Units
During the Accumulation Period the Owner may, upon written request
received by the Company at its Annuity Service Mailing Address, convert the
value of a designated number of Fixed Accumulation Units then credited to the
Accumulation Account into Variable Accumulation Units of particular Sub-Accounts
having an equal aggregate value, or convert the value of a designated number of
Variable Accumulation Units then credited to the Accumulation Account into other
Variable Accumulation Units and/or Fixed Accumulation Units having an equal
aggregate value. These conversions shall, however, be subject to the following
conditions: (1) conversions involving Fixed Accumulation Units may be made only
during the forty-five (45) day period before and the forty-five (45) day period
after each Contract Anniversary; (2) not more than eight (8) conversions may be
made in any Contract Year; and (3) the value of Accumulation Units converted may
not be less than $1,000 unless all of the Fixed Accumulation Units or Variable
Accumulation Units credited to the Accumulation Account are being converted. In
addition, these conversions shall be subject to such terms and conditions as may
be imposed by each Fund. Any conversion shall be made using the Accumulation
Unit Values for the Valuation Period during which the request for conversion is
received by the Company at its Annuity Service Mailing Address.
Contract Maintenance Charge
Prior to the Annuity Commencement Date, at the end of each Contract Year,
the Company will deduct from the value of the Accumulation Account a contract
maintenance charge of $30 to reimburse it for administrative expenses relating
to the Contract, the Fixed Account, the Variable Account and the Sub-Accounts.
The contract maintenance charge will be deducted in equal amounts from the Fixed
Account and each Sub-Account in which the Owner has Accumulation Units on the
Contract Anniversary. If the Contract is surrendered for the full value of the
Accumulation Account on other than the Contract Anniversary, the contract
maintenance charge will be deducted in full at the time of such surrender. In no
event will the portion of the contract maintenance charge that is deducted from
the Fixed Account cause the Contract's Fixed Accumulation Value (adjusted for
any cash withdrawals) to increase by less than four percent (4%) per annum.
10
<PAGE>
CASH WITHDRAWALS AND WITHDRAWAL CHARGES
Cash Withdrawals
At any time before the Annuity Commencement Date and during the lifetime
of the Annuitant, the Owner may elect to receive a cash withdrawal payment from
the Company by filing with the Company a written election in such form as the
Company may require. Any such election shall specify the amount of the cash
withdrawal payment and will be effective on the date that it is received by the
Company at its Annuity Service Mailing Address. For withdrawals in excess of
$5,000, the signature(s) of the Owner(s) must be guaranteed by a member firm of
the New York, American, Boston, Midwest, Philadelphia, or Pacific Stock
Exchange, or by a commercial bank (not a savings bank), which is a member of the
Federal Deposit Insurance Corporation, or, in certain cases, by a member firm of
the National Association of Securities Dealers, Inc. which has entered into an
appropriate agreement with the Company. In some cases (for example, requests by
a corporation, partnership, agent, fiduciary, or surviving joint owner), the
Company will require additional documentation of a customary nature.
The amount of the cash withdrawal payment may be equal to the total value
of the Accumulation Account at the end of the Valuation Period during which the
election becomes effective less the contract maintenance charge and any
withdrawal charge which applies (a "full surrender"), or it may be for a lesser
amount (a "partial withdrawal"). If a partial withdrawal is requested which
would leave an Accumulation Account value of less than the contract maintenance
charge, then such partial withdrawal will be treated as a full surrender.
The cash withdrawal payment will result in the cancellation of
Accumulation Units with an aggregate value equal to the dollar amount of the
cash withdrawal payment plus, if applicable, the contract maintenance charge and
any withdrawal charge. Unless instructed to the contrary, the Company will
cancel Fixed Accumulation Units and Variable Accumulation Units of the
particular Sub-Accounts in the same proportion that the total value of Fixed
Accumulation Units and Variable Accumulation Units of the particular
Sub-Accounts then credited to the Accumulation Account bear to the value of the
Accumulation Account at the end of the Valuation Period during which the
election becomes effective. Any cash withdrawal payment generally will be paid
within seven (7) days from the date the election becomes effective, except as
the Company may be permitted to defer any such payment of amounts withdrawn from
the Variable Account in accordance with the Investment Company Act of 1940. The
Company reserves the right to defer the payment of amounts withdrawn from the
Fixed Account for a period not to exceed six (6) months from the date written
request for such withdrawal is received by the Company at its Annuity Service
Mailing Address.
Withdrawal Charges
If a cash withdrawal payment is made, a withdrawal charge may be assessed
by the Company. The amount of any withdrawal charge is determined as follows:
Old Payments, new Payments and accumulated value: With respect to a
particular Contract Year, "new Payments" are those Payments made in that
Contract Year or in the four immediately preceding Contract Years; "old
Payments" are those Payments not defined as new Payments; and "accumulated
value" is the value of the Accumulation Account less the sum of old and
new Payments.
Order of liquidation: For purposes of a full surrender or partial
withdrawal, the oldest previously unliquidated Payment will be deemed to
have been liquidated first, then the next oldest, and so forth. Once all
old and new Payments have been withdrawn, additional amounts withdrawn
will be attributed to accumulated value.
Maximum free withdrawal amount: The maximum amount that can be
withdrawn without a withdrawal charge in a Contract Year is equal to the
sum of: (a) any old Payments not already liquidated; and (b) 10% of any
new Payments, irrespective of whether these new Payments have been
liquidated.
11
<PAGE>
Amount subject to withdrawal charge: On a particular partial
withdrawal or full surrender, the amount subject to a withdrawal charge
will be the excess, if any, of (a) amounts liquidated from old and new
Payments (as specified in the "order of liquidation" section above) over
(b) the remaining maximum free withdrawal amount at the time of the
partial withdrawal or surrender.
Amount of withdrawal charge: The amount of the withdrawal charge is
equal to (a) minus (b) where (a) is the amount subject to a withdrawal
charge, if any, divided by 0.95, and (b) is the amount subject to a
withdrawal charge, if any.
DEATH BENEFIT
Death Benefit Provided by the Contract
If the Annuitant dies while this Contract is in effect and before the
Annuity Commencement Date, the Company, upon receipt of due proof of death of
the Annuitant, will pay a death benefit to the Beneficiary in accordance with
this "Death Benefit" provision. If there is no designated Beneficiary living on
the date of death of the Annuitant, the Company will pay the death benefit upon
receipt of due proof of the death of both the Annuitant and the designated
Beneficiary in one sum to the Owner, or, if the Annuitant was the Owner, to the
estate of the Owner/Annuitant. If the death of the Annuitant occurs on or after
the Annuity Commencement Date, no death benefit will be payable under the
Contract except as may be provided under the form of annuity elected.
Election and Effective Date of Election
During the lifetime of the Annuitant and prior to the Annuity Commencement
Date, the Owner may elect to have the value of the Accumulation Account applied
under one or more of the Annuity Options in accordance with the Settlement
Provisions to effect a Variable Annuity or a Fixed Annuity or a combination of
both for the Beneficiary as Payee after the death of the Annuitant. This
election may be made or subsequently revoked by filing with the Company a
written election or revocation of an election in such form as the Company may
require. Any written election or revocation of an election of a method of
settlement of the death benefit by the Owner will become effective on the date
it is received by the Company at its Annuity Service Mailing Address. If no
election of a method of settlement of the death benefit by the Owner is in
effect on the date of death of the Annuitant, the Beneficiary may elect (a) to
receive the death benefit in the form of a cash payment in which event the
Accumulation Account will be cancelled, or (b) to have the value of the
Accumulation Account applied under one or more of the Annuity Options in
accordance with the Settlement Provisions to effect, on the Annuity Commencement
Date determined in the section "Payment of Death Benefit" below, a Variable
Annuity or a Fixed Annuity or a combination of both for the Beneficiary as
Payee. This election may be made by filing with the Company a written election
in such form as the Company may require. Any written election of a method of
settlement of the death benefit by the Beneficiary will become effective on the
later of: (a) the date the election is received by the Company at its Annuity
Service Mailing Address; or (b) the date due proof of the death of the Annuitant
and any required release or consent from any inheritance taxing authority is
received by the Company at its Annuity Service Mailing Address. If a written
election by the Beneficiary is not received by the Company within sixty (60)
days following the date due proof of the death of the Annuitant and any required
release or consent from any inheritance taxing authority is received by the
Company at its Annuity Service Mailing Address, the Beneficiary shall be deemed
to have elected a cash payment as of the last day of the sixty (60) day period.
Payment of Death Benefit
If the death benefit is to be paid in cash to the Beneficiary, payment
will be made within seven (7) days of the date the election becomes effective or
is deemed to become effective, except as the Company may be permitted to defer
any such payment of amounts derived from the Variable Account in accordance with
the Investment Company Act of 1940. If the death benefit is to be paid in one
sum to
12
<PAGE>
the Owner, or to the estate of the deceased Annuitant, payment will be made
within seven (7) days of the date due proof of the death of the Annuitant and
the designated Beneficiary, is received by the Company at its Annuity Service
Mailing Address. If settlement under one or more of the Annuity Options is
elected by the Owner, the Annuity Commencement Date will be the first day of the
second calendar month following the date due proof of the death of the Annuitant
and the Beneficiary, if any, is received by the Company at its Annuity Service
Mailing Address. If settlement under one or more of the Annuity Options is
elected by the Beneficiary, the Annuity Commencement Date will be the first day
of the second calendar month following the effective date of the election. The
Owner or Beneficiary, as applicable, may elect an Annuity Commencement Date
later than that specified above provided that such date is (a) the first day of
a calendar month and (b) not later than the first day of the first month
following the 85th birthday of the Beneficiary or other Payee designated by the
Owner, as the case may be. If a later Annuity Commencement Date has been elected
and the Owner or Beneficiary dies before this later Annuity Commencement Date,
the Contract's accumulated value will be paid in cash to the estate or
beneficiary, as appropriate, of the individual making the election.
Amount of Death Benefit
The death benefit is equal to the greater of (a) the Contract's
Accumulation Account value or (b) the sum of all Purchase Payments made under
the Contract less the sum of all cash withdrawal payments. If (b) is operative,
the Accumulation Account value will be increased by the excess of (b) over (a)
and the amount of the increase will be allocated to the Fixed Account and the
Sub-Accounts based on the respective values of the Fixed Account and the
Sub-Accounts on the date the amount of the death benefit is determined.
The Accumulation Unit Values used in determining the amount of the death
benefit will be those for the Valuation Period during which due proof of the
death of the Annuitant is received by the Company at its Annuity Service Mailing
Address if settlement is elected by the Owner under one or more of the Annuity
Options or, if no election by the Owner is in effect, either the values for the
Valuation Period during which an election by the Beneficiary either becomes
effective or is deemed effective, or the values for the Valuation Period during
which due proof of the death of both the Annuitant and the designated
Beneficiary is received by the Company at its Annuity Service Mailing Address if
the amount of the death benefit is to be paid in one sum to the deceased
Owner/Annuitant's estate.
SETTLEMENT PROVISIONS
General
On the Annuity Commencement Date, the adjusted value of the Accumulation
Account as determined in accordance with the "Determination of Amount" provision
will be applied, as specified by the Owner, under one or more of the Annuity
Options provided in the Contract or under such other settlement options as may
be agreed to by the Company.
Election and Effective Date of Election
During the lifetime of the Annuitant and prior to the Annuity Commencement
Date, the Owner may elect to have the adjusted value of the Accumulation Account
applied on the Annuity Commencement Date under one or more of the Annuity
Options provided in the Contract; if more than one person is named as Annuitant,
due to the Owner's designation of a "Co-Annuitant", the Owner may elect to name
one of such persons to be the sole Annuitant as of the Annuity Commencement
Date. The Owner may also change any election but any election or change of
election must be effective at least thirty (30) days prior to the Annuity
Commencement Date. This election or change of election may be made by filing
with the Company a written election or change of election in such form as the
Company may require. Any such election or change of election will become
effective on the date it is received by the Company at its Annuity Service
Mailing Address. If no such election is in effect on the 30th day prior to the
Annuity
13
<PAGE>
Commencement Date, the adjusted value of the Accumulation Account will be
applied under Annuity Option B, for a Life Annuity with 120 monthly payments
certain. If there is no election of a sole Annuitant in effect on the 30th day
prior to the Annuity Commencement Date, the person who the Owner has designated
as Co-Annuitant will be the Payee under the applicable Annuity Option.
Any such election may specify the proportion of the adjusted value of the
Accumulation Account to be applied to the Fixed Account and the various
Sub-Accounts. In the event the election does not so specify, then the portion of
the adjusted value of the Accumulation Account to be applied to the Fixed
Account and the various Sub-Accounts will be determined on a pro rata basis from
the composition of the Accumulation Account on the Annuity Commencement Date.
The Annuity Options in the Contract may also be elected by the Owner or
the Beneficiary as provided in the section of the Contract entitled "Death
Benefit".
Determination of Amount
The adjusted value of the Accumulation Account of the Contract to be
applied to provide a Variable Annuity or a Fixed Annuity or a combination of
both, shall be equal to the value of the Accumulation Account for the Valuation
Period which ends immediately preceding the Annuity Commencement Date, minus the
sum of any applicable premium or similar tax and a proportionate amount of the
contract maintenance charge to reflect the time elapsed between the last
Contract Anniversary and the day before the Annuity Commencement Date.
Effect of Annuity Commencement Date on Accumulation Account
On the Annuity Commencement Date the Accumulation Account of this Contract
will be cancelled.
Annuity Commencement Date
The Annuity Commencement Date is set forth on the Contract Specifications
Page. This date may be changed from time to time by the Owner provided that each
change is effective at least thirty (30) days prior to the then current Annuity
Commencement Date and the new Annuity Commencement Date is a date which is: (1)
at least thirty (30) days after the effective date of the change; (2) the first
day of a month; and (3) not later than the first day of the first month
following the Annuitant's 85th birthday. Any change of the Annuity Commencement
Date may be made by filing with the Company a written designation of a new
Annuity Commencement Date in such form as the Company may require. Any such
change will become effective on the date the designation is received by the
Company at its Annuity Service Mailing Address.
The Annuity Commencement Date may also be changed by an election of a
settlement option as provided in the section of the Contract entitled "Death
Benefit".
Fixed Annuity Payments
The dollar amount of each fixed annuity payment shall be determined in
accordance with the Annuity Payment Rates found in the Contract which are based
on the minimum guaranteed interest rate of 4% per year or, if more favorable to
the Payee(s), in accordance with the Single Premium Immediate Settlement Rates
published by the Company and in use on the Annuity Commencement Date.
Variable Annuity Payments
The dollar amount of the first variable annuity payment shall be
determined in accordance with the Annuity Payment Rates found in the Contract,
which are based on an assumed interest rate of 4% per year.
All variable annuity payments other than the first are determined by means
of Annuity Units credited to the Contract. The number of Annuity Units to be
credited in respect of a particular Sub-Account is determined by dividing that
portion of the first variable annuity payment attributable to that Sub-Account
14
<PAGE>
by the Annuity Unit Value of that Sub-Account for the Valuation Period which
ends immediately preceding the Annuity Commencement Date. The number of Annuity
Units of each particular Sub-Account credited to the Contract then remains fixed
unless an exchange of Annuity Units is made pursuant to the "Exchange of Annuity
Units" section. The dollar amount of each variable annuity payment after the
first may increase, decrease or remain constant, and is equal to the sum of the
amounts determined by multiplying the number of Annuity Units of a particular
Sub-Account credited to the Contract by the Annuity Unit Value for the
particular Sub-Account for the Valuation Period which ends immediately preceding
the due date of each subsequent payment.
Annuity Unit Value
The Annuity Unit Value for each Sub-Account was established at $10.00 for
the first Valuation Period of the particular Sub-Account. The Annuity Unit Value
for the particular Sub-Account for any subsequent Valuation Period is determined
by multiplying the Annuity Unit Value for the particular Sub-Account for the
immediately preceding Valuation Period by the Net Investment Factor for the
particular Sub-Account for the current Valuation Period and then multiplying
that product by a factor to neutralize the assumed interest rate of 4% per year
used to establish the Annuity Payment Rates found in the Contract. The factor is
0.99989255 for a one day Valuation Period.
Exchange of Annuity Units
After the Annuity Commencement Date the Payee may, by filing a written
request with the Company at its Annuity Service Mailing Address, exchange the
value of a designated number of Annuity Units of particular Sub-Accounts then
credited to the Contract into other Annuity Units the value of which would be
such that the dollar amount of an annuity payment made on the date of the
exchange would be unaffected by the exchange. No more than four (4) exchanges
may be made within each Contract Year.
Exchanges may be made within the Variable Account only. Exchanges shall be
made using the Annuity Unit Values for the Valuation Period during which the
request for exchange is received by the Company at its Annuity Service Mailing
Address.
Contract Maintenance Charge
After the Annuity Commencement Date, a contract maintenance charge
amounting to $30 on an annual basis will be deducted pro rata from each annuity
payment made during the year to reimburse the Company for administrative
expenses relating to the Contract, the Fixed Account, the Variable Account and
the Sub-Accounts.
Description of Annuity Options
All Annuity Options are available on either a fixed annuity or a variable
annuity basis.
Annuity Option A. Life Annuity: Monthly payments during the lifetime of
the Payee.
Annuity Option B. Life Annuity with 60, 120, 180, or 240 Monthly Payments
Certain: Monthly payments during the lifetime of the Payee and in any event for
sixty (60), one hundred twenty (120), one hundred eighty (180) or two hundred
forty (240) months certain as elected. In the event of the death of the
Annuitant on or after the Annuity Commencement Date, the Company will pay the
Beneficiary any remaining payments under this Annuity Option as they become due.
If there is no designated Beneficiary then living, the Company will pay the
discounted value of the remaining payments, if any, for the period certain in
one sum to the deceased Annuitant's estate. The discounted value will be based,
for payments being made on a variable basis, on interest compounded annually at
the assumed interest rate, and for payments being made on a fixed basis, at the
interest rate initially used in determining the amount of each payment. For
Variable Annuity payments this calculation will also be based on the assumptions
that the particular Annuity Unit Values applicable to the remaining payments
will be the particular Annuity Unit
15
<PAGE>
Values for the Valuation Period which ends on the day before the date of the
determination and that this value will remain unchanged thereafter. Any
Beneficiary who becomes entitled to any remaining payments under this Annuity
Option may elect to receive the amount specified in one sum. In the event of the
death of a Beneficiary who has become entitled to receive any remaining
payments, the Company will pay the amount specified in one sum to the deceased
Beneficiary's estate. All payments made in one sum by the Company as provided in
this paragraph are made in lieu of paying any remaining payments under this
Annuity Option.
Annuity Option C. Joint and Survivor Annuity: Monthly payments payable
during the joint lifetime of the Payee and a designated second person and during
the lifetime of the survivor. During the lifetime of the survivor variable
monthly payments, if any, will be determined using the percentage chosen at the
time of the election of this option of the number of each type of Annuity Unit
credited to the Contract and each fixed monthly payment, if any, will be equal
to the same percentage of the fixed monthly payment payable during the joint
lifetime of the Payee and the designated second person.
Annuity Payment Rates
The Annuity Payment Rates below show, for each $1,000 applied, the dollar
amount of both (a) the first monthly variable annuity payment based on the
assumed interest rate of 4% and (b) the monthly fixed annuity payment, when this
payment is based on the minimum guaranteed interest rate of 4% per year.
The mortality table used in determining the Annuity Payment Rates is the
1971 Individual Annuitant Mortality Table. In using this mortality table, ages
of Annuitants will be reduced by one year for Annuity Commencement Dates
occurring during the 1980's, reduced two years for Annuity Commencement Dates
occurring during the 1990's, and so on.
The Annuity Payment Rates in the tables shown below already reflect rates
of mortality appropriate for Annuity Commencement Dates occurring during the
1980's. Thus, for Annuity Commencement Dates occurring during the 1980's the
term "Adjusted Age", as used in the tables below, means actual age. "Adjusted
Age" shall mean actual age less one year for Annuity Commencement Dates
occurring during the 1990's, actual age less two years for Annuity Commencement
Dates occurring in the decade 2000-2009, and so on.
Adjusted ages will be determined based on the actual age(s) of
Annuitant(s), in completed years and months, as of the Annuity Commencement
Date. The tables below show Annuity Payment Rates for exact Adjusted Ages; rates
for Adjusted Ages expressed in completed years and months will be based on
straight line interpolation between the appropriate Annuity Payment Rates.
The dollar amount of annuity payment for any Adjusted Age or combination
of Adjusted Ages not shown below or for any other form of Annuity Option agreed
to by the Company will be quoted by the Company on request.
16
<PAGE>
AMOUNT OF FIRST MONTHLY ANNUITY PAYMENT PER $1,000
SINGLE LIFE ANNUITY
<TABLE>
<CAPTION>
OPTION A OPTION B
LIFE ANNUITY LIFE ANNUITY WITH PAYMENTS CERTAIN
Adjusted 60 120 180 240
Age PAYMENTS PAYMENTS PAYMENTS PAYMENTS
<S> <C> <C> <C> <C> <C>
20 3.62 3.61 3.61 3.61 3.61
25 3.70 3.70 3.69 3.69 3.69
30 3.80 3.80 3.79 3.79 3.78
35 3.93 3.93 3.92 3.91 3.91
40 4.09 4.09 4.08 4.07 4.06
45 4.31 4.30 4.29 4.27 4.24
50 4.59 4.58 4.56 4.52 4.47
55 4.96 4.95 4.91 4.84 4.75
60 5.45 5.42 5.35 5.23 5.07
65 6.11 6.06 5.93 5.71 5.41
70 7.08 6.99 6.71 6.26 5.71
75 8.57 8.34 7.68 6.79 5.90
80 10.86 10.22 8.69 7.13 5.98
85 14.43 12.57 9.45 7.28 6.00
</TABLE>
OPTION C
JOINT AND SURVIVOR ANNUITY*
<TABLE>
<CAPTION>
Adjusted Age
of Payee Adjusted Age of Survivor
-------- ---------------------------------------------
<S> <C> <C> <C> <C> <C>
55 60 65 70 75
55 4.95 5.19 5.45 5.75 6.10
60 5.15 5.43 5.74 6.11 6.53
65 5.37 5.69 6.07 6.52 7.04
70 5.61 5.98 6.43 6.99 7.65
75 5.87 6.30 6.82 7.50 8.35
</TABLE>
- -------------------
* Table Based on Assumed Election of Joint and Two-Thirds Survivor Annuity.
17
<PAGE>
OWNERSHIP PROVISIONS
Owner
The Contract shall belong to the Owner, or the Successor Owner or
transferee of the Owner. All Contract rights and privileges may be exercised by
the Owner, the Successor Owner or transferee of the Owner without the consent of
the Beneficiary or any other person. Such rights and privileges may be exercised
only during the lifetime of the Annuitant except as otherwise provided in the
Contract.
Change of Ownership
Ownership of the Contract may not be transferred except (1) to the
Annuitant, (2) to a trustee or successor trustee of a pension or profit sharing
trust which is qualified under Section 401 of the Internal Revenue Code, (3) to
the trustee of an individual retirement account plan qualified under Section 408
of the Internal Revenue Code for the benefit of the Owner or (4) as otherwise
permitted from time to time by laws and regulations governing the retirement or
deferred compensation plans for which this Contract may be issued. Subject to
the foregoing, the Contract may not be sold, assigned, transferred, discounted
or pledged as collateral for a loan or as security for the performance of an
obligation or for any other purpose to any person other than the Company. A
change of ownership will not be binding upon the Company until written
notification is received by the Company at the Annuity Service Mailing Address.
When it is so received, the change will be effective as of the date on which the
request for change was signed by the Owner, but the change will be without
prejudice to the Company on account of any payment made or any action taken by
the Company prior to receiving the change. The Company may require that the
signature of the Owner be guaranteed by a member firm of the New York, American,
Boston, Midwest, Philadelphia or Pacific Stock Exchange or by a commercial bank
(not a savings bank) which is a member of the Federal Deposit Insurance
Corporation or, in certain cases, by a member firm of the National Association
of Securities Dealers, Inc. which has entered into an appropriate agreement with
the Company.
Voting of Fund Shares
The Company will vote Fund shares held by the Sub-Accounts at meetings of
shareholders of the particular Fund, but will follow voting instructions
received at least one day prior to each such meeting from persons having the
right to give voting instructions. Fund shares for which no timely voting
instructions are received will be voted by the Company in the same proportion as
the shares for which instructions are received from persons having such voting
rights.
The Owner is the person having the right to give voting instructions prior
to the Annuity Commencement Date. On or after the Annuity Commencement Date, the
Payee receiving or entitled to receive variable annuity payments is the person
having such voting rights.
Neither the Variable Account nor the Company is under any duty to inquire
as to the instructions received or the authority of Owners or others to instruct
the voting of particular Fund shares. Except as the Variable Account or the
Company has actual knowledge to the contrary, the instructions given by Owners
and Payees will be valid as they affect the Variable Account, the Company and
any others having voting instruction rights with respect to the Variable
Account.
All Fund proxy material together with an appropriate form to be used to
give voting instructions will be provided to each Owner and each Payee having
the right to give voting instructions at least ten (10) days prior to each
meeting of the shareholders of the particular Fund. The number of particular
Fund shares as to which each such person is entitled to give instructions will
be determined by the Company on a date not more than ninety (90) days prior to
each such meeting. Prior to the Annuity Commencement Date, the number of
particular Fund shares as to which voting instructions may be given to the
Company by the Owner is determined by dividing the value of all of the Variable
Accumulation Units of the particular Sub-Account credited to the Accumulation
Account of the Contract by the net asset value of one particular Fund share as
of the same date. On or after the Annuity Commencement
18
<PAGE>
Date the number of particular Fund shares as to which such instructions may be
given by a Payee is determined by dividing the reserve held by the Company in
the particular Sub-Account for the Contract by the net asset value of the
particular Fund share as of the same date.
Periodic Reports
The Company will send the Owner, or such other person having voting
rights, at least once during each Contract Year, a statement showing the number,
type and value of the Accumulation Units or Annuity Units credited to the
Contract and the cash withdrawal value of the Contract, which statement shall be
accurate as of a date not more than two (2) months previous to the date of
mailing. In addition, every person having voting rights will receive such
reports or prospectuses concerning the Variable Account and the particular Funds
as may be required by the Investment Company Act of 1940 and the Securities Act
of 1933. The Company will also send such statements reflecting transactions in
the Accumulation Account as may be required by applicable laws, rules and
regulations.
BENEFICIARY PROVISION
Designation and Change of Beneficiary
The Beneficiary designation contained in the Application will remain in
effect until changed. The interest of any Beneficiary is subject to the
Beneficiary surviving the Annuitant.
Subject to the rights of an irrevocably designated Beneficiary, the Owner
may change or revoke the designation of a Beneficiary at any time while the
Annuitant is living by filing with the Company a written beneficiary designation
or revocation in such form as the Company may require. The change or revocation
will not be binding upon the Company until it is received at the Annuity Service
Mailing Address. When it is so received the change or revocation will be
effective as of the date on which the beneficiary designation or revocation was
signed but the change or revocation will be without prejudice to the Company on
account of any payment made or any action taken by the Company prior to
receiving the change or revocation.
GENERAL PROVISIONS
Contract
The Contract is issued in consideration of the Application and payment of
the first Purchase Payment. The Contract and the Application, a copy of which is
attached, constitute the entire Contract. All statements made in the Application
will be deemed representations and not warranties, and no statement will void
the Contract or be used in defense to a claim under the Contract unless it is
contained in the Application and a copy of the Application is attached at issue.
Only the President, a Vice President, the Actuary or the Secretary of the
Company has authority to agree on behalf of the Company to any alteration of the
Contract or to any waiver of the rights or requirements of the Company.
Currency
All amounts due under the Contract are payable in United States Dollars,
lawful money of the United States of America.
Determination of Values
The method of determination by the Company of the Net Investment Factor
and the number and value of Accumulation Units and Annuity Units shall be
conclusive upon the Owner, any Payee and any Beneficiary.
Guarantees
Subject to the Net Investment Factor provision, the Company guarantees
that the dollar amount of Variable Annuity payments made during the lifetime of
the Payee(s) will not be adversely affected by the
19
<PAGE>
actual mortality experience of the Company or by the actual expenses incurred by
the Company in excess of the expense deductions provided for in this and other
Contracts providing benefits which vary in accordance with the investment
performance of the Sub-Accounts.
Incontestability
This Contract is incontestable.
Misstatement of Age
If any date of birth has been misstated the amounts payable pursuant to
the Contract will be the amounts which would have been provided using the
correct age. Any deficiency in the payments already made by the Company shall be
paid immediately and any excess in the payments already made by the Company
shall be charged against the benefits falling due after adjustment.
Modification
Upon notice to the Owner or the Payee(s) the Contract may be modified by
the Company, but only if such modification (i) is necessary to make the Contract
comply with any law or regulation issued by a governmental agency to which the
Company is subject or (ii) is necessary to assure continued qualification of the
Contract under the Internal Revenue Code or other federal or state laws relating
to retirement annuities or annuity contracts or (iii) is necessary to reflect a
change in the operation of the Variable Account or the Sub-Accounts or (iv)
provides additional Variable Account and/or fixed accumulation options. In the
event of any such modification, the Company may make appropriate endorsement in
this Contract to reflect such modification.
Nonparticipating
The Contract is nonparticipating and will not share in any surplus
earnings of the Company.
Payments and Values
All payments and values that may be available under this Contract are not
less than the minimum benefits required by the laws of the State of New York.
Payments by the Company
All sums payable by the Company pursuant to the Contract are payable only
at its Home Office or such other place as may be designated by the Company. The
Company may require surrender of the Contract upon final payment of all sums
payable by the Company pursuant to the Contract.
Proof of Age
The Company shall have the right to require evidence of the age of any
Payee prior to the Annuity Commencement Date.
Proof of Survival
The Company shall have the right to require evidence of the survival of
any Payee at the time any payment payable to such Payee is due.
Splitting Units
The Company reserves the right to split or combine the value of the
Variable Accumulation Units, the Fixed Accumulation Units, the Annuity Units or
any of them. In effecting any such change of unit values, strict equity will be
preserved and any change will have no material effect on the benefits or other
provisions of this Contract.
20
<PAGE>
TABLE OF FIXED ACCUMULATION ACCOUNT VALUES
GUARANTEED MINIMUM VALUES ASSUMING ANNUAL PURCHASE PAYMENT OF $1,000
ALLOCATED TO THE FIXED ACCOUNT TO AGE 65
<TABLE>
<CAPTION>
AGE AT CONTRACT'S FIXED* CONTRACT'S CASH* MONTHLY INCOME
ISSUE DATE ACCUMULATION VALUE WITHDRAWAL VALUE** AT AGE 65***
<S> <C> <C> <C>
20 $122,239.69 $122,014.69 $1,251.73
21 116,567.01 116,342.01 1,193.65
22 111,112.51 110,887.51 1,137.79
23 105,867.79 105,642.79 1,084.09
24 100,824.80 100,599.80 1,032.45
25 95,975.77 95,750.77 982.79
26 91,313.24 91,088.24 935.05
27 86,830.04 86,605.04 889.14
28 82,519.27 82,294.27 845.00
29 78,374.30 78,149.30 802.55
30 74,388.75 74,163.75 761.74
31 70,556.49 70,331.49 722.50
32 66,871.62 66,646.62 684.77
33 63,328.48 63,103.48 648.48
34 59,921.62 59,696.62 613.60
35 56,645.79 56,420.79 580.05
36 53,495.95 53,270.95 547.80
37 50,467.26 50,242.26 516.78
38 47,555.06 47,330.06 486.96
39 44,754.86 44,529.86 458.29
40 42,062.37 41,837.37 430.72
41 39,473.43 39,248.43 404.21
42 36,984.07 36,759.07 378.72
43 34,590.45 34,365.45 354.21
44 32,288.89 32,063.89 330.64
45 30,075.86 29,850.86 307.98
46 27,947.94 27,722.94 286.19
47 25,901.87 25,676.87 265.24
48 23,934.49 23,709.49 245.09
49 22,042.78 21,817.78 225.72
50 20,223.82 19,998.82 207.09
51 18,474.83 18,249.83 189.18
52 16,793.11 16,568.11 171.96
53 15,176.06 14,951.06 155.40
54 13,621.21 13,396.21 139.48
55 12,126.17 11,901.17 124.17
56 10,688.62 10,463.62 109.45
57 9,306.37 9,081.37 95.30
58 7,977.28 7,752.28 81.69
59 6,699.31 6,474.31 68.60
60 5,470.49 5,245.49 56.02
61 4,288.93 4,108.93 43.92
62 3,152.82 3,017.82 32.28
63 2,060.40 1,970.40 21.10
64 1,010.00 965.00 10.34
</TABLE>
- -----------------
*Values based on interest rate of 4%, compounded annually. Assumes deduction
of $30 contract maintenance charge on each Contract Anniversary.
**Assumes deduction of applicable withdrawal charges described in the
Contract under `Cash Withdrawals and Withdrawal Charges'.
***Assumes election of Annuity Option B, with 120 monthly payments certain.
If you were to discontinue making Purchase Payments prior to age 65, the
values available to you at age 65 may be obtained from the table by taking the
value at your issue age and subtracting therefrom the value at the age
corresponding to your issue age plus the number of years you made Purchase
Payments. For example, if you are age 45 when the Contract is issued and make
Purchase Payments for 10 years and then stop, your values will equal the age 45
values less the age 55 values.
21
<PAGE>
[This page intentionally left blank.]
<PAGE>
[This page intentionally left blank.]
<PAGE>
SunLife Sun Life Insurance and Annuity Company of New York
(N.Y.) A Wholly-Owned Subsidiary of Sun Life Assurance
Company of Canada (U.S.)
Home Office: Annuity Service Mailing Address:
67 Broad Street 67 Broad Street
New York, New York 10004 25th Floor
New York, New York 10004
Flexible Payment Deferred Combination Variable and Fixed Annuity Contract
Sun Life (N.Y.) Variable Account A
Nonparticipating
ALL PAYMENTS AND VALUES PROVIDED BY THIS CONTRACT
WHEN BASED ON THE INVESTMENT EXPERIENCE OF A VARIABLE
ACCOUNT ARE VARIABLE AND ARE NOT GUARANTEED AS TO DOLLAR AMOUNT
NYVA85Q-MFS-1
<PAGE>
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
67 Broad Street, 25th Floor, New York, NY 10004-2414
Compass 1 Please make checks payable to Sun Insurance and Annuity
Company of New York. Send the Application and check to
either your Broker/Dealer home office or Sun Life Insurance
and Annuity Company of New York, 67 Broad Street, 25th
Floor, New York, NY 10004-2414
- --------------------------------------------------------------------------------
VARIABLE ANNUITY APPLICATION FOR IRS RETIREMENT PROGRAMS (401, 408, 457
[excluding 408(b) & 403(b)])
1. OWNER (Print Name)___________________________________________________________
First Middle Last
2. Address____________________________________ Tax I.D. No. or Soc. Sec. No.
Street _____________________________
____________________________________
City State Zip
3. Successor Owner __________________________________________________________
First Middle Last
- --------------------------------------------------------------------------------
4. ANNUITANT _____________________________ Sex_M _F Date of Birth______________
(Print Name) First Middle Last Mo. Day Year
5. Address ____________________________________
Street Soc. Sec. No.
____________________________________ ________________________
City State Zip
- --------------------------------------------------------------------------------
6. BENEFICIARY _______________________________________ _______________________
(Print Name) First Middle Last Relationship
7. Successor _________________________________________ _______________________
Beneficiary First Middle Last Relationship
- --------------------------------------------------------------------------------
8. IRS TAX QUALIFIED RETIREMENT PROGRAMS This application cannot be
__Self-employed __IRA __401(a) __401(k) __457 processed without the
appropriate Adoption
Agreement if a Sun Life
Prototype is used.
- --------------------------------------------------------------------------------
9. PURCHASE PAYMENTS -- An initial purchase payment of $________.___ is attached
(payments must total at least $300 in the first year). Subsequent purchase
payments may be made in the amount of $25.00 or more. Please check this box___
if you would like information on Bank Draft for future purchase payments.
- --------------------------------------------------------------------------------
10. PURCHASE PAYMENT ALLOCATION (whole %, must total 100%)
____% Massachusetts Cash Management Trust-Prime Series
____% Massachusetts Cash Management Trust-Government Series
____% MFS Worldwide Governments Trust
____% Massachusetts Financial Bond Fund, Inc.
____$ Massachusetts Financial High Income Trust
____% Massachusetts Financial Total Return Trust
____% Massachusetts Investors Trust
____% Massachusetts Financial Research Fund, Inc.
____% Massachusetts Investors Growth Stock Fund, Inc.
____% Massachusetts Capital Development Fund, Inc.
____% Massachusetts Financial Emerging Growth Trust
____% Fixed Account
If no allocations are indicated above, the total purchase payment will be
allocated to Massachusetts Cash Management Trust-Prime Series pending
allocation instructions from the owner.
- --------------------------------------------------------------------------------
11. OPTIONAL ANNUITY FORM ELECTED
__Joint and Two-thirds Survivor __Life Annuity
__120/__240 Monthly Payments Certain and Life __Fixed Payments
Survivor __________________________ Sex _F _M Date of Birth______________
Annuitant First Middle Last Mo. Day Year
________________________________________ Soc. Sec. No.______________
Street City State Zip
- --------------------------------------------------------------------------------
12. ANNUITY COMMENCEMENT DATE 13. SPECIAL INSTRUCTIONS
The first day of __ Month Year _____
- --------------------------------------------------------------------------------
14. Will this contract replace or change any existing life insurance or
annuity in this or any other company? __ No __ Yes. If yes, please
explain under Special Instructions and request replacement information
from your agent.
- --------------------------------------------------------------------------------
I hereby represent my answers to the above questions to be correct and true to
the best of my knowledge and belief and agree that this application shall be a
part of any contract issued by the Company. ALL PAYMENTS AND VALUES PROVIDED BY
THIS CONTRACT WHEN BASED ON INVESTMENT EXPERIENCE OF A VARIABLE ACCOUNT ARE
VARIABLE AND NOT GUARANTEED AS TO DOLLAR AMOUNT. I acknowledge receipt of a
current Compass prospectus and applicable mutual fund(s) prospectus.
_______ Witness/Agent______________________ Signed at:___________New York______
Date Print Agent's Name and Number City State
Applicant________________________________ _____________________________________
Signature of Owner Signature of Agent
- --------------------------------------------------------------------------------
Complete this statement if the Annuitant/Co-Annuitant is different from the
owner.
Annuitant/Co-Annuitant: The Annuitant/Co-Annuitant (if other than Applicant)
declares that the statements made which relate to
him/her are full and true to the best of his/her
knowledge and belief. The Annuitant/Co-Annuitant
consents to this application.
Signed at: ____________________________ ___________________________________
Signature of Annuitant
on ____________________________________ ___________________________________
Date Signature of Co-Annuitant
- --------------------------------------------------------------------------------
Agent: Will this contract replace or change any existing life insurance or
annuity in this or any other company?
__ Yes __ No If yes, please explain under Special Instructions.
General Agent __________________________________________________________________
Branch Office Address __________________________________________________________
Street City State Zip
App-NYVAQ-MFS-1 CO1N-8-6/92/10M
<PAGE>
Exhibit 10
INDEPENDENT AUDITORS' CONSENT
We consent to the use in this Post-Effective Amendment No.
17 to the Registration Statement No. 2-95002 on Form N-4 of Sun Life
(N.Y.) Variable Account A of our report dated February 6, 1998
accompanying the financial statements of Sun Life (N.Y.) Variable
Account A and our report dated February 5, 1998 accompanying the
financial statements of Sun Life Insurance and Annuity Company of
New York appearing in the Statement of Additional Information,
which is part of such Registration Statement.
We also consent to the reference to us under the headings "Condensed
Financial Information-Accumulation Unit Values" appearing in the Prospectus
and "Accountants" appearing in the Statement of Additional Information, which
are part of such Registration Statement.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
April 22, 1998
<PAGE>
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that Angus A. MacNaughton, whose
signature appears below, constitutes and appoints Margaret E. Hankard,
Margaret Sears Mead and David N. Brown, and each of them, his
attorneys-in-fact, each with the power of substitution, for him in any and
all capacities, to sign a Registration Statement on Form N-4 of Sun Life
(N.Y.) Variable Account A (Reg. No. 2-95002), and any amendments thereto, and
to file the same, with exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, hereby ratifying and
confirming all that each of said attorneys-in-fact or his substitute or
substitutes, may do or cause to be done by virtue hereof.
/s/ Angus A. MacNaughton
---------------------------
Angus A. MacNaughton
March 23, 1998
<PAGE>
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that S. Caesar Raboy, whose signature
appears below, constitutes and appoints Margaret E. Hankard, Margaret Sears
Mead and David N. Brown, and each of them, his attorneys-in-fact, each with
the power of substitution, for him in any and all capacities, to sign a
Registration Statement on Form N-4 of Sun Life (N.Y.) Variable Account A
(Reg. No. 2-95002), and any amendments thereto, and to file the same, with
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
each of said attorneys-in-fact or his substitute or substitutes, may do or
cause to be done by virtue hereof.
/s/ S. Caesar Raboy
---------------------------
S. Caesar Raboy
March 23, 1998
<PAGE>
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that M. Colyer Crum, whose signature
appears below, constitutes and appoints Margaret E. Hankard, Margaret Sears
Mead and David N. Brown, and each of them, his attorneys-in-fact, each with
the power of substitution, for him in any and all capacities, to sign a
Registration Statement on Form N-4 of Sun Life (N.Y.) Variable Account A
(Reg. No. 2-95002), and any amendments thereto, and to file the same, with
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
each of said attorneys-in-fact or his substitute or substitutes, may do or
cause to be done by virtue hereof.
/s/ M. Colyer Crum
---------------------------
M. Colyer Crum
March 23, 1998
<PAGE>
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that David D. Horn, whose signature
appears below, constitutes and appoints Margaret E. Hankard, Margaret Sears
Mead and David N. Brown, and each of them, his attorneys-in-fact, each with
the power of substitution, for him in any and all capacities, to sign a
Registration Statement on Form N-4 of Sun Life (N.Y.) Variable Account A
(Reg. No. 2-95002), and any amendments thereto, and to file the same, with
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
each of said attorneys-in-fact or his substitute or substitutes, may do or
cause to be done by virtue hereof.
/s/ David D. Horn
---------------------------
David D. Horn
March 23, 1998
<PAGE>
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that C. James Prieur, whose signature
appears below, constitutes and appoints Margaret E. Hankard, Margaret Sears
Mead and David N. Brown, and each of them, his attorneys-in-fact, each with
the power of substitution, for him in any and all capacities, to sign a
Registration Statement on Form N-4 of Sun Life (N.Y.) Variable Account A
(Reg. No. 2-95002), and any amendments thereto, and to file the same, with
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
each of said attorneys-in-fact or his substitute or substitutes, may do or
cause to be done by virtue hereof.
/s/ C. James Prieur
---------------------------
C. James Prieur
March 23, 1998
<PAGE>
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that Richard B. Bailey, whose signature
appears below, constitutes and appoints Margaret E. Hankard, Margaret Sears
Mead and David N. Brown, and each of them, his attorneys-in-fact, each with
the power of substitution, for him in any and all capacities, to sign a
Registration Statement on Form N-4 of Sun Life (N.Y.) Variable Account A
(Reg. No. 2-95002), and any amendments thereto, and to file the same, with
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
each of said attorneys-in-fact or his substitute or substitutes, may do or
cause to be done by virtue hereof.
/s/ Richard B. Bailey
---------------------------
Richard B. Bailey
March 23, 1998
<PAGE>
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that Robert P. Vrolyk, whose signature
appears below, constitutes and appoints Margaret E. Hankard, Margaret Sears
Mead and David N. Brown, and each of them, his attorneys-in-fact, each with
the power of substitution, for him in any and all capacities, to sign a
Registration Statement on Form N-4 of Sun Life (N.Y.) Variable Account A
(Reg. No. 2-95002), and any amendments thereto, and to file the same, with
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
each of said attorneys-in-fact or his substitute or substitutes, may do or
cause to be done by virtue hereof.
/s/ Robert P. Vrolyk
---------------------------
Robert P. Vrolyk
March 23, 1998
<PAGE>
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that Ralph F. Peters, whose signature
appears below, constitutes and appoints Margaret E. Hankard, Margaret Sears
Mead and David N. Brown, and each of them, his attorneys-in-fact, each with
the power of substitution, for him in any and all capacities, to sign a
Registration Statement on Form N-4 of Sun Life (N.Y.) Variable Account A
(Reg. No. 2-95002), and any amendments thereto, and to file the same, with
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
each of said attorneys-in-fact or his substitute or substitutes, may do or
cause to be done by virtue hereof.
/s/ Ralph F. Peters
---------------------------
Ralph F. Peters
March 23, 1998
<PAGE>
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that Frederick B. Whittemore, whose
signature appears below, constitutes and appoints Margaret E. Hankard,
Margaret Sears Mead and David N. Brown, and each of them, his
attorneys-in-fact, each with the power of substitution, for him in any and
all capacities, to sign a Registration Statement on Form N-4 of Sun Life
(N.Y.) Variable Account A (Reg. No. 2-95002), and any amendments thereto, and
to file the same, with exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, hereby ratifying and
confirming all that each of said attorneys-in-fact or his substitute or
substitutes, may do or cause to be done by virtue hereof.
/s/ Frederick B. Whittemore
----------------------------
Frederick B. Whittemore
March 23, 1998
<PAGE>
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that Edward M. Lamont, whose signature
appears below, constitutes and appoints Margaret E. Hankard, Margaret Sears
Mead and David N. Brown, and each of them, his attorneys-in-fact, each with
the power of substitution, for him in any and all capacities, to sign a
Registration Statement on Form N-4 of Sun Life (N.Y.) Variable Account A
(Reg. No. 2-95002), and any amendments thereto, and to file the same, with
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
each of said attorneys-in-fact or his substitute or substitutes, may do or
cause to be done by virtue hereof.
/s/ Edward M. Lamont
---------------------------
Edward M. Lamont
March 23, 1998
<PAGE>
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that John G. Ireland, whose signature
appears below, constitutes and appoints Margaret E. Hankard, Margaret Sears
Mead and David N. Brown, and each of them, his attorneys-in-fact, each with
the power of substitution, for him in any and all capacities, to sign a
Registration Statement on Form N-4 of Sun Life (N.Y.) Variable Account A
(Reg. No. 2-95002), and any amendments thereto, and to file the same, with
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
each of said attorneys-in-fact or his substitute or substitutes, may do or
cause to be done by virtue hereof.
/s/ John G. Ireland
---------------------------
John G. Ireland
March 23, 1998
<PAGE>
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that John D. McNeil, whose signature
appears below, constitutes and appoints Margaret E. Hankard, Margaret Sears
Mead and David N. Brown, and each of them, his attorneys-in-fact, each with
the power of substitution, for him in any and all capacities, to sign a
Registration Statement on Form N-4 of Sun Life (N.Y.) Variable Account A
(Reg. No. 2-95002), and any amendments thereto, and to file the same, with
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
each of said attorneys-in-fact or his substitute or substitutes, may do or
cause to be done by virtue hereof.
/s/ John D. McNeil
---------------------------
John D. McNeil
March 23, 1998
<PAGE>
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that John S. Lane, whose signature
appears below, constitutes and appoints Margaret E. Hankard, Margaret Sears
Mead and David N. Brown, and each of them, his attorneys-in-fact, each with
the power of substitution, for him in any and all capacities, to sign a
Registration Statement on Form N-4 of Sun Life (N.Y.) Variable Account A
(Reg. No. 2-95002), and any amendments thereto, and to file the same, with
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
each of said attorneys-in-fact or his substitute or substitutes, may do or
cause to be done by virtue hereof.
/s/ John S. Lane
---------------------------
John S. Lane
March 23, 1998
<PAGE>
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that Fioravante G. Perrotta, whose
signature appears below, constitutes and appoints Margaret E. Hankard,
Margaret Sears Mead and David N. Brown, and each of them, his
attorneys-in-fact, each with the power of substitution, for him in any and
all capacities, to sign a Registration Statement on Form N-4 of Sun Life
(N.Y.) Variable Account A (Reg. No. 2-95002), and any amendments thereto, and
to file the same, with exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, hereby ratifying and
confirming all that each of said attorneys-in-fact or his substitute or
substitutes, may do or cause to be done by virtue hereof.
/s/ Fioravante G. Perrotta
---------------------------
Fioravante G. Perrotta
March 23, 1998
<PAGE>
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that Donald A. Stewart, whose signature
appears below, constitutes and appoints Margaret E. Hankard, Margaret Sears
Mead and David N. Brown, and each of them, his attorneys-in-fact, each with
the power of substitution, for him in any and all capacities, to sign a
Registration Statement on Form N-4 of Sun Life (N.Y.) Variable Account A
(Reg. No. 2-95002), and any amendments thereto, and to file the same, with
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
each of said attorneys-in-fact or his substitute or substitutes, may do or
cause to be done by virtue hereof.
/s/ Donald A. Stewart
---------------------------
Donald A. Stewart
March 23, 1998
