<PAGE>
SUN LIFE (N.Y.) VARIABLE ACCOUNT B
STATEMENT OF CONDITION-- June 30, 1997
<TABLE>
<CAPTION>
ASSETS:
Investments in MFS/Sun Life Series Trust Shares Cost Value
---------- ------------ ------------
<S> <C> <C> <C>
Capital Appreciation Series ("CAS")...... 1,763,525 $ 51,921,954 $ 66,281,998
Government Securities Series ("GSS")..... 2,075,484 25,862,735 25,538,574
High Yield Series ("HYS")................ 1,494,351 13,119,443 13,601,832
Money Market Series ("MMS").............. 12,910,062 12,910,062 12,910,062
Managed Sectors Series ("MSS")........... 486,478 11,457,687 12,830,645
Total Return Series ("TRS").............. 2,224,861 36,262,578 43,612,454
World Government Series ("WGS").......... 564,744 6,520,506 5,997,971
------------ ------------
$158,054,965 $180,773,536
------------
------------
LIABILTY:
Payable to sponsor................................................... (61,771)
------------
Net Assets..................................................... $180,711,765
------------
------------
</TABLE>
<TABLE>
<CAPTION>
Applicable to Owners of
Deferred Variable Annuity Contracts Reserve for
NET ASSETS: ----------------------------------- Variable
COMPASS 2 CONTRACTS: Units Unit Value Value Annuities Total
--------- ---------- ------------ ----------- ------------
<S> <C> <C> <C> <C> <C>
CAS................................................ 1,096,493 55.7697 $ 61,145,565 $239,351 $ 61,384,916
GSS................................................ 1,079,595 22.9444 24,767,115 95,080 24,862,195
HYS................................................ 465,631 27.3882 12,755,172 42,769 12,797,941
MMS................................................ 744,180 16.2990 12,123,191 11,204 12,134,395
MSS................................................ 301,052 37.8672 11,411,909 -- 11,411,909
TRS................................................ 1,435,044 27.0055 38,801,477 605,864 39,407,341
WGS................................................ 301,444 18.0738 5,456,415 -- 5,456,415
------------ ----------- ------------
$166,460,844 $994,268 $167,455,112
------------ ----------- ------------
<CAPTION>
COMPASS 3 CONTRACTS:
<S> <C> <C> <C> <C> <C>
CAS................................................ 273,057 17.9674 $ 4,905,820 $ 143 $ 4,905,963
GSS................................................ 59,071 11.4352 675,000 -- 675,000
HYS................................................ 59,205 13.4982 799,210 -- 799,210
MMS................................................ 68,172 11.2460 766,494 -- 766,494
MSS................................................ 89,278 15.9217 1,417,659 287 1,417,946
TRS................................................ 275,492 15.0686 4,150,355 129 4,150,484
WGS................................................ 49,407 10.9750 541,556 -- 541,556
------------ ----------- ------------
$ 13,256,094 $ 559 $ 13,256,653
------------ ----------- ------------
Net Assets............................................................ $179,716,938 $994,827 $180,711,765
------------ ----------- ------------
------------ ----------- ------------
</TABLE>
See notes to financial statements
1
<PAGE>
SUN LIFE (N.Y.) VARIABLE ACCOUNT B
STATEMENTS OF OPERATIONS-- Six Months Ended June 30, 1997
<TABLE>
<CAPTION>
CAS GSS HYS MMS
Sub-Account Sub-Account Sub-Account Sub-Account
----------- ----------- ---------- ------------
<S> <C> <C> <C> <C>
INCOME AND EXPENSES:
Dividend income and capital gain distributions
received...................................... $ 5,671,221 $1,773,033 $ 888,950 $ 349,808
Mortality and expense risk charges.............. 394,002 166,885 83,543 92,541
Distribution expense charges.................... 3,071 487 565 622
----------- ----------- ---------- ------------
Net investment income....................... $ 5,274,148 $1,605,661 $ 804,842 $ 256,645
----------- ----------- ---------- ------------
REALIZED AND UNREALIZED GAINS (LOSSES):
Realized gains (losses) on investment
transactions
Proceeds from sales........................... $ 6,999,207 $4,181,583 $2,819,383 $ 7,851,713
Cost of investments sold...................... 5,082,897 4,278,423 2,539,784 7,851,713
----------- ----------- ---------- ------------
Net realized gains (losses)................. $ 1,916,310 $ (96,840 ) $ 279,599 $ --
----------- ----------- ---------- ------------
Net unrealized appreciation (depreciation) on
investments
End of period................................. $14,360,044 $ (324,161 ) $ 482,389 $ --
Beginning of period........................... 13,093,275 670,954 861,574 $ --
----------- ----------- ---------- ------------
Change in unrealized appreciation
(depreciation)............................ $ 1,266,769 $ (995,115 ) $(379,185 ) $ --
----------- ----------- ---------- ------------
Realized and unrealized gains (losses)........ $ 3,183,079 $(1,091,955) $ (99,586 ) $ --
----------- ----------- ---------- ------------
INCREASE IN NET ASSETS FROM OPERATIONS............ $ 8,457,227 $ 513,706 $ 705,256 $ 256,645
----------- ----------- ---------- ------------
----------- ----------- ---------- ------------
</TABLE>
<TABLE>
<CAPTION>
MSS TRS WGS
Sub-Account Sub-Account Sub-Account Total
---------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
INCOME AND EXPENSES:
Dividend income and capital gain distributions
received...................................... $1,371,268 $4,275,682 $ 252,672 $14,582,634
Mortality and expense risk charges.............. 73,110 255,267 40,287 1,105,635
Distribution expense charges.................... 934 2,758 393 8,830
---------- ---------- ---------- -----------
Net investment income....................... $1,297,224 $4,017,657 $ 211,992 $13,468,169
---------- ---------- ---------- -----------
REALIZED AND UNREALIZED GAINS (LOSSES):
Realized gains (losses) on investment
transactions
Proceeds from sales........................... $1,610,469 $4,316,944 $1,129,719 $28,909,018
Cost of investments sold...................... 1,248,554 3,008,968 1,241,669 25,252,008
---------- ---------- ---------- -----------
Net realized gains (losses)................. $ 361,915 $1,307,976 $(111,950 ) $ 3,657,010
---------- ---------- ---------- -----------
Net unrealized appreciation (depreciation) on
investments
End of period................................. $1,372,958 $7,349,876 $(522,535 ) $22,718,571
Beginning of period........................... 1,586,190 8,090,640 (245,952 ) 24,056,681
---------- ---------- ---------- -----------
Change in unrealized depreciation........... $(213,232 ) $(740,764 ) $(276,583 ) $(1,338,110)
---------- ---------- ---------- -----------
Realized and unrealized gains (losses)........ $ 148,683 $ 567,212 $(388,533 ) $ 2,318,900
---------- ---------- ---------- -----------
INCREASE (DECREASE) IN NET ASSETS FROM
OPERATIONS....................................... $1,445,907 $4,584,869 $(176,541 ) $15,787,069
---------- ---------- ---------- -----------
---------- ---------- ---------- -----------
</TABLE>
See notes to financial statements
2
<PAGE>
SUN LIFE (N.Y.) VARIABLE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
CAS GSS
Sub-Account Sub-Account
------------------------------ ------------------------------
<S> <C> <C> <C> <C>
Six Months Year Ended Six Months Year Ended
Ended December 31, Ended December 31,
June 30, 1997 1996 June 30, 1997 1996
-------------- ------------- -------------- -------------
OPERATIONS:
Net investment income...................................... $ 5,274,148 $ 3,981,524 $ 1,605,661 $ 1,241,066
Net realized gains (losses)................................ 1,916,310 4,576,791 (96,840) (27,070)
Net unrealized gains (losses).............................. 1,266,769 2,015,008 (995,115) (1,124,217)
-------------- ------------- -------------- -------------
Increase in net assets from operations................. $ 8,457,227 $10,573,323 $ 513,706 $ 89,779
-------------- ------------- -------------- -------------
CONTRACT OWNER TRANSACTIONS:
Accumulation Activity:
Purchase payments received............................... $ 1,632,516 $ 2,717,881 $ 357,154 $ 894,639
Net transfers between Sub-Accounts and Fixed Account..... (194,765) (1,800,976) 245,460 493,206
Withdrawals, surrenders, annuitizations and contract
charges................................................ (3,390,392) (7,564,122) (2,443,236) (4,694,596)
-------------- ------------- -------------- -------------
Net accumulation activity.............................. $(1,952,641) $(6,647,217) $(1,840,622) $(3,306,751)
-------------- ------------- -------------- -------------
Annuitization Activity:
Annuitizations........................................... $ 67,112 $ 7,453 $ -- $ 10,761
Annuity payments and contract charges.................... (13,634) (21,172) (15,358) (43,569)
Adjustments to annuity reserve........................... (2,533) 775 1,410 1,408
-------------- ------------- -------------- -------------
Net annuitization activity............................. $ 50,945 $ (12,944) $ (13,948) $ (31,400)
-------------- ------------- -------------- -------------
Decrease in net assets from contract owner transactions.... $(1,901,696) $(6,660,161) $(1,854,570) $(3,338,151)
-------------- ------------- -------------- -------------
Increase (decrease) in net assets........................ $ 6,555,531 $ 3,913,162 $(1,340,864) $(3,248,372)
NET ASSETS:
Beginning of period........................................ 59,735,348 55,822,186 26,878,059 30,126,431
-------------- ------------- -------------- -------------
End of period.............................................. $66,290,879 $59,735,348 $25,537,195 $26,878,059
-------------- ------------- -------------- -------------
-------------- ------------- -------------- -------------
<CAPTION>
HYS MMS
Sub-Account Sub-Account
------------------------------ ------------------------------
Six Months Year Ended Six Months Year Ended
Ended December 31, Ended December 31,
June 30, 1997 1996 June 30, 1997 1996
-------------- ------------- -------------- -------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income...................................... $ 804,842 $ 942,056 $ 256,645 $ 524,831
Net realized gains......................................... 279,599 281,243 -- --
Net unrealized gains (losses).............................. (379,185) 168,726 -- --
-------------- ------------- -------------- -------------
Increase in net assets from operations................. $ 705,256 $ 1,392,025 $ 256,645 $ 524,831
-------------- ------------- -------------- -------------
CONTRACT OWNER TRANSACTIONS:
Accumulation Activity:
Purchase payments received............................... $ 101,496 $ 373,887 $ 223,744 $ 506,719
Net transfers between Sub-Accounts and Fixed Account..... 291,925 (133,634) (999,196) 1,225,167
Withdrawals, surrenders, annuitizations and contract
charges................................................ (1,021,637) (2,039,017) (2,197,225) (3,891,615)
-------------- ------------- -------------- -------------
Net accumulation activity.............................. $ (628,216) $(1,798,764) $(2,972,677) $(2,159,729)
-------------- ------------- -------------- -------------
Annuitization Activity:
Annuity payments and contract charges.................... (3,170) (6,135) (626) (4,273)
Adjustments to annuity reserve........................... (96) (255) 11,008 (11,568)
-------------- ------------- -------------- -------------
Net annuitization activity............................. $ (3,266) $ (6,390) $ 10,382 $ (15,841)
-------------- ------------- -------------- -------------
Decrease in net assets from contract owner transactions.... $ (631,482) $(1,805,154) $(2,962,295) $(2,175,570)
-------------- ------------- -------------- -------------
Increase (decrease) in net assets........................ $ 73,774 $ (413,129) $(2,705,650) (1,650,739)
NET ASSETS:
Beginning of period........................................ 13,523,377 13,936,506 15,606,539 17,257,278
-------------- ------------- -------------- -------------
End of period.............................................. $13,597,151 $13,523,377 $12,900,889 $15,606,539
-------------- ------------- -------------- -------------
-------------- ------------- -------------- -------------
</TABLE>
See notes to financial statements
3
<PAGE>
SUN LIFE (N.Y.) VARIABLE ACCOUNT B
STATEMENTS OF CHANGES IN NET ASSETS -- continued
<TABLE>
<CAPTION>
MSS TRS
Sub-Account Sub-Account
------------------------------ --------------------------------
<S> <C> <C> <C> <C>
Six Months Year Ended Six Months Year Ended
Ended December 31, Ended December 31,
June 30, 1997 1996 June 30, 1997 1996
-------------- ------------- --------------- --------------
OPERATIONS:
Net investment income...................................... $ 1,297,224 $ 1,252,707 $ 4,017,657 $ 2,404,032
Net realized gains......................................... 361,915 346,321 1,307,976 1,937,824
Net unrealized gains (losses).............................. (213,232) 27,275 (740,764) 489,044
-------------- ------------- --------------- --------------
Increase in net assets from operations................. $ 1,445,907 $ 1,626,303 $ 4,584,869 $ 4,830,900
-------------- ------------- --------------- --------------
CONTRACT OWNER TRANSACTIONS:
Accumulation Activity:
Purchase payments received............................... $ 332,646 $ 728,572 $ 958,880 $ 1,903,724
Net transfers between Sub-Accounts and Fixed Account..... 323,720 455,068 (178,683) (23,251)
Withdrawals, surrenders, annuitizations and contract
charges................................................ (981,780) (1,326,391) (2,964,349) (5,723,230)
-------------- ------------- --------------- --------------
Net accumulation activity.............................. $ (325,414) $ (142,751) $ (2,184,152) $ (3,842,757)
-------------- ------------- --------------- --------------
Annuitization Activity:
Annuitizations........................................... $ -- $ -- $ 56,378 $ 19,728
Annuity payments and contract charges.................... (75) (135) (38,699) (68,505)
Adjustments to annuity reserve........................... (11,285) 11,582 (10,921) (13,885)
-------------- ------------- --------------- --------------
Net annuitization activity............................. $ (11,360) $ 11,447 $ 6,758 $ (62,662)
-------------- ------------- --------------- --------------
Decrease in net assets from contract owner transactions.... $ (336,774) $ (131,304) $ (2,177,394) $ (3,905,419)
-------------- ------------- --------------- --------------
Increase in net assets................................... $ 1,109,133 $ 1,494,999 $ 2,407,475 $ 925,481
NET ASSETS:
Beginning of period........................................ 11,720,722 10,225,723 41,150,350 40,224,869
-------------- ------------- --------------- --------------
End of period.............................................. $12,829,855 $11,720,722 $ 43,557,825 $ 41,150,350
-------------- ------------- --------------- --------------
-------------- ------------- --------------- --------------
<CAPTION>
WGS
Sub-Account Total
------------------------------ --------------------------------
Six Months Year Ended Six Months Year Ended
Ended December 31, Ended December 31,
June 30, 1997 1996 June 30, 1997 1996
-------------- ------------- --------------- --------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income...................................... $ 211,992 $ 951,977 $ 13,468,169 $ 11,298,193
Net realized gains (losses)................................ (111,950) (130,309) 3,657,010 6,984,800
Net unrealized gains (losses).............................. (276,583) (582,106) (1,338,110) 993,730
-------------- ------------- --------------- --------------
Increase (decrease) in net assets from operations...... $ (176,541) $ 239,562 $ 15,787,069 $ 19,276,723
-------------- ------------- --------------- --------------
CONTRACT OWNER TRANSACTIONS:
Accumulation Activity:
Purchase payments received............................... $ 111,955 $ 408,414 $ 3,718,391 $ 7,533,836
Net transfers between Sub-Accounts and Fixed Account..... (119,815) (463,423) (631,354) (247,843)
Withdrawals, surrenders, annuitizations and contract
charges................................................ (992,772) (1,295,854) (13,991,391) (26,534,825)
-------------- ------------- --------------- --------------
Net accumulation activity.............................. $(1,000,632) $(1,350,863) $(10,904,354) $ (19,248,832)
-------------- ------------- --------------- --------------
Annuitization Activity:
Annuitizations........................................... $ -- $ -- $ 123,490 $ 37,942
Annuity payments and contract charges.................... -- -- (71,562) (143,789)
Adjustments to annuity reserve........................... -- -- (12,417) (11,943)
-------------- ------------- --------------- --------------
Net annuitization activity............................. $ -- $ -- $ 39,511 $ (117,790)
-------------- ------------- --------------- --------------
Decrease in net assets from contract owner transactions.... $(1,000,632) $(1,350,863) $(10,864,843) $ (19,366,622)
-------------- ------------- --------------- --------------
Increase (decrease) in net assets........................ $(1,177,173) $(1,111,301) $ 4,922,226 $ (89,899)
NET ASSETS:
Beginning of period........................................ 7,175,144 8,286,445 175,789,539 175,879,438
-------------- ------------- --------------- --------------
End of period.............................................. $ 5,997,971 $ 7,175,144 $180,711,765 $ 175,789,539
-------------- ------------- --------------- --------------
-------------- ------------- --------------- --------------
</TABLE>
See notes to financial statements
4
<PAGE>
SUN LIFE (N.Y.) VARIABLE ACCOUNT B
NOTES TO FINANCIAL STATEMENTS
(1) ORGANIZATION
Sun Life (N.Y.) Variable Account B (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 series of MFS/Sun Life Series
Trust (the "Series Trust") as selected by contract owners. The Series Trust is
an open-end management investment company registered under the Investment
Company Act of 1940. Massachusetts Financial Services Company, a subsidiary of
Sun Life Assurance Company of Canada (U.S.), is investment adviser to the Series
Trust.
(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 shares of the Series Trust are recorded at their net asset value.
Realized gains and losses on sales of shares of the Series Trust are determined
on the identified cost basis. Dividend income and capital gain distributions
received by the Sub-Accounts are reinvested in additional Series Trust 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
5
<PAGE>
SUN LIFE (N.Y.) VARIABLE ACCOUNT B
NOTES TO FINANCIAL STATEMENTS -- continued
Sponsor. These deductions are transferred periodically to the Sponsor.
Currently, the deduction is at an effective annual rate of 1.3% of the assets of
the Variable Account attributable to Compass 2 contracts and 1.25% of the assets
of the Variable Account attributable to Compass 3 contracts.
Each year on the contract anniversary, a contract maintenance charge of $30 is
deducted from each contract's accumulation account to cover administrative
expenses relating to the contract. After the annuity commencement date the
charge 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 (including the distribution expense charge
described below applicable to Compass 3 contracts) exceed 5% of the purchase
payments made under a Compass 2 contract or 9% of the purchase payments made
under a Compass 3 contract.
For assuming the risk that withdrawal charges may be insufficient to compensate
it for the costs of distributing the Compass 3 contracts, the Sponsor makes a
deduction from the Variable Account at the end of each valuation period for the
first seven contract years (during both the accumulation period and, if
applicable, after annuity payments begin) at an effective annual rate of 0.15%
of the assets of the Variable Account attributable to such contracts. No
deduction is made after the seventh contract anniversary. No such deduction is
made with respect to assets attributable to Compass 2 contracts.
(4) ANNUITY RESERVES
Annuity reserves for contracts with annuity commencement dates prior to February
1, 1987 have been calculated using the 1971 Individual Annuitant Mortality
Table. Annuity reserves for contracts with annuity commencement dates on or
after February 1, 1987 are calculated using the 1983 Individual Annuitant
Mortality Table. All annuity reserves are calculated using an assumed interest
rate of 4%. Required adjustments to the reserve are accomplished by transfers to
or from the Sponsor.
6
<PAGE>
SUN LIFE (N.Y.) VARIABLE ACCOUNT B
NOTES TO FINANCIAL STATEMENTS -- continued
(5) UNIT ACTIVITY FROM CONTRACT OWNER TRANSACTIONS
<TABLE>
<CAPTION>
CAS GSS HYS MMS
Sub-Account Sub-Account Sub-Account Sub-Account
----------------------- ----------------------- ------------------- -----------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Six Year
Six Months Year Ended Six Months Year Ended Months Ended Six Months Year Ended
Ended December Ended December Ended December Ended December
June 30, 31, June 30, 31, June 30, 31, June 30, 31,
COMPASS 2 CONTRACTS 1997 1996 1997 1996 1997 1996 1997 1996
- ----------------------- ---------- ---------- ---------- ---------- -------- -------- ---------- ----------
Units Outstanding
Beginning of Period 1,149,253 1,311,905 1,160,869 1,317,288 489,793 570,116 917,551 1,084,910
Units purchased 17,163 34,513 14,225 29,010 1,955 5,193 10,481 20,814
Units transferred
between Sub-
Accounts and
Fixed Account (6,044) (32,094) 9,557 25,659 11,618 (6,162) (50,491) 58,322
Units withdrawn,
surrendered, and
annuitized (63,879) (165,071) (105,056) (211,088) (37,735) (79,354) (133,361) (246,495)
---------- ---------- ---------- ---------- -------- -------- ---------- ----------
Units Outstanding End
of Period 1,096,493 1,149,253 1,079,595 1,160,869 465,631 489,793 744,180 917,551
---------- ---------- ---------- ---------- -------- -------- ---------- ----------
---------- ---------- ---------- ---------- -------- -------- ---------- ----------
</TABLE>
<TABLE>
<CAPTION>
MSS TRS WGS
Sub-Account Sub-Account Sub-Account
----------------------- ----------------------- -------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Six Year
Six Months Year Ended Six Months Year Ended Months Ended
Ended December Ended December Ended December
June 30, 31, June 30, 31, June 30, 31,
1997 1996 1997 1996 1997 1996
---------- ---------- ---------- ---------- -------- --------
Units Outstanding
Beginning of Period 314,243 331,221 1,532,369 1,740,564 358,117 433,736
Units purchased 5,552 11,544 24,032 40,026 3,969 10,747
Units transferred
between Sub-
Accounts and
Fixed Account 7,533 12,613 (9,129) (6,258) (5,747) (20,115)
Units withdrawn,
surrendered, and
annuitized (26,276) (41,135) (112,228) (241,963) (54,895) (66,251)
---------- ---------- ---------- ---------- -------- --------
Units Outstanding End
of Period 301,052 314,243 1,435,044 1,532,369 301,444 358,117
---------- ---------- ---------- ---------- -------- --------
---------- ---------- ---------- ---------- -------- --------
</TABLE>
7
<PAGE>
SUN LIFE (N.Y.) VARIABLE ACCOUNT B
NOTES TO FINANCIAL STATEMENTS -- continued
<TABLE>
<CAPTION>
CAS GSS HYS MMS
Sub-Account Sub-Account Sub-Account Sub-Account
----------------------- ----------------------- ------------------- -----------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Six Year
Six Months Year Ended Six Months Year Ended Months Ended Six Months Year Ended
Ended December Ended December Ended December Ended December
June 30, 31, June 30, 31, June 30, 31, June 30, 31,
COMPASS 3 CONTRACTS 1997 1996 1997 1996 1997 1996 1997 1996
- ----------------------- ---------- ---------- ---------- ---------- -------- -------- ---------- ----------
Units Outstanding
Beginning of Period 231,231 184,876 58,052 39,286 58,945 43,963 83,267 44,348
Units purchased 46,731 82,988 3,207 23,535 3,772 20,780 4,895 16,424
Units transferred
between Sub-
Accounts and
Fixed Account 3,401 (23,851) 3,937 (1,004) (2,013) 1,055 (15,921) 25,043
Units withdrawn,
surrendered, and
annuitized (8,306) (12,782) (6,125) (3,765) (1,499) (6,853) (4,069) (2,548)
---------- ---------- ---------- ---------- -------- -------- ---------- ----------
Units Outstanding End
of Period 273,057 231,231 59,071 58,052 59,205 58,945 68,172 83,267
---------- ---------- ---------- ---------- -------- -------- ---------- ----------
---------- ---------- ---------- ---------- -------- -------- ---------- ----------
<CAPTION>
MSS TRS WGS
Sub-Account Sub-Account Sub-Account
----------------------- ----------------------- -------------------
Six Year
Six Months Year Ended Six Months Year Ended Months Ended
Ended December Ended December Ended December
June 30, 31, June 30, 31, June 30, 31,
1997 1996 1997 1996 1997 1996
---------- ---------- ---------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Units Outstanding
Beginning of Period 82,578 53,846 255,284 185,716 47,922 46,895
Units purchased 9,039 29,174 24,649 80,349 3,711 20,202
Units transferred
between Sub-
Accounts and
Fixed Account 2,385 4,546 3,369 10,544 (1,502) (9,737)
Units withdrawn,
surrendered, and
annuitized (4,724) (4,988) (7,810) (21,325) (724) (9,438)
---------- ---------- ---------- ---------- -------- --------
Units Outstanding End
of Period 89,278 82,578 275,492 255,284 49,407 47,922
---------- ---------- ---------- ---------- -------- --------
---------- ---------- ---------- ---------- -------- --------
</TABLE>
8
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Participants in Sun Life (N.Y.) Variable Account B
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 B (the Variable Account) as of June 30, 1997, the related
statements of operations for the six months then ended and the statements of
changes in net assets for the six months ended June 30, 1997 and the year ended
December 31, 1996. These financial statements are the responsibility of
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of the Variable Account as of June 30, 1997,
the results of its operations and the changes in its net assets for the
respective stated periods in conformity with generally accepted accounting
principles.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
August 8, 1997
----------------------------------------
This report is prepared for the general information of contract owners. It is
authorized for distribution to prospective purchasers only when preceded or
accompanied by an effective prospectus.
9
<PAGE>
SUN LIFE INSURANCE AND ANNUITY COMPANY
OF NEW YORK
80 Broad Street
New York, NY 10004
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DIRECTORS AND OFFICERS
PROFESSIONALLY MANAGED COMBINATION
JOHN D. McNEIL, Chairman and Director
FIXED/VARIABLE ANNUITIES
DONALD A. STEWART, President and
Director
FOR PERSONAL INVESTMENTS AND
DAVID D. HORN, Senior Vice President
QUALIFIED RETIREMENT PLANS
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and Director
SEMIANNUAL REPORT, JUNE 30, 1997
S. CAESAR RABOY, Senior Vice President
and Director
RICHARD B. BAILEY, Director
A. KEITH BRODKIN, Director
M. COLYER CRUM, Director
JOHN G. IRELAND, Director
EDWARD M. LAMONT, Director
JOHN S. LANE, Director
ANGUS A. MacNAUGHTON, Director
FIORAVANTE G. PERROTTA, Director
RALPH F. PETERS, Director
PAMELA T. TIMMINS, Director
MICHAEL A. COHEN, Vice President
and Regional Manager
MARGARET SEARS MEAD, Assistant Vice
President
and Secretary
L. BROCK THOMSON, Vice President and
Treasurer
[LOGO]
GENERAL DISTRIBUTOR
Clarendon Insurance Agency, Inc.
500 Boylston Street, Boston,
Massachusetts 02116
LEGAL COUNSEL
Covington & Burling
1201 Pennsylvania Avenue, N.W.
P.O. Box 7566, Washington, D.C. 20044
AUDITORS
Deloitte & Touche LLP
125 Summer Street, Boston,
Massachusetts 02110
ISSUED BY
CONY-3-8/97 8M SUN LIFE
INSURANCE AND ANNUITY COMPANY OF NEW YORK
