<PAGE>
SUN LIFE (N.Y.) VARIABLE ACCOUNT B
STATEMENT OF CONDITION-- December 31, 1996
<TABLE>
<CAPTION>
ASSETS:
Investments in MFS/Sun Life Series Trust: Shares Cost Value
---------- ------------ ------------
<S> <C> <C> <C>
Capital Appreciation Series ("CAS")...... 1,666,783 $ 46,630,660 $ 59,723,935
Government Securities Series ("GSS")..... 2,089,102 26,209,896 26,880,850
High Yield Series ("HYS")................ 1,468,395 12,666,389 13,527,963
Money Market Series ("MMS").............. 15,626,723 15,626,723 15,626,723
Managed Sectors Series ("MSS")........... 446,110 10,124,036 11,710,226
Total Return Series ("TRS").............. 2,119,044 33,103,413 41,194,053
World Governments Series ("WGS")......... 637,353 7,421,095 7,175,143
------------ ------------
$151,782,212 $175,838,893
------------
------------
LIABILTY:
Payable to sponsor................................................... 49,354
------------
Net Assets..................................................... $175,789,539
------------
------------
</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................................................ 1,149,253 $ 48.6833 $ 55,945,505 $161,493 $ 56,106,998
GSS................................................ 1,160,869 22.5040 26,120,603 106,515 26,227,118
HYS................................................ 489,793 25.9755 12,725,125 43,245 12,768,370
MMS................................................ 917,551 16.0115 14,685,977 -- 14,685,977
MSS................................................ 314,243 33.5381 10,547,471 11,516 10,558,987
TRS................................................ 1,532,369 24.2332 37,168,687 528,580 37,697,267
WGS................................................ 358,117 18.5138 6,636,842 -- 6,636,842
------------ ----------- ------------
$163,830,210 $851,349 $164,681,559
------------ ----------- ------------
<CAPTION>
COMPASS 3 CONTRACTS:
<S> <C> <C> <C> <C> <C>
CAS................................................ 231,231 $ 15.6920 $ 3,628,190 $ 160 $ 3,628,350
GSS................................................ 58,052 11.2212 650,941 -- 650,941
HYS................................................ 58,945 12.8082 755,007 -- 755,007
MMS................................................ 83,267 11.0530 920,235 327 920,562
MSS................................................ 82,578 14.0980 1,161,735 -- 1,161,735
TRS................................................ 255,284 13.5283 3,452,935 148 3,453,083
WGS................................................ 47,922 11.2477 538,302 -- 538,302
------------ ----------- ------------
$ 11,107,345 $ 635 $ 11,107,980
------------ ----------- ------------
Net Assets............................................................ $174,937,555 $851,984 $175,789,539
------------ ----------- ------------
------------ ----------- ------------
</TABLE>
See notes to financial statements
1
<PAGE>
SUN LIFE (N.Y.) VARIABLE ACCOUNT B
STATEMENTS OF OPERATIONS-- Year Ended December 31, 1996
<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....................................... $ 4,738,438 $1,612,644 $1,120,332 $ 720,534
Mortality and expense risk charges.............. 752,284 370,701 177,311 194,882
Distribution expense charges.................... 4,630 877 965 821
----------- ----------- ---------- ------------
Net investment income....................... $ 3,981,524 $1,241,066 $ 942,056 $ 524,831
----------- ----------- ---------- ------------
REALIZED AND UNREALIZED GAINS (LOSSES):
Realized gains (losses) on investment
transactions:
Proceeds from sales........................... $16,230,201 $9,813,452 $6,256,541 $ 12,850,999
Cost of investments sold...................... 11,653,410 9,840,522 5,975,298 12,850,999
----------- ----------- ---------- ------------
Net realized gains (losses)................. $ 4,576,791 $ (27,070 ) $ 281,243 $ --
----------- ----------- ---------- ------------
Net unrealized appreciation (depreciation) on
investments
End of year................................... $13,093,275 $ 670,954 $ 861,574 $ --
Beginning of year............................. 11,078,267 1,795,171 692,848 --
----------- ----------- ---------- ------------
Change in unrealized appreciation
(depreciation)............................. $ 2,015,008 $(1,124,217) $ 168,726 $ --
----------- ----------- ---------- ------------
Realized and unrealized gains (losses)........ $ 6,591,799 $(1,151,287) $ 449,969 $ --
----------- ----------- ---------- ------------
INCREASE IN NET ASSETS FROM OPERATIONS............ $10,573,323 $ 89,779 $1,392,025 $ 524,831
----------- ----------- ---------- ------------
----------- ----------- ---------- ------------
</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....................................... $1,389,216 $2,905,588 $1,047,797 $13,534,549
Mortality and expense risk charges.............. 135,188 497,130 95,011 2,222,507
Distribution expense charges.................... 1,321 4,426 809 13,849
---------- ---------- ---------- -----------
Net investment income....................... $1,252,707 $2,404,032 $ 951,977 $11,298,193
---------- ---------- ---------- -----------
REALIZED AND UNREALIZED GAINS (LOSSES):
Realized gains (losses) on investment
transactions:
Proceeds from sales........................... $2,187,159 $7,642,534 $2,039,768 $57,020,654
Cost of investments sold...................... 1,840,838 5,704,710 2,170,077 50,035,854
---------- ---------- ---------- -----------
Net realized gains (losses)................. $ 346,321 $1,937,824 $(130,309 ) $ 6,984,800
---------- ---------- ---------- -----------
Net unrealized appreciation (depreciation) on
investments
End of year................................... $1,586,190 $8,090,640 $(245,952 ) $24,056,681
Beginning of year............................. 1,558,915 7,601,596 336,154 23,062,951
---------- ---------- ---------- -----------
Change in unrealized appreciation
(depreciation)............................. $ 27,275 $ 489,044 $(582,106 ) $ 993,730
---------- ---------- ---------- -----------
Realized and unrealized gains (losses)........ $ 373,596 $2,426,868 $(712,415 ) $ 7,978,530
---------- ---------- ---------- -----------
INCREASE IN NET ASSETS FROM OPERATIONS............ $1,626,303 $4,830,900 $ 239,562 $19,276,723
---------- ---------- ---------- -----------
---------- ---------- ---------- -----------
</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>
Year Ended December 31, Year Ended December 31,
------------------------------ -------------------------------
<CAPTION>
1996 1995 1996 1995
-------------- ------------- -------------- --------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income....................................... $ 3,981,524 $ 552,397 $ 1,241,066 $ 1,637,451
Net realized gains (losses)................................. 4,576,791 2,507,432 (27,070) 603,085
Net unrealized gains (losses)............................... 2,015,008 10,932,150 (1,124,217) 2,707,574
-------------- ------------- -------------- --------------
Increase in net assets from operations.................. $10,573,323 $13,991,979 $ 89,779 $ 4,948,110
-------------- ------------- -------------- --------------
CONTRACT OWNER TRANSACTIONS:
Accumulation Activity:
Purchase payments received................................ $ 2,717,881 $ 2,487,233 $ 894,639 $ 1,033,624
Net transfers between Sub-Accounts and Fixed Account...... (1,800,976) 2,243,560 493,206 (7,186,488)
Withdrawals, surrenders, annuitizations and contract
charges.................................................. (7,564,122) (5,693,451) (4,694,596) (5,369,947)
-------------- ------------- -------------- --------------
Net accumulation activity............................... $(6,647,217) $ (962,658) $(3,306,751) $(11,522,811)
-------------- ------------- -------------- --------------
Annuitization Activity:
Annuitizations............................................ $ 7,453 $ 41,730 $ 10,761 $ 51,369
Annuity payments and contract charges..................... (21,172) (16,842) (43,569) (41,652)
Adjustments to annuity reserve............................ 775 2,207 1,408 1,228
-------------- ------------- -------------- --------------
Net annuitization activity.............................. $ (12,944) $ 27,095 $ (31,400) $ 10,945
-------------- ------------- -------------- --------------
Decrease in net assets from contract owner transactions..... $(6,660,161) $ (935,563) $(3,338,151) $(11,511,866)
-------------- ------------- -------------- --------------
Increase (decrease) in net assets......................... $ 3,913,162 $13,056,416 $(3,248,372) $ (6,563,756)
NET ASSETS:
Beginning of year........................................... 55,822,186 42,765,770 30,126,431 36,690,187
-------------- ------------- -------------- --------------
End of year................................................. $59,735,348 $55,822,186 $26,878,059 $ 30,126,431
-------------- ------------- -------------- --------------
-------------- ------------- -------------- --------------
<CAPTION>
HYS MMS
Sub-Account Sub-Account
------------------------------ -------------------------------
Year Ended December 31, Year Ended December 31,
------------------------------ -------------------------------
1996 1995 1996 1995
-------------- ------------- -------------- --------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income....................................... $ 942,056 $ 785,539 $ 524,831 $ 711,100
Net realized gains.......................................... 281,243 183,759 -- --
Net unrealized gains........................................ 168,726 1,082,523 -- --
-------------- ------------- -------------- --------------
Increase in net assets from operations.................. $ 1,392,025 $ 2,051,821 $ 524,831 $ 711,100
-------------- ------------- -------------- --------------
CONTRACT OWNER TRANSACTIONS:
Accumulation Activity:
Purchase payments received................................ $ 373,887 $ 263,434 $ 506,719 $ 424,234
Net transfers between Sub-Accounts and Fixed Account...... (133,634) (431,236) 1,225,167 5,180,410
Withdrawals, surrenders, annuitizations and contract
charges.................................................. (2,039,017) (2,037,347) (3,891,615) (5,371,738)
-------------- ------------- -------------- --------------
Net accumulation activity............................... $(1,798,764) $(2,205,149) $(2,159,729) $ 232,906
-------------- ------------- -------------- --------------
Annuitization Activity:
Annuitizations $ -- $ -- $ -- $ --
Annuity payments and contract charges..................... (6,135) (5,761) (4,273) (7,368)
Adjustments to annuity reserve............................ (255) (530) (11,568) (11,104)
-------------- ------------- -------------- --------------
Net annuitization activity.............................. $ (6,390) $ (6,291) $ (15,841) $ (18,472)
-------------- ------------- -------------- --------------
Increase (decrease) in net assets from contract owner
transactions............................................... $(1,805,154) $(2,211,440) $(2,175,570) $ 214,434
-------------- ------------- -------------- --------------
Increase (decrease) in net assets......................... $ (413,129) $ (159,619) $(1,650,739) $ 925,534
NET ASSETS:
Beginning of year........................................... 13,936,506 14,096,125 17,257,278 16,331,744
-------------- ------------- -------------- --------------
End of year................................................. $13,523,377 $13,936,506 $15,606,539 $ 17,257,278
-------------- ------------- -------------- --------------
-------------- ------------- -------------- --------------
</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>
Year Ended December 31, Year Ended December 31,
------------------------------ -----------------------------
<CAPTION>
1996 1995 1996 1995
--------------- ------------ -------------- ------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income................................ $ 1,252,707 $ 209,209 $ 2,404,032 $ 975,755
Net realized gains................................... 346,321 724,204 1,937,824 2,476,482
Net unrealized gains................................. 27,275 1,724,469 489,044 5,260,617
--------------- ------------ -------------- ------------
Increase in net assets from operations........... $ 1,626,303 $ 2,657,882 $ 4,830,900 $ 8,712,854
--------------- ------------ -------------- ------------
CONTRACT OWNER TRANSACTIONS:
Accumulation Activity:
Purchase payments received......................... $ 728,572 $ 676,945 $ 1,903,724 $ 1,453,111
Net transfers between Sub-Accounts and Fixed
Account........................................... 455,068 1,442,412 (23,251) (2,492,700)
Withdrawals, surrenders, annuitizations and
contract charges.................................. (1,326,391) (2,086,791) (5,723,230) (5,149,792)
--------------- ------------ -------------- ------------
Net accumulation activity........................ $ (142,751) $ 32,566 $ (3,842,757) $ (6,189,381)
--------------- ------------ -------------- ------------
Annuitization Activity:
Annuitizations..................................... $ -- $ -- $ 19,728 $ --
Annuity payments and contract charges.............. (135) (121) (68,505) (59,803)
Adjustments to annuity reserve..................... 11,582 (148) (13,885) (11,643)
--------------- ------------ -------------- ------------
Net annuitization activity....................... $ 11,447 $ (269) $ (62,662) $ (71,446)
--------------- ------------ -------------- ------------
Increase (decrease) in net assets from contract owner
transactions........................................ $ (131,304) $ 32,297 $ (3,905,419) $ (6,260,827)
--------------- ------------ -------------- ------------
Increase in net assets............................. $ 1,494,999 $ 2,690,179 $ 925,481 $ 2,452,027
NET ASSETS:
Beginning of year.................................... 10,225,723 7,535,544 40,224,869 37,772,842
--------------- ------------ -------------- ------------
End of period........................................ $11,720,722 $10,225,723 $ 41,150,350 $ 40,224,869
--------------- ------------ -------------- ------------
--------------- ------------ -------------- ------------
<CAPTION>
WGS
Sub-Account Total
------------------------------ -----------------------------
Year Ended December 31, Year Ended December 31,
------------------------------ -----------------------------
1996 1995 1996 1995
--------------- ------------ -------------- ------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income................................ $ 951,977 $ 403,047 $ 11,298,193 $ 5,274,498
Net realized gains (losses).......................... (130,309) 110,004 6,984,800 6,604,966
Net unrealized gains (losses)........................ (582,106) 702,901 993,730 22,410,234
--------------- ------------ -------------- ------------
Increase in net assets from operations........... $ 239,562 $ 1,215,952 $ 19,276,723 $ 34,289,698
--------------- ------------ -------------- ------------
CONTRACT OWNER TRANSACTIONS:
Accumulation Activity:
Purchase payments received......................... $ 408,414 $ 273,558 $ 7,533,836 $ 6,612,139
Net transfers between Sub-Accounts and Fixed
Account........................................... (463,423) (595,533) (247,843) (1,839,575)
Withdrawals, surrenders, annuitizations and
contract charges.................................. (1,295,854) (1,346,149) (26,534,825) (27,055,215)
--------------- ------------ -------------- ------------
Net accumulation activity........................ $(1,350,863) $(1,668,124) $(19,248,832) $(22,282,651)
--------------- ------------ -------------- ------------
Annuitization Activity:
Annuitizations..................................... $ -- $ -- $ 37,942 $ 93,099
Annuity payments and contract charges.............. -- -- (143,789) (131,547)
Adjustments to annuity reserve..................... -- -- (11,943) (19,990)
--------------- ------------ -------------- ------------
Net annuitization activity....................... $ -- $ -- $ (117,790) $ (58,438)
--------------- ------------ -------------- ------------
Decrease in net assets from contract owner
transactions........................................ $(1,350,863) $(1,668,124) $(19,366,622) $(22,341,089)
--------------- ------------ -------------- ------------
Increase (decrease) in net assets.................. $(1,111,301) $ (452,172) $ (89,899) $ 11,948,609
NET ASSETS:
Beginning of year.................................... 8,286,445 8,738,617 175,879,438 163,930,829
--------------- ------------ -------------- ------------
End of year.......................................... $ 7,175,144 $ 8,286,445 $175,789,539 $175,879,438
--------------- ------------ -------------- ------------
--------------- ------------ -------------- ------------
</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
Sub-Account Sub-Account Sub-Account
----------------------- ----------------------- -------------------
<S> <C> <C> <C> <C> <C> <C>
Year Ended Year Ended Year Ended
December 31, December 31, December 31,
----------------------- ----------------------- -------------------
<CAPTION>
COMPASS 2 CONTRACTS 1996 1995 1996 1995 1996 1995
- -------------------------------------------------- ---------- ---------- ---------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Units Outstanding Beginning of Year 1,311,905 1,352,145 1,317,288 1,877,778 570,116 673,380
Units purchased 34,513 53,525 29,010 40,875 5,193 8,072
Units transferred between Sub-Accounts and
Fixed Account (32,094) 61,551 25,659 (341,163) (6,162) (19,382)
Units withdrawn, surrendered, and annuitized (165,071) (155,316) (211,088) (260,202) (79,354) (91,954)
---------- ---------- ---------- ---------- -------- --------
Units Outstanding End of Year 1,149,253 1,311,905 1,160,869 1,317,288 489,793 570,116
---------- ---------- ---------- ---------- -------- --------
---------- ---------- ---------- ---------- -------- --------
<CAPTION>
MMS
Sub-Account
-----------------------
<S> <C> <C>
Year Ended
December 31,
-----------------------
COMPASS 2 CONTRACTS 1996 1995
- -------------------------------------------------- ---------- ----------
<S> <C> <C>
Units Outstanding Beginning of Year 1,084,910 1,074,216
Units purchased 20,814 22,486
Units transferred between Sub-Accounts and
Fixed Account 58,322 338,828
Units withdrawn, surrendered, and annuitized (246,495) (350,620)
---------- ----------
Units Outstanding End of Year 917,551 1,084,910
---------- ----------
---------- ----------
</TABLE>
<TABLE>
<CAPTION>
MSS TRS WGS
Sub-Account Sub-Account Sub-Account
---------------------- ---------------------- ------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Year Ended Year Ended Year Ended
December 31, December 31, December 31,
---------------------- ---------------------- ------------------
<CAPTION>
1996 1995 1996 1995 1996 1995
---------- ---------- ---------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Units Outstanding Beginning of Year 331,221 328,532 1,740,564 2,083,366 433,736 530,682
Units purchased 11,544 14,042 40,026 52,963 10,747 11,682
Units transferred between Sub-Accounts and
Fixed Account 12,613 63,983 (6,258) (132,595) (20,115) (31,859)
Units withdrawn, surrendered, and annuitized (41,135) (75,336) (241,963) (263,170) (66,251) (76,769)
---------- ---------- ---------- ---------- -------- --------
Units Outstanding End of Year 314,243 331,221 1,532,369 1,740,564 358,117 433,736
---------- ---------- ---------- ---------- -------- --------
---------- ---------- ---------- ---------- -------- --------
</TABLE>
7
<PAGE>
SUN LIFE (N.Y.) VARIABLE ACCOUNT B
NOTES TO FINANCIAL STATEMENTS -- continued
<TABLE>
<CAPTION>
CAS GSS HYS
Sub-Account Sub-Account Sub-Account
----------------------- ----------------------- -------------------
<S> <C> <C> <C> <C> <C> <C>
Year Ended Year Ended Year Ended
December 31, December 31, December 31,
----------------------- ----------------------- -------------------
<CAPTION>
COMPASS 3 CONTRACTS 1996 1995 1996 1995 1996 1995
- -------------------------------------------------- ---------- ---------- ---------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Units Outstanding Beginning of Year 184,876 135,042 39,286 32,725 43,963 37,197
Units purchased 82,988 51,695 23,535 17,789 20,780 7,798
Units transferred between Sub-Accounts and
Fixed Account (23,851) 6,001 (1,004) (9,242) 1,055 1,400
Units withdrawn, surrendered, and annuitized (12,782) (7,862) (3,765) (1,986) (6,853) (2,432)
---------- ---------- ---------- ---------- -------- --------
Units Outstanding End of Year 231,231 184,876 58,052 39,286 58,945 43,963
---------- ---------- ---------- ---------- -------- --------
---------- ---------- ---------- ---------- -------- --------
<CAPTION>
MMS
Sub-Account
-----------------------
<S> <C> <C>
Year Ended
December 31,
-----------------------
COMPASS 3 CONTRACTS 1996 1995
- -------------------------------------------------- ---------- ----------
<S> <C> <C>
Units Outstanding Beginning of Year 44,348 33,901
Units purchased 16,424 7,957
Units transferred between Sub-Accounts and
Fixed Account 25,043 4,581
Units withdrawn, surrendered, and annuitized (2,548) (2,091)
---------- ----------
Units Outstanding End of Year 83,267 44,348
---------- ----------
---------- ----------
</TABLE>
<TABLE>
<CAPTION>
MSS TRS WGS
Sub-Account Sub-Account Sub-Account
---------------------- ---------------------- ------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Year Ended Year Ended Year Ended
December 31, December 31, December 31,
---------------------- ---------------------- ------------------
<CAPTION>
1996 1995 1996 1995 1996 1995
---------- ---------- ---------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Units Outstanding Beginning of Year 53,846 28,752 185,716 154,543 46,895 43,259
Units purchased 29,174 27,333 80,349 39,993 20,202 6,637
Units transferred between Sub-Accounts and
Fixed Account 4,546 (147) 10,544 (2,984) (9,737) 191
Units withdrawn, surrendered, and annuitized (4,988) (2,092) (21,325) (5,836) (9,438) (3,192)
---------- ---------- ---------- ---------- -------- --------
Units Outstanding End of Year 82,578 53,846 255,284 185,716 47,922 46,895
---------- ---------- ---------- ---------- -------- --------
---------- ---------- ---------- ---------- -------- --------
</TABLE>
8
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Contract Owners participating 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 December 31, 1996, the related
statements of operations for the year then ended and the statements of changes
in net assets for the years ended December 31, 1996 and 1995. These financial
statements are the responsibility of management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures included
confirmation of securities held at December 31, 1996 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,
1996, 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 7, 1997
9
<PAGE>
SUN LIFE INSURANCE AND ANNUITY COMPANY
OF NEW YORK
80 Broad Street
New York, NY 10004
DIRECTORS AND OFFICERS
JOHN D. McNEIL, Chairman and Director
DONALD A. STEWART, President and Director
DAVID D. HORN, 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
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
This report is prepared for the general information
of contract owners. It is authorized for distribution
to prospective purchasers only if preceded or
accompanied by an effective prospectus.
CONY-3-2/97
SUN LIFE (N.Y.) VARIABLE
ACCOUNT B
[COMPASS 2 & 3 LOGO]
PROFESSIONALLY MANAGED COMBINATION
FIXED/VARIABLE ANNUITIES
FOR PERSONAL INVESTMENTS AND
QUALIFIED RETIREMENT PLANS
-------------------------------------------
ANNUAL REPORT, DECEMBER 31, 1996
[LOGO]
ISSUED BY
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
