<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
__________________
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1998
_____________________
Securities and Exchange Commission File No. 812-06037
THE MANUFACTURERS LIFE INSURANCE COMPANY OF NORTH AMERICA
(Exact name of registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation or organization)
22-2265014
(I.R.S. Employer Identification No.)
116 Huntington Avenue
Boston, Massachusetts 02116
(Address of principal executive offices)
(617) 266-6008
(Registrant's telephone number, including area code)
_____________________
Indicated by check market whether the registrant (1) has filed reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
__X__ Yes _____ No
APPLICABLE ONLY TO CORPORATE ISSUERS:
The number of shares outstanding of the issuer's sole class of common stock, as
of September 30, 1998 was 2,600.
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THE MANUFACTURERS LIFE INSURANCE COMPANY OF NORTH AMERICA
Quarterly Report on Form 10-Q
For the period ended September 30, 1998
Table of Contents
<TABLE>
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Page
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Part I Financial Information
Item 1. Consolidated Financial Statements
Consolidated Balance Sheets as of September 30, 1998 and December 31, 1997 3
Consolidated Statements of Income for the nine months and three months ended 4
September 30, 1998 and 1997
Statements of Cash Flows for the nine months ended September 30, 1998 and 1997 5
Notes to Consolidated Financial Statements 6
Item 2. Management Discussion and Analysis of Results of Operations and Financial Condition 7
Part II Other Information
Item 1 Legal Proceedings 12
Item 2 Change in Securities 12
Item 3 Default upon Senior Securities 12
Item 4 Submission of matters to a vote of Security Holders 12
Item 5 Other Information 12
Item 6A Exhibits 12
Item 6B 15
</TABLE>
2
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THE MANUFACTURERS LIFE INSURANCE COMPANY OF NORTH AMERICA
(A WHOLLY-OWNED SUBSIDIARY OF
MANULIFE-WOOD LOGAN HOLDING CO., INC.)
The Manufacturers Life Insurance Company of North America
Consolidated Balance Sheets (Unaudited)
<TABLE>
<CAPTION>
AS AT AS AT
SEPTEMBER 30 DECEMBER 31
ASSETS ($ thousands) 1998 1997
------------ -----------
(UNAUDITED)
<S> <C> <C>
INVESTMENTS
Fixed maturities available-for-sale, at fair value
(amortized cost: 1998 $148,918; 1997 $140,573) $ 155,335 $ 143,307
Short-term investments 58,503 14,992
Policy loans 4,956 3,276
----------- -----------
TOTAL INVESTMENTS $ 218,794 $ 161,575
----------- -----------
Cash and cash equivalents $ 2,721 $ 7,339
Accrued investment income 2,829 2,641
Deferred policy acquisition costs 418,532 364,983
Receivable from affiliates - 4,605
Other assets 7,273 9,626
Due from reinsurers 566,084 553,834
Separate account assets 10,389,723 9,529,160
----------- -----------
TOTAL ASSETS $11,605,956 $10,633,763
=========== ===========
LIABILITIES AND SHAREHOLDER'S EQUITY ($ thousands)
LIABILITIES:
Policyholder funds $ 96,004 $ 92,750
Payable to affiliates 10,345 -
Amounts on deposit from reinsurer 3,000 3,000
Amount payable to reinsurers 569,464 571,882
Notes payable to affiliates 241,000 183,955
Deferred tax liability 23,529 16,428
Other liabilities 36,192 27,862
Separate account liabilities 10,389,723 9,529,160
----------- -----------
TOTAL LIABILITIES $11,369,257 $10,425,037
----------- -----------
SHAREHOLDER'S EQUITY:
Common stock (par value $1,000 per share--authorized,
3,000 shares; issued and outstanding, 2,600 shares) $ 2,600 $ 2,600
Additional paid-in capital 179,053 179,053
Unrealized appreciation on securities available-for-sale 2,722 1,200
Retained earnings 52,324 25,873
----------- -----------
Total shareholder's equity $ 236,699 $ 208,726
----------- -----------
TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY $11,605,956 $10,633,763
=========== ===========
</TABLE>
See accompanying notes.
3
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THE MANUFACTURERS LIFE INSURANCE COMPANY OF NORTH AMERICA
(A WHOLLY-OWNED SUBSIDIARY OF
MANULIFE-WOOD LOGAN HOLDING CO., INC.)
Consolidated Statements of Income (Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30
------------------ -------------------
($ thousands) 1998 1997 1998 1997
-------- ------- -------- --------
<S> <C> <C> <C> <C>
REVENUES:
Fees from separate accounts and policyholder funds $42,666 $34,044 $123,556 $ 89,220
Advisory fees and other distribution revenues 22,796 18,151 66,866 48,201
Net investment income 3,124 1,883 9,044 5,324
Net realized investment gains (losses) 306 (5) 509 132
------- ------- -------- --------
TOTAL REVENUE $68,892 $54,073 $199,975 $142,877
------- ------- -------- --------
BENEFITS AND EXPENSES:
Benefits to policyholders $ 1,365 $ 1,448 $ 3,983 $ 3,746
Amortization of deferred policy acquisition costs 28,749 9,196 49,597 28,840
Other insurance expenses 33,189 31,049 97,340 76,057
Financing costs 1,727 2,459 8,158 7,924
------- ------- -------- --------
TOTAL BENEFITS AND EXPENSES $65,030 $44,152 $159,078 116,567
------- ------- -------- --------
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME
TAXES $ 3,862 $ 9,921 $ 40,897 $ 26,310
------- ------- -------- --------
INCOME TAX EXPENSE $ 1,504 $ 3,725 $ 14,446 $ 9,471
------- ------- -------- --------
INCOME FROM CONTINUING OPERATIONS $ 2,358 $ 6,196 $ 26,451 $ 16,839
------- ------- -------- --------
Discontinued operations:
Loss from operations, net of tax $ - $ - $ - $ 141
------- ------- -------- --------
NET INCOME $ 2,358 $ 6,196 $ 26,451 $ 16,698
------- ------- -------- --------
</TABLE>
See accompanying notes.
4
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THE MANUFACTURERS LIFE INSURANCE COMPANY OF NORTH AMERICA
(A WHOLLY-OWNED SUBSIDIARY OF
MANULIFE-WOOD LOGAN HOLDING CO., INC.)
Consolidated Statements of Cash Flows (Unaudited)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30
--------------------
($thousands) 1998 1997
--------- --------
<S> <C> <C>
OPERATING ACTIVITIES:
Net income $ 26,451 $ 16,698
Adjustments to reconcile net income to net income to net cash (used in) provided
by operating activities:
Amortization of bond discount and premium 490 286
Benefits to policyholders 3,983 3,746
Provision for deferred income tax 6,285 8,604
Net realized investment gains (509) (127)
Amortization of deferred policy acquisition costs 49,597 30,546
Policy acquisition costs deferred (104,491) (88,389)
Changes in assets and liabilities:
Accrued investment income (188) (241)
Other assets 2,353 (2,749)
Receivable from affiliates 4,605 -
Payable to affiliates 10,345 3,454
Other liabilities 8,330 18,547
--------- --------
Net cash (used in) provided by operating activities $ 7,251 $ (9,625)
--------- --------
INVESTING ACTIVITIES:
Purchase of fixed maturities $ (37,722) $(33,091)
Proceeds from fixed maturities sold, matured or repaid 29,396 26,941
Proceeds from sales of foreclosed real estate - 2,268
Net change in short-term investments (43,511) 4,095
Net change in policy loans (1,680) (2,204)
--------- --------
Net cash used in investing activities $ (53,517) $ (1,991)
--------- --------
FINANCING ACTIVITIES:
Net reinsurance (consideration) proceeds $ (14,668) $ (3,109)
Receipts credited to policyholder funds 8,793 17,434
Return of policyholder funds (9,522) (11,034)
Increase in notes payable to affiliates 57,045 25,711
--------- --------
Net cash provided by financing activities $ 41,648 $ 29,002
--------- --------
Increase (decrease) in cash and cash equivalents during the period $ (4,618) $ 17,386
Cash and cash equivalents at beginning of year 7,339 12,073
--------- --------
BALANCE, END OF PERIOD $ 2,721 $ 29,459
========= ========
</TABLE>
See accompanying notes.
5
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THE MANUFACTURERS LIFE INSURANCE COMPANY OF NORTH AMERICA
NOTES TO THE FINANCIAL STATEMENTS
UNAUDITED
1. BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements of the
Company and its wholly-owned subsidiaries have been prepared in
accordance with generally accepted accounting principles ("GAAP"), except
that they do not contain complete notes. However, in the opinion of
management, these statements include all normal recurring adjustments
necessary for a fair presentation of the results. These financial
statements should be read in conjunction with the financial statements
and the related notes included in the Company's annual report on Form
10-K for the year ended December 31, 1997. Operating results for the
nine months ended September 30, 1998 are not necessarily indicative of
the results that may be expected for the full year ending December 31,
1998.
2. COMPREHENSIVE INCOME
The Company adopted Statement of Financial Accounting Standards (SFAS)
130, "Reporting Comprehensive Income". SFAS 130 establishes standards
for reporting and displaying comprehensive income and its components in a
full set of general-purpose annual financial statements. Comprehensive
income includes all changes in shareholder's equity during a period
except those resulting from investments by, and distributions to
shareholders. The adoption of SFAS 130 resulted in revised and
additional disclosures but had no effect on the financial position,
results of operations, or liquidity of the Company.
Total comprehensive income for the three months and nine months ended
September 30, 1998 and 1997 was as follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30
------------------ -----------------
COMPREHENSIVE INCOME: 1998 1997 1998 1997
------ ------ ------- -------
<S> <C> <C> <C> <C>
NET INCOME $2,358 $6,196 $26,451 $16,698
OTHER COMPREHENSIVE INCOME, NET OF TAX:
Unrealized holding gains
on available-for-sale securities 1,145 328 1,522 377
------ ------ ------- -------
COMPREHENSIVE INCOME $3,503 $6,524 $27,973 $17,075
====== ====== ======= =======
</TABLE>
Other comprehensive income is reported net of taxes of $617 and $177 for
the three months and $820 and $203 for the nine months ended September
30, 1998 and 1997, respectively.
6
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Item 2. Management's Discussion And Analysis of Results of Operations
And Financial Condition
OVERVIEW
The following analysis of the consolidated results of operations and financial
condition of the Manufacturers Life Insurance Company of North America, (the
"Company") should be read in conjunction with the Consolidated Financial
Statements and the related Notes to Consolidated Financial Statements.
CORPORATE STRUCTURE
The Company is a direct wholly-owned U.S. subsidiary of Manulife-Wood Logan
Holding Co. Inc., which in turn is owned 62.5% by The Manufacturers Life
Insurance Company (U.S.A.) ("ManUSA"), 22.5% by MRL Holding, LLC ("MRL") and
15% by minority interests (which includes certain employees and former owners
of Wood Logan Associates). ManUSA and MRL are indirectly wholly-owned
subsidiaries of The Manufacturers Life Insurance Company ("Manulife
Financial"), a Canadian mutual insurance company. Manulife Financial has been
doing business in the United States since 1903.
On January 20, 1998, the Board of Directors of Manulife Financial asked the
management of Manulife Financial to prepare a plan for conversion of Manulife
Financial from a mutual life insurance company to an investor-owned,
publicly-traded stock company. Any demutualization plan for Manulife Financial
is subject to the approval of Manulife Financial's Board of Directors and
policyholders as well as regulatory approval.
REVIEW OF CONSOLIDATED OPERATING RESULTS AND CONSOLIDATED FINANCIAL CONDITION
OPERATING RESULTS
The discussion that follows compares results for the three months ended
September 30, 1998 to those for the three months ended September 30, 1997.
DEPOSITS AND PREMIUMS
During the third quarter of 1998, the company recognized moderate growth in
variable annuity sales. The Company's sales increased by $55 million from $607
million in 1997 to $662 million in 1998. The third quarter was a record sales
quarter for the Company even though the industry was facing a very volatile
market. The overall increase in sales is primarily due to the effects of the
Efficient Frontier Investment model, competitively performing investment funds
and competitive product features and sales compensation.
FEE INCOME
Total fees, including advisory fees, generated by Separate Accounts and
policyholder funds increased $13.3 million to $65.5 million for the third
quarter of 1998 versus the same period in 1997. Although investment
performance was lower in the quarter, our overall investment performance and a
growing block of inforce business has resulted in higher separate account
values and, therefore, higher fee income, which is a percentage of the net
value of invested assets in the separate account portfolio.
NET INVESTMENT INCOME
7
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Net investment income was $3.1 million for the third quarter of 1998, compared
to $1.9 million in the same period of 1997. This growth is primarily due to
the $47.7 million capital infusion received to support expanded operations in
New York State in the fourth quarter of 1997.
REALIZED CAPITAL GAINS
Realized gains in the third quarter of 1998 were $0.3 million compared to
realized gains of $0.0 million in the same period of 1997. The Company does
not actively trade assets for capital gains.
POLICYHOLDER BENEFITS
Policyholder benefits were $1.4 million in the third quarter of 1998, compared
to $1.5 million in the third quarter of 1997. This slight decrease is primarily
a result of lower interest rates related to fixed accumulation account values.
The Company's policyholder funds were $ 96.0 million and $ 92.8 million at
September 30, 1998 and September 30, 1997, respectively.
EXPENSES AND DEFERRED POLICY ACQUISITION COSTS (DPAC) AMORTIZATION
Operating costs and expenses, including commissions, were $72.6 million for the
third quarter of 1998 compared to $65.9 million for the third quarter of 1997
before deferral of acquisition expenses ($33.2 million and $31.1 million,
respectively, net of deferred acquisition expenses). The increase in expenses
in the third quarter of 1998 is primarily attributable to higher subadvisory
expenses generated from higher asset levels in the Manufacturers Investment
Trust, an increase in non-capitalized acquisition expenses (related to higher
sales volumes), other costs associated with growth in the Company's business,
and additional operating expenses associated with expanding the Company's
operations in New York. The Company's DPAC amortization expense during the
quarter was $28.7 million, an increase of $19.5 million from the third quarter
of 1997. The increase in DPAC amortization is a result of the growth in the
DPAC balance and negative investment returns for the quarter. Approximate
investment returns for 1998 and 1997 were a negative 11% versus a positive 6%,
respectively. The Company incurred lower financing costs during the quarter as
a result of reinsurance allowances received during the third quarter.
Offsetting the reinsurance allowances were higher financing fees associated
with an increase in outstanding notes payable. The Company borrowed an
additional $25 million in June 1997, $25 million in February 1998 and $32.5
million in August 1998 for commission financing associated with the sales
growth of the Company.
NET INCOME
Net income in the third quarter of 1998 was $2.4 million, compared to net
income of $6.2 million in the same period of 1997. As noted previously, the
higher fee income and higher investment income in the third quarter of 1998
were more than offset by higher benefits, operating costs and DPAC amortization
which led to lower third quarter 1998 results.
The discussion that follows compares results for the nine months ended
September 30, 1998 to those for the nine months ended September 30, 1997.
DEPOSITS AND PREMIUMS
The Company's sales increased by $311 million from $1,515 million in 1997 to
$1,826 million in 1998. The increasing sales is primarily due to the effects
of the Efficient Frontier Investment model, competitively performing investment
funds and competitive product features and sales compensation.
8
<PAGE> 9
FEE INCOME
Total fees, including advisory fees, generated by Separate Accounts and
policyholder funds increased to $190.4 million from $137.4 million during 1998
versus the same period in 1997. Although investment performance year to date
is significantly lower in 1998 our overall investment performance and a growing
block of inforce business has resulted in higher separate account values and,
therefore, higher fee income, which is a percentage of the net value of
invested assets in the separate account portfolio.
NET INVESTMENT INCOME
Net investment income was $9.0 million for 1998, compared to $5.3 million in
the same period of 1997. This growth is primarily due to the $47.7 million
capital infusion received to support expanded operations in New York State in
the fourth quarter of 1997.
REALIZED CAPITAL GAINS
Realized gains in 1998 were $0.5 million compared to realized gains of $0.1
million in the same period of 1997. The Company does not actively trade assets
for capital gains.
POLICYHOLDER BENEFITS
Policyholder benefits were $4.0 million in 1998, compared to $3.7 million in
1997. This increase is primarily a result of higher fixed accumulation account
values offset by lower interest rates. The Company's policyholder funds were
$96.0 million and $92.8 million at September 30, 1998 and September 30, 1997,
respectively.
EXPENSES AND DEFERRED POLICY ACQUISITION COSTS (DPAC) AMORTIZATION
Operating costs and expenses, including commissions, were $202.7 million in
1998 compared to $164.5 million for 1997 before deferral of acquisition
expenses ($97.3 million and $76.1 million, respectively, net of deferred
acquisition expenses). The increase in expenses during 1998 is primarily
attributable to higher subadvisory expenses generated from higher asset levels
in the Manufacturers Investment Trust, an increase in non-capitalized
acquisition expenses (related to higher sales volumes), other costs associated
with growth in the Company's business, and additional operating expenses
associated with expanding the Company's operations in New York. The Company's
DPAC amortization expense was $49.6 million an increase of $20.8 million from
the same period in 1997. The increase in DPAC amortization is a result of
growth in the DPAC balance and negative investment returns for 1998.
Approximate investment returns for 1998 and 1997 were a negative 2% versus a
positive 17%, respectively. The Company borrowed an additional $25 million in
June 1997, $25 million in February 1998 and $32.5 million in August 1998 for
commission financing associated with the sales growth of the Company. Partially
offsetting the financing costs is an increase in reinsurance allowances
received during 1998.
NET INCOME
Net income in 1998 was $26.5 million, compared to net income of $16.7 million
in the same period of 1997. As noted previously, the higher fee income and
higher investment income in 1998 were partially offset by higher benefits,
operating costs, DPAC amortization and additional financing costs which led to
improved 1998 results.
9
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FINANCIAL CONDITION
ASSETS
Separate account assets were $10.4 billion at the end of the third quarter of
1998, compared to $9.5 billion at the end of 1997. This growth reflects net
cash inflows to the separate accounts of $1.1 billion related to growth in the
overall variable annuity business and a reduction of $0.2 billion due to
investment performance of the underlying funds.
General account assets were $1.2 billion at the end of the third quarter of
1998, compared to $1.1 billion at the end of 1997.
The DPAC asset increased from $365.0 million at the end of 1997 to $418.5
million at the end of the third quarter of 1998. This increase is primarily due
to deferrable acquisition costs associated with the increased sales volumes of
variable annuity products net of DPAC amortization associated with in-force
business.
LIABILITIES
The Company's total liabilities of $11.4 billion increased $1.0 billion and
moved with changes in the asset levels. Separate Account liabilities move in
tandem with changes in Separate Account assets. The Company received an
additional $25 million and $32.5 million of borrowing during February 1998 and
August 1998, respectively, to provide commission financing as the Company
continued to increase its sales volumes over 1997 levels.
IMPACT OF YEAR 2000
The Company makes extensive use of information systems in the operations of its
various businesses, including for the exchange of financial data and other
information with customers, suppliers and other counterparties. The Company
also uses software and information systems provided by third parties in its
accounting, business and investment systems.
The Year 2000 risk, as it is commonly known, is the result of computer programs
being written using two digits, rather than four, to define the applicable
year. Any of the Company's computer programs that have date-sensitive software
may recognize a date using "00" as the year 1900 rather than the year 2000.
This could result in systems failures or miscalculations causing disruptions of
operations, including among other things, a temporary inability to process
transactions, send premium billing notices, make claims payments or engage in
other normal business activities.
In 1996, in order to make all systems applicable to and shared by the Company
with Manulife Financial Year 2000 compliant, a program was instituted to modify
or replace both Manulife Financial's information technology systems ("IT
systems") and embedded technology systems ("Non-IT systems"). The phases of
this program include (i) an inventory and assessment of all systems to
determine which are critical, (ii) planning and designing the required
modifications and replacements, (iii) making these modifications and
replacements, (iv) testing modified or replaced systems, (v) redeploying
modified or replaced systems and (vi) final management review and
certification. For most IT systems identified as critical, Manulife Financial
is in either the testing, redeployment or final review and certification phase.
For critical Non-IT systems, Manulife Financial is, on average, in the
redeployment phase. Management
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believes that Manulife Financial's critical systems will be Year 2000
compliant by the end of 1998, and that other systems will be dealt with by the
end of 1999.
In addition to efforts directed at Manulife Financial's own systems, Manulife
Financial is presently consulting vendors, customers, and other third parties
with which it deals in an effort to ensure that no material aspect of Manulife
Financial's or the Company's operations will be hindered by Year 2000 problems
of these third parties. This process includes providing third parties with
questionnaires regarding the state of their Year 2000 readiness and, where
possible or where the relationship is deemed material, testing or otherwise
confirming that the responses received are correct.
Manulife Financial's contingency plans for the Year 2000 risk are currently
being addressed in conjunction with its business continuity planning process,
which includes disaster recovery. Manulife Financial and the Company
recognize the importance of preparing for the change to the Year 2000 and,
commencing in January 1999, will conduct an assessment of the risk that
Manulife Financial's Year 2000 program has not fully resolved its Year 2000
issues and prepare, if necessary, appropriate contingency plans to address
these risks. Management currently believes that, with modifications to
existing software and conversions to new software, the Year 2000 risk will not
pose significant operational problems for Manulife Financial's or the Company's
computer systems. As part of the Year 2000 program, critical systems are being
"time-shift" tested in the Year 2000 and beyond to confirm that they will
continue to function properly before, during and after the change to the Year
2000. However, there can be no assurance that the Manulife Financial's Year
2000 program, including consulting third parties, will avoid any material
adverse effect on Manulife Financial's or the Company's operations, customer
relations or financial condition. Manulife Financial estimates the total cost
of its Year 2000 program will be approximately $60 million, of which $42
million has been incurred through September 30, 1998; however, there can be no
assurance that the actual cost incurred will not be materially higher than such
estimate. Those costs attributed to the purchase of new software and hardware
will be capitalized. Other costs will be expensed as incurred. The Company
will receive an allocation of these costs due to its shared systems but these
costs are not expected to have a material effect on the net operating income of
the Company.
FORWARD-LOOKING STATEMENTS
Certain information included herein is forward-looking within the meaning of
the Private Securities Litigation Reform Act of 1995, including, but not
limited to, statements concerning anticipated operating results, financial
resources, growth in existing markets and the impact of the year 2000. Such
forward-looking information involves important risks and uncertainties that
could significantly affect actual results and cause them to differ materially
from expectations expressed herein. These risks and uncertainties include
changes in general economic conditions, the effect of regulatory, tax and
competitive changes in the environment in which the Company operates,
fluctuations in interest rates, performance of financial markets and the
Company's ability to achieve anticipated levels of earnings.
11
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PART II--OTHER INFORMATION
Item 1 - Legal Proceedings
No reportable events
Item 2 - Changes In Securities
(a) and (b) No reportable events
(c)
The Company currently sells Venture Group Annuity, a flexible premium payment
deferred variable unallocated group annuity, to retirement plans that qualify
for special tax treatment under Section 401(a) of the Internal Revenue Code.
Sales of these securities are not required to be registered under the
Securities Act of 1933 (Section 3(a)(2) of this Act). Manufacturers Securities
Services, LLC, a majority owned subsidiary of the Company is the principal
underwriter of the contracts and Wood Logan Associates, Inc., an affiliate of
the Company, is the promotional agent. There are no maximum or minimum
purchase payments required to establish a contract. The value of a contract
will vary according to the investment performance, charges and expenses of the
subaccounts in which the contract is invested. As of September 30, 1998, the
total variable assets in the Venture Group Annuity was $99,324,847.
Items 3 - Defaults Upon Senior Securities
No reportable events
Item 4 - Submission Of Matters To A Vote Of Security Holders
No reportable events
Item 5 - Other Information
No reportable events
Item 6A - Exhibits
(3) Exhibits (the Registrant is also referred to as the "Company")
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
1(a) Underwriting Agreement between the Company and Manufacturers
Securities Services, LLC, formerly NASL Financial Services, Inc.
(Underwriter)1/
1(b)i Promotional Agent Agreement between Manufacturers Securities
Services, LLC, formerly NASL Financial Services, Inc.
(Underwriter), the Company and Wood Logan Associates, Inc.
(Promotional Agent) 2/
1(b)ii Amendment to Promotional Agent Agreement 1/
2 Not Applicable
3(i)(a) Certificate of Incorporation of the Company 3/
3(i)(b) Certificate of Amendment of Certificate of Incorporation of the
Company, Name Change, July 1984 3/
</TABLE>
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<TABLE>
<CAPTION>
<S> <C>
3(i)(c) Certificate of Amendment of Certificate of Incorporation of the
Company, Authorization of Capital, December 1994 3/
3(i)(d) Certificate of Amendment of Certificate of Incorporation of the
Company, Name Change, March 1997 4/
3(i)(e) Certificate of Amendment of Certificate of Incorporation of the
Company, Registered Agent, July 1997 3/
3(ii) Amended and Restated By-Laws of the Company 3/
4(i) Form of Individual Single Payment Deferred Fixed Annuity
Non-Participating Contract - 10/
4(ii) Form of Group Single Payment Deferred Fixed Annuity
Non-Participating Contract - 10/
4(iii) Individual Retirement Annuity Endorsement - 10/
4(iv) ERISA Tax-Sheltered Annuity Endorsement - 10/
4(v) Tax-Sheltered Annuity Endorsement - 10/
4(vi) Section 401 Plans Endorsement - 10/
5 Opinion and Consent of James D. Gallagher, Esq. - 11/
6 Not Applicable
7 Not Applicable
8 Not Applicable
9 Not Applicable
10(i) - Form of broker-dealer agreement between the Company,
Manufacturers Securities Services, LLC, formerly NASL Financial
Services, Inc. (underwriter), Wood Logan Associates, Inc.
(Promotional Agent) and broker-dealers 5/
(10)(ii) - Reinsurance and Guaranteed Death Benefits Agreement between
the Company and Connecticut General Life Insurance Company 8/
(10)(iii) - Reinsurance Agreement between the Company and PaineWebber Life
Insurance Company 9/
(10)(iv) - Coinsurance Agreement between the Company and Peoples Security
Life Insurance Company - 12/
(10)(v) - Reinsurance and Accounts Receivable Agreements between the
Company and ITT Lyndon Life - 12/
(10)(vi) - Automatic Modified -Coinsurance Reinsurance Agreement between
the Company and Transamerica Occidental Life Insurance
Company - 12/
</TABLE>
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<FF>
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<TABLE>
<CAPTION>
<S> <C>
(10)(vii) - Automatic Yearly Renewable Term Reinsurance Agreement between
the Company and Transamerica Occidental Life Insurance
Company - 12/
(10)(viii) - Amendment No. 1 to the Variable Annuity Guaranteed Death
Benefit Reinsurance Agreement between the Company and
Connecticut General Life Insurance Company -12/
11 Not Applicable
12 Not Applicable
13 Not Applicable
14 Not Applicable
15 Not Applicable
16 Not Applicable
17 Not Applicable
18 Not Applicable
19 Not Applicable
20 Not Applicable
21 The Company has the following wholly owned subsidiaries:
Manufacturers Securities Services, LLC and The Manufacturers Life
Insurance Company of New York
22 Not Applicable
23(i) Not Applicable
23(ii) Not Applicable
24 (i) Power of Attorney - John D. Richardson, Director and Chairman of
the Company 2/
24(ii) Power of Attorney - David W. Libbey, Principal Financial Officer
of the Company 3/
24(iii) Power of Attorney - Peter Hutchison, Director of the Company 1/
25 Not Applicable
26 Not Applicable
27 Financial Data Schedule - 14/
28 Not Applicable
</TABLE>
1/ Incorporated by reference to Post-Effective Amendment No. 4 to
Registration Statement on Form N-4, file number 33-76162, filed February
25, 1988 on behalf of The Manufacturers Life Insurance Company of North
America Separate Account A.
14
<PAGE> 15
2/ Incorporated by reference to Post-Effective Amendment No. 3 to
Registration Statement on Form N-4, file number 33-76162, filed April 29,
1997 on behalf of The Manufacturers Life Insurance Company of North
America Separate Account A.
3/ Incorporated by reference to Form 10Q, file number 812-06037, filed
November 14, 1997 on behalf of The Manufacturers Life Insurance Company of
North America.
4/ Incorporated by reference to Post-Effective Amendment No. 1 to
Registration Statement on Form S-1, file number 333-6011, filed October 9,
1997 on behalf of The Manufacturers Life Insurance Company of North
America.
5/ Incorporated by reference to Exhibit (b)(3)(iii) to pre-effective
amendment no. 1 to Form N-4, file number 33-9960, filed February 2, 1987
on behalf of the NASL Variable Account of the Company, now known as The
Manufacturers Life Insurance Company of North America Separate Account A
6/ not applicable
7/ not applicable
8/ Incorporated by reference to Exhibit (b)(7)(i) to Registration Statement
on Form N-4, file number 33-76162, filed March 1, 1996
9/ Incorporated by reference to Exhibit (b)(7)(iii) to Registration
Statement on Form N-4, file number 33-76162, filed March 1, 1996
10/ Incorporated by reference to Exhibit 4 to Registration Statement on Form
S-1, file number 33-6011, filed June 14, 1996
11/ Incorporated by reference to Exhibit 5 to Pre-Effective Amendment No. 1
to the Registration Statement on Form S-1, file number 33-6011, filed
January 29, 1997
12/ Incorporated by reference to Exhibits (10)(iv) through (10)(viii) to
Pre-Effective Amendment No. 1 to the Registration Statement on Form S-1,
file number 33-6011, filed January 29, 1997
13/ Incorporated by reference to Form 10K, file number 812-06037, filed March
31, 1998 on behalf of The Manufacturers Life Insurance Company of North
America
14/ Filed herewith
ITEM 6B - REPORTS ON FORM 8-K
No reports on Form 8-K were filed during the quarter.
15
<PAGE> 16
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
THE MANUFACTURERS LIFE INSURANCE COMPANY OF NORTH AMERICA
(Registrant)
By: /s/ David W. Libbey
David W. Libbey
Vice President, Treasurer and Chief Financial Officer
(Principal Financial Officer and Duly Authorized Officer)
Date: November 13, 1998
16
<FF>
<PAGE> 17
EXHIBIT INDEX
Exhibit No. Description
----------- ------------------------------------------------------------
27 Financial data schedule for quarter ended September 30, 1998
17
<TABLE> <S> <C>
<ARTICLE> 7
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<DEBT-HELD-FOR-SALE> 155,335
<DEBT-CARRYING-VALUE> 0
<DEBT-MARKET-VALUE> 0
<EQUITIES> 0
<MORTGAGE> 0
<REAL-ESTATE> 0
<TOTAL-INVEST> 218,794
<CASH> 2,721
<RECOVER-REINSURE> 0
<DEFERRED-ACQUISITION> 418,532
<TOTAL-ASSETS> 11,605,956
<POLICY-LOSSES> 96,004
<UNEARNED-PREMIUMS> 0
<POLICY-OTHER> 0
<POLICY-HOLDER-FUNDS> 10,389,723
<NOTES-PAYABLE> 241,000
<COMMON> 2,600
0
0
<OTHER-SE> 234,099
<TOTAL-LIABILITY-AND-EQUITY> 11,605,956
0
<INVESTMENT-INCOME> 9,044
<INVESTMENT-GAINS> 509
<OTHER-INCOME> 190,422
<BENEFITS> 3,983
<UNDERWRITING-AMORTIZATION> 49,597
<UNDERWRITING-OTHER> 105,498
<INCOME-PRETAX> 40,897
<INCOME-TAX> 14,446
<INCOME-CONTINUING> 26,451
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 26,451
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<RESERVE-OPEN> 0
<PROVISION-CURRENT> 0
<PROVISION-PRIOR> 0
<PAYMENTS-CURRENT> 0
<PAYMENTS-PRIOR> 0
<RESERVE-CLOSE> 0
<CUMULATIVE-DEFICIENCY> 0
</TABLE>
