<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 March 31, 1999
_____________________
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 March 31, 1999 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 March 31, 1999
Table of Contents
<TABLE>
<CAPTION>
Page
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<S> <C> <C>
Part I Financial Information
Item 1. Consolidated Financial Statements
Consolidated Balance Sheets as of March 31, 1999 and December 31, 1998 3
Consolidated Statements of Income for the three months ended March 31, 1999 and 1998 4
Consolidated Statement of Changes in Shareholder's Equity as of March 31, 1999 5
Consolidated Statements of Cash Flows for the three months ended March 31, 1999
and 1998 6
Notes to Consolidated Financial Statements 7
Item 2. Management Discussion and Analysis of Results of Operations and Financial Condition 9
Part II Other Information
Item 1 Legal Proceedings 13
Item 2 Change in Securities 13
Item 3 Default upon Senior Securities 13
Item 4 Submission of matters to a vote of Security Holders 13
Item 5 Other Information 13
Item 6A Exhibits 13
Item 6B Reports on Form 8-K 17
</TABLE>
2
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THE MANUFACTURERS LIFE INSURANCE COMPANY OF NORTH AMERICA
CONSOLIDATED BALANCE SHEETS
<TABLE>
<S> <C> <C>
AS AT AS AT
MARCH 31 DECEMBER 31
ASSETS ($ thousands) 1999 1998
-------- -----------
(UNAUDITED)
INVESTMENTS
Fixed maturities available-for-sale, at fair value
(amortized cost: 1999 $151,127; 1998 $152,969) $ 153,025 $ 157,743
Short-term investments 21,266 34,074
Policy loans 5,287 5,175
----------- -----------
TOTAL INVESTMENTS $ 179,578 $ 196,992
- ----------------- ----------- -----------
Cash and cash equivalents $ 21,801 $ 10,320
Accrued investment income 3,359 3,132
Deferred policy acquisition costs 480,335 449,332
Receivable for undelivered securities 11,143 -
Other assets 6,899 6,360
Due from reinsurers 657,810 641,858
Separate account assets 12,633,204 12,188,420
----------- -----------
TOTAL ASSETS $13,994,129 $13,496,414
- ------------ ----------- -----------
LIABILITIES AND SHAREHOLDER'S EQUITY ($ thousands)
LIABILITIES:
Policyholder funds $ 110,116 $ 102,252
Payable to affiliates 8,631 4,644
Notes payable to affiliates 254,300 241,419
Deferred income taxes 26,437 23,777
Other liabilities 27,320 25,980
Due to reinsurers 671,487 655,892
Separate account liabilities 12,633,204 12,188,420
----------- -----------
TOTAL LIABILITIES $13,731,495 $13,242,384
- ----------------- ----------- -----------
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
Retained earnings 80,196 70,293
Unrealized appreciation on securities available-for-sale 785 2,084
----------- -----------
Total shareholder's equity $ 262,634 $ 254,030
----------- -----------
TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY $13,994,129 $13,496,414
- ------------------------------------------ ----------- -----------
</TABLE>
See accompanying notes.
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THE MANUFACTURERS LIFE INSURANCE COMPANY OF NORTH AMERICA
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
<TABLE>
<S> <C> <C>
FOR THE THREE MONTHS ENDED MARCH 31
($ thousands) 1999 1998
REVENUES:
Premiums $ 9 $ -
Fees from separate accounts and policyholder funds 49,011 38,327
Advisory fees and other distribution revenues 26,750 20,965
Net investment income 3,047 2,899
Net realized investment gains 203 77
------- -------
TOTAL REVENUE $79,020 $62,268
- ------------- ------- -------
BENEFITS AND EXPENSES:
Policyholder benefits and claims $ 1,333 $ 1,406
Amortization of deferred acquisition costs 15,378 3,712
Other insurance expenses 42,353 28,587
Financing costs 4,654 4,164
------- -------
TOTAL BENEFITS AND EXPENSES $63,718 $37,869
------- -------
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES $15,302 $24,399
------- -------
- -----------------------------------------------------
INCOME TAX EXPENSE $ 5,399 $ 8,540
- ------------------ ------- -------
NET INCOME $ 9,903 $15,859
- ---------- ------- -------
</TABLE>
See accompanying notes
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THE MANUFACTURERS LIFE INSURANCE COMPANY OF NORTH AMERICA
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDER'S EQUITY (UNAUDITED)
<TABLE>
<CAPTION>
ACCUMULATED OTHER TOTAL
COMMON ADDITIONAL RETAINED EARNINGS COMPREHENSIVE SHAREHOLDER'S
($thousands) STOCK PAID-IN CAPITAL (DEFICIT) INCOME EQUITY
------ --------------- ----------------- ----------------- -------------
<S> <C> <C> <C> <C> <C>
Balance at January 1, 1999 $2,600 $179,053 $70,293 $ 2,084 $254,030
Capital contribution - - - - -
Comprehensive income (note 2) - - 9,903 (1,299) 8,604
------ --------------- -------------------- ------------------- -------------
BALANCE, MARCH 31, 1999 $2,600 $179,053 $80,196 $ 785 $262,634
- ----------------------- ------ --------------- -------------------- ------------------- -------------
</TABLE>
See accompanying notes
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THE MANUFACTURERS LIFE INSURANCE COMPANY OF NORTH AMERICA
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31
<S> <C> <C>
($thousands) 1999 1998
-------- --------
OPERATING ACTIVITIES:
Net income $ 9,903 $ 15,859
Adjustments to reconcile net income to net income to net cash (used in) provided
by operating activities:
Amortization of bond discount and premium 211 128
Benefits to policyholders 1,333 1,406
Provision for deferred income tax 3,355 1,502
Net realized investment gains (197) (77)
Amortization of deferred policy acquisition costs 15,378 3,712
Policy acquisition costs deferred (45,499) (31,210)
Changes in assets and liabilities:
Accrued investment income (227) (355)
Other assets (539) (8,678)
Receivable from affiliates - 4,605
Payable to affiliates 3,987 2,815
Other liabilities 1,340 16,724
-------- --------
Net cash (used in) provided by operating activities $(10,955) $ 6,431
-------- --------
INVESTING ACTIVITIES:
Purchase of fixed maturity securities $(13,984) $(16,243)
Proceeds from fixed maturity securities sold, matured or repaid 15,812 11,322
Net change in short-term investments 12,808 (21,008)
Net change in policy loans (112) (904)
Net change in receivable for undelivered securities (11,143) -
-------- --------
Net cash used in investing activities $ 3,381 $(26,833)
-------- --------
FINANCING ACTIVITIES:
Net reinsurance (consideration) proceeds $ (357) $ (3,075)
Receipts credited to policyholder funds 10,443 1,094
Return of policyholder funds (3,912) (3,483)
Increase in notes payable to affiliates 12,881 25,017
-------- --------
Net cash provided by financing activities $ 19,055 $ 19,553
-------- --------
Increase (decrease) in cash and cash equivalents during the period $ 11,481 $ (849)
Cash and cash equivalents at beginning of year 10,320 7,339
-------- --------
BALANCE, END OF PERIOD $ 21,801 $ 6,490
-------- --------
</TABLE>
See accompanying notes.
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THE MANUFACTURERS LIFE INSURANCE COMPANY OF NORTH AMERICA
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1999
(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, 1998. Operating results for the
three months ended March 31, 1999 are not necessarily indicative of the
results that may be expected for the full year ending December 31, 1999.
2. COMPREHENSIVE INCOME
Total comprehensive income was as follows:
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED MARCH 31
($ thousands) 1999 1998
------- ----------
NET INCOME $ 9,903 $15,959
- ---------- ------- ----------
<S> <C> <C>
OTHER COMPREHENSIVE INCOME, NET OF TAX:
Unrealized holding gains (losses) arising during the year (1,167) 159
Less:
Reclassification adjustment for realized gains included in net (132) (50)
------- ----------
Income
Other comprehensive income (loss) (1,299) 109
- --------------------------------- ------- ----------
COMPREHENSIVE INCOME $ 8,604 $16,068
- -------------------- ------- ----------
</TABLE>
Other comprehensive income (loss) is reported net of taxes of $(699) and
$59 for the three months ended March 31, 1999 and 1998, respectively.
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3. SEGMENT DISCLOSURES
The Company reports three business segments: Annuities, Savings and
Retirement Services, and Life Insurance. The Annuities segment consists
of annuity contracts that provide the customer with the opportunity to
invest in mutual funds managed by independent investment managers and the
Company or in the general account of the Company, with investment returns
accumulating on a tax-deferred basis. The Savings and Retirement
Services segment offers 401(k) products to customers in the State of New
York. The Individual Life Insurance segment offers traditional
non-participating life insurance to the New York market. No significant
assets or revenues have been generated to date in these two segments.
The following is a summary of the contribution to net income of the three
business segments:
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED MARCH 31
($ thousands) 1999 1998
------ ------
<S> <C> <C>
Annuities $10,012 $16,126
Savings and Retirement Services (246) (9)
Life Insurance 137 (258)
------- -------
NET INCOME (LOSS) $ 9,903 $15,859
- ----------------- ------- -------
</TABLE>
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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
(hereinafter referred to as "MNA" or the "Company") should be read in
conjunction with the Consolidated Financial Statements and the related Notes to
Consolidated Financial Statements.
CORPORATE STRUCTURE AND OVERVIEW
The Company is a wholly-owned subsidiary of Manulife-Wood Logan Holding Co.,
Inc. ("MWL"). MWL is 62.5% owned by The Manufacturers Life Insurance Company
(USA) ("ManUSA"), 22.5% by MRL Holding, LLC ("MRL") and 15% by minority
interest shareholders. ManUSA and MRL are indirectly wholly-owned subsidiaries
of The Manufacturers Life Insurance Company ("Manulife Financial"), a federally
chartered Canadian mutual life insurance company. MNA is licensed to sell
fixed and variable annuities, traditional life and variable life insurance, and
accident and health insurance in all states except New Hampshire and New York.
MNY is licensed to sell fixed and variable annuities, traditional life
insurance, and accident and health insurance in New York only.
MNA has two subsidiaries, The Manufacturers Life Insurance Company of New York
("MNY") and Manufacturers Securities Services, LLC ("MSS"). MNY is an
insurance subsidiary licensed to conduct business in the State of New York.
MSS, a majority-owned broker dealer, acts as investment advisor to the
Manufacturers Investment Trust ("MIT"), a no-load, open-end management
investment company organized as a Massachusetts business trust and is the
principal underwriter of the Company's variable annuity and life insurance
contracts and is the exclusive distributor of its insurance products in New
York. MSS is the successor to NASL Financial Services, Inc. ("NASL Financial"),
a broker dealer that conducted operations until September 30, 1997, when it was
reorganized into MSS. Prior to October 1, 1997, NASL Financial also acted as
investment advisor to North American Funds (NAF), a no-load, open-end management
investment company organized as a Massachusetts business trust.
The Company, along with its ultimate parent company Manulife Financial, enjoys
strong financial ratings that enhance its ability to attract new sales and
retain assets. Distributors and consumers of variable and fixed annuity
products have begun to utilize the relative financial strength ratings as a
criteria in choosing an annuity carrier. The Company has received financial
strength ratings of A++ (Superior) by A.M. Best, AA+ (Very Strong) by Standards
and Poor's ("S&P") and Aa2 (Excellent) by Moody's Investor Services. The
Company is rated AAA (Highest) by Duff & Phelps in terms of the Company's
ability to meet its contractual obligations to its policyholders.
On January 20, 1998, the Board of Directors of Manulife Financial asked its
management to prepare a plan for conversion 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 its
Board of Directors and policyholders, as well as regulatory approval.
Prior to 1998, the Company reported two segments, Annuities and Mutual Funds.
The Mutual Fund segment consisted solely of NAF, a group of thirteen mutual
funds. During 1997, the Company disposed of its Mutual Fund segment to an
unrelated party. In 1998 and 1997, pursuant to a revised plan of operations for
MNY, the Company entered the Savings and Retirement Services and the Life
Insurance businesses in New York. The Company now reports three segments:
Annuities, Savings and Retirement Services, and Life Insurance. Two of the
Company's segments, Savings and Retirement Services and Life Insurance, are in
the development stage and the assets, revenues and operations of those segments
are not material to the Company's first quarter 1999 financial position or
results of operations.
The remainder of this discussion will be limited to the Annuities segment
except as noted.
The Company's primary source of earnings from the Annuities segment are fees
assessed against policyholder account balances held in the Company's separate
accounts including: mortality and expense
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risk charges, surrender charges and an annual administrative charge. In
addition, the segment earns a spread between the advisory fees charged to
manage the separate account assets invested in MIT and the subadvisory fees
paid to external managers of those assets. A key factor in the Company's
profitability is sustained growth in the underlying assets through market
performance coupled with the ability to acquire and retain variable annuity and
life deposits.
REVIEW OF OPERATING RESULTS
The discussion that follows compares results for the three months ended March
31, 1999 to those for the three months ended March 31, 1998.
1999 Compared to 1998
The Company recorded net income of $9.9 million in 1999 versus net income of
$15.9 million in 1998, a decrease of $6.0 million or 38%. Revenues grew by 27%
to $79.0 million as a result of growth in fee income earned on additional
separate account assets, additional advisory profits associated with additional
assets in MIT and investment income from higher general account assets.
Separate account assets at March 31, 1999 compared to March 31, 1998 were
higher by $1.8 billion or 17%. The asset growth is attributed to an increase
in variable annuity sales, strong equity market performance, and favorable
contract persistency. Total sales during the first quarter of 1999 was $660.2
million an increase of 19% over the same quarter in 1998. Total fees, including
advisory fees, generated by separate accounts and policyholder liabilities
increased by $16.5 million or 28% in 1999.
The Company incurred total benefits and expenses in 1999 of $63.7 million, an
increase of $25.8 million, or 68% compared to 1998. The additional expenses
reflect an increase in non-capitalized acquisition expenses, an increase in
deferred acquisition costs (DAC) amortization, additional sub-advisory expenses
associated with additional assets in MIT and higher financing costs. Higher DAC
balances at March 31, 1999 contributed to an increase in the amortization of
DAC. In addition, the Company's investment performance in the first quarter
of 1999 (approximately 1.2%) was significantly lower than the first quarter of
1998 (approximately 10%) which resulted in additional amortization of the
Company's DAC asset during the first quarter of 1999. The effect of these two
items contributed an additional $11.7 million of DAC amortization during the
first quarter of 1999. The Company paid an additional $3.0 million of
sub-advisory expenses during the first quarter of 1999. The Company's
commission financing loans increased by approximately $46 million over March
31, 1998 levels and added an additional $0.5 million of expense.
FINANCIAL POSITION
1999 Compared to 1998
Total assets increased from $13.5 billion at December 31, 1998 to $14.0 billion
at March 31, 1999, an increase of $.5 billion or 4%. Separate account assets
increased by 4% over the first quarter of 1999 and represent 90% of total
assets as the Company continues to focus on its variable option annuity
products. The Company continues to own high quality investment grade fixed
maturity investments to support its general account liabilities and
shareholder's equity. The Company's DAC asset grew by 7% as the Company
experienced increased annuity sales volumes during the first quarter of 1999.
The Company deferred the related costs, net of current amortization, associated
with those sales.
Total liabilities have increased proportionately with the growth in the related
assets, primarily in the Company's separate accounts. During the first quarter
of 1999, the Company borrowed an additional $13.3 million from Manulife to
support its sales volumes and related acquisition expenses.
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The growth in retained earnings is primarily due to net income from operations
of $9.9 million. The Company's shareholder's equity decreased by $1.3 million
due to lower market values associated with invested assets at March 31, 1999.
MARKET RISK
Market risk is the risk that the Company will incur losses due to adverse
changes in market rates and prices. The primary market risk exposure for the
Company is the impact of lower than expected equity market performance on its
asset-related fee revenue. The Company also has certain exposures to changes
in interest rates.
The Company earns asset based fees based on the asset levels invested in the
separate accounts. As a result, the Company is subject to equity risk and the
effect changes in equity market levels will have on the amounts invested in the
separate accounts.
Interest rate risk is the risk that the Company will incur economic losses due
to adverse changes in interest rates. This risk arises from the issuance of
certain interest sensitive annuity products and the investing of those proceeds
in fixed rate investments. The Company manages its interest rate risk through
an asset/liability management program. The Company has established a target
portfolio mix which takes into account the risk attributes of the liabilities
supported by the assets, expectations of market performance, and a generally
conservative investment philosophy. Preservation of capital and maintenance of
income flows are key objectives of this program. In addition, the Company has
diversified its product portfolio offerings to include products that contain
features that will protect it against fluctuations in interest rates. Those
features include adjustable crediting rates, policy surrender charges, and
market value adjustments on liquidations.
Based on the Company's overall exposure to interest rate and equity price
risks, the Company believes that changes in market rates would not materially
affect the consolidated near-term financial position, results of operations or
cashflows of the Company as of March 31, 1999. Refer to the Company's Annual
Report on form 10-K for a more detailed discussion of market risks.
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.
The systems used by the Company have been assessed as part of a comprehensive
written plan conducted by The Manufacturers Life Insurance Company
(collectively with its subsidiaries "Manulife Financial"), to ensure that
computer systems and processes of Manulife Financial and its subsidiaries and
affiliates, including the Company, will continue to perform through the end of
this century and in the next.
In 1996, in order to make Manulife Financial's systems 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
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certification. For most IT and non-IT systems identified as critical,
certification has been completed for the Company. Of those systems classified
as critical, management believes that over 99% were Year 2000 compliant at the
end of 1998. Management continues to focus attention on the remaining 1% of
critical systems. Those that affect the Company are expected to be compliant by
the end of the second quarter in 1999. The Company's non-critical systems were
Year 2000 compliant by the end of the first quarter 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 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
appropriate, conducting further due diligence activities.
Manulife Financial recognizes the importance of preparing for the change to the
Year 2000 and, in January 1999, commenced preparation of contingency plans, in
the event that Manulife Financial's Year 2000 program has not fully resolved
its Year 2000 issues. The Year 2000 Project Management Office for Manulife
Financial's U.S. Division is coordinating the preparation of the Year 2000
contingency plan on behalf of U.S. Division affiliates and subsidiaries.
Contingency planning is targeted for completion by mid-1999.
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 computer systems. As part of the
Year 2000 program, critical systems were "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 Manulife Financial's Year 2000 program, including consulting
third parties and its contingency planning, will avoid any material adverse
effect on Manulife Financial's operations, customer relations or financial
condition. Manulife Financial estimates the total cost of its Year 2000 program
will be approximately $59.9 million*, of which $48.6 million * has been
incurred through December 31, 1998; however, there can be no assurance that the
actual cost incurred will not be materially higher than such estimate. Manulife
Financial's Year 2000 costs were $3.9 million* for the first three months of
1999 and $7.1 million* for the first three months of 1998. Most costs will be
expensed as incurred; however, those costs attributed to the purchase of new
software and hardware will generally be capitalized. The total cost of the Year
2000 program is not expected to have a material effect on Manulife Financial's
net operating income.
* All dollar values converted from Canadian dollars using the exchange rate of
1.512 in effect March 31, 1999.
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.
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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 March 31, 1999, the total
variable assets in the Venture Group Annuity was $124,370,390.
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)14/
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>
Exhibit No. Description
- ----------- -----------
<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/
</TABLE>
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<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
(10)(vi) Automatic Modified -Coinsurance Reinsurance Agreement between the
Company and Transamerica Occidental Life Insurance Company - 12/
(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/
(10)(ix) Coinsurance Agreement between the Company and The Manufacturers
Life Insurance Company (USA) 13/
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/
24(iv) Power of Attorney - John D. DesPrez III 16/
25 Not Applicable
</TABLE>
15
<PAGE> 16
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
26 Not Applicable
27 Financial Data Schedule 17/
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.
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/ Incorporated by reference to Exhibit (b)(3)(i) to Form N-4, file number
33-76162, filed March 1, 1999.
15/ Incorporated by reference to Form 10K, file number 812-06037, filed March
30, 1999 on behalf of The Manufacturers Life Insurance Company of North
America
16/ Incorporated by reference to Exhibit (14)(iv) to post-effective amendment
no. 1 to Form N-4, file number 333-38081 filed April 19, 1999.
17/ Filed herewith.
16
<PAGE> 17
ITEM 6B - REPORTS ON FORM 8-K
No reports on Form 8-K were filed during the quarter.
17
<PAGE> 18
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: May 17, 1999
18
<PAGE> 19
EXHIBIT INDEX
<TABLE>
<S> <C>
Exhibit No. Description
----------- --------------------------------------------------------
27 Financial data schedule for quarter ended March 31, 1999
</TABLE>
19
<TABLE> <S> <C>
<ARTICLE> 7
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<DEBT-HELD-FOR-SALE> 153,025
<DEBT-CARRYING-VALUE> 0
<DEBT-MARKET-VALUE> 0
<EQUITIES> 0
<MORTGAGE> 0
<REAL-ESTATE> 0
<TOTAL-INVEST> 179,578
<CASH> 21,801
<RECOVER-REINSURE> 0
<DEFERRED-ACQUISITION> 480,335
<TOTAL-ASSETS> 13,994,129
<POLICY-LOSSES> 110,116
<UNEARNED-PREMIUMS> 0
<POLICY-OTHER> 0
<POLICY-HOLDER-FUNDS> 12,633,204
<NOTES-PAYABLE> 254,300
0
0
<COMMON> 2,600
<OTHER-SE> 260,034
<TOTAL-LIABILITY-AND-EQUITY> 13,994,129
9
<INVESTMENT-INCOME> 3,047
<INVESTMENT-GAINS> 203
<OTHER-INCOME> 75,761
<BENEFITS> 1,333
<UNDERWRITING-AMORTIZATION> 15,378
<UNDERWRITING-OTHER> 42,353
<INCOME-PRETAX> 15,302
<INCOME-TAX> 5,399
<INCOME-CONTINUING> 9,903
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 9,903
<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>
