<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
JOHN R. GARDNER, 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
BONNIE S. ANGUS, 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
[REGATTA N.Y. LOGO]
SEMI-ANNUAL REPORT, JUNE 30, 1996
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.
REGNY-3-9/96 5M
PROFESSIONALLY MANAGED ANNUITY ISSUED BY
SUN LIFE INSURANCE AND ANNUITY COMPANY
OF NEW YORK
<PAGE>
SUN LIFE (N.Y.) VARIABLE ACCOUNT C
STATEMENT OF CONDITION-- June 30, 1996
<TABLE>
<CAPTION>
ASSETS:
Investments in MFS/Sun Life
Series Trust: Shares Cost Value
--------- ----------- -----------
<S> <C> <C> <C>
Capital Appreciation Series
("CAS")....................... 567,940 $16,611,284 $18,845,911
Conservative Growth Series
("CGS")....................... 535,735 10,531,609 12,504,104
Government Securities Series
("GSS")....................... 673,569 8,474,079 8,319,868
High Yield Series ("HYS")...... 521,558 4,587,997 4,412,490
Managed Sectors Series
("MSS")....................... 215,552 5,032,993 5,185,251
Money Market Series ("MMS").... 6,639,278 6,639,278 6,639,278
Total Return Series ("TRS").... 1,180,144 19,467,571 21,070,832
Utilities Series ("UTS")....... 123,337 1,429,401 1,512,859
World Governments Series
("WGS")....................... 350,683 4,094,329 3,752,647
World Growth Series ("WGO").... 361,616 4,411,377 4,674,760
----------- -----------
$81,279,918 $86,918,000
-----------
-----------
LIABILITY:
Payable to sponsor 30,160
-----------
Net Assets................. $86,887,840
-----------
-----------
</TABLE>
<TABLE>
<CAPTION>
NET ASSETS OF CONTRACT OWNERS:
<S> <C> <C> <C> <C> <C>
Applicable to Owners of
Deferred Variable Annuity Contracts: Reserve for
------------------------------------ Variable
Units Unit Value Value Annuities Total
--------- ----------- ----------- ----------- -----------
CAS................................................... 1,187,036 $ 15.7425 $18,689,256 $151,269 $18,840,525
CGS................................................... 844,835 14.7226 12,437,213 64,189 12,501,402
GSS................................................... 739,698 11.2338 8,309,777 9,976 8,319,753
HYS................................................... 355,412 12.3874 4,412,490 -- 4,412,490
MSS................................................... 353,955 14.6499 5,185,250 -- 5,185,250
MMS................................................... 608,369 10.9129 6,636,715 2,534 6,639,249
TRS................................................... 1,548,477 13.2027 20,442,070 606,959 21,049,029
UTS................................................... 114,139 13.2521 1,512,859 -- 1,512,859
WGS................................................... 312,613 11.9755 3,745,776 6,748 3,752,524
WGO................................................... 382,477 12.2210 4,674,759 -- 4,674,759
----------- ----------- -----------
Net Assets................................................................ $86,046,165 $841,675 $86,887,840
----------- ----------- -----------
----------- ----------- -----------
</TABLE>
See notes to financial statements
1
<PAGE>
SUN LIFE (N.Y.) VARIABLE ACCOUNT C
STATEMENTS OF OPERATIONS-- Six Months Ended June 30, 1996
<TABLE>
<CAPTION>
CAS CGS GSS HYS MSS MMS
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
------------ ------------ ------------ ------------ ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
INCOME AND EXPENSES:
Dividend income and capital gain
distributions received.......... $ 1,509,942 $ 464,174 $ 465,691 $ 336,895 $561,229 $ 152,144
Mortality and expense risk
charges......................... 110,637 66,850 46,646 23,645 26,634 39,870
Administrative charges........... 13,276 8,022 5,598 2,837 3,196 4,785
------------ ------------ ------------ ------------ ----------- ------------
Net investment income........ $ 1,386,029 $ 389,302 $ 413,447 $ 310,413 $531,399 $ 107,489
------------ ------------ ------------ ------------ ----------- ------------
REALIZED AND UNREALIZED GAINS
(LOSSES):
Realized gains (losses) on
investment transactions:
Proceeds from sales............ $ 2,564,798 $ 373,467 $ 995,266 $ 2,101,540 $179,111 $ 5,809,644
Cost of investments sold....... 2,041,426 269,154 1,004,724 1,909,994 151,300 5,809,644
------------ ------------ ------------ ------------ ----------- ------------
Net realized gains
(losses).................... $ 523,372 $ 104,313 $ (9,458) $ 191,546 $ 27,811 $ --
------------ ------------ ------------ ------------ ----------- ------------
Net unrealized appreciation
(depreciation) on investments:
End of period.................. $ 2,234,627 $ 1,972,495 $ (154,211) $ (175,507) $152,258 $ --
Beginning of period............ 2,185,946 1,495,863 455,475 236,587 441,178 --
------------ ------------ ------------ ------------ ----------- ------------
Change in unrealized
appreciation
(depreciation).............. $ 48,681 $ 476,632 $ (609,686) $ (412,094) $(288,920) $ --
------------ ------------ ------------ ------------ ----------- ------------
Realized and unrealized
gains (losses)............ $ 572,053 $ 580,945 $ (619,144) $ (220,548) $(261,109) $ --
------------ ------------ ------------ ------------ ----------- ------------
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS................... $ 1,958,082 $ 970,247 $ (205,697) $ 89,865 $270,290 $ 107,489
------------ ------------ ------------ ------------ ----------- ------------
------------ ------------ ------------ ------------ ----------- ------------
</TABLE>
<TABLE>
<CAPTION>
TRS UTS WGS WGO
Sub-Account Sub-Account Sub-Account Sub-Account Total
------------ ----------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C>
INCOME AND EXPENSES:
Dividend income and capital gain
distributions received.......... $ 1,496,774 $ 74,155 $ 492,561 $287,259 $ 5,840,824
Mortality and expense risk
charges......................... 118,229 8,428 21,677 22,653 485,269
Administrative charges........... 14,188 1,011 2,601 2,718 58,232
------------ ----------- ----------- ----------- ------------
Net investment income........ $ 1,364,357 $ 64,716 $ 468,283 $261,888 $ 5,297,323
------------ ----------- ----------- ----------- ------------
REALIZED AND UNREALIZED GAINS
(LOSSES):
Realized gains on investment
transactions:
Proceeds from sales............ $ 865,425 $192,542 $ 190,187 $ 45,328 $ 13,317,308
Cost of investments sold....... 768,894 155,289 202,992 38,835 12,352,252
------------ ----------- ----------- ----------- ------------
Net realized gains
(losses).................... $ 96,531 $ 37,253 $ (12,805) $ 6,493 $ 965,056
------------ ----------- ----------- ----------- ------------
Net unrealized appreciation
(depreciation) on investments:
End of period.................. $ 1,603,261 $ 83,458 $(341,682) $263,383 $ 5,638,082
Beginning of period............ 2,289,049 120,703 153,332 158,881 7,537,014
------------ ----------- ----------- ----------- ------------
Change in unrealized
appreciation
(depreciation).............. $ (685,788) $(37,245) $(495,014) $104,502 $ (1,898,932)
------------ ----------- ----------- ----------- ------------
Realized and unrealized
gains (losses)............ $ (589,257) $ 8 $(507,819) $110,995 $ (933,876)
------------ ----------- ----------- ----------- ------------
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS................... $ 775,100 $ 64,724 $ (39,536) $372,883 $ 4,363,447
------------ ----------- ----------- ----------- ------------
------------ ----------- ----------- ----------- ------------
</TABLE>
See notes to financial statements
2
<PAGE>
SUN LIFE (N.Y.) VARIABLE ACCOUNT C
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
CAS CGS GSS HYS
Sub-Account Sub-Account Sub-Account Sub-Account
-------------------------- -------------------------- ------------------------ ------------------------
Six Months Six Months Six Months Six Months
Ended Year Ended Ended Year Ended Ended Year Ended Ended Year Ended
June 30, December 31, June 30, December 31, June 30, December June 30, December
1996 1995 1996 1995 1996 31, 1995 1996 31, 1995
------------ ------------ ------------ ------------ ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment
income........... $ 1,386,029 $ 76,548 $ 389,302 $ 33,776 $ 413,447 $ 242,483 $ 310,413 $ 167,734
Net realized gains
(losses)......... 523,372 79,869 104,313 92,928 (9,458) (115,930) 191,546 76,785
Net unrealized
gains (losses)... 48,681 2,630,005 476,632 1,558,928 (609,686) 736,390 (412,094) 233,953
------------ ------------ ------------ ------------ ----------- ----------- ----------- -----------
Increase
(decrease) in
net assets
from
operations... $ 1,958,082 $ 2,786,422 $ 970,247 $1,685,632 $ (205,697) $ 862,943 $ 89,865 $ 478,472
------------ ------------ ------------ ------------ ----------- ----------- ----------- -----------
PARTICIPANT
TRANSACTIONS:
Accumulation
Activity:
Purchase
payments
received....... $ 2,760,414 $ 5,366,882 $ 2,020,327 $3,495,520 $ 730,299 $1,638,343 $ 615,172 $1,270,014
Net transfers
between Sub-
Accounts and
Fixed Account.. (1,126,597) 1,418,442 648,053 649,433 1,473,820 (2,027,001) (24,819) 583,971
Withdrawals,
surrenders,
annuitizations
and contract
charges........ (518,412) (418,456) (244,390) (200,218) (145,976) (154,062) (343,935) (1,757,160)
------------ ------------ ------------ ------------ ----------- ----------- ----------- -----------
Net
accumulation
activity..... $ 1,115,405 $ 6,366,868 $ 2,423,990 $3,944,735 $2,058,143 $ (542,720) $ 246,418 $ 96,825
------------ ------------ ------------ ------------ ----------- ----------- ----------- -----------
Annuitization
Activity:
Annuitizations... $ 136,803 $ 14,987 $ 68,590 $ -- $ -- $ 11,807 $ -- $ --
Annuity payments
and contract
charges........ (4,970) (3,311) (1,610) -- (1,302) (656) (18) --
Adjustments to
annuity
reserve........ (5,260) (185) (2,703) -- (72) (43) -- --
------------ ------------ ------------ ------------ ----------- ----------- ----------- -----------
Net
annuitization
activity..... $ 126,573 $ 11,491 $ 64,277 $ -- $ (1,374) $ 11,108 $ (18) $ --
------------ ------------ ------------ ------------ ----------- ----------- ----------- -----------
Increase
(decrease) in net
assets from
participant
transactions..... $ 1,241,978 $ 6,378,359 $ 2,488,267 $3,944,735 $2,056,769 $ (531,612) $ 246,400 $ 96,825
------------ ------------ ------------ ------------ ----------- ----------- ----------- -----------
Increase in net
assets......... $ 3,200,060 $ 9,164,781 $ 3,458,514 $5,630,367 $1,851,072 $ 331,331 $ 336,265 $ 575,297
NET ASSETS:
Beginning of
period........... 15,640,465 6,475,684 9,042,888 3,412,521 6,468,681 6,137,350 4,076,225 3,500,928
------------ ------------ ------------ ------------ ----------- ----------- ----------- -----------
End of period..... $18,840,525 $ 15,640,465 $12,501,402 $9,042,888 $8,319,753 $6,468,681 $4,412,490 $4,076,225
------------ ------------ ------------ ------------ ----------- ----------- ----------- -----------
------------ ------------ ------------ ------------ ----------- ----------- ----------- -----------
</TABLE>
See notes to financial statements
3
<PAGE>
SUN LIFE (N.Y.) VARIABLE ACCOUNT C
STATEMENTS OF CHANGES IN NET ASSETS -- continued
<TABLE>
<CAPTION>
MSS TRS UTS
Sub-Account MMS Sub-Account Sub-Account
-------------------------- Sub-Account -------------------------- ------------
Six Months ---------------------------- Six Months Six Months
Ended Year Ended Six Months Year Ended Ended Year Ended Ended
June 30, December 31, Ended December 31, June 30, December 31, June 30,
1996 1995 June 30, 1996 1995 1996 1995 1996
------------ ------------ ------------- ------------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment
income
(expense)........ $ 531,399 $ 35,186 $ 107,489 $ 212,481 $ 1,364,357 $ 307,436 $ 64,716
Net realized
gains............ 27,811 9,478 -- -- 96,531 59,519 37,253
Net unrealized
gains (losses)... (288,920) 557,033 -- -- (685,788) 2,777,204 (37,245)
------------ ------------ ------------- ------------- ------------ ------------ ------------
Increase in
net assets
from
operations... $ 270,290 $ 601,697 $ 107,489 $ 212,481 $ 775,100 $ 3,144,159 $ 64,724
------------ ------------ ------------- ------------- ------------ ------------ ------------
PARTICIPANT
TRANSACTIONS:
Accumulation
Activity:
Purchase
payments
received....... $ 573,675 $1,349,023 $ 2,593,796 $ 7,242,711 $ 2,493,569 $ 3,549,303 $ 276,850
Net transfers
between Sub-
Accounts and
Fixed Account.. 673,925 399,369 (2,564,995) (4,861,678) 146,691 647,551 (56,343)
Withdrawals,
surrenders,
annuitizations
and account
fees........... (153,517) (103,799) (207,461) (120,225) (299,086) (662,572) (3,045)
------------ ------------ ------------- ------------- ------------ ------------ ------------
Net
accumulation
activity..... $1,094,083 $1,644,593 $ (178,660) $ 2,260,808 $ 2,341,174 $ 3,534,282 $ 217,462
------------ ------------ ------------- ------------- ------------ ------------ ------------
Annuitization
Activity:
Annuitizations... $ -- $ -- $ -- $ 2,948 $ -- $ -- $ --
Annuity payments
and contract
charges........ -- -- (324) (162) (29,814) (53,574) --
Adjustments to
annuity
reserve........ -- -- (19) (10) (5,161) 1,036 --
------------ ------------ ------------- ------------- ------------ ------------ ------------
Net
annuitization
activity..... $ -- $ -- $ (343) $ 2,776 $ (34,975) $ (52,538) $ --
------------ ------------ ------------- ------------- ------------ ------------ ------------
Increase
(decrease) in net
assets from
participant
transactions..... $1,094,083 $1,644,593 $ (179,003) $ 2,263,584 $ 2,306,199 $ 3,481,744 $ 217,462
------------ ------------ ------------- ------------- ------------ ------------ ------------
Increase
(decrease) in
net assets..... $1,364,373 $2,246,290 $ (71,514) $ 2,476,065 $ 3,081,299 $ 6,625,903 $ 282,186
NET ASSETS:
Beginning of
period........... 3,820,877 1,574,587 6,710,763 4,234,698 17,967,730 11,341,827 1,230,673
------------ ------------ ------------- ------------- ------------ ------------ ------------
End of period..... $5,185,250 $3,820,877 $ 6,639,249 $ 6,710,763 $21,049,029 $ 17,967,730 $1,512,859
------------ ------------ ------------- ------------- ------------ ------------ ------------
------------ ------------ ------------- ------------- ------------ ------------ ------------
<CAPTION>
Year Ended
December 31,
1995
------------
<S> <C>
OPERATIONS:
Net investment
income
(expense)........ $ (632)
Net realized
gains............ 10,315
Net unrealized
gains (losses)... 120,719
------------
Increase in
net assets
from
operations... $ 130,402
------------
PARTICIPANT
TRANSACTIONS:
Accumulation
Activity:
Purchase
payments
received....... $ 648,062
Net transfers
between Sub-
Accounts and
Fixed Account.. 398,554
Withdrawals,
surrenders,
annuitizations
and account
fees........... (5,451)
------------
Net
accumulation
activity..... $1,041,165
------------
Annuitization
Activity:
Annuitizations... $ --
Annuity payments
and contract
charges........ --
Adjustments to
annuity
reserve........ --
------------
Net
annuitization
activity..... $ --
------------
Increase
(decrease) in net
assets from
participant
transactions..... $1,041,165
------------
Increase
(decrease) in
net assets..... $1,171,567
NET ASSETS:
Beginning of
period........... 59,106
------------
End of period..... $1,230,673
------------
------------
</TABLE>
See notes to financial statements
4
<PAGE>
SUN LIFE (N.Y.) VARIABLE ACCOUNT C
STATEMENTS OF CHANGES IN NET ASSETS-- continued
<TABLE>
<CAPTION>
WGS WGO
Sub-Account Sub-Account Total
-------------------------- -------------------------- --------------------------
Six Months Six Months Six Months
Ended Year Ended Ended Year Ended Ended Year Ended
June 30, December 31, June 30, December 31, June 30, December 31,
1996 1995 1996 1995 1996 1995
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment
income........... $ 468,283 $ 105,435 $ 261,888 $ 5,851 $ 5,297,323 $ 1,186,298
Net realized gains
(losses)......... (12,805) (37,747) 6,493 4,653 965,056 179,870
Net unrealized
gains (losses)... (495,014) 309,414 104,502 167,910 (1,898,932) 9,091,556
------------ ------------ ------------ ------------ ------------ ------------
Increase
(decrease) in
net assets
from
operations... $ (39,536) $ 377,102 $ 372,883 $ 178,414 $ 4,363,447 $ 10,457,724
------------ ------------ ------------ ------------ ------------ ------------
PARTICIPANT
TRANSACTIONS:
Accumulation
Activity:
Purchase
payments
received....... $ 316,960 $ 492,054 $ 991,760 $1,231,855 $13,372,822 $ 26,283,767
Net transfers
between
Sub-Accounts
and Fixed
Account........ 233,223 (30,310) 596,687 1,034,283 (355) (1,787,386)
Withdrawals,
surrenders,
annuitizations
and contract
charges........ (50,522) (109,230) (42,902) (24,904) (2,009,246) (3,556,077)
------------ ------------ ------------ ------------ ------------ ------------
Net
accumulation
activity..... $ 499,661 $ 352,514 $1,545,545 $2,241,234 $11,363,221 $ 20,940,304
------------ ------------ ------------ ------------ ------------ ------------
Annuitization
Activity:
Annuitizations... $ -- $ -- $ -- $ -- $ 205,393 $ 29,742
Annuity payments
and contract
charges........ (1,108) (2,227) -- -- (39,146) (59,930)
Adjustments to
annuity
reserve........ (52) (119) -- -- (13,267) 679
------------ ------------ ------------ ------------ ------------ ------------
Net
annuitization
activity..... $ (1,160) $ (2,346) $ -- $ -- $ 152,980 $ (29,509)
------------ ------------ ------------ ------------ ------------ ------------
Increase in net
assets from
participant
transactions..... $ 498,501 $ 350,168 $1,545,545 $2,241,234 $11,516,201 $ 20,910,795
------------ ------------ ------------ ------------ ------------ ------------
Increase in net
assets......... $ 458,965 $ 727,270 $1,918,428 $2,419,648 $15,879,648 $ 31,368,519
NET ASSETS:
Beginning of
period........... 3,293,559 2,566,289 2,756,331 336,683 71,008,192 39,639,673
------------ ------------ ------------ ------------ ------------ ------------
End of period..... $3,752,524 $3,293,559 $4,674,759 $2,756,331 $86,887,840 $ 71,008,192
------------ ------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------ ------------
</TABLE>
See notes to financial statements
5
<PAGE>
SUN LIFE (N.Y.) VARIABLE ACCOUNT C
NOTES TO FINANCIAL STATEMENTS
(1) ORGANIZATION
Sun Life (N.Y.) Variable Account C (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 October 18, 1985 as a funding vehicle for the variable portion of
certain individual combination fixed/variable annuity contracts. Sale of the
contracts commenced on April 1, 1993. 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 revenue 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 Sponsor. These deductions are
transferred periodically to the Sponsor. Currently, the deduction is at an
effective annual rate of 1.25%.
6
<PAGE>
SUN LIFE (N.Y.) VARIABLE ACCOUNT C
NOTES TO FINANCIAL STATEMENTS -- continued
Each year on the contract anniversary, an account administration fee ("Account
Fee") of $30 is deducted from each contract's accumulation account. After the
annuity commencement date the Account Fee is deducted pro rata from each
variable annuity payment made during the year. In addition, a deduction is made
from the Variable Account at the end of each valuation period (during both the
accumulation period and after annuity payments begin) at an effective annual
rate of 0.15% of the daily net assets of the Variable Account. These charges are
paid to the Sponsor to reimburse it for administrative expenses which exceed the
revenues received from the Account Fee.
The Sponsor does not deduct a sales charge from purchase payments. However, a
withdrawal charge (contingent deferred sales charge) of up to 6% of certain
amounts withdrawn, when applicable, will be deducted to cover certain expenses
relating to the sale of the contracts. In no event shall the aggregate
withdrawal charges assessed against a contract exceed 9% of the purchase
payment.
(4) ANNUITY RESERVES
Annuity reserves are calculated using the 1983 Individual Annuitant Mortality
Table and an assumed interest rate of 4%. Required adjustments to the reserves
are accomplished by transfers to or from the Sponsor.
7
<PAGE>
SUN LIFE (N.Y.) VARIABLE ACCOUNT C
NOTES TO FINANCIAL STATEMENTS -- continued
(5) UNIT ACTIVITY FROM PARTICIPANT TRANSACTIONS
<TABLE>
<CAPTION>
CAS CGS GSS HYS
Sub-Account Sub-Account Sub-Account Sub-Account
--------------------------- --------------------------- --------------------------- ------------
Six Months Six Months Six Months Six Months
Ended Year Ended Ended Year Ended Ended Year Ended Ended
June 30, Dec. 31, June 30, Dec. 31, June 30, Dec. 31, June 30,
1996 1995 1996 1995 1996 1995 1996
------------ ------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Units outstanding
beginning of
period............. 1,106,267 606,673 671,847 342,664 554,873 612,070 334,034
Units purchased... 182,884 415,058 144,406 293,750 66,434 149,800 51,659
Units transferred
between Sub-
Accounts and
Fixed Account.... (68,653) 118,528 45,600 53,992 131,269 (191,789) (2,591)
Units withdrawn,
surrendered and
annuitized....... (33,462) (33,992) (17,018) (18,559) (12,878) (15,208) (27,690)
------------ ------------ ------------ ------------ ------------ ------------ ------------
Units outstanding
end of period...... 1,187,036 1,106,267 844,835 671,847 739,698 554,873 355,412
------------ ------------ ------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------ ------------ ------------
<CAPTION>
Year Ended
Dec. 31,
1995
------------
<S> <C>
Units outstanding
beginning of
period............. 331,677
Units purchased... 108,668
Units transferred
between Sub-
Accounts and
Fixed Account.... 50,762
Units withdrawn,
surrendered and
annuitized....... (157,073)
------------
Units outstanding
end of period...... 334,034
------------
------------
</TABLE>
<TABLE>
<CAPTION>
MSS MMS UTS
Sub-Account Sub-Account TRS Sub-Account
--------------------------- --------------------------- Sub-Account ------------
Six Months Six Months ----------------------------- Six Months
Ended Year Ended Ended Year Ended Six Months Ended
June 30, Dec. 31, June 30, Dec. 31, Ended Year Ended June 30,
1996 1995 1996 1995 June 30, 1996 Dec. 31, 1995 1996
------------ ------------ ------------ ------------ ------------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Units outstanding
beginning of
period............. 277,142 148,048 623,252 408,469 1,365,757 1,063,839 97,337
Units purchased... 41,167 105,019 242,884 687,664 194,079 305,777 21,593
Units transferred
between Sub-
Accounts and
Fixed Account.... 46,397 32,193 (237,463) (460,986) 11,709 54,692 (4,553)
Units withdrawn,
surrendered and
annuitized....... (10,751) (8,118) (20,304) (11,895) (23,068) (58,552) (238)
------------ ------------ ------------ ------------ ------------- ------------- ------------
Units outstanding
end of period...... 353,955 277,142 608,369 623,252 1,548,477 1,365,757 114,139
------------ ------------ ------------ ------------ ------------- ------------- ------------
------------ ------------ ------------ ------------ ------------- ------------- ------------
<CAPTION>
Year Ended
Dec. 31, 1995
-------------
<S> <C>
Units outstanding
beginning of
period............. 6,103
Units purchased... 57,226
Units transferred
between Sub-
Accounts and
Fixed Account.... 34,485
Units withdrawn,
surrendered and
annuitized....... (477)
------
Units outstanding
end of period...... 97,337
------
------
</TABLE>
<TABLE>
<CAPTION>
WGS WGO
Sub-Account Sub-Account
--------------------------- ---------------------------
Six Months Six Months
Ended Year Ended Ended Year Ended
June 30, Dec. 31, June 30, Dec. 31,
1996 1995 1996 1995
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Units outstanding beginning of
period............................ 268,890 238,927 251,193 35,096
Units purchased.................. 28,510 41,956 84,034 118,652
Units transferred between
Sub-Accounts and Fixed
Account......................... 19,433 (2,027) 50,871 100,386
Units withdrawn, surrendered and
annuitized...................... (4,220) (9,966) (3,621) (2,941)
------------ ------------ ------------ ------------
Units outstanding end of period.... 312,613 268,890 382,477 251,193
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
</TABLE>
8
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Participants in Sun Life (N.Y.) Variable Account C
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 C (the "Variable Account") as of June 30, 1996, the related
statement of operations for the six months then ended and the statements of
changes in net assets for the six months then ended and the year ended December
31, 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 with the custodian of securities held for the Variable Account as
of June 30, 1996. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of the Variable Account as of June 30, 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
August 2, 1996
9
