<PAGE>
SUN LIFE (N.Y.) VARIABLE ACCOUNT C
PERFORMANCE SUMMARY
These performance results do not reflect any applicable surrender charges. Past
performance is no guarantee of future results.
<TABLE>
<CAPTION>
UNIT VALUE
-------------------------------- PERCENTAGE
DECEMBER 31, CHANGE
DECEMBER 31, 1997 1998 IN UNIT VALUE
----------------- ------------ -------------
<S> <C> <C> <C>
REGATTA - NY CONTRACTS
Capital Appreciation Series........................ $20.4955 $26.0156 26.93%
Conservative Growth Series......................... 21.5979 26.3767 22.13%
Government Securities Series....................... 12.4617 13.3628 7.23%
High Yield Series.................................. 14.9542 14.8376 (0.78)%
Managed Sectors Series............................. 19.6663 21.7749 10.72%
Money Market Series................................ 11.5063 11.9179 3.58%
Total Return Series................................ 17.1690 18.9202 10.20%
Utilities Series................................... 19.6408 22.7757 15.96%
World Governments Series........................... 12.2419 13.9401 13.87%
World Growth Series................................ 13.9137 15.7177 12.97%
REGATTA GOLD - NY CONTRACTS
Capital Appreciation Series........................ 13.6249 17.2946 26.93%
Capital Opportunities Series*...................... 10.8511 13.5854 25.20%
Conservative Growth Series......................... 14.6125 17.8458 22.13%
Emerging Growth Series............................. 12.6847 16.7445 32.01%
MFS/Foreign & Colonial Emerging Markets Equity
Series............................................ 8.7203 6.0241 (30.92)%
International Growth Series........................ 10.7213 12.8587 19.94%
International Growth and Income Series............. 9.3612 9.4088 0.51%
Government Securities Series....................... 10.9695 11.7627 7.23%
High Yield Series.................................. 11.8237 11.7316 (0.78)%
Managed Sectors Series............................. 14.0620 15.5700 10.72%
Money Market Series................................ 10.4857 10.8609 3.58%
Research Series.................................... 13.2588 16.1649 21.92%
Research Growth and Income Series.................. 10.7234 12.9195 20.48%
Total Return Series................................ 12.9446 14.2649 10.20%
Utilities Series................................... 14.6470 16.9849 15.96%
World Asset Allocation Series...................... 11.6505 12.2289 4.96%
World Governments Series........................... 10.0221 11.4123 13.87%
World Growth Series................................ 11.8491 13.3854 12.97%
World Total Return Series.......................... 11.9033 13.8923 16.71%
</TABLE>
*Before May 1, 1998, called the Value Series.
1
<PAGE>
SUN LIFE (N.Y.) VARIABLE ACCOUNT C
STATEMENT OF CONDITION-- December 31, 1998
<TABLE>
<CAPTION>
ASSETS:
Investments in MFS/Sun Life Series Trust: Shares Cost Value
---------- ------------ ------------
<S> <C> <C> <C>
Capital Appreciation Series ("CAS")........... 1,108,949 $ 41,650,221 $ 50,936,925
Capital Opportunities ("COS")................. 196,081 3,004,140 3,329,814
Conservative Growth Series ("CGS")............ 1,906,082 58,914,232 72,903,135
Emerging Growth Series ("EGS")................ 1,066,331 19,376,576 24,822,677
MFS/Foreign & Colonial Emerging Markets Equity
Series ("FCE")............................... 18,696 166,204 140,033
International Growth Series ("FCG")........... 265,459 3,054,820 3,500,104
International Growth and Income Series
("FCI")...................................... 40,468 414,408 393,971
Government Securities Series ("GSS").......... 940,103 12,111,944 12,592,294
High Yield Series ("HYS")..................... 1,610,555 15,133,234 14,758,345
Managed Sectors Series ("MSS")................ 449,846 12,202,600 12,705,820
Money Market Series ("MMS")................... 16,308,662 16,308,662 16,308,662
Research Series ("RES")....................... 1,636,136 32,275,523 37,668,622
Research Growth and Income Series ("RGS")..... 215,616 2,547,539 2,888,032
Total Return Series ("TRS")................... 2,672,163 51,616,074 56,819,488
Utilities Series ("UTS")...................... 644,603 9,987,187 11,012,694
World Asset Allocation Series ("WAA")......... 227,036 3,291,343 3,279,539
World Governments Series ("WGS").............. 334,327 3,766,005 4,087,858
World Growth Series ("WGO")................... 672,489 9,523,270 10,527,939
World Total Return Series ("WTR")............. 279,438 4,244,370 4,699,842
------------ ------------
$299,588,352 $343,375,794
------------
------------
LIABILITY:
Payable to sponsor............................ (86,551)
------------
Net Assets................................ $343,289,243
------------
------------
</TABLE>
See notes to financial statements
2
<PAGE>
SUN LIFE (N.Y.) VARIABLE ACCOUNT C
STATEMENT OF CONDITION-- (continued)
<TABLE>
<CAPTION>
NET ASSETS:
Applicable to Owners of
Deferred Variable Annuity
Contracts:
--------------------------------- Reserve for
Unit Variable
Units Value Value Annuities Total
--------- -------- ------------ ----------- ------------
<S> <C> <C> <C> <C> <C>
Regatta-NY Contracts:
CAS............................ 1,030,044 $26.0156 $ 26,792,285 $ 139,574 $ 26,931,859
CGS............................ 759,522 26.3767 20,032,265 92,682 20,124,947
GSS............................ 516,775 13.3628 6,905,503 -- 6,905,503
HYS............................ 299,433 14.8376 4,456,292 15,289 4,471,581
MSS............................ 294,045 21.7749 6,403,143 -- 6,403,143
MMS............................ 529,219 11.9179 6,303,200 -- 6,303,200
TRS............................ 1,320,198 18.9202 24,974,001 664,139 25,638,140
UTS............................ 88,196 22.7757 2,009,345 -- 2,009,345
WGS............................ 219,014 13.9401 3,055,870 1,724 3,057,594
WGO............................ 327,055 15.7177 5,141,618 -- 5,141,618
------------ ----------- ------------
$106,073,522 $ 913,408 $106,986,930
------------ ----------- ------------
Regatta Gold-NY Contracts:
CAS............................ 1,387,198 17.2946 $ 23,992,396 $ -- $ 23,992,396
COS............................ 245,193 13.5854 3,329,814 -- 3,329,814
CGS............................ 2,936,804 17.8458 52,405,906 350,357 52,756,263
EGS............................ 1,482,470 16.7445 24,822,677 -- 24,822,677
FCE............................ 23,240 6.0241 140,033 -- 140,033
FCG............................ 272,201 12.8587 3,500,104 -- 3,500,104
FCI............................ 41,872 9.4088 393,971 -- 393,971
GSS............................ 483,528 11.7627 5,686,382 -- 5,686,382
HYS............................ 869,291 11.7316 10,205,985 78,983 10,284,968
MSS............................ 401,019 15.5700 6,244,146 60,790 6,304,936
MMS............................ 921,204 10.8609 10,005,379 -- 10,005,379
RES............................ 2,330,245 16.1649 37,668,622 -- 37,668,622
RGS............................ 222,849 12.9195 2,888,032 -- 2,888,032
TRS............................ 2,154,305 14.2649 30,720,733 408,278 31,129,011
UTS............................ 529,135 16.9849 9,003,349 -- 9,003,349
WAA............................ 267,873 12.2289 3,279,539 -- 3,279,539
WGS............................ 90,226 11.4123 1,029,944 -- 1,029,944
WGO............................ 402,319 13.3854 5,386,321 -- 5,386,321
WTR............................ 334,013 13.8923 4,640,350 60,222 4,700,572
------------ ----------- ------------
$235,343,683 $ 958,630 $236,302,313
------------ ----------- ------------
Net Assets...................................... $341,417,205 $ 1,872,038 $343,289,243
------------ ----------- ------------
------------ ----------- ------------
</TABLE>
See notes to financial statements
3
<PAGE>
SUN LIFE (N.Y.) VARIABLE ACCOUNT C
STATEMENT OF OPERATIONS-- Year Ended December 31, 1998
<TABLE>
<CAPTION>
CAS COS CGS EGS FCE
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
INCOME AND EXPENSES:
Dividend income and capital gain
distributions received............... $ 4,727,025 $ 65,902 $ 4,021,926 $ 588,305 $ 12,512
Mortality and expense risk charges.... 528,475 24,531 731,436 227,305 3,537
Administrative charges................ 63,417 2,944 87,772 27,277 424
----------- ----------- ----------- ----------- -----------
Net investment income............. $ 4,135,133 $ 38,427 $ 3,202,718 $ 333,723 $ 8,551
----------- ----------- ----------- ----------- -----------
REALIZED AND UNREALIZED GAINS (LOSSES):
Realized gains (losses) on investment
transactions:
Proceeds from sales................. $ 9,944,892 $915,602 $ 8,893,269 $3,539,526 $ 309,078
Cost of investments sold............ 7,636,624 790,212 6,408,134 2,704,077 501,878
----------- ----------- ----------- ----------- -----------
Net realized gains (losses)....... $ 2,308,268 $125,390 $ 2,485,135 $ 835,449 $(192,800)
----------- ----------- ----------- ----------- -----------
Net unrealized appreciation
(depreciation) on investments:
End of year......................... $ 9,286,704 $325,674 $13,988,903 $5,446,101 $ (26,171)
Beginning of year................... 5,044,914 21,682 8,236,126 1,240,869 (52,077)
----------- ----------- ----------- ----------- -----------
Change in unrealized appreciation
(depreciation)................... $ 4,241,790 $303,992 $ 5,752,777 $4,205,232 $ 25,906
----------- ----------- ----------- ----------- -----------
Realized and unrealized gains
(losses)....................... $ 6,550,058 $429,382 $ 8,237,912 $5,040,681 $(166,894)
----------- ----------- ----------- ----------- -----------
INCREASE (DECREASE) IN NET ASSETS FROM
OPERATIONS............................. $10,685,191 $467,809 $11,440,630 $5,374,404 $(158,343)
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
</TABLE>
<TABLE>
<CAPTION>
FCG FCI GSS HYS MSS
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
---------- ---------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
INCOME AND EXPENSES:
Dividend income and capital gain
distributions received............... $ 90,124 $ 2,673 $ 606,875 $ 850,440 $1,700,250
Mortality and expense risk charges.... 37,022 3,260 139,729 170,097 141,133
Administrative charges................ 4,443 391 16,767 20,412 16,936
---------- ---------- ----------- ----------- -----------
Net investment income (loss)...... $ 48,659 $ (978) $ 450,379 $ 659,931 $1,542,181
---------- ---------- ----------- ----------- -----------
REALIZED AND UNREALIZED GAINS (LOSSES):
Realized gains (losses) on investment
transactions:
Proceeds from sales................. $436,106 $ 63,828 $4,623,254 $4,139,643 $2,077,949
Cost of investments sold............ 382,074 67,075 4,495,083 3,989,746 1,951,325
---------- ---------- ----------- ----------- -----------
Net realized gains (losses)....... $ 54,032 $ (3,247) $ 128,171 $ 149,897 $ 126,624
---------- ---------- ----------- ----------- -----------
Net unrealized appreciation
(depreciation) on investments:
End of year......................... $445,284 $(20,437) $ 480,350 $ (374,889) $ 503,220
Beginning of year................... 60,185 (3,549) 264,065 604,130 1,044,592
---------- ---------- ----------- ----------- -----------
Change in unrealized appreciation
(depreciation)................... $385,099 $(16,888) $ 216,285 $ (979,019) $ (541,372)
---------- ---------- ----------- ----------- -----------
Realized and unrealized gains
(losses)....................... $439,131 $(20,135) $ 344,456 $ (829,122) $ (414,748)
---------- ---------- ----------- ----------- -----------
INCREASE (DECREASE) IN NET ASSETS FROM
OPERATIONS............................. $487,790 $(21,113) $ 794,835 $ (169,191) $1,127,433
---------- ---------- ----------- ----------- -----------
---------- ---------- ----------- ----------- -----------
</TABLE>
See notes to financial statements
4
<PAGE>
SUN LIFE (N.Y.) VARIABLE ACCOUNT C
STATEMENT OF OPERATIONS-- continued
<TABLE>
<CAPTION>
MMS RES RGS TRS UTS
Sub-Account Sub-Account Sub-Account Sub-Account Sub-Account
----------- ----------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C>
INCOME AND EXPENSES:
Dividend income and capital gain
distributions received............... $ 548,007 $1,202,319 $ 5,749 $5,291,992 $ 808,978
Mortality and expense risk charges.... 138,868 368,165 18,782 609,802 95,903
Administrative charges................ 16,664 44,180 2,254 73,176 11,508
----------- ----------- ---------- ----------- -----------
Net investment income (loss)...... $ 392,475 $ 789,974 $(15,287) $4,609,014 $ 701,567
----------- ----------- ---------- ----------- -----------
REALIZED AND UNREALIZED GAINS:
Realized gains on investment
transactions:
Proceeds from sales................. $24,403,313 $4,570,415 $155,606 $7,535,287 $1,120,448
Cost of investments sold............ 24,403,313 3,702,264 134,802 6,566,389 875,313
----------- ----------- ---------- ----------- -----------
Net realized gains................ $ -- $ 868,151 $ 20,804 $ 968,898 $ 245,135
----------- ----------- ---------- ----------- -----------
Net unrealized appreciation
(depreciation) on investments:
End of year......................... $ -- $5,393,099 $340,493 $5,203,414 $1,025,507
Beginning of year................... -- 1,565,138 27,151 5,938,585 809,777
----------- ----------- ---------- ----------- -----------
Change in unrealized
appreciation..................... $ -- $3,827,961 $313,342 $ (735,171) $ 215,730
----------- ----------- ---------- ----------- -----------
Realized and unrealized gains... $ -- $4,696,112 $334,146 $ 233,727 $ 460,865
----------- ----------- ---------- ----------- -----------
INCREASE IN NET ASSETS FROM
OPERATIONS............................. $ 392,475 $5,486,086 $318,859 $4,842,741 $1,162,432
----------- ----------- ---------- ----------- -----------
----------- ----------- ---------- ----------- -----------
</TABLE>
<TABLE>
<CAPTION>
WAA WGS WGO WTR
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............... $219,895 $ 52,678 $ 742,689 $146,812 $21,685,151
Mortality and expense risk charges.... 40,045 50,462 123,593 41,967 3,494,112
Administrative charges................ 4,805 6,055 14,831 5,036 419,292
---------- ----------- ----------- ---------- -----------
Net investment income (loss)...... $175,045 $ (3,839) $ 604,265 $ 99,809 $17,771,747
---------- ----------- ----------- ---------- -----------
REALIZED AND UNREALIZED GAINS (LOSSES):
Realized gains on investment
transactions:
Proceeds from sales................. $792,170 $1,490,665 $2,750,733 $476,776 $78,238,560
Cost of investments sold............ 790,404 1,478,842 2,356,373 398,990 69,632,918
---------- ----------- ----------- ---------- -----------
Net realized gains................ $ 1,766 $ 11,823 $ 394,360 $ 77,786 $ 8,605,642
---------- ----------- ----------- ---------- -----------
Net unrealized appreciation
(depreciation) on investments:
End of year......................... $(11,804) $ 321,853 $1,004,669 $455,472 $43,787,442
Beginning of year................... 56,458 (205,715) 833,861 121,517 25,607,709
---------- ----------- ----------- ---------- -----------
Change in unrealized appreciation
(depreciation)................... $(68,262) $ 527,568 $ 170,808 $333,955 $18,179,733
---------- ----------- ----------- ---------- -----------
Realized and unrealized gains
(losses)....................... $(66,496) $ 539,391 $ 565,168 $411,741 $26,785,375
---------- ----------- ----------- ---------- -----------
INCREASE IN NET ASSETS FROM
OPERATIONS............................. $108,549 $ 535,552 $1,169,433 $511,550 $44,557,122
---------- ----------- ----------- ---------- -----------
---------- ----------- ----------- ---------- -----------
</TABLE>
See notes to financial statements
5
<PAGE>
SUN LIFE (N.Y.) VARIABLE ACCOUNT C
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
EGS
CAS COS CGS Sub-Account
Sub-Account Sub-Account Sub-Account -----------
------------------------ ---------------------- ------------------------
Year Ended
Year Ended Year Ended Year Ended December
December 31, December 31, December 31, 31,
------------------------ ---------------------- ------------------------ -----------
1998 1997 1998 1997* 1998 1997 1998
----------- ----------- ---------- ---------- ----------- ----------- -----------
OPERATIONS:
<S> <C> <C> <C> <C> <C> <C> <C>
Net investment income (loss).......... $ 4,135,133 $ 2,120,283 $ 38,427 $ (1,777) $ 3,202,718 $ 839,603 $ 333,723
Net realized gains.................... 2,308,268 1,540,585 125,390 4,627 2,485,135 1,505,247 835,449
Net unrealized gains.................. 4,241,790 1,903,609 303,992 21,682 5,752,777 4,882,670 4,205,232
----------- ----------- ---------- ---------- ----------- ----------- -----------
Increase in net assets from
operations....................... $10,685,191 $ 5,564,477 $ 467,809 $ 24,532 $11,440,630 $ 7,227,520 $ 5,374,404
----------- ----------- ---------- ---------- ----------- ----------- -----------
CONTRACT OWNER TRANSACTIONS:
Accumulation Activity:
Purchase payments received.......... $ 5,645,231 $ 5,437,094 $1,250,849 $ 342,925 $13,430,158 $12,920,177 $ 4,565,860
Net transfers between Sub-Accounts
and Fixed Account.................. 2,271,423 2,074,585 1,000,555 302,919 8,538,077 6,398,425 3,478,850
Withdrawals, surrenders,
annuitizations and contract
charges............................ (3,030,676) (1,919,576) (59,775) -- (3,468,420) (1,877,932) (857,070)
----------- ----------- ---------- ---------- ----------- ----------- -----------
Net accumulation activity......... $ 4,885,978 $ 5,592,103 $2,191,629 $ 645,844 $18,499,815 $17,440,670 $ 7,187,640
----------- ----------- ---------- ---------- ----------- ----------- -----------
Annuitization Activity:
Annuitizations...................... $ -- $ -- $ -- $ -- $ 54,952 $ 251,244 $ --
Annuity payments and account fees... (39,858) (31,346) -- -- (32,919) (15,570) --
Adjustments to annuity reserve...... (3,612) (2,576) -- -- (6,680) (12,192) --
----------- ----------- ---------- ---------- ----------- ----------- -----------
Net annuitization activity........ $ (43,470) $ (33,922) $ -- $ -- $ 15,353 $ 223,482 $ --
----------- ----------- ---------- ---------- ----------- ----------- -----------
Increase in net assets from contract
owner transactions................... $ 4,842,508 $ 5,558,181 $2,191,629 $ 645,844 $18,515,168 $17,664,152 $ 7,187,640
----------- ----------- ---------- ---------- ----------- ----------- -----------
Increase in net assets.............. $15,527,699 $11,122,658 $2,659,438 $ 670,376 $29,955,798 $24,891,672 $12,562,044
NET ASSETS:
Beginning of period................... 35,396,556 24,273,898 670,376 -- 42,925,412 18,033,740 12,260,633
----------- ----------- ---------- ---------- ----------- ----------- -----------
End of period......................... $50,924,255 $35,396,556 $3,329,814 $ 670,376 $72,881,210 $42,925,412 $24,822,677
----------- ----------- ---------- ---------- ----------- ----------- -----------
----------- ----------- ---------- ---------- ----------- ----------- -----------
<CAPTION>
1997
-----------
OPERATIONS:
<S> <C>
Net investment income (loss).......... $ (81,849)
Net realized gains.................... 119,697
Net unrealized gains.................. 1,280,838
-----------
Increase in net assets from
operations....................... $ 1,318,686
-----------
CONTRACT OWNER TRANSACTIONS:
Accumulation Activity:
Purchase payments received.......... $ 5,109,875
Net transfers between Sub-Accounts
and Fixed Account.................. 2,532,138
Withdrawals, surrenders,
annuitizations and contract
charges............................ (237,664)
-----------
Net accumulation activity......... $ 7,404,349
-----------
Annuitization Activity:
Annuitizations...................... $ --
Annuity payments and account fees... --
Adjustments to annuity reserve...... --
-----------
Net annuitization activity........ $ --
-----------
Increase in net assets from contract
owner transactions................... $ 7,404,349
-----------
Increase in net assets.............. $ 8,723,035
NET ASSETS:
Beginning of period................... 3,537,598
-----------
End of period......................... $12,260,633
-----------
-----------
</TABLE>
*For the period July 14, 1997 (commencement of operations) to December 31, 1997.
See notes to financial statements
6
<PAGE>
SUN LIFE (N.Y.) VARIABLE ACCOUNT C
STATEMENTS OF CHANGES IN NET ASSETS -- continued
<TABLE>
<CAPTION>
FCE FCG FCI
Sub-Account Sub-Account Sub-Account
------------------------ ------------------------- ------------------------
Year Ended Year Ended Year Ended
December 31, December 31, December 31,
------------------------ ------------------------- ------------------------
1998 1997* 1998 1997 1998 1997**
----------- ---------- ----------- ----------- ---------- -----------
OPERATIONS:
<S> <C> <C> <C> <C> <C> <C>
Net investment income (loss).......... $ 8,551 $ (1,887) $ 48,659 $ (5,125) $ (978) $ (255)
Net realized gains (losses)........... (192,800) (146) 54,032 5,393 (3,247) (16)
Net unrealized gains (losses)......... 25,906 (52,077) 385,099 56,979 (16,888) (3,549)
----------- ---------- ----------- ----------- ---------- -----------
Increase (decrease) in net assets
from operations.................. $ (158,343) $ (54,110) $ 487,790 $ 57,247 $ (21,113) $ (3,820)
----------- ---------- ----------- ----------- ---------- -----------
CONTRACT OWNER TRANSACTIONS:
Accumulation Activity:
Purchase payments received.......... $ 99,812 $ 116,973 $ 364,428 $ 680,068 $ 182,841 $ 53,676
Net transfers between Sub-Accounts
and Fixed Account.................. (159,531) 302,187 775,936 731,375 155,918 36,535
Withdrawals, surrenders,
annuitizations
and contract charges............... (6,955) -- (151,648) (20,814) (10,066) --
----------- ---------- ----------- ----------- ---------- -----------
Net accumulation activity......... $ (66,674) $ 419,160 $ 988,716 $ 1,390,629 $ 328,693 $ 90,211
----------- ---------- ----------- ----------- ---------- -----------
Annuitization Activity:
Annuity payments and account fees... $ -- $ -- $ -- $ -- $ -- $ --
Adjustments to annuity reserve...... -- -- -- -- -- --
----------- ---------- ----------- ----------- ---------- -----------
Net annuitization activity........ $ -- $ -- $ -- $ -- $ -- $ --
----------- ---------- ----------- ----------- ---------- -----------
Increase (decrease) in net assets from
contract owner transactions.......... $ (66,674) $ 419,160 $ 988,716 $ 1,390,629 $ 328,693 $ 90,211
----------- ---------- ----------- ----------- ---------- -----------
Increase (decrease) in net assets... $ (225,017) $ 365,050 $ 1,476,506 $ 1,447,876 $ 307,580 $ 86,391
NET ASSETS:
Beginning of period................... 365,050 -- 2,023,598 575,722 86,391 --
----------- ---------- ----------- ----------- ---------- -----------
End of period......................... $ 140,033 $ 365,050 $ 3,500,104 $ 2,023,598 $ 393,971 $ 86,391
----------- ---------- ----------- ----------- ---------- -----------
----------- ---------- ----------- ----------- ---------- -----------
<CAPTION>
GSS
Sub-Account
------------------------
Year Ended
December 31,
------------------------
1998 1997
----------- -----------
OPERATIONS:
<S> <C> <C>
Net investment income (loss).......... $ 450,379 $ 488,183
Net realized gains (losses)........... 128,171 37,818
Net unrealized gains (losses)......... 216,285 129,079
----------- -----------
Increase (decrease) in net assets
from operations.................. $ 794,835 $ 655,080
----------- -----------
CONTRACT OWNER TRANSACTIONS:
Accumulation Activity:
Purchase payments received.......... $ 1,440,848 $ 901,461
Net transfers between Sub-Accounts
and Fixed Account.................. 2,333,811 537,631
Withdrawals, surrenders,
annuitizations
and contract charges............... (1,525,871) (577,767)
----------- -----------
Net accumulation activity......... $ 2,248,788 $ 861,325
----------- -----------
Annuitization Activity:
Annuity payments and account fees... $ (8,935) $ (2,591)
Adjustments to annuity reserve...... (83) (132)
----------- -----------
Net annuitization activity........ $ (9,018) $ (2,723)
----------- -----------
Increase (decrease) in net assets from
contract owner transactions.......... $ 2,239,770 $ 858,602
----------- -----------
Increase (decrease) in net assets... $ 3,034,605 $ 1,513,682
NET ASSETS:
Beginning of period................... 9,557,280 8,043,598
----------- -----------
End of period......................... $12,591,885 $ 9,557,280
----------- -----------
----------- -----------
</TABLE>
*For the period July 14, 1997 (commencement of operations) to December 31,
1997.
**For the period August 11, 1997 (commencement of operations) to December 31,
1997.
See notes to financial statements
7
<PAGE>
SUN LIFE (N.Y.) VARIABLE ACCOUNT C
STATEMENTS OF CHANGES IN NET ASSETS -- continued
<TABLE>
<CAPTION>
HYS MSS MMS
Sub-Account Sub-Account Sub-Account
------------------------ ------------------------ ------------------------
Year Ended Year Ended Year Ended
December 31, December 31, December 31,
------------------------ ------------------------ ------------------------
1998 1997 1998 1997 1998 1997
----------- ----------- ----------- ----------- ----------- -----------
OPERATIONS:
<S> <C> <C> <C> <C> <C> <C>
Net investment income................. $ 659,931 $ 383,220 $ 1,542,181 $ 706,385 $ 392,475 $ 357,569
Net realized gains.................... 149,897 124,062 126,624 312,787 -- --
Net unrealized gains (losses)......... (979,019) 380,978 (541,372) 531,538 -- --
----------- ----------- ----------- ----------- ----------- -----------
Increase (decrease) in net assets
from operations.................. $ (169,191) $ 888,260 $ 1,127,433 $ 1,550,710 $ 392,475 $ 357,569
----------- ----------- ----------- ----------- ----------- -----------
CONTRACT OWNER TRANSACTIONS:
Accumulation Activity:
Purchase payments received.......... $ 3,046,502 $ 2,509,428 $ 1,471,282 $ 1,282,041 $ 6,979,970 $ 7,367,664
Net transfers between Sub-Accounts
and Fixed Account.................. 2,266,782 1,893,307 1,246,414 1,220,095 4,354,504 (4,368,281)
Withdrawals, surrenders,
annuitizations and contract
charges............................ (1,309,324) (421,568) (917,266) (587,414) (5,785,099) (2,272,208)
----------- ----------- ----------- ----------- ----------- -----------
Net accumulation activity......... $ 4,003,960 $ 3,981,167 $ 1,800,430 $ 1,914,722 $ 5,549,375 $ 727,175
----------- ----------- ----------- ----------- ----------- -----------
Annuitization Activity:
Annuitizations...................... $ 86,382 $ 20,734 $ 54,124 $ -- $ -- $ --
Annuity payments and account fees... (8,589) (1,137) (520) -- (2,231) (643)
Adjustments to annuity reserve...... (1,717) (79) 2,259 -- (6) (30)
----------- ----------- ----------- ----------- ----------- -----------
Net annuitization activity........ $ 76,076 $ 19,518 $ 55,863 $ -- $ (2,237) $ (673)
----------- ----------- ----------- ----------- ----------- -----------
Increase in net assets from contract
owner transactions................... $ 4,080,036 $ 4,000,685 $ 1,856,293 $ 1,914,722 $ 5,547,138 $ 726,502
----------- ----------- ----------- ----------- ----------- -----------
Increase in net assets.............. $ 3,910,845 $ 4,888,945 $ 2,983,726 $ 3,465,432 $ 5,939,613 $ 1,084,071
NET ASSETS:
Beginning of period................... 10,845,704 5,956,759 9,724,353 6,258,921 10,368,966 9,284,895
----------- ----------- ----------- ----------- ----------- -----------
End of period......................... $14,756,549 $10,845,704 $12,708,079 $ 9,724,353 $16,308,579 $10,368,966
----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- -----------
<CAPTION>
RES
Sub-Account
------------------------
Year Ended
December 31,
------------------------
1998 1997
----------- -----------
OPERATIONS:
<S> <C> <C>
Net investment income................. $ 789,974 $ 91,756
Net realized gains.................... 868,151 165,147
Net unrealized gains (losses)......... 3,827,961 1,401,570
----------- -----------
Increase (decrease) in net assets
from operations.................. $ 5,486,086 $ 1,658,473
----------- -----------
CONTRACT OWNER TRANSACTIONS:
Accumulation Activity:
Purchase payments received.......... $ 5,661,381 $ 7,847,808
Net transfers between Sub-Accounts
and Fixed Account.................. 8,373,302 6,025,796
Withdrawals, surrenders,
annuitizations and contract
charges............................ (1,448,446) (239,605)
----------- -----------
Net accumulation activity......... $12,586,237 $13,633,999
----------- -----------
Annuitization Activity:
Annuitizations...................... $ -- $ --
Annuity payments and account fees... -- --
Adjustments to annuity reserve...... -- --
----------- -----------
Net annuitization activity........ $ -- $ --
----------- -----------
Increase in net assets from contract
owner transactions................... $12,586,237 $13,633,999
----------- -----------
Increase in net assets.............. $18,072,323 $15,292,472
NET ASSETS:
Beginning of period................... 19,596,299 4,303,827
----------- -----------
End of period......................... $37,668,622 $19,596,299
----------- -----------
----------- -----------
</TABLE>
See notes to financial statements
8
<PAGE>
SUN LIFE (N.Y.) VARIABLE ACCOUNT C
STATEMENTS OF CHANGES IN NET ASSETS -- continued
<TABLE>
<CAPTION>
RGS TRS UTS
Sub-Account Sub-Account Sub-Account
------------------------- ------------------------ ------------------------
Year Ended Year Ended Year Ended
December 31, December 31, December 31,
------------------------- ------------------------ ------------------------
1998 1997*** 1998 1997 1998 1997
----------- ----------- ----------- ----------- ----------- -----------
OPERATIONS:
<S> <C> <C> <C> <C> <C> <C>
Net investment income (loss).......... $ (15,287) $ (1,915) $ 4,609,014 $ 2,714,679 $ 701,567 $ 282,139
Net realized gains.................... 20,804 380 968,898 880,365 245,135 128,266
Net unrealized gains (losses)......... 313,342 27,151 (735,171) 2,564,568 215,730 510,417
----------- ----------- ----------- ----------- ----------- -----------
Increase in net assets from
operations....................... $ 318,859 $ 25,616 $ 4,842,741 $ 6,159,612 $ 1,162,432 $ 920,822
----------- ----------- ----------- ----------- ----------- -----------
CONTRACT OWNER TRANSACTIONS:
Accumulation Activity:
Purchase payments received.......... $ 955,442 $ 403,727 $ 5,723,954 $ 7,910,254 $ 3,379,684 $ 1,252,037
Net transfers between Sub-Accounts
and Fixed Account.................. 1,012,621 216,206 7,589,931 4,487,309 2,309,074 674,611
Withdrawals, surrenders,
annuitizations and contract
charges............................ (41,336) (3,103) (3,756,499) (2,898,217) (626,782) (250,586)
----------- ----------- ----------- ----------- ----------- -----------
Net accumulation activity......... $ 1,926,727 $ 616,830 $ 9,557,386 $ 9,499,346 $ 5,061,976 $ 1,676,062
----------- ----------- ----------- ----------- ----------- -----------
Annuitization Activity:
Annuitizations...................... $ -- $ -- $ 395,341 $ -- $ -- $ --
Annuity payments and account fees... -- -- (79,366) (68,443) -- --
Adjustments to annuity reserve...... -- -- (7,297) (16,416) -- --
----------- ----------- ----------- ----------- ----------- -----------
Net annuitization activity........ $ -- $ -- $ 308,678 $ (84,859) $ -- $ --
----------- ----------- ----------- ----------- ----------- -----------
Increase in net assets from contract
owner transactions................... $ 1,926,727 $ 616,830 $ 9,866,064 $ 9,414,487 $ 5,061,976 $ 1,676,062
----------- ----------- ----------- ----------- ----------- -----------
Increase in net assets.............. $ 2,245,586 $ 642,446 $14,708,805 $15,574,099 $ 6,224,408 $ 2,596,884
NET ASSETS:
Beginning of period................... 642,446 -- 42,058,346 26,484,247 4,788,286 2,191,402
----------- ----------- ----------- ----------- ----------- -----------
End of period......................... $ 2,888,032 $ 642,446 $56,767,151 $42,058,346 $11,012,694 $ 4,788,286
----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- -----------
<CAPTION>
WAA
Sub-Account
-------------------------
Year Ended
December 31,
-------------------------
1998 1997
----------- -----------
OPERATIONS:
<S> <C> <C>
Net investment income (loss).......... $ 175,045 $ 49,854
Net realized gains.................... 1,766 19,530
Net unrealized gains (losses)......... (68,262) 43,944
----------- -----------
Increase in net assets from
operations....................... $ 108,549 $ 113,328
----------- -----------
CONTRACT OWNER TRANSACTIONS:
Accumulation Activity:
Purchase payments received.......... $ 451,961 $ 1,203,801
Net transfers between Sub-Accounts
and Fixed Account.................. 357,692 818,064
Withdrawals, surrenders,
annuitizations and contract
charges............................ (149,424) (42,361)
----------- -----------
Net accumulation activity......... $ 660,229 $ 1,979,504
----------- -----------
Annuitization Activity:
Annuitizations...................... $ -- $ --
Annuity payments and account fees... -- --
Adjustments to annuity reserve...... -- --
----------- -----------
Net annuitization activity........ $ -- $ --
----------- -----------
Increase in net assets from contract
owner transactions................... $ 660,229 $ 1,979,504
----------- -----------
Increase in net assets.............. $ 768,778 $ 2,092,832
NET ASSETS:
Beginning of period................... 2,510,761 417,929
----------- -----------
End of period......................... $ 3,279,539 $ 2,510,761
----------- -----------
----------- -----------
</TABLE>
***For the period July 9, 1997 (commencement of operations) to December 31,
1997.
See notes to financial statements
9
<PAGE>
SUN LIFE (N.Y.) VARIABLE ACCOUNT C
STATEMENTS OF CHANGES IN NET ASSETS -- continued
<TABLE>
<CAPTION>
WGS WGO WTR
Sub-Account Sub-Account Sub-Account
------------------------- ------------------------- -------------------------
Year Ended Year Ended Year Ended
December 31, December 31, December 31,
------------------------- ------------------------- -------------------------
1998 1997 1998 1997 1998 1997
----------- ----------- ----------- ------------ ----------- -----------
OPERATIONS:
<S> <C> <C> <C> <C> <C> <C>
Net investment income (loss).......... $ (3,839) $ 112,200 $ 604,265 $ 55,306 $ 99,809 $ 746
Net realized gains (losses)........... 11,823 (107,682) 394,360 243,950 77,786 8,873
Net unrealized gains (losses)......... 527,568 (99,232) 170,808 585,190 333,955 111,590
----------- ----------- ----------- ------------ ----------- -----------
Increase (decrease) in net assets
from operations.................. $ 535,552 $ (94,714) $ 1,169,433 $ 884,446 $ 511,550 $ 121,209
----------- ----------- ----------- ------------ ----------- -----------
CONTRACT OWNER TRANSACTIONS:
Accumulation Activity:
Purchase payments received.......... $ 98,948 $ 298,940 $ 560,743 $ 1,760,372 $ 557,044 $ 837,139
Net transfers between Sub-Accounts
and Fixed Account.................. (43,239) (117,698) 424,047 1,155,858 1,590,561 955,063
Withdrawals, surrenders,
annuitizations and contract
charges............................ (640,532) (305,308) (826,884) (558,141) (174,073) (14,517)
----------- ----------- ----------- ------------ ----------- -----------
Net accumulation activity......... $ (584,823) $ (124,066) $ 157,906 $ 2,358,089 $ 1,973,532 $ 1,777,685
----------- ----------- ----------- ------------ ----------- -----------
Annuitization Activity:
Annuitizations...................... $ -- $ -- $ -- $ -- $ 58,314 $ --
Annuity payments and account fees... (2,179) (2,160) -- -- (560) --
Adjustments to annuity reserve...... (87) (56) -- -- 730 --
----------- ----------- ----------- ------------ ----------- -----------
Net annuitization activity........ $ (2,266) $ (2,216) $ -- $ -- $ 58,484 $ --
----------- ----------- ----------- ------------ ----------- -----------
Increase (decrease) in net assets from
contract owner transactions.......... $ (587,089) $ (126,282) $ 157,906 $ 2,358,089 $ 2,032,016 $ 1,777,685
----------- ----------- ----------- ------------ ----------- -----------
Increase (decrease) in net assets... $ (51,537) $ (220,996) $ 1,327,339 $ 3,242,535 $ 2,543,566 $ 1,898,894
NET ASSETS:
Beginning of period................... 4,139,075 4,360,071 9,200,600 5,958,065 2,157,006 258,112
----------- ----------- ----------- ------------ ----------- -----------
End of period......................... $ 4,087,538 $ 4,139,075 $10,527,939 $ 9,200,600 $ 4,700,572 $ 2,157,006
----------- ----------- ----------- ------------ ----------- -----------
----------- ----------- ----------- ------------ ----------- -----------
<CAPTION>
Total
--------------------------
Year Ended
December 31,
--------------------------
1998 1997
------------ ------------
OPERATIONS:
<S> <C> <C>
Net investment income (loss).......... $ 17,771,747 $ 8,109,115
Net realized gains (losses)........... 8,605,642 4,988,883
Net unrealized gains (losses)......... 18,179,733 14,276,945
------------ ------------
Increase (decrease) in net assets
from operations.................. $ 44,557,122 $ 27,374,943
------------ ------------
CONTRACT OWNER TRANSACTIONS:
Accumulation Activity:
Purchase payments received.......... $ 55,866,938 $ 58,235,460
Net transfers between Sub-Accounts
and Fixed Account.................. 47,876,728 25,876,125
Withdrawals, surrenders,
annuitizations and contract
charges............................ (24,786,146) (12,226,781)
------------ ------------
Net accumulation activity......... $ 78,957,520 $ 71,884,804
------------ ------------
Annuitization Activity:
Annuitizations...................... $ 649,113 $ 271,978
Annuity payments and account fees... (175,157) (121,890)
Adjustments to annuity reserve...... (16,493) (31,481)
------------ ------------
Net annuitization activity........ $ 457,463 $ 118,607
------------ ------------
Increase (decrease) in net assets from
contract owner transactions.......... $ 79,414,983 $ 72,003,411
------------ ------------
Increase (decrease) in net assets... $123,972,105 $ 99,378,354
NET ASSETS:
Beginning of period................... 219,317,138 119,938,784
------------ ------------
End of period......................... $343,289,243 $219,317,138
------------ ------------
------------ ------------
</TABLE>
See notes to financial statements
10
<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
Regatta-NY and Regatta Gold-NY contracts commenced on April 1, 1993 and August
1, 1996, respectively. 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-Registered Trademark-/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, an affiliate of Sun Life Assurance Company of Canada
(U.S.), is investment adviser to the Series Trust.
(2) SIGNIFICANT ACCOUNTING POLICIES
GENERAL
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
INVESTMENT VALUATIONS
Investments in shares of the Series Trust are recorded at their net asset value.
Realized gains and losses on sales of shares of the Series Trust are determined
on the identified cost basis. Dividend income and capital gain distributions
received by the Sub-Accounts are reinvested in additional Series Trust shares
and are recognized on the ex-dividend date.
Exchanges between Sub-Accounts requested by contract owners are recorded in the
new Sub-Account upon receipt of the redemption proceeds.
FEDERAL INCOME TAX STATUS
The operations of the Variable Account are part of the operations of the Sponsor
and are not taxed separately. The Variable Account is not taxed as a regulated
investment company. The Sponsor qualifies for the federal income tax treatment
granted to life insurance companies under Subchapter L of the Internal Revenue
Code. Under existing federal income tax law, investment income and capital gains
earned by the Variable Account on contract owner reserves are not taxable, and
therefore, no provision has been made for federal income taxes.
11
<PAGE>
SUN LIFE (N.Y.) VARIABLE ACCOUNT C
NOTES TO FINANCIAL STATEMENTS -- continued
(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%.
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 the 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 exceed 9% of the purchase payment made under a
Regatta-NY contract or 6% of the aggregate purchase payments made under a
Regatta Gold-NY contract.
(4) ANNUITY RESERVES
Annuity reserves are calculated using the 1983 Individual Annuitant Mortality
Table and an assumed interest rate of 4% for Regatta-NY contracts and 3% for
Regatta Gold-NY contracts. Required adjustments to the reserves are accomplished
by transfers to or from the Sponsor.
12
<PAGE>
SUN LIFE (N.Y.) VARIABLE ACCOUNT C
NOTES TO FINANCIAL STATEMENTS -- continued
(5) UNIT ACTIVITY FROM CONTRACT OWNER TRANSACTIONS
<TABLE>
<CAPTION>
Units
Transferred
Between
Sub-Accounts Units Withdrawn,
Units Outstanding and Fixed Surrendered and Units Outstanding
Beginning of Year Units Purchased Account Annuitized End of Year
------------------- --------------- ---------------- ----------------- -------------------
Year Ended Year Ended Year Ended Year Ended Year Ended
December 31, December 31, December 31, December 31, December 31,
------------------- --------------- ---------------- ----------------- -------------------
1998 1997 1998 1997 1998 1997 1998 1997 1998 1997
--------- --------- ------- ------- ------- -------- -------- -------- --------- ---------
MFS REGATTA
CONTRACTS:
-----------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CAS Sub-Account... 1,098,819 1,160,312 -- 1,731 16,251 20,840 (85,026) (84,064) 1,030,044 1,098,819
CGS Sub-Account... 806,893 845,581 -- 1,750 16,355 30,673 (63,726) (71,111) 759,522 806,893
GSS Sub-Account... 617,817 654,198 -- -- 6,548 9,196 (107,590) (45,577) 516,775 617,817
HYS Sub-Account... 340,853 355,247 -- 1,321 10,788 9,610 (52,208) (25,325) 299,433 340,853
MSS Sub-Account... 314,374 326,412 -- -- 3,793 17,274 (24,122) (29,312) 294,045 314,374
MMS Sub-Account... 540,785 611,608 -- 23 428,614 109,285 (440,180) (180,131) 529,219 540,785
TRS Sub-Account... 1,439,364 1,567,221 -- 2,075 (6,574) 26,932 (112,592) (156,855) 1,320,198 1,439,364
UTS Sub-Account... 103,362 112,112 -- -- 1,434 6,232 (16,600) (14,982) 88,196 103,362
WGS Sub-Account... 277,498 321,322 -- -- (17,719) (23,467) (40,765) (20,357) 219,014 277,498
WGO Sub-Account... 384,999 406,783 -- 1,002 (16,241) 12,949 (41,703) (35,735) 327,055 384,999
MFS REGATTA GOLD
CONTRACTS
-----------------
CAS Sub-Account... 933,956 401,401 377,035 429,277 155,695 129,225 (79,488) (25,947) 1,387,198 933,956
COS Sub-Account*... 61,777 -- 103,389 35,061 85,059 26,716 (5,032) -- 245,193 61,777
CGS Sub-Account... 1,722,218 347,210 833,525 981,150 504,212 431,451 (123,151) (37,593) 2,936,804 1,722,218
EGS Sub-Account... 966,583 335,404 324,632 442,404 255,069 209,941 (63,814) (21,166) 1,482,740 966,583
FCE Sub-Account*... 41,861 -- 11,240 11,586 (28,912) 30,275 (949) -- 23,240 41,861
FCG Sub-Account... 188,749 56,408 32,884 65,816 64,726 68,561 (14,158) (2,036) 272,201 188,749
FCI Sub-Account**... 9,227 -- 18,569 5,355 15,201 3,872 (1,125) -- 41,872 9,227
GSS Sub-Account... 168,798 40,062 125,717 87,840 199,497 44,641 (10,484) (3,745) 483,528 168,798
HYS Sub-Account... 482,767 109,992 256,362 220,099 176,263 157,860 (46,101) (5,184) 869,291 482,767
MSS Sub-Account... 251,868 92,171 98,329 97,276 80,721 65,953 (29,899) (3,532) 401,019 251,868
MMS Sub-Account... 395,655 244,386 653,207 720,359 (65,544) (545,823) (62,114) (23,267) 921,204 395,655
RES Sub-Account... 1,478,012 386,810 388,372 639,173 566,075 471,183 (102,214) (19,154) 2,330,245 1,478,012
RGS Sub-Account***... 59,221 -- 81,967 36,514 85,163 23,014 (3,502) (307) 222,849 59,221
TRS Sub-Account... 1,288,455 321,897 424,309 669,097 571,586 333,800 (130,045) (36,339) 2,154,305 1,288,455
UTS Sub-Account... 187,310 45,474 214,542 99,515 144,840 42,677 (17,557) (356) 529,135 187,310
WAA Sub-Account... 215,473 39,223 36,286 108,426 28,666 71,503 (12,552) (3,679) 267,873 215,473
WGS Sub-Account... 73,436 30,008 9,445 29,573 17,520 19,615 (10,175) (5,760) 90,226 73,436
WGO Sub-Account... 324,362 94,134 44,685 152,296 53,301 84,074 (20,029) (6,142) 402,319 324,362
WTR Sub-Account... 181,210 24,306 43,452 74,918 122,655 83,263 (13,304) (1,277) 334,013 181,210
</TABLE>
*Units for the year ended December 31, 1997 are for the period July 14, 1997
(commencement of operations of the Sub-Account) to December 31, 1997.
**Units for the year ended December 31, 1997 are for the period August 11, 1997
(commencement of operations of the Sub-Account) to December 31, 1997.
***Units for the year ended December 31, 1997 are for the period July 9, 1997
(commencement of operations of the Sub-Account) to December 31, 1997.
13
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Contract Owners 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 Capital Appreciation
Sub-Account, Capital Opportunities Sub-Account, Conservative Growth Sub-Account,
Emerging Growth Sub-Account, MFS/ Foreign & Colonial Emerging Markets Equity
Sub-Account, International Growth Sub-Account, International Growth and Income
Sub-Account, Government Securities Sub-Account, High Yield Sub-Account, Managed
Sectors Sub-Account, Money Market Sub-Account, Research Equity Sub-Account,
Research Growth and Income Sub-Account, Total Return Sub-Account, Utilities
Sub-Account, World Asset Allocation Sub-Account, World Governments Sub-Account,
World Growth Sub-Account, and World Total Return Sub-Account of Sun Life (N.Y.)
Variable Account C (the "Sub-Accounts") as of December 31, 1998, the related
statement of operations for the year then ended and the statements of changes in
net assets for the years ended December 31, 1998 and 1997. These financial
statements are the responsibility of management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures included
confirmation of securities held at December 31, 1998 by correspondence with the
custodian. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of the Sub-Accounts as of December 31, 1998,
the results of their operations and the changes in their net assets for the
respective stated periods in conformity with generally accepted accounting
principles.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
February 4, 1999
----------------------------------------
This report is prepared for the general information of contract owners. It is
authorized for distribution to prospective purchasers only when preceded or
accompanied by an effective prospectus.
14
<PAGE>
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
80 Broad Street, New York, NY 10004
DIRECTORS AND OFFICERS
DONALD A. STEWART, Chairman and Director
C. JAMES PRIEUR, President and Director
S. CAESAR RABOY, Senior Vice President and
Director
RICHARD B. BAILEY, Director
M. COLYER CRUM, Director
DAVID D. HORN, Director
JOHN G. IRELAND, Director
EDWARD M. LAMONT, Director
JOHN S. LANE, Director
ANGUS A. MacNAUGHTON, Director
JOHN D. McNEIL, Director
PETER R. O'FLINN, Director
FIORAVANTE G. PERROTTA, Director
RALPH F. PETERS, Director
FREDERICK B. WHITTEMORE, Director
MICHAEL A. COHEN, Vice President and
Regional Manager
ELLEN B. KING, Secretary
L. BROCK THOMSON, Vice President and
Treasurer
GENERAL DISTRIBUTOR
Clarendon Insurance Agency, Inc.
One Sun Life Executive Park
Wellesley Hills, Mass. 02481
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, Mass. 02110
[LOGO]
ANNUAL REPORT, DECEMBER 31, 1998
PROFESSIONALLY MANAGED ANNUITIES ISSUED BY
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
RENY-2/99 11M
