<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
33-58482
For Quarter Ended September 30, 1995 Commission File Number 33-1079
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
(Exact name of registrant as specified in its charter)
NEW YORK 04-2845273
(State or other jurisdiction of (IRS Employer I.D. No.)
incorporation or organization)
80 BROAD STREET, NEW YORK, N.Y. 10004
(Address of Principal Executive Office) (Zip Code)
Registrant's telephone number, including area code (212) 943-3855
NONE
Former name, former address, and former fiscal year, if changed since last
report
Indicate by check mark whether the Registrant (1) has filed all 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.
(1) Yes X No
(2) Yes X No
THE REGISTRANT MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTION H(1) (a)
AND (b) OF FORM 10-Q AND IS THEREFORE FILING THIS FORM WITH THE REDUCED
DISCLOSURE FORMAT PERMITTED BY INSTRUCTION H.
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SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
INDEX
Page
Number
Part I: Financial Information
Item 1: Financial Statements:*
Balance Sheets -
September 30, 1995 and December 31, 1994 3
Statements of Operations -
Three Months Ended
September 30, 1995 and September 30, 1994 4
Statements of Operations -
Nine Months Ended
September 30, 1995 and September 30, 1994 5
Statements of Capital Stock and Surplus -
Nine Months Ended
September 30, 1995 and September 30, 1994 6
Statements of Cash Flows -
Nine Months Ended
September 30, 1995 and September 30, 1994 7
Notes to Unaudited Financial Statements 8
Management's Discussion and Analysis of
Financial Condition and Results of Operations 9
Part II: Other Information
NONE
* The balance sheet at December 31, 1994 has been taken from the audited
financial statements at that date. All other statements are unaudited.
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<PAGE>
ITEM 1. FINANCIAL STATEMENTS
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
BALANCE SHEETS
<TABLE>
<CAPTION>
(UNAUDITED) (SEE NOTE BELOW)
SEPTEMBER 30, DECEMBER 31,
ASSETS 1995 1994
------------ ------------
<S> <C> <C>
Bonds $146,798,333 $188,460,195
Mortgage loans 55,977,506 63,377,327
Real estate 811,548 823,655
Policy loans 448,351 520,383
Cash 1,447,219 (756,378)
Investment income due and accrued 3,586,151 4,393,086
Other assets 1,319,034 1,512,498
------------ ------------
General account assets 210,388,142 258,330,766
------------ ------------
Separate account assets
Unitized 242,298,306 210,706,368
Non-unitized 76,797,568 34,945,221
------------ ------------
Total assets $529,484,016 $503,982,355
------------ ------------
------------ ------------
LIABILITIES
Reserves for unmatured obligations $ 21,630,754 $ 20,402,804
Annuity deposits 150,886,794 201,476,544
Accrued expenses and taxes 453,091 525,863
Other liabilities 587,894 539,438
Due to parent and affiliates - net 1,429,457 591,254
Due to separate accounts 427,096
Interest maintenance reserve 1,700,865 1,778,014
Asset valuation reserve 1,360,352 1,763,921
------------ ------------
General account liabilities 178,476,303 227,077,838
------------ ------------
Separate account liabilities
Unitized 242,135,803 210,550,227
Non-unitized 76,797,568 34,945,221
------------ ------------
Total liabilities 497,409,674 472,573,286
------------ ------------
CAPITAL STOCK AND SURPLUS
Capital stock - Par value $1,000
Authorized, issued and outstanding
2,000 shares 2,000,000 2,000,000
Surplus 30,074,342 29,409,069
------------ ------------
Total capital stock and surplus 32,074,342 31,409,069
------------ ------------
Total liabilities, capital stock and surplus $529,484,016 $503,982,355
------------ ------------
------------ ------------
</TABLE>
Note: The balance sheet at December 31, 1994 has been taken from the audited
financials at that date.
See notes to unaudited financial statements.
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SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
THREE MONTHS ENDED SEPTEMBER 30,
1995 1994
----------- -----------
<S> <C> <C>
INCOME
Premiums and annuity considerations $ 2,984,454 $ 1,834,233
Annuity deposit funds 4,472,087 9,707,440
Net investment income 4,509,944 5,393,463
Amortization of interest maintenance reserve 189,274 199,640
Realized losses on investments (677,723) (431,080)
Mortality and expense risk charges 778,353 707,532
----------- -----------
12,256,389 17,411,228
----------- -----------
BENEFITS AND EXPENSES
Increase (decrease) in actuarial reserves 500,221 (4,764,576)
Decrease in liability for annuity deposit funds (16,656,867) (578,329)
Death, health benefits and annuity payments 2,582,284 2,274,903
Annuity deposit fund withdrawals 23,290,856 9,435,790
Surplus transfer from separate account (2,102,070) (851,764)
Transfers to non-unitized separate account 166,284 7,737,044
----------- -----------
7,780,708 13,253,068
Operating expenses 1,260,125 1,214,005
Commissions 702,453 711,076
Taxes, licenses and fees 93,291 127,253
----------- -----------
9,836,577 15,305,402
----------- -----------
Net income from operations before
federal income tax 2,419,812 2,105,826
Federal income tax expense 2,954,370 114,228
----------- -----------
Net income (loss) $ (534,558) $ 1,991,598
----------- -----------
----------- -----------
</TABLE>
See notes to unaudited financial statements.
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<PAGE>
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30,
1995 1994
------------ ------------
<S> <C> <C>
INCOME
Premiums and annuity considerations $ 8,562,058 $ 5,785,603
Annuity deposit funds 40,441,831 18,985,784
Net investment income 14,276,989 16,744,695
Amortization of interest maintenance reserve 551,290 541,188
Realized losses on investments (1,350,000) (900,000)
Mortality and expense risk charges 2,193,863 2,079,893
------------ ------------
64,676,031 43,237,163
------------ ------------
BENEFITS AND EXPENSES
Increase (decrease) in actuarial reserves 1,227,950 (753,854)
Decrease in liability for annuity deposit funds (50,589,750) (25,298,519)
Death, health benefits and annuity payments 6,961,510 6,544,725
Annuity deposit fund withdrawals 66,397,086 39,719,318
Surplus transfer to (from) separate account 1,735,292 (1,235,900)
Transfers to non-unitized separate account 30,028,880 14,095,469
------------ ------------
55,760,968 33,071,239
Operating expenses 4,393,565 3,561,784
Commissions 2,742,716 2,217,864
Taxes, licenses and fees 435,253 330,426
------------ ------------
63,332,502 39,181,313
------------ ------------
Net income from operations before
federal income tax 1,343,529 4,055,850
Federal income tax expense 1,115,647 564,228
------------ ------------
Net income $ 227,882 $ 3,491,622
------------ ------------
------------ ------------
</TABLE>
See notes to unaudited financial statements.
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<PAGE>
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
STATEMENTS OF CAPITAL STOCK AND SURPLUS
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30,
1995 1994
----------- -----------
<S> <C> <C>
Capital stock $ 2,000,000 $ 2,000,000
Paid-in surplus 28,750,000 28,750,000
Special contingency reserve 750,000 750,000
Unassigned surplus
Balance, beginning of period (90,931) (4,295,377)
Net income 227,882 3,491,622
Change in non-admitted assets 27,460 (139,191)
Change in and transfers of separate account surplus 6,362 (152,357)
Change in asset valuation reserve 403,569 68,717
----------- -----------
Balance, end of period 574,342 (1,026,586)
----------- -----------
Total surplus 30,074,342 28,473,414
----------- -----------
Total capital stock and surplus $32,074,342 $30,473,414
----------- -----------
----------- -----------
</TABLE>
See notes to unaudited financial statements.
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<PAGE>
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30,
1995 1994
------------ ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income from operations $ 227,882 $ 3,491,622
ADJUSTMENTS TO RECONCILE NET INCOME
TO NET CASH:
Increase (decrease) in actuarial reserves 1,227,950 (753,854)
Decrease in liability for annuity deposit funds (50,589,750) (25,298,519)
Decrease in investment income
due and accrued 806,935 375,614
Net accrual and amortization of discount
and premium on investments 176,013 338,750
Realized losses on investments 1,350,000 900,000
Change in non-admitted assets 27,460 (139,191)
Other 1,440,410 582,380
------------ ------------
Net cash used in operating activities (45,333,100) (20,503,198)
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale and maturity of investments 96,914,436 75,012,870
Purchase of investments (49,531,245) (45,936,955)
Net change in short-term investments 153,506 (7,885,090)
------------ ------------
Net cash provided by investing activities 47,536,697 21,190,825
------------ ------------
Increase in cash during the period 2,203,597 687,627
Cash, beginning of period (756,378) (569,290)
------------ ------------
Cash, end of period $ 1,447,219 $ 118,337
------------ ------------
------------ ------------
</TABLE>
See notes to unaudited financial statements.
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<PAGE>
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
NOTES TO UNAUDITED FINANCIAL STATEMENTS
(1) General
In management's opinion all adjustments, which include only normal recurring
adjustments, necessary for a fair presentation of the financial statements
have been made.
(2) Management and Service Contracts
The Registrant has agreements with Sun Life (Canada) which provide that Sun
Life (Canada) will furnish to the Registrant, as requested, personnel as well
as certain investment and administrative services on a cost reimbursement
basis. Expenses under these agreements amounted to approximately $546,000 and
$1,440,000 for the three month and nine month periods in 1995 and
approximately $387,000 and $1,171,000 for the three month and nine month
periods in 1994.
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<PAGE>
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The Registrant had a net loss of $535,000 and net income of $228,000 in the
three and nine month periods ended September 30, 1995 as compared to net
income of $1,992,000 and $3,492,000 for the same periods ended September 30,
1994. The $2,526,000 decrease in the three month period is due primarily to
an increase in federal income taxes, while the $3,264,000 decrease in the
nine month period is due primarily to a surplus transfer to the Registrant's
separate account and an increase in federal income taxes.
Total income decreased by $5,155,000 for the three month period ended
September 30, 1995 as compared with the same period in 1994 as a result of a
decrease in annuity sales, resulting from declining interest rates. Total
income increased by $21,439,000 for the nine month period ended September 30,
1995 primarily as a result of strong annuity sales during the first two
quarters of 1995 when credited rates were higher.
Policyholder benefits decreased by $5,472,000 for the three month period
ended September 30, 1995 as compared with same period in 1994 reflecting a
decrease in transfers to the non-unitized separate account, as a result of
decreased sales of the Registrant's market value adjusted deferred annuity
contract. Policyholder benefits increased by $22,690,000 for the nine month
period ended September 30, 1995 as a result of an increase in transfers to
the non-unitized separate account and a surplus transfer to separate account.
The increase in transfers to the non-unitized separate account is due to the
increase in annuity sales during the first two quarters described above.
The increase between years in the surplus transfer to the separate account is
due to a greater increase in the market value adjusted cash surrender value
of the non-unitized separate account annuity reserves as compared to the
increase in the market value of the corresponding assets. The decrease in
the liability for annuity deposit funds for the three and nine month periods
ended September 30, 1995 as compared with the prior year is due directly to
the increase in annuity deposit fund withdrawals.
Operating expenses, commissions and taxes increased by $4,000 and $1,461,000
for the three and nine month periods ended September 30, 1995 as compared
with 1994. The substantial increase in the nine month period is attributable
to increased allocations from the Registrant's parent, annuity sales and
franchise taxes.
Federal income taxes increased by $2,840,000 and $551,000 for the three and
nine month periods ended September 30, 1995 as a result of under-accrued
income tax provisions during the first two quarters of 1995 and an
under-accrued income tax provision at December 31, 1994, respectively.
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<PAGE>
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.
Sun Life Insurance and
Annuity Company of New York
November 14, 1995 /s/ David D. Horn
----------------------------
David D. Horn
Senior Vice President
November 14, 1995 /s/ Bonnie S. Angus
----------------------------
Bonnie S. Angus
Secretary
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