<PAGE>
FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended DECEMBER 31, 1995
Commission file numbers 33-1079 AND 33-58482
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 (I.R.S. Employer Identification No.)
incorporation or organization)
80 Broad Street, New York, New York 10004
- --------------------------------------- ------------------------------------
Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 943-3855
-------------------------
Securities registered pursuant to Section 12(b) of the Act
TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH REGISTERED
None
- --------------------------------- ------------------------------------------
- --------------------------------- ------------------------------------------
Securities registered pursuant to Section 12(g) of the Act:
None
- -------------------------------------------------------------------------------
(Title of Class)
- -------------------------------------------------------------------------------
(Title of Class)
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. Yes _X_ No ___
Registrant has no voting stock outstanding held by non-affiliates.
Registrant has 2,000 shares of common stock outstanding on March 28, 1996,
all of which are owned by Sun Life Assurance Company of Canada (U.S.).
THE REGISTRANT MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTION J (1)
(a) AND (b) FOR FORM 10-K AND IS THEREFORE FILING THIS FORM WITH THE REDUCED
DISCLOSURE FORMAT PERMITTED BY INSTRUCTION J.
<PAGE>
-2-
PART I
ITEM 1. BUSINESS.
The Registrant is a stock life insurance company incorporated in the
state of New York on May 25, 1983 and currently transacts business only in
the State of New York.
The Registrant is a wholly-owned subsidiary of Sun Life Assurance
Company of Canada (U.S.) ("Sun Life of Canada (U.S.)"), One Sun Life
Executive Park, Wellesley Hills, Massachusetts 02181, a stock life insurance
company incorporated in Delaware. Sun Life of Canada (U.S.), in turn, is a
wholly-owned subsidiary of Sun Life Assurance Company of Canada, 150 King
Street West, Toronto, Ontario, Canada, a mutual life insurance company
incorporated pursuant to an Act of Parliament of Canada. The Registrant is
engaged in the sale of individual fixed and combination fixed/variable
annuity contracts and group life and health insurance contracts. These
contracts are sold by insurance agents, some of whom are registered
representatives of national and regional stock brokerage firms and brokers.
ITEM 2. PROPERTIES.
The Registrant owns no properties.
The Registrant occupies office space leased by it. The lease expires in
February, 2004.
ITEM 3. LEGAL PROCEEDINGS.
The Registrant is engaged in various kinds of routine litigation which,
in management's judgement, is not of material importance to its total assets.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Omitted pursuant to Instruction J (2) (c) to Form 10-K.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS.
The Registrant is a wholly-owned subsidiary of Sun Life Assurance
Company of Canada (U.S.) and as such there is no market for its common stock.
No dividends have been paid by the Registrant.
ITEM 6. SELECTED FINANCIAL DATA
Omitted pursuant to Instruction J (2) (a) to Form 10-K.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
FINANCIAL CONDITION:
Omitted pursuant to Instruction J (2) (a) to Form 10-K.
RESULTS OF OPERATIONS:
The Registrant had net income of $930,000 for 1995 as compared to
$4,355,000 for 1994. An increase in group life and health insurance premiums
and fixed annuity deposits in 1995, were offset by lower earnings on
investments, higher annuity surrenders and proportionally higher federal
income taxes.
NEW ACCOUNTING PRONOUNCEMENT:
In April, 1993, the Financial Accounting Standards Board (FASB) issued
FASB Interpretation No. 40, "Applicability of Generally Accepted Accounting
Principles to Mutual Life Insurance and Other Enterprises." Under this new
interpretation, annual financial statements of mutual life insurance
enterprises for fiscal years beginning after December 15, 1992, shall provide
a brief description that financial statements prepared on the basis of
statutory accounting practices will no longer be described as prepared in
conformity with generally accepted accounting principles. In January, 1995,
Statement of Financial Accounting Standards No. 120 (SFAS No. 120),
"Accounting and Reporting by Mutual Life Insurance Enterprises for Certain
Long Duration Participating Contracts," was issued. SFAS No. 120 delays the
effective date of Interpretation No. 40 until fiscal years beginning after
December 15, 1995.
<PAGE>
-3-
NEW ACCOUNTING PRONOUNCEMENT (CONTINUED):
Beginning in 1996, the Registrant will file financial statements
prepared in accordance with all applicable pronouncements that define
generally accepted accounting principles for all enterprises.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
Financial statements, in the form required by Regulation S-X, are set
forth below. The Registrant is not subject to the requirement to file
supplementary financial data specified by Item 302 of Regulation S-K.
<PAGE>
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
(Wholly-owned subsidiary of Sun Life Assurance Company of Canada (U.S.))
BALANCE SHEETS
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------
1995 1994
------------ ------------
<S> <C> <C>
ASSETS
Bonds $132,026,064 $188,460,195
Mortgage loans 51,843,936 63,377,327
Real estate 0 823,655
Policy loans 476,194 520,383
Cash 1,267,905 (756,378)
Investment income due and accrued 3,255,286 4,393,086
Due from (to) parent and
affiliates--net 1,292,878 (591,254)
Other assets 443,663 204,302
------------ ------------
General account assets 190,605,926 256,431,316
------------ ------------
Separate account assets
Unitized 250,782,417 208,575,098
Non-unitized 81,110,554 35,768,295
------------ ------------
$522,498,897 $500,774,709
------------ ------------
------------ ------------
LIABILITIES
Policy reserves $ 23,548,885 $ 20,402,804
Annuity and other deposits 129,743,536 201,476,544
Accrued expenses and taxes 376,573 525,863
Other liabilities 906,238 539,438
Due to (from) separate accounts 1,036,679 (1,308,196)
Interest maintenance reserve 1,648,375 1,778,014
Asset valuation reserve 1,545,857 1,763,921
------------ ------------
General account liabilities 158,806,143 225,178,388
------------ ------------
Separate account liabilities
Unitized 250,617,786 208,418,957
Non-unitized 81,110,554 35,768,295
------------ ------------
490,534,483 469,365,640
------------ ------------
CAPITAL STOCK AND SURPLUS
Capital stock--Par value $1,000:
Authorized, issued and
outstanding
2,000 shares 2,000,000 2,000,000
Surplus 29,964,414 29,409,069
------------ ------------
Total capital stock and surplus 31,964,414 31,409,069
------------ ------------
$522,498,897 $500,774,709
------------ ------------
------------ ------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
4
<PAGE>
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
(Wholly-owned subsidiary of Sun Life Assurance Company of Canada (U.S.))
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
----------------------------------------
1995 1994 1993
------------ ------------ ------------
<S> <C> <C> <C>
INCOME
Premiums and annuity considerations $ 11,608,782 $ 8,191,112 $ 6,272,860
Annuity and other deposit funds 44,946,931 37,829,796 15,069,691
Net investment income 18,450,106 21,947,153 25,281,626
Amortization of interest maintenance
reserve 753,350 750,567 451,075
Realized losses on investments (33,133) (721,715) (103,689)
Mortality and expense risk charges 2,997,827 2,768,194 2,448,085
------------ ------------ ------------
78,723,863 70,765,107 49,419,648
------------ ------------ ------------
BENEFITS AND EXPENSES
Increase (decrease) in policy
reserves 3,146,081 (883,568) (2,272,569)
Decrease in liability for annuity
deposit funds (71,733,008) (34,019,523) (20,342,940)
Death, health benefits and annuity
payments 9,114,806 8,703,872 8,482,195
Annuity and other deposit fund
withdrawals 91,409,854 53,964,415 45,532,023
Surplus transfer to (from) separate
account 2,344,875 (437,497) (988,017)
Transfers to non-unitized separate
account 31,567,692 29,538,473 5,273,703
------------ ------------ ------------
65,850,300 56,866,172 35,684,395
General expenses 4,030,452 3,864,223 2,891,251
Commissions 4,937,953 4,497,683 3,704,138
Taxes, licenses and fees 540,521 417,643 255,538
------------ ------------ ------------
75,359,226 65,645,721 42,535,322
------------ ------------ ------------
Net income from operations before
federal
income tax 3,364,637 5,119,386 6,884,326
Federal income tax expense (2,435,109) (764,555) (2,924,442)
------------ ------------ ------------
NET INCOME $ 929,528 $ 4,354,831 $ 3,959,884
------------ ------------ ------------
------------ ------------ ------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
5
<PAGE>
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
(Wholly-owned subsidiary of Sun Life Assurance Company of Canada (U.S.))
STATEMENTS OF CAPITAL STOCK AND SURPLUS
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-------------------------------------
1995 1994 1993
----------- ----------- -----------
<S> <C> <C> <C>
CAPITAL STOCK $ 2,000,000 $ 2,000,000 $ 2,000,000
PAID-IN SURPLUS 28,750,000 28,750,000 28,750,000
SPECIAL CONTINGENCY RESERVE 750,000 750,000 750,000
UNASSIGNED SURPLUS
Balance, beginning of year (90,931) (4,295,377) (8,114,755)
Net income 929,528 4,354,831 3,959,884
Unrealized losses (672,000) 0 0
Change in non-admitted assets 71,263 (139,468) (7,314)
Earnings on and transfers of
separate account surplus 8,490 (150,603) 3,856
Change in asset valuation reserve 218,064 139,686 (137,048)
----------- ----------- -----------
Balance, end of year 464,414 (90,931) (4,295,377)
----------- ----------- -----------
TOTAL SURPLUS 29,964,414 29,409,069 25,204,623
----------- ----------- -----------
TOTAL CAPITAL STOCK AND SURPLUS $31,964,414 $31,409,069 $27,204,623
----------- ----------- -----------
----------- ----------- -----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
6
<PAGE>
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
(Wholly-owned subsidiary of Sun Life Assurance Company of Canada (U.S.))
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
----------------------------------------
1995 1994 1993
------------ ------------ ------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income from operations $ 929,528 $ 4,354,831 $ 3,959,884
Adjustments to reconcile net income
to net cash:
Increase (decrease) in policy
reserves 3,146,081 (883,568) (20,342,940)
Decrease in liability for
annuity and other deposit funds (71,733,008) (34,019,523) (2,272,569)
Decrease in investment income
due and accrued 1,137,800 448,252 370,334
Net accrual and amortization of
discount and premium on
investments 209,593 409,961 296,280
Realized losses on investments 33,133 721,715 103,689
Change in non-admitted assets 71,263 (139,468) (7,314)
Other 365,912 1,189,737 82,349
------------ ------------ ------------
Net cash used in operating activities (65,839,698) (27,918,063) (17,810,287)
------------ ------------ ------------
Cash flows from investing activities:
Proceeds from sale and maturity of
investments 124,028,229 98,636,780 46,154,969
Purchase of investments (52,676,090) (69,335,246) (27,502,652)
Net change in short-term investments (3,488,158) (1,570,559) 280,549
------------ ------------ ------------
Net cash provided by investing
activities 67,863,981 27,730,975 18,932,866
------------ ------------ ------------
Increase (decrease) in cash during the
year 2,024,283 (187,088) 1,122,579
Cash, beginning of year (756,378) (569,290) (1,691,869)
------------ ------------ ------------
Cash, end of year $ 1,267,905 $ (756,378) $ (569,290)
------------ ------------ ------------
------------ ------------ ------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
7
<PAGE>
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
(Wholly-owned subsidiary of Sun Life Assurance Company of Canada (U.S.))
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
GENERAL--
Sun Life Insurance and Annuity Company of New York (the Company) is incorporated
as a life insurance company and is currently engaged in the sale of individual
fixed and variable annuities and group life and long-term disability insurance.
The parent company, Sun Life Assurance Company of Canada (U.S.) (Sun Life of
Canada (U.S.)), is a wholly-owned subsidiary of Sun Life Assurance Company of
Canada (Sun Life (Canada)), a mutual life insurance company. The Company, which
is domiciled in the State of New York, prepares its financial statements in
accordance with statutory accounting practices prescribed by the State of New
York Insurance Department. Statutory accounting practices are considered to be
generally accepted accounting principles for mutual insurance companies and
subsidiaries and affiliates of mutuals. Prescribed accounting practices include
a variety of publications of the National Association of Insurance Commissioners
(NAIC), as well as New York state laws, regulations and general administrative
rules. Permitted accounting practices encompass all accounting practices not so
prescribed. The permitted accounting practices adopted by the Company are not
material to the financial statements. Preparation of the financial statements
requires management to make certain estimates and assumptions.
Assets in the balance sheets are stated at values prescribed or permitted to be
reported by state regulatory authorities. Bonds are carried at cost adjusted for
amortization of premium or accrual of discount. Mortgage loans acquired at a
premium or discount are carried at amortized values and other mortgage loans at
the amounts of the unpaid balances. Real estate investments are carried at the
lower of cost or appraised value, adjusted for accumulated depreciation, less
encumbrances. Depreciation of buildings and improvements is calculated using the
straight line method over the estimated useful life of the property. For life
and annuity contracts, premiums are recognized as revenues over the premium
paying period, whereas commissions and other costs applicable to the acquisition
of new business are charged to operations as incurred. Furniture and equipment
acquisitions are capitalized but treated as nonadmitted assets. Furniture and
equipment depreciation is calculated on a straight line basis over the useful
life of the assets.
MANAGEMENT AND SERVICE CONTRACTS--
The Company has agreements with Sun Life (Canada) which provide that Sun Life
(Canada) will furnish to the Company, as requested, personnel as well as certain
investment and administrative services on a cost reimbursement basis. Expenses
under these agreements amounted to approximately $1,741,000 in 1995, $1,559,000
in 1994 and $1,200,000 in 1993.
REINSURANCE--
The Company has agreements with Sun Life (Canada) which provide that Sun Life
(Canada) will reinsure the mortality and morbidity risks of the group life
insurance contracts and group long term disability contracts issued by the
Company. Under these agreements, basic death benefits and long term disability
benefits are reinsured on a yearly renewable term basis. The agreements provide
that Sun Life (Canada) will reinsure the mortality risks in excess of $50,000
per policy for group life insurance contracts and $3,000 per policy per month
for the group long term disability contracts ceded by the Company. Reinsurance
transactions under these agreements had the effect of increasing income from
operations by approximately $652,000 and $222,000 for the years ended December
31, 1995 and 1994, respectively.
The group life and long term disability reinsurance agreements require that the
reinsurer provide funds in amounts equal to the reserves ceded.
8
<PAGE>
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
(Wholly-owned subsidiary of Sun Life Assurance Company of Canada (U.S.))
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED):
The following are summarized pro-forma results of operations of the Company for
the years ended December 31, 1995 and 1994 before the effect of reinsurance
transactions with Sun Life (Canada).
<TABLE>
<CAPTION>
YEARS ENDED
DECEMBER 31,
----------------
1995 1994
------- -------
(IN 000'S)
<S> <C> <C>
Income:
Premiums, annuity deposits and other revenues $60,927 $49,473
Net investment income and realized losses 19,170 21,976
------- -------
Subtotal 80,097 71,449
------- -------
Benefits and expenses:
Policyholder benefits 67,875 57,772
Other expenses 9,509 8,780
------- -------
Subtotal 77,384 66,552
------- -------
Income from operations $ 2,713 $ 4,897
------- -------
------- -------
</TABLE>
SEPARATE ACCOUNTS--
The Company has established unitized separate accounts applicable to individual
qualified and non-qualified variable annuity contracts.
Assets and liabilities of the separate accounts, representing net deposits and
accumulated net investment earnings less fees, held primarily for the benefit of
contract holders, are shown as separate captions in the financial statements.
Assets held in the separate accounts are carried at market values.
Deposits to all separate accounts are reported as increases in separate account
liabilities and are not reported as revenues. Mortality and expense risk charges
and surrender fees incurred by the separate accounts are included in income of
the Company.
The Company has established a non-unitized separate account for amounts
allocated to the fixed portion of a certain combination fixed/variable deferred
annuity contract. The assets of this account are available to fund general
account liabilities and general account assets are available to fund liabilities
of this account.
Any difference between the assets and liabilities of the separate accounts is
treated as payable to or receivable from the general account of the Company. The
amount receivable from the general account of the Company amounted to $1,037,000
in 1995. The amount payable to the general account of the Company in 1994 was
$1,308,000.
OTHER--
Income on investments is recognized on the accrual method.
The reserves for life insurance, health insurance and annuity contracts,
developed by accepted actuarial methods, have been established and maintained on
the basis of published mortality and morbidity tables using assumed interest
rates and valuation methods that will provide reserves at least as great as
those required by law and contract provisions.
Certain reclassifications have been made in the 1994 financial statements to
conform to the classifications used in 1995.
9
<PAGE>
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
(Wholly-owned subsidiary of Sun Life Assurance Company of Canada (U.S.))
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
2. CAPITAL STOCK AND SURPLUS:
On January 2, 1985, the Company issued 2,000 shares of common stock to Sun Life
of Canada (U.S.) for $6,000,000. Through December 31, 1995, Sun Life of Canada
(U.S.) has contributed an additional $25,500,000 to the Company's capital, of
which $750,000 was used to establish a special contingency reserve in support of
separate account business as required by New York Insurance Law.
3. BONDS:
The amortized cost and estimated market value of investments in debt securities
as of December 31, 1995 and 1994 are as follows:
<TABLE>
<CAPTION>
DECEMBER 31, 1995
------------------------------------------
GROSS GROSS ESTIMATED
AMORTIZED UNREALIZED UNREALIZED MARKET
COST GAINS LOSSES VALUE
-------- ---------- -------- --------
(000'S)
<S> <C> <C> <C> <C>
Long-term bonds:
United States government and
government agencies and authorities $ 11,243 $ 327 $10 $ 11,560
Foreign governments 1,824 157 0 1,981
Public utilities 39,018 1,249 20 40,247
Transportation 3,908 45 0 3,953
Finance 14,047 385 6 14,426
All other corporate bonds 54,949 2,700 0 57,649
-------- ---------- --- --------
Total long-term bonds 124,989 4,863 36 129,816
Short-term bonds:
U.S. Treasury Bills, bankers
acceptances and commercial paper 7,037 0 0 7,037
-------- ---------- --- --------
$132,026 $4,863 $36 $136,853
-------- ---------- --- --------
-------- ---------- --- --------
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31, 1994
--------------------------------------------
GROSS GROSS ESTIMATED
AMORTIZED UNREALIZED UNREALIZED MARKET
COST GAINS LOSSES VALUE
-------- ---------- ---------- --------
(000'S)
<S> <C> <C> <C> <C>
Long-term bonds:
United States government and
government agencies and authorities $ 34,300 $ 92 $ 746 $ 33,646
Foreign governments 5,536 44 162 5,418
Public utilities 47,125 333 896 46,562
Transportation 7,128 53 185 6,996
Finance 14,450 39 270 14,219
All other corporate bonds 76,372 823 1,347 75,848
-------- ---------- ---------- --------
Total long-term bonds 184,911 1,384 3,606 182,689
Short-term bonds:
U.S. Treasury Bills, bankers
acceptances and commercial paper 3,549 0 0 3,549
-------- ---------- ---------- --------
$188,460 $1,384 $3,606 $186,238
-------- ---------- ---------- --------
-------- ---------- ---------- --------
</TABLE>
10
<PAGE>
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
(Wholly-owned subsidiary of Sun Life Assurance Company of Canada (U.S.))
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
3. BONDS (CONTINUED):
The amortized cost and estimated market value of bonds at December 31, 1995 and
1994 by contractual maturity are shown below. Expected maturities will differ
from contractual maturities because borrowers may have the right to call or
prepay obligations with or without call or prepayment penalties.
<TABLE>
<CAPTION>
DECEMBER 31, 1995
-----------------------
AMORTIZED ESTIMATED
COST MARKET VALUE
--------- ------------
(000'S)
<S> <C> <C>
Maturities are:
Due in one year or less $ 33,138 $ 33,410
Due after one year through five
years 70,212 72,833
Due after five years through ten
years 16,167 17,283
Due after ten years 6,765 7,289
--------- ------------
Subtotal 126,282 130,815
Mortgage-backed securities 5,744 6,038
--------- ------------
$132,026 $136,853
--------- ------------
--------- ------------
<CAPTION>
DECEMBER 31, 1994
-----------------------
AMORTIZED ESTIMATED
COST MARKET VALUE
--------- ------------
(000'S)
<S> <C> <C>
Maturities are:
Due in one year or less $ 16,291 $ 16,362
Due after one year through five
years 120,253 118,837
Due after five years through ten
years 35,577 34,682
Due after ten years 8,002 8,130
--------- ------------
Subtotal 180,123 178,011
Mortgage-backed securities 8,337 8,227
--------- ------------
$188,460 $186,238
--------- ------------
--------- ------------
</TABLE>
A bond included above with an amortized cost of approximately $399,000 and
$398,000 at December 31, 1995 and 1994, respectively, was on deposit with the
Superintendent of Insurance of the State of New York as required by law.
4. MORTGAGE LOANS:
The Company invests in commercial first mortgage loans throughout the United
States. The Company monitors the condition of the mortgage loans in its
portfolio. In those cases where mortgages have been restructured, appropriate
provisions have been made. In those cases where, in management's judgement, the
mortgage loans' values are impaired, appropriate losses are recorded.
11
<PAGE>
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
(Wholly-owned subsidiary of Sun Life Assurance Company of Canada (U.S.))
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
4. MORTGAGE LOANS (CONTINUED):
The following table shows the geographic distribution of the mortgage portfolio.
<TABLE>
<CAPTION>
DECEMBER 31,
----------------
1995 1994
------- -------
(000'S)
<S> <C> <C>
New York $14,264 $16,474
California 5,076 10,751
Massachusetts 6,720 8,205
Ohio 4,748 4,803
Florida 4,020 4,414
All other 17,016 18,730
------- -------
$51,844 $63,377
------- -------
------- -------
</TABLE>
As of December 31, 1995, the Company has restructured mortgage loans totalling
$4,891,000, against which there are provisions of $497,000.
5. INVESTMENTS--LOSSES:
<TABLE>
<CAPTION>
YEARS ENDED
DECEMBER 31,
-------------------
1995 1994 1993
----- ----- -----
(000'S)
<S> <C> <C> <C>
Realized losses:
Mortgage loans $ (1) $(722) $ (96)
Real estate (32) -- (7)
Stocks -- -- (1)
----- ----- -----
$ (33) $(722) $(104)
----- ----- -----
----- ----- -----
Changes in unrealized losses:
Mortgage loans $(672) $ 0 $ 0
----- ----- -----
----- ----- -----
</TABLE>
Realized capital gains and losses on bonds and mortgages which relate to changes
in levels of interest rate risk are charged or credited to an interest
maintenance reserve and amortized into income over the remaining contractual
life of the security sold. The realized capital gains credited to the interest
maintenance reserve were $960,000, $936,000 and $1,081,000 in 1995, 1994 and
1993, respectively. All gains are net of applicable taxes.
12
<PAGE>
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
(Wholly-owned subsidiary of Sun Life Assurance Company of Canada (U.S.))
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
6. INVESTMENT INCOME:
Net investment income consisted of:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-------------------------
1995 1994 1993
------- ------- -------
(000'S)
<S> <C> <C> <C>
Interest income from bonds $13,020 15,562 $18,180
Interest income from mortgage loans 5,882 6,875 7,290
Real estate investment income (loss) (52) (85) 572
Other investment income 170 117 69
------- ------- -------
Gross investment income 19,020 22,469 26,111
Investment expenses 570 522 829
------- ------- -------
$18,450 $21,947 $25,282
------- ------- -------
------- ------- -------
</TABLE>
7. WITHDRAWAL CHARACTERISTICS OF ANNUITY ACTUARIAL RESERVES AND DEPOSIT
LIABILITIES:
Withdrawal characteristics of general account and separate account annuity
reserves and deposits:
<TABLE>
<CAPTION>
DECEMBER 31, 1995
--------------------
AMOUNT % OF TOTAL
-------- ----------
(000'S)
<S> <C> <C>
Subject to discretionary withdrawal
--with market value adjustment $ 81,085 16.9%
--at book value less surrender charges
(surrender charge > 5%) 103,767 21.6%
--at book value (minimal or no charge
or adjustment) 275,075 57.3%
Not subject to discretionary withdrawal
provision 20,181 4.2%
-------- -----
Total annuity actuarial reserves and
deposit liabilities $480,108 100.0%
-------- -----
-------- -----
<CAPTION>
DECEMBER 31, 1994
--------------------
AMOUNT % OF TOTAL
-------- ----------
(000'S)
<S> <C> <C>
Subject to discretionary withdrawal
--with market value adjustment $ 35,768 7.7%
--at book value less surrender charges
(surrender charge > 5%) 181,770 39.3%
--at book value (minimal or no charge
or adjustment) 226,854 49.1%
Not subject to discretionary withdrawal
provision 17,994 3.9%
-------- -----
Total annuity actuarial reserves and
deposit liabilities $462,386 100.0%
-------- -----
-------- -----
</TABLE>
8. RETIREMENT PLANS:
The Company participates with Sun Life (Canada) and Sun Life of Canada (U.S.) in
a non-contributory defined benefit pension plan covering essentially all
employees. The benefits are based on years of service and compensation.
13
<PAGE>
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
(Wholly-owned subsidiary of Sun Life Assurance Company of Canada (U.S.))
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
8. RETIREMENT PLANS (CONTINUED):
The funding policy for the pension plan is to contribute an amount which at
least satisfies the minimum amount required by ERISA. The Company is charged for
its share of the pension cost based upon its covered participants. Pension plan
assets consist principally of a variable accumulation fund contract held in a
separate account of Sun Life (Canada).
On January 1, 1994, the Company adopted Statement of Financial Accounting
Standard No. 87, "Employers Accounting for Pensions," which is in accordance
with generally accepted accounting principles.
The following table sets forth the funded status for the pension plan (for Sun
Life (Canada), Sun Life of Canada (U.S.), Sun Investment Services Company,
another wholly-owned subsidiary of Sun Life of Canada (U.S.), and the Company)
at December 31, 1995 and 1994:
<TABLE>
<CAPTION>
TOTAL PENSION PLAN
------------------
1995 1994
-------- --------
(000'S)
<S> <C> <C>
Actuarial present value of benefit
obligations:
Vested benefit obligations $(40,949) $(38,157)
Accumulated benefit obligation (42,452) (39,686)
-------- --------
-------- --------
Projected benefit obligation for service
rendered to date $(60,885) $(53,494)
Plan assets at fair value 117,178 101,833
-------- --------
Difference between plan assets and
projected benefit obligations 56,293 48,339
Unrecognized net (gain) loss from past
experience different from that assumed
and effects of changes in assumptions (9,016) (1,238)
Unrecognized net asset at January 1,
1994 being recognized
over 17 years (30,842) (32,898)
-------- --------
(Accrued) prepaid pension cost included
in other assets $ 16,435 $ 14,203
-------- --------
-------- --------
</TABLE>
The components of the 1995 and 1994 pension cost for the pension plan were:
<TABLE>
<CAPTION>
TOTAL PENSION PLAN
---------------------
1995 1994
------- ------------
(000'S)
<S> <C> <C>
Service cost $ 3,390 $ 2,847
Interest cost 4,051 3,769
Actual return on plan assets (16,388) (8,294)
Net amortization and deferral 6,715 (817)
------- ------------
Net pension income $(2,232) $(2,495)
------- ------------
------- ------------
</TABLE>
The Company's share of the group's accrued pension cost at December 31, 1995 and
1994 was $97,000 and $79,000, respectively. The Company's share of net periodic
pension cost was $18,000 and $79,000, respectively.
The discount rate and rate of increase in future compensation levels used in
determining the actuarial present value of the projected benefit obligation were
7.5% and 4.5%, respectively. The expected long-term rate of return on assets was
7.5%.
14
<PAGE>
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
(Wholly-owned subsidiary of Sun Life Assurance Company of Canada (U.S.))
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
8. RETIREMENT PLANS (CONTINUED):
The Company also participates with Sun Life (Canada), Sun Life of Canada (U.S.)
and certain affiliates in a 401(k) savings plan for which substantially all
employees are eligible. The Company matches, up to specified amounts, employees'
contributions to the plan. Employer contributions were $21,000, $17,000 and
$14,000 for the years ended December 31, 1995, 1994 and 1993, respectively.
9. OTHER POST-RETIREMENT BENEFIT PLANS:
In addition to pension benefits the Company provides certain health, dental and
life insurance benefits ("post-retirement benefits") for retired employees and
dependents. Substantially all employees may become eligible for these benefits
if they reach normal retirement age while working for the Company, or retire
early upon satisfying an alternate age plus service condition. Life insurance
benefits are generally set at a fixed amount.
Effective January 1, 1993, the Company adopted Statement of Financial Accounting
Standards No. 106 (SFAS No. 106), "Employers Accounting for Post-retirement
Benefits other than Pensions." SFAS No. 106 requires the Company to accrue the
estimated cost of retiree benefit payments during the years the employee
provides service. SFAS No. 106 allows recognition of the cumulative effect of
the liability in the year of adoption or the amortization of the obligation over
a period of up to 20 years. The Company has elected to recognize this obligation
of approximately $52,000 over a period of ten years. The Company's cash flows
are not affected by implementation of this standard, but implementation
decreased net income by $7,000 in 1995, $5,000 in 1994 and $14,000 in 1993. The
Company's post-retirement health care plans currently are not funded.
The following table sets forth the plan's funded status, reconciled with amounts
recognized in the Company's balance sheet:
<TABLE>
<CAPTION>
DECEMBER 31,
------------------
1995 1994
-------- --------
<S> <C> <C>
Accumulated post-retirement benefit
obligation:
Retirees $ 0 $ 0
Fully eligible active plan participants 0 0
Other active plan participants (19,000) (11,000)
-------- --------
Total (19,000) (11,000)
Plan assets at market value 0 0
-------- --------
Accumulated post-retirement benefit
obligation in excess of plan assets (19,000) (11,000)
Unrecognized gains from past experience (44,000) (50,000)
Unrecognized transition obligation 37,000 42,000
-------- --------
Accrued post-retirement benefit cost $(26,000) $(19,000)
-------- --------
-------- --------
</TABLE>
15
<PAGE>
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
(Wholly-owned subsidiary of Sun Life Assurance Company of Canada (U.S.))
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
9. OTHER POST-RETIREMENT BENEFIT PLANS (CONTINUED):
Net periodic post-retirement benefit cost components:
<TABLE>
<CAPTION>
YEARS ENDED
DECEMBER 31,
----------------
1995 1994
------- -------
<S> <C> <C>
Service cost--benefits earned $ 5,000 $ 3,000
Interest cost on accumulated
post-retirement benefit obligation 1,000 1,000
Amortization of transition obligation 5,000 5,000
Net amortization and deferral (4,000) (4,000)
------- -------
Net periodic post-retirement benefit
cost $ 7,000 $ 5,000
------- -------
------- -------
</TABLE>
The discount rate used in determining the accumulated post-retirement benefit
obligation was 7.5% in 1995 and 8.0% in 1994 and the assumed health care cost
trend rate was 12.0% graded to 6% over 10 years after which it remains constant.
The health care cost trend rate assumption has a significant effect on the
amounts reported. To illustrate, increasing the assumed health care cost trend
rates by one percentage point in each year would increase the post-retirement
benefit obligation as of December 31, 1995 by $8,000 and the estimated service
and interest cost components of the net periodic post-retirement benefit cost
for 1995 by $3,000.
10. FAIR VALUE OF FINANCIAL INSTRUMENTS:
The following table presents the carrying amounts and fair values of the
Company's financial instruments at December 31, 1995 and 1994:
<TABLE>
<CAPTION>
1995 1994
----------------------------- -----------------------------
CARRYING CARRYING
AMOUNT FAIR VALUE AMOUNT FAIR VALUE
-------------- ------------ -------------- ------------
(000'S)
<S> <C> <C> <C> <C>
ASSETS
Bonds $132,026 $ 136,853 $188,460 $ 186,238
Mortgages 51,844 53,718 63,377 63,193
-------------- ------------ -------------- ------------
Total $183,870 $ 190,571 $251,837 $ 249,431
-------------- ------------ -------------- ------------
-------------- ------------ -------------- ------------
LIABILITIES
Individual annuities $138,661 $ 137,463 $221,675 $ 200,582
-------------- ------------ -------------- ------------
-------------- ------------ -------------- ------------
</TABLE>
The major methods and assumptions used in estimating the fair values of
financial instruments are as follows:
The fair values of short-term bonds are estimated to be the amortized cost. The
fair values of long-term bonds which are publicly traded are based upon market
prices or dealer quotes. For privately placed bonds, fair values are estimated
using prices for publicly traded bonds of similar credit risk and maturity and
repayment characteristics.
The fair values of the Company's general account reserves and liabilities under
investment-type contracts (insurance and annuity contracts that do not involve
mortality or morbidity risks) are estimated using discounted cash flow analyses
or surrender values. Those contracts that are deemed to have short-term
guarantees have a carrying amount equal to the estimated market value.
16
<PAGE>
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
(Wholly-owned subsidiary of Sun Life Assurance Company of Canada (U.S.))
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
10. FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED):
The fair values of mortgages are estimated by discounting future cash flows
using current rates at which similar loans would be made to borrowers with
similar credit ratings and for the same maturities.
11. STATUTORY INVESTMENT VALUATION RESERVES:
The asset valuation reserve (AVR) provides a reserve for losses from investments
in bonds, stocks, mortgage loans, real-estate and other invested assets with
related increases or decreases being recorded directly to surplus.
Realized capital gains and losses on bonds and mortgages which relate to changes
in levels of interest rate risk are charged or credited to an interest
maintenance reserve (IMR) and amortized into income over the remaining
contractual life of the security sold.
The table shown below presents changes in the major elements of the AVR and IMR.
<TABLE>
<CAPTION>
1995 1994
-------------- --------------
AVR IMR AVR IMR
------ ------ ------ ------
(000'S) (000'S)
<S> <C> <C> <C> <C>
Balance, beginning of year $1,764 $1,778 $1,904 $1,920
Realized capital gains (losses), net of
tax (22) 624 (127) 609
Amortization of investment gains 0 (754) 0 (751)
Unrealized investment losses (672) 0 (527) 0
Required by formula 476 0 514 0
------ ------ ------ ------
Balance, end of year $1,546 $1,648 $1,764 $1,778
------ ------ ------ ------
------ ------ ------ ------
</TABLE>
12. LIABILITY FOR UNPAID CLAIMS AND CLAIM ADJUSTMENT EXPENSE:
Activity in the liability for unpaid claims and claim adjustment expense is
summarized below.
<TABLE>
<CAPTION>
DECEMBER 31,
-------------------------
1995 1994 1993
------- ------- -------
(000'S)
<S> <C> <C> <C>
Balance at January 1 $ 2,322 $ 1,648 $ 659
Claims Incurred 4,789 2,930 2,587
Claims Paid (2,791) (2,256) (1,598)
------- ------- -------
Balance at December 31 $ 4,320 $ 2,322 $ 1,648
------- ------- -------
------- ------- -------
</TABLE>
The information presented above includes unpaid benefit claims and claim
adjustment expenses for the group life and group long term disability contracts.
As of December 31, 1995 and 1994 the unpaid claim and claim adjustment liability
for these contracts is included in Policy Reserves on the Balance Sheet.
13. FEDERAL INCOME TAXES:
The Company files a consolidated federal income tax return with Sun Life of
Canada (U.S.) and other affiliates. Federal income taxes are calculated as if
the Company filed a return as a separate company. No provision is recognized for
timing differences which may exist between financial statement and taxable
17
<PAGE>
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
(Wholly-owned subsidiary of Sun Life Assurance Company of Canada (U.S.))
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
13. FEDERAL INCOME TAXES (CONTINUED):
income. Such differences include reserves, depreciation and accrual of market
discount on bonds. The Company made cash payments to Sun Life of Canada (U.S.)
of $2,421,000, $725,000 and $3,472,000 during 1995, 1994 and 1993, respectively.
14. LEASE COMMITMENTS:
The Company leases two separate facilities for its annuity operations and group
sales office. Both leases commenced in March, 1994.
Future minimum lease commitments are as follows:
<TABLE>
<CAPTION>
YEAR ENDING
DECEMBER 31,
------------------------------ AMOUNT
------
(000'S)
<S> <C>
1996 $ 225
1997 225
1998 225
1999 221
2000 221
Thereafter 823
------
Total $1,940
------
------
</TABLE>
Rent expense under these and prior leases in 1995, 1994 and 1993 amounted to
$336,000, $307,000 and $286,000, respectively.
15. RISK-BASED CAPITAL:
Effective December 31, 1993 the NAIC adopted risk-based capital requirements for
life insurance companies. The risk-based capital requirements provide a method
for measuring the minimum acceptable amount of adjusted capital that a life
insurer should have, as determined under statutory accounting practices, taking
into account the risk characteristics of its investments and products. The
Company has met the minimum risk-based capital requirements for 1995 and 1994.
16. NEW ACCOUNTING PRONOUNCEMENT:
In April 1993, the Financial Accounting Standards Board (FASB) issued FASB
Interpretation No. 40, "Applicability of Generally Accepted Accounting
Principles to Mutual Life Insurance and Other Enterprises." Under this new
interpretation, annual financial statements of mutual life insurance enterprises
for fiscal years beginning after December 15, 1992, shall provide a brief
description that financial statements prepared on the basis of statutory
accounting practices will no longer be described as prepared in conformity with
generally accepted accounting principles. In January 1995, Statement of
Financial Accounting Standards No. 120 (SFAS No. 120), "Accounting and Reporting
by Mutual Life Insurance Enterprises for Certain Long Duration Participating
Contracts" was issued. SFAS No. 120 delays the effective date of Interpretation
No. 40 until fiscal years beginning after December 15, 1995.
Beginning In 1996, the Company will file financial statements prepared in
accordance with all applicable pronouncements that define generally accepted
accounting principles for all enterprises.
18
<PAGE>
INDEPENDENT AUDITORS' REPORT
TO THE BOARD OF DIRECTORS AND STOCKHOLDER
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
WELLESLEY HILLS, MASSACHUSETTS
We have audited the accompanying balance sheets of Sun Life Insurance and
Annuity Company of New York (a wholly-owned subsidiary of Sun Life Assurance
Company of Canada) as of December 31, 1995 and 1994, and the related statements
of operations, capital stock and surplus, and cash flows for each of the three
years in the period ended December 31, 1995. These financial statements are the
responsibility of the Company's 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. 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 Company as of December 31, 1995 and
1994, and the results of its operations and its cash flows for each of the three
years in the period ended December 31, 1995, in conformity with generally
accepted accounting principles.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
February 7, 1996
19
<PAGE>
-20-
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
No events have occurred which are required to be reported by Item 304 of
Regulation S-K.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
Omitted pursuant to Instruction J (2) (c) to Form 10-K.
ITEM 11. EXECUTIVE COMPENSATION.
Omitted pursuant to Instruction J (2) (c) to Form 10-K.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
Omitted pursuant to Instruction J (2) (c) to Form 10-K.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Omitted pursuant to Instruction J (2) (c) to Form 10-K.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
(a) 1. Financial statements (set forth in Item 8):
- Balance Sheets as of December 31, 1995 and December 31, 1994.
- Statements of Operations for each of the three years ended
December 31, 1995, December 31, 1994 and December 31, 1993.
- Statements of Capital Stock and Surplus for each of the three
years ended December 31, 1995, December 31, 1994 and December 31,
1993.
- Statements of Cash Flows for each of the three years ended
December 31, 1995, December 31, 1994 and December 31, 1993.
- Notes to Financial Statements, Years Ended December 31, 1995,
1994 and 1993.
- Independent Auditors' Report.
(a) 2. Financial statement schedules (set forth below):
- Schedule I - Summary of Investments, Other than Investments in
Affiliates.
- Schedule VI - Summary of Reinsurance.
- Independent Auditors' Report.
Financial statement schedules not included in this Form 10-K have been
omitted because the required information either is not applicable or is
presented in the consolidated financial statements or notes thereto.
<PAGE>
-21-
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
SCHEDULE I
SUMMARY OF INVESTMENTS, OTHER THAN INVESTMENTS IN AFFILIATES
(in 000's)
<TABLE>
<CAPTION>
AMOUNT AT WHICH
SHOWN IN THE
TYPE OF INVESTMENT COST VALUE BALANCE SHEET
- ------------------ -------- -------- ---------------
<S> <C> <C> <C>
Bonds:
United States government
and government agencies
and authorities $ 11,243 $ 11,560 $ 11,243
Foreign governments 1,824 1,981 1,824
Public utilities 39,018 40,247 39,018
All other corporate bonds 72,904 76,028 72,904
-------- -------- --------
Total bonds 124,989 129,816 124,989
Mortgage loans 51,844 xxxxxx 51,844
Policy loans 476 xxxxxx 476
Short-term investments 7,037 xxxxxx 7,037
-------- -------- --------
Total investments $184,346 xxxxxx $184,346
-------- -------- --------
-------- -------- --------
</TABLE>
<PAGE>
-22-
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
SCHEDULE VI
SUMMARY OF REINSURANCE
(in 000's)
<TABLE>
<CAPTION>
CEDED TO
GROSS OTHER NET
AMOUNT COMPANIES AMOUNT
---------- --------- ----------
<S> <C> <C> <C>
1995
Life Insurance In Force $1,963,789 $300,314 $1,663,475
---------- --------- ----------
---------- --------- ----------
Premiums
Life Insurance $ 5,848 $ 917 $ 4,931
Accident and Health 1,862 456 1,406
---------- --------- ----------
Total Premiums $ 7,710 $ 1,373 $ 6,337
---------- --------- ----------
---------- --------- ----------
1994
Life Insurance In Force $1,699,729 $264,144 $1,435,585
---------- --------- ----------
---------- --------- ----------
Premiums
Life Insurance $ 4,524 $ 633 $ 3,891
Accident and Health 779 51 728
---------- --------- ----------
Total Premiums $ 5,303 $ 684 $ 4,619
---------- --------- ----------
---------- --------- ----------
1993
Life Insurance In Force $ 987,356 $164,318 $ 823,038
---------- --------- ----------
---------- --------- ----------
Premiums
Life Insurance $ 3,184 $ 396 $ 2,788
Accident and Health 562 68 494
---------- --------- ----------
Total Premiums $ 3,746 $ 464 $ 3,282
---------- --------- ----------
---------- --------- ----------
</TABLE>
<PAGE>
-23-
INDEPENDENT AUDITORS' REPORT
TO THE BOARD OF DIRECTORS AND STOCKHOLDER
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
NEW YORK, NEW YORK
We have audited the balance sheets of Sun Life Insurance and Annuity Company
of New York (wholly-owned subsidiary of Sun Life Assurance Company of Canada
(U.S.)) as of December 31, 1995 and 1994 and the related statements of
operations, capital stock and surplus and cash flows for each of the three
years in the period ended December 31, 1995, and have issued our report
thereon dated February 7, 1996 (which report is included elsewhere in this
Form 10-K). Our audits also included the financial statement schedules
listed in Item 14 (a) 2 in this Form 10-K. In our opinion, such financial
statement schedules, when considered in relation to the basic financial
statements taken as a whole, present fairly, in all material respects, the
information therein set forth.
Deloitte & Touche LLP
Boston, Massachusetts
February 7, 1996
<PAGE>
-24-
ITEM 14 CONTINUED
(a) 3 and (c). Exhibits:
The following Exhibits are incorporated herein by reference:
EXHIBIT NO.
1 Underwriting Agreement (Filed as Exhibit No. 1 to Registration
Statement on Form S-1 (Reg. No. 33-1079)).
3 Declaration of Intent and Charter and By-Laws (filed as Exhibits 3(a)
and 3(b), respectively, to the Registration Statement on Form S-1
(Reg. No. 33-1079)).
4 Combination Fixed/Variable Group Annuity Contract and Certificate
(filed as Exhibit 4 to Amendment No. 1 to the Registration Statement
on Form S-1 (Reg. No. 33-1079)); Combination Fixed/Variable single
premium Annuity Contract (filed as Exhibit 4 to the Registration
Statement on Form S-1 (Reg. No. 33-58482)).
5 Opinion Re: Legality (filed as Exhibit 5 to Amendment No. 1 to the
Registration Statement on Form S-1 (Reg. No. 33-1079) and as Exhibit
5 to the Registration Statement on Form S-1 (Reg No. 33-58482)).
6 Opinion Re: Tax Matters (filed as Exhibit 6 to Amendment No. 1 to the
Registration Statement on Form S-1 (Reg. No. 33-1079)).
24 Powers of Attorney (filed herewith).
27 Financial Data Schedule (file herwith).
(b) Reports on Form 8-K
No reports on Form 8-K have been filed during the last quarter.
(d) No additional financial statements are required to be filed.
<PAGE>
-25-
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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
(Registrant)
By:* /s/ JOHN D. McNEIL
-------------------
John D. McNeil, Chairman
Date: March 28, 1996
-----------------------------
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
*/s/ JOHN D. McNEIL */s/ JOHN R. GARDNER
- ----------------------- ---------------------------
John D. McNeil John R. Gardner
Chairman and Director President and Director
(Principal Executive Officer)
Date: March 28, 1996 Date: March 28, 1996
--------------- ---------------
*/s/ L. BROCK THOMSON */s/ RICHARD B. BAILEY
- ----------------------- ---------------------------
L. Brock Thomson Richard B. Bailey
Vice President and Treasurer Director
(Principal Financial & Accounting Officer)
Date: March 28, 1996 Date: March 28, 1996
--------------- ---------------
*/s/ A. KEITH BRODKIN */s/ FIORAVANTE G. PERROTTA
- ----------------------- ---------------------------
A. Keith Brodkin Fioravante G. Perrotta
Director Director
Date: March 28, 1996 Date: March 28, 1996
--------------- ---------------
*/s/ JOHN S. LANE */s/ RALPH F. PETERS
- ----------------------- ---------------------------
John S. Lane Ralph F. Peters
Director Director
Date: March 28, 1996 Date: March 28, 1996
--------------- ---------------
____________
* By Bonnie S. Angus pursuant to Power of Attorney filed herewith
<PAGE>
-26-
*/s/ DAVID D. HORN */s/ PAMELA T. TIMMINS
- ----------------------- ---------------------------
David D. Horn Pamela T. Timmins
Senior Vice President and Director Director
Date: March 28, 1996 Date: March 28, 1996
--------------- ---------------
*/s/ JOHN G. IRELAND */s/ ANGUS A. MACNAUGHTON
- ----------------------- ---------------------------
John G. Ireland Angus A. MacNaughton
Director Director
Date: March 28, 1996 Date: March 28, 1996
--------------- ---------------
*/s/ EDWARD M. LAMONT */s/ M. COLYER CRUM
- ----------------------- ---------------------------
Edward M. Lamont M. Colyer Crum
Director Director
Date: March 28, 1996 Date: March 28, 1996
--------------- ---------------
____________
* By Bonnie S. Angus pursuant to Power of Attorney filed herewith
<PAGE>
EXHIBIT 24
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that John D. McNeil, whose signature
appears below, constitutes and appoints Bonnie S. Angus, David D. Horn and
David N. Brown, and each of them, his attorneys-in-fact, each with the power
of substitution, for him in any and all capacities, to sign the Annual Report
on Form 10-K for the fiscal year ended December 31, 1995 of Sun Life
Insurance and Annuity Company of New York and any amendments thereto and to
file the same, with exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, hereby ratifying and
confirming all that each of said attorneys-in-fact or his substitute or
substitutes, may do or cause to be done by virtue hereof.
/s/ John D. McNeil
____________________________________
John D. McNeil
March 25, 1996
<PAGE>
EXHIBIT 24
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that L. Brock Thomson, whose signature
appears below, constitutes and appoints Bonnie S. Angus, David D. Horn and
David N. Brown, and each of them, his attorneys-in-fact, each with the power
of substitution, for him in any and all capacities, to sign the Annual Report
on Form 10-K for the fiscal year ended December 31, 1995 of Sun Life
Insurance and Annuity Company of New York and any amendments thereto and to
file the same, with exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, hereby ratifying and
confirming all that each of said attorneys-in-fact or his substitute or
substitutes, may do or cause to be done by virtue hereof.
/s/ L. Brock Thomson
-----------------------------------
L. Brock Thomson
March 25, 1996
<PAGE>
EXHIBIT 24
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that Richard B. Bailey, whose signature
appears below, constitutes and appoints Bonnie S. Angus, David D. Horn and
David N. Brown, and each of them, his attorneys-in-fact, each with the power
of substitution, for him in any and all capacities, to sign the Annual Report
on Form 10-K for the fiscal year ended December 31, 1995 of Sun Life
Insurance and Annuity Company of New York and any amendments thereto and to
file the same, with exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, hereby ratifying and
confirming all that each of said attorneys-in-fact or his substitute or
substitutes, may do or cause to be done by virtue hereof.
/s/ Richard B. Bailey
-----------------------------------
Richard B. Bailey
March 25, 1996
<PAGE>
EXHIBIT 24
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that A. Keith Brodkin, whose signature
appears below, constitutes and appoints Bonnie S. Angus, David D. Horn and
David N. Brown, and each of them, his attorneys-in-fact, each with the power
of substitution, for him in any and all capacities, to sign the Annual Report
on Form 10-K for the fiscal year ended December 31, 1995 of Sun Life
Insurance and Annuity Company of New York and any amendments thereto and to
file the same, with exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, hereby ratifying and
confirming all that each of said attorneys-in-fact or his substitute or
substitutes, may do or cause to be done by virtue hereof.
/s/ A. Keith Brodkin
-----------------------------------
A. Keith Brodkin
March 25, 1996
<PAGE>
EXHIBIT 24
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that M. Colyer Crum, whose signature
appears below, constitutes and appoints Bonnie S. Angus, David D. Horn and
David N. Brown, and each of them, his attorneys-in-fact, each with the power
of substitution, for him in any and all capacities, to sign the Annual Report
on Form 10-K for the fiscal year ended December 31, 1995 of Sun Life
Insurance and Annuity Company of New York and any amendments thereto and to
file the same, with exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, hereby ratifying and
confirming all that each of said attorneys-in-fact or his substitute or
substitutes, may do or cause to be done by virtue hereof.
/s/ M. Colyer Crum
-----------------------------------
M. Colyer Crum
March 26, 1996
<PAGE>
EXHIBIT 24
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that John R. Gardner, whose signature
appears below, constitutes and appoints Bonnie S. Angus, David D. Horn and
David N. Brown, and each of them, his attorneys-in-fact, each with the power
of substitution, for him in any and all capacities, to sign the Annual Report
on Form 10-K for the fiscal year ended December 31, 1995 of Sun Life
Insurance and Annuity Company of New York and any amendments thereto and to
file the same, with exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, hereby ratifying and
confirming all that each of said attorneys-in-fact or his substitute or
substitutes, may do or cause to be done by virtue hereof.
/s/ John R. Gardner
-----------------------------------
John R. Gardner
March 26, 1996
<PAGE>
EXHIBIT 24
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that David D. Horn, whose signature
appears below, constitutes and appoints Bonnie S. Angus, David D. Horn and
David N. Brown, and each of them, his attorneys-in-fact, each with the power
of substitution, for him in any and all capacities, to sign the Annual Report
on Form 10-K for the fiscal year ended December 31, 1995 of Sun Life
Insurance and Annuity Company of New York and any amendments thereto and to
file the same, with exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, hereby ratifying and
confirming all that each of said attorneys-in-fact or his substitute or
substitutes, may do or cause to be done by virtue hereof.
/s/ David D. Horn
-----------------------------------
David D. Horn
March 25, 1996
<PAGE>
EXHIBIT 24
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that John G. Ireland, whose signature
appears below, constitutes and appoints Bonnie S. Angus, David D. Horn and
David N. Brown, and each of them, his attorneys-in-fact, each with the power
of substitution, for him in any and all capacities, to sign the Annual Report
on Form 10-K for the fiscal year ended December 31, 1995 of Sun Life
Insurance and Annuity Company of New York and any amendments thereto and to
file the same, with exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, hereby ratifying and
confirming all that each of said attorneys-in-fact or his substitute or
substitutes, may do or cause to be done by virtue hereof.
/s/ John G. Ireland
-----------------------------------
John G. Ireland
March 25, 1996
<PAGE>
EXHIBIT 24
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that Edward M Lamont, whose signature
appears below, constitutes and appoints Bonnie S. Angus, David D. Horn and
David N. Brown, and each of them, his attorneys-in-fact, each with the power
of substitution, for him in any and all capacities, to sign the Annual Report
on Form 10-K for the fiscal year ended December 31, 1995 of Sun Life
Insurance and Annuity Company of New York and any amendments thereto and to
file the same, with exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, hereby ratifying and
confirming all that each of said attorneys-in-fact or his substitute or
substitutes, may do or cause to be done by virtue hereof.
/s/ Edward M. Lamont
-----------------------------------
Edward M. Lamont
March 25, 1996
<PAGE>
EXHIBIT 24
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that John S. Lane, whose signature
appears below, constitutes and appoints Bonnie S. Angus, David D. Horn and
David N. Brown, and each of them, his attorneys-in-fact, each with the power
of substitution, for him in any and all capacities, to sign the Annual Report
on Form 10-K for the fiscal year ended December 31, 1995 of Sun Life
Insurance and Annuity Company of New York and any amendments thereto and to
file the same, with exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, hereby ratifying and
confirming all that each of said attorneys-in-fact or his substitute or
substitutes, may do or cause to be done by virtue hereof.
/s/ John S. Lane
-----------------------------------
John S. Lane
March 27, 1996
<PAGE>
EXHIBIT 24
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that Angus A. MacNaughton, whose signature
appears below, constitutes and appoints Bonnie S. Angus, David D. Horn and
David N. Brown, and each of them, his attorneys-in-fact, each with the power
of substitution, for him in any and all capacities, to sign the Annual Report
on Form 10-K for the fiscal year ended December 31, 1995 of Sun Life
Insurance and Annuity Company of New York and any amendments thereto and to
file the same, with exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, hereby ratifying and
confirming all that each of said attorneys-in-fact or his substitute or
substitutes, may do or cause to be done by virtue hereof.
/s/ Angus A. MacNaughton
-----------------------------------
Angus A. MacNaughton
March 26, 1996
<PAGE>
EXHIBIT 24
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that Fioravante G. Perrotta, whose signature
appears below, constitutes and appoints Bonnie S. Angus, David D. Horn and
David N. Brown, and each of them, his attorneys-in-fact, each with the power
of substitution, for him in any and all capacities, to sign the Annual Report
on Form 10-K for the fiscal year ended December 31, 1995 of Sun Life
Insurance and Annuity Company of New York and any amendments thereto and to
file the same, with exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, hereby ratifying and
confirming all that each of said attorneys-in-fact or his substitute or
substitutes, may do or cause to be done by virtue hereof.
/s/ Fioravante G. Perrotta
-----------------------------------
Fioravante G. Perrotta
March 25, 1996
<PAGE>
EXHIBIT 24
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that Ralph F. Peters, whose signature
appears below, constitutes and appoints Bonnie S. Angus, David D. Horn and
David N. Brown, and each of them, his attorneys-in-fact, each with the power
of substitution, for him in any and all capacities, to sign the Annual Report
on Form 10-K for the fiscal year ended December 31, 1995 of Sun Life
Insurance and Annuity Company of New York and any amendments thereto and to
file the same, with exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, hereby ratifying and
confirming all that each of said attorneys-in-fact or his substitute or
substitutes, may do or cause to be done by virtue hereof.
/s/ Ralph F. Peters
____________________________________
Ralph F. Peters
March 27, 1996
<PAGE>
EXHIBIT 24
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that Pamela T. Timmins, whose signature
appears below, constitutes and appoints Bonnie S. Angus, David D. Horn and
David N. Brown, and each of them, his attorneys-in-fact, each with the power
of substitution, for him in any and all capacities, to sign the Annual Report
on Form 10-K for the fiscal year ended December 31, 1995 of Sun Life
Insurance and Annuity Company of New York and any amendments thereto and to
file the same, with exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, hereby ratifying and
confirming all that each of said attorneys-in-fact or his substitute or
substitutes, may do or cause to be done by virtue hereof.
/s/ Pamela T. Timmins
-----------------------------------
Pamela T. Timmins
March 25, 1996
<TABLE> <S> <C>
<PAGE>
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<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<DEBT-HELD-FOR-SALE> 0
<DEBT-CARRYING-VALUE> 132,026,000
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59,554,000
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