<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
33-1079, 33-58482 and
For Quarter Ended March 31, 1997 Commission File Number 333-09141
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SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
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(Exact name of registrant as specified in its charter)
New York 04-2845273
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
80 Broad Street, New York, New York 10004
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 943-3855
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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
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(2) Yes X No
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THE REGISTRANT MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTIONS H (1)
(a) AND (b) OF FORM 10-Q AND IS THEREFORE FILING THIS FORM WITH THE REDUCED
DISCLOSURE FORMAT PERMITTED BY INSTRUCTION H.
<PAGE>
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
INDEX
Page
Number
Part I: Financial Information
Item 1: Financial Statements:*
Statutory Statements of Admitted Assets,
Liabilities and Capital Stock and Surplus -
March 31, 1997 and December 31, 1996 3
Statutory Statements of Operations -
Three Months Ended March 31, 1997 and March 31, 1996 4
Statutory Statements of Changes in Capital Stock and Surplus -
Three Months Ended March 31, 1997 and March 31, 1996 5
Statutory Statements of Cash Flow -
Three Months Ended March 31, 1997 and March 31, 1996 6
Notes to Unaudited Statutory Financial Statements 7
Management's Discussion and Analysis of Financial Condition
and Results of Operations 8
Part II: Other Information
Item 5. Other Information
Registrant's ultimate parent company, Sun Life Assurance Company
of Canada has established a wholly-owned subsidiary, Sun Life of
Canada (U.S.) Holdings, Inc. ("Holdco"), a Delaware corporation,
to serve as the holding company for Sun Life Assurance Company of
Canada (U.S.) ("Sun Life (U.S.)"), the Registrant's immediate
parent, and its subsidiaries, and for general corporate
financing purposes. As of May 1, 1997, Holdco owns all of the
outstanding common stock of Sun Life (U.S.). The management and
day-to-day operations of Registrant have not changed, and
Registrant believes that this transaction does not constitute a
change of control.
* The Statutory Statement of Admitted Assets, Liabilities and Capital
Stock and Surplus at December 31, 1996 has been taken from the audited
statutory financial statements at that date. All other statutory
statements are unaudited.
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<PAGE>
ITEM 1. FINANCIAL STATEMENTS
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
STATUTORY STATEMENTS OF ADMITTED ASSETS, LIABILITIES AND
CAPITAL STOCK AND SURPLUS
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
ADMITTED ASSETS 1997 1996
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<S> <C> <C>
Bonds $ 78,995,417 $ 81,649,792
Mortgage loans 37,601,397 40,431,773
Real estate, net of encumbrances 1,358,625 1,377,041
Policy loans 687,869 651,332
Cash 456,903 107,821
Investment income due and accrued 1,657,838 1,737,199
Due from separate accounts 1,304,676 1,689,278
Other assets 794,046 505,452
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General account assets 122,856,771 128,149,688
Unitized separate account assets 302,629,633 297,690,137
Non-unitized separate account assets 100,846,745 92,192,714
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Total assets 526,333,149 $ 518,032,539
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LIABILITIES
Policy reserves $ 27,170,353 $ 25,264,586
Annuity and other deposits 55,474,234 61,747,147
Accrued expenses and taxes 767,292 532,957
Other liabilities 1,101,153 941,534
Due to parent and affiliates - net 1,440,074 2,014,355
Interest maintenance reserve 1,051,349 1,173,961
Asset valuation reserve 1,830,333 1,845,237
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General account liabilities 88,834,788 93,519,777
Unitized separate account liabilities 302,454,842 297,517,405
Non-unitized separate account liabilities 100,846,745 92,192,714
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Total liabilities 492,136,375 483,229,896
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CAPITAL STOCK AND SURPLUS
Capital stock - Par value $1,000:
Authorized, issued and outstanding;
2,000 shares 2,000,000 2,000,000
Surplus 32,196,774 32,802,643
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Total capital stock and surplus 34,196,774 34,802,643
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Total liabilities, capital stock and surplus $526,333,149 $ 518,032,539
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</TABLE>
See notes to unaudited statutory financial statements.
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<PAGE>
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
STATUTORY STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
INCOME 1997 1996
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<S> <C> <C>
Premiums and annuity considerations $ 4,077,501 $ 3,232,553
Deposit-type funds 29,155,480 9,579,653
Net investment income 2,418,756 3,556,647
Amortization of interest maintenance reserve 151,425 183,397
Net gain from operations from separate accounts 2,059 0
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35,805,221 16,552,250
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BENEFITS AND EXPENSES
Death benefits 1,289,733 555,932
Annuity benefits 1,381,217 1,430,810
Disability benefits and benefits under accident
and health policies 222,693 85,230
Surrender benefits and other fund withdrawals 22,961,597 23,185,317
Increase in aggregate reserves for life and
accident and health policies and contracts 1,603,767 713,679
Decrease in liability for premium and other deposit funds (6,272,913) (9,955,789)
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21,186,094 16,015,179
Commissions on premiums and annuity considerations 1,304,130 684,118
General insurance expenses 1,701,220 1,237,169
Insurance taxes, licenses and fees 197,956 176,346
Net transfers to (from) separate accounts 12,059,615 (1,644,208)
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36,449,015 16,468,604
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Net gain (loss) from operations before federal income taxes (643,794) 83,646
Federal income taxes incurred (excluding tax on
capital gains) (85,515) 262,129
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Net loss from operations after federal income taxes
and before realized capital losses (558,279) (178,483)
Net realized capital losses less capital gains tax 0 0
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NET LOSS $ (558,279) $ (178,483)
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</TABLE>
See notes to unaudited statutory financial statements.
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<PAGE>
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
STATUTORY STATEMENTS OF CHANGES IN CAPITAL STOCK AND SURPLUS
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
1997 1996
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<S> <C> <C>
CAPITAL STOCK $ 2,000,000 $ 2,000,000
PAID-IN SURPLUS 29,500,000 28,750,000
SPECIAL CONTINGENCY RESERVE 0 750,000
UNASSIGNED SURPLUS
Balance, beginning of period 3,302,643 464,414
Net loss (558,279) (178,483)
Unrealized losses (50,000) (125,000)
Change in non-admitted assets (12,494) 10,077
Earnings on and transfers of separate account surplus 0 1,971
Change in asset valuation reserve 14,904 69,430
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Balance, end of period 2,696,774 242,409
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TOTAL SURPLUS 32,196,774 29,742,409
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TOTAL CAPITAL STOCK AND SURPLUS $ 34,196,774 $ 31,742,409
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</TABLE>
See notes to unaudited statutory financial statements.
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<PAGE>
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
STATUTORY STATEMENTS OF CASH FLOW
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
1997 1996
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<S> <C> <C>
CASH PROVIDED
Premiums, annuity considerations
and deposit funds received $ 32,907,683 $ 12,717,957
Net investment income received 2,527,407 4,014,626
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Total receipts 35,435,090 16,732,583
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Benefits paid 25,180,110 25,219,489
Insurance expenses and taxes paid 2,968,971 2,064,838
Net cash transfers to (from) separate accounts 11,675,013 (1,834,700)
Federal income tax payments
(excluding tax on capital gains) 400,000 1,243,294
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Total payments 40,224,094 26,692,921
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Net cash from operations (4,789,004) (9,960,338)
Proceeds from long-term investments sold,
matured or repaid (after deducting taxes on
capital gains of $15,515 for 1997, and $(127,871)
for 1996) 8,518,070 19,645,036
Other cash provided 644,133 3,358,798
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Total cash provided 9,162,203 23,003,834
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CASH APPLIED
Cost of long-term investments acquired 746,736 5,872,472
Other cash applied 934,396 35,090
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Total cash applied 1,681,132 5,907,562
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Net change in cash and short-term investments 2,692,067 7,135,934
CASH AND SHORT-TERM INVESTMENTS:
BEGINNING OF PERIOD 4,614,994 8,304,756
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END OF PERIOD $ 7,307,061 $ 15,440,690
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</TABLE>
See notes to unaudited statutory financial statements.
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<PAGE>
Sun Life Insurance and Annuity Company of New York
Notes to Unaudited Statutory 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 $339,000 and $424,000
for the three month periods in 1997 and 1996, respectively.
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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 $558,000 and $178,000 in the three month
periods ended March 31, 1997 and March 31, 1996, respectively. The $380,000
decrease in earnings between periods was due primarily to adverse group long-
term disability claims experience and reserve strengthening related to the
Registrant's market-value adjusted fixed annuity product.
Total income for the three months ended March 31, 1997 was $35,805,000, an
increase of $19,253,000 from the same period one year ago. The increase was due
primarily to increases in fixed annuity deposits and group life insurance
premium.
Policyholder benefits for the three months ended March 31, 1997 increased
$5,171,000 to $21,186,000. The increase was due to higher reserves for group
accident and health policies, from poor claims experience, and reserve
strengthening for the Registrant's market-value adjusted deferred annuity
contract, the result of cash-flow testing.
General expenses and commissions increased by $1,084,000 for the three month
period ended March 31, 1997 as a result of the increase in sales of the
Registrant's market-value adjusted deferred annuity and group life insurance
products.
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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
May 15, 1997 s/ Robert P. Vrolyk
------------------------------------------------
Robert P. Vrolyk, Vice President, Controller and
Actuary
May 15, 1997 s/ Margaret S. Mead
------------------------------------------------
Margaret S. Mead, Assistant Vice President and
Secretary
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<TABLE> <S> <C>
<PAGE>
<ARTICLE> 7
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
STATUTORY STATEMENTS OF ADMITTED ASSETS, LIABILITIES AND CAPITAL STOCK AND
SURPLUS AND THE STATUTORY STATEMENTS OF OPERATIONS ON PAGES 3 AND 4 OF THE
COMPANY'S FORM 10-Q FOR THE YEAR-TO-DATE PERIOD ENDED MARCH 31, 1997.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<DEBT-HELD-FOR-SALE> 0
<DEBT-CARRYING-VALUE> 78,995,000
<DEBT-MARKET-VALUE> 80,046,000
<EQUITIES> 0
<MORTGAGE> 37,601,000
<REAL-ESTATE> 1,359,000
<TOTAL-INVEST> 118,643,000
<CASH> 457,000
<RECOVER-REINSURE> 0
<DEFERRED-ACQUISITION> 0
<TOTAL-ASSETS> 526,333,000
<POLICY-LOSSES> 27,170,000
<UNEARNED-PREMIUMS> 0
<POLICY-OTHER> 0
<POLICY-HOLDER-FUNDS> 55,474,000
<NOTES-PAYABLE> 0
0
0
<COMMON> 2,000,000
<OTHER-SE> 32,197,000
<TOTAL-LIABILITY-AND-EQUITY> 526,333,000
33,233,000
<INVESTMENT-INCOME> 2,572,000
<INVESTMENT-GAINS> 0
<OTHER-INCOME> 0
<BENEFITS> 21,186,000
<UNDERWRITING-AMORTIZATION> 1,304,000
<UNDERWRITING-OTHER> 13,959,000
<INCOME-PRETAX> (644,000)
<INCOME-TAX> (86,000)
<INCOME-CONTINUING> (558,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (558,000)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<RESERVE-OPEN> 0
<PROVISION-CURRENT> 0
<PROVISION-PRIOR> 0
<PAYMENTS-CURRENT> 0
<PAYMENTS-PRIOR> 0
<RESERVE-CLOSE> 0
<CUMULATIVE-DEFICIENCY> 0
</TABLE>
