<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 September 30, 1997 Commission File Number 333-09141
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 (I.R.S. Employer Identification No.)
of 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
--------------------------
- ------------------------------------------------------------------------------
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 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.
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SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
INDEX
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Page
Number
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<S> <C>
Part I: Financial Information
Item 1: Financial Statements:*
Statutory Statements of Admitted Assets, Liabilities and Capital Stock and Surplus -
September 30, 1997 and December 31, 1996 3
Statutory Statements of Operations -
Three Months Ended September 30, 1997 and September 30, 1996 4
Statutory Statements of Operations -
Nine Months Ended September 30, 1997 and September 30, 1996 5
Statutory Statements of Changes in Capital Stock and Surplus -
Nine Months Ended September 30, 1997 and September 30, 1996 6
Statutory Statements of Cash Flow -
Nine Months Ended September 30, 1997 and September 30, 1996 7
Notes to Unaudited Statutory Financial Statements 8
Management's Discussion and Analysis of Financial Condition
and Results of Operations 9
</TABLE>
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 the
Registrant have not changed, and the 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.
2
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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>
SEPTEMBER 30, DECEMBER 31,
Admitted Assets 1997 1996
- -------------------------------------------------------------------- -------------- --------------
<S> <C> <C>
Bonds............................................................... $ 68,062,715 $ 81,649,792
Mortgage loans...................................................... 31,117,316 40,431,773
Real estate, net of encumbrances.................................... 1,321,515 1,377,041
Policy loans........................................................ 597,184 651,332
Cash................................................................ 863,452 107,821
Investment income due and accrued................................... 1,536,821 1,737,199
Due from separate accounts.......................................... 4,473,319 1,689,278
Other assets........................................................ 2,415,756 505,452
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General account assets.............................................. 110,388,078 128,149,688
Unitized separate account assets.................................... 389,895,121 297,690,137
Non-unitized separate account assets................................ 114,894,961 92,192,714
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Total assets........................................................ $ 615,178,160 $ 518,032,539
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----------- -----------
Liabilities
Policy reserves..................................................... $ 30,282,362 $ 25,264,586
Annuity and other deposits.......................................... 36,472,063 61,747,147
Accrued expenses and taxes.......................................... 804,228 532,957
Other liabilities................................................... 2,675,001 941,534
Due to parent and affiliates--net................................... 2,489,175 2,014,355
Interest maintenance reserve........................................ 816,083 1,173,961
Asset valuation reserve............................................. 1,742,128 1,845,237
----------- -----------
General account liabilities......................................... 75,281,040 93,519,777
Unitized separate account liabilities............................... 389,715,922 297,517,405
Non-unitized separate account liabilities........................... 114,894,961 92,192,714
----------- -----------
Total liabilities................................................... 579,891,923 483,229,896
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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............................................................. 33,286,237 32,802,643
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Total capital stock and surplus..................................... 35,286,237 34,802,643
----------- -----------
Total liabilities, capital stock and surplus........................ $ 615,178,160 $ 518,032,539
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</TABLE>
See notes to unaudited statutory financial statements.
3
<PAGE>
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
STATUTORY STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
THREE MONTHS ENDED SEPTEMBER 30,
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<S> <C> <C>
Income 1997 1996
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Premiums and annuity considerations................................................. $ 4,124,748 $ 2,915,344
Deposit-type funds.................................................................. 29,644,724 22,594,317
Net investment income............................................................... 2,103,551 2,760,560
Amortization of interest maintenance reserve........................................ 131,426 163,422
Net gain from operations from separate accounts..................................... 2,244 0
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36,006,693 28,433,643
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Benefits and expenses
Death benefits...................................................................... 1,254,315 1,085,322
Annuity benefits.................................................................... 1,424,406 2,541,018
Disability benefits and benefits under accident and health policies................. 248,843 96,063
Surrender benefits and other fund withdrawals....................................... 33,327,858 42,127,282
Increase (decrease) in aggregate reserves for life and
accident and health policies and contracts........................................ 1,342,274 (270,294)
Decrease in liability for premium and other deposit funds........................... (9,997,150) (30,316,794)
------------- -------------
27,600,546 15,262,597
Commissions on premiums and annuity considerations.................................. 1,419,335 851,401
General insurance expenses.......................................................... 2,109,676 1,350,234
Insurance taxes, licenses and fees.................................................. 169,973 166,792
Net transfers to separate accounts.................................................. 4,171,562 4,063,714
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35,471,092 21,694,738
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Net gain from operations before federal income taxes................................ 535,601 6,738,905
Federal income taxes incurred (excluding tax on capital gains)...................... 596,291 1,915,290
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Net gain (loss) from operations after federal income taxes
and before realized capital losses................................................ (60,690) 4,823,615
Net realized capital losses less capital gains tax.................................. 0 (89,069)
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Net income (loss)................................................................... $ (60,690) $ 4,734,546
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</TABLE>
See notes to unaudited statutory financial statements.
4
<PAGE>
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
STATUTORY STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30,
-------------------------------
<S> <C> <C>
Income 1997 1996
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Premiums and annuity considerations................................................. $ 12,458,398 $ 9,136,956
Deposit-type funds.................................................................. 91,868,239 43,674,647
Net investment income............................................................... 6,836,460 10,075,533
Amortization of interest maintenance reserve........................................ 416,790 536,219
Net gain from operations from separate accounts..................................... 6,467 0
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111,586,354 63,423,355
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Benefits and expenses
Death benefits...................................................................... 3,898,610 2,247,072
Annuity benefits.................................................................... 4,217,865 5,297,066
Disability benefits and benefits under accident and health policies................. 748,953 303,039
Surrender benefits and other fund withdrawals....................................... 81,044,249 86,666,212
Increase in aggregate reserves for life and accident and health policies and
contracts......................................................................... 4,697,776 897,344
Decrease in liability for premium and other deposit funds........................... (25,275,084) (50,464,729)
------------- -------------
69,332,369 44,946,004
Commissions on premiums and annuity considerations.................................. 4,142,882 2,118,684
General insurance expenses.......................................................... 5,683,865 3,889,089
Insurance taxes, licenses and fees.................................................. 563,096 567,407
Net transfers to separate accounts.................................................. 29,848,904 2,312,330
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109,571,116 53,833,514
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Net gain from operations before federal income taxes................................ 2,015,238 9,589,841
Federal income taxes incurred (excluding tax on capital gains)...................... 1,488,500 2,860,577
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Net gain from operations after federal income taxes and before realized capital
losses............................................................................ 526,738 6,729,264
Net realized capital losses less capital gains tax.................................. (3,908) (478,761)
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Net income.......................................................................... $ 522,830 $ 6,250,503
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</TABLE>
See notes to unaudited statutory financial statements.
5
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SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
STATUTORY STATEMENTS OF CHANGES IN CAPITAL STOCK AND SURPLUS
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30,
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<S> <C> <C>
1997 1996
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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 income......................................................................... 522,830 6,250,503
Unrealized gains (losses).......................................................... (143,988) 361,555
Change in non-admitted assets...................................................... 1,643 29,819
Earnings on and transfers of separate account surplus.............................. 0 6,032
Change in asset valuation reserve.................................................. 103,109 33,180
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Balance, end of period............................................................. 3,786,237 7,145,503
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Total surplus...................................................................... 33,286,237 36,645,503
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Total capital stock and surplus.................................................... $ 35,286,237 $ 38,645,503
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</TABLE>
See notes to unaudited statutory financial statements.
6
<PAGE>
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
STATUTORY STATEMENTS OF CASH FLOW
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30,
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<S> <C> <C>
Cash Provided 1997 1996
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Premiums, annuity considerations and deposit funds received....................... $ 104,023,727 $ 52,677,750
Net investment income received.................................................... 7,136,810 11,378,263
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Total receipts.................................................................... 111,160,537 64,056,013
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Benefits paid..................................................................... 89,396,248 94,244,689
Insurance expenses and taxes paid................................................. 10,118,572 6,347,806
Net cash transfers to separate accounts........................................... 32,632,945 9,066,319
Federal income tax payments (excluding tax on capital gains)...................... 808,500 2,606,742
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Total payments.................................................................... 132,956,265 112,265,556
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Net cash from operations.......................................................... (21,795,728) (48,209,543)
Proceeds from long-term investments sold, matured or repaid (after deducting taxes
on capital gains of $29,618 for 1997, and $(134,249) for 1996).................. 45,425,627 71,255,423
Other cash provided............................................................... 2,321,445 4,349,255
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Total cash provided............................................................... 47,747,072 75,604,678
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Cash Applied
Cost of long-term investments acquired............................................ 22,596,492 28,625,739
Other cash applied................................................................ 2,589,996 5,239,602
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Total cash applied................................................................ 25,186,488 33,865,341
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Net change in cash and short-term investments..................................... 764,856 (6,470,206)
Cash and short-term investments:
Beginning of period............................................................... 4,614,994 8,304,756
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End of period..................................................................... $ 5,379,850 $ 1,834,550
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</TABLE>
See notes to unaudited statutory financial statements.
7
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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 $512,000 and
$1,219,000 for the three and nine month periods in 1997 and approximately
$366,000 and $1,244,000 for the three and nine month periods in 1996,
respectively.
8
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Sun Life Insurance and Annuity Company of New York
Management's Discussion and Analysis of
Financial Condition and Results of Operations
The Registrant had net loss of $61,000 for the three month period ended
September 30, 1997 and net income of $523,000 for the nine month period ended
September 30, 1997 as compared to net income of $4,735,000 and $6,251,000 for
the same periods ended September 30, 1996. The $4,796,000 and $5,728,000
decrease in earnings between periods was due primarily to reserve strengthening
related to the Registrant's market-value adjusted combination fixed/variable
annuity product and adverse group long-term disability claims experience.
Total income increased by $7,573,000 and $48,163,000 for the three and nine
month periods ended September 30, 1997 as compared with the same periods in
1996. The increase was due primarily to higher fixed and variable annuity
deposits and group life insurance premiums.
Policyholder benefits increased by $12,338,000 and $24,386,000 for the three and
nine month periods ended September 30, 1997 as compared with the same periods in
1996. The increase was due primarily to an increase in the liability for
premium and other deposit funds, the result of fewer maturing fixed annuity
contracts in 1997.
General expenses and commissions increased by $1,327,000 and $3,819,000 for the
three and nine month periods ended September 30, 1997 as a result of the
increase in sales of the Registrant's market-value adjusted deferred annuity and
group life insurance products.
9
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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 13, 1997 s/ Robert P. Vrolyk
-------------------------------------------------
Robert P. Vrolyk, Vice President, Controller and
Actuary
November 13, 1997 s/ Margaret S. Mead
-----------------------------------------------
Margaret S. Mead, Assistant Vice President and
Secretary
-10-
<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 5 OF THE
COMPANY'S FORM 10Q FOR THE YEAR-TO-DATE ENDED SEPTEMBER 30, 1997, AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000779955
<NAME> SUN LIFE INSURANCE & ANNUITY CO. OF NEW YORK
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<DEBT-HELD-FOR-SALE> 0
<DEBT-CARRYING-VALUE> 68,063,000
<DEBT-MARKET-VALUE> 69,627,000
<EQUITIES> 0
<MORTGAGE> 31,117,000
<REAL-ESTATE> 1,322,000
<TOTAL-INVEST> 101,099,000
<CASH> 863,000
<RECOVER-REINSURE> 0
<DEFERRED-ACQUISITION> 0
<TOTAL-ASSETS> 615,178,000
<POLICY-LOSSES> 30,282,000
<UNEARNED-PREMIUMS> 0
<POLICY-OTHER> 0
<POLICY-HOLDER-FUNDS> 36,472,000
<NOTES-PAYABLE> 0
0
0
<COMMON> 2,000,000
<OTHER-SE> 33,286,000
<TOTAL-LIABILITY-AND-EQUITY> 615,178,000
104,326,000
<INVESTMENT-INCOME> 7,260,000
<INVESTMENT-GAINS> 0
<OTHER-INCOME> 0
<BENEFITS> 69,332,000
<UNDERWRITING-AMORTIZATION> 4,143,000
<UNDERWRITING-OTHER> 36,096,000
<INCOME-PRETAX> 2,015,000
<INCOME-TAX> 1,492,000
<INCOME-CONTINUING> 523,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 523,000
<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>
