<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 June 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.
<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 -
June 30, 1997 and December 31, 1996 3
Statutory Statements of Operations -
Three Months Ended June 30, 1997 and
June 30, 1996 4
Statutory Statements of Operations -
Six Months Ended June 30, 1997
and June 30, 1996 5
Statutory Statements of Changes in
Capital Stock and Surplus -
Six Months Ended June 30, 1997 and
June 30, 1996 6
Statutory Statements of Cash Flow -
Six Months Ended June 30, 1997 and
June 30, 1996 7
Notes to Unaudited Statutory Financial
Statements 8
Management's Discussion and Analysis of
Financial Condition and Results of Operations 9
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
<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>
JUNE 30, DECEMBER 31,
1997 1996
-------------- --------------
<S> <C> <C>
Admitted Assets
Bonds............................................................................ $ 74,855,766 $ 81,649,792
Mortgage loans................................................................... 35,047,305 40,431,773
Real estate, net of encumbrances................................................. 1,340,070 1,377,041
Policy loans..................................................................... 619,741 651,332
Cash............................................................................. 520,473 107,821
Investment income due and accrued................................................ 1,272,525 1,737,199
Due from separate accounts....................................................... 3,821,673 1,689,278
Other assets..................................................................... 1,023,791 505,452
-------------- --------------
General account assets........................................................... 118,501,344 128,149,688
Unitized separate account assets................................................. 354,088,272 297,690,137
Non-unitized separate account assets............................................. 107,250,520 92,192,714
-------------- --------------
Total assets..................................................................... $ 579,840,136 $ 518,032,539
-------------- --------------
-------------- --------------
Liabilities
Policy reserves.................................................................. $ 29,518,998 $ 25,264,586
Annuity and other deposits....................................................... 46,469,213 61,747,147
Accrued expenses and taxes....................................................... 787,042 532,957
Other liabilities................................................................ 1,859,601 941,534
Due to parent and affiliates--net................................................ 1,983,165 2,014,355
Interest maintenance reserve..................................................... 944,116 1,173,961
Asset valuation reserve.......................................................... 1,769,042 1,845,237
-------------- --------------
General account liabilities...................................................... 83,331,177 93,519,777
Unitized separate account liabilities............................................ 353,911,317 297,517,405
Non-unitized separate account liabilities........................................ 107,250,520 92,192,714
-------------- --------------
Total liabilities................................................................ 544,493,014 483,229,896
-------------- --------------
Capital Stock and Surplus
Capital stock--Par value $1,000:
Authorized, issued and outstanding; 2,000 shares................................. 2,000,000 2,000,000
Surplus.......................................................................... 33,347,122 32,802,643
-------------- --------------
Total capital stock and surplus.................................................. 35,347,122 34,802,643
-------------- --------------
Total liabilities, capital stock and surplus..................................... $ 579,840,136 $ 518,032,539
-------------- --------------
-------------- --------------
</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 JUNE 30,
---------------------------
1997 1996
------------ -------------
<S> <C> <C>
Income
Premiums and annuity considerations.................................................. $ 4,256,149 $ 2,989,059
Deposit-type funds................................................................... 33,068,035 11,500,677
Net investment income................................................................ 2,314,153 3,758,326
Amortization of interest maintenance reserve......................................... 133,939 189,400
Net gain from operations from separate accounts...................................... 2,164 0
------------ -------------
39,774,440 18,437,462
------------ -------------
Benefits and expenses
Death benefits....................................................................... 1,354,562 605,818
Annuity benefits..................................................................... 1,412,242 1,325,238
Disability benefits and benefits under accident and health policies.................. 277,417 121,746
Surrender benefits and other fund withdrawals........................................ 24,754,794 21,353,613
Increase in aggregate reserves for life and accident and health policies and
contracts.......................................................................... 1,751,735 453,959
Decrease in liability for premium and other deposit funds............................ (9,005,021) (10,192,146)
------------ -------------
20,545,729 13,668,228
Commissions on premiums and annuity considerations................................... 1,419,417 583,165
General insurance expenses........................................................... 1,872,969 1,301,686
Insurance taxes, licenses and fees................................................... 195,167 224,269
Net transfers to (from) separate accounts............................................ 13,617,727 (107,176)
------------ -------------
37,651,009 15,670,172
------------ -------------
Net gain from operations before federal income taxes................................. 2,123,431 2,767,290
Federal income taxes incurred (excluding tax on capital gains)....................... 977,724 683,158
------------ -------------
Net gain from operations after federal income taxes and before realized capital
losses............................................................................. 1,145,707 2,084,132
Net realized capital losses less capital gains tax................................... (3,908) (389,692)
------------ -------------
Net income........................................................................... $ 1,141,799 $ 1,694,440
------------ -------------
------------ -------------
</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>
SIX MONTHS ENDED JUNE 30,
----------------------------
1997 1996
------------- -------------
<S> <C> <C>
Income
Premiums and annuity considerations................................................. $ 8,333,650 $ 6,221,612
Deposit-type funds.................................................................. 62,223,515 21,080,330
Net investment income............................................................... 4,732,909 7,314,973
Amortization of interest maintenance reserve........................................ 285,364 372,797
Net gain from operations from separate accounts..................................... 4,223 0
------------- -------------
75,579,661 34,989,712
------------- -------------
Benefits and expenses
Death benefits...................................................................... 2,644,295 1,161,750
Annuity benefits.................................................................... 2,793,459 2,756,048
Disability benefits and benefits under accident and health policies................. 500,110 206,976
Surrender benefits and other fund withdrawals....................................... 47,716,391 44,538,930
Increase in aggregate reserves for life and accident and health policies and
contracts......................................................................... 3,355,502 1,167,638
Decrease in liability for premium and other deposit funds........................... (15,277,934) (20,147,935)
------------- -------------
41,731,823 29,683,407
Commissions on premiums and annuity considerations.................................. 2,723,547 1,267,283
General insurance expenses.......................................................... 3,574,189 2,538,855
Insurance taxes, licenses and fees.................................................. 393,123 400,615
Net transfers to (from) separate accounts........................................... 25,677,342 (1,751,384)
------------- -------------
74,100,024 32,138,776
------------- -------------
Net gain from operations before federal income taxes................................ 1,479,637 2,850,936
Federal income taxes incurred (excluding tax on capital gains)...................... 892,209 945,287
------------- -------------
Net gain from operations after federal income taxes and before realized capital
losses............................................................................ 587,428 1,905,649
Net realized capital losses less capital gains tax.................................. (3,908) (389,692)
------------- -------------
Net income.......................................................................... $ 583,520 $ 1,515,957
------------- -------------
------------- -------------
</TABLE>
See notes to unaudited statutory financial statements.
5
<PAGE>
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
STATUTORY STATEMENTS OF CHANGES IN CAPITAL STOCK AND SURPLUS
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30,
----------------------------
1997 1996
------------- -------------
<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 income......................................................................... 583,520 1,515,957
Unrealized gains (losses).......................................................... (93,988) 474,526
Change in non-admitted assets...................................................... (21,248) 20,626
Earnings on and transfers of separate account surplus.............................. 0 3,936
Change in asset valuation reserve.................................................. 76,195 (164,286)
------------- -------------
Balance, end of period............................................................. 3,847,122 2,315,173
------------- -------------
Total surplus...................................................................... 33,347,122 31,815,173
------------- -------------
Total capital stock and surplus.................................................... $ 35,347,122 $ 33,815,173
------------- -------------
------------- -------------
</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>
SIX MONTHS ENDED JUNE 30,
----------------------------
1997 1996
------------- -------------
<S> <C> <C>
Cash Provided
Premiums, annuity considerations and deposit funds received........................ $ 70,463,441 $ 27,350,392
Net investment income received..................................................... 5,254,882 8,000,373
------------- -------------
Total receipts..................................................................... 75,718,323 35,350,765
------------- -------------
Benefits paid...................................................................... 53,179,266 48,709,504
Insurance expenses and taxes paid.................................................. 6,436,774 4,131,844
Net cash transfers to (from) separate accounts..................................... 27,809,737 (788,596)
Federal income tax payments (excluding tax on capital gains)....................... 372,210 1,831,452
------------- -------------
Total payments..................................................................... 87,797,987 53,884,204
------------- -------------
Net cash from operations........................................................... (12,079,664) (18,533,439)
Proceeds from long-term investments sold, matured or repaid (after deducting taxes
on capital gains of $27,790 for 1997, and $(70,288) for 1996).................... 29,362,790 37,734,985
Other cash provided................................................................ 1,392,969 3,517,553
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Total cash provided................................................................ 30,755,759 41,252,538
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Cash Applied
Cost of long-term investments acquired............................................. 16,465,400 21,793,637
Other cash applied................................................................. 1,043,623 214,906
------------- -------------
Total cash applied................................................................. 17,509,023 22,008,543
------------- -------------
Net change in cash and short-term investments...................................... 1,167,072 710,556
Cash and short-term investments:
Beginning of period................................................................ 4,614,994 8,304,756
------------- -------------
End of period...................................................................... $ 5,782,066 $ 9,015,312
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------------- -------------
</TABLE>
See notes to unaudited statutory financial statements.
7
<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 $368,000 and $707,000
for the three and six month periods in 1997 and approximately $454,000 and
$878,000 for the three and six month periods in 1996, respectively.
- 8 -
<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 net income of $1,142,000 and $584,000 for the three and
six month periods ended June 30, 1997 as compared to $1,694,000 and
$1,516,000 for the same periods ended June 30, 1996. The $552,000 and
$932,000 decrease in earnings between periods were 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 increased by $21,337,000 and $40,590,000 for the three and six
month periods ended June 30, 1997 as compared with the same periods in 1996.
The increases were due primarily to higher fixed and variable annuity
deposits and group life insurance premiums.
Policyholder benefits increased by $6,878,000 and $12,048,000 for the three
and six month periods ended June 30, 1997 as compared with the same periods
in 1996. The increases were due to higher reserves for group accident and
health policies, from poor claims experience, and increases in death,
disability and annuity surrender benefits.
General expenses and commissions increased by $1,408,000 and $2,492,000 for
the three and six month periods ended June 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-
<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
August 12, 1997 s/ Robert P. Vrolyk
-------------------------------------------------
Robert P. Vrolyk, Vice President, Controller and
Actuary
August 12, 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 10-Q FOR THE YEAR-TO -DATE PERIOD ENDED JUNE 30, 1997.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<DEBT-HELD-FOR-SALE> 0
<DEBT-CARRYING-VALUE> 74,856,000
<DEBT-MARKET-VALUE> 76,179,000
<EQUITIES> 0
<MORTGAGE> 35,047,000
<REAL-ESTATE> 1,340,000
<TOTAL-INVEST> 111,863,000
<CASH> 520,000
<RECOVER-REINSURE> 0
<DEFERRED-ACQUISITION> 0
<TOTAL-ASSETS> 579,840,000
<POLICY-LOSSES> 29,519,000
<UNEARNED-PREMIUMS> 0
<POLICY-OTHER> 0
<POLICY-HOLDER-FUNDS> 46,469,000
<NOTES-PAYABLE> 0
0
0
<COMMON> 2,000,000
<OTHER-SE> 33,347,000
<TOTAL-LIABILITY-AND-EQUITY> 579,840,000
70,557,000
<INVESTMENT-INCOME> 5,023,000
<INVESTMENT-GAINS> 0
<OTHER-INCOME> 0
<BENEFITS> 41,732,000
<UNDERWRITING-AMORTIZATION> 2,724,000
<UNDERWRITING-OTHER> 29,644,000
<INCOME-PRETAX> 1,480,000
<INCOME-TAX> 896,000
<INCOME-CONTINUING> 584,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 584,000
<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>
