<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, 1998 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.
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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, 1998 and December 31, 1997 3
Statutory Statements of Operations -
Three Months Ended March 31, 1998 and March 31, 1997 4
Statutory Statements of Changes in Capital Stock and Surplus -
Three Months Ended March 31, 1998 and March 31, 1997 5
Statutory Statements of Cash Flow -
Three Months Ended March 31, 1998 and March 31, 1997 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
* The Statutory Statement of Admitted Assets, Liabilities and Capital
Stock and Surplus at December 31, 1997 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 1998 1997
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<S> <C> <C>
General account assets:
Bonds ................................................................ $ 59,069,976 $ 61,703,336
Mortgage loans on real estate ........................................ 23,024,132 25,787,001
Policy loans ......................................................... 667,426 636,277
Cash and short-term investments ...................................... 8,799,521 10,120,237
Life insurance premiums and annuity considerations due and uncollected 745,581 791,011
Accident and health premiums due and unpaid .......................... 144,908 158,858
Investment income due and accrued .................................... 1,352,261 1,083,939
Other assets ......................................................... 0 497,790
General account assets ............................................... 93,803,805 100,778,449
Separate account assets:
Unitized ............................................................. 466,196,090 406,430,585
Non-unitized ......................................................... 112,668,189 116,889,545
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Total admitted assets ................................................ $ 672,668,084 $ 624,098,579
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Liabilities
General account liabiliities:
Aggregate reserve for life policies and contracts .................... $ 23,139,479 $ 22,374,626
Aggregate reserve for accident and health policies ................... 7,712,000 7,414,000
Policy and contract claims ........................................... 1,640,050 1,912,737
Liability for premium and other deposit funds ........................ 25,077,250 31,341,254
Interest maintenance reserve ......................................... 828,569 885,581
Commissions to agents due or accrued ................................. 444,330 521,106
General expenses due or accrued ...................................... 463,166 415,105
Transfers from Separate Accounts due or accrued ...................... (10,063,195) (7,224,058)
Taxes, licenses and fees due or accrued .............................. 120,560 114,986
Federal income taxes due or accrued .................................. 824,000 1,000,000
Asset valuation reserve .............................................. 1,307,952 1,346,335
Payable to parent, subsidiaries and affiliates ....................... 1,851,349 1,266,475
Other liabilities .................................................... 410,280 810,594
General account liabilities .......................................... 53,755,790 62,178,741
Separate account liabilities:
Unitized ............................................................. 466,012,364 406,249,110
Non-unitized ......................................................... 112,668,189 116,889,545
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Total liabilities .................................................... 632,436,343 585,317,396
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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
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Gross paid in and contributed surplus ................................ 29,500,000 29,500,000
Group life contingency reserve fund .................................. 647,915 180,457
Unassigned funds ..................................................... 8,083,826 7,100,726
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Total surplus ........................................................ 38,231,741 36,781,183
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Capital stock and surplus ............................................ 40,231,741 38,781,183
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Total liabilities, capital stock and surplus ......................... $ 672,668,084 $ 624,098,579
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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 1998 1997
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<S> <C> <C>
Premiums and annuity considerations .................................. $ 4,346,887 $ 3,944,695
Deposit-type funds ................................................... 29,401,037 29,155,480
Net investment income ................................................ 1,775,170 2,418,756
Amortization of interest maintenance reserve ......................... 84,750 151,425
Net gain from operations from separate accounts ...................... 2,251 2,059
Fee income ........................................................... 411,043 132,806
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Total income ......................................................... 36,021,138 35,805,221
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Benefits and expenses
Death benefits ....................................................... 1,758,058 1,270,388
Annuity benefits ..................................................... 1,622,609 1,381,217
Disability benefits and benefits under accident
and health policies ............................................... 232,051 222,693
Surrender benefits and other fund withdrawals ........................ 44,581,752 22,961,597
Interest on policy or contract claims ................................ 20,932 19,345
Increase in aggregate reserves for life and
accident and health policies and contracts ........................ 1,062,853 1,603,767
Decrease in liability for premium and other deposit funds ............ (6,264,004) (6,272,913)
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Total benefits ....................................................... 43,014,251 21,186,094
Commissions on premiums and annuity considerations (direct business only) 2,282,391 2,053,908
General insurance expenses ........................................... 1,172,326 951,442
Insurance taxes, licenses and fees, excluding federal income taxes ... 195,899 197,956
Net transfers to (from) Separate Accounts ............................ (12,900,252) 12,059,615
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Total benefit and expenses ........................................... 33,764,615 36,449,015
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Net gain (loss) from operations before dividends to policyholders
and federal income taxes ........................................... 2,256,523 (643,794)
Federal income taxes incurred (excluding tax on
capital gains) .................................................... 813,473 (85,515)
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Net gain (loss) from operations after dividends to policyholders and
federal income taxes and before realized capital losses ........... 1,443,050 (558,279)
Net realized capital gain or (losses) less capital gains tax and
transferred to the interest maintenance reserve ................... (8,189) 0
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Net income (loss) .................................................... $ 1,434,861 $ (558,279)
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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,
1998 1997
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<S> <C> <C>
Capital and surplus, beginning of period ............................. $ 38,781,183 $ 34,802,643
Net income (loss) ................................................ 1,434,861 (558,279)
Change in net unrealized capital losses .......................... (50,000) (50,000)
Change in non-admitted assets and related items .................. 27,314 (12,494)
Change in asset valuation reserve ................................ 38,383 14,904
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Net change in capital and surplus for the period ................. 1,450,558 (605,869)
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Capital and surplus, end of period ................................... $ 40,231,741 $ 34,196,774
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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,
1998 1997
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<S> <C> <C>
Cash Provided
Premiums, annuity considerations and deposit funds received .......... $ 33,770,276 $ 32,774,877
Net investment income received ....................................... 1,489,533 2,527,407
Fee income ........................................................... 411,043 132,806
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Total receipts ....................................................... 35,670,852 35,435,090
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Benefits paid ........................................................ 48,492,089 25,180,110
Insurance expenses and taxes paid .................................... 3,673,758 2,968,971
Net cash transfers to (from) separate accounts ....................... (10,061,115) 11,675,013
Federal income tax payments (excluding tax on capital gains) ......... 989,473 400,000
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Total payments ....................................................... 43,094,205 40,224,094
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Net cash from operations ............................................. (7,423,353) (4,789,004)
Proceeds from long-term investments sold, matured or repaid
(after deducting taxes on capital gains of $10,527 for 1998,
and $15,515 for 1997) ............................................ 9,771,303 8,518,070
Other cash provided .................................................. 1,922,929 644,133
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Total cash provided .................................................. 11,694,232 9,162,203
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Cash Applied
Cost of long-term investments acquired ............................... 4,432,712 746,736
Other cash applied ................................................... 1,158,883 934,396
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Total cash applied ................................................... 5,591,595 1,681,132
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Net change in cash and short-term investments ........................ (1,320,716) 2,692,067
Cash and short-term investments:
Beginning of period .................................................. 10,120,237 4,614,994
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End of period ........................................................ $ 8,799,521 $ 7,307,061
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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 $309,000 and $339,000
for the three month periods in 1998 and 1997, 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 net income of $1,435,000 compared to a loss of $558,000 in
the three month periods ended March 31, 1998 and March 31, 1997, respectively.
The $1,993,000 increase in earnings between periods was due primarily to higher
fee income from market appreciation on separate account assets, an increase in
the surplus transfer from the separate accounts and favorable group health
claims experience.
Total income for the three months ended March 31, 1998 was $36,021,000, an
increase of $216,000 from the same period one year ago. The increase was due
primarily to higher fixed annuity deposits, resulting from a dollar cost
averaging ("DCA") sales program, in the Registrant's market-value adjusted
combination fixed/variable annuity product, and increases in group life and
accident and health premiums. The DCA program credits a higher than market rate
of interest on the fixed annuity deposit during the first year. Purchase
payments allocated to the DCA program are deposited into the fixed account and
periodically transferred to the variable sub-accounts during the year.
Policyholder benefits for the three months ended March 31, 1998 increased
$21,828,000 to $43,014,000. The increase was due primarily to higher surrenders
from fixed DCA transfers to the Registrant's unitized separate accounts.
General expenses and commissions increased by $449,000 for the three month
period ended March 31, 1998 as a result of the increase in sales of the
Registrant's market-value adjusted deferred annuity and group life and accident
and health 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 14, 1998 s/ Robert P. Vrolyk
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Robert P. Vrolyk, Vice President, Controller and
Actuary
May 14, 1998 s/ Margaret S. Mead
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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, 1998.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<DEBT-HELD-FOR-SALE> 0
<DEBT-CARRYING-VALUE> 67,894,000
<DEBT-MARKET-VALUE> 69,104,000
<EQUITIES> 0
<MORTGAGE> 23,024,000
<REAL-ESTATE> 0
<TOTAL-INVEST> 91,585,000
<CASH> (24,000)
<RECOVER-REINSURE> 0
<DEFERRED-ACQUISITION> 0
<TOTAL-ASSETS> 672,668,000
<POLICY-LOSSES> 32,492,000
<UNEARNED-PREMIUMS> 0
<POLICY-OTHER> 0
<POLICY-HOLDER-FUNDS> 25,077,000
<NOTES-PAYABLE> 0
0
0
<COMMON> 2,000,000
<OTHER-SE> 38,232,000
<TOTAL-LIABILITY-AND-EQUITY> 672,668,000
33,748,000
<INVESTMENT-INCOME> 1,862,000
<INVESTMENT-GAINS> 0
<OTHER-INCOME> 411,000
<BENEFITS> 43,014,000
<UNDERWRITING-AMORTIZATION> 2,282,000
<UNDERWRITING-OTHER> (11,532,000)
<INCOME-PRETAX> 2,257,000
<INCOME-TAX> 813,000
<INCOME-CONTINUING> 1,435,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,435,000
<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>
