<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
<TABLE>
<S> <C>
For the fiscal year Commission file numbers
ended 33-1079, 33-58482 AND 333-09141
DECEMBER 31, 1997
</TABLE>
-------------------
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
NEW YORK 04-2845273
(State or other (I.R.S. Employer
jurisdiction of Identification No.)
incorporation or
organization)
80 BROAD STREET, 10004
NEW YORK, NEW YORK
(Address of principal (Zip Code)
executive offices)
</TABLE>
Registrant's telephone number, including area code (212) 943-3855
-------------------
Securities registered pursuant to Section 12(b) of the Act
<TABLE>
<S> <C>
Title of Each Class Name of Each Exchange
on which registered
NONE
</TABLE>
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 31, 1998, 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>
PART I
ITEM 1. BUSINESS.
The Company 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 Company 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. Effective May 1, 1997, the Company's ultimate parent company, Sun Life
Assurance Company of Canada ("SLOC"), established a wholly-owned subsidiary, Sun
Life of Canada (U.S.) Holdings, Inc. ("Life Holdco"), a Delaware corporation, to
serve as the holding company for Sun Life (U.S.). On December 18, 1997, Life
Holdco became a wholly-owned subsidiary of Sun Life Assurance Company of
Canada-U.S. Operations Holdings, Inc. ("US Holdco"). US Holdco is a wholly-owned
subsidiary of SLOC, 150 King Street West, Toronto, Ontario, Canada, a mutual
life insurance company incorporated pursuant to an Act of Parliament of Canada.
The Company is engaged in the sale of 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 Company owns no properties.
The Company occupies office space leased by it. The lease expires in February,
2004.
ITEM 3. LEGAL PROCEEDINGS.
The Company 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 COMPANY'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
The Company 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 Company.
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 Company had net income of $3,356,000 for 1997 as compared to $2,403,000 for
1996. The increase in net income was due to higher earnings from annuity and
group life segments, the result of higher fees from separate account assets and
an increase in the surplus transfer from the unitized separate account, and
strong group life sales and good mortality experience, respectively, offset by
lower earnings from group health, the result of lower than expected sales
combined with higher reserves from increasing claims.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
The Company does not invest in derivative financial instruments or derivative
commodity instruments.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
Financial statements, in the form required by Regulation S-X, are set forth
below. The Company is not subject to the requirement to file supplementary
financial data specified by Item 302 of Regulation S-K.
2
<PAGE>
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
(Wholly-owned subsidiary of Sun Life Assurance Company of Canada (U.S.))
STATUTORY STATEMENTS OF ADMITTED ASSETS, LIABILITIES AND CAPITAL STOCK AND
SURPLUS
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------
1997 1996
------------ ------------
<S> <C> <C>
ADMITTED ASSETS
GENERAL ACCOUNT ASSETS:
Bonds $ 61,703,336 $ 77,142,619
Mortgage loans on real estate 25,787,001 40,431,773
Properties acquired in satisfaction
of debt -- 1,377,041
Policy loans 636,277 651,332
Cash and short-term investments 10,120,237 4,614,994
Life insurance premiums and annuity
considerations due and uncollected 791,011 421,112
Accident and health premiums due and
unpaid 158,858 69,672
Investment income due and accrued 1,083,939 1,737,199
Other assets 497,790 14,668
------------ ------------
General account assets 100,778,449 126,460,410
SEPARATE ACCOUNT ASSETS:
Unitized 406,430,585 303,896,114
Non-unitized 116,889,545 87,676,015
------------ ------------
Total Admitted Assets $624,098,579 $518,032,539
------------ ------------
------------ ------------
LIABILITIES
GENERAL ACCOUNT LIABILITIES:
Aggregate reserve for life policies
and contracts $ 22,374,626 $ 20,404,586
Aggregate reserve for accident and
health policies 7,414,000 4,185,000
Policy and contract claims 1,912,737 1,107,333
Liability for premium and other
deposit funds 31,341,254 61,747,147
Interest maintenance reserve 885,581 1,173,961
Commissions to agents due or accrued 521,106 217,449
General expenses due or accrued 415,105 218,624
Transfers from Separate Accounts due
or accrued (7,224,058) (1,689,278)
Taxes, licenses and fees due or
accrued 114,986 96,884
Federal income taxes due or accrued 1,000,000 400,000
Asset valuation reserve 1,346,335 1,845,237
Payable to parent, subsidiaries and
affiliates 1,266,475 1,614,355
Other liabilities 810,594 509,201
------------ ------------
General account liabilities 62,178,741 91,830,499
SEPARATE ACCOUNT LIABILITIES:
Unitized 406,249,110 303,723,382
Non-unitized 116,889,545 87,676,015
------------ ------------
Total liabilities 585,317,396 483,229,896
------------ ------------
CAPITAL STOCK AND SURPLUS
Capital Stock--Par value $1,000;
authorized issued and outstanding;
2,000 shares 2,000,000 2,000,000
------------ ------------
Gross paid in and contributed
surplus 29,500,000 29,500,000
Group life contingency reserve fund 180,457 118,381
Unassigned funds 7,100,726 3,184,262
------------ ------------
Total Surplus 36,781,183 32,802,643
------------ ------------
CAPITAL STOCK AND SURPLUS 38,781,183 34,802,643
------------ ------------
Total liabilities, capital stock and
surplus $624,098,579 $518,032,539
------------ ------------
------------ ------------
</TABLE>
SEE NOTES TO STATUTORY FINANCIAL STATEMENTS.
3
<PAGE>
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
(Wholly-Owned Subsidiary of Sun Life Assurance Company Of Canada (U.S.))
STATUTORY STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
----------------------------------------
1997 1996 1995
------------ ------------ ------------
<S> <C> <C> <C>
INCOME:
Premiums and annuity considerations $ 16,670,915 $ 11,581,817 $ 11,731,623
Deposit-type funds 122,789,862 72,121,136 73,714,439
Net investment income 8,824,668 12,313,903 18,450,106
Amortization of interest maintenance
reserve 519,001 704,763 753,351
Net gain from operations from
Separate Accounts 8,743 8,101 --
------------ ------------ ------------
Total Income 148,813,189 96,729,720 104,649,519
------------ ------------ ------------
BENEFITS AND EXPENSES:
Death benefits 4,916,746 2,881,367 2,589,934
Annuity benefits 5,439,091 7,175,995 6,606,801
Disability benefits and benefits
under accident and health policies 939,635 464,615 233,549
Surrender benefits and other fund
withdrawals 111,623,776 118,432,072 118,975,912
Interest on policy or contract funds 75,069 83,323 --
Increase in aggregate reserves for
life and accident and health
policies and contracts 5,199,040 1,550,701 3,022,081
Decrease in liability for premium
and other deposit funds (30,405,893) (67,996,389) (71,733,008)
------------ ------------ ------------
Total Benefits 97,787,464 62,591,684 59,695,269
Commissions on premiums and annuity
considerations (direct business
only) 5,582,738 3,047,358 3,212,849
General insurance expenses 7,687,478 6,093,131 5,716,492
Insurance taxes, licenses and fees,
excluding federal income taxes 788,386 729,244 579,585
Net transfers to Separate Accounts 31,479,097 19,487,747 32,047,554
------------ ------------ ------------
Total Benefits and Expenses 143,325,163 91,949,164 101,251,749
------------ ------------ ------------
Net gain from operations before
dividends to policyholders and
federal income taxes 5,488,026 4,780,556 3,397,770
Federal income taxes incurred
(excluding tax on capital gains) 2,315,259 1,938,734 2,446,706
------------ ------------ ------------
Net gain from operations after
dividends to policyholders and
federal income taxes and before
realized capital gains 3,172,767 2,841,822 951,064
Net realized capital gains (losses)
less capital gains tax and
transferred to the interest
maintenance reserve 183,262 (439,101) (21,536)
------------ ------------ ------------
NET INCOME $ 3,356,029 $ 2,402,721 $ 929,528
------------ ------------ ------------
------------ ------------ ------------
</TABLE>
SEE NOTES TO STATUTORY 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.))
STATUTORY STATEMENTS OF CHANGES IN CAPITAL STOCK AND SURPLUS
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-------------------------------------
1997 1996 1995
----------- ----------- -----------
<S> <C> <C> <C>
CAPITAL AND SURPLUS, BEGINNING OF YEAR $34,802,643 $31,964,414 $31,409,069
----------- ----------- -----------
Net income 3,356,029 2,402,721 929,528
Change in net unrealized capital
gains (losses) 138,000 702,000 (672,000)
Change in nonadmitted assets and
related items (14,391) 32,888 71,263
Change in asset valuation reserve 498,902 (299,380) 226,554
----------- ----------- -----------
Net change in capital and surplus
for the year 3,978,540 2,838,229 555,345
----------- ----------- -----------
CAPITAL AND SURPLUS, END OF YEAR $38,781,183 $34,802,643 $31,964,414
----------- ----------- -----------
----------- ----------- -----------
</TABLE>
SEE NOTES TO STATUTORY 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.))
STATUTORY STATEMENTS OF CASH FLOW
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
----------------------------------------
1997 1996 1995
------------ ------------ ------------
<S> <C> <C> <C>
CASH PROVIDED
Premiums, annuity considerations and
deposit funds received $139,005,632 $ 83,598,181 $ 85,243,958
Net investment income 9,707,801 14,106,521 19,808,090
------------ ------------ ------------
Total receipts 148,713,433 97,704,702 105,052,048
------------ ------------ ------------
Benefits paid 122,170,301 128,975,968 128,129,129
Insurance expenses and taxes paid 13,540,362 9,712,774 9,655,310
Net cash transfers to separate
accounts 37,013,877 22,213,704 29,702,679
Federal income tax payments
(excluding tax on capital gains) 1,715,259 2,909,899 2,125,541
------------ ------------ ------------
Total payments 174,439,799 163,812,345 169,612,659
Net cash from operations (25,726,366) (66,107,643) (64,560,611)
Proceeds from long-term investments
sold, matured or repaid (after
deducting taxes on capital gains
of $222,860 for 1997, $(112,405)
for 1996 and $324,248 for 1995) 59,132,310 86,583,714 123,662,512
Other cash provided 325,543 4,654,856 444,240
------------ ------------ ------------
Total cash provided 59,457,853 91,238,570 124,106,752
------------ ------------ ------------
CASH APPLIED
Cost of long-term investments
acquired 27,369,138 28,654,582 51,631,901
Other cash applied 857,106 166,107 2,401,799
------------ ------------ ------------
Total cash applied 28,226,244 28,820,689 54,033,700
------------ ------------ ------------
Net change in cash and short-term
investments 5,505,243 (3,689,762) 5,512,441
CASH AND SHORT-TERM INVESTMENTS:
BEGINNING OF YEAR 4,614,994 8,304,756 2,792,315
------------ ------------ ------------
END OF YEAR $ 10,120,237 $ 4,614,994 $ 8,304,756
------------ ------------ ------------
------------ ------------ ------------
</TABLE>
SEE NOTES TO STATUTORY 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.))
NOTES TO STATUTORY FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
1. DESCRIPTION OF THE BUSINESS AND 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 ultimately 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 or
permitted by the Insurance Department of the State of New York. 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.
Prior to 1996, statutory accounting practices were recognized by the insurance
industry and the accounting profession as generally accepted accounting
principles ("GAAP") for mutual life insurance companies and stock life insurance
companies wholly owned by mutual life insurance companies. In April of 1993, the
Financial Accounting Standards Board ("FASB") issued an interpretation (the
"Interpretation") which became effective in 1996 that has changed the previous
practice of mutual life insurance companies (and stock life insurance companies
that are wholly owned subsidiaries of mutual life insurance companies) with
respect to utilizing statutory basis financial statements for general purposes,
in that it will no longer allow such financial statements to be described as
having been prepared in conformity with GAAP. Consequently, these financial
statements prepared in conformity with statutory accounting practices as
described above, vary from and are not intended to present the Company's
financial position, results of operations or cash flow in conformity with GAAP.
(See Note 16 for further discussion relative to the Company's basis of financial
statement presentation.) The effects on the financial statements of the
variances between the statutory basis of accounting and GAAP, although not
reasonably determinable, are presumed to be material.
INVESTED ASSETS--
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, adjusted for
accumulated depreciation, or appraised value less encumbrances. Short-term
investments are carried at amortized cost which approximates fair value.
Depreciation of buildings and improvements is calculated using the straight-line
method over the estimated useful life of the property, generally three to
sixteen years.
POLICY AND CONTRACT RESERVES--
The reserves for group life insurance, group long-term disability 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.
INCOME AND EXPENSES--
For group life, group long-term disability 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.
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 STATUTORY FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
1. DESCRIPTION OF THE BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES (CONTINUED):
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 statutory financial
statements. Assets held in the separate accounts are carried at market values.
The Company has also 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.
Gains (losses) from mortality experience and investment experience of the
separate accounts, not applicable to contract owners, are transferred to (from)
the general account. Accumulated gains (losses) that have not been transferred
are recorded as payable (receivable) to (from) the general account. Transfers
from separate accounts due or accrued amounted to $7,224,000 in 1997 and
$1,689,000 in 1996.
OTHER--
Preparation of the financial statements requires management to make estimates
and assumptions that affect the reported amounts of assets, liabilities,
revenues and expenses. Actual results could differ from those estimates.
Certain 1996 and 1995 amounts have been reclassified to conform to amounts as
presented in 1997.
2. BONDS:
Investments in debt securities are as follows:
<TABLE>
<CAPTION>
DECEMBER 31, 1997
------------------------------------------
GROSS GROSS ESTIMATED
AMORTIZED UNREALIZED UNREALIZED FAIR
COST GAINS LOSSES VALUE
-------- ---------- -------- --------
(IN 000'S)
<S> <C> <C> <C> <C>
Long-term bonds:
United States Government and
government agencies and authorities $15,005 $ 311 $-- $15,316
Foreign governments 523 16 -- 539
Public utilities 12,126 341 -- 12,467
Finance 4,026 80 -- 4,106
All other corporate bonds 30,023 696 16 30,703
-------- ---------- --- --------
Total long-term bonds 61,703 1,444 16 63,131
-------- ---------- --- --------
Short-term bonds:
U.S. Treasury Bills, bankers
acceptances and commercial paper 9,406 -- -- 9,406
-------- ---------- --- --------
$71,109 $1,444 $16 $72,537
-------- ---------- --- --------
-------- ---------- --- --------
</TABLE>
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 STATUTORY FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
2. BONDS (CONTINUED):
<TABLE>
<CAPTION>
DECEMBER 31, 1996
--------------------------------------------
GROSS GROSS ESTIMATED
AMORTIZED UNREALIZED UNREALIZED FAIR
COST GAINS LOSSES VALUE
-------- ---------- ---------- --------
(IN 000'S)
<S> <C> <C> <C> <C>
Long-term bonds:
United States Government and
government agencies and authorities $ 9,075 $ 179 $ -- $ 9,254
Foreign governments 530 14 -- 544
Public utilities 19,997 434 8 20,423
Transportation 468 34 -- 502
Finance 9,643 182 -- 9,825
All other corporate bonds 37,430 1,149 33 38,546
-------- ---------- --- --------
Total long-term bonds 77,143 1,992 41 79,094
Short-term bonds:
U.S. Treasury Bills, bankers
acceptances and commercial paper 4,507 -- -- 4,507
-------- ---------- --- --------
$81,650 $1,992 $ 41 $83,601
-------- ---------- --- --------
-------- ---------- --- --------
</TABLE>
The amortized cost and estimated fair value of bonds at December 31, 1997 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 and/or prepayment penalties.
<TABLE>
<CAPTION>
DECEMBER 31, 1997
-----------------------
AMORTIZED ESTIMATED
COST FAIR VALUE
--------- ------------
(IN 000'S)
<S> <C> <C>
Maturities are:
Due in one year or less $21,723 $ 21,825
Due after one year through five
years 33,228 34,015
Due after five years through ten
years 2,386 2,499
Due after ten years 6,162 6,471
--------- ------------
Subtotal 63,499 64,810
--------- ------------
Mortgage-backed securities 7,610 7,727
--------- ------------
$71,109 $ 72,537
--------- ------------
--------- ------------
</TABLE>
Proceeds from sales and maturities of investments in debt securities during
1997, 1996 and 1995 were $42,986,000, $76,431,000 and $111,448,000,
respectively. Gross gains of $395,000, $537,000 and $1,295,000 and gross losses
of $40,000, $183,000 and $335,000 were realized on such sales during 1997, 1996
and 1995, respectively.
A bond, included above, with an amortized cost of approximately $408,000 and
$412,000 at December 31, 1997 and 1996, respectively, was on deposit with the
Superintendent of Insurance of the State of New York as required by law.
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 STATUTORY FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
3. 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
allowances for losses have been made. In those cases where, in management's
judgment, the mortgage loans' values are impaired, appropriate losses are
recorded.
The following table shows the geographic distribution of the mortgage loan
portfolio at December 31:
<TABLE>
<CAPTION>
1997 1996
------- -------
(IN 000'S)
<S> <C> <C>
New York $ 4,375 $10,717
California 4,672 4,884
Massachusetts 2,556 6,542
Ohio 1,308 3,445
Florida 3,313 3,795
All other 9,563 11,049
------- -------
$25,787 $40,432
------- -------
------- -------
</TABLE>
As of December 31, 1997, the Company has restructured mortgage loans totaling
$960,000 against which there are allowances for losses of $250,000.
4. INVESTMENT GAINS (LOSSES):
<TABLE>
<CAPTION>
YEARS ENDED
DECEMBER 31,
-------------------
1997 1996 1995
----- ----- -----
(IN 000'S)
<S> <C> <C> <C>
Realized capital gains (losses):
Mortgage loans $ (6) $(676) $ (1)
Real estate 288 -- (32)
----- ----- -----
282 (676) (33)
----- ----- -----
----- ----- -----
Changes in unrealized capital gains
(losses) on mortgage loans $ 138 $ 702 $(672)
----- ----- -----
----- ----- -----
</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 ("IMR") and amortized into income over the remaining
contractual life of the security sold. The gross realized capital gains credited
to the interest maintenance reserve were $355,000, $354,000 and $960,000 in
1997, 1996 and 1995, respectively. All gains are transferred net of applicable
income taxes.
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 STATUTORY FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
5. NET INVESTMENT INCOME:
Net investment income consisted of the following for:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-------------------------
1997 1996 1995
------- ------- -------
(IN 000'S)
<S> <C> <C> <C>
Interest income from bonds $ 5,622 $ 8,576 $13,020
Interest income from mortgage loans 3,279 4,252 5,882
Real estate investment income (loss) 483 376 (52)
Other investment income (loss) 170 (93) 170
------- ------- -------
Gross investment income 9,554 13,111 19,020
Investment expenses 729 797 570
------- ------- -------
Net investment income $ 8,825 $12,314 $18,450
------- ------- -------
------- ------- -------
</TABLE>
6. 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 $139,000 for the year ended December 31, 1997, decreasing income
from operations by $500,000 for the year ended December 31, 1996 and increasing
income from operations by $652,000 for the year ended December 31, 1995.
The group life and long-term disability reinsurance agreements require that the
reinsurer provide funds in amounts equal to the reserves ceded.
The following are summarized proforma results of operations of the Company for
the years ended December 31, 1997, 1996 and 1995 before the effect of
reinsurance transactions with Sun Life (Canada).
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
---------------------------
1997 1996 1995
-------- ------- --------
(IN 000'S)
<S> <C> <C> <C>
Income:
Premiums, annuity deposits and other
revenues $142,915 $85,947 $ 86,819
Net investment income 9,343 13,019 19,204
-------- ------- --------
Subtotal 152,258 98,966 106,023
-------- ------- --------
Benefits and expenses:
Policyholder benefits 101,371 64,328 61,720
Other expenses 45,538 29,357 41,557
-------- ------- --------
Subtotal 146,909 93,685 103,277
-------- ------- --------
Income from operations $ 5,349 $ 5,281 $ 2,746
-------- ------- --------
-------- ------- --------
</TABLE>
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 STATUTORY FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
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, 1997
--------------------
AMOUNT % OF TOTAL
-------- ----------
(IN 000'S)
<S> <C> <C>
Subject to discretionary withdrawal:
--with market value adjustment $120,764 21.40%
--at book value less surrender charges
(surrender charge > 5%) 13,811 2.40
--at book value (minimal or no charge
or adjustment) 410,484 72.70
Not subject to discretionary withdrawal
provision 19,972 3.50
-------- ----------
Total annuity actuarial reserves and
deposit liabilities $565,031 100.00%
-------- ----------
-------- ----------
<CAPTION>
DECEMBER 31, 1996
--------------------
AMOUNT % OF TOTAL
-------- ----------
(IN 000'S)
<S> <C> <C>
Subject to discretionary withdrawal:
--with market value adjustment $ 92,135 19.60%
--at book value less surrender charges
(surrender charge > 5%) 38,668 8.20
--at book value (minimal or no
surrender charge or adjustment) 318,886 67.90
Not subject to discretionary withdrawal
provision 20,326 4.30
-------- ----------
Total annuity actuarial reserves and
deposit liabilities $470,015 100.00%
-------- ----------
-------- ----------
</TABLE>
8. RETIREMENT PLANS:
The Company participates with Sun Life (Canada) and Sun Life of Canada (U.S.) in
a noncontributory defined benefit pension plan covering essentially all
employees. The benefits are based on years of service and compensation.
The funding policy for the pension plan is to contribute an amount which at
least satisfies the minimum amount required by ERISA; the plan is currently
fully funded. 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).
The Company's share of the group's accrued pension cost at December 31, 1997,
1996 and 1995 was $211,000, $178,000 and $97,000, respectively. The Company's
share of net periodic pension cost was $33,000, $81,000 and $18,000 for the
years ended December 31, 1997, 1996 and 1995, respectively.
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 $28,000, $27,000 and
$21,000 for the years ended December 31, 1997, 1996 and 1995, respectively.
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
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 STATUTORY FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
8. RETIREMENT PLANS (CONTINUED):
early upon satisfying an alternate age plus service condition. Life insurance
benefits are generally set at a fixed amount. The expense recognized in the
financial statements relative to this plan was $16,000 in 1997, $8,000 in 1996
and $7,000 in 1995.
9. FAIR VALUE OF FINANCIAL INSTRUMENTS:
The following table presents the carrying amounts and fair values of the
Company's financial instruments at December 31, 1997 and 1996:
<TABLE>
<CAPTION>
1997 1996
----------------------------- -----------------------------
CARRYING CARRYING
AMOUNT FAIR VALUE AMOUNT FAIR VALUE
-------------- ------------ -------------- ------------
(IN 000'S)
<S> <C> <C> <C> <C>
ASSETS:
Bonds $ 71,109 $ 72,537 $ 81,650 $ 83,601
Mortgages 25,787 26,557 40,432 41,196
------- ------------ -------------- ------------
Total $ 98,896 $ 99,094 $122,082 $ 124,797
------- ------------ -------------- ------------
------- ------------ -------------- ------------
LIABILITIES:
Individual annuities $ 40,479 $ 38,177 $ 70,166 $ 68,830
------- ------------ -------------- ------------
------- ------------ -------------- ------------
</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, maturity,
repayment and liquidity 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.
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 remaining maturities.
10. STATUTORY INVESTMENT VALUATION RESERVES:
The asset valuation reserve ("AVR") provides a reserve for losses from
investments in bonds, 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 IMR and amortized
into income over the remaining contractual life of the security sold.
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 STATUTORY FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
10. STATUTORY INVESTMENT VALUATION RESERVES (CONTINUED):
The table shown below presents changes in the major elements of the AVR and IMR.
<TABLE>
<CAPTION>
1997 1996
-------------- --------------
AVR IMR AVR IMR
------ ------ ------ ------
(IN 000'S) (IN 000'S)
<S> <C> <C> <C> <C>
Balance, beginning of year $1,845 $1,174 $1,546 $1,648
Net realized capital gains (losses), net
of tax 183 231 (439) 230
Amortization of net investment gains -- (519) -- (704)
Unrealized investment gains 138 -- 702 --
Required by formula (820) -- 36 --
------ ------ ------ ------
Balance, end of year $1,346 $ 886 $1,845 $1,174
------ ------ ------ ------
------ ------ ------ ------
</TABLE>
11. LIABILITY FOR UNPAID CLAIMS AND CLAIM ADJUSTMENT EXPENSES:
Activity in the liability for unpaid claims and claim adjustment expense is
summarized below (in 000's).
<TABLE>
<CAPTION>
1997 1996 1995
------- ------- -------
<S> <C> <C> <C>
Balance, January 1 $ 6,129 $ 4,320 $ 2,322
Claims incurred 9,008 5,061 4,789
Claims paid (4,898) (3,252) (2,791)
------- ------- -------
Balance, December 31 $10,239 $ 6,129 $ 4,320
------- ------- -------
------- ------- -------
</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, 1997, the unpaid claim and claim adjustment liability for
these contracts is included in Policy Reserves.
12. 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
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 $1,938,000, $2,797,000 and $2,421,000 during 1997, 1996 and 1995,
respectively.
13. LEASE COMMITMENTS:
The Company leases two separate facilities for its annuity operations and group
sales office. Both leases commenced in March 1994.
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 STATUTORY FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
13. LEASE COMMITMENTS (CONTINUED):
Future minimum lease commitments are as follows:
<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31,
------------------------------ AMOUNT
------
(IN
000'S)
<S> <C>
1998 $ 354
1999 305
2000 237
2001 237
2002 237
Thereafter 275
------
Total $1,645
------
------
</TABLE>
Rent expense under these and prior leases in 1997, 1996 and 1995 amounted to
$348,000, $336,000 and $336,000, respectively.
14. 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, actuarial and administrative services on a cost reimbursement basis.
Expenses under these agreements amounted to approximately $1,155,000 in 1997,
$1,866,000 in 1996 and $1,741,000 in 1995.
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 at December 31,
1997 and 1996.
16. ACCOUNTING POLICIES AND PRINCIPLES:
The financial statements of the Company have been prepared on the basis of
statutory accounting practices which, prior to 1996, were considered by the
insurance industry and the accounting profession to be in accordance with GAAP
for mutual life insurance companies. The primary differences between statutory
accounting and GAAP are described as follows. Statutory accounting practices do
not recognize the following assets or liabilities which are reflected under
GAAP; deferred acquisition costs, deferred federal income taxes and statutory
non admitted assets. AVR and IMR are established under statutory accounting
practices but not under GAAP. Methods for calculating real estate depreciation
and investment valuation allowances differ under statutory accounting practices
and GAAP. Premiums for investment-type products are recognized as income for
statutory purposes and as deposits to policyholders' accounts for GAAP.
Because the Company's management uses financial information prepared in
conformity with accounting policies generally accepted in Canada in the normal
course of business, the management of the Company has determined that the cost
of complying with Statement No. 120 would exceed the benefits that the Company,
or the users of its financial statements, would experience. Consequently, the
Company has elected not to apply such standards in the preparation of these
financial statements.
15
<PAGE>
INDEPENDENT AUDITORS' REPORT
TO THE BOARD OF DIRECTORS
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
We have audited the accompanying statutory statements of admitted assets,
liabilities and capital stock and surplus of Sun Life Insurance and Annuity
Company of New York ("the Company") as of December 31, 1997 and 1996, and the
related statutory statements of operations, changes in capital stock and
surplus, and cash flow for each of the three years in the period ended December
31, 1997. 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 audits 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.
As described more fully in Notes 1 and 16 to the financial statements, the
Company prepared these financial statements using accounting practices
prescribed or permitted by the Insurance Department of the State of New York,
which practices differ from generally accepted accounting principles. The
effects on the financial statements of the variances between the statutory basis
of accounting and generally accepted accounting principles, although not
reasonably determinable, are presumed to be material.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the admitted assets, liabilities and capital stock and
surplus of Sun Life Insurance and Annuity Company of New York as of December 31,
1997 and 1996, and the results of its operations and its cash flow for each of
the three years in the period ended December 31, 1997 on the basis of accounting
described in Notes 1 and 16.
However, because of the effects of the matter discussed in the second preceding
paragraph, in our opinion, the statutory financial statements referred to above
do not present fairly, in conformity with generally accepted accounting
principles, the financial position of Sun Life Insurance and Annuity Company of
New York as of December 31, 1997 and 1996 or the results of its operations or
its cash flow for each of the three years in the period ended December 31, 1997.
As management has stated in Note 16, because the Company's management uses
financial information prepared in accordance with accounting principles
generally accepted in Canada in the normal course of business, the management of
Sun Life Insurance and Annuity Company of New York has determined that the cost
of complying with Statement No. 120, Accounting and Reporting by Mutual Life
Insurance Enterprises and by Insurance Enterprises for Certain Long-Duration
Participating Contracts, would exceed the benefits that the Company, or the
users of its financial statements would experience. Consequently, the Company
has elected not to apply such standards in the preparation of these financial
statements.
DELOITTE & TOUCHE LLP
February 5, 1998
16
<PAGE>
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 COMPANY.
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):
-- Statutory Statements of Admitted Assets, Liabilities and Capital Stock
and Surplus as of December 31, 1997 and December 31, 1996.
-- Statutory Statements of Operations for each of the three years ended
December 31, 1997, December 31, 1996 and December 31, 1995.
-- Statutory Statements of Changes in Capital Stock and Surplus for each
of the three years ended December 31, 1997, December 31, 1996 and
December 31, 1995.
-- Statutory Statements of Cash Flow for each of the three years ended
December 31, 1997, December 31, 1996 and December 31, 1995.
-- Notes to Statutory Financial Statements, Years Ended December 31,
1997, 1996 and 1995.
-- 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.
17
<PAGE>
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
SCHEDULE I
SUMMARY OF INVESTMENTS, OTHER THAN INVESTMENTS IN AFFILIATES
<TABLE>
<CAPTION>
AMOUNT AT WHICH
SHOWN IN THE
TYPE OF INVESTMENT COST VALUE BALANCE SHEET
- ------------------------------------------------------------------------ --------- ----------- -----------------
<S> <C> <C> <C>
(IN 000'S)
Bonds:
United States government and government agencies and authorities $ 15,005 $ 15,316 $ 15,005
Foreign governments 523 539 523
Public utilities 12,126 12,467 12,126
All other corporate bonds 34,049 34,809 34,049
--------- ----------- -------
Total bonds 61,703 63,131 61,703
--------- ----------- -------
Mortgage loans 25,787 25,787 25,787
Policy loans 636 636 636
Short-term investments 9,406 9,406 9,406
--------- ----------- -------
Total investments $ 97,532 $ 98,960 $ 97,532
--------- ----------- -------
--------- ----------- -------
</TABLE>
18
<PAGE>
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
SCHEDULE VI
SUMMARY OF REINSURANCE
<TABLE>
<CAPTION>
CEDED TO
GROSS OTHER NET
AMOUNT COMPANIES AMOUNT
------------ ----------- ------------
<S> <C> <C> <C>
(IN 000'S)
1997
Life Insurance in Force $ 4,113,017 $ 879,923 $ 3,233,094
------------ ----------- ------------
------------ ----------- ------------
Premiums
Life Insurance $ 11,759 $ 2,379 $ 9,380
Accident and Health 3,677 1,066 2,611
------------ ----------- ------------
Total Premiums $ 15,436 $ 3,445 $ 11,991
------------ ----------- ------------
------------ ----------- ------------
1996
Life Insurance In Force $ 3,044,368 $ 400,572 $ 2,643,796
------------ ----------- ------------
------------ ----------- ------------
Premiums
Life Insurance $ 7,506 $ 1,408 $ 6,098
Accident and Health 2,773 828 1,945
------------ ----------- ------------
Total Premiums $ 10,279 $ 2,236 $ 8,043
------------ ----------- ------------
------------ ----------- ------------
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
------------ ----------- ------------
------------ ----------- ------------
</TABLE>
19
<PAGE>
INDEPENDENT AUDITORS' REPORT
TO THE BOARD OF DIRECTORS
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
We have audited the statutory statements of admitted assets, liabilities and
capital stock and surplus 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, 1997 and 1996 and the related statutory statements of operations,
changes in capital stock and surplus and cash flow for each of the three years
in the period ended December 31, 1997, and have issued our report thereon dated
February 5, 1998 (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. These financial statement schedules are the responsibility of
the Company's management. Our responsibility is to express an opinion based on
our audits. 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
February 5, 1998
20
<PAGE>
ITEM 14. CONTINUED
(a) 3 and (c). Exhibits:
The following Exhibits are incorporated herein by reference:
<TABLE>
<CAPTION>
EXHIBIT NO.
- ---------------
<S> <C>
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)); Combination Fixed/Variable Flexible Premium Annuity Contract (filed as Exhibit 4 to
the Registration Statement on Form N-4 of Sun Life (N.Y.) Variable Account C (Reg. No. 333-05037)).
5 Opinion Re: Legality (filed as Exhibit 5 to Amendment No. 1 to the Registration Statement on Form S-1
(Reg. No. 33-1079); as Exhibit 5 to the Registration Statement on Form S-1 (Reg No. 33-58482)) and
as Exhibit 5 to the Registration Statement on Form S-2 (Reg. No. 333-09141).
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).
</TABLE>
(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.
21
<PAGE>
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 10, 1998
---------------------------------
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.
<TABLE>
<C> <S> <C>
*/s/ JOHN D. MCNEIL Chairman and Director
- ------------------------------------------- (Principal Executive Date: March 10, 1998
John D. McNeil Officer)
Vice President,
*/s/ ROBERT P. VROLYK Controller and Actuary
- ------------------------------------------- (Principal Financial & Date: March 10, 1998
Robert P. Vrolyk Accounting Officer)
- ------------------------------------------- Director Date:
A. Keith Brodkin
*/s/ JOHN S. LANE
- ------------------------------------------- Director Date: March 10, 1998
John S. Lane
- ------------------------------------------- Director Date:
David D. Horn
*/s/ JOHN G. IRELAND
- ------------------------------------------- Director Date: March 14, 1998
John G. Ireland
*/s/ EDWARD M. LAMONT
- ------------------------------------------- Director Date: March 9, 1998
Edward M. Lamont
</TABLE>
- ---------
* By Margaret Sears Mead pursuant to Power of Attorney filed herewith.
22
<PAGE>
<TABLE>
<C> <S> <C>
*/s/ DONALD A. STEWART
- ------------------------------------------- President and Director Date: March 10, 1998
Donald A. Stewart
*/s/ RICHARD B. BAILEY
- ------------------------------------------- Director Date: March 11, 1998
Richard B. Bailey
*/s/ FIORAVANTE G. PERROTTA
- ------------------------------------------- Director Date: March 9, 1998
Fioravante G. Perrotta
*/s/ RALPH F. PETERS
- ------------------------------------------- Director Date: March 19, 1998
Ralph F. Peters
- ------------------------------------------- Director Date:
Pamela T. Timmins
*/s/ ANGUS A. MACNAUGHTON
- ------------------------------------------- Director Date: March 10, 1998
Angus A. MacNaughton
*/s/ M. COLYER CRUM
- ------------------------------------------- Director Date: March 9, 1998
M. Colyer Crum
*/s/ SEYMOUR C. RABOY
- ------------------------------------------- Senior Vice President and Date: March 10, 1998
Seymour C. Raboy Director
</TABLE>
- ----------------------------
*By Margaret Sears Mead pursuant to Power of Attorney filed herewith
23
<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 Margaret Sears Mead, C. James Prieur 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, 1997 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 10, 1998
<PAGE>
EXHIBIT 24
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that Robert P. Vrolyk, whose signature appears
below, constitutes and appoints Margaret Sears Mead, C. James Prieur 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, 1997 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/ ROBERT P. VROLYK
------------------------
Robert P. Vrolyk
March 10, 1998
<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 Margaret Sears Mead, C. James Prieur 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, 1997 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 11, 1998
<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 Margaret Sears Mead, C. James Prieur 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, 1997 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.
------------------------
A. Keith Brodkin
<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 Margaret Sears Mead, C. James Prieur 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, 1997 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 9, 1998
<PAGE>
EXHIBIT 24
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that Donald A. Stewart, whose signature appears
below, constitutes and appoints Margaret Sears Mead, C. James Prieur 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, 1997 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/ DONALD A. STEWART
------------------------
Donald A. Stewart
March 10, 1998
<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 Margaret Sears Mead, C. James Prieur 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, 1997 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.
------------------------
David D. Horn
<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 Margaret Sears Mead, C. James Prieur 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, 1997 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 14, 1998
<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 Margaret Sears Mead, C. James Prieur 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, 1997 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 9, 1998
<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 Margaret Sears Mead, C. James Prieur 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, 1997 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 10, 1998
<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 Margaret Sears Mead, C. James Prieur
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, 1997 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 10, 1998
<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 Margaret Sears Mead, C. James Prieur 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, 1997 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 9, 1998
<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 Margaret Sears Mead, C. James Prieur 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, 1997 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 19, 1998
<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 Margaret Sears Mead, C. James Prieur 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, 1997 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.
------------------------
Pamela T. Timmins
<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 Margaret Sears Mead, C. James Prieur 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, 1997 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/ SEYMOUR C. RABOY
------------------------
Seymour C. Raboy
March 10, 1998
<TABLE> <S> <C>
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<FISCAL-YEAR-END> DEC-31-1997
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<DEBT-HELD-FOR-SALE> 0
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