<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT 0F 1934
For the Quarterly Period Commission File Number
Ended September 30, 2000 33-01079,33-58482
and 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 of (IRS Employer I.D. No.)
incorporation or organization)
122 East 42nd Street, Suite 1900 New York, NY 10017
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(Address of Principal Executive Offices) (Zip Code)
(212) 922-9242
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(Registrant's telephone number, including area code)
NONE
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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 |_|
(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:
Statements of Income (unaudited) --
Nine Months Ended
September 30, 2000 and September 30, 1999 1
Statements of Income (unaudited) --
Three Months Ended
September 30, 2000 and September 30, 1999 2
Balance Sheets --
September 30, 2000 (unaudited) and December 31, 1999 (audited) 3
Statements of Comprehensive Income (unaudited) --
Nine Months Ended
September 30, 2000 and September 30, 1999 4
Statements of Changes in Stockholder's Equity (unaudited) --
Nine Months Ended
September 30, 2000 and September 30, 1999 5
Statements of Cash Flows (unaudited) --
Nine Months Ended
September 30, 2000 and September 30,1999 6
Notes to unaudited Financial Statements 7
Item 2: Management's Discussion and Analysis of
Financial Condition and Results of Operations 18
PART II: Other Information
Item 6: Exhibits and Reports on Form 8-K 24
<PAGE>
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
(A WHOLLY-OWNED SUBSIDIARY OF
SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.))
STATEMENTS OF INCOME
(IN THOUSANDS)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
<TABLE>
<CAPTION>
UNAUDITED UNAUDITED
2000 1999
------ ------
<S> <C> <C>
Revenues
Premiums and annuity considerations $ 13,527 $ 13,979
Net investment income 8,803 8,916
Net realized investment gains (losses) (286) 474
Fee and other income 7,373 6,194
-------- --------
Total revenues 29,417 29,563
-------- --------
Benefits and expenses
Policyowner benefits 14,786 14,961
Underwriting, acquisition and other operating
expenses 6,438 6,769
Amortization of deferred policy acquisition costs 3,769 3,202
-------- --------
Total benefits and expenses 24,993 24,932
-------- --------
Income before income tax expense 4,424 4,631
Income tax expense 1,549 1,491
-------- --------
Net income $ 2,875 $ 3,140
======== ========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL
STATEMENTS.
1
<PAGE>
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
(A WHOLLY-OWNED SUBSIDIARY OF
SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.))
STATEMENTS OF INCOME
(IN THOUSANDS)
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
<TABLE>
<CAPTION>
UNAUDITED UNAUDITED
2000 1999
------ ------
<S> <C> <C>
Revenues
Premiums and annuity considerations $ 4,579 $ 4,390
Net investment income 3,028 2,900
Net realized investment gains (losses) (42) (138)
Fee and other income 2,388 2,158
-------- --------
Total revenues 9,953 9,310
-------- --------
Benefits and expenses
Policyowner benefits 4,975 4,078
Underwriting, acquisition and other operating expenses 2,266 2,465
Amortization of deferred policy acquisition costs 796 1,652
-------- --------
Total benefits and expenses 8,037 8,195
-------- --------
Income before income tax expense 1,916 1,115
Income tax expense 671 338
-------- --------
Net income $ 1,245 $ 777
======== ========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL
STATEMENTS.
2
<PAGE>
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
(A WHOLLY-OWNED SUBSIDIARY OF
SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.))
BALANCE SHEETS
(IN THOUSANDS EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
UNAUDITED AUDITED
SEPTEMBER 30, DECEMBER 31,
2000 1999
ASSETS ---- ----
<S> <C> <C>
Investments
Fixed maturity securities available for sale at fair
value (amortized cost of $111,304 and $122,748 in
2000 and 1999, respectively) $ 108,063 $ 119,940
Short-term investments 15,561 7,295
Mortgage loans 27,798 26,244
Policy loans 560 538
--------- ---------
Total investments 151,982 154,017
Cash and cash equivalents 10,827 11,458
Accrued investment income 1,961 1,871
Deferred policy acquisition costs 26,385 27,893
Outstanding premiums 2,505 2,747
Other assets 7,298 4,263
Separate account assets 621,624 632,351
--------- ---------
TOTAL ASSETS $ 822,582 $ 834,600
========= =========
LIABILITIES
Future contract and policy benefits $ 36,744 $ 35,251
Contractholder deposit funds and other policy liabilities 102,386 108,277
Unearned revenue 67 24
Accrued expenses and taxes 1,540 431
Deferred federal income taxes 1,787 1,674
Other liabilities 3,549 144
Separate account liabilities 621,624 632,351
--------- ---------
Total liabilities 767,697 778,152
--------- ---------
STOCKHOLDER'S EQUITY
Common stock, $1,000 par value -- 2,000 shares authorized;
2,000 shares issued and outstanding 2,000 2,000
Additional paid-in capital 29,500 29,500
Accumulated other comprehensive income (1,010) (1,272)
Retained earnings 24,395 26,220
--------- ---------
Total stockholder's equity 54,885 56,448
--------- ---------
Total liabilities and stockholder's equity $ 822,582 $ 834,600
========= =========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL
STATEMENTS.
3
<PAGE>
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
(A WHOLLY-OWNED SUBSIDIARY OF
SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.))
STATEMENTS OF COMPREHENSIVE INCOME
(IN THOUSANDS)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
<TABLE>
<CAPTION>
UNAUDITED UNAUDITED
2000 1999
------ ------
<S> <C> <C>
Net Income $ 2,875 $ 3,140
Other comprehensive income:
Net change in unrealized holding gains and losses on
available for sale securities, net of tax 261 (1,832)
Other 1 --
--------- ---------
Other comprehensive income: 262 (1,832)
--------- ---------
Comprehensive income $ 3,137 $ 1,308
========= =========
</TABLE>
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
<TABLE>
<CAPTION>
UNAUDITED UNAUDITED
2000 1999
------ ------
<S> <C> <C>
Net Income $ 1,245 $ 777
Other comprehensive income:
Net change in unrealized holding gains and losses on
available for sale securities, net of tax 493 (174)
--------- ---------
Other comprehensive income: 493 (174)
--------- ---------
Comprehensive income $ 1,738 $ 603
========= =========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE
FINANCIAL STATEMENTS.
4
<PAGE>
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
(A WHOLLY-OWNED SUBSIDIARY OF
SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.))
STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY
(IN THOUSANDS)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
(UNAUDITED)
<TABLE>
<CAPTION>
ACCUMULATED
ADDITIONAL OTHER TOTAL
COMMON PAID-IN COMPREHENSIVE RETAINED STOCKHOLDER'S
STOCK CAPITAL INCOME EARNINGS EQUITY
------ ---------- ------------- -------- -------------
<S> <C> <C> <C> <C> <C>
Balance at December 31, 1998 $ 2,000 $ 29,500 $ 1,171 $ 28,265 $ 60,936
Comprehensive income:
Net income 3,140 3,140
Other comprehensive income (1,832) (1,832)
Dividends to stockholder (6,500) (6,500)
-------- ---------- ------- -------- --------
Balance at September 30, 1999 $ 2,000 $ 29,500 $ (661) $ 24,905 $ 55,744
======== ========== ======= ======== ========
Balance at December 31, 1999 $ 2,000 $ 29,500 $(1,272) $ 26,220 $ 56,448
Comprehensive income:
Net income 2,875 2,875
Other comprehensive income 262 262
Dividends to stockholder (4,700) (4,700)
======== ========== ======= ======== ========
Balance at September 30, 2000 $ 2,000 $ 29,500 $(1,010) $ 24,395 $ 54,885
======== ========== ======= ======== ========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
5
<PAGE>
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
(A WHOLLY-OWNED SUBSIDIARY OF
SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.))
STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
<TABLE>
<CAPTION>
UNAUDITED UNAUDITED
2000 1999
------ ------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 2,875 $ 3,140
Adjustments to reconcile net income to net cash provided by
operating activities:
Amortization of discount and premiums 43 133
Net realized (gains) losses on investments 286 (474)
Interest credited 4,323 4,497
Deferred federal income taxes (14) (329)
Changes in assets and liabilities:
Deferred acquisition costs 2,330 1,388
Outstanding premiums 242 (1,074)
Accrued investment income (90) (411)
Other assets (3,035) (1,399)
Future contract and policy benefits 1,705 2,209
Other, net 4,558 1,224
-------- --------
Net cash provided by operating activities 13,223 8,904
======== ========
CASH FLOWS FROM INVESTING ACTIVITIES:
Sales, maturities and repayments of:
Available-for-sale fixed maturities 40,776 68,032
Mortgage loans 2,255 7,925
Real estate -- 1,966
Purchases of:
Available-for-sale fixed maturities (29,661) (63,721)
Mortgage loans (3,809) (2,950)
Real estate -- --
Net change in policy loans (22) 15
Net change in short term investments (8,266) (64)
-------- --------
Net cash provided by investing activities 1,273 11,203
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Deposits to contractholder deposit funds 7,958 3,930
Withdrawals from contractholder deposit funds (18,385) (19,606)
Dividends paid to stockholder (4,700) (6,500)
-------- --------
Net cash used in financing activities (15,127) (22,176)
-------- --------
Net change in cash and cash equivalents (631) (2,069)
Cash and cash equivalents, beginning of period 11,458 9,384
-------- --------
Cash and cash equivalents, end of period $ 10,827 $ 7,315
======== ========
SUPPLEMENTAL CASH FLOW INFORMATION:
Income taxes paid net of refunds $ 701 $ 1,963
======== ========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE UNAUDITED FINANCIAL
STATEMENTS.
6
<PAGE>
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
(A WHOLLY-OWNED SUBSIDIARY OF SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.))
NOTES TO UNAUDITED FINANCIAL STATEMENTS
(1) DESCRIPTION OF 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 annuity contracts, as well as group life and
disability insurance contracts, in its state of domicile, New York. 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 Financial
Services of Canada Inc. ("SLF"). SLF was formed as a result of the
demutualization on March 22, 2000 of Sun Life Assurance Company of Canada
("SLOC"), which was the Company's ultimate parent at December 31, 1999.
BASIS OF PRESENTATION - For the year ended December 31, 1999, the Company filed
its Annual Report on Form 10-K using audited statutory 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 is a comprehensive basis of accounting other than generally accepted
accounting principles. The Company has changed its basis of accounting for the
period ended September 30, 2000 to GAAP and has restated the financial
statements for the prior year ended December 31, 1999 (Balance Sheet) and for
the period ended September 30, 1999 (Statement of Income, Statement of
Comprehensive Income, Statement of Changes in Stockholder's Equity, and
Statement of Cash Flows) to conform with GAAP. See Note 4 for a reconciliation
of statutory surplus to GAAP equity and statutory net income to GAAP net income.
USE OF ESTIMATES - The preparation of financial statements in conformity with
GAAP requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the reported amount
of revenues and expenses during the reporting period. The most significant
estimates are those used in determining deferred policy acquisition costs,
investment allowances and the liabilities for future policyholder benefits.
Actual results could differ from those estimates.
FINANCIAL INSTRUMENTS - In the normal course of business, the Company enters
into transactions involving various types of financial instruments, including
cash and cash equivalents, investments such as fixed maturities, mortgage loans
and equity securities, off balance sheet financial instruments, debt, loan
commitments and financial guarantees. These instruments involve credit risk and
also may be subject to risk of interest rate fluctuation. The Company evaluates
and monitors each
7
<PAGE>
financial instrument individually and, when appropriate, obtains collateral or
other security to minimize losses.
CASH AND CASH EQUIVALENTS - Cash and cash equivalents primarily include cash,
commercial paper, money market investments, and short term bank participations.
All such investments have maturities of three months or less and are considered
cash equivalents for purposes of reporting cash flows.
INVESTMENTS - The Company accounts for its investments in accordance with
Statement of Financial Accounting Standards No. 115, Accounting for Certain
Investments of Debt and Equity Securities. At the time of purchase, fixed
maturity securities are classified based on intent, as held-to-maturity or
available-for sale. In order for the security to be classified as
held-to-maturity, the Company must have positive intent and ability to hold the
securities to maturity. Securities held-to-maturity are stated at cost,
adjusted for amortization of premiums, and accretion of discounts. Securities
that do not meet this criterion are classified as available-for-sale.
Available-for-sale securities are carried at estimated fair value with changes
in unrealized gains or losses reported net of taxes in a separate component of
stockholder's equity. Fair values are obtained from external market quotations.
The Company does not engage in trading activities. All of the Company's fixed
maturity securities are available-for-sale. All securities transactions are
recorded on a trade date basis.
Mortgage loans are stated at unpaid principle balances, net of provisions for
estimated losses. Mortgage loans acquired at a premium or discount are
carried at amortized values net of provisions for estimated losses. Loans
include commercial first mortgage loans and are diversified by property type
and geographic area throughout the United States. Mortgage loans are
collateralized by the related properties and generally are no more than 75%
of the properties' value at the time that the original loan is made.
A loan is recognized as impaired when it is probable that the principal or
interest is not collectible in accordance with the contractual terms of the
loan. Measurement of impairment is based on the present value of expected
future cash flows discounted at the loan's effective interest rate, or at the
loan's observable market price. A specific valuation allowance is established
if the fair value of the impaired loan is less than the recorded amount. Loans
are also charged against the allowance when determined to be uncollectible. The
allowance is based on a continuing review of the loan portfolio, past loss
experience and current economic conditions which may affect the borrower's
ability to pay. While management believes that it uses the best information
available to establish the allowance, future adjustments to the allowance may
become necessary if economic conditions differ from the assumptions used in
making the evaluation.
8
<PAGE>
Real estate investments are held for the production of income or held-for-sale.
Real estate investments held for the production of income are carried at the
lower of cost adjusted for accumulated depreciation or fair value. Real estate
investments held-for-sale are primarily acquired through foreclosure of
mortgage loans. The cost of real estate that has been acquired through
foreclosure is the estimated fair value at the time of foreclosure.
Depreciation of buildings and improvements is calculated using the
straight-line method over the estimated useful life of the property, generally
40 to 50 years. There were no real estate holdings at September 30, 2000 or
December 31, 1999.
Policy loans are carried at the amount of outstanding principal balance not in
excess of net cash surrender values of the related insurance policies.
Investment income is recognized on an accrual basis. Realized gains and losses
on the sales of investments are recognized in operations at the date of sale
and are determined using the specific cost identification method. When an
impairment of a specific investment or a group of investments is determined to
be other than temporary, a realized investment loss is recorded. Changes in the
provision for estimated losses on mortgage loans and real estate are included
in net realized investment gains and losses.
Interest income on loans is recorded on the accrual basis. Loans are placed in
a non-accrual status when management believes that the borrower's financial
condition, after giving consideration to economic and business conditions and
collection efforts, is such that collection of principal and interest is
doubtful. When a loan is placed in non-accrual status, all interest previously
accrued is reversed against current period interest income. Interest accruals
are resumed on such loans only when they are brought fully current with respect
to principal and interest, have performed on a sustained basis for a reasonable
period of time, and when, in the judgment of management, the loans are
estimated to be fully collectible as to both principal and interest.
DEFERRED POLICY ACQUISITION COSTS- Acquisition costs consist of commissions,
underwriting and other costs which vary with and are primarily related to the
production of revenues. Acquisition costs related to investment-type contracts,
primarily deferred annuity and guaranteed investment contracts, are deferred
and amortized with interest in proportion to the present value of estimated
gross profits to be realized over the estimated lives of the contracts.
Estimated gross profits are composed of net investment income, net realized
investment gains and losses, life and variable annuity fees, surrender charges
and direct variable administrative expenses. This amortization is reviewed
quarterly and adjusted retrospectively by a cumulative charge or credit to
current operations when the Company revises its estimate of current or future
gross profits to be realized from this group of products, including realized
and unrealized gains and losses from investments.
9
<PAGE>
Deferred acquisition costs for each product are reviewed to determine if they
are recoverable from future income, including investment income. If such costs
are determined to be unrecoverable, they are expensed at the time of
determination. Although realization of deferred policy acquisition costs is not
assured, the Company believes it is more likely than not that all of these
costs will be realized. The amount of deferred policy acquisition costs
considered realizable, however, could be reduced in the near term if the
estimates of gross profits discussed above are reduced. The amount of
amortization of deferred policy acquisition costs could be revised in the near
term if any of the estimates discussed above are revised.
OTHER ASSETS - Property, equipment, and leasehold improvements which are
included in other assets are stated at cost, less accumulated depreciation and
amortization. Depreciation is provided using the straight-line or accelerated
method over the estimated useful lives of the related assets, which generally
range from 3 to 30 years. Amortization of leasehold improvements is provided
using the straight-line method over the lesser of the term of the leases or the
estimated useful life of the improvements. Reinsurance receivables from
reinsurance ceded are also included in other assets.
POLICY LIABILITIES AND ACCRUALS - Future contract and policy benefits are
liabilities for life, health and annuity products. Such liabilities are
established in amounts adequate to meet the estimated future obligations of
policies in force. Future policy benefits for individual life insurance and
annuity policies are computed using interest rates ranging from 5% to 6% for
life insurance and 6% to 7% for annuities. The liabilities associated with
traditional life insurance, annuity and disability insurance products are
computed using the net level premium method based on assumptions about future
investment yields, mortality, morbidity and persistency. The assumptions used
are based upon both the Company's and its affiliates' experience and industry
standards. Estimated liabilities are established for group life and health
policies that contain experience rating provisions.
Policyholder contract deposits consist of policy values that accrue to the
holders of investment-related products such as deferred annuities and
guaranteed investment contracts. The liabilities are determined using the
retrospective deposit method and consist of net deposits and investment
earnings less administrative charges. The liability is before the deduction of
any applicable surrender charges.
10
<PAGE>
Other policy liabilities include liabilities for policy and contract claims.
These amounts consist of the estimated amount payable for claims reported but
not yet settled and an estimate of claims incurred but not reported. The amount
reported is based upon historical experience, adjusted for trends and current
circumstances. Management believes that the recorded liability is sufficient to
provide for the associated claims adjustment expenses. Revisions of these
estimates are included in operations in the year such refinements are made.
REVENUE AND EXPENSES - Premiums for traditional individual life and annuity
products are considered revenue when due. Premiums related to group life and
group disability insurance are recognized as revenue pro-rata over the contract
period. The unexpired portion of these premiums is recorded as unearned
premiums. Revenue from investment-related products includes charges for cost of
insurance (mortality), initiation and administration of the policy and
surrender charges. Revenue is recognized when the charges are assessed except
that any portion of an assessment that relates to services to be provided in
future years is deferred and recognized over the period during which the
services are provided.
Benefits and expenses, other than deferred policy acquisition costs, related to
traditional life, annuity, and disability contracts, including group policies,
are recognized when incurred in a manner designed to match them with related
premium revenue and spread income recognition over expected policy lives. For
investment-type contracts, benefits include interest credited to policyholder's
accounts and death benefits in excess of account values, which are recognized
as incurred.
INCOME TAXES - The Company files a consolidated federal income tax return with
Sun Life of Canada (U.S.) and other affiliates. Deferred income taxes are
generally recognized when assets and liabilities have different values for
financial statement and tax reporting purposes, and for other temporary taxable
and deductible differences as defined by Statement of Financial Accounting
Standards ("SFAS") No. 109, Accounting for Income Taxes. These differences
result primarily from policy reserves, policy acquisition expenses and
unrealized gains or losses on investments.
11
<PAGE>
SEPARATE ACCOUNTS - The Company has established separate accounts applicable to
various classes of contracts providing for variable benefits. Contracts for
which funds are invested in separate accounts include 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 financial statements. Assets held in the
separate accounts are carried at market value and the investment risk of such
securities is retained by the policyholder.
NEW ACCOUNTING PRONOUNCEMENTS - In June 1998, the Financial Accounting
Standards Board ("FASB") issued Statement of Financial Accounting Standards No.
133, Accounting for Derivative Instruments and Hedging Activities ("SFAS No.
133"), which establishes accounting and reporting standards for derivative
instruments. SFAS No. 133 requires that an entity recognize all derivatives as
either assets or liabilities at fair value in the balance sheet, and
establishes special accounting for the following three types of hedges: fair
value hedges, cash flow hedges, and hedges of foreign currency exposures of net
investments in foreign operations.
In June 1999, the FASB issued Statement of Financial Accounting Standards No.
137 ("SFAS No. 137"), "Accounting for Derivative Instruments and Hedging
Activities - Deferral of the Effective Date of FASB SFAS No. 133." SFAS No. 137
delays the effective date of SFAS No. 133 for all fiscal quarters until fiscal
years beginning after June 15, 2000. The Company is evaluating SFAS No. 133 and
has not determined its effect on the financial statements.
On January 1, 1999, the Company adopted the American Institute of Certified
Public Accountants ("AICPA") Statement of Position ("SOP") 97-3, "Accounting by
Insurance and Other Enterprises for Insurance-Related Assessments." This
statement provides guidance on when an insurance or other enterprise should
recognize a liability for guaranty fund and other assessments and on how to
measure such liability. The adoption of SOP 97-3 had no material impact on the
financial position or results of operations of the Company.
In September 2000, the FASB issued SFAS 140, "Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities" which
replaces SFAS No. 125, "Accounting for Transfers and Services of Financial
Assets and Extinguishments of Liabilities". This standard revises the methods
for accounting for securitizations and other transfers of financial assets
and collateral as outlined in SFAS No. 125, and requires certain additional
disclosures. For transfers and servicing of financial assets and
extinguishments of liabilities, this standard will be effective for the
Company's June 30, 2001 financial statements. However, for disclosures
regarding securitizations and collateral, as well as recognition and
reclassification of collateral, this standard will be effective for the
Company's December 31, 2000 financial statements. The Company is currently
evaluating the impact of the adoption of this standard, however, it does not
expect the adoption of this standard to have a material effect on its
financial position pr results of operations.
On January 1, 1999, the Company adopted AICPA SOP 98-1, "Accounting for the
Costs of Computer Software Developed or Obtained for Internal Use." This SOP
provides guidance for determining whether costs of software developed or
obtained for internal use should be capitalized or expensed as incurred. In the
past, the Company has expensed such costs as they were incurred. The adoption
of SOP 98-1 had no material impact on pre-tax income in either nine month
period.
(2) MANAGEMENT AND SERVICE CONTRACTS
The Company has agreements with Sun Life of Canada (U.S.) and SLOC, which
provide that Sun Life of Canada (U.S.) and SLOC will furnish to the Company, as
requested, personnel as well as certain investment and administrative
12
<PAGE>
services on a cost reimbursement basis. Expenses under these agreements
amounted to approximately $902,000 and $2,076,000 for the three and nine month
periods in 2000 and $1,114,000 and $1,677,000 for the same periods in 1999.
(3) SEGMENT INFORMATION
The Company offers financial products and services such as fixed and variable
annuities, retirement plan services, life insurance on an individual and group
basis, as well as disability insurance on a group basis. Within these areas,
the Company conducts business principally in three operating segments and
maintains a corporate segment to provide for the capital needs of the three
operating segments and to engage in other financing related activities.
The Individual Protection segment administers life insurance products sold to
individuals under conversions from group policies.
The Group Protection segment markets and administers group life and long-term
disability insurance to small and mid-size employers.
The Wealth Management segment markets and administers individual variable
annuity products and individual fixed annuity products which include market
value adjusted annuities, and other retirement benefit products.
Summarized unaudited financial information by segment is provided in the tables
below:
<TABLE>
<CAPTION>
(IN THOUSANDS) SEPTEMBER 30,
NINE MONTHS ENDED SEPTEMBER 30, 2000 2000
------------------------------------ ----------
TOTAL TOTAL PRETAX NET TOTAL
REVENUES EXPENDITURES INCOME INCOME ASSETS
------------- ---------------- ------------ ----------- -----------
<S> <C> <C> <C> <C> <C>
Individual Protection $ 220 $ 300 $ (80) $ (52) $ 1,072
Group Protection 13,159 11,788 1,371 891 30,067
Wealth Management 15,469 12,940 2,529 1,644 786,099
Corporate 569 (35) 604 392 5,344
------- -------- ------- ------ --------
Total $29,417 $ 24,993 $ 4,424 $2,875 $822,582
======= ======== ======= ====== ========
<CAPTION>
DECEMBER 31,
NINE MONTHS ENDED SEPTEMBER 30, 1999 1999
------------------------------------ ----------
<S> <C> <C> <C> <C> <C>
Individual Protection $ 329 $ 56 $ 273 $ 177 $ 483
Group Protection 12,588 11,216 1,372 893 20,038
Wealth Management 15,684 13,560 2,124 1,527 791,283
Corporate 962 100 862 544 22,796
------- -------- ------- ------ --------
Total $29,563 $ 24,932 $ 4,631 $3,141 $834,600
======= ======== ======= ====== ========
13
<PAGE>
(IN THOUSANDS) SEPTEMBER 30,
THREE MONTHS ENDED SEPTEMBER 30, 2000 2000
------------------------------------- ----------
TOTAL TOTAL PRETAX NET TOTAL
REVENUES EXPENDITURES INCOME INCOME ASSETS
------------- ---------------- ------------ ----------- -----------
<S> <C> <C> <C> <C> <C>
Individual Protection $ 53 $ -- $ 53 $ 35 $ 1,072
Group Protection 4,468 4,120 348 226 30,067
Wealth Management 5,341 3,935 1,406 914 786,099
Corporate 91 (18) 109 70 5,344
------- -------- ------- ------ --------
Total $ 9,953 $ 8,037 $ 1,916 $1,245 $822,582
======= ======== ======= ====== ========
<CAPTION>
DECEMBER 31,
THREE MONTHS ENDED SEPTEMBER 30, 1999 1999
------------------------------------- ----------
<S> <C> <C> <C> <C> <C>
Individual Protection $ 142 $ (108) $ 250 $ 163 $ 483
Group Protection 4,227 3,360 867 585 20,038
Wealth Management 4,804 5,058 (254) (119) 791,283
Corporate 137 (115) 252 148 22,796
------- -------- ------- ------ --------
Total $ 9,310 $ 8,195 $ 1,115 $ 777 $834,600
======= ======== ======= ====== ========
</TABLE>
(4) STATUTORY FINANCIAL INFORMATION
For the year ended December 31, 1999, the Company filed its Annual Report on
Form 10-K using audited statutory 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 is a
comprehensive basis of accounting other than generally accepted accounting
principles. The Company has changed its basis of accounting for the three
months ended September 30, 2000 to generally accepted accounting principles
("GAAP") and has restated the financial statements for the prior year ended
December 31, 1999 (Balance Sheet) and for the period ended September 30, 1999
(Statement of Income, Statement of Comprehensive Income, Statement of Changes
in Stockholder's Equity, and Statement of Cash Flows) to conform with GAAP.
The Statutory Balance Sheet filed as part of the 1999 Annual Report on From
10-K is shown below:
14
<PAGE>
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
STATUTORY STATEMENTS OF ADMITTED ASSETS, LIABILITIES AND
CAPITAL STOCK AND SURPLUS
DECEMBER 31, 1999
<TABLE>
<CAPTION>
1999
------------
<S> <C>
ADMITTED ASSETS
Bonds $ 59,215,128
Mortgage loans on real estate 8,659,610
Policy loans 537,976
Cash and short-term investments 6,261,102
Life insurance premiums and annuity considerations due and uncollected 2,168,135
Accident and health premiums due and unpaid 579,460
Receivable from parent and affiliates 621,625
Investment income due and accrued 795,075
Federal Income Tax Recoverable 520,467
Other assets 235,655
General account assets 79,594,233
Separate account assets
Unitized 632,350,720
Non-unitized 94,061,504
------------
TOTAL ADMITTED ASSETS $806,006,457
LIABILITIES
Aggregate reserve for life policies and contracts $ 21,762,306
Aggregate reserve for accident and health policies 9,251,000
Policy and contract claims 2,182,472
Liability for premium and other deposit funds 18,048,656
Interest maintenance reserve 553,770
Commissions to agents due or accrued 449,213
General expenses due or accrued 580,432
Transfers from Separate Accounts due or accrued (17,043,885)
Taxes, licenses and fees due or accrued 100,000
Asset valuation reserve 1,210,107
Other liabilities 1,353,930
------------
General account liabilities 38,448,001
Separate account liabilities:
Unitized 632,150,968
Non-unitized 94,061,504
------------
TOTAL LIABILITIES 764,660,473
------------
CAPITAL STOCK AND SURPLUS
Common capital stock 2,000,000
------------
Gross paid in and contributed surplus 29,500,000
Group life contingency reserve fund 1,035,323
Unassigned funds 8,810,661
------------
Total surplus 39,345,984
Capital stock and surplus 41,345,984
TOTAL LIABILITIES, CAPITAL STOCK AND SURPLUS $806,006,457
============
</TABLE>
15
<PAGE>
The following reconciles statutory net income and statutory surplus with net
income and equity on a GAAP basis.
<TABLE>
<CAPTION>
(in thousands) NINE MONTHS ENDED SEPTEMBER 30,
2000 1999
---- ----
<S> <C> <C>
Statutory net income $ 4,349 $ 4,438
Adjustments to GAAP for life insurance companies:
Statutory interest maintenance reserve (149) (195)
Investment income and realized gains(losses) (343) 2,270
Policyowner benefits 943 (2,264)
Deferred policy acquisition costs (2,330) (1,388)
Deferred income taxes 448 283
Other (43) (4)
------- --------
GAAP net income (loss) $ 2,875 $ 3,140
======= ========
<CAPTION>
(in thousands) THREE MONTHS ENDED SEPTEMBER 30,
2000 1999
---- ----
<S> <C> <C>
Statutory net income $ 1,177 $ 1,425
Adjustments to GAAP for life insurance companies:
Statutory interest maintenance reserve (42) (60)
Investment income and realized gains(losses) (385) 208
Policyowner benefits 643 147
Deferred policy acquisition costs (379) (1,045)
Deferred income taxes 274 106
Other, net (43) (4)
------- --------
GAAP net income (loss) $ 1,245 $ 777
======= ========
<CAPTION>
SEPTEMBER 30, 2000 DECEMBER 31, 1999
------------------ -----------------
<S> <C> <C>
Adjustments to GAAP for life
Insurance companies: $40,976 $ 41,346
Valuation of investments (2,834) (2,185)
Deferred policy acquisition costs 26,385 27,893
Future policy benefits and
Contractholder deposit funds (9,822) (10,547)
Deferred income taxes (1,787) (1,674)
Statutory interest maintenance
Reserve 305 554
Statutory asset valuation reserve 1,229 1,210
Other, net 433 (149)
------- --------
GAAP equity $54,885 $ 56,448
======= ========
</TABLE>
The NAIC has codified statutory accounting practices, which are expected to
constitute the only source of prescribed statutory accounting practices and are
effective in 2001. Codification will change prescribed statutory accounting
practices and may result in changes to the accounting practices that insurance
enterprises use to prepare their statutory financial statements. The changes of
codification will not have a material impact on statutory surplus.
16
<PAGE>
(5) COMMITMENTS AND CONTINGENT LIABILITIES
The Company is involved in pending and threatened litigation in the normal
course of its business in which claims for monetary and punitive damages have
been asserted. Although there can be no assurances, at the present time the
Company does not anticipate that the ultimate liability arising from such
pending or threatened litigation, after consideration of provisions made for
potential losses and costs of defense, will have a material adverse effect on
the financial condition or operating results of the Company.
Under insurance guaranty fund laws in each state, the District of Columbia and
Puerto Rico, insurers licensed to do business can be assessed by state
insurance guaranty associations for certain obligations of insolvent insurance
companies to policyholders and claimants. Recent regulatory actions against
certain large life insurers encountering financial difficulty have prompted
various state insurance guaranty associations to begin assessing life insurance
companies for the deemed losses. Most of these laws do provide, however, that
an assessment may be excused or deferred if it would threaten an insurer's
solvency and further provide annual limits on such assessments. Part of the
assessments paid by the Company and its subsidiaries pursuant to these laws may
be used as credits for a portion of the associated premium taxes.
17
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
CAUTIONARY STATEMENT
This Form 10-Q includes forward-looking statements by the Company under the
Private Securities Litigation Reform Act of 1995. These statements are not
matters of historical fact; they relate to such topics as future product sales,
Year 2000 compliance, volume growth, market share, market risk and financial
goals. It is important to understand that these forward-looking statements are
subject to certain risks and uncertainties that could cause actual results to
differ materially from those that the statements anticipate. These risks and
uncertainties may concern, among other things:
- Heightened competition, particularly in terms of price, product features,
and distribution capability, which could constrain the Company's growth and
profitability.
- Changes in interest rates and market conditions.
- Regulatory and legislative developments.
- Developments in consumer preferences and behavior patterns.
- The Company's ability to identify and address any remaining Year 2000 issues
successfully, in a timely manner, and at reasonable cost. They also may
concern the ability of the Company's vendors, suppliers, other service
providers, and customers to successfully address any of their own remaining
Year 2000 issues in a timely manner.
RESULTS OF OPERATIONS
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2000 COMPARED TO 1999:
The Company had net income of $1,245,000 and $2,875,000 for the three and nine
month periods ended September 30, 2000, respectively, as compared to $777,000
and $3,140,000 for the same periods ended September 30, 1999. The net increase
in earnings of $468,000 for the quarter is primarily due to the additional
operating expenses incurred in the third quarter of 1999 when the Company
transitioned insurance operations to its parent, Sun Life (U.S.). The decrease
in operating expenses for the three months ended September 30, 2000 is
partially offset by unfavorable claims experience that resulted in increased
payments to policyholders in the Group segment. The decrease in earnings of
$265,000 for the nine month period ended September 30, 2000 was primarily due
to the effect unfavorable market conditions had on the Wealth Management
segment. The results by segment are discussed in more detail below.
NET INCOME BY SEGMENT
The Company's net income from operations reflects the operations of its four
business segments: the Wealth Management segment, the Individual Protection
segment, the Group Protection segment and the Corporate segment.
The following table provides a summary of net income from operations by
segment, which is discussed more fully below (in thousands):
18
<PAGE>
<TABLE>
<CAPTION>
3 MONTHS ENDED 9 MONTHS ENDED $ CHANGE
2000 1999 2000 1999 3 MONTHS 9 MONTHS
---- ---- ---- ---- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Wealth Management $ 914 $(119) $1,644 $1,527 $1,033 $ 117
Individual Protection 35 163 (52) 177 (128) (229)
Group Protection 226 585 891 893 (359) (2)
Corporate 70 148 392 543 (78) (151)
------ ----- ------ ------ ------ -----
$1,245 $ 777 $2,875 $3,140 $ 468 $(265)
====== ===== ====== ====== ====== =====
</TABLE>
WEALTH MANAGEMENT SEGMENT
The Wealth Management segment focuses on the savings and retirement needs of
individuals preparing for retirement or who have already retired. It primarily
markets to upscale consumers in New York, selling individual and variable
annuities. Its major product lines, "Regatta" and "Futurity," are combination
fixed/variable annuities. In these combination annuities, contractholders have
the choice of allocating payments either to a fixed account, which provides a
guaranteed rate of return, or to variable accounts. Withdrawals from the fixed
account are subject to market value adjustment. In the variable accounts, the
contractholder can choose from a range of investment options and styles. The
return depends upon investment performance of the options selected. Investment
funds available under Regatta products are managed by Massachusetts Financial
Services Company ("MFS"), an affiliate of the Company. Investment funds
available under Futurity products are managed by several investment managers,
including MFS and Sun Capital Advisers, Inc., a subsidiary of Sun Life (U.S.).
Net income increased by $1,033,000 and $117,000 for the three and nine month
periods ended September 30, 2000 as compared to the same periods in 1999. The
large increase for the quarter was primarily due to the consolidation of the
Company's customer service and accounting functions with its parent, Sun Life
(U.S.) which occurred during the third quarter of 1999. One-time charges
incurred in connection with this consolidation totaled approximately $800,000
and consisted primarily of: (1) severance and employee benefit costs; (2)
termination fee associated with a lease cancellation and; (3) furniture and
equipment write-offs. The year to date results also reflect the 1999 one-time
charges, but the gain is offset by increased amortization of deferred
acquisition costs ("DAC"), decreased net investment income and net realized
investment gains. Decreased separate account investment performance lowers the
expected future gross profits which in turn increases the current period
amortization. The increase in DAC amortization year to date was $567,000 for
the nine month period ended September 30, 2000. Net investment income and net
realized investment gains decreased by $1,182,000 for the nine month period
ended September 30, 2000 over the same period in 1999.
19
<PAGE>
Year to date net deposits of annuity products decreased by $24.9 million as
compared with the nine months ended September 30, 1999. The decrease in net
deposits resulted from increases in annuity surrenders in 2000. The surrenders
are primarily related to older products which are no longer actively marketed.
The Company expects that as the separate account block of business continues to
grow, from both net deposits and asset appreciation, and as an increasing
number of accounts are no longer subject to surrender charges, surrenders will
tend to increase.
Total new deposits to fixed and variable annuities also decreased for the nine
months ended September 30, 2000 as compared to the same period in 1999. The
Company recently introduced its Futurity line of products. The Company expects
that sales of the Futurity product will increase in the future based on
management's beliefs that market demand is growing for multi-manager variable
annuity products, and that the marketplace will continue to respond favorably
to introductions of new Futurity products and product enhancements.
INDIVIDUAL PROTECTION SEGMENT
The only individual products offered by the Company are from conversions from
the group life products. Net income from the Individual Protection segment
decreased by $128,000 and $229,000 for the three and nine month periods ended
September 30, 2000 as compared to the same periods in 1999, primarily due to
higher death benefits.
GROUP PROTECTION SEGMENT
The Group Protection segment focuses on providing life and disability insurance
to small and medium size employers as part of those companies' employee benefit
programs. Unfavorable claims experience in the third quarter of 2000 is the key
contributor to the decrease in net income of $359,000 and $2,000 for the three
and nine months ended September 30, 2000 as compared to the same periods in
1999.
CORPORATE SEGMENT
The Corporate segment includes the unallocated capital of the Company and items
not otherwise attributable to the other segments. For the three and nine months
ended September 30, 2000, net income from operations for the Corporate segment
decreased by $78,000 and $151,000, respectively, as compared to the same period
in 1999. During the third quarter of 2000, other operating expenses increased
by $244,000 and was partially offset by related tax benefits.
FINANCIAL CONDITION & LIQUIDITY
ASSETS
The Company's total assets are comprised of those held in its general account
and those held in its separate accounts. General account assets support general
account liabilities. Separate accounts are investment vehicles for the
20
<PAGE>
Company's annuity contracts. Policyholders may choose from among various
investment options offered under these contracts according to their individual
needs and preferences. Policyholders assume the investment risks associated
with these choices. Separate account assets are not available to fund the
liabilities of the general account.
General account assets decreased by 0.6% from December 31, 1999 to September
30, 2000 and variable separate account assets decreased by 1.7%. These
decreases are due to net withdrawals from the Company's fixed and variable
annuity products.
CAPITAL RESOURCES
CAPITAL ADEQUACY
The National Association of Insurance Commissioners ("NAIC") adopted
regulations at the end of 1993 that established minimum capitalization
requirements for insurance companies, based on risk-based capital ("RBC")
formulas as applied to statutory surplus. These requirements are intended to
identify undercapitalized companies, so that specific regulatory actions can be
taken on a timely basis. The RBC formula for life insurance companies
calculates capital requirements related to asset, insurance, interest rate, and
business risks. According to the RBC calculation, the Company's capital was
well in excess of its required capital at year-end 1999 and at September 30,
2000.
LIQUIDITY
The Company's liquidity requirements are generally met by funds from
operations. The Company's main uses of funds are to pay out death benefits and
other maturing insurance and annuity contract obligations; to make pay-outs on
contract terminations; to purchase new investments; to fund new business
ventures; and to pay normal operating expenditures and taxes. The Company's
main sources of funds are premiums and deposits on insurance and annuity
products; proceeds from the sales of investments; income from investments; and
repayments of investment principal.
In managing its general account assets in relation to its liabilities, the
Company has segmented these assets by product or by groups of products. The
Company manages each segment's assets based on an investment policy that it has
established for that segment. Among other matters, this investment policy
considers liquidity requirements and provides cash flow estimates. The Company
reviews these policies quarterly.
The Company's liquidity targets are intended to enable it to meet its
day-to-day cash requirements. On a quarterly basis, the Company compares its
total liquid assets to its total demand liabilities. Liquid assets comprise
cash and assets that could quickly be converted to cash should the need
arise. These assets include short-term investments and other current assets
and investment-grade bonds. The Company's policy is to maintain a liquidity
ratio in excess of 100%. Based on its ongoing liquidity analyses, the Company
believes that its available liquidity is more than sufficient to meet its
liquidity needs.
21
<PAGE>
OTHER MATTERS
DEMUTUALIZATION
The Company's ultimate parent as of December 31, 1999, Sun Life Assurance
Company of Canada ("SLOC") completed its demutualization on March 22, 2000. As
a result of the demutualization, a new holding company, Sun Life Financial
Services of Canada Inc. ("SLF") is now the ultimate parent of SLOC and the
Company. SLF, a corporation organized in Canada, is a reporting company under
the Securities Exchange Act of 1934, as amended, with common shares listed on
the Toronto, New York, London, and Manila stock exchanges.
YEAR 2000 COMPLIANCE
The statements in this section include "Year 2000 Readiness Disclosures" within
the meaning of the Year 2000 Information and Readiness Disclosure Act.
During the fourth quarter of 1996, the Company, SLOC and affiliates began a
comprehensive analysis of information technology ("IT") and non-IT systems,
including hardware, software, data, data feed products, and internal and
external supporting services, to address the ability of these systems to
correctly process date calculations through the year 2000 and beyond. The
Company created a full-time Year 2000 project team in early 1997 to manage this
endeavor across the Company. This team, which worked with dedicated personnel
from all business units and with the legal and audit departments, reported
directly to the Company's senior management on a monthly basis. In addition,
the Company's Year 2000 project was periodically reviewed by internal and
external auditors.
Relevant systems were identified and their components inventoried, needed
resolutions were documented, timelines and project plans were developed, and
remediation and testing were completed. All of the Company's critical systems
were assessed, fixed where necessary, tested, and, based on those tests, are
considered to be Year 2000 compliant. The Company regards Year 2000 compliance
as meaning that its business systems have passed tests and have operated
accurately and will continue to operate accurately after January 1, 2000 with
respect to Year 2000 issues.
In mid-1997, the Company's Year 2000 project team contacted all key vendors to
obtain their representation that the products and services provided would not
have a Year 2000 issue. Where appropriate, vendor testing was conducted. In
addition, the project team worked with critical business partners, such as
third-party administrators, investment property managers, investment mortgage
correspondents, and others, with the goal of verifying that these partners
would continue to be able to support the Company's business during and after
the Year 2000.
Non-IT applications, including building security, HVAC systems, and other such
systems, as well as IT applications, were tested. Compliant client server and
mainframe environments were used to allow for testing of critical dates such as
December 31, 1999, January 1, 2000, February 28, 2000, February 29, 2000 and
March 1, 2000 without impact to the Company's production environment.
The Company has completed an assessment of its systems, and has not identified
22
<PAGE>
any significant Year 2000 problems. No material problems were encountered on
key dates including December 31, 1999, January 1, 2000, January 31, 2000 and
February 28, 2000 through March 1, 2000. Although we continue to be free of any
Significant Year 2000 issues, the Company will continue to monitor its systems
over the coming months as part of its normal practices. The Company does not
currently anticipate that it will experience any material Year 2000 problems,
however there can be no assurance that such an issue will not arise. Factors
giving rise to this uncertainty include loss of knowledgeable technical
resources, failure to identify all susceptible system processing, compliance
issues of third parties whose systems and operations affect the Company, and
other similar uncertainties. A possible worst-case scenario might include
identification of a material Year 2000 issue in one or more of the Company's
systems. Such a scenario could result in disruption to the Company's
operations. Consequences of such disruption could include, among other
possibilities, the inability to update customers' accounts, process payments
and other financial transactions; and the inability to report accurate data to
customers, management, regulators, and others. Consequences also could include
business interruptions or shutdowns, reputational harm, increased scrutiny by
regulators, and litigation related to Year 2000 issues. Such potential
consequences, depending on their nature and duration, could have an impact on
the Company's results of operations and financial position.
As of September 30, 2000, the Company has expended, cumulatively, approximately
$288,000 on its Year 2000 effort.
23
<PAGE>
PART II: OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K
(a) The following exhibits are incorporated by reference unless otherwise
indicated:
EXHIBIT NO.
-----------
27 Financial Data Schedule (filed herewith)
24
<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
(Registrant)
Date November 14, 2000 /s/ Davey S. Scoon
-------------------------------
Davey S. Scoon
Vice President Finance,
Controller and Treasurer
Date November 14, 2000 /s/ Michael K. Moran
--------------------------------
Michael K. Moran
Assistant Vice President Finance
