American International
Life Assurance Company of New York
-------------------------------------------------------
VARIABLE ACCOUNT B
ANNUAL REPORT
-------------------------------------------------------
DECEMBER 31, 1995
(Audited)
<PAGE>
AMERICAN INTERNATIONAL LIFE ASSURANCE COMPANY
OF NEW YORK (AI LIFE)
VARIABLE ACCOUNT B
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1995
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Assets:
Investments at Market Value: Shares Cost
Alliance ------ ----
Conservative Investors Portfolio ...................................... 29.251 $ 341 $ 338
Growth Portfolio ...................................................... 25.987 341 349
Growth Investors Portfolio ............................................ 9.627 114 115
Fidelity
Money Market Portfolio ................................................ 181.450 181 181
Asset Manager Portfolio ............................................... 14.562 227 224
Growth Portfolio ...................................................... 3.311 100 100
Overseas Portfolio .................................................... 13.554 227 224
Investment Grade Bond Portfolio ....................................... 18.401 227 226
High Income Portfolio ................................................. 9.493 114 114
Van Eck
Gold and Natural Resources Portfolio .................................. 7.857 114 112
Worldwide Balanced Portfolio .......................................... 22.805 227 228
Dreyfus
Stock Index Portfolio ................................................. 19.566 343 338
------ ------
Total Investments ................................................... $2,556 2,549
Receivable from American International Life
Assurance Company of New York ........................................ 198
------
Total Assets ........................................................ $2,747
======
Equity:
Contract Owners' Equity ................................................. $2,747
------
Total Equity ........................................................ $2,747
======
</TABLE>
See Notes to Financial Statements
<PAGE>
AMERICAN INTERNATIONAL LIFE ASSURANCE COMPANY
OF NEW YORK (AI LIFE)
VARIABLE ACCOUNT B
STATEMENT OF OPERATIONS
For the Period Ended December 31, 1995
<TABLE>
<CAPTION>
Alliance Alliance Alliance
Conservative Growth
Investors Growth Investors
Total Portfolio Portfolio Portfolio
----- --------- --------- ---------
<S> <C> <C> <C> <C>
Investment Income:
Dividends .......................................... $ 10 $ -- $ -- $ --
Expenses:
Mortality & Expense Risk Fees ...................... (1) -- -- --
------- ------- ------- -------
(1) -- -- --
------- ------- ------- -------
Net Investment Income (Loss) ....................... 9 -- -- --
------- ------- ------- -------
Realized and Unrealized Gain (Loss)
on Investments:
Realized Gain (Loss) on Investment
Activity ........................................ (3) -- -- --
Change in Unrealized Appreciation
(Depreciation) .................................. (7) (3) 8 1
------- ------- ------- -------
Net Gain (Loss) on Investments ..................... (10) (3) 8 1
Increase (Decrease) in Net Assets
Resulting From Operations ....................... $ (1 $ (3) $ 8 $ 1
======= ======= ======= =======
</TABLE>
See Notes to Financial Statements
<PAGE>
AMERICAN INTERNATIONAL LIFE ASSURANCE COMPANY
OF NEW YORK (AI LIFE)
VARIABLE ACCOUNT B
STATEMENT OF OPERATIONS
For the Period Ended December 31, 1995
<TABLE>
<CAPTION>
Fidelity Fidelity Fidelity Fidelity Fidelity
Money Asset Investment
Market Manager Growth Overseas Grade Bond
Portfolio Portfolio Portfolio Portfolio Portfolio
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Investment Income:
Dividends................................... $ 7 $ -- $ -- $ -- $ --
Expenses:
Mortality & Expense Risk Fees .............. (1) -- -- -- --
--------- --------- --------- --------- ---------
(1) -- -- -- --
--------- --------- --------- --------- ---------
Net Investment Income (Loss) ............... 6 -- -- -- --
--------- --------- --------- --------- ---------
Realized and Unrealized Gain (Loss)
on Investments:
Realized Gain (Loss) on Investment
Activity................................. -- -- (3) -- --
Change in Unrealized Appreciation
(Depreciation)........................... (3) -- (3) (1)
--------- --------- --------- --------- ---------
Net Gain (Loss) on Investments ............. -- (3) (3) (3) (1)
Increase (Decrease) in Net Assets
Resulting From Operations................ $ 6 $ (3) $ (3) $ (3) $ (1)
========= ========= ========= ========= =========
</TABLE>
See Notes to Financial Statements
<PAGE>
AMERICAN INTERNATIONAL LIFE ASSURANCE COMPANY
OF NEW YORK (AI LIFE)
VARIABLE ACCOUNT B
STATEMENT OF OPERATIONS
For the Period Ended December 31, 1995
<TABLE>
<CAPTION>
Fidelity Van Eck Van Eck Dreyfus
High Gold and Natural Worldwide Stock
Income Resources Balanced Index
Portfolio Portfolio Portfolio Portfolio
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Investment Income:
Dividends........................................... $ -- $ -- $ -- $ 3
Expenses:
Mortality & Expense Risk Fees ...................... -- -- -- --
-------- --------- --------- --------
-- -- -- --
-------- --------- --------- --------
Net Investment Income (Loss) ....................... -- -- -- 3
-------- --------- --------- --------
Realized and Unrealized Gain (Loss)
on Investments:
Realized Gain (Loss) on Investment
Activity......................................... -- -- -- --
Change in Unrealized Appreciation
(Depreciation) .................................. -- (2) 1 (5)
-------- --------- --------- --------
Net Gain (Loss) on Investments ..................... -- (2) 1 (5)
Increase (Decrease) in Net Assets
Resulting From Operations........................ $ -- (2) $ 1 $ (2)
======== ========= ========= ========
</TABLE>
See Notes to Financial Statements
<PAGE>
AMERICAN INTERNATIONAL LIFE ASSURANCE COMPANY
OF NEW YORK (AI LIFE)
VARIABLE ACCOUNT B
STATEMENT OF CHANGES TO NET ASSETS
For the Period Ended December 31, 1995
<TABLE>
<CAPTION>
1995
----------- ----------- ----------- -----------
Alliance Alliance Alliance
Conservative Growth
Investors Growth Investors
Total Portfolio Portfolio Portfolio
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Increase in Net Assets
Operations:
Net Investment Income (Loss) ................................. $ 9 $ -- $ -- $ --
Realized Gain (Loss) on Investment Activity .................. (3) -- -- --
Change in Unrealized Appreciation
(Depreciation) ........................................... (7) (3) 8 1
---------- --------- --------- ---------
Increase (Decrease) in Net Assets Resulting
from Operations .......................................... (1) (3) 8 1
---------- --------- --------- ---------
Capital Transactions:
Contract Deposits ............................................. 3,110 351 351 117
Transfers to the Company for monthly deductions ................ (362) (4) (8) (3)
---------- --------- --------- ---------
Increase (Decrease) in Net Assets
Resulting from Capital Transactions ....................... 2,748 347 343 114
---------- --------- --------- ---------
Total Increase (Decrease) in Net Assets ........................ 2,747 344 351 115
Net Assets, at Beginning of Period ............................. -- -- --
---------- --------- --------- ---------
Net Assets, at End of Period ................................... $ 2,747 $ 344 $ 351 $ 115
========== ========= ========= =========
</TABLE>
See Notes to Financial Statements
<PAGE>
AMERICAN INTERNATIONAL LIFE ASSURANCE COMPANY
OF NEW YORK (AI LIFE)
VARIABLE ACCOUNT B
STATEMENT OF CHANGES TO NET ASSETS
For the Period Ended December 31, 1995
<TABLE>
<CAPTION>
1995
----------- ----------- ----------- ----------- -----------
Fidelity Fidelity Fidelity Fidelity Fidelity
Money Asset Investment
Market Manager Growth Overseas Grade Bond
Portfolio Portfolio Portfolio Portfolio Portfolio
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Increase in Net Assets
Operations:
Net Investment Income (Loss) ......................... $ 6 $ -- $ -- $ -- $ --
Realized Gain (Loss) on Investment Activity .......... -- -- (3) -- --
Change in Unrealized Appreciation
(Depreciation) ................................... -- (3) -- (3) (1)
-------- -------- -------- -------- --------
Increase (Decrease) in Net Assets Resulting
from Operations .................................. 6 (3) (3) (3) (1)
-------- -------- -------- -------- --------
Capital Transactions:
Contract Deposits ..................................... 622 234 148 234 234
Transfers to the Company for monthly deductions ........ (271) (1) (50) -- (3)
-------- -------- -------- -------- --------
Increase (Decrease) in Net Assets
Resulting from Capital Transactions ............... 351 233 98 234 231
-------- -------- -------- -------- --------
Total Increase (Decrease) in Net Assets ................ 357 230 95 231 230
Net Assets, at Beginning of Period ..................... -- -- -- -- --
-------- -------- -------- -------- --------
Net Assets, at End of Period ........................... $ 357 $ 230 $ 95 $ 231 $ 230
======== ======== ======== ======== ========
</TABLE>
See Notes to Financial Statements
<PAGE>
AMERICAN INTERNATIONAL LIFE ASSURANCE COMPANY
OF NEW YORK (AI LIFE)
VARIABLE ACCOUNT B
STATEMENT OF CHANGES TO NET ASSETS
For the Period Ended December 31, 1995
<TABLE>
<CAPTION>
1995
----------- ----------- ----------- -----------
Fidelity Van Eck Van Eck Dreyfus
High Gold and Natural Worldwide Stock
Income Resources Balanced Index
Portfolio Portfolio Portfolio Portfolio
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Increase in Net Assets
Operations:
Net Investment Income (Loss) .......................... $ -- $ -- $ -- $ 3
Realized Gain (Loss) on Investment Activity ........... -- -- -- --
Change in Unrealized Appreciation
(Depreciation) .................................... -- (2) 1 (5)
-------- -------- -------- --------
Increase (Decrease) in Net Assets Resulting
from Operations ................................... 0 (2) 1 (2)
-------- -------- -------- --------
Capital Transactions:
Contract Deposits ...................................... 117 117 234 351
Transfers to the Company for monthly deductions ......... (3) (1) (7) (11)
-------- -------- -------- --------
Increase (Decrease) in Net Assets
Resulting from Capital Transactions ................ 114 116 227 340
-------- -------- -------- --------
Total Increase (Decrease) in Net Assets ................. 114 114 228 338
Net Assets, at Beginning of Period ...................... -- -- -- --
-------- -------- -------- --------
Net Assets, at End of Period ............................ $ 114 $ 114 $ 228 $ 338
======== ======== ======== ========
</TABLE>
See Notes to Financial Statements
<PAGE>
AMERICAN INTERNATIONAL LIFE ASSURANCE COMPANY
OF NEW YORK (AI LIFE)
VARIABLE ACCOUNT B
NOTES TO FINANCIAL STATEMENTS
1. History
Variable Account B (the "Account") is a separate investment account maintained
under the provisions of New York Insurance Law by American International Life
Assurance Company of New York (the "Company"), a subsidiary of American
International Group, Inc. The Account operates as a unit investment trust
registered under the Investment Company Act of 1940, as amended, and supports
the operations of the Company's individual flexible premium variable universal
life insurance policies (the "policies").
The Account invests in shares of Alliance Variable Products Series Fund, Inc.
("Alliance Fund"), Dreyfus Variable Investment Fund ("Dreyfus Fund"), Dreyfus
Stock Index Fund, Fidelity Investments Variable Insurance Products Fund
("Fidelity Trust"), Fidelity Variable Insurance Products Fund II ("Fidelity
Trust II") and Van Eck Investment Trust ("Van Eck Trust"). The assets in the
policies may be invested in the following subaccounts:
Alliance Fund:
Growth and Income Portfolio Fidelity Trust:
Conservative Investors Portfolio Money Market Portfolio
Growth Portfolio High Income Portfolio
Growth Investors Portfolio Growth Portfolio
Overseas Portfolio
Dreyfus Fund:
Zero Coupon 2000 Portfolio Fidelity Trust II:
The Dreyfus Stock Index Fund Investment Grade Bond Portfolio
Asset Manager Portfolio
Van Eck Trust:
Gold and Natural Resources Fund
Worldwide Balanced Fund
The Account commenced operations on May 4, 1995.
The assets of the Account are the property of the Company. The portion of the
Account's assets applicable to the policies are not chargeable with the
liabilities arising out of any other business conducted by the Company.
<PAGE>
In addition to the Account, policy owners may also allocate assets of the
policies to the Guaranteed Account, which is part of the Company's general
account. Amounts allocated to the Guaranteed Account are credited with a
guaranteed rate of interest. Because of exemptive and exclusionary provisions,
interests in the Guaranteed Account have not been registered under the
Securities Act of 1933 and the Guaranteed Account has not been registered as an
investment company under the Investment Company Act of 1940.
2. Significant Accounting Policies
The following is a summary of significant accounting policies followed by the
Account in preparation of the financial statements in conformity with generally
accepted accounting principles.
A. Investment Valuation - The investments in the Funds are stated at market
value which is the net asset value of each of the respective series as
determined at the close of business on the last business day of the period by
the Fund.
B. Accounting for Investments - Investment transactions are accounted for on the
date the investments are purchased or sold. Dividend income is recorded on the
ex-dividend date.
C. Federal Income Taxes - The Company is taxed under federal law as a life
insurance company. The Account is part of the Company's total operations and is
not taxed separately. Under existing federal law, no taxes are payable on
investment income and realized capital gains of the Account.
D. The preparation of the accompanying financial statements required management
to make estimates and assumptions that affect the reported values of assets and
liabilities as of December 31, 1995 and the reported amounts from operations and
policy transactions during 1995. Actual results could differ from those
estimates.
3. Contract Charges
There are charges and deductions which the Company will deduct from each policy.
The deductions from premium are a sales charge of 5% plus the state specific
premium taxes.
Daily charges for mortality and expense risks assumed by the Company are
assessed through the daily unit value calculation and are equivalent on an
annual basis to .90% of the account value of the policies. This charge may be
decreased to not less than .50% in policy years eleven and greater.
On the policies' issue date and each monthly anniversary, the following
deductions are made from the policies' account value:
(a) administrative charges
<PAGE>
(b) insurance charges
(c) supplemental benefit charges.
If the policy is surrendered during the first fourteen policy years, the Company
will deduct a surrender charge based on a percentage of first year premium. A
pro rata surrender charge will be deducted for any partial surrender. An
administrative charge upon partial surrender will be equal to the lessor of
$25.00 or 2% of the amount surrendered.
<PAGE>
AMERICAN INTERNATIONAL LIFE ASSURANCE COMPANY
OF NEW YORK (AI LIFE)
VARIABLE ACCOUNT B
NOTES TO FINANCIAL STATEMENTS (Continued)
4. Purchases of Investments
For the period ended December 31, 1995, investment activity in the Fund was as
follows:
Cost of Proceeds
Shares of Purchases From Sales
- --------- --------- ----------
Alliance Funds:
Conservative Investors Portfolio............... $ 351 $ 10
Growth Portfolio............................... 351 10
Growth Investors Portfolio..................... 117 3
Fidelity Trust Funds:
Money Market Portfolio ........................ 4,552 4,371
Asset Manager Portfolio ....................... 234 7
Growth Portfolio .............................. 148 45
Overseas Portfolio............................. 234 7
Investment Grade Bond Portfolio................ 234 7
High Income Portfolio.......................... 117 3
Van Eck:
Gold and Natural Resources Portfolio........... 117 3
Worldwide Balanced Portfolio................... 234 7
Dreyfus
Stock Index Portfolio.......................... 410 68
<PAGE>
<TABLE>
<CAPTION>
AMERICAN INTERNATIONAL LIFE ASSURANCE COMPANY
OF NEW YORK (AI LIFE)
VARIABLE ACCOUNT B
NOTES TO FINANCIAL STATEMENTS (Continued)
5. Net Increase in Accumulation Units
For the period ended December 31, 1995 transactions in accumulation units of the account were as follows:
Alliance Alliance Alliance Fidelity
Conservative Growth Money
Investors Growth Investors Market
VARIABLE LIFE Portfolio Portfolio Portfolio Portfolio
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Units Purchased ...................................... -- -- -- 311.19
Units Withdrawn ...................................... -- -- (0.34) (26.95)
Units Transferred Between Funds ...................... 35.14 35.14 - 11.71 (248.62)
Net Units Transferred From (To) AI Life .............. -- -- -- --
-------- -------- -------- --------
Net Increase (Decrease) .............................. 35.14 35.14 11.37 35.62
Units, at Beginning of the Period .................... -- -- -- --
-------- -------- -------- --------
Units, at End of the Period .......................... 35.14 35.14 11.37 35.62
======== ======== ======== ========
Unit Value at December 31, 1995 ...................... $ 10.08 $ 10.30 $ 10.05 $ 10.04
======== ======== ======== ========
<CAPTION>
Fidelity Fidelity Fidelity Fidelity
Asset Investment
Manager Growth Overseas Grade Bond
Portfolio Portfolio Portfolio Portfolio
--------- --------- --------- ---------
Units Purchased ...................................... -- -- -- --
Units Withdrawn ...................................... (0.68) (4.93) (0.68) (0.68)
Units Transferred Between Funds ...................... 23.43 14.80 23.43 23.43
Net Units Transferred From (To) AI Life .............. -- -- -- --
-------- -------- -------- --------
Net Increase (Decrease) .............................. 22.75 9.87 22.75 22.75
Units, at Beginning of the Period .................... -- -- --
-------- -------- -------- --------
Units, at End of the Period .......................... 22.75 9.87 22.75 22.75
======== ======== ======== ========
Unit Value at December 31, 1995 ...................... $ 10.11 $ 9.65 $ 10.16 $ 10.09
======== ======== ======== ========
<CAPTION>
Fidelity Van Eck Van Eck Dreyfus
High Gold & Nat Worldwide Stock
Yield Resources Balanced Index
Portfolio Portfolio Portfolio Portfolio
--------- --------- --------- ---------
Units Purchased ...................................... -- -- -- --
Units Withdrawn ...................................... (0.34) (0.34) (0.68) (1.02)
Units Transferred Between Funds ...................... 11.71 11.71 23.43 35.14
Net Units Transferred From (To) AI Life .............. -- -- -- --
-------- -------- -------- --------
Net Increase (Decrease) .............................. 11.37 11.37 22.75 34.12
Units, at Beginning of the Period .................... -- -- -- --
-------- -------- -------- --------
Units, at End of the Period .......................... 11.37 11.37 22.75 34.12
======== ======== ======== ========
Unit Value at December 31, 1995 ...................... $ 10.05 $ 9.96 $ 10.02 $ 9.92
======== ======== ======== ========
</TABLE>
<PAGE>
AMERICAN INTERNATIONAL LIFE ASSURANCE COMPANY
OF NEW YORK (AI LIFE)
VARIABLE LIFE SEPARATE ACCOUNT B
REPORT OF INDEPENDENT ACCOUNTANTS
To the Contract Owners of
American International Life Assurance Company of New York
Variable Life Separate Account B
We have audited the accompanying statements of assets and liabilities of
American International Life Assurance Company of New York Variable Life Separate
Account B comprising the Alliance Conservative Investors, Growth, Growth
Investors; the Fidelity Money Market, Asset Manager, Growth, Overseas,
Investment Grade Bond, High Income; the Van Eck Gold and Natural Resources,
Worldwide Balanced; and the Dreyfus Stock Index Portfolios as of December 31,
1995, and the related statements of operations and changes in net assets for the
period May 4, 1995 (Date of Inception) to December 31, 1995. These financial
statements are the responsibility of the management of Variable Life Separate
Account B. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit 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. Our procedures included
confirmation of investments held at December 31, 1995 by correspondence with the
transfer agents. 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 audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of American International Life
Assurance Company of New York Variable Life Separate Account B as of December
31, 1995, and the results of its operations and the changes in its net assets
for the period May 4, 1995 (Date of Inception) to December 31, 1995 in
conformity with generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
2400 Eleven Penn Center
Philadelphia, Pennsylvania
February 19, 1996
