UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
_X_ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1995
OR
___ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
Commission file number 33-47245
Allstate Life Insurance Company of New York
(Exact name of Registrant as specified in its charter)
New York 36-2608394
(State or Other Jurisdiction,(IRS Employer Identification No.)
Incorporation or Organization)
One Allstate Drive
P.O. Box 9095
Farmingville, New York 11738
_______________________________________________________
(Address of Principal Executive Offices) (Zip Code)
516.451.5300
(Registrant's Telephone Number, including Area Code)
Securities registered pursuant to Section 12(b) of the Act: NONE
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 ___
State the aggregate market value of the voting stock held by non-
affiliates of the registrant: NONE
Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of March 31, 1995: Common stock, par value of
$20 per share: 80,000 shares outstanding.
<PAGE>
Allstate Life Insurance Company of New York
(Registrant)
INDEX
Page
Cover Page
Index
PART I - Financial Information
Item 1. Financial Statements
Statements of Financial Position
June 30, 1995 (Unaudited) and December 31, 1994 1
Statements of Income (Unaudited)
Periods Ended June 30, 1995 and March 31, 1994 2
Statements of Cash Flows (Unaudited)
Periods Ended June 30, 1995 and March 31, 1994 3
Notes to Financial Statements 4
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations 5
PART II - Other Information
Item 1. Legal Proceedings 8
Item 2. Change in Securities 8
Item 3. Defaults Upon Senior Securities 8
Item 4. Submission of Matters to a Vote of Security Holders 8
Item 5. Other Information 8
Item 6. Exhibits and Reports on Form 8-K 8
Signature Page
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
STATEMENTS OF FINANCIAL POSITION
June 30
(Unaudited) December 31,
($ in thousands) 1995 1994
Assets
Investments
Fixed income securities:
Held to maturity, at amortized cost
(fair value $699,121 and $583,000) $ 629,107 $ 601,359
Available for sale, at fair value
(amortized cost $506,557 and
$468,518) 539,632 457,018
Mortgage loans 83,606 86,435
Policy loans 21,470 20,500
Real estate 1,160
Short-term 17,851 7,212
Total investments 1,292,826 1,172,524
Deferred policy acquisition costs 52,448 50,699
Accrued investment income 16,697 16,518
Reinsurance recoverable 9,698 10,365
Deferred income taxes 5,641 17,443
Cash 1,704 1,763
Other assets 2,932 4,763
Separate Accounts 195,438 175,918
Total assets $1,577,384 $1,449,993
Liabilities
Reserve for life insurance policy
benefits $ 702,689 626,316
Contractholder funds 480,116 483,812
Other liabilities and accrued expenses 11,662 13,304
Net payable to affiliates 1,588 1,402
Separate Accounts 195,438 175,918
Total liabilities 1,391,493 1,300,752
Shareholder equity
Common stock, $25 par, 80,000 shares
authorized, issued and outstanding 2,000 2,000
Additional capital paid-in 45,787 45,787
Unrealized net capital gains (losses) 21,064 (6,891)
Retained income 117,040 108,345
Total shareholder equity 185,891 149,241
Total liabilities and shareholder
equity $1,577,384 $1,449,993
See notes to financial statements.
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
STATEMENTS OF CASH FLOW
Six Months Ended
June 30
(Unaudited)
($ in thousands) 1995 1994
Cash flows from operating activities:
Net income $ 8,695 $ 9,422
Adjustments to reconcile net income to net
cash provided by operating activities:
Realized capital losses (gains) 2,133 (1,197)
Depreciation, amortization and other
noncash items (10,647) (8,889)
Increase in reserve for policy benefits
and contractholder funds 85,153 49,704
Increase in deferred policy acquisition
costs (3,265) (2,435)
(Increase) decrease in accrued
investment income (343) 697
Change in deferred income taxes (3,298) (2,673)
Changes in other operating assets and
liabilities 1,004 (19,445)
Net cash from operating activities 79,432 25,184
Cash flows from investing activities:
Proceeds from sales
Fixed income securities available
for sale 6,097 7,235
Investment collections
Fixed income securities available
for sale 14,931 47,178
Fixed income securities held
to maturity 2,864 4,852
Mortgage loans 2,475 6,288
Investment purchases
Fixed income securities available
for sale (57,638) (65,054)
Fixed income securities held
to maturity (21,273) (37,376)
Mortgage loans (2,895) (10,119)
Net change in short-term investments (10,639) 36,949
Change in other investments (937) (749)
Net cash from investing activities (67,015) (10,796)
Cash flows from financing activities:
Payments received under investment
contracts 23,820 20,394
Interest credited to investment contracts 9,640 10,809
Payments on maturity of investment contracts
and other charges (45,936) (43,898)
Net cash from financing activities (12,476) (12,695)
Net (decrease) increase in cash (59) 1,693
Cash at beginning of year 1,763 2,457
Cash at end of year $ 1,704 $ 4,150
See notes to financial statements.<PAGE>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
STATEMENTS OF INCOME
Three Months Ended Six Months Ended
June 30 June 30
(Unaudited) (Unaudited)
($ in thousands) 1995 1994 1995 1994
Revenues
Premium income $ 29,285 $ 22,660 $ 76,607 $ 42,185
Contract charges 5,544 4,599 9,838 9,265
Investment income, less
investment expense 25,455 24,236 50,682 47,962
Realized capital gains
and losses (518) (278) (2,133) 1,197
59,766 51,217 134,994 100,609
Costs and expenses
Provision for policy
benefits 46,865 39,368 109,771 74,644
Policy acquisition
costs and operating
expenses 6,275 5,843 12,177 11,629
53,140 45,211 121,948 86,273
Income before income taxes 6,626 6,006 13,046 14,336
Income tax expense 2,192 2,047 4,351 4,914
Net income $ 4,434 $ 3,959 $ 8,695 $ 9,422
See notes to financial statements.
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO FINANCIAL STATEMENTS
1. Financial Statements
The Statement of Financial Position as of June 30, 1995, the Statements
of Income for the three-month and six-month periods ended June 30, 1995 and
1994, and the Statements of Cash Flow for the six-month periods then ended are
unaudited. The interim financial statements reflect all adjustments
(consisting only of normal recurring accruals) which are, in the opinion of
management, necessary for a fair statement of the results for the interim
periods presented. The financial statements should be read in conjunction with
the financial statements and notes thereto included in the Allstate Life
Insurance Company of New York 1994 Financial Statements. The results of
operations for the interim periods should not be considered indicative of
results to be expected for the full year.
2. Accounting Change
The Company adopted Statement of Financial Accounting Standards ("SFAS")
No. 114, "Accounting by Creditors for Impairment of a Loan" and SFAS No. 118,
"Accounting by Creditors for Impairment of a Loan-Income Recognition and
Disclosure" on January 1, 1995. SFAS No. 114 defines impaired loans as loans
in which it is probable that a creditor will be unable to collect all amounts
contractually due under the terms of the loan agreement and requires that
impairment be measured based on the present value of expected future cash flows
discounted at the loan's effective interest rate. SFAS No. 118 amends SFAS No.
114 to allow a creditor to use existing methods for recognizing interest income
on impaired loans. The adoption of these statements did not have a material
impact on results of operations or financial position.
<PAGE>
Allstate Life Insurance Company of New York
Management's Discussion and Analysis
of Financial Condition and Results of Operations
Three- and Six-Month Periods Ended June 30, 1995
General
Allstate Life Insurance Company of New York ("the Company") is a wholly
owned subsidiary of Allstate Life Insurance Company ("Allstate Life").
Allstate Life is wholly-owned by Allstate Insurance Company, a wholly-owned
subsidiary of The Allstate Corporation ("the Corporation"). Sears, Roebuck and
Co. distributed its 80.3% ownership in the Corporation on June 30, 1995 to
Sears common shareholders through a tax-free dividend. As a result of the
distribution, Sears no longer has an ownership interest in the Corporation.
The Company markets insurance products through the established agency
facilities of Allstate and through direct marketing. It also markets annuity
products through Dean Witter Reynolds, Inc. account executives.
Results of Operations
Statutory premiums, which include premiums and deposits received for all
products, decreased $1.5 million or 3.1% for the second quarter of 1995 to
$47.5 million from $49.0 for the same period in 1994. The decrease was
primarily related to lower sales of flexible premium deferred variable annuity
contracts. For the first six months of 1995, statutory premiums increased to
$118.8 million from $92.5 million for the same period in 1994. The increase
was primarily attributable to higher sales of structured settlement products
partially offset by lower sales of flexible premium deferred variable annuity
contracts during the first quarter. Premium income and contract charges under
generally accepted accounting principles ("GAAP") were $34.8 million for the
second quarter and $86.4 million for the first six months, compared to $27.3
million and $51.5 million for the same periods in 1994. Under GAAP, revenues
exclude deposits on most annuities and premiums on universal life insurance
policies and will vary with the mix of products sold during the period. The
increases were primarily related to the level of structured settlements sold
with life contingencies.
Pre-tax net investment income in the second quarter of 1995 increased 5.4%
to $25.5 million, compared to $24.2 million for the same period in 1994. For
the first six months of 1995 pre-tax net investment income increased 5.6% to
$50.7 million, compared to $48.0 million for the same period in 1994. The
increases were primarily related to the 10.2% growth in invested assets as
compared to June 30, 1994.
<PAGE>
In the second quarter, the Company experienced after-tax capital losses
of $337 thousand compared with after-tax capital losses of $181 thousand in
1994. After-tax net capital losses through June 30, 1995 were $1.4 million as
compared with after-tax capital gains of $778 thousand over the six-month
period in 1994. The losses were primarily due to writedowns of commercial
mortgages, partially offset by gains on disposition of fixed income securities.
Fluctuations in realized capital gains and losses are largely a function of
management's view of individual investments and overall market conditions.
Provision for policy benefits, which under generally accepted accounting
principles are significantly influenced by the type of product sold, increased
$7.5 million to $46.9 million for second quarter compared to $39.4 million for
the same period in 1994. For the first six months of 1995, provison for
policy benefits increased $35.2 million to $109.8 million compared to $74.6
million for the same period in 1994. The increases were primarily related to
the level of structured settlements sold with life contingencies.
Net income increased $475 thousand in the second quarter of 1995 to $4.4
million from $4.0 million in 1994. For the first six months of 1995, net
income decreased $727 thousand to $8.7 million from $9.4 million for the same
period in 1994.
Liquidity and Capital Resources
The Company's investment policy places an emphasis on the matching of
assets with related liabilities while also maintaining liquidity. To achieve
an economic balance between assets and liabilities, the investment portfolios
are segmented by type of insurance product.
This strategy places over 90% of the Company's portfolio in fixed income
securities, which includes publicly traded bonds, mortgage-backed securities
and mortgage loans to support the investment-oriented product lines. The
mortgage-backed securities are primarily government agency-backed securities.
The Company also invests in privately placed bonds which have comparable
investment quality as public securities but offer higher yields.
The Company defines problem commercial mortgage loans as loans that are
in foreclosure, have a principal or interest payment over 60 days past due, or
are current but considered in-substance foreclosed. Restructured commercial
loans have modified terms and conditions that were not at prevailing market
rates or terms at the time of the restructuring. Potential problem commercial
mortgage loans are current or less than 60 days delinquent as to contractual
principal and interest payments, but because of other facts and circumstances,
management has serious doubts regarding the borrower's ability to pay future
interest and principal or management believes these loans may be classified as
problem or restructured in the future. At June 30, 1995 and December 31, 1994
total problem, restructured and potential problem loans, net of reserves, were
$9.3 million and $8.4 million, respectively. All of the problem, restructured
and potential problem loans were impaired as of June 30, 1995 (See Notes to
Financial Statements #2).<PAGE>
The majority of the Company's liabilities
consist of contractholder funds
and reserves for life insurance policy benefits. These reserves increased 6.5%
from December 31, 1994 to June 30, 1995 primarily as a result of sales of
universal life, structured settlements, and traditional life insurance
products. In addition, Separate Account balances increased 11.1% in the period
due to favorable investment performance of the Separate Account funds,
transfers from fixed annuities to variable annuities and sales of flexible
premium deferred variable annuity contracts.
Pending Accounting Standards
In March 1995, the Financial Accounting Standards Board issued SFAS No.
121 "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed Of". The statement requires that long-lived assets and
certain identifiable intangibles to be held and used by an entity be reviewed
for impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. The statement requires
that impairment loss be measured for those assets as the amount by which the
carrying amount of the asset exceeds the asset's fair value. This statement
will be adopted in 1996 and is not expected to have a material impact on the
Company's results of operations or financial position
<PAGE>
PART II
Item 1. Legal Proceedings
Allstate Life of New York is not involved in any litigation that is expected
to have a material effect.
Item 2. Changes in Securities
Not applicable.
Item 3. Defaults Upon Senior Securities
Not applicable.
Item 4. Submission of Matters to a Vote of Securities Holders
Not applicable.
Item 5. Other Information
Not applicable.
Item 6. Exhibits, Financial Statements and Reports on Form 8-K
(a) (1) and (2) Financial Statements of registrant are listed on pages
hereof and are filed as part of this Report.
(a) (3) Exhibits
Regulation S-K
2. Not applicable.
4. Exhibits
Allstate Life Insurance Company of New York Flexible Premium Deferred
Annuity Contract, incorporated by reference to Registrant's Form S-1
Registration Statement, Registration No.33-47245, filed November 13, 1992.
11. Not applicable.
15. Not applicable.
16. Not applicable.
18. None.
19. Not applicable.
20. Not applicable.
23. None.
24. Not applicable.
25. Not applicable.
27. Financial Data Schedule
28. None.
(b) Reports on 8-K
No reports on Form 8-K were filed during the second quarter of 1995.<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.
Allstate Life Insurance Company of New York
(Registrant)
Signature Title Date
__/s/Louis G. Lower___ President and Chairman August 11, 1995
LOUIS G. LOWER, II (Principal Executive Officer)
__/s/Barry S. Paul____ Assistant Vice President August 11, 1955
BARRY S. PAUL (Chief Accounting Officer)
<TABLE> <S> <C>
<ARTICLE> 7
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE STMTS OF
FINANCIAL POSITION, STMTS OF CASH FLOWS, STMTS OF INCOME; NOTES THERETO; AND
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINACIAL RESULTS FOR THE PERIODS ENDED
JUNE 30, 1995, JUNE 30, 1994 OR DECEMBER 31, 1994.
</LEGEND>
<CIK> 0000839759
<NAME> ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
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<PERIOD-TYPE> 6-MOS YEAR
<FISCAL-YEAR-END> DEC-31-1995 DEC-31-1994
<PERIOD-START> JAN-01-1995 JAN-01-1994
<PERIOD-END> JUN-30-1995 DEC-31-1994
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