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 March 31, 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
(State or Other Jurisdiction, Incorporation or Organization)
36-2608394
(IRS Employer Identification No.)
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
$20 per share: 80,000 shares outstanding.
Allstate Life Insurance Company of New York
(Registrant)
INDEX
Page No.
Cover Page
Index
PART I - Financial Information
Item 1. Financial Statements
Statements of Financial Position
March 31, 1995 (Unaudited) and December 31, 1994 1
Statements of Income (Unaudited)
Periods Ended March 31, 1995 and March 31, 1994 2
Statements of Cash Flows (Unaudited)
Periods Ended March 31, 1995 and March 31, 1994 3
Notes to Financial Statements 4
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations 5
PART II - Other Information
Item 1. Legal Proceedings 7
Item 2. Change in Securities 7
Item 3. Defaults Upon Senior Securities 7
Item 4. Submission of Matters to a Vote of Security Holders 7
Item 5. Other Information 7
Item 6. Exhibits and Reports on Form 8-K 7
Signature Page
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
STATEMENTS OF FINANCIAL POSITION
March 31
(Unaudited) December 31,
($ in thousands) 1995 1994
---------- -----------
Assets
Investments
Fixed income securities:
Held to maturity, at amortized cost
(fair value $618,126 and $583,000) $ 610,452 $ 601,359
Available for sale, at fair value
(amortized cost $496,021 and $468,518) 498,850 457,018
Mortgage loans 84,767 86,435
Policy loans 20,927 20,500
Real estate 1,164 0
Short-term 17,758 7,212
---------- ----------
Total investments 1,233,918 1,172,524
Deferred policy acquisition costs 52,154 50,699
Accrued investment income 14,994 16,518
Reinsurance recoverable 10,262 10,365
Deferred income taxes 14,958 17,443
Cash 2,470 1,763
Other assets 2,897 4,763
Separate Accounts 182,734 175,918
---------- ----------
Total assets $1,514,387 $1,449,993
---------- ----------
Liabilities
Reserve for life insurance policy benefits $ 674,381 626,316
Contractholder funds 478,491 483,812
Other liabilities and accrued expenses 14,109 13,304
Net payable to affiliates 2,406 1,402
Separate Accounts 182,734 175,918
---------- ----------
Total liabilities 1,352,121 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 (losses) gains 1,873 (6,891)
Retained income 112,606 108,345
---------- ----------
Total shareholder equity 162,266 149,241
---------- ----------
Total liabilities and shareholder equity $1,514,387 $1,449,993
---------- ----------
---------- ----------
See notes to financial statements.
1
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
STATEMENTS OF INCOME
Three Months Ended
March 31
(Unaudited)
($ in thousands) 1995 1994
---------- -----------
Revenues
Premium income $ 47,322 $ 19,525
Contract charges 4,294 4,666
Investment income, less investment expense 25,227 23,726
Realized capital gains and losses (1,615) 1,475
---------- -----------
75,228 49,392
---------- -----------
---------- -----------
Costs and expenses
Benefits to policyholders and beneficiaries 9,768 9,009
Provision for policy benefits and interest
credited to contractholders 53,138 26,267
Policy acquisition costs and operating
expenses 5,902 5,786
---------- -----------
68,808 41,062
---------- -----------
---------- -----------
Income before income taxes 6,420 8,330
Income tax expense 2,159 2,867
---------- -----------
Net income $ 4,261 $ 5,463
---------- -----------
---------- -----------
See notes to financial statements.
2
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
STATEMENTS OF CASH FLOW
Three Months Ended
March 31
(Unaudited)
------------------------
($ in thousands) 1995 1994
---------- ----------
Cash flows from operating activities:
Net income $ 4,261 $ 5,463
Adjustments to reconcile net income to net
cash provided by operating activities:
Realized capital gains 1,615 (1,475)
Depreciation, amortization and other
noncash items (5,201) (4,272)
Increase in policy benefit and other
insurance reserves 52,279 24,080
Increase in deferred policy acquisition
costs (2,216) (871)
(Increase) decrease in accrued
investment income 1,524 1,265
Change in deferred income taxes (2,235) (2,019)
Changes in other operating assets and
liabilities 3,764 3,637
---------- ----------
Net cash provided by operating activities 53,791 25,808
---------- ----------
Cash flows from investing activities:
Proceeds from sales
Fixed income securities available for sale 3,463 7,235
Investment collections
Fixed income securities available for sale 9,069 23,421
Fixed income securities held to maturity 2,305 1,844
Mortgage loans 1,833 4,498
Investment purchases
Fixed income securities available for sale (39,489) (32,251)
Fixed income securities held to maturity (6,849) (17,592)
Mortgage loans (2,895) (1,519)
Net change in short-term investments (10,546) 7,196
Change in other investments (441) (14)
---------- ----------
Net cash used in investing activities (43,550) (7,182)
---------- ----------
Cash flows from financing activities:
Payments received under investment contracts 15,545 8,297
Interest credited to investment contracts 4,181 4,650
Payments on maturity of investment contracts
and other charges (29,260) (22,107)
---------- ----------
Net cash used by financing activities (9,534) (9,160)
---------- ----------
Net increase (decrease) in cash 707 9,466
Cash at beginning of year 1,763 2,457
---------- ----------
Cash at end of year $ 2,470 $ 11,923
---------- ----------
---------- ----------
See notes to financial statements.
3
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO FINANCIAL STATEMENTS
1. Financial Statements
The Statement of Financial Position as of March 31, 1995, the
Statements of Income for the three-month periods ended March 31, 1995 and
1994, and the Statements of Cash Flow for the three-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.
4
Allstate Life Insurance Company of New York
Management's Discussion and Analysis
of Financial Condition and Results of Operations
Three Months Ended March 31, 1995
General
Allstate Life Insurance Company of New York ("the Company") is wholly
owned by a wholly-owned subsidiary ("Parent") of Allstate Insurance
Company ("Allstate"). 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, increased $27.8 million or 63.9% for the first quarter of
1995 to $71.3 million from $43.5 million for the same period in 1994. The
increase was primarily attributable to higher sales of structured
settlement products. Premium income and contract charges, which under
generally accepted accounting principles are significantly influenced by
the type of products sold, increased $27.4 million for the three months
ended March 31, 1995 to $51.6 million, compared to $24.2 million for the
same period in 1994. The increase was primarily related to the level of
structured settlements sold with life contingencies.
Pre-tax net investment income in the first quarter of 1995 increased
6.3% to $25.2 million, compared to $23.7 million for the same period in
1994. The increase was primarily related to the 6.0% growth in invested
assets as compared to March 31, 1994.
In the first quarter, the Company experienced after-tax capital
losses of $1.0 million compared with after-tax capital gains of $1.0
million in 1994. The losses were due to writedowns of commercial
mortgages and dispositions 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 and interest credited to
contractholders, which under generally accepted accounting principles are
significantly influenced by the type of product sold, increased $26.8
million for the three months ended March 31, 1995 to $53.1 million,
compared with $26.3 million for the same period in 1994. The increase is
primarily related to the level of structured settlements sold with life
contingencies.
Net income decreased $1.2 million to $4.3 million for the three-month
period of 1995, from $5.5 million for the same period in 1994. First
quarter 1995 net income included a nonrecurring after-tax benefit of $197
thousand attributable to a reduced rate of amortization of deferred
acquisition costs.
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
5
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.
Problem fixed income investments include securities in default with
respect to principal and/or interest and/or securities issued by companies
that went into bankruptcy subsequent to the Company's acquisition of the
securities. Potential problem fixed income investments are current with
respect to contractual principal and/or interest, but because of other
facts and circumstances, management has serious doubts regarding the
borrower's ability to pay future interest and principal which causes
management to believe these securities may be classified as problem in the
future. At March 31, 1995, total problem and potential problem fixed
income securities were $7.9 million. There were no problem and potential
problem fixed income securities at March 31, 1994.
The Company's commercial mortgage portfolio consists exclusively of
loans secured by first mortgages on developed, commercial real estate,
substantially all of which are non-recourse to the borrowers. There are
no loans to joint ventures in which the Company is a part owner nor are
there loans for construction or undeveloped land. Loan underwriting
standards at origination included criteria and objectives to maintain
geographic dispersion, diversification by property-type, and evaluation of
the creditworthiness of the borrowers.
The Company closely monitors its commercial mortgage loan portfolio
on a loan-by-loan basis. An important part of the monitoring process is
to regularly prepare individual discounted cash flow projections to
estimate the underlying collateral values for each loan. These cash flow
projections are based on property-specific information such as current
rent rolls and market-specific assumptions such as future rental, discount
and exit capitalization rates. Problem commercial mortgage loans include
loans that are in foreclosure, have a principal or interest payment over
60 days past due, or are current but considered in-substance foreclosed.
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
which causes management to believe these loans may be classified as
problem or restructured in the future. Total problem and potential
problem loans were $11.8 million and $12.5 million at March 31, 1995 and
1994, respectively, and reserves of $2.2 million and $.7 million,
respectively, were established for these loans at those dates.
The majority of the Company's liabilities consist of contractholder
funds and reserves for life insurance policy benefits. These reserves
increased 3.9% from December 31, 1994 to March 31, 1995 primarily as a
result of sales of universal life, structured settlements, and traditional
life insurance products. In addition, Separate Account balances increased
3.9% in the period due to sales of flexible premium deferred variable
annuity contracts and transfers from fixed annuities to variable
annuities.
The Company generates substantial positive cash flows from operations
and financing activities. The primary sources of cash flow are insurance
premiums, annuity deposits, investment income and the maturity and sale of
investments. Insurance premiums and deposits are received in advance of
the time when claims and policyholders' benefits are paid. The resulting
cash flow is invested until required to satisfy policyholder benefits.
6
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.
3. Incorporated by reference to previously filed Form S-1
Registration Statement, No. 33-47245, April 15, 1992.
4. Incorporated by reference to previously filed Form S-1
Registration Statement, No. 33-47245, November 13, 1992.
10. Incorporated by reference to previously filed Form S-1
Registration Statement, No. 33-47245, November 13, 1992.
11. Not Applicable.
15. Not Applicable.
18. Not Applicable.
19. Not Applicable.
22. Not Applicable.
23. Incorporated by reference to previously filed Form S-1
Registration Statement, No. 33-47245, November 13, 1992.
24. Not Applicable.
27. Filed herewith.
99. Not Applicable.
7
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
__Louis G. Lower, II__ President and Chairman May 12, 1995
LOUIS G. LOWER, II (Principal Executive Officer)
__Barry S. Paul___ Assistant Vice President May 12, 1995
BARRY S. PAUL (Chief Accounting Officer)
