FORM 10-Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
The registrant meets the conditions set forth in General Instruction H(1)(a) and
(b) of Form 10-Q and is therefore filing this Form with the reduced disclosure
format.
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: March 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission file number: 33-47245
33-65355
33-65381
33-35445
33-24228
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
(Exact name of registrant as specified in its charter)
NEW YORK 35-2608394
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Allstate Drive
Farmingville, New York 11738
(Address of principal executive offices)(Zip Code)
800/256-9392
(Registrant's telephone number, including area code)
Not Applicable
(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.
Yes../X/.. No
Indicate the number of shares of each of the issuer's classes of common
stock, as of March 31, 1998; there were 80,000 shares of common capital stock
outstanding, par value $25 per share all of which shares are held by Allstate
Life Insurance Company.
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
Statements of Financial Position
March 31, 1999(Unaudited) and December 31, 1998.................. 3
Statements of Operations
Three Months Ended March 31, 1999 and
March 31, 1998 (Unaudited)....................................... 4
Statements of Cash Flows
Three Months Ended March 31, 1999 and
March 31, 1998 (Unaudited)................................. 5
Notes to Financial Statements.................................... 6
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS..................... 9
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT
MARKET RISK*..................................................N/A
PART II - OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS..................................................13
Item 2. CHANGES IN SECURITIES AND USE OF PROCEEDS*........................N/A
Item 3. DEFAULTS UPON SENIOR SECURITIES*..................................N/A
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS*..............N/A
Item 5. OTHER INFORMATION..................................................13
Item 6. EXHIBITS AND REPORTS ON FORM 8-K...................................14
SIGNATURE PAGE...............................................................15
*Omitted pursuant to General Instruction H(2) of Form 10-Q.
-2-
<PAGE>
<TABLE>
<CAPTION>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
STATEMENTS OF FINANCIAL POSITION
MARCH 31, DECEMBER 31,
($ in thousands) 1999 1998
------------- -------------
(UNAUDITED)
<S> <C> <C>
ASSETS
Investments
Fixed income securities, at fair value
(amortized cost $1,718,741 and $1,648,972) $ 1,950,660 $ 1,966,067
Mortgage loans 160,902 145,095
Short-term 12,441 76,127
Policy loans 29,985 29,620
------------- -------------
Total investments 2,153,988 2,216,909
Deferred acquisition costs 90,796 87,830
Accrued investment income 21,751 22,685
Reinsurance recoverables 1,996 2,210
Cash 586 3,117
Other assets 8,068 9,887
Separate Accounts 374,545 366,247
------------- -------------
TOTAL ASSETS $ 2,651,730 $ 2,708,885
============= =============
LIABILITIES
Reserve for life-contingent contract benefits $ 1,183,074 $ 1,208,104
Contractholder funds 730,224 703,264
Current income taxes payable 16,943 14,029
Deferred income taxes 11,618 25,449
Other liabilities and accrued expenses 22,364 23,463
Payable to affiliates, net 3,167 38,835
Separate Accounts 374,545 366,247
------------- -------------
TOTAL LIABILITIES 2,341,935 2,379,391
------------- -------------
COMMITMENTS AND CONTINGENT LIABILITIES (NOTE 3)
SHAREHOLDER'S EQUITY
Common stock, $25 par value, 80,000 shares
authorized, issued and outstanding 2,000 2,000
Additional capital paid-in 45,787 45,787
Retained income 205,486 198,801
Accumulated other comprehensive income:
Unrealized net capital gains 56,522 82,906
------------- -------------
TOTAL ACCUMULATED OTHER COMPREHENSIVE
INCOME 56,522 82,906
------------- -------------
TOTAL SHAREHOLDER'S EQUITY 309,795 329,494
------------- -------------
TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY $ 2,651,730 $ 2,708,885
============= =============
<FN>
See notes to financial statements.
</FN>
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
STATEMENTS OF OPERATIONS
THREE MONTHS ENDED
MARCH 31,
-----------------------------
($ in thousands) 1999 1998
------------- -------------
(UNAUDITED)
<S> <C> <C>
REVENUES
Premiums and contract charges (net of reinsurance
ceded of $1,164 and $848) $ 31,251 $ 26,671
Net investment income 35,560 32,569
Realized capital gains and losses 353 1,231
------------- -------------
67,164 60,471
------------- -------------
COSTS AND EXPENSES
Contract benefits (net of reinsurance recoveries
of $537 and $359) 48,480 41,260
Amortization of deferred acquisition costs 2,179 2,085
Operating costs and expenses 6,141 6,011
------------- -------------
56,800 49,356
------------- -------------
INCOME FROM OPERATIONS BEFORE INCOME
TAX EXPENSE 10,364 11,115
Income tax expense 3,679 3,979
------------- -------------
NET INCOME $ 6,685 $ 7,136
============= =============
<FN>
See notes to financial statements.
</FN>
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
STATEMENTS OF CASH FLOWS
THREE MONTHS ENDED
MARCH 31,
------------------------------
1999 1998
------------- -------------
($ in thousands) (UNAUDITED)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 6,685 $ 7,136
Adjustments to reconcile net income to net cash
provided by operating activities
Amortization and other non-cash items (9,127) (8,220)
Realized capital gains and losses (353) (1,231)
Interest credited to contractholder funds 13,289 10,035
Changes in:
Life-contingent contract benefits
and contractholder funds 11,935 8,662
Deferred policy acquisition costs (2,770) (2,464)
Accrued investment income 934 1,863
Income taxes payable 3,291 (954)
Other operating assets and liabilities 4,926 1,223
------------- -------------
Net cash provided by operating activities 28,810 16,050
------------- -------------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sales of fixed income securities 12,436 5,278
Investment collections
Fixed income securities 14,263 47,026
Mortgage loans 1,018 1,986
Investment purchases
Fixed income securities (117,658) (75,356)
Mortgage loans (16,870) (4,000)
Change in short-term investments, net 54,740 (4,353)
Change in policy loans, net (365) (417)
------------- -------------
Net cash used in investing activities (52,436) (29,836)
------------- -------------
CASH FLOWS FROM FINANCING ACTIVITIES
Contractholder fund deposits 35,571 28,429
Contractholder fund withdrawals (14,476) (12,533)
------------- -------------
Net cash provided by financing activities 21,095 15,896
------------- -------------
NET (DECREASE) INCREASE IN CASH (2,531) 2,110
CASH AT BEGINNING OF PERIOD 3,117 393
------------- -------------
CASH AT END OF PERIOD $ 586 $ 2,503
============= =============
<FN>
See notes to financial statements.
</FN>
</TABLE>
5
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
1. BASIS OF PRESENTATION
The accompanying financial statements include the accounts of
Allstate Life Insurance Company of New York (the "Company"), a wholly
owned subsidiary of Allstate Life Insurance Company ("ALIC"), which is
wholly owned by Allstate Insurance Company ("AIC"), a wholly owned
subsidiary of The Allstate Corporation (the "Corporation"). These
financial statements have been prepared in conformity with generally
accepted accounting principles.
The financials statements and notes as of March 31, 1999 and for
the three month periods ended March 31, 1999 and 1998 are unaudited. The
financial statements reflect all adjustments (consisting only of normal
recurring accruals) which are, in the opinion of management, necessary
for the fair presentation of the financial position, results of
operations and cash flows for the interim periods. These financial
statements and notes should be read in conjunction with the financial
statements and notes thereto included in the Allstate Life Insurance
Company of New York Annual Report on Form 10K for 1998. The results of
operations for the interim periods should not be considered indicative
of results to be expected for the full year.
Effective January 1, 1999, the Company adopted Statement of
Position ("SOP") 97-3, "Accounting by Insurance and Other Enterprises
for Insurance-Related Assessments." The SOP provides guidance concerning
when to recognize a liability for insurance-related assessments and how
those liabilities should be measured. Specifically, insurance-related
assessments should be recognized as liabilities when all of the
following criteria have been met: 1) an assessment has been imposed or
it is probable that an assessment will be imposed, 2) the event
obligating an entity to pay an assessment has occurred and 3) the amount
of the assessment can be reasonably estimated. The adoption of this
statement was immaterial to the Company's results of operations and
financial position.
To conform with the 1999 presentation, certain amounts in the
prior years' financial statements and notes have been reclassified.
6
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED) (cont'd)
2. COMPREHENSIVE INCOME
The components of other comprehensive income on a pretax and
after-tax basis for the three months ended March 31, are as follows:
<TABLE>
<CAPTION>
($ in thousands) 1999 1998
-------------------------------- -------------------------------
AFTER- AFTER-
PRETAX TAX TAX PRETAX TAX TAX
------ --- --- ------ --- ---
<S> <C> <C> <C> <C> <C> <C>
Unrealized capital gains and and losses:
---------------------------------------
Unrealized holding losses
arising during the period $(84,822) $ 29,688 $(55,134) $ (3,895) $ 1,362 $ (2,533)
Adjustments to unrealized capital
gains and losses arising during
the period:
Deferred acquisition costs 196 (69) 127 (258) 90 (168)
Reserves for life insurance
policy benefits 44,389 (15,536) 28,853 9,473 (3,315) 6,158
-------- -------- -------- -------- -------- --------
Net unrealized holding
gains (losses) arising
during the period (40,237) 14,083 (26,154) 5,320 (1,863) 3,457
-------- -------- -------- -------- -------- --------
Less: reclassification adjustment
for realized net capital gains
included in net income 354 (124) 230 1,281 (449) 832
-------- -------- -------- -------- -------- --------
Other comprehensive
(loss) income $(40,591) $ 14,207 (26,384) $ 4,039 $ (1,414) 2,625
======== ======== -------- ======== ======== --------
Net income 6,685 7,136
-------- -------
Comprehensive (loss) income $(19,699) $ 9,761
======== =======
</TABLE>
3. REGULATION AND LEGAL PROCEEDINGS
The Company is subject to the effects of a changing social, economic
and regulatory environment. Public and regulatory initiatives have varied
and have included efforts to adversely influence and restrict premium
rates, restrict the Company's ability to cancel policies, impose
underwriting standards and expand overall regulation. The ultimate changes
and eventual effects, if any, of these initiatives are uncertain.
Various other legal and regulatory actions are currently pending that
involve the Company and specific aspects of its conduct of business. In the
opinion of management, the ultimate liability, if any, in one or more of
these actions in excess of amounts currently reserved is not expected to
have a material effect on the results of operations, liquidity or financial
position of the Company.
7
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion highlights significant factors influencing
results of operations and changes in financial position of Allstate Life
Insurance Company of New York (the "Company"). It should be read in conjunction
with the financial statements and related notes thereto found under items 7 and
8 of Part II of the Allstate Life Insurance Company of New York Annual Report on
Form 10-K for the year ended December 31, 1998.
The Company, a wholly owned subsidiary of Allstate Life Insurance Company
("ALIC"), which is a wholly owned subsidiary of Allstate Insurance Company
("AIC"), a wholly owned subsidiary of The Allstate Corporation ("Corporation"),
markets life insurance and savings products in the State of New York. Life
insurance products include traditional life products such as whole life and term
insurance, as well as universal life. Savings products consist of fixed annuity
products, including indexed, market value adjusted and structured settlement
annuities, as well as variable annuities. The Company's products are distributed
through a combination of Allstate agents (which include life specialists),
banks, independent insurance agents, brokers and direct marketing. The Company
has identified itself as a single segment entity.
FINANCIAL HIGHLIGHTS
($ in thousands)
THREE MONTHS
ENDED MARCH 31,
-----------------------
1999 1998
---------- ----------
Statutory premiums and deposits $ 62,922 $ 58,126
========== ==========
Investments $2,153,988 $1,964,452
Separate Account assets 374,545 340,160
---------- ----------
Investments, including Separate Account assets $2,528,533 $2,304,612
========== ==========
Premiums and contract charges $ 31,251 $ 26,671
Net investment income 35,560 32,569
Contract benefits 48,480 41,260
Operating costs and expenses 8,320 8,084
---------- ----------
Income from operations 10,011 9,896
Income tax expense on operations 3,556 3,552
---------- ----------
Operating income 6,455 6,344
Net realized capital gains and losses, net of tax (1) 230 792
---------- ----------
Net income $ 6,685 $ 7,136
========== ==========
(1) After the effect of the related amortization of deferred policy acquisitions
costs.
8
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(cont'd)
Statutory premiums and deposits, which includes premiums and deposits for
all products, increased 8.3% for the three-month period ended March 31, 1999,
over the comparable period in 1998. Increased sales of structured settlement
annuities and fixed annuities were partially offset by lower variable annuity
sales. Fixed annuity sales for the first quarter of 1999 increased 21.5% over
prior year due to the introduction of new products and new marketing
partnerships in the broker and banking distribution channels. Variable annuity
sales decreased 34.6% for the first three months of 1999 compared to the same
period last year due to increased market competition in the broker distribution
channel.
Under generally accepted accounting principles ("GAAP"), revenues exclude
deposits on most annuity contracts and premiums on universal life insurance
policies, and will vary with the mix of business sold during the period. For the
first quarter of 1999, premiums and contract charges under GAAP increased $4.6
million to $31.3 million due to increased premiums from structured settlement
annuities with life contingencies and universal life and variable annuity
contract charges.
Pretax net investment income increased 9.2% in the first quarter of 1999
compared with the same period last year as higher investment balances were
partially offset by lower investment yields. Lower investment yields are due, in
part, to the investment of proceeds from calls and maturities and the investment
of positive cash flows from operations in securities yielding less than the
average portfolio rate. In relatively low interest rate environments, funds from
maturing investments may be reinvested at interest rates lower than those which
prevailed when the funds were previously invested, resulting in lower investment
income. Investments at March 31, 1999, excluding Separate Accounts and
unrealized gains on fixed income securities, grew 11.5% from the same period
last year.
Operating income increased slightly to $6.5 million during the first
three months of 1999 compared to the same period last year. Increases in
contract charges and net investment income were partially offset by a slight
decline in mortality experience and higher expenses.
Realized capital gains and losses, after-tax, were $230 thousand for the
three months ended March 31, 1999 compared to $792 thousand for the first
quarter of 1998. Higher net capital gains in 1998 were due primarily to
prepayments received on privately-placed corporate obligations.
INVESTMENTS
The composition of the investment portfolio at March 31, 1999, at
financial statement carrying values, is presented in the table below:
PERCENT
($ in thousands) TO TOTAL
--------
Fixed income securities (1) $ 1,950,660 90.6%
Mortgage loans 160,902 7.4
Policy loans 29,985 1.4
Short-term 12,441 .6
------------------ -------
Total $ 2,153,988 100.0%
================== =======
(1) Fixed income securities are carried at fair value. Amortized cost for these
securities was $1,718,741 at March 31, 1999.
9
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(cont'd)
Total investments were $2.15 billion at March 31, 1999 compared to $2.22
billion at December 31, 1998. Positive cash flows generated from operations were
more than offset by lower unrealized gains on fixed income securities and a
decrease in short term investments. The decrease in short-term investments
resulted from the settlement of an intercompany balance. At March 31, 1999,
unrealized capital gains on the fixed income securities portfolio were $231.9
million compared to $317.1 million at December 31, 1998.
At March 31, 1999, substantially all of the Company's fixed income
securities portfolio is rated investment grade, which is defined by the Company
as a security having a National Association of Insurance Commissioners ("NAIC")
rating of 1 or 2, a Moody's rating of Aaa, Aa, A or Baa, or a comparable Company
internal rating.
SEPARATE ACCOUNTS
Separate Account assets and liabilities increased to $374.5 million at
March 31, 1999 from $366.2 million at December 31, 1998 due primarily to $9.4
million of flexible premium deferred variable annuity sales and favorable
performance of the Separate Account investment portfolios, partially offset by
variable annuity contract surrenders and withdrawals.
LIQUIDITY AND CAPITAL RESOURCES
The Company's principal sources of funds are collections of principal and
interest from the investment portfolio and the receipt of premiums and deposits.
The primary uses of these funds are to purchase investments and pay policyholder
claims, benefits, contract maturities and surrenders, and operating costs.
The maturity structure of the Company's fixed income securities, which
represent 90.6% of the Company's total investments, is managed to meet the
anticipated cash flow requirements of the underlying liabilities. A portion of
the Company's product portfolio, primarily fixed deferred annuity and universal
life insurance products, is subject to discretionary surrender and withdrawal by
contractholders. Management believes its assets are sufficiently liquid to meet
future obligations to its life and annuity contractholders under various
interest rate scenarios.
Surrenders and withdrawals were $11.3 million for the three month period
ended March 31, 1999, compared to $15.1 million for the same period in 1998.
YEAR 2000
The Company is dependent upon certain services provided for it by the
Corporation including computer-related systems, and systems and equipment not
typically thought of as computer-related (referred to as "non-IT"). For this
reason, the Company is reliant upon the Corporation for the establishment and
maintenance of its computer-related systems and non-IT.
The Corporation is heavily dependent upon complex computer systems for all
phases of its operations, including customer service, insurance processing,
underwriting, loss reserving, investments and other enterprise systems. Since
many of the Corporation's older computer software programs recognize only the
last two digits of the year in any date, some software may fail to operate
properly in or after the year 1999, if the software is not reprogrammed,
remediated, or replaced, ("Year 2000"). Also, non-IT often contains embedded
hardware or software that may have a Year 2000 sensitive component. The
Corporation believes that many of its counterparties and suppliers also have
Year 2000 issues and non-IT issues which could affect the Corporation.
10
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(cont'd)
In 1995, the Corporation commenced a plan consisting of four phases which
are intended to mitigate and/or prevent the adverse effects of Year 2000 issues
on its systems: 1) inventory and assessment of affected systems and equipment,
2) remediation and compliance of systems and equipment through strategies that
include the replacement or enhancement of existing systems, upgrades to
operating systems already covered by maintenance agreements and modifications to
existing systems to make them Year 2000 compliant, 3) testing of systems using
clock-forward testing for both current and future dates and for dates which
trigger specific processing, and 4) contingency planning which will address
possible adverse scenarios and the potential financial impact to the
Corporation's results of operations, liquidity or financial position.
The Corporation believes that the first three steps of this plan,
assessment, remediation and testing, including clock-forward testing which is
being performed on the Corporation's systems and non-IT, are mostly complete for
the Corporation's critical systems. The Corporation is relying on other
remediation techniques for its midrange and personal computer environments, and
certain mainframe applications.
Certain other processing systems are planned to be remediated by the
middle of 1999, and the implementation and rollout of the remediated personal
computer environment will continue through the third quarter of 1999. Some
systems and non-IT related to discontinued or non-critical functions of the
Corporation are planned to be abandoned by the end of 1999.
The Corporation is currently in the process of developing contingency
plans in the event that the systems supporting key processes are not Year 2000
compliant in or after the year 1999. Management believes these contingency plans
should be completed by mid-1999 with testing of these plans conducted throughout
the second half of 1999. Management has also begun to identify and model the
impacts of the most reasonably likely worst case scenarios. Until these plans
are complete, management is unable to determine an estimate of the most
reasonably likely worst case scenario due to issues relating to the Year 2000.
In addition, the Corporation is actively working with its major external
counterparties and suppliers to assess their compliance efforts and the
Corporation's exposure to both their Year 2000 issues and non-IT issues. This
assessment has included the solicitation of external counterparties and
suppliers, evaluating responses received and testing third party interfaces and
interactions to determine compliance. Currently, the Corporation has solicited
and has received responses from the majority of its counterparties and
suppliers. These responses generally state that they believe they will be Year
2000 compliant and that no transactions will be affected. However, certain
vendors are also in ongoing assessment and testing of their products whereby
they are currently unable to identify all potential problems in certain products
which are used by the Corporation. The Corporation believes that these vendors
will make no statements regarding their Year 2000 readiness other than to
publish declarations addressing specific compliance issues identified with their
products. The Corporation has begun to work with these key vendors and is
developing procedures in order to stay aware of any compliance issues
encountered by these vendors. The Corporation has also decided to test certain
interfaces and interactions to gain additional assurance on third party
compliance. If key vendors are determined to be unable to meet the Year 2000
requirement, the Corporation is preparing contingency plans that will allow the
Corporation to continue to sell its products and to service its customers.
Management believes these contingency plans should be completed by mid-1999. The
Corporation currently does not have sufficient information to determine whether
or not all of its external counterparties and suppliers will be Year 2000 ready.
11
<PAGE>
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(cont'd)
The Corporation may be exposed to the risk that the issuers of investments
in its portfolios will be adversely impacted by Year 2000 issues. The
Corporation assesses the impact which Year 2000 issues have on the Corporation's
investments as part of due diligence for proposed new investments and in its
ongoing review of all current portfolio holdings. Any recommended actions with
respect to individual investments are determined by taking into account the
potential impact of Year 2000 on the issuer. The Corporation currently does not
have sufficient information to determine the impacts of such exposures on their
results of operations, liquidity or financial position.
The Corporation presently believes that it will resolve the Year 2000
issue in a timely manner. Year 2000 costs are expensed as incurred, therefore
the majority of the expenses related to this project have been incurred as of
March 31, 1999. The Corporation estimates that approximately $125.0 million in
costs will be incurred between the years of 1995 and 2000. These amounts include
costs directly related to fixing Year 2000 issues, such as modifying software
and hiring Year 2000 solution providers, as well as costs to replace certain
non-compliant systems which would not have been otherwise replaced. A portion of
these costs will be incurred by the Company on a pro rata basis of usage of the
computer-related systems and non-IT, as compared to the usage of all entities
which share these services with the Corporation. These amounts are not expected
to be material to the results of operations of the Company.
PENDING ACCOUNTING STANDARDS
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standard ("SFAS") No. 133, "Accounting for Derivative
Instruments and Hedging Activities." SFAS 133 replaces existing pronouncements
and practices with a single, integrated accounting framework for derivatives and
hedging activities. The requirements are effective for fiscal years beginning
after June 15, 1999. Earlier application is encouraged but is only permitted as
of the beginning of any fiscal quarter after issuance. This statement requires
that all derivatives be recognized on the balance sheet at fair value.
Derivatives that are not hedges must be adjusted to fair value through income.
If the derivative is a hedge, depending on the nature of the hedge, changes in
the fair value of derivatives will either be offset against the change in fair
value of the hedged assets, liabilities, or firm commitments through earnings or
recognized in other comprehensive income until the hedged item is recognized in
earnings. Additionally, the change in fair value of a derivative which is not
effective as a hedge will be immediately recognized in earnings. The Company
expects to adopt SFAS No. 133 as of January 1, 2000. Based on existing
interpretations of the requirements of SFAS No. 133, the impact of adoption is
not expected to be material to the results of operations or financial position
of the Company.
FORWARD-LOOKING STATEMENTS
The statements contained in this Management's Discussion and Analysis that
are not historical information are forward-looking statements that are based on
management's estimates, assumptions and projections. The Private Securities
Litigation Reform Act of 1995 provides a safe harbor under The Securities Act of
1933 and The Securities Exchange Act of 1934 for forward-looking statements.
12
<PAGE>
PART II - OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
The Company and its Board of Directors know of no material legal
proceedings pending to which the Company is a party or which would
materially affect the Company. The Company is involved in pending and
threatened litigation in the normal course of its business in which claims
for monetary damages are asserted. Management, after consultation with
legal counsel, does not anticipate the ultimate liability arising from such
pending or threatened litigation to have a material effect on the financial
condition of the Company.
Item 5. OTHER INFORMATION
Not applicable.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits required by Item 601 of Regulation S-K
(2) None
(3)(i) Restated Certificate of Incorporation of Allstate Life Insurance Company
of New York (Incorporated herein by reference to the Company's Form 10-K
Annual Report for the year ended December 31, 1998)
(3)(ii) Amended By-laws of Allstate Life Insurance Company of New York
(Incorporated herein by reference to the Company's Form 10-K Annual Report
for the year ended December 31, 1998)
(4) None
(10) None
(11) Not Required
(15) None
(18) None
(19) None
(22) None
(23) Not required
(24) None
(27) Financial Data Schedule
13
<PAGE>
(b) Reports on 8-K
No reports on Form 8-K were filed during the first quarter of 1999.
14
<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, on the 14th day of May 1999.
ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
-------------------------------------------
(Registrant)
/s/ LOUIS G. LOWER, II CHAIRMAN OF THE BOARD OF DIRECTORS
- ------------------------ AND CHIEF EXECUTIVE OFFICER
LOUIS G. LOWER, II (Principal Executive Officer)
/s/ KEITH A. HAUSCHILDT ASSISTANT VICE PRESIDENT AND CONTROLLER
- ------------------------ (Chief Accounting Officer)
KEITH A. HAUSCHILDT
15
<PAGE>
Exhibit Index
Exhibit No. Exhibit
(27) Financial Data Scehdule
<TABLE> <S> <C>
<ARTICLE> 7
<LEGEND> THIS SCHEUDLE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
STATEMENTS OF FINANCIAL POSITION AT MARCH 31, 1999; STATEMENTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1999; AND STATEMENTS OF CASH FLOWS THREE MONTHS
ENDED MARCH 31, 1999.
</LEGEND>
<CIK> 0000839759
<NAME> ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<EXCHANGE-RATE> 1
<DEBT-HELD-FOR-SALE> 1,950,660
<DEBT-CARRYING-VALUE> 0
<DEBT-MARKET-VALUE> 0
<EQUITIES> 0
<MORTGAGE> 160,902
<REAL-ESTATE> 0
<TOTAL-INVEST> 2,153,988
<CASH> 586
<RECOVER-REINSURE> 1,996
<DEFERRED-ACQUISITION> 90,796
<TOTAL-ASSETS> 2,651,730
<POLICY-LOSSES> 0
<UNEARNED-PREMIUMS> 0
<POLICY-OTHER> 1,183,074
<POLICY-HOLDER-FUNDS> 730,224
<NOTES-PAYABLE> 0
0
0
<COMMON> 2,000
<OTHER-SE> 307,795
<TOTAL-LIABILITY-AND-EQUITY> 2,651,730
31,251
<INVESTMENT-INCOME> 35,560
<INVESTMENT-GAINS> 353
<OTHER-INCOME> 0
<BENEFITS> 48,480
<UNDERWRITING-AMORTIZATION> 2,179
<UNDERWRITING-OTHER> 6,141
<INCOME-PRETAX> 10,364
<INCOME-TAX> 3,676
<INCOME-CONTINUING> 6,685
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 6,685
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<RESERVE-OPEN> 0
<PROVISION-CURRENT> 0
<PROVISION-PRIOR> 0
<PAYMENTS-CURRENT> 0
<PAYMENTS-PRIOR> 0
<RESERVE-CLOSE> 0
<CUMULATIVE-DEFICIENCY> 0
</TABLE>
