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Previous: FINANCIAL INSTITUTIONS INC, 10-Q, 1999-08-13 |
Next: ISLE OF CAPRI CASINOS INC, DEF 14A, 1999-08-13 |
<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1999
COMMISSION FILE NUMBERS 33-34562; 33-60288; 333-48983
ML LIFE INSURANCE COMPANY OF NEW YORK
(Exact name of Registrant as specified in its charter)
<TABLE>
<S> <C>
NEW YORK 16-1020455
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
</TABLE>
100 CHURCH STREET
NEW YORK, NEW YORK 10080-6511
(Address of Principal Executive Offices)
(800) 333-6524
(Registrant's telephone number including area code)
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 __
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
COMMON 220,000
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.
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<PAGE> 2
PART I Financial Information
Item 1. Financial Statements.
ML LIFE INSURANCE COMPANY OF NEW YORK
(a wholly owned subsidiary of Merrill Lynch Insurance Group, Inc.)
BALANCE SHEETS
(Dollars in Thousands) (Unaudited)
<TABLE>
<CAPTION>
June 30, December 31,
ASSETS 1999 1998
- ------ ------------ ------------
<S> <C> <C>
INVESTMENTS:
Fixed maturity securities, at estimated fair value
(amortized cost: 1999 - $182,586; 1998 - $197,588) $ 180,724 $ 200,681
Equity securities, at estimated fair value
(cost: 1999 - $22,255; 1998 - $14,684) 21,621 13,718
Policy loans on insurance contracts 89,448 88,083
------------ ------------
Total Investments 291,793 302,482
CASH AND CASH EQUIVALENTS 13,800 18,707
ACCRUED INVESTMENT INCOME 5,847 4,968
DEFERRED POLICY ACQUISITION COSTS 29,457 29,742
FEDERAL INCOME TAXES - DEFERRED 1,540 -
REINSURANCE RECEIVABLES 269 652
AFFILIATED RECEIVABLES - NET 658 -
RECEIVABLES FROM SECURITIES SOLD 1,971 -
OTHER ASSETS 4,217 4,261
SEPARATE ACCOUNTS ASSETS 965,262 887,170
------------ ------------
TOTAL ASSETS $ 1,314,814 $ 1,247,982
============ ============
</TABLE>
See notes to financial statements. (continued)
ML LIFE INSURANCE COMPANY OF NEW YORK
(a wholly owned subsidiary of Merrill Lynch Insurance Group, Inc.)
BALANCE SHEETS
(Continued) (Dollars in Thousands, Except Per Share Amounts)
(Unaudited)
<TABLE>
<CAPTION>
June 30, December 31,
LIABILITIES AND STOCKHOLDER'S EQUITY 1999 1998
- ------------------------------------ ------------ ------------
<S> <C> <C>
LIABILITIES:
POLICYHOLDER LIABILITIES AND ACCRUALS:
Policyholders' account balances $ 258,726 $ 269,246
Claims and claims settlement expenses 4,226 2,986
------------ ------------
Total policyholder liabilities and accruals 262,952 272,232
OTHER POLICYHOLDER FUNDS 1,078 1,783
FEDERAL INCOME TAXES - DEFERRED - 119
FEDERAL INCOME TAXES - CURRENT 878 1,347
AFFILIATED PAYABLES - NET - 1,253
OTHER LIABILITIES 1,572 2,124
SEPARATE ACCOUNTS LIABILITIES 965,262 887,170
------------ ------------
Total Liabilities 1,231,742 1,166,028
------------ ------------
STOCKHOLDER'S EQUITY:
Common stock, $10 par value - 220,000 shares
authorized, issued and outstanding 2,200 2,200
Additional paid-in capital 66,259 66,259
Retained earnings 16,863 14,462
Accumulated other comprehensive loss (2,250) (967)
------------ ------------
Total Stockholder's Equity 83,072 81,954
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY $ 1,314,814 $ 1,247,982
============ ============
</TABLE>
See notes to financial statements.
ML LIFE INSURANCE COMPANY OF NEW YORK
(a wholly owned subsidiary of Merrill Lynch Insurance Group, Inc.)
STATEMENTS OF EARNINGS
(Dollars in Thousands) (Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
----------------------------------
1999 1998
------------ ------------
<S> <C> <C>
REVENUES:
Investment revenue:
Net investment income $ 9,893 $ 11,137
Net realized investment losses (2,779) (62)
Policy charge revenue 8,367 7,589
------------ ------------
Total Revenues 15,481 18,664
------------ ------------
BENEFITS AND EXPENSES:
Interest credited to policyholders' account balances 6,233 6,899
Market value adjustment expense 161 195
Policy benefits (net of reinsurance recoveries: 1999 - $360;
1998 - $375) 286 693
Reinsurance premium ceded 898 814
Amortization of deferred policy acquisition costs 2,302 2,156
Insurance expenses and taxes 1,907 2,372
------------ ------------
Total Benefits and Expenses 11,787 13,129
------------ ------------
Earnings Before Federal Income Tax Provision 3,694 5,535
FEDERAL INCOME TAX PROVISION (BENEFIT):
Current 2,261 1,662
Deferred (968) (247)
------------ ------------
Total Federal Income Tax Provision 1,293 1,415
------------ ------------
NET EARNINGS $ 2,401 $ 4,120
============ ============
</TABLE>
See notes to financial statements.
ML LIFE INSURANCE COMPANY OF NEW YORK
(a wholly owned subsidiary of Merrill Lynch Insurance Group, Inc.)
STATEMENTS OF EARNINGS
(Dollars in Thousands) (Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
June 30,
---------------------------------
1999 1998
------------ -----------
<S> <C> <C>
REVENUES:
Investment revenue:
Net investment income $ 4,844 $ 5,482
Net realized investment losses (2,597) (207)
Policy charge revenue 4,348 3,955
------------ -----------
Total Revenues 6,595 9,230
------------ -----------
BENEFITS AND EXPENSES:
Interest credited to policyholders' account balances 3,240 3,254
Market value adjustment expense 66 63
Policy benefits (net of reinsurance recoveries: 1999 - $224;
1998 - $26) 108 438
Reinsurance premium ceded 468 414
Amortization of deferred policy acquisition costs 947 1,071
Insurance expenses and taxes 992 1,203
------------ -----------
Total Benefits and Expenses 5,821 6,443
------------ -----------
Earnings Before Federal Income Tax Provision 774 2,787
FEDERAL INCOME TAX PROVISION (BENEFIT):
Current 877 917
Deferred (606) (12)
------------ -----------
Total Federal Income Tax Provision 271 905
------------ -----------
NET EARNINGS $ 503 $ 1,882
============ ===========
</TABLE>
See notes to financial statements.
ML LIFE INSURANCE COMPANY OF NEW YORK
(a wholly owned subsidiary of Merrill Lynch Insurance Group, Inc.)
STATEMENTS OF COMPREHENSIVE INCOME
(Dollars in Thousands) (Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
----------------------------------
1999 1998
------------ ------------
<S> <C> <C>
NET EARNINGS $ 2,401 $ 4,120
------------ ------------
OTHER COMPREHENSIVE LOSS:
Net unrealized losses on investment securities:
Net unrealized holding losses arising during the period (7,746) (1,013)
Reclassification adjustment for losses included in net earnings 3,123 104
------------ ------------
Net unrealized losses on investment securities (4,623) (909)
Adjustments for:
Policyholder liabilities 2,649 280
Deferred federal income taxes 691 220
------------ ------------
Total other comprehensive loss (1,283) (409)
------------ ------------
COMPREHENSIVE INCOME $ 1,118 $ 3,711
============ ============
</TABLE>
See notes to financial statements.
ML LIFE INSURANCE COMPANY OF NEW YORK
(a wholly owned subsidiary of Merrill Lynch Insurance Group, Inc.)
STATEMENTS OF COMPREHENSIVE INCOME
(Dollars in Thousands) (Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
June 30,
---------------------------------
1999 1998
------------ -----------
<S> <C> <C>
NET EARNINGS $ 503 $ 1,882
------------ -----------
OTHER COMPREHENSIVE INCOME (LOSS):
Net unrealized losses on investment securities:
Net unrealized holding losses arising during the period (4,339) (434)
Reclassification adjustment for losses included in net earnings 2,699 208
------------ -----------
Net unrealized losses on investment securities (1,640) (226)
Adjustments for:
Policyholder liabilities 2,070 (131)
Deferred federal income taxes (150) 125
------------ -----------
Total other comprehensive income (loss) 280 (232)
------------ -----------
COMPREHENSIVE INCOME $ 783 $ 1,650
============ ===========
</TABLE>
See notes to financial statements.
ML LIFE INSURANCE COMPANY OF NEW YORK
(a wholly owned subsidiary of Merrill Lynch Insurance Group, Inc.)
STATEMENTS OF STOCKHOLDER'S EQUITY
(Dollars in Thousands) (Unaudited)
<TABLE>
<CAPTION>
Accumulated
Additional other Total
Common paid-in Retained comprehensive stockholder's
Stock capital earnings (loss) equity
----------- ----------- ----------- ------------- -------------
<S> <C> <C> <C> <C> <C>
BALANCE, JANUARY 1, 1998 $ 2,200 $ 66,259 $ 9,692 $ (370) $ 77,781
Net earnings 4,770 4,770
Other comprehensive loss, net of tax (597) (597)
----------- ----------- ----------- ------------- -------------
BALANCE, DECEMBER 31, 1998 2,200 66,259 14,462 (967) 81,954
Net earnings 2,401 2,401
Other comprehensive loss, net of tax (1,283) (1,283)
----------- ----------- ----------- ------------- -------------
BALANCE, JUNE 30, 1999 $ 2,200 $ 66,259 $ 16,863 $ (2,250) $ 83,072
=========== =========== =========== ============= =============
</TABLE>
See notes to financial statements.
ML LIFE INSURANCE COMPANY OF NEW YORK
(a wholly owned subsidiary of Merrill Lynch Insurance Group, Inc.)
STATEMENTS OF CASH FLOWS
(Dollars in Thousands) (Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
----------------------------------
1999 1998
------------ ------------
<S> <C> <C>
Cash Flows From Operating Activities:
Net earnings $ 2,401 $ 4,120
Noncash items included in earnings:
Amortization of deferred policy acquisition costs 2,302 2,156
Capitalization of policy acquisition costs (2,017) (2,493)
Amortization (accretion) of investments 144 (294)
Interest credited to policyholders' account balances 6,233 6,899
Benefit for deferred Federal income tax (968) (247)
(Increase) decrease in operating assets:
Accrued investment income (879) (181)
Affiliated receivables (658) -
Other 427 62
Increase (decrease) in operating liabilities:
Claims and claims settlement expenses 1,240 182
Other policyholder funds (705) (322)
Federal income taxes - current (469) (1,338)
Affiliated payables (1,253) (1,169)
Other (552) 748
Other operating activities:
Net realized investment losses 2,779 62
Policy loans on insurance contracts (1,365) 745
------------ ------------
Net cash and cash equivalents provided by operating activities 6,660 8,930
------------ ------------
Cash Flows From Investing Activities:
Proceeds from (payments for):
Sales of available-for-sale securities 138,023 48,954
Maturities of available-for-sale securities 22,353 30,936
Purchases of available-for-sale securities (157,839) (54,028)
------------ ------------
Net cash and cash equivalents provided by investing activities $ 2,537 $ 25,862
------------ ------------
</TABLE>
See notes to financial statements. (continued)
ML LIFE INSURANCE COMPANY OF NEW YORK
(a wholly owned subsidiary of Merrill Lynch Insurance Group, Inc.)
STATEMENTS OF CASH FLOWS
(Continued) (Dollars in Thousands) (Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
----------------------------------
1999 1998
------------ ------------
<S> <C> <C>
Cash Flows From Financing Activities:
Proceeds from (payments for):
Policyholder deposits (excludes internal policy replacement deposits) $ 34,536 $ 45,775
Policyholder withdrawals (including transfers to/from separate accounts) (48,640) (77,568)
------------ ------------
Net cash and cash equivalents used by financing activities (14,104) (31,793)
------------ ------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (4,907) 2,999
CASH AND CASH EQUIVALENTS:
Beginning of year 18,707 10,063
------------ ------------
End of period $ 13,800 $ 13,062
============ ============
Supplementary Disclosure of Cash Flow Information:
Cash paid for:
Federal income taxes $ 2,730 $ 2,999
Intercompany interest 44 76
</TABLE>
See notes to financial statements.
ML LIFE INSURANCE COMPANY OF NEW YORK
(a wholly owned subsidiary of Merrill Lynch Insurance Group, Inc.)
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1: BASIS OF PRESENTATION:
ML Life Insurance Company of New York (the "Company") is a
wholly owned subsidiary of Merrill Lynch Insurance Group, Inc.
("MLIG"). The Company is an indirect wholly owned subsidiary of
Merrill Lynch & Co., Inc. ("Merrill Lynch & Co."). The Company
sells life insurance and annuity products, including variable
life insurance and variable annuities.
The interim financial statements for the three and six month
periods are unaudited. In the opinion of management, these
unaudited financial statements include all adjustments
(consisting only of normal recurring accruals) necessary for a
fair presentation of the financial position and the results of
operations in accordance with generally accepted acounting
principles. These unaudited financial statements should be read
in conjunction with the audited financial statements included in
the Company's Annual Report included as an exhibit to Form 10-K
for the year ended December 31, 1998. The nature of the
Company's business is such that the results of any interim
period are not necessarily indicative of results for a full
year. Certain reclassifications have also been made to prior
period financial statements, where appropriate, to conform to
the current period presentation.
NOTE 2. STATUTORY ACCOUNTING PRACTICES:
The Company maintains its statutory accounting records in
conformity with accounting practices prescribed or permitted by
the Insurance Department of the State of New York and the
National Association of Insurance Commissioners. Statutory
capital and surplus at June 30, 1999 and December 31, 1998, was
$60.0 million and $55.9 million, respectively. For the six month
periods ended June 30, 1999 and 1998, statutory net income was
$4.4 million and $4.3 million, respectively.
NOTE 3. INVESTMENTS:
The Company's investments in debt and equity securities are
classified as available-for-sale and are recorded at fair value.
The Company has recorded certain adjustments to deferred policy
acquisition costs and policyholders' account balances in
conjunction with investments classified as available-for-sale.
The Company adjusts those assets and liabilities as if the
unrealized investment gains or losses from available-for-sale
investments had actually been realized, with corresponding
credits or charges reported in stockholder's equity as a
component of accumulated other comprehensive loss, net of taxes.
The following reconciles net unrealized investment gains
(losses) on available-for-sale investments:
June 30, December 31,
<PAGE> 3
PART II Other Information
Item 1. Legal Proceedings.
Nothing to report.
Item 5. Other Information.
Nothing to report.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
Financial Data Schedule.
(b) Reports on Form 8-K.
None.
<PAGE> 4
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.
ML LIFE INSURANCE COMPANY OF NEW YORK
/s/ JOSEPH E. CROWNE
-----------------------------------------
Joseph E. Crowne
Senior Vice President and
Chief Financial Officer
Date: August 13, 1999
<PAGE> 5
EXHIBIT INDEX
-------------
Exhibit
No. Description
- ------- -----------
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 7
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> JUN-30-1999
<DEBT-HELD-FOR-SALE> 180,724
<DEBT-CARRYING-VALUE> 0
<DEBT-MARKET-VALUE> 0
<EQUITIES> 21,621
<MORTGAGE> 0
<REAL-ESTATE> 0
<TOTAL-INVEST> 291,793
<CASH> 13,800
<RECOVER-REINSURE> 269
<DEFERRED-ACQUISITION> 29,457
<TOTAL-ASSETS> 1,314,814
<POLICY-LOSSES> 4,226
<UNEARNED-PREMIUMS> 0
<POLICY-OTHER> 1,078
<POLICY-HOLDER-FUNDS> 258,726
<NOTES-PAYABLE> 0
0
0
<COMMON> 2,200
<OTHER-SE> 80,872
<TOTAL-LIABILITY-AND-EQUITY> 1,314,814
0
<INVESTMENT-INCOME> 9,893
<INVESTMENT-GAINS> (2,779)
<OTHER-INCOME> 8,367
<BENEFITS> 286
<UNDERWRITING-AMORTIZATION> 2,302
<UNDERWRITING-OTHER> 1,907
<INCOME-PRETAX> 3,694
<INCOME-TAX> 1,293
<INCOME-CONTINUING> 2,401
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,401
<EPS-BASIC> 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>
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