<PAGE> 1
As filed with the Securities and Exchange Commission on April 27, 2000.
Registration No. 333-61283
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
POST-EFFECTIVE AMENDMENT NO. 3
THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT A
(Exact name of Registrant)
THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK
(Name of Depositor)
100 Summit Lake Drive, Second Floor
Valhalla, New York 10595
(Address of Depositor's Principal Executive Offices)
(914) 773-0708
(Depositor's Telephone Number Including Area Code)
James D. Gallagher, President Copy to:
The Manufacturers Life Insurance J. Sumner Jones, Esq.
Company of New York Jones & Blouch, LLP
100 Summit Lake Drive 1025 Thomas Jefferson Street, N.W.
Valhalla, NY 10595 Washington, DC 20007
(Name and Address of Agent for Service)
It is proposed that this filing will become effective:
___ immediately upon filing pursuant to paragraph (b) of Rule 485
X on May 1, 2000 pursuant to paragraph (b)(i) of Rule 485
___ 60 days after filing pursuant to paragraph (a) of Rule 485(R)
___ on [DATE] pursuant to paragraph (a) of Rule
485
If appropriate check the following box:
___ this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
<PAGE> 2
THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK
CROSS REFERENCE TO ITEMS REQUIRED BY FORM N-4
<TABLE>
<CAPTION>
N-4 Item
Part A Caption in Prospectus
- ------ ---------------------
<S> <C>
1 ................ Cover Page
2 ................ Special Terms
3 ................ Summary
4 ................ Performance Data; Financial Statements
5 ................ General Information about Us, The Variable Account and The
Trust
6 ................ Charges and Deductions; Administration Fees; Distribution
Fee; Mortality and Expense Risk Charge; Taxes
7 ................ Accumulation Period Provisions; Our Approval; Purchase
Payments; Accumulation Units; Net Investment Factor;
Transfers Among Investment Options; Special Transfer
Services - Dollar Cost Averaging; Asset Rebalancing Program;
Withdrawals; Special Withdrawal Services - the Income Plan;
Contract Owner Inquiries; Other Contract Provisions;
Ownership; Beneficiary; Modification
8 ................ Pay-out Period Provisions; General; Annuity Options;
Determination of Amount of the First Variable Annuity
Payment; Annuity Units and the Determination of Subsequent
Variable Annuity Payments; Transfers During Pay-out Period
9 ................ Accumulation Period Provisions; Death Benefit During
Accumulation Period; Pay-out Period Provisions; Death
Benefit During Pay-out Period
10 ............... Accumulation Period Provisions; Purchase Payments;
Accumulation Units; Value of Accumulation Units; Net
Investment Factor; Distribution of Contracts
11 ............... Withdrawals; Accumulation Period Provisions; Purchase
Payments; Other Contract Provisions; Right to Review
Contract
12 ............... Federal Tax Matters; Introduction; Our Tax Status; Taxation
of Annuities in General; Qualified Retirement Plans
13 ............... Legal Proceedings
14 ............... Statement of Additional Information - Table of Contents
Caption in Statement of
Part B Additional Information
- ------ ----------------------
15 ............... Cover Page
16 ............... Table of Contents
17 ............... General History and Information
18 ............... Services-Accountants; Services-Servicing Agent
19 ............... Not Applicable
20 ............... Services - Principal Underwriter
21 ............... Performance Data
22 ............... Not Applicable
23 ............... Audited Financial Statements
</TABLE>
<PAGE> 3
PART A
INFORMATION REQUIRED IN A PROSPECTUS
<PAGE> 4
HOME OFFICE ANNUITY SERVICE OFFICE MAILING ADDRESS
100 Summit Lake Drive, Second Floor Post Office Box 9013
Valhalla, New York 10595 Boston, Massachusetts 02205-9013
THE MANUFACTURERS LIFE INSURANCE COMPANY
OF NEW YORK SEPARATE ACCOUNT A
OF
THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK
SINGLE PAYMENT INDIVIDUAL DEFERRED
COMBINATION FIXED AND VARIABLE ANNUITY CONTRACT
NON-PARTICIPATING
This Prospectus describes an annuity contract (the "CONTRACT") issued by
The Manufacturers Life Insurance Company of New York ("WE" or "US"). The
contract is a single purchase payment, individual, deferred, non-participating,
combination fixed and variable annuity contract.
- Contract values and annuity benefit payments are based upon
forty-eight investment options. Forty-six options are variable and two
are fixed account options.
- Contract values (other than those allocated to one of the fixed
accounts) and variable annuity benefit payments will vary according to
the investment performance of the sub-accounts of one of our separate
accounts, The Manufacturers Life Insurance Company of New York
Separate Account A (the "VARIABLE ACCOUNT"). Contract values may be
allocated to, and transferred among, one or more of those
sub-accounts.
- Each sub-account's assets are invested in a corresponding portfolio of
a mutual fund, Manufacturers Investment Trust (the "TRUST"). We will
provide the contract owner ("YOU") a prospectus for the Trust with
this Prospectus.
- SHARES OF THE TRUST ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
OR ENDORSED BY, ANY BANK, AND THE SHARES ARE NOT FEDERALLY INSURED BY
THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD,
OR ANY OTHER AGENCY.
- Except as specifically noted here and under the caption "FIXED ACCOUNT
INVESTMENT OPTIONS" below, this Prospectus describes only the variable
portion of the contract.
- Special terms are defined in a glossary in Appendix A.
PLEASE READ THIS PROSPECTUS CAREFULLY AND KEEP IT FOR FUTURE REFERENCE. IT
CONTAINS INFORMATION ABOUT THE VARIABLE ACCOUNT AND THE VARIABLE PORTION OF THE
CONTRACT THAT YOU SHOULD KNOW BEFORE INVESTING.
<PAGE> 5
THE CONTRACTS HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION ("SEC"). NEITHER THE SEC NOR ANY STATE HAS DETERMINED
WHETHER THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
<PAGE> 6
- - ADDITIONAL INFORMATION about the contract and the Variable Account is
contained in a Statement of Additional Information, dated the same date as
this Prospectus, which has been filed with the SEC and is incorporated
herein by reference. The Statement of Additional Information is available
without charge upon request by writing us at the address on the front cover
or by telephoning (877) 391-3748.
- - The SEC maintains a Web site (http://www.sec.gov) that contains the
Statement of Additional Information and other information about us, the
contracts and the Variable Account.
STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
General Information and History............................... 3
Performance Data.............................................. 3
State Premium Taxes........................................... 10
Services
Independent Auditors................................. 10
Servicing Agent...................................... 11
Principal Underwriter................................ 11
Appendix A - State Premium Taxes.............................. 12
Financial Statements.......................................... 13
</TABLE>
The date of this Prospectus is May 1, 2000
NYVISION.PR 05/2000
<PAGE> 7
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
SUMMARY ................................................................. 4
GENERAL INFORMATION ABOUT US, THE VARIABLE ACCOUNT AND THE TRUST ........ 8
The Manufacturers Life Insurance Company of
New York ........................................................... 8
The Variable Account ............................................... 8
The Trust .......................................................... 9
DESCRIPTION OF THE CONTRACT ............................................. 13
ACCUMULATION PERIOD PROVISIONS ....................................... 13
Purchase Payments .................................................. 13
Accumulation Units ................................................. 14
Value of Accumulation Units ........................................ 14
Net Investment Factor .............................................. 14
Transfers Among Investment Options ................................. 15
Maximum Number of Investment Options ............................... 15
Telephone Transactions ............................................. 15
Special Transfer Services - Dollar Cost Averaging .................. 15
Asset Rebalancing Program .......................................... 15
Withdrawals ........................................................ 16
Special Withdrawal Services - the Income Plan ...................... 17
Death Benefit During Accumulation Period ........................... 18
PAY-OUT PERIOD PROVISIONS ............................................ 19
General ............................................................ 19
Annuity Options .................................................... 20
Determination of Amount of the First Variable
Annuity Payment .................................................... 21
Annuity Units and the Determination of
Subsequent Variable Annuity Payments ............................. 21
Transfers During Pay-out Period .................................... 22
Death Benefit During Pay-out Period ................................ 22
OTHER CONTRACT PROVISIONS ............................................ 22
Right to Review Contract ........................................... 22
Ownership .......................................................... 23
Annuitant .......................................................... 23
Beneficiary ........................................................ 23
Modification ....................................................... 23
Our Approval ....................................................... 23
Misstatement and Proof of Age, Sex or Survival ..................... 24
FIXED ACCOUNT INVESTMENT OPTIONS ................................... 24
CHARGES AND DEDUCTIONS .................................................. 25
Administration Fees ................................................ 25
Distribution Fee ................................................... 26
Mortality and Expense Risk Charge .................................. 26
Taxes .............................................................. 26
Expenses of Distributing Contracts ................................. 26
FEDERAL TAX MATTERS ..................................................... 26
INTRODUCTION ......................................................... 26
OUR TAX STATUS ....................................................... 27
TAXATION OF ANNUITIES IN GENERAL ..................................... 27
Tax Deferral During Accumulation Period ............................ 27
Taxation of Partial and Full Withdrawals ........................... 28
Taxation of Annuity Benefit Payments ............................... 29
Taxation of Death Benefit Proceeds ................................. 29
Penalty Tax on Premature Distributions ............................. 30
Aggregation of Contracts ........................................... 30
QUALIFIED RETIREMENT PLANS ........................................... 30
Direct Rollovers ................................................... 31
Loans .............................................................. 17
FEDERAL INCOME TAX WITHHOLDING ....................................... 32
GENERAL MATTERS ......................................................... 32
Performance Data ................................................... 32
Asset Allocation and Timing Services ............................... 32
Distribution of Contracts .......................................... 33
Contract Owner Inquiries ........................................... 33
Confirmation Statements ............................................ 33
Legal Proceedings .................................................. 33
Year 2000 Issues ................................................... 33
Cancellation of Contract ........................................... 34
Voting Interest .................................................... 34
APPENDIX A: SPECIAL TERMS .............................................. A-1
APPENDIX B: TABLE OF ACCUMULATION UNIT VALUES
RELATING TO THE CONTRACT ........................................... B-1
APPENDIX C: QUALIFIED PLAN TYPES ........................................ C-1
</TABLE>
<PAGE> 8
SUMMARY
OVERVIEW OF THE CONTRACT. Under the contract, you make a single payment to us
(the "ACCUMULATION PERIOD") and then later, beginning on the "MATURITY DATE" we
make one or more annuity benefit payments to you (the "PAY-OUT PERIOD").
Contract values during the accumulation period and the amounts of annuity
benefit payments during the pay-out period may either be variable or fixed,
depending upon the investment option(s) you select. You may use the contract to
fund either a non-qualified or tax-qualified retirement plan.
When you purchase a variable annuity for any tax-qualified retirement plan, the
variable annuity does not provide any additional tax deferred treatment of
earnings beyond the treatment provided by the plan. Consequently, you should
purchase a variable annuity for a tax-qualified plan only on the basis of other
benefits offered by the variable annuity. These benefits may include lifetime
income payments, family protection through the death benefit, and guaranteed
fees.
PURCHASE PAYMENT LIMITS. The minimum purchase payment is $25,000. Additional
purchase payments are not permitted. For purchase payments in excess of
$1,000,000 you must obtain our approval in order to purchase the contract.
INVESTMENT OPTIONS. Upon issuance of the contract, purchase payments may be
allocated among up to seventeen of the available investment options (including
all fixed account investment options). After the contract is issued, there is no
limit on the number of investment options to which you may allocate purchase
payments. Currently, forty-six Variable Account investment options and two fixed
account investment options are available under the contract. Each of the
forty-six Variable Account investment options is a sub-account of the Variable
Account that invests in a corresponding portfolio of the Trust. A full
description of each Trust portfolio is in the accompanying Prospectus of the
Trust. Your contract value during the accumulation period and the amounts of
annuity benefit payments will depend upon the investment performance of the
Trust portfolio underlying each sub-account of the Variable Account you select
and/or upon the interest we credit on each fixed account option you select.
Subject to certain regulatory limitations, we may elect to add, subtract or
substitute investment options.
Allocating assets only to one or a small number of the investment options (other
than the Lifestyle Trusts) should not be considered a balanced investment
strategy. In particular, allocating assets to a small number of investment
options that concentrate their investments in a particular business or market
sector will increase the risk that the value of your contract will be more
volatile since these investment options may react similarly to business or
market specific events. Examples of business or market sectors where this risk
historically has been and may continue to be particularly high include: (a)
technology related businesses, including internet related businesses, (b) small
cap securities and (c) foreign securities. The Company does not provide advice
regarding appropriate investment allocations, please discuss this matter with
your financial adviser.
TRANSFERS. During the accumulation period, you may transfer your contract values
among any of the investment options. During the pay-out period, you may transfer
your allocations among the Variable Account investment options, but transfers
from Variable Account options to fixed account options or from fixed account
options to Variable Account options are not permitted.
WITHDRAWALS. During the accumulation period, you may withdraw all or a portion
of your contract value. The amount you withdraw from any investment account must
be at least $300 or, if less, your entire balance in that investment account. If
a partial withdrawal plus any applicable withdrawal charge would reduce your
contract value to less than $300, we will treat your withdrawal request as a
request to withdraw all of your contract value. A withdrawal charge and an
administration fee may apply to your withdrawal. A withdrawal may be subject to
income tax and a 10% penalty tax. A systematic withdrawal plan service is
available under the contract.
CONFIRMATION STATEMENTS. We will send you confirmation statements for certain
transactions in your account. You should carefully review these statements to
verify their accuracy. You should immediately report any mistakes to our Annuity
Service Office. If you fail to notify our Annuity Service Office of any mistake
within 60 days of the mailing of the confirmation statement, you will be deemed
to have ratified the transaction.
4
<PAGE> 9
DEATH BENEFITS. We will pay the death benefit described below to your
BENEFICIARY if you die during the accumulation period. If a contract is owned by
more than one person, then the surviving contract owner will be deemed the
beneficiary of the deceased contract owner. No death benefit is payable on the
death of any ANNUITANT (a natural person or persons whose life is used to
determine the duration of ANNUITY BENEFIT PAYMENTS involving life
contingencies), except that if any contract owner is not a natural person, the
death of any annuitant will be treated as the death of an owner. The amount of
the death benefit will be calculated as of the date on which our Annuity Service
Office receives written notice and proof of death and all required claim forms.
The formula used to calculate the death benefit may vary according to the age(s)
of the contract owner(s) at the time the contract is issued and the age of the
contract owner who dies. If there are any unpaid loans (including unpaid
interest) under the contract, the death benefit equals the death benefit
calculated according to the applicable formula, minus the amount of the unpaid
loans. If the annuitant dies during the pay-out period and annuity benefit
payment method selected called for payments for a guaranteed period, we will
make the remaining guaranteed payments to the beneficiary.
ANNUITY BENEFIT PAYMENTS. We offer a variety of fixed and variable annuity
payment options. Periodic annuity benefit payments will begin on the "maturity
date" (the first day of the pay-out period). You select the maturity date, the
frequency of payment and the type of annuity benefit payment option.
TEN DAY REVIEW. You may cancel your contract by returning it to us within 10
days of receiving it.
TAXATION. Generally, all earnings on the underlying investments to be
tax-deferred until withdrawn or until annuity benefit payments begin. Normally,
a portion of each annuity benefit payment is taxable as ordinary income. Partial
and total withdrawals are taxable as ordinary income to the extent contract
value prior to the withdrawal exceeds the purchase payments you have made, minus
any prior withdrawals that were not taxable. A penalty tax may apply to
withdrawals prior to age 59-1/2.
CHARGES AND DEDUCTIONS. The following Table and Example are designed to assist
you in understanding the various costs and expenses related to the contract. The
table reflects expenses of the Variable Account and the underlying portfolios of
the Trust. In addition to the items listed in the following table, premium taxes
may be applicable to certain contracts and we reserve the right to impose an
annual $30 per contract administration fee on contracts where the contract value
is less than $10,000 as a result of a partial withdrawal. The items listed under
"Contract Owner Transaction Expenses" and "Separate Account Annual Expenses" are
more completely described in this Prospectus under "Charges and Deductions." The
items listed under "Trust Annual Expenses" are described in detail in the
accompanying Trust Prospectus.
CONTRACT OWNER TRANSACTION EXPENSES
Deferred sales load (withdrawal charge as percentage of purchase payments) NONE
<TABLE>
<CAPTION>
SEPARATE ACCOUNT ANNUAL EXPENSES
(as a percentage of average account value)
<S> <C>
Mortality and expense risk fees........................................ 1.25%
Administration fee .................................................... 0.25%
Distribution fee....................................................... 0.15%
Total Separate Account Annual Expenses................................. 1.65%
</TABLE>
TRUST ANNUAL EXPENSES
(as a percentage of Trust average net assets for the fiscal year ended December
31, 1999)
<TABLE>
<CAPTION>
OTHER EXPENSES
MANAGEMENT (AFTER EXPENSE TOTAL TRUST
TRUST PORTFOLIO FEES REIMBURSEMENT) ANNUAL EXPENSES
<S> <C> <C> <C>
Pacific Rim Emerging Markets........ 0.850% 0.260% 1.110%
Internet Technologies............... 1.150% 0.136%(A) 1.286%
</TABLE>
5
<PAGE> 10
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Science & Technology................ 1.100% 0.060% 1.160%
International Small Cap............. 1.100% 0.270% 1.370%
Aggressive Growth................... 1.000%(F) 0.130% 1.130%
Emerging Small Company.............. 1.050% 0.070% 1.120%
Small Company Blend................. 1.050% 0.250%(A) 1.300%(E)
Dynamic Growth...................... 1.000%(F) 0.132%(A) 1.132%
Mid Cap Stock....................... 0.925% 0.100%(A) 1.025%(E)
All Cap GrowthH..................... 0.950%(F) 0.070% 1.020%
Overseas............................ 0.950% 0.260% 1.210%
International Stock................. 1.050% 0.200% 1.250%
International Value................. 1.000% 0.230%(A) 1.230%(E)
Mid Cap Blend....................... 0.850%(F) 0.060% 0.910%
Small Company Value................. 1.050% 0.170% 1.220%
Global Equity....................... 0.900% 0.160% 1.060%
Growth.............................. 0.850% 0.050% 0.900%
Large Cap Growth.................... 0.875%(F) 0.100% 0.975%
Quantitative Equity................. 0.700% 0.060% 0.760%
Blue Chip Growth.................... 0.875%(F) 0.050% 0.925%
Real Estate Securities.............. 0.700% 0.070% 0.770%
Value............................... 0.800% 0.070% 0.870%
Tactical Allocation................. 0.900% 0.127%(A) 1.027%
Growth & Income..................... 0.750% 0.050% 0.800%
U.S. Large Cap Value................ 0.875% 0.070%(A) 0.945%(E)
Equity-Income....................... 0.875%(F) 0.060% 0.935%
Income & Value...................... 0.800%(F) 0.080% 0.880%
Balanced............................ 0.800% 0.070% 0.870%
High Yield.......................... 0.775% 0.065% 0.840%
Strategic Bond...................... 0.775% 0.095% 0.870%
Global Bond......................... 0.800% 0.180% 0.980%
Total Return........................ 0.775% 0.060%(A) 0.835%(E)
Investment Quality Bond............. 0.650% 0.120% 0.770%
Diversified Bond.................... 0.750% 0.090% 0.840%
U.S. Government Securities.......... 0.650% 0.070% 0.720%
Money Market........................ 0.500% 0.050% 0.550%
Small Cap Index..................... 0.525% 0.075%(AG) 0.600%
International Index................. 0.550% 0.050%(AG) 0.600%
Mid Cap Index....................... 0.525% 0.075%(AG) 0.600%
Total Stock Market Index............ 0.525% 0.075%(AG) 0.600%
500 Index........................... 0.525% 0.039%(AG) 0.564%
Lifestyle Aggressive 1000D.......... 0.075% 1.060%(B) 1.135%(C)
Lifestyle Growth 820D............... 0.057% 1.008%(B) 1.065%(C)
Lifestyle Balanced 640D............. 0.057% 0.928%(B) 0.985%(C)
Lifestyle Moderate 460D............. 0.066% 0.869%(B) 0.935%(C)
Lifestyle Conservative 280D......... 0.075% 0.780%(B) 0.855%(C)
</TABLE>
- -----------------
(A) Based on estimates to be made during the current fiscal year.
(B) Reflects expenses of the Underlying Portfolios.
(C) The investment adviser to the Trust, Manufacturers Securities Services, LLC
("MSS" or the "Adviser") has voluntarily agreed to pay certain expenses of
each Lifestyle Trust (excluding the expenses of the Underlying Portfolios)
as follows:
If total expenses of a Lifestyle Trust (absent reimbursement) exceed
0.075%, the Adviser will reduce the advisory fee or reimburse expenses of
that Lifestyle Trust by an amount such that total expenses of the Lifestyle
Trust, equal 0.075%. If the total expenses of a Lifestyle Trust (absent
reimbursement) are equal to or less than 0.075%, then no expenses will be
reimbursed by the Adviser. (For purposes of the expense reimbursement total
expenses of a Lifestyle Trust includes the advisory fee but excludes (a)
the expenses of the Underlying Portfolios, (b) taxes, (c) portfolio
brokerage, (d) interest, (e) litigation and (f) indemnification expenses
and other extraordinary expenses not incurred in the ordinary course of the
Trust's business.)
6
<PAGE> 11
This voluntary expense reimbursement may be terminated at any time. If such
expense reimbursement was not in effect, Total Trust Annual Expenses would be
higher (based on current advisory fees and the Other Expenses of the
Lifestyle Trusts for the fiscal year ended December 31, 1999) as noted in the
chart below:
<TABLE>
<CAPTION>
MANAGEMENT OTHER TOTAL TRUST
TRUST PORTFOLIO FEES EXPENSES ANNUAL EXPENSES
<S> <C> <C> <C>
Lifestyle Aggressive 1000...... 0.075% 1.090% 1.165%
Lifestyle Growth 820........... 0.057% 1.030% 1.087%
Lifestyle Balanced 640......... 0.057% 0.940% 0.997%
Lifestyle Moderate 460......... 0.066% 0.900% 0.966%
Lifestyle Conservative 280..... 0.075% 0.810% 0.885%
</TABLE>
D Each Lifestyle Trust will invest in shares of the Underlying Portfolios.
Therefore, each Lifestyle Trust will bear its pro rata share of the fees
and expenses incurred by the Underlying Portfolios in which it invests, and
the investment return of each Lifestyle Trust will be net of the Underlying
Portfolio expenses. Each Lifestyle Portfolio must bear its own expenses.
However, the Adviser is currently paying certain of these expenses as
described in footnote ( C ) above.
E Annualized - For the period May 1, 1999 (commencement of operations) to
December 31, 1999.
F Management Fees changed effective May 1, 1999. Fees shown are the current
management fees.
G MSS has voluntarily agreed to pay expenses of each Index Trust (excluding
the advisory fee) that exceed the following amounts: 0.050% in the case of
the International Index Trust and 500 Index Trust and 0.075% in the case of
the Small Cap Index Trust, the Mid Cap Index Trust and Total Stock Market
Index Trust. If such expense reimbursement were not in effect, it is
estimated that "Other Expenses" and "Total Trust Annual Expenses" would be
0.022% higher for the International Index Trust, 0.014% higher for the
Small Cap Index Trust, 0.060% higher for the Mid Cap Index Trust and 0.005%
higher for the Total Stock Market Index Trust. It is estimated that the
expense reimbursement will not be effective during the year end December
31, 2000 for the 500 Index Trust. The expense reimbursement may be
terminated at any time by MSS.
H Formerly, the Mid Cap Growth Trust.
EXAMPLE
You would pay the following expenses on a $1,000 investment, assuming 5% annual
return on assets, regardless of whether the contract owner annuitizes as
provided for in the contract, surrenders the contract at the end of the
applicable time period or does not surrender the contract at the end of the
applicable time period:
<TABLE>
<CAPTION>
TRUST PORTFOLIO 1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
Pacific Rim Emerging Markets........ $28 $86 $146 $309
Internet Technologies............... 30 91 155 326
Science & Technology................ 28 87 148 314
International Small Cap............. 30 93 159 334
Aggressive Growth................... 28 86 147 311
Emerging Small Company.............. 28 86 146 310
Small Company Blend................. 30 91 155 327
Dynamic Growth...................... 28 86 147 311
Mid Cap Stock....................... 27 83 142 301
All Cap Growth (A).................. 27 83 141 300
Overseas............................ 29 89 151 319
International Stock................. 29 90 153 322
International Value................. 29 89 152 320
Mid Cap Blend....................... 26 80 136 290
Small Company Value................. 29 89 151 319
Global Equity....................... 27 84 143 304
Growth.............................. 26 79 136 289
</TABLE>
7
<PAGE> 12
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Large Cap Growth.................... 27 82 139 296
Quantitative Equity................. 24 75 129 275
Blue Chip Growth.................... 26 80 137 291
Real Estate Securities.............. 25 75 129 276
Value............................... 26 78 134 286
Tactical Allocation................. 27 83 142 301
Growth and Income................... 25 76 131 279
U.S. Large Cap Value................ 26 81 138 293
Equity-Income....................... 26 80 137 292
Income & Value...................... 26 79 135 287
Balanced............................ 26 78 134 286
High Yield.......................... 25 78 133 283
Strategic Bond...................... 26 78 134 286
Global Bond......................... 27 82 140 296
Total Return........................ 25 77 132 282
Investment Quality Bond............. 25 75 129 276
Diversified Bond.................... 25 78 133 283
U.S. Government Securities.......... 24 74 127 271
Money Market........................ 22 69 118 253
Small Cap Index..................... 23 70 120 258
International Index................. 23 70 120 258
Mid Cap Index....................... 23 70 120 258
Total Stock Market Index............ 23 70 120 258
500 Index........................... 22 69 119 255
Lifestyle Aggressive 1000........... 28 86 147 311
Lifestyle Growth 820................ 27 84 144 305
Lifestyle Balanced 640.............. 27 82 140 297
Lifestyle Moderate 460.............. 26 80 137 292
Lifestyle Conservative 280.......... 25 78 133 284
(A) Formerly, the Mid Cap Growth Trust
</TABLE>
For purposes of presenting the foregoing Example, we have made certain
assumptions. We have assumed that, where applicable, the maximum sales load is
deducted, that there are no transfers or other transactions and that the "Other
Expenses" line item under "Trust Annual Expenses" will remain the same
(including any voluntary expense reimbursement continuing in effect). Those
assumptions, (each of which is mandated by the SEC in an attempt to provide
prospective investors with standardized data with which to compare various
annuity contracts) do not take into account certain features of the contract and
prospective changes in the size of the Trust which may operate to change the
expenses borne by contract owners. CONSEQUENTLY, THE AMOUNTS LISTED IN THE
EXAMPLE ABOVE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES AND ACTUAL EXPENSES BORNE BY CONTRACT OWNERS MAY BE GREATER OR LESSER
THAN THOSE SHOWN.
A TABLE OF ACCUMULATION UNIT VALUES RELATING TO THE CONTRACT IS INCLUDED IN
APPENDIX B TO THIS PROSPECTUS.
LOCATION OF FINANCIAL STATEMENTS OF REGISTRANT AND DEPOSITOR
Our financial statements and those of the Variable Account may be found in
the Statement of Additional Information.
GENERAL INFORMATION ABOUT US, THE VARIABLE ACCOUNT AND THE TRUST
We are an indirect subsidiary of MFC.
THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK
We are a stock life insurance company organized under the laws of New York
on February 10, 1992. Our principal office is located at 100 Summit Lake Drive,
Second Floor Valhalla, New York 10595. We are a wholly-owned subsidiary of The
Manufacturers Life Insurance Company of North America ("MANULIFE NORTH
AMERICA"). Manulife North America is a stock life insurance company organized
under the laws of Delaware in 1979. Manulife North America's principal office is
located at 500 Boylston Street, Boston, Massachusetts 02116. The principal
business of Manulife North America is offering variable
8
<PAGE> 13
annuity contacts, similar to those offered by us in New York, in 48 other
states, and the District of Columbia. Our ultimate parent is Manulife Financial
Corporation ("MFC"), a publicly traded company, based in Toronto, Canada. MFC is
the holding company of The Manufacturers Life Insurance Company and its
subsidiaries, collectively known as Manulife Financial.
The Manufacturers Life Insurance Company of New York's financial
ratings are as follows:
A++ A.M. Best
Superior in financial strength; 1st category of 15
AAA Duff & Phelps
Highest in claims paying ability; 1st category of 18
AA+ Standard & Poor's
Very strong in financial strength; 2nd category of 21
These ratings, which are current as of the date of this prospectus and are
subject to change, are assigned as a measure of The Manufacturers Life Insurance
Company of New York's ability to honor the death benefit, fixed account
guarantees and life annuitization guarantees but not specifically to its
products, the performance (return) of these products, the value of any
investment in these products upon withdrawal or to individual securities held in
any portfolio.
The Variable Account is one of our separate accounts that invests the contract
values you allocate to it in the Trust portfolio(s) you select.
THE VARIABLE ACCOUNT
We established the Variable Account on March 4, 1992. The income, gains and
losses, whether or not realized, from assets of the Variable Account are
credited to or charged against the Variable Account without regard to our other
income, gains or losses. Nevertheless, all obligations arising under the
contracts are our general corporate obligations. Assets of the Variable Account
may not be charged with liabilities arising out of any of our other business.
The Variable Account is registered with the SEC under the Investment
Company Act of 1940, as amended (the "1940 Act") as a unit investment trust. A
unit investment trust is a type of investment company which invests its assets
in specified securities, such as the shares of one or more investment companies.
Registration under the 1940 Act does not involve supervision by the SEC of the
management or investment policies or practices of the Variable Account. If we
determine that it would be in the best interests of persons having voting rights
under the contracts, the Variable Account may be operated as a management
company under the 1940 Act or it may be deregistered if 1940 Act registration
were no longer required.
The Variable Account currently has forty-six sub-accounts. We reserve the
right, subject to prior approval of the New York Superintendent of Insurance and
compliance with applicable law, to add other sub-accounts, eliminate existing
sub-accounts, combine sub-accounts or transfer assets in one sub-account to
another sub-account that we, or an affiliated company, may establish.
The Trust is a mutual fund in which the Variable Account invests.
THE TRUST
The assets of each sub-account of the Variable Account are invested in
shares of a corresponding investment portfolio of the Trust. The Trust is
registered under the 1940 Act as an open-end management investment company. Each
of the portfolios is diversified for purposes of the 1940 Act, except for the
Global Bond Trust and the five Lifestyle Trusts which are non-diversified. The
Trust receives investment advisory services from MSS, the successor to NASL
Financial Services, Inc.
The Trust currently has nineteen subadvisers who manage all of the
portfolios, one of which is Manufacturers Adviser Corporation ("MAC"). Both MSS
and MAC are affiliates of ours.
<TABLE>
<CAPTION>
SUBADVISER PORTFOLIO
<S> <C>
A I M Capital Management, Inc. Aggressive Growth Trust
All Cap Growth Trust (B)
</TABLE>
9
<PAGE> 14
<TABLE>
<CAPTION>
<S> <C>
AXA Rosenberg Investment Management LLC Small Company Value Trust
Capital Guardian Trust Company Small Company Blend Trust
U.S. Large Cap Value Trust
Income & Value Trust
Diversified Bond Trust
Fidelity Management Trust Company Mid Cap Blend Trust
Large Cap Growth Trust
Overseas Trust
Founders Asset Management LLC International Small Cap Trust
Balanced Trust
Franklin Advisers, Inc. Emerging Small Company Trust
Janus Capital Corporation Dynamic Growth Trust
Manufacturers Adviser Corporation Pacific Rim Emerging Markets Trust
Quantitative Equity Trust
Real Estate Securities Trust
Money Market Trust
Index Trusts
Lifestyle Trusts(A)
Miller Anderson & Sherrerd, LLP Value Trust
High Yield Trust
Mitchell Hutchins Asset Management Inc. Tactical Allocation Trust
Morgan Stanley Asset Management Inc. Global Equity Trust
Munder Capital Management Internet Technologies Trust
Pacific Investment Management Company Global Bond Trust
Total Return Trust
Rowe Price-Fleming International, Inc. International Stock Trust
Salomon Brothers Asset Management Inc U.S. Government Securities Trust
Strategic Bond Trust
State Street Global Advisors Growth Trust
Lifestyle Trusts(A)
T. Rowe Price Associates, Inc. Science & Technology Trust
Blue Chip Growth Trust
Equity-Income Trust
Templeton Investment Counsel, Inc. International Value Trust
Wellington Management Company, LLP Growth & Income Trust
Investment Quality Bond Trust
Mid Cap Stock Trust
</TABLE>
(A) State Street Global Advisors provides subadvisory consulting services to
Manufacturers Adviser Corporation regarding management of the Lifestyle Trusts.
(B) Formerly, the Mid Cap Growth Trust.
The following is a brief description of each portfolio:
The PACIFIC RIM EMERGING MARKETS TRUST seeks long-term growth of capital by
investing in
10
<PAGE> 15
a diversified portfolio that is comprised primarily of common stocks and
equity-related securities of corporations domiciled in countries in the Pacific
Rim region.
The INTERNET TECHNOLOGIES TRUST seeks long-term capital appreciation by
investing the portfolio's assets primarily in companies engaged in
Internet-related business (such businesses also include Intranet-related
businesses).
The SCIENCE & TECHNOLOGY TRUST seeks long-term growth of capital by investing at
least 65% of the portfolio's total assets in common stocks of companies expected
to benefit from the development, advancement, and use of science and technology.
Current income is incidental to the portfolio's objective.
The INTERNATIONAL SMALL CAP TRUST seeks capital appreciation by investing
primarily in securities issued by foreign companies which have total market
capitalization or annual revenues of $1 billion or less. These securities may
represent companies in both established and emerging economies throughout the
world.
The AGGRESSIVE GROWTH TRUST seeks long-term capital appreciation by investing
the portfolio's asset principally in common stocks, convertible bonds,
convertible preferred stocks and warrants of companies which in the opinion of
the subadviser are expected to achieve earnings growth over time at a rate in
excess of 15% per year. Many of these companies are in the small and
medium-sized category.
The EMERGING SMALL COMPANY TRUST seeks long-term growth of capital by investing,
under normal market conditions, at least 65% of the portfolio's total assets in
common stock equity securities of companies with market capitalizations that
approximately match the range of capitalization of the Russell 2000 Index
("small cap stocks") at the time of purchase.
The SMALL COMPANY BLEND TRUST seeks long-term growth of capital and income by
investing the portfolio's assets, under normal market conditions, primarily in
equity and equity-related securities of companies with market capitalizations
that approximately match the range of capitalization of the Russell 2000 Index
at the time of purchase.
The DYNAMIC GROWTH TRUST seeks long-term growth of capital by investing the
portfolio's assets primarily in equity securities selected for their growth
potential. Normally at least 50% of its equity assets are invested in
medium-sized companies.
The MID CAP STOCK TRUST seeks long-term growth of capital by investing primarily
in equity securities with significant capital appreciation potential, with
emphasis on medium-sized companies.
The ALL CAP GROWTH TRUST (formerly, Mid Cap Growth Trust) seeks long-term
capital appreciation by investing the portfolio's assets, under normal market
conditions, principally in common stocks of companies that are likely to benefit
from new or innovative products, services or processes, as well as those that
have experienced above-average, long-term growth in earnings and have excellent
prospects for future growth.
The OVERSEAS TRUST seeks growth of capital by investing, under normal market
conditions, at least 65% of the portfolio's assets in foreign securities
(including American Depositary Receipts (ADRs) and European Depositary Receipts
(EDRs)). The portfolio expects to invest primarily in equity securities.
The INTERNATIONAL STOCK TRUST seeks long-term growth of capital by investing
primarily in common stocks of established, non-U.S. companies.
The INTERNATIONAL VALUE TRUST seeks long-term growth of capital by investing,
under normal market conditions, primarily in equity securities of companies
located outside the U.S., including emerging markets.
The MID CAP BLEND TRUST seeks growth of capital by investing primarily in common
stocks of
11
<PAGE> 16
U.S. issuers and securities convertible into or carrying the right to buy common
stocks.
The SMALL COMPANY VALUE TRUST seeks long-term growth of capital by investing,
under normal circumstances, at least 65% of the portfolio's assets in common
stocks of companies with total market capitalization that approximately match
the range of capitalization of the Russell 2000 Index and are traded principally
in the markets of the United States.
The GLOBAL EQUITY TRUST seeks long-term capital appreciation by investing
primarily in equity securities throughout the world, including U.S. issuers and
emerging markets.
The GROWTH TRUST seeks long-term growth of capital by investing primarily in
large capitalization growth securities (market capitalizations of approximately
$1 billion or greater).
The LARGE CAP GROWTH TRUST seeks long-term growth of capital by investing, under
normal market conditions, at least 65% of the portfolio's assets in equity
securities of companies with large market capitalizations.
The QUANTITATIVE EQUITY TRUST seeks to achieve intermediate and long-term growth
through capital appreciation and current income by investing in common stocks
and other equity securities of well established companies with promising
prospects for providing an above average rate of return.
The BLUE CHIP GROWTH TRUST seeks to achieve long-term growth of capital (current
income is a secondary objective) by investing at least 65% of the portfolio's
total assets in the common stocks of large and medium-sized blue chip companies.
Many of the stocks in the portfolio are expected to pay dividends.
The REAL ESTATE SECURITIES TRUST seeks to achieve a combination of long-term
capital appreciation and satisfactory current income by investing in real estate
related equity and debt securities.
The VALUE TRUST seeks to realize an above-average total return over a market
cycle of three to five years, consistent with reasonable risk, by investing
primarily in common and preferred stocks, convertible securities, rights and
warrants to purchase common stocks, ADRs and other equity securities of
companies with equity capitalizations usually greater than $300 million.
The TACTICAL ALLOCATION TRUST seeks total return, consisting of long-term
capital appreciation and current income, by allocating the portfolio's assets
between (i) a stock portion that is designed to track the performance of the S&P
500 Composite Stock Price Index, and (ii) a fixed income portion that consists
of either five-year U.S. Treasury notes or U.S. Treasury bills with remaining
maturities of 30 days.
The GROWTH & INCOME TRUST seeks long-term growth of capital and income,
consistent with prudent investment risk, by investing primarily in a diversified
portfolio of common stocks of U.S. issuers which the subadviser believes are of
high quality.
The U.S. LARGE CAP VALUE TRUST seeks long-term growth of capital and income by
investing the portfolio's assets, under normal market conditions, primarily in
equity and equity-related securities of companies with market capitalization
greater than $500 million.
The EQUITY-INCOME TRUST seeks to provide substantial dividend income and also
long-term capital appreciation by investing primarily in dividend-paying common
stocks, particularly of established companies with favorable prospects for both
increasing dividends and capital appreciation.
The INCOME & VALUE TRUST seeks the balanced accomplishment of (a) conservation
of principal and (b) long-term growth of capital and income by investing the
portfolio's assets in both equity and fixed-income securities. The subadviser
has full discretion to determine the allocation between equity and fixed income
securities.
The BALANCED TRUST seeks current income and capital appreciation by investing in
a balanced portfolio of common stocks, U.S. and foreign government obligations
and a variety of corporate fixed income securities.
12
<PAGE> 17
The HIGH YIELD TRUST seeks to realize an above-average total return over a
market cycle of three to five years, consistent with reasonable risk, by
investing primarily in high yield debt securities, including corporate bonds and
other fixed-income securities.
The STRATEGIC BOND TRUST seeks a high level of total return consistent with
preservation of capital by giving its subadviser broad discretion to deploy the
portfolio's assets among certain segments of the fixed income market as the
subadviser believes will best contribute to achievement of the portfolio's
investment objective.
The GLOBAL BOND TRUST seeks to realize maximum total return, consistent with
preservation of capital and prudent investment management by investing the
portfolio's asset primarily in fixed income securities denominated in major
foreign currencies, baskets of foreign currencies (such as the ECU), and the
U.S. dollar.
The TOTAL RETURN TRUST seeks to realize maximum total return, consistent with
preservation of capital and prudent investment management by investing, under
normal market conditions, at least 65% of the portfolio's assets in a
diversified portfolio of fixed income securities of varying maturities. The
average portfolio duration will normally vary within a three- to six-year time
frame based on the subadviser's forecast for interest rates.
The INVESTMENT QUALITY BOND TRUST seeks a high level of current income
consistent with the maintenance of principal and liquidity, by investing
primarily in a diversified portfolio of investment grade corporate bonds and
U.S. Government bonds with intermediate to longer term maturities. The portfolio
may also invest up to 20% of its assets in non-investment grade fixed income
securities.
The DIVERSIFIED BOND TRUST seeks high total return consistent with the
conservation of capital by investing at least 75% of the portfolio's assets in
fixed income securities.
The U.S. GOVERNMENT SECURITIES TRUST seeks a high level of current income
consistent with preservation of capital and maintenance of liquidity, by
investing in debt obligations and mortgage-backed securities issued or
guaranteed by the U.S. Government, its agencies or instrumentalities and
derivative securities such as collateralized mortgage obligations backed by such
securities.
The MONEY MARKET TRUST seeks maximum current income consistent with preservation
of principal and liquidity by investing in high quality money market instruments
with maturities of 397 days or less issued primarily by U. S.
entities.
The SMALL CAP INDEX TRUST seeks to approximate the aggregate total return of a
small cap U.S. domestic equity market index by attempting to track the
performance of the Russell 2000 Index.*
The INTERNATIONAL INDEX TRUST seeks to approximate the aggregate total return of
a foreign equity market index by attempting to track the performance of the
Morgan Stanley European Australian Far East Free Index (the "MSCI EAFE Index").*
The MID CAP INDEX TRUST seeks to approximate the aggregate total return of a mid
cap U.S. domestic equity market index by attempting to track the performance of
the S&P Mid Cap 400 Index.*
The TOTAL STOCK MARKET INDEX seeks to approximate the aggregate total return of
a broad U.S. domestic equity market index by attempting to track the performance
of the Wilshire 5000 Equity Index.*
The 500 INDEX TRUST seeks to approximate the aggregate total return of a broad
U.S. domestic equity market index by attempting to track the performance of the
S&P 500 Composite Stock Price Index.*
The LIFESTYLE AGGRESSIVE 1000 TRUST seeks to provide long-term growth of capital
(current income is not a consideration) by investing 100% of the Lifestyle
Trust's assets in other portfolios of the
13
<PAGE> 18
Trust ("Underlying Portfolios") which invest primarily in equity securities.
The LIFESTYLE GROWTH 820 TRUST seeks to provide long-term growth of capital with
consideration also given to current income by investing approximately 20% of the
Lifestyle Trust's assets in Underlying Portfolios which invest primarily in
fixed income securities and approximately 80% of its assets in Underlying
Portfolios which invest primarily in equity securities.
The LIFESTYLE BALANCED 640 TRUST seeks to provide a balance between a high level
of current income and growth of capital with a greater emphasis given to capital
growth by investing approximately 40% of the Lifestyle Trust's assets in
Underlying Portfolios which invest primarily in fixed income securities and
approximately 60% of its assets in Underlying Portfolios which invest primarily
in equity securities.
The LIFESTYLE MODERATE 460 TRUST seeks to provide a balance between a high level
of current income and growth of capital with a greater emphasis given to current
income by investing approximately 60% of the Lifestyle Trust's assets in
Underlying Portfolios which invest primarily in fixed income securities and
approximately 40% of its assets in Underlying Portfolios which invest primarily
in equity securities.
The LIFESTYLE CONSERVATIVE 280 TRUST seeks to provide a high level of current
income with some consideration also given to growth of capital by investing
approximately 80% of the Lifestyle Trust's assets in Underlying Portfolios which
invest primarily in fixed income securities and approximately 20% of its assets
in Underlying Portfolios which invest primarily in equity securities.
*"Standard & Poor's(R)," "S&P 500(R)," "Standard and Poor's 500(R)" and
"Standard and Poor's 400(R)" are trademarks of The McGraw-Hill Companies, Inc.
"Russell 2000(R)" is a trademark of Frank Russell Company. "Wilshire 5000(R)" is
a trademark of Wilshire Associates. "Morgan Stanley European Australian Far East
Free" and "EAFE(R)" are trademarks of Morgan Stanley & Co. Incorporated. None of
the Index Trusts are sponsored, endorsed, managed, advised, sold or promoted by
any of these companies, and none of these companies make any representation
regarding the advisability of investing in the Trust.
A full description of the Trust, including the investment objectives,
policies and restrictions of, and the risks relating to investment in, each
portfolio is contained in the Trust's Prospectus which we provided you along
with this Prospectus. The Trust prospectus should be read carefully before
allocating purchase payments to a sub-account.
If the shares of a Trust portfolio are no longer available for investment
or in our judgment investment in a Trust portfolio becomes inappropriate, we may
eliminate the shares of a portfolio and substitute shares of another portfolio
of the Trust or another open-end registered investment company. Substitution may
be made with respect to both existing investments and the investment of future
purchase payments. However, we will make no such substitution without first
notifying you and obtaining approval of the New York Superintendent of Insurance
and the SEC (to the extent required by the 1940 Act).
You instruct us how to vote Trust shares.
We will vote shares of the Trust portfolios held in the Variable Account at
the Trust's shareholder meetings according to voting instructions received from
the persons having the voting interest under the contracts. We will determine
the number of portfolio shares for which voting instructions may be given not
more than 90 days prior to the meeting. Trust proxy material will be distributed
to each person having the voting interest under the contract together with
appropriate forms for giving voting instructions. We will vote all portfolio
shares that we hold (including our own shares and those we hold in the Variable
Account for contract owners) in proportion to the instructions so received.
During the accumulation period, the contract owner has the voting interest
under a contract. During the pay-out period, the annuitant has the voting
interest under a contract. We reserve the right to make any changes in the
voting rights described above that may be permitted by the federal securities
laws, regulations or interpretations thereof. For further information on voting
interest under the contract see "Voting Interest" in this prospectus.
14
<PAGE> 19
DESCRIPTION OF THE CONTRACT
ACCUMULATION PERIOD PROVISIONS
The minimum purchase payment is $25,000. Subsequent purchase payments are not
permitted. Payments over $1 million require our approval.
PURCHASE PAYMENTS
Your purchase payments are made to us at our Annuity Service Office. The
minimum purchase payment is $25,000. Subsequent purchase payments are not
permitted. For purchase payments in excess of $1,000,000 you must obtain our
approval in order to make the payment.
You designate how your purchase payment is to be allocated among the
investment options.
15
<PAGE> 20
The value of an investment account is measured in "accumulation units," which
vary in value with the performance of the underlying Trust portfolio.
ACCUMULATION UNITS
During the accumulation period, we will establish an "INVESTMENT ACCOUNT"
for you for each Variable Account investment option to which you allocate a
portion of your contract value. Amounts are credited to those investment
accounts in the form of "ACCUMULATION UNITS" (units of measure used to calculate
the value of the variable portion of your contract during the accumulation
period). The number of accumulation units to be credited to each investment
account is determined by dividing the amount allocated to that investment
account by the value of an accumulation unit for that investment account next
computed after the purchase payment is received at our Annuity Service Office
complete with all necessary information or, in the case of the first purchase
payment, pursuant to the procedures described below.
Initial purchase payments received by mail will usually be credited on the
business day (any date on which the New York Stock Exchange is open and the net
asset value of a Trust portfolio is determined) on which they are received at
our Annuity Service Office, and in any event not later than two business days
after our receipt of all information necessary for issuing the contract. You
will be informed of any deficiencies preventing processing if your contract
cannot be issued. If the deficiencies are not remedied within five business days
after receipt, your purchase payment will be returned promptly, unless you
specifically consent to our retaining your purchase payment until all necessary
information is received. Initial purchase payments received by wire transfer
from broker-dealers will be credited on the business day received by us if the
broker-dealers have made special arrangements with us.
VALUE OF ACCUMULATION UNITS
The value of your accumulation units will vary from one business day to the
next depending upon the investment results of the investment options you select.
The value of an accumulation unit for each sub-account was arbitrarily set at
$10 or $12.50 for the first business day under other contracts we have issued.
The value of an accumulation unit for any subsequent business day is determined
by multiplying the value of an accumulation unit for the immediately preceding
business day by the net investment factor for that sub-account (described below)
for the business day for which the value is being determined. Accumulation units
will be valued at the end of each business day. A business day is deemed to end
at the time of the determination of the net asset value of the Trust shares.
NET INVESTMENT FACTOR
The net investment factor is an index used to measure the investment
performance of a sub-account from one business day to the next (the "VALUATION
PERIOD"). The net investment factor may be greater or less than or equal to one;
therefore, the value of an accumulation unit may increase, decrease or remain
the same. The net investment factor for each sub-account for any valuation
period is determined by dividing (a) by (b) and subtracting (c) from the result:
- Where (a) is:
- the net asset value per share of a portfolio share held in the
sub-account determined at the end of the current valuation
period, plus
- the per share amount of any dividend or capital gain
distributions made by the portfolio on shares held in the
sub-account if the "ex-dividend" date occurs during the current
valuation period.
- Where (b) is the net asset value per share of a portfolio share held
in the sub-account determined as of the end of the immediately
preceding valuation period.
- Where (c) is a factor representing the charges deducted from the
sub-account on a daily basis for administrative expenses, a portion of
the distribution expenses, and mortality and expense risks. That
factor is equal on an annual basis to 1.65% (0.25% for administrative
expenses, 0.15% for distribution expenses and 1.25% for mortality and
expense risks).
16
<PAGE> 21
Amounts invested may be transferred among investment options.
TRANSFERS AMONG INVESTMENT OPTIONS
During the accumulation period, you may transfer amounts among the
investment options at any time and without charge upon written notice to us.
Accumulation units will be canceled from the investment account from which you
transfer amounts transferred and credited to the investment account to which you
transfer amounts. Your contract value on the date of the transfer will not be
affected by a transfer. You must transfer at least $300 or, if less, the entire
value of the investment account. If after the transfer the amount remaining in
the investment account is less than $100, then we will transfer the entire
amount instead of the requested amount. We reserve the right to limit, upon
notice, the maximum number of transfers you may make to one per month or six at
any time within a contract year. In addition, we reserve the right to defer a
transfer at any time we are unable to purchase or redeem shares of the Trust
portfolios. We also reserve the right to modify or terminate the transfer
privilege at any time (to the extent permitted by applicable law).
Currently, the Company imposes no charge for transfer requests. The first
twelve transfers in a contract year are free of any transfer charge. For each
additional transfer in a contract year, the Company does not currently assess a
charge but reserves the right (to the extent permitted by your contract) to
assess a reasonable charge to reimburse it for the expenses of processing
transfers.
Where permitted by law, we may accept your authorization for a third party
to make transfers for you subject to our rules. However, the contract is not
designed for professional market timing organizations or other entities or
persons engaging in programmed, frequent or large exchanges (collectively,
"market timers") to speculate on short-term movements in the market since such
activity may be disruptive to the Trust portfolios and increase their
transaction costs. Therefore, in order to prevent excessive use of the exchange
privilege, we reserve the right to (a) reject or restrict any specific purchase
and exchange requests and (b) impose specific limitations with respect to market
timers, including restricting exchanges by market timers to certain variable
investment options (transfers by market timers into or out of fixed investment
options is not permitted).
MAXIMUM NUMBER OF INVESTMENT OPTIONS
Upon issuance of the contract, purchase payments may be allocated among up to
seventeen of the available investment options (including all fixed account
investment options). After the contract is issued, there is no limit on the
number of investment options to which you may allocate purchase payments.
TELEPHONE TRANSACTIONS
Any person who can furnish proper account identification is permitted to
request transfers by telephone. The telephone transaction privilege is made
available automatically without the contract owner's election. We will not be
liable for following instructions communicated by telephone that we reasonably
believe to be genuine. We will employ reasonable procedures to confirm that
instructions communicated by telephone are genuine and may only be liable for
any losses due to unauthorized or fraudulent instructions where we fail to
employ our procedures properly. Such procedures include the following: upon
telephoning a request, you will be asked to provide information that verifies
that it is you calling. For both your and our protection, we will tape record
all conversations with you. All telephone transactions will be followed by a
confirmation statement of the transaction. We reserve the right to impose new
procedural requirements regarding transfer privileges.
Dollar Cost Averaging and Asset Rebalancing programs are available.
SPECIAL TRANSFER SERVICES - DOLLAR COST AVERAGING
We administer a Dollar Cost Averaging ("DCA") program. If you enter into a
DCA agreement, you may instruct us to transfer monthly a predetermined dollar
amount from any sub-account or the one year fixed account investment option to
other sub-accounts until the amount in the sub-account from which the transfer
is made or one year fixed account investment option is exhausted. A DCA fixed
account investment option may be established under the DCA program to make
automatic transfers. Only purchase payments (and not existing contract values)
may be allocated to the DCA fixed account investment option. If the DCA fixed
account investment option is elected, the amounts allocated to this account will
be credited with interest at the guaranteed interest rate in effect on the date
of such allocation.
17
<PAGE> 22
The DCA program is generally suitable if you are making a substantial
deposit and desire to control the risk of investing at the top of a market
cycle. The DCA program allows investments to be made in equal installments over
time in an effort to reduce that risk. Therefore, a lower purchase price may be
achieved over the long-term by purchasing more accumulation units of a
particular sub-account when the unit value is low; less when the unit value is
high. However, the DCA program does not guarantee profits or prevent losses in a
declining market and requires regular investment regardless of fluctuating price
levels. Contract owners interested in the DCA program should consider their
financial ability to continue purchases through periods of low price levels. If
you are interested in the DCA program, you may elect to participate in the
program on the application or by separate application. You may obtain a separate
application and full information concerning the program and its restrictions
from your securities dealer or our Annuity Service Office. There is no charge
for participation in the DCA program.
ASSET REBALANCING PROGRAM
We administer an Asset Rebalancing Program which enables you to specify the
percentage levels you would like to maintain in particular portfolios. Your
contract value will be automatically rebalanced pursuant to the schedule
described below to maintain the indicated percentages by transfers among the
portfolios. (The Fixed Account Investment Options are not eligible for
participation in the Asset Rebalancing Program.) The entire value of the
variable investment accounts must be included in the Asset Rebalancing Program.
Other investment programs, such as the DCA program, or other transfers or
withdrawals may not work in concert with the Asset Rebalancing Program.
Therefore, you should monitor your use of these other programs and any other
transfers or withdrawals while the Asset Rebalancing Program is being used. If
you are interested in the Asset Rebalancing Program, you may obtain a separate
application and full information concerning the program and its restrictions
from your securities dealer or our Annuity Service Office. There is no charge
for participation in the Asset Rebalancing Program.
Asset rebalancing will only be permitted on the following time schedules:
- quarterly on the 25th day of the last month of the quarter (or the
next business day if the 25th is not a business day);
- semi-annually on June 25th or December 26th (or the next business day
if these dates are not business days); or
- annually on December 26th (or the next business day if December 26th
is not a business day).
You may withdraw all or a portion of your contract value, but may incur tax
liability as a result.
WITHDRAWALS
During the accumulation period, you may withdraw all or a portion of your
contract value upon written request (complete with all necessary information) to
our Annuity Service Office. For certain qualified contracts, exercise of the
withdrawal right may require the consent of the qualified plan participant's
spouse under the Internal Revenue Code of 1986, as amended (the "Code") and
related Treasury Department regulations. In the case of a total withdrawal, we
will pay the contract value as of the date of receipt of the request at our
Annuity Service Office, minus the annual $30 administration fee (if applicable)
and any unpaid loans (including unpaid interest). The contract then will be
canceled. In the case of a partial withdrawal, we will pay the amount requested
and cancel accumulation units credited to each investment account equal in value
to the amount withdrawn from that investment account.
When making a partial withdrawal, you should specify the investment options
from which the withdrawal is to be made. The amount requested from an investment
option may not exceed the value of that investment option. If you do not specify
the investment options from which a partial withdrawal is to be taken, the
withdrawal will be taken from the variable account investment options until
exhausted and then from the fixed account investment options. If the partial
withdrawal is less than the total value in the variable account investment
options, the withdrawal will be taken proportionately from all of your variable
account investment options. For rules governing the order and manner of
withdrawals from the fixed account investment options, see "FIXED ACCOUNT
INVESTMENT OPTIONS".
There is no limit on the frequency of partial withdrawals; however, the
amount withdrawn must be at least $300 or, if less, the entire balance in the
investment option. If after the withdrawal the amount remaining in the
investment option is less than $100, we will treat the partial withdrawal as a
withdrawal of
18
<PAGE> 23
the entire amount held in the investment option. If a partial withdrawal charge
would reduce the contract value to less than $300, we will treat the partial
withdrawal as a total withdrawal of the contract value.
The amount of any withdrawal from the variable account investment options
will be paid promptly, and in any event within seven days of receipt of the
request, complete with all necessary information at our Annuity Service Office,
except that we reserve the right to defer the right of withdrawal or postpone
payments for any period when:
- the New York Stock Exchange is closed (other than customary weekend
and holiday closings),
- trading on the New York Stock Exchange is restricted,
- an emergency exists as a result of which disposal of securities held
in the Variable Account is not reasonably practicable or it is not
reasonably practicable to determine the value of the Variable
Account's net assets, or
- the SEC, by order, so permits for the protection of security holders;
provided that applicable rules and regulations of the SEC shall govern
as to whether trading is restricted or an emergency exists.
Withdrawals from the contract may be subject to income tax and a 10%
penalty tax (See "Federal Tax Matters"). Withdrawals are permitted from
contracts issued in connection with Section 403(b) qualified plans only under
limited circumstances (see Appendix C: "Qualified Plan Types")
Systematic "Income Plan" withdrawals are available.
SPECIAL WITHDRAWAL SERVICES - THE INCOME PLAN
We administer an Income Plan ("IP") which permits you to pre-authorize a
periodic exercise of the contractual withdrawal rights described above. After
entering into an IP agreement, you may instruct us to withdraw a level dollar
amount from specified investment options on a periodic basis. The total of IP
withdrawals in a contract year is limited to not more than 20% of the purchase
payment made. If an additional withdrawal is made from a contract participating
in an IP, the IP will terminate automatically and may be reinstated only on or
after the next contract anniversary pursuant to a new application. The IP is not
available to contracts participating in the dollar cost averaging program. IP
withdrawals, like other withdrawals, may be subject to income tax and a 10%
penalty tax. If you are interested in an IP, you may obtain a separate
application and full information concerning the program and its restrictions
from your securities dealer or our Annuity Service Office. The IP program is
offered without charge.
If you die during the accumulation period, your beneficiary will receive a death
benefit that might exceed your contract value.
DEATH BENEFIT DURING ACCUMULATION PERIOD
IN GENERAL. The following discussion applies principally to contracts that
are not issued in connection with qualified plans, i.e., "NON-QUALIFIED
CONTRACTS." Tax law requirements applicable to qualified plans, and the tax
treatment of amounts held and distributed under such plans, are quite complex.
Accordingly, if your contract is to be used in connection with a qualified plan,
you should seek competent legal and tax advice regarding the suitability of the
contract for the situation involved and the requirements governing the
distribution of benefits, including death benefits, from a contract used in the
plan. In particular, if you intend to use the contract in connection with a
qualified plan, you should consider that the contract provides a death benefit
(described below) that could be characterized as an "incidental death benefit."
There are limits on the amount of incidental benefits that may be provided under
certain qualified plans and the provision of such benefits may result in
currently taxable income to plan participants (see "FEDERAL TAX MATTERS" and
Appendix C).
AMOUNT OF DEATH BENEFIT. If any owner dies and the oldest owner had an
attained age of less than 81 years on the contract date, the death benefit will
be determined as follows:
During the first contract year, the death benefit will be the greater of:
- the contract value or
19
<PAGE> 24
- the sum of the purchase payment made, less any amounts deducted in
connection with partial withdrawals.
During any subsequent contract year, the death benefit will be the greater
of:
- the contract value or
- the death benefit on the last day of the previous contract year, less
any amounts deducted in connection with partial withdrawals since
then.
If any owner dies on or after his or her 81st birthday, the death benefit
will be the greater of:
- the contract value or
- the death benefit on the last day of the contract year ending just
prior to the owner's 81st birthday, less amounts deducted in
connection with partial withdrawals.
If any owner dies and the oldest owner had an attained age of 81 years or
greater on the contract date, the death benefit will be greater of:
- the contract value or
- the excess of the purchase payment over the sum of any amounts
deducted in connection with partial withdrawals.
The determination of the death benefit will be made on the date we receive
written notice and "proof of death" as well as all required completed claims
forms, at our Annuity Service Office. No one is entitled to the death benefit
until this time. Death benefits will be paid within 7 days of that
determination. Proof of death occurs when we receive one of the following at our
Annuity Service Office within one year of the date of death:
- a certified copy of a death certificate;
- a certified copy of a decree of a court of competent jurisdiction as
to the finding of death; or
- any other proof satisfactory to us.
If there are any unpaid loans, the death benefit equals the death benefit, as
described above, minus the amount of unpaid loans (including unpaid interest).
PAYMENT OF DEATH BENEFIT. We will pay the death benefit to the beneficiary
if any contract owner dies before the maturity date. If there is a surviving
contract owner, that contract owner will be deemed to be the beneficiary. No
death benefit is payable on the death of any annuitant, except that if any
contract owner is not a natural person, the death of any annuitant will be
treated as the death of an owner. On the death of the last surviving annuitant,
the contract owner, if a natural person, will become the annuitant unless the
contract owner designates another person as the annuitant.
The death benefit may be taken in the form of a lump sum immediately, in
which case the contract will terminate. If not taken immediately, the contract
will continue subject to the following:
- The beneficiary will become the contract owner.
- Any excess of the death benefit over the contract value will be
allocated to the owner's investment accounts in proportion to their
relative values on the date of receipt at our Annuity Service Office
of due proof of the owner's death.
- No additional purchase payments may be made.
- If the beneficiary is not the deceased owner's spouse, distribution of
the contract owner's entire interest in the contract must be made
within five years of the owner's death, or alternatively, distribution
may be made as an annuity, under one of the annuity options described
below, which begins within one year of the owner's death and is
payable over the life of the beneficiary or over a period not
extending beyond the life expectancy of the
20
<PAGE> 25
beneficiary. Upon the death of the beneficiary, the death benefit will
equal the contract value and must be distributed immediately in a
single sum.
- If the owner's spouse is the beneficiary, the spouse continues the
contract as the new owner. In such a case, the distribution rules
applicable when a contract owner dies will apply when the spouse, as
the owner, dies. In addition, a death benefit will be paid upon the
death of the spouse. For purposes of calculating the death benefit
payable upon the death of the spouse, the death benefit paid upon the
first owner's death will be treated as a purchase payment to the
contract. In addition, the purchase payment and all amounts deducted
in connection with partial withdrawals prior to the date of the first
owner's death will not be considered in the determination of the
spouse's death benefit.
If any annuitant is changed and any contract owner is not a natural person,
the entire interest in the contract must be distributed to the contract owner
within five years.
A substitution or addition of any contract owner may result in resetting
the death benefit to an amount equal to the contract value as of the date of the
change. For purposes of subsequent calculations of the death benefit prior to
the maturity date, the contract value on the date of the change will be treated
as an initial purchase payment made on that date. In addition, all payments made
and all amounts deducted in connection with partial withdrawals prior to the
date of the change will not be considered in the determination of the death
benefit. No such change in death benefit will be made if the person whose death
will cause the death benefit to be paid is the same after the change in
ownership or if ownership is transferred to the owner's spouse.
Death benefits will be paid within seven days of the date the amount of the
death benefit is determined, as described above, subject to postponement under
the same circumstances that payment of withdrawals may be postponed (see
"WITHDRAWALS").
PAY-OUT PERIOD PROVISIONS
You have a choice of several different ways of receiving annuity benefit
payments from us.
GENERAL
You or your beneficiary may elect to have any amounts that we are obligated
to pay you or your beneficiary on withdrawal or death, or as of the maturity
date, paid by means of periodic annuity benefit payments rather than in one lump
sum (subject to the distribution of death benefit provisions described above).
Generally, we will begin paying annuity benefits under the contract on the
contract's maturity date (the first day of the pay-out period). The maturity
date is the date specified on your contract's specifications page, unless you
change that date. If no date is specified, the maturity date is the maximum
maturity date described below. The maximum maturity date is the first day of the
month following the 90th birthday of the annuitant. You may specify a different
maturity date at any time by written request at least one month before both the
previously specified and the new maturity date. The new maturity date may not be
later than the maximum maturity date. Maturity dates which occur at advanced
ages, e.g., past age 85, may in some circumstances have adverse income tax
consequences (see "FEDERAL TAX MATTERS"). Distributions from qualified contracts
may be required before the maturity date.
You may select the frequency of annuity payments. However, if the contract
value at the maturity date is such that a monthly payment would be less than
$20, we may pay the contract value, minus any unpaid loans, in one lump sum to
the annuitant on the maturity date.
ANNUITY OPTIONS
Annuity benefit payments are available under the contract on a fixed,
variable, or combination fixed and variable basis. Upon purchase of the
contract, and at any time during the accumulation period, you may select one or
more of the annuity options described below on a fixed and/or variable basis
(except Option 5 which is available on a fixed basis only) or choose an
alternate form of payment acceptable to us. If an annuity option is not
selected, we will provide as a default option a life annuity with payments
guaranteed for ten years as described below. Annuity payments will be determined
based on the
21
<PAGE> 26
Investment Account Value of each investment option at the maturity date.
Treasury Department regulations may preclude the availability of certain annuity
options in connection with certain qualified contracts.
Please read the description of each annuity option carefully. In general, a
non-refund life annuity provides the highest level of payments. However, because
there is no guarantee that any minimum number of payments will be made, an
annuitant may receive only one payment if the annuitant dies prior to the date
the second payment is due. Annuities with payments guaranteed for a certain
number of years may also be elected but the amount of each payment will be lower
than that available under the non-refund life annuity option.
The following annuity options are guaranteed to be offered in the contract.
OPTION 1(a): NON-REFUND LIFE ANNUITY - An annuity with payments during the
lifetime of the annuitant. No payments are due after the death of the
annuitant. Because there is no guarantee that any minimum number of
payments will be made, an annuitant may receive only one payment if the
annuitant dies prior to the date the second payment is due.
OPTION 1(b): LIFE ANNUITY WITH PAYMENTS GUARANTEED FOR 10 YEARS - An
annuity with payments guaranteed for 10 years and continuing thereafter
during the lifetime of the annuitant. Because payments are guaranteed for
10 years, annuity payments will be made to the end of such period if the
annuitant dies prior to the end of the tenth year.
OPTION 2(a): JOINT & SURVIVOR NON-REFUND LIFE ANNUITY - An annuity with
payments during the lifetimes of the annuitant and a designated
co-annuitant. No payments are due after the death of the last survivor of
the annuitant and co-annuitant. Because there is no guarantee that any
minimum number of payments will be made, an annuitant or co-annuitant may
receive only one payment if the annuitant and co-annuitant die prior to the
date the second payment is due.
OPTION 2(b): JOINT & SURVIVOR LIFE ANNUITY WITH PAYMENTS GUARANTEED FOR 10
YEARS - An annuity with payments guaranteed for 10 years and continuing
thereafter during the lifetimes of the annuitant and a designated
co-annuitant. Because payments are guaranteed for 10 years, annuity
payments will be made to the end of such period if both the annuitant and
the co-annuitant die prior to the end of the tenth year.
In addition to the foregoing annuity options which we are contractually
obligated to offer at all times, we currently offer the following annuity
options. We may cease offering the following annuity options at any time and may
offer other annuity options in the future.
OPTION 3: LIFE ANNUITY WITH PAYMENTS GUARANTEED FOR 5, 15 OR 20 YEARS - An
Annuity with payments guaranteed for 5, 15 or 20 years and continuing
thereafter during the lifetime of the annuitant. Because payments are
guaranteed for the specific number of years, annuity payments will be made
to the end of the last year of the 5, 15 or 20 year period.
OPTION 4: JOINT & TWO-THIRDS SURVIVOR NON-REFUND LIFE ANNUITY - An annuity
with full payments during the joint lifetime of the annuitant and a
designated co-annuitant and two-thirds payments during the lifetime of the
survivor. Because there is no guarantee that any minimum number of payments
will be made, an annuitant or co-annuitant may receive only one payment if
the annuitant and co-annuitant die prior to the date the second payment is
due.
OPTION 5: PERIOD CERTAIN ONLY ANNUITY FOR 5, 10, 15 OR 20 YEARS - An
annuity with payments for a 5, 10, 15 or 20 year period and no payments
thereafter.
22
<PAGE> 27
DETERMINATION OF AMOUNT OF THE FIRST VARIABLE ANNUITY PAYMENT
The first variable annuity payment is determined by applying that amount of
the contract value used to purchase a variable annuity to the annuity tables
contained in the contract. The amount of the contract value will be determined
as of a date not more than ten businesss days prior to the maturity date. The
amount of the first and all subsequent fixed annuity payments is determined on
the same basis using the portion of the contract value used to purchase a fixed
annuity. Contract value used to determine annuity payments will be reduced by
any applicable premium taxes.
The rates contained in the annuity tables vary with the annuitant's sex and
age and the annuity option selected. However, for contracts issued in connection
with certain employer-sponsored retirement plans sex-distinct tables may not be
used. Under such tables, the longer the life expectancy of the annuitant under
any life annuity option or the longer the period for which payments are
guaranteed under the option, the smaller the amount of the first monthly
variable annuity payment will be.
ANNUITY UNITS AND THE DETERMINATION OF SUBSEQUENT VARIABLE ANNUITY PAYMENTS
Variable annuity payments after the first one will be based on the
investment performance of the sub-accounts selected during the pay-out period.
The amount of a subsequent payment is determined by dividing the amount of the
first annuity payment from each sub-account by the annuity unit value of that
sub-account (as of the same date the contract value to effect the annuity was
determined) to establish the number of annuity units which will thereafter be
used to determine payments. This number of annuity units for each sub-account is
then multiplied by the appropriate annuity unit value as of a uniformly applied
date not more than ten business days before the annuity payment is due, and the
resulting amounts for each sub-account are then totaled to arrive at the amount
of the annuity benefit payment to be made. The number of annuity units generally
remains constant throughout the pay-out period (assuming no transfer is made).
The value of an annuity unit for each sub-account for any business day is
determined by multiplying the annuity unit value for the immediately preceding
business day by the net investment factor for that sub-account (see "NET
INVESTMENT FACTOR") for the valuation period for which the annuity unit value is
being calculated and by a factor to neutralize the assumed interest rate.
A 3% assumed interest rate is built into the annuity tables in the contract
used to determine the first variable annuity payment.
Some transfers are permitted during the pay-out period, but subject to a few
more limitations than during the accumulation period.
TRANSFERS DURING PAY-OUT PERIOD
Once variable annuity payments have begun, you may transfer all or part of
the investment upon which those payments are based from one sub-account to
another. You must submit your transfer request to our Annuity Service Office at
least 30 days before the due date of the first annuity payment to which your
transfer will apply. Transfers after the maturity date will be made by
converting the number of annuity units being transferred to the number of
annuity units of the sub-account to which the transfer is made, so that the next
annuity payment if it were made at that time would be the same amount that it
would have been without the transfer. Thereafter, annuity payments will reflect
changes in the value of the annuity units for the new sub-account selected. We
reserve the right to limit, upon notice, the maximum number of transfers a
contract owner may make per contract year to four. Once annuity payments have
commenced, no transfers may be made from a fixed annuity option to a variable
annuity option or from a variable annuity option to a fixed annuity option. In
addition, we reserve the right to defer the transfer privilege at any time that
we are unable to purchase or redeem shares of the Trust portfolios. We also
reserve the right to modify or terminate the transfer privilege at any time in
accordance with New York law.
DEATH BENEFIT DURING PAY-OUT PERIOD
If an annuity option providing for payments for a guaranteed period has
been selected, and the annuitant dies during the pay-out period, we will make
the remaining guaranteed payments to the beneficiary. Any remaining payments
will be made as rapidly as under the method of distribution being used as of the
date of the annuitant's death. If no beneficiary is living, we will commute any
unpaid guaranteed payments to a single sum (on the basis of the interest rate
used in determining the payments) and pay that single sum to the estate of the
last to die of the annuitant and the beneficiary.
23
<PAGE> 28
OTHER CONTRACT PROVISIONS
You have a ten-day right to cancel your contract.
RIGHT TO REVIEW CONTRACT
You may cancel the contract by returning it to our Annuity Service Office
or to your registered representative within 10 days after receiving it. Within 7
days of receiving a returned contract, we will pay you the contract value (minus
any unpaid loans) computed at the end of the business day on which we receive
your contract. When the contract is issued as an individual retirement annuity
under Sections 408 or 408A of the Code, during the first 7 days of the 10 day
period we will return the purchase payment if it is greater than the amount
otherwise payable.
If you purchased the contract in connection with a replacement of an
existing annuity contract (as described below), you may also cancel the contract
by returning it to our Annuity Service Office or your registered representative
at any time within 60 days after receiving the contract. Within 10 days of
receiving a returned contract, we will pay you the contract value (minus any
unpaid loans) computed at the end of the business day on which we receive your
returned contract. In the case of a replacement of a contract issued by a New
York insurance company, you may have the right to reinstate the prior contract.
You should consult with your registered representative or attorney regarding
this matter prior to purchasing the new contract.
Replacement of an existing annuity contract generally is defined as the
purchase of a new annuity contract in connection with (a) the lapse, partial or
full surrender or change of, or borrowing from, an existing annuity or life
insurance contract or (b) the assignment to a new issuer of an existing annuity
contract. This description, however, does not necessarily cover all situations
which could be considered a replacement of an existing annuity contract.
Therefore, you should consult with your registered representative or attorney
regarding whether the purchase of a new annuity contract is a replacement of an
existing annuity or life insurance contract.
You are entitled to exercise all rights under your contract.
OWNERSHIP
The contract owner is the person entitled to exercise all rights under the
contract. Prior to the maturity date, the contract owner is the person
designated in the contract specifications page or as subsequently named. On and
after the maturity date, the annuitant is the contract owner. If amounts become
payable to any beneficiary under the contract, the beneficiary is the contract
owner.
In the case of non-qualified contracts, ownership of the contract may be
changed or the contract may be collaterally assigned at any time prior to the
maturity date, subject to the rights of any irrevocable beneficiary. Assigning a
contract, or changing the ownership of a contract, may be treated as a
(potentially taxable) distribution of the contract value for federal tax
purposes. A change of any contract owner may result in resetting the death
benefit to an amount equal to the contract value as of the date of the change
and treating that value as a purchase payment made on that date for purposes of
computing the amount of the death benefit.
Any change of ownership or assignment must be made in writing. We must
approve any change. Any assignment and any change, if approved, will be
effective as of the date we receive the request at our Annuity Service Office.
We assume no liability for any payments made or actions taken before a change is
approved or an assignment is accepted or responsibility for the validity or
sufficiency of any assignment. An absolute assignment will revoke the interest
of any revocable beneficiary.
In the case of qualified contracts, ownership of the contract generally may
not be transferred except by the trustee of an exempt employees' trust which is
part of a retirement plan qualified under Section 401 of the Code or as
otherwise permitted by applicable Internal Revenue Service ("IRS") regulations.
Subject to the foregoing, a qualified contract may not be sold, assigned,
transferred, discounted or pledged as collateral for a loan or as security for
the performance of an obligation or for any other purpose to any person other
than us.
24
<PAGE> 29
The "annuitant" is either you or someone you designate.
ANNUITANT
The annuitant is any natural person or persons whose life is used to
determine the duration of annuity payments involving life contingencies. If the
contract owner names more than one person as an "annuitant," the second person
named shall be referred to as "CO-ANNUITANT." The annuitant is as designated on
the contract specifications page or in the application, unless changed.
On the death of the annuitant, the co-annuitant, if living, becomes the
annuitant. If there is no living co-annuitant, the owner becomes the annuitant.
In the case of certain qualified contracts, there are limitations on the ability
to designate and change the annuitant and the co-annuitant.
The "beneficiary" is the person you designate to receive the death benefit if
you die.
BENEFICIARY
The beneficiary is the person, persons or entity designated in the contract
specifications page (or as subsequently changed). However, if there is a
surviving contract owner, that person will be treated as the beneficiary. The
beneficiary may be changed subject to the rights of any irrevocable beneficiary.
Any change must be made in writing, approved by us, and (if approved) will be
effective as of the date on which written. We assume no liability for any
payments made or actions taken before the change is approved. If no beneficiary
is living, the contingent beneficiary will be the beneficiary. The interest of
any beneficiary is subject to that of any assignee. If no beneficiary or
contingent beneficiary is living, the beneficiary is the estate of the deceased
contract owner. In the case of certain qualified contracts, Treasury Department
regulations may limit designations of beneficiaries.
MODIFICATION
We may not modify your contract without your consent, except to the extent
required to make it conform to any law or regulation or ruling issued by a
governmental agency. The provisions of the contract shall be interpreted so as
to comply with the requirements of Section 72(s) of the Code.
OUR APPROVAL
We reserve the right to accept or reject any contract application at our
sole discretion.
MISSTATEMENT AND PROOF OF AGE, SEX OR SURVIVAL
We may require proof of age, sex or survival of any person upon whose age,
sex or survival any payment depends. If the age or sex of the annuitant has been
misstated, the benefits will be those that would have been provided for the
annuitant's correct age and sex. If we have made incorrect annuity payments, the
amount of any underpayment will be paid immediately and the amount of any
overpayment will be deducted from future annuity payments.
FIXED ACCOUNT INVESTMENT OPTIONS
The fixed account investment options are not securities.
SECURITIES REGISTRATION. Interests in the fixed account investment options
are not registered under the Securities Act of 1933, as amended, (the "1933
Act") and our general account is not registered as an investment company under
the 1940 Act. Neither interests in the fixed account investment options nor the
general account are subject to the provisions or restrictions of the 1933 Act or
the 1940 Act. Disclosures relating to interests in the fixed account investment
options and the general account nonetheless may be required by the federal
securities laws to be accurate.
Fixed account investment options guarantee interest of at least 3%.
INVESTMENT OPTIONS. A one-year fixed account investment option is available
under the contract. In addition, a DCA fixed investment account may be
established under the DCA program to make automatic transfers to one or more
variable investment option. Under the fixed account investment options, we
guarantee the principal value of purchase payments and the rate of interest
credited to the investment account for the term of the guarantee period. The
portion of the contract value in a fixed account investment option and any fixed
annuity benefit payments will reflect those interest and principal guarantees.
We determine the guaranteed interest rates on new amounts allocated or
transferred to a fixed investment account from time to time, according to market
conditions. In no event will the guaranteed rate of interest be less than 3%.
Once an interest rate is guaranteed for a fixed investment account, it is
guaranteed for the duration of the guarantee period and we may not change it.
25
<PAGE> 30
INVESTMENT ACCOUNTS. You may allocate purchase payments, or make transfers
from the variable investment options, to the one-year fixed account investment
option at any time prior to the maturity date. We establish a separate
investment account each time you allocate or transfer amounts to the one-year
fixed account investment option. Amounts may not be allocated to a fixed account
investment option that would extend the guarantee period beyond the maturity
date.
RENEWALS. At the end of a guarantee period, you may establish a new
investment account with a one-year guarantee period at the then current interest
rate or transfer the amounts to a variable account investment option, all
without the imposition of any charge. In the case of renewals in the last year
of the accumulation period, the only fixed account investment option available
is to have interest accrued for the remainder of the accumulation period at the
then current interest rate for one-year guarantee periods. If you do not specify
a renewal option, we will select the one-year fixed account investment option.
In the case of a renewal in the last year of the accumulation period, we will
credit interest for the remainder of the accumulation period at the then current
interest rate for one-year guarantee periods.
Withdrawals and some transfers from fixed account investment options are
permitted during the accumulation period.
TRANSFERS. During the accumulation period, you normally may transfer
amounts from the fixed account investment option to the variable account
investment options only at the end of a guaranteed period. You may, however,
transfer amounts from fixed to variable account investment options prior to the
end of the guarantee period pursuant to the DCA program. Where there are
multiple investment accounts within the one-year fixed account investment
option, amounts must be transferred from the one-year fixed account investment
option on a first-in-first-out basis.
WITHDRAWALS. You may make total and partial withdrawals of amounts held in
the fixed account investment options at any time during the accumulation period.
Withdrawals from the fixed account investment options will be made in the same
manner and be subject to the same limitations as set forth under "WITHDRAWALS"
plus the following provisions also apply to withdrawals from the fixed account
investment options:
- We reserve the right to defer payment of amounts withdrawn from the
fixed account investment options for up to six months from the date we
receive the written withdrawal request. If a withdrawal is deferred
for more than 30 days pursuant to this right, we will pay interest on
the amount deferred at a rate not less than 3% per year (or a higher
rate if required by applicable law).
- If there are multiple investment accounts under the fixed account
investment options, amounts must be withdrawn from those accounts on a
first-in-first-out basis.
If you do not specify the investment options from which a partial
withdrawal is to be taken, the partial withdrawal will be taken from the
variable account investment options until exhausted and then from the fixed
account investment options. Such withdrawals will be made from the investment
options beginning with the shortest guarantee period. Within such a sequence,
where there are multiple investment accounts within a fixed account investment
option, withdrawals will be made on a first-in-first-out basis. For this
purpose, the DCA fixed account investment option is considered to have a shorter
guarantee period than the one-year fixed account investment option.
Withdrawals from the contract may be subject to income tax and a 10%
penalty tax (see "FEDERAL TAX MATTERS" below). Withdrawals are permitted from
contracts issued in connection with Section 403(b) qualified plans only under
limited circumstances (see Appendix C "Qualified Plan Types").
LOANS. We offer a loan privilege only to owners of contracts issued in
connection with Section 403(b) qualified plans that are not subject to Title I
of ERISA. If you own such a contract, you may borrow from us, using your
contract as the only security for the loan, in the same manner and subject to
the same limitations as described under "LOANS" above.
FIXED ANNUITY OPTIONS. Subject to the distribution of death benefits
provisions (see "DEATH BENEFIT DURING ACCUMULATION PERIOD" above), on death,
withdrawal or the maturity date of the contract, the proceeds may be applied to
a fixed annuity option (see "ANNUITY OPTIONS" above).
26
<PAGE> 31
The amount of each fixed annuity payment is determined by applying the portion
of the proceeds (minus any applicable premium taxes) applied to purchase the
fixed annuity to the appropriate table in the contract. If the table we are then
using is more favorable to you, we will substitute that table. We guarantee the
dollar amount of fixed annuity payments.
CHARGES. No administrative, distribution, or mortality and expense risks
charges are deducted from fixed account investment options.
CHARGES AND DEDUCTIONS
Charges and deductions under the contracts are assessed against the
purchase payment, contract values or annuity payments. In addition, there are
deductions from and expenses paid out of the assets of the Trust portfolios that
are described in the accompanying Prospectus of the Trust.
We deduct asset-based charges totaling 1.65% on an annual basis for
administration, distribution and mortality and expense risks.
ADMINISTRATION FEES
A daily fee in an amount equal to 0.25% of the value of each variable
investment account on an annual basis is deducted from each sub-account as an
administration fee. The fee is designed to compensate us for administering the
contracts and operating the Variable Account. Even though administrative
expenses may increase, we guarantee that we will not increase the amount of the
administration fees.
If your contract value falls below $10,000 as a result of a partial
withdrawal, we may deduct an annual administration fee of $30 as partial
compensation for administrative expenses. The fee will be deducted on the last
day of each contract year. It will be withdrawn from each investment option in
the same proportion that the value of such investment option bears to the
contract value. If the entire contract value is withdrawn on other than the last
day of any contract year, the fee will be deducted from the amount paid.
DISTRIBUTION FEE
A daily fee in an amount equal to 0.15% of the value of each variable
investment account on an annual basis is deducted from each sub-account as a
distribution fee. The fee is designed to compensate us for a portion of the
expenses we incur in selling the contracts.
MORTALITY AND EXPENSE RISKS CHARGE
The mortality risk we assume is the risk that annuitants may live for a
longer period of time than we estimate. We assume this mortality risk by virtue
of annuity benefit payment rates incorporated into the contract which cannot be
changed. This assures each annuitant that his or her longevity will not have an
adverse effect on the amount of annuity benefit payments. We also assume
mortality risks in connection with our guarantee that, if the contract owner
dies during the accumulation period, we will pay a death benefit. The expense
risk we assume is the risk that the administration charges, distribution charge,
or withdrawal charge may be insufficient to cover actual expenses.
To compensate us for assuming these risks, we deduct from each of the
sub-accounts a daily charge in an amount equal to 1.25% of the value of the
variable investment accounts on an annual basis. The rate of the mortality and
expense risks charge cannot be increased. If the charge is insufficient to cover
the actual cost of the mortality and expense risks assumed, we will bear the
loss. Conversely, if the charge proves more than sufficient, the excess will be
profit to us and will be available for any proper corporate purpose including,
among other things, payment of distribution expenses. Under the Period Certain
Only Anuity Options, if you elect benefits payable on a variable basis, the
mortality and expense risks charge is assessed although we bear only the expense
risk and not any mortality risk. The mortality and expense risks charge is not
assessed against the fixed account investment options.
27
<PAGE> 32
We will charge you for state premium taxes to the extent we incur them and
reserve the right to charge you for new taxes we may incur.
TAXES
We reserve the right to charge, or provide for, certain taxes against
purchase payments, contract values or annuity payments. Such taxes may include
premium taxes or other taxes levied by any government entity which we determine
to have resulted from our:
- establishment or maintenance of the Variable Account,
- receipt of purchase payments,
- issuance of the contracts, or
- commencement or continuance of annuity payments under the contracts.
In addition, we will withhold taxes to the extent required by applicable law.
The State of New York does not currently assess a premium tax. In the event
New York does impose a premium tax, we reserve the right to charge you, the
contract owner. For non-New York residents, state premium taxes currently range
from 0% to 3.5% depending on the jurisdiction and the tax status of the contract
and are subject to change by the legislature or other authority.
EXPENSES OF DISTRIBUTING CONTRACTS
MSS, the principal underwriter for the contracts, pays compensation to
selling brokers in varying amounts which under normal circumstances are not
expected to exceed 2.25% of purchase payments plus 1% of the contract value per
year commencing one year after each purchase payment. These expenses are not
assessed against the contracts but are instead paid by MSS. See "Distribution of
Contracts" for further information.
FEDERAL TAX MATTERS
INTRODUCTION
The following discussion of the Federal income tax treatment of the
contract is not exhaustive, does not purport to cover all situations, and is not
intended as tax advice. You should consult a qualified tax advisor with regard
to the application of the law to your circumstances. This discussion is based on
the Code, Treasury Department regulations, and interpretations existing on the
date of this Prospectus. These authorities, however, are subject to change by
Congress, the Treasury Department, and judicial decisions.
This discussion does not address state or local tax consequences associated
with the purchase of a contract. In addition, WE MAKE NO GUARANTEE REGARDING ANY
TAX TREATMENT -- FEDERAL, STATE, OR LOCAL -- OF ANY CONTRACT OR OF ANY
TRANSACTION INVOLVING A CONTRACT.
OUR TAX STATUS
We are taxed as a life insurance company. Because the operations of the
Variable Account are a part of, and are taxed with, our operations, the Variable
Account is not separately taxed as a "regulated investment company" under the
Code. Under existing Federal income tax laws, we are not taxed on the investment
income and capital gains of the Variable Account. We do not anticipate that we
will be taxed on the income and gains of the Variable Account, but if we are,
then we may impose a corresponding charge against the Variable Account.
TAXATION OF ANNUITIES IN GENERAL
28
<PAGE> 33
Gains inside the contract are usually tax-deferred until you make a withdrawal,
start receiving annuity benefit payments, or receive a death benefit payment.
TAX DEFERRAL DURING ACCUMULATION PERIOD
Under existing provisions of the Code, except as described below, any
increase in the contract value is generally not taxable to the contract owner or
annuitant until received, either in the form of annuity payments, or in some
other form of distribution. Certain requirements must be satisfied in order for
this general rule to apply, including:
- the contract must be owned by an individual (or treated as owned by an
individual),
- the investments of the Variable Account must be "adequately
diversified" in accordance with Treasury Department regulations,
- we, rather than the contract owner, must be considered the owner of
the assets of the Variable Account for federal tax purposes, and
- the contract must provide for appropriate amortization, through
annuity benefit payments, of the contract's purchase payment and
earnings, e.g., the pay-out period must not occur near the end of the
annuitant's life expectancy.
NON-NATURAL OWNERS. As a general rule, deferred annuity contracts held by
"non-natural persons" (such as a corporation, trust or other similar entity) are
not treated as annuity contracts for Federal income tax purposes. The investment
income on such contracts is taxed as ordinary income that is received or accrued
by the owner of the contract during the taxable year. There are several
exceptions to this general rule for non-natural contract owners. First,
contracts will generally be treated as held by a natural person if the nominal
owner is a trust or other entity which holds the contract as an agent for a
natural person. This special exception will not apply, however, in the case of
any employer who is the nominal owner of an annuity contract under a
non-qualified deferred compensation arrangement for its employees.
Exceptions to the general rule for non-natural contract owners will also
apply with respect to:
- contracts acquired by an estate of a decedent by reason of the death
of the decedent,
- certain qualified contracts,
- certain contracts purchased by employers upon the termination of
certain qualified plans,
- certain contracts used in connection with structured settlement
agreements, and
- contracts purchased with a single premium when the annuity starting
date (as defined in the tax law) is no later than a year from purchase
of the annuity and substantially equal periodic payments are made, not
less frequently than annually, during the annuity period.
LOSS OF INTEREST DEDUCTION WHERE CONTRACTS ARE HELD BY OR FOR THE BENEFIT
OF CERTAIN NON-NATURAL PERSONS. In the case of contracts issued after June 8,
1997 to a non-natural taxpayer (such as a corporation or a trust), or held for
the benefit of such an entity, otherwise deductible interest may not be
deductible by the entity, regardless of whether the interest relates to debt
used to purchase or carry the contract. However, this interest deduction
disallowance does not affect a contract if the income on the contract is treated
as ordinary income that is received or accrued by the owner during the taxable
year. Entities that are considering purchasing the contract, or entities that
will be beneficiaries under a contract, should consult a tax advisor.
DIVERSIFICATION REQUIREMENTS. For a contract to be treated as an annuity
for Federal income tax purposes, the investments of the Variable Account must be
"adequately diversified" in accordance with Treasury Department Regulations. The
Secretary of the Treasury has issued regulations which prescribe standards for
determining whether the investments of the Variable Account are "adequately
diversified." If the Variable Account failed to comply with these
diversification standards, a contract would not be treated as an annuity
contract for Federal income tax purposes and the contract owner would generally
be taxable currently on the excess of the contract value over the premiums paid
for the contract.
Although we do not control the investments of the Trust, we expect that the
Trust will comply with such regulations so that the Variable Account will be
considered "adequately diversified."
29
<PAGE> 34
OWNERSHIP TREATMENT. In certain circumstances, a variable annuity contract
owner may be considered the owner, for Federal income tax purposes, of the
assets of the insurance company separate account used to support his or her
contract. In those circumstances, income and gains from such separate account
assets would be includible in the contract owner's gross income. The IRS has
stated in published rulings that a variable contract owner will be considered
the owner of separate account assets if the owner possesses "incidents of
ownership" in those assets, such as the ability to exercise investment control
over the assets. In addition, the Treasury Department announced, in connection
with the issuance of regulations concerning investment diversification, that
those regulations "do not provide guidance concerning the circumstances in which
investor control of the investments of a segregated asset account may cause the
investor, rather than the insurance company, to be treated as the owner of the
assets in the account." This announcement also stated that guidance would be
issued in the form of regulations or rulings on the "extent to which
Policyholders may direct their investments to particular sub-accounts of a
separate account without being treated as owners of the underlying assets." As
of the date of this Prospectus, no such guidance has been issued.
The ownership rights under this contract are similar to, but different in
certain respects from, those described by the IRS in rulings in which it was
determined that contract owners were not owners of separate account assets. For
example, the owner of this contract has the choice of many more investment
options to which to allocate premiums and contract values, and may be able to
transfer among investment options more frequently than in such rulings. THESE
DIFFERENCES COULD RESULT IN THE CONTRACT OWNER BEING TREATED AS THE OWNER OF THE
ASSETS OF THE VARIABLE ACCOUNT AND THUS SUBJECT TO CURRENT TAXATION ON THE
INCOME AND GAINS FROM THOSE ASSETS. In addition, we do not know what standards
will be set forth in the regulations or rulings which the Treasury Department
has stated it expects to issue. We therefore reserve the right to modify the
contract as necessary to attempt to prevent contract owners from being
considered the owners of the assets of the Variable Account.
DELAYED PAY-OUT PERIODS. If the contract's pay-out period commences (or is
scheduled to commence) at a time when the annuitant has reached an advanced age,
(e.g., past age 85), it is possible that the contract would not be treated as an
annuity for Federal income tax purposes. In that event, the income and gains
under the contract could be currently includible in the owner's income.
The remainder of this discussion assumes that the contract will be treated
as an annuity contract for Federal income tax purposes and that we will be
treated as the owner of the Variable Account assets.
TAXATION OF PARTIAL AND FULL WITHDRAWALS
In the case of a partial withdrawal, amounts received are includible in
income to the extent the contract value before the withdrawal exceeds the
"INVESTMENT IN THE CONTRACT." In the case of a full withdrawal, amounts received
are includible in income to the extent they exceed the investment in the
contract. For these purposes the investment in the contract at any time equals
the total of the purchase payments made under the contract to that time (to the
extent such payments were neither deductible when made nor excludible from
income as, for example, in the case of certain employer contributions to
qualified plans) less any amounts previously received from the contract which
were not included in income.
Other than in the case of certain qualified contracts, any amount received
as a loan under a contract, and any assignment or pledge (or agreement to assign
or pledge) any portion of the contract value, is treated as a withdrawal of such
amount or portion. (Loans, assignments and pledges are permitted only in limited
circumstances under qualified contracts.) The investment in the contract is
increased by the amount includible in income with respect to such assignment or
pledge, though it is not affected by any other aspect of the assignment or
pledge (including its release). If an individual transfers his or her interest
in an annuity contract without adequate consideration to a person other than the
owner's spouse (or to a former spouse incident to divorce), the owner will be
taxed on the difference between the contract value and the investment in the
contract at the time of transfer. In such a case, the transferee's investment in
the contract will be increased to reflect the increase in the transferor's
income.
There may be special income tax issues present in situations where the
owner and the annuitant are not the same person and are not married to one
another. A tax advisor should be consulted in those situations.
30
<PAGE> 35
A portion of each annuity payment is usually taxable as ordinary income.
TAXATION OF ANNUITY BENEFIT PAYMENTS
Normally, a portion of each annuity benefit payment is taxable as ordinary
income. The taxable portion of an annuity benefit payment is equal to the excess
of the payment over the "EXCLUSION AMOUNT." In the case of variable annuity
payments, the exclusion amount is the investment in the contract (defined above)
allocated to the variable annuity option, adjusted for any period certain or
refund feature, when payments begin to be made divided by the number of payments
expected to be made (determined by Treasury Department regulations which take
into account the annuitant's life expectancy and the form of annuity benefit
selected). In the case of fixed annuity payments, the exclusion amount is the
amount determined by multiplying the payment by the ratio of (a) to (b), where:
(a) is the investment in the contract allocated to the fixed annuity
option (adjusted for any period certain or refund feature) and
(b) is the total expected value of fixed annuity payments for the term of
the contract (determined under Treasury Department regulations).
A simplified method of determining the taxable portion of annuity payments
applies to contracts issued in connection with certain qualified plans other
than IRAs.
Once the total amount of the investment in the contract is excluded using
these ratios, annuity payments will be fully taxable. If annuity payments cease
because of the death of the annuitant and before the total amount of the
investment in the contract is recovered, the unrecovered amount generally will
be allowed as a deduction to the annuitant in his or her last taxable year.
TAXATION OF DEATH BENEFIT PROCEEDS
Amounts may be distributed from a contract because of the death of an owner
or the annuitant. During the accumulation period, death benefit proceeds are
includible in income as follows:
- if distributed in a lump sum, they are taxed in the same manner as a
full withdrawal, as described above, or
- if distributed under an annuity option, they are taxed in the same
manner as annuity payments, as described above.
During the pay-out period, where a guaranteed period exists under an annuity
option and the annuitant dies before the end of that period, payments made to
the beneficiary for the remainder of that period are includible in income as
follows:
- if received in a lump sum, they are includible in income to the extent
that they exceed the unrecovered investment in the contract at that
time, or
- if distributed in accordance with the existing annuity option
selected, they are fully excludable from income until the remaining
investment in the contract is deemed to be recovered, and all annuity
payments thereafter are fully includible in income.
Withdrawals prior to age 59-1/2 may incur a 10% penalty tax.
PENALTY TAX ON PREMATURE DISTRIBUTIONS
There is a 10% penalty tax on the taxable amount of any payment from a
non-qualified contract unless the payment is:
- received on or after the contract owner reaches age 59-1/2;
- attributable to the contract owner becoming disabled (as defined in
the tax law);
- made to a beneficiary on or after the death of the contract owner or,
if the contract owner is not an individual, on or after the death of
the primary annuitant (as defined in the tax law);
31
<PAGE> 36
- made as a series of substantially equal periodic payments (not less
frequently than annually) for the life (or life expectancy) of the
annuitant or for the joint lives (or joint life expectancies) of the
annuitant and designated beneficiary (as defined in the tax law);
- made under an annuity contract purchased with a single premium when
the annuity starting date (as defined in the tax law) is no later than
a year from purchase of the annuity and substantially equal periodic
payments are made, not less frequently than annually, during the
annuity period; or
- made with respect to certain annuities issued in connection with
structured settlement agreements.
A similar penalty tax, applicable to distributions from certain qualified
contracts, is discussed below.
AGGREGATION OF CONTRACTS
In certain circumstances, the amount of an annuity payment or a withdrawal
from a contract that is includible in income may be determined by combining some
or all of the non-qualified contracts owned by an individual. For example, if a
person purchases a contract offered by this Prospectus and also purchases at
approximately the same time an immediate annuity, the IRS may treat the two
contracts as one contract. Similarly, if a person transfers part of his interest
in one annuity contract to purchase another annuity contract, the IRS might
treat the two contracts as one contract. In addition, if a person purchases two
or more deferred annuity contracts from the same insurance company (or its
affiliates) during any calendar year, all such contracts will be treated as one
contract. The effects of such aggregation are not clear; however, it could
affect the amount of a withdrawal or an annuity payment that is taxable and the
amount which might be subject to the penalty tax described above. Consult your
tax advisor for additional information.
Special tax provisions apply to qualified plans. Consult your tax advisor prior
to using a contract with a qualified plan.
QUALIFIED RETIREMENT PLANS
The contracts are also designed for use in connection with certain types of
retirement plans which receive favorable treatment under the Code ("QUALIFIED
PLANS"). Numerous special tax rules apply to the participants in qualified plans
and to the contracts used in connection with qualified plans. Therefore, no
attempt is made in this Prospectus to provide more than general information
about use of the contract with the various types of qualified plans. Brief
descriptions of various types of qualified plans in connection with which we may
issue a contract are contained in Appendix C to this Prospectus. Appendix C also
discusses certain potential tax consequences associated with the use of the
contract with certain qualified plans which should be considered by a purchaser.
The tax rules applicable to qualified plans vary according to the type of
plan and the terms and conditions of the plan itself. For example, for both
withdrawals and annuity payments under certain qualified contracts, there may be
no "investment in the contract" and the total amount received may be taxable.
Also, loans from qualified contracts, where allowed, are subject to a variety of
limitations, including restrictions as to the amount that may be borrowed, the
duration of the loan, and the manner in which the loan must be repaid. (You
should always consult your tax advisor and retirement plan fiduciary prior to
exercising your loan privileges.) Both the amount of the contribution that may
be made, and the tax deduction or exclusion that you may claim for that
contribution, are limited under qualified plans. If you are considering the
purchase of a contract in connection with a qualified plan, you should consider,
in evaluating the suitability of the contract, that the contract requires a
minimum initial purchase payment of $25,000 and no additional purchase payments
are allowed. If this contract is used in connection with a qualified plan, the
owner and annuitant must be the same individual. If a co-annuitant is named, all
distributions made while the annuitant is alive must be made to the annuitant.
Also, if a co-annuitant is named who is not the annuitant's spouse, the annuity
options which are available may be limited, depending on the difference in ages
between the annuitant and co-annuitant. Furthermore, the length of any guarantee
period may be limited in some circumstances to satisfy certain minimum
distribution requirements under federal tax laws.
In addition, special rules apply to the time at which distributions must
commence and the form in which the distributions must be paid. For example,
failure to comply with minimum distribution
32
<PAGE> 37
requirements applicable to qualified plans will result in the imposition of an
excise tax. This excise tax generally equals 50% of the amount by which a
minimum required distribution exceeds the actual distribution from the qualified
plan. In the case of IRAs (other than Roth IRAs), distributions of minimum
amounts (as specified in the tax law) must generally commence by April 1 of the
calendar year following the calendar year in which the owner attains age 70-1/2.
In the case of certain other qualified plans, distributions of such minimum
amounts must generally commence by the later of this date or April 1 of the
calendar year following the calendar year in which the employee retires.
There is also a 10% penalty tax on the taxable amount of any payment from
certain qualified contracts (but not Section 457 plans). (The amount of the
penalty tax is 25% of the taxable amount of any payment received from a "SIMPLE
retirement account" during the 2-year period beginning on the date the
individual first participated in any qualified salary reduction arrangement (as
defined in the tax law) maintained by the individual's employer.) There are
exceptions to this penalty tax which vary depending on the type of qualified
plan. In the case of an "Individual Retirement Annuity" or an "IRA," including a
"SIMPLE IRA," exceptions provide that the penalty tax does not apply to a
payment:
- received on or after the contract owner reaches age 59-1/2,
- received on or after the owner's death or because of the owner's
disability (as defined in the tax law), or
- made as a series of substantially equal periodic payments (not less
frequently than annually) for the life (or life expectancy) of the
owner or for the joint lives (or joint life expectancies) of the owner
and designated beneficiary (as defined in the tax law).
These exceptions, as well as certain others not described herein, generally
apply to taxable distributions from other qualified plans (although, in the case
of plans qualified under Sections 401 and 403, the exception for substantially
equal periodic payments applies only if the owner has separated from service).
In addition, the penalty tax does not apply to certain distributions from IRAs
taken after December 31, 1997 which are used for qualified first time home
purchases or for higher education expenses. Special conditions must be met to
qualify for these two exceptions to the penalty tax. If you wish to take a
distribution from an IRA for these purposes, you should consult your tax
advisor.
When issued in connection with a qualified plan, a contract will be amended
as generally necessary to conform to the requirements of the plan. However, the
rights of any person to any benefits under qualified plans may be subject to the
terms and conditions of the plans themselves, regardless of the terms and
conditions of the contract. In addition, we will not be bound by terms and
conditions of qualified plans to the extent those terms and conditions
contradict the contract, unless we consent.
DIRECT ROLLOVERS
If the contract is used in connection with a retirement plan that is
qualified under Sections 401(a), 403(a), or 403(b) of the Code, any "ELIGIBLE
ROLLOVER DISTRIBUTION" from the contract will be subject to "direct rollover"
and mandatory withholding requirements. An eligible rollover distribution
generally is any taxable distribution from such qualified plans, excluding
certain amounts such as (i) minimum distributions required under Section
401(a)(9) of the Code, and (ii) certain distributions for life, life expectancy,
or for 10 years or more which are part of a "series of substantially equal
periodic payments."
Under these requirements, Federal income tax equal to 20% of the eligible
rollover distribution will be withheld from the amount of the distribution.
Unlike withholding on certain other amounts distributed from the contract,
discussed below, the owner cannot elect out of withholding with respect to an
eligible rollover distribution. However, this 20% withholding will not apply if,
instead of receiving the eligible rollover distribution, the person receiving
the distribution elects to have it directly transferred to certain qualified
plans. Prior to receiving an eligible rollover distribution, a notice will be
provided explaining generally the direct rollover and mandatory withholding
requirements and how to avoid the 20% withholding by electing a direct rollover.
LOANS
We offer a loan privilege only to owners of contracts issued in connection
with Section 403(b) qualified plans that are not subject to Title I of ERISA. If
you are not an owner of such a contract, none of
33
<PAGE> 38
this discussion about loans applies to your contract. If you are an owner of
such a contract, you may borrow from us, using your contract as the only
security for the loan. Loans are subject to certain tax law restrictions and to
applicable retirement program rules (collectively, "LOAN RULES"). You should
consult your tax advisor and retirement plan fiduciary prior to taking a loan
under the contract.
The maximum loan value of a contract is normally 80% of the contract value,
although loan rules may serve to reduce that maximum in some cases. The amount
available for a loan at any given time is the loan value less any unpaid prior
loans. Unpaid prior loans equal the amount of any prior loans plus interest
accrued on those loans. Loans will be made only upon written request from the
owner. We will make loans within seven days of receiving a properly completed
loan application (applications are available from our Annuity Service Office),
subject to postponement under the same circumstances that payment of withdrawals
may be postponed (see "WITHDRAWALS").
When you request a loan, we will reduce your investment in the investment
accounts and transfer the amount of the loan to the "LOAN ACCOUNT," a part of
our general account. You may designate the investment accounts from which the
loan is to be withdrawn. Absent such a designation, the amount of the loan will
be withdrawn from the investment accounts in accordance with the rules for
making partial withdrawals (see "WITHDRAWALS"). The contract provides that you
may repay unpaid loans at any time. Under applicable loan rules, loans generally
must be repaid within five years, repayments must be made at least quarterly and
repayments must be made in substantially equal amounts. When a loan is repaid,
the amount of the repayment will be transferred from the loan account to the
investment accounts. You may designate the investment accounts to which a
repayment is to be allocated. Otherwise, the repayment will be allocated in the
same manner as your most recent purchase payment. On each anniversary of the
date your contract was issued, we will transfer from the investment accounts to
the loan account the excess of the balance of your loan over the balance in your
loan account.
We charge interest of 6% per year on contract loans. Loan interest is
payable in arrears and, unless paid in cash, the accrued loan interest is added
to the amount of the debt and bears interest at 6% as well. We credit interest
with respect to amounts held in the loan account at a rate of 4% per year.
Consequently, the net cost of loans under the contract is 2%. If on any date
unpaid loans under your contract exceed your contract value, your contract will
be in default. In such case you will receive a notice indicating the payment
needed to bring your contract out of default and will have a thirty-one day
grace period within which to pay the default amount. If the required payment is
not made within the grace period, your contract may be terminated without value.
The amount of any unpaid loans (including unpaid interest) will be deducted
from the death benefit otherwise payable under the contract. In addition, loans,
whether or not repaid, will have a permanent effect on contract value because
the investment results of the investment accounts will apply only to the
unborrowed portion of the contract value. The longer a loan is unpaid, the
greater the effect is likely to be. The effect could be favorable or
unfavorable. If the investment results are greater than the rate being credited
on amounts held in your loan account while your loan is unpaid, your contract
value will not increase as rapidly as it would have if no loan were unpaid. If
investment results are below that rate, contract value will be greater than it
would have been had no loan been outstanding.
We may be required to withhold amounts from some payments for Federal income tax
payments.
FEDERAL INCOME TAX WITHHOLDING
We will withhold and remit to the U.S. Government a part of the taxable
portion of each distribution made under a contract unless the person receiving
the distribution notifies us at or before the time of the distribution that he
or she elects not to have any amounts withheld. In certain circumstances, we may
be required to withhold tax. The withholding rates applicable to the taxable
portion of periodic annuity payments are the same as the withholding rates
generally applicable to payments of wages. In addition, the withholding rate
applicable to the taxable portion of non-periodic payments (including
withdrawals prior to the maturity date and rollovers from non-Roth IRAs to Roth
IRAs) is 10%. As discussed above, the withholding rate applicable to eligible
rollover distributions is 20%.
GENERAL MATTERS
34
<PAGE> 39
We may advertise our investment performance.
PERFORMANCE DATA
Each of the sub-accounts may quote total return figures in its advertising
and sales materials. PAST PERFORMANCE FIGURES ARE NOT INTENDED TO INDICATE
FUTURE PERFORMANCE OF ANY SUB-ACCOUNT. The sub-accounts may advertise both
"standardized" and "non-standardized" total return figures. Standardized figures
will include average annual total return figures for one, five and ten years, or
from the inception date of the relevant sub-account of the Variable Account (if
that period since inception is shorter than one of those periods).
Non-standardized total return figures also may be quoted, including figures that
do not assume redemption at the end of the time period. Non-standardized figures
may also include total return numbers from the inception date of the portfolio
or ten years, whichever period is shorter. Where the period since inception is
less than one year, the total return quoted will be the aggregate return for the
period.
Average annual total return is the average annual compounded rate of return
that equates a purchase payment to the market value of that purchase payment on
the last day of the period for which the return is calculated. The aggregate
total return is the percentage change (not annualized) that equates a purchase
payment to the market value of such purchase payment on the last day of the
period for which the return is calculated. For purposes of the calculations it
is assumed that an initial payment of $1,000 is made on the first day of the
period for which the return is calculated. For total return figures quoted for
periods prior to the commencement of the offering of the contract, standardized
performance data will be the historical performance of the Trust portfolio from
the date the applicable sub-account of the Variable Account first became
available for investment under other contracts that we offer, adjusted to
reflect current contract charges. In the case of non-standardized performance,
performance figures will be the historical performance of the Trust portfolio
from the inception date of the portfolio (or in the case of the Trust portfolios
created in connection with the merger of Manulife Series Fund, Inc. into the
Trust, the inception date of the applicable predecessor Manulife Series Fund,
Inc. portfolio), adjusted to reflect current contract charges.
ASSET ALLOCATION AND TIMING SERVICES
We are aware that certain third parties are offering asset allocation and
timing services in connection with the contracts. In certain cases we have
agreed to honor transfer instructions from such asset allocation and timing
services where we have received powers of attorney, in a form acceptable to us,
from the contract owners participating in the service. The contract is not
designed, however, for professional market timing organizations or other
entities or persons engaging in programmed, frequent or large exchanges
(collectively, "market timers") to speculate on short-term movements in the
market since such activity may be disruptive to the Trust portfolios and
increase their transaction costs. Therefore, in order to prevent excessive use
of the exchange privilege, we reserve the right to (a) reject or restrict any
specific purchase and exchange requests and (b) impose specific limitations with
respect to market timers, including restricting exchanges by market timers to
certain variable investment options (transfers by market timers into or out of
fixed investment options is not permitted).WE DO NOT ENDORSE, APPROVE OR
RECOMMEND SUCH SERVICES IN ANY WAY AND YOU SHOULD BE AWARE THAT FEES PAID FOR
SUCH SERVICES ARE SEPARATE AND IN ADDITION TO FEES PAID UNDER THE CONTRACTS.
We pay broker-dealers to sell the contracts.
DISTRIBUTION OF CONTRACTS
MSS is a Delaware limited liability company that is controlled by Manulife
North America. We have a 10% equity interest in MSS. MSS is the principal
underwriter and exclusive distributor of the contracts. MSS also is the
investment adviser to the Trust. MSS is a broker-dealer registered under the
Securities Exchange Act of 1934, is a member of the National Association of
Securities Dealers and is duly appointed and licensed as our insurance agent.
MSS is located at 73 Tremont Street, Boston, Massachusetts 02108.
We have entered into an Underwriting and Distribution Agreement with MSS
where we appointed MSS the principal underwriter and exclusive representative
for the distribution of all insurance products and authorized MSS to enter into
agreements with selling broker-dealers and general agents for the distribution
of the products. Sales of the contracts will be made by registered
representatives of broker-dealers authorized by us and MSS to sell the
contracts. Those registered representatives will also be our licensed insurance
agents. MSS will pay distribution compensation to selling broker-dealers in
varying
35
<PAGE> 40
amounts which under normal circumstances are not expected to exceed 2.25% of
purchase payments plus 1% of the contract value per year commencing one year
after each purchase payment.
CONTRACT OWNER INQUIRIES
Your inquiries should be directed to our Annuity Service Office mailing
address at The Manufacturers Life Insurance Company of New York, Annuity Service
Office, P.O. Box 9013, Boston, Massachusetts 02205-9013.
CONFIRMATION STATEMENTS
You will be sent confirmation statements for certain transactions in your
account. You should carefully review these statements to verify their accuracy.
Any mistakes should immediately be reported to our Annuity Service Office. If
you fail to notify our Annuity Service Office of any mistake within 60 days of
the mailing of the confirmation statement, you will be deemed to have ratified
the transaction.
LEGAL PROCEEDINGS
There are no legal proceedings to which the Variable Account is a party or
to which the assets of the Variable Account are subject. Neither we nor MSS are
involved in any litigation that is of material importance to either, or that
relates to the Variable Account.
YEAR 2000 ISSUES
The Year 2000 Issue arises because many computerized systems use two digits
rather than four to identify a year. Date sensitive systems may recognize the
year 2000 as 1900 or some other date, resulting in errors when information using
year 2000 dates is processed. In addition, similar problems may arise in some
systems which use certain dates in 1999 to represent something other than a
date. Although the change in date has occurred, it is not possible to conclude
that all aspects of the Year 2000 Issue that May affect us, including those
related to customers, suppliers, or other third parties, have been fully
resolved.
CANCELLATION OF CONTRACT
We may, at our option, cancel a contract at the end of any two consecutive
contract years in which no purchase payments by or on behalf of you, have been
made, if both:
- the total purchase payments made for the contract, less any
withdrawals, are less than $2,000; and
- the contract value at the end of such two year period is less than
$2,000.
We, as a matter of administrative practice, will attempt to notify you prior to
such cancellation in order to allow you to make the necessary purchase payment
to keep the contract in force.
VOTING INTEREST
As stated above under "The Trust", we will vote shares of the Trust
portfolios held in the Variable Account at the Trust's shareholder meetings
according to voting instructions received from the persons having the voting
interest under the contracts.
Accumulation Period. During the accumulation period, the contract owner has
the voting interest under a contract. The number of votes for each portfolio for
which voting instructions may be given is determined by dividing the value of
the investment account corresponding to the sub-account in which such portfolio
shares are held by the net asset value per share of that portfolio.
Pay-out Period. During the pay-out period, the annuitant has the voting
interest under a contract. The number of votes as to each portfolio for which
voting instructions may be given is determined by dividing the reserve for the
contract allocated to the sub-account in which such portfolio shares are held by
the net asset value per share of that portfolio.
36
<PAGE> 41
Generally, the number of votes tends to decrease as annuity payments
progress since the amount of reserves attributable to a contract will usually
decrease after commencement of annuity payments. We will determine the number of
portfolio shares for which voting instructions may be given not more than 90
days prior to the meeting.
37
<PAGE> 42
APPENDIX A
SPECIAL TERMS
The following terms as used in this Prospectus have the indicated meanings:
ACCUMULATION PERIOD - The accumulation period is the period between the issue
date of the contract and the maturity date of the contract. During this period,
purchase payments are typically made by the owner.
ACCUMULATION UNIT - A unit of measure that is used to calculate the value of the
variable portion of the contract before the maturity date.
ANNUITANT - Any natural person or persons whose life is used to determine the
duration of annuity payments involving life contingencies. If the contract owner
names more than one person as an "annuitant," the second person named shall be
referred to as "co-annuitant." The "annuitant" and "co-annuitant" will be
referred to collectively as "annuitant." The "annuitant" is as designated on the
contract specification page or in the application, unless changed.
ANNUITY UNIT - A unit of measure that is used after the maturity date to
calculate variable annuity payments.
BENEFICIARY - The person, persons or entity entitled to the death benefit under
the contract upon the death of a contract owner or, in certain circumstances, an
annuitant. The beneficiary is as specified in the application, unless changed.
If there is a surviving contract owner, that person will be the beneficiary.
BUSINESS DAY - Any day on which the New York Stock Exchange is open for business
and the net asset value of a Trust portfolio may be determined.
THE CODE - The Internal Revenue Code of 1986, as amended.
CONTINGENT BENEFICIARY - The person, persons or entity to become the beneficiary
if the beneficiary is not alive. The contingent beneficiary is as specified in
the application, unless changed.
CONTRACT YEAR - The period of twelve consecutive months beginning on the date as
of which the contract is issued, or any anniversary of that date.
FIXED ANNUITY - An annuity option with payments the amount of which we
guarantee.
GENERAL ACCOUNT - All of our assets other than assets in separate accounts such
as the Variable Account.
INVESTMENT ACCOUNT - An account we establish for you which represents your
interest in an investment option during the accumulation period.
INVESTMENT OPTIONS - The investment choices available to contract owners.
Currently, there are thirty-eight variable and two fixed investment options
under the contract.
LOAN ACCOUNT - The portion of our general account that is used for collateral
for a loan.
MATURITY DATE - The date on which the pay-out period commences and we begin to
make annuity benefit payments to the annuitant. The maturity date is the date
specified on the contract specifications page and is generally the first day of
the month following the later of the annuitant's 85th birthday or the tenth
contract anniversary, unless changed. The maturity date will not be later than
the annuitant's 90th birthday.
NON-QUALIFIED CONTRACTS - Contracts which are not issued under qualified plans.
OWNER OR CONTRACT OWNER - The person, persons (co-owner) or entity entitled to
all of the ownership rights under the contract. References in this Prospectus to
contract owners are typically by use of "you." The owner has the legal right to
make all changes in contractual designations where specifically permitted by the
contract. The owner is as specified in the application, unless changed.
PAY-OUT PERIOD - The pay-out period is the period when we make annuity benefit
payments to you.
PORTFOLIO OR TRUST PORTFOLIO - A separate investment portfolio of the Trust, a
mutual fund in which the Variable Account invests, or of any successor mutual
fund.
<PAGE> 43
QUALIFIED CONTRACTS - Contracts issued under qualified plans.
QUALIFIED PLANS - Retirement plans which receive favorable tax treatment under
Section 401, 403, 408 or 408A, or 457 of the Code.
SUB-ACCOUNT(S) - One or more of the sub-accounts of the Variable Account. Each
sub-account is invested in shares of a different Trust portfolio.
UNPAID LOANS - The unpaid amounts (including any accrued interest) of loans some
contract owners may have taken from us, using certain qualified contracts as
collateral.
VALUATION PERIOD - Any period from one business day to the next, measured from
the time on each business day that the net asset value of each portfolio is
determined.
<PAGE> 44
APPENDIX B
TABLE OF ACCUMULATION UNIT VALUES
RELATING TO THE CONTRACT
<TABLE>
<CAPTION>
SUB-ACCOUNT UNIT VALUE AT UNIT VALUE AT NUMBER OF UNITS AT END OF
START OF YEAR(A) END OF YEAR YEAR
<S> <C> <C> <C>
Pacific Rim Emerging Markets
1998 $12.500000 $7.656925 0.000
1999 7.656925 12.267100 11,339.373
Science & Technology
1998 $12.500000 $19.191525 0.000
1999 19.191525 37.660683 74,836.525
International Small Cap
1998 $12.500000 $14.687879 0.000
1999 14.687879 26.718058 9,892.542
Aggressive Growth
1998 $12.500000 $12.617679 0.000
1999 12.617679 16.504105 47,183.889
Emerging Small Company
1998 $12.500000 $14.310172 0.000
1999 14.310172 24.427201 12,455.847
Small Company Blend
1999 $12.500000 $15.895877 7,239.531
Mid Cap Growth
1998 $12.500000 $18.869029 0.000
1999 18.869029 26.855000 40,628.907
Mid Cap Stock
1999 $12.500000 $12.462837 24,423.970
Overseas
1998 $12.500000 $12.168562 0.000
1999 12.168562 16.833813 26,270.772
International Stock
1998 $12.500000 $14.265882 0.000
1999 14.265882 18.202233 15,681.838
International Value
1999 $12.500000 $12.838100 13,081.628
Mid Cap Blend
1998 $12.500000 $22.973151 448.588
1999 22.973151 28867552 29,850.154
Small Company Value
1998 $12.500000 $11.143828 0.000
1999 11.143828 11.83789 12,958.761
Global Equity
1998 $12.500000 $18.706100 1,353.551
1999 18.706100 19.073534 28,618.022
Growth
1998 $12.500000 $20.612746 0.000
1999 20.612746 27.818889 34,965.215
Large Cap Growth
1998 $12.500000 $18.982681 0.000
1999 18.982681 23.393391 62,551.647
</TABLE>
<PAGE> 45
<TABLE>
<CAPTION>
SUB-ACCOUNT UNIT VALUE AT UNIT VALUE AT NUMBER OF UNITS AT END OF
START OF YEAR(A) END OF YEAR YEAR
<S> <C> <C> <C>
Quantitative Equity
1998 $12.500000 $19.968902 0.000
1999 19.968902 24.022598 20,577.391
Blue Chip Growth
1998 $12.500000 $22.573222 450.564
1999 22.573222 26.518360 136,324.720
Real Estate Securities
1998 $12.500000 $12.255908 0.000
1999 12.255908 11.090818 3,789.517
Value
1998 $12.500000 $14.519332 0.000
1999 14.519332 13.883152 29,002.081
Growth & Income
1998 $12.500000 $26.056725 769.618
1999 26.056725 30.467742 155,039.214
U.S. Large Cap Value
1999 $12.500000 $12.700198 42,362.048
Equity-Income
1998 $12.500000 $20.794388 484.376
1999 20.794388 21.149570 53,745.789
Income & Value
1998 $12.500000 $16.824988 0.000
1999 16.824988 17.986686 14,561.183
Balanced
1998 $12.500000 $16.377624 0.000
1999 16.377624 15.843343 15,773.592
High Yield
1998 $12.500000 $14.008370 1,070.053
1999 14.008370 14.881850 28,142.952
Strategic Bond
1998 $12.500000 $14.243718 2,110.645
1999 14.243718 14.321908 13,538.080
Global Bond
1998 $12.500000 $14.814388 0.000
1999 14.814388 13.599529 1,654.578
Total Return
1999 $12.500000 12.235367 67,694.719
Investment Quality Bond
1998 $12.500000 $13.299876 0.000
1999 13.299876 12.847911 33,537.825
Diversified Bond
1998 $12.500000 $14.663990 0.000
1999 14.663990 14.527388 26,748.830
U.S. Government Securities
1998 $12.500000 $12.999698 772.499
1999 12.999698 12.757839 25,710.833
Money Market
1998 $12.500000 $11.811952 0.000
1999 11.811952 12.153141 125,080.921
</TABLE>
<PAGE> 46
<TABLE>
<CAPTION>
SUB-ACCOUNT UNIT VALUE AT UNIT VALUE AT NUMBER OF UNITS AT END OF
START OF YEAR(A) END OF YEAR YEAR
<S> <C> <C> <C>
Lifestyle Aggressive 1000
1998 $12.500000 $14.064128 0.000
1999 14.064128 15.855076 11,343.154
Lifestyle Growth 820
1998 $12.500000 $14.623605 0.000
1999 14.623605 16.767184 80,481.118
Lifestyle Balanced 640
1998 $12.500000 $14.591457 0.000
1999 14.591457 16.136115 40,993.431
Lifestyle Moderate 460
1998 $12.500000 $15.096548 0.000
1999 15.096548 16.021927 7,292.329
Lifestyle Conservative 280
1998 $12.500000 $14.950846 0.000
1999 14.950846 15.324704 36,540.735
</TABLE>
(A) Units under this series of contracts were first credited under the
sub-accounts on November 6, 1998, except in the case of the:
- - Small Company Blend, Mid Cap Stock, International Value, U.S. Large Cap
Value and Total Return Trusts where units were first credited on May 1,
1999.
<PAGE> 47
APPENDIX C
QUALIFIED PLAN TYPES
Set forth below are brief descriptions of the types of qualified plans in
connection with which we will issue contracts. Certain potential tax
consequences associated with use of the contract in connection with qualified
plans are also described. Persons intending to use the contract in connection
with qualified plans should consult their tax advisor.
INDIVIDUAL RETIREMENT ANNUITIES. Section 408 of the Code permits eligible
individuals to contribute to an individual retirement program known as an
"Individual Retirement Annuity" or "IRA." IRAs are subject to limits on the
amounts that may be contributed, the persons who may be eligible and on the time
when distributions may commence. Also, distributions from certain other types of
qualified retirement plans may be "rolled over" on a tax-deferred basis into an
IRA. The contract may not, however be used in connection with an "Education IRA"
under Section 530 of the Code.
IRAs generally may not provide life insurance coverage, but they may
provide a death benefit that equals the greater of the premiums paid and the
contract value. The contract provides a death benefit that in certain
circumstances may exceed the greater of the purchase payments and the contract
value. It is possible that the contract's death benefit could be viewed as
providing life insurance coverage with the result that the contract would not be
viewed as satisfying the requirements of an IRA.
Simplified Employee Pensions (SEP-IRAs). Section 408(k) of the Code allows
employers to establish simplified employee pension plans for their employees,
using the employees' IRAs for such purposes, if certain criteria are met. Under
these plans the employer may, within specified limits, make deductible
contributions on behalf of the employees to IRAs. As discussed above (see
Individual Retirement Annuities), there is some uncertainty regarding the
treatment of the contract's death benefit for purposes of the tax rules
governing IRAs (which would include SEP-IRAs).
SIMPLE IRAs. Section 408(p) of the Code permits certain small employers to
establish "SIMPLE retirement accounts," including SIMPLE IRAs, for their
employees. Under SIMPLE IRAs, certain deductible contributions are made by both
employees and employers. SIMPLE IRAs are subject to various requirements,
including limits on the amounts that may be contributed, the persons who may be
eligible, and the time when distributions may commence. As discussed above (see
Individual Retirement Annuities), there is some uncertainty regarding the proper
characterization of the contract's death benefit for purposes of the tax rules
governing IRAs (which would include SIMPLE IRAs).
Roth IRAs. Section 408A of the Code permits eligible individuals to
contribute to a type of IRA known as a "Roth IRA." Roth IRAs are generally
subject to the same rules as non-Roth IRAs, but differ in certain respects.
Among the differences is that contributions to a Roth IRA are not
deductible and "qualified distributions" from a Roth IRA are excluded from
income. A qualified distribution is a distribution that satisfies two
requirements. First, the distribution must be made in a taxable year that is at
least five years after the first taxable year for which a contribution to any
Roth IRA established for the owner was made. Second, the distribution must be:
- made after the owner attains age 59-1/2;
- made after the owner's death;
- attributable to the owner being disabled; or
- a qualified first-time homebuyer distribution within the meaning of
Section 72(t)(2)(F) of the Code.
In addition, distributions from Roth IRAs need not commence when the owner
attains age 70-1/2. A Roth IRA may accept a "qualified rollover contribution"
from a non-Roth IRA, but a Roth IRA may not accept rollover contributions from
other qualified plans.
As described above (see "Individual Retirement Annuities"), there is some
uncertainty regarding the proper characterization of the contract's death
benefit for purposes of the tax rules governing IRAs (which include Roth IRAs).
Also, the state tax treatment of a Roth IRA may differ from the Federal income
tax treatment of a Roth IRA.
<PAGE> 48
Corporate and Self-Employed ("H.R. 10" and "Keogh") Pension and
Profit-Sharing Plans. Sections 401(a) and 403(a) of the Code permit corporate
employers to establish various types of tax-favored retirement plans for
employees. The Self-Employed Individuals' Tax Retirement Act of 1962, as
amended, commonly referred to as "H.R. 10" or "Keogh," permits self-employed
individuals also to establish such tax-favored retirement plans for themselves
and their employees. Such retirement plans may permit the purchase of the
contracts in order to provide benefits under the plans. The contract provides a
death benefit that in certain circumstances may exceed the greater of the
purchase payments and the contract value. It is possible that the IRS could
characterize the death benefit as an "incidental death benefit." There are
limitations on the amount of incidental benefits that may be provided under
pension and profit sharing plans. In addition, the provision of such benefits
may result in current taxable income to participants.
Tax-Sheltered Annuities. Section 403(b) of the Code permits public school
employees and employees of certain types of charitable, educational and
scientific organizations specified in Section 501(c)(3) of the Code to have
their employers purchase annuity contracts for them and, subject to certain
limitations, to exclude the amount of purchase payments from gross income for
tax purposes. These annuity contracts are commonly referred to as "tax-sheltered
annuities." Purchasers of the contracts for such purposes should seek competent
advice as to eligibility, limitations on permissible amounts of purchase
payments and other tax consequences associated with the contracts. In
particular, purchasers should consider that the contract provides a death
benefit that in certain circumstances may exceed the greater of the purchase
payments and the contract value. It is possible that the IRS could characterize
the death benefit as an "incidental death benefit." If so, the contract owner
could be deemed to receive currently taxable income. In addition, there are
limitations on the amount of incidental benefits that may be provided under a
tax-sheltered annuity. Even if the IRS characterized the benefit under the
contract as an incidental death benefit, the death benefit is unlikely to
violate those limits unless the purchaser also purchases a life insurance
contract as part of his or her tax-sheltered annuity plan.
Tax-sheltered annuity contracts must contain restrictions on withdrawals
of:
- contributions made pursuant to a salary reduction agreement in years
beginning after December 31, 1988,
- earnings on those contributions, and
- earnings after 1988 on amounts attributable to salary reduction
contributions (and earnings on those contributions) held as of the
last day of the year beginning before January 1, 1989.
These amounts can be paid only if the employee has reached age 59-1/2, separated
from service, died, or become disabled (within the meaning of the tax law), or
in the case of hardship (within the meaning of the tax law). Amounts permitted
to be distributed in the event of hardship are limited to actual contributions;
earnings thereon cannot be distributed on account of hardship. Amounts subject
to the withdrawal restrictions applicable to Section 403(b)(7) custodial
accounts may be subject to more stringent restrictions. (These limitations on
withdrawals do not apply to the extent we are directed to transfer some or all
of the contract value to the issuer of another tax-sheltered annuity or into a
Section 403(b)(7) custodial account.)
<PAGE> 49
PART B
INFORMATION REQUIRED IN A
STATEMENT OF ADDITIONAL INFORMATION
<PAGE> 50
STATEMENT OF ADDITIONAL INFORMATION
THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK SEPARATE ACCOUNT A
of
THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK
SINGLE PAYMENT INDIVIDUAL DEFERRED
COMBINATION FIXED AND VARIABLE ANNUITY CONTRACT
NON-PARTICIPATING
This Statement of Additional Information is not a Prospectus. It contains
information in addition to that described in the Prospectus and should be read
in conjunction with the Prospectus dated the same date as this Statement of
Additional Information. The Prospectus may be obtained by writing The
Manufacturers Life Insurance Company of New York, at the mailing address of the
Annuity Service Office at P.O. 9013, Boston, MA 02205-9013 or by telephoning
(800) 551-2078.
<PAGE> 51
The date of this Statement of Additional Information is May 1, 2000.
The Manufacturers Life Insurance Company of New York
100 Summit Lake Drive
Valhalla, New York 10595
(877) 391-3748
2
<PAGE> 52
STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
General Information and History.................................................................. 3
Performance Data................................................................................. 3
State Premium Taxes.............................................................................. 10
Services
Independent Auditors.................................................................... 10
Servicing Agent......................................................................... 11
Principal Underwriter................................................................... 11
Appendix A - State Premium Taxes................................................................. 12
Audited Financial Statements..................................................................... 13
</TABLE>
3
<PAGE> 53
GENERAL INFORMATION AND HISTORY
The Manufacturers Life Insurance Company of New York Separate Account A
(the "VARIABLE ACCOUNT") is a separate investment account of The Manufacturers
Life Insurance Company of New York ("WE" or "US"). We are a stock life insurance
company organized under the laws of New York in 1992. Our principal office is
located at 100 Summit Lake Drive, Second Floor, Valhalla, New York 10595. We are
a wholly-owned subsidiary of The Manufacturers Life Insurance Company of North
America ("MANULIFE NORTH AMERICA"), a stock life insurance company established
in 1979 in Delaware. The ultimate parent of Manulife North America is Manulife
Financial Corporation ("MFC"), a publicly traded company, based in Toronto,
Ontario, Canada. MFC is the holding company of The Manufacturers Life Insurance
Company and its subsidiaries, collectively known as Manulife Financial.
Our financial statements which are included in the Statement of Additional
Information should be considered only as bearing on our ability to meet our
obligations under the contracts. They should not be considered as bearing on the
investment performance of the assets held in the Variable Account.
PERFORMANCE DATA
Each of the sub-accounts may in its advertising and sales materials quote
total return figures. The sub-accounts may advertise both "standardized" and
"non-standardized" total return figures, although standardized figures will
always accompany non-standardized figures. Non-standardized total return figures
may be quoted assuming both:
- redemption at the end of the time period, and
- not assuming redemption at the end of the time period.
Standardized figures include total return figures from:
- the inception date of the sub-account of the Variable Account which
invests in the portfolio, or
- ten years, whichever period is shorter.
Non-standardized figures include total return figures from:
- inception date of the portfolio, or
- ten years, whichever period is shorter.
Such figures will always include the average annual total return for recent
one year and, when applicable, five and ten year periods and, where less than
ten years, the inception date of the sub-account, in the case of standardized
returns, and the inception date of the portfolio, in the case of
non-standardized returns. Where the period since inception is less than one
year, the total return quoted will be the aggregate return for the period. The
average annual total return is the average annual compounded rate of return that
equates a purchase payment to the market value of such purchase payment on the
last day of the period for which such return is calculated. The aggregate total
return is the percentage change (not annualized) that equates a purchase payment
to the market value of such purchase payment on the last day of the period for
which such return is calculated. For purposes of the calculations it is assumed
that an initial payment of $1,000 is made on the first day of the period for
which the return is calculated.
In calculating standardized return figures, all recurring charges (all
asset charges -mortality and expense risk fees and administrative fees) are
reflected and the asset charges are reflected in changes in unit values.
Standardized total return figures will be quoted assuming redemption at the end
of the period. Non-standardized total return figures reflecting redemption at
the end of the time period are calculated on the same basis as the standardized
returns. Non-standardized total return figures not reflecting redemption at the
end of the time period are calculated on the same basis as the standardized
returns except that the calculations assume no redemption at the end of the
period and do not reflect deduction of the annual contract fee. We believe such
non-standardized figures not reflecting redemptions at the end of the time
period are useful to contract owners who wish to assess the performance of an
ongoing contract of the size that is meaningful to the individual contract
owner.
For total return figures quoted for periods prior to the commencement of
the offering of this contract, November 6, 1998, standardized performance data
will be the historical performance of the Trust portfolio from
4
<PAGE> 54
the date the applicable sub-account of the Variable Account first became
available for investment under other contracts offered by us; adjusted to
reflect current contract charges. In the case of non-standardized performance,
performance figures will be the historical performance of the Trust portfolio
from the inception date of the portfolio (or in the case of the Trust portfolios
created in connection with the merger of Manulife Series Fund, Inc. into the
Trust, the inception date of the applicable predecessor Manulife Series Fund,
Inc. portfolio), adjusted to reflect current contract charges.
STANDARDIZED AVERAGE ANNUAL TOTAL RETURN FIGURES
CALCULATED AS OF DECEMBER 31, 1999
<TABLE>
<CAPTION>
SINCE INCEPTION OR
10 YEARS, WHICHEVER INCEPTION
TRUST PORTFOLIO 1 YEAR 5 YEAR SHORTER DATE(A)
<S> <C> <C> <C> <C>
Pacific Rim Emerging Markets 60.21% N/A -0.63% 01/01/97
Science & Technology 96.24% N/A 44.48% 01/01/97
International Small Cap 81.91% N/A 21.95% 03/04/96
Aggressive Growth 30.80% N/A 9.71% 01/01/97
Emerging Small Company 70.70% N/A 25.05% 01/01/97
Small Company Blend N/A N/A 27.17% 05/01/99
Mid Cap Stock N/A N/A -0.30% 05/01/99
All Cap Growth (B) 42.32% N/A 22.12% 03/04/96
Overseas 38.34% N/A 11.03% 01/09/95
International Stock 27.59% N/A 13.36% 01/01/97
International Value N/A N/A 2.71% 05/01/99
Mid Cap Blend 25.66% 21.36% 17.54% 10/31/92
Small Company Value 6.23% N/A -2.39% 10/01/97
Global Equity 1.96% 9.43% 11.10% 10/31/92
Growth 34.96% N/A 25.99% 07/15/96
Large Cap Growth 23.24% 17.82% 13.41% 10/31/92
Quantitative Equity 20.30% N/A 24.35% 01/01/97
Blue Chip Growth 17.48% 23.36% 13.94% 12/11/92
Real Estate Securities -9.51% N/A -3.91% 01/01/97
Value -4.38% N/A 3.56% 01/01/97
Growth & Income 16.93% 23.90% 18.16% 10/31/92
U.S. Large Cap Value N/A N/A 1.60% 05/01/99
Equity-Income 1.71% 14.86% 12.25% 02/19/93
Income & Value 6.90% 12.11% 9.30% 10/31/92
Balanced -3.26% N/A 8.23% 01/01/97
</TABLE>
5
<PAGE> 55
<TABLE>
<CAPTION>
SINCE INCEPTION OR
10 YEARS, WHICHEVER INCEPTION
TRUST PORTFOLIO 1 YEAR 5 YEAR SHORTER DATE(A)
<S> <C> <C> <C> <C>
High Yield 6.24% N/A 5.99% 01/01/97
Strategic Bond 0.55% 7.67% 5.37% 02/19/93
Global Bond -8.20% 5.79% 5.23% 10/31/92
Total Return N/A N/A -2.12% 05/01/99
Investment Quality Bond -3.40% 5.75% 4.42% 10/31/92
Diversified Bond -0.93% 7.65% 6.01% 10/31/92
U.S. Government Securities -1.86% 5.06% 4.02% 10/31/92
Money Market 2.89% 3.38% 2.82% 10/31/92
Lifestyle Aggressive 1000 12.73% N/A 8.31% 01/07/97
Lifestyle Growth 820 14.66% N/A 10.36% 01/07/97
Lifestyle Balanced 640 10.59% N/A 8.95% 01/07/97
Lifestyle Moderate 460 6.13% N/A 8.69% 01/07/97
Lifestyle Conservative 280 2.50% N/A 7.08% 01/07/97
</TABLE>
(A) Inception date of the sub-account of the Variable Account which invests in
the portfolio.
(B) Formerly, the Mid Cap Growth Trust
6
<PAGE> 56
NON-STANDARDIZED AVERAGE ANNUAL TOTAL RETURN FIGURES
(ASSUMING REDEMPTION AT THE END OF THE TIME PERIOD)
CALCULATED AS OF DECEMBER 31, 1999
<TABLE>
<CAPTION>
SINCE INCEPTION OR INCEPTION DATE
10 YEARS, OF PORTFOLIO
TRUST PORTFOLIO 1 YEAR 5 YEAR WHICHEVER SHORTER
<S> <C> <C> <C> <C>
Pacific Rim Emerging Markets (A) 57.21% 2.87% 1.61% 10/04/94
Science & Technology 93.24% N/A 44.00% 01/01/97
International Small Cap 78.91% N/A 21.95% 03/04/96
Aggressive Growth 27.80% N/A 8.88% 01/01/97
Emerging Small Company 67.70% N/A 24.40% 01/01/97
Small Company Blend N/A N/A 24.17% 05/01/99
Mid Cap Stock N/A N/A -2.99% 05/01/99
All Cap Growth (C) 39.32% N/A 22.12% 03/04/96
Overseas 35.34% N/A 11.03% 01/09/95
International Stock 24.59% N/A 12.57% 01/01/97
International Value N/A N/A -0.07% 05/01/99
Mid Cap Blend 22.66% 21.36% 12.15% (B) 06/18/85
Small Company Value 3.34% N/A -3.56% 10/01/97
Global Equity -0.79% 9.43% 6.96% (B) 03/18/88
Growth 31.96% N/A 25.99% 07/15/96
Large Cap Growth 20.24% 17.82% 10.95% (B) 08/03/89
Quantitative Equity (A) 17.30% 23.00% 14.07% (B) 04/30/87
Blue Chip Growth 14.48% 23.36% 13.94% 12/11/92
Real Estate Securities (A) -11.92% 5.38% 8.83% (B) 4/30/87
Value -6.95% N/A 2.62% 01/01/97
Growth & Income 13.93% 23.90% 16.53% 04/23/91
U.S. Large Cap Value N/A N/A -1.15% 05/01/99
Equity-Income -1.04% 14.86% 12.25% 02/19/93
Income & Value 4.00% 12.11% 8.07% (B) 08/03/89
Balanced -5.86% N/A 7.37% 01/01/97
High Yield 3.35% N/A 5.09% 01/01/97
Strategic Bond -2.17% 7.67% 5.37% 02/19/93
Global Bond -10.65% 5.79% 6.29% (B) 03/18/88
Total Return N/A N/A -4.75% 05/01/99
</TABLE>
7
<PAGE> 57
<TABLE>
<CAPTION>
SINCE INCEPTION OR INCEPTION DATE
10 YEARS, OF PORTFOLIO
TRUST PORTFOLIO 1 YEAR 5 YEAR WHICHEVER SHORTER
<S> <C> <C> <C> <C>
Investment Quality Bond -6.00% 5.75% 4.45% (B) 06/18/85
Diversified Bond -3.60% 7.65% 5.73% (B) 08/03/89
U.S. Government Securities -4.50% 5.06% 5.12% (B) 03/18/88
Money Market 0.10% 3.38% 3.17% (B) 06/18/85
Lifestyle Aggressive 1000 9.73% N/A 7.45% 01/07/97
Lifestyle Growth 820 11.66% N/A 9.53% 01/07/97
Lifestyle Balanced 640 7.59% N/A 8.10% 01/07/97
Lifestyle Moderate 460 3.25% N/A 7.83% 01/07/97
Lifestyle Conservative 280 -0.27% N/A 6.20% 01/07/97
</TABLE>
(A) Performance for each of these sub-accounts is based upon the historical
performance of the portfolio, adjusted to reflect current contract charges.
On December 31, 1996, Manulife Series Fund, Inc. merged with the Trust.
Performance for each of these sub-accounts is based on the historical
performance of the respective predecessor Manulife Series Fund, Inc.
portfolio for periods prior to December 31, 1996.
(B) Ten year average annual return.
(C) Formerly, the Mid Cap Stock Trust
8
<PAGE> 58
NON-STANDARDIZED AVERAGE ANNUAL TOTAL RETURN FIGURES
(ASSUMING NO REDEMPTION AT THE END OF THE TIME PERIOD)
CALCULATED AS OF DECEMBER 31, 1999
<TABLE>
<CAPTION>
SINCE INCEPTION OR INCEPTION DATE
10 YEARS, WHICHEVER OF PORTFOLIO
TRUST PORTFOLIO 1 YEAR 5 YEAR SHORTER
<S> <C> <C> <C> <C>
Pacific Rim Emerging Markets (A) 60.21% 2.87% 1.61% 10/04/94
Science & Technology 96.24% N/A 44.48% 01/01/97
International Small Cap 81.91% N/A 21.95% 03/04/96
Aggressive Growth 30.80% N/A 9.71% 01/01/97
Emerging Small Company 70.70% N/A 25.05% 01/01/97
Small Company Blend N/A N/A 27.17% 05/01/99
Mid Cap Stock N/A N/A -0.30% 05/01/99
All Cap Growth 42.32% N/A 22.12% 03/04/96
Overseas 38.34% N/A 11.03% 01/09/95
International Stock 27.59% N/A 13.36% 01/01/97
International Value N/A N/A 2.71% 05/01/99
Mid Cap Blend 25.66% 21.36% 12.15%(B) 06/18/85
Small Company Value 6.23% N/A -2.39% 10/01/97
Global Equity 1.96% 9.43% 6.96%(B) 03/18/88
Growth 34.96% N/A 25.99% 07/15/96
Large Cap Growth 23.24% 17.82% 10.95%(B) 08/03/89
Quantitative Equity (A) 20.30% 23.00% 14.07%(B) 04/30/87
Blue Chip Growth 17.48% 23.36% 13.94% 12/11/92
Real Estate Securities (A) -9.51% 5.38% 8.83%(B) 04/30/87
Value -4.38% N/A 3.56% 01/01/97
Growth & Income 16.93% 23.90% 16.53% 04/23/91
U.S. Large Cap Value N/A N/A 1.60% 05/01/99
Equity-Income 1.71% 14.86% 12.25% 02/19/93
Income & Value 6.90% 12.11% 8.07%(B) 08/03/89
Balanced -3.26% N/A 8.23% 01/01/97
High Yield 6.24% N/A 5.99% 01/01/97
Strategic Bond 0.55% 7.67% 5.37% 02/19/93
Global Bond -8.20% 5.79% 6.29%(B) 03/18/88
Total Return N/A N/A -2.12% 05/01/99
</TABLE>
9
<PAGE> 59
<TABLE>
<CAPTION>
SINCE INCEPTION OR INCEPTION DATE
10 YEARS, WHICHEVER OF PORTFOLIO
TRUST PORTFOLIO 1 YEAR 5 YEAR SHORTER
<S> <C> <C> <C> <C>
Investment Quality Bond -3.40% 5.75% 4.45%(B) 06/18/85
Diversified Bond -0.93% 7.65% 5.73%(B) 08/03/89
U.S. Government Securities -1.86% 5.06% 5.12%(B) 03/18/88
Money Market 2.89% 3.38% 3.17%(B) 06/18/85
Lifestyle Aggressive 1000 12.73% N/A 8.31% 01/07/97
Lifestyle Growth 820 14.66% N/A 10.36% 01/07/97
Lifestyle Balanced 640 10.59% N/A 8.95% 01/07/97
Lifestyle Moderate 460 6.13% N/A 8.69% 01/07/97
Lifestyle Conservative 280 2.50% N/A 7.08% 01/07/97
</TABLE>
(A) Performance for each of these sub-accounts is based upon the historical
performance of the portfolio, adjusted to reflect current contract charges.
On December 31, 1996, Manulife Series Fund, Inc. merged with the Trust.
Performance for each of these sub-accounts is based on the historical
performance of the respective predecessor Manulife Series Fund, Inc.
portfolio for periods prior to December 31, 1996.
(B) Ten year average annual return.
(C) Formerly, the Mid Cap Growth Trust.
* * * * *
In addition to the non-standardized returns quoted above, each of the
sub-accounts may from time to time quote aggregate non-standardized total
returns calculated in the same manner as set forth above for other time periods.
From time to time the Trust may include in its advertising and sales literature
general discussions of economic theories, including but not limited to,
discussions on how demographic and political trends can affect the financial
markets. Further, the Trust may also include in its advertising and sales
literature specific information on each of the Trust's subadvisers, including
but not limited to, research capabilities of a subadviser, assets under
management, information relating to other clients of a subadviser, and other
generalized information.
STATE PREMIUM TAXES
New York does not currently assess a premium tax. In the event New York
does impose a premium tax, we reserve the right to pass-through such tax to
contract owners.
SERVICES
INDEPENDENT AUDITORS
The audited financial statements of the Company at December 31, 1999 and
1998 and for each of the three years in the period ended December 31, 1999 and
of the Variable Account at December 31, 1999 and for each of the two years in
the period ended December 31, 1999 appearing in this Statement of Additional
Information have been audited by Ernst & Young LLP, independent auditors, as set
forth in their reports thereon appearing elsewhere herein, and are included in
reliance upon such reports given on the authority of such firm as experts in
accounting and auditing.
10
<PAGE> 60
SERVICING AGENT
Computer Sciences Corporation Financial Services Group ("CSC FSG") provides
us a computerized data processing recordkeeping system for variable annuity
administration. CSC FSG provides various daily, semimonthly, monthly, semiannual
and annual reports including:
- daily updates on:
- accumulation unit values,
- variable annuity participants and transactions, and
- agent production and commissions;
- semimonthly commission statements;
- monthly summaries of agent production and daily transaction reports;
- semiannual statements for contract owners; and
- annual contract owner tax reports.
We pay CSC FSG approximately $7.80 per policy per year, plus certain other fees
for the services provided.
PRINCIPAL UNDERWRITER
Manufacturers Securities Services, LLC, ("MSS") the successor to NASL
Financial Services, Inc., is a Delaware limited liability company controlled by
Manulife North America. MSS serves as principal underwriter of the contracts.
Contracts are offered on a continuous basis. The aggregate dollar amount of
underwriting commissions paid to MSS in 1999, 1998 and 1997 was $15,407,826,
$12,640,836 and $3,222,530, respectively. MSS did not retain any of these
amounts during such periods.
11
<PAGE> 61
APPENDIX A
STATE PREMIUM TAXES
Premium taxes vary according to the state and are subject to change. In
many jurisdictions there is no tax at all. For current information, a tax
advisor should be consulted.
<TABLE>
<CAPTION>
TAX RATE
QUALIFIED NON-QUALIFIED
STATE CONTRACTS CONTRACTS
<S> <C> <C>
CALIFORNIA .50% 2.35%
MAINE .00 2.00%
NEVADA .00 3.50%
PUERTO RICO 1.00% 1.00%
SOUTH DAKOTA* .00 1.25%
WEST VIRGINIA 1.00% 1.00%
WYOMING .00 1.00%
</TABLE>
* Premium tax paid upon receipt of premium (no tax at annuitization if tax
paid on premium at issue).
12
<PAGE> 62
AUDITED FINANCIAL STATEMENTS
<PAGE> 63
AUDITED FINANCIAL STATEMENTS
THE MANUFACTURERS LIFE INSURANCE
COMPANY OF NEW YORK
Years ended December 31, 1999, 1998 and 1997
<PAGE> 64
The Manufacturers Life Insurance Company of New York
Audited Financial Statements
Years ended December 31, 1999, 1998 and 1997
CONTENTS
Report of Independent Auditors......................................... 1
Audited Financial Statements
Balance Sheets......................................................... 2
Statements of Income................................................... 3
Statements of Changes in Shareholder's Equity.......................... 4
Statements of Cash Flows............................................... 5
Notes to Financial Statements.......................................... 6
<PAGE> 65
REPORT OF INDEPENDENT AUDITORS
The Board of Directors and Shareholder
The Manufacturers Life Insurance Company of New York
We have audited the accompanying balance sheets of The Manufacturers Life
Insurance Company of New York (the Company) as of December 31, 1999 and 1998,
and the related statements of income, changes in shareholder's equity, and cash
flows for each of the three years in the period ended December 31, 1999. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. 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. 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 audits provide 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 The Manufacturers Life
Insurance Company of New York at December 31, 1999 and 1998, and the results of
its operations and its cash flows for each of the three years in the period
ended December 31, 1999, in conformity with accounting principles generally
accepted in the United States.
/s/ Ernst & Young LLP
Boston, Massachusetts
February 21, 2000
1
<PAGE> 66
THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK
BALANCE SHEETS
<TABLE>
<CAPTION>
As at December 31
ASSETS ($ thousands) 1999 1998
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENTS:
Fixed maturity securities available-for-sale, at fair value
(note 3)
(amortized cost: 1999 $125,429; 1998 $120,902) $ 122,301 $ 125,088
Investment in unconsolidated affiliate 175 175
Policy loans 930 552
Short-term investments 41,311 10,032
- --------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS $ 164,717 $ 135,847
- --------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents 7,093 5,946
Accrued investment income 3,036 3,073
Deferred acquisition costs (note 5) 50,476 36,831
Other assets 456 1,834
Separate account assets 1,119,103 833,693
- --------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS $1,344,881 $1,017,224
====================================================================================================================
LIABILITIES AND SHAREHOLDER'S EQUITY ($ thousands)
- --------------------------------------------------------------------------------------------------------------------
LIABILITIES:
Policyholder liabilities and accruals $ 131,104 $ 94,492
Payable to affiliates 3,825 4,114
Deferred income taxes (note 6) 4,382 3,615
Other liabilities 5,258 1,943
Separate account liabilities 1,119,103 833,693
- --------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES $1,263,672 $ 937,857
- --------------------------------------------------------------------------------------------------------------------
SHAREHOLDER'S EQUITY:
Common stock (note 7) $ 2,000 $ 2,000
Additional paid-in capital 72,706 72,706
Retained earnings 8,947 3,209
Accumulated other comprehensive income (loss) (2,444) 1,452
- --------------------------------------------------------------------------------------------------------------------
TOTAL SHAREHOLDER'S EQUITY $ 81,209 $ 79,367
- --------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY $1,344,881 $1,017,224
====================================================================================================================
</TABLE>
See accompanying notes.
2
<PAGE> 67
THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK
STATEMENTS OF INCOME
<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31
($ thousands) 1999 1998 1997
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
REVENUES:
Fees from separate accounts and policyholder liabilities $14,670 $10,961 $ 7,395
Premiums 175 - -
Net investment income (note 3) 16,944 9,786 6,717
Net realized investment (losses) gains (222) 713 769
- ---------------------------------------------------------------------------------------------------------------------
TOTAL REVENUE $31,567 $21,460 $14,881
- ---------------------------------------------------------------------------------------------------------------------
BENEFITS AND EXPENSES:
Policyholder benefits and claims $ 6,613 $ 4,603 $ 4,747
Amortization of deferred acquisition costs (note 5) 4,287 4,849 3,393
Other insurance expenses 11,834 10,359 5,845
- ---------------------------------------------------------------------------------------------------------------------
TOTAL BENEFITS AND EXPENSES $22,734 $19,811 $13,985
- ---------------------------------------------------------------------------------------------------------------------
INCOME BEFORE INCOME TAXES $ 8,833 $ 1,649 $ 896
- ---------------------------------------------------------------------------------------------------------------------
INCOME TAXES (NOTE 6) $ 3,095 $ 576 $ 310
- ---------------------------------------------------------------------------------------------------------------------
NET INCOME $ 5,738 $ 1,073 $ 586
=====================================================================================================================
</TABLE>
See accompanying notes.
3
<PAGE> 68
THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK
STATEMENTS OF CHANGES IN SHAREHOLDER'S EQUITY
<TABLE>
<CAPTION>
ACCUMULATED
OTHER TOTAL
COMMON ADDITIONAL RETAINED COMPREHENSIVE SHAREHOLDER'S
($ thousands) STOCK PAID-IN CAPITAL EARNINGS INCOME (LOSS) EQUITY
(NOTE 7)
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Balance at January 1, 1997 $2,000 $24,800 $1,550 $ 419 $28,769
Capital contribution - 47,731 - - 47,731
Comprehensive income (note 4) - - 586 676 1,262
-------------------------------------------------------------------------------------------------------------------
BALANCE, DECEMBER 31, 1997 $2,000 $72,531 $2,136 $ 1,095 $77,762
Capital contribution - 175 - - 175
Comprehensive income (note 4) - - 1,073 357 1,430
-------------------------------------------------------------------------------------------------------------------
BALANCE, DECEMBER 31, 1998 2,000 72,706 3,209 1,452 79,367
Comprehensive income (Loss) (note 4) - - 5,738 (3,896) 1,842
-------------------------------------------------------------------------------------------------------------------
BALANCE, DECEMBER 31, 1999 $2,000 $72,706 $8,947 $ (2,444) $81,209
===================================================================================================================
</TABLE>
See accompanying notes.
4
<PAGE> 69
THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31
($ thousands) 1999 1998 1997
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
OPERATING ACTIVITIES:
Net income $ 5,738 $ 1,073 $ 586
Adjustments to reconcile net income to net cash provided by (used in)
operating activities:
Amortization of bond discount and premium 585 434 333
Net realized investment losses (gains) 222 (713) (769)
Provision for deferred income tax 1,857 1,153 (29)
Amortization of deferred acquisition costs 4,287 4,849 3,393
Policy acquisition costs deferred (15,604) $ (14,515) $ (11,684)
Return credited to policyholders and other benefits 6,613 4,603 4,747
Changes in assets and liabilities:
Accrued investment income 37 (672) (873)
Other assets 1,378 (1,603) (80)
Payable to affiliates (289) (231) 2,328
Other liabilities 3,315 956 115
- ------------------------------------------------------------------------------------------------------------------------
Net cash provided by (used in) operating activities $ 8,139 $ (4,666) $ (1,933)
- ------------------------------------------------------------------------------------------------------------------------
INVESTING ACTIVITIES:
Fixed maturity securities sold, matured or repaid $ 73,626 $ 30,591 $ 59,307
Fixed maturity securities purchased (78,960) $ (24,500) (103,383)
Net change in short-term investments (31,279) (34) (6,011)
Policy loans advanced, net (378) (154) (215)
- ------------------------------------------------------------------------------------------------------------------------
Cash (used in) provided by investing activities $ (36,991) $ 5,903 $ (50,302)
- ------------------------------------------------------------------------------------------------------------------------
FINANCING ACTIVITIES:
Deposits to policyholder funds $ 50,351 $ 14,212 17,212
Return of policyholder funds (20,352) (10,934) (15,382)
Capital contribution by parent - - 47,731
- ------------------------------------------------------------------------------------------------------------------------
Cash provided by financing activities $ 29,999 $ 3,278 $ 49,561
- ------------------------------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS:
Increase (decrease) during the year 1,147 4,515 (2,674)
Balance, beginning of year 5,946 1,431 4,105
- ------------------------------------------------------------------------------------------------------------------------
BALANCE, END OF YEAR $ 7,093 $ 5,946 $ 1,431
========================================================================================================================
</TABLE>
See accompanying notes
5
<PAGE> 70
THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
(IN THOUSANDS OF DOLLARS)
1. ORGANIZATION
The Manufacturers Life Insurance Company of New York (First North
American Life Assurance Company prior to October 1, 1997, and
hereinafter referred to as "the Company") is a stock life insurance
company which was organized on February 10, 1992 under the laws of the
State of New York. The New York Insurance Department ("the Department")
granted the Company a license to operate on July 22, 1992. The Company
is a wholly-owned subsidiary of The Manufacturers Life Insurance
Company of North America (formerly North American Security Life
Insurance Company ("NASL") and hereinafter referred to as "MNA"), which
is, in turn, a wholly-owned subsidiary of Manulife-Wood Logan Holding
Co., Inc. (hereinafter referred to as "MWLH"). MWLH is an indirect
wholly-owned subsidiary of The Manufacturers Life Insurance Company
("MLI"); prior to June 1, 1999, MLI indirectly owned 85% of MWLH, and
minority shareholders associated with MWLH owned the remaining 15%. MLI
is a wholly-owned subsidiary of Manulife Financial Corporation, a
publicly traded company. Manulife Financial Corporation and its
subsidiaries are known collectively as "Manulife Financial."
The Company issues individual and group annuity and individual life
insurance contracts (collectively, the contracts) in the State of New
York. Amounts invested in the fixed portion of the contracts are
allocated to the general account or a noninsulated separate account of
the Company. Amounts invested in the variable portion of the contracts
are allocated to the separate accounts of the Company. Each of these
separate accounts invests in either the shares of various portfolios of
the Manufacturers Investment Trust (formerly NASL Series Trust and
hereinafter referred to as "MIT"), a no-load, open-end investment
management company organized as a Massachusetts business trust, or in
open-end investment management companies offered and managed by
unaffiliated third parties.
Prior to October 1, 1997, the Company sold and administered only
combination fixed and variable annuity products. On October 21, 1997,
the Company received approval from the Department for a revised plan of
operations which expanded its product offerings. MNA contributed
$47,731 to the Company in support of the revised plan of operations.
Prior to October 1, 1997, NASL Financial Services Inc. ("NASL
Financial"), an affiliate of the Company, acted as investment adviser
to MIT and as principal underwriter of the annuity contracts issued by
the Company. Effective October 1, 1997, Manufacturers Securities
Services, LLC ("MSS"), the successor to NASL Financial and an affiliate
of the Company, replaced NASL
6
<PAGE> 71
1. ORGANIZATION (CONTINUED)
Financial as the investment advisor to MIT and as the principal
underwriter for the variable contracts and exclusive distributor of all
contracts issued by the Company.
Prior to October 1, 1997, Manulife Wood Logan, Inc. (formerly Wood
Logan Associates and hereinafter referred to as "MWL"), a subsidiary of
MWLH, acted as the promotional agent for the sale of the Company's
contracts. Since October 1, 1997, marketing services for the sale of
all contracts issued by the Company and other services are provided by
certain affiliates of the Company pursuant to an Administrative
Services Agreement and an Investment Services Agreement between the
Company and MLI. Currently, services are provided by MLI, MWLH, MNA and
The Manufacturers Life Insurance Company (U.S.A.)
("ManUSA").
On October 31, 1998, the Company received a 10% interest in the
members' equity of MSS from MNA, the managing member of MSS. The
Company treated the receipt of its equity interest as a contribution to
paid-in capital of $175.
2. SIGNIFICANT ACCOUNTING POLICIES
a) BASIS OF PRESENTATION
The accompanying financial statements of the Company have been prepared
in conformity with generally accepted accounting principles ("GAAP") in
the United States.
The preparation of financial statements in conformity with GAAP
requires management to make estimates and assumptions that affect the
amounts reported in the financial statements and accompanying notes.
Actual results could differ from reported results using those
estimates.
b) RECENT ACCOUNTING STANDARDS
i) In June 1998, the Financial Accounting Standards Board (FASB) issued
Statement No. 133, "Accounting for Derivative Instruments and Hedging
Activities" (SFAS No. 133). SFAS No. 133 establishes accounting and
reporting standards for derivative instruments and for hedging
activities. Contracts that contain embedded derivatives, such as
certain insurance contracts, are also addressed by the Statement. SFAS
No. 133 requires that an entity recognize all derivatives as either
assets or liabilities in the statement of financial position and
measure those instruments at fair value. In July 1999, the FASB issued
Statement 137, which delayed the effective date of SFAS No. 133 to
fiscal years beginning after June 15, 2000. The Company is evaluating
the accounting implications of SFAS No. 133 and has not determined its
impact on the Company's results of operations or its financial
condition.
7
<PAGE> 72
2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
b) RECENT ACCOUNTING STANDARDS (CONTINUED)
ii) In December 1997, the American Institute of Certified Public
Accountant's Accounting Standards Executive Committee (AcSEC) issued
Statement of Position (SOP) 97-3, "Accounting by Insurance and Other
Enterprises for Insurance-Related Assessments." SOP 97-3 provides
guidance on the recognition and measurement of liabilities for various
assessments related to insurance activities, including those by state
guaranty funds. The Company adopted SOP 97-3 during 1999. Prior to the
adoption of SOP 97-3, the Company expensed and recognized liabilities
for such assessments on a "pay-as-you-go" basis. The effect of adopting
SOP 97-3 did not have a material impact on the results of operations
and financial condition of the Company for the year ended December 31,
1999.
iii) In March 1998, AcSEC issued SOP 98-1, "Accounting for the Costs of
Computer Software Developed or Obtained for Internal Use." SOP 98-1
requires the capitalization of certain costs incurred in connection
with developing or obtaining internal-use software. The Company adopted
SOP 98-1 during 1999. Prior to the adoption of SOP 98-1, the Company
expensed internal-use software-related costs as incurred. The effect of
adopting SOP 98-1 did not have a material impact on the results of
operations and financial condition of the Company for the year ended
December 31, 1999.
c) INVESTMENTS
The Company classifies all of its fixed-maturity securities as
available-for-sale and records these securities at fair value. Realized
gains and losses on sales of securities classified as
available-for-sale are recognized in net income using the
specific-identification method. Changes in the fair value of securities
available-for-sale are reflected directly in accumulated other
comprehensive income after adjustments for deferred taxes and deferred
acquisition costs. Discounts and premiums on investments are amortized
using the effective-interest method.
The cost of fixed-maturity securities is adjusted for the amortization
of premiums and accretion of discounts using the interest method. This
amortization or accretion is included in net investment income.
For the mortgage-backed bond portion of the fixed-maturity securities
portfolio, the Company recognizes amortization using a constant
effective yield based on anticipated prepayments and the estimated
economic life of the securities. When actual prepayments differ
significantly from anticipated prepayments, the effective yield is
recalculated to reflect actual payments to date and anticipated future
payments. The net investment in the security is adjusted to the amount
that would have existed had the new effective yield been applied since
the acquisition of the security. That adjustment is included in net
investment income.
Policy loans are reported at aggregate unpaid balances, which
approximate fair value.
8
<PAGE> 73
2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
c) INVESTMENTS (CONTINUED)
Short-term investments, which include investments with maturities of
less than one year and greater than 90 days at the date of acquisition,
are reported at amortized cost, which approximates fair value.
d) CASH EQUIVALENTS
The Company considers all liquid debt instruments purchased with an
original maturity date of three months or less to be cash equivalents.
Cash equivalents are stated at cost plus accrued interest, which
approximates fair value.
e) DEFERRED ACQUISITION COSTS (DAC)
Commissions and other expenses which vary with, and are primarily
related to, the production of new business are deferred to the extent
recoverable and included as an asset. Acquisition costs associated with
annuity contracts and investment pension contracts are being amortized
generally in proportion to the present value of expected gross profits
from surrender charges and investment, mortality and expense margins.
The amortization is adjusted retrospectively when estimates of current
or future gross profits are revised. DAC associated with traditional
non-participating individual insurance policies is charged to expense
over the premium-paying period of the related policies. DAC is adjusted
for the impact on estimated future gross profits, assuming the
unrealized gains or losses on securities had been realized at year end.
The impact of any such adjustments is included in net unrealized gains
(losses) in accumulated other comprehensive income. DAC is reviewed
annually to determine recoverability from future income and, if not
recoverable, it is immediately expensed.
f) POLICYHOLDER LIABILITIES AND ACCRUALS
Policyholder liabilities equal the policyholder account value for the
fixed portion of annuity contracts and for investment pension contracts
with no substantial mortality risk. Account values are increased for
deposits received and interest credited, and are reduced by
withdrawals. For traditional nonparticipating life insurance policies,
policyholder liabilities are computed using the net level premium
method and are based upon estimates as to future mortality,
persistency, maintenance expenses and interest rate yields that are
applicable in the year of issue. The assumptions include a provision
for adverse deviation.
9
<PAGE> 74
2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
g) SEPARATE ACCOUNTS
Separate account assets and liabilities that are reported in the
accompanying balance sheets represent investments in either MIT, which
are mutual funds that are separately administered for the exclusive
benefit of the policyholders of the Company and its affiliates, or
open-end investment management companies offered and managed by
unaffiliated third parties, which are mutual funds that are separately
administered for the benefit of the Company's policyholders and other
shareholders. These assets and liabilities are reported at fair value.
The policyholders, rather than the Company, bear the investment risk.
The operations of the separate accounts are not included in the
accompanying financial statements. Fees charged on separate account
policyholder funds are included in revenues.
h) REVENUE RECOGNITION
Fee income from separate accounts, annuity contracts and investment
pension contracts consists of charges for mortality, expenses, and
surrender and administration charges that have been assessed against
the policyholder account balances. Premiums on traditional
nonparticipating life insurance policies are recognized as revenue when
due. Investment income is recorded as revenue when due.
i) POLICYHOLDER BENEFITS AND CLAIMS
Benefits for annuity contracts and investment pension contracts include
interest credited to policyholder account balances and benefit claims
incurred during the period in excess of policyholder account balances.
j) INCOME TAXES
Income taxes have been provided using the liability method in
accordance with SFAS No. 109, "Accounting for Income Taxes." Under this
method, deferred tax assets and liabilities are determined based on
differences between the financial reporting and tax bases of assets and
liabilities and are measured using the enacted tax rates and laws that
likely will be in effect when the differences are expected to reverse.
The measurement of deferred tax assets is reduced by a valuation
allowance if, based upon the available evidence, it is more likely than
not that some or all of the deferred tax assets will not be realized.
10
<PAGE> 75
3. INVESTMENTS AND INVESTMENT INCOME
a) FIXED-MATURITY SECURITIES
At December 31, 1999 and 1998, all fixed-maturity securities have been
classified as available-for-sale and reported at fair value. The
amortized cost and fair value are summarized as follows:
<TABLE>
<CAPTION>
GROSS GROSS
AMORTIZED COST UNREALIZED UNREALIZED FAIR VALUE
AS AT DECEMBER 31, GAINS LOSSES
($ thousands) 1999 1998 1999 1998 1999 1998 1999 1998
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
U.S. government $ 21,147 $ 11,018 $ - $ 591 $ (536) $(15) $ 20,611 $ 11,594
Corporate securities 92,532 99,696 122 3,321 (2,486) (35) 90,168 102,982
Mortgage-backed securities 8,278 6,680 27 125 (184) (21) 8,121 6,784
Foreign governments 2,414 2,449 23 111 - - 2,437 2,560
States/political subdivisions 1,058 1,059 - 109 (94) - 964 1,168
-------------------------------------------------------------------------------------------------------------------
TOTAL FIXED-MATURITY SECURITIES $125,429 $120,902 $172 $4,257 $(3,300) $(71) $122,301 $125,088
-------------------------------------------------------------------------------------------------------------------
</TABLE>
Proceeds from sales of fixed-maturity securities during 1999 were
$60,595 (1998, $17,985; 1997, $45,217). Gross gains of $301 and gross
losses of $523 were realized on those sales (1998, $715 and $2; 1997,
$772 and $6, respectively).
The contractual maturities of fixed-maturity securities at December 31,
1999 are shown below. Expected maturities may differ from contractual
maturities because borrowers may have the right to call or prepay
obligations with or without prepayment penalties. Corporate
requirements and investment strategies may result in the sale of
investments before maturity.
<TABLE>
<CAPTION>
($ thousands) AMORTIZED COST FAIR VALUE
-----------------------------------------------------------------------------------------------------------
<S> <C> <C>
FIXED-MATURITY SECURITIES
One year or less $ 38,416 $ 38,507
Greater than 1; up to 5 years 46,376 45,790
Greater than 5; up to 10 years 15,922 15,114
Due after 10 years 16,437 14,769
Mortgage-backed securities 8,278 8,121
-----------------------------------------------------------------------------------------------------------
TOTAL FIXED-MATURITY SECURITIES $125,429 $122,301
-----------------------------------------------------------------------------------------------------------
</TABLE>
Fixed-maturity securities with a fair value of $438 and $410 at December
31, 1999 and 1998, respectively, were on deposit with or in custody
accounts on behalf of New York State Insurance Department to satisfy
regulatory requirements.
11
<PAGE> 76
3. INVESTMENTS AND INVESTMENT INCOME (CONTINUED)
b) INVESTMENT INCOME
Income by type of investment was as follows:
<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31
($ thousands) 1999 1998 1997
-----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Fixed-maturity securities $ 8,147 $8,338 $6,342
Other invested assets 7,476 830 -
Short-term investments 1,443 762 477
-----------------------------------------------------------------------------------------------------------
Gross investment income 17,066 9,930 6,819
-----------------------------------------------------------------------------------------------------------
Investment expenses
(122) (144) (102)
-----------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME $16,944 $9,786 $6,717
===========================================================================================================
</TABLE>
The Company includes income earned from its investment in MSS in the
other invested assets category. Income earned from the Company's
investment in MSS was $7,453 and $813 for the years ended December 31,
1999 and 1998, respectively.
4. COMPREHENSIVE INCOME
Total comprehensive income was as follows:
<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31
($ thousands) 1999 1998 1997
-----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NET INCOME $ 5,738 $1,073 $ 586
-----------------------------------------------------------------------------------------------------------
OTHER COMPREHENSIVE (LOSS) INCOME, NET OF TAX (BENEFITS):
Unrealized holding (losses) gains arising
during the year (4,038) 820 1,176
Less:
Reclassification adjustment for realized
(losses) gains included in net income (142) 463 500
-----------------------------------------------------------------------------------------------------------
Other comprehensive (loss) income (3,896) 357 676
-----------------------------------------------------------------------------------------------------------
COMPREHENSIVE INCOME $ 1,842 $1,430 $1,262
===========================================================================================================
</TABLE>
Other comprehensive (loss) income is reported net of income taxes
(benefit) of $(1,088), $192, and $364 for 1999, 1998 and 1997,
respectively.
12
<PAGE> 77
5. DEFERRED ACQUISITION COSTS
The components of the change in DAC were as follows:
<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31
($ thousands) 1999 1998 1997
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Balance at January 1 $36,831 $28,364 $20,208
Capitalization 15,604 14,515 11,684
Amortization (4,287) (4,849) (3,393)
Effect of net unrealized losses (gains)
on securities available-for-sale 2,328 (1,199) (135)
----------------------------------------------------------------------------------------------------------
BALANCE AT DECEMBER 31 $50,476 $36,831 $28,364
==========================================================================================================
</TABLE>
6. INCOME TAXES
The components of income tax expense were as follows:
<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31
($ thousands) 1999 1998 1997
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Current expense (benefit) $1,238 $ (577) $339
Deferred expense (benefit) 1,857 1,153 (29)
----------------------------------------------------------------------------------------------------------
TOTAL EXPENSE $3,095 $ 576 $310
==========================================================================================================
</TABLE>
Components of the Company's net deferred tax liability are as follows:
<TABLE>
<CAPTION>
AS AT DECEMBER 31
($ thousands) 1999 1998
-----------------------------------------------------------------------------------------------------------
<S> <C> <C>
DEFERRED TAX ASSETS:
Reserves $ 708 $ 389
Unrealized losses on securities available-for-sale 963 -
-----------------------------------------------------------------------------------------------------------
Gross deferred tax assets 1,671 389
Valuation allowance -
(657) -
-----------------------------------------------------------------------------------------------------------
Net deferred tax assets 1,014 389
-----------------------------------------------------------------------------------------------------------
DEFERRED TAX LIABILITIES:
Deferred acquisition costs (5,147) (2,203)
Unrealized gains on securities available-for-sale - (784)
Other (249) (1,017)
-----------------------------------------------------------------------------------------------------------
Total deferred tax liabilities (5,396) (4,004)
-----------------------------------------------------------------------------------------------------------
NET DEFERRED TAX LIABILITY $(4,382) $(3,615)
===========================================================================================================
</TABLE>
As of December 31, 1999, the Company had $3,128 of unrealized capital
losses in its available for sale portfolio. Under federal tax law,
utilization of these capital losses, when realized, is limited to use
as an offset against capital gains. The Company believes that it is
more likely than not that it will be unable to realize the benefit of
the full deferred tax asset related to the net unrealized capital
losses. The Company has therefore established a valuation allowance for
13
<PAGE> 78
6. INCOME TAXES (CONTINUED)
the amount in excess of the available capital gains. The Company
believes that it will realize the full benefit of its remaining
deferred tax assets.
The Company participates as a member of the MWLH-affiliated group,
filing a consolidated federal income tax return. The Company files a
separate New York State return. The method of allocation between the
companies is subject to a tax-sharing agreement under which the tax
liability is allocated to each member of the group on a pro rata basis
based on the relationship that the member's tax liability (computed on
a separate-return basis) bears to the tax liability of the consolidated
group. The tax charge to the Company will not be more than the Company
would have paid on a separate-return basis. Settlement of taxes are
made through an increase or reduction to the payable to parent,
subsidiaries and affiliates, which is settled periodically.
The Company received a refund of $719 in 1999 and made tax payments of
$1,121 and $531 in 1998 and 1997, respectively.
7. SHAREHOLDER'S EQUITY
The Company has one class of common stock:
<TABLE>
<CAPTION>
AS AT DECEMBER 31:
($ thousands) 1999 1998
-----------------------------------------------------------------------------------------------------------
<S> <C> <C>
AUTHORIZED, ISSUED AND OUTSTANDING:
2,000,000 Common shares, par value $1 $2,000 $2,000
-----------------------------------------------------------------------------------------------------------
</TABLE>
The net assets of the Company available for the Parent as dividends are
generally limited to, and cannot be made except from, earned
statutory-basis profits. The maximum amount of dividends that may be
paid by life insurance companies without prior approval of the New York
Insurance Commissioner is subject to restrictions relating to statutory
surplus and net gain from operations on a statutory basis.
The aggregate statutory capital and surplus of the Company at December
31, 1999 was $63,470 (1998, $62,881). The aggregate statutory net
income (loss) of the Company for the year ended 1999 was $932; (1998,
($5,678); 1997, ($1,562)). State regulatory authorities prescribe
statutory accounting practices that differ in certain respects from
generally accepted accounting principles followed by stock life
insurance companies. The significant differences relate to investments,
deferred acquisition costs, deferred income taxes, nonadmitted asset
balances, and reserves.
8. REINSURANCE
The Company has entered into reinsurance agreements with various
reinsurers to reinsure any face amounts in excess of $100 for its
traditional nonparticipating insurance products. The Company remains
liable for amounts ceded in the event that reinsurers do not meet their
obligations. To date, there have been no reinsurance recoveries under
these agreements.
14
<PAGE> 79
9. RELATED-PARTY TRANSACTIONS
The Company utilized various services provided by MLI and affiliates,
such as legal, personnel, investment accounting and other corporate
services. Prior to October 1, 1997, MLI and MNA charged the Company for
those services. In the first nine months of 1997, MLI and MNA charged
the Company approximately $623. Effective October 1, 1997, pursuant to
a revised plan of operations, all intercompany expenses were billed
through MLI. For the years ended December 31, 1999 and 1998, and for
the fourth quarter of 1997, MLI billed the Company expenses of $6,391,
$4,685 and $869, respectively. At December 31, 1999 and 1998, the
Company had a net liability to MLI of $2,664 and $2,372, respectively,
for those services.
For the nine months ended September 30, 1997, the Company paid
underwriting commissions to NASL Financial of $8,421. NASL Financial
then reimbursed MWL for promotional agent services. Effective October
1, 1997, MSS replaced NASL Financial as underwriter. Thereafter, all
commissions were paid to MSS by the Company, and MWL marketing services
expenses were paid by MLI, who was then reimbursed by the Company.
Underwriting commissions and marketing services expense of $19,575 and
$17,838 was incurred during the years ended December 31, 1999 and 1998,
respectively, and $4,431 was incurred during the fourth quarter of
1997. At December 31, 1999 and 1998, the Company had a net liability of
$1,161 and $799, respectively, for these services.
The financial statements have been prepared from the records maintained
by the Company and may not necessarily be indicative of the financial
conditions or results of operations that would have occurred if the
Company had been operated as an unaffiliated corporation (see also
Notes 1, 6, 11 and 14 for additional related-party transactions).
10. BORROWED MONEY
The Company has an unsecured line of credit with State Street Bank and
Trust in the amount of $5,000, bearing interest at the bank's money
market rate plus 50 basis points. There were no outstanding advances
under the line of credit at December 31, 1999 and 1998.
11. EMPLOYEE BENEFITS
a) RETIREMENT PLAN
Prior to July 1, 1998, the Company and MNA participated in a
noncontributory defined benefit pension plan (the Nalaco Plan)
sponsored by MLI, covering its employees. A similar plan (the Manulife
Plan) also existed for ManUSA. Both plans provided pension benefits
based on length of service and final average earnings. Vested benefits
are fully funded; current pension costs are funded as they accrue.
15
<PAGE> 80
11. EMPLOYEE BENEFITS (CONTINUED)
a) RETIREMENT PLAN (CONTINUED)
Effective July 1, 1998, the Nalaco Plan was merged into the Manulife
Plan as approved by the Board of Directors of MLI. The merged plan was
then restated as a cash balance pension plan entitled "The Manulife
Financial U.S. Cash Balance Pension Plan" (Cash Balance Plan).
Participants in the two prior plans ceased accruing benefits under the
old plan effective June 30, 1998, and became participants in the Cash
Balance Plan on July 1, 1998. Also effective July 1, ManUSA became the
sponsor of the Cash Balance Plan. Each participant who was a
participant in one of the prior plans received an opening account
balance equal to the present value of their June 30, 1998 accrued
benefit under the prior plan, using Pension Benefit Guaranty
Corporation rates. Future contribution credits under the Cash Balance
Plan vary by service, and interest credits are a function of interest
rate levels. Pension benefits are provided to participants after three
years of vesting service, and the normal retirement benefit is
actuarially equivalent to the cash balance account at normal retirement
date. The normal form of payment under the Cash Balance Plan is a life
annuity, with various optional forms available.
Actuarial valuation of accumulated plan benefits are based on projected
salaries and best estimates of investment yields on plan assets,
mortality of participants, employee termination and ages at retirement.
Pension costs relating to current service and amortization of
experience gains and losses are amortized to income over the estimated
average remaining service lives of the participants. No pension expense
was recognized by the plan sponsor in 1999, 1998 or 1997 because the
plan was subject to the full funding limitation under the Internal
Revenue Code.
At December 31, 1999, the projected benefit obligation based on an
assumed interest rate of 7.5% was $47,124. The fair value of plan
assets invested in ManUSA's general fund deposit administration
insurance contracts was $86,777.
b) 401(k) PLAN
Prior to July 1, 1998, the Company also participated in a defined
contribution plan sponsored by MNA, the North American Security Life
401(k) Savings Plan (NASL 401k), which was subject to the provisions of
the Employee Retirement Income Security Act of 1974 (ERISA). A similar
plan, the Manulife Financial 401K Savings Plan, also existed for
employees of ManUSA. These two plans were effectively merged on July 1,
1998 into one defined contribution plan sponsored by ManUSA, as
approved by the Board of Directors on March 26, 1998. The costs
associated with the Plan were charged to the Company and were not
material.
c) OTHER POSTRETIREMENT BENEFIT PLAN
In addition to the retirement plan, the Company participates in the
other postretirement benefit plan of MNA which provides retiree medical
and life insurance benefits to those who have attained age 55 with ten
or more years of service. The plan provides the medical coverage for
retirees and spouses under age 65. When the retirees or the covered
dependents reach age 65, Medicare provides primary coverage and the
plan provides secondary coverage. There is no contribution for post-age
65 coverage, and no contributions are required for retirees for life
insurance coverage. The plan is unfunded.
16
<PAGE> 81
11. EMPLOYEE BENEFITS (CONTINUED)
c) OTHER POSTRETIREMENT BENEFIT PLAN (CONTINUED)
The other postretirement benefit cost of the Company, which includes
the expected cost of post-retirement benefits for newly eligible
employees and for vested employees, interest cost, and gains and losses
arising from differences between actuarial assumptions and actual
experience is accounted for by the plan sponsor, ManUSA.
12. FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying values and estimated fair values of the Company's
financial instruments at December 31 were as follows:
<TABLE>
<CAPTION>
1999 1998
-----------------------------------------------------------------------------
CARRYING FAIR CARRYING FAIR
VALUE VALUE VALUE VALUE
-----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Assets:
Fixed-maturity securities $122,301 $122,301 $125,088 $125,088
Policy loans 930 930 552 552
Short-term investments 41,311 41,311 10,032 10,032
Cash and cash equivalents 7,093 7,093 5,946 5,946
Liabilities:
Policyholder liabilities and
accruals 130,808 126,272 94,492 91,113
</TABLE>
The following methods and assumptions were used by the Company in
estimating the fair value disclosures for financial instruments:
Fixed-Maturity Securities: Fair values for fixed-maturity securities
are obtained from an independent pricing service.
Policy Loans: Carrying values approximate fair values.
Short-Term Investment and Cash and Cash Equivalents: Carrying values
approximate fair values.
Policyholder Liabilities and Accruals: Fair values of the Company's
liabilities under contracts not involving significant mortality risk
(deferred annuities) are estimated to be the cash surrender value or
the cost the Company would incur to extinguish the liability.
13. LEASES
The Company leases office space under various operating lease
agreements which will expire between 2000 and 2005. For the years ended
December 31, 1999, 1998 and 1997 the Company incurred rent expense of
$166, $95 and $84, respectively.
17
<PAGE> 82
13. LEASES (CONTINUED)
The minimum lease payments associated with the office space under the
operating lease agreements are as follows:
YEAR ENDED MINIMUM LEASE PAYMENTS
---------------------------------------------
2000 $ 247
2001 231
2002 235
2003 221
2004 and after 346
---------------------------------------------
Total $1,280
---------------------------------------------
14. CAPITAL MAINTENANCE AGREEMENT
Pursuant to a capital maintenance agreement and subject to regulatory
approval, MLI has agreed to maintain the Company's statutory capital
and surplus at a specified level and to ensure that sufficient funds
are available for the timely payment of contractual obligations.
15. CONTINGENCIES
The Company is subject to various lawsuits that have arisen in the
course of its business. Contingent liabilities arising from litigation,
income taxes and other matters are not considered material in relation
to the financial position of the Company.
18
<PAGE> 83
AUDITED FINANCIAL STATEMENTS
THE MANUFACTURERS LIFE
INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT A
Years ended December 31, 1999 and 1998
<PAGE> 84
The Manufacturers Life Insurance Company of
New York Separate Account A
Audited Financial Statements
Years ended December 31, 1999 and 1998
CONTENTS
Report of Independent Auditors................................................1
Audited Financial Statements
Statement of Assets and Contract Owners' Equity...............................2
Statements of Operations and Changes in Contract Owners' Equity...............3
Notes to Financial Statements................................................17
<PAGE> 85
Report of Independent Auditors
To the Contract Owners of
The Manufacturers Life Insurance Company of
New York Separate Account A
We have audited the accompanying statement of assets, liabilities and contract
owners' equity of The Manufacturers Life Insurance Company of New York Separate
Account A of The Manufacturers Life Insurance Company of New York as of December
31, 1999, and the related statements of operations and changes in contract
owners' equity for each of the two years in the period then ended. These
financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with generally accepted auditing standards
in the United States. 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. 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 audits provide 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 The Manufacturers Life
Insurance Company of New York Separate Account A at December 31, 1999, and the
results of its operations and the changes in its contract owners' equity for
each of the two years in the period then ended in conformity with accounting
principles generally accepted in the United States.
/s/ Ernst & Young LLP
Boston, Massachusetts
February 15, 2000
1
<PAGE> 86
The Manufacturers Life Insurance Company of New York
Separate Account A
Statement of Assets and Contract Owners' Equity
December 31, 1999
<TABLE>
<S> <C>
ASSETS
Investments at market value:
Sub-Accounts:
Mid Cap Blend Portfolio--4,947,626 shares (cost $97,627,315) $ 108,353,013
Investment Quality Bond Portfolio--1,082,965 shares (cost $12,963,687) 12,562,390
Growth and Income Portfolio--6,521,022 shares (cost $153,035,246) 213,041,790
Blue Chip Growth Portfolio--5,002,782 shares (cost $80,896,155) 108,260,194
Money Market Portfolio--3,318,125 shares (cost $33,181,248) 33,181,248
Global Equity Portfolio--2,856,127 shares (cost $51,589,889) 53,666,635
Global Government Bond Portfolio--584,322 shares (cost $7,713,633) 6,778,137
U.S. Government Securities Portfolio--1,223,229 shares (cost $16,524,102) 16,195,546
Diversified Bond Portfolio--726,845 shares (cost $8,177,112) 7,864,460
Income & Value Portfolio--2,245,899 shares (cost $27,342,302) 28,994,557
Large Cap Growth Portfolio--1,338,293 shares (cost $18,657,579) 23,058,789
Equity-Income Portfolio--5,263,837 shares (cost $80,265,769) 89,748,425
Strategic Bond Portfolio--2,541,638 shares (cost $29,671,146) 28,313,850
Overseas Portfolio--1,654,149 shares (cost $19,942,627) 26,334,055
Growth Portfolio--1,150,435 shares (cost $22,976,998) 30,923,698
Mid Cap Growth Portfolio--1,995,341 shares (cost $35,796,490 ) 49,664,040
International Small Cap Portfolio--678,797 shares (cost $11,407,734 ) 19,114,921
Pacific Rim Emerging Markets Portfolio--426,752 shares (cost $4,080,338) 4,643,064
Science & Technology Portfolio--2,053,786 shares (cost $47,888,938) 74,285,457
Emerging Small Company Portfolio--260,978 shares (cost $6,770,971) 10,632,248
Aggressive Growth Portfolio--419,561 shares (cost $5,478,710) 7,275,183
International Stock Portfolio--324,604 shares (cost $4,385,519) 5,008,635
Quantitative Equity Portfolio--427,846 shares (cost $10,470,268) 12,048,153
Value Trust Portfolio--572,956 shares (cost $8,529,765) 7,580,205
Real Estate Securities Portfolio--201,187 shares (cost $3,152,467) 2,593,305
Balanced Portfolio--319,022 shares (cost $5,894,185) 5,684,978
High Yield Portfolio--704,067 shares (cost $9,490,655) 9,040,226
Lifestyle Aggressive 1000 Portfolio--361,868 shares (cost $4,692,198) 5,261,554
Lifestyle Growth 820 Portfolio--1,859,200 shares (cost $25,521,580) 28,222,650
Lifestyle Balanced 640 Portfolio--2,098,179 shares (cost $28,109,005) 29,878,071
Lifestyle Moderate 460 Portfolio--881,149 shares (cost $11,920,005) 12,450,642
Lifestyle Conservative 280 Portfolio--510,775 shares (cost $6,690,679) 6,716,694
Small Company Value Portfolio--276,888 shares (cost $3,020,209) 3,397,422
Total Return Portfolio--239,638 shares (cost $2,963,766) 2,964,326
US Large Cap Value Portfolio--437,166 shares (cost $5,387,947) 5,613,215
Mid Cap Stock Portfolio--122,010 shares (cost $1,488,694) 1,537,326
Small Company Blend Portfolio--95,514 shares (cost $1,274,641) 1,505,299
International Value Portfolio--59,753 shares (cost $724,310) 775,593
----------------
Total assets $ 1,093,169,994
================
CONTRACT OWNERS' EQUITY
Variable annuity contracts $ 1,093,144,215
Annuity reserve 25,779
----------------
Total contract owners' equity $ 1,093,169,994
================
</TABLE>
See accompanying notes.
2
<PAGE> 87
The Manufacturers Life Insurance Company of New York
Separate Account A
Statements of Operations and Changes in Contract Owners' Equity
<TABLE>
<CAPTION>
SUB-ACCOUNT
--------------------------------------------------------------------------------------------
MID CAP BLEND (1) INVESTMENT QUALITY BOND GROWTH AND INCOME
--------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31,
1999 1998 1999 1998 1999 1998
--------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Income:
Dividends $ 10,389,331 $ 15,130,703 $ 620,390 $ 561,373 $ 5,766,968 $ 6,612,962
Expenses:
Mortality and expense risk
and administrative charges 1,295,413 1,145,526 171,871 140,373 2,508,334 1,602,622
--------------------------------------------------------------------------------------------
Net investment income (loss) 9,093,918 13,985,177 448,519 421,000 5,010,340 3,258,634
Net realized gain (loss) 2,664,968 1,007,114 (415) 195,010 7,079,116 3,398,048
Unrealized appreciation
(depreciation) during the
period 10,320,182 (9,138,827) (850,952) 47,652 17,861,968 17,104,121
--------------------------------------------------------------------------------------------
Net increase (decrease) in
contract owners' equity from
operations 22,079,068 5,853,464 (402,848) 663,662 28,199,718 25,512,509
--------------------------------------------------------------------------------------------
Changes from principal
transactions:
Purchase payments 7,513,089 9,156,693 2,158,703 2,092,516 31,201,877 23,975,140
Transfers between
sub-accounts and the
Company (1,497,184) (1,769,886) 426,766 895,525 21,481,374 8,666,092
Withdrawals (6,364,759) (3,542,523) (708,280) (623,663) (10,507,981) (5,289,954)
Annual contract fee (44,780) (43,305) (4,558) (3,771) (76,507) (53,050)
--------------------------------------------------------------------------------------------
Net increase (decrease) in
contract owners' equity from
principal transactions (393,634) 3,800,979 1,872,631 2,360,607 42,098,763 27,298,228
--------------------------------------------------------------------------------------------
Total increase (decrease) in
contract owners' equity 21,685,434 9,654,443 1,469,783 3,024,269 70,298,481 52,810,737
Contract owners' equity at
beginning of period 86,667,579 77,013,136 11,092,607 8,068,338 142,743,309 89,932,572
--------------------------------------------------------------------------------------------
Contract owners' equity at end
of period $ 108,353,013 $ 86,667,579 $ 12,562,390 $ 11,092,607 $ 213,041,790 $ 142,743,309
============================================================================================
</TABLE>
(1) Effective May 3, 1999, the Equity Sub-Account was renamed Mid Cap Blend
through a vote of the Board of Directors.
See accompanying notes.
3
<PAGE> 88
The Manufacturers Life Insurance Company of New York
Separate Account A
Statements of Operations and Changes in Contract Owners' Equity (continued)
<TABLE>
<CAPTION>
SUB-ACCOUNT
------------------------------------------------------------------------------------------
BLUE CHIP GROWTH MONEY MARKET GLOBAL EQUITY
------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31,
1999 1998 1999 1998 1999 1998
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Income:
Dividends $ 3,547,690 $ 925,258 $ 1,437,718 $ 1,217,864 $ 5,535,859 $ 3,435,281
Expenses:
Mortality and expense risk
and administrative charges 1,230,470 734,935 447,148 345,389 747,136 701,828
------------------------------------------------------------------------------------------
Net investment income (loss) 2,317,220 190,323 990,570 872,475 4,788,723 2,733,453
Net realized gain (loss) 3,564,898 1,888,866 228,810 (4,278) 1,751,074 976,295
Unrealized appreciation
(depreciation) during the
period 9,378,290 10,851,936 0 0 (5,540,721) 1,055,569
------------------------------------------------------------------------------------------
Net increase (decrease) in
contract owners' equity from
operations 15,260,408 12,931,125 1,219,380 868,197 999,076 4,765,317
------------------------------------------------------------------------------------------
Changes from principal
transactions:
Purchase payments 16,560,189 13,085,482 17,450,076 23,529,594 3,521,176 4,558,097
Transfers between
sub-accounts and the
Company 13,287,349 4,838,123 (7,095,942) (21,232,778) (952,941) 311,099
Withdrawals (5,966,875) (2,000,593) (5,572,666) (2,647,622) (3,044,050) (1,957,660)
Annual contract fee (38,009) (24,824) (9,758) (6,939) (26,061) (26,281)
------------------------------------------------------------------------------------------
Net increase (decrease) in
contract owners' equity from
principal transactions 23,842,654 15,898,188 4,771,710 (357,745) (501,876) 2,885,255
------------------------------------------------------------------------------------------
Total increase (decrease) in
contract owners' equity 39,103,062 28,829,313 5,991,090 510,452 497,200 7,650,572
Contract owners' equity at
beginning of period 69,157,132 40,327,819 27,190,158 26,679,706 53,169,435 45,518,863
------------------------------------------------------------------------------------------
Contract owners' equity at end
of period $ 108,260,194 $ 69,157,132 $ 33,181,248 $ 27,190,158 $ 53,666,635 $ 53,169,435
==========================================================================================
</TABLE>
See accompanying notes.
4
<PAGE> 89
The Manufacturers Life Insurance Company of New York
Separate Account A
Statements of Operations and Changes in Contract Owners' Equity (continued)
<TABLE>
<CAPTION>
SUB-ACCOUNT
-------------------------------------------------------------------------------------
U.S. GOVERNMENT DIVERSIFIED BOND (3)
GLOBAL BOND (2) SECURITIES
-------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31,
1999 1998 1999 1998 1999 1998
-------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Income:
Dividends $ 745,529 $ 828,155 $ 713,252 $ 767,695 $ 748,053 $ 683,398
Expenses:
Mortality and expense risk
and administrative charges 104,884 121,247 244,931 232,775 109,861 102,810
-------------------------------------------------------------------------------------
Net investment income (loss) 640,645 706,908 468,321 534,920 638,192 580,588
Net realized gain (loss) (290,060) 131,303 314,867 188,892 (8,884) 122,379
Unrealized appreciation
(depreciation) during the
period (1,003,444) (331,938) (1,087,081) 236,061 (680,769) (56,020)
-------------------------------------------------------------------------------------
Net increase (decrease) in
contract owners' equity from
operations (652,859) 506,273 (303,893) 959,873 (51,461) 646,947
-------------------------------------------------------------------------------------
Changes from principal transactions:
Purchase payments 250,749 419,396 1,774,042 3,629,590 848,171 582,731
Transfers between
sub-accounts and the
Company (1,058,750) (301,107) (1,352,111) 372,771 (329,796) 599,459
Withdrawals (534,603) (507,258) (2,329,987) (1,002,775) (569,360) (609,672)
Annual contract fee (3,573) (4,248) (7,152) (6,895) (4,612) (4,571)
-------------------------------------------------------------------------------------
Net increase (decrease) in
contract owners' equity from
principal transactions (1,346,177) (393,217) (1,915,208) 2,992,691 (55,597) 567,947
-------------------------------------------------------------------------------------
Total increase (decrease) in
contract owners' equity (1,999,036) 113,056 (2,219,101) 3,952,564 (107,058) 1,214,894
Contract owners' equity at
beginning of period 8,777,173 8,664,117 18,414,647 14,462,083 7,971,518 6,756,624
-------------------------------------------------------------------------------------
Contract owners' equity at end
of period $ 6,778,137 $ 8,777,173 $ 16,195,546 $ 18,414,647 $ 7,864,460 $ 7,971,518
=====================================================================================
</TABLE>
(2) Effective May 3, 1999, the Global Government Bond Sub-Account was renamed
Global Bond through a vote of the Board of Directors.
(3) Effective May 3, 1999, the Conservative Asset Allocation Sub-Account was
renamed Diversified Bond through a vote of the Board of Directors.
See accompanying notes.
5
<PAGE> 90
The Manufacturers Life Insurance Company of New York
Separate Account A
Statements of Operations and Changes in Contract Owners' Equity (continued)
<TABLE>
<CAPTION>
SUB-ACCOUNT
-----------------------------------------------------------------------------------------
INCOME & VALUE (4) LARGE CAP GROWTH (5) EQUITY INCOME
-----------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31,
1999 1998 1999 1998 1999 1998
-----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Income:
Dividends $ 3,262,684 $ 2,721,906 $ 1,462,144 $ 1,432,979 $ 6,639,089 $ 4,886,452
Expenses:
Mortality and expense risk
and administrative charges 405,381 354,371 229,404 177,019 1,312,004 1,183,871
-----------------------------------------------------------------------------------------
Net investment income (loss) 2,857,303 2,367,535 1,232,740 1,255,960 5,327,085 3,702,581
Net realized gain (loss) 676,183 240,650 673,975 325,333 4,670,683 2,699,560
Unrealized appreciation
(depreciation) during the
period (1,562,002) 610,351 2,166,775 406,423 (8,374,904) (213,380)
-----------------------------------------------------------------------------------------
Net increase (decrease) in
contract owners' equity from
operations 1,971,484 3,218,536 4,073,490 1,987,716 1,622,864 6,188,761
-----------------------------------------------------------------------------------------
Changes from principal
transactions:
Purchase payments 1,889,519 1,976,675 4,110,011 1,088,836 7,333,688 10,272,190
Transfers between
sub-accounts and the
Company 34,607 (493,969) 2,401,258 (682,669) (4,353,163) 340,674
Withdrawals (1,861,079) (1,870,614) (1,207,853) (626,377) (5,447,799) (3,814,029)
Annual contract fee (14,197) (13,415) (8,674) (8,315) (43,667) (42,132)
-----------------------------------------------------------------------------------------
Net increase (decrease) in
contract owners' equity from
principal transactions 48,850 (401,323) 5,294,742 (228,525) (2,510,941) 6,756,703
-----------------------------------------------------------------------------------------
Total increase (decrease) in
contract owners' equity 2,020,334 2,817,213 9,368,232 1,759,191 (888,077) 12,945,464
Contract owners' equity at
beginning of period 26,974,223 24,157,010 13,690,557 11,931,366 90,636,502 77,691,038
-----------------------------------------------------------------------------------------
Contract owners' equity at end
of period $ 28,994,557 $ 26,974,223 $ 23,058,789 $ 13,690,557 $ 89,748,425 $ 90,636,502
=========================================================================================
</TABLE>
(4) Effective May 3, 1999, the Moderate Asset Allocation Sub-Account was
renamed Income & Value through a vote of the Board of Directors.
(5) Effective May 3, 1999, the Aggressive Asset Allocation Sub-Account was
renamed Large Cap Growth through a vote by the Board of Directors.
See accompanying notes.
6
<PAGE> 91
The Manufacturers Life Insurance Company of New York
Separate Account A
Statements of Operations and Changes in Contract Owners' Equity (continued)
<TABLE>
<CAPTION>
SUB-ACCOUNT
------------------------------------------------------------------------------------------
STRATEGIC BOND OVERSEAS (6) GROWTH
------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31,
1999 1998 1999 1998 1999 1998
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Income:
Dividends $ 2,445,021 $ 2,295,167 $ 0 $ 918,754 $ 859,187 $ 378,033
Expenses:
Mortality and expense risk
and administrative charges 452,630 486,219 276,831 252,751 302,573 146,819
------------------------------------------------------------------------------------------
Net investment income (loss) 1,992,391 1,808,948 (276,831) 666,003 556,614 231,214
Net realized gain (loss) (499,170) 859,950 962,029 268,040 958,174 239,398
Unrealized appreciation
(depreciation) during the
period (1,291,606) (2,696,973) 6,480,126 (5,437) 5,558,422 1,647,389
------------------------------------------------------------------------------------------
Net increase (decrease) in
contract owners' equity
from operations 201,615 (28,075) 7,165,324 928,606 7,073,210 2,118,001
------------------------------------------------------------------------------------------
Changes from principal
transactions:
Purchase payments 2,144,510 7,609,581 1,651,406 2,337,324 4,273,287 3,141,393
Transfers between
sub-accounts and the
Company (7,528,077) (2,900,935) (150,069) (19,511) 6,007,737 2,270,326
Withdrawals (2,468,375) (1,483,625) (975,966) (804,738) (832,997) (347,582)
Annual contract fee (13,785) (14,237) (10,326) (10,494) (8,549) (4,261)
------------------------------------------------------------------------------------------
Net increase (decrease) in
contract owners' equity from
principal transactions (7,865,727) 3,210,784 515,045 1,502,581 9,439,478 5,059,876
------------------------------------------------------------------------------------------
Total increase (decrease) in
contract owners' equity (7,664,112) 3,182,709 7,680,369 2,431,187 16,512,688 7,177,877
Contract owners' equity at
beginning of period 35,977,962 32,795,253 18,653,686 16,222,499 14,411,010 7,233,133
------------------------------------------------------------------------------------------
Contract owners' equity at end
of period $ 28,313,850 $ 35,977,962 $ 26,334,055 $ 18,653,686 $ 30,923,698 $ 14,411,010
==========================================================================================
</TABLE>
(6) Effective May 3, 1999, the International Growth & Income Sub-Account was
renamed Overseas through a vote of the Board of Directors.
See accompanying notes.
7
<PAGE> 92
The Manufacturers Life Insurance Company of New York
Separate Account A
Statements of Operations and Changes in Contract Owners' Equity (continued)
<TABLE>
<CAPTION>
SUB-ACCOUNT
--------------------------------------------------------------------------------------------
INTERNATIONAL PACIFIC RIM
MID CAP GROWTH (7) SMALL CAP EMERGING MARKETS
--------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31,
1999 1998 1999 1998 1999 1998
--------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Dividends $ 4,187,706 $ 0 $ 32,036 $ 23,697 $ 74,711 $ 0
Expenses:
Mortality and expense risk
and administrative charges 480,620 306,388 149,181 113,927 31,884 9,975
--------------------------------------------------------------------------------------------
Net investment income (loss) 3,707,086 (306,388) (117,145) (90,230) 42,827 (9,975)
Net realized gain (loss) 2,717,113 1,378,269 1,061,007 409,189 662,173 (154,105)
Unrealized appreciation
(depreciation) during the
period 7,390,190 4,593,528 7,367,156 309,360 529,833 141,071
--------------------------------------------------------------------------------------------
Net increase (decrease) in
contract owners' equity
from operations 13,814,389 5,665,409 8,311,018 628,319 1,234,833 (23,009)
--------------------------------------------------------------------------------------------
Changes from principal
transactions:
Purchase payments 4,908,698 4,789,484 1,113,321 925,104 672,325 503,933
Transfers between
sub-accounts and the
Company 2,912,295 2,289,436 1,522,620 845,594 1,801,255 183,911
Withdrawals (1,868,445) (1,018,210) (784,705) (283,422) (121,725) (28,153)
Annual contract fee (15,956) (11,426) (4,455) (4,127) (864) (298)
--------------------------------------------------------------------------------------------
Net increase (decrease) in
contract owners' equity from
principal transactions 5,936,592 6,049,284 1,846,781 1,483,149 2,350,991 659,393
--------------------------------------------------------------------------------------------
Total increase (decrease) in
contract owners' equity 19,750,981 11,714,693 10,157,799 2,111,468 3,585,824 636,384
Contract owners' equity at
beginning of period 29,913,059 18,198,366 8,957,122 6,845,654 1,057,240 420,856
--------------------------------------------------------------------------------------------
Contract owners' equity at end
of period $ 49,664,040 $ 29,913,059 $ 19,114,921 $ 8,957,122 $ 4,643,064 $ 1,057,240
============================================================================================
</TABLE>
(7) Effective May 3, 1999, the Small Mid Cap Sub-Account was renamed Mid Cap
Growth through a vote of the Board of Directors.
See accompanying notes.
8
<PAGE> 93
The Manufacturers Life Insurance Company of New York
Separate Account A
Statements of Operations and Changes in Contract Owners' Equity (continued)
<TABLE>
<CAPTION>
SUB-ACCOUNT
--------------------------------------------------------------------------------------------
SCIENCE & TECHNOLOGY EMERGING SMALL COMPANY AGGRESSIVE GROWTH (8)
--------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31,
1999 1998 1999 1998 1999 1998
--------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Income:
Dividends $ 5,160,554 $ 0 $ 71,618 $ 50,122 $ 0 $ 0
Expenses:
Mortality and expense risk
and administrative charges 509,712 140,540 78,549 53,801 62,126 39,530
--------------------------------------------------------------------------------------------
Net investment income (loss) 4,650,842 (140,540) (6,931) (3,679) (62,126) (39,530)
Net realized gain (loss) 2,500,553 245,552 228,415 98,646 189,779 7,185
Unrealized appreciation
(depreciation) during the
period 22,272,538 4,315,307 3,741,254 (127,344) 1,499,667 220,471
--------------------------------------------------------------------------------------------
Net increase (decrease) in
contract owners' equity from
operations 29,423,933 4,420,319 3,962,738 (32,377) 1,627,320 188,126
--------------------------------------------------------------------------------------------
Changes from principal
transactions:
Purchase payments 11,642,300 5,039,793 1,003,045 1,628,997 2,029,654 800,978
Transfers between
sub-accounts and the 16,787,391 3,207,637 1,006,706 557,075 (169,156) 863,113
Company
Withdrawals (1,536,409) (319,985) (318,158) (191,761) (260,523) (119,872)
Annual contract fee (13,841) (4,020) (2,389) (1,724) (1,708) (1,646)
--------------------------------------------------------------------------------------------
Net increase (decrease) in
contract owners' equity from
principal transactions 26,879,441 7,923,425 1,689,204 1,992,587 1,598,267 1,542,573
--------------------------------------------------------------------------------------------
Total increase (decrease) in
contract owners' equity 56,303,374 12,343,744 5,651,942 1,960,210 3,225,587 1,730,699
--------------------------------------------------------------------------------------------
Contract owners' equity at
beginning of period 17,982,083 5,638,339 4,980,306 3,020,096 4,049,596 2,318,897
--------------------------------------------------------------------------------------------
Contract owners' equity at end
of period $ 74,285,457 $ 17,982,083 $ 10,632,248 $ 4,980,306 $ 7,275,183 $ 4,049,596
============================================================================================
</TABLE>
(8) Effective May 3, 1999, the Pilgrim Baxter Growth Sub-Account was renamed
Aggressive Growth through a vote of the Board of Directors.
See accompanying notes.
9
<PAGE> 94
The Manufacturers Life Insurance Company of New York
Separate Account A
Statements of Operations and Changes in Contract Owners' Equity (continued)
<TABLE>
<CAPTION>
SUB-ACCOUNT
------------------------------------------------------------------------------------------
QUANTITATIVE
INTERNATIONAL STOCK WORLDWIDE GROWTH (9) EQUITY
------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31,
1999 1998 1999 1998 1999 1998
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Income:
Dividends $ 413,960 $ 43,775 $ 21,603 $ 13,045 $ 598,619 $ 297,413
Expenses:
Mortality and expense risk
and administrative charges 49,175 31,689 11,932 29,659 115,609 43,301
------------------------------------------------------------------------------------------
Net investment income (loss) 364,785 12,086 9,671 (16,614) 483,010 254,112
Net realized gain (loss) 150,393 27,952 200,267 36,499 148,201 25,491
Unrealized appreciation
(depreciation) during the
period 521,153 219,452 (78,542) 88,489 1,046,733 456,874
------------------------------------------------------------------------------------------
Net increase (decrease) in
contract owners' equity from
operations 1,036,331 259,490 131,396 108,374 1,677,944 736,477
------------------------------------------------------------------------------------------
Changes from principal
transactions:
Purchase payments 1,130,989 640,937 109,985 869,846 2,506,769 1,492,800
Transfers between
sub-accounts and
the Company 50,156 457,349 (2,744,881) 115,421 3,341,246 932,023
Withdrawals (128,809) (102,003) (66,997) (110,403) (331,637) (83,791)
Annual contract fee (1,450) (1,001) (312) (914) (3,305) (1,211)
------------------------------------------------------------------------------------------
Net increase (decrease) in
contract owners' equity from
principal transactions 1,050,886 995,282 (2,702,205) 873,950 5,513,073 2,339,821
------------------------------------------------------------------------------------------
Total increase (decrease) in
contract owners' equity 2,087,217 1,254,772 (2,570,809) 982,324 7,191,017 3,076,298
------------------------------------------------------------------------------------------
Contract owners' equity at
beginning of period 2,921,418 1,666,646 2,570,809 1,588,485 4,857,136 1,780,838
------------------------------------------------------------------------------------------
Contract owners' equity at end
of period $ 5,008,635 $ 2,921,418 $ 0 $ 2,570,809 $ 12,048,153 $ 4,857,136
==========================================================================================
</TABLE>
(9) Effective April 30, 1999, the Worldwide Growth Sub-Account was merged with
Global Equity through a vote of the Board of Directors.
See accompanying notes.
10
<PAGE> 95
The Manufacturers Life Insurance Company of New York
Separate Account A
Statements of Operations and Changes in Contract Owners' Equity (continued)
<TABLE>
<CAPTION>
SUB-ACCOUNT
----------------------------------------------------------------------------------------
REAL ESTATE
VALUE TRUST SECURITIES BALANCED
----------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31,
1999 1998 1999 1998 1999 1998
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Income:
Dividends $ 240,043 $ 268,076 $ 138,667 $ 340,740 $ 358,736 $ 274,564
Expenses:
Mortality and expense risk
and administrative charges 120,281 94,438 38,771 40,096 77,257 36,138
----------------------------------------------------------------------------------------
Net investment income (loss) 119,762 173,638 99,896 300,644 281,479 238,426
Net realized gain (loss) (198,442) 81,939 (398,793) (115,048) (159,412) 9,117
Unrealized appreciation
(depreciation) during the
period (389,978) (595,649) 32,162 (775,195) (277,411) 35,848
----------------------------------------------------------------------------------------
Net increase (decrease) in
contract owners' equity from
operations (468,658) (340,072) (266,735) (589,599) (155,344) 283,391
----------------------------------------------------------------------------------------
Changes from principal
transactions:
Purchase payments 1,739,644 3,119,814 206,235 940,108 1,900,015 1,602,611
Transfers between
sub-accounts and the Company (1,426,196) 1,619,109 (277,145) 636,804 (257,437) 1,705,099
----------------------------------------------------------------------------------------
Withdrawals (390,633) (220,984) (162,041) (166,110) (195,543) (47,399)
Annual contract fee (3,519) (2,510) (1,133) (982) (2,120) (725)
----------------------------------------------------------------------------------------
Net increase (decrease) in
contract owners' equity from
principal transactions (80,704) 4,515,429 (234,084) 1,409,820 1,444,915 3,259,586
----------------------------------------------------------------------------------------
Total increase (decrease) in
contract owners' equity (549,362) 4,175,357 (500,819) 820,221 1,289,571 3,542,977
----------------------------------------------------------------------------------------
Contract owners' equity at
beginning of period 8,129,567 3,954,210 3,094,124 2,273,903 4,395,407 852,430
----------------------------------------------------------------------------------------
Contract owners' equity at end
of period $ 7,580,205 $ 8,129,567 $ 2,593,305 $ 3,094,124 $ 5,684,978 $ 4,395,407
========================================================================================
</TABLE>
See accompanying notes.
11
<PAGE> 96
The Manufacturers Life Insurance Company of New York
Separate Account A
Statements of Operations and Changes in Contract Owners' Equity (continued)
<TABLE>
<CAPTION>
SUB-ACCOUNT
----------------------------------------------------------------------------------------
CAPITAL LIFESTYLE
HIGH YIELD GROWTH BOND (10) AGGRESSIVE 1000
----------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31,
1999 1998 1999 1998 1999 1998
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Income:
Dividends $ 719,247 $ 543,274 $ 61,318 $ 28,804 $ 333,300 $ 305,318
Expenses:
Mortality and expense risk
and administrative charges 125,457 86,517 3,982 9,656 81,854 83,756
----------------------------------------------------------------------------------------
Net investment income (loss) 593,790 456,757 57,336 19,148 251,446
221,562
Net realized gain (loss) (32,854) 115,549 (43,935) 7,917 (107,893) 73,870
Unrealized appreciation
(depreciation) during the
period (10,174) (500,323) (26,461) 16,427 431,193 (15,084)
----------------------------------------------------------------------------------------
Net increase (decrease) in
contract owners' equity from
operations 550,762 71,983 (13,060) 43,492 574,746 280,348
----------------------------------------------------------------------------------------
Changes from principal
transactions:
Purchase payments 1,694,142 3,600,414 69,827 598,774 757,414 3,077,092
Transfers between
sub-accounts and
the Company (85,354) 256,649 (835,008) (198,882) (3,149,323) (268,897)
Withdrawals (606,766) (348,311) (17,220) (62,706) (611,389) (290,307)
Annual contract fee (3,312) (1,447) (90) (166) (5,533) (5,347)
----------------------------------------------------------------------------------------
Net increase (decrease) in
contract owners' equity from
principal transactions 998,710 3,507,305 (782,491) 337,020 (3,008,831) 2,512,541
----------------------------------------------------------------------------------------
Total increase (decrease) in
contract owners' equity 1,549,472 3,579,288 (795,551) 380,512 (2,434,085) 2,792,889
----------------------------------------------------------------------------------------
Contract owners' equity at
beginning of period 7,490,754 3,911,466 795,551 415,039 7,695,639 4,902,750
----------------------------------------------------------------------------------------
Contract owners' equity at end
of period $ 9,040,226 $ 7,490,754 $ 0 $ 795,551 $ 5,261,554 $ 7,695,639
========================================================================================
</TABLE>
(10) Effective April 30, 1999, the Capital Growth Bond Sub-Account was merged
with Investment Quality Bond through a vote of the Board of Directors.
See accompanying notes.
12
<PAGE> 97
The Manufacturers Life Insurance Company of New York
Separate Account A
Statements of Operations and Changes in Contract Owners' Equity (continued)
<TABLE>
<CAPTION>
SUB-ACCOUNT
-----------------------------------------------------------------------------------------
LIFESTYLE LIFESTYLE LIFESTYLE
GROWTH 820 BALANCED 640 MODERATE 460
-----------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31,
1999 1998 1999 1998 1999 1998
-----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Income:
Dividends $ 1,747,760 $ 1,767,734 $ 1,960,473 $ 1,583,990 $ 742,188 $ 496,729
Expenses:
Mortality and expense risk
and administrative charges 421,007 431,445 432,727 390,197 176,230 142,347
-----------------------------------------------------------------------------------------
Net investment income (loss) 1,326,753 1,336,289 1,527,746 1,193,793 565,958 354,382
Net realized gain (loss) 214,773 357,181 32,385 293,921 303,640 80,885
Unrealized appreciation
(depreciation) during the
period 2,274,894 (312,708) 1,421,732 (390,020) (63,578) 357,260
-----------------------------------------------------------------------------------------
Net increase (decrease) in
contract owners' equity from
operations 3,816,420 1,380,762 2,981,863 1,097,694 806,020 792,527
-----------------------------------------------------------------------------------------
Changes from principal
transactions:
Purchase payments 5,160,258 15,208,587 4,809,735 13,654,532 1,635,149 5,735,053
Transfers between
sub-accounts and
the Company (16,542,580) (657,869) (11,079,098) 561,143 (2,362,700) 414,134
Withdrawals (1,764,649) (1,326,866) (1,518,789) (1,185,813) (723,129) (349,708)
Annual contract fee (17,845) (15,608) (14,744) (11,425) (5,949) (3,558)
-----------------------------------------------------------------------------------------
Net increase (decrease) in
contract owners' equity from
principal transactions (13,164,816) 13,208,244 (7,802,896) 13,018,437 (1,456,629) 5,795,921
-----------------------------------------------------------------------------------------
Total increase (decrease) in
contract owners' equity (9,348,396) 14,589,006 (4,821,033) 14,116,131 (650,609) 6,588,448
-----------------------------------------------------------------------------------------
Contract owners' equity at
beginning
of period 37,571,046 22,982,040 34,699,104 20,582,973 13,101,251 6,512,803
-----------------------------------------------------------------------------------------
Contract owners' equity at end
of period $ 28,222,650 $ 37,571,046 $ 29,878,071 $ 34,699,104 $ 12,450,642 $ 13,101,251
=========================================================================================
</TABLE>
See accompanying notes.
13
<PAGE> 98
The Manufacturers Life Insurance Company of New York
Separate Account A
Statements of Operations and Changes in Contract Owners' Equity (continued)
<TABLE>
<CAPTION>
SUB-ACCOUNT
-------------------------------------------------------------------------------------
LIFESTYLE SMALL TOTAL RETURN
CONSERVATIVE 280 COMPANY VALUE (11)
-------------------------------------------------------------------------------------
YEAR ENDED
YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31, DECEMBER 31,
1999 1998 1999 1998 1999
-------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Income:
Dividends $ 439,339 $ 162,598 $ 2,112 $ 512 $ 0
Expenses:
Mortality and expense risk
and administrative charges 90,231 51,871 42,581 22,160 14,483
-------------------------------------------------------------------------------------
Net investment income (loss) 349,108 110,727 (40,469) (21,648) (14,483)
Net realized gain (loss) 41,012 36,948 (212,962) (79,550) (499)
Unrealized appreciation
(depreciation) during the
period (221,715) 179,655 475,746 (98,533) 560
-------------------------------------------------------------------------------------
Net increase (decrease) in
contract owners' equity from
operations 168,405 327,330 222,315 (199,731) (14,422)
-------------------------------------------------------------------------------------
Changes from principal
transactions:
Purchase payments 1,343,171 3,398,468 1,017,273 2,148,651 1,666,355
Transfers between
sub-accounts and
the Company 198,222 82,618 (575,184) 991,569 1,381,559
Withdrawals (468,557) (141,941) (143,639) (62,404) (69,003)
Annual contract fee (2,724) (1,284) (1,172) (256) (163)
-------------------------------------------------------------------------------------
Net increase (decrease) in
contract owners' equity from
principal transactions 1,070,112 3,337,861 297,278 3,077,560 2,978,748
-------------------------------------------------------------------------------------
Total increase (decrease) in
contract owners' equity 1,238,517 3,665,191 519,593 2,877,829 2,964,326
-------------------------------------------------------------------------------------
Contract owners' equity at
beginning of period 5,478,177 1,812,986 2,877,829 0 0
-------------------------------------------------------------------------------------
Contract owners' equity at end
of period $ 6,716,694 $ 5,478,177 $ 3,397,422 $ 2,877,829 $ 2,964,326
=====================================================================================
</TABLE>
(11) Commencement of Operations, May 3, 1999, through a vote of the Board of
Directors.
See accompanying notes.
14
<PAGE> 99
The Manufacturers Life Insurance Company of New York
Separate Account A
Statements of Operations and Changes in Contract Owners' Equity (continued)
<TABLE>
<CAPTION>
SUB-ACCOUNT
--------------------------------------------------------
SMALL
US LARGE CAP MID CAP STOCK COMPANY BLEND
VALUE (11) (11) (11)
--------------------------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31,
1999 1999 1999
--------------------------------------------------------
<S> <C> <C> <C>
Income:
Dividends $ 0 $ 0 $ 28,511
Expenses:
Mortality and expense risk and administrative charges 35,870 6,892 6,891
--------------------------------------------------------
Net investment income (loss) (35,870) (6,892) 21,620
Net realized gain (loss) (10,636) (8,908) 4,928
Unrealized appreciation (depreciation) during the period 225,268 48,632 230,658
--------------------------------------------------------
Net increase (decrease) in contract owners' equity from
operations 178,762 32,832 257,206
--------------------------------------------------------
Changes from principal transactions:
Purchase payments 3,136,423 1,009,841 562,946
Transfers between sub-accounts and the Company 2,339,105 504,374 689,623
Withdrawals (40,659) (9,675) (4,390)
Annual contract fee (416) (46) (86)
--------------------------------------------------------
Net increase (decrease) in contract owners' equity from 5,434,453 1,504,494 1,248,093
principal transactions
--------------------------------------------------------
Total increase (decrease) in contract owners' equity 5,613,215 1,537,326 1,505,299
--------------------------------------------------------
Contract owners' equity at beginning
of period 0 0 0
--------------------------------------------------------
Contract owners' equity at end of period $ 5,613,215 $ 1,537,326 $ 1,505,299
========================================================
</TABLE>
See accompanying notes.
15
<PAGE> 100
The Manufacturers Life Insurance Company of New York
Separate Account A
Statements of Operations and Changes in Contract Owners' Equity (continued)
<TABLE>
<CAPTION>
SUB-ACCOUNT
-----------------------------------------------------------
INTERNATIONAL
VALUE (11) TOTAL
-----------------------------------------------------------
YEAR ENDED
DECEMBER 31, YEAR ENDED DECEMBER 31,
1999 1999 1998
-----------------------------------------------------------
<S> <C> <C> <C>
Income:
Dividends $ 0 $ 61,505,416 $ 48,996,371
Expenses:
Mortality and expense risk and administrative
charges 3,106 13,005,279 9,885,986
-----------------------------------------------------------
Net investment income (loss) (3,106) 48,500,137 39,110,385
Net realized gain (loss) (1,570) 30,024,983 15,473,967
Unrealized appreciation (depreciation) during the
period 51,283 79,867,077 27,635,813
-----------------------------------------------------------
Net increase (decrease) in contract owners' equity
from operations 46,607 158,392,197 82,220,165
-----------------------------------------------------------
Changes from principal transactions:
Purchase payments 542,253 155,048,260 177,231,214
Transfers between sub-accounts and
the Company 188,666 12,540,214 5,486,250
Withdrawals (1,909) (60,538,029) (33,588,834)
Annual contract fee (24) (417,364) (336,413)
-----------------------------------------------------------
Net increase (decrease) in contract owners'
equity from principal transactions 728,986 106,633,081 148,792,217
-----------------------------------------------------------
Total increase (decrease) in contract owners' equity 775,593 265,025,278 231,012,382
-----------------------------------------------------------
Contract owners' equity at beginning
of period 0 828,144,716 597,132,334
-----------------------------------------------------------
Contract owners' equity at end of period $ 775,593 $ 1,093,169,994 $ 828,144,716
===========================================================
</TABLE>
See accompanying notes.
16
<PAGE> 101
The Manufacturers Life Insurance Company of New York
Separate Account A
Notes to Financial Statements
December 31, 1999
1. ORGANIZATION
The Manufacturers Life Insurance Company of New York Separate Account A (the
Account) is a separate account established by The Manufacturers Life Insurance
Company of New York (the Company). The Company established the Account on July
22, 1992 as a separate account under New York law. The Account operates as a
Unit Investment Trust under the Investment Company Act of 1940, as amended, and
invests in thirty-eight sub-accounts of Manufacturers Investment Trust (the
Trust). The Account is a funding vehicle for variable annuity contracts (the
Contracts) issued by the Company. The account includes four contracts,
distinguished principally by the level of expenses and surrender charges. These
four contracts are Venture Variable Annuity 9 (VEN9), Venture Variable Annuity
10 (VEN10), Venture Variable Annuity (VEN24) and Vision Variable Annuity 24
(VIS24).
The Company is a wholly-owned subsidiary of the Manufacturers Life Insurance
Company of North America (MNA). MNA is a wholly-owned subsidiary of Manulife
Wood Logan Holding Company, Inc. (MWLH). MWLH is 78.4% owned by The
Manufacturers Life Insurance Company (USA), (ManUSA) and 21.6% by MRL Holding
LLC, (MRL). ManUSA and MRL are indirectly wholly-owned subsidiaries of the
Manufacturers Life Insurance Company (MLI), which in turn is a wholly-owned
subsidiary of Manulife Financial Corporation. Manulife Financial Corporation and
its subsidiaries are known collectively as Manulife Financial.
On May 3, 1999, 5 new sub-accounts, Small Company Blend, Total Return, US Large
Cap Value, International Value and Mid Cap Stock commenced operations.
On April 30, 1999, 2 sub-accounts, Capital Growth Bond and Worldwide Growth,
ceased operations and were merged with Investment Quality Bond and Global Equity
sub-accounts, respectively.
2. SIGNIFICANT ACCOUNTING POLICIES
Investments are made in the portfolios of the Trust and are valued at the
reported net asset value of such portfolios. Transactions are recorded on the
trade date. Income from dividends is recorded on the ex-dividend date. Realized
gains and losses on the sales of investments are computed on the basis of the
identified cost of the investment sold.
In addition to the Account, a contract holder may also allocate funds to the
Fixed Account, which is part of the Company's general account. Because of
exemptive and exclusionary provisions, interests in the Fixed Account have not
been registered under the Securities Act of 1933, and the Company's general
account has not been registered as an investment company under the Investment
Company act of 1940.
17
<PAGE> 102
The Manufacturers Life Insurance Company of New York Separate
Account A
Notes to Financial Statements (continued)
2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
The operations of the Account are included in the federal income tax return of
the Company, which is taxed as a life insurance company under the provisions of
the Internal Revenue Code (the Code). Under the current provisions of the Code,
the Company does not expect to incur federal income taxes on the earnings of the
Account to the extent the earnings are credited under the contracts. Based on
this, no charge is being made currently to the Account for federal income taxes.
The Company will review, periodically, the status of such decision based on
changes in the tax law. Such a charge may be made in future years for any
federal income taxes that would be attributable to the contract.
The preparation of financial statements in conformity with generally accepted
accounting principals requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from reported results using those estimates.
3. AFFILIATED COMPANY TRANSACTIONS
The Company has an Administrative Services Agreement with Manulife Financial,
whereby Manulife Financial or its designee, with the consent of the Company,
performs certain services on behalf of the Company necessary for the operation
of the separate account. The Company has an underwriting and distribution
agreements with its affiliate, Manufacturers Securities Services LLC (MSS). MSS
is owned 90% by MNA and 10% by the Company.
4. CONTRACT CHARGES
There are no deductions made from purchase payments for sales charges at the
time of purchase. In the event of a surrender, a contingent deferred sales
charge may be made by the Company to cover sales expenses. An annual
administrative fee of $30 is deducted from each contract owners' account on the
contract anniversary date to cover contract administration costs. This charge is
waived on certain contracts.
Deductions from each sub-account for the VEN9, VEN10 and VEN24 contracts are
made daily for administrative fees and for the assumption of mortality and
expense risk charges, equal to an effective annual rate of 0.15% and 1.25% of
the contract value, respectively.
Deductions from each sub-account for the VIS24 contracts are made daily for
distribution fees, administration and for the assumption of mortality and
expense risks equal to an effective annual rate of 0.15%, 0.25% and 1.25% of the
contract value, respectively.
18
<PAGE> 103
The Manufacturers Life Insurance Company of New York Separate
Account A
Notes to Financial Statements (continued)
5. PURCHASES AND SALES OF INVESTMENTS
The following table shows aggregate cost of shares purchased and proceeds from
sales of each sub-account for the year ended December 31, 1999:
<TABLE>
<CAPTION>
PURCHASES SALES
----------------------------------
<S> <C> <C>
Mid Cap Blend Portfolio $ 20,671,139 $ 11,970,855
Investment Quality Bond Portfolio 5,032,082 2,710,932
Growth and Income Portfolio 58,308,505 12,951,108
Blue Chip Growth Portfolio 33,548,196 7,388,322
Money Market Portfolio 60,191,756 54,429,476
Global Equity Portfolio 17,049,507 12,762,660
Global Bond Portfolio 2,517,398 3,222,930
U.S. Government Securities Portfolio 6,801,373 8,248,260
Diversified Bond Portfolio 2,172,891 1,590,296
Income & Value Portfolio 8,042,078 5,135,925
Large Cap Growth Portfolio 8,922,195 2,394,713
Equity-Income Portfolio 16,695,502 13,879,358
Strategic Bond Portfolio 8,544,941 14,418,277
Overseas Portfolio 7,982,013 7,743,799
Growth Portfolio 12,634,654 2,638,562
Mid Cap Growth Portfolio 19,338,519 9,694,841
International Small Cap Portfolio 6,859,071 5,129,435
Pacific Rim Emerging Markets Portfolio 6,307,682 3,913,864
Science & Technology Portfolio 37,489,234 5,958,951
Emerging Small Company Portfolio 4,595,667 2,913,394
Aggressive Growth Portfolio 3,573,165 2,037,024
International Stock Portfolio 2,986,991 1,571,320
Worldwide Growth Portfolio 346,731 3,039,265
Quantitative Equity Portfolio 7,140,781 1,144,698
Value Trust Portfolio 3,605,093 3,566,035
Real Estate Securities Portfolio 917,464 1,051,652
Balanced Portfolio 3,592,560 1,866,166
High Yield Portfolio 4,755,486 3,162,986
Capital Growth Bond Portfolio 461,347 1,186,502
Lifestyle Aggressive 1000 Portfolio 1,100,883 3,858,268
Lifestyle Growth 820 Portfolio 6,972,543 18,810,606
Lifestyle Balanced 640 Portfolio 7,319,732 13,594,882
Lifestyle Moderate 460 Portfolio 2,254,401 3,145,072
Lifestyle Conservative 280 Portfolio 2,683,999 1,264,779
Small Company Value Portfolio 1,874,955 1,618,146
International Value Portfolio 997,738 271,858
US Large Cap Value Portfolio 6,921,639 1,523,056
Small Company Blend Portfolio 1,443,493 173,780
Mid Cap Stock Portfolio 1,718,222 220,620
Total Return Portfolio 3,256,870 292,605
----------------------------------
Total $407,628,496 $252,495,278
==================================
</TABLE>
19
<PAGE> 104
The Manufacturers Life Insurance Company of New York Separate
Account A
Notes to Financial Statements (continued)
6. UNIT VALUES
A summary of the accumulation unit values at December 31, 1999 and 1998, and the
accumulation units and dollar values outstanding at December 31, 1999 are as
follows:
<TABLE>
<CAPTION>
1998 1999
---------------- --------------------------------------------------
UNIT UNIT
VALUE VALUE UNITS DOLLARS
---------------- --------------------------------------------------
<S> <C> <C> <C> <C>
Mid Cap Blend Sub-Account:
Ven 9, Ven 10 and Ven 24 Contracts $31.289551 $39.416089 2,727,092 $107,491,312
Vis 24 Contracts 22.973151 28.867552 29,850 861,701
-----------------------------------
2,756,942 108,353,013
Investment Quality Bond Sub-Account:
Ven 9, Ven 10 and Ven 24 Contracts 19.660365 19.039807 637,165 12,131,499
Vis 24 Contracts 12.847911 33,538 430,891
-----------------------------------
670,703 12,562,390
Growth and Income Sub-Account:
Ven 9, Ven 10 and Ven 24 Contracts 32.976967 38.655938 5,388,989 208,316,427
Vis 24 Contracts 26.056725 30.467742 155,039 4,723,695
-----------------------------------
5,544,028 213,040,122
Blue-Chip Growth Sub-Account:
Ven 9, Ven 10 and Ven 24 Contracts 21.710674 25.568866 4,092,676 104,645,086
Vis 24 Contracts 22.573222 26.518360 136,325 3,615,108
-----------------------------------
4,229,001 108,260,194
Money Market Sub-Account:
Ven 9, Ven 10 and Ven 24 Contracts 15.794513 16.291417 1,943,423 31,661,122
Vis 24 Contracts 12.153141 125,081 1,520,126
-----------------------------------
2,068,504 33,181,248
Global Equity Sub-Account:
Ven 9, Ven 10 and Ven 24 Contracts 24.098970 24.633827 2,156,416 53,120,788
Vis 24 Contracts 18.706100 19.073534 28,618 545,847
-----------------------------------
2,185,034 53,666,635
Global Bond Sub-Account:
Ven 9, Ven 10 and Ven 24 Contracts 21.333144 19.632749 344,100 6,755,636
Vis 24 Contracts 13.599529 1,655 22,501
-----------------------------------
345,755 6,778,137
</TABLE>
20
<PAGE> 105
The Manufacturers Life Insurance Company of New York Separate
Account A
Notes to Financial Statements (continued)
6. UNIT VALUES (CONTINUED)
<TABLE>
<CAPTION>
1998 1999
-------------------------------------------------------------------
UNIT UNIT
VALUE VALUE UNITS DOLLARS
-------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. Government Securities Sub-Account:
Ven 9, Ven 10 and Ven 24 Contracts $17.535478 $18.286918 867,698 $15,867,531
Vis 24 Contracts 12.757839 25,711 328,015
-----------------------------------
893,409 16,195,546
Diversified Bond Sub-Account:
Ven 9, Ven 10 and Ven 24 Contracts 18.125951 18.002047 415,279 7,475,869
Vis 24 Contracts 14.527388 26,749 388,591
-----------------------------------
442,028 7,864,460
Income & Value Sub-Account:
Ven 9, Ven 10 and Ven 24 Contracts 20.742457 22.230152 1,292,508 28,732,650
Vis 24 Contracts 17.986686 14,561 261,907
-----------------------------------
1,307,069 28,994,557
Large Cap Growth Sub-Account:
Ven 9, Ven 10 and Ven 24 Contracts 23.040505 28.465074 758,666 21,595,494
Vis 24 Contracts 23.393391 62,552 1,463,295
-----------------------------------
821,218 23,058,789
Equity-Income Sub-Account:
Ven 9, Ven 10 and Ven 24 Contracts 22.054902 22.487758 3,940,443 88,611,725
Vis 24 Contracts 20.794388 21.149570 53,746 1,136,700
-----------------------------------
3,994,189 89,748,425
Strategic Bond Sub-Account:
Ven 9, Ven 10 and Ven 24 Contracts 14.486687 14.602672 1,925,359 28,115,388
Vis 24 Contracts 14.243718 14.321908 13,538 193,891
-----------------------------------
1,938,897 28,309,279
Overseas Sub-Account:
Ven 9, Ven 10 and Ven 24 Contracts 12.290162 17.044524 1,518,672 25,885,043
Vis 24 Contracts 16.833813 26,271 442,237
-----------------------------------
1,544,943 26,327,280
Growth Sub-Account:
Ven 9, Ven 10 and Ven 24 Contracts 20.739989 28.060585 1,067,369 29,951,005
Vis 24 Contracts 27.818889 34,965 972,693
-----------------------------------
1,102,334 30,923,698
</TABLE>
21
<PAGE> 106
The Manufacturers Life Insurance Company of New York Separate
Account A
Notes to Financial Statements (continued)
7. UNIT VALUES (CONTINUED)
<TABLE>
<CAPTION>
1998 1999
-------------------------------------------------------------------
UNIT UNIT
VALUE VALUE UNITS DOLLARS
-------------------------------------------------------------------
<S> <C> <C> <C> <C>
Mid-Cap Growth Sub-Account:
Ven 9, Ven 10 and Ven 24 Contracts $19.002856 $27.113084 1,791,495 $48,572,951
Vis 24 Contracts 26.855000 40,629 1,091,089
-----------------------------------
1,832,124 49,664,040
International Small-Cap Sub-Account:
Ven 9, Ven 10 and Ven 24 Contracts 14.792077 26.974754 698,741 18,848,373
Vis 24 Contracts 26.718058 9,893 264,310
-----------------------------------
708,634 19,112,683
Pacific Rim Emerging Markets Sub-Account:
Ven 9, Ven 10 and Ven 24 Contracts 7.695249 12.359297 364,288 4,502,345
Vis 24 Contracts 12.267100 11,339 139,101
-----------------------------------
375,627 4,641,446
Science & Technology Sub-Account:
Ven 9, Ven 10 and Ven 24 Contracts 19.287390 37.943261 1,883,525 71,467,062
Vis 24 Contracts 37.660683 74,837 2,818,395
-----------------------------------
1,958,362 74,285,457
Emerging Small Company Sub-Account:
Ven 9, Ven 10 and Ven 24 Contracts 14.381705 24.610648 419,655 10,327,987
Vis 24 Contracts 24.427201 12,456 304,261
-----------------------------------
432,111 10,632,248
Aggressive Growth Sub-Account:
Ven 9, Ven 10 and Ven 24 Contracts 12.680777 16.628126 390,691 6,496,455
Vis 24 Contracts 16.504105 47,184 778,728
-----------------------------------
437,875 7,275,183
International Stock Sub-Account:
Ven 9, Ven 10 and Ven 24 Contracts 14.337171 18.338932 257,550 4,723,191
Vis 24 Contracts 18.202233 15,682 285,444
-----------------------------------
273,232 5,008,635
Quantitative Equity Sub-Account:
Ven 9, Ven 10 and Ven 24 Contracts 20.068624 24.202942 477,373 11,553,831
Vis 24 Contracts 24.022598 20,577 494,322
-----------------------------------
497,950 12,048,153
</TABLE>
22
<PAGE> 107
The Manufacturers Life Insurance Company of New York Separate
Account A
Notes to Financial Statements (continued)
6. UNIT VALUES (CONTINUED)
<TABLE>
<CAPTION>
1998 1999
---------------- --------------------------------------------------
UNIT UNIT
VALUE VALUE UNITS DOLLARS
---------------- --------------------------------------------------
<S> <C> <C> <C> <C>
Value Trust Sub-Account:
Ven 9, Ven 10 and Ven 24 Contracts $14.591878 $13.987433 512,842 $ 7,173,343
Vis 24 Contracts 13.883152 29,002 402,640
-----------------------------------
541,844 7,575,983
Real Estate Securities Sub-Account:
Ven 9, Ven 10 and Ven 24 Contracts 12.317190 11.174188 228,009 2,547,821
Vis 24 Contracts 11.090818 3,790 42,029
-----------------------------------
231,799 2,589,850
Balanced Sub-Account:
Ven 9, Ven 10 and Ven 24 Contracts 16.459454 15.962370 340,493 5,435,072
Vis 24 Contracts 15.843343 15,774 249,906
-----------------------------------
356,267 5,684,978
High-Yield Sub-Account:
Ven 9, Ven 10 and Ven 24 Contracts 14.078376 14.993652 574,922 8,620,175
Vis 24 Contracts 14.008370 14.881850 28,143 418,819
-----------------------------------
603,065 9,038,994
Lifestyle Aggressive 1000 Sub-Account:
Ven 9, Ven 10 and Ven 24 Contracts 14.134419 15.974195 318,120 5,081,707
Vis 24 Contracts 15.855076 11,343 179,847
-----------------------------------
329,463 5,261,554
Lifestyle Growth 820 Sub-Account:
Ven 9, Ven 10 and Ven 24 Contracts 14.696667 16.893101 1,590,780 26,873,208
Vis 24 Contracts 16.767184 80,481 1,349,442
-----------------------------------
1,671,261 28,222,650
Lifestyle Balanced 640 Sub-Account:
Ven 9, Ven 10 and Ven 24 Contracts 14.664362 16.257312 1,797,136 29,216,596
Vis 24 Contracts 16.136115 40,993 661,475
-----------------------------------
1,838,129 29,878,071
Lifestyle Moderate 460 Sub-Account:
Ven 9, Ven 10 and Ven 24 Contracts 15.171965 16.142259 764,069 12,333,805
Vis 24 Contracts 16.021927 7,292 116,837
-----------------------------------
771,361 12,450,642
</TABLE>
23
<PAGE> 108
The Manufacturers Life Insurance Company of New York Separate
Account A
Notes to Financial Statements (continued)
6. UNIT VALUES (CONTINUED)
<TABLE>
<CAPTION>
1998 1999
---------------- ---------------------------------------------------
UNIT UNIT
VALUE VALUE UNITS DOLLARS
---------------- ---------------------------------------------------
<S> <C> <C> <C> <C>
Lifestyle Conservative 280 Sub-Account:
Ven 9, Ven 10 and Ven 24 Contracts $15.025549 15.439823 $398,756 $ 6,156,718
Vis 24 Contracts 15.324704 36,541 559,976
------------------------------------
435,297 6,716,694
Total Return Sub-Account:
Ven 9, Ven 10 and Ven 24 Contracts 12.255674 174,291 2,136,056
Vis 24 Contracts 12.235367 67,695 828,270
------------------------------------
241,986 2,964,326
Small Company Value Sub-Account:
Ven 9, Ven 10 and Ven 24 Contracts 11.178700 11.904646 272,500 3,244,018
Vis 24 Contracts 11.837890 12,959 153,404
------------------------------------
285,459 3,397,422
U.S. Large Cap Value Sub-Account:
Ven 9, Ven 10 and Ven 24 Contracts 12.721279 398,954 5,075,209
Vis 24 Contracts 12.700198 42,362 538,006
------------------------------------
441,316 5,613,215
Mid Cap Stock Sub-Account:
Ven 9, Ven 10 and Ven 24 Contracts 12.483520 98,765 1,232,934
Vis 24 Contracts 12.462837 24,424 304,392
------------------------------------
123,189 1,537,326
Small Company Blend Sub-Account:
Ven 9, Ven 10 and Ven 24 Contracts 15.922213 87,313 1,390,220
Vis 24 Contracts 15.895877 7,240 115,079
------------------------------------
94,553 1,505,299
International Value Sub-Account:
Ven 9, Ven 10 and Ven 24 Contracts 12.860110 47,250 607,640
Vis 24 Contracts 12.838810 13,082 167,953
------------------------------------
60,332 775,593
TOTAL CONTRACT OWNERS' EQUITY $1,093,144,215
================
</TABLE>
24
<PAGE> 109
The Manufacturers Life Insurance Company of New York Separate
Account A
Notes to Financial Statements (continued)
7. DIVERSIFICATION REQUIREMENTS
Under the provisions of Section 817(h) of the Internal Revenue Code, a variable
annuity contract, other than a contract issued in connection with certain types
of employee benefits plans, will not be treated as an annuity contract for
federal tax purposes for any period for which the investments of the segregated
asset account on which the contract is based are not adequately diversified. The
Code provides that the "adequately diversified" requirement may be met if the
underlying investments satisfy either a statutory safe harbor test or
diversification requirements set forth in regulations issued by the Secretary of
Treasury.
The Internal Revenue Service has issued regulations under Section 817(h) of the
Code. The Company believes that the Account satisfies the current requirements
of the regulations, and it intends that the Account will continue to meet such
requirements.
25
<PAGE> 110
PART C
OTHER INFORMATION
<PAGE> 111
Item 24. Financial Statements and Exhibits
<TABLE>
<CAPTION>
<S> <C>
Guide to Name Changes and Successions:
The following name changes took place October 1, 1997:
Old Name New Name
FNAL Variable Account The Manufacturers Life Insurance Company of New York
Separate Account A
First North American Life Assurance Company The Manufacturers Life Insurance Company of New York
The following name changes took place November 1, 1997:
Old Name New Name
NAWL Holding Co., Inc. Manulife-Wood Logan Holding Co., Inc.
The following name changes took place September 24, 1999:
Old Name New Name
Wood Logan Associates, Inc. Manulife Wood Logan, Inc.
</TABLE>
On September 30, 1997, Manufacturers Securities Services, LLC
succeeded to the business of NASL Financial Services, Inc.
* * * * *
(a) Financial Statements
(1) Financial Statements of the Registrant, The Manufacturers Life
Insurance Company of New York Separate Account A (Part B of the
registration statement) - FILED HEREIN
(2) Financial Statements of the Depositor, The Manufacturers Life
Insurance Company of New York (Part B of the registration
statement) - FILED HEREIN
(b) Exhibits
(1) (a) Resolution of the Board of Directors of First North American Life
Assurance Company establishing the FNAL Variable Account -
Incorporated by reference to Exhibit (b)(1)(a) to Form N-4, file
number 33-46217, filed February 25, 1998.
(b) Resolution of the Board of Directors of First North American Life
Assurance Company establishing the Fixed Separate Account -
Incorporated by reference to Exhibit (b)(1)(b) to Form N-4, file
number 33-46217, filed February 25, 1998.
(c) Resolution of the Board of Directors of First North American Life
Assurance Company establishing The Manufacturers Life Insurance
Company of New York Separate Account D and The Manufacturers Life
Insurance Company of New York Separate Account E Incorporated by
reference to Exhibit (b)(1)(c) to Form N-4, file number 33-46217,
filed February 25, 1998.
2
<PAGE> 112
(2) Agreements for custody of securities and similar investments.-
Not Applicable.
(3) (a) Underwriting Agreement between Manufacturers Life
Insurance Company of New York (Depositor) and
Manufacturers Securities Services, LLC (Underwriter)
- Incorporated by reference to Exhibit (b)(3)(a) to
Form N-4, file number 33-46217, filed February 25,
1998.
(b) Selling Agreement between The Manufacturers Life
Insurance Company of New York, Manufactures
Securities Services, LLC (Underwriter), Selling
Broker Dealers, and General Agent - Incorporated by
reference to Exhibit (b)(3)(b) to Form N-4, file
number 33-46217, filed February 25, 1998.
(4) (a) Specimen Single Purchase Payment Individual Deferred
Combination Fixed and Variable Annuity Contract,
Non-Participating - Previously filed as Exhibit
(b)(4)(a) to the initial registration statement to
Form N-4 filed August 12, 1998.
(b) Specimen Endorsements to Contract: (i) ERISA Tax
Sheltered Annuity Endorsement; (ii) Tax-sheltered
Annuity Endorsement; (iii) Qualified Plan Endorsement
Section 401 Plans, (iv) Simple Individual Retirement
Annuity Endorsement; (v) Unisex Benefits and Payments
Endorsement; (vi) Individual Retirement Annuity
Endorsement - Previously filed as Exhibit (b)(4)(b)
to the initial registration statement to Form N-4
filed August 12, 1998.
(5) (a) Specimen Application for Single Purchase Payment
Individual Deferred Combination Fixed and Variable
Annuity Contract, Non-Participating - Incorporated by
reference to Exhibit (b)(5)(a) to post effective
amendment no 2 to Form N-4, file number 333-61283,
filed February 28, 2000.
(6) (a)(i) Declaration of Intention and Charter of First North
American Life Assurance Company Incorporated by
reference to Exhibit (b)(6)(a)(i) to Form N-4, file
number 33-46217, filed February 25, 1998.
(a)(ii) Certificate of amendment of the Declaration of
Intention and Charter of First North American Life
Assurance Company - Incorporated by reference to
Exhibit (b)(6)(a)(ii) to Form N-4, file number
33-46217, filed February 25, 1998.
(a)(iii) Certificate of amendment of the Declaration of
Intention and Charter of The Manufacturers Life
Insurance Company of New York - Incorporated by
reference to Exhibit (b)(6)(a)(iii) to Form N-4, file
number 33-46217, filed February 25, 1998.
(b) By-laws of The Manufacturers Life Insurance Company
of New York - Incorporated by reference to Exhibit
(b)(6)(b) to Form N-4, file number 33-46217, filed
February 25, 1998.
(7) Contract of reinsurance in connection with the variable
annuity contracts being offered - Not Applicable.
3
<PAGE> 113
(8) Other material contracts not made in the ordinary course of
business which are to be performed in whole or in part on or
after the date the registration statement is filed:
(a) Administrative Agreement between The Manufacturers
Life Insurance Company of New York and The
Manufacturers Life Insurance Company - Incorporated
by reference to Exhibit (b)(8)(a) to Form N-4, file
number 33-46217, filed February 25, 1998.
(b) Investment Services Agreement between The
Manufacturers Life Insurance Company of New York and
The Manufacturers Life Insurance Company -
Incorporated by reference to Exhibit 1(A)(8)(c) to
Form S-6, file number 333-33351, filed March 16,
1998.
(9) Opinion of Counsel and consent to its use as to the legality
of the securities being registered - Previously filed as
Exhibit (b)(9) to pre-effective amendment no. 1 to Form N-4,
filed November 4, 1998.
(10) Written consent of Ernst & Young LLP, independent auditors -
Filed Herein
(11) All financial statements omitted from Item 23, Financial
Statements - Not Applicable.
(12) Agreements in consideration for providing initial capital
between or among Registrant, Depositor, Underwriter or initial
contract owners - Not Applicable.
(13) Schedule for computation of each performance quotation
provided in the Registration Statement in response to Item 21
- Incorporated by reference to Exhibit (b)(13) to Form N-4,
33-76162 filed March 1, 1996.
(14) (a) Power of Attorney - The Manufacturers Life Insurance
Company of New York Directors - Incorporated by
reference to Exhibit (7) to Form S-6, file number
333-33351, filed March 16, 1998.
(b) Power of Attorney, James O'Malley and Thomas Borshoff
- Incorporated by reference to Exhibit (b)(14)(b) to
Form N-4, file number 33-79112, filed March 2, 1999.
(c) Power of Attorney, James D. Gallagher and James R.
Boyle - Incorporated by reference to Exhibit (7)(iii)
to Form S-6, file number 333-83023, filed November 1,
1999.
(d) Power of Attorney, Robert Cook - Incorporated by
reference to Exhibit (14)(e) to Form N-4, file number
33-79112, filed February 28, 2000
Item 25. Directors and Officers of the Depositor.
Officers and Directors of THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK
4
<PAGE> 114
<TABLE>
<CAPTION>
NAME AND PRINCIPAL POSITION WITH THE MANUFACTURERS LIFE
BUSINESS ADDRESS INSURANCE COMPANY OF NEW YORK
<S> <C>
John D. Richardson Director and Chairman
200 Bloor Street East
North Tower 11
Toronto, Ontario
Canada M4W-1E5
Bruce Avedon Director
6601 Hitching Post Lane
Cincinnati, OH 45230
Thomas Borshoff Director
3 Robin Drive
Rochester, NY 14618
James R. Boyle Director
500 Boylston Street
Boston, MA 02116
Robert Cook Director
73 Tremont Street
Boston, MA 02108
John D. DesPrez III Director
73 Tremont Street
Boston, MA 02108
Ruth Ann Fleming Director
205 Highland Avenue
Short Hills, NJ 07078
James D. Gallagher Director & President
73 Tremont Street
Boston, MA 02108
Neil M. Merkl, Esq. Director
35-35 161st Street
Flushing, NY 11358
James P. O'Malley Director and VP-Pensions Marketing
200 Bloor Street East
Toronto, Ontario
Canada M4W-1E5
James K. Robinson Director
</TABLE>
5
<PAGE> 115
<TABLE>
<CAPTION>
<S> <C>
7 Summit Drive
Rochester, NY 14620-3127
Tracy Anne Kane Secretary and Counsel
73 Tremont Street
Boston, MA 02108
David W. Libbey Treasurer
500 Boylston Street
Boston, MA 02116
E. Paige Sabine Assistant Vice President & Chief
73 Tremont Street Administrative Officer
Boston, MA 02108
</TABLE>
Item 26. Persons Controlled by or Under Common Control with Depositor or
Registrant.
MANULIFE FINANCIAL CORPORATION
Corporate Organization as at December 31, 1999
Manulife Financial Corporation (Canada)
The Manufacturers Life Insurance Company (Canada)
1. Manulife Data Services Inc. - Barbados (100%)
2. MF Leasing (Canada) Inc. - Ontario (100%)
2.1 1332953 Ontario Inc. - Ontario (100%)
3. Enterprise Capital Management Inc. - Ontario (20%)
4. Cantay Holdings Inc. - Canada (100%)
5. 994744 Ontario Inc. - Ontario (100%)
6. 3426505 Canada Inc. - Canada (100%)
7. Family Realty First Corp. - Ontario (100%)
8. Manulife Bank of Canada - Canada (100%)
9. Manulife Securities International Ltd. - Canada (100%)
10. NAL Resources Limited - Alberta (100%)
6
<PAGE> 116
11. Manulife International Capital Corporation Limited - Ontario (100%)
11.1.Golf Town Canada Inc. - Canada (100%)
11.2.Regional Power Inc. - Ontario (100%)
11.2.1. Addalam Power Corporation - Philippines
11.2.2. La Regionale Power Angliers Inc. - Canada (100%)
11.2.3. La Regionale Power Port-Cartier Inc. - Canada (100%)
11.3. VFC Inc. - Canada (100%)
11.4. 1198184 Ontario Limited - Ontario (100%)
12. 1293319 Ontario Inc. - Ontario (100%)
13. FNA Financial Inc. - Canada (100%)
13.1.Elliott & Page Limited - Ontario (100%)
13.2. Seamark Asset Management Ltd. - Canada (67.86%)
13.3. NAL Resources Management Limited - Canada (100%)
13.3.1. Caravan Oil & Gas Ltd. - Alberta (12.2%)
13.3.2. Carrack Energy Inc. - Alberta (16%)
13.4. First North American Insurance Company - Canada (100%)
14. MLI Resources Inc. - Alberta (100%)
15. Stylus Exploration Inc. - Alberta (100%)
16. Manucab Ltd. - Canada (100%)
16.1. Plazcab Service Limited - Newfoundland (100%)
17. The Manufacturers Investment Corporation - Michigan (100%)
17.1.Manulife Reinsurance Corporation (U.S.A.) - Michigan (100%)
17.1.1. Manulife Reinsurance Limited - Bermuda (100%)
17.1.1.1. MRL Holding, LLC - Delaware (99%)
17.1.2. MRL Holding, LLC - Delaware (1%)
17.1.2.1. Manulife-Wood Logan Holding Co. Inc. - Delaware (22.4%)
17.1.3. The Manufacturers Life Insurance Company (U.S.A.) - Michigan
(100%)
17.1.3.1. Manulife-Wood Logan Holding Co. Inc. - Delaware (77.6%)
17.1.3.1.1. Manulife Wood Logan, Inc. - Connecticut (100%)
17.1.3.1.2. The Manufacturers Life Insurance Company of
North America - Delaware (100%)
17.1.3.1.2.1. Manufacturers Securities Services, LLC -
Delaware (90%)
17.1.3.1.2.2. The Manufacturers Life Insurance Company
of New York - New York (100%)
17.1.3.1.2.2.1 Manufacturers Securities Services,
LLC - Delaware (10%)
17.1.3.2. Flex Leasing 1, LLC - Delaware (50%)
17.1.3.3. Ennal, Inc. - Ohio (100%)
7
<PAGE> 117
17.1.3.4. ESLS Investment Limited, LLC - Ohio (100%)
17.1.3.5. Thornhill Leasing Investments, LLC - Delaware (90%)
17.1.3.6. The Manufacturers Life Insurance Company of America -
Michigan (100%)
17.1.3.6.1. Manulife Holding Corporation - Delaware (100%)
17.1.3.6.1.1. ManEquity, Inc. - Colorado (100%)
17.1.3.6.1.2. Manufacturers Adviser Corporation -
Colorado (100%)
17.1.3.6.1.3. Manulife Capital Corporation - Delaware
(100%)
17.1.3.6.1.3.1. MF Private Capital, Inc. -
Delaware (80.4%)
17.1.3.6.1.3.1.1. MF Private Capital
Securities, Inc. - Delaware
(100%)
17.1.3.6.1.3.1.2. MFPC Ventures, Inc. -
Delaware (100%)
17.1.3.6.1.3.1.3. MFPC Insurance Advisors,
Inc. - Delaware (100%)
17.1.3.6.1.4. Manulife Property Management of Washington,
D.C. Inc. - Washington, D.C. (100%)
17.1.3.4.1.5. ManuLife Service Corporation - Colorado (100%)
17.1.3.4.1.6. Manulife Leasing Co., LLC. - Delaware (80%)
18. Manulife International Investment Management Limited - U.K. (100%)
18.1. Manulife International Fund Management Limited - U.K. (100%)
19. WT(SW) Properties Ltd. - U.K. (100%)
20. Manulife Europe Ruckversicherungs-Aktiengesellschaft - Germany (100%)
21. Manulife International Holdings Limited - Bermuda (100%)
21.1. Manulife Provident Funds Trust Company Limited - Hongkong (100%)
21.2. Manulife (International) Limited - Bermuda (100%)
21.2.1. Zhong Hong Life Insurance Co. Ltd. - China (51%)
21.3. Manulife Funds Direct (Barbados) Limited - Barbados (100%)
21.3.1. Manulife Funds Direct (Hong Kong) Limited - Hongkong (100%)
21.3.2. Pt. Manulife Aset Manajemen Indonesia - Indonesia (55%)
22. ManuLife (International) Reinsurance Limited - Bermuda (100%)
22.1. Manufacturers Life Reinsurance Limited - Barbados (100%)
22.2. Manufacturers P&C Limited - Barbados (100%)
22.3. Manulife Management Services Ltd. - Barbados (100%)
23. Chinfon-Manulife Insurance Company Limited - Bermuda (60%)
24. Manulife Century Investments (Bermuda) Limited - Bermuda (13%)
25. Manulife Century Investments (Alberta) Inc. - Alberta (100%)
25.1 Manulife Century Investments (Bermuda) Limited - Bermuda (87%)
8
<PAGE> 118
25.1.1 Daihyaku System Service Co. Ltd. - Japan (90%)
25.2 Manulife Century Investments (Luxembourg) S.A. - Luxembourg (100%)
25.2.1 Manulife Century Investments (Netherlands) B.V. - Netherlands
(100%)
25.2.1.1 Daihyaku Manulife Holdings (Bermuda) Limited - Bermuda
(100%)
25.2.1.1.1 Manulife Century Life Insurance Company - Japan
(8.8%)
25.2.1.2 Manulife Century Life Insurance Company - Japan (74.6%)
25.2.1.2.1 Daihyaku System Service Co. Ltd. - Japan (10%)
25.2.1.2.2 Manulife Century Business Company - Japan (100%)
25.2.1.2.3 Kyoritsu Confirm Co., Ltd. - Japan (9.1%)
25.2.1.2.4 Daihyaku Premium Collection Co., Ltd. - Japan
(10%)
25.2.1.3 Kyoritsu Confirm Co., Ltd. - Japan (90.9%)
25.2.1.4 Daihyaku Premium Collection Co., Ltd. - Japan (57%)
26. P.T. Asuransi Jiwa Dharmala ManuLife - Indonesia (51%)
26.1. P.T. Buanadays Sarana Informatika - Indonesia (100%)
26.2. P.T. Asuransi Jiwa Arta Mandiri Prime - Indonesia (100%)
27. OUB Manulife Pte. Ltd. - Singapore (50%)
28. The Manufacturers Life Insurance Company (Phils.) Inc. - Philippines (100%)
Item 27. Number of Contract Owners.
As of March 31, 2000, there were 113 qualified and 288 non-qualified contracts
of the series offered hereby outstanding.
Item 28. Indemnification.
Article 10 of the Charter of the Company provides as follows:
TENTH: No director of the Corporation shall be personally liable to the
Corporation or any of its shareholders for damages for any breach of duty as a
director; provided, however, the foregoing provision shall not eliminate or
limit (i) the liability of a director if a judgment or other final adjudication
adverse to such director established his or her such acts or omissions were in
bad faith or involved intentional misconduct or were acts or omissions (a) which
he or she knew or reasonably should have known violated the New York Insurance
Law or (b) which violated a specific standard of care imposed on directors
directly, and not by reference, by a provision of the New York Insurance Law (or
any regulations promulgated thereunder) or (c) which constituted a knowing
violation of any other law, or establishes that the director personally gained
in fact a financial profit or other advantage to which the director was not
legally entitled or (ii) the liability of a director for any act or omission
prior to the adoption of this Article by the shareholders of the Corporation.
Any repeal or modification of this Article by the shareholders of the
Corporation shall be prospective only, and shall not adversely affect any
limitation on the personal liability of a director of the Corporation existing
at the time of such repeal or modification.
Article VII of the By-laws of the Company provides as follows:
9
<PAGE> 119
Section VII.1. Indemnification of Directors and Officers. The Corporation may
indemnify any person made, or threatened to be made, a party to an action by or
in the right of the corporation to procure a judgment in its favor by reason of
the fact that he or she, his or her testator, testatrix or intestate, is or was
a director or officer of the Corporation, or is or was serving at the request of
the Corporation as a director or officer of any other corporation of any type or
kind, domestic or foreign, of any partnership, joint venture, trust, employee
benefit plan or other enterprise, against amounts paid in settlement and
reasonable expenses, including attorneys' fees, actually and necessarily
incurred by him or her in connection with the defense or settlement of such
action, or in connection with an appeal therein, if such director or officer
acted, in good faith, for a purpose which he or she reasonably believed to be
in, or, in the case of service for any other corporation or any partnership,
joint venture, trust, employee benefit plan or other enterprise, not opposed to,
the best interests of the Corporation, except that no indemnification under this
Section shall be made in respect of (1) a threatened action, or a pending action
which is settled or is otherwise disposed of, or (2) any claim, issue or matter
as to which such person shall have been adjudged to be liable to the
Corporation, unless and only to the extent that the court in which the action
was brought, or , if no action was brought, any court of competent jurisdiction,
determines upon application that, in view of all the circumstances of the case,
the person is fairly and reasonably entitled to indemnity for such portion of
the settlement amount and expenses as the court deems proper.
The Corporation may indemnify any person made, or threatened to be made, a party
to an action or proceeding (other than one by or in the right of the Corporation
to procure a judgment in its favor), whether civil or criminal, including an
action by or in the right of any other corporation of any type or kind, domestic
or foreign, or any partnership, joint venture, trust, employee benefit plan or
other enterprise, which any director or officer of the Corporation served in any
capacity at the request of the Corporation, by reason of the fact that he or
she, his or her testator, testatrix or intestate, was a director or officer of
the Corporation, or served such other corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise in any capacity, against
judgments, fines, amounts paid in settlement and reasonable expenses, including
attorneys' fees actually and necessarily incurred as a result of such action or
proceeding, or any appeal therein, if such director or officer acted, in good
faith, for a purpose which he or she reasonably believed to be in, or, in the
case of service for any other corporation or any partnership, joint venture,
trust, employee benefit plan or other enterprise, not opposed to, the best
interests of the Corporation and, in criminal actions or proceedings, in
addition, had no reasonable cause to believe that his or her conduct was
unlawful.
The termination of any such civil or criminal action or proceeding by judgment,
settlement, conviction or upon a plea of nolo contendere, of its equivalent,
shall not in itself create a presumption that any such director or officer did
not act, in good faith, for a purpose which he or she reasonably believed to be
in, or, in the case of service for any other corporation or any partnership,
joint venture, trust, employee benefit plan or other enterprise, not opposed to,
the best interest of the Corporation or that he or she had reasonable cause to
believe that his or her conduct was unlawful.
Notwithstanding the foregoing, Registrant hereby makes the following undertaking
pursuant to Rule 484 under the Securities Act of 1933:
Insofar as indemnification for liability arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or
otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against
public policy as expressed in the Act and is, therefore,
unenforceable. In the event a claim for indemnification against such
liabilities
10
<PAGE> 120
(other than the payment by the registrant of expenses incurred or paid
by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the
opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of
such issue.
Notwithstanding the foregoing, Registrant hereby makes the following undertaking
pursuant to Rule 484 under the Securities Act of 1933:
Insofar as indemnification for liability arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or
otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against
public policy as expressed in the Act and is, therefore,
unenforceable. In the event a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and will be
governed by the final adjudication of such issue.
Item 29. Principal Underwriters.
<TABLE>
<CAPTION>
a. NAME OF INVESTMENT COMPANY CAPACITY IN WHICH ACTING
<S> <C>
Manufacturers Investment Trust Investment Adviser
The Manufacturers Life Insurance Principal Underwriter
Company of North America Separate
Account A
The Manufacturers Life Insurance Principal Underwriter
Company of North America Separate
Account B
The Manufacturers Life Insurance Principal Underwriter
Company of New York Separate
Account A
The Manufacturers Life Insurance Principal Underwriter
Company of New York Separate
Account B
</TABLE>
b. The Manufacturers Life Insurance Company of North America is the
managing member of Manufacturers Securities Services, LLC and has sole power to
act on behalf of Manufacturers Securities
11
<PAGE> 121
Services, LLC. The officers and directors of The Manufacturers Life Insurance
Company of North America are set forth below.
<TABLE>
<CAPTION>
NAME AND PRINCIPAL POSITION WITH THE MANUFACTURERS LIFE INSURANCE
BUSINESS ADDRESS COMPANY OF NORTH AMERICA
<S> <C>
James R. Boyle Director and President
500 Boylston Street
Boston, MA 02116
John D. DesPrez III Director and Chairman of the Board of
73 Tremont Street Directors
Boston, MA 02108
John D. Richardson Director
200 Bloor Street East
Toronto, Ontario
Canada M4W-1E5
John G. Vrysen Vice President & Chief Actuary
73 Tremont Street
Boston, MA 02108
James D. Gallagher Vice President, Secretary and General Counsel
73 Tremont Street
Boston, MA 02108
Janet Sweeney Vice President, Human Resources
73 Tremont Street
Boston, MA 02108
Robert Boyda Vice President, Investment Management Services
73 Tremont Street
Boston, MA 01208
David W. Libbey Vice President, Treasurer & Chief
500 Boylston Street Financial Officer
Boston, MA 02116
Kevin Hill Vice President, Business Implementation
500 Boylston Street
Boston, MA 02116
Brian Kroll Vice President, Product Development
500 Boylston Street
Boston, MA 02116
Jonnie Smith Vice President, Customer Service and Administration
500 Boylston Street
Boston, MA 02116
</TABLE>
12
<PAGE> 122
c. None.
Item 30. Location of Accounts and Records.
All books and records are maintained at 100 Summit Lake Drive, Second Floor,
Valhalla, New York 10595.
Item 31. Management Services.
The Company has entered into an Administrative Services Agreement with The
Manufacturers Life Insurance Company ("Manulife"). This Agreement provides that
under the general supervision of the Board of Directors of the Company, and
subject to initiation, preparation and verification by the Chief Administrative
Officer of the Company, Manulife shall provide accounting services related to
the provision of a payroll support system, general ledger, accounts payable, tax
and auditing services.
Item 32. Undertakings.
a. Representation of Insurer pursuant to Section 26 of the Investment Company
Act of 1940.
The Manufacturers Life Insurance Company of New York (the "Company") hereby
represents that the fees and charges deducted under the Contracts issued
pursuant to this registration statement, in the aggregate, are reasonable
in relation to the services rendered, the expenses expected to be incurred
and the risks assumed by the Company.
13
<PAGE> 123
SIGNATURES
As required by the Securities Act of 1933 and the Investment Company Act of
1940, the Registrant, THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK
SEPARATE ACCOUNT A, certifies that it meets all the requirements for
effectiveness of this Amendment to the Registration Statement pursuant to
Securities Act of 1933 Rule 485(b) and has caused this amended Registration
Statement to be signed on its behalf, in the City of Boston, and Commonwealth of
Massachusetts on this 27th day of April, 2000.
THE MANUFACTURERS LIFE INSURANCE COMPANY
OF NEW YORK SEPARATE ACCOUNT A
(Registrant)
By: THE MANUFACTURERS LIFE INSURANCE
COMPANY OF NEW YORK
(Depositor)
By: /s/ JAMES D. GALLAGHER
James D. Gallagher
President
Attest
/s/ GRETCHEN H. SWANZ
Gretchen H. Swanz
Secretary
Pursuant to the requirements of the Securities Act of 1933, the Depositor has
duly caused this amended Registration Statement to be signed on its behalf by
the undersigned on the 27th day of April, 2000 in the City of Boston, and
Commonwealth of Massachusetts.
THE MANUFACTURERS LIFE INSURANCE COMPANY
OF NEW YORK SEPARATE ACCOUNT A
(Registrant)
By: THE MANUFACTURERS LIFE INSURANCE
COMPANY OF NEW YORK
(Depositor)
By: /s/ JAMES D. GALLAGHER
James D. Gallagher
President
Attest
/s/ GRETCHEN H. SWANZ
Gretchen H. Swanz
Secretary
<PAGE> 124
As required by the Securities Act of 1933, this amended Registration Statement
has been signed by the following persons in the capacities with the Depositor on
the 27th day of April, 2000.
<TABLE>
<CAPTION>
SIGNATURE TITLE
<S> <C>
/s/ JAMES D. GALLAGHER Director and President
- ------------------------------- (Principal Executive
James D. Gallagher Officer)
* Chairman of the Board
- ------------------------------- of Directors
John D. Richardson
* Director
- -------------------------------
John D. DesPrez, III
* Director
- -------------------------------
Ruth Ann Fleming
* Director
- -------------------------------
Neil M. Merkl
* Director
- -------------------------------
Thomas Borshoff
* Director
- -------------------------------
James K. Robinson
* Director
- -------------------------------
James R. Boyle
* Director
- -------------------------------
Bruce Avedon
* Director
- -------------------------------
James P. O'Malley
* Director
- -------------------------------
Robert Cook
/s/ DAVID W. LIBBEY Treasurer (Principal
- ------------------------------- Financial and Accounting
David W. Libbey Officer)
</TABLE>
*By: /s/ DAVID W. LIBBEY
--------------------------
David W. Libbey
Attorney-in-Fact Pursuant
to Powers of Attorney
<PAGE> 125
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description
<S> <C>
(10) Written consent of Ernst & Young LLP, independent auditors
</TABLE>
14
<PAGE> 1
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Independent
Auditors" and to the use of our reports dated February 21, 2000, with respect
to the financial statements of The Manufacturers Life Insurance Company of New
York and our reports dated February 15, 2000, with respect to the financial
statements of The Manufacturers Life Insurance Company of New York Separate
Account A, both of which are contained in the Statement of Additional
Information, in Post-Effective Amendment No. 3 to the Registration Statement
(Form N-4 File No. 333-61283).
/s/ Ernst & Young LLP
Boston, Massachusetts
April 24, 2000
