<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
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FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1998
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Securities and Exchange Commission File No. __________
THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK
(Exact name of registrant as specified in its charter)
NEW YORK
(State or other jurisdiction of incorporation or organization)
22-2265014
(I.R.S. Employer Identification No.)
555 Theodore Fremd Avenue
Rye, New York 10580
(Address of principal executive offices)
(914) 921-1020
(Registrant's telephone number, including area code)
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Indicated by check market whether the registrant (1) has filed reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
[ ] Yes [X] No
APPLICABLE ONLY TO CORPORATE ISSUERS:
The number of shares outstanding of the issuer's sole class of common stock, as
of June 1, 1998 was 2,000,000.
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THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK
Quarterly Report on Form 10-Q
For the period ended June 30, 1998
Table of Contents
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Page
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Part I Financial Information
Item 1. Financial Statements
Balance Sheets as of June 30, 1998 and December 31, 1997 3
Statements of Income for the six months and three months
ended June 30, 1998 and 1997 4
Statements of Cash Flows for the six months ended
June 30, 1998 and 1997 5
Notes to Consolidated Financial Statements 6
Item 2. Management Discussion and Analysis of Results of
Operations and Financial Condition 7
Part II Other Information
Item 1 Legal Proceedings 11
Item 2 Change in Securities 11
Item 3 Default upon Senior Securities 11
Item 4 Submission of matters to a vote of Security Holders 11
Item 5 Other Information 11
Item 6A Exhibits 11
Item 6B 13
2
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THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK
Balance Sheets (Unaudited)
<TABLE>
<CAPTION>
AS AT AS AT
JUNE 30 DECEMBER 31
ASSETS ($ thousands) 1998 1997
- --------------------------------------------------------------------------------------------------
(UNAUDITED)
<S> <C> <C>
INVESTMENTS:
Fixed maturities available-for-sale, at fair
value (amortized cost: 1998 $126,052; 1997 $126,714) $129,197 $129,151
Short-term investments 7,381 9,998
Policy loans 359 398
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TOTAL INVESTMENTS $136,937 $139,547
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Cash and cash equivalents $ 2,287 $ 1,431
Accrued investment income 2,477 2,401
Deferred policy acquisition costs 34,448 28,364
Other assets 1,666 231
Separate account assets 736,499 597,194
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TOTAL ASSETS $914,314 $769,168
==================================================================================================
LIABILITIES AND SHAREHOLDER'S EQUITY ($ thousands)
- --------------------------------------------------------------------------------------------------
LIABILITIES:
Policyholder reserves $ 88,690 $ 86,611
Payable to affiliates 4,369 4,345
Deferred tax liability 3,483 2,269
Other liabilities 1,985 987
Separate account liabilities 736,499 597,194
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TOTAL LIABILITIES $835,026 $691,406
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SHAREHOLDER'S EQUITY:
Common stock (shares authorized, issued and outstanding:
2,000,000; par value $1) $ 2,000 $ 2,000
Additional paid-in capital 72,531 72,531
Unrealized appreciation on available-for-sale securities 1,200 1,095
Retained earnings 3,557 2,136
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Total shareholder's equity $ 79,288 $ 77,762
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TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY $914,314 $769,168
==================================================================================================
</TABLE>
See accompanying notes.
3
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THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK
Statements of Income (Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30 JUNE 30
($ thousands) 1998 1997 1998 1997
-----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
REVENUE:
Fees from separate account and policyholder funds $2,916 $1,415 $5,215 $2,809
Net investment income 2,282 1,524 4,541 3,003
Net realized investment gains 126 -- 203 137
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TOTAL REVENUE $5,324 $2,939 $9,959 $5,949
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BENEFITS AND EXPENSES:
Return credited to policyholders & other benefits $1,222 $1,095 $2,495 $2,181
Amortization of deferred policy acquisition costs 1,212 390 1,405 1,061
Other insurance expenses 2,436 845 3,872 1,456
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TOTAL BENEFITS AND EXPENSES $4,870 $2,330 $7,772 $4,698
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INCOME BEFORE INCOME TAXES $ 454 $ 609 $2,187 $1,251
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INCOME TAX EXPENSE $ 160 $ 214 $ 766 $ 439
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NET INCOME $ 294 $ 395 $1,421 $ 812
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</TABLE>
See accompanying notes.
4
<PAGE> 5
THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK
Statements of Cash Flows (Unaudited)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30
($ thousands) 1998 1997
- -----------------------------------------------------------------------------------------------
<S> <C> <C>
OPERATING ACTIVITIES:
Net income $ 1,421 $ 812
Adjustments to reconcile net income to net cash used in
operating activities:
Amortization of bond discount and premium 200 140
Net realized investment gain (203) (137)
Provision for deferred income tax provision(benefit) 1,157 (91)
Amortization of deferred policy acquisition costs 1,405 1,061
Policy acquisition costs deferred (8,035) (5,037)
Return credited to policyholders and other benefits 2,495 2,181
Changes in assets and liabilities:
Accrued investment income (76) (167)
Other assets (1,435) (65)
Payable to affiliates 24 (1,192)
Other liabilities 998 898
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Net cash used in operating activities $ (2,049) $ (1,597)
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INVESTING ACTIVITIES:
Purchase of fixed maturities $(19,719) $(18,336)
Proceeds from fixed maturities sold, matured or repaid 20,384 13,079
Net change in short-term investments 2,617 1,510
Net change in policy loans 39 (134)
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Net cash (used in) provided by investing activities $ 3,321 $ (3,881)
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FINANCING ACTIVITIES:
Receipts credited to policyholder funds $ 6,333 $ 11,090
Return of policyholder funds (6,749) (7,970)
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Net cash (used in) provided by financing activities $ (416) $ 3,120
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Increase (decrease) in cash and cash equivalents during the period $ 856 $ (2,358)
Cash and cash equivalents at beginning of year 1,431 4,105
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BALANCE, END OF PERIOD $ 2,287 $ 1,747
===============================================================================================
</TABLE>
See accompanying notes.
5
<PAGE> 6
THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO THE FINANCIAL STATEMENTS
UNAUDITED
1. BASIS OF PRESENTATION
The accompanying unaudited financial statements of the Company have
been prepared in accordance with generally accepted accounting
principles ("GAAP"), except that they do not contain complete notes.
However, in the opinion of management, these statements include all
normal recurring adjustments necessary for a fair presentation of the
results. These financial statements should be read in conjunction with
the financial statements and the related notes included in the
Company's annual report for the year ended December 31, 1997. Operating
results for the six months ended June 30, 1998 are not necessarily
indicative of the results that may be expected for the full year ending
December 31, 1998.
2. COMPREHENSIVE INCOME
The Company adopted Statement of Financial Accounting Standards (SFAS)
130, "Reporting Comprehensive Income". SFAS 130 establishes standards
for reporting and displaying comprehensive income and its components in
a full set of general-purpose annual financial statements.
Comprehensive income includes all changes in shareholder's equity
during a period except those resulting from investments by and
distributions to shareholders. The adoption of SFAS 130 resulted in
revised and additional disclosures but had no effect on the financial
position, results of operations, or liquidity of the Company.
Total comprehensive income for the six months ended June 30, 1998 and
1997 was as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30
COMPREHENSIVE INCOME: 1998 1997
--------------------------------------------------------------------------
<S> <C> <C>
NET INCOME $1,421 $ 812
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX:
Unrealized holding gains (losses)
on available-for-sale securities 105 (239)
--------------------------------------------------------------------------
COMPREHENSIVE INCOME $1,526 $ 573
--------------------------------------------------------------------------
</TABLE>
Other comprehensive income is reported net of taxes of $57 and $(129)
respectively for the six months ended June 30, 1998 and 1997.
6
<PAGE> 7
Item 2. Management's Discussion And Analysis of Results of Operations And
Financial Condition
OVERVIEW
The following analysis of the results of operations and financial condition of
the Manufacturers Life Insurance Company of New York, (the "Company") should be
read in conjunction with the Financial Statements and the related Notes to
Financial Statements.
CORPORATE STRUCTURE
The Company is a direct wholly-owned U.S. subsidiary of the Manufacturers Life
Insurance Company of North America which is in turn a direct wholly-owned U.S.
subsidiary of Manulife-Wood Logan Holding Co. Inc. ("MWL"). MWL is owned 62.5%
by The Manufacturers Life Insurance Company (U.S.A.) ("ManUSA"), 22.5% by MRL
Holding, LLC ("MRL") and 15% by minority interests (which includes certain
employees and former owners of Wood Logan Associates). ManUSA and MRL are
indirectly wholly-owned subsidiaries of The Manufacturers Life Insurance Company
("Manulife Financial"), a Canadian mutual insurance company. Manulife Financial,
with consolidated assets under management at December 31, 1997 of $79.7 billion
($Can), actively operates in thirteen countries worldwide. Manulife Financial
has been doing business in the United States since 1903.
IMPACT OF YEAR 2000
Preparing computer systems to deal with the Year 2000 risk has become a major
issue for businesses throughout the world. Within the Manulife Financial group,
a group-wide program has been underway since 1996 to make all critical systems
compliant by the end of 1998 and other systems compliant by the end of 1999.
Included in this program are all systems applicable to and shared by the Company
with Manulife Financial. Based on a detailed assessment, Manulife Financial
determined that a portion of its software needs to be modified or replaced so
that its computer systems will function properly into the Year 2000 and beyond.
Like most companies, the Year 2000 issue represents a significant challenge for
Manulife Financial and extensive resources have been dedicated to modifying
existing software and to converting to new software. However, there can be no
assurances that Manulife Financial's systems, nor those of other companies on
which Manulife Financial relies, will be fully converted on a timely basis and
therefore that all adverse effect on the Company due to the Year 2000 risk will
be avoided. Manulife Financial is presently consulting with vendors, customers,
subsidiaries, third-parties and other businesses with which it deals to ensure
that no material aspect of its, or the Company's, operations will be hindered by
the Year 2000 risk.
FORWARD-LOOKING STATEMENTS
Certain information included herein is forward-looking within the meaning of the
Private Securities Litigation Reform Act of 1995, including, but not limited to,
statements concerning anticipated operating results, financial resources, growth
in existing markets and the impact of the year 2000. Such forward-looking
information involves important risks and uncertainties that could significantly
affect actual results and cause them to differ materially from expectations
expressed herein. These risks and uncertainties include changes in general
economic conditions, the effect of regulatory, tax and competitive changes in
the environment in which the Company operates, fluctuations in interest rates,
performance of financial markets and the Company's ability to achieve
anticipated levels of earnings.
7
<PAGE> 8
REVIEW OF OPERATING RESULTS AND FINANCIAL CONDITION
OPERATING RESULTS
The discussion that follows compares results for the three months ended June 30,
1998 to those for the three months ended June 30, 1997.
DEPOSITS AND PREMIUMS
During the second quarter of 1998, strong growth in variable annuity sales
continued. The Company's sales increased by $15 million from $46 million in 1997
to $61 million in 1998. The increasing sales are primarily due to the effects of
the Efficient Frontier Investment model, competitively performing investment
funds and competitive product features and sales compensation.
FEE INCOME
Total fees generated by Separate Accounts and policyholder funds increased $1.5
million to $2.9 million for the second quarter of 1998 versus the same period in
1997. Investment performance and a growing block of inforce business has
resulted in higher separate account values and, therefore, higher fee income,
which is a percentage of the net value of invested assets in the separate
account portfolio.
NET INVESTMENT INCOME
Net investment income was $2.3 million for the second quarter of 1998, compared
to $1.5 million in the same period of 1997. This growth is primarily due to the
$47.7 million capital infusion received to support expanded operations in New
York State in the fourth quarter of 1997.
REALIZED CAPITAL GAINS
Realized gains in the second quarter of 1998 were $0.1 million compared to
realized gains of $0.0 million in the same period of 1997. The Company does not
actively trade assets for capital gains.
POLICYHOLDER BENEFITS
Policyholder benefits were $1.2 million in the second quarter of 1998, compared
to $1.1 million in the second quarter of 1997. This slight increase is primarily
a result of higher fixed accumulation account values. The Company's policyholder
funds were $88.7 million and $ 85.3 million at June 30, 1998 and June 30, 1997,
respectively.
8
<PAGE> 9
EXPENSES AND DEFERRED POLICY ACQUISITION COSTS (DPAC) AMORTIZATION
Operating costs and expenses, including commissions, were $7.6 million for the
second quarter of 1998 compared to $3.7 million for the second quarter of 1997
before deferral of acquisition expenses ($2.4 million and $0.9 million,
respectively, net of deferred acquisition expenses). The increase in expenses in
the second quarter of 1998 is primarily attributable to an increase in
non-capitalized acquisition expenses (related to higher sales volumes), other
costs associated with growth in the Company's business, and additional operating
expenses associated with expanding the Company's operations in New York. As a
result of FASB 97, the Company's DPAC amortization expense increased by $0.8
million from $0.4 million during the second quarter of 1998. The increase in
DPAC amortization for the second quarter is a result of the growth in the DPAC
balance and lower investment returns during the quarter.
NET INCOME
Net income in the second quarter of 1998 was $0.3 million, compared to net
income of $0.4 million in the same period of 1997. As noted previously the
higher fee income and higher investment income in the second quarter of 1998
were offset by higher benefits, operating costs, and DPAC amortization which led
to slightly lower second quarter 1998 results.
The discussion that follows compares results for the six months ended June 30,
1998 to those for the six months ended June 30, 1997.
DEPOSITS AND PREMIUMS
During the first half of 1998, strong growth in variable annuity sales
continued. The Company's sales increased by $12 million from $85 million in 1997
to $97 million in 1998. The increasing sales are primarily due to the effects of
the Efficient Frontier Investment model, competitively performing investment
funds and competitive product features and sales compensation.
FEE INCOME
Total fees generated by Separate Accounts and policyholder funds increased to
$5.2 million from $2.8 million during the first half of 1998 versus the same
period in 1997. Continued strong investment performance and a growing block of
inforce business has resulted in higher separate account values and, therefore,
higher fee income, which is a percentage of the net value of invested assets in
the separate account portfolio.
NET INVESTMENT INCOME
Net investment income was $4.5 million for the first half of 1998, compared to
$3.0 million in the same period of 1997. This growth is primarily due to the
$47.7 million capital infusion received to support expanded operations in New
York State in the fourth quarter of 1997.
REALIZED CAPITAL GAINS
Realized gains in the first half of 1998 were $0.2 million compared to realized
gains of $0.1 million in the same period of 1997. The Company does not actively
trade assets for capital gains.
9
<PAGE> 10
POLICYHOLDER BENEFITS
Policyholder benefits were $2.5 million in the first half of 1998, compared to
$2.2 million in the first half of 1997. This slight increase is primarily a
result of higher fixed accumulation account values. The Company's policyholder
funds were $88.7 million and $ 85.3 million at June 30, 1998 and June 30, 1997,
respectively
EXPENSES AND DEFERRED POLICY ACQUISITION COSTS (DPAC) AMORTIZATION
Operating costs and expenses, including commissions, were $11.9 million for the
first half of 1998 compared to $6.5 million for the first half of 1997 before
deferral of acquisition expenses ($3.9 million and $1.5 million, respectively,
net of deferred acquisition expenses). The increase in expenses in the first
half of 1998 is primarily attributable to an increase in non-capitalized
acquisition expenses (related to higher sales volumes), other costs associated
with growth in the Company's business, and additional operating expenses
associated with expanding the Company's operations in New York. As a result of
FASB 97, the Company's DPAC amortization expense increased by $0.3 million to
$1.4 million from $1.1 million during the first half of 1998. The impact of
growth in business on DPAC amortization has been largely offset by the effect of
better than expected investment returns.
NET INCOME
Net income in the first half of 1998 was $1.4 million, compared to net income of
$0.8 million in the same period of 1997. As noted previously the higher fee
income and higher investment income in the first half of 1998, partly offset by
higher benefits and operating costs, led to improved 1998 results.
FINANCIAL CONDITION
ASSETS
Separate account assets were $736.5 million at the end of the second quarter of
1998, compared to $597.2 million at the end of 1997. This growth reflects net
cash transfers to the separate accounts of $77.9 million and $61.3 million of
gains due to investment performance of the underlying funds and growth in the
overall variable annuity business.
General account assets were $177.8 million at the end of the second quarter of
1998, compared to $172.0 million at the end of 1997.
The DPAC asset increased from $28.4 million at the end of 1997 to $34.4 million
at the end of the second quarter of 1998. This increase is primarily due to
deferrable acquisition costs associated with the increased sales volumes of
variable annuity products net of DPAC amortization associated with in-force
business.
LIABILITIES
The Company's total liabilities of $835.0 million increased $143.6 million and
moved with changes in the asset levels. Separate Account liabilities move in
tandem with changes in Separate Account assets.
10
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PART II--OTHER INFORMATION
Item 1 - Legal Proceedings
No reportable events
Item 2 - Changes In Securities
No reportable events
Item 3 - Defaults Upon Senior Securities
No reportable events
Item 4 - Submission Of Matters To A Vote Of Security Holders
No reportable events
Item 5 - Other Information
No reportable events
Item 6A - Exhibits
(3) Exhibits (the Registrant is also referred to as the "Company")
Exhibit No. Description
- ----------- -----------
1(a) Underwriting and Distribution Agreement between The Manufacturers
Life Insurance Company of New York (the "Company") and
Manufacturers Securities Services, LLC. (Underwriter) --
Incorporated by reference to Exhibit (b)(3)(a) to post effective
amendment no. 7 on Form N-4, file number 33-46217, filed March
25, 1998.
1(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 post effective
amendment no. 7 on Form N-4, file number 33-46217, filed March
25, 1998.
2 Not Applicable
3(i)(a) Declaration of Intention and Charter of the Company Incorporated
by reference to Exhibit (b)(6)(a)(i) to post effective amendment
no. 7 on Form N-4 filed March 25, 1998.
3(i)(b) Certificate of amendment of the Declaration of Intention and
Charter of the Company Incorporated by reference to Exhibit
(b)(6)(a)(ii) to post effective amendment no. 7 on Form N-4, file
number 33-46217, filed March 25, 1998.
3(i)(c) Certificate of amendment of the Declaration of Intention and
Charter of the Company Incorporated by reference to Exhibit
(b)(6)(a)(iii) to post effective amendment no. 7 on Form N-4,
file number 33-46217, filed March 25, 1998.
3(ii) By-laws of the Company Incorporated by reference to Exhibit
(b)(6)(b) to post effective amendment no. 7 on Form N-4, file
number 33-46217, filed March 25, 1998
4(i) Form of Individual Single Payment Deferred Fixed Annuity
Non-Participating Contract -- Previously filed as Exhibit 4(i) to
pre-effective amendment no. 1 to Form S-1 filed July 17, 1997.
11
<PAGE> 12
4(ii) Individual Retirement Annuity Endorsement -- Previously filed as
Exhibit 4(ii) to pre-effective amendment no. 1 to Form S-1 filed
July 17, 1997.
4(iii) ERISA Tax-Sheltered Annuity Endorsement -- Previously filed as
Exhibit 4(iii) to pre-effective amendment no. 1 to Form S-1 filed
July 17, 1997.
4(iv) Tax-Sheltered Annuity Endorsement -- Previously filed as Exhibit
4(iv) to pre-effective amendment no. 1 to Form S-1 filed July 17,
1997.
4(v) Section 401 Plans Endorsement -- Previously filed as Exhibit
4(vi) to pre-effective amendment no. 1 to Form S-1 filed July 17,
1997.
4(vi) Roth Individual Retirement Annuity Endorsement -- Filed herewith
4(vii) Unisex Benefits and Payments Endorsement -- Filed herewith
5 Not Applicable
6 Not Applicable
7 Not Applicable
8 Not Applicable
9 Not Applicable
10 Form of broker-dealer agreement between the Company, NASL
Financial Services, Inc. (Underwriter), Wood Logan Associates,
Inc. (Promotional Agent) and broker-dealers -- Previously filed
as Exhibit 10 to pre-effective amendment no. 1 to Form S-1 filed
July 17, 1997.
11 Not Applicable
12 Not Applicable
13 Not Applicable
14 Not Applicable
15 Not Applicable
16 Not Applicable
17 Not Applicable
18 Not Applicable
19 Not Applicable
20 Not Applicable
21 Not Applicable
22 Not Applicable
23 (i) Not Applicable
23(ii) Not Applicable
24 Power of Attorney -- Power of Attorney - The Manufacturers Life
Insurance Company of New York Directors Incorporated by reference
to Exhibit 7 to pre-effective amendment no.
12
<PAGE> 13
1 on Form S-6, file number 333-33351, filed March 16, 1998.
25 Not Applicable
26 Not Applicable
27 Financial Data Schedule -- Filed herewith.
28 Not Applicable
ITEM 6B - REPORTS ON FORM 8-K
No reports on Form 8-K were filed during the quarter.
13
<PAGE> 14
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK
(Registrant)
By: /s/ David W. Libbey
-----------------------------------------------------------
David W. Libbey, Treasurer
(Principal Financial Officer and Duly Authorized Officer)
Date: August 14, 1998
14
<PAGE> 15
EXHIBIT INDEX
Exhibit No. RuDescription
- ----------- -------------
4(vi) Roth Individual Retirement Annuity Endorsement
4(vii) Unisex Benefits and Payments Endorsement
27 Financial data schedule for quarter ended June 30, 1998
15
<PAGE> 1
Exhibit 4(vi)
THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK
Corporate Center at Rye
555 Theodore Fremd Avenue, Suite C-209
Rye, NY 10580
ROTH INDIVIDUAL RETIREMENT ANNUITY ENDORSEMENT
- --------------------------------------------------------------------------------
Check if this endorsement supersedes a prior Roth
IRA endorsement ................................. -------------
Check if Roth Conversion IRA ................... -------------
- --------------------------------------------------------------------------------
This endorsement is made a part of the annuity contract to which it is
attached, and the following provisions apply in lieu of any provisions in the
contract to the contrary.
The Annuitant is establishing a Roth individual retirement annuity (Roth
IRA) under section 408A to provide for his or her retirement and for the support
of his or her beneficiaries after death.
ARTICLE I
1. If this Roth IRA is not designated as a Roth Conversion IRA, then,
except in the case of a rollover contribution described in section 408A(e), the
issuer will except only cash contributions and only up to a maximum amount of
$2,000 for any tax year of the annuitant.
2. If this Roth IRA is designated as a Roth Conversion IRA, no
contributions other than IRA Conversion Contributions made during the same tax
year will be accepted.
ARTICLE II
The $2,000 limit described in Article I is gradually reduced to $0 between
certain levels of adjusted gross income (AGI). For a single annuitant, the
$2,000 annual contribution is phased out between AGI of $95,000 and $110,000;
for a married annuitant who files jointly, between AGI of $150,000 and $160,000;
and for a married annuitant who files separately, between $0 and $10,000. In the
case of a conversion, the issuer will not accept IRA Conversion Contributions in
a tax year if the annuitant's AGI for that tax year exceeds $100,000 or if the
annuitant is married and files a separate return. Adjusted gross income is
defined in section 408A(c)(3) and does not include IRA Conversion Contributions.
ARTICLE III
The annuitant's interest in the contract is nonforfeitable and
nontransferable.
ARTICLE IV
1. The contract does not require fixed contributions.
2. Any dividends (refund of contributions other than those attributable
to excess contributions) arising under the contract will be applied before the
close of the calendar year following the year of the dividend as contributions
toward the contract.
ARTICLE V
1. If the annuitant dies before his or her entire interest in the
contract is distributed to him or her and the annuitant's surviving spouse is
not the sole beneficiary, the entire remaining interest will, at the election of
the annuitant or, if the annuitant has not so elected, at the election of the
beneficiary, either:
(a) Be distributed by December 31 of the calendar year containing the
fifth anniversary of the annuitant's death, or
(b) Be distributed over the life, or a period not longer than the life
expectancy, of the designated beneficiary starting no later than December 31 of
the calendar year following the calendar year of the annuitant's death. Life
expectancy is computed using the expected return multiples in Table V of section
1.72-9 of the Income Tax Regulations. If distributions do not begin by the date
described in (b) distribution method (a) will apply.
2. If the annuitant's spouse is the sole beneficiary on the annuitant's
date of death, such spouse will then be treated as the annuitant.
ARTICLE VI
<PAGE> 2
1. The annuitant agrees to provide the issuer with information necessary
for the issuer to prepare any reports required under sections 408(i) and
408A(d)(3)(E), and Regulations section 1.408-5 and 1.408-6, and under guidance
published by the Internal Revenue Service.
2. The issuer agrees to submit reports to the Internal Revenue Service
and the annuitant as prescribed by the Internal Revenue Service.
ARTICLE VII
Notwithstanding any other articles which may be added or incorporated, the
provisions of Articles I through IV and this sentence will be controlling. Any
additional articles that are not consistent with section 408A, the related
regulations, and other published guidance will be invalid.
ARTICLE VIII
This endorsement will be amended from time to time to comply with the
provisions of the Code, related regulations, and other published guidance. Other
amendments may be made with the consent of the persons whose signatures appear
on the contract.
ARTICLE IX
1. The Annuitant must be an individual who is the sole Owner. A Joint
Owner cannot be named. Neither the Owner nor the Annuitant can be changed. The
Contract is established for the exclusive benefit of the Owner and his or her
beneficiaries.
2. All distributions made while the Owner is alive must be made to the
Owner. All payments made under a Joint and Survivor Annuity Income Option after
the Owner's death while the Joint Annuitant is alive must be made to the Joint
Annuitant.
3. No loan may be made under the Contract. The Owner's interest in the
Contract may not be sold, assigned, transferred, discounted or pledged as
collateral for a loan or as security for the performance of any obligation or
for any other purpose (other than a transfer incident to a divorce or separation
instrument in accordance with section 408(d)(6)) to any person.
4. All references in the Contract to IRC Section 72(s) are deleted.
Endorsed on the Date of Issue of this Contract.
THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK
President
<PAGE> 3
GENERAL INSTRUCTIONS
(Section references are to the Internal Revenue Code unless otherwise noted.)
PURPOSE OF FORM
A Roth individual retirement annuity (Roth IRA) is established after the
contract, which includes this endorsement, is fully executed by both the
individual (annuitant) and the issuer. The contract must be for the exclusive
benefit of the annuitant or his or her beneficiaries.
Unlike contributions to traditional individual retirement arrangements,
contributions to a Roth IRA are not deductible from the annuitant's gross
income; and distributions after 5 years that are made when the annuitant is 59
1/2 years of age or older or on account of death, disability, or the purchase of
a home by a first-time homebuyer (limited to $10,000), are not includible in
gross income. For more information on Roth IRAs, including the required
disclosure the annuitant can get from the issuer, get Pub. 590, Individual
Retirement Arrangements (IRAs).
This Roth IRA can be used by an annuitant to hold: (1) IRA Conversion
Contributions, amounts rolled over or transferred from another Roth IRA, and
annual cash contributions of up to $2,000 from the annuitant; or (2) if
designated as a Roth Conversion IRA (by checking the box on page 1), only IRA
Conversion Contributions for the same tax year.
To simplify the identification of funds distributed from Roth IRAs, annuitants
are encouraged to maintain IRA Conversion Contributions for each tax year in a
separate Roth IRA.
DEFINITIONS
ROTH CONVERSION IRA. A Roth Conversion IRA is a Roth IRA that accepts only IRA
Conversion Contributions made during the same tax year.
IRA CONVERSION CONTRIBUTIONS. IRA Conversion Contributions are amounts rolled
over, transferred, or considered transferred from a nonRoth IRA to a Roth IRA. A
nonRoth IRA is an individual retirement account or annuity described in section
408(a) or 408(b), other than a Roth IRA.
ISSUER. The issuer is the insurance company providing the annuity contract.
ANNUITANT. The annuitant is the person who establishes the annuity contract.
SPECIFIC INSTRUCTIONS
ARTICLE I. The annuitant may be subject to a 6-percent tax on excess
contributions if (1) contributions to other individual retirement arrangements
of the annuitant have been made for the same tax year, (2) the annuitant's
adjusted gross income exceeds the applicable limits in Article II for the tax
year, or (3) the annuitant's and spouse's compensation does not exceed the
amount contributed for them for the tax year. The annuitant should see the
disclosure statement or Pub. 590 for more information
ARTICLE IX. Article IX and any that follow it may incorporate additional
provisions that are agreed to by the annuitant and issuer to complete the
contract. They may include, for example, definitions, investment powers, voting
rights, exculpatory provisions, amendment and termination, removal of the
issuer, issuer's fees, state law requirements, beginning date of distributions,
accepting only cash, treatment of excess contributions, prohibited transactions
with the annuitant, etc.
<PAGE> 1
Exhibit 4(vii)
UNISEX BENEFITS AND PAYMENTS
ENDORSEMENTS
The Contract to which this Endorsement is attached is amended as follows:
1. The sex of the annuitant, Co-Annuitant or other payee shall have no
affect on the benefits or any payments under this Contract, Any
reference to this Contract to the sex of the Annuitant, Co-Annuitant or
other payee is deleted by this Endorsement.
Endorsed on the Date of Issue of this Contract.
THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK
/s/ A. Scott Logan
- -------------------------------
President
<PAGE> 2
AMOUNT OF FIRST MONTHLY PAYMENT
PER $1000 OF CONTRACT VALUE
Option 1: Life Annuity
<TABLE>
<CAPTION>
Option 1(A): Non-Refund Option 1(B): 10-Year Certain
- ------------------------------- ----------------------------------
Adjusted Age Adjusted Age
of Annuitant Annuitant of Annuitant Annuitant
- ------------------------------- ----------------------------------
<S> <C> <C> <C>
55 4.23 55 4.19
60 4.64 60 4.57
65 5.20 65 5.05
70 5.94 70 5.65
75 6.91 75 6.35
80 8.21 80 7.13
85 9.94 85 7.90
<CAPTION>
OPTION 2: JOINT AND SURVIVOR LIFE ANNUITY
Option 2(A): Non-Refund
Age of Co-Annuitant
- --------------------------------------------------------------------------------
Adjusted
Age of 10 Years 5 Years Same 5 Years 10 Years
Annuitant Younger Younger Age Older Older
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
55 3.24 3.38 3.53 3.69 3.83
60 3.40 3.58 3.78 3.98 4.16
65 3.61 3.85 4.10 4.36 4.61
70 3.88 4.19 4.53 4.88 5.20
75 4.23 4.64 5.10 5.57 6.00
80 4.70 5.26 5.88 6.51 7.06
85 5.34 6.09 6.94 7.76 8.43
<CAPTION>
Option 2(B): 10 Year Certain
Age of Co-Annuitant
- --------------------------------------------------------------------------------
Adjusted
Age of 10 Years 5 Years Same 5 Years 10 Years
Annuitant Younger Younger Age Older Older
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
55 3.24 3.38 3.53 3.69 3.83
60 3.40 3.58 3.78 3.98 4.16
65 3.61 3.85 4.10 4.36 4.59
70 3.88 4.18 4.52 4.86 5.16
75 4.23 4.63 5.07 5.50 5.86
80 4.68 5.21 5.78 6.30 6.69
85 5.27 5.95 6.62 7.18 7.56
- --------------------------------------------------------------------------------
</TABLE>
Monthly installments for ages not shown will be furnished on request.
<TABLE> <S> <C>
<ARTICLE> 7
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<EXCHANGE-RATE> 1
<DEBT-HELD-FOR-SALE> 129,197
<DEBT-CARRYING-VALUE> 0
<DEBT-MARKET-VALUE> 0
<EQUITIES> 0
<MORTGAGE> 0
<REAL-ESTATE> 0
<TOTAL-INVEST> 136,937
<CASH> 2,287
<RECOVER-REINSURE> 0
<DEFERRED-ACQUISITION> 34,448
<TOTAL-ASSETS> 914,314
<POLICY-LOSSES> 88,690
<UNEARNED-PREMIUMS> 0
<POLICY-OTHER> 0
<POLICY-HOLDER-FUNDS> 736,499
<NOTES-PAYABLE> 0
0
0
<COMMON> 2,000
<OTHER-SE> 77,288
<TOTAL-LIABILITY-AND-EQUITY> 914,314
0
<INVESTMENT-INCOME> 4,541
<INVESTMENT-GAINS> 203
<OTHER-INCOME> 5,215
<BENEFITS> 2,495
<UNDERWRITING-AMORTIZATION> 1,405
<UNDERWRITING-OTHER> 3,872
<INCOME-PRETAX> 2,187
<INCOME-TAX> 766
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,421
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<RESERVE-OPEN> 0
<PROVISION-CURRENT> 0
<PROVISION-PRIOR> 0
<PAYMENTS-CURRENT> 0
<PAYMENTS-PRIOR> 0
<RESERVE-CLOSE> 0
<CUMULATIVE-DEFICIENCY> 0
</TABLE>
