<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 September 30, 1999
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Securities and Exchange Commission File No. 333-31491
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.)
100 Summit Lake Drive
Valhalla, New York 10595
(Address of principal executive offices)
(914) 773-0708
(Registrant's telephone number, including area code)
---------------------
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.
[X] Yes [ ] No
APPLICABLE ONLY TO CORPORATE ISSUERS:
The number of shares outstanding of the issuer's sole class of common stock, as
of September 30, 1999 was 2,000,000.
<PAGE> 2
THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK
Quarterly Report on Form 10-Q
For the period ended September 30, 1999
Table of Contents
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<TABLE>
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Page
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<S> <C>
Part I Financial Information 3
Item 1. Financial Statements 3
Balance Sheets as of September 30, 1999 and December 31, 1998 3
Statements of Income for the nine months ended September 30, 1999 and 1998 4
Statement of Changes in Shareholder's Equity as at September 30, 1999 5
Statements of Cash Flows for the nine months ended September 30, 1999 and 1998 6
Notes to Financial Statements 7
Item 2. Management's Discussion and Analysis of Results of Operations and Financial Condition 9
Part II Other Information
Item 1 Legal Proceedings 15
Item 2 Changes in Securities 15
Item 3 Defaults upon Senior Securities 15
Item 4 Submission of matters to a vote of Security Holders 15
Item 5 Other Information 15
Item 6A Exhibits 15
Item 6B Reports on Form 8-K 17
</TABLE>
2
<PAGE> 3
THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK
BALANCE SHEETS
<TABLE>
<CAPTION>
AS AT AS AT
SEPTEMBER 30 DECEMBER 31
ASSETS ($ thousands) 1999 1998
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(UNAUDITED)
<S> <C> <C>
INVESTMENTS:
Fixed maturity securities available-for-sale, at fair value
(amortized cost: 1999 $126,471; 1998 $120,902) $ 124,625 $ 125,088
Investment in unconsolidated affiliate 175 175
Policy loans 760 552
Short-term investments 29,568 10,032
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TOTAL INVESTMENTS $ 155,128 $ 135,847
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Cash and cash equivalents $ 18,239 $ 5,946
Accrued investment income 2,542 3,073
Deferred acquisition costs 46,944 36,831
Receivable for undelivered securities 175 -
Other assets 321 1,834
Separate account assets 957,773 833,693
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TOTAL ASSETS $ 1,181,122 $ 1,017,224
=======================================================================================================
LIABILITIES AND SHAREHOLDER'S EQUITY ($ thousands)
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LIABILITIES:
Policyholder liabilities and accruals $ 122,216 $ 94,492
Payable to affiliates 2,583 4,114
Deferred income taxes 3,785 3,615
Payable for securities 11,407 -
Other liabilities 2,265 1,943
Separate account liabilities 957,773 833,693
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TOTAL LIABILITIES $ 1,100,029 $ 937,857
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SHAREHOLDER'S EQUITY:
Common stock $ 2,000 $ 2,000
Additional paid-in capital 72,706 72,706
Retained earnings 7,123 3,209
Accumulated other comprehensive income (736) 1,452
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TOTAL SHAREHOLDER'S EQUITY $ 81,093 $ 79,367
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TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY $ 1,181,122 $ 1,017,224
=======================================================================================================
</TABLE>
See accompanying notes.
3
<PAGE> 4
THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK
STATEMENTS OF INCOME (UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30
($ thousands) 1999 1998 1999 1998
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<S> <C> <C> <C> <C>
REVENUE:
Fees from separate accounts and policyholder liabilities $ 3,724 $ 2,777 $ 10,581 $ 7,992
Premiums 4 - 27 -
Net investment income 4,461 2,255 12,160 6,796
Net realized investment gains (losses) (198) 297 (120) 500
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TOTAL REVENUE $ 7,991 $ 5,329 $ 22,648 $ 15,288
===============================================================================================================
BENEFITS AND EXPENSES:
Policyholder benefits and claims $ 1,870 $ 1,256 $ 4,557 $ 3,751
Amortization of deferred acquisition costs 1,396 2,256 3,864 3,661
Other insurance expenses 2,701 1,442 8,205 5,314
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TOTAL BENEFITS AND EXPENSES $ 5,967 $ 4,954 $ 16,626 $ 12,726
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INCOME BEFORE INCOME TAXES $ 2,024 $ 375 $ 6,022 $ 2,562
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INCOME TAX EXPENSE $ 709 $ 131 $ 2,108 $ 897
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NET INCOME $ 1,315 $ 244 $ 3,914 $ 1,665
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</TABLE>
See accompanying notes.
4
<PAGE> 5
THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK
STATEMENT OF CHANGES IN SHAREHOLDER'S EQUITY
(UNAUDITED)
<TABLE>
<CAPTION>
ACCUMULATED
OTHER TOTAL
COMMON ADDITIONAL RETAINED COMPREHENSIVE SHAREHOLDER'S
($ thousands) STOCK PAID-IN CAPITAL EARNINGS INCOME EQUITY
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<S> <C> <C> <C> <C> <C>
Balance at January 1, 1999 $2,000 $72,706 $3,209 $ 1,452 $79,367
Comprehensive income (note 3) 3,914 (2,188) 1,726
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BALANCE, SEPTEMBER 30, 1999 $2,000 $72,706 $7,123 $ (736) $81,093
========================================================================================================
</TABLE>
See accompanying notes.
5
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THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK
STATEMENTS OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30
($ thousands) 1999 1998
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<S> <C> <C>
OPERATING ACTIVITIES:
Net income $ 3,914 $ 1,665
Adjustments to reconcile net income to net cash used in
operating activities:
Amortization of bond discount and premium 435 319
Net realized investment loss (gain) 120 (500)
Deferred income tax provision 1,350 1,567
Amortization of deferred acquisition costs 3,864 3,661
Acquisition costs deferred (11,313) (12,777)
Return credited to policyholders and other benefits 4,557 3,751
Changes in assets and liabilities:
Accrued investment income 531 104
Other assets 1,513 (1,701)
Payable to affiliates (1,531) (1,645)
Other liabilities 322 2,308
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Net cash provided by (used in) operating activities $ 3,762 $ (3,248)
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INVESTING ACTIVITIES:
Purchase of fixed maturity securities $(67,982) $(21,118)
Proceeds from fixed maturity securities sold, matured or repaid 61,858 26,612
Net change in short-term investments (19,536) (1,176)
Net change in policy loans (208) (55)
Net change in receivable for undelivered securities (175) -
Net change in payable for securities 11,407 -
- -------------------------------------------------------------------------------------------------------
Net cash provided by (used in) investing activities $ (14,636) $ 4,263
- -------------------------------------------------------------------------------------------------------
FINANCING ACTIVITIES:
Receipts credited to policyholder funds $ 35,304 $ 8,793
Return of policyholder funds (12,137) (10,721)
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Net cash provided by (used in) financing activities $ 23,167 $ (1,928)
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Increase (decrease) in cash and cash equivalents during the period $ 12,293 $ (913)
Cash and cash equivalents at beginning of year 5,946 1,431
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BALANCE, END OF PERIOD $ 18,239 $ 518
=======================================================================================================
</TABLE>
See accompanying notes.
6
<PAGE> 7
THE MANUFACTURERS LIFE INSURANCE COMPANY OF NEW YORK
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
(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 on form 10-K for the year ended December 31,
1998. Operating results for the nine months ended September 30, 1999
are not necessarily indicative of the results that may be expected for
the full year ending December 31, 1999.
2. RECENT ACCOUNTING STANDARDS
In June 1998, the Financial Accounting Standards Board (FASB) issued
Statement No. 133, "Accounting for Derivative Instruments and Hedging
Activities" (FAS 133). FAS 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. FAS 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 FAS 133 to fiscal years beginning after June 15,
2000. The Company is evaluating FAS No. 133 and has not determined its
impact on results of operations and financial condition.
3. COMPREHENSIVE INCOME
Total comprehensive income was as follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
COMPREHENSIVE INCOME: SEPTEMBER 30 SEPTEMBER 30
($ thousands) 1999 1998 1999 1998
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<S> <C> <C> <C> <C>
NET INCOME $ 1,315 $ 244 $ 3,914 $ 1,665
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OTHER COMPREHENSIVE INCOME, NET OF TAX:
Unrealized holding gains (losses) arising
during the year (470) 891 (2,266) 1,128
Less:
Reclassification adjustment for realized
(gains) losses included in net income 129 (193) 78 (325)
---------------------------------------------------------------------------------------------
Other comprehensive income (loss) (341) 698 (2,188) 803
---------------------------------------------------------------------------------------------
COMPREHENSIVE INCOME $ 974 $ 942 $ 1,726 $ 2,468
----------------------------------------------------------------------------------------------
</TABLE>
Other comprehensive income is reported net of taxes recoverable
(payable) of $184 and ($376) for the three months and $1,180 and ($432)
for the nine months ended September 30, 1999 and 1998, respectively.
7
<PAGE> 8
4. SEGMENT DISCLOSURES
The Company reports three business segments: Annuities, Pensions, and
Life Insurance. The Annuities segment consists of annuity contracts
that provide the customer with the opportunity to invest in mutual
funds managed by independent investment managers and the Company or in
the general account of the Company, with investment returns
accumulating on a tax-deferred basis. The Pensions segment offers
401(k) products to customers in the State of New York. The Individual
Life Insurance segment offers traditional non-participating life
insurance to the New York State market. The Pensions segment was
launched in 1998 and the Individual Life Insurance segment was launched
in late 1997. Both these segments are in the development phase. Other
than operating expenses, no significant assets or revenues have been
generated to date in these two segments. The following is a summary of
the contribution to net income of the three business segments:
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30
1999 1998 1999 1998
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<S> <C> <C> <C> <C>
Annuities $1,948 $1,025 $5,316 $ 2,837
Pensions (382) (115) (1,125) (198)
Life Insurance (251) (666) (277) (974)
------------------------------------------------------------------------
NET INCOME (LOSS) $ 1,315 $ 244 $ 3,914 $ 1,665
------------------------------------------------------------------------
</TABLE>
8
<PAGE> 9
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 (hereinafter referred to as
"MNY" or the "Company") should be read in conjunction with the Financial
Statements and the related Notes to Financial Statements.
CORPORATE STRUCTURE AND OVERVIEW
The Company is a wholly-owned subsidiary of The Manufacturers Life Insurance
Company of North America ("MNA"), which is an indirect wholly-owned subsidiary
of the Manufacturers Life Insurance Company, which in turn is a wholly-owned
subsidiary of Manulife Financial Corporation. Manulife Financial Corporation and
its subsidiaries are known collectively as Manulife Financial.
Manulife Financial is a leading provider of financial protection products and
investment management services to individuals, families, businesses and groups
in selected international markets. Manulife Financial operates in 16 countries
and territories worldwide, with more than 27,000 employees and agents. Funds
under management by Manulife Financial were $96.7 billion (Cdn) as of December
31, 1998 with a consolidated surplus position of $6.0 billion (Cdn).
The Company is licensed to sell fixed and variable annuities, life insurance,
and accident and health insurance in the State of New York only.
Manufacturers Securities Services, LLC ("MSS"), a majority-owned subsidiary of
MNA, acts as investment adviser to the Manufacturers Investment Trust ("MIT"), a
no-load, open-end management investment company organized as a Massachusetts
business trust and is the principal underwriter of the Company's variable
insurance products as well as the exclusive distributor of the Company's
insurance products. MSS is a broker-dealer registered under the Securities
Exchange Act of 1934 and a member of the National Association of Securities
Dealers, Inc. MSS is the successor to NASL Financial Services, Inc. ("NASL
Financial"), a broker dealer that conducted operations until September 30, 1997,
when it was reorganized into MSS. Prior to October 1, 1997, NASL Financial also
acted as investment adviser to North American Funds (NAF), a no-load, open-end
management investment company organized as a Massachusetts business trust. 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, along with The Manufacturers Life Insurance Company, enjoys strong
financial ratings that enhance its ability to attract new sales and retain
assets. Distributors and consumers of variable and fixed annuity products have
begun to utilize the relative financial strength ratings as a criteria in
choosing an annuity carrier. The Company has received financial strength ratings
of A++ (Superior) by A.M. Best and AA+ (Very Strong) by Standards and Poor's.
The Company is rated AAA (Highest) by Duff & Phelps in terms of its ability to
meet contractual obligations to policyholders.
In 1998 and 1997, pursuant to an expanded plan of operations, the Company
entered the Pensions and Life Insurance segments. As a result, the Company now
reports three segments: Annuities; Pensions; and Life Insurance. Because two of
the Company's segments are in the development phase, the assets, revenues and
operations of those segments are not material to the Company's third quarter
1999 financial position or, aside from the effect of operating expenses, results
of operations. Refer to Note 4 of the Financial Statements for additional
segmented information. As a result, the remainder of this discussion will be
limited to the Annuities segment except as noted.
9
<PAGE> 10
The Company's primary source of earnings from the Annuities segment are fees
assessed against policyholder account balances held in the Company's separate
accounts including: mortality and expense risk charges, surrender charges and an
annual administrative charge. In addition, the segment earns a spread between
the advisory fees charged to manage the separate account assets invested in MIT
and the subadvisory fees paid to external managers of those assets. A key factor
in the Company's profitability is sustained growth in the underlying assets
through market performance coupled with the ability to acquire and retain
variable annuity deposits.
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.
10
<PAGE> 11
REVIEW OF OPERATING RESULTS AND FINANCIAL CONDITION
- ---------------------------------------------------
REVIEW OF OPERATING RESULTS
The discussion that follows compares results for the three months ended
September 30, 1999 to the three months ended September 30, 1998.
The Company recorded net income of $1.3 million in 1999 versus net income of
$0.2 million in 1998, an increase of $1.1 million or 439%. Revenues grew by 50%
to $8.0 million as a result of growth in fee income earned on higher separate
account assets, investment income from higher general account assets, and
distributions from MSS associated with the 10% interest in the members' equity
transferred to the Company on October 31, 1998. Separate account assets at
September 30, 1999 compared to September 30, 1998 were higher by $257 million or
37%. The asset growth is attributed to increased variable annuity sales, strong
equity market performance, favorable contract persistency, and the introduction
of the Company's pension products during 1998. Total fees generated from
separate accounts and policyholder liabilities increased by $1.0 million or 34%
in 1999. Net investment income grew by $2.2 million or 98% due to the third
quarter distribution from MSS of net advisory profits associated with the
Company's assets held in MIT and other excess cash flow items due the Company.
The Company incurred total benefits and expenses in 1999 of $6.0 million, an
increase of $1.0 million, or 20% compared to 1998. The expenses reflect an
increase in non-capitalized acquisition expenses and other increased operating
costs related to the expanded operations. Average policyholder liabilities
during the third quarter of 1999 were approximately $31 million higher than the
levels at September 30, 1998. The increased liabilities have resulted in higher
interest amounts credited to policyholder accounts during the third quarter of
1999. The amortization of Deferred Acquisition Costs (DAC) was reduced by $0.9
million during the third quarter of 1999 due primarily to improved investment
performance of the Company's Separate Account Assets compared to the third
quarter of 1998. It is this asset base against which fees are assessed. Higher
projected fees due to the quarter's results compared to that of 1998 resulted in
reduced DAC amortization requirements for the quarter.
The discussion that follows compares results for the nine months ended September
30, 1999 to the nine months ended September 30, 1998.
The Company recorded net income of $3.9 million in 1999 versus net income of
$1.7 million in 1998, an increase of $2.2 million or 135%. Revenues grew by 48%
to $22.7 million as a result of growth in fee income earned on additional
separate account assets, investment income from higher general account assets
and distributions from MSS associated with its 10% interest in the members'
equity transferred to the Company on October 31, 1998. Separate account assets
at September 30, 1999 compared to September 30, 1998 were higher by $257 million
or 37%. The asset growth is attributed to increased variable annuity sales,
strong equity market performance, favorable contract persistency and the
introduction of the Company's pension products during 1998. Total fees generated
from separate accounts and policyholder liabilities increased by $2.6 million or
32% in 1999. Net investment income grew by $5.4 million or 79% due primarily to
the distribution in 1999 from MSS of net advisory profits associated with the
Company's assets held in MIT and other excess cash flow items due the Company.
11
<PAGE> 12
The Company incurred total benefits and expenses in 1999 of $16.6 million, an
increase of $3.9 million, or 31% compared to 1998. The additional expenses
reflect an increase in non-capitalized acquisition expenses and other increased
operating costs. Average policyholder liabilities during 1999 were approximately
$21 million higher than the corresponding 1998 levels. The increased liabilities
have resulted in higher interest amounts credited to policyholder accounts
during 1999. DAC amortization costs of $3.9 million for 1999 were comparable to
DAC amortization costs of $3.7 million for 1998.
FINANCIAL POSITION
September 30, 1999 compared to December 31, 1998
Total assets increased from $1,017 million at December 31, 1998 to $1,181
million at September 30, 1999, an increase of $164 million or 16%. Separate
account assets increased by 15% over the first nine months of 1999 and represent
81% of total assets as the Company continues to focus on its variable option
annuity and pension products. The Company continues to own only investment grade
fixed maturity investments to support its general account liabilities and
shareholder's equity. The Company's DAC asset grew by 27% as the Company
experienced ongoing annuity sales during the first nine months of 1999. The
Company deferred the related costs, net of current amortization, associated with
those sales.
Total liabilities have increased proportionately with the growth in the related
assets, primarily in the Company's Separate accounts.
The growth in retained earnings is primarily due to net income from operations
of $3.9 million. The Company's shareholder's equity decreased by $2.2 million
due to lower market values associated with invested assets as at September 30,
1999.
MARKET RISK
Market risk is the risk that the Company will incur losses due to adverse
changes in market rates and prices. The primary market risk exposure for the
Company is the impact of lower than expected equity market performance on its
asset-related fee revenue. The Company also has certain exposures to changes in
interest rates.
The Company earns asset based fees on the asset levels invested in the separate
accounts. As a result, the Company is subject to equity risk and the effect
changes in equity market levels will have on the amounts invested in the
separate accounts.
Interest rate risk is the risk that the Company will incur economic losses due
to adverse changes in interest rates. This risk arises from the issuance of
certain interest sensitive annuity products and the investing of those proceeds
in fixed rate investments. The Company manages its interest rate risk through an
asset/liability management program. The Company has established a target
portfolio mix which takes into account the risk attributes of the liabilities
supported by the assets, expectations of market performance, and a generally
conservative investment philosophy. Preservation of capital and maintenance of
income flows are key objectives of this program. In addition, the Company has
diversified its product portfolio offerings to include products that contain
features that will protect it against fluctuations in interest rates. Those
features include adjustable crediting rates, policy surrender charges, and
market value adjustments on liquidations.
Based on the Company's overall exposure to interest rate and equity price risks,
the Company believes that changes in market rates would not materially affect
the near-term financial position, results of operations or cashflows of the
Company as of September 30, 1999. Refer to the Company's Annual Report on
form 10-K for a more detailed discussion of market risks.
12
<PAGE> 13
IMPACT OF YEAR 2000
The Company makes extensive use of information systems in the operations of its
various businesses, including for the exchange of financial data and other
information with customers, suppliers and other counterparties. The Company also
uses software and information systems provided by third parties in its
accounting, business and investment systems.
The Year 2000 risk, as it is commonly known, is the result of computer programs
being written using two digits, rather than four, to define the applicable year.
Any of the Company's computer programs that have date-sensitive software may
recognize a date using "00" as the year 1900 rather than the year 2000. This
could result in systems failures or miscalculations causing disruptions of
operations, including, among other things, a temporary inability to process
transactions, send premium billing notices, make claims payments or engage in
other normal business activities.
The systems used by the Company have been assessed as part of a comprehensive
written plan conducted by the Company's ultimate parent company, Manulife
Financial Corporation, on behalf of all of its subsidiaries, to ensure that the
computer systems and processes of all of the Manulife Financial companies,
including the Company's, will continue to perform through the end of this
century and in the next.
In 1996, in order to make Manulife Financial's systems Year 2000 compliant, a
Project was instituted to modify or replace both Manulife Financial's
information technology systems ("IT systems") and embedded technology systems
("Non-IT systems"). The phases of this Project include (i) an inventory and
assessment of all systems to determine which are critical, (ii) planning and
designing the required modifications and replacements, (iii) making these
modifications and replacements, (iv) testing modified or replaced systems, (v)
redeploying modified or replaced systems and (vi) final management review and
certification.
Management believes that the certification phase was completed for all the
Company's critical IT and Non-IT systems as of June 30, 1999. Management
believes that the Company's non-critical systems were Year 2000 compliant as of
the first quarter 1999.
In addition to efforts directed at Manulife Financial's own systems, Manulife
Financial consulted vendors, customers, and other third parties with which it
deals in an effort to ensure that no material aspect of Manulife Financial's
operations will be hindered by Year 2000 problems of these third parties. This
process included providing third parties with questionnaires regarding the state
of their Year 2000 readiness and, where possible or where appropriate,
conducting further due diligence activities. Where appropriate, risk management
steps are being followed as a result of the third-party assessment.
The Year 2000 Project Management Office for Manulife Financial's U.S. Division
has coordinated the preparation and completion of contingency plans on behalf of
U.S. Division affiliates and subsidiaries, including the Company, in the event
that Manulife Financial's Year 2000 Project has not fully resolved its Year 2000
issues.
Management currently believes that, due to the modifications made to existing
software and conversions to new software, the Year 2000 risk will not pose
significant operational problems for the Company's computer systems. As part of
the Year 2000 Project, critical systems were "time-shift" tested in the year
2000 and beyond to confirm that they will continue to function properly before,
during and after the change to the year 2000. However, there can be no assurance
that Manulife Financial's Year 2000 Project, including consulting third parties
and its contingency planning, will avoid any material adverse effect on the
Company's operations, customer relations or financial condition.
13
<PAGE> 14
Manulife Financial estimates the total cost of its Year 2000 Project will be
approximately $60.5 million,* of which $58.7 million* has been incurred through
September 30, 1999. In addition, previously unbudgeted costs associated with the
start up of a new joint venture in Japan in April 1999 are estimated to be $5.0
million,* of which approximately $3.2 million* was incurred through September
30, 1999. These previously unbudgeted costs will be shared by Manulife Financial
and its joint venture partner. There can be no assurance that the actual costs
incurred will not be materially higher than estimated. Manulife Financial's Year
2000 costs were $12.5 million* for the first nine months of 1999, including the
total joint venture costs, and $26.4 million* for the first nine months of 1998.
Most costs will be expensed as incurred; however, those costs attributed to the
purchase of new software and hardware will generally be capitalized. A
proportional amount of the total cost will be allocated to the Company and is
not expected to have a material effect on the Company's net operating income.
* All figures are shown in US dollars converted from Canadian dollars using the
average exchange rate of 1.490 in effect September 30, 1999.
14
<PAGE> 15
PART II--OTHER INFORMATION
Item 1 - Legal Proceedings
No reportable events
Item 2 - Changes In Securities
No reportable events
Items 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")
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
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.
</TABLE>
15
<PAGE> 16
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
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- - Previously
filed as exhibit 4(vi) to Form 10K, file number 333-31491,
filed August 14, 1998 on behalf of The Manufacturers Life
Insurance Company of New York
4(vii) Unisex Benefits and Payments Endorsement- - Previously filed
as exhibit 4(vii) to Form 10K, file number 333-31491, filed
August 14, 1998 on behalf of The Manufacturers Life
Insurance Company of New York
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
</TABLE>
16
<PAGE> 17
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
22 Not Applicable
23 (i) Not Applicable
23(ii) Not Applicable
24(i) 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. 1
on Form S-6, file number 333-33351, filed March 16, 1998.
24(ii) Power of Attorney, James O'Malley and Thomas Borshoff -
Incorporated by reference to Exhibit 14 to post-effective
amendment no. 6 on Form N-4, file number 33-79112, filed
March 2, 1999.
24(iii) Power of Attorney, James Gallagher and James Boyle -
Incorporated by reference to Exhibit 7(iii) to
pre-effective amendment no 1 on Form S-6, file
number 333-83023, filed November 1, 1999.
25 Not Applicable
26 Not Applicable
27 Financial Data Schedule -- Filed herewith.
28 Not Applicable
</TABLE>
ITEM 6B - REPORTS ON FORM 8-K
No reports on Form 8-K were filed during the quarter.
17
<PAGE> 18
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: November 15, 1999
<PAGE> 19
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
27 Financial data schedule for quarter ended September 30, 1999
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 7
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<DEBT-HELD-FOR-SALE> 124,625
<DEBT-CARRYING-VALUE> 0
<DEBT-MARKET-VALUE> 0
<EQUITIES> 0
<MORTGAGE> 0
<REAL-ESTATE> 0
<TOTAL-INVEST> 155,128
<CASH> 18,239
<RECOVER-REINSURE> 0
<DEFERRED-ACQUISITION> 46,944
<TOTAL-ASSETS> 1,181,122
<POLICY-LOSSES> 122,216
<UNEARNED-PREMIUMS> 0
<POLICY-OTHER> 0
<POLICY-HOLDER-FUNDS> 957,773
<NOTES-PAYABLE> 0
0
0
<COMMON> 2,000
<OTHER-SE> 79,093
<TOTAL-LIABILITY-AND-EQUITY> 1,181,122
27
<INVESTMENT-INCOME> 12,160
<INVESTMENT-GAINS> (120)
<OTHER-INCOME> 10,581
<BENEFITS> 4,557
<UNDERWRITING-AMORTIZATION> 3,864
<UNDERWRITING-OTHER> 8,205
<INCOME-PRETAX> 6,022
<INCOME-TAX> 2,108
<INCOME-CONTINUING> 3,914
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,914
<EPS-BASIC> 0
<EPS-DILUTED> 0
<RESERVE-OPEN> 0
<PROVISION-CURRENT> 0
<PROVISION-PRIOR> 0
<PAYMENTS-CURRENT> 0
<PAYMENTS-PRIOR> 0
<RESERVE-CLOSE> 0
<CUMULATIVE-DEFICIENCY> 0
</TABLE>
