AMERICAN LIFE
SEPARATE ACCOUNT NO. 3
ANNUAL REPORT
DECEMBER 31, 1999
This report is not to be construed as an offering for sale of any Variable
Product. No offering is made except in conjunction with a prospectus which
must precede or accompany this report.
<PAGE>
THE AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
Separate Account No. 3
Annual Report
December 31, 1999
Dear Policyowner:
We are pleased to send you the 1999 Annual Report of American Life's
Separate Account No. 3. This Account, which commenced operations in late 1994,
is an investment vehicle for owners of our Variable Universal Life policies.
Separate Account No. 3 consists of seventeen distinct funds. Each invests in
shares of one of nine funds of Mutual of America Investment Corporation
("Investment Company"): the Money Market, All America, Equity Index, Mid-Cap
Equity Index (commenced operations on May 3, 1999), Bond, Short-Term Bond,
Mid-Term Bond, Composite and Aggressive Equity Funds; three portfolios of
Scudder Variable Life Investment Fund ("Scudder"): The Bond, Capital Growth and
International Portfolios; the VP Capital Appreciation Fund of American Century
Variable Portfolios, Inc. ("American Century"); the Calvert Social Balanced
Portfolio of Calvert Variable Series, Inc. ("Calvert"); the Equity-Income
Portfolio of Fidelity Investments Variable Insurance Products Fund ("Fidelity
VIP"); and the Contrafund and Asset Manager Portfolios of Fidelity Investments
Variable Insurance Products Fund II ("Fidelity VIP II").
Each of the Funds of Separate Account No. 3 owns shares in a similarly
named fund of the Investment Company, portfolio of Scudder, fund of American
Century, portfolio of Calvert, portfolio of Fidelity VIP and portfolio of
Fidelity VIP II. The investment results of each of the Funds of Separate Account
No. 3 are based on the performance of the corresponding funds or portfolios of
the Investment Company, Scudder, American Century, Calvert, Fidelity VIP and
Fidelity VIP II.
The investment objectives and primary investments of the funds and
portfolios in which the Separate Account Funds invested in 1999 are summarized
as follows:
Investment Company Money Market Fund: This Fund seeks to realize high
current income to the extent consistent with the maintenance of liquidity,
investment quality and stability of capital through investments in money market
instruments and other short-term debt securities.
Investment Company All America Fund: This Fund seeks to outperform the
Standard & Poor's Composite Index of 500 Stocks (the "S&P 500 Index") by
investing in a diversified portfolio of primarily common stocks. The Fund
invests approximately 60% of its assets (the "Indexed Assets") to provide
investment results that correspond to the performance of the S&P 500 Index. The
remaining approximately 40% of its assets (the "Active Assets") seek to achieve
a high level of total return, through both appreciation of capital and, to a
lesser extent, current income, by means of a diversified portfolio of primarily
common stocks with a broad exposure to the market. ("Standard & Poor's",
"S&P"and "S&P 500" are trademarks of The McGraw-Hill Companies, Inc.)
Investment Company Equity Index Fund: This Fund seeks to provide
investment results that correspond to the performance of the S&P 500 Index by
investing primarily in the common stocks that comprise the S&P 500 Index.
Investment Company Mid-Cap Equity Index Fund: This Fund seeks to provide
investment results that correspond to the performance of the S&P MidCap 400
Index by investing primarily in the common stocks that comprise the S&P MidCap
400 Index. ("S&P MidCap 400" is a trademark of The McGraw-Hill Companies, Inc.)
Investment Company Bond Fund: This Fund seeks to provide as high a level
of current income over time as is believed consistent with prudent investment
risk, with preservation of capital a secondary objective, by investing primarily
in publicly-traded, investment grade debt securities.
Investment Company Short-Term Bond Fund: This Fund seeks to provide as
high a level of current income over time as is believed consistent with prudent
investment risk, with preservation of capital a secondary objective, by
investing primarily in publicly-traded, investment grade debt securities and
money market instruments. The average maturity of the Fund is between one and
three years.
1
<PAGE>
Investment Company Mid-Term Bond Fund: This Fund seeks to provide as high
a level of current income over time as is believed consistent with prudent
investment risk, with preservation of capital a secondary objective, by
investing primarily in publicly-traded, investment grade debt securities. The
average maturity of the Fund is between three and seven years.
Investment Company Composite Fund: This Fund seeks to achieve as high a
total rate of return, through both appreciation of capital and current income,
as is consistent with prudent investment risk, by investing in a diversified
portfolio of publicly-traded common stocks, bonds and money market instruments.
Investment Company Aggressive Equity Fund: This Fund's investment
objective is capital appreciation, by investing approximately half of its assets
in companies believed to possess above-average growth potential and the other
half of its assets in companies believed to possess valuable assets or whose
securities are believed to be undervalued in the marketplace.
At a special meeting of shareholders of the Investment Company scheduled
for February 28, 2000, Aggressive Equity Fund shareholders who owned shares as
of December 21, 1999 will vote on a proposal to amend the investment objective
of the Fund to read: "The investment objective of the Aggressive Equity Fund is
capital appreciation." If approved, the Fund will continue to invest in growth
and value stocks, but the Adviser will determine the percentage of Fund assets
to be invested in each type of stock, rather than investing Fund assets
approximately equally in each type.
Scudder Bond Portfolio: This Portfolio seeks a high level of income
consistent with a high quality portfolio of primarily investment grade debt
securities.
Scudder Capital Growth Portfolio: This Portfolio seeks to maximize
long-term capital growth through a broad and flexible investment program, by
investing in marketable securities, principally common stocks and, consistent
with its objective of long-term capital growth, preferred stocks.
Scudder International Portfolio: This Portfolio seeks long-term growth of
capital primarily through a diversified portfolio of foreign equity securities,
by investing primarily in established companies that do business principally
outside of the United States and that are listed on foreign exchanges.
American Century VP Capital Appreciation Fund: This Fund seeks capital
growth by investing primarily in common stocks that meet certain fundamental and
technical standards and are considered by the Fund's management to have
better-than-average prospects for appreciation.
Calvert Social Balanced Portfolio: This Portfolio seeks a competitive
total return through an actively managed, non-diversified portfolio of stocks,
bonds and money market instruments that offer income and growth opportunity and
satisfy the Portfolio's investment and social criteria.
Fidelity VIP Equity-Income Portfolio: This Portfolio seeks reasonable
income by investing primarily in income-producing equity securities, while
considering the potential for capital appreciation, and it also seeks to achieve
a yield that exceeds the composite yield on the securities comprising the S&P
500 Index.
Fidelity VIP II Contrafund Portfolio: This Portfolio seeks capital
appreciation over the Long-Term by investing primarily in securities of
companies whose value, the Portfolio's adviser believes, is not fully recognized
by the public. These securities may be issued by domestic or foreign companies
and many may not be well known. The Portfolio normally invests in common stocks.
Fidelity VIP II Asset Manager Portfolio: This Portfolio seeks high total
return with reduced risk over the long-term by allocating its assets among
domestic and foreign stocks, bonds and short-term/money market instruments, with
an expected "neutral mix" over the long-term of 10% in short-term/money market
instruments, 40% in bonds and 50% in stocks.
2
<PAGE>
For the year ended December 31, 1999, the following total returns were
experienced in these seventeen Separate Account Funds:
Investment Company Money Market Fund(1) ......................... + 2.7%
Investment Company All America Fund ............................. +23.0%
Investment Company Equity Index Fund ............................ +17.9%
Investment CompanyMid-Cap Equity Index Fund(2) .................. +10.1%
Investment Company Bond Fund .................................... - 4.1%
Investment Company Short-Term Bond Fund ......................... + 1.9%
Investment Company Mid-Term Bond Fund ........................... - 0.9%
Investment Company Composite Fund ............................... +12.6%
Investment Company Aggressive Equity Fund ....................... +40.1%
Scudder Bond Fund ............................................... - 3.1%
Scudder Capital Growth Fund ..................................... +32.2%
Scudder International Fund ...................................... +51.1%
American Century VP Capital Appreciation Fund ................... +61.2%
Calvert Social Balanced Fund .................................... + 9.7%
Fidelity VIP Equity-Income Fund ................................. + 4.1%
Fidelity VIP II Contrafund ...................................... +21.6%
Fidelity VIP II Asset Manager Fund .............................. + 8.7%
----------
(1) The seven-day net annualized effective yield as of 2/15/00 was 3.38%
and is not necessarily indicative of future actual yields.
(2) Commenced operations May 3, 1999; total return is from that date.
Total return is equal to the changes in the value of a unit of
participation in a Fund from the beginning to the end of the specified period.
It reflects investment income earned and reinvested plus the changes in the
market value (whether realized or unrealized) of the securities in the
respective fund or portfolio of the Investment Company, Scudder, American
Century, Calvert or Fidelity during the indicated period. Results are net of all
charges, including a monthly service charge (assessed against an average account
balance for all policyowners) based upon a hypothetical $1,000 invested at the
beginning of the period. These returns are not guaranteed and are not
necessarily indicative of the future investment performance of the particular
fund. Withdrawals and contributions made within a period would experience
different rates of return based on the respective unit values on the dates of
such transactions.
This report includes financial statements for each Fund of Separate
Account No. 3. Accompanying this report are the financial statements for each
similarly named fund of the Investment Company, portfolios of Scudder, fund of
American Century, portfolio of Calvert and portfolios of Fidelity VIP and
Fidelity VIP II.
Total Return Separate Account Performance Notes for extended time periods
and other services are available by calling 1-800-468-3785.
I hope you will find this report helpful and informative.
Sincerely,
/s/ Manfred Altstadt
--------------------
Manfred Altstadt
Senior Executive Vice President
and Chief Financial Officer,
The American Life Insurance Company of New York
3
<PAGE>
CONTENTS
Page
----
Annual Report of American Life Separate Account No. 3 ................... 1
Statement of Assets and Liabilities ................................... 5
Statement of Operations ............................................... 7
Statements of Changes in Net Assets ................................... 9
Notes to Financial Statements ......................................... 12
Report of Independent Public Accountants .............................. 17
4
<PAGE>
AMERICAN LIFE SEPARATE ACCOUNT NO. 3
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1999
<TABLE>
<CAPTION>
Investment Company
-------------------------------------------------------------
Money All Equity Mid-Cap
Market America Index Equity Index Bond
Fund Fund Fund Fund Fund
--------- --------- -------- ------------ -------
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments in Mutual of America Investment
Corporation at market value
(Cost:
Money Market Fund -- $10,972
All America Fund -- $1,010,289
Equity Index Fund -- $553,382
Mid-Cap Equity Index Fund -- $9,965
Bond Fund -- $39,473)
(Notes 1 and 2) ..................................... $10,711 $1,205,450 $693,551 $10,545 $35,597
Due From (To) General Account .......................... 32 7,327 7,739 (5) 558
------- ---------- -------- ------- -------
NET ASSETS ............................................. $10,743 $1,212,777 $701,290 $10,540 $36,155
======= ========== ======== ======= =======
UNIT VALUE AT DECEMBER 31, 1999 (Note 5) ............... $ 2.11 $ 10.05 $ 3.41 $ 1.11 $ 3.07
======= ========== ======== ======= =======
NUMBER OF UNITS OUTSTANDING AT
DECEMBER 31, 1999 (Note 5) .......................... 5,096 120,656 205,553 9,513 11,766
======= ========== ======== ======= =======
<CAPTION>
INVESTMENT COMPANY
----------------------------------------------------
Aggressive
Short-Term Mid-Term Composite Equity
Bond Fund Bond Fund Fund Fund
---------- ---------- --------- ----------
<S> <C> <C> <C> <C>
ASSETS:
Investments in Mutual of America Investment Corporation
at market value
(Cost:
Short-Term Bond Fund -- $3,544
Mid-Term Bond Fund -- $4,171
Composite Fund -- $437,065
Aggressive Equity Fund -- $365,151)
(Notes 1 and 2) .................................................. $3,364 $3,910 $457,025 $495,573
Due From (To) General Account ....................................... (29) (43) 7,887 1,876
------ ------ -------- --------
NET ASSETS .......................................................... $3,335 $3,867 $464,912 $497,449
====== ====== ======== ========
UNIT VALUE AT DECEMBER 31, 1999 (Note 5) ............................ $ 1.28 $ 1.32 $ 5.61 $ 2.85
====== ====== ======== ========
NUMBER OF UNITS OUTSTANDING AT
DECEMBER 31, 1999 (Note 5) ....................................... 2,603 2,919 82,918 174,367
====== ====== ======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
AMERICAN LIFE SEPARATE ACCOUNT NO. 3
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1999
<TABLE>
<CAPTION>
American
Scudder Century
----------------------------------------- ------------
Capital VP Capital
Bond Growth International Appreciation
Fund Fund Fund Fund
----------------------------------------- ------------
<S> <C> <C> <C> <C>
ASSETS:
Investment in Scudder Portfolio and American Century VP
Capital Application Fund at market value
(Cost:
Scudder Bond Fund -- $13,388
Scudder Capital Growth Fund -- $816,318
Scudder International Fund -- $299,065
American Century VP Capital
Appreciation Fund -- $109,101)
(Notes 1 and 2) ......................................... $7,793 $ 999,330 $305,319 $157,385
Due From (To) General Account .............................. 143 3,117 176 266
------ ---------- -------- --------
NET ASSETS ................................................. $7,936 $1,002,447 $305,495 $157,651
====== ========== ======== ========
UNIT VALUE AT DECEMBER 31, 1999 (Note 5) ................... $12.73 $ 48.17 $ 25.83 $ 17.40
====== ========== ======== ========
NUMBER OF UNITS OUTSTANDING AT
DECEMBER 31, 1999 (Note 5) .............................. 623 20,809 11,828 9,062
====== ========== ======== ========
<CAPTION>
Calvert Fidelity
----------------------------------------------------
Social VIP VIP II VIP II
Balanced Equity-Income Contra Asset Manager
Fund Fund Fund Fund
---------- ------------- -------- -------------
<S> <C> <C> <C> <C>
ASSETS:
Investments in Calvert Social Balanced Portfolio and
Fidelity Portfolios at market value
(Cost:
Calvert Social Balanced Fund -- $78,246
VIP Equity-Income Fund -- $328,028
VIP II Contra Fund -- $495,731
VIP II Asset Manager Fund -- $224,132)
(Notes 1 and 2) ......................................... $69,605 $237,833 $583,881 $205,687
Due From (To) General Account .............................. (223) 1,097 3,937 (1,542)
------- -------- -------- --------
NET ASSETS ................................................. $69,382 $238,930 $587,818 $204,145
======= ======== ======== ========
UNIT VALUE AT DECEMBER 31, 1999 (Note 5) ................... $ 3.37 $ 32.21 $ 32.13 $ 26.40
======= ======== ======== ========
NUMBER OF UNITS OUTSTANDING AT
DECEMBER 31, 1999 (Note 5) .............................. 20,588 7,417 18,296 7,732
======= ======== ======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
6
<PAGE>
AMERICAN LIFE SEPARATE ACCOUNT NO. 3
STATEMENT OF OPERATIONS
For the Year Ended December 31, 1999
<TABLE>
<CAPTION>
Investment Company
---------------------------------------------------------------
Mid-Cap
Money Market All America Equity Index Equity Index
Fund Fund Fund Fund*
------------- ----------- ------------ ------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME AND EXPENSES:
Income (Notes 1 and 4):
Dividend Income ............................................... $ 495 $ 90,639 $ 17,838 $ 84
-------- -------- -------- --------
Expenses (Note 3):
Fees and administrative expenses .............................. 332 14,489 8,336 54
-------- -------- -------- --------
NET INVESTMENT INCOME (LOSS) ..................................... 163 76,150 9,502 30
-------- -------- -------- --------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS (Note 1):
Net realized gain (loss) on investments ....................... 9 5,982 2,583 (1)
Net unrealized appreciation (depreciation) of
investments ................................................. (90) 142,058 86,992 580
-------- -------- -------- --------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS .................................................. (81) 148,040 89,575 579
-------- -------- -------- --------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS ..................................... $ 82 $224,190 $ 99,077 $ 609
======== ======== ======== ========
<CAPTION>
Investment Company
---------------------------------------------------------------------
Aggressive
Bond Short-Term Mid-Term Composite Equity
Fund Bond Fund Bond Fund Fund Fund
--------- ---------- --------- --------- -----------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME AND EXPENSES:
Income (Notes 1 and 4):
Dividend Income ....................................... $ 2,546 $ 274 $ 239 $ 32,089 $ 27
--------- --------- --------- --------- ---------
Expenses (Note 3):
Fees and administrative expenses ...................... 1,179 56 128 7,533 4,651
--------- --------- --------- --------- ---------
NET INVESTMENT INCOME (LOSS) ............................. 1,367 218 111 24,556 (4,624)
--------- --------- --------- --------- ---------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS (Note 1):
Net realized gain (loss) on investments ............... (728) 7 (39) 3,345 (1,287)
Net unrealized appreciation (depreciation) of
investments ......................................... (2,629) (119) (155) 28,739 146,822
--------- --------- --------- --------- ---------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS ........................................... (3,357) (112) (194) 32,084 145,535
--------- --------- --------- --------- ---------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS ............................. $ (1,990) $ 106 $ (83) $ 56,640 $ 140,911
========= ========= ========= ========= =========
</TABLE>
- ----------
* Commenced operations May 3, 1999.
The accompanying notes are an integral part of these financial statements.
7
<PAGE>
AMERICAN LIFE SEPARATE ACCOUNT NO. 3
STATEMENT OF OPERATIONS
For the Year Ended December 31, 1999
<TABLE>
<CAPTION>
American
Scudder Century
----------------------------------------------- -------------
Capital VP Capital
Bond Growth International Appreciation
Fund Fund Fund Fund
----------------------------------------------- -------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME AND EXPENSES:
Income (Notes 1 and 4):
Dividend Income ........................................... $ 364 $ 72,252 $ 16,406 $ --
-------- -------- -------- --------
Expenses (Note 3):
Fees and administrative expenses .......................... 301 9,449 2,459 1,339
-------- -------- -------- --------
NET INVESTMENT INCOME (LOSS) ................................. 63 62,803 13,947 (1,339)
-------- -------- -------- --------
NET REALIZED AND UNREALIZED
GAIN ON INVESTMENTS (Note 1):
Net realized gain (loss) on investments ................... 2,420 29,561 42,870 (538)
Net unrealized appreciation
(depreciation) of investments .......................... (2,853) 150,030 41,902 61,812
-------- -------- -------- --------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS ................................ (433) 179,591 84,772 61,274
-------- -------- -------- --------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS ................................. $ (370) $242,394 $ 98,719 $ 59,935
======== ======== ======== ========
<CAPTION>
Calvert Fidelity
---------- ----------------------------------------------
Social VIP VIP II VIP II
Balanced Equity-Income Contra Asset Manager
Fund Fund Fund Fund
---------- ------------- -------- -------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME AND EXPENSES:
Income (Notes 1 and 4):
Dividend Income ........................................... $ 6,639 $ 10,795 $ 15,980 $ 11,496
-------- -------- -------- --------
Expenses (Note 3):
Fees and administrative expenses .......................... 1,126 5,386 6,311 2,871
-------- -------- -------- --------
NET INVESTMENT INCOME (LOSS) ................................. 5,513 5,409 9,669 8,625
-------- -------- -------- --------
NET REALIZED AND UNREALIZED
GAIN ON INVESTMENTS (Note 1):
Net realized gain (loss) on investments ................... 2,463 49,375 26,565 7,343
Net unrealized appreciation
(depreciation) of investments ........................... (2,145) (45,328) 62,794 169
-------- -------- -------- --------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS ................................ 318 4,047 89,359 7,512
-------- -------- -------- --------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS ................................. $ 5,831 $ 9,456 $ 99,028 $ 16,137
======== ======== ======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
8
<PAGE>
AMERICAN LIFE SEPARATE ACCOUNT NO. 3
STATEMENTS OF CHANGES IN NET ASSETS
For the Years Ended December 31,
<TABLE>
<CAPTION>
Investment Company
-----------------------------------------------------------------------------
Money Market Fund All America Fund Equity Index Fund
----------------------------------------------------- ----------------------
1999 1998 1999 1998 1999 1998
-------- -------- ----------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss) .......... $ 163 $ 58 $ 76,150 $ 89,933 $ 9,502 $ 26,288
Net realized gain (loss) on
investments ......................... 9 (6) 5,982 1,744 2,583 2,147
Net unrealized appreciation
(depreciation) of investments ....... (90) (27) 142,058 32,513 86,992 34,890
-------- -------- ----------- ---------- ---------- ----------
Net Increase (Decrease) in net assets
resulting from operations ............. 82 25 224,190 124,190 99,077 63,325
-------- -------- ----------- ---------- ---------- ----------
From Unit Transactions:
Contributions ......................... 5,763 6,108 225,775 241,902 200,423 180,950
Withdrawals ........................... (741) (57) (14,164) (10,084) (10,982) (7,360)
Net Transfers ......................... (687) (3,176) (78,826) (49,261) 10,361 4,004
-------- -------- ----------- ---------- ---------- ----------
Net Increase (Decrease) from unit
transactions .......................... 4,335 2,875 132,785 182,557 199,802 177,594
-------- -------- ----------- ---------- ---------- ----------
NET INCREASE (DECREASE) IN
NET ASSETS ............................ 4,417 2,900 356,975 306,747 298,879 240,919
NET ASSETS:
Beginning of Year ........................ 6,326 3,426 855,802 549,055 402,411 161,492
-------- -------- ----------- ---------- ---------- ----------
End of Year .............................. $ 10,743 $ 6,326 $ 1,212,777 $ 855,802 $ 701,290 $ 402,411
======== ======== =========== ========== ========== ==========
<CAPTION>
Investment Company
--------------------------------------------------------------------------------
Mid-Cap
Equity Index Fund* Bond Fund Short-Term Bond Fund
----------------- ---------------------------- ----------------------------
1999 1999 1998 1999 1998
----------------- ------------- ----------- ------------ -----------
<S> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss) .................... $ 30 $ 1,367 $ 1,687 $ 218 $ 103
Net realized gain (loss) on
investments .................................... (1) (728) 233 7 6
Net unrealized appreciation
(depreciation) of investments ................. 580 (2,629) (1,044) (119) (12)
-------- -------- -------- -------- --------
Net Increase (Decrease) in net assets
resulting from operations ....................... 609 (1,990) 876 106 97
-------- -------- -------- -------- --------
From Unit Transactions:
Contributions ................................... 1,768 23,334 25,539 1,436 1,370
Withdrawals ..................................... -- (1,742) (2,714) (553) --
Net Transfers ................................... 8,163 (23,253) (5,483) (668) (277)
-------- -------- -------- -------- --------
Net Increase (Decrease) from unit
transactions ..................................... 9,931 (1,661) 17,342 215 1,093
-------- -------- -------- -------- --------
NET INCREASE (DECREASE) IN
NET ASSETS ....................................... 10,540 (3,651) 18,218 321 1,190
NET ASSETS:
Beginning of Period/Year ........................... -- 39,806 21,588 3,014 1,824
-------- -------- -------- -------- --------
End of Year ........................................ $ 10,540 $ 36,155 $ 39,806 $ 3,335 $ 3,014
======== ======== ======== ======== ========
</TABLE>
- ----------
* Commenced operations May 3, 1999.
The accompanying notes are an integral part of these financial statements.
9
<PAGE>
AMERICAN LIFE SEPARATE ACCOUNT NO. 3
STATEMENTS OF CHANGES IN NET ASSETS
For the Years Ended December 31,
<TABLE>
<CAPTION>
Investment Company
---------------------------------------------------------------------------------
Mid-Term Aggressive
Bond Fund Composite Fund Equity Fund
----------------------------------------------------- -------------------------
1999 1998 1999 1998 1999 1998
------------- ---------- ---------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss) ................ $ 111 $ 49 $ 24,556 $ 14,028 $ (4,624) $ (1,051)
Net realized gain (loss) on
investments ............................... (39) (1) 3,345 (2,308) (1,287) (5,609)
Net unrealized appreciation
(depreciation) of investments ............. (155) (30) 28,739 40,252 146,822 (9,779)
--------- -------- --------- --------- --------- ---------
Net Increase (Decrease) in net assets
resulting from operations ................... (83) 18 56,640 51,972 140,911 (16,439)
--------- -------- --------- --------- --------- ---------
From Unit Transactions:
Contributions ............................... 3,734 4,187 143,578 160,764 122,221 164,628
Withdrawals ................................. (33) (157) (7,275) (13,170) (11,223) (15,635)
Net Transfers ............................... (2,933) (2,597) (230,186) (43,657) (51,648) (57,515)
--------- -------- --------- --------- --------- ---------
Net Increase (Decrease) from unit
transactions ................................. 768 1,433 (93,883) 103,937 59,350 91,478
--------- -------- --------- --------- --------- ---------
NET INCREASE (DECREASE) IN
NET ASSETS .................................. 685 1,451 (37,243) 155,909 200,261 75,039
NET ASSETS:
Beginning of Year .............................. 3,182 1,731 502,155 346,246 297,188 222,149
--------- -------- --------- --------- --------- ---------
End of Year .................................... $ 3,867 $ 3,182 $ 464,912 $ 502,155 $ 497,449 $ 297,188
========= ======== ========= ========= ========= =========
<CAPTION>
Scudder
--------------------------------------------------------------------------------------
Bond Fund Capital Growth Fund International Fund
-------------------------- -------------------------- ---------------------------
1999 1998 1999 1998 1999 1998
----------- ----------- ----------- ----------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss) .......... $ 63 $ 140 $ 62,803 $ 21,930 $ 13,947 $ 13,208
Net realized gain (loss) on
investments ......................... 2,420 435 29,561 59,922 42,870 8,854
Net unrealized appreciation
(depreciation) of investments ....... (2,853) (417) 150,030 20,657 41,902 (3,025)
----------- ----------- ----------- ----------- ----------- -----------
Net Increase (Decrease) in net assets
resulting from operations ............. (370) 158 242,394 102,509 98,719 19,037
----------- ----------- ----------- ----------- ----------- -----------
From Unit Transactions:
Contributions ......................... 6,655 7,436 179,349 171,043 48,408 41,383
Withdrawals ........................... (7,951) (747) (19,485) (17,243) (4,488) (3,269)
Net Transfers ......................... 2,657 (4,105) (32,768) (37,452) 5,086 (6,087)
----------- ----------- ----------- ----------- ----------- -----------
Net Increase (Decrease) from unit
transactions ........................... 1,361 2,584 127,096 116,348 49,006 32,027
----------- ----------- ----------- ----------- ----------- -----------
NET INCREASE (DECREASE) IN
NET ASSETS ............................ 991 2,742 369,490 218,857 147,725 51,064
NET ASSETS:
Beginning of Year ........................ 6,945 4,203 632,957 414,100 157,770 106,706
----------- ----------- ----------- ----------- ----------- -----------
End of Year .............................. $ 7,936 $ 6,945 $ 1,002,447 $ 632,957 $ 305,495 $ 157,770
=========== =========== =========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
10
<PAGE>
AMERICAN LIFE SEPARATE ACCOUNT NO. 3
STATEMENTS OF CHANGES IN NET ASSETS
For the Years Ended December 31,
<TABLE>
<CAPTION>
American Century Calvert
-------------------------------------------------------------
VP Capital Appreciation Fund Social Balanced Fund
---------------------------- ----------------------------
1999 1998 1999 1998
------------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss) .................................... $ (1,339) $ 3,232 $ 5,513 $ 2,632
Net realized gain (loss) on investments ......................... (538) (2,064) 2,463 3,550
Net unrealized appreciation (depreciation) of investments ....... 61,812 (3,934) (2,145) (1,400)
--------- --------- --------- ---------
Net Increase (Decrease) in net assets resulting
from operations ................................................. 59,935 (2,766) 5,831 4,782
--------- --------- --------- ---------
From Unit Transactions:
Contributions ................................................... 19,332 28,381 29,109 30,086
Withdrawals ..................................................... (3,725) (1,400) (1,433) (2,076)
Net Transfers ................................................... (12,717) (9,765) (10,503) (12,258)
--------- --------- --------- ---------
Net Increase (Decrease) from unit transactions ..................... 2,890 17,216 17,173 15,752
--------- --------- --------- ---------
NET INCREASE (DECREASE) IN NET ASSETS .............................. 62,825 14,450 23,004 20,534
NET ASSETS:
Beginning of Year .................................................. 94,826 80,376 46,378 25,844
--------- --------- --------- ---------
End of Year ........................................................ $ 157,651 $ 94,826 $ 69,382 $ 46,378
========= ========= ========= =========
<CAPTION>
Fidelity
---------------------------------------------------------------------------------
VIP Equity-Income Fund VIP II Contra Fund VIP II Asset Manager Fund
-------------------------- ------------------------- -------------------------
1999 1998 1999 1998 1999 1998
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income (loss) ................ $ 5,409 $ 6,552 $ 9,669 $ 10,289 $ 8,625 $ 11,124
Net realized gain (loss) on
investments ............................... 49,375 41,256 26,565 43,590 7,343 17,688
Net unrealized appreciation
(depreciation) of investments ............. (45,238) (31,062) 62,794 22,246 169 (13,211)
--------- --------- --------- --------- --------- ---------
Net Increase (Decrease) in net assets
resulting from operations ................... 9,456 16,746 99,028 76,125 16,137 15,601
--------- --------- --------- --------- --------- ---------
From Unit Transactions:
Contributions ............................... 102,202 132,435 128,973 124,636 63,355 69,680
Withdrawals ................................. (20,796) (22,291) (14,050) (15,833) (3,675) (2,791)
Net Transfers ............................... (73,688) (58,797) (3,218) (43,163) (23,061) (31,342)
--------- --------- --------- --------- --------- ---------
Net Increase (Decrease) from
unit transactions ............................ 7,718 51,347 111,705 65,640 36,619 35,547
--------- --------- --------- --------- --------- ---------
NET INCREASE (DECREASE) IN
NET ASSETS ................................... 17,174 68,093 210,733 141,765 52,756 51,148
NET ASSETS:
Beginning of Year .............................. 221,756 153,663 377,085 235,320 151,389 100,241
--------- --------- --------- --------- --------- ---------
End of Year .................................... $ 238,930 $ 221,756 $ 587,818 $ 377,085 $ 204,145 $ 151,389
========= ========= ========= ========= ========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
11
<PAGE>
AMERICAN LIFE SEPARATE ACCOUNT NO. 3
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION
Separate Account No. 3 of The American Life Insurance Company of New York
("the Company") was established in conformity with New York Insurance Law and
commenced operations on December 21, 1994 as a unit investment trust. On that
date, the following American Life Funds became available as investment
alternatives: Money Market Fund, All America Fund, Equity Index Fund, Bond Fund,
Short-Term Bond Fund, Mid-Term Bond Fund, Composite Fund, Aggressive Equity
Fund, Scudder Bond Fund, Scudder Capital Growth Fund, Scudder International
Fund, American Century VP Capital Appreciation Fund and Calvert Social Balanced
Fund .The American Life Funds invest in a corresponding fund of Mutual of
America Investment Corporation ("Investment Company"), portfolios of Scudder
Variable Life Investment Fund ("Scudder"), fund of American Century Variable
Portfolios Inc. ("American Century") and a corresponding fund of Calvert Social
Balanced Portfolio of Calvert Variable Series, Inc. ("Calvert").
On May 1, 1995, Fidelity Investments Equity-Income, Contrafund and Asset
Manager Funds became available to Separate Account No. 3 as investment
alternatives. The Fidelity Equity-Income Fund invests in the corresponding
portfolio of Fidelity Variable Insurance Products Fund ("Fidelity VIP") and the
Contrafund and Asset Manager Funds invest in corresponding portfolios of
Fidelity Variable Insurance Products Fund II ("Fidelity VIP II") (collectively,
"Fidelity").
On May 3, 1999 the Mid-Cap Equity Index Fund of the Investment Company
became the 17th investment alternative available to Separate Account No. 3.
Separate Account No. 3 was formed by the Company to support the operations
of the Company's variable universal life insurance policies. The assets of
Separate Account No. 3 are the property of the Company. The portion of Separate
Account No. 3's assets applicable to the policies will not be charged with
liabilities arising out of any other business the Company may conduct.
The significant accounting policies of Separate Account No. 3 are as
follows:
Investment Valuation -- Investments are made in shares of the Investment
Company, Scudder, American Century, Calvert and Fidelity and are valued at the
reported net asset values of the respective funds and portfolios.
Investment Transactions -- Investment transactions are recorded on the
trade date. Realized gains and losses on sales of investments are determined
based on the average cost of the investment sold.
Federal Income Taxes -- Separate Account No. 3 will be treated as a part
of the Company and will not be taxed separately as a "regulated investment
company"under existing law. The Company is taxed as a life insurance company
under the life insurance tax provisions of the Internal Revenue Code of 1986. No
provision for income taxes is required in the accompanying financial statements.
2. INVESTMENTS
The number of shares owned by Separate Account No. 3 and the respective
net asset values (rounded to the nearest cent) per share at December 31, 1999
are as follows:
Number of Net Asset
Shares Value
--------- ---------
Investment Company Funds:
Money Market Fund: ........................... 9,026 $ 1.19
All America Fund ............................. 357,922 3.37
Equity Index Fund ............................ 240,742 2.88
Mid-Cap Equity Index Fund .................... 9,514 1.11
Bond Fund .................................... 27,442 1.30
Short-Term Bond Fund ......................... 3,389 0.99
Mid-Term Bond Fund ........................... 4,513 0.87
Composite Fund ............................... 239,869 1.91
Aggressive Equity Fund ....................... 229,289 2.16
Scudder Portfolios:
Bond Portfolio ............................... 1,201 6.49
Capital Growth Portfolio--Class "A" .......... 34,306 29.13
International Portfolio--Class "A" ........... 15,011 20.34
12
<PAGE>
AMERICAN LIFE SEPARATE ACCOUNT NO. 3
NOTES TO FINANCIAL STATEMENTS (Continued)
2. INVESTMENTS (CONTINUED)
Number of Net Asset
Shares Value
--------- ---------
American Century VP Capital Appreciation Fund ........ 10,605 $14.84
Calvert Social Balanced Portfolio .................... 32,090 2.17
Fidelity Portfolios:
Equity-Income--"Initial" Class .................... 9,251 25.71
Contrafund--"Initial" Class ....................... 20,030 29.15
Asset Manager--"Initial" Class .................... 11,017 18.67
3. EXPENSES
Administrative Fees and Expenses and Cost of Insurance -- In connection
with its administrative functions, the Company deducts daily charges at an
annual rate of .40% (except for American Century for which the rate charged is
.20% and each Fidelity fund, for which the rate is .30%) from the value of the
net assets of each Fund. Monthly charges equaling the lesser of $2.00 or 1/12 of
1% of account value may also be deducted. The cost of insurance, to compensate
the Company for life insurance coverage provided under the policies, is deducted
monthly and reflected as net transfers in the accompanying financial statements.
Mortality and Expense Risk Fees -- The Company assumes the risk that
insureds may live for a shorter period of time than estimated for purposes of
current or guaranteed cost of insurance rates; for this it deducts a mortality
risk charge daily, at an annual rate of .70%, from the value of the net assets
of each Fund. An expense risk charge, deducted daily, at an annual rate of .15%
from the value of the net assets of each Fund, compensates the Company for the
risk that administrative expenses incurred will be greater than estimated.
4. DIVIDENDS
All dividend distributions are reinvested in additional shares of the
respective funds or portfolios at net asset value. On December 31, 1999 a
dividend distribution was made by the Investment Company to shareholders of
record as of December 30, 1999. Prior thereto, the Investment Company declared
and paid a dividend distribution on September 15, 1999. The combined amount of
these dividends was as follows:
Money Market Fund ............................................. $ 495
All America Fund .............................................. 90,639
Equity Index Fund ............................................. 17,838
Mid-Cap Equity Index Fund ..................................... 84
Bond Fund ..................................................... 2,546
Short-Term Bond Fund .......................................... 274
Mid-Term Bond Fund ............................................ 239
Composite Fund ................................................ 32,089
Aggressive Equity Fund ........................................ 27
On January 27, 1999 and April 28, 1999, dividends were paid by the Scudder
Bond Portfolio. The combined amount of the dividends was $364.
On January 27, 1999 and April 28, 1999, dividends were paid by the Scudder
Capital Growth Portfolio. The combined amount of the dividends was $72,252.
On April 28, 1999, a dividend was paid by the Scudder International
Portfolio. The amount of the dividend was $16,406.
On December 30, 1999, a dividend was paid by the Calvert Social Balanced
Portfolio. The amount of the dividend was $6,639.
On February 5, 1999, a dividend was paid by the Fidelity Equity-Income
Portfolio. The amount of the dividend was $10,795.
On February 5, 1999, a dividend was paid by the Fidelity Contrafund
Portfolio. The amount of the dividend was $15,980.
On February 5, 1999, a dividend was paid by the Fidelity Asset Manager
Portfolio. The amount of the dividend was $11,496.
No dividend was paid by the American Century VP Capital Appreciation Fund
during 1999.
13
<PAGE>
AMERICAN LIFE SEPARATE ACCOUNT NO. 3
NOTES TO FINANCIAL STATEMENTS (Continued)
5. FINANCIAL HIGHLIGHTS
Shown below are financial highlights for a Unit outstanding for the year
ended December 31, 1999 and for each of the previous years, or, if not in
existence a full year, the initial period ended December 31:
<TABLE>
<CAPTION>
Investment Company
---------------------------------------------------------------------------------------
Money Market Fund All America Fund
-------------------------------------- -----------------------------------------------
1999 1998 1997 1996 1995 1999 1998 1997 1996 1995
----- ----- ----- ----- ----- -------- ------- ------- ------- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Unit value, beginning
of year ............................ $2.03 $1.95 $1.87 $1.80 $1.77 $ 8.09 $ 6.76 $ 5.39 $ 4.52 $ 3.36
===== ===== ===== ===== ===== ======== ======= ======= ======= ======
Unit value, end
of year ............................ $2.11 $2.03 $1.95 $1.87 $1.80 $ 10.05 $ 8.09 $ 6.76 $ 5.39 $ 4.52
===== ===== ===== ===== ===== ======== ======= ======= ======= ======
Units outstanding,
end of year ........................ 5,096 3,113 1,755 442 25 120,656 105,770 81,264 39,912 9,813
===== ===== ===== ===== ===== ======== ======= ======= ======= ======
<CAPTION>
Investment Company
-----------------------------------------------------------------------------------------------
Mid-Cap
Equity
Equity Index Fund Index Fund Bond Fund
-------------------------------------------- ---------- ---------------------------------------
1999 1998 1997 1996 1995 1999* 1999 1998 1997 1996 1995
------- -------- ------ ------ ----- ----- ------ ------ ----- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Unit value, beginning
of period/year ............... $ 2.86 $ 2.26 $ 1.72 $ 1.42 $1.25 $1.00 $ 3.17 $ 3.00 $2.75 $2.69 $2.36
======= ======== ====== ====== ===== ===== ====== ====== ===== ===== =====
Unit value, end
of year ...................... $ 3.41 $ 2.86 $ 2.26 $ 1.72 $1.42 $1.11 $ 3.07 3.17 $3.00 $2.75 $2.69
======= ======== ====== ====== ===== ===== ====== ====== ===== ===== =====
Units outstanding,
end of year ..................... 205,553 140,499 71,579 26,794 4,449 9,513 11,766 12,551 7,204 3,239 507
======= ======== ====== ====== ===== ===== ====== ====== ===== ===== =====
<CAPTION>
Investment Company
--------------------------------------------------------------------------------------
Short-Term Bond Fund Mid-Term Bond Fund
----------------------------------------- -----------------------------------------
1999 1998 1997 1996 1995 1999 1998 1997 1996 1995
----- ----- ----- ----- ----- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Unit value, beginning
of year .............................. $1.24 $1.19 $1.14 $1.10 $1.08 $1.32 $1.26 $1.19 $1.16 $1.11
===== ===== ===== ===== ===== ===== ===== ===== ===== =====
Unit value, end
of year .............................. $1.28 $1.24 $1.19 $1.14 $1.10 $1.32 $1.32 $1.26 $1.19 $1.16
===== ===== ===== ===== ===== ===== ===== ===== ===== =====
Units outstanding,
end of year ............................ 2,603 2,422 1,530 908 302 2,919 2,404 1,374 460 28
===== ===== ===== ===== ===== ===== ===== ===== ===== =====
<CAPTION>
Investment Company
-------------------------------------------------------------------------------------------
Composite Fund Aggressive Equity Fund
------------------------------------------ ----------------------------------------------
1999 1998 1997 1996 1995 1999 1998 1997 1996 1995
------ ------- ------ ------ ----- ------- ------- ------- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Unit value, beginning
of year ........................ $ 4.93 $ 4.36 $ 3.75 $ 3.39 $3.14 $ 2.02 $ 2.15 $ 1.80 $ 1.43 $ 1.05
====== ======= ====== ====== ===== ======= ======= ======= ====== =======
Unit value, end
of year ........................... $ 5.61 $ 4.93 $ 4.36 $ 3.75 $3.39 $ 2.85 $ 2.02 $ 2.15 $ 1.80 $ 1.43
====== ======= ====== ====== ===== ======= ======= ======= ====== =======
Units outstanding,
end of year .................... 82,918 101,886 79,417 27,055 2,688 174,367 147,405 103,218 46,985 12,411
====== ======= ====== ====== ===== ======= ======= ======= ====== =======
</TABLE>
- ----------
* Commenced operations May 3, 1999.
14
<PAGE>
AMERICAN LIFE SEPARATE ACCOUNT NO. 3
NOTES TO FINANCIAL STATEMENTS (Continued)
5. FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
Scudder
---------------------------------------------------------------------------------------
Bond Fund Capital Growth Fund
------------------------------------------ ------------------------------------------
1999 1998 1997 1996 1995 1999 1998 1997 1996 1995
------ ------ ------ ------- ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Unit value, beginning
of year ............................ $13.02 $12.37 $11.48 $11.30 $10.68 $36.07 $29.64 $22.11 $18.64 $14.67
====== ====== ====== ====== ====== ====== ====== ====== ====== ======
Unit value, end
of year ............................ $12.73 $13.02 $12.37 $11.48 $11.30 $48.17 $36.07 $29.64 $22.11 $18.64
====== ====== ====== ====== ====== ====== ====== ====== ====== ======
Units outstanding,
end of year ........................... 623 534 340 120 35 20,809 17,547 970 5,067 2,011
====== ====== ====== ====== ====== ====== ====== ====== ====== ======
<CAPTION>
Scudder
-----------------------------------------------------------------------
International Fund
-----------------------------------------------------------------------
1999 1998 1997 1996 1995
-------- ------- ------- ------- ------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of year ..................... $ 16.93 $ 14.46 $ 13.43 $ 11.85 $10.80
======== ======= ======= ======= ======
Unit value, end of year ........................... $ 25.83 $ 16.93 $ 14.46 $ 13.43 $11.85
======== ======= ======= ======= ======
Units outstanding, end of year .................... 11,828 9,321 7,377 5,193 715
======== ======= ======= ======= ======
<CAPTION>
American Century Calvert
------------------------------------------ ----------------------------------------
VP Capital Appreciation Fund Social Balanced Fund
------------------------------------------ ----------------------------------------
1999 1998 1997 1996 1995 1999 1998 1997 1996 1995
------ ------ ------ ------ ------ ------ ------- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Unit value, beginning
of year ............................... $10.69 $11.04 $11.53 $12.18 $11.14 $ 3.04 $ 2.65 $2.23 $2.01 $1.89
====== ====== ====== ====== ====== ====== ======= ===== ===== =====
Unit value, end
of year ............................... $17.40 $10.69 $11.04 $11.53 $12.18 $ 3.37 $ 3.04 $2.65 $2.23 $2.01
====== ====== ====== ====== ====== ====== ======= ===== ===== =====
Units outstanding,
end of year ........................... 9,062 8,874 7,282 5,921 4,409 20,588 15,253 9,760 2,364 115
====== ====== ====== ====== ====== ====== ======= ===== ===== =====
<CAPTION>
Fidelity
-----------------------------------------------------------------------------------------
VIP Equity-Income Fund VIP II Contra Fund
------------------------------------------ --------------------------------------------
1999 1998 1997 1996 1995* 1999 1998 1997 1996 1995*
------ ------ ------ ------ ------ ------ ------- ------- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Unit value, beginning
of year/period ..................... $30.65 $27.77 $21.93 $19.43 $17.68 $26.16 $ 20.36 $ 16.59 $13.85 $12.41
====== ====== ====== ====== ====== ====== ======= ======= ====== ======
Unit value, end
of year ............................ $32.21 $30.65 $27.77 $21.93 $19.43 $32.13 $ 26.16 $ 20.36 $16.59 $13.85
====== ====== ====== ====== ====== ====== ======= ======= ====== ======
Units outstanding,
end of year ........................ 7,417 7,236 5,533 2,393 449 18,296 14,417 11,560 6,672 756
====== ====== ====== ====== ====== ====== ======= ======= ====== ======
<CAPTION>
Fidelity
------------------------------------------------------------------
VIP II Asset Manager Fund
------------------------------------------------------------------
1999 1998 1997 1996 1995*
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Unit value, beginning of year/period ................. $24.04 $21.14 $17.72 $15.66 $14.87
====== ====== ====== ====== ======
Unit value, end of year .............................. $26.40 $24.04 $21.14 $17.72 $15.66
====== ====== ====== ====== ======
Units outstanding, end of year ....................... 7,732 6,297 4,742 2,639 1,178
====== ====== ====== ====== ======
</TABLE>
- ----------
* Commenced operations May 1, 1995.
15
<PAGE>
AMERICAN LIFE SEPARATE ACCOUNT NO. 3
NOTES TO FINANCIAL STATEMENTS (Continued)
6. SUBSEQUENT EVENT
In September 1999, Mutual of America Life Insurance Company ("Mutual of
America"), submitted to the New York Insurance Department a Plan of
Reorganization whereby Mutual of America would prepare for the sale of its
wholly-owned subsidiary, The American Life Insurance Company of New York ("the
Company"). In preparation for such sale, Mutual of America would assume, subject
to approval from the Company's policyowners, the Company's in force business.
Upon obtaining approval from the policyowners, Mutual of America will assume the
Company's outstanding Variable Universal Life policies ("Policies") pursuant to
the assumption reinsurance agreement. Upon transfer of these Policies, Mutual of
America will replace the Company as the issuer of the Policies. Commensurate
with the transfer, all of the assets and obligations of the variable portion of
these Policies will be transferred to Mutual of America's Separate Account No.
3.
16
<PAGE>
Report of Independent Public Accountants
To The American Life Insurance Company of New York:
We have audited the accompanying statement of assets and liabilities of
American Life Separate Account No. 3 as of December 31, 1999, and the related
statement of operations for the year then ended, the statements of changes in
net assets for each of the two years in the period then ended, and the financial
highlights for each of the five years in the period then ended. These financial
statements and financial highlights are the responsibility of the Separate
Account's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights. 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 and financial highlights referred
to above present fairly, in all material respects, the financial position of
American Life Separate Account No. 3 as of December 31, 1999, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended, and the financial highlights for each of
the five years in the period then ended, in conformity with generally accepted
accounting principles.
Arthur Andersen LLP
New York, New York
February 21, 2000
17
<PAGE>
THE AMERICAN LIFE
INSURANCE COMPANY OF NEW YORK
A SUBSIDIARY OF MUTUAL OF AMERICA LIFE INSURANCE COMPANY
MUTUAL OF AMERICA LIFE INSURANCE COMPANY IS A REGISTERED
BROKER-DEALER AND DISTRIBUTES THE VARIABLE PRODUCTS OF
THE AMERICAN LIFE INSURANCE COMPANY OF NEW YORK
320 PARK AVENUE
NEW YORK, NY 10022-6839
212-224-1700
www.mutualofamerica.com
