<PAGE>
1996 ANNUAL REPORT
T. ROWE PRICE VARIABLE ANNUITY
ISSUED BY FIRST SECURITY BENEFIT
LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
<PAGE>
T. ROWE PRICE
VARIABLE ANNUITY ACCOUNT
OF FIRST SECURITY
BENEFIT LIFE INSURANCE
AND ANNUITY COMPANY
OF NEW YORK
FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 1996
CONTENTS
Report of Independent Auditors ......................................... 2
Audited Financial statements
Balance Sheet ..................................................... 3
Statement of Operations and Changes in Net Assets ................. 4
Notes to Financial Statements .......................................... 5
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REPORT OF INDEPENDENT AUDITORS
The Contract Owners of T. Rowe Price Variable Annuity
Account of First Security Benefit Life Insurance and
Annuity Company of New York and The Board of
Directors of First Security Benefit Life Insurance and
Annuity Company of New York
We have audited the accompanying balance sheet of T. Rowe Price Variable Annuity
Account of First Security Benefit Life Insurance and Annuity Company of New York
(the Company) as of December 31, 1996, and the related statement of operations
and changes in net assets for the year then ended. These financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audit 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 are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures included
confirmation of investments owned as of December 31, 1996, by correspondence
with the custodian. 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 audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of T. Rowe Price Variable Annuity
Account of First Security Benefit Life Insurance and Annuity Company of New York
at December 31, 1996, and the results of its operations and changes in its net
assets for the year then ended in conformity with generally accepted accounting
principles.
ERNST & YOUNG LLP
February 7, 1997
2
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BALANCE SHEET
T. ROWE PRICE VARIABLE ANNUITY ACCOUNT
OF FIRST SECURITY BENEFIT LIFE INSURANCE
AND ANNUITY COMPANY OF NEW YORK
DECEMBER 31, 1996
(DOLLARS IN THOUSANDS)
ASSETS
Investments:
T. Rowe Price Portfolios:
New America Growth Portfolio - 130,198 shares at net
asset value of $17.67 per share (cost, $2,198) .......... $2,301
International Stock Portfolio - 87,096 shares at net
asset value of $12.64 per share (cost, $1,036) .......... 1,101
Equity Income Portfolio - 174,577 shares at net
asset value of $15.26 per share (cost, $2,483) .......... 2,664
Personal Strategy Balanced Portfolio - 39,911 shares
at net asset value of $13.44 per share (cost, $512) ..... 536
Limited-Term Bond Portfolio - 73,958 shares at net
asset value of $4.93 per share (cost, $366) ............. 365
- --------------------------------------------------------------------------------
Total Assets .................................................. $6,967
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NET ASSETS
Net assets are represented by (NOTE 3):
Number Unit
of Units Value
- --------------------------------------------------------------------------------
New America Growth Subaccount:
Accumulation units .................... 143,768 $16.00 $2,301
International Stock Subaccount:
Accumulation units .................... 86,235 12.77 1,101
Equity Income Subaccount:
Accumulation units .................... 181,250 14.70 2,664
Personal Strategy Balanced Subaccount:
Accumulation units .................... 39,697 13.51 536
Limited-Term Bond Subaccount:
Accumulation units .................... 33,375 10.92 365
- --------------------------------------------------------------------------------
Total net assets ................................................. $6,967
================================================================================
See accompanying notes.
3
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STATEMENT OF OPERATIONS AND CHANGES IN NET ASSETS
T. ROWE PRICE VARIABLE ANNUITY ACCOUNT
OF FIRST SECURITY BENEFIT LIFE INSURANCE
AND ANNUITY COMPANY OF NEW YORK
YEAR ENDED DECEMBER 31, 1996
(THOUSANDS)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
New Inter- Personal Limited-
America national Equity Strategy Term
Growth Stock Income Balanced Bond
Subaccount Subaccount Subaccount Subaccount Subaccount
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Dividend distributions: ........ $ 2 $ 9 $ 45 $ 11 $ 14
Expenses (NOTE 2):
Mortality and expense
risk fee ................... (6) (3) (7) (2) (1)
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Net investment income (loss) ... (4) 6 38 9 13
Capital gains distributions .... 15 5 11 9 -
Realized gain on investments ... 24 7 15 4 -
Unrealized appreciation
(depreciation) on
investments .................. 103 65 181 24 (1)
- ----------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments ... 142 77 207 37 (1)
- ----------------------------------------------------------------------------------------------
Net increase in net assets
resulting from operations .... 138 83 245 46 12
Net assets at beginning
of year ...................... - - - - -
Variable annuity deposits
(NOTES 2 AND 3) .............. 2,318 1,094 2,526 543 834
Terminations and withdrawals
(NOTES 2 AND 3) .............. (155) (76) (107) (53) (481)
- ----------------------------------------------------------------------------------------------
Net assets at end of year ...... $2,301 $1,101 $2,664 $536 $365
==============================================================================================
</TABLE>
See accompanying notes.
4
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NOTES TO FINANCIAL STATEMENTS
T. ROWE PRICE VARIABLE ANNUITY ACCOUNT
OF FIRST SECURITY BENEFIT LIFE INSURANCE
AND ANNUITY COMPANY OF NEW YORK
DECEMBER 31, 1996
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION
T. Rowe Price Variable Annuity Account (the Account) is a separate account of
First Security Benefit Life Insurance and Annuity Company of New York (FSBL).
The Account is registered as a unit investment trust under the Investment
Company Act of 1940, as amended. The Account currently is divided into five
subaccounts. Each subaccount invests exclusively in shares of a single
corresponding mutual fund. Purchase payments received by the Account are
invested in one of the Portfolios of either T. Rowe Price Equity Series, Inc.,
T. Rowe Price Fixed Income Series, Inc. or T. Rowe Price International Series,
Inc., mutual funds not otherwise available to the public. As directed by the
Owners, purchase payments are invested in shares of New America Growth Portfolio
- - emphasis on long-term capital growth through investments in common stocks of
domestic companies, International Stock Portfolio - emphasis on long-term
capital growth through investments in common stocks of established foreign
companies, Equity Income Portfolio - emphasis on substantial dividend income and
capital appreciation by investing primarily in dividend-paying common stocks,
Personal Strategy Balanced Portfolio - emphasis on both capital appreciation and
income, and Limited-Term Bond Portfolio - emphasis on income with moderate price
fluctuation by investing in short- and intermediate-term investment grade debt
securities.
T. Rowe Price Associates, Inc. (T. Rowe Price) serves as the investment advisor
to each Portfolio except the International Stock Portfolio, which is managed by
Rowe Price-Fleming International, Inc., an affiliate of T. Rowe Price. The
investment advisors are responsible for managing the Portfolio's assets in
accordance with the terms of the investment advisory contracts.
INVESTMENT VALUATION
Investments in mutual fund shares are carried in the balance sheet at market
value (net asset value of the underlying mutual fund). The first-in, first-out
cost method is used to determine gains and losses. Security transactions are
accounted for on the trade date.
The cost of investments purchased and proceeds from investments sold during 1996
were as follows:
1996
--------------------------------
COST OF PROCEEDS
PURCHASES FROM SALES
--------------------------------
(IN THOUSANDS)
New America Growth Portfolio $2,498 $324
International Stock Portfolio 1,151 122
Equity Income Portfolio 2,813 345
Personal Strategy Balanced Portfolio 578 70
Limited-Term Bond Portfolio 872 506
5
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NOTES TO FINANCIAL STATEMENTS (Cont.)
T. ROWE PRICE VARIABLE ANNUITY ACCOUNT
OF FIRST SECURITY BENEFIT LIFE INSURANCE
AND ANNUITY COMPANY OF NEW YORK
DECEMBER 31, 1996
ANNUITY RESERVES
As of December 31, 1996, annuity reserves have not been established because
there are no contracts that have matured and are in the payout stage. Such
reserves would be computed on the basis of published mortality tables using
assumed interest rates that will provide reserves as prescribed by law. In cases
where the payout option selected is life contingent, FSBL periodically
recalculates the required annuity reserves, and any resulting adjustment is
either charged or credited to FSBL and not to the Account.
REINVESTMENT OF DIVIDENDS
Dividend and capital gains distributions paid by the mutual fund to the Account
are reinvested in additional shares of each respective Portfolio. Dividend
income and capital gains distributions are recorded as income on the ex-dividend
date.
FEDERAL INCOME TAXES
Under current law, no federal income taxes are payable with respect to the
Account.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.
2. VARIABLE ANNUITY CONTRACT CHARGES
Mortality and expense risks assumed by FSBL are compensated for by a fee
equivalent to an annual rate of .55% of the average daily net assets of each
account.
When applicable, an amount for state premium taxes is deducted as provided by
pertinent state law, either from the purchase payments or from the amount
applied to effect an annuity at the time annuity payments commence.
3. SUMMARY OF UNIT TRANSACTIONS
UNITS
------------------
1996
------------------
(IN THOUSANDS)
New America Growth Subaccount:
Variable annuity deposits 154
Terminations and withdrawals 11
International Stock Subaccount:
Variable annuity deposits 92
Terminations and withdrawals 6
Equity Income Subaccount:
Variable annuity deposits 189
Terminations and withdrawals 8
Personal Strategy Balanced Subaccount:
Variable annuity deposits 44
Terminations and withdrawals 4
Limited-Term Bond Subaccount:
Variable annuity deposits 7
Terminations and withdrawals 44
6
