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1998 ANNUAL REPORT
T. ROWE PRICE VARIABLE ANNUITY
ISSUED BY
FIRST SECURITY BENEFIT LIFE INSURANCE
AND ANNUITY COMPANY OF NEW YORK
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T. Rowe Price Variable Annuity Account
of First Security Benefit Life Insurance
and Annuity Company of New York
Financial Statements
Year ended December 31, 1998
CONTENTS
Report of Independent Auditors.................................................2
Audited Financial Statements
Balance Sheet................................................................3
Statements of Operations and Changes in Net Assets...........................4
Notes to Financial Statements..................................................5
The T. Rowe Price No-Load Variable Annuity is issued by First Security Benefit
Life Insurance and Annuity Company of New York, White Plains, NY (policy number
FSB201 11/96). FSBL and the T. Rowe Price companies are not affiliated.
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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 Account) (comprised of the individual series as indicated therein) as of
December 31, 1998, and the related statement of operations and changes in net
assets for the year then ended. These financial statements are the
responsibility of the Account's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
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 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, 1998, by correspondence
with the transfer agent. 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 the individual series of T.
Rowe Price Variable Annuity Account of First Security Benefit Life Insurance and
Annuity Company of New York at December 31, 1998, and the results its operations
and changes in its net assets for the year then ended in conformity with
generally accepted accounting principles.
Ernst & Young LLP
February 5, 1999
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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, 1998 (DOLLARS IN THOUSANDS - EXCEPT PER SHARE AND UNIT VALUES)
ASSETS
Investments:
T. Rowe Price Portfolios:
New America Growth Portfolio - 172,709 shares at net asset
value of $24.74 per share (cost, $3,371) ...................... $ 4,273
International Stock Portfolio - 131,338 shares at net asset
value of $14.52 per share (cost, $1,725) ...................... 1,907
Equity Income Portfolio - 362,391 shares at net asset value
of $19.24 per share (cost, $6,278) ............................ 6,972
Personal Strategy Balanced Portfolio - 105,605 shares at net
asset value of $16.16 per share (cost, $1,569) ................ 1,707
Limited-Term Bond Portfolio - 102,684 shares at net asset
value of $5.02 per share (cost, $511) ......................... 515
Mid-Cap Growth Portfolio - 156,109 shares at net asset value
of $14.27 per share (cost, $1,870) ............................ 2,228
Prime Reserve Portfolio - 1,092,990 shares at net asset
value of $1.00 per share (cost, $1,093) ....................... 1,093
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Total assets ......................................................... $18,695
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NET ASSETS
Net assets are represented by (NOTE 3):
NUMBER UNIT
OF UNITS VALUE AMOUNT
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New America Growth Subaccount:
Accumulation units ................. 188,096 $22.72 $ 4,273
International Stock Subaccount:
Accumulation units ................. 126,224 15.08 $ 1,903
Annuity reserves ................... 236 15.08 4 1,907
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Equity Income Subaccount:
Accumulation units ................. 341,036 20.42 6,964
Annuity reserves ................... 413 20.42 8 6,972
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Personal Strategy Balanced Subaccount:
Accumulation units ................. 94,177 18.04 1,699
Annuity reserves ................... 447 18.04 8 1,707
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Limited-Term Bond Subaccount:
Accumulation units ................. 40,576 12.37 502
Annuity reserves ................... 1,089 12.37 13 515
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Mid-Cap Growth Subaccount:
Accumulation units ................. 155,295 14.34 2,228
Prime Reserve Subaccount:
Accumulation units ................. 99,654 10.97 1,093
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Total net assets ..................................................... $18,695
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See accompanying notes.
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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, 1998 (IN THOUSANDS)
<TABLE>
<CAPTION>
PERSONAL
NEW AMERICA INTERNATIONAL EQUITY STRATEGY LIMITED- MID-CAP PRIME
GROWTH STOCK INCOME BALANCED TERM BOND GROWTH RESERVE
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
-------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Dividend distributions ......... $ - $ 22 $ 134 $ 48 $ 27 $ - $ 52
Expenses (NOTE 2):
Mortality and expense risk fee (21) (10) (36) (9) (3) (9) (6)
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Net investment income (loss) ... (21) 12 98 39 24 (9) 46
Capital gain distributions ..... 85 7 213 61 2 32 -
Realized gain on investments ... 200 63 379 68 3 65 -
Unrealized appreciation
(depreciation) on investments. 347 167 (167) 24 2 238 -
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Net realized and unrealized
gain on investments .......... 632 237 425 153 7 335 -
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Net increase in net assets
resulting from operations .... 611 249 523 192 31 326 46
Net assets at beginning of year 3,296 1,620 6,053 1,218 500 1,077 790
Variable annuity deposits
(NOTES 2 AND 3) .............. 1,057 471 1,652 581 206 1,058 2,018
Terminations and withdrawals
(NOTES 2 AND 3) .............. (691) (432) (1,255) (284) (220) (233) (1,761)
Annuity payments (NOTES 2 AND 3) - (1) (1) - (2) - -
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Net assets at end of year ...... $4,273 $1,907 $6,972 $1,707 $515 $2,228 $1,093
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</TABLE>
See accompanying notes.
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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, 1998
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 seven
subaccounts. Each subaccount invests exclusively in shares of a single
corresponding mutual fund or series thereof. 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, Limited-Term Bond Portfolio - emphasis
on income with moderate price fluctuation by investing in short- and
intermediate-term investment-grade debt securities, Mid-Cap Growth Portfolio -
emphasis on long-term capital appreciation through investments in common stocks
of medium-sized growth companies, and Prime Reserve Portfolio - emphasis on
preservation of capital and liquidity while generating current income by
investing primarily in high-quality money market securities.
T. Rowe Price Associates, Inc. (T. Rowe Price) serves as the investment
adviser 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 advisers are responsible for managing the portfolios'
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 were as
follows:
COST OF PROCEEDS
PURCHASES FROM SALES
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(IN THOUSANDS)
New America Growth Portfolio .......... $1,184 $ 754
International Stock Portfolio ......... 540 483
Equity Income Portfolio ............... 2,107 1,400
Personal Strategy Balanced Portfolio .. 738 341
Limited-Term Bond Portfolio ........... 279 269
Mid-Cap Growth Portfolio .............. 1,112 264
Prime Reserve Portfolio ............... 2,072 1,769
ANNUITY RESERVES
Annuity reserves relate to contracts that have matured and are in the payout
stage. Such reserves are 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
The operations of the Account are a part of the operations of FSBL. Under
current law, no federal income taxes are allocated by FSBL to the operations of
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 0.55% 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
(IN THOUSANDS)
New America Growth Subaccount:
Variable annuity deposits ............................. 51
Terminations, withdrawals and annuity payments ........ 34
International Stock Subaccount:
Variable annuity deposits ............................. 33
Terminations, withdrawals and annuity payments ........ 31
Equity Income Subaccount:
Variable annuity deposits ............................. 86
Terminations, withdrawals and annuity payments ........ 66
Personal Strategy Balanced Subaccount:
Variable annuity deposits ............................. 36
Terminations, withdrawals and annuity payments ........ 19
Limited-Term Bond Subaccount:
Variable annuity deposits ............................. 17
Terminations, withdrawals and annuity payments ........ 19
Mid-Cap Growth Subaccount:
Variable annuity deposits ............................. 82
Terminations, withdrawals and annuity payments ........ 18
Prime Reserve Subaccount:
Variable annuity deposits ............................. 188
Terminations, withdrawals and annuity payments ........ 164
