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1999 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, 1999
CONTENTS
Report of Independent Auditors .............................................. 2
Audited Financial Statements
Balance Sheets ............................................................ 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
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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 individual and combined balance sheets of T.
Rowe Price Variable Annuity Account of First Security Benefit Life Insurance and
Annuity Company of New York (comprised of the individual series as indicated
therein) as of December 31, 1999, and the related statements of operations and
changes in net assets for the year then ended. These financial statements are
the responsibility of First Security Benefit Life Insurance and Annuity Company
of New York's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. 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, 1999,
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 individual and combined 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, 1999, and
the individual and combined results of their operations and changes in their net
assets for the year then ended in conformity with accounting principles
generally accepted in the United States.
Ernst & Young LLP
February 4, 2000
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BALANCE SHEETS
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T. Rowe Price Variable Annuity Account of First Security Benefit Life Insurance
and Annuity Company of New York
December 31, 1999 (DOLLARS IN THOUSANDS - EXCEPT PER SHARE AND UNIT VALUES)
ASSETS
Investments:
T. Rowe Price Portfolios:
New America Growth Portfolio - 167,990 shares at net
asset value of $26.18 per share (cost, $3,597).................. $ 4,398
International Stock Portfolio - 133,205 shares at net
asset value of $19.04 per share (cost, $1,840).................. 2,536
Equity Income Portfolio - 346,304 shares at net asset
value of $18.73 per share (cost, $6,318)........................ 6,486
Personal Strategy Balanced Portfolio - 108,900 shares
at net asset value of $16.00 per share (cost, $1,668)........... 1,742
Limited-Term Bond Portfolio - 94,651 shares at net
asset value of $4.79 per share (cost, $470)..................... 453
Mid-Cap Growth Portfolio - 189,832 shares at net asset
value of $17.46 per share (cost, $2,546)........................ 3,314
Prime Reserve Portfolio - 1,137,023 shares at net
asset value of $1.00 per share (cost, $1,137)................... 1,137
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Combined assets....................................................... $20,066
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NET ASSETS
Net assets are represented by (NOTE 3):
NUMBER UNIT
OF UNITS VALUE AMOUNT
-------- ----- ------
New America Growth Subaccount:
Accumulation units.................. 172,664 $25.47 $ 4,398
International Stock Subaccount:
Accumulation units.................. 126,636 19.99 $2,532
Annuity reserves.................... 212 19.99 4 2,536
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Equity Income Subaccount:
Accumulation units.................. 307,417 21.07 6,478
Annuity reserves.................... 376 21.07 8 6,486
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Personal Strategy Balanced Subaccount:
Accumulation units.................. 89,204 19.44 1,734
Annuity reserves.................... 404 19.44 8 1,742
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Limited-Term Bond Subaccount:
Accumulation units.................. 35,572 12.39 441
Annuity reserves.................... 959 12.39 12 453
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Mid-Cap Growth Subaccount:
Accumulation units.................. 187,779 17.65 3,314
Prime Reserve Subaccount:
Accumulation units.................. 99,390 11.44 1,137
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Combined net assets...................... $20,066
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See accompanying notes.
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STATEMENTS OF OPERATIONS AND CHANGES IN NET ASSETS
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T. Rowe Price Variable Annuity Account
of First Security Benefit Life Insurance and Annuity Company of New York
Year Ended December 31, 1999 (IN THOUSANDS)
<TABLE>
<CAPTION>
NEW AMERICA INTERNATIONAL EQUITY INCOME PERSONAL STRATEGY
GROWTH SUBACCOUNT STOCK SUBACCOUNT SUBACCOUNT BALANCED SUBACCOUNT
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<S> <C> <C> <C> <C>
Dividend distributions................................. $ --- $ 9 $ 127 $ 52
Expenses (NOTE 2):
Mortality and expense risk fee....................... (23) (11) (38) (10)
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Net investment income (loss)........................... (23) (2) 89 42
Capital gain distributions............................. 252 29 287 102
Realized gain (loss) on investments.................... 346 80 349 50
Unrealized appreciation (depreciation) on investments.. (101) 514 (526) (64)
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Net realized and unrealized gain (loss) on investments. 497 623 110 88
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Net increase in net assets resulting from operations... 474 621 199 130
Net assets at beginning of year........................ 4,273 1,907 6,972 1,707
Variable annuity deposits (NOTES 2 AND 3) ............. 625 340 700 178
Terminations and withdrawals (NOTES 2 AND 3)........... (974) (332) (1,385) (273)
Annuity payments (NOTES 2 AND 3)....................... --- --- --- ---
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Net assets at end of year.............................. $4,398 $2,536 $6,486 $1,742
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<TABLE>
<CAPTION>
LIMITED-TERM MID-CAP GROWTH PRIME RESERVE
BOND SUBACCOUNT SUBACCOUNT SUBACCOUNT COMBINED
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<S> <C> <C> <C> <C>
Dividend distributions................................. $ 27 $ --- $ 53 $ 268
Expenses (NOTE 2):
Mortality and expense risk fee....................... (3) (14) (6) (105)
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Net investment income (loss)........................... 24 (14) 47 163
Capital gain distributions............................. --- 33 --- 703
Realized gain (loss) on investments.................... (3) 165 --- 987
Unrealized appreciation (depreciation) on investments.. (21) 410 --- 212
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Net realized and unrealized gain (loss) on investments. (24) 608 --- 1,902
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Net increase in net assets resulting from operations... --- 594 47 2,065
Net assets at beginning of year........................ 515 2,228 1,093 18,695
Variable annuity deposits (NOTES 2 AND 3) ............. 167 926 490 3,426
Terminations and withdrawals (NOTES 2 AND 3)........... (229) (434) (493) (4,120)
Annuity payments (NOTES 2 AND 3)....................... --- --- --- ---
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Net assets at end of year.............................. $ 453 $3,314 $1,137 $20,066
===========================================================
See accompanying notes.
</TABLE>
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NOTES TO FINANCIAL STATEMENTS
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T. Rowe Price Variable Annuity Account of
First Security Benefit Life Insurance and
Annuity Company of New York
December 31, 1999
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 adviseers 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 during
the year ended December 31 were as follows:
COST OF PROCEEDS
PURCHASES FROM SALES
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(IN THOUSANDS)
New America Growth Portfolio.................. $ 945 $1,065
International Stock Portfolio................. 380 345
Equity Income Portfolio....................... 1,202 1,511
Personal Strategy Balanced Portfolio.......... 346 297
Limited-Term Bond Portfolio................... 196 234
Mid-Cap Growth Portfolio...................... 1,005 494
Prime Reserve Portfolio....................... 543 499
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 accounting
principles generally accepted in the United States 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................................. 26
Terminations, withdrawals and annuity payments............ 42
International Stock Subaccount:
Variable annuity deposits................................. 21
Terminations, withdrawals and annuity payments............ 20
Equity Income Subaccount:
Variable annuity deposits................................. 32
Terminations, withdrawals and annuity payments............ 66
Personal Strategy Balanced Subaccount:
Variable annuity deposits................................. 10
Terminations, withdrawals and annuity payments............ 15
Limited-Term Bond Subaccount:
Variable annuity deposits................................. 13
Terminations, withdrawals and annuity payments............ 18
Mid-Cap Growth Subaccount:
Variable annuity deposits................................. 61
Terminations, withdrawals and annuity payments............ 29
Prime Reserve Subaccount:
Variable annuity deposits................................. 44
Terminations, withdrawals and annuity payments............ 44
