-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Lsg26DN8BR7aAKslIp+YLlgpUC9OAtDNAXV5k2IlYBcK9xBF9MZ74l9JIM16106+ UuWZZKVO9PWdpj1fRt4ojg== 0000839759-95-000011.txt : 19951119 0000839759-95-000011.hdr.sgml : 19951119 ACCESSION NUMBER: 0000839759-95-000011 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951114 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ALLSTATE LIFE INSURANCE CO OF NEW YORK CENTRAL INDEX KEY: 0000839759 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 362608394 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 033-47245 FILM NUMBER: 95592033 BUSINESS ADDRESS: STREET 1: ONE ALLSTATE DR STREET 2: PO BOX 9095 CITY: FARMINGVILLE STATE: NY ZIP: 11738 BUSINESS PHONE: 5164515300 MAIL ADDRESS: STREET 1: ONE ALLSTATE DR STREET 2: PO BOX 9095 CITY: FARMINGVILLE STATE: NY ZIP: 11738 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) _X_ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 1995 OR ___ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED] Commission file number 33-47245 Allstate Life Insurance Company of New York (Exact name of Registrant as specified in its charter) New York 36-2608394 (State or Other Jurisdiction,(IRS Employer Identification No.) Incorporation or Organization) One Allstate Drive P.O. Box 9095 Farmingville, New York 11738 _______________________________________________________ (Address of Principal Executive Offices) (Zip Code) 516.451.5300 (Registrant's Telephone Number, including Area Code) Securities registered pursuant to Section 12(b) of the Act: NONE Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES _X_ NO ___ State the aggregate market value of the voting stock held by non- affiliates of the registrant: NONE Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of September 30, 1995: Common stock, par value of $25 per share: 80,000 shares outstanding. Allstate Life Insurance Company of New York (Registrant) INDEX Page Cover Page Index PART I - Financial Information Item 1. Financial Statements Statements of Financial Position September 30, 1995 (Unaudited) and December 31, 1994 1 Statements of Income (Unaudited) Periods Ended September 30, 1995 and September 30, 1994 2 Statements of Cash Flows (Unaudited) Periods Ended September 30, 1995 and September 30, 1994 3 Notes to Financial Statements 4 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 5 PART II - Other Information Item 1. Legal Proceedings 8 Item 2. Change in Securities 8 Item 3. Defaults Upon Senior Securities 8 Item 4. Submission of Matters to a Vote of Security Holders 8 Item 5. Other Information 8 Item 6. Exhibits and Reports on Form 8-K 8 Signature Page ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK STATEMENTS OF FINANCIAL POSITION September 30, December 31, ($ in thousands) 1995 1994 (Unaudited) Assets Investments Fixed income securities: Available for sale, at fair value (amortized cost $1,165,988 and $468,518) $1,286,013 $ 457,018 Held to maturity, at amortized cost (fair value $0 and $583,000) 601,359 Mortgage loans 83,372 86,435 Policy loans 22,102 20,500 Real estate 16 Short-term 27,826 7,212 Total investments 1,419,329 1,172,524 Deferred policy acquisition costs 53,166 50,699 Accrued investment income 16,810 16,518 Reinsurance recoverable 9,524 10,365 Deferred income taxes 17,443 Cash 519 1,763 Other assets 8,816 4,763 Separate Accounts 208,430 175,918 Total assets $1,716,594 $1,449,993 Liabilities Reserve for life insurance policy benefits $ 755,735 626,316 Contractholder funds 488,911 483,812 Deferred income taxes 13,434 Other liabilities and accrued expenses 13,184 13,304 Net payable to affiliates 7,599 1,402 Separate Accounts 208,430 175,918 Total liabilities 1,487,293 1,300,752 Shareholder equity Common stock, $25 par, 80,000 shares authorized, issued and outstanding 2,000 2,000 Additional capital paid-in 45,787 45,787 Unrealized net capital gains (losses) 59,890 (6,891) Retained income 121,624 108,345 Total shareholder equity 229,301 149,241 Total liabilities and shareholder equity $1,716,594 $1,449,993 See notes to financial statements. ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK STATEMENTS OF INCOME Three Months Ended Nine Months Ended September 30 September 30 ($ in thousands) 1995 1994 1995 1994 (Unaudited) (Unaudited) Revenues Premium income $23,519 $ 20,038 $100,126 $ 62,223 Contract charges 5,676 4,534 15,514 13,799 Investment income, less investment expense 26,622 24,404 77,304 72,366 Realized capital gains and losses 324 (679) (1,809) 518 56,141 48,297 191,135 148,906 Costs and expenses Provision for policy benefits 43,061 35,464 152,832 110,108 Policy acquisition costs and operating expenses 6,099 5,138 18,276 16,767 49,160 40,602 171,108 126,875 Income before income taxes 6,981 7,695 20,027 22,031 Income tax expense 2,397 2,581 6,748 7,495 Net income $ 4,584 $ 5,114 $ 13,279 $ 14,536 See notes to financial statements. ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK STATEMENTS OF CASH FLOW Nine Months Ended September 30 ($ in thousands) 1995 1994 (Unaudited) Cash flows from operating activities: Net income $ 13,279 $ 14,536 Adjustments to reconcile net income to net cash provided by operating activities: Realized capital losses (gains) 1,809 (518) Depreciation, amortization and other noncash items (16,430) (13,912) Increase in reserve for policy benefits and contractholder funds 115,692 74,652 Increase in deferred policy acquisition costs (4,429) (3,749) (Increase) decrease in accrued investment income (456) 973 Change in deferred income taxes (5,078) (1,714) Changes in other operating assets and liabilities 2,799 (24,397) Net cash from operating activities 107,186 45,871 Cash flows from investing activities: Proceeds from sales Fixed income securities available for sale 13,526 23,820 Investment collections Fixed income securities available for sale 20,919 56,320 Fixed income securities held to maturity 3,067 6,367 Mortgage loans 2,890 8,790 Investment purchases Fixed income securities available for sale (84,910) (100,154) Fixed income securities held to maturity (32,046) (41,251) Mortgage loans (3,074) (10,119) Net change in short-term investments (20,614) 41,457 Change in other investments (215) (1,394) Net cash from investing activities (100,457) (16,164) Cash flows from financing activities: Payments received under investment contracts 32,871 24,522 Interest credited to investment contracts 14,659 14,431 Payments on maturity of investment contracts and other charges (55,503) (61,664) Net cash from financing activities (7,973) (22,711) Net (decrease) increase in cash (1,244) 6,996 Cash at beginning of period 1,763 2,457 Cash at end of period $ 519 $ 9,453 See notes to financial statements. ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK NOTES TO FINANCIAL STATEMENTS 1. Financial Statements The Statement of Financial Position as of September 30, 1995, the Statements of Income for the three-month and nine-month periods ended September 30, 1995 and 1994, and the Statements of Cash Flow for the nine - -month periods then ended are unaudited. The interim financial statements reflect all adjustments (consisting only of normal recurring accruals) which are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented. The financial statements should be read in conjunction with the financial statements and notes thereto included in the Allstate Life Insurance Company of New York 1994 Financial Statements. The results of operations for the interim periods should not be considered indicative of results to be expected for the full year. Certain reclassifications have been made to the prior year financial statements to conform to the presentation for the current year. 2. Investments SFAS No. 115 "Accounting for Certain Investments in Debt and Equity Securities", requires the Company to classify its fixed income securities based on the Company's intent with respect to the eventual disposition of the securities. Fixed income securities which may be sold prior to their contractual maturity ("available for sale") are carried at fair value. Fixed income securities which the Company has both the ability and positive intent to hold to maturity ("held to maturity") are carried at amortized cost. During the third quarter of 1995, the Company transferred its held to maturity portfolio, with an amortized cost of $644.0 million at September 30, 1995, to the available for sale portfolio. The fair value of these securities as of September 30, 1995 was $726.8 million, resulting in an increase to shareholders' equity of $36.1 million, after adjustment for deferred income taxes, deferred policy acquisition costs and reserves for life insurance policy benefits. While the Company's investment philosophy has not changed, management chose to transfer these securities to available for sale to maximize the Company's flexibility in responding to changes in market conditions. 3. Accounting Change The Company adopted Statement of Financial Accounting Standards ("SFAS") No. 114, "Accounting by Creditors for Impairment of a Loan" and SFAS No. 118, "Accounting by Creditors for Impairment of a Loan-Income Recognition and Disclosure" on January 1, 1995. SFAS No. 114 defines impaired loans as loans in which it is probable that a creditor will be unable to collect all amounts contractually due under the terms of the loan agreement and requires that impairment be measured based on the present value of expected future cash flows discounted at the loan's effective interest rate. SFAS No. 118 amends SFAS No. 114 to allow a creditor to use existing methods for recognizing interest income on impaired loans. The adoption of these statements did not have a material impact on results of operations or financial position. Allstate Life Insurance Company of New York Management's Discussion and Analysis of Financial Condition and Results of Operations Three- and Nine-Month Periods Ended September 30, 1995 General Allstate Life Insurance Company of New York ("the Company") is a wholly owned subsidiary of Allstate Life Insurance Company ("Allstate Life"). Allstate Life is wholly-owned by Allstate Insurance Company ("Allstate"), a wholly-owned subsidiary of The Allstate Corporation ("the Corporation"). Sears, Roebuck and Co. distributed its 80.3% ownership in the Corporation on June 30, 1995 to Sears common shareholders through a tax-free dividend. As a result of the distribution, Sears no longer has an ownership interest in the Corporation. The Company markets insurance products through the established agency facilities of Allstate and through direct marketing. It also markets annuity products through Dean Witter Reynolds, Inc. account executives. Results of Operations Statutory premiums, which include premiums and deposits received for all products, increased $9.9 million or 27.4% for the third quarter of 1995 to $46.0 million from $36.1 million for the same period in 1994. The increase was primarily related to higher sales of structured settlement products. For the first nine months of 1995, statutory premiums increased to $164.7 million from $128.6 million in the prior year. The increase was primarily attributable to higher sales of structured settlement products, partially offset by lower sales of flexible premium deferred variable annuity contracts. Premium income and contract charges, which under generally accepted accounting principles are significantly influenced by the type of products sold, were $29.2 million for the third quarter and $115.6 million for the first nine months, compared to $24.6 million and $76.0 million for the same periods in 1994. The increases were primarily related to the level of structured settlements sold with life contingencies. Pre-tax net investment income in the third quarter of 1995 increased 9.0% to $26.6 million, compared to $24.4 million for the same period in 1994. For the first nine months of 1995 pre-tax net investment increased 6.8% to $77.3 million, compared to $72.4 million for the same period in 1994. The increases were primarily related to the 10.1% growth in invested assets, calculated based on amortized cost, as compared to September 30, 1994. In the third quarter, the Company experienced after-tax capital gains of $211 thousand compared with after-tax capital losses of $441 thousand in 1994. After-tax net capital losses through September 30, 1995 were $1.2 million as compared with after-tax capital gains of $337 thousand over the nine-month period in 1994. The losses were primarily due to writedowns of commercial mortgages, partially offset by gains on disposition of fixed income securities and sale of a real estate property acquired through foreclosure. Fluctuations in realized capital gains and losses are largely a function of management's view of individual investments and overall market conditions. The provision for policy benefits, which under generally accepted accounting principles is also significantly influenced by the type of products sold, increased $7.6 million to $43.1 million for the third quarter compared to $35.5 million for the same period in 1994. For the first nine months of 1995, the provision for policy benefits increased $42.7 million to $152.8 million compared to $110.1 million for the same period in 1994. The increases were primarily related to the level of structured settlements sold with life contingencies. Net income decreased $.5 million in the third quarter of 1995 to $4.6 million from $5.1 million in 1994. For the first nine months of 1995, net income decreased $1.2 million to $13.3 million from $14.5 million for the same period in 1994. The decreases were primarily due to higher commercial mortgage loan losses and lower mortality margins. Liquidity and Capital Resources The Company's investment policy places an emphasis on the matching of assets with related liabilities while also maintaining liquidity. To achieve an economic balance between assets and liabilities, the investment portfolios are segmented by type of insurance product. This strategy places over 90% of the Company's portfolio in fixed income securities, which includes publicly traded bonds, mortgage-backed securities and mortgage loans to support the investment-oriented product lines. The mortgage- backed securities are primarily government agency-backed securities. The Company also invests in privately placed bonds which have comparable investment quality as public securities but offer higher yields. During the third quarter of 1995, the Company transferred its held to maturity portfolio, with an amortized cost of $644.0 million at September 30, 1995, to the available for sale portfolio. The fair value of these securities as of September 30, 1995 was $726.8 million, resulting in an increase to shareholders' equity of $36.1 million, after adjustment for deferred income taxes, deferred policy acquisition costs and reserves for life insurance policy benefits. While the Company's investment philosophy has not changed, management chose to transfer these securities to available for sale to maximize the Company's flexibility in responding to changes in market conditions. Problem fixed income investments include securities in default with respect to principal and/or interest. Restructured fixed income securities have modified terms and conditions that were not at current market rates or terms at the time of the restructuring. Potential problem fixed income investments are current with respect to contractual principal and/or interest, but because of other facts and circumstances, management has serious doubts regarding the borrower's ability to pay future interest and principal or which causes management to believe these securities may be classified as problem in the future. There were no problem and potential problem fixed income investments as of September 30, 1995, compared to $7.0 million of potential problem fixed income securities at December 31, 1994. The $7.0 million of potential problem fixed income securities at December 31, 1994 was related to a single security which has been removed from the potential problem category due to its improved status. The Company defines problem commercial mortgage loans as loans that are in foreclosure, have a principal or interest payment over 60 days past due, or are current but considered in-substance foreclosed. Restructured commercial loans have modified terms and conditions that were not at prevailing market rates or terms at the time of the restructuring. Potential problem commercial mortgage loans are current or less than 60 days delinquent as to contractual principal and interest payments, but because of other facts and circumstances, management has serious doubts regarding the borrower's ability to pay future interest and principal or management believes these loans may be classified as problem or restructured in the future. At September 30, 1995 and December 31, 1994 total problem, restructured and potential problem loans, net of reserves, were $9.4 million and $8.4 million, respectively. The majority of the Company's liabilities consist of contractholder funds and reserves for life insurance policy benefits. These reserves increased 12.1% from December 31, 1994 to September 30, 1995 primarily as a result of sales of universal life, structured settlements, and traditional life insurance products. In addition, Separate Account balances increased 18.5% in the period due to sales of flexible premium deferred variable annuity contracts, transfers from fixed annuities to variable annuities, and favorable investment performance of the Separate Account funds. Pending Accounting Standards In March 1995, the Financial Accounting Standards Board issued SFAS No. 121 "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of". The statement requires that long-lived assets and certain identifiable intangibles to be held and used by an entity be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The statement requires that impairment loss be measured for those assets as the amount by which the carrying amount of the asset exceeds the asset's fair value. This statement will be adopted in 1996 and is not expected to have a material impact on results of operations or financial position. In October 1995, the FASB issued SFAS No. 123 "Accounting for Stock-Based Compensation" which encourages entities to adopt a fair value based method of accounting for compensation cost of employee stock compensation plans. The statement allows an entity to continue the application of accounting prescribed by APB Opinion No. 25, "Accounting for Stock Issued to Employees", however pro forma disclosures of net income and earnings per share, as if the fair value based method of accounting defined by this statement had been applied, are required. The disclosure requirements of this statement will be adopted in 1996. Results of operations and financial position will not be affected by the adoption of this statement. PART II Item 1. Legal Proceedings Allstate Life of New York is not involved in any litigation that is expected to have a material effect. Item 2. Changes in Securities Not applicable. Item 3. Defaults Upon Senior Securities Not applicable. Item 4. Submission of Matters to a Vote of Securities Holders Not applicable. Item 5. Other Information Not applicable. Item 6. Exhibits, Financial Statements and Reports on Form 8-K (a) (1) and (2) Financial Statements of registrant are listed on pages hereof and are filed as part of this Report. (a) (3) Exhibits Regulation S-K 2. Not applicable. 4. Exhibits Allstate Life Insurance Company of New York Flexible Premium Deferred Annuity Contract, incorporated by reference to Registrant's Form S-1 Registration Statement, Registration No.33-47245, filed November 13, 1992. 11. Not applicable. 15. Not applicable. 16. Not applicable. 18. None. 19. Not applicable. 20. Not applicable. 23. None. 24. Not applicable. 25. Not applicable. 27. Financial Data Schedule 28. None. (b) Reports on 8-K No reports on Form 8-K were filed during the second quarter of 1995. EX-27 2
7 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE ALLSTATE LIFE OF NEW YORK STMTS OF FIN'L POSITION, PERIODS ENDED 9/30/95 & 12/31/94; STMTS OF INCOME, PERIODS ENDED 9/30/95&94; STMTS OF CASH FLOWS, PERIODS ENDED 9/30/95&94; NOTES THERETO; AND MGMT'S DISC. AND ANAL. OF FIN'L CONDITION AND RESULTS OF OP'S AND IS QUALIFIED IN ITS ENTIRETY BY REFER. TO SUCH FIN'L STMTS. 1,000 U.S. DOLLARS 9-MOS YEAR DEC-31-1994 DEC-31-1994 SEP-30-1995 DEC-31-1994 1 1 1,286,013 457,018 0 601,359 0 583,000 0 0 83,372 86,435 16 0 1,419,329 1,172,524 519 1,763 9,524 10,365 53,166 50,699 1,716,594 1,449,993 755,735 626,316 0 0 0 0 488,911 483,812 0 0 2,000 2,000 0 0 0 0 227,301 147,241 1,716,594 1,449,993 115,640 88,560 77,304 96,911 (1,809) 778 0 0 152,832 137,434 18,276 20,205 0 0 20,027 27,400 6,748 9,179 13,279 18,221 0 0 0 0 0 0 13,279 18,221 165.99 227.76 165.99 227.76 3,527 3,624 7,790 10,414 0 0 6,818 10,511 0 0 4,499 3,527 0 0
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