-----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, NmHzS6DVbXxsHfdhbNOCAKBj4jRplC9Zi3N1Xozq1zm9B7fGyfslc74XQ29/XLzg DI48hbRVegQHAgZHx6JHeA== 0000945094-97-000017.txt : 19970815 0000945094-97-000017.hdr.sgml : 19970815 ACCESSION NUMBER: 0000945094-97-000017 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19970814 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: 97660938 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 ALICNY FORM 10-Q FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 The registrant meets the conditions set forth in General Instruction H(1)(a) and (b) of Form 10-Q and is therefore filing this Form with the reduced disclosure format. [x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended: June 30, 1997 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number: 33-47245 33-65381 ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK (Exact name of registrant as specified in its charter) NEW YORK 36-2608394 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 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) Not Applicable (Former name, former address and former fiscal year, if changed since last report) 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 Indicate the number of shares of each of the issuer's classes of common stock, as of June 30, 1997; there were 80,000 shares of common capital stock outstanding, par value $25 per share all of which shares are held by Allstate Life Insurance Company. PART I - FINANCIAL INFORMATION Item 1. FINANCIAL STATEMENTS Statements of Financial Position June 30, 1997(Unaudited)and December 31, 1996.....................3 Statements of Operations Three Months Ended June 30, 1997 and June 30, 1996 and Six Months Ended June 30, 1997 and June 30, 1996 (Unaudited).......................................................4 Statements of Cash Flows Six Months Ended June 30, 1997 and June 30, 1996 (Unaudited).....................................5 Notes to Financial Statements(Unaudited)..........................6 Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS......................7 Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK.*.................................................N/A PART II - OTHER INFORMATION Item 1. LEGAL PROCEEDINGS..................................................11 Item 2. CHANGES IN SECURITIES*............................................N/A Item 3. DEFAULTS UPON SENIOR SECURITIES*..................................N/A Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS*..............N/A Item 5. OTHER INFORMATION .................................................11 Item 6. EXHIBITS AND REPORTS ON FORM 8-K...................................11 SIGNATURE PAGE...............................................................13 *Omitted pursuant to General Instruction H(2) of Form 10-Q. -2- ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK STATEMENTS OF FINANCIAL POSITION
June 30, December 31, ($ in thousands) 1997 1996 ----------- ------------ (Unaudited) ASSETS Investments Fixed income securities, at fair value (amortized cost $1,459,320 and $1,378,155) $1,569,737 $1,500,783 Mortgage loans 98,781 84,657 Policy loans 26,227 25,359 Short-term 9,079 25,855 ---------- ---------- Total investments 1,703,824 1,636,654 Deferred acquisition costs 65,796 61,559 Accrued investment income 21,528 20,321 Reinsurance recoverables 2,012 2,566 Cash 7,336 1,027 Other assets 6,730 7,489 Separate Accounts 290,425 260,668 ---------- ---------- Total assets $2,097,651 $1,990,284 ========== ========== LIABILITIES Reserve for life-contingent contract benefits $ 951,055 $ 911,457 Contractholder funds 591,422 572,480 Income taxes payable 537 - Deferred income taxes 1,685 3,692 Other liabilities and accrued expenses 15,397 6,405 Net payable to affiliates 5,705 2,515 Separate Accounts 290,425 260,668 ---------- ---------- Total liabilities 1,856,226 1,757,217 ---------- ---------- SHAREHOLDER'S EQUITY Common stock, $25 par value, 80,000 shares authorized, issued and outstanding 2,000 2,000 Additional capital paid-in 45,787 45,787 Unrealized net capital gains 33,649 36,852 Retained income 159,989 148,428 ---------- ---------- Total shareholder's equity 241,425 233,067 ---------- ---------- Total liabilities and shareholder's equity $2,097,651 $1,990,284 ========== ==========
See notes to financial statements. -3- ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK STATEMENTS OF OPERATIONS
Three Months Ended Six Months Ended June 30, June 30, ------------------- ------------------- ($ in thousands) 1997 1996 1997 1996 ---- ---- ---- ---- (Unaudited) REVENUES Life and annuity premiums (net of reinsurance ceded of $759 and $610; $1,450 and $1,194) $ 26,146 $ 21,813 $ 46,807 $ 44,916 Contract charges 7,114 6,604 13,982 12,305 Net investment income 31,042 27,830 61,242 55,424 Realized capital gains and losses (26) 420 (75) 351 -------- -------- --------- -------- 64,276 56,667 121,956 112,996 -------- -------- --------- -------- COSTS AND EXPENSES Provision for policy benefits (net of reinsurance recoverable of $385 and $1,305, $683 and $2,170) 47,899 42,372 89,865 85,389 Amortization of deferred policy acquisition costs 1,849 1,818 3,819 2,965 Operating costs and expenses 5,430 3,941 10,256 8,414 ------- -------- -------- -------- 55,178 48,131 103,940 96,768 ------- -------- -------- -------- INCOME BEFORE INCOME TAX EXPENSE 9,098 8,536 18,016 16,228 INCOME TAX EXPENSE 3,246 3,223 6,455 5,990 ------- ------- -------- ------- NET INCOME $ 5,852 $ 5,313 $ 11,561 $ 10,238 ========= ========= ========== =========
See notes to financial statements. -4- ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK STATEMENTS OF CASH FLOWS
Six Months Ended June 30, -------- 1997 1996 ---- ---- ($ in thousands) (Unaudited) CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 11,561 $ 10,238 Adjustments to reconcile net income to net cash provided by operating activities Realized capital gains and losses 75 (351) Depreciation, amortization and other non-cash items (15,086) (12,571) Interest credited to contractholder funds 16,382 11,326 Increase in reserve for life-contingent contract benefits and contractholder funds 35,476 38,824 Increase in deferred policy acquisition costs (4,153) (3,083) Increase in accrued investment income (1,207) (219) Change in deferred income taxes (283) (3,128) Change in other operating assets and liabilities 14,100 75 --------- --------- Net cash provided by operating activities 56,865 41,111 --------- --------- CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from sales of fixed income securities 11,455 - Investment collections Fixed income securities 61,096 38,404 Mortgage loans 1,204 3,360 Investment purchases Fixed income securities (139,472) (65,089) Mortgage loans (15,500) - Change in short-term investments, net 16,776 (24,195) Change in policy loans, net (868) (1,135) --------- --------- Net cash used in investing activities (65,309) (48,655) --------- --------- CASH FLOWS FROM FINANCING ACTIVITIES Contractholder fund deposits 39,434 31,615 Contractholder fund withdrawals (24,681) (23,586) --------- -------- Net cash provided by financing activities 14,753 8,029 --------- -------- NET INCREASE IN CASH 6,309 485 CASH AT BEGINNING OF PERIOD 1,027 1,472 --------- --------- CASH AT END OF PERIOD $ 7,336 $ 1,957 ========= ========= See notes to financial statements.
-5- ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK NOTES TO FINANCIAL STATEMENTS (Unaudited) 1. Basis of Presentation Allstate Life Insurance Company of New York (the "Company") is wholly owned by a wholly owned subsidiary of Allstate Insurance Company, a wholly owned subsidiary of The Allstate Corporation. The statements of financial position as of June 30, 1997, the statements of operations for the three-month and six-month periods ended June 30, 1997 and 1996, and the statements of cash flows for the six-month periods ended June 30, 1997 and 1996 are unaudited. The interim financial statements reflect all adjustments (consisting only of normal recurring accruals) which are, in the opinion of management, necessary for the fair presentation of the financial position, results of operations and cash flows for the interim periods. These financial statements should be read in conjunction with the financial statements and notes thereto included in the Allstate Life Insurance Company of New York Annual Report on Form 10K for 1996. The results of operations for the interim periods should not be considered indicative of results to be expected for the full year. -6- ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion highlights significant factors influencing results of operations and changes in financial position of Allstate Life Insurance Company of New York (the "Company"). It should be read in conjunction with the discussion and analysis and financial statements and notes thereto found under Items 7 and 8 of Part II of the Allstate Life Insurance Company of New York Annual Report on Form 10-K for the year ended December 31, 1996. The Company is wholly owned by a wholly owned subsidiary of Allstate Insurance Company. The Company markets a broad line of life insurance and annuity products in the state of New York. Life insurance includes traditional products such as whole life and term life insurance, as well as universal life and other interest-sensitive life products. Annuities include deferred annuities, such as variable annuities and fixed rate single and flexible premium annuities, and immediate annuities such as structured settlement annuities. The Company distributes its products using a combination of Allstate agents, including life specialists, banks and other financial institutions, brokers and direct response marketing.
RESULTS OF OPERATIONS Three Months Ended Six Months Ended June 30, June 30, ($ in thousands) 1997 1996 1997 1996 Statutory premiums and deposits $ 57,552 $ 44,541 $ 103,764 $ 89,359 ============ ============ ============ ============ Investments $ 1,703,824 $ 1,462,487 $ 1,703,824 $ 1,462,487 Separate Account assets 290,425 238,347 290,425 238,347 ------------ ------------ ------------ ------------ Investments including Separate Account assets $ 1,994,249 $ 1,700,834 $ 1,994,249 $ 1,700,834 ============ ============ ============ ============ Premiums and contract charges (net of reinsurance) $ 33,260 $ 28,417 $ 60,789 $ 57,221 Net investment income 31,042 27,830 61,242 55,424 Contract benefits (net of reinsurance) 47,899 42,372 89,865 85,389 Operating costs and expenses 7,279 5,759 14,075 11,379 ------------ ------------ ------------ ----------- Income from operations 9,124 8,116 18,091 15,877 Income tax expense on operations 3,255 3,076 6,481 5,867 ------------ ------------ ------------ ----------- Net operating income 5,869 5,040 11,610 10,010 Realized capital gains and losses, after tax (17) 273 (49) 228 ------------ ------------ ------------ ----------- Net income $ 5,852 $ 5,313 $ 11,561 $ 10,238 ============ ============ ============= ============
-7- ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Premium, deposits and contract charges Statutory premiums, which include premiums and deposits for all products, increased $13.0 million or 29.1% and $14.4 million or 16.1% for the second quarter and the six-month period ending June 30, 1997, respectively, when compared to the same period in 1996. The increases are primarily due to higher sales of structured settlement annuities, variable annuities and interest sensitive life insurance products. Premiums and contract charges under generally accepted accounting principles ("GAAP") increased $4.8 million or 17.0% and $3.6 million or 6.2% for the three-month and six-month periods ending June 30, 1997, respectively when compared to the same period last year. Under GAAP, revenues exclude deposits on most annuities and premiums on universal life insurance policies. The increase was due to higher sales of structured settlement annuities with life contingencies and higher renewal of life premiums. GAAP premium and contract charges will vary with the mix of products sold during the period. Net operating income Pretax net investment income increased 11.5% and 10.5% for the three-month and six-month periods ended June 30, 1997, respectively, primarily due to growth in investments from positive cash flows from operations. Operating expenses including amortization of deferred policy acquisition costs increased $1.5 million or 26.4% and $2.7 million or 23.7% for the three-month and six-month periods ended June 30, 1997. The increase resulted primarily from an increase in the amortization of deferred policy acquisition costs related to growth in customer policies and a larger maturing block of business, and higher general expenses. Net operating income increased 16.5% for the second quarter and 15.9% for the six-month period ending June 30, 1997. Net operating income increased primarily due to favorable mortality margins on the structured settlement annuity business and higher investment margins due to additional sales of structured settlement annuities. Realized capital gains and losses Net realized capital gains after tax were $17 thousand and $49 thousand for the three-month and the six-month periods, respectively. During both periods ended June 30, 1997, gains realized from the sales of fixed income securities were partially offset by losses on mortgage loans. -8- INVESTMENTS The composition of the investment portfolio at June 30, 1997 is presented at carrying value in the table below.
($ in thousands) Percent to total Fixed income securities $1,569,737 92.2% Mortgage loans 98,781 5.8 Policy loans 26,227 1.5 Short-term 9,079 0.5 ---------- ------ Total $1,703,824 100.0% ========== ======
The Company's fixed income securities portfolio consists of tax-exempt municipal bonds, publicly traded corporate bonds, privately-placed securities, mortgage-backed securities, asset-backed securities, and U.S. government bonds. The Company generally holds its fixed income securities for the long term, but has classified all of these securities as available for sale to allow maximum flexibility in portfolio management. Total investments increased to $1.7 billion at June 30, 1997 from $1.64 billion at December 31, 1996 as the investment of positive cash flows generated from operating activities was offset in part by a $12.2 million decrease in unrealized gains on the fixed income securities portfolio. The decrease in the unrealized gain position is primarily attributable to rising interest rates. The Company's fixed income securities portfolio has 99.2% rated investment grade. Investment grade is defined by the Company as a security having a National Association of Insurance Commissioners rating of 1 or 2, a Moody's rating of Aaa, Aa, A or Baa, or a comparable Company internal rating. LIQUIDITY AND CAPITAL RESOURCES Liquidity The Company's principal sources of funds are premiums, deposits, and collections of principal and income from the investment portfolio. The primary uses of these funds are to purchase investments and pay policyholder claims, benefits, contract maturities and surrenders, and operating costs. Cash provided by operating activities, investment collections and the investing of part of the short term investment balance was used to purchase fixed income securities and mortgage loans. Cash at the end of the period increased as cash from operations and financing activities were partially offset by the purchase of investments. Cash from operations increased due to increased sales and lower federal income tax payments offset in part by higher benefits and expenses. -9- ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS PENDING ACCOUNTING STANDARDS In January 1997, the Securities and Exchange Commission issued Financial Reporting Release No. 48 ("FRR 48") "Disclosure of Accounting Policies for Derivative Financial Instruments and Derivative Commodity Instruments and Disclosure of Quantitative and Qualitative Information about Market Risk Inherent in Derivative Financial Instruments, Other Financial Instruments, and Derivative Commodity Instruments." Among other things, FRR 48 requires annual disclosure of quantitative and qualitative information about the market risk inherent in the Company's market risk sensitive instruments, including but not limited to, the Company's fixed income securities. The quantitative and qualitative disclosures are effective for the Company's year-end 1998 reporting, but recent Congressional events may ultimately impact the nature and effective date of FRR 48. Effective in the second quarter of 1997, FRR 48 requires additional disclosures in the footnotes to the financial statements about the Company's accounting policies for derivative financial instruments. The Company substantially adopted this requirement at December 31, 1996. In addition, FRR 48 requires annual disclosure of quantitative and qualitative information about the market risk inherent in the Company's market risk sensitive instruments, including but not limited to, equity and fixed income securities and derivative financial instruments. The quantitative and qualitative disclosures are effective for the Company's year-end 1997 reporting. In June 1997, the Financial Accounting Standards Board issued SFAS No. 130 "Reporting Comprehensive Income" and SFAS No. 131 "Disclosures About Segments of an Enterprise and Related Information." SFAS No. 130 requires the presentation of comprehensive income in the financial statements. Comprehensive income is a measurement of all changes in equity that result from transactions and other economic events other than transactions with stockholders. The requirements of this statement will be adopted in January 1998. SFAS No. 131 redefines how segments are determined and requires additional segment disclosures for both annual and quarterly reporting. Under this statement, segments are determined using the management approach for financial statement reporting. The management approach is how an enterprise makes operating decisions and assesses performance of its businesses. The requirements of this statement will be adopted in December 1998. FORWARD-LOOKING STATEMENTS The statements contained in this Management's Discussion and Analysis that are not historical information are forward-looking statements that are based on management's estimates, assumptions and projections. The Private Securities Litigation Reform Act of 1995 provides a safe harbor under The Securities Act of 1933 and The Securities Exchange Act of 1934 for forward-looking statements. -10- PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS The Company and its Board of Directors know of no material legal proceedings pending to which the Company is a party or which would materially affect the Company. The Company is involved in pending and threatened litigation in the normal course of its business in which claims for monetary damages are asserted. Management, after consultation with legal counsel, does not anticipate the ultimate liability arising from such pending or threatened litigation to have a material effect on the financial condition of the Company. ITEM 5. OTHER INFORMATION Not applicable. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits required by Item 601 of Regulation S-K (2) None (3)(i) Articles of Incorporation* (ii) By-laws* (4) Allstate Life Insurance Company of New York Single Premium Deferred Annuity Contract** Allstate Life Insurance Company of New York Flexible Premium Deferred Annuity Contract* (10) None (11) None (15) None (18) None (19) None (22) None (23)(a)Consent of Independent Public Accountants*** (b)Consent of Attorneys**** (24) None (27) Financial Data Schedule (99) None (b) Reports on 8-K No reports on Form 8-K were filed during the second quarter of 1997. * Previously filed in Form N-4 Registration Statement No.33-65381 dated -11- September 20, 1996 and incorporated by reference. ** Previously filed in Form S-1 Registration Statement No.33-47245 dated November 13, 1992 and incorporated by reference. *** Previously filed in Form S-1 Registration Statement No.33-47245 dated April 1, 1997 and incorporated by reference. Previously filed in Form S-1 Registration Statement No. 33-65355 dated April 1, 1997 and incorporated by reference. **** Previously filed in Form S-1 Registration Statement No.33-47245 dated November 13, 1992 and incorporated by reference. Previously filed in Form S-1 Registration Statement No. 33-65355 dated September 20, 1996 and incorporated by reference. -12- SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized on the 11th day of August 1997. ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK (Registrant) /s/LOUIS G. LOWER, II CHAIRMAN OF THE BOARD OF DIRECTORS - -------------------- and PRESIDENT LOUIS G. LOWER, II (Principal Executive Officer) /s/KEITH A. HAUSCHILDT ASSISTANT VICE PRESIDENT AND CONTROLLER - ---------------------- (Chief Accounting Officer) KEITH A. HAUSCHILDT EX-27 2 FDS ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
7 THIS SCHEUDLE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM STATEMENTS OF FINANCIAL POSITION AT JUNE 30, 1997; STATEMENTS OF OPERATIONS THREE MONTHS ENDED JUNE 3O, 1997 AND JUNE 30, 1996 AND SIX MONTHS ENDED JUNE 30, 1997 AND JUNE 30, 1996; AND STATEMENTS OF CASH FLOWS SIX MONTHS ENDED JUNE 30, 1997. 0000839759 ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK 1,000 U.S. DOLLARS 6-MOS DEC-31-1997 JAN-01-1997 JUN-30-1997 1 1,569,737 0 0 0 98,781 0 1,703,824 7,336 2,012 65,796 2,097,651 0 0 951,055 591,422 0 0 0 2,000 239,425 2,097,651 46,807 61,242 (75) 13,982 89,865 3,819 10,256 18,016 6,455 11,561 0 0 0 11,561 0 0 0 0 0 0 0 0 0
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