Registration No

485BPOS 1 file.htm Registration No

Registration No. 333-65048

811-07837

As Filed with the Securities and Exchange Commission on May 1, 2006

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-6

REGISTRATION UNDER THE SECURITIES ACT OF 1933 [ X ]

Pre-Effective Amendment No. ____ [ ]

Post-Effective Amendment No.__11__ [ X ]

and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [ X ]

Amendment No.__15__ [ X ]

Sun Life of Canada (U.S.) Variable Account G

Registrant

Sun Life Assurance Company of Canada (U.S.)

Depositor

One Sun Life Executive Park

Wellesley Hills, Massachusetts 02481

Depositor's Address

1-888-594-2654

Depositor's Telephone Number

Sandra DaDalt

Assistant Vice President and Senior Counsel

Sun Life Assurance Company of Canada (U.S.)

One Sun Life Executive Park

Wellesley Hills, Massachusetts 02481

Name and Address of Agent For Service

It is proposed that this filing will become effective (check appropriate box)

[ ] immediately upon filing pursuant to paragraph (b) of Rule 485.

[ X ] on May 1, 2006 pursuant to paragraph (b) of Rule 485.

[ ] 60 days after filing pursuant to paragraph (a)(1) of Rule 485.

[ ] on May 1, 2006 pursuant to paragraph (a)(1) of Rule 485.

[ ] This post-effective amendment designates a new effective date for a previously filed post-effective amendment.

PART A

Sun Life Assurance Company of Canada (U.S.)

One Sun Life Executive Park

Wellesley Hills, Massachusetts 02481

(888) 594-2654

SUN LIFE LOGO

Futurity Corporate VUL

Sun Life of Canada (U.S.) Variable Account G

A Flexible Premium Variable Universal Life Insurance Policy

This prospectus describes the variable universal life insurance policy (the "Policy") issued by Sun Life Assurance Company of Canada (U.S.) ("we", "us" or "Company"), a member of the Sun Life Financial group of companies, through Sun Life of Canada (U.S.) Variable Account G (the "Variable Account"), one of our separate accounts. The Policy is being offered as an individual policy. The Policy allows "you," the policyowner, within certain limits, to:

choose the life insurance coverage you need and increase or decrease coverage as your insurance needs change;

choose the amount and timing of premium payments;

allocate net premium payments among the available investment options and transfer amounts among these options as your investment objectives change; and

access the Policy's Account Value through policy loans and partial surrenders or a full surrender.

This prospectus contains important information you should understand before purchasing a Policy. We use certain special terms which are defined in Appendix A. You should read this prospectus carefully and keep it for future reference.

Neither the Securities and Exchange Commission nor any state securities commission has approved these securities or determined that this prospectus is accurate or complete. Any representation to the contrary is a criminal offense.

	Table of Contents
Topic		Page
Risk/Benefit Summary of Policy		4
About Who We Are		9
The Variable Account		9
The Funds		9
Fees and Expenses of the Funds		14
Potential Conflicts		14
Our General Account		15
About the Policy		15
Application and Issuance		15
Death Benefit Compliance Test		15
Initial Premium Payment		15
Effective Date of Coverage		15
Insurable Interest Requirement		16
Right to Return Policy Period		16
Premium Payments		16
General Limitations		16
Guideline Premium Test Limitations		16
Planned Periodic Premiums		17
Allocation of Net Premium		17
Modified Endowment Contract		17
Additional Protection Benefit Rider (APB Rider)		17
Maturity Date Extension Rider		18
Enhanced Cash Surrender Value Endorsement		18
Fixed Account Endorsement		18
Directed Deductions Endorsement		18
Death Benefit		18
Policy Proceeds		18
Death Benefit Options		18
Changes in the Death Benefit Option		19
APB Rider Death Benefit		19
Minimum Face Amount		19
Changes in Face Amount		19
Increases in Face Amount		19
Decreases in Face Amount		20
Account Value		20
Account Value in the Sub-Accounts		20
Net Investment Factor		21
Account Value in the Loan Account		22
Insufficient Value		22
Grace Period		22
Splitting Units		22
Transfer Privileges		22
Short-Term Trading		22
Accessing Your Account Value		23
Surrender		23
Partial Surrenders		24
Policy Loans		24
Deferral of Payment		24
Charges, Deductions and Refunds		25
Expense Charges Applied to Premium		25
Sales Load Refund at Surrender		25
Mortality and Expense Risk Charge		25
Monthly Expense Charge		25
Monthly Cost of Insurance		25
APB Rider Charge		26
Reduction of Charges		26
Termination of Policy		26
Other Policy Provisions		26

Topic

Page

     Alteration

26

     Assignments

26

     Rights of Owner

26

     Rights of Beneficiary

27

     Reports to Policyowners

27

     Illustrations

27

     Conversion

27

     Misstatement of Age or Sex

27

     Suicide

27

     Incontestability

27

     Addition, Deletion or Substitution of Investments

27

     Nonparticipating

27

     Modification

28

     Entire Contract

28

Performance Information

28

Voting Rights

29

Distribution of Policy

29

Federal Income Tax Considerations

30

     Our Tax Status

30

     Taxation of Policy Proceeds

31

     Withholding

33

     Tax Return Disclosure

33

Other Information

34

     State Regulation

34

     Legal Proceedings

34

     Experts

34

     Registration Statements

34

     Financial Statements

34

Appendix A - Glossary of Policy Terms

35

Appendix B - Privacy Policy

38

This prospectus does not constitute an offering in any jurisdiction where the offering would not be lawful. You should rely only on the information contained in this prospectus or in the prospectus or Statement of Additional Information of the underlying mutual funds. We have not authorized anyone to provide you with information that is different.

Risk/Benefit Summary of Policy

Use of Policy

The Policy provides corporations and other entities life insurance coverage on employees or other persons in whose lives they have an insurable interest. It may be used in connection with various types of non-tax-qualified executive benefit plans.

Premium Payments

-	Generally, you must make an initial minimum premium payment equal to 1/12th of the Seven Pay Premium. If Seven Pay Premium is exceeded, the Policy becomes a Modified Endowment Contract.

Seven Pay Premium is the maximum Premium payment permitted in the first Policy Year of an unrated Policy, not involving a 1035 exchange, under Internal Revenue Code Section 7702A.

A 1035 exchange is a tax-sheltered exchange of cash value from one life insurance policy to another.

A Policy is a Modified Endowment Contract if the Premium paid during the first seven Policy Years exceeds the equivalent of seven level annual premiums necessary for a paid-up Policy.

- -	You choose the amount and timing of subsequent premium payments, within certain limits. We allocate your net premium payments among the Policy's Sub-Accounts and the Fixed Account according to your instructions.

Account Value
-	The Account Value equals
	- - -	premiums, plus investment performance of the Sub-Accounts, the Fixed Account and the Loan Account; less any partial surrenders and Policy charges.
Accessing Your Account Value

Cash Surrender Value is

Account Value, less

Policy Debt, plus

any sales load refund due at surrender, plus

any Enhanced Cash Surrender Value endorsement benefit.

You may borrow from us using the Account Value as collateral. Taking Policy loans may increase the risk of Policy lapse.

You may surrender the Policy for its Cash Surrender Value.

You may make a partial surrender of only a portion of the Cash Surrender Value once per year after the Policy has been in force for one year. Reducing the Cash Surrender Value with a partial surrender may increase the risk of Policy lapse.

A partial surrender may cause a decrease in Total Face Amount of your Policy if the amount of the death benefit minus your Account Value after the partial surrender exceeds the amount of the death benefit minus your Account Value before the partial surrender.

Death Benefit Compliance Test

-	For favorable federal tax treatment, the Policy must meet one of the following standards-
	- -	the Guideline Premium Test, or the Cash Value Accumulation Test.
-	You choose the applicable test. You may not change your election.

-	Please see the Death Benefit Compliance Test paragraph in the About the Policy section of the prospectus for Guideline Premium Test and Cash Value Accumulation Test definitions.

Death Benefit

Specified Face Amount is the amount of life insurance coverage you request.

-	If the Guideline Premium Test applies, you have a choice of two death benefit options-
	- -	the Specified Face Amount (Option A); or the Specified Face Amount plus your Account Value (Option B).

- - -	You may change your death benefit option on any Policy Anniversary, subject to our underwriting rules then in effect. If the Cash Value Accumulation Test applies, you will be deemed to have elected Option A, which may not be changed. After the first Policy Year, you may-
	- -	increase the Specified Face Amount, subject to satisfactory evidence of the Insured's insurability; or decrease the Specified Face Amount to a level not less than the minimum specified in the Policy.

The Variable Account

We have established a separate account ( the "Variable Account") to fund the variable insurance benefits under your Policy.

The assets of the Variable Account are free from our general creditor's claims.

The Variable Account is divided into Sub-Accounts.

Each Sub-Account invests exclusively in shares of a corresponding mutual fund.

When you choose Sub-Accounts in the Variable Account, your benefits will fluctuate based on certain economic conditions. These conditions include, but are not limited to

inflationary forces,

changes in rates of return available from different types of investments,

changes in employment rates and

the presence of international conflict.

With such Sub-Accounts, you assume all investment risk. Investment risk is the uncertainty of the future benefits to be realized from an investment.

A comprehensive discussion of the risks of such Sub-Accounts may be found in the underlying Fund's prospectus.

It is unsuitable to purchase a life insurance policy as a short-term savings vehicle. This Policy is unsuitable if you plan to surrender it to meet short-term needs because the premium expense loads are higher in the early Policy Years.

Investment Options
- - - -	You may allocate your net premium payments among the Sub-Accounts and the Fixed Account. If your Policy was issued before December 15, 2002, a Fixed Account investment option was not offered but became available, via Policy endorsement, on December 15, 2002. If that option was rejected, references to the Fixed Account within this prospectus should be disregarded. You may transfer amounts from one Sub-Account to another or to the Fixed Account, subject to any limits that we or the Funds may impose. You may transfer amounts from the Fixed Account, subject to our transfer rules in effect at time of transfer.
Right to Return Period You may return the Policy and receive a refund within the later of 45 days after you sign a policy application or the 20-day period (or a longer period if required by applicable state law) beginning when you receive the Policy.

What if Charges and Deductions Exceed Account Value?

Your Policy may terminate if your Account Value at the beginning of any Policy Month is insufficient to pay all charges and deductions then due. If this occurs, we will send you written notice and allow you a 61 day grace period. If you do not make a premium payment within the grace period, sufficient to cover all charges and deductions due, the Policy will terminate at the end of the grace period.

Federal Tax Considerations

Purchase of, and transactions under, the Policy may have tax consequences that you should consider. You may wish to consult a qualified tax professional prior to purchase regarding tax treatment of death benefits and surrenders.

The following tables describe the fees and expenses that you will pay when buying, owning and surrendering the Policy. The first table describes the expenses that you will pay at the time that you buy the Policy and at the time of each subsequent premium payment.

TRANSACTION FEES
Charge	When Charge is Deducted	Amount Deducted
Expense Charge Applied to Premium Premium Tax (on Premium) Federal Tax (on Premium) Sales Load on Premium up to and Including Target Premium Sales Load on Premium in Excess of Target Premium	Upon premium receipt Upon premium receipt Upon premium receipt Upon premium receipt	Guaranteed: Guaranteed for KY: Current: Current for KY:	4% in all states except KY 9% 2% in all states except KY 7%
			1.25%
		Policy Year 1: Policy Years 2-4: Policy Years 5-7: Policy Years 8+:	8.75% Guaranteed: 8.75% Current: 7.25% Guaranteed: 8.75% Current: 6.00% 0.00%
		Policy Years 1-7: Policy Years 8+:	2.25% 0.00%
Illustration Charge	Upon fulfillment of illustration request	Guaranteed: Current:	$25.00 $0.00

The next table describes the fees and expenses that you will pay periodically during the time you own the Policy, not including Fund fees and expenses.

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PERIODIC CHARGES OTHER THAN FUND OPERATING EXPENSES
Charge	When Charge is Deducted	Amount Deducted
Cost of Insurance¹ Minimum and Maximum Charge Representative Owner Charge⁴ (For a male, nonsmoker, issue age 45)	At the end of a Policy Month	(Per $1000 of Net Amount at Risk)
		Guaranteed: Current: Guaranteed: Current:	$1.05/$1000.00³ $0.35/$199.45² $4.55 $1.02
Mortality and Expense Risk Charge	Daily	(On the assets allocated to the investment options)
		Policy Years 1-10: Policy Years 11-20: Policy Years 21+:	Guaranteed: 0.60% Current: 0.40% Guaranteed: 0.60% Current: 0.25% Guaranteed: 0.60% Current: 0.20%
Monthly Expense Charge⁵	At the beginning of a Policy Month	Policy Year 1: Policy Years 2+:	$13.75 Guaranteed: $13.75 Current: $7.50
Loan Interest	At the end of each Policy Year	Policy Years 1-10: Policy Years 11+:	5.0% 4.25%

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OPTIONAL CHARGE (FOR ADDITIONAL PROTECTION BENEFIT RIDER):
Charge	When Charge is Deducted	Amount Deducted
Additional Protection Benefit Rider⁶ (This charge is in addition to the Policy Cost of Insurance Charge.) Minimum and Maximum Charge Representative Owner Charge⁴ (For a male, nonsmoker, issue age 45.)	At the end of a Policy Month	(Per $1000 of Net Amount at Risk)
		Guaranteed: Current: Guaranteed: Current:	$1.31/$1000.00⁸ $0.35/$199.45⁷ $5.69 $1.02

The next table describes the Fund fees and expenses that you will pay periodically during the time that you own the Policy. The table shows the minimum and maximum fees and expenses charged by any of the Funds and deducted from Fund assets. More detail concerning each Fund's fees and expenses is contained in the prospectus for each Fund.

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ANNUAL FUND OPERATING EXPENSES
Total Annual Fund Expenses (reflects management fees, distribution [and/or service](12b-1) fees and other expenses)	Minimum	Maximum
	0.27%	2.74%

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^{1The cost of insurance charge varies based on individual characteristics, specifically the length of time the Policy has been in force and the Insured's age, sex and rating class. The cost of insurance charge shown may not be representative of the charge that you will pay. You may obtain more information about the particular cost of insurance charge that would apply to you from your sales representative.

2The first number is the current annual minimum cost of insurance charge possible under the Policy. The $0.35 represents the per $1000 of Net Amount at Risk charge for an Insured female, nonsmoker, age 26. The second number is the current annual maximum cost of insurance charge possible under the Policy. The $199.45 represents the per $1000 of Net Amount at Risk charge for an Insured male, smoker, age 99.
^{3The first number is the guaranteed annual minimum cost of insurance charge possible under the Policy. The $1.05 represents the per $1000 of Net Amount at Risk charge for an Insured female, age 20. The second number is the guaranteed annual maximum cost of insurance charge possible under the Policy. The $1000.00 represents the per $1000 of Net Amount at Risk charge for an Insured male, age 99.
^{4A Representative Owner is a male, nonsmoker, age 45. It is assumed the Owner and the Insured are the same person. The charges shown are annual charges.
^{5The monthly expense charge varies based on our expectations of future expenses but will never exceed $13.75.
^{6The cost of insurance charge varies based on individual characteristics, specifically the length of time the rider has been in force and the Insured's age, sex and rating class. The cost of insurance charge shown may not be representative of the charge that you will pay. You may obtain more information about the particular cost of insurance charge that would apply to you from your sales representative.
^{7The first number is the current annual minimum cost of insurance charge possible under the rider. The $0.35 represents the per $1000 of Net Amount at Risk charge for an Insured female, nonsmoker, age 26. The second number is the current annual maximum cost of insurance charge possible under the rider. The $199.45 represents the per $1000 of Net Amount at Risk charge for an Insured male, smoker, age 99.
^{8The first number is the guaranteed annual minimum cost of insurance charge possible under the rider. The $1.31 represents the per $1000 of Net Amount at Risk charge for an Insured female, age 20. The second number is the guaranteed annual maximum cost of insurance charge possible under the rider. The $1000.00 represents the per $1000 of Net Amount at Risk charge for an Insured male, age 99.}}}}}}}

About Who We Are

We are a stock life insurance company incorporated under the laws of Delaware on January 12, 1970. We do business in 49 states, the District of Columbia and the Virgin Islands. We have an insurance company subsidiary that does business in New York. Our executive office mailing address is One Sun Life Executive Park, Wellesley Hills, Massachusetts 02481.

We are ultimately controlled by Sun Life Financial Inc. ("Sun Life Financial"). Sun Life Financial, a corporation organized in Canada, is a reporting company under the Securities Exchange Act of 1934 with common shares listed on the Toronto, New York and Philippine stock exchanges.

The Variable Account

Sun Life of Canada (U.S.) Variable Account G is one of our separate accounts established in accordance with Delaware law on July 25, 1996. The Variable Account may also be used to fund benefits payable under other life insurance policies issued by us. We are obligated to pay all benefits payable under the Policy.

We own the assets of the Variable Account. The income, gains or losses, realized or unrealized, from assets allocated to the Variable Account are credited to or charged against the Variable Account without regard to our other income, gains or losses.

We will at all times maintain assets in the Variable Account with a total market value at least equal to the reserves and other liabilities relating to the variable benefits under all policies participating in the Variable Account. The assets of the Variable Account are insulated from our general liabilities and may not be charged with our liabilities from our other business. Our obligations under the Policy are, however, our general corporate obligations.

The Variable Account is registered with the Securities and Exchange Commission (the "SEC") under the Investment Company Act of 1940 ("1940 Act") as a unit investment trust. That registration does not involve any supervision by the SEC of the management or investment practices or policies of the Variable Account.

The Variable Account may be deregistered if registration is no longer required; however, we may continue, at our election, to operate the Variable Account as a unit investment trust or other form of investment company, subject to any necessary vote by those having voting rights. In the event of any change in the registration status of the Variable Account, we may amend the Policy to reflect the change and take such other action as may be necessary and appropriate to effect the change.

The Variable Account is divided into Sub-Accounts. Each Sub-Account invests exclusively in shares of a corresponding investment portfolio of a registered investment company (commonly known as a mutual fund). We may in the future add new or delete existing Sub-Accounts. The income, gains or losses, realized or unrealized, from assets allocated to each Sub-Account are credited to or charged against that Sub-Account without regard to the other income, gains or losses of the other Sub-Accounts.

The Funds

The Policy offers several mutual fund options, which are briefly described below. More comprehensive information, including a discussion of potential risks, is found in the current prospectuses for the Funds (the "Fund Prospectuses"). You should read the Fund Prospectuses, which may be obtained by calling 888-594-2654, before investing.

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AIM Variable Insurance Funds (advised by A I M Advisors, Inc.)

AIM V.I. Capital Appreciation Fund² (Series I Shares) seeks growth of capital by investing principally in common stocks of companies which the Fund's portfolio managers believe are likely to benefit from new or innovative products, services or processes, as well as those that have experienced above-average, long-term growth in earnings and have excellent prospects for future growth.

AIM V.I. Dynamics Fund (Series I Shares) seeks long-term capital growth by investing at least 65% of its net assets in common stocks of mid-sized companies.

AIM V.I. Core Equity Fund¹ (Series I Shares) seeks growth of capital by investing, normally, at least 80% of its net assets, plus the amount of any borrowings for investment purposes, in equity securities, including convertible securities, of established companies that have long-term, above-average growth in earnings.

AIM V.I. International Growth Fund (Series I Shares) seeks to provide long-term growth of capital by investing in a diversified portfolio of international equity securities whose issuers are considered to have strong earnings momentum.

AIM V.I. Small Company Growth Fund (Series I Shares) seeks long-term capital growth by normally investing at least 80% of its net assets in common stocks of small-capitalization companies.

NOTE: Effective July 3, 2006, AIM V.I. Small Company Growth Fund's name will change to AIM V.I. Small Cap Growth Fund.

AllianceBernstein Variable Products Series Fund, Inc. (advised by Alliance Capital Management L.P.)

AllianceBernstein VP Global Technology Portfolio (Class B) (formerly AllianceBernstein VP Technology Portfolio) seeks long-term growth of capital.

AllianceBernstein VP Growth and Income Portfolio (Class B) seeks long-term growth of capital.

AllianceBernstein VP International Growth Portfolio (Class B) (formerly AllianceBernstein VP Worldwide Privatization) seeks long-term growth of capital.

AllianceBernstein VP Small Cap Growth Portfolio (Class B) (formerly AllianceBernstein VP Quasar Portfolio) seeks long-term growth of capital.

Delaware Variable Insurance Products Trust (advised by Delaware Management Company)

Delaware VIP Growth Opportunities Series (Standard Class) seeks long-term capital appreciation by investing primarily in securities of medium-sized companies that have established themselves within the industry but still have growth potential.

Delaware VIP Small Cap Value Series (Standard Class) seeks capital appreciation. Under normal circumstances, at least 80% of the Series' net assets will be in investments of small capitalization companies. The Series defines small-cap companies as those having a market capitalization generally less than $2.0 billion at the time of purchase.

Delaware VIP Trend Series (Standard Class) seeks long-term capital appreciation by investing primarily in stocks of small, growth-oriented or emerging companies that the manager believes are responsive to changes within the marketplace and which the manager believes have the fundamental characteristics to support continued growth.

Dreyfus Investment Portfolios (advised by the Dreyfus Corporation)

Dreyfus MidCap Stock Portfolio (Initial Shares) seeks investment results that are greater than the total return performance of publicly traded common stocks of medium-size domestic companies in the aggregate, as represented by the S&P MidCap 400^(R) Index.

Dreyfus Stock Index Fund, Inc. (Initial Shares) (advised by the Dreyfus Corporation) seeks to match the performance of the S&P 500^(R).

DWS Investments VIT Funds (advised by Deutsche Asset Management, Inc.)

DWS Small Cap Index VIP (Class B) (formerly Scudder VIT Small Cap Index Fund) seeks to replicate, as closely as possible, before expenses, the performance of the Russell 2000 Small Stock Index (the Russell 2000 Index), which emphasizes stocks of small U.S. companies.

Fidelity Variable Insurance Products Funds (advised by Fidelity Management & Research Company. Fidelity, Fidelity Investments and Contrafund are registered trademarks of FMR Corp.)

Fidelity VIP Contrafund^(R) Portfolio (Service Class 2) seeks long-term capital appreciation by normally investing primarily in common stocks of companies whose value it believes is not fully recognized by the public.

Fidelity VIP Growth Portfolio (Service Class 2) seeks to achieve capital appreciation by investing primarily in stocks of companies it believes to have above-average growth potential.

Fidelity VIP Overseas Portfolio (Service Class 2) seeks long-term growth of capital by investing at least 80% of the fund's assets primarily in non-U.S. securities. The fund is normally invested primarily in common stocks.

Goldman Sachs Variable Insurance Trust (advised by Goldman Sachs Asset Management, L.P.)

Goldman Sachs VIT Structured U.S. Equity Fund (formerly Goldman Sachs VIT CORE^SM U.S. Equity Fund) seeks long-term growth of capital and dividend income by investing in a broadly diversified portfolio of large cap and blue chip equity securities representing all major sectors of the U.S. economy.

Goldman Sachs VIT Capital Growth Fund seeks long-term growth of capital by investing at least 90% of its total assets in equity investments.

Lord Abbett Series Fund, Inc. (advised by Lord, Abbett & Co. LLC)

Lord Abbett Series Fund-Mid-Cap Value Portfolio (Class VC) seeks capital appreciation through investments, primarily in equity securities, which are believed to be undervalued in the marketplace. To pursue this goal, the Portfolio normally invests at least 80% of its net assets, plus the amount of any borrowings for investment purposes, in equity securities of mid-sized companies.

Lord Abbett Series Fund-Growth and Income Portfolio (Class VC) seeks to provide long-term growth of capital and income without excessive fluctuation in market value. To pursue this goal, the Portfolio primarily purchases equity securities of LARGE, SEASONED, U.S. and MULTINATIONAL COMPANIES that we believe are undervalued. Under normal circumstances, the Fund will invest at least 80% of its net assets in equity securities of large companies.

Lord Abbett Series Fund-International Portfolio (Class VC) seeks long-term capital appreciation. To pursue this goal, the Fund primarily invests in stocks of companies principally based outside the United States. Under normal circumstances, the Fund will diversify its investments among a number of different countries throughout the world. The Fund normally intends to invest at least 65% of its net assets in equity securities of small companies.

MFS/Sun Life Series Trust (advised by Massachusetts Financial Services Company, a subsidiary of Sun Life of Canada (U.S.) Financial Services Holdings, Inc., which in turn is an indirect wholly owned subsidiary of Sun Life Financial, Inc., a diversified financial services organization)

MFS/Sun Life Bond Series (Service Class) mainly seeks as high a level of current income as is believed to be consistent with prudent investment risk; its secondary objective is to seek to protect shareholder's capital.

MFS/Sun Life Capital Appreciation Series (Service Class) seeks to maximize capital appreciation by investing in securities of all types, with major emphasis on common stocks.

MFS/Sun Life Capital Opportunities Series (Service Class) seeks capital appreciation. The series focuses on companies which MFS believes have favorable growth prospects and attractive valuations based on current and expected earnings or cash flow.

MFS/Sun Life Emerging Growth Series (Service Class) seeks long-term growth of capital.

MFS/Sun Life Government Securities Series (Service Class) seeks current income and preservation of capital by investing in U.S. Government and U.S. Government-related securities.

MFS/Sun Life High Yield Series (Service Class) seeks high current income and capital appreciation by investing primarily in certain low rated or unrated fixed income securities (possibly with equity features) of U.S. and foreign issuers.

MFS/Sun Life International Growth Series (Service Class) seeks capital appreciation. The series invests, under normal market conditions, at least 65% of its net assets in common stocks and related securities, such as preferred stock, convertible securities and depositary receipts, of foreign (including emerging market) issuers.

MFS/Sun Life Massachusetts Investors Growth Stock Series (Service Class) seeks to provide long-term growth of capital and future income rather than current income.

MFS/Sun Life Massachusetts Investors Trust Series (Service Class) seeks long-term growth of capital with a secondary objective to seek reasonable current income.

MFS/Sun Life Mid Cap Growth Series (Service Class) seeks long-term growth of capital by investing primarily in securities of companies with medium market capitalizations that MFS believes have above-average growth potential.

MFS/Sun Life New Discovery Series (Service Class) seeks capital appreciation by generally focusing on smaller cap emerging growth companies that are early in their life cycle.

MFS/Sun Life Research Series (Service Class) seeks to provide long-term growth of capital and future income.

MFS/Sun Life Strategic Growth Series (Service Class) seeks capital appreciation. The series invests, under normal market conditions, at least 65% of its net assets in common stocks and related securities, such as preferred stock, bonds, warrants, or rights convertible into stock and depositary receipts for these securities, of companies which the series' investment adviser believes offer superior prospects for growth.

MFS/Sun Life Strategic Income Series (Service Class) seeks to provide high current income by investing in fixed income securities and will seek to take advantage of opportunities to realize significant capital appreciation while maintaining a high level of current income.

MFS/Sun Life Strategic Value Series (Service Class) seeks capital appreciation. The series invests, under normal market conditions at least 65% of is net assets in common stocks and related securities, such as preferred stocks, convertible securities and depositary receipts, of companies which the series' investment adviser, MFS, believes are undervalued in the market relative to their long term potential.

MFS/Sun Life Total Return Series (Service Class) mainly seeks to obtain above-average income (compared to a portfolio entirely invested in equity securities) consistent with prudent employment of capital; its secondary objective is to take advantage of opportunities for growth of capital and income since many securities offering a better than average yield may also possess growth potential.

MFS/Sun Life Utilities Series (Service Class) seeks capital growth and current income (income above that available from a portfolio invested entirely in equity securities) by investing under normal market conditions, at least 80% of its assets in equity and debt securities of both domestic and foreign companies in the utilities industry.

MFS/Sun Life Value Series (Service Class) seeks capital appreciation and reasonable income by investing primarily in income producing equity securities of companies that MFS believes are undervalued in the market relative to their long term potential.

Neuberger Berman Advisers Management Trust (advised by Neuberger Berman Management Inc.)

Neuberger Berman AMT Regency Portfolio (Class I) seeks growth of capital by investing mainly in common stocks of mid-capitalization companies.

Oppenheimer Variable Account Funds (advised by OppenheimerFunds, Inc.)

Oppenheimer Capital Appreciation Fund/VA (Non-Service Shares) seeks capital appreciation by investing in securities of well-known, established companies.

PIMCO Variable Insurance Trust (advised by Pacific Investment Management Company LLC ("PIMCO"))

PIMCO VIT Emerging Markets Bond Portfolio (Administrative Class) seeks maximum total return, consistent with preservation of capital and prudent investment management. The Portfolio seeks to achieve its investment objective by investing under normal circumstances at least 80% of its assets in Fixed Income Instruments of issuers that economically are tied to countries with emerging securities markets. Such securities may be denominated in non-U.S. currencies and the U.S. dollar.

PIMCO VIT High Yield Portfolio (Administrative Class) seeks maximum total return, consistent with preservation of capital and prudent investment management. The Portfolio seeks to achieve its investment objective by investing under normal circumstances at least 80% of its assets in a diversified portfolio of high yield securities ("junk bonds") rated below investment grade but rated at least Caa by Moody's or CCC by S&P, or, if unrated, determined by PIMCO to be of comparable quality.

PIMCO VIT Low Duration Portfolio (Administrative Class) seeks maximum total return, consistent with preservation of capital and prudent investment management. The Portfolio seeks to achieve its investment objective by investing under normal circumstances at least 65% of its net assets in a diversified portfolio of Fixed Income Instruments of varying maturities. The average portfolio duration of the Portfolio normally varies within a one to three year time frame based on PIMCO's forecast for interest rates.

PIMCO VIT Real Return Portfolio (Administrative Class) seeks maximum real return, consistent with preservation of real capital and prudent investment management. The Portfolio seeks to achieve its investment objective by investing under normal circumstances at least 80% of its assets in inflation-indexed bonds of varying maturities issued by the U.S. and non-U.S. governments, their agencies or government-sponsored enterprises and corporations.

PIMCO VIT Total Return Portfolio (Administrative Class) seeks maximum total return, consistent with preservation of capital and prudent investment management. The Portfolio seeks to achieve its investment objective by investing under normal circumstances at least 65% of its assets in a diversified portfolio of Fixed Income Instruments of varying maturities. The average portfolio duration of this Portfolio normally varies within a three to six year time frame based on PIMCO's forecast for interest rates.

Rydex Variable Trust (advised by Rydex Investments)

Rydex VT Nova Fund seeks to provide investment results that match the performance of a specific benchmark on a daily basis. The Fund's current benchmark is 150% of the daily performance of the S&P 500 Index. If the Fund meets its objective, the value of the Fund's shares will tend to increase on a daily basis by 150% of the value of any increase in the underlying index. When the value of the underlying index declines, the value of the Fund's shares should also decrease on a daily basis by 150% of the value of any decrease in the underlying index (e.g., if the underlying index goes down by 5%, the value of the Fund's shares should go down by 7.5% on that day.)

Rydex VT OTC Fund seeks to provide investment results that correspond to a benchmark for over-the-counter securities. The Fund's current benchmark is the NASDAQ 100 Index. If the Fund meets its objective, the value of the Fund's shares should increase on a daily basis by the amount of any increase in the value of the underlying index. However, when the value of the underlying index declines, the value of the Fund's shares should also decrease on a daily basis by the amount of the decrease in the value of the underlying index.

Sun Capital Advisers Trust^SM (advised by Sun Capital Advisers, Inc., an affiliate of the Company; Davis Select Advisers, L.P., serves as investment sub-adviser to SC^SM Davis Venture Value Fund; Oppenheimer Funds, Inc. serves as investment subadviser to SC^SM Oppenheimer Main Street Small Cap Fund; Wellington Management Company, LLP, serves as investment subadviser to SC^SM Blue Chip Mid Cap Fund.)

Sun Capital^SM All Cap Fund(Initial Class) seeks long-term capital growth by investing primarily in equity securities of U.S. companies.

Sun Capital Investment Grade Bond Fund^(R) (Initial Class) seeks high current income consistent with relative stability of principal by investing at least 80% of its net assets in investment grade bonds. The Fund may invest up to 20% of its assets in lower rated or unrated bonds (also known as high yield or junk bonds).

Sun Capital Money Market Fund^(R) (Initial Class) seeks to maximize current income, consistent with maintaining liquidity and preserving capital, by investing exclusively in high quality U.S. dollar-denominated money market securities.

Sun Capital Real Estate Fund^(R) (Initial Class) primarily seeks long-term capital growth and, secondarily, seeks current income and growth of income. The Fund invests at least 80% of its net assets in securities of real estate investment trusts and other real estate companies.

SC^SM Blue Chip Mid Cap Fund seeks long-term capital growth by investing, under normal conditions, at least 80% of its net assets in a diversified portfolio of common stocks and other equity securities of U.S. companies with market capitalizations within the collective range of the Russell Midcap or the S & P Mid Cap 400 Indexes.

SC^SM Davis Venture Value Fund seeks long-term growth of capital by investing primarily in the common stock of U.S. companies with market capitalizations of at least $10 billion.

SC^SM Oppenheimer Main Street Small Cap Fund seeks capital appreciation. Under normal market conditions, the Fund will invest at least 80% of its net assets in securities of companies with small market capitalization.

Franklin Templeton Variable Insurance Products Trust (managed by Templeton Investment Counsel, LLC ("TIC"), except for the Templeton Growth Securities Fund, which is managed by Templeton Global Advisors Limited ("TGAL"))

Templeton Foreign Securities Fund (Class 2) seeks long term capital growth. Under normal market conditions, the Fund will invest primarily in investments of issuers located outside the U.S., including those in emerging markets.

Templeton Growth Securities Fund (Class 2) seeks long term capital growth. Under normal market conditions, the Fund will invest mainly in the equity securities of companies located anywhere in the world, including those located in the U.S. and emerging markets.

T. Rowe Price Equity Series, Inc. (advised by T. Rowe Price Associates, Inc.)

T. Rowe Price Equity Income Portfolio seeks substantial dividend income and long-term capital growth.

^{1Effective April 30, 2006, AIM V.I. Premium Equity Fund was merged into AIM V.I. Core Equity Fund.}

2Effective April 30, 2006, AIM V.I. Growth Fund was merged into AIM V.I. Capital Appreciation Fund.</R>

Fees and Expenses of the Funds. Fund shares are purchased at net asset value, which reflects the deduction of investment management fees and other expenses. The management fees are charged by each Fund's investment adviser for managing the Fund and selecting its portfolio of securities. Other expenses can include such items as interest expense on loans and contracts with transfer agents, custodians and other companies that provide services to the Fund, and actual expenses may vary.

Because they are assessed at the Fund level, you will indirectly bear the fees and expenses of the Funds you select. The table presented earlier in this prospectus shows the range of fees and expenses paid by the Funds as a percentage of average net assets. These fees and expenses are more fully described in the Fund Prospectuses.

Potential Conflicts. We, as well as other affiliated and unaffiliated insurance companies, may also purchase shares of the Funds on behalf of other separate accounts used to fund variable benefits payable under other variable life insurance and variable annuity contracts. As a result, it is possible, though we do not anticipate, that a material conflict may arise between the interests of our policyowners with respect to the Variable Account and those of other variable

contractowners with respect to the other separate accounts that participate in the Funds. The Funds have agreed to monitor themselves for the existence of any material conflict between the interests of variable contractowners. In the event of such a conflict involving a Fund, we will take any steps necessary to remedy the conflict including withdrawing the assets of the Variable Account from the Fund. If the Variable Account or another separate account withdraws its assets from a Fund for this reason, the Fund may be forced to sell its portfolio securities at disadvantageous prices which would negatively affect the investment performance of the corresponding Sub-Account.

Our General Account

Our general account consists of all of our assets other than those in our variable separate accounts. Subject to applicable law, we have sole discretion over the investment of our general account assets. Interests in our general account offered through the Fixed Account investment option have not been registered under the Securities Act of 1933 and our general account has not been registered as an investment company under the Investment Company Act of 1940. An allocation of premium to the Fixed Account does not entitle you to share in the investment experience of our general account. Instead, we guarantee that your Fixed Account allocation will accrue interest daily at an effective annual rate of at least 2%, without regard to the actual investment experience of our general account. We may credit a higher rate of interest but are not obligated to do so.

About the Policy

This prospectus describes the standard features of the Policy. The Policy, as issued, may differ in some respects due to the legal requirements of the state where the Policy is issued.

Application and Issuance. To apply for a Policy, you must submit an application to our Principal Office. We will then follow underwriting procedures designed to determine the insurability of the proposed Insured. We offer the Policy on a regular (or medical) underwriting, simplified underwriting, expanded guaranteed issue or guaranteed issue basis. The proposed Insured generally must be less than 81 years old for a Policy to be issued. For Policies underwritten on a medical or simplified basis, we may require that the proposed Insured undergo one or more medical examinations and that you provide us with such additional information as we may deem necessary, before an application is approved. We will issue Policies on an expanded guaranteed issue or guaranteed issue basis with respect to certain groups of Insureds. Policies issued on such basis must be pre-approved based on information you provide to us on a master application and on certain other underwriting requirements which all members of a proposed group of Insureds must meet. Proposed Insureds must be acceptable risks based on our underwriting limits and standards. We will not issue a Policy until the underwriting process has been completed to our satisfaction. In addition, we reserve the right to reject an application that does not meet our underwriting requirements or to "rate" an Insured as a substandard risk, which will result in increased Monthly Cost of Insurance charges.

Death Benefit Compliance Test. The Policy must, at all times, satisfy one of two legal standards for it to qualify as life insurance and thus be entitled to receive favorable tax treatment under applicable federal tax law. We will refer to these standards as the "Cash Value Accumulation Test" and the "Guideline Premium Test." Under both tests, the Death Benefit must effectively always equal or exceed your Account Value multiplied by a certain percentage (the "Death Benefit Percentage"). The Death Benefit Percentages for the Guideline Premium Test vary by age, whereas those for the Cash Value Accumulation Test vary by age and sex. The Death Benefit Percentages for the Cash Value Accumulation Test, in general, are greater than those for the Guideline Premium Test. The Guideline Premium Test imposes limits on the amount of premium you may pay under the Policy, where the Cash Value Accumulation Test does not. You must specify in the Policy application which of these tests will apply to the Policy. You may not change your selection once the Policy has been issued. In general, if your primary objective is maximum accumulation of Account Value during the initial Policy Years, then the Cash Value Accumulation Test would be the more appropriate choice. If your primary objective is the most economically efficient method of obtaining a specified amount of coverage, then the Guideline Premium Test is generally more appropriate. Because your choice of tests depends on complex factors and may not be changed, you should consult with a qualified tax adviser before deciding.

Initial Premium Payment. A Minimum Premium will be due and payable as of the Issue Date. In general, the Minimum Premium equals 1/12th of the Seven Pay Premium. The Seven Pay Premium is the maximum Premium payment permitted in the first Policy Year of an unrated Policy, not involving a 1035 exchange, so the Policy does not become a Modified Endowment Contract. Pending approval of your application, we will allocate any premium payments you make to our general account. If your application is not approved, we will promptly return your premium payments.

Effective Date of Coverage. Upon approval of your application, we will issue to you a Policy on the life of the Insured which will set forth your rights and our obligations. The Issue Date is the date specified as such in the Policy, from

which Policy Anniversaries, Policy Years and Policy Months are measured. The Effective Date of Coverage for the Policy will be the latest of-

the Issue Date, or

the date we approve the application for the Policy, or

the date you pay a premium equal to or in excess of the Minimum Premium.

Insurable Interest Requirement. You must have an insurable interest in the life of the Insured up to the full amount of insurance coverage. Otherwise, the Policy will not qualify as life insurance under applicable state insurance and federal tax law. You should consult with a qualified adviser when determining the amount of coverage and before taking any action to increase the amount of existing coverage to ensure that you have an insurable interest for the full amount of coverage.

Right to Return Policy Period

If you are not satisfied with the Policy, you may return it by delivering or mailing it to our Principal Office or to the sales representative through whom you purchased the Policy within 20 days from the date of receipt (unless a different period is applicable under state law) or within 45 days after your application is signed, whichever period ends later (the "Right to Return Policy Period").

If you return the Policy during the Right to Return Policy Period, the Policy will be deemed void and you will receive a refund equal to the sum of-

the difference between any premium payments made, including fees and charges, and the amounts allocated to the Variable Account and the Fixed Account;

the value of the amounts allocated to the Variable Account and the Fixed Account on the date the cancellation request is received by us or the sales representative through whom you purchased the Policy; and

any fees or charges imposed on amounts allocated to the Variable Account and the Fixed Account.

If required by applicable state insurance law, however, you will receive instead a refund equal to the sum of all premium payments made, without regard to the investment experience of the Variable Account. Unless you are entitled to receive a full refund of premium, you bear all of the investment risks with respect to the amount of any net premiums allocated to the Variable Account during the Right to Return Policy Period with respect to the Policy.

If you are entitled under applicable state law to receive a full refund during the Right to Return Policy Period, we will allocate the net premium payments to the Sun Capital Money Market Fund Sub-Account during that period beginning on the Investment Start Date. Upon expiration of the Right to Return Policy Period, we will reallocate your Account Value and allocate future net premium payments in accordance with your instructions.

Premium Payments

In general, you may choose the frequency and amount of any additional premium payments subject to the limits described below. All premium payments should be made payable to Sun Life Assurance Company of Canada (U.S.) and mailed to our Principal Office.

General Limitations. We reserve the right to limit the number of premium payments we accept on an annual basis. No premium payment may be less than $100 without our consent, although we will accept a smaller premium payment if it is necessary to keep the Policy in force. We reserve the right not to accept a premium payment that causes the Death Benefit to increase by an amount that exceeds the premium received and we may require satisfactory evidence of insurability before we accept such a premium.

Guideline Premium Test Limitations. The Guideline Premium Test limits the amount of premium you may pay per year. We will not accept premium payments that would, in our opinion, exceeds these limits, if you have chosen this test as the applicable Death Benefit Compliance Test, unless you have expressly directed us to do so. We will inform you of the applicable maximum premium limitations for the coming years in our annual report to you. In contrast, the Cash Value Accumulation Test does not impose any additional limitations on the amount of premium you may pay.

Planned Periodic Premiums. While you are not required to make premium payments according to a fixed schedule, you may select a planned periodic premium schedule and corresponding billing period, subject to our premium limits. In general, the billing period must be annual or semiannual. We will send reminder notices for the planned periodic premium at the beginning of each billing period unless reminder notices have been suspended as described below. You are not required, however, to pay the planned periodic premium; you may increase or decrease premium payments, subject to our limits, and you may skip a planned payment or make unscheduled payments. You may change your planned payment schedule or the billing period, subject to our approval. Depending on the investment performance of the Sub-Accounts you select, the planned periodic premium may not be sufficient to keep the Policy in force, and you may need to change your planned payment schedule or make additional payments in order to prevent termination of the Policy. We reserve the right to suspend reminder notices if premiums are not being paid (except for notices in connection with the grace period). We will notify you prior to suspending reminder notices. We will also suspend reminder notices at your written request.

Allocation of Net Premium. Net Premium is the amount you pay as premium minus Expense Charges Applied to Premium. We will allocate Net Premium among the Sub-Accounts and the Fixed Account in accordance with your allocation instructions, except during the Right to Return Policy Period as described above. You will be required to specify initial allocation percentages in the policy application. While there are no limitations concerning the number of Investment Options to which Net Premium may be allocated, we reserve the right to impose minimum allocation amounts, as determined by the Fund, for any or all Investment Options.

You may change the allocation of future Net Premium at any time by submitting an acceptable request to our Service Center. An allocation change will be effective as of the date our Service Center receives your request for that change provided that it is received on a Valuation Date before the close of the New York Stock Exchange. If a request is received on a day that is not a Valuation Date or after the close of the New York Stock Exchange on a Valuation Date, it will become effective on the next Valuation Date.

Modified Endowment Contract. Less favorable federal tax rules apply to life insurance policies that are defined as "Modified Endowment Contracts." One way the Policy could become a Modified Endowment Contract is if you pay premiums in excess of applicable tax-law limitations.

We will notify you if we receive a premium that would, in our opinion, cause the Policy to become a Modified Endowment Contract. We will not credit the premium unless we receive specific instructions from you to do so. If we have not received instructions within 24 hours of the date we sent notice to you, we will immediately return the premium.

Additional Protection Benefit Rider (APB Rider)

The Policy may be issued with an APB Rider. This rider provides life insurance coverage, annually renewable to Attained Age 100, on the life of the Insured equal to the amount of the APB Rider Death Benefit. You will be required to specify the initial APB Rider Face Amount in the policy application.

The cost of the APB Rider will be included in the Monthly Cost of Insurance deduction. The applicable guaranteed maximum Monthly Cost of Insurance Rates for the APB Rider Death Benefit exceed those for the Base Death Benefit.

Target Premium is the amount of premium specified as such in the Policy, used to determine our sales load charges. Total Face Amount is the sum of the Specified Face Amount and the APB Rider Face Amount.

Two otherwise identical Policies with the same Total Face Amount will have different Target Premiums depending on how much of the Total Face Amount is attributable to the Specified Face Amount versus the APB Rider Face Amount. Target Premium will be lower for the Policy which has the greater APB Rider Face Amount, which will result in lower sales load deductions for that Policy.

If you convert the Policy to a flexible premium universal life insurance policy, any related APB Rider will terminate automatically. An APB Rider will also terminate on the earliest of-

our receipt of your written request for termination,

the lapse of the Policy because of insufficient value, or

the Insured's Attained Age 100 if the Maturity Date Extension Rider is in effect, or

the termination of the Policy.

Maturity Date Extension Rider

You may elect to extend the maturity date beyond the Insured's Attained Age 100. No further premium will be accepted and no further deduction for Monthly Cost of Insurance will be made. The Base Death Benefit will be equal to the Account Value. There is no charge for this rider.

The Policy may not qualify as life insurance beyond the Insured's Attained Age 100 and may be subject to tax consequences. We recommend that you receive counsel from your tax advisor. This rider may not be available in all states.

Enhanced Cash Surrender Value Endorsement

<R>

This endorsement provides an enhanced cash surrender value benefit if you surrender the Policy during the first ten Policy Years and such surrender is not made pursuant to an exchange under Section 1035 of the Internal Revenue Code (or any successor provision). The benefit is a return of a certain percentage of premium paid. Percentages for each Policy Year are shown in this endorsement. The amount available for Policy loan or partial surrender will not increase due to this endorsement. For purposes of computing any Death Benefit, the Account Value will be increased by the amount of this endorsement. This endorsement may not be available in all states and is provided at no charge.</R>

Fixed Account Endorsement

All Policies issued on or after December 15, 2002 include the Fixed Account Endorsement, which adds a Fixed Account to the Policy as an additional investment option. Policies issued prior to December 15, 2002 may have this endorsement at the Owner's option. This endorsement may not be available in all states and is provided at no charge. This prospectus presupposes this endorsement is affixed to the Policy.

Directed Deductions Endorsement

All Policies issued on or after December 15, 2002 include the Directed Deductions Endorsement. Policies issued prior to December 15, 2002 may have this endorsement at the Owner's option. This endorsement gives the Owner the ability to direct from which investment options the Monthly Expense Charge, Monthly Cost of Insurance Charge and Mortality & Expense Risk Charge are taken. This endorsement may not be available in all states and is provided at no charge. This prospectus presupposes this endorsement is affixed to the Policy.

Death Benefit

Policy Proceeds. If the Policy is in force at the time of the Insured's death and we have received Due Proof of the Insured's death, we will pay your designated beneficiary a lump sum amount equal to-

the amount of the Base Death Benefit, minus

the amount of any outstanding Policy Debt, plus

the amount of any APB Rider Death Benefit, plus

the amount of any other supplemental benefits.

<R>The amount of the Base Death Benefit and APB Rider Death Benefit depends upon the death benefit option in effect at the time of the Insured's death.</R>

Death Benefit Options. The Policy has two death benefit options. You will be required to select one of them in the Policy application.

Option A-Specified Face Amount. Under this option, the Base Death Benefit is the greater of-

- -	the Policy's Specified Face Amount, or the Account Value multiplied by the applicable Death Benefit Percentage.

Option B-Specified Face Amount Plus Account Value. Under this option, the Base Death Benefit is the greater of-

- -	the Specified Face Amount plus the Account Value, or the Account Value multiplied by the applicable Death Benefit Percentage.

Option B is not available, however, and you will be deemed to have elected Option A, if you have chosen the Cash Value Accumulation Test as the applicable Death Benefit Compliance Test. There is no charge related to the election of Option B.

At any time the Base Death Benefit is defined as the Account Value multiplied by the applicable Death Benefit Percentage, and the Base Death Benefit minus Account Value exceeds the Policy's Total Face Amount, we reserve the right to distribute Account Value to you as a partial surrender to the extent necessary so that the Base Death Benefit minus Account Value will equal the Total Face Amount. You will not have the option of providing evidence of insurability to maintain a higher level of Base Death Benefit.

We will notify you in writing if we exercise our right to distribute Account Value to you as a partial surrender as described above. You may allocate the partial surrender among the Sub-Accounts and the Fixed Account. If you do not specify the allocation, then we will allocate the partial surrender among the Sub-Accounts and the Fixed Account in the same proportion that the Account Value of each investment option bears to the aggregate Account Value of all Sub-Accounts and the Fixed Account on the date of partial surrender.

Changes in the Death Benefit Option. If you have chosen the Guideline Premium Test as the applicable Death Benefit Compliance Test, then you may change the death benefit option, subject to our underwriting rules in effect at the time of the change. Requests for a change must be made in writing to our Service Center. The effective date of the change will be the Policy Anniversary on or next following the date of receipt of your request.

If you change from Option B to Option A, we will increase the Specified Face Amount by the Account Value. If you change from Option A to Option B, we will reduce the Specified Face Amount by the Account Value. In either case, the amount of the Base Death Benefit at the time of change will not be altered, but the change will affect the determination of the Base Death Benefit going forward.

A change in the death benefit option could cause total premiums paid prior to the change to exceed the applicable maximum premium limitations under the Guideline Premium Test. The change could also reduce these limitations for future premium payments. If the requested change causes total premiums paid to exceed the applicable maximum premium limitations, you will be required to make a partial surrender of the Policy. You should consult a qualified tax adviser before changing the death benefit option.

APB Rider Death Benefit. The APB Rider Death Benefit is the greater of zero or the result of the APB Rider Face Amount minus the excess, if any, of the Base Death Benefit over-

the Specified Face Amount, if the applicable death benefit option is Option A, or

the Specified Face Amount plus the Account Value, if the applicable death benefit option is Option B.

Minimum Face Amount. Total Face Amount is the sum of the Specified Face Amount and the APB Rider Face Amount. In general, the Total Face Amount must be at least $50,000, of which the Specified Face Amount must be at least $5,000. We reserve the right to waive these minimums and to offer the Policy only in conjunction with an APB Rider with a specified APB Rider Face Amount.

Changes in Face Amount. After the end of the first Policy Year, you may change the Specified Face Amount and, if applicable, the APB Rider Face Amount, subject to our underwriting rules in effect at the time of the change. Unless you specify otherwise, we will first apply a change to the APB Rider Face Amount to the extent possible. You must send your request for a change to our Service Center in writing. The Effective Date of Coverage for changes will be-

- -	for any increase in coverage, the Monthly Anniversary Day that falls on or next follows the date we approve the supplemental application for the increase; and for any decrease in coverage, the Monthly Anniversary Day that falls on or next follows the date we receive your request.

Increases in Face Amount. An increase in the Specified Face Amount and, if applicable, the APB Rider Face Amount, is subject to our underwriting rules in effect at the time of the increase. You may be required to submit satisfactory evidence of the Insured's insurability.
Decreases in Face Amount. The Specified Face Amount may not decrease to less than the Minimum Specified Face Amount specified in the Policy. Similarly, a decrease in Specified Face Amount or APB Rider Face Amount may not decrease the Total Face Amount to an amount less than the Minimum Total Face Amount specified in the Policy. A decrease in face amount will be applied-
- - -	first, to the most recent increase; second, to the next most recent increases, in reverse chronological order; and finally, to the initial face amount.

A decrease in the Specified Face Amount or APB Rider Face Amount could cause total premiums paid prior to the change to exceed the applicable maximum premium limitations under the Guideline Premium Test. The change could also reduce these limitations for future premium payments. If the requested change causes total premiums paid to exceed the applicable maximum premium limitations, you will be required to make a partial surrender of the Policy. You should consult a qualified tax adviser before decreasing the Specified Face Amount or APB Rider Face Amount.

Account Value

Your Account Value is the sum of the amounts in each Sub-Account and the Fixed Account plus the amount of the Loan Account.

We measure the amounts in the Sub-Accounts in terms of Units and Unit Values. On any given day, the amount you

have in a Sub-Account is equal to the Unit Value multiplied by the number of Units credited to you in that Sub-Account. The Units for each Sub-Account will have different Unit Values.

Amounts allocated to a Sub-Account will be used to purchase Units of that Sub-Account. Units are redeemed when you make partial surrenders, undertake policy loans or transfer amounts from a Sub-Account, and for payment of the Mortality and Expense Risk Charge, the Monthly Expense Charge and the Monthly Cost of Insurance Charge. The number of Units of each Sub-Account purchased or redeemed is determined by dividing the dollar amount of the transaction by the Unit Value for the Sub-Account. A Valuation Date is any day on which we, the applicable Fund, and the New York Stock Exchange are open for business. For the first Valuation Date of each Sub-Account, the Unit Value is established at $10.00. The Unit Value for any subsequent Valuation Date is equal to the Unit Value for the preceding Valuation Date multiplied by the Net Investment Factor. The Unit Value of a Sub-Account for any Valuation Date is determined as of the close of the Valuation Period ending on that Valuation Date. The Valuation Period is the period of time from one determination of Unit Values to the next.

Transactions are normally processed on the date we receive a premium at our Principal Office or any acceptable request is received at our Service Center. If your premium or request is received on a date that is not a Valuation Date, or after the close of the New York Stock Exchange on a Valuation Date, the transaction will be processed on the next Valuation Date.

The Investment Start Date is the date we apply your first premium payment, which will be the later of the Issue Date, the Business Day we approve the policy application or the Business Day we receive a premium equal to or in excess of the Minimum Premium.

Account Value in the Sub-Accounts. The Account Value on the Investment Start Date equals-

that portion of Net Premium received and allocated to the Sub-Accounts and the Fixed Account, minus

the Monthly Expense Charges due on the Issue Date and subsequent Monthly Anniversary Days through the Investment Start Date, minus

the Monthly Cost of Insurance deductions due from the Issue Date through the Investment Start Date.

The Account Value on subsequent Valuation Dates is equal to-

- - - - - -	the Account Value attributable to the Sub-Account on the preceding Valuation Date multiplied by that Sub-Account's Net Investment Factor, minus the Daily Risk Percentage multiplied by the number of days in the Valuation Period multiplied by the Account Value in the Sub-Account, plus the value of the Fixed Account on the preceding Valuation Date, accrued at interest, plus that portion of Net Premium received and allocated to the Sub-Accounts and the Fixed Account during the current Valuation Period, plus any amounts transferred by You to the Sub-Accounts and Fixed Account during the current Valuation Period, minus any amounts transferred by You from the Sub-Accounts and Fixed Account during the current Valuation Period, plus
- - - -		that portion of any loan repayment allocated to a Sub-Account and the Fixed Account during the current Valuation Period, plus that portion of any interest credited on the Loan Account which is allocated to a Sub-Account and the Fixed Account during the current Valuation Period, minus that portion of any partial surrenders deducted from a Sub-Account and the Fixed Account during the current Valuation Period, minus that portion of any Policy loan transferred from a Sub-Account and the Fixed Account to the Loan Account during the current Valuation Period, minus

if a Monthly Anniversary Day occurs during the current Valuation Period, that portion of the Monthly Expense Charge for the Policy Month just beginning charged to the Sub-Accounts and the Fixed Account, minus

if a Monthly Anniversary Day occurs during the current Valuation Period, that portion of the Monthly Cost of Insurance for the Policy Month just ending charged to the Sub-Accounts and the Fixed Account, minus

if you surrender during the current Valuation Period, that portion of the pro-rata Monthly Cost of Insurance for the Policy month charged to the Sub-Accounts and the Fixed Account.

A Sub-Account's Unit Value on any Valuation Date is equal to the Unit Value for the preceding Valuation Date multiplied by the Net Investment Factor.

Net Investment Factor. The Net Investment Factor is used to measure the Sub-Account's investment performance from one Valuation Period to the next. This factor will be greater or less than or equal to one, corresponding to a positive or negative or to a lack of change in the Sub-Account's investment performance for the preceding Valuation Period. Although we do not currently take any federal, state or local taxes into account when determining the Net Investment Factor, we reserve the right to do so. The Net Investment Factor for each Sub-Account for any Valuation Period is determined by dividing the net result of-

the net asset value of a mutual fund share held in the Sub-Account determined as of the end of the Valuation Period, plus

the per share amount of any dividend or other distribution declared on fund shares held in the Sub-Account if the "ex-dividend" date occurs during the Valuation Period, plus or minus

a per share credit or charge with respect to any taxes reserved for by us, or paid by us if not previously reserved for, during the Valuation Period which are determined by us to be attributable to the operation of the Sub-Account,

-by the net asset value of a fund share held in the Sub-Account determined as of the end of the preceding Valuation Period.

Account Value in the Loan Account. The Account Value in the Loan Account is zero on the Investment Start Date.

The Account Value in the Loan Account on any day after the Investment Start Date equals-

the Account Value in the Loan Account on the preceding day credited with interest at the rate specified in the Policy as the "interest credited on Loan Account rate" of 4%, plus

any amount transferred from the Sub-Accounts or the Fixed Account to the Loan Account for Policy loans requested on that day; minus

any loan repayments made on that day, minus

if that day is a Policy Anniversary, any amount transferred to the Sub-Accounts or the Fixed Account by which the Loan Account Value exceeds the outstanding Policy loan.

Insufficient Value. If the Account Value minus the outstanding Policy Debt is less than or equal to zero on a Valuation Date, then the Policy will terminate for no value, subject to the grace period described below.

Grace Period. If, on a Valuation Date, the Policy will terminate by reason of insufficient value, we will allow a grace period. This grace period will allow 61 calendar days from that Valuation Date for the payment of a Net Premium sufficient to cover the deductions from the Account Value. Notice of premium due will be mailed to your last known address or the last known address of any assignee of record. We will assume that your last known address is the address shown on the policy application (or notice of assignment), unless we have received satisfactory written notice of a change in address. If the premium due is not paid during the grace period, then the Policy will terminate without value at the end of the 61 day period without further notice. The Policy will continue to remain in force during this grace period. If the Policy Proceeds become payable during the grace period, then we will deduct any overdue Monthly Cost of Insurance and Monthly Expense Charge from the amount payable. If the Policy terminates by reason of insufficient value, there is no right to reinstate the coverage.

Splitting Units. We reserve the right to split or combine the value of Units. In effecting any such change, strict equity will be preserved and no change will have a material effect on the benefits or other provisions of the Policy.

Transfer Privileges

You normally may transfer all or a portion of your Account Value among Sub-Accounts and into the Fixed Account. Transfers from the Fixed Account may not exceed the greater of the transfer percentage multiplied by the highest Fixed Account value over the transfer period and the transfer minimum. The transfer percentage, transfer period and transfer minimum are shown in the Policy. We will make transfers pursuant to an acceptable request to our Principal Office.

You may transfer a specified dollar amount or a specified percentage of the investment option's value.

Your transfer privileges are subject to our consent. We reserve the right to impose limitations on transfers, including, but not limited to-

the minimum amount that may be transferred;

the frequency of transfers; and

the minimum amount that may remain in an investment option following a transfer from that investment option.

We will notify you in writing of the imposition of a transfer limitation. We do not reserve any right to impose charges for transfers. Any restrictions on transfers will apply to all policyowners in a non-discriminatory fashion.

Short-Term Trading

The Policy is not designed for short-term trading. If you wish to employ such strategies, do not purchase a Policy. Transfer limits and other restrictions, described below, are subject to our ability to monitor transfer activity. Some Owners and their third party intermediaries engaging in short-term trading may employ a variety of strategies to avoid detection. Despite our efforts to prevent short-term trading, there is no assurance that we will be able to identify such Owners or intermediaries or curtail their trading. A failure to detect and curtail short-term trading could result in adverse consequences to Owners. Short-term trading can increase costs for all Owners as a result of excessive portfolio

transaction fees. In addition, short-term trading can adversely affect a Fund's performance. If large amounts of money are suddenly transferred out of a Fund, the Fund's investment adviser cannot effectively invest in accordance with the Fund's investment objectives and policies.

The Company has policies and procedures to discourage frequent transfers of Account Value. As described below under "Transfer Privileges," the Policy includes the right to limit the frequency of transfers.

Short-term trading activities whether by an individual, a firm or a third party authorized to initiate transfer requests on behalf of Owner(s) may be subject to other restrictions as well. For example, we reserve the right to take actions against short-term trading which restrict your transfer privileges more narrowly than the policies described under "Transfer Privileges", such as requiring transfer requests to be submitted in writing through regular first-class U.S., mail (e.g., no overnight, priority or courier delivery allowed), and refusing any and all transfer instructions.

If we determine that a third party acting on your behalf is engaging (alone or in combination with transfers effected by you directly) in a pattern of short-term trading, we may refuse to process certain transfers requested by such a third party. We may also impose special restrictions on third parties that engage in reallocations of Policy values by limiting the frequency of the transfer, requiring advance notice of the transfer pursuant to in-force service agreements, and reallocating or exchanging 100% of the values in the redeeming subaccounts.

In addition, some of the Funds reserve the right to refuse purchase or transfers requests from the Variable Account if, in the judgment of the Fund's investment adviser, the Fund would be unable to invest effectively in accordance with its investment objective and policies, or the request is considered to be part of a short-term trading strategy. Accordingly, the Variable Account may not be in a position to effectuate some transfers with such Funds and therefore, will be unable to process such transfer requests. We also reserve the right to refuse requests involving transfers to or from the Fixed Account Option.

We reserve the right to waive short-term trading restrictions, where permitted by law and not adverse to the interest of the relevant underlying Fund and other shareholders, in certain instances such as:

- when a new broker of record is designated for the Policy;

- when necessary in our view to avoid hardship to an Owner;

- when underlying Funds are dissolved, merged or substituted.

If short-term trading results as a consequence of waiving the restrictions against short-term trading, it could expose Owners to certain risks. The short-term trading could increase costs for all Owners as a result of excessive portfolio transaction fees. In addition, the short-term trading could adversely affect a Fund's performance. If large amounts of money are suddenly transferred out of a Fund, the Fund's investment adviser cannot effectively invest in accordance with the Fund's investment objectives and policies. Unless the short-term trading policy and the permitted waivers of that policy are applied uniformly, some Owners may experience a different application of the policy and therefore may experience some of these risks. Too much discretion on our part in allowing the waivers of short-term trading policy could result in an unequal treatment of short-term traders by permitting some short-term traders to engage in short-term trading while prohibiting others from doing the same.

Accessing Your Account Value

Surrender. By written request, you may surrender the Policy for its Cash Surrender Value at any time. The date the surrender is processed, the insurance coverage and all other benefits under the Policy will terminate. The Cash Surrender Value is-
- - - -	the Account Value, minus the outstanding balance of any outstanding Policy Debt; plus the benefit payable under the Enhanced Cash Surrender Value endorsement, if any, plus the Sales Load Refund at Surrender, if any.

Sales Load Refund at Surrender is that portion of any premium paid in the Policy Year of surrender that we will refund if you surrender the Policy in the first three Policy Years.

Partial Surrenders. You may make a partial surrender of the Policy once each Policy Year after the first Policy Year by written request to our Service Center. The amount of any partial surrender may not exceed the Account Value minus any outstanding Policy Debt and will be payable in a lump sum. Partial surrenders may have tax consequences. Unless you provide us satisfactory evidence that the Insured remains an acceptable risk based on our underwriting limits and standards, the Total Face Amount will be reduced to the extent necessary so that

- -	the death benefit minus the Account Value immediately after the partial surrender does not exceed the death benefit minus the Account Value immediately before the partial surrender.

If you provide satisfactory evidence of insurability, the Death Benefit will be equal to what it was immediately prior to the partial surrender. After the partial surrender, the Specified Face Amount may not be lower than the minimum Specified Face Amount and the Total Face Amount may not be lower than the minimum Total Face Amount.

You may allocate a partial surrender among the Sub-Accounts and the Fixed Account. If you do not specify the allocation, then we will allocate the partial surrender among the investment options in the same proportion that the Account Value of each investment option bears to the aggregate Account Value less the Loan Account of all investment options on the date of partial surrender.

Policy Loans. Using the Policy as collateral, you may request a policy loan of up to 90% of your Account Value, decreased by the balance of any outstanding Policy Debt on the date the policy loan is made. We will transfer Account Value equal to the amount of the policy loan from the Sub-Accounts and the Fixed Account to the Loan Account on the date the policy loan is made. You may allocate the policy loan among the Sub-Accounts and the Fixed Account. If you do not specify the allocation, then we will allocate the policy loan among the investment options in the same proportion that the Account Value of each investment option bears to the aggregate Account Value less the Loan Account of all investment options immediately prior to the loan.

Interest on the policy loan will accrue daily at an annual rate of 5% in Policy Years 1 through 10 and 4.25% thereafter. This interest will be due and payable to us in arrears on each Policy Anniversary. Any unpaid interest will be added to the principal amount as an additional policy loan and will bear interest at the same rate and in the same manner as the prior policy loan.

The Cash Surrender Value and the Policy Proceeds are reduced by the amount of any outstanding Policy Debt.

All funds we receive from you will be credited to the Policy as premium unless we have received acceptable notice that the funds are to be applied to repay a policy loan. It is generally advantageous to repay a loan rather than to make a premium payment, because premium payments incur expense charges but loan repayments do not. Loan repayments will first reduce the outstanding balance of the policy loan and then accrued but unpaid interest on such loans. We will accept repayment of any policy loan at any time before Maturity. The amount of the loan repayment up to the outstanding balance of the policy loan will be transferred from the Loan Account to the Sub-Accounts and the Fixed Account. You may allocate the loan repayment among the Sub-Accounts and the Fixed Account. If you do not specify the allocation, then we will allocate the loan repayment among the investment options in the same proportion that the

Account Value of each investment option bears to the total Account Value minus the Loan Account immediately prior to the loan repayment. We reserve the right to require that loan repayments, up to the amount of the loan allocated to the Fixed Account, first be allocated back to the Fixed Account.

Deferral of Payment. We will usually pay any amount due from the Variable Account within seven days after the Valuation Date following our receipt of written notice for payment or, in the case of death of the Insured, Due Proof of such death. Payment of any amount payable from the Variable Account on death, surrender, partial surrender or policy loan may be postponed whenever-

the New York Stock Exchange is closed, other than customary weekend and holiday closing, or trading on that exchange is otherwise restricted;

the SEC, by order, permits postponement for the protection of policyowners; or

an emergency exists as determined by the SEC, as a result of which disposal of securities is not reasonably practicable, or it is not reasonably practicable to determine the value of the assets of the Variable Account.

We may defer payment from the Fixed Account for a period up to six months.

Charges, Deductions and Refunds

Expense Charges Applied to Premium. We deduct charges from each premium payment for premium taxes and our federal tax obligations and as a sales load.

States and a few cities and municipalities may impose taxes on premiums paid for life insurance, which generally range from 2% to 4% of premium but may exceed 4% in some states (for example, Kentucky). We will from time to time determine the applicable premium tax rate based on the rate we expect to pay. The premium tax rate is guaranteed not to exceed 4% for all states except Kentucky, in which case it is guaranteed not to exceed 9%.

We deduct a 1.25% charge from each premium payment for our federal tax obligations. This charge is guaranteed not to exceed 1.25%. The charge for federal tax obligations is referred to as the "DAC tax" in the Policy.

We also charge a current sales load of 8.75% in Policy Year 1, 7.25% in Policy Years 2-4 and 6.00% in Policy Years 5-7 on each premium payment up to and including Target Premium (as specified in the Policy) and a 2.25% sales load on

premiums paid in excess of Target Premium for each of the first seven Policy Years. This sales load is guaranteed not to exceed 8.75% on each premium payment up to and including Target Premium and 2.25% on premium in excess of Target Premium. There are no sales load charges after Policy Year 7. Target Premium varies based on the Specified Face Amount and the Insured's Issue Age and sex. We may reduce or waive the sales load for certain group or sponsored arrangements and corporate purchasers.

Sales Load Refund at Surrender. If you surrender the Policy during the first three Policy Years, we will refund 100% of the sales load charged against premium payments made during the Policy Year in which you surrendered the Policy.

Mortality and Expense Risk Charge. We deduct a daily charge from the assets of the Variable Account for the mortality and expense risks we assume with respect to the Policy. Unless you direct otherwise, we will allocate the Mortality and Expense Risk Charge among the investment options in the same proportion that the Account Value of each investment option bears to the aggregate Account Value of all investment options immediately prior to the deduction. This charge is based on the applicable Daily Risk Percentage, which we will from time to time determine based on our expectations of future interest, mortality experience, persistency, expenses and taxes. Expressed as an equivalent annual rate, the Daily Risk Percentage is guaranteed not to exceed 0.60% (0.00163894% daily) of assets. Our current effective annual rates as a percentage of assets are-

0.40% (0.00109371% daily) for Policy Years 1 through 10;

0.25% (0.00068408% daily) for Policy Years 11 through 20; and

0.20% (0.00054740% daily) thereafter.

The mortality risk we assume is that the group of lives insured under the Policies may, on average, live for shorter periods of time than we estimated. The expense risk we assume is that our costs of issuing and administering Policies may be more than we estimated.

Monthly Expense Charge. We deduct a flat charge at the beginning of each month to cover administrative and other expenses actually incurred. We will from time to time determine the applicable Monthly Expense Charge based on our expectations of future expenses, which will not exceed $13.75 in any Policy Month. Unless you direct otherwise, we will allocate the Monthly Expense Charge among the investment options in the same proportion that the Account Value of each investment option bears to the aggregate Account Value of all investment options immediately prior to the deduction. Currently, the Monthly Expense Charge is $13.75 per month for the first Policy Year and $7.50 per month thereafter.

Monthly Cost of Insurance. We deduct a Monthly Cost of Insurance charge from your Account Value to cover anticipated costs of providing insurance coverage. This charge is made, in arrears, at the end of each Policy Month. If you surrender the Policy on any day other than a Monthly Anniversary Day, we will deduct a cost of insurance charge on a pro-rata basis. Unless you direct otherwise, we will allocate the Monthly Cost of Insurance deduction among the investment options in the same proportion that the Account Value of each investment option bears to the aggregate Account Value of all investment options immediately prior to the deduction. The deduction will equal the monthly cost of insurance rate multiplied by the Net Amount at Risk, divided by 1000. The deduction will also be adjusted to include any rider charges and any additional charges due to a substandard risk classification. The Net Amount at Risk

is determined at the end of the Policy Month prior to the deduction of the Monthly Cost of Insurance and is the Death Benefit less the Account Value. The Net Amount at Risk is affected by the performance of the investment options to which premium is allocated, the cumulative premium paid, any Policy Debt, any partial surrenders, transaction fees and periodic charges.

Monthly Cost of Insurance rates are based on the length of time the Policy has been in force and on the Insured's sex (except for unisex Policies), Issue Age, Class and table rating, if any. We will from time to time determine the applicable rates based on our expectations of future experience with respect to mortality, persistency, interest rates, expenses and taxes. The expenses we consider will include, but not be limited to, any additional commissions we are required to pay as a result of any additional services that a corporate purchaser specifically requests or authorizes to be provided by our agent. Any variations will be based on uniformly applied criteria that do not discriminate unfairly against any person. We anticipate the cost of insurance rates for coverage under the Policy to be less than the guaranteed maximum monthly rates shown in the Policy, unless the Insured has been rated a substandard risk. The cost of insurance rates shown in the Policy are based on the 1980 Commissioner's Standard Ordinary Mortality Table A (for males and unisex Policies) or Table G (for females) Monthly cost of insurance rates for classes of Insureds with substandard risk ratings are based on multiples of the CSO Mortality Tables described above.

APB Rider Charge. The Account Value will be reduced monthly by the cost of this rider, if attached to the Policy. We anticipate the rider's cost of insurance to be less than the guaranteed maximum monthly rates shown in the Policy for this rider. The rates are based on 125% of the 1980 CSO Mortality Table A (for males and unisex Policies) or G (for females), unless the Insured has been rated a substandard risk. Monthly rider cost of insurance rates for classes of Insured with substandard risk ratings are based on multiples of the CSO Mortality Tables described above.

Reduction of Charges. We reserve the right to reduce any of our charges and deductions in connection with the sale of the Policy if we expect that the sale may result in cost savings, subject to any requirements we may from time to time impose. We may change our requirements based on experience. We will determine the propriety and amount of any reduction. No reduction will be unfairly discriminatory against the interests of any class of policyowner.

Termination of Policy

The Policy will terminate on the earliest of-

the date we receive your request to surrender, or

the expiration date of the grace period due to insufficient value, or

the date of Insured's death; or

the date of maturity.

Other Policy Provisions

Alteration. Our sales representatives do not have the authority to either alter or modify the Policy or to waive any of its provisions. The only persons with this authority are our president, actuary, secretary or one of our vice presidents.

Assignments. During the lifetime of the Insured, you may assign all or some of your rights under the Policy. All assignments must be filed at our Service Center and must be in satisfactory written form. The assignment will then be effective as of the date you signed the form, subject to any action taken before we receive it at our Service Center. We are not responsible for the validity or legal effect of any assignment.

Rights of Owner. While the Insured is alive, unless you have assigned any of these rights, you may-

transfer ownership to a new owner;

name a contingent owner who will automatically become the owner of the Policy if you die before the Insured;

change or revoke a contingent owner;

change or revoke a beneficiary; and

exercise all other rights in the Policy.

When you transfer your rights to a new owner, you automatically revoke any prior contingent owner designation. You do not affect a prior beneficiary when you merely transfer ownership, or change or revoke a contingent owner designation. When you want to change or revoke a prior beneficiary designation, you have to specify that action.

You do not need the consent of a beneficiary or a contingent owner in order to exercise any of your rights. However, you must give us written notice of the requested action. The request must be filed at our Service Center and must be in satisfactory written form. Your request will then, except as otherwise specified in the Policy, be effective as of the date you signed the form, subject to any action taken before we receive it at our Service Center.

Rights of Beneficiary. The beneficiary has no rights in the Policy until the death of the Insured. If a beneficiary is alive at that time, the beneficiary will be entitled to payment of the Policy Proceeds as they become due.

Reports to Policyowners. We will send you a report at least once each Policy Year. The report will show current policy values, premiums paid and deductions made since the last report. It will also show the balance of any outstanding policy loans and accrued interest on those loans.

Illustrations. Upon request, we will provide you with a hypothetical illustration of future Account Value and Death Benefits. This illustration will be furnished to you for a fee not to exceed $25.

Conversion. You may convert the Policy into a flexible premium universal life policy offered by an affiliate, Sun Life Assurance Company of Canada, during the first 24 months after the Issue Date while the Policy is in force. Choice of a new policy is subject to our approval and will be restricted to those policies that offer the same Class and rating as the Policy. Our affiliate will issue the new policy with the same Class and rating as the Policy without new evidence of the Insured's insurability. This provision does not apply to the APB Rider, if any, or to any other supplemental benefits that may be attached to the Policy. Any riders or supplemental benefits will terminate automatically when the Policy is converted.

Misstatement of Age or Sex. If the age or sex (unless a unisex Policy) of the Insured is stated incorrectly in the Policy application, the amounts payable by us will be adjusted.

Misstatement discovered at death-The Death Benefit will be recalculated to that which would be purchased by the most recently charged Monthly Cost of Insurance rate for the correct age or sex.

Misstatement discovered prior to death-The Account Value will be recalculated from the Issue Date using the Monthly Cost of Insurance rates based on the correct age or sex.

Suicide. Unless state law otherwise requires, if the Insured, whether sane or insane, commits suicide within two years after the Issue Date, we will not pay any part of the Policy Proceeds. We will refund to you the premiums paid, minus the amount of any Policy Debt and any partial surrenders.

Incontestability. All statements made in the application or in a supplemental application are representations and not warranties. We will rely on these statements when approving the issuance, increase in face amount, increase in Base Death Benefit over premium paid, or change in death benefit option of the Policy. We can use no statement in defense of a claim unless the statement was made in the application or in a supplemental application. In the absence of fraud, after a Policy has been in force during the lifetime of the Insured for a period of two years from its Issue Date, we cannot contest it except for non-payment of premiums. However, any increase in the Total Face Amount which is effective after the Issue Date will be incontestable only after the increase has been in force during the lifetime of the Insured for two years from the effective date of coverage of the increase. Any increase in Base Death Benefit over premium paid or increase in Base Death Benefit due to a death benefit option change will be incontestable only after such increase has been in force during the lifetime of the Insured for two years from the date of the increase.

Addition, Deletion or Substitution of Investments. Subject to our obtaining any necessary regulatory approvals, share of other registered open-end investment companies or unit investment trusts may be substituted both for fund shares already purchased by the Variable Account and/or as the security to be purchased in the future. In addition, the investment policies of the Sub-Accounts will not be changed without the approval of the Insurance Commissioner of the State of Delaware. We also reserve the right to eliminate or combine existing Sub-Accounts or to transfer assets between Sub-Accounts. In the event of any substitution or other act described above, we may make appropriate amendment to the Policy to reflect the substitution.

Nonparticipating. The Policy does not pay dividends. The Policy does not share in our profits or surplus earnings.

Modification. Upon notice to you, we may modify the Policy if that modification-

is necessary to make the Policy, the Variable Account or the Fixed Account comply with any law or regulation issued by a governmental agency to which we are subject;

is necessary to assure continued qualification of the Policy under the Internal Revenue Code or other federal or state laws as a life insurance policy;

is necessary to reflect a change in the operation of the Variable Account or the Sub-Accounts; or

adds, deletes or otherwise changes Sub-Account options.

We also reserve the right to modify certain provisions of the Policy as stated in those provisions. In the event of any such modification, we may make appropriate amendment to the Policy to reflect the modification.

Entire Contract. Your entire contract with us consists of the Policy, the application(s), any riders, any endorsements, and any other attachments. Any hypothetical illustrations prepared in connection with the Policy do not form a part of our contract with you and are intended solely to provide information about how Policy values may be affected by different investment returns and other factors.

Performance Information

From time to time, we may advertise total return and average annual total return of the Funds. This performance information, presented in sales literature, is based on historical earnings and is not intended to indicate future performance. Total return for a Portfolio refers to the total of the income generated by the Fund net of total operating expenses plus capital gains and losses, realized or unrealized, for the Fund. Total return of the Portfolio, net of Mortality & Expense Risk Charges, refers to the total of the income generated by the Fund net of total operating expenses plus capital gains and losses, realized or unrealized, for the Fund and net of the mortality and expense risk charge. Other charges, fees and expenses payable under the Policy are not deducted from the performance information. Average annual total return reflects the hypothetical annually compounded return that would have produced the same cumulative return if the Fund's or Sub-Account's performance had been constant over the entire period. Because average annual total returns tend to smooth out variations in the return of the Fund or Sub-Account, they are not the same as actual year-by-year results.

We may compare performance information in reports and promotional literature, to-

the S&P 500, Dow Jones Industrial Average, Lehman Brothers Aggregate Bond Index or other unmanaged indices so that investors may compare the Sub-Account results with those of a group of unmanaged securities widely regarded by investors as representative of the securities markets in general;

other groups of variable life separate accounts or other investment products tracked by Lipper Analytical Services, a widely used independent research firm which ranks mutual funds and other investment products by overall performance, investment objectives, and assets, or tracked by other services, companies, publications, or persons, such as Morningstar, Inc., who rank such investment products on overall performance or other criteria; or

the Consumer Price Index (a measure for inflation) to assess the real rate of return from an investment in the Sub-Account.

Unmanaged indices may assume the reinvestment of dividends but generally do not reflect deductions for administrative and management costs and expenses.

We may provide in advertising, sales literature, periodic publications or other materials information on various topics of interest to policyowners and prospective policyowners. Topics may include-

-		the relationship between sectors of the economy and the economy as a whole and its effect on various securities markets, investment strategies and techniques (such as value investing, short-term trading, dollar cost averaging, asset allocation, constant ratio transfer and account rebalancing);
- - - -	the advantages and disadvantages of investing in tax-deferred and taxable investments; customer profiles and hypothetical purchase and investment scenarios; financial management and tax and retirement planning; and investment alternatives to certificates of deposit and other financial instruments, including comparisons between the Policy and the characteristics of and market for such financial instruments.
The Policy was first offered to the public in 1997. We may, however, advertise return data based on the period of time that the Funds have been in existence. The results for any period prior to the time the Policy was first publicly offered will be calculated as if the Policy had been offered during that period of time.

Voting Rights

We will vote shares of the Funds held in the Variable Account in accordance with instructions received from policyowners having a voting interest in the corresponding Sub-Accounts, to the extent required by law. We will provide each policyowner who has a voting interest in a Sub-Account with the proxy materials of the corresponding Fund, together with an appropriate form for the policyowner to submit its voting instructions to us. We will vote shares for which we receive no timely instructions, together with shares not attributable to any Policy, in the same proportion as those shares held by the Sub-Account for which we receive instructions.

We will determine the number of shares for which you are entitled to provide voting instructions as of the record date established for the applicable Fund. This number is determined by dividing your Account Value in the Sub-Account, if any, by the net asset value of one share in the corresponding Fund.

We may, if required by state insurance regulators, disregard voting instructions if the instructions require shares to be voted to cause a change in the subclassification or investment objective of one or more of the Funds, or to approve or disapprove an investment advisory contract for a Fund. In addition, we may disregard voting instructions in favor of any change in the investment policies or in any investment adviser or principal underwriter of a Fund. Our disapproval of any such change must be reasonable and, in the case of change in investment policies or investment adviser, based on a good faith determination that the change would be contrary to state law or otherwise inappropriate in light of the objectives and purposes of the Fund. If we disregard voting instructions, we will include a summary of and the reasons for that action in our next periodic report to policyowners.

We reserve the right to vote shares held in the Variable Account in our own right, if permitted by applicable law.

Distribution of Policy

The Policy is sold by licensed insurance agents ("Selling Agents") in those states where the Policy may be lawfully sold. Such Selling Agents will be registered representatives of affiliated and unaffiliated broker-dealer firms ("Selling Broker-Dealers") registered under the Securities Exchange Act of 1934 who are members of the National Association of Securities Dealers, Inc. (the "NASD") and who have entered into selling agreements with the Company and our general distributor, Clarendon Insurance Agency, Inc. ("Clarendon"), One Sun Life Executive Park, Wellesley Hills, Massachusetts 02481. Clarendon is a wholly-owned subsidiary of the Company, is registered with the SEC under the Securities Exchange Act of 1934 and is a member of the NASD.

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The Company (or its affiliates, for the purposes of this section only, collectively, "the Company"), pays the Selling Broker-Dealers compensation for sale of the Policy. The Selling Agents who solicit sales of the Policy typically receive a portion of the compensation paid by the Company to the Selling Broker-Dealers in the form of commissions or other compensation, depending on the agreement between the Selling Broker-Dealer and their Selling Agent. This compensation is not paid directly by the Policy Owner or the Separate Account. The Company intends to recoup this compensation through fees and charges imposed under the Policy, and from profits on payments received by the Company for providing administrative, marketing, and other support and services to the Funds. The amount and timing of commissions the Company may pay to Selling Broker-Dealers is not expected to be more than 40% of premium paid in the first Policy Year and 15% per annum of premium paid in Policy Years two through seven. We may also pay a commission of-

-	up to 0.15% per annum of Account Value for Policy Years one through twenty; and

-	up to 0.10% per annum of Account Value thereafter.

We may also pay up to an additional 0.15% per annum of Account Value to broker-dealers who provide additional services specifically requested or authorized by corporate purchasers. The Company may pay or allow other promotional incentives or payments in the form of cash or other compensation to the extent permitted by NASD rules and other applicable laws and regulations.

The Company also pays compensation to wholesaling broker-dealers or other firms or intermediaries, including, in some cases, payments to affiliates of the Company such as Sun Life Financial Distributors, Inc., in return for wholesaling services such as providing marketing and sales support, product training and administrative services to the Selling Agents of the Selling Broker-Dealers. These allowances may be based on a percentage of premium, a percentage of Account Value and/or may be a fixed dollar amount.

In addition to the compensation described above, the Company may make additional cash payments or reimbursements to Selling Broker-Dealers in recognition of their marketing and distribution, transaction processing and/or administrative services support. These payments are not offered to all Selling Broker-Dealers, and the terms of any particular agreement governing the payments may vary among Selling Broker-Dealers depending on, among other things, the level of and type of marketing and distribution support provided. Marketing and distribution support services may include, among other services, placement of the Company's products on the Selling Broker-Dealer's preferred or recommended list, access to the Selling Broker-Dealer's registered representatives for purposes of promoting sales of the Company's products, assistance in training and education for the Selling Agents, and opportunities for the Company to participate in sales conferences and educational seminars. The payments or reimbursements may be calculated as a percentage of the particular Selling Broker-Dealer's actual aggregate sales of our variable policies (including the Policy), in most cases not to exceed 3% of aggregate sales attributable to the Selling Broker-Dealer and/or may be a fixed dollar amount.</R>

Federal Income Tax Considerations

The following is a summary of our understanding of current federal income tax laws and is not intended as tax advice. You should be aware that Congress has the power to enact legislation affecting the tax treatment of life insurance contracts which could be applied retroactively. New judicial or administrative interpretation of federal income tax law may also affect the tax treatment of life insurance contracts. The Internal Revenue Code of 1986, as amended (the "Code"), is not in force in the Commonwealth of Puerto Rico. Accordingly, some references in this summary will not apply to Policies issued in Puerto Rico. However, due to IRS Rev. Rul. 2004-75, as amplified by Rev. Rul. 2004-97, we will treat Policy distributions and withdrawals occurring on and after January 1, 2005 as U.S.-source income that is subject to U.S. income tax withholding and reporting. Any person contemplating the purchase of a Policy or any transaction involving a Policy should consult a qualified tax adviser. We do not make any representation or provide any guarantee regarding the federal, state or local tax treatment of any Policy or any transaction involving a Policy.

Our Tax Status

We are taxed as a life insurance company under Subchapter L of the Code. Although we account for the operations of the Variable Account separately from our other operations for purposes of federal income taxation, the Variable Account currently is not separately taxable as a regulated investment company or other taxable entity.

Taxes we pay, or reserve for, that are attributable to the earnings of the Variable Account could affect the Net Investment Factor, which in turn affects your Account Value. Under existing federal income tax law, however, the income (consisting primarily of interest, dividends and net capital gains) of the Variable Account, to the extent applied to increase reserves under the Policy, is not taxable to us. Similarly, no state or local income taxes are currently attributable to the earnings of the Variable Account. Therefore, we do not take any federal, state or local taxes into account when determining the Net Investment Factor. We may take taxes into account when determining the Net Investment Factor in future years if, due to a change in law, our tax status or otherwise, such taxes are attributable to the earnings of the Variable Account.

Taxation of Policy Proceeds

Section 7702 of the Code provides certain tests for whether a policy will be treated as a "life insurance contract" for tax purposes. Provided that the policyowner of the Policy has an insurable interest in the Insured, we believe that the Policy meets these tests, and thus should receive the same federal income tax treatment as a fixed life insurance contract. As such, the Death Benefit under the Policy will generally be eligible for exclusion from the gross income of the beneficiary under Section 101 of the Code, and the policyowner will not be deemed to be in constructive receipt of the increases in Cash Surrender Values, including additions attributable to interest, dividends, appreciation or gains realized upon transfers among the Sub-Accounts and the Fixed Account, until actual receipt thereof.

However, you will be taxed on all of the accumulated income under the Policy on its maturity date and there can be no assurance than an election to extend the maturity date of the Policy will avoid that result. In addition, a corporate owner may be subject to alternative minimum tax on the annual increases in Cash Surrender Values and on the portion of the Death Benefit under the Policy that exceeds its Cash Surrender Value.

To qualify as a life insurance contract under Section 7702, the Policy must satisfy certain actuarial requirements. Section 7702 requires that actuarial calculations be based on mortality charges that meet the "reasonable mortality charge" requirements set forth in the Code, and other charges reasonably expected to be actually paid that are specified in the Policy. The law relating to reasonableness standards for mortality and other charges is based on statutory language and certain IRS pronouncements that do not address all relevant issues. Accordingly, although we believe that the mortality and other charges that are used in the calculations (including those used with respect to Policies issued to so-called "sub-standard risks") meet the applicable requirements, we cannot be certain. It is possible that future regulations will contain standards that would require us to modify the mortality and other charges used in the calculations, and we reserve the right to make any such modifications.

For a variable contract like the Policy to qualify as life insurance for federal income tax purposes, it also must comply with the investment diversification rules found in Section 817 of the Code. We believe that the Variable Account complies with the diversification requirements prescribed by Section 1.817-5 of the Treasury Regulations.

The IRS has stated that satisfaction of the diversification requirements described above by itself does not prevent a contract owner from being treated as the owner of separate account assets under an "owner control" test. If a contract owner is treated as the owner of separate account assets for tax purposes, the contract owner would be subject to taxation on the income and gains from the separate account assets. In published revenue rulings through 1982 and then again in 2003, the IRS has stated that a variable contract owner will be considered the owner of separate account assets if the owner possesses incidents of ownership in those assets, such as the ability to exercise control over the investment of the assets. In Rev. Rul. 2003-91, the IRS considered certain variable annuity and variable life insurance contracts and concluded that the owners of the variable contracts would not be considered the owners of the contracts underlying assets for federal income tax purposes.

Rev. Rul. 2003-91 states that the determination of whether the owner of a variable contract possesses sufficient incidents of ownership over the assets underlying the variable contract so as to be deemed the owner of those assets for federal income tax purposes will depend on all the facts and circumstances. We do not believe that the differences between the Policy and the contracts described in Rev. Rul. 2003-91 with respect to the number of investment choices and the ability to transfer among investment choices should prevent the holding in Rev. Rul. 2003-91 from applying. Nevertheless, you should consult with a competent tax adviser on the potential impact of the investor control rules of the IRS as they relate to the investment decisions and activities you may undertake with respect to the Policy.

The guidelines in Rev. Rul. 2003-91 do not address the treatment of a policyholder which is, or which is affiliated with, an investment manager. Any investment manager or affiliate who purchases a Policy assumes the risk that it may be treated as the owner of the investments underlying the Policy under the "owner control" rules because of the investment manager's control over assets held under the Policy. However, because the diversification rules would permit an investment manager (or its affiliate) to hold a direct investment in an investment option under the Policy, we do not believe that the application of the "owner control" rules to an investment manager (or its affiliate) should affect you.

In the future, the IRS and/or the Treasury Department may issue new rulings, interpretations or regulations on this subject. Accordingly, we reserve the right to modify the Policy as necessary to attempt to prevent you from being considered the owner, for tax purposes, of the underlying assets. We also reserve the right to notify you if we determine that it is no longer practicable to maintain the Policy in a manner that was designed to prevent you from being considered the owner of the assets of the Separate Account. You bear the risk that you may be treated as the owner of Separate Account assets and taxed accordingly.

The tax consequences of distributions from, and loans taken from or secured by, a Policy depend on whether the Policy is classified as a Modified Endowment Contract under Section 7702A of the Code. Due to the flexibility of the payment of premiums and other rights you have under the Policy, classification of the Policy as a Modified Endowment Contract will depend upon the individual operation of each Policy. A Policy is a Modified Endowment Contract if the aggregate amount paid under the Policy at any time during the first seven Policy Years exceeds the sum of the net level premiums that would have been paid on or before such time if the Policy provided for paid up future benefits after the payment of seven level annual premiums. If there is a reduction in benefits during the first seven Policy Years, the foregoing computation is made as if the Policy originally had been issued at the reduced benefit level. If there is a "material change" to the Policy, the seven year testing period for Modified Endowment Contract status is restarted. A life insurance contract received in exchange for a Modified Endowment Contract also will be treated as a Modified Endowment Contract.

We have undertaken measures to prevent payment of a premium from inadvertently causing the Policy to become a Modified Endowment Contract. In general, you should consult a qualified tax adviser before undertaking any transaction involving the Policy to determine whether such a transaction would cause the Policy to become a Modified Endowment Contract.

If a Policy is not a Modified Endowment Contract, cash distributions from the Policy are treated first as a nontaxable return of the owner's "Investment in the Policy" and then as a distribution of the income earned under the Policy, which is subject to ordinary income tax. (An exception to this general rule occurs when a cash distribution is made in connection with certain reductions in the death benefit under the Policy in the first fifteen contract years. Such a cash distribution is taxed in whole or in part as ordinary income.) Loans from, or secured by, a Policy that is not a Modified Endowment Contract generally are treated as bona fide indebtedness, and thus are not included in the owner's gross income.

If a Policy is a Modified Endowment Contract, distributions from the Policy are treated as ordinary income subject to ordinary income tax up to the amount equal to the excess of the Account Value (which includes unpaid policy loans) immediately before the distribution over the Investment in the Policy. Loans taken from, or secured by, such a Policy, as well as due but unpaid interest thereon, are taxed in the same manner as distributions from the Policy. A 10 percent additional tax is imposed on the portion of any distribution from, or loan taken from or secured by, a Modified Endowment Contract that is included in income except when the distribution or loan is made on or after the owner attains age 59 1/2, is attributable to the policyowner's becoming disabled, or is part of a series of substantially equal periodic payments for the life (or life expectancy) of the policyowner or the joint lives (or joint life expectancies ) of the policyowner and the policyowner's Beneficiary. These exceptions are not likely to apply where the Policy is not owned by an individual (or held in trust for an individual). For purposes of the computations described in this paragraph, all Modified Endowment Contracts issued by us (or our affiliates) to the same policyowner during any calendar year are treated as one Modified Endowment Contract.

There are substantial limits on the deductibility of policy loan interest. You should consult a qualified tax adviser regarding such deductions.

Upon the complete maturity, surrender or lapse of the Policy, the amount by which the sum of the Policy's Cash Surrender Value and any unpaid Policy Debt exceeds the policyowner's "Investment in the Policy" (as defined below) is treated as ordinary income subject to tax. Any loss incurred upon surrender generally is not deductible. Any corporation that is subject to the alternative minimum tax will also have to make a separate computation of the Investment in the Policy and the gain resulting from the maturity of the Policy, or a surrender or lapse of the Policy for purposes of that tax.

The term "Investment in the Policy" means-

the aggregate amount of any premiums or other consideration paid for a Policy, minus

the aggregate amount received under the Policy which is excluded from the owner's gross income (other than loan amounts), plus

the amount of any loan from, or secured by, the Policy that is a Modified Endowment Contract (as defined below) to the extent that such amount is included in the policyowner's gross income.

The "Investment in the Policy" is increased by any unpaid Policy Debt on a Policy that is a Modified Endowment Contract in order to prevent double taxation of income. Since the Policy Debt was treated as a taxable distribution at the time the Policy Debt was incurred, the failure to increase the "Investment in the Policy" by the Policy Debt would cause such amount to be taxed again upon a Policy surrender or lapse.

The amount realized that is taken into account in computing the gain on the complete surrender or lapse of a Policy will include any unpaid Policy Debt on a Policy that is a Modified Endowment Contract even though that amount has already been treated as a taxable distribution.

If a Policy is not a Modified Endowment Contract, then the Investment in the Policy is not affected by the receipt of a loan from, or secured by a Policy.

Whether or not the Policy is a Modified Endowment Contract, however, no payment of the principal of, or the interest due under, any loan from or secured by a Policy will affect the amount of the Investment in the Policy.

A policyowner generally will not recognize gain upon the exchange of the Policy for another life insurance policy issued by us or another insurance company, except to the extent that the policyowner receives cash in the exchange or is relieved of policy indebtedness as a result of the exchange. In no event will the gain recognized exceed the amount by which the Policy's Account Value (which includes unpaid policy loans) exceeds the policyowner's Investment in the Policy.

A transfer of the Policy, a change in the policyowner, a change in the beneficiary, certain other changes to the Policy and particular uses of the Policy (including use in a so called "split-dollar" arrangement) may have tax consequences depending upon the particular circumstances and should not be undertaken prior to consulting with a qualified tax adviser. For instance, if you transfer the Policy or designate a new policyowner in return for valuable consideration (or, in some cases, if the transferor is relieved of a liability as a result of the transfer), then the Death Benefit payable upon the death of the Insured may in certain circumstances be includible in your taxable income to the extent that the Death Benefit exceeds the prior consideration paid for the transfer and any premiums and other amounts paid later by the transferee. Further, in such a case, if the consideration received exceeds your Investment in the Policy, the difference will be taxed to you as ordinary income.

Federal, as well as state and local, estate, inheritance and other tax consequences of ownership or receipt of Policy Proceeds will depend on your individual circumstances and those of the beneficiary.

Withholding

We will withhold and remit to the U.S. Government a part of the taxable portion of each distribution unless, prior to the distribution, the Owner provides us his or her taxpayer identification number and instructs us (in the manner prescribed) not to withhold. The Owner may credit against his or her federal income tax liability for the year of distribution any amounts that we withhold.

Tax Return Disclosure

The Company believes that the purchase of a Policy is not currently subject to the tax return disclosure requirements of IRC Section 6011 and Treasury Regulation Section 1.6011-4. However, it is your responsibility, in consultation with your tax and legal counsel and advisers, to make your own determination as to the applicability of the disclosure requirements of IRC Section 6011 and Treasury Regulation Section 1.6011-4 to your federal tax return.

The Company believes that the customer list requirements of IRC Section 6112 and Treasury Regulation Section 1.6112-1 are not currently applicable to such offerings and sales.

Under IRC Section 6111 and Temporary Treasury Regulation Section 301.6111, the Company is required to register with the IRS any offerings or sales of Policies that are considered tax shelters. The Company believes that registration would not be required under current regulations with respect to sales of the offering or sale of a Policy.

Other Information

State Regulation

We are subject to the laws of Delaware governing life insurance companies and to regulation by Delaware's Commissioner of Insurance, whose agents periodically conduct an examination of our financial condition and business operations. We are also subject to the insurance laws and regulations of the jurisdictions in which we are authorized to do business.

We are required to file an annual statement with the insurance regulatory authority of those jurisdictions where we are authorized to do business relating to our business operations and financial condition as of December 31st of the preceding year.

Legal Proceedings

There are no pending legal proceedings which would have a material adverse effect on the Variable Account. We are engaged in various kinds of routine litigation which, in our judgment, is not material to the Variable Account.

Experts

<R>

Actuarial matters concerning the Policy have been examined by Joshua Sobol, FSA, MAAA, Associate Product Officer for Corporate Markets of Sun Life Assurance Company of Canada (U.S.).</R>

Registration Statements

This prospectus is part of a registration statement that has been filed with the Securities and Exchange Commission under the Securities Act of 1933, as amended, with respect to the Policy. It does not contain all of the information set forth in the registration statement and the exhibits filed as part of the registration statement. You may refer to the registration statement for additional information about us, the Variable Account, the underlying funds and the Policy.

Financial Statements

Our financial statements, provided in the Statement of Additional Information, should be considered only as bearing on our ability to meet our obligations with respect to the death benefit and our assumption of the mortality and expense risks. They should not be considered as bearing on the investment performance of the shares of any Fund held in the Variable Account. Instructions on how to obtain the Statement of Additional Information are provided on the last page of this prospectus.

Appendix A

Glossary of Policy Terms

Account Value-The sum of the amounts in each Sub-Account, the Fixed Account and the amount of the Loan Account.

Anniversary-The same day in each succeeding year as the day of the year corresponding to the Issue Date.

APB Rider-An Additional Protection Benefit Rider (APB Rider) with which the Policy may be issued to provide additional life insurance coverage under the Policy.

APB Rider Death Benefit-The death benefit under the APB Rider.

APB Rider Face Amount-The amount of APB Rider coverage you request, as specified in your application, used in determining the Death Benefit.

Attained Age-The Insured's Issue Age plus the number of completed Policy Years.

Base Death Benefit-The death benefit under the Policy, exclusive of any APB Rider Death Benefit or any other supplemental benefits.

Business Day-Any day that we are open for business.

Cash Surrender Value-The Account Value less the balance of any outstanding Policy Debt, plus any Sales Load Refund at Surrender and any benefit payable under the Enhanced Cash Surrender Value endorsement.

Class-The risk, underwriting, and substandard table rating, if any, classification of the Insured.

Daily Risk Percentage-The applicable daily rate for deduction of the mortality and expense risk charge.

Death Benefit-The sum of the Base Death Benefit and any APB Rider Death Benefit.

Due Proof-Such evidence as we may reasonably require in order to establish that Policy Proceeds are due and payable.

Effective Date of Coverage-

Initially, the Investment Start Date;

with respect to any increase in the Total Face Amount, the Monthly Anniversary Day that falls on or next follows the date we approve the supplemental application for such increase; and

with respect to any decrease in the Total Face Amount, the Monthly Anniversary Day that falls on or next follows the date we receive your request.

Expense Charges Applied to Premium-The expense charges applied to premium, consisting of the charges for premium tax, our federal tax obligations with respect to the Policy, and the sales load.

Fixed Account-The portion of the Account Value funded by assets invested in our General Account.

Fund-A mutual fund in which a Sub-Account invests.

General Account-The assets held by us other than those allocated to the Sub-Accounts or any of our other separate accounts.

Insured-The person on whose life the Policy is issued.

Investment Start Date-The date the first premium is applied, which will be the later of

the Issue Date,

the Business Day we approve the application for a Policy, or

the Business Day we receive a premium equal to or in excess of the Minimum Premium.

Issue Age-The Insured's age as of the Insured's birthday nearest the Issue Date.

Issue Date-The date specified in the Policy, from which Policy Anniversaries, Policy Years and Policy Months are measured.

Loan Account-An account established for the Policy, the value of which is the principal amount of any outstanding loan against the Policy, plus credited interest thereon.

Minimum Premium-The premium amount due and payable as of the Issue Date, as specified in the Policy. The Minimum Premium varies based on the Class, Issue Age, and sex of the Insured and the Total Face Amount of the Policy.

Monthly Anniversary Day-The same day in each succeeding month as the day of the month corresponding to the Issue Date.

Monthly Cost of Insurance-A deduction made on a monthly basis for the insurance coverage provided by the Policy.

Monthly Expense Charge-A per Policy deduction made on a monthly basis for administration and other expenses.

Net Premium-The amount you pay as the premium minus Expense Charges Applied to Premium.

Our Principal Office-Sun Life Assurance Company of Canada (U.S.)(Attn: Corporate Markets), One Sun Life Executive Park, Wellesley Hills, Massachusetts 02481, or such other address as we may specify to you by written notice.

Policy Debt-The principal amount of any outstanding loans against the Policy, plus accrued but unpaid interest on such loans.

Policy Month-A one-month period commencing on the Issue Date or any Monthly Anniversary Day and ending on the next Monthly Anniversary Day.

Policy Proceeds-The amount determined in accordance with the terms of the Policy that is payable at the death of the Insured prior to maturity.

Policy Year-A one-year period commencing on the Issue Date or any Anniversary and ending on the next Anniversary.

Sales Load Refund at Surrender-The portion of any premium paid in the Policy Year of surrender that we will refund if you surrender the Policy in the first three Policy Years.

SEC-Securities and Exchange Commission.

Service Center-Andesa TPA, Inc., 1605 N. Cedar Crest Blvd., Suite 502, Allentown, Pennsylvania, 18104-2351, or such other service center or address as we may hereafter specify to you by written notice.

Specified Face Amount-The amount of life insurance coverage you request, as specified in the Policy, exclusive of any APB Rider coverage, used in determining the Death Benefit.

Sub-Accounts-Sub-Accounts into which the assets of the Variable Account are divided, each of which corresponds to an investment choice available to you, and the Fixed Account.

Target Premium-An amount of premium specified as such in the Policy, used to determine our sales load charges.

Total Face Amount-The sum of the Specified Face Amount and the APB Rider Face Amount.

Unit-A unit of measurement that we use to calculate the value of each investment option.

Unit Value-The value of each Unit of assets in an investment option.

Valuation Date-Any day that benefits vary and on which we, the applicable Fund, and the New York Stock Exchange are open for business and any other day as may be required by the applicable rules and regulations of the Securities and Exchange Commission.

Valuation Period-The period of time from one to the next determination of Unit Values. We will determine Unit Values for each Valuation Date as of the close of the New York Stock Exchange on that Valuation Date.

Variable Account-Sun Life of Canada (U.S.) Variable Account G, one of our separate accounts established for the purposes including the funding of variable insurance benefits payable under the Policy.

Appendix B

Privacy Policy

Introduction

At the Sun Life Financial group of companies, protecting your privacy is important to us. Whether you are an existing customer or considering a relationship with us, we recognize that you have an interest in how we may collect, use and share information about you.

Sun Life Financial has a long tradition of safeguarding the privacy of its customers' information. We understand and appreciate the trust and confidence you place in us, and we take seriously our obligation to maintain the confidentiality and security of your personal information.

We invite you to review this Privacy Policy which outlines how we use and protect that information.

Collection of Nonpublic Personal Information by Sun Life Financial

Collecting personal information from you is essential to our ability to offer you high-quality investment, retirement and insurance products. When you apply for a product or service from us, we need to obtain information from you to determine whether we can provide it to you. As part of that process, we may collect information about you, known as nonpublic personal information, from the following sources:

-	Information we receive from you on applications or other forms, such as your name, address, social security number and date of birth;
-	Information about your transactions with us, our affiliates or others, such as other life insurance policies or annuities that you may own; and
-	Information we receive from a consumer reporting agency, such as a credit report.

Limited Use and Sharing of Nonpublic Personal Information by Sun Life Financial

We use the nonpublic personal information we collect to help us provide the products and services you have requested and to maintain and service your accounts. Once we obtain nonpublic personal information from you, we do not disclose it to any third party except as permitted or required by law.

We may share your nonpublic personal information within Sun Life Financial to help us develop innovative financial products and services and to allow our member companies to inform you about them. The Sun Life Financial group of companies provides a wide variety of financial products and services including individual life insurance, individual fixed and variable annuities and group life, disability, and medical stop-loss insurance.

We also may disclose your nonpublic personal information to companies that help in conducting our business or perform services on our behalf, or to other financial institutions with which we have joint marketing agreements. Sun Life Financial is highly selective in choosing these companies, and we require them to comply with strict standards regarding the security and confidentiality of our customers' nonpublic personal information. These companies may use and disclose the information provided to them only for the purpose for which it is provided, as permitted by law.

There also may be times when Sun Life Financial is required to disclose its customers' nonpublic personal information, such as when complying with federal, state or local laws, when responding to a subpoena, or when complying with an inquiry by a governmental agency or regulator.

Our Treatment of Information About Former Customers

Our protection of your nonpublic personal information extends beyond the period of your customer relationship with us. If your customer relationship with us ends, we will not disclose your information to nonaffiliated third parties other than as permitted or required by law.

Security of Your Nonpublic Personal Information

We maintain physical, electronic and procedural safeguards that comply with federal and state regulations to safeguard your nonpublic personal information from unauthorized use or improper access.

Employee Access to Your Nonpublic Personal Information

We restrict access to your nonpublic personal information to those employees who have a business need to know that information in order to provide products or services to you or to maintain your accounts. Our employees are governed by a strict code of conduct and are required to maintain the confidentiality of customer information.

The following Sun Life Financial member companies have adopted this Notice. Other Sun Life Financial affiliated companies have adopted their own privacy policies. Please check their websites for details.

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Insurance Companies	Distributors/Broker-Dealers/Underwriters

Sun Life Assurance Company of Canada	Clarendon Insurance Agency, Inc.
Sun Life Assurance Company of Canada (U.S.)	Sun Life Financial Distributors, Inc.
Sun Life Insurance and Annuity Company of New York	IFMG of Oklahoma, Inc.
Independence Life and Annuity Company	IFS Agencies, Inc.
(including the separate accounts of these companies)	IFS Agencies of Alabama, Inc.
	IFS Agencies of New Mexico, Inc.
	IFS Insurance Agencies of Ohio, Inc.
	IFS Insurance Agencies of Texas, Inc.
	Independent Financial Marketing Group, Inc.
	IFMG Securities, Inc.
	LSC Insurance Agency of Arizona, Inc.

</R>

The SAI includes additional information about Sun Life of Canada (U.S.) Variable Account G and is incorporated herein by reference. The SAI and personalized illustrations of death benefits, cash surrender values and cash values are available upon request at no charge. You may make inquiries about the Policy, request an SAI and request a personalized illustration by calling 1-888-594-2654.

You can review and copy the complete registration statement (including the SAI) which contains additional information about us, the Policy and the Variable Account at the SEC's Public Reference Room in Washington, D.C. To find out more about this public service, call the Securities and Exchange Commission at 202-942-8090. Reports and other information about the Policy and its mutual fund investment options are also available on the SEC's website (www.sec.gov), or you can receive copies of this information, for a duplication fee, by writing the Public Reference Section, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, D.C. 20549-0102.

Investment Company Act File No. 811-07837

PART B

STATEMENT OF ADDITIONAL INFORMATION

FUTURITY CORPORATE VUL

VARIABLE UNIVERSAL LIFE POLICY

	SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
	SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT G

<R>	May 1, 2006

This Statement of Additional Information (SAI) is not a prospectus but it relates to, and should be read in conjunction with, the Futurity Corporate VUL prospectus, dated May 1, 2006. The SAI is incorporated by reference into the prospectus. The prospectus is available, at no charge, by writing Sun Life Assurance Company of Canada (U.S.)("the Company") at One Sun Life Executive Park, Wellesley Hills, MA 02481 or calling 1-888-594-2654.</R>

TABLE OF CONTENTS

THE COMPANY AND THE VARIABLE ACCOUNT	2
CUSTODIAN	2
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM	2
DISTRIBUTION AND UNDERWRITING OF POLICY	2
THE POLICY	3
FINANCIAL STATEMENTS OF SEPARATE ACCOUNT G	5
FINANCIAL STATEMENTS OF THE COMPANY	60

	THE COMPANY AND THE VARIABLE ACCOUNT
Sun Life Financial Inc. ("Sun Life Financial"), a reporting company under the Securities Exchange Act of 1934 with common shares listed on the Toronto, New York and Philippine stock exchanges, is the ultimate corporate parent of Sun Life (U.S.). Sun Life Financial ultimately controls Sun Life (U.S.) through the following intervening holding company subsidiaries: Sun Life of Canada (U.S.) Holdings, Inc., Sun Life Financial (U.S.) Investments LLC, Sun Life Financial (U.S.) Holdings, Inc., Sun Life Assurance Company of Canada - U.S. Operations Holdings, Inc., and Sun Life Financial Corp. Sun Life of Canada (U.S.) Variable Account G was established in accordance with Delaware law on July 25, 1996 and is registered as a unit investment trust.
		CUSTODIAN

We are the Custodian of the assets of the Variable Account. We will purchase Fund shares at net asset value in connection with amounts allocated to the Sub-Accounts in accordance with your instructions, and we will redeem Fund shares at net asset value for the purpose of meeting the contractual obligations of the Variable Account, paying charges relative to the Variable Account or making adjustments for reserves held in the Variable Account.

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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The consolidated financial statements of Sun Life Assurance Company of Canada (U.S.) that are included in the Statement of Additional Information have been audited by Deloitte & Touche LLP, independent registered public accounting firm, as stated in their report appearing therein (which report, dated March 23, 2006, accompanying such financial statements expresses an unqualified opinion and includes an explanatory paragraph relating to the adoption of the American Institute of Certified Public Accountants' Statement of Position 03-01, Accounting and Reporting by Insurance Enterprises of Certain Nontraditional Long-Duration Contracts and for Separate Accounts, effective January 1, 2004, the adoption of provisions of FASB Interpretation No. 46, Consolidation of Variable Interest Entities, and the adoption of provisions of FASB Interpretation No 46R, Consolidation of Variable Interest Entities, effective December 31, 2003 as described in Note 1), and have been included on their authority as experts in accounting and auditing. Their office is located at 200 Berkeley St, Boston, Massachusetts.

The financial statements of Sun Life of Canada (U.S.) Variable Account G that are included in the Statement of Additional Information have been audited by Deloitte & Touche LLP, independent registered public accounting firm, as stated in their report appearing therein (which report dated April 7, 2006 accompanying the financial statements of Sun Life of Canada (U.S.) Variable Account G expresses an unqualified opinion) and have been included on their authority as experts in accounting and auditing.</R>

DISTRIBUTION AND UNDERWRITING OF THE POLICY

<R>

The Policy is offered on a continuous basis. The Policy is sold by licensed insurance agents ("Selling Agents") in those states where the Policy may be lawfully sold. Such Selling Agents will be registered representatives of affiliated and unaffiliated broker-dealer firms ("Selling Broker-Dealers") registered under the Securities Exchange Act of 1934 who are members of the National Association of Securities Dealers, Inc. (the "NASD") and who have entered into selling agreements with the Company and our general distributor, Clarendon Insurance Agency, Inc. ("Clarendon"), One Sun Life Executive Park, Wellesley Hills, Massachusetts 02481. Clarendon is a wholly-owned subsidiary of the Company, is registered with the SEC under the Securities Exchange Act of 1934 and is a member of the NASD.

o

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up to 0.15% per annum of Account Value for Policy Years one through twenty; and

up to 0.10% per annum of Account Value thereafter.</R>

We may also pay up to an additional 0.15% per annum to broker-dealers who provide additional services specifically requested or authorized by corporate purchasers. The Company may pay or allow other promotional incentives or payments in the form of cash or other compensation to the extent permitted by NASD rules and other applicable laws and regulations.

<R>

THE POLICY

To apply for a Policy, you must submit an application to our Principal Office. We will then follow underwriting procedures designed to determine the insurability of the proposed Insured. We offer the Policy on a regular (or medical) underwriting, simplified underwriting, expanded guaranteed issue or guaranteed issue basis. The proposed Insured generally must be less than 81 years old for a Policy to be issued. For Policies underwritten on a medical or simplified basis, we may require that the proposed Insured undergo one or more medical examinations and that you provide us with such additional information as we may deem necessary, before an application is approved. We will issue Policies on an expanded guaranteed issue or guaranteed issue basis with respect to certain groups of Insureds. Policies issued on such basis must be pre-approved based on information you provide to us on a master application and on certain other underwriting requirements which all members of a proposed group of Insureds must meet. Proposed Insureds must be acceptable risks based on our underwriting limits and standards. We will not issue a Policy until the underwriting process has been completed to our satisfaction. In addition, we reserve the right to reject an application that does not meet our underwriting requirements or to "rate" an Insured as a substandard risk, which will result in increased cost of insurance charges. The cost of insurance charges are based on the 1980 Commissioner's Standard Ordinary Mortality Table A (for males and unisex Policies) or Table G (for females)

Expense Charges Applied to Premium. We deduct charges from each premium payment for premium taxes and our federal tax obligations and as a sales load.

States and a few cities and municipalities may impose taxes on premiums paid for life insurance. We will from time to time determine the applicable premium tax rate based on the rate we expect to pay. The premium tax rate is guaranteed not to exceed 4% for all states except Kentucky, in which case it is guaranteed not to exceed 9%.

We deduct a 1.25% charge from each premium payment for our federal tax obligations. This charge is guaranteed not to exceed 1.25%.

We also charge a sales load guaranteed not to exceed 8.75% on each premium payment up to and including Target Premium (as specified in the Policy) and a 2.25% sales load on premiums paid in excess of Target Premium for each of the first seven Policy Years. Target Premium varies based on the Specified Face Amount and the Insured's Issue Age and sex. There are no sales load charges after the seventh Policy Year. We may reduce or waive the sales load for certain group or sponsored arrangements and corporate purchasers.

Increase in Face Amount. After the first policy anniversary, you may request an increase in the Specified Face Amount. You must provide satisfactory evidence of the Insured's insurability. Once requested, an increase will become effective at the next policy anniversary following our approval of your request. The Policy does not allow for an increase if the Insured's Attained Age is greater than 80 on the effective date of the increase.

If there are increases in the Specified Face Amount other than increases caused by changes in the death benefit option, the cost of insurance charge is determined separately for the initial Specified Face Amount and each increase in the Specified Face Amount. In calculating the net amount at risk, your Account Value will first be allocated to the initial death benefit and then to each increase in the Specified Face Amount in the order in which the increases were made.

FINANCIAL STATEMENTS

The financial statements of the Variable Account and Sun Life Assurance Company of Canada (U.S.) are included in this Statement of Additional Information. The consolidated financial statements of Sun Life Assurance Company of Canada (U.S.) are provided as relevant to its ability to meet its financial obligations under the Policies and should not be considered as bearing on the investment performance of the assets held in the Variable Account.

Sun Life of Canada (U.S.) Variable Account G

Statement of Condition - December 31, 2005

Assets:
Investments in Mutual Funds:	Shares	Cost		Value
AIM Variable Insurance Funds:
AIM V.I. Basic Value Fund ("AI6")	844	$	10,206	$	10,439
AIM V.I. Capital Appreciation Fund ("ACA")	82,984		1,749,856		2,048,035
AIM V.I. Core Equity Fund ("AI3")	481		10,437		11,284
AIM V.I. Growth Fund ("AI2")	486		7,845		8,376
AIM V.I. International Growth Fund ("AI4")	17,702		353,071		410,145
AIM V.I. Mid Cap Core Equity Fund ("A22")	50,904		668,259		692,807
AIM V.I. Premier Equity Fund ("AVF")	4,656		93,428		103,921
Alger American Fund:
Alger American MidCap Growth Portfolio ("AL4")	32		695		706
AllianceBernstein Variable Products Series Fund, Inc.:
VP Growth and Income Portfolio ("AN3")	25,264		572,474		622,753
VP Technology Portfolio ("AN2")	1,544		22,185		24,139
VP Worldwide Privatization Portfolio ("AN4")	36,379		693,278		878,908
Delaware Variable Insurance Products Trust:
Delaware VIP Growth Opportunities Series ("DGO")	4,625		77,989		82,224
Delaware VIP REIT Series ("DRS")	14,938		263,953		280,386
Delaware VIP Small Cap Value Series ("DSV")	11,465		326,049		353,481
Dreyfus Investment Portfolios:
MidCap Stock Portfolio ("DMC")	939		18,040		17,978
Dreyfus Variable Investment Fund:
Appreciation Portfolio ("DCA")	508		17,866		18,852
Developing Leaders Portfolio ("DSC")	152,529		5,837,404		6,705,154
Growth and Income Portfolio ("DGI")	598		11,628		13,042
Quality Bond Portfolio ("DQB")	545,449		6,212,228		6,152,664
Dreyfus Stock Index Fund ("DSI"):	1,137,371		31,592,627		36,191,147
Fidelity Variable Insurance Products Funds:
VIP Equity-Income Portfolio ("FEI")	401,670		8,652,080		10,238,569
VIP Growth Portfolio ("FGP")	88,518		2,519,831		2,983,045
VIP Growth & Income Portfolio ("FVG")	1,713		24,975		25,260
VIP High Income Portfolio ("FHI")	62,450		401,707		385,319
VIP Investment Grade Bond Portfolio ("FIG")	334,427		4,230,506		4,267,292
VIP Money Market Portfolio ("FMM")	138,904		138,904		138,904
VIP Money Market Portfolio SC ("FL5")	5,196,569		5,196,569		5,196,569
Fidelity Variable Insurance Products Funds II:
VIP II Asset Manager: Growth Portfolio ("FAM")	1,336		16,621		17,326
VIP II Contrafund Portfolio ("FCN")	93,429		2,296,939		2,899,099
VIP II Contrafund SC2 Portfolio ("FL1")	168,404		4,131,312		5,168,326
VIP II Growth Portfolio ("FL3")	72,576		2,242,167		2,416,056
VIP II Index 500 Portfolio ("FIP")	402		48,053		56,972
VIP II Overseas Portfolio ("FL2")	117,074		1,953,892		2,392,999
FAM Variable Series Funds, Inc.
Mercury Value Opportunities V.I. Fund ("MLV")	74,860		1,967,333		1,866,268
Franklin Templeton Variable Insurance Products Trust:
Franklin Real Estate Fund ("FRE")	6,721		218,707		218,785
Franklin Small-Mid Cap Growth Securities Fund ("FSC")	29,441		577,397		608,257
Templeton Foreign Securities Fund: Class 1 ("TFS")	206,481		3,009,084		3,270,664
Templeton Foreign Securities Fund: Class 2 ("FTI")	50,502		673,013		788,842
Templeton Growth Securities Fund: Class 1 ("TSF")	855,888		10,496,054		11,965,308
Templeton Growth Securities Fund: Class 2 ("FTG")	31,417		407,229		433,867
Goldman Sachs Variable Insurance Trust:
Goldman Sachs VIT CORE^SM U.S. Equity Fund ("GS3")	6,031		70,537		79,186
Goldman Sachs VIT Capital Growth Fund ("GS7")	8,302		82,465		88,662
INVESCO Variable Investment Funds, Inc.:
INVESCO VIF Small Company Growth Fund ("IV2")	68,494		990,995		1,110,286
J.P. Morgan Series Trust II:
Bond Portfolio ("JBP")	1,079,352		12,638,013		12,811,912

See notes to financial statements

Sun Life of Canada (U.S.) Variable Account G

Statement of Condition - December 31, 2005 - continued

Assets:
Investments in Mutual Funds (continued):	Shares	Cost		Value
J.P. Morgan Series Trust II (continued):
Small Company Portfolio ("JSC")	40,338	$	566,707	$	642,180
U.S. Large Cap Core Equity Portfolio ("JEP")	8,444		112,840		114,836
Lord Abbett Series Fund, Inc.:
Growth and Income Portfolio ("LA1")	284,568		7,295,514		7,444,295
International Portfolio ("LA3")	3,809		32,153		39,726
Mid-Cap Value Portfolio ("LA2")	155,004		3,094,582		3,269,031
MFS/Sun Life Series Trust:
Bond Series ("MF7")	15,804		187,661		179,060
Capital Appreciation Series ("CAS")	371,427		6,228,967		7,172,252
Capital Appreciation Series SC ("MFD")	58,089		1,016,576		1,112,980
Capital Opportunities Series ("CO1")	11,561		146,534		154,105
Emerging Growth Series ("EGS")	6,602		98,586		112,770
Emerging Growth Series SC ("MFF")	7,474		111,764		126,233
Global Growth Series ("GGR")	9,749		120,369		131,423
Government Securities Series ("GSS")	1,239,453		16,390,451		15,914,574
Government Securities Series SC ("MFK")	148,335		1,908,095		1,894,235
High Yield Series SC ("MFC")	25,214		179,270		171,204
International Growth Series ("IG1")	63,628		812,558		977,324
Massachusetts Investors Growth Stock Series ("MIS")	10,448		84,639		102,183
Massachusetts Investors Growth Stock Series SC ("M1B")	23,260		214,684		225,856
Massachusetts Investors Trust Series ("CGS")	629		14,313		18,965
Massachusetts Investors Trust Series SC ("MFL")	954		26,363		28,589
Mid Cap Growth Series ("MC1")	155,277		812,362		919,240
Money Market Series ("MMS")	34,103,329		34,103,329		34,103,329
New Discovery Series SC ("M1A")	97,795		1,281,328		1,387,713
Research International Series ("RIS")	146,055		2,118,923		2,444,969
Research Series ("RES")	1,108		15,323		18,891
Research Series SC ("RE1")	28,116		433,953		476,001
Strategic Growth Series ("SG1")	110,602		804,317		850,530
Strategic Income Series ("SI1")	61		643		649
Total Return Series ("TRS")	540,480		9,677,617		10,323,172
Total Return Series SC ("MFJ")	254,202		4,694,564		4,822,216
Utilities Series ("UTS")	1,594		22,490		28,887
Utilities Series SC ("MFE")	560		9,681		10,084
Value Series ("EIS")	-		-		-
Value Series SC ("MV1")	30,619		456,464		496,329
Neuberger Berman Advisers Management Trust:
Limited Maturity Bond Portfolio ("NLM")	49,569		640,124		626,554
Mid-Cap Growth Portfolio ("NMC")	236,883		4,217,314		4,803,984
Partners Portfolio ("NPP")	14		279		298
Regency Portfolio ("NAR")	119,975		1,636,571		1,859,618
Oppenheimer Variable Account Funds:
Oppenheimer Capital Appreciation Fund/VA ("OCF")	27,770		1,038,334		1,069,694
Oppenheimer Global Securities Fund/VA ("OGS")	548		17,964		18,308
Oppenheimer Main Street Small Cap Fund®/VA ("OSC")	32,816		520,772		563,777
PIMCO Variable Insurance Trust:
PIMCO Emerging Markets Bond Portfolio ("PMB")	2,002		26,353		27,343
PIMCO High Yield Portfolio ("PHY")	42,772		349,439		350,304
PIMCO Low Duration Portfolio ("PLD")	80		816		809
PIMCO Real Return Portfolio ("PRR")	112,655		1,450,629		1,429,593
PIMCO Total Return Portfolio ("PTR")	452,042		4,724,753		4,628,915
Rydex Variable Trust:
Rydex VT Nova Fund ("RX1")	60		451		512
Rydex VT OTC Fund ("RX2")	5		58		73
Scudder VIT Funds:
Scudder VIT EAFE® Equity Index Fund ("SEE")	-		-		-

See notes to financial statements

Sun Life of Canada (U.S.) Variable Account G

Statement of Condition - December 31, 2005 - continued

Assets:
Investments in Mutual Funds (continued):	Shares	Cost		Value
Scudder VIT Funds (continued):
Scudder VIT Small Cap Index Fund: Class A ("SSI")	106,080	$	1,415,312	$	1,527,549
Scudder VIT Small Cap Index Fund: Class B ("SSC")	95,204		1,235,892		1,369,988
Scudder Variable Series II:
SVS Dreman Small Cap Value Portfolio ("SCV")	282		5,386		5,643
Sun Capital Advisers Trust^SM:
Sun Capital All Cap Fund ("SCM")	31,174		367,791		326,389
Sun Capital Investment Grade Bond Fund ("SIG")	408,738		4,045,971		3,972,930
Sun Capital Money Market Fund ("SC1")	21,916,153		21,916,153		21,916,153
Sun Capital Real Estate Fund ("SRE")	376,421		6,376,801		7,076,722
SC^SM Blue Chip Mid Cap Fund ("SC5")	213,602		3,642,531		4,400,206
SC^SM Davis Venture Value Fund ("SC7")	3,176		33,601		36,712
SC^SM Value Small Cap Fund ("SCB")	151,291		2,117,208		2,086,298
T. Rowe Price Equity Series, Inc.:
Blue Chip Growth Portfolio ("TBC")	29,063		276,464		279,588
Equity Income Portfolio ("REI")	653,343		13,562,682		14,236,335
New America Growth Portfolio ("RNA")	3,575		70,084		72,648
The Universal Institutional Funds, Inc.
Van Kampen UIF Mid Cap Growth Portfolio ("VMG")	7,004		86,034		85,312
Van Kappen Life Investment Trust:
Van Kampen LIT Comstock Portfolio ("VCP")	98		1,293		1,348
Van Kampen LIT Growth and Income Portfolio ("VGI")	992		20,402		20,335

Net Assets:		$	274,394,983	$	292,561,983

See notes to financial statements

Sun Life of Canada (U.S.) Variable Account G

Statement of Condition - December 31, 2005 - continued

Net Assets Applicable to Contract Owners:	Units	Unit Value		Value
AI6	915	$	11.4122	$	10,439
ACA	189,249		10.8218		2,048,035
AI3	818		13.8173		11,284
AI2	727		11.5281		8,376
AI4	24,516		16.7255		410,145
A22	59,376		11.6681		692,807
AVF	12,129		8.5661		103,921
AL4	61		11.8482		706
AN3	46,915		13.2730		622,753
AN2	1,935		12.5140		24,139
AN4	38,455		22.8557		878,908
DGO	6,474		12.7000		82,224
DRS	19,485		14.3899		280,386
DSV	26,821		13.1793		353,481
DMC	1,562		11.5084		17,978
DCA	1,535		12.2839		18,852
DSC	476,208		14.0812		6,705,154
DGI	1,188		10.9822		13,042
DQB	422,644		14.5623		6,152,664
DSI	3,603,696		10.0405		36,191,147
FEI	600,228		17.0576		10,238,569
FGP	204,148		14.6115		2,983,045
FVG	2,234		11.3080		25,260
FHI	34,527		11.1573		385,319
FIG	270,915		15.7514		4,267,292
FL5	500,774		10.3773		5,196,569
FAM	1,848		11.1454		17,326
FCN	126,315		22.9521		2,899,099
FL1	308,911		16.7292		5,168,326
FL3	205,186		11.7748		2,416,056
FIP	3,432		16.4872		56,972
FL2	141,542		16.9053		2,392,999
MLV	148,198		12.5931		1,866,268
FRE	19,099		11.4557		218,785
FSC	52,788		11.5226		608,257
TFS	254,286		12.8622		3,270,664
FTI	43,562		18.1103		788,842
TSF	650,615		18.3908		11,965,308
FTG	24,456		17.7420		433,867
GS3	5,797		13.6604		79,186
GS7	7,633		11.6171		88,662
IV2	78,833		14.0834		1,110,286
JBP	789,914		16.2227		12,811,912
JSC	37,694		17.0208		642,180
JEP	9,144		12.5588		114,836
LA1	522,122		14.2559		7,444,295
LA3	2,812		14.1247		39,726
LA2	206,568		15.8192		3,269,031
MF7	16,412		10.9101		179,060
CAS	656,239		10.9294		7,172,252
MFD	97,961		11.3613		1,112,980
CO1	12,888		11.9566		154,105
EGS	7,689		14.6685		112,770
MFF	9,627		13.1134		126,233
GGR	6,688		19.6372		131,423
GSS	984,125		16.1714		15,914,574

See notes to financial statements

Sun Life of Canada (U.S.) Variable Account G

Statement of Condition - December 31, 2005 - continued

Net Assets Applicable to Contract Owners (continued):	Units	Unit Value		Value
MFK	161,616	$	11.7174	$	1,894,235
MFC	11,655		14.6890		171,204
IG1	66,809		14.6287		977,324
MIS	11,155		9.1571		102,183
M1B	19,482		11.5928		225,856
CGS	1,679		11.2862		18,965
MFL	2,288		12.5156		28,589
MC1	77,639		11.8400		919,240
MMS	2,848,202		11.9731		34,103,329
M1A	106,088		13.0783		1,387,713
RIS	179,699		13.6059		2,444,969
RES	1,633		11.5636		18,891
RE1	36,361		13.0909		476,001
SG1	76,777		11.0779		850,530
SI1	58		11.2304		649
TRS	576,178		17.9160		10,323,172
MFJ	361,075		13.3548		4,822,216
UTS	1,628		17.7541		28,887
MFE	634		15.9064		10,084
EIS	-		11.9969		-
MV1	37,653		13.1817		496,329
NLM	44,587		14.0507		626,554
NMC	330,149		14.5519		4,803,984
NPP	20		16.7065		298
NAR	141,084		13.1809		1,859,618
OCF	94,709		11.2946		1,069,694
OGS	1,374		13.3276		18,308
OSC	43,365		13.0009		563,777
PMB	1,433		19.0893		27,343
PHY	22,982		15.2457		350,304
PLD	79		10.2557		809
PRR	116,738		12.2474		1,429,593
PTR	399,997		11.5732		4,628,915
RX1	58		8.8899		512
RX2	11		7.8776		73
SEE	-		0.0000		-
SSI	126,501		12.0754		1,527,549
SSC	81,411		16.8283		1,369,988
SCV	488		11.5625		5,643
SCM	23,634		13.8105		326,389
SIG	284,245		13.9822		3,972,930
SC1	2,072,605		10.5761		21,916,153
SRE	249,940		28.3149		7,076,722
SC5	230,173		19.1149		4,400,206
SC7	2,448		15.0011		36,712
SCB	124,420		16.7646		2,086,298
TBC	24,398		11.4595		279,588
REI	930,172		15.3048		14,236,335
RNA	7,084		10.2558		72,648
VMG	6,297		13.5484		85,312
VCP	114		11.8920		1,348
VGI	1,633		12.4484		20,335
Net Assets Applicable to Contract Owners					292,423,079
Net Assets Applicable to Sponsor⁽¹⁾	10,000		13.8910		138,904
Total Net Assets				$	292,561,983

All net assets applicable to the Sponsor are held in Fidelity VIP Money Market Portfolio ("FMM")

See notes to financial statements

Sun Life of Canada (U.S.) Variable Account G

Statement of Operations - Year Ended December 31, 2005

	AI6		ACA			AI3		AI2			AI4		A22
	Sub-		Sub-			Sub-		Sub-			Sub-		Sub-
	Account		Account			Account		Account			Account		Account
Income:
Dividends	$	99	$	1,061		$	165	$	-		$	2,512	$	3,260
Net investment income	$	9	$	1,061		$	165	$	-		$	2,512	$	3,260

Realized and Unrealized Gains (Losses):
Realized gains (losses) on investment transactions:
Realized gain (loss) on sale of fund shares	$	-	$	(14,430	)	$	426	$	6		$	43,648	$	16,672
Realized gain distributions		116		-			-		-			-		19,926
Net realized gains (losses)	$	116	$	(14,430	)	$	426	$	6		$	43,648	$	36,598
Net unrealized appreciation (depreciation) on investments:
End of year	$	233	$	298,179		$	847	$	531		$	57,074	$	24,548
Beginning of year		-		137,939			824		-			37,787		-
Change in unrealized appreciation (depreciation)	$	233	$	160,240		$	23	$	531		$	19,287	$	24,548
Realized and unrealized gains (losses)	$	349	$	145,810		$	449	$	537		$	62,935	$	61,146
Increase (Decrease) in net assets from operations	$	358	$	146,871		$	614	$	537		$	65,447	$	64,406

	AVF		AL4⁽¹⁾			AN3		AN2			AN4		DGO
	Sub-		Sub-			Sub-		Sub-			Sub-		Sub-
	Account		Account			Account		Account			Account		Account
Income:
Dividends	$	8644	$	-		$	6,521	$	-		$	2,469	$	-
Net investment income	$	8644	$	-		$	6,521	$	-		$	2,469	$	-

Realized and Unrealized Gains (Losses):
Realized gains (losses) on investment transactions:
Realized gain (loss) on sale of fund shares	$	2,088	$	(12	)	$	3,727	$	759		$	11,991	$	88
Realized gain distributions		-		-			-		-			-		-
Net realized gains (losses)	$	2,088	$	(12	)	$	3,727	$	759		$	11,991	$	88
Net unrealized appreciation (depreciation) on investments:
End of year	$	10,493	$	11		$	50,279	$	1,954		$	185,630	$	4,235
Beginning of year		7,851		-			32,784		2,104			45,447		-
Change in unrealized appreciation (depreciation)	$	2,642	$	11		$	17,495	$	(150	)	$	140,183	$	4,235
Realized and unrealized gains (losses)	$	4,730	$	(1	)	$	21,222	$	609		$	152,174	$	4,323
Increase (Decrease) in net assets from operations	$	5,594	$	(1	)	$	27,743	$	609		$	154,643	$	4,323

For the period May 2, 2005 (commencement of operations of Sub-Account) through December 31, 2005

See notes to financial statements

Sun Life of Canada (U.S.) Variable Account G

Statement of Operations - Year Ended December 31, 2005 - continued

DRS

DSV

DMC⁽¹⁾

DCA

DSC

DGI

Sub-

Sub-

Sub-

Sub-

Sub-

Sub-

Account

Account

Account

Account

Account

Account

Income:

Dividends

$

-

$

-

$

-

$

44

$

-

$

166

Net investment income

$

-

$

-

$

-

$

44

$

-

$

166

Realized and Unrealized Gains (Losses):

Realized gains (losses) on investment transactions:

Realized gain (loss) on sale of fund shares

$

1,647

$

6,751

$

-

$

33,800

$

488,186

$

608

Realized gain distributions

-

-

-

-

-

-

Net realized gains (losses)

$

1,647

$

6,751

$

-

$

33,800

$

488,186

$

608

Net unrealized appreciation (depreciation) on investments:

End of year

$

16,433

$

27,432

$

(62

)

$

986

$

867,750

$

1,414

Beginning of year

-

-

-

30,563

808,839

1,694

Change in unrealized appreciation (depreciation)

$

16,433

$

27,432

$

(62

)

$

(29,577

)

$

58,911

$

(280

)

Realized and unrealized gains (losses)

$

18,080

$

34,183

$

(62

)

$

4,223

$

547,097

$

328

Increase (Decrease) in net assets from operations

$

18,080

$

34,183

$

(62

)

$

4,267

$

547,097

$

494

DQB

DSI

FEI

FGP

FVG

FHI

Sub-
Sub-

Sub-

Sub-

Sub-

Sub-

Account

Account

Account

Account

Account

Account

Income:

Dividends

$

221,771

$

516,314

$

144,563

$

13,030

$

-

$

50,510

Net investment income

$

221,771

$

516,314

$

144,563

$

13,030

$

-

$

50,510

Realized and Unrealized Gains (Losses):

Realized gains (losses) on investment transactions:

Realized gain (loss) on sale of fund shares

$

13,015

$

74,182

$

1,215,896

$

(11,064

)

$

12

$

1,663

Realized gain distributions

-

-

317,683

-

-

-

Net realized gains (losses)

$

13,015

$

74,182

$

1,533,579

$

(11,064

)

$

12

$

1,663

Net unrealized appreciation (depreciation) on investments:

End of year

$

(59,564

)

$

4,598,520

$

1,586,489

$

463,214

$

285

$

(16,388

)

Beginning of year

21,499

3,419,365

2,764,175

292,552

-

26,394

Change in unrealized appreciation (depreciation)

$

(81,063

)

$

1,179,155

$

(1,177,686

)

$

170,662

$

285

$

(42,782

)

Realized and unrealized gains (losses)

$

(68,048

)

$

1,253,337

$

355,893

$

159,598

$

297

$

(41,119

)

Increase (Decrease) in net assets from operations

$

153,723

$

1,769,651

$

500,456

$

172,628

$

297

$

9,391

(1) For the period May 2, 2005 (commencement of operations of Sub-Account) through December 31, 2005

See notes to financial statements

Sun Life of Canada (U.S.) Variable Account G

Statement of Operations - Year Ended December 31, 2005 - continued

FIG

FMM

FL5

FAM

FCN

FL1

Sub-

Sub-

Sub-

Sub-

Sub-

Sub-

Account

Account

Account

Account

Account

Account

Income:

Dividends

$

-

$

4,087

$

108,379

$

-

$

5,470

$

3,742

Net investment income

$

-

$

4,087

$

108,379

$

-

$

5,470

$

3,742

Realized and Unrealized Gains (Losses):

Realized gains (losses) on investment transactions:

Realized gain (loss) on sale of fund shares

$

2,012

$

-

$

-

$

23,237

$

67,115

$

65,309

Realized gain distributions

-

-

-

-

342

535

Net realized gains (losses)

$

2,012

$

-

$

-

$

23,237

$

67,457

$

65,844

Net unrealized appreciation (depreciation) on investments:

End of year

$

36,786

$

-

$

-

$

705

$

602,160

$

1,037,014

Beginning of year

-

-

-

25,374

296,558

400,134

Change in unrealized appreciation (depreciation)

$

36,786

$

-

$

-

$

(24,669

)

$

305,602

$

636,880

Realized and unrealized gains (losses)

$

38,798

$

-

$

-

$

(1,432

)

$

373,059

$

702,724

Increase (Decrease) in net assets from operations

$

38,798

$

4,087

$

108,379

$

(1,432

)

$

378,529

$

706,466

FL3

FIP

FL2

MLV

FRE⁽¹⁾

FSC

Sub-

Sub-

Sub-

Sub-

Sub-

Sub-

Account

Account

Account

Account

Account

Account

Income:

Dividends

$

4,137

$

965

$

8,822

$

4,930

$

-

$

-

Net investment income

$

4,137

$

965

$

8,822

$

4,930

$

-

$

-

Realized and Unrealized Gains (Losses):

Realized gains (losses) on investment transactions:

Realized gain (loss) on sale of fund shares

$

9,986

$

360

$

17,357

$

2,862

$

17

$

111

Realized gain distributions

-

-

8,822

219,457

-

-

Net realized gains (losses)

$

9,986

$

360

$

26,179

$

222,319

$

17

$

111

Net unrealized appreciation (depreciation) on investments:

End of year

$

173,889

$

8,919

$

439,107

$

(101,065

)

$

78

$

30,860

Beginning of year

56,022

7,469

163,950

-

-

1,066

Change in unrealized appreciation (depreciation)

$

117,867

$

1,450

$

275,157

$

(101,065

)

$

78

$

29,794

Realized and unrealized gains (losses)

$

127,853

$

1,810

$

301,336

$

121,254

$

95

$

29,905

Increase (Decrease) in net assets from operations

$

131,990

$

2,775

$

310,158

$

126,184

$

95

$

29,905

(1) For the period May 2, 2005 (commencement of operations of Sub-Account) through December 31, 2005

See notes to financial statements

Sun Life of Canada (U.S.) Variable Account G

Statement of Operations - Year Ended December 31, 2005 - continued

TFS

FTI

TSF

FTG

GS3

GS7

Sub-

Sub-

Sub-

Sub-

Sub-

Sub-

Account

Account

Account

Account

Account

Account

Income:

Dividends

$

19,1944

$

9,030

$

131,706

$

1,727

$

587

$

125

Net investment income

$

19,194

$

9,030

$

131,706

$

1,727

$

587

$

125

Realized and Unrealized Gains (Losses):

Realized gains (losses) on investment transactions:

Realized gain (loss) on sale of fund shares

$

16,269

$

19,757

$

(29,043

)

$

1,619

$

4,900

$

1,817

Realized gain distributions

-

-

-

-

-

-

Net realized gains (losses)

$

16,269

$

19,757

$

(29,043

)

$

1,619

$

4,900

$

1,817

Net unrealized appreciation (depreciation) on investments:

End of year

$

261,580

$

115,829

$

1,469,254

$

26,638

$

8,649

$

6,197

Beginning of year

1,448

61,357

555,885

6,890

8,146

4,603

Change in unrealized appreciation (depreciation)

$

260,132

$

54,472

$

913,369

$

19,748

$

503

$

1,594

Realized and unrealized gains (losses)

$

276,401

$

74,229

$

884,326

$

21,367

$

5,403

$

3,411

Increase (Decrease) in net assets from operations

$

295,595

$

83,259

$

1,016,032

$

23,094

$

5,990

$

3,536

IV2

JBP

JSC

JEP

LA1

LA3

Sub-

Sub-

Sub-

Sub-

Sub-

Sub-

Account

Account

Account

Account

Account

Account

Income:

Dividends

$

-

$

384,798

$

-

$

1,394

$

71,434

$

-

Net investment income

$

-

$

384,798

$

-

$

1,394

$

71,434

$

-

Realized and Unrealized Gains (Losses):

Realized gains (losses) on investment transactions:

Realized gain (loss) on sale of fund shares

$

1,946

$

461

$

14,503

$

10,925

$

223,193

$

649

Realized gain distributions

-

194,363

80,007

-

436,450

1,475

Net realized gains (losses)

$

1,946

$

194,824

$

94,510

$

10,925

$

659,643

$

2,124

Net unrealized appreciation (depreciation) on investments:

End of year

$

119,291

$

173,899

$

75,473

$

1,996

$

148,781

$

7,573

Beginning of year

65,430

419,326

151,353

16,203

588,512

1,639

Change in unrealized appreciation (depreciation)

$

53,861

$

(245,427

)

$

(75,880

)

$

(14,207

)

$

(439,731

)

$

5,934

Realized and unrealized gains (losses)

$

55,807

$

(50,603

)

$

18,630

$

(3,282

)

$

219,912

$

8,058

Increase (Decrease) in net assets from operations

$

55,807

$

334,195

$

18,630

$

(1,888

)

$

291,346

$

8,058

See notes to financial statements

Sun Life of Canada (U.S.) Variable Account G

Statement of Operations - Year Ended December 31, 2005 - continued

	LA2			MF7			CAS			MFD			CO1			EGS
	Sub-			Sub-			Sub-			Sub-			Sub-			Sub-
	Account			Account			Account			Account			Account			Account
Income:
Dividends	$	13,888		$	10,616		$	38,837		$	3,053		$	1,237		$	-
Net investment income	$	13,888		$	10,616		$	38,837		$	3,053		$	1,237		$	-

Realized and Unrealized Gains (Losses):
Realized gains (losses) on investment transactions:
Realized gain (loss) on sale of fund shares	$	12,785		$	(909	)	$	34,154		$	6,463		$	1,548		$	16,366
Realized gain distributions		189,765			3,101			-			-			-			-
Net realized gains (losses)	$	202,550		$	2,192		$	34,154		$	6,463		$	1,548		$	16,366
Net unrealized appreciation (depreciation) on investments:
End of year	$	174,449		$	(8,601	)	$	943,285		$	96,404		$	7,571		$	14,184
Beginning of year		207,031			1,479			930,051			90,481			7,813			21,522
Change in unrealized appreciation (depreciation)	$	(32,582	)	$	(10,080	)	$	13,234		$	5,923		$	(242	)	$	(7,338	)
Realized and unrealized gains (losses)	$	169,968		$	(7,888	)	$	47,388		$	12,386		$	1,306		$	9,028
Increase (Decrease) in net assets from operations	$	183,856		$	2,728		$	86,225		$	15,439		$	2,543		$	9,028

	MFF			GGR			GSS			MFK			MFC			IG1
	Sub-			Sub-			Sub-			Sub-			Sub-			Sub-
	Account			Account			Account			Account			Account			Account
Income:
Dividends	$	-		$	870		$	652,937		$	69,624		$	15,831		$	5,463
Net investment income	$	-		$	870		$	652,937		$	69,624		$	15,831		$	5,463

Realized and Unrealized Gains (Losses):
Realized gains (losses) on investment transactions:
Realized gain (loss) on sale of fund shares	$	61,183		$	15,909		$	(13,168	)	$	(30,792	)	$	(2,737	)	$	9,992
Realized gain distributions		-			-			-			-			-			-
Net realized gains (losses)	$	61,183		$	15,909		$	(13,168	)	$	(30,792	)	$	(2,737	)	$	9,992
Net unrealized appreciation (depreciation) on investments:
End of year	$	14,469		$	11,054		$	(475,877	)	$	(13,860	)	$	(8,066	)	$	164,766
Beginning of year		87,428			20,489			(121,146	)		(14,335	)		1,987			58,610
Change in unrealized appreciation (depreciation)	$	(72,959	)	$	(9,435	)	$	(354,731	)	$	475		$	(10,053	)	$	106,156
Realized and unrealized gains (losses)	$	(11,776	)	$	6,474		$	(367,899	)	$	(30,317	)	$	(12,790	)	$	116,148
Increase (Decrease) in net assets from operations	$	(11,776	)	$	7,344		$	285,038		$	39,307		$	3,041		$	121,611

See notes to financial statements

Sun Life of Canada (U.S.) Variable Account G

Statement of Operations - Year Ended December 31, 2005 - continued

	MIS			M1B		CGS		MFL		MC1		MMS
	Sub-			Sub-		Sub-		Sub-		Sub-		Sub-
	Account			Account		Account		Account		Account		Account
Income:
Dividends	$	460		$	258	$	167	$	234	$	-	$	917,231
Net investment income	$	460		$	258	$	167	$	234	$	-	$	917,231

Realized and Unrealized Gains (Losses):
Realized gains (losses) on investment transactions:
Realized gain (loss) on sale of fund shares	$	1,497		$	2,383	$	327	$	205	$	13,334	$	(1	)
Realized gain distributions		-			-		-		-		-		-
Net realized gains (losses)	$	1,497		$	2,383	$	327	$	205	$	13,334	$	(1	)
Net unrealized appreciation (depreciation) on investments:
End of year	$	17,544		$	11,172	$	4,652	$	2,226	$	106,878	$	-
Beginning of year		15,852			3,132		3,739		606		90,208		-
Change in unrealized appreciation (depreciation)	$	1,692		$	8,040	$	913	$	1,620	$	16,670	$	-
Realized and unrealized gains (losses)	$	3,189		$	10,423	$	1,240	$	1,825	$	30,004	$	(1	)
Increase (Decrease) in net assets from operations	$	3,649		$	10,681	$	1,407	$	2,059	$	30,004	$	917,230

	M1A			RIS		RES		RE1		SG1		SI1
	Sub-			Sub-		Sub-		Sub-		Sub-		Sub-
	Account			Account		Account		Account		Account		Account
Income:
Dividends	$	-		$	15,558	$	92	$	1,624	$	1,022	$	800
Net investment income	$	-		$	15,558	$	92	$	1,624	$	1,022	$	800

Realized and Unrealized Gains (Losses):
Realized gains (losses) on investment transactions:
Realized gain (loss) on sale of fund shares	$	(10,242	)	$	134	$	463	$	2,020	$	8,301	$	(549	)
Realized gain distributions		-			-		-		-		-		109
Net realized gains (losses)	$	(10,242	)	$	134	$	463	$	2,020	$	8,301	$	(440	)
Net unrealized appreciation (depreciation) on investments:
End of year	$	106,385		$	326,046	$	3,568	$	42,048	$	46,213	$	6
Beginning of year		75,468			-		2,699		12,614		41,696		292
Change in unrealized appreciation (depreciation)	$	30,917		$	326,046	$	869	$	29,434	$	4,517	$	(286	)
Realized and unrealized gains (losses)	$	20,675		$	326,180	$	1,332	$	31,454	$	12,818	$	(726	)
Increase (Decrease) in net assets from operations	$	20,675		$	341,738	$	1,424	$	33,078	$	13,840	$	74

See notes to financial statements

Sun Life of Canada (U.S.) Variable Account G

Statement of Operations - Year Ended December 31, 2005 - continued

		TRS						MFJ					UTS					MFE				EIS				MV1
		Sub-						Sub-					Sub-					Sub-				Sub-				Sub-
		Account						Account					Account					Account				Account				Account
Income:
Dividends		$		242,540				$		91,332			$		211			$		8		$		454		$		5,952
Net investment income		$		242,540				$		91,332			$		211			$		8		$		454		$		5,952

Realized and Unrealized Gains (Losses):
Realized gains (losses) on investment transactions:
Realized gain (loss) on sale of fund shares		$		26,081				$		34,580			$		1,677			$		204		$		12,844		$		11,778
Realized gain distributions				233,340						93,750					-					-				-				-
Net realized gains (losses)		$		259,421				$		128,330			$		1,677			$		204		$		12,844		$		11,778
Net unrealized appreciation (depreciation) on investments:
End of year		$		645,555				$		127,652			$		6,397			$		403		$		-		$		39,865
Beginning of year				851,850						215,948					4,800					217				-				27,063
Change in unrealized appreciation (depreciation)		$		(206,295		)		$		(88,296	)		$		1,597			$		186		$		-		$		12,802
Realized and unrealized gains (losses)		$		53,126				$		40,034			$		3,274			$		390		$		12,844		$		24,580
Increase (Decrease) in net assets from operations		$		295,666				$		131,366			$		3,485			$		398		$		13,298		$		30,532

	NLM						NMC					NPP					NAR				OCF				OGS
	Sub-						Sub-					Sub-					Sub-				Sub-				Sub-
	Account						Account					Account					Account				Account				Account
Income:
Dividends	$		17,551				$		-			$		2			$		1,316		$		3,827		$		-
Net investment income	$		17,551				$		-			$		2			$		1,316		$		3,827		$		-

Realized and Unrealized Gains (Losses):
Realized gains (losses) on investment transactions:
Realized gain (loss) on sale of fund shares	$		(1,384		)		$		276,364			$		23,870			$		24,078		$		83		$		(14		)
Realized gain distributions			-						-					-					97,004				-				-
Net realized gains (losses)	$		(1,384		)		$		276,364			$		23,870			$		121,082		$		83		$		(14		)
Net unrealized appreciation (depreciation) on investments:
End of year	$		(13,570		)		$		586,670			$		19			$		223,047		$		31,360		$		344
Beginning of year			(5,184		)				321,793					23,288					152,018				-				-
Change in unrealized appreciation (depreciation)	$		(8,386		)		$		264,877			$		(23,269		)	$		71,029		$		31,360		$		344
Realized and unrealized gains (losses)	$		(9,770		)		$		541,241			$		601			$		192,111		$		31,443		$		330
Increase (Decrease) in net assets from operations	$		7,781				$		541,241			$		603			$		193,427		$		35,270		$		330

See notes to financial statements

Sun Life of Canada (U.S.) Variable Account G

Statement of Operations - Year Ended December 31, 2005 - continued

	OSC			PMB			PHY			PLD			PRR			PTR
	Sub-			Sub-			Sub-			Sub-			Sub-			Sub-
	Account			Account			Account			Account			Account			Account
Income:
Dividends	$	-		$	897		$	15,406		$	8		$	31,882		$	143,739
Net investment income	$	-		$	897		$	15,406		$	8		$	31,882		$	143,739

Realized and Unrealized Gains (Losses):
Realized gains (losses) on investment transactions:
Realized gain (loss) on sale of fund shares	$	(6	)	$	2		$	(166	)	$	(5	)	$	25,246		$	1,039
Realized gain distributions		10,862			492			-			2			14,810			72,071
Net realized gains (losses)	$	10,856		$	494		$	(166	)	$	(3	)	$	40,056		$	73,110
Net unrealized appreciation (depreciation) on investments:
End of year	$	43,005		$	990		$	865		$	(7	)	$	(21,036	)	$	(95,838	)
Beginning of year		-			(2	)		5,137			-			20,778			20,298
Change in unrealized appreciation (depreciation)	$	43,005		$	992		$	(4,272	)	$	(7	)	$	(41,814	)	$	(116,136	)
Realized and unrealized gains (losses)	$	53,861		$	1,486		$	(4,438	)	$	(10	)	$	(1,758	)	$	(43,026	)
Increase (Decrease) in net assets from operations	$	53,861		$	2,383		$	10,968		$	(2	)	$	30,124		$	100,713

	RX1			RX2			SEE⁽²⁾			SSI			SSC			SCV⁽¹⁾
	Sub-			Sub-			Sub-			Sub-			Sub-			Sub-
	Account			Account			Account			Account			Account			Account
Income:
Dividends	$	2		$	-		$	19		$	9,016		$	4,183		$	-
Net investment income	$	2		$	-		$	19		$	9,016		$	4,183		$	-

Realized and Unrealized Gains (Losses):
Realized gains (losses) on investment transactions:
Realized gain (loss) on sale of fund shares	$	65		$	3		$	(26	)	$	(293)		$	14,481		$	-
Realized gain distributions		-			-			-			38,669			27,840			-
Net realized gains (losses)	$	65		$	3		$	(26	)	$	38,376		$	42,321		$	-
Net unrealized appreciation (depreciation) on investments:
End of year	$	61		$	15		$	(1	)	$	112,238		$	134,096		$	257
Beginning of year		111			2			-			-			101,902			-
Change in unrealized appreciation (depreciation)	$	(50	)	$	13		$	(1	)	$	112,238		$	32,194		$	257
Realized and unrealized gains (losses)	$	15		$	16		$	(27	)	$	150,614		$	74,515		$	257
Increase (Decrease) in net assets from operations	$	17		$	16		$	(8	)	$	159,630		$	78,698		$	257

(1) For the period May 2, 2005 (commencement of operations of Sub-Account) through December 31, 2005

(2) For the period January 1, 2005 (commencement of operations of Sub-Account) through July 25, 2005

See notes to financial statements

Sun Life of Canada (U.S.) Variable Account G

Statement of Operations - Year Ended December 31, 2005 - continued

SCM

SIG

SC1

SRE

SC5

SC7

Sub-

Sub-

Sub-

Sub-

Sub-

Sub-

Account

Account

Account

Account

Account

Account

Income:

Dividends

$

411

$

165,650

$

595,734

$

104,956

$

3,339

$

197

Net investment income

$

411

$

165,650

$

595,734

$

104,956

$

3,339

$

197

Realized and Unrealized Gains (Losses):

Realized gains (losses) on investment transactions:

Realized gain (loss) on sale of fund shares

$

8,687

$

9,072

$

1

$

170,127

$

54,823

$

752

Realized gain distributions

51,506

34,584

-

564,686

93,428

-

Net realized gains (losses)

$

60,193

$

43,656

$

1

$

734,813

$

148,251

$

752

Net unrealized appreciation (depreciation) on investments:

End of year

$

(41,402

)

$

(73,041

)

$

-

$

699,921

$

757,675

$

3,111

Beginning of year

20,401

67,488

-

793,856

301,740

1,206

Change in unrealized appreciation (depreciation)

$

(61,803

)

$

(140,529

)

$

-

$

(93,935

)

$

455,935

$

1,905

Realized and unrealized gains (losses)

$

(1,610

)

$

(96,873

)

$

1

$

640,878

$

604,186

$

2,657

Increase (Decrease) in net assets from operations

$

(1,199

)

$

68,777

$

595,735

$

745,834

$

607,525

$

2,854

SCB

TBC

REI

RNA

VMG

VCP

Sub-
Sub-

Sub-

Sub-

Sub-

Sub-

Account

Account

Account

Account

Account

Account

Income:

Dividends

$

-

$

201

$

211,690

$

-

$

-

$

-

Net investment income

$

-

$

201

$

211,690

$

-

$

-

$

-

Realized and Unrealized Gains (Losses):

Realized gains (losses) on investment transactions:

Realized gain (loss) on sale of fund shares

$

26,456

$

508

$

72,619

$

2,318

$

12

$

(5

)

Realized gain distributions

262,943

-

652,582

-

-

-

Net realized gains (losses)

$

289,399

$

508

$

725,201

$

2,318

$

12

$

(5

)

Net unrealized appreciation (depreciation) on investments:

End of year

$

(30,910

)

$

3,124

$

673,653

$

2,564

$

(722

)

$

55

Beginning of year

163,301

1,288

1,062,450

1,647

-

-

Change in unrealized appreciation (depreciation)

$

(194,211

)

$

1,836

$

(388,797

)

$

917

$

(722

)

$

55

Realized and unrealized gains (losses)

$

95,188

$

2,344

$

336,404

$

3,235

$

(710

)

$

50

Increase (Decrease) in net assets from operations

$

95,188

$

2,545

$

548,094

$

3,235

$

(710

)

$

50

See notes to financial statements

Sun Life of Canada (U.S.) Variable Account G

Statement of Operations - Year Ended December 31, 2005 - continued

VGI

Sub-

Account

Income:

Dividends

$

-

Net investment income

$

-

Realized and Unrealized Gains (Losses):

Realized gains (losses) on investment transactions:

Realized gain (loss) on sale of fund shares

$

1

Realized gain distributions

-

Net realized gains (losses)

$

1

Net unrealized appreciation (depreciation) on investments:

End of year

$

(67

)

Beginning of year

-

Change in unrealized appreciation (depreciation)

$

(67

)

Realized and unrealized gains (losses)

$

(66

)

Increase (Decrease) in net assets from operations

$

(66

)

See notes to financial statements

Sun Life of Canada (U.S.) Variable Account G

Statements of Changes in Net Assets

	AI6			ACA						AI3						AI2			AI4						A22
	Sub-Account			Sub-Account						Sub-Account						Sub-Account			Sub-Account						Sub-Account
	Year Ended															Year Ended									Year Ended
	December 31,			Year Ended December 31,						Year Ended December 31,						December 31,			Year Ended December 31,						December 31,
	2005			2005			2004			2005			2004			2005			2005			2004			2005
Operations:
Net investment income (loss)	$	9		$	1,061		$	-		$	165		$	78		$	-		$	2,512		$	1,109		$	3,260
Net realized gains (losses)		116			(14,430	)		(34,945	)		426			269			6			43,648			502			36,598
Change in unrealized gains (losses)		233			160,240			125,949			23			272			531			19,287			31,693			24,548
Increase (Decrease) in net assets from operations	$	358		$	146,871		$	91,004		$	614		$	619		$	537		$	65,447		$	33,304		$	64,406

Contract Owner Transactions:
Purchase payments received	$	11,548		$	318,735		$	356,581		$	4,830		$	2,418		$	3,021		$	116,858		$	71,247		$	810,538
Net transfers between Sub-Accounts		-			(126,665	)		(54,525	)		-			2,238			5,183			39,044			26,086			(155,700	)
Withdrawals, surrenders and annuitizations		-			(1,468	)		(3,791	)		-			-			-			-			-			-
Mortality and expense risk, cost of insurance and contract charges		(1,467	)		(24,590	)		(24,827	)		(2,236	)		(1,408	)		(365	)		(5,334	)		(3,197	)		(26,437	)
Increase (Decrease) in net assets from contract owner transactions	$	10,081		$	166,012		$	273,438		$	2,594		$	3,248		$	7,839		$	150,568		$	94,136		$	628,401
Increase (Decrease) in net assets	$	10,439		$	312,883		$	364,442		$	3,208		$	3,867		$	8,376		$	216,015		$	127,440		$	692,807

Net Assets:
Beginning of year		-			1,735,152			1,370,710			8,076			4,209			-			194,130			66,690			-
End of year	$	10,439		$	2,048,035		$	1,735,152		$	11,284		$	8,076		$	8,376		$	410,145		$	194,130		$	692,807

Unit Activity from Participant Transactions:
Beginning of Year		-			174,503			146,985			617			353			-			13,682			5,825			-
Units purchased		1,048			29,120			36,434			370			196			273			7,853			5,960			75,770
Units transferred between Sub-Accounts		-			(11,762	)		(5,869	)		-			182			488			3,341			2,155			(14,016	)
Units withdrawn, surrendered or canceled		(133	)		(2,612	)		(3,047	)		(169	)		(114	)		(34	)		(360	)		(258	)		(2,378	)
End of Year		915			189,249			174,503			818			617			727			24,516			13,682			59,376

See notes to financial statements

Sun Life of Canada (U.S.) Variable Account G

Statements of Changes in Net Assets - continued

	AVF						AL4			AN3						AN2						AN4						DGO
	Sub-Account						Sub-Account			Sub-Account						Sub-Account						Sub-Account						Sub-Account
							Year Ended																					Year Ended
	Year Ended December 31,						December 31,			Year Ended December 31,						Year Ended December 31,						Year Ended December 31,						December 31,
	2005			2004			2005⁽¹⁾			2005			2004			2005			2004			2005			2004			2005
Operations:
Net investment income (loss)	$	864		$	268		$	-		$	6,521		$	2,001		$	-		$	-		$	2,469		$	280		$	-
Net realized gains (losses)		2,088			6,192			(12	)		3,727			5,147			759			985			11,991			316			88
Change in unrealized gains (losses)		2,642			(1,990	)		11			17,495			23,109			(150	)		980			140,183			45,426			4,235
Increase (Decrease) in net assets from operations	$	5,594		$	4,470		$	(1	)	$	27,743		$	30,257		$	609		$	1,965		$	154,643		$	46,022		$	4,323

Contract Owner Transactions:
Purchase payments received	$	37,493		$	8,747		$	804		$	90,548		$	123,612		$	13,243		$	8,342		$	269,832		$	207		$	-
Net transfers between Sub-Accounts		7,677			(932	)		-			137,802			199,003			(12,874	)		9,841			181,629			247,231			78,468
Withdrawals, surrenders and annuitizations		-			(66,986	)		-			-			(13,398	)		-			-			-			-			-
Mortality and expense risk, cost of insurance and contract charges		(5,845	)		(5,250	)		(97	)		(15,017	)		(9,314	)		(749	)		(482	)		(15,735	)		(5,047	)		(567	)
Increase (Decrease) in net assets from contract owner transactions	$	39,325			(64,421	)	$	707		$	213,333		$	299,903		$	(380	)	$	17,701		$	435,726		$	242,391		$	77,901
Increase (Decrease) in net assets	$	44,919		$	(59,951	)	$	706		$	241,076		$	330,160		$	229		$	19,666		$	590,369		$	288,413		$	82,224

Net Assets:
Beginning of year		59,002			118,953			-			381,677			51,517			23,910			4,244			288,539			126			-
End of year		103,921		$	59,002		$	706		$	622,753		$	381,677		$	24,139		$	23,910		$	878,908		$	288,539		$	82,224

Unit Activity from Participant Transactions:
Beginning of Year		7,274			15,515			-			30,073			4,511			1,986			370			15,219			8			-
Units purchased		4,643			1,140			69			7,117			10,697			1,131			741			14,547			13			-
Units transferred between Sub-Accounts		928			(118	)		-			10,895			16,819			(1,117	)		919			9,461			15,505			6,520
Units withdrawn, surrendered or canceled		(716	)		(9,263	)		(8	)		(1,170	)		(1,954	)		(65	)		(44	)		(772	)		(307	)		(46	)
End of Year		12,129			7,274			61			46,915			30,073			1,935			1,986			38,455			15,219			6,474

(1) For the period May 2, 2005 (commencement of operations of Sub-Account) through December 31, 2005

See notes to financial statements

Sun Life of Canada (U.S.) Variable Account G

Statements of Changes in Net Assets - continued

	DRS			DSV			DMC					DCA							DSC									DGI
	Sub-Account			Sub-Account			Sub-Account					Sub-Account							Sub-Account									Sub-Account
	Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,					Year Ended December 31,							Year Ended December 31,									Year Ended December 31,
	2005			2005			2005⁽¹⁾					2005				2004			2005						2004			2005			2004
Operations:
Net investment income (loss)	$	-		$	-		$	-				$	44			$	11,215		$	-					$	8,928		$	166		$	136
Net realized gains (losses)		1,647			6,751			-					33,800				1,950			488,186						301,400			608			399
Change in unrealized gains (losses)		16,433			27,432			(62			)		(29,577	)			11,729			58,911						96,538			(280	)		245
Increase (Decrease) in net assets from operations	$	18,080		$	34,183		$	(62			)	$	4,267			$	24,894		$	547,097					$	406,866		$	494		$	780

Contract Owner Transactions:
Purchase payments received	$	28,087		$	118,431		$		18,046			$	5,677			$	42,878		$	810,397				$		310,724		$	3,295		$	3,792
Net transfers between Sub-Accounts		239,271			214,869				-				(274,794		)		33,426			789,633						745,485			131			(1	)
Withdrawals, surrenders and annuitizations		-			-				-				-				(299,280	)		(23,287		)				(158,300	)		-			-
Mortality and expense risk, cost of insurance and contract charges		(5,052	)		(14,002	)			(6	)			(4,804		)		(14,451	)		(114,932		)				(92,636	)		(2,476	)		(2,379	)
Increase (Decrease) in net assets from contract owner transactions	$	262,306		$	319,298		$		18,040			$	(273,921	)		$	(237,427	)	$		1,461,811		$			805,273		$	950		$	1,412
Increase (Decrease) in net assets	$	280,386		$	353,481		$		17,978			$	(269,654	)		$	(212,533	)	$		2,008,908		$			1,212,139		$	1,444		$	2,192

Net Assets:
Beginning of year		-			-				-				288,506				501,039				4,696,246					3,484,107			11,598			9,406
End of year	$	280,386		$	353,481		$		17,978			$	18,852			$	288,506		$		6,705,154		$			4,696,246		$	13,042		$	11,598

Unit Activity from Participant Transactions:
Beginning of Year		-			-				-				24,514				45,304				352,886					291,499			1,094			953
Units purchased		2,015			9,753				1,563				477				3,790				63,882					25,203			316			380
Units transferred between Sub-Accounts		17,826			18,191				-				(23,053	)			2,976				69,807					55,918			13			-
Units withdrawn, surrendered or canceled		(356	)		(1,123	)			(1	)			(403	)			(27,556	)			(10,367	)				(19,734	)		(235	)		(239	)
End of Year		19,485			26,821				1,562				1,535				24,514				476,208					352,886			1,188		1,094

(1) For the period May 2, 2005 (commencement of operations of Sub-Account) through December 31, 2005

See notes to financial statements

Sun Life of Canada (U.S.) Variable Account G

Statements of Changes in Net Assets - continued

DQB

DSI

FEI

FGP

FVG

Sub-Account

Sub-Account

Sub-Account

Sub-Account

Sub-Account

Year Ended

Year Ended December 31,

Year Ended December 31,

Year Ended December 31,

Year Ended December 31,

December 31,

2005

2004

2005

2004

2005

2004

2005

2004

2005

Operations:

Net investment income (loss)

$

221,771

$

223,520

$

516,314

$

343,068

$

144,563

$

221,575

$

13,030

$

5,671

$

-

Net realized gains (losses)

13,015

12,263

74,182

(352,654

)

1,533,579

95,879

(11,064

)

(35,407

)

12

Change in unrealized gains (losses)

(81,063

)

(40,294

)

1,179,155

1,982,275

(1,177,686

)

1,400,617

170,662

111,758

285

Increase (Decrease) in net assets from operations

$

153,723

$

195,489

$

1,769,651

$

1,972,689

$

500,456

$

1,718,071

$

172,628

$

82,022

$

297

Contract Owner Transactions:

Purchase payments received

$

314,882

$

319,843

$

8,592,510

$

1,834,552

$

2,109,999

$

2,794,652

$

435,570

$

472,830

$

26,590

Net transfers between Sub-Accounts

202,081

(3,759

)

5,944,929

1,798,676

(9,126,509

)

(34,282

)

49

(27

)

-

Withdrawals, surrenders and annuitizations

(36,513

)

(536,123

)

(177,126

)

(1,887,643

)

(3,277

)

(217,758

)

-

(122,370

)

-

Mortality and expense risk, cost of insurance and contract charges

(95,631

)

(83,260

)

(589,833

)

(355,426

)

(262,373

)

(418,484

)

(73,612

)

(65,924

)

(1,627

)

Increase (Decrease) in net assets from contract owner transactions

$

384,819

$

(303,299

)

$

13,770,480

$

1,390,159

$

(7,282,160

)

$

2,124,128

$

362,007

$

284,509

$

24,963

Increase (Decrease) in net assets

$

538,542

$

(107,810

)

$

15,540,131

$

3,362,848

$

(6,781,704

)

$

3,842,199

$

534,635

$

366,531

$

25,260

Net Assets:

Beginning of year

5,614,122

5,721,932

20,651,016

17,288,168

17,020,273

13,178,074

2,448,410

2,081,879

-

End of year

$

6,152,664

$

5,614,122

$

36,191,147

$

20,651,016

$

10,238,569

$

17,020,273

$

2,983,045

$

2,448,410

$

25,260

Unit Activity from Participant Transactions:

Beginning of Year

395,218

416,146

2,152,440

1,994,466

1,056,327

912,163

177,274

155,827

-

Units purchased

21,882

23,760

903,262

207,227

130,306

189,139

32,206

35,073

2,382

Units transferred between Sub-Accounts

14,800

(166

)

627,639

203,674

(569,956

)

(2,378

)

-

-

-

Units withdrawn, surrendered or canceled

(9,256

)

(44,522

)

(79,645

)

(252,927

)

(16,449

)

(42,597

)

(5,332

)

(13,626

)

(148

)

End of Year

422,644

395,218

3,603,696

2,152,440

600,228

1,056,327

204,148

177,274

2,234

See notes to financial statements

Sun Life of Canada (U.S.) Variable Account G

Statements of Changes in Net Assets - continued

		FHI						FIG			FMM					FL5						FAM
		Sub-Account						Sub-Account			Sub-Account					Sub-Account						Sub-Account
								Year Ended
	Year Ended December 31,							December 31,			Year Ended December 31,					Year Ended December 31,						Year Ended December 31,
			2005			2004			2005			2005		2004			2005			2004⁽²⁾			2005			2004
Operations:
Net investment income (loss)		$	50,510		$	16,852		$	-		$	4,087	$	1,611		$	108,379		$	74,245		$	-		$	3,369
Net realized gains (losses)			1,663			4,733			2,012			-		-			-			-			23,237			445
Change in unrealized gains (losses)			(42,782	)		(381	)		36,786			-		-			-			-			(24,669	)		7,600
Increase (Decrease) in net assets from operations		$	9,391		$	21,204		$	38,798		$	4,087	$	1,611		$	108,379		$	74,245		$	(1,432	)	$	11,414

Contract Owner Transactions:
Purchase payments received		$	24,633		$	8,993		$	197,228		$	-	$	-		$	18,083,308		$	30,924,266		$	5,088		$	6,602
Net transfers between Sub-Accounts			80,707			65,564			4,085,940			-		-			(12,885,678	)		(30,776,858			(217,852	)		75,008
Withdrawals, surrenders and annuitizations			(13,016	)		(647	)		-			-		-			-			-			-			-
Mortality and expense risk, cost of insurance and contract charges			(9,131	)		(7,603	)		(54,674	)		-		(1	)		(132,040	)		(199,053	)		(4,242	)		(5,792	)
Increase (Decrease) in net assets from contract owner transactions		$	83,193		$	66,307		$	4,228,494		$	-	$	(1	)	$	5,065,590		$	(51,645	)	$	(217,006	)	$	75,818
Increase (Decrease) in net assets		$	92,584		$	87,511		$	4,267,292		$	4,087	$	1,610		$	5,173,969		$	22,600		$	(218,438	)	$	87,232

Net Assets:
Beginning of year			292,735			205,224			-			134,817		133,207			22,600			-			235,764			148,532
End of year		$	385,319		$	292,735		$	4,267,292		$	138,904	$	134,817		$	5,196,569		$	22,600		$	17,326		$	235,764

Unit Activity from Participant Transactions:
Beginning of Year			26,937			20,702			-			10,000		10,000			2,242			-			21,978			14,671
Units purchased			2,251			877			12,789			-		-			1,775,370			3,087,582			488			642
Units transferred between Sub-Accounts			7,372			6,165			261,620			-		-			(1,263,852	)		(3,065,478	)		(20,219	)		7,231
Units withdrawn, surrendered or canceled			(2,033	)		(807	)		(3,494	)		-		-			(12,986	)		(19,862	)		(399	)		(566	)
End of Year			34,527			26,937			270,915			10,000		10,000			500,774			2,242			1,848			21,978

(2) For the period May 3, 2004 (commencement of operations of Sub-Account) through December 31, 2004

See notes to financial statements

Sun Life of Canada (U.S.) Variable Account G

Statements of Changes in Net Assets - continued

	FCN						FL1						FL3						FIP						FL2
	Sub-Account						Sub-Account						Sub-Account						Sub-Account						Sub-Account
	Year Ended December 31,						Year Ended December 31,						Year Ended December 31,						Year Ended December 31,						Year Ended December 31,
	2005			2004			2005			2004			2005			2004			2005			2004			2005			2004
Operations:
Net investment income (loss)	$	5,470		$	2,459		$	3,742		$	1,548		$	4,137		$	659		$	965		$	709		$	8,822		$	8,039
Net realized gains (losses)		67,457			54,519			65,844			24,926			9,986			56,783			360			1,030			26,179			63,478
Change in unrealized gains (losses)		305,602			137,140			636,880			291,743			117,867			(8,008	)		1,450			2,635			275,157			93,539
Increase (Decrease) in net assets from operations	$	378,529		$	194,118		$	706,466		$	318,217		$	131,990		$	49,434		$	2,775		$	4,374		$	310,158		$	165,056

Contract Owner Transactions:
Purchase payments received	$	702,141		$	28,764		$	875,022		$	677,260		$	575,576		$	593,549		$	-		$	-		$	426,315		$	498,774
Net transfers between Sub-Accounts		266,377			872,462			977,269			1,194,370			263,079			414,930			-			32,567			48,831			650,595
Withdrawals, surrenders and annuitizations		(41,102	)		(150,988	)		(2,383	)		(1,274	)		-			(17,436	)		-			-			-			(31,134	)
Mortality and expense risk, cost of insurance and contract charges		(50,085	)		(24,968	)		(111,123	)		(63,933	)		(48,898	)		(37,953	)		(1,331	)		(1,295	)		(32,618	)		(32,798	)
Increase (Decrease) in net assets from contract owner transactions	$	877,331		$	725,270		$	1,738,785		$	1,806,423		$	789,757		$	953,090		$	(1,331	)	$	31,272		$	442,528		$	1,085,437
Increase (Decrease) in net assets	$	1,255,860		$	919,388		$	2,445,251		$	2,124,640		$	921,747		$	1,002,524		$	1,444		$	35,646		$	752,686		$	1,250,493

Net Assets:
Beginning of year		1,643,239			723,851			2,723,075			598,435			1,494,309			491,785			55,528			19,882			1,640,313			389,820
End of year	$	2,899,099		$	1,643,239		$	5,168,326		$	2,723,075		$	2,416,056		$	1,494,309		$	56,972		$	55,528		$	2,392,999		$	1,640,313

Unit Activity from Participant Transactions:
Beginning of year		83,724			42,586			189,838			48,020			133,887			45,436			3,516			1,378			115,242			31,025
Units purchased		33,383			1,634			59,580			53,025			52,561			55,911			-			-			29,729			39,937
Units transferred between Sub-Accounts		13,629			49,337			66,977			93,755			23,132			37,706			-			2,226			(1,183	)		49,286
Units withdrawn, surrendered or canceled		(4,421	)		(9,833	)		(7,484	)		(4,962	)		(4,394	)		(5,166	)		(84	)		(88	)		(2,246	)		(5,006	)
End of year		126,315			83,724			308,911			189,838			205,186			133,887			3,432			3,516			141,542			115,242

See notes to financial statements

Sun Life of Canada (U.S.) Variable Account G

Statements of Changes in Net Assets - continued

	MLV			FRE			FSC						TFS						FTI						TSF
	Sub-Account			Sub-Account			Sub-Account						Sub-Account						Sub-Account						Sub-Account
	Year Ended December 31,			Year Ended December 31,			Year Ended December 31,						Year Ended December 31,						Year Ended December 31,						Year Ended December 31,
	2005			2005⁽¹⁾			2005			2004⁽²⁾			2005			2004⁽²⁾			2005			2004			2005			2004
Operations:
Net investment income (loss)	$	4,930		$	-		$	-		$	-		$	19,194		$	-		$	9,030		$	3,490		$	131,706		$	42,475
Net realized gains (losses)		222,319			17			111			-			16,269			-			19,757			1,817			(29,043	)		(35,837	)
Change in unrealized gains (losses)		(101,065	)		78			29,794			1,066			260,132			1,448			54,472			60,362			913,369			526,511
Increase (Decrease) in net assets from operations	$	126,184		$	95		$	29,905		$	1,066		$	295,595		$	1,448		$	83,259		$	65,669		$	1,016,032		$	533,149

Contract Owner Transactions:
Purchase payments received	$	26,787		$	219,799		$	204,002		$	86,302		$	1,624,473		$	51,198		$	172,088		$	47,892		$	1,398,712		$	350,081
Net transfers between Sub-Accounts		1,735,949			(4	)		308,140			-			1,378,178			-			160,088			286,396			5,704,530			154,073
Withdrawals, surrenders and annuitizations		-			-			-			-			-			-			-			-			(39,377	)		(121,512	)
Mortality and expense risk, cost of insurance and contract charges		(22,652	)		(1,105	)		(21,097	)		(61	)		(80,189	)		(39	)		(21,680	)		(10,822	)		(213,214	)		(64,346	)
Increase (Decrease) in net assets from contract owner transactions	$	1,740,084		$	218,690		$	491,045		$	86,241		$	2,922,462		$	51,159		$	310,496		$	323,466		$	6,850,651		$	318,296
Increase (Decrease) in net assets	$	1,866,268		$	218,785		$	520,950		$	87,307		$	3,218,057		$	52,607		$	393,755		$	389,135		$	7,866,683		$	851,445

Net Assets:
Beginning of year		-			-			87,307			-			52,607			-			395,087			5,952			4,098,625			3,247,180
End of year	$	1,866,268		$	218,785		$	608,257		$	87,307		$	3,270,664		$	52,607		$	788,842		$	395,087		$	11,965,308		$	4,098,625

Unit Activity from Participant Transactions:
Beginning of year		-			-			7,962			-			4,519	)		-			24,034			430			243,051			223,841
Units purchased		2,257			19,198			18,035			7,968			139,931			4,522			10,661			3,295			81,191			21,353
Units transferred between Sub-Accounts		147,803			-			28,733			-			116,544			-			10,156			21,053			340,933			10,085
Units withdrawn, surrendered or canceled		(1,862	)		(99	)		(1,942	)		(6	)		(6,708	)		(3	)		(1,289	)		(744	)		(14,560	)		(12,228	)
End of year		148,198			19,099			52,788			7,962			254,286			4,519			43,562			24,034			650,615			243,051

(1) For the period May 2, 2005 (commencement of operations of Sub-Account) through December 31, 2005

(2) For the period May 3, 2004 (commencement of operations of Sub-Account) through December 31, 2004

See notes to financial statements

Sun Life of Canada (U.S.) Variable Account G

Statements of Changes in Net Assets - continued

	FTG						GS3						GS7						IV2						JBP
	Sub-Account						Sub-Account						Sub-Account						Sub-Account						Sub-Account
	Year Ended December 31,						Year Ended December 31,						Year Ended December 31,						Year Ended December 31,						Year Ended December 31,
	2005			2004			2005			2004			2005			2004			2005			2004			2005			2004
Operations:
Net investment income (loss)	$	1,727		$	570		$	587		$	801		$	125		$	376		$	-		$	-		$	384,798		$	374,120
Net realized gains (losses)		1,619			4,696			4,900			(125	)		1,817			(240	)		1,946			25,163			194,824			205,885
Change in unrealized gains (losses)		19,748			3,247			503			8,055			1,594			4,603			53,861			39,362			(245,427	)		(114,725	)
Increase (Decrease) in net assets from operations	$	23,094		$	8,513		$	5,990		$	8,731		$	3,536		$	4,739		$	55,807		$	64,525		$	334,195		$	465,280

Contract Owner Transactions:
Purchase payments received	$	39,656		$	20,599		$	14,878		$	17,307		$	32,217		$	9,763		$	232,014		$	241,480		$	1,426,066		$	354,889
Net transfers between Sub-Accounts		316,062			19,509			(14,601	)		52,473			1,468			42,579			248,611			79,930			1,332			(91,629	)
Withdrawals, surrenders, and annuitizations		(542	)		(104	)		-			-			-			-			-			-			(331	)		(556	)
Mortality and expense risk, cost of insurance and contract charges		(8,734	)		(5,306	)		(3,851	)		(2,316	)		(4,021	)		(1,619	)		(13,890	)		(9,709	)		(197,862	)		(178,390	)
Increase (Decrease) in net assets from contract owner transactions	$	346,442		$	34,698		$	(3,574	)	$	67,464		$	29,664		$	50,723		$	466,735		$	311,701		$	1,229,205		$	84,314
Increase (Decrease) in net assets	$	369,536		$	43,211		$	2,416		$	76,195		$	33,200		$	55,462		$	522,542		$	376,226		$	1,563,400		$	549,594

Net Assets:
Beginning of year		64,331			21,120			76,770			575			55,462			-			587,744			211,518			11,248,512			10,698,918
End of year	$	433,867		$	64,331		$	79,186		$	76,770		$	88,662		$	55,462		$	1,110,286		$	587,744		$	12,811,912		$	11,248,512

Unit Activity from Participant Transactions:
Beginning of year		3,950			1,504			5,987			53			4,915			-			43,896			17,990			713,031			707,104
Units purchased		2,397			1,419			1,189			1,477			2,891			935			17,737			20,597			89,341			23,453
Units transferred between Sub-Accounts		18,663			1,392			(1,076	)		4,654			188			4,134			18,248			6,119			(39	)		(5,889	)
Units withdrawn, surrendered or canceled		(554	)		(365	)		(303	)		(197	)		(361	)		(154	)		(1,048	)		(810	)		(12,419	)		(11,637	)
End of year		24,456			3,950			5,797			5,987			7,633			4,915			78,833			43,896			789,914			713,031

See notes to financial statements

Sun Life of Canada (U.S.) Variable Account G

Statements of Changes in Net Assets - continued

	JSC						JEP						LA1						LA3						LA2
	Sub-Account						Sub-Account						Sub-Account						Sub-Account						Sub-Account
	Year Ended December 31,						Year Ended December 31,						Year Ended December 31,						Year Ended December 31,						Year Ended December 31,
	2005			2004			2005			2004			2005			2004			2005			2004			2005			2004
Operations:
Net investment income (loss)	$	-		$	-		$	1,394		$	6,199		$	71,434		$	34,890		$	-		$	7		$	13,888		$	3,035
Net realized gains (losses)		94,510			10,771			10,925			28,632			659,643			110,143			2,124			183			202,550			41,332
Change in unrealized gains (losses)		(75,880	)		92,180			(14,207	)		(17,045	)		(439,731	)		322,382			5,934			811			(32,582	)		126,007
Increase (Decrease) in net assets from operations	$	18,630		$	102,951		$	(1,888	)	$	17,786		$	291,346		$	467,415		$	8,058		$	1,001		$	183,856		$	170,374

Contract Owner Transactions:
Purchase payments received	$	7,769		$	15,469		$	812		$	177,164		$	3,243,381		$	1,820,565		$	1,691		$	2,040		$	1,185,145		$	408,512
Net transfers between Sub-Accounts		127,119			(1,684	)		(175,221	)		(692,549	)		(304,810	)		663,183			25,089			1			804,369			182,695
Withdrawals, surrenders, and annuitizations		(384	)		-			(343	)		-			(2,980	)		(276	)		-			-			(3,982	)		(161	)
Mortality and expense risk, cost of insurance and contract charges		(11,267	)		(8,655	)		(1,969	)		(6,708	)		(193,577	)		(112,812	)		(1,361	)		(1,008	)		(80,710	)		(30,494	)
Increase (Decrease) in net assets from contract owner transactions	$	123,237		$	5,130		$	(176,721	)	$	(522,093	)	$	2,742,014		$	2,370,660		$	25,419		$	1,033		$	1,904,822		$	560,552
Increase (Decrease) in net assets	$	141,867		$	108,081		$	(178,609	)	$	(504,307	)	$	3,033,360		$	2,838,075		$	33,477		$	2,034		$	2,088,678		$	730,926

Net Assets:
Beginning of year		500,313			392,232			293,445			797,752			4,410,935			1,572,860			6,249			4,215			1,180,353			449,427
End of year	$	642,180		$	500,313		$	114,836		$	293,445		$	7,444,295		$	4,410,935		$	39,726		$	6,249		$	3,269,031		$	1,180,353

Unit Activity from Participant Transactions:
Beginning of year		30,363			30,306			23,681			70,487			319,388			128,258			561			457			80,667			38,062
Units purchased		464			1,088			67			14,537			239,834			146,784			144			205			79,958			30,870
Units transferred between Sub-Accounts		7,580			(416	)		(14,416	)		(60,764	)		(22,690	)		53,292			2,220			-			51,599			14,108
Units withdrawn, surrendered or canceled		(713	)		(615	)		(188	)		(579	)		(14,410	)		(8,946	)		(113	)		(101	)		(5,656	)		(2,373	)
End of year		37,694			30,363			9,144			23,681			522,122			319,388			2,812			561			206,568			80,667

See notes to financial statements

Sun Life of Canada (U.S.) Variable Account G

Statements of Changes in Net Assets - continued

	MF7						CAS						MFD						CO1						EGS
	Sub-Account						Sub-Account						Sub-Account						Sub-Account						Sub-Account
	Year Ended December 31,						Year Ended December 31,						Year Ended December 31,						Year Ended December 31,						Year Ended December 31,
	2005			2004			2005			2004			2005			2004			2005			2004			2005			2004
Operations:
Net investment income (loss)	$	10,616		$	52		$	38,837		$	3,496		$	3,053		$	-		$	1,237		$	178		$	-		$	-
Net realized gains (losses)		2,192			(12	)		34,154			6,533			6,463			6,901			1,548			3,739			16,366			4,393
Change in unrealized gains (losses)		(10,080	)		1,479			13,234			584,514			5,923			58,407			(242	)		7,530			(7,338	)		7,262
Increase (Decrease) in net assets from operations	$	2,728		$	1,519		$	86,225		$	594,543		$	15,439		$	65,308		$	2,543		$	11,447		$	9,028		$	11,655

Contract Owner Transactions:
Purchase payments received	$	221		$	161,988		$	1,103,305		$	1,149,155		$	438,337		$	435,864		$	-		$	164,630		$	38,748		$	7,751
Net transfers between Sub-Accounts		18,298			(519	)		(108,633	)		47,298			766			-			(13,009	)		(21,972	)		(21,559	)		3,360
Withdrawals, surrenders, and annuitizations		-			-			-			(4,120	)		-			(19,549	)		-			-			-			(7,148	)
Mortality and expense risk, cost of insurance and contract charges		(4,492	)		(683	)		(184,817	)		(160,245	)		(28,965	)		(19,179	)		(4,030	)		(2,243	)		(5,898	)		(5,304	)
Increase (Decrease) in net assets from contract owner transactions	$	14,027		$	160,786		$	809,855		$	1,032,088		$	410,138		$	397,136		$	(17,039	)	$	140,415		$	11,291		$	(1,341	)
Increase (Decrease) in net assets	$	16,755		$	162,305		$	896,080		$	1,626,631		$	425,577		$	462,444		$	(14,496	)	$	151,862		$	20,319		$	10,314

Net Assets:
Beginning of year		162,305			-			6,276,172			4,649,541			687,403			224,959			168,601			16,739			92,451			82,137
End of year	$	179,060		$	162,305		$	7,172,252		$	6,276,172		$	1,112,980		$	687,403		$	154,105		$	168,601		$	112,770		$	92,451

Unit Activity from Participant Transactions:
Beginning of year		15,113			-			579,514			476,632			60,888			22,075			14,286			1,596			6,880			6,920
Units purchased		20			15,223			104,023			115,070			39,603			42,532			-			14,643			2,956			635
Units transferred between Sub-Accounts		1,693			(45	)		(10,034	)		4,245			69			-			(1,049	)		(1,747	)		(1,709	)		306
Units withdrawn, surrendered or canceled		(414	)		(65	)		(17,264	)		(16,433	)		(2,599	)		(3,719	)		(349	)		(206	)		(438	)		(981	)
End of year		16,412			15,113			656,239			579,514			97,961			60,888			12,888			14,286			7,689			6,880

See notes to financial statements

Sun Life of Canada (U.S.) Variable Account G

Statements of Changes in Net Assets - continued

	MFF						GGR						GSS						MFK						MFC
	Sub-Account						Sub-Account						Sub-Account						Sub-Account						Sub-Account
	Year Ended December 31,						Year Ended December 31,						Year Ended December 31,						Year Ended December 31,						Year Ended December 31,
	2005			2004			2005			2004			2005			2004			2005			2004			2005			2004
Operations:
Net investment income (loss)		-		$	-		$	870		$	537		$	652,937		$	521,584		$	69,624		$	50,634		$	15,831		$	2,755
Net realized gains (losses)		61,183			13,776			15,909			36,907			(13,168	)		(53,125	)		(30,792	)		(9,612	)		(2,737	)		1,277
Change in unrealized gains (losses)		(72,959	)		78,492			(9,435	)		(16,871	)		(354,731	)		(152,905	)		475			(3,709	)		(10,053	)		928
Increase (Decrease) in net assets from operations	$	(11,776	)	$	92,268		$	7,344		$	20,573		$	285,038		$	315,554		$	39,307		$	37,313		$	3,041		$	4,960

Contract Owner Transactions:
Purchase payments received	$	14,766		$	216,038		$	4,661		$	3,276		$	1,441,325		$	1,532,220		$	680,658		$	592,707		$	503		$	252,830
Net transfers between Sub-Accounts		(717,383	)		(122,694	)		(1,488	)		25,800			5,368,537			(1,171,113	)		(103,073	)		(434,308	)		(277	)		(463,093	)
Withdrawals, surrenders, and annuitizations		-			-			-			(132,503	)		(36,561	)		(24,914	)		-			(61,089	)		-			-
Mortality and expense risk, cost of insurance and contract charges		(4,662	)		(21,994	)		(4,764	)		(5,315	)		(307,957	)		(214,261	)		(44,186	)		(33,118	)		(4,390	)		(5,386	)
Increase (Decrease) in net assets from contract owner transactions	$	(707,279	)	$	71,350		$	(1,591	)	$	(108,742	)	$	6,465,344		$	121,932		$	533,399		$	64,192		$	(4,164	)	$	(215,649	)
Increase (Decrease) in net assets	$	(719,055	)	$	163,618		$	5,753		$	(88,169	)	$	6,750,382		$	437,486		$	572,706		$	101,505		$	(1,123	)	$	(210,689	)

Net Assets:
Beginning of year		845,288			681,670			125,670			213,839			9,164,192			8,726,706			1,321,529			1,220,024			172,327			383,016
End of year	$	126,233		$	845,288		$	131,423		$	125,670		$	15,914,574		$	9,164,192		$	1,894,235		$	1,321,529		$	171,204		$	172,327

Unit Activity from Participant Transactions:
Beginning of year		70,196			63,948			7,037			13,847			579,747			572,822			115,002			109,937			11,959			29,070
Units purchased		1,307			19,626			264			207			90,057			99,257			58,662			52,861			36			18,355
Units transferred between Sub-Accounts		(61,487	)		(11,368	)		(348	)		1,614			335,854			(76,874	)		(8,245	)		(39,320	)		(35	)		(35,066	)
Units withdrawn, surrendered or canceled		(389	)		(2,010	)		(265	)		(8,631	)		(21,533	)		(15,458	)		(3,803	)		(8,476	)		(305	)		(400	)
End of year		9,627			70,196			6,688			7,037			984,125			579,747			161,616			115,002			11,655			11,959

See notes to financial statements

Sun Life of Canada (U.S.) Variable Account G

Statements of Changes in Net Assets - continued

	IG1						MIS						M1B						CGS						MFL
	Sub-Account						Sub-Account						Sub-Account						Sub-Account						Sub-Account
	Year Ended December 31,						Year Ended December 31,						Year Ended December 31,						Year Ended December 31,						Year Ended December 31,
	2005			2004			2005			2004			2005			2004			2005			2004			2005			2004
Operations:
Net investment income (loss)	$	5,463		$	1,102		$	460		$	54		$	258		$	-		$	167		$	158		$	234		$	178
Net realized gains (losses)		9,992			2,303			1,497			(108	)		2,383			1,168			327			190			205			804
Change in unrealized gains (losses)		106,156			57,137			1,692			9,659			8,040			2,759			913			1,494			1,620			606
Increase (Decrease) in net assets from operations	$	121,611		$	60,542		$	3,649		$	9,605		$	10,681		$	3,927		$	1,407		$	1,842		$	2,059		$	1,588

Contract Owner Transactions:
Purchase payments received	$	9,159		$	303,184		$	19,428		$	18,302		$	1,122		$	47,514		$	1,560		$	1,459		$	221		$	36
Net transfers between Sub-Accounts		209,695			233,059			-			(1	)		149,487			4,175			-			-			18,836			7,008
Withdrawals, surrenders, and annuitizations		-			-			(23,752	)		-			-			-			-			-			-			-
Mortality and expense risk, cost of insurance and contract charges		(20,566	)		(9,502	)		(2,979	)		(2,847	)		(4,582	)		(1,899	)		(1,263	)		(1,219	)		(653	)		(506	)
Increase (Decrease) in net assets from contract owner transactions	$	198,288		$	526,741		$	(7,303	)	$	15,454		$	146,027		$	49,790		$	297		$	240		$	18,404		$	6,538
Increase (Decrease) in net assets	$	319,899		$	587,283		$	(3,654	)	$	25,059		$	156,708		$	53,717		$	1,704		$	2,082		$	20,463		$	8,126

Net Assets:
Beginning of year		657,425			70,142			105,837			80,778			69,148			15,431			17,261			15,179			8,126			-
End of year	$	977,324		$	657,425		$	102,183		$	105,837		$	225,856		$	69,148		$	18,965		$	17,261		$	28,589		$	8,126

Unit Activity from Participant Transactions:
Beginning of year		51,512			6,517			12,059			10,088			6,214			1,517			1,649			1,624			698			-
Units purchased		711			25,192			2,201			2,321			104			4,455			149			152			19			3
Units transferred between Sub-Accounts		16,155			20,635			-			-			13,575			426			-			-			1,627			742
Units withdrawn, surrendered or canceled		(1,569	)		(832	)		(3,105	)		(350	)		(411	)		(184	)		(119	)		(127	)		(56	)		(47	)
End of year		66,809			51,512			11,155			12,059			19,482			6,214			1,679			1,649			2,288			698

See notes to financial statements

Sun Life of Canada (U.S.) Variable Account G

Statements of Changes in Net Assets - continued

	MC1						MMS						M1A						RIS			RES
	Sub-Account						Sub-Account						Sub-Account						Sub-Account			Sub-Account
	Year Ended December 31,						Year Ended December 31,						Year Ended December 31,						Year Ended December 31,			Year Ended December 31,
	2005			2004			2005			2004			2005			2004			2005			2005			2004
Operations:
Net investment income (loss)	$	-		$	-		$	917,231		$	339,175		$	-		$	-		$	15,558		$	92		$	104
Net realized gains (losses)		13,334			16,343			(1	)		-			(10,242	)		53,477			134			463			126
Change in unrealized gains (losses)		16,670			81,885			-			-			30,917			27,759			326,046			869			1,617
Increase (Decrease) in net assets from operations	$	30,004		$	98,228		$	917,230		$	339,175		$	20,675		$	81,236		$	341,738		$	1,424		$	1,847

Contract Owner Transactions:
Purchase payments received	$	-		$	254,247		$	384,649		$	837,217		$	102,754		$	389,059		$	1,325,488		$	5,037		$	4,888
Net transfers between Sub-Accounts		45,341			(63,606	)		(400,832	)		(31,854,909	)		(356,447	)		434,519			809,305			-			-
Withdrawals, surrenders and annuitizations		-			-			(486,425	)		(747,369	)		-			-			-			-			(554	)
Mortality and expense risk, cost of insurance and contract charges		(22,397	)		(21,849	)		(1,225,671	)		(1,506,340	)		(35,616	)		(42,569	)		(31,562	)		(1,832	)		(1,698	)
Increase (Decrease) in net assets from contract owner transactions	$	22,944		$	168,792		$	(1,728,279	)	$	(33,271,401	)	$	(289,309	)	$	781,009		$	2,103,231		$	3,205		$	2,636
Increase (Decrease) in net assets	$	52,948		$	267,020		$	(811,049	)	$	(32,932,226	)	$	(268,634	)	$	862,245		$	2,444,969		$	4,629		$	4,483

Net Assets:
Beginning of year		866,292			599,272			34,914,378			67,846,604			1,656,347			794,102			-			14,262			9,779
End of year	$	919,240		$	866,292		$	34,103,329		$	34,914,378		$	1,387,713		$	1,656,347		$	2,444,969		$	18,891		$	14,262

Unit Activity from Participant Transactions:
Beginning of Year		75,199			59,452			2,995,635			5,869,001			132,904			68,306			-			1,331			1,058
Units purchased		-			23,800			32,422			71,844			8,611			32,464			110,393			470			504
Units transferred between Sub-Accounts		4,440			(5,979	)		(33,899	)		(2,703,557	)		(32,487	)		35,835			71,907			-			-
Units withdrawn, surrendered or canceled		(2,000	)		(2,074	)		(145,956	)		(241,653	)		(2,940	)		(3,701	)		(2,601	)		(168	)		(231	)
End of Year		77,639			75,199			2,848,202			2,995,635			106,088			132,904			179,699			1,633			1,331

See notes to financial statements

Sun Life of Canada (U.S.) Variable Account G

Statements of Changes in Net Assets - continued

	RE1						SG1						SI1						TRS						MFJ
	Sub-Account						Sub-Account						Sub-Account						Sub-Account						Sub-Account
	Year Ended December 31,						Year Ended December 31,						Year Ended December 31,						Year Ended December 31,						Year Ended December 31,
	2005			2004			2005			2004			2005			2004			2005			2004			2005			2004
Operations:
Net investment income (loss)	$	1,624		$	28		$	1,022		$	-		$	800		$	479		$	242,540		$	165,033		$	91,332		$	55,438
Net realized gains (losses)		2,020			64			8,301			13,761			(440	)		24			259,421			4,565			128,330			46,944
Change in unrealized gains (losses)		29,434			12,614			4,517			36,547			(286	)		275			(206,295	)		667,776			(88,296	)		158,231
Increase (Decrease) in net assets from operations	$	33,078		$	12,706		$	13,840		$	50,308		$	74		$	778		$	295,666		$	837,374		$	131,366		$	260,613

Contract Owner Transactions:
Purchase payments received	$	-		$	215,366		$	111		$	262,218		$	-		$	3,030		$	1,480,981		$	1,219,847		$	1,170,371		$	1,180,501
Net transfers between Sub-Accounts		147,551			79,110			40,351			116,981			(10,140	)		(2,198	)		498,283			864,205			534,089			1,026,054
Withdrawals, surrenders and annuitizations		-			-			-			-			-			-			-			(154,028	)		-			(48,177	)
Mortality and expense risk, cost of insurance and contract charges		(10,705	)		(1,105	)		(20,879	)		(20,928	)		(192	)		(298	)		(245,491	)		(202,880	)		(101,567	)		(70,840	)
Increase (Decrease) in net assets from contract owner transactions	$	136,846		$	293,371		$	19,583		$	358,271		$	(10,332	)	$	534		$	1,733,773		$	1,727,144		$	1,602,893		$	2,087,538
Increase (Decrease) in net assets	$	169,924		$	306,077		$	33,423		$	408,579		$	(10,258	)	$	1,312		$	2,029,439		$	2,564,518		$	1,734,259		$	2,348,151
Net Assets:
Beginning of year		306,077			-			817,107			408,528			10,907			9,595			8,293,733			5,729,215			3,087,957			739,806
End of year	$	476,001		$	306,077		$	850,530		$	817,107		$	649		$	10,907		$	10,323,172		$	8,293,733		$	4,822,216		$	3,087,957

Unit Activity from Participant Transactions:
Beginning of Year		25,183			-			74,624			39,766			987			936			476,896			367,218			237,715			63,289
Units purchased		-			18,579			10			24,881			-			293			84,703			76,822			89,940			98,937
Units transferred between Sub-Accounts		12,040			6,697			4,088			12,035			(912	)		(215	)		28,575			54,950			41,178			85,442
Units withdrawn, surrendered or canceled		(862	)		(93	)		(1,945	)		(2,058	)		(17	)		(27	)		(13,996	)		(22,094	)		(7,758	)		(9,953	)
End of Year		36,361			25,183			76,777			74,624			58			987			576,178			476,896			361,075			237,715

See notes to financial statements

Sun Life of Canada (U.S.) Variable Account G

Statements of Changes in Net Assets - continued

	UTS						MFE						EIS			MV1						NLM
	Sub-Account						Sub-Account						Sub-Account			Sub-Account						Sub-Account
	Year Ended December 31,						Year Ended December 31,						Year Ended December 31,			Year Ended December 31,						Year Ended December 31,
	2005			2004			2005			2004			2005			2005			2004			2005			2004
Operations:
Net investment income (loss)	$	211		$	262		$	8		$	12		$	454		$	5,952		$	2,321		$	17,551		$	4,025
Net realized gains (losses)		1,677			592			204			23			12,844			11,778			7,168			(1,384	)		(993	)
Change in unrealized gains (losses)		1,597			2,977			186			130			-			12,802			24,581			(8,386	)		(2,202	)
Increase (Decrease) in net assets from operations	$	3,485		$	3,831		$	398		$	165		$	13,298		$	30,532		$	34,070		$	7,781		$	830

Contract Owner Transactions:
Purchase payments received	$	12,137		$	5,784		$	8,596		$	343		$	59,397		$	-		$	281,502		$	13,579		$	4,770
Net transfers between Sub-Accounts		475			-			913			-			(68,228	)		(16,979	)		40,211			522,017			166
Withdrawals, surrenders and annuitizations		-			-			-			-			-			-			-			-			(16,294	)
Mortality and expense risk, cost of insurance and contract charges		(4,629	)		(2,718	)		(711	)		(134	)		(4,467	)		(12,152	)		(7,197	)		(10,112	)		(5,964	)
Increase (Decrease) in net assets from contract owner transactions	$	7,983		$	3,066		$	8,798		$	209		$	(13,298	)	$	(29,131	)	$	314,516		$	525,484		$	(17,322	)
Increase (Decrease) in net assets	$	11,468		$	6,897		$	9,196		$	374		$	-		$	1,401		$	348,586		$	533,265		$	(16,492	)

Net Assets:
Beginning of year		17,419			10,522			888			514			-			494,928			146,342			93,289			109,781
End of year	$	28,887		$	17,419		$	10,084		$	888		$	-		$	496,329		$	494,928		$	626,554		$	93,289

Unit Activity from Participant Transactions:
Beginning of Year		1,151			906			69			50			-			39,927			13,598			6,730			7,982
Units purchased		723			456			554			30			5,248			-			23,762			980			346
Units transferred between Sub-Accounts		31			-			57			-			(4,862	)		(1,316	)		3,202			37,603			12
Units withdrawn, surrendered or canceled		(277	)		(211	)		(46	)		(11	)		(386	)		(958	)		(635	)		(726	)		(1,610	)
End of Year		1,628			1,151			634			69			-			37,653			39,927			44,587			6,730

See notes to financial statements

Sun Life of Canada (U.S.) Variable Account G

Statements of Changes in Net Assets - continued

	NMC						NPP						NAR						OCF			OGS			OSC
	Sub-Account						Sub-Account						Sub-Account						Sub-Account			Sub-Account			Sub-Account
																			Year Ended			Year Ended			Year Ended
	Year Ended December 31,						Year Ended December 31,						Year Ended December 31,						December 31,			December 31,			December 31,
	2005			2004			2005			2004			2005			2004⁽³⁾			2005			2005			2005
Operations:
Net investment income (loss)	$	-		$	-		$	2		$	12		$	1,316		$	207		$	3,827		$	-		$	-
Net realized gains (losses)		276,364			143,022			23,870			10,328			121,082			4,139			83			(14	)		10,856
Change in unrealized gains (losses)		264,877			199,426			(23,269	)		8,045			71,029			152,018			31,360			344			43,005
Increase (Decrease) in net assets from operations	$	541,241		$	342,448		$	603		$	18,385		$	193,427		$	156,364		$	35,270		$	330		$	53,861

Contract Owner Transactions:
Purchase payments received	$	54,906		$	177,884		$	190		$	67		$	453,455		$	62,304		$	527,983		$	19,042		$	518,867
Net transfers between Sub-Accounts		2,241,204			810,950			(109,220	)		49,098			107,207			921,960			517,196			-			(27	)
Withdrawals, surrenders and annuitizations		-			(207,646	)		-			(46,362	)		-			-			-			-			-
Mortality and expense risk, cost of insurance and contract charges		(35,875	)		(15,566	)		(704	)		(1,612	)		(25,896	)		(9,203	)		(10,755	)		(1,064	)		(8,924	)
Increase (Decrease) in net assets from contract owner transactions	$	2,260,235		$	765,622		$	(109,734	)	$	1,191		$	534,766		$	975,061		$	1,034,424		$	17,978		$	509,916
Increase (Decrease) in net assets	$	2,801,476		$	1,108,070		$	(109,131	)	$	19,576		$	728,193		$	1,131,425		$	1,069,694		$	18,308		$	563,777

Net Assets:
Beginning of year		2,002,508			894,438			109,429			89,853			1,131,425			-			-			-			-
End of year	$	4,803,984		$	2,002,508		$	298		$	109,429		$	1,859,618		$	1,131,425		$	1,069,694		$	18,308		$	563,777

Unit Activity from Participant Transactions:
Beginning of Year		156,542			81,333			7,734			7,553			96,138			-			-			-			-
Units purchased		4,288			14,375			12			5			37,709			5,974			49,792			1,458			44,102
Units transferred between Sub-Accounts		171,995			80,555			(7,678	)		3,995			9,350			91,022			45,908			-			-
Units withdrawn, surrendered or canceled		(2,676	)		(19,721	)		(48	)		(3,819	)		(2,113	)		(858	)		(991	)		(84	)		(737	)
End of Year		330,149			156,542			20			7,734			141,084			96,138			94,709			1,374			43,365

(3) For the period July 26, 2004 (commencement of operations of Sub-Account) through December 31, 2004

See notes to financial statements

Sun Life of Canada (U.S.) Variable Account G

Statements of Changes in Net Assets - continued

	PMB						PHY						PLD			PRR						PTR
	Sub-Account						Sub-Account						Sub-Account			Sub-Account						Sub-Account
													Year Ended
	Year Ended December 31,						Year Ended December 31,						December 31,			Year Ended December 31,						Year Ended December 31,
	2005			2004			2005			2004			2005			2005			2004			2005			2004
Operations:
Net investment income (loss)	$	897		$	6		$	15,406		$	7,739		$	8		$	31,882		$	6,857		$	143,739		$	36,719
Net realized gains (losses)		494			(8	)		(166	)		(3	)		(3	)		40,056			35,495			73,110			43,819
Change in unrealized gains (losses)		992			15			(4,272	)		4,926			(7	)		(41,814	)		17,354			(116,136	)		19,928
Increase (Decrease) in net assets from operations	$	2,383		$	13		$	10,968		$	12,662		$	(2	)	$	30,124		$	59,706		$	100,713		$	100,466

Contract Owner Transactions:
Purchase payments received	$	221		$	201		$	134,541		$	54,480		$	930		$	799,138		$	416,263		$	1,798,263		$	618,188
Net transfers between Sub-Accounts		24,844			95			39,448			114,972			-			(364,588	)		341,678			283,778			1,559,781
Withdrawals, surrenders and annuitizations		-			(672	)		-			-			-			-			(659	)		(29,233	)		(11,160	)
Mortality and expense risk, cost of insurance and contract charges		(222	)		(62	)		(15,349	)		(5,511	)		(119	)		(38,933	)		(23,281	)		(113,183	)		(67,987	)
Increase (Decrease) in net assets from contract owner transactions	$	24,843		$	(438	)	$	158,640		$	163,941		$	811		$	395,617		$	734,001		$	1,939,625		$	2,098,822
Increase (Decrease) in net assets	$	27,226		$	(425	)	$	169,608		$	176,603		$	809		$	425,741		$	793,707		$	2,040,338		$	2,199,288

Net Assets:
Beginning of year		117			542			180,696			4,093			-			1,003,852			210,145			2,588,577			389,289
End of year	$	27,343		$	117		$	350,304		$	180,696		$	809		$	1,429,593		$	1,003,852		$	4,628,915		$	2,588,577

Unit Activity from Participant Transactions:
Beginning of Year		7			35			12,344			307			-			83,689			19,082			229,165			36,149
Units purchased		12			13			8,992			3,855			91			66,060			36,727			158,069			56,215
Units transferred between Sub-Accounts		1,426			6			2,676			8,583			-			(29,805)			29,957			25,198			143,969
Units withdrawn, surrendered or canceled		(12	)		(47	)		(1,030	)		(401	)		(12	)		(3,206	)		(2,077	)		(12,435	)		(7,168	)
End of Year		1,433			7			22,982			12,344			79			116,738			83,689			399,997			229,165

(1) For the period September 29, 2005 (commencement of operations of Sub-Account) through December 31, 2005

See notes to financial statements

Sun Life of Canada (U.S.) Variable Account G
Statements of Changes in Net Assets - continued

	RX1						RX2						SEE			SSI			SSC						SCV
	Sub-Account						Sub-Account						Sub-Account			Sub-Account			Sub-Account						Sub-Account
													Year Ended			Year Ended									Year Ended
	Year Ended December 31,						Year Ended December 31,						December 31,			December 31,			Year Ended December 31,						December 31,
	2005			2004			2005			2004			2005⁽⁴⁾			2005			2005			2004			2005⁽¹⁾
Operations:
Net investment income (loss)	$	2		$	-		$	-		$	-		$	19		$	9,016		$	4,183		$	551		$	-
Net realized gains (losses)		65			2			3			(23	)		(26	)		38,376			42,321			4,849			-
Change in unrealized gains (losses)		(50	)		65			15			2			(1	)		112,238			32,194			95,190			257
Increase (Decrease) in net assets from operations	$	17		$	67		$	18		$	(21)		$	(8	)	$	159,630		$	78,698		$	100,590		$	257

Contract Owner Transactions:
Purchase payments received	$	155		$	299		$	69		$	67		$	-		$	637,169		$	459,083		$	114,981		$	-
Net transfers between Sub-Accounts		(30	)		-			-			-			925			748,859			103,942			456,176			5,386
Withdrawals, surrenders and annuitizations		(138	)		-			-			-			(836	)		-			(598	)		-			-
Mortality and expense risk, cost of insurance and contract charges		(61	)		(55	)		(41	)		(29	)		(81	)		(18,109	)		(24,760	)		(14,544	)		-
Increase (Decrease) in net assets from contract owner transactions	$	(74	)	$	244		$	28		$	38		$	8		$	1,367,919		$	537,667		$	556,613		$	5,386
Increase (Decrease) in net assets	$	(57	)	$	311		$	46		$	17		$	-		$	1,527,549		$	616,365		$	657,203		$	5,643

Net Assets:
Beginning of year		569			258			27			10			-			-			753,623			96,420			-
End of year	$	512		$	569		$	73		$	27		$	-		$	1,527,549		$	1,369,988		$	753,623		$	5,643

Unit Activity from Participant Transactions:
Beginning of Year		67			35			7			1			-			-			46,571			7,000			-
Units purchased		19			39			10			9			-			56,249			30,162			8,143			-
Units transferred between Sub-Accounts		(4	)		-			-			-			66			71,818			6,267			32,438			488
Units withdrawn, surrendered or canceled		(24	)		(7	)		(6	)		(3	)		(66	)		(1,566	)		(1,589	)		(1,010	)		-
End of Year		58			67			11			7			-			126,501			81,411			46,571			488

(1) For the period May 2, 2005 (commencement of operations of Sub-Account) through December 31, 2005

(4) For the period January 1, 2005 (commencement of operations of Sub-Account) through July 25, 2005

See notes to financial statements

Sun Life of Canada (U.S.) Variable Account G

Statements of Changes in Net Assets - continued

	SCM						SIG						SC1						SRE						SC5
	Sub-Account						Sub-Account						Sub-Account						Sub-Account						Sub-Account
	Year Ended December 31,						Year Ended December 31,						Year Ended December 31,						Year Ended December 31,						Year Ended December 31,
	2005			2004			2005			2004			2005			2004			2005			2004			2005			2004
Operations:
Net investment income (loss)	$	411		$	639		$	165,650		$	147,691		$	595,734		$	116,131		$	104,956		$	51,734		$	3,339		$	-
Net realized gains (losses)		60,193			26,640			43,656			65,659			1			-			734,813			242,768			148,251			79,806
Change in unrealized gains (losses)		(61,803	)		8,330			(140,529	)		(10,565	)		-			-			(93,935	)		641,910			455,935			198,859
Increase (Decrease) in net assets from operations	$	(1,199	)	$	35,609		$	68,777		$	202,785		$	595,735		$	116,131		$	745,834		$	936,412		$	607,525		$	278,665

Contract Owner Transactions:
Purchase payments received	$	140,428		$	119,049		$	720,557		$	840,995		$	11,628,330		$	21,005,670		$	1,107,071		$	723,964		$	939,158		$	735,219
Net transfers between Sub-Accounts		(60,518	)		(9,739	)		(101,910	)		(171,544	)		(4,189,788	)		(17,434,406	)		1,328,902			1,791,937			668,077			650,862
Withdrawals, surrenders and annuitizations		-			-			-			(643,304	)		(888,999	)		(180,912	)		-			(215,296	)		(832	)		(155	)
Mortality and expense risk, cost of insurance and contract charges		(5,188	)		(5,104	)		(119,464	)		(110,130	)		(706,362	)		(573,318	)		(108,435	)		(61,854	)		(76,269	)		(48,744	)
Increase (Decrease) in net assets from contract owner transactions	$	74,722		$	104,206		$	499,183		$	(83,983	)	$	5,843,181		$	2,817,034		$	2,327,538		$	2,238,751		$	1,530,134		$	1,337,182
Increase (Decrease) in net assets	$	73,523		$	139,815		$	567,960		$	118,802		$	6,438,916		$	2,933,165		$	3,073,372		$	3,175,163		$	2,137,659		$	1,615,847

Net Assets:
Beginning of year		252,866			113,051			3,404,970			3,286,168			15,477,237			12,544,072			4,003,350			828,187			2,262,547			646,700
End of year	$	326,389		$	252,866		$	3,972,930		$	3,404,970		$	21,916,153		$	15,477,237		$	7,076,722		$	4,003,350		$	4,400,206		$	2,262,547

Unit Activity from Participant Transactions:
Beginning of Year		18,179			9,785			248,388			255,079			1,504,073			1,228,069			155,069			42,775			137,998			45,795
Units purchased		10,358			9,621			51,934			64,015			1,123,455			2,053,092			42,050			36,397			55,777			51,344
Units transferred between Sub-Accounts		(4,515	)		(818	)		(7,458	)		(13,623	)		(400,820	)		(1,703,456	)		56,977			88,666			40,877			44,209
Units withdrawn, surrendered or canceled		(388	)		(409	)		(8,619	)		(57,083	)		(154,103	)		(73,632	)		(4,156	)		(12,769	)		(4,479	)		(3,350	)
End of Year		23,634			18,179			284,245			248,388			2,072,605			1,504,073			249,940			155,069			230,173			137,998

See notes to financial statements

Sun Life of Canada (U.S.) Variable Account G

Statements of Changes in Net Assets - continued

	SC7						SCB						TBC						REI						RNA
	Sub-Account						Sub-Account						Sub-Account						Sub-Account						Sub-Account
	Year Ended December 31,						Year Ended December 31,						Year Ended December 31,						Year Ended December 31,						Year Ended December 31,
	2005			2004			2005			2004			2005			2004⁽²⁾			2005			2004			2005			2004
Operations:
Net investment income (loss)	$	197		$	66		$	-		$	-		$	201		$	-		$	211,690		$	128,730		$	-		$	5
Net realized gains (losses)		752			442			289,399			154,052			508			-			725,201			239,851			2,318			13
Change in unrealized gains (losses)		1,905			509			(194,211	)		88,328			1,836			1,288			(388,797	)		664,894			917			915
Increase (Decrease) in net assets from operations	$	2,854		$	1,017		$	95,188		$	242,380		$	2,545		$	1,288		$	548,094		$	1,033,475		$	3,235		$	933

Contract Owner Transactions:
Purchase payments received	$	19,782		$	6,159		$	471,240		$	399,348		$	200,794		$	82,383		$	2,371,489		$	384,925		$	3,008		$	2,790
Net transfers between Sub-Accounts		7,749			(184	)		(364,694	)		1,009,450			(281	)		-			25,787			7,883,396			58,434			-
Withdrawals, surrenders and annuitizations		-			-			-			-			-			-			(254,652	)		(64,078	)		-			-
Mortality and expense risk, cost of insurance and contract charges		(3,433	)		(2,049	)		(48,517	)		(42,579	)		(7,078	)		(63	)		(102,994	)		(71,554	)		(2,047	)		(1,566	)
Increase (Decrease) in net assets from contract owner transactions	$	24,098		$	3,926		$	58,029		$	1,366,219		$	193,435		$	82,320		$	2,039,630		$	8,132,689		$	59,395		$	1,224
Increase (Decrease) in net assets	$	26,952		$	4,943		$	153,217		$	1,608,599		$	195,980		$	83,608		$	2,587,724		$	9,166,164		$	62,630		$	2,157

Net Assets:
Beginning of year		9,760			4,817			1,933,081			324,482			83,608			-			11,648,611			2,482,447			10,018			7,861
End of year	$	36,712		$	9,760		$	2,086,298		$	1,933,081		$	279,588		$	83,608		$	14,236,335		$	11,648,611		$	72,648		$	10,018

Unit Activity from Participant Transactions:
Beginning of year		714			397			120,273			23,890			7,729			-			790,941			194,604			1,023			889
Units purchased		1,410			493			31,123			28,167			17,346			7,735			161,990			28,279			315			305
Units transferred between Sub-Accounts		567			(15	)		(23,819	)		71,165			(25	)		-			1,487			578,307			5,956			-
Units withdrawn, surrendered or canceled		(243	)		(161	)		(3,157	)		(2,949	)		(652	)		(6	)		(24,246	)		(10,249	)		(210	)		(171	)
End of year		2,448			714			124,420			120,273			24,398			7,729			930,172			790,941			7,084			1,023

(2) For the period May 3, 2004 (commencement of operations of Sub-Account) through December 31, 2004

See notes to financial statements

Sun Life of Canada (U.S.) Variable Account G

Statements of Changes in Net Assets - continued

	VMG			VCP			VGI
	Sub-Account			Sub-Account			Sub-Account
	Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,
	2005			2005			2005
Operations:
Net investment income (loss)	$	-		$	-		$	-
Net realized gains (losses)		12			(5	)		1
Change in unrealized gains (losses)		(722	)		55			(67	)
Increase (Decrease) in net assets from operations	$	(710	)	$	50		$	(66	)

Contract Owner Transactions:
Purchase payments received	$	86,378		$	1,488		$	20,409
Net transfers between Sub-Accounts		-			-			-
Withdrawals, surrenders and annuitizations		-			-			-
Mortality and expense risk, cost of insurance and contract charges		(356	)		(190	)		(8	)
Increase (Decrease) in net assets from contract owner transactions	$	86,022		$	1,298		$	20,401
Increase (Decrease) in net assets	$	85,312		$	1,348		$	20,335

Net Assets:
Beginning of year		-			-			-
End of year	$	85,312		$	1,348		$	20,335

Unit Activity from Participant Transactions:
Beginning of Year		-			-			-
Units purchased		6,324			130			1,634
Units transferred between Sub-Accounts		-			-			-
Units withdrawn, surrendered or canceled		(27	)		(16	)		(1	)
End of Year		6,297			114			1,633

See notes to financial statements

Sun Life of Canada (U.S.) Variable Account G

Notes to Financial Statements

(1) Organization

Sun Life of Canada (U.S.) Variable Account G (the "Variable Account"), a separate account of Sun Life Assurance Company of Canada (U.S.) (the "Sponsor"), was established on July 25, 1996 as a funding vehicle for the variable portion of certain individual variable life insurance contracts. The Variable Account is registered with the Securities and Exchange Commission under the Investment Company Act of 1940 as a unit investment trust.

The assets of the Variable Account are divided into Sub-Accounts. Each Sub-Account is invested in shares of a single corresponding investment portfolio of one of the following mutual funds: AIM Variable Insurance Funds, Alger American Fund, AllianceBernstein Variable Products Series Fund, Inc., Delaware Variable Insurance Products Trust, Dreyfus Investment Portfolios, Dreyfus Variable Investment Fund, Dreyfus Stock Index Fund, Fidelity Variable Insurance Products Funds, Fidelity Variable Insurance Products Funds, Fidelity Variable Insurance Products Funds II, FAM Variable Series Funds, Inc., Franklin Templeton Variable Insurance Products Trust, Goldman Sachs Variable Insurance Trust, INVESCO Variable Investment Funds, Inc., J.P. Morgan Series Trust II, Lord Abbett Series Fund, Inc., MFS/Sun Life Series Trust, Neuberger Berman Advisers Management Trust, Oppenheimer Variable Account Funds, PIMCO Variable Insurance Trust, Rydex Variable Trust, Scudder VIT Funds, Scudder Variable Series II, Sun Capital Advisers TrustSM, T. Rowe Price Equity Series, Inc., The Universal Institutional Funds, Inc., and Van Kappen Life Investment Trust (the "Funds"). Massachusetts Financial Services Company, an affiliate of the Sponsor, is the investment adviser to MFS/Sun Life Series Trust. Sun Capital Advisers, Inc., an affiliate of the Sponsor, is the investment adviser to Sun Capital Advisers Trust.

The Variable Account exists in accordance with the regulations of the Delaware Insurance Department. Under applicable insurance laws, the assets and liabilities of the Variable Account are clearly identified and distinguished from the Sponsor's other assets and liabilities. Assets applicable to the Variable Account are not chargeable with liabilities arising out of any other business the Sponsor may conduct.

(2) Significant Accounting Policies
General

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires the Sponsor's management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Investment Valuations

Investments in shares of an investment portfolio of the mutual funds are recorded at their net asset value. The Funds value their investment securities at fair value. Transactions are recorded on a trade date basis. Realized gains and losses on sales of shares of the Funds are determined on the identified cost basis. Dividend income and capital gain distributions received by the Sub-Accounts are reinvested in additional Fund shares and are recognized on the ex-dividend date.

Exchanges between Sub-Accounts requested by contract owners are recorded in the new Sub-Account upon receipt of the redemption proceeds.

Federal Income Tax Status

The operations of the Variable Account are part of the operations of the Sponsor and are not taxed separately. The Variable Account is not taxed as a regulated investment company. The Sponsor qualifies for the federal income tax treatment granted to life insurance companies under Subchapter L of the Internal Revenue Code. Under existing federal income tax law, investment income and capital gains earned by the Variable Account on contract owner reserves are not taxable, and therefore, no provision has been made for federal income taxes.

Sun Life of Canada (U.S.) Variable Account G

Notes to Financial Statements - continued

(3) Expenses and Related Party Transactions

For the Sun Life Corporate VUL and Futurity^SM Corporate VUL products, the Sponsor deducts expense charges applied to premium consisting of the premium tax, the federal Deferred Acquisition Cost ("DAC") tax and the sales load. The premium tax varies by state but in general will range from 2% to 4% of the premium in most states (Kentucky charges 7%). The total premium tax charges were $1,129,597 in 2005. The DAC tax charge is 1.25% of the premium. The total DAC tax charges were $696,161 in 2005. The sales load is 8.75% of the premium up to target premium and 2.25% of the premium in excess of the target premium. The total sales loads were $3,671,315 in 2005. For the Sun Life Large Case VUL product, the Sponsor deducts expense charges applied to premium only consisting of the premium expense load. The premium expense load varies dependent upon the rates defined in the underlying insurance contract. The premium expense load will range from 0% to 9% of the premium up to target premium and from 0% to 3.25% of the premium in excess of the target premium. The premium expense loads were $4,046,050 in 2005. These expense charges are deducted from the premium before being allocated by Sub-Account.

For Sun Life Corporate VUL and Futurity^SM Corporate VUL policies surrendered in the first three policy years, a portion of the sales loads is refunded. The total sales loads refund inforce was $1,900,881 in 2005. For the Futurity^SM Corporate VUL and the Sun Life Large Case VUL an enhancement benefit increasing the cash surrender value may be provided if the policy is surrendered during the first 10 and 12 policy years, respectively. The total enhancement benefit inforce was $9,639,585 for Futurity^SM Corporate VUL and $6,867,293 for Sun Life Large Case VUL in 2005.

The Sponsor deducts certain charges from the account value of each contract, through the cancellation of units, on a monthly basis. For the Sun Life Corporate VUL and the Futurity^SM Corporate VUL products, a monthly expense charge of $13.75 per policy at the beginning of each month during the first policy year and $7.50 for months thereafter is deducted to recover certain administration expenses. For the Sun Life Large Case VUL product, a monthly expense charge of $5.00 per policy at the beginning of each policy month is deducted to recover certain administration expenses. The Sponsor also deducts a charge at the end of each policy month for providing life insurance protection. This charge will be based upon the Sponsor's expectations of future mortality, persistency, interest rates, expenses and taxes. However, the maximum rates for the base death benefit for insureds that are not rated substandard risks will not exceed those based on the 1980 CSO Mortality Tables, and the maximum rates for the APB rider death benefit for similar insureds will not exceed those based on 125% of the 1980 CSO Mortality Table. The Sun Life Large Case VUL product also charges a deferred expense load applied to premium. The deferred expense load on policy year 1 premium for policy years 2 through 7 will range from 0% to 0.5% of the premium up to target premium and 0% of the premium in excess of target premium. The deferred expense load was $62,952 in 2005.

For the year ended December 31, 2005, the Sponsor received the following amount related to the above mentioned contract charges. These charges are reflected in the Mortality and expense risk, cost of insurance and contract charges line of the Statement of Changes in Net Assets.

Contract Charges

AIM Variable Insurance Funds:

AIM V.I. Basic Value Fund

$

1,467

AIM V.I. Capital Appreciation Fund

24,590

AIM V.I. Core Equity Fund

2,236

AIM V.I. Growth Fund

365

AIM V.I. International Growth Fund

5,334

AIM V.I. Mid Cap Core Equity Fund

26,437

AIM V.I. Premier Equity Fund

5,845

Alger American Fund:

Alger American MidCap Growth Portfolio

97

AllianceBernstein Variable Products Series Fund, Inc.:

VP Growth and Income Portfolio

15,017

VP Technology Portfolio

749

VP Worldwide Privatization Portfolio

15,735

Delaware Variable Insurance Products Trust:

Delaware VIP Growth Opportunities Series

567

Delaware VIP REIT Series

5,052

Delaware VIP Small Cap Value Series

14,002

Dreyfus Investment Portfolios:

MidCap Stock Portfolio

6

Dreyfus Variable Investment Fund:

Appreciation Portfolio

4,804

Developing Leaders Portfolio

114,932

Growth and Income Portfolio

2,476

Quality Bond Portfolio

95,631

Dreyfus Stock Index Fund:

589,833

Sun Life of Canada (U.S.) Variable Account G

Notes to Financial Statements - continued

(3) Expenses and Related Party Transactions - continued

Contract Charges

Fidelity Variable Insurance Products Funds:

VIP Equity-Income Portfolio

$

262,373

VIP Growth Portfolio

73,612

VIP Growth & Income Portfolio

1,627

VIP High Income Portfolio

9,131

VIP Investment Grade Bond Portfolio

54,674

VIP Money Market Portfolio

-

VIP Money Market Portfolio SC

131,795

Fidelity Variable Insurance Products Funds II:

VIP II Asset Manager: Growth Portfolio

4,242

VIP II Contrafund Portfolio

50,085

VIP II Contrafund SC2 Portfolio

111,123

VIP II Growth Portfolio

48,898

VIP II Index 500 Portfolio

1,331

VIP II Overseas Portfolio

32,618

FAM Variable Series Funds, Inc.

Mercury Value Opportunities V.I. Fund

22,652

Franklin Templeton Variable Insurance Products Trust:

Franklin Real Estate Fund

1,105

Franklin Small-Mid Cap Growth Securities Fund

21,097

Templeton Foreign Securities Fund: Class 1

80,189

Templeton Foreign Securities Fund: Class 2

21,680

Templeton Growth Securities Fund: Class 1

213,214

Templeton Growth Securities Fund: Class 2

8,734

Goldman Sachs Variable Insurance Trust:

Goldman Sachs VIT CORESM U.S. Equity Fund

3,851

Goldman Sachs VIT Capital Growth Fund

4,021

INVESCO Variable Investment Funds, Inc.:

INVESCO VIF Small Company Growth Fund

13,890

J.P. Morgan Series Trust II:

Bond Portfolio

197,862

Small Company Portfolio

11,267

U.S. Large Cap Core Equity Portfolio

1,969

Lord Abbett Series Fund, Inc.:

Growth and Income Portfolio

193,577

International Portfolio

1,361

Mid-Cap Value Portfolio

80,710

MFS/Sun Life Series Trust:

Bond Series

4,492

Capital Appreciation Series

184,817

Capital Appreciation Series SC

28,965

Capital Opportunities Series

4,030

Emerging Growth Series

5,898

Emerging Growth Series SC

4,662

Global Growth Series

4,764

Government Securities Series

307,957

Government Securities Series SC

44,186

High Yield Series SC

4,390

International Growth Series

20,566

Massachusetts Investors Growth Stock Series

2,979

Massachusetts Investors Growth Stock Series SC

4,582

Massachusetts Investors Trust Series

1,263

Massachusetts Investors Trust Series SC

653

Mid Cap Growth Series

22,397

Money Market Series

1,220,035

New Discovery Series SC

35,616

Research International Series

31,562

Research Series

1,832

Research Series SC

10,705

Strategic Growth Series

20,879

Strategic Income Series

192

Total Return Series

245,491

Total Return Series SC

101,567

Sun Life of Canada (U.S.) Variable Account G

Notes to Financial Statements - continued

(3) Expenses and Related Party Transactions - continued

	Contract Charges
MFS/Sun Life Series Trust (continued):
Utilities Series	$	4,629
Utilities Series SC		711
Value Series		4,467
Value Series SC		12,152
Neuberger Berman Advisers Management Trust:
Limited Maturity Bond Portfolio		10,112
Mid-Cap Growth Portfolio		35,875
Partners Portfolio		704
Regency Portfolio		25,896
Oppenheimer Variable Account Funds:
Oppenheimer Capital Appreciation Fund/VA		10,755
Oppenheimer Global Securities Fund/VA		1,064
Oppenheimer Main Street Small Cap Fund®/VA		8,924
PIMCO Variable Insurance Trust:
PIMCO Emerging Markets Bond Portfolio		222
PIMCO High Yield Portfolio		15,349
PIMCO Low Duration Portfolio		119
PIMCO Real Return Portfolio		38,933
PIMCO Total Return Portfolio		113,183
Rydex Variable Trust:
Rydex VT Nova Fund		61
Rydex VT OTC Fund		41
Scudder VIT Funds:
Scudder VIT EAFE® Equity Index Fund		81
Scudder VIT Small Cap Index Fund: Class A		18,109
Scudder VIT Small Cap Index Fund: Class B		24,760
Scudder Variable Series II:
SVS Dreman Small Cap Value Portfolio		-
Sun Capital Advisers TrustSM:
Sun Capital All Cap Fund		5,188
Sun Capital Investment Grade Bond Fund		119,464
Sun Capital Money Market Fund		706,362
Sun Capital Real Estate Fund		108,435
SCSM Blue Chip Mid Cap Fund		76,269
SCSM Davis Venture Value Fund		3,433
SCSM Value Small Cap Fund		48,517
T. Rowe Price Equity Series, Inc.:
Blue Chip Growth Portfolio		7,078
Equity Income Portfolio		102,994
New America Growth Portfolio		2,047
The Universal Institutional Funds, Inc.
Van Kampen UIF Mid Cap Growth Portfolio		356
Van Kappen Life Investment Trust:
Van Kampen LIT Comstock Portfolio		190
Van Kampen LIT Growth and Income Portfolio	$	8
Total Contract Charges:	$	6,404,831

The Sponsor also deducts certain charges from each contract, through the cancellation of units, for the mortality and expense risk assumed by the Sponsor. The mortality and expense risk charge varies dependent upon the rates defined in the underlying insurance contract. The daily deduction currently ranges between 0.0004107% and 0.0016389% (which is equivalent to an annual rate between 0.15% and 0.60%, respectively) for policies in their first ten policy years, between 0.0002738% and 0.0006841% (which is equivalent to an annual rate between 0.10% and 0.25%, respectively) for the next ten policy years and between 0.0002738% and 0.0005474% (which is equivalent to an annual rate between 0.10% and 0.20%, respectively) for policies in policy years twenty-one and beyond. Should mortality and expenses result in a daily allocation to a Sub-Account of less than one cent for a given policyowner, the Sponsor systematically deducts charges from the policyowner's account, allocating the charge to a Sub-Account in which the policyowner participated. The total mortality and expense risk charges were $1,325,987 in 2005.

Massachussets Financial Services Company, an affiliate of the Sponsor, is investment adviser to MFS/Sun Life Series Trust (the "MFS Trust"). The MFS Trust's advisory agreement provides for a management fee at an effective annual rate ranging from 0.50% to 0.90% of the average net assets.

Sun Capital Advisers, Inc., an affiliate of the Sponsor, is the investment adviser to Sun Capital Adviser Trust (the "SC Trust"). The SC Trust's advisory agreement provides for a management fee at an effective annual rate ranging from 0.50% to 0.95% of the average net assets.

Sun Life of Canada (U.S.) Variable Account G

Notes to Financial Statements - continued

(4) Investment Purchases and Sales

The following table shows the aggregate cost of fund shares purchased and proceeds from the sales of fund shares for each Sub-Account for the year ended December 31, 2005:

	Purchases		Sales
AIM Variable Insurance Funds:
AIM V.I. Basic Value Fund	$	11,083	$	877
AIM V.I. Capital Appreciation Fund		582,819		415,746
AIM V.I. Core Equity Fund		4,807		2,048
AIM V.I. Growth Fund		8,160		321
AIM V.I. International Growth Fund		306,077		152,997
AIM V.I. Mid Cap Core Equity Fund		1,124,383		472,796
AIM V.I. Premier Equity Fund		48,924		8,735
Alger American Fund:
Alger American MidCap Growth Portfolio		765		58
AllianceBernstein Variable Products Series Fund, Inc.:
VP Growth and Income Portfolio		233,852		13,998
VP Technology Portfolio		15,009		15,389
VP Worldwide Privatization Portfolio		497,884		59,689
Delaware Variable Insurance Products Trust:
Delaware VIP Growth Opportunities Series		79,552		1,653
Delaware VIP REIT Series		280,391		18,085
Delaware VIP Small Cap Value Series		550,765		231,467
Dreyfus Investment Portfolios:
MidCap Stock Portfolio		18,073		33
Dreyfus Variable Investment Fund:
Appreciation Portfolio		6,254		280,131
Developing Leaders Portfolio		3,141,580		1,679,769
Growth and Income Portfolio		3,726		2,610
Quality Bond Portfolio		1,818,091		1,211,501
Dreyfus Stock Index Fund:		15,878,112		1,591,318
Fidelity Variable Insurance Products Funds:
VIP Equity-Income Portfolio		2,571,137		9,391,051
VIP Growth Portfolio		446,579		71,542
VIP Growth & Income Portfolio		25,960		997
VIP High Income Portfolio		160,533		26,830
VIP Investment Grade Bond Portfolio		4,410,766		182,272
VIP Money Market Portfolio		4,087		-
VIP Money Market Portfolio SC		25,774,478		20,600,509
Fidelity Variable Insurance Products Funds II:
VIP II Asset Manager: Growth Portfolio		123,326		340,332
VIP II Contrafund Portfolio		1,095,815		212,672
VIP II Contrafund SC2 Portfolio		1,915,442		172,380
VIP II Growth Portfolio		944,653		150,759
VIP II Index 500 Portfolio		966		1,332
VIP II Overseas Portfolio		994,926		534,754
FAM Variable Series Funds, Inc.
Mercury Value Opportunities V.I. Fund		1,984,686		20,215
Franklin Templeton Variable Insurance Products Trust:
Franklin Real Estate Fund		219,712		1,022
Franklin Small-Mid Cap Growth Securities Fund		577,891		86,846
Templeton Foreign Securities Fund: Class 1		3,391,619		449,963
Templeton Foreign Securities Fund: Class 2		423,633		104,107
Templeton Growth Securities Fund: Class 1		7,496,872		514,515
Templeton Growth Securities Fund: Class 2		355,061		6,892
Goldman Sachs Variable Insurance Trust:
Goldman Sachs VIT CORESM U.S. Equity Fund		36,870		39,857
Goldman Sachs VIT Capital Growth Fund		49,020		19,231
INVESCO Variable Investment Funds, Inc.:
INVESCO VIF Small Company Growth Fund		499,845		33,110

Sun Life of Canada (U.S.) Variable Account G

Notes to Financial Statements - continued

(4) Investment Purchases and Sales - continued

	Purchases		Sales
J.P. Morgan Series Trust II:
Bond Portfolio	$	1,996,791	$	188,425
Small Company Portfolio		284,249		81,005
U.S. Large Cap Core Equity Portfolio		2,196		177,523
Lord Abbett Series Fund, Inc.:
Growth and Income Portfolio		4,404,437		1,154,539
International Portfolio		28,359		1,465
Mid-Cap Value Portfolio		2,354,265		245,790
MFS/Sun Life Series Trust:
Bond Series		43,893		16,149
Capital Appreciation Series		1,195,035		346,343
Capital Appreciation Series SC		442,120		28,929
Capital Opportunities Series		24,894		40,696
Emerging Growth Series		71,155		59,864
Emerging Growth Series SC		17,136		724,415
Global Growth Series		118,418		119,139
Government Securities Series		8,069,736		951,455
Government Securities Series SC		1,141,033		538,010
High Yield Series SC		47,580		35,913
International Growth Series		254,418		50,667
Massachusetts Investors Growth Stock Series		19,851		26,694
Massachusetts Investors Growth Stock Series SC		186,427		40,142
Massachusetts Investors Trust Series		1,726		1,262
Massachusetts Investors Trust Series SC		21,276		2,638
Mid Cap Growth Series		121,344		98,398
Money Market Series		1,395,700		2,206,748
New Discovery Series SC		243,538		532,847
Research International Series		2,146,151		27,362
Research Series		5,122		1,825
Research Series SC		164,624		26,154
Strategic Growth Series		130,714		110,109
Strategic Income Series		2,797		12,220
Total Return Series		2,467,337		257,684
Total Return Series SC		2,221,391		433,416
Utilities Series		12,412		4,218
Utilities Series SC		9,334		528
Value Series		148,637		161,481
Value Series SC		86,934		110,113
Neuberger Berman Advisers Management Trust:
Limited Maturity Bond Portfolio		570,775		27,740
Mid-Cap Growth Portfolio		3,820,050		1,559,815
Partners Portfolio		5,666		115,398
Regency Portfolio		751,800		118,714
Oppenheimer Variable Account Funds:
Oppenheimer Capital Appreciation Fund/VA		1,046,927		8,676
Oppenheimer Global Securities Fund/VA		18,637		659
Oppenheimer Main Street Small Cap Fund®/VA		529,627		8,849
PIMCO Variable Insurance Trust:
PIMCO Emerging Markets Bond Portfolio		26,437		205
PIMCO High Yield Portfolio		207,593		33,547
PIMCO Low Duration Portfolio		892		71
PIMCO Real Return Portfolio		1,344,223		901,914
PIMCO Total Return Portfolio		2,860,023		704,588
Rydex Variable Trust:
Rydex VT Nova Fund		157		229
Rydex VT OTC Fund		69		39

Sun Life of Canada (U.S.) Variable Account G

Notes to Financial Statements - continued

(4) Investment Purchases and Sales - continued

	Purchases		Sales
Scudder VIT Funds:
Scudder VIT EAFE® Equity Index Fund	$	944	$	917
Scudder VIT Small Cap Index Fund: Class A		1,432,714		17,110
Scudder VIT Small Cap Index Fund: Class B		679,617		109,927
Scudder Variable Series II:
SVS Dreman Small Cap Value Portfolio		5,386		-
Sun Capital Advisers TrustSM:
Sun Capital All Cap Fund		192,000		65,361
Sun Capital Investment Grade Bond Fund		1,002,954		303,537
Sun Capital Money Market Fund		13,506,047		7,067,132
Sun Capital Real Estate Fund		3,553,391		556,211
SCSM Blue Chip Mid Cap Fund		1,826,504		199,603
SCSM Davis Venture Value Fund		27,386		3,091
SCSM Value Small Cap Fund		911,669		590,697
T. Rowe Price Equity Series, Inc.:
Blue Chip Growth Portfolio		204,523		10,887
Equity Income Portfolio		3,448,877		544,975
New America Growth Portfolio		120,153		60,758
The Universal Institutional Funds, Inc.
Van Kampen UIF Mid Cap Growth Portfolio		86,374		352
Van Kappen Life Investment Trust:
Van Kampen LIT Comstock Portfolio		1,412		114
Van Kampen LIT Growth and Income Portfolio		20,440		39
Total	$	146,198,481	$	60,945,730

Sun Life of Canada (U.S.) Variable Account G

Notes to Financial Statements - continued

(5) Unit Values

A summary of unit values and units outstanding for variable life insurance contracts, investment income and total return for the years ended December 31, 2005, 2004, 2003 and 2002 is shown below. No expense ratio is shown as there are no expenses that result in a direct reduction to unit values. Charges made directly to Policyowner accounts through the redemption of units and expenses of the underlying funds are excluded from the expense ratio calculation.

							Investment
			Net Assets				Income as a
Sub-		Units	Unit				% of Average		Total
Accounts		Outstanding	Value		(000s)		Net Assets⁽¹⁾		Return⁽²⁾
AI6
	December 31, 2005	915	$	11.41	$	10	0.34	%	5.74	%
ACA
	December 31, 2005	189,249		10.82		2,048	0.06		8.84
	December 31, 2004	174,503		9.94		1,735	-		6.63
	December 31, 2003	146,985		9.33		1,371	-		29.52
	December 31, 2002	112,940		7.20		813	-		(24.36	)
AI3
	December 31, 2005	818		13.82		11	1.60		5.31
	December 31, 2004	617		13.12		8	1.30		8.97
	December 31, 2003	353		12.04		4	1.40		24.42
	December 31, 2002	150		9.68		1	2.66		(0.03	)
AI2
	December 31, 2005	727		11.53		8	-		7.48
AI4
	December 31, 2005	24,516		16.73		410	0.87		17.93
	December 31, 2004	13,682		14.18		194	0.83		24.00
	December 31, 2003	5,825		11.44		67	1.55		29.06
	December 31, 2002	1,100		8.86		10	0.86		(0.11	)
A22
	December 31, 2005	59,376		11.67		693	0.52		7.62
AVF
	December 31, 2005	12,129		8.57		104	0.99		5.65
	December 31, 2004	7,274		8.11		59	0.44		5.77
	December 31, 2003	15,515		7.67		119	0.21		25.08
	December 31, 2002	25,744		6.13		158	0.21		(30.26	)
AL4
	December 31, 2005	61		11.85		1	-		18.48	⁽³⁾
AN3
	December 31, 2005	46,915		13.27		623	1.29		4.60
	December 31, 2004	30,073		12.69		382	0.75		11.22
	December 31, 2003	4,511		11.41		52	0.90		32.18
	December 31, 2002	986		8.63		9	1.09		(0.14	)
AN2
	December 31, 2005	1,935		12.51		24	-		3.65
	December 31, 2004	1,986		12.07		24	-		5.09
	December 31, 2003	370		11.49		4	-		43.79
	December 31, 2002	382		7.99		3	-		(0.20	)

(1) These amounts represent the dividends, excluding distributions of capital gains, received by the Sub-Account from the underlying mutual fund, net of management fees assessed by the fund manager, divided by the average monthly net assets. These ratios exclude expenses, such as mortality and expense charges, that result in direct reductions in the unit values. The recognition of investment income by the Sub-Account is affected by the timing of the declaration of dividends by the underlying fund in which the Sub-Accounts invest.

(2) These amounts represent the total return for the periods indicated, including changes in the value of the underlying fund, and reflect deductions for all items included in the expense ratio. The total return does not include any expenses assessed through the redemption of units; inclusion of these expenses in the calculation would result in a reduction in the total return presented. Investment options with a date notation indicate the effective date of that investment option in the variable account. The total return is calculated for the period indicated or from the effective date through the end of the reporting period.

(3) Not annualized, for the period May 2, 2005 (commencement of operations of Sub-Account) through December 31, 2005.

Sun Life of Canada (U.S.) Variable Account G

Notes to Financial Statements - continued

(5) Unit Values - continued

							Investment
			Net Assets				Income as a
Sub-		Units	Unit				% of Average		Total
Accounts		Outstanding	Value		(000s)		Net Assets⁽¹⁾		Return⁽²⁾
AN4
	December 31, 2005	38,455	$	22.86	$	879	0.36	%		20.55	%
	December 31, 2004	15,219		18.96		289	0.18			23.97
	December 31, 2003	8		15.29		-	-			52.93
DGO
	December 31, 2005	6,474		12.70		82	-			11.40
DRS
	December 31, 2005	19,485		14.39		280	-			7.17
DSV
	December 31, 2005	26,821		13.18		353	-			9.42
DMC
	December 31, 2005	1,562		11.51		18	-			15.08	⁽³⁾
DCA
	December 31, 2005	1,535		12.28		19	0.04			4.38
	December 31, 2004	24,514		11.77		289	2.78			5.05
	December 31, 2003	45,304		11.20		501	0.02			21.17
	December 31, 2002	43,810		9.25		403	1.05			(16.71	)
DSC
	December 31, 2005	476,208		14.08		6,705	-			5.80
	December 31, 2004	352,886		13.31		4,696	0.00			0.11
	December 31, 2003	291,499		11.95		3,484	0.02			31.69
	December 31, 2002	1,015,383		9.08		9,217	0.04			(19.12	)
DGI
	December 31, 2005	1,188		10.98		13	1.36			3.35
	December 31, 2004	1,094		10.63		12	1.29			7.47
	December 31, 2003	953		9.89		9	0.11			26.57
	December 31, 2002	87,658		7.81		685	1.72			(25.33	)
DQB
	December 31, 2005	422,644		14.56		6,153	3.62			2.48
	December 31, 2004	395,218		14.21		5,614	4.06			3.37
	December 31, 2003	416,146		13.75		5,722	3.92			4.94
	December 31, 2002	439,778		13.10		5,760	5.25			7.76
DSI
	December 31, 2005	3,603,696		10.04		36,191	1.71			4.69
	December 31, 2004	2,152,440		9.59		20,651	1.86			10.64
	December 31, 2003	1,994,466		8.67		17,288	1.54			28.36
	December 31, 2002	1,407,209		6.75		9,503	1.44			(22.36	)
FEI
	December 31, 2005	600,228		17.06		10,239	1.38			5.87
	December 31, 2004	1,056,327		16.11		17,020	1.48			11.53
	December 31, 2003	912,163		14.45		13,178	1.49			30.33
	December 31, 2002	741,221		11.08		8,216	1.68			(16.95	)

(3) Not annualized, for the period May 2, 2005 (commencement of operations of Sub-Account) through December 31, 2005.

Sun Life of Canada (U.S.) Variable Account G

Notes to Financial Statements - continued
(5) Unit Values - continued

								Investment
			Net Assets					Income as a
Sub-		Units	Unit					% of Average		Total
Accounts		Outstanding	Value		(000s)			Net Assets⁽¹⁾		Return⁽²⁾
FGP
	December 31, 2005	204,148	$	14.61	$	2,983		0.48	%	5.80	%
	December 31, 2004	177,274		13.81		2,448		0.25		3.38
	December 31, 2003	155,827		13.36		2,082		0.24		32.85
	December 31, 2002	150,653		10.06		1,515		0.27		(30.10	)
FVG
	December 31, 2005	2,234		11.31		25		-		7.63
FHI
	December 31, 2005	34,527		11.16		385		15.17		2.70
	December 31, 2004	26,937		10.86		293		7.07		9.59
	December 31, 2003	20,702		9.91		205		6.40		27.26
	December 31, 2002	9,217		7.79		72		7.54		3.44
FIG
	December 31, 2005	270,915		15.75		4,267		-		2.19
FMM
	December 31, 2005	10,000		13.89		139	⁽⁶⁾	N/A		3.04
	December 31, 2004	10,000		13.48		135	⁽⁶⁾	15.79		1.21
	December 31, 2003	10,000		13.32		133	⁽⁶⁾	2.44		1.00
	December 31, 2002	28,667		13.19		509	⁽⁶⁾	1.68		1.69
FL5
	December 31, 2005	500,774		10.38		5,197		2.76		2.93
	December 31, 2004	2,242		10.08		23		2.39	⁽⁴⁾	0.82	⁽⁵⁾
FAM
	December 31, 2005	1,848		11.15		17		-		3.89
	December 31, 2004	21,978		10.73		236		1.65		5.98
	December 31, 2003	14,671		10.12		149		2.16		23.34
	December 31, 2002	16,070		8.21		131		3.32		(15.53	)
FCN
	December 31, 2005	126,315		22.95		2,899		0.24		16.94
	December 31, 2004	83,724		19.63		1,643		0.21		15.48
	December 31, 2003	42,586		17.00		724		0.38		28.46
	December 31, 2002	37,708		13.23		499		0.94		(9.35	)
FL1
	December 31, 2005	308,911		16.73		5,168		0.09		16.65
	December 31, 2004	189,838		14.34		2,723		0.09		15.16
	December 31, 2003	48,020		12.45		598		0.11		28.20
	December 31, 2002	12,540		9.71		122		0.26		(0.03	)
FL3
	December 31, 2005	205,186		11.77		2,416		0.22		5.50
	December 31, 2004	133,887		11.16		1,494		0.06		3.12
	December 31, 2003	45,436		10.82		492		0.03		32.54
	December 31, 2002	4,217		8.17		34		0.02		(0.18	)

(4) Annualized.

(5) Not annualized, for the period May 3, 2004 (commencement of operations of Sub-Account) through December 31, 2004.

(6) This amount represents the total of the Fidelity VIP Money Market Portfolio Net Assets Applicable to Contract Owners and the Net Assets Applicable to Sponsor.

Sun Life of Canada (U.S.) Variable Account G

Notes to Financial Statements - continued

(5) Unit Values - continued

							Investment
			Net Assets				Income as a
Sub-		Units	Unit				% of Average		Total
Accounts		Outstanding	Value		(000s)		Net Assets⁽¹⁾		Return⁽²⁾
FIP
	December 31, 2005	3,432	$	16.49	$	57	1.74	%	4.82	%
	December 31, 2004	3,516		15.73		56	1.39		10.61
	December 31, 2003	1,378		14.22		20	9.28		28.41
	December 31, 2002	120,555		11.07		1,335	1.34		(22.25	)
FL2
	December 31, 2005	141,542		16.91		2,393	0.52		18.78
	December 31, 2004	115,242		14.23		1,640	0.65		13.31
	December 31, 2003	31,025		12.56		390	0.26		43.04
	December 31, 2002	6,335		8.78		56	0.55		(0.12	)
MLV
	December 31, 2005	148,198		12.59		1,866	0.56		10.38
FRE
	December 31, 2005	19,099		11.46		219	-		14.56	⁽³⁾
FSC
	December 31, 2005	52,788		11.52		608	-		5.09
	December 31, 2004	7,962		10.96		87	-		9.65	⁽⁵⁾
TFS
	December 31, 2005	254,286		12.86		3,271	0.92		10.48
	December 31, 2004	4,519		11.64		53	-		16.43	⁽⁵⁾
FTI
	December 31, 2005	43,562		18.11		789	1.42		10.17
	December 31, 2004	24,034		16.44		395	1.17		18.53
	December 31, 2003	430		13.87		6	1.94		38.69
TSF
	December 31, 2005	650,615		18.39		11,965	1.36		9.06
	December 31, 2004	243,051		16.86		4,099	1.24		16.25
	December 31, 2003	223,841		14.51		3,247	1.73		32.62
	December 31, 2002	189,578		10.94		2,074	2.59		(18.32	)
FTG
	December 31, 2005	24,456		17.74		434	0.76		8.86
	December 31, 2004	3,950		16.30		64	1.31		16.03
	December 31, 2003	1,504		14.05		21	1.95		40.46
GS3
	December 31, 2005	5,797		13.66		79	0.63		6.51
	December 31, 2004	5,987		12.83		77	1.88		14.94
	December 31, 2003	53		11.16		1	1.11		29.47
	December 31, 2002	23		8.62		-	-		(0.14	)
GS7
	December 31, 2005	7,633		11.62		89	0.16		2.94
	December 31, 2004	4,915		11.29		55	1.34		12.85

(3) Not annualized, for the period May 2, 2005 (commencement of operations of Sub-Account) through December 31, 2005.

(5) Not annualized, for the period May 3, 2004 (commencement of operations of Sub-Account) through December 31, 2004.

Sun Life of Canada (U.S.) Variable Account G

Notes to Financial Statements - continued
(5) Unit Values - continued

							Investment
			Net Assets				Income as a
Sub-		Units		Unit			% of Average		Total
Accounts		Outstanding		Value		(000s)	Net Assets⁽¹⁾		Return⁽²⁾
IV2
	December 31, 2005	78,833	$	14.08	$	1,110	0.00	%	5.19	%
	December 31, 2004	43,896		13.39		588	-		13.90
	December 31, 2003	17,990		11.76		212	-		33.43
	December 31, 2002	367		8.81		3	-		(0.12	)
JBP
	December 31, 2005	789,914		16.22		12,812	3.18		2.81
	December 31, 2004	713,031		15.78		11,249	3.43		4.29
	December 31, 2003	707,104		15.13		10,699	2.83		3.72
	December 31, 2002	724,379		14.59		10,568	0.78		8.80
JSC
	December 31, 2005	37,694		17.02		642	-		3.42
	December 31, 2004	30,363		16.46		500	-		27.17
	December 31, 2003	30,306		12.94		392	-		35.98
	December 31, 2002	29,068		9.52		277	0.23		(21.65	)
JEP
	December 31, 2005	9,144		12.56		115	1.10		1.35
	December 31, 2004	23,681		12.39		293	1.58		9.49
	December 31, 2003	70,487		11.32		798	0.72		28.14
	December 31, 2002	54,154		8.83		478	0.05		(24.62	)
LA1
	December 31, 2005	522,122		14.26		7,444	1.12		3.25
	December 31, 2004	319,388		13.81		4,411	1.12		12.65
	December 31, 2003	128,258		12.26		1,573	0.95		31.01
	December 31, 2002	41,527		9.36		389	0.93		(0.06	)
LA3
	December 31, 2005	2,812		14.12		40	-		26.63
	December 31, 2004	561		11.15		6	0.14		20.71
	December 31, 2003	457		9.24		4	2.01		41.25
	December 31, 2002	288		6.54		2	1.56		(0.35	)
LA2
	December 31, 2005	206,568		15.82		3,269	0.68		8.22
	December 31, 2004	80,667		14.62		1,180	0.43		24.04
	December 31, 2003	38,062		11.78		449	0.61		24.75
	December 31, 2002	25,510		9.45		241	0.81		(0.06	)
MF7
	December 31, 2005	16,412		10.91		179	5.95		1.59
	December 31, 2004	15,113		10.74		162	0.21		7.39
CAS
	December 31, 2005	656,239		10.93		7,172	0.57		0.92
	December 31, 2004	579,514		10.83		6,276	0.06		11.02
	December 31, 2003	476,632		9.76		4,650	-		28.71
	December 31, 2002	346,448		7.58		2,626	0.18		(32.39	)

Sun Life of Canada (U.S.) Variable Account G
Notes to Financial Statements - continued

(5) Unit Values - continued

							Investment
			Net Assets				Income as a
Sub-		Units	Unit				% of Average		Total
Accounts		Outstanding	Value		(000s)		Net Assets⁽¹⁾		Return⁽²⁾
MFD
	December 31, 2005	97,961	$	11.36	$	1,113	0.33	%	0.63	%
	December 31, 2004	60,888		11.29		687	-		10.78
	December 31, 2003	22,075		10.19		225	-		28.35
	December 31, 2002	539		7.94		4	0.14		(0.21	)
CO1
	December 31, 2005	12,888		11.96		154	0.75		1.31
	December 31, 2004	14,286		11.80		169	0.24		12.52
	December 31, 2003	1,596		10.49		17	-		4.88	⁽⁷⁾
EGS
	December 31, 2005	7,689		14.67		113	-		9.14
	December 31, 2004	6,880		13.44		92	-		13.24
	December 31, 2003	6,920		11.87		82	-		31.49
	December 31, 2002	11,341		9.03		102	-		(34.15	)
MFF
	December 31, 2005	9,627		13.11		126	-		8.90
	December 31, 2004	70,196		12.04		845	-		12.96
	December 31, 2003	63,948		10.66		682	-		31.14
	December 31, 2002	34		8.13		-	-		(0.19	)
GGR
	December 31, 2005	6,688		19.64		131	0.69		10.03
	December 31, 2004	7,037		17.85		126	0.38		15.61
	December 31, 2003	13,847		15.44		214	0.50		35.44
	December 31, 2002	14,157		11.40		162	0.31		(19.36	)
GSS
	December 31, 2005	984,125		16.17		15,915	4.73		2.30
	December 31, 2004	579,747		15.81		9,164	5.94		3.76
	December 31, 2003	572,822		15.23		8,727	4.30		2.15
	December 31, 2002	467,971		14.91		6,979	2.73		9.80
MFK
	December 31, 2005	161,616		11.72		1,894	4.29		2.01
	December 31, 2004	115,002		11.49		1,322	4.91		3.55
	December 31, 2003	109,937		11.09		1,220	4.31		1.87
	December 31, 2002	58,198		10.89		634	1.47		0.09
MFC
	December 31, 2005	11,655		14.69		171	9.04		1.93
	December 31, 2004	11,959		14.41		172	1.34		9.37
	December 31, 2003	29,070		13.18		383	-		31.76

(7) Not annualized, for the period November 28, 2003 (commencement of operations of Sub-Account) through December 31, 2003.

Sun Life of Canada (U.S.) Variable Account G

Notes to Financial Statements - continued
(5) Unit Values - continued

							Investment
			Net Assets				Income as a
Sub-		Units	Unit				% of Average		Total
Accounts		Outstanding	Value		(000s)		Net Assets⁽¹⁾		Return⁽²⁾
IG1
	December 31, 2005	66,809	$	14.63	$	977	0.67	%	14.62	%
	December 31, 2004	51,512		12.76		657	0.37		18.58
	December 31, 2003	6,517		10.76		70	-		7.63	⁽⁸⁾
MIS
	December 31, 2005	11,155		9.16		102	0.47		4.37
	December 31, 2004	12,059		8.77		106	0.06		9.61
	December 31, 2003	10,088		8.00		81	-		23.39
	December 31, 2002	9,686		6.49		63	0.15		(28.05	)
M1B
	December 31, 2005	19,482		11.59		226	0.15		4.15
	December 31, 2004	6,214		11.13		69	-		9.36
	December 31, 2003	1,517		10.18		15	-		1.78
CGS
	December 31, 2005	1,679		11.29		19	0.94		7.70
	December 31, 2004	1,649		10.48		17	1.00		11.99
	December 31, 2003	1,624		9.36		15	1.43		22.83
	December 31, 2002	3,098		7.62		24	1.00		(21.22	)
MFL
	December 31, 2005	2,288		12.52		29	0.94		7.42
	December 31, 2004	698		11.65		8	1.15		16.51
MC1
	December 31, 2005	77,639		11.84		919	-		2.78
	December 31, 2004	75,199		11.52		866	-		14.29
	December 31, 2003	59,452		10.08		599	-		0.80	⁽⁹⁾
MMS
	December 31, 2005	2,848,202		11.97		34,103	2.68		2.72
	December 31, 2004	2,995,635		11.66		34,914	0.74		0.83
	December 31, 2003	5,869,001		11.56		67,847	0.63		0.63
	December 31, 2002	6,145,747		11.49		70,602	1.27		1.27
M1A
	December 31, 2005	106,088		13.08		1,388	-		4.96
	December 31, 2004	132,904		12.46		1,656	-		7.22
	December 31, 2003	68,306		11.62		794	-		35.01
	December 31, 2002	10,249		8.61		88	-		(0.14	)
RIS
	December 31, 2005	179,699		13.61		2,445	0.97		16.56
RES
	December 31, 2005	1,633		11.56		19	0.55		8.01
	December 31, 2004	1,331		10.71		14	0.90		15.83
	December 31, 2003	1,058		9.24		10	0.72		25.32
	December 31, 2002	736		7.38		5	0.51		(25.11	)

(8) Not annualized, for the period November 14, 2003 (commencement of operations of Sub-Account) through December 31, 2003.

(9) Not annualized, for the period November 13, 2003 (commencement of operations of Sub-Account) through December 31, 2003.

Sun Life of Canada (U.S.) Variable Account G

Notes to Financial Statements - continued
(5) Unit Values - continued

							Investment
			Net Assets				Income as a
Sub-		Units	Unit				% of Average		Total
Accounts		Outstanding	Value		(000s)		Net Assets⁽¹⁾		Return⁽²⁾
RE1
	December 31, 2005	36,361	$	13.09	$	476	0.38	%	7.71	%
	December 31, 2004	25,183		12.15		306	0.07	⁽⁴⁾	21.54	⁽⁹⁾
SG1
	December 31, 2005	76,777		11.08		851	0.12		1.17
	December 31, 2004	74,624		10.95		817	-		6.58
	December 31, 2003	39,766		10.27		409	-		2.73	⁽⁹⁾
SI1
	December 31, 2005	58		11.23		1	9.57		1.61
	December 31, 2004	987		11.05		11	4.56		7.83
	December 31, 2003	936		10.25		10	-		2.50	⁽⁹⁾
TRS
	December 31, 2005	576,178		17.92		10,323	2.54		3.02
	December 31, 2004	476,896		17.39		8,294	2.30		11.47
	December 31, 2003	367,218		15.60		5,729	3.41		17.15
	December 31, 2002	299,863		13.32		3,993	3.27		(5.69)
MFJ
	December 31, 2005	361,075		13.35		4,822	2.24		2.81
	December 31, 2004	237,715		12.99		3,088	2.50		11.14
	December 31, 2003	63,289		11.69		740	2.59		16.83
	December 31, 2002	4,540		10.00		45	2.31		-
UTS
	December 31, 2005	1,628		17.75		29	0.91		17.29
	December 31, 2004	1,151		15.14		17	1.94		30.37
	December 31, 2003	906		11.61		11	3.64		36.26
	December 31, 2002	1,039		8.52		9	3.19		(23.87	)
MFE
	December 31, 2005	634		15.91		10	0.26		16.97
	December 31, 2004	69		13.60		1	1.74		30.01
	December 31, 2003	50		10.46		1	2.65		36.03
	December 31, 2002	24		7.69		-	-		(0.23	)
EIS
	December 31, 2005	-		12.00		-	0.54		6.60
MV1
	December 31, 2005	37,653		13.18		496	1.20		6.34
	December 31, 2004	39,927		12.40		495	0.97		15.18
	December 31, 2003	13,598		10.76		146	-		7.62	⁽⁹⁾
NLM
	December 31, 2005	44,587		14.05		627	3.66		1.44
	December 31, 2004	6,730		13.85		93	3.68		0.78
	December 31, 2003	7,982		13.74		110	0.04		2.42
	December 31, 2002	4,163,286		13.42		55,865	4.38		5.34

(4) Annualized.

(9) Not annualized, for the period November 13, 2003 (commencement of operations of Sub-Account) through December 31, 2003.

Sun Life of Canada (U.S.) Variable Account G

Notes to Financial Statements - continued
(5) Unit Values - continued

							Investment
			Net Assets				Income as a
Sub-		Units	Unit				% of Average		Total
Accounts		Outstanding	Value		(000s)		Net Assets⁽¹⁾		Return⁽²⁾
NMC
	December 31, 2005	330,149	$	14.55	$	4,804	0.00	%	13.74	%
	December 31, 2004	156,542		12.79		2,003	-		16.31
	December 31, 2003	81,333		11.00		894	-		28.07
	December 31, 2002	399,740		8.59		3,433	-		(29.34	)
NPP
	December 31, 2005	20		16.71		-	0.00		18.05
	December 31, 2004	7,734		14.15		109	0.00		0.19
	December 31, 2003	7,553		11.90		90	-		35.09
	December 31, 2002	26,534		8.81		234	0.61		(24.14	)
NAR
	December 31, 2005	141,084		13.18		1,860	0.09		12.00
	December 31, 2004	96,138		11.77		1,131	0.06	⁽⁴⁾	17.69	⁽¹⁰⁾
OCF
	December 31, 2005	94,709		11.29		1,070	0.86		5.10
OGS
	December 31, 2005	1,374		13.33		18	-		14.31
OSC
	December 31, 2005	43,365		13.00		564	-		9.92
PMB
	December 31, 2005	1,433		19.09		27	5.50		10.78
	December 31, 2004	7		17.23		-	2.80		12.12
	December 31, 2003	35		15.37		1	4.89		53.68
PHY
	December 31, 2005	22,982		15.25		350	6.51		4.13
	December 31, 2004	12,344		14.64		181	6.54		9.56
	December 31, 2003	307		13.36		4	7.47		33.64
PLD
	December 31, 2005	79		10.26		1	3.81		1.01
PRR
	December 31, 2005	116,738		12.25		1,430	2.79		2.10
	December 31, 2004	83,689		12.00		1,004	1.11		8.92
	December 31, 2003	19,082		11.01		210	1.26		10.13
PTR
	December 31, 2005	399,997		11.57		4,629	3.51		2.45
	December 31, 2004	229,165		11.30		2,589	1.98		4.89
	December 31, 2003	36,149		10.77		389	2.58		7.69
RX1
	December 31, 2005	58		8.89		1	0.43		3.96
	December 31, 2004	67		8.55		1	-		14.62
	December 31, 2003	35		7.46		-	-		39.19
	December 31, 2002	24		5.36		-	6.60		(0.46	)

(4) Annualized.

(10) Not annualized, for the period July 26, 2004 (commencement of operations of Sub-Account) through December 31, 2004.

Sun Life of Canada (U.S.) Variable Account G

Notes to Financial Statements - continued
(5) Unit Values - continued

							Investment
			Net Assets				Income as a
Sub-		Units	Unit				% of Average		Total
Accounts		Outstanding	Value		(000s)		Net Assets⁽¹⁾		Return⁽²⁾
RX2
	December 31, 2005	11	$	7.88	$	-	0.00	%	1.11	%
	December 31, 2004	7		7.79		-	-		9.35
	December 31, 2003	1		7.13		-	-		(28.75	)
SEE
	December 31, 2005	-		-		-	6.84	⁽⁴⁾	1.08	⁽¹¹⁾
SSI
	December 31, 2005	126,501		12.08		1,528	0.83		4.26
SSC
	December 31, 2005	81,411		16.83		1,370	0.37		3.99
	December 31, 2004	46,571		16.18		754	0.12		17.48
	December 31, 2003	7,000		13.77		96	-		37.75
SCV
	December 31, 2005	488		11.56		6	-		15.63	⁽³⁾
SCM
	December 31, 2005	23,634		13.81		326	0.13		(0.71	)
	December 31, 2004	18,179		13.91		253	0.31		20.39
	December 31, 2003	9,785		11.55		113	2.94		52.89
	December 31, 2002	25		7.56		-	-		(0.24	)
SIG
	December 31, 2005	284,245		13.98		3,973	4.68		1.96
	December 31, 2004	248,388		13.71		3,405	4.75		6.42
	December 31, 2003	255,079		12.89		3,286	5.36		9.65
	December 31, 2002	5,659		11.75		66	5.90		0.18
SC1
	December 31, 2005	2,072,605		10.58		21,916	2.79		2.76
	December 31, 2004	1,504,073		10.29		15,477	0.73		0.74
	December 31, 2003	1,228,069		10.22		12,544	0.55		0.55
	December 31, 2002	420,196		10.16		4,270	1.12		0.02
SRE
	December 31, 2005	249,940		28.31		7,077	1.77		9.67
	December 31, 2004	155,069		25.82		4,003	2.09		33.32
	December 31, 2003	42,775		19.37		828	-		35.95
	December 31, 2002	12,628		14.25		180	0.04		0.04
SC5
	December 31, 2005	230,173		19.11		4,400	0.10		16.61
	December 31, 2004	137,998		16.39		2,263	-		16.14
	December 31, 2003	45,795		14.11		647	-		36.09
	December 31, 2002	9,059		10.37		94	-		0.04

(3) Not annualized, for the period May 2, 2005 (commencement of operations of Sub-Account) through December 31, 2005.

(4) Annualized.

(11) Not annualized, for the period January 1, 2005 (commencement of operations of Sub-Account) through July 25, 2005.

Sun Life of Canada (U.S.) Variable Account G
Notes to Financial Statements - continued

(5) Unit Values - continued

							Investment
			Net Assets				Income as a
Sub-		Units	Unit				% of Average		Total
Accounts		Outstanding	Value		(000s)		Net Assets⁽¹⁾		Return⁽²⁾
SC7
	December 31, 2005	2,448	$	15.00	$	37	0.83	%	9.73	%
	December 31, 2004	714		13.67		10	0.67		12.45
	December 31, 2003	397		12.16		5	1.13		21.57
SCB
	December 31, 2005	124,420		16.76		2,086	-		4.33
	December 31, 2004	120,273		16.07		1,933	-		18.43
	December 31, 2003	23,890		13.57		324	0.06		41.62
	December 31, 2002	8,140		9.58		78	-		(0.04	)
TBC
	December 31, 2005	24,398		11.46		280	0.21		5.94
	December 31, 2004	7,729		10.82		84	-		8.17	⁽⁵⁾
REI
	December 31, 2005	930,172		15.30		14,236	1.62		3.92
	December 31, 2004	790,941		14.73		11,649	2.46		15.45
	December 31, 2003	194,604		12.76		2,482	0.84		24.92
	December 31, 2002	520,284		10.21		5,313	1.57		(13.12	)
RNA
	December 31, 2005	7,084		10.26		73	-		4.47
	December 31, 2004	1,023		9.82		10	0.06		10.88
	December 31, 2003	889		8.85		8	-		35.10
	December 31, 2002	753		6.55		5	-		(28.31	)
	December 31, 2005	6,297		13.55		85	-		35.48
VMG
	December 31, 2005	6,297		13.55		85	-		17.57
VCP
	December 31, 2005	114		11.89		1	-		4.37
VGI
	December 31, 2005	1,633		12.45		20	-		9.99

(5) Not annualized, for the period May 3, 2004 (commencement of operations of Sub-Account) through December 31, 2004.

Report of Independent Registered Public Accounting Firm

To the Contract Owners participating in Sun Life of Canada (U.S.) Variable Account G

And the Board of Directors of Sun Life Assurance Company of Canada (U.S.):

We have audited the accompanying statement of condition of AIM V.I. Basic Value Sub-Account, AIM V.I. Capital Appreciation Sub-Account, AIM V.I. Core Equity Sub-Account, AIM V.I. Growth Sub-Account, AIM V.I. International Growth Sub-Account, AIM V.I. Mid Cap Core Equity Sub-Account, AIM V.I. Premier Equity Sub-Account, Alger American MidCap Growth Sub-Account, AllianceBernstein VP Growth and Income Sub-Account, AllianceBernstein VP Technology Sub-Account, AllianceBernstein VP Worldwide Privatization Sub-Account, Delaware VIP Growth Opportunities Sub-Account, Delaware VIP REIT Sub-Account, Delaware VIP Small Cap Value Sub-Account, Dreyfus Investment MidCap Stock Sub-Account, Dreyfus Variable Investment Appreciation Sub-Account, Dreyfus Variable Investment Developing Leaders Sub-Account, Dreyfus Variable Investment Growth and Income Sub-Account, Dreyfus Variable Investment Quality Bond Sub-Account, Dreyfus Stock Index Sub-Account, Fidelity VIP Equity Income Sub-Account, Fidelity VIP Growth Sub-Account, Fidelity VIP Growth and Income Sub-Account, Fidelity VIP High Income Sub-Account, Fidelity VIP Investment Grade Bond Sub-Account, Fidelity VIP Money Market Sub-Account, Fidelity VIP Money Market SC Sub-Account, Fidelity VIP II Asset Manager: Growth Sub-Account, Fidelity VIP II Contrafund Sub-Account, Fidelity VIP II Contrafund SC2 Sub-Account, Fidelity VIP II Growth Sub-Account, Fidelity VIP II Index 500 Sub-Account, Fidelity VIP II Overseas Sub-Account, FAM Variable Series Mercury Value Opportunities V.I. Sub-Account, Franklin Real Estate Sub-Account, Franklin Small-Mid Cap Growth Securities Sub-Account, Franklin Templeton Foreign Securities: Class 1 Sub-Account, Franklin Templeton Foreign Securities: Class 2 Sub-Account, Franklin Templeton Growth Securities: Class 1 Sub-Account, Franklin Templeton Growth Securities: Class 2 Sub-Account, Goldman Sachs VIT CORESM U.S. Equity Sub-Account, Goldman Sachs VIT Capital Growth Sub-Account, INVESCO VIF Small Company Growth Sub-Account, J.P. Morgan Series Trust II Bond Sub-Account, J.P. Morgan Series Trust II Small Company Sub-Account, J.P. Morgan Series Trust II U.S. Large Cap Core Equity Sub-Account, Lord Abbett Growth and Income Sub-Account, Lord Abbett International Sub-Account, Lord Abbett Mid Cap Value Sub-Account, MFS/Sun Life Bond Sub-Account, MFS/Sun Life Capital Appreciation Sub-Account, MFS/Sun Life Capital Appreciation SC Sub-Account, MFS/Sun Life Capital Opportunities Sub-Account, MFS/Sun Life Emerging Growth Sub-Account, MFS/Sun Life Emerging Growth SC Sub-Account, MFS/Sun Life Global Growth Sub-Account, MFS/Sun Life Governement Securities Sub-Account, MFS/Sun Life Government Securities SC Sub-Account, MFS/Sun Life High Yield SC Sub-Account, MFS/Sun Life International Growth Sub-Account, MFS/Sun Life Massachusetts Investors Growth Stock Sub-Account, MFS/Sun Life Massachusetts Investors Growth Stock SC Sub-Account, MFS/Sun Life Massachusetts Investors Trust Sub-Account, MFS/Sun Life Massachusetts Investors Trust SC Sub-Account, MFS/Sun Life Mid Cap Growth, MFS/Sun Life Money Market Sub-Account, MFS/Sun Life New Discovery SC Sub-Account, MFS/Sun Life Research International Sub-Account, MFS/Sun Life Research Sub-Account, MFS/Sun Life Research SC Sub-Account, MFS/Sun Life Strategic Growth Sub-Account, MFS/Sun Life Strategic Income Sub-Account, MFS/Sun Life Total Return Sub-Account, MFS/Sun Life Total Return SC Sub-Account, MFS/Sun Life Utilities Sub-Account, MFS/Sun Life Utilities SC
Sub-Account, MFS/Sun Life Value Sub-Account, MFS/Sun Life Value SC Sub-Account, Neuberger Berman Advisers Management Limited Maturity Bond Sub-Account, Neuberger Berman Advisers Management Mid-Cap Growth Sub-Account, Neuberger Berman Advisers Management Partners Sub-Account, Neuberger Berman Advisers Management Regency Sub-Account, Oppenheimer Variable Account Capital Appreciation Sub-Account, Oppenheimer Variable Account Global Securuties Sub-Account, Oppenheimer Variable Account Main Street Small Cap Sub-Account, PIMCO Variable Insurance Emerging Markets Bond Sub-Account, PIMCO Variable Insurance High Yield Sub-Account, PIMCO Variable Insurance Low Duration Sub-Account, PIMCO Variable Insurance Real Return Sub-Account, PIMCO Variable Insurance Total Return Sub-Account, Rydex VT Nova Sub-Account, Rydex VT OTC Sub-Account, Scudder VIT EAFE® Equity Index Sub-Account, Scudder VIT Small Cap Index: Class A Sub-Account, Scudder VIT Small Cap Index: Class B Sub-Account, Scudder Variable Series II SVS Dreman Small Cap Value Sub-Account, Sun Capital Advisers All Cap Sub-Account, Sun Capital Advisers Investment Grade Bond Sub-Account, Sun Capital Advisers Money Market Sub-Account, Sun Capital Advisers Real Estate Sub-Account, SCSM Blue Chip Mid Cap Sub-Account, SCSM Davis Venture Value Sub-Account, SCSM Value Small Cap Sub-Account, T. Rowe Price Blue Chip Growth Sub-Account, T. Rowe Price Equity Income Sub-Account, T. Rowe Price New America Growth Sub-Account, Van Kappen UIF Mid Cap Growth Sub-Account, Van Kappen LIT Comstock Sub-Account, Van Kappen LIT Growth and Income Sub-Account of Sun Life of Canada (U.S.) Variable Account G (the "Sub-Accounts") as of December 31, 2005, the related statements of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the four years in the period then ended. These financial statements and financial highlights are the responsibility of management. Our responsibility is to express an opinion on these fianancial statements and financial highlights based on our audits.

We conducted our audits in accordance with auditing standards of the Public Company Accounting Oversight Board (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 considerations of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 2004 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 audits provide a reasonable basis for our opinion.

In our opinion, such financial statements and financial highlights present fairly, in all material respects, the financial position of each of the
Sub-Accounts at December 31, 2005, the results of their operations for the year then ended, the changes in their net assets for each of the two years in the period then ended, and the financial highlights for each of the four years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.

Boston, Massachusetts

April 7, 2006

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)

(A Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)

CONSOLIDATED STATEMENTS OF INCOME

(in thousands)

For the years ended December 31,

2005

2004

2003

Revenues:

   Premiums and annuity considerations

$ 51,982

$ 58,820

$ 60,518

   Net investment income

1,112,529

1,134,257

1,208,750

Net derivative income (loss)

16,474

(98,419)

(203,200)

   Net realized investment gains

16,925

96,074

134,085

   Fee and other income

362,275

357,011

319,596

Total revenues

1,560,185

1,547,743

1,519,749

Benefits and expenses:

Interest credited

637,502

673,442

783,999

Interest expense

123,279

128,522

120,905

   Policyowner benefits

187,013

141,377

201,248

   Amortization of deferred acquisition costs ("DAC") and
value of business acquired ("VOBA")

243,821

82,876

98,398

   Other operating expenses

196,543

214,495

184,472

Total benefits and expenses

1,388,158

1,240,712

1,389,022

Income before income tax expense, minority interest and
      cumulative effect of change in accounting principle

172,027

307,031

130,727

Income tax expense (benefit):

Federal

40,091

71,352

27,366

State

(2)

(98)

823

   Income tax expense

40,089

71,254

28,189

Income before minority interest and cumulative

      effect of change in accounting principles

131,938

235,777

102,538

Minority interest share of (loss) income

(1,214)

5,561

-

Income before cumulative effect of change in
      accounting principles

133,152

230,216

102,538

Cumulative effect of change in accounting principles, net of
      tax benefit of $4,814 and $4,064 in 2004 and 2003,
      respectively

-

(8,940)

(7,547)

Net income

$ 133,152

$ 221,276

$ 94,991

The accompanying notes are an integral part of the consolidated financial statements
SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)

(A Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)

CONSOLIDATED BALANCE SHEETS

(in thousands except share data)

December 31,

ASSETS	2005	2004
Investments
Available-for-sale fixed maturities at fair value (amortized cost of $15,620,827 and $16,207,312 in 2005 and 2004, respectively)	$ 15,677,148	$ 16,692,987
Trading fixed maturities at fair value (amortized cost of $1,982,762 and $1,408,618 in 2005 and 2004, respectively)	1,984,848	1,491,028
Subordinated note from affiliate held-to-maturity (fair value of $645,755 and $689,132 in 2005 and 2004, respectively)	600,000	600,000
Short-term investments	-	23,957
Mortgage loans	1,739,370	1,465,896
Derivative instruments - receivable	487,947	566,401
Limited partnerships	222,148	304,809
Real estate	170,510	168,139
Policy loans	701,769	696,305
Other invested assets	554,917	791,541
Cash and cash equivalents	347,654	552,949
Total investments	22,486,311	23,354,012

Accrued investment income	261,507	279,679
Deferred policy acquisition costs	1,341,377	1,147,181
Value of business acquired	53,670	24,130
Deferred federal income taxes	4,360	-
Goodwill	701,451	701,451
Receivable for investments sold	79,860	21,213
Reinsurance receivable	1,860,680	1,928,365
Other assets	122,239	111,131
Separate account assets	19,095,391	19,120,381

Total assets	$ 46,006,846	$ 46,687,543

LIABILITIES

Contractholder deposit funds and other policy liabilities	$ 18,668,578	$ 18,846,238
Future contract and policy benefits	768,297	721,135
Payable for investments purchased	248,733	284,511
Accrued expenses and taxes	150,318	95,655
Deferred federal income taxes	-	64,610
Long-term debt	-	33,500
Debt payable to affiliates	1,125,000	1,025,000
Partnership capital securities	607,826	607,826
Reinsurance payable to affiliate	1,652,517	1,697,348
Derivative instruments - payable	197,765	228,774
Other liabilities	766,657	1,010,006
Separate account liabilities	19,095,391	19,120,381

Total liabilities	43,281,082	43,734,984

Commitments and contingencies - Note 19
Minority interest	-	5,561

STOCKHOLDER'S EQUITY

Common stock, $1,000 par value - 10,000 shares authorized; 6,437 shares issued and outstanding in 2005 and 2004	$ 6,437	$ 6,437
Additional paid-in capital	2,138,880	2,131,888
Accumulated other comprehensive income	19,260	180,638
Retained earnings	561,187	628,035

Total stockholder's equity	2,725,764	2,946,998

Total liabilities and stockholder's equity	$ 46,006,846	$ 46,687,543

The accompanying notes are an integral part of the consolidated financial statements

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)

(A Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)

For the years ended December 31,

	2005	2004	2003

Net income	$ 133,152	$ 221,276	$ 94,991
Other comprehensive income (loss)
Net change in unrealized holding (losses) gains on
available-for-sale securities, net of tax and policyholder amounts	(79,814)	23,103	158,442
Minimum pension liability adjustment, net of tax	(1,842)	-	-
Reclassification adjustments of realized investment gains into net income	(79,722)	(70,146)	(179,672)

Other comprehensive loss	(161,378)	(47,043)	(21,230)

Comprehensive (loss) income	$ (28,226)	$ 174,233	$ 73,761

The accompanying notes are an integral part of the consolidated financial statements

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)

(A Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)

CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY

(in thousands)

For the years ended December 31,

			Accumulated
		Additional	Other		Total
	Common	Paid-In	Comprehensive	Retained	Stockholder's
	Stock	Capital	Income	Earnings	Equity

Balance at December 31, 2002 - Restated	$ 6,437	$ 2,071,888	$ 248,911	$ 468,344	$ 2,795,580

Net income	-	-	-	94,991	94,991
Other comprehensive loss	-	-	(21,230)	-	(21,230)

Balance at December 31, 2003	$ 6,437	$ 2,071,888	$ 227,681	$ 563,335	$ 2,869,341

Net income	-	-	-	221,276	221,276
Additional paid-in-capital	-	60,000	-	-	60,000
Dividends	-	-	-	(156,576)	(156,576)
Other comprehensive loss	-	-	(47,043)	-	(47,043)

Balance at December 31, 2004	$ 6,437	$ 2,131,888	$ 180,638	$ 628,035	$ 2,946,998

Net income	-	-	-	133,152	133,152
Additional paid-in-capital	-	6,992	-	-	6,992
Dividends	-	-	-	(200,000)	(200,000)
Other comprehensive loss	-	-	(161,378)	-	(161,378)

Balance at December 31, 2005	$ 6,437	$ 2,138,880	$ 19,260	$ 561,187	$ 2,725,764

The accompanying notes are an integral part of the consolidated financial statements

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)

(A Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

For the years ended December 31,

	2005	2004	2003

Cash Flows From Operating Activities:
Net income from operations	$ 133,152	$ 221,276	$ 94,991
Adjustments to reconcile net income to net cash provided
by (used in) operating activities:
Minority interest share	(1,214)	5,561	-
Amortization (accretion) of discount and premiums	60,195	82,123	112,761
Amortization of DAC and VOBA	243,821	82,876	98,398
Depreciation and amortization	3,985	3,025	1,730
Non cash derivative activity	(93,478)	(18,690)	144,091
Net realized gains on investments	(16,925)	(96,074)	(134,085)
Net losses (gains) on trading investments	80,324	7,237	(63,573)
Net change in unrealized and undistributed (gains) losses in private equity limited partnerships	(48,244)	(58,981)	15,789
Interest credited to contractholder deposits	637,502	671,101	781,834
Deferred federal income taxes	22,047	72,648	43,029
Cumulative effect of change in accounting principles, net of tax	-	8,940	7,547
Changes in assets and liabilities:
Deferred acquisition costs	(261,917)	(346,996)	(263,762)
Accrued investment income	17,916	5,545	(28,655)
Future contract and policy benefits	25,123	(42,530)	(854)
Other, net	155,865	211,882	127,056
Net sales (purchases) of trading fixed maturities	(651,921)	27,801	(60,321)
Net cash provided by operating activities	306,231	836,744	875,976

Cash Flows From Investing Activities:
Sales, maturities and repayments of:
Available-for-sale fixed maturities	5,685,008	10,472,377	13,004,400
Net cash from sale of subsidiary	17,040	39,687	1,500
Other invested assets	483,700	144,145	127,944
Mortgage loans	117,438	205,740	339,735
Real estate	947	-	14,275
Purchases of:
Available-for-sale fixed maturities	(5,269,211)	(10,367,260)	(13,414,490)
Other invested assets	(171,539)	(910,784)	(4,926)
Mortgage loans	(390,376)	(698,776)	(338,627)
Real estate	(6,648)	(86,743)	(16,153)
Changes due to other investments, net	(239,910)	728,637	5,100
Net change in policy loans	(5,464)	(3,418)	(10,858)
Net change in short-term investments	(4,576)	705	153,355

Net cash provided by (used in) investing activities	$ 216,409	$ (475,690)	$ (138,745)

The accompanying notes are an integral part of the consolidated financial statements

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)

(A Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

For the years ended December 31,

	2005	2004	2003

Cash Flows From Financing Activities:
Deposits to contractholder deposit funds	$ 2,720,141	$ 2,552,431	$ 2,461,677
Withdrawals from contractholder deposit funds	(3,404,468)	(2,867,815)	(3,411,004)
Net cash of Sun Capital Advisers, Inc	-	(2,910)	-
Issuance of debt	100,000	-	-
Dividends paid to stockholder	(150,600)	(150,000)	-
Additional capital contributed	-	60,000	-
Other, net	6,992	42,004	(145,258)
Net cash used in financing activities	(727,935)	(366,290)	(1,094,585)

Net change in cash and cash equivalents	(205,295)	(5,236)	(357,354)

Cash and cash equivalents, beginning of year	552,949	558,185	915,539

Cash and cash equivalents, end of year	$ 347,654	$ 552,949	$ 558,185

Supplemental Cash Flow Information
Interest paid	$ 122,474	$ 120,195	$ 118,302

Supplemental Schedule of non-cash investing and financing activities

In 2005, the Company declared and paid a $200.0 million dividend to its direct parent, Sun Life of Canada (U.S.) Holdings, Inc., consisting of $150.6 million in cash and $49.4 million in notes. In 2004, the Company declared and paid cash dividends in the amount of $150.0 million and transferred via dividend its ownership of SCA valued at $6.6 million to its parent, SLC - U.S. Ops Holdings. The Company did not make any dividend payments in 2003.

On April 19, 2005, the Company sold its interest in a consolidated variable interest entity ("VIE"). As a result of the sale, bonds decreased by $42.5 million, short-term investments decreased by $28.5 million, investment income due and accrued decreased by $0.3 million, other invested assets decreased by $3.2 million, other liabilities decreased by $26.1 million, deferred tax liability decreased by $3.9 million, and notes payable decreased by $33.5 million.

On December 31, 2004, the Company distributed through a dividend to its parent, Sun Life of Canada (U.S.) Holdings, Inc., its interest in Sun Capital Advisers, Inc. As a result of the dividend, other assets decreased by $5.2 million, other liabilities decreased by $0.9 million, and accrued expenses and taxes decreased by $0.6 million in a non-cash transaction.

On June 30, 2004, the Company sold its interest in another consolidated VIE. As a result of the sale, bonds decreased by $51.0 million, other liabilities decreased by $11.1 million, deferred tax liability decreased by $3.8 million, notes payable decreased by $7.0 million, and other invested assets decreased by $0.6 million.

The accompanying notes are an integral part of the consolidated financial statements

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)

(A Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)

For the years ended December 31, 2005, 2004 and 2003

1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
GENERAL

Sun Life Assurance Company of Canada (U.S.) (the "Company") is a stock life insurance company incorporated under the laws of Delaware. The Company is an indirect wholly-owned subsidiary of Sun Life Assurance Company of Canada - U.S. Operations Holdings, Inc. ("SLC - U.S. Ops Holdings") and is an indirect wholly-owned subsidiary of Sun Life Financial Inc. ("SLF"), a reporting company under the Securities Exchange Act of 1934. SLF and its subsidiaries are collectively referred to herein as "Sun Life Financial."

The Company and its subsidiaries are engaged in the sale of individual and group variable life insurance, individual universal life insurance, individual and group fixed and variable annuities, group pension contracts, guaranteed investment contracts ("GICs"), group life, group disability, and group stop loss insurance. These products are distributed through individual insurance agents, financial planners, insurance brokers and broker-dealers to both the tax qualified and non-tax-qualified markets. The Company is authorized to transact business in 49 states, the District of Columbia, Puerto Rico and the U.S. Virgin Islands. In addition, the Company's wholly-owned subsidiary, Sun Life Insurance and Annuity Company of New York ("SLNY"), is authorized to transact business in the State of New York.

As of December 31, 2004, SLC - U.S. Ops Holdings, was a direct wholly-owned subsidiary of Sun Life Assurance Company of Canada ("SLOC"), 150 King Street West, Toronto, Ontario, Canada. SLOC is a life insurance company incorporated in 1865. As of December 31, 2005, SLOC transacted business directly or through its subsidiaries and joint ventures in all of the Canadian provinces and territories, all of the United States, the District of Columbia, Puerto Rico, the Virgin Islands, Great Britain, Ireland, Hong Kong, Bermuda, Barbados, Philippines, Indonesia, China and India. SLOC is a direct wholly-owned subsidiary of SLF.

On January 4, 2005, a reorganization was completed under which most of SLOC's asset management businesses in Canada and the United States were transferred to Sun Life Financial Corp., a newly incorporated wholly-owned subsidiary of SLF. After this reorganization, the operations remaining in SLOC consist primarily of Sun Life Financial's life, health and annuities businesses in Canada, most of its life and health businesses in the United States, and all of its operations in the United Kingdom and Asia. SLOC continues to be a direct wholly-owned subsidiary of SLF. The Company and its subsidiaries are now indirect wholly-owned subsidiaries of Sun Life Financial Corp., and continue to be indirect wholly-owned subsidiaries of SLF.

On December 31, 2004, Sun Capital Advisers, Inc. ("SCA"), a registered investment adviser, was distributed in the form of a dividend to the Company's parent and became a consolidated subsidiary of the SLC - U.S. Ops Holdings. As a result of this transaction, SCA is no longer the Company's wholly-owned subsidiary. As of December 31, 2004, SCA's total assets were $8.1 million. SCA's net income was $1.9 million and $0.7 million for the years ended December 31, 2004 and 2003, respectively.

On April 19, 2005, the Company sold its interest in a consolidated VIE and recognized a gain of $6.1 million. The Company received net cash proceeds of $17.0 million and reduced consolidated assets and liabilities by $74.5 million and $63.6 million, respectively. The Company's net income for the year ended December 31, 2005 included a net loss of $0.8 million related to this VIE.

On June 30, 2004, the Company sold its interest in another consolidated VIE and recognized a gain of $9.7 million. The Company received net cash proceeds of $39.7 million and reduced consolidated assets and liabilities by $51.6 million and $21.9 million, respectively. The Company's net income related to this VIE for the year ended December 31, 2004, excluding the gain on the sale, was $7.1 million.

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)

(A Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)

For the years ended December 31, 2005, 2004 and 2003

1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

GENERAL (CONTINUED)

On December 31, 2003, Keyport Life Insurance Company ("Keyport") was merged with and into the Company with the Company as the surviving entity. Prior to the merger, the Company and Keyport were both indirect wholly-owned subsidiaries of SLC - U.S. Ops Holdings. The merger had no effect on the existing rights and benefits of policyholders and contractholders from either company. The Company is licensed and authorized to write all business that was previously written by the Keyport.

The merger was accounted for under Statement of Financial Accounting Standards ("SFAS") No. 141, "Business Combinations." Under SFAS No. 141, transfers of net assets and exchanges of shares between entities under common control are recorded at their carrying amounts at the date of transfer. The financial statements of prior periods have been restated to give effect to the merger as of November 1, 2001, the date on which the predecessor companies came under common control.

The following summarizes the results of operations and total assets as of and for the year ended December 31, 2003 (in 000's):

	Keyport	SLUS	Surviving Entity
Total revenues	$ 893,846	$ 625,903	$ 1,519,749
Total expenditures	764,596	624,426	1,389,022
Pre-tax income	129,250	1,477	130,727

Net income	$ 76,452	$ 18,539	$ 94,991

Total Assets	$ 21,132,604	$ 22,541,772	$ 43,674,376

BASIS OF PRESENTATION

The financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for stockholder-owned life insurance companies.

The consolidated financial statements include the accounts of the Company and its subsidiaries. As of December 31, 2005, the Company owned all of the outstanding shares of SLNY, Sun Life of Canada (U.S.) SPE 97-I, Inc. ("SPE 97-I"), Clarendon Insurance Agency, Inc. ("Clarendon"), SLF Private Placement Investment Company I, LLC ("Private Placement I"), Sun Parkaire Landing LLC ("Sun Parkaire"), 7101 France Avenue Manager, LLC ("France Avenue"), Independence Life and Annuity Company ("Independence Life"), and Sun Life of Canada (U.S.) Holdings General Partner LLC (the "General Partner"). During 2005, Sun Benefit Services Company, Inc., an inactive subsidiary, was dissolved.

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)

(A Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)

For the years ended December 31, 2005, 2004 and 2003

1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

The General Partner is the sole general partner in Sun Life of Canada (U.S.) Limited Partnership I (the "Partnership") and, as a result, the Partnership is consolidated with the results of the Company. The Partnership was established to purchase subordinated debentures issued by the Company's parent, SLC - U.S. Ops Holdings, and to issue partnership capital securities to an affiliated business trust, Sun Life of Canada (U.S.) Capital Trust I (the "Capital Trust").

In addition, the Company had consolidated a certain interest in a VIE. The consolidation of the VIE required the Company to report its minority interest relating to the equity ownership not controlled by the Company. The Company's interest in the VIE was sold on April 19, 2005.

All significant intercompany transactions have been eliminated in consolidation.

USE OF ESTIMATES

The preparation of financial statements in conformity with GAAP 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. The most significant estimates are those used in determining the fair value of financial instruments, goodwill, DAC, VOBA, the liabilities for future contract and policyholder benefits and other-than-temporary impairments of investments. Actual results could differ from those estimates.

FINANCIAL INSTRUMENTS

In the normal course of business, the Company enters into transactions involving various types of financial instruments, including cash equivalents, fixed maturity investments, mortgage loans, equity securities, off balance sheet financial instruments, debt, loan commitments and financial guarantees. These instruments involve credit risk and also may be subject to risk of loss due to interest rate fluctuation. The Company evaluates and monitors each financial instrument individually and, when appropriate, obtains collateral or other security to minimize losses.

CASH AND CASH EQUIVALENTS

Cash and cash equivalents primarily include cash, commercial paper, money market investments and short-term bank participations. All such investments have maturities of three months or less when purchased and are considered cash equivalents for purposes of reporting cash flows.

INVESTMENTS

The Company accounts for its investments in accordance with SFAS No. 115, "Accounting for Certain Investments in Debt and Equity Securities." At the time of purchase, fixed maturity securities are classified based on intent as either held-to-maturity, trading or available-for-sale. In order for the security to be classified as held-to-maturity, the Company must have positive intent and ability to hold the securities to maturity. Securities held-to-maturity are stated at cost, adjusted for amortization of premiums and accretion of discounts. Securities that are bought and held principally for the purpose of selling them in the near term are classified as trading. Trading securities are carried at aggregate fair value with changes in unrealized gains or losses reported as a component of net investment income. Securities that do not meet the held-to-maturity or trading criterion are classified as available-for-sale. Included with available for sale fixed maturities are mortgage backed securities in the To Be Announced form, ('TBA'). The Company records these purchases on trade date and the corresponding payable is recorded as an outstanding liability in the payable for investments purchased until the settlement date of the transaction. Available-for-sale securities are carried at fair value with the unrealized gains or losses reported in other comprehensive income.

Fair values for publicly traded securities are obtained from external market quotations. For privately placed fixed maturities, fair values are estimated by taking into account prices for publicly traded securities of similar credit risk, maturities repayment and liquidity characteristics. All security transactions are recorded on a trade date basis.

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)

(A Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)

For the years ended December 31, 2005, 2004 and 2003

1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
INVESTMENTS (CONTINUED)

The Company's accounting policy for impairment requires recognition of an other-than-temporary impairment write-down on a security if it is determined that the Company will be unable to recover all amounts due under the contractual obligation of the security. Once an impairment charge has been recorded, the Company continues to review the other-than-temporarily impaired security for additional impairment, if necessary. Other-than-temporary impairments are reported as a component of net realized investment gains (losses).

Mortgage loans are stated at unpaid principal balances, net of provisions for estimated losses. Mortgage loans acquired at a premium or discount are carried at amortized values net of provisions for estimated losses. Mortgage loans, which include primarily commercial first mortgages, are diversified by property type and geographic area throughout the United States. Mortgage loans are collateralized by the related properties and generally are no more than 75% of the property's value at the time that the original loan is made.

A loan is recognized as impaired when it is probable that the principal or interest is not collectible in accordance with the contractual terms of the loan. Measurement of impairment is based on the present value of expected future cash flows discounted at the loan's effective interest rate, or at the loan's observable market price. A specific valuation allowance is established if the fair value of the impaired loan is less than the recorded amount. Loans are also charged against the allowance when determined to be uncollectible. The allowance is based on a continuing review of the loan portfolio, past loss experience and current economic conditions, which may affect the borrower's ability to pay. While management believes that it uses the best information available to establish the allowance, future adjustments to the allowance may become necessary if economic conditions differ from the assumptions used in making the evaluation.

Real estate investments are held for the production of income or are held-for-sale. Real estate investments held for the production of income are carried at the lower of cost adjusted for accumulated depreciation or fair value. Depreciation of buildings and improvements is calculated using the straight-line method over the estimated useful life of the property, generally 40 to 50 years. Real estate investments held-for-sale are primarily acquired through foreclosure of mortgage loans. The cost of real estate that has been acquired through foreclosure is the estimated fair value less estimated costs to dispose at the time of foreclosure. Real estate investments are diversified by property type and geographic area throughout the United States.

Policy loans are carried at the amount of outstanding principal balance. Policy loans are collateralized by the related insurance policy and do not exceed the net cash surrender value of such policy.

Investments in private equity limited partnerships are accounted for on either the cost or equity method. The equity method of accounting is used for all partnerships in which the Company has an ownership interest in excess of 3%.

The Company uses derivative financial instruments including swaps, options and futures as a means of hedging exposure to interest rate, currency and equity price risk. Derivatives are carried at fair value and changes in fair value are recorded as a component of derivative income.

Realized gains and losses on the sales of investments are recognized in operations at the date of sale and are determined using the average cost method. When an impairment of a specific investment is determined to be other-than-temporary, a realized investment loss is recorded. Changes in the provision for estimated losses on mortgage loans and real estate are included in net realized investment gains and losses.

Interest income is recorded on the accrual basis. Investments are placed in a non-accrual status when management believes that the borrower's financial condition, after giving consideration to economic and business conditions and collection efforts, is such that collection of principal and interest is doubtful. When an investment is placed in non-accrual status, all interest previously accrued is reversed against current period interest income. Interest accruals are resumed on such investments only when the investments have performed on a sustained basis for a reasonable period of time and when, in the judgment of management, the investments are estimated to be fully collectible as to both principal and interest.

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)

(A Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)

For the years ended December 31, 2005, 2004 and 2003

1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

DEFERRED POLICY ACQUISITION COSTS

Acquisition costs consist of commissions, underwriting and other costs, which vary with and are primarily related to the production of new business. Acquisition costs related to investment-type contracts, primarily deferred annuity and GICs, and universal and variable life products are deferred and amortized with interest in proportion to the present value of estimated gross profits to be realized over the estimated lives of the contracts. Estimated gross profits are composed of net investment income, net realized investment gains and losses, life and variable annuity fees, surrender charges, interest credited, policyholder benefits and direct variable administrative expenses. This amortization is reviewed periodically and adjusted retrospectively when the Company revises actual profits and its estimate of future gross profits to be realized from this group of products, including realized and unrealized gains and losses from investments.

Although realization of DAC is not assured, the Company believes it is more likely than not that all of these costs will be realized. The amount of DAC considered realizable, however, could be reduced in the near term if the estimates of gross profits or total revenues discussed above are reduced.

DAC is also adjusted for amounts relating to the recognition of unrealized investment gains and losses. This adjustment, net of tax, is included with the change in net unrealized investment gains or losses that is credited or charged directly to accumulated other comprehensive income (loss). DAC was reduced by $12.8 million and $172.9 million at December 31, 2005 and 2004, respectively, to reflect unrealized gains and losses.

VALUE OF BUSINESS ACQUIRED

VOBA represents the actuarially-determined present value of projected future gross profits from policies in force at the date of their acquisition. This amount is amortized in proportion to the projected emergence of profits.

VOBA is also adjusted for amounts relating to the recognition of unrealized investment gains and losses. This adjustment, net of tax, is included with the change in net unrealized investment gains or losses that is credited or charged directly to accumulated other comprehensive income (loss). VOBA was decreased by $1.2 million and $48.2 million at December 31, 2005 and 2004, respectively, to account for unrealized investment gains and losses.

GOODWILL

Goodwill represents the difference between the purchase price paid and the fair value of the net assets acquired in connection with the acquisition of Keyport on November 1, 2001. In accordance with SFAS No. 142, "Goodwill and Other Intangible Assets," goodwill is tested for impairment on an annual basis. The Company completed the required impairment tests of goodwill and indefinite-lived intangible assets during the second quarter of 2005 and concluded that these assets were not impaired.

During 2004, the Company finalized tax periods that predated the acquisition of Keyport. In accordance with the Emerging Issues Task Force ("EITF") Issue No. 93-7, "Uncertainties Related to Income Taxes in a Purchase Business Combinations," adjustments upon resolution of income tax uncertainties that predate or result from a purchase business combination should be recorded as an increase or decrease to goodwill regardless of the time that has elapsed since the acquisition date. The Company reduced goodwill by $8.7 million in 2004 to record the difference between the estimated tax liability at the acquisition date and the final tax liability for closed tax years that predated the acquisition.

OTHER ASSETS

Property, equipment, leasehold improvements and capitalized software costs that are included in other assets are stated at cost, less accumulated depreciation and amortization. Depreciation and amortization are calculated using the straight-line or accelerated method over the estimated useful lives of the related assets, which generally range from 3 to 10 years.

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)

(A Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)

For the years ended December 31, 2005, 2004 and 2003

1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

OTHER ASSETS (CONTINUED)

Amortization of leasehold improvements is calculated using the straight-line method over the lesser of the term of the leases or the estimated useful life of the improvements. Intangible assets are also included in other assets.

Intangible assets acquired primarily consist of state insurance licenses that are not subject to amortization and of intangible assets related to product rights that have a weighted-average useful life of 7 years.

POLICY LIABILITIES AND ACCRUALS

Contractholder deposit funds consist of policy values that accrue to the holders of universal life-type contracts and investment-related products such as deferred annuities, single premium whole life policies ("SPWL") and GICs. The liabilities consist of deposits received plus interest credited, less accumulated policyholder charges, assessments and withdrawals. The liability is before the deduction of any applicable surrender charges.

Other policy liabilities include liabilities for policy and contract claims. These amounts consist of the estimated amount payable for claims reported but not yet settled and an estimate of claims incurred but not reported. The amount reported is based upon historical experience, adjusted for trends and current circumstances. Management believes that the recorded liability is sufficient to provide for the associated claims adjustment expenses. Revisions of these estimates are included in operations in the year such refinements are made.

Future contract and policy benefits are liabilities for traditional life, health and stop loss products. Such liabilities are established in amounts adequate to meet the estimated future obligations of policies in force. The liabilities associated with traditional life insurance and disability insurance products are computed using the net level premium method based on assumptions about future investment yields, mortality, morbidity and persistency. The assumptions used are based upon the Company's experience and industry standards.

The fair values of S&P 500 Index and other equity linked embedded derivatives are produced using standard derivative valuation techniques.

Guaranteed minimum accumulation benefits or withdrawal benefits are considered to be derivatives under SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities," and are recorded at fair value through earnings. The fair value of the embedded derivatives is calculated stochastically using risk neutral scenarios over a 50 year projection. Policyholder assumptions are based on experience studies and industry standards.

REVENUE AND EXPENSES

Premiums for traditional individual life products are considered earned revenue when due. Premiums related to group life, stop loss and group disability insurance are recognized as earned revenue pro-rata over the contract period. The unexpired portion of these premiums is recorded as unearned premiums. Revenue from universal life-type products and investment-related products includes charges for the cost of insurance (mortality), initiation and administration of the policy and surrender charges. Revenue is recognized when the charges are assessed except that any portion of an assessment that relates to services to be provided in future years is deferred and recognized over the period during which the services are provided.

Benefits and expenses related to traditional life, annuity and disability contracts, including group policies, are recognized when incurred in a manner designed to match them with related premium revenue and to spread income recognition over the expected life of the policy. For universal life-type and investment-type contracts, expenses include interest credited to policyholders' accounts and death benefits in excess of account values, which are recognized as incurred.

Fees from investment advisory services are recognized as revenues when the services are provided.

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)

(A Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)

For the years ended December 31, 2005, 2004 and 2003

1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
INCOME TAXES

For the years ended December 31, 2005 and 2004, the Company participated in a consolidated federal income tax return with SLC - US Ops Holdings and other affiliates. For the 2003 tax year, as in prior years, the Company participated in the consolidated federal income tax return with SLC - U.S. Ops Holdings and other affiliates. For 2003, Keyport filed a separate consolidated return with an affiliate, Independence Life.

Deferred income taxes are generally recognized when assets and liabilities have different values for financial statement and tax reporting purposes, and for other temporary taxable and deductible differences as defined by SFAS No. 109, "Accounting for Income Taxes." These differences primarily result from policy reserves, policy acquisition expenses and unrealized gains or losses on investments.

SEPARATE ACCOUNTS

The Company has established separate accounts applicable to various classes of contracts providing for variable benefits. Separate account assets are subject to general account claims only to the extent the value of such assets exceeds the separate account liabilities. Contracts for which funds are invested in separate accounts include variable life insurance and individual and group qualified and non-qualified variable annuity contracts. Investment income and changes in mutual fund asset values are allocated to policyholders and therefore do not affect the operating results of the Company. Assets held in the separate accounts are carried at fair value and the investment risk of such securities is retained by the contractholder. The Company earns separate account fees for providing administrative services and bearing the mortality risks related to these contracts. The activity of the separate accounts is not reflected in the financial statements except for: (1) the fees the Company receives, which are assessed on a daily or monthly basis and recognized as revenue when assessed and earned; and (2) the activity related to the guaranteed minimum death benefit ('GMDB'), guaranteed minimum income benefit ('GMIB'), guaranteed minimum accumulation benefit ('GMAB') and guaranteed minimum withdrawal benefit ('GMWB') are reflected in the Company's consolidated financial statements.

ACCOUNTING PRONOUNCEMENTS
New Accounting Pronouncements

In November of 2005, the FASB issued FASB Staff Position ("FSP") 115-1 and 124-1 "The Meaning of Other-Than-Temporary Impairments and its Application to Certain Investments." This FSP is effective for reporting periods beginning after December 15, 2005. The FSP addresses the determination as to when an investment is considered impaired, whether that impairment is other than temporary, and the measurement of the impairment loss. The statement also includes accounting guidance for periods subsequent to the recognition of an other-than-temporary impairment and requires certain disclosures about unrealized losses that have not been recognized as other-than-temporary impairments. Adoption of this FSP will not impact the methodology used by the Company to determine and measure impaired investments. See disclosure in Note 4.

In September of 2005, AICPA issued Statement of Position ("SOP") 05-1, "Accounting by Insurance Enterprises for Deferred Acquisition Costs in Connection with Modifications or Exchanges of Insurance Contracts." This SOP provides guidance on accounting by insurance companies for DAC on internal replacements other than those specifically described in SFAS No. 97, "Accounting and Reporting by Insurance Enterprises for Certain Long-Duration Contracts and for Realized Gains and Losses from the Sale of Investments." This SOP is effective for internal replacements occurring in fiscal years beginning after December 15, 2006. The Company is in the process of evaluating the provisions of the proposed SOP and its impact on the Company's financial position and results of operations.

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)

(A Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)

For the years ended December 31, 2005, 2004 and 2003

ACCOUNTING PRONOUNCEMENTS (CONTINUED)

In May of 2005, the Financial Accounting Standards Board (the "FASB") issued FASB Statement 154 "Accounting Changes and Error Corrections - a replacement of APB Opinion No. 20 and FASB Statement No. 3." This statement is effective for fiscal years beginning after December 15, 2005. This statement changes the requirements for the accounting and reporting of a change in accounting principle and applies to all voluntary changes in accounting principle. The statement eliminates the requirement in APB 20 to include the cumulative effect of a change in accounting in the income statement in the period of change and requires retrospective applications to prior periods' financial statements of changes in accounting principle, unless it is impracticable to determine either the specific period effects or the cumulative effect of the change. This statement applies to changes required by new accounting pronouncements only when the pronouncement does not include specific transition guidance. The Company will adopt this statement as required in 2006 and report any changes in accounting principle to be implemented in accordance with the requirements of the this pronouncement.

Other Accounting Pronouncements

On January 1, 2004, the Company adopted the American Institute of Certified Public Accountants' (the "AICPA") Statement of Position 03-1, "Accounting and Reporting by Insurance Enterprises for Certain Nontraditional Long-Duration Contracts and for Separate Accounts" ("SOP 03-1"). The major provisions of SOP 03-1 that affect the Company require:

l

Establishment of reserves primarily related to death benefit and income benefit guarantees provided under variable annuity contracts;

l

Deferral of sales inducements that meet certain criteria, and amortization using the same method used for DAC; and

l

Reporting and measuring the Company's interest in its separate accounts as investments.

See Footnote 12 for additional information regarding the impact of adoption.

Effective December 31, 2003, the Company adopted the disclosure requirements of EITF Issue No. 03-1, "The Meaning of Other-Than-Temporary Impairment and Its Application to Certain Investments." As a result, disclosures are required for unrealized losses on fixed maturity and equity securities accounted for under SFAS No. 115, "Accounting for Certain Investment in Debt and Equity Securities," that are classified as either available-for-sale or held-to-maturity.

The disclosure requirements include quantitative information regarding the aggregate amount of unrealized losses and the associated fair value of the investments in an unrealized loss position, segregated into time periods for which the investments have been in an unrealized loss position. EITF No. 03-1 also requires certain qualitative disclosures about holdings with unrealized losses in order to provide additional information that the Company considered in concluding that the unrealized losses were not other-than-temporary. For further discussion, see disclosures in Note 4.

In January 2003, the Financial Accounting Standards Board (the "FASB") issued Interpretation No. 46, "Consolidation of Variable Interest Entities" ("FIN No. 46"). In December 2003, the FASB issued a revised version of FIN 46 ("FIN 46R"), which incorporated a number of modifications and changes made to the original version. FIN 46R replaces the previously issued FIN No. 46 and, subject to certain special provisions, is effective no later than the first reporting period that ends after December 15, 2003 for entities considered to be special-purpose entities and no later than the end of the first reporting period that ends after March 15, 2004 for all other VIEs. Early adoption was permitted. The Company adopted FIN No. 46 and FIN 46R in the fourth quarter of 2003. Implementation of FIN No. 46 and FIN 46R resulted in the consolidation of two VIEs and increased total consolidated assets by $67.8 million at December 31, 2003. As required by FIN No. 46 and FIN 46R, the difference between the carrying amount of the assets and the fair value of the VIEs resulted in a cumulative effect of change in accounting principles, net of tax, of $7.5 million as of the date of adoption.

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)

(A Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)

For the years ended December 31, 2005, 2004 and 2003

ACCOUNTING PRONOUNCEMENTS (CONTINUED)

The Company has a greater than or equal to 20% involvement in eight VIEs at December 31, 2005. The Company is a creditor in five trusts, two limited liability companies and one special purpose entity that were used to finance commercial mortgages, franchise receivables, auto receivables and equipment used in utility generation. The Company's maximum exposure to loss related to all of these VIEs is the investments' carrying value, which was $40.2 million and $62.8 million at December 31, 2005 and 2004, respectively. The notes mature between February 2006 and December 2035. See Note 4 for additional information with respect to leveraged leases which is not included above.

Consolidated VIE's increased total consolidated assets by $64.3 million at December 31, 2004. The liabilities included a $33.5 million note issued in June 2000. The note will mature on June 1, 2012. The interest rate on the note is the three-month LIBOR plus 1.75% for the period from June 23, 2000 to December 1, 2005 and LIBOR for the period from December 1, 2005 to June 1, 2012. The Company's interests in the VIEs were sold on April 19, 2005 and June 30, 2004. Refer to disclosures in footnote 2 for further discussion on the sale of the VIE's.

2. MERGERS, ACQUISITIONS AND DISPOSITIONS

On December 31, 2004, SCA, a registered investment adviser and a wholly-owned subsidiary of the Company, was distributed in the form of a dividend to the Company's parent and became a consolidated subsidiary of SLC - U.S. Ops Holdings. As a result of this transaction, SCA is no longer the Company's wholly-owned subsidiary. As of December 31, 2004 and 2003, SCA's net assets were $8.1 million and $5.1 million, respectively. SCA's net income for the years ended December 31, 2004 and 2003, was $1.9 million and $0.7 million, respectively.

On June 30, 2004, the Company sold its interest in another consolidated VIE and recognized a gain of $9.7 million. The Company received net cash proceeds of $39.7 and reduced consolidated assets and liabilities by $51.6 million and $21.9 million, respectively. The Company's net income for the year ended December 31, 2004 includes net income of $7.1 million related to this VIE.

On December 31, 2003, Clarendon merged with an affiliate, Keyport Financial Services Corp ("KFSC")., with Clarendon as the surviving entity. KFSC was a wholly-owned subsidiary of Keyport.

On November 18, 2003, the Company sold its interest in its wholly-owned subsidiary, Vision Financial Corporation, for $1.5 million. A loss of approximately $1.0 million was realized on this transaction.

On April 1, 2003, Sun Life Financial Services Limited ("SLFSL"), a wholly-owned subsidiary of the Company, ceased operations and was liquidated during the fourth quarter of 2003. SLFSL served as marketing administrator for the distribution of offshore products offered by SLOC, an affiliate of the Company.

3. SIGNIFICANT TRANSACTIONS WITH AFFILIATES

Below is a summary of the affiliated transactions for those affiliates that are not consolidated within the Company.

The Company and its subsidiaries have management services agreements with SLOC which provides that SLOC will furnish, as requested, certain services and facilities on a cost-reimbursement basis. Expenses under these agreements amounted to approximately $11.3 million in 2005, $24.4 million in 2004, and $73.3 million in 2003. In accordance with a management service agreement between the Company and SLOC, the Company provides personnel and certain services to SLOC, as requested. Reimbursements under this agreement, which are recorded as a reduction of other operating expenses, were approximately $170.4 million, $136.8 million and $152.2 million for the years ended December 31, 2005, 2004 and 2003, respectively.

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)

(A Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)

For the years ended December 31, 2005, 2004 and 2003

3. SIGNIFICANT TRANSACTIONS WITH AFFILIATES (CONTINUED)

The Company has an administrative services agreement with SLC - U.S. Ops Holdings under which the Company provides administrative and investor services with respect to certain open-end management investment companies for which an affiliate, Massachusetts Financial Services Company ("MFS"), serves as the investment adviser, and which are offered to certain of the Company's separate accounts established in connection with the variable annuity contracts issued by the Company. Amounts received under this agreement amounted to approximately $23.4 million, $22.8 million and $21.3 million for the years ended December 31, 2005, 2004 and 2003, respectively.

The Company leases office space to SLOC under lease agreements with terms expiring in December 31, 2009 and options to extend the terms for each of twelve successive five year terms at fair market value of the fixed rent for the term, which is ending. Rent received by the Company under the leases amounted to approximately $10.6 million, $11.8 million, and $11.8 million in 2005, 2004 and 2003, respectively. Rental income is reported as a component of net investment income.

As more fully described in Note 8, the Company has been involved in several reinsurance transactions with SLOC.

On December 31, 2004, the Company received a $60.0 million capital contribution from its parent, SLC - U.S. Ops Holdings.

In 2004, the employees of the Company became participants in a restricted share unit ("RSU") plan with its indirect parent, SLF. Under the RSU plan, participants are granted units that are equivalent to one common share of SLF stock and have a fair market value of a common share of SLF stock on the date of grant. RSUs earn dividend equivalents in the form of additional RSUs at the same rate as the dividends on common shares of SLF stock. The redemption value, upon vesting, is the fair market value of an equal number of common shares of SLF stock. The Company incurred expenses of $7.0 million and $4.1 million relating to RSUs for the years ended December 31, 2005 and 2004, respectively.

In 2004, the employees of the Company became participants in a performance share unit ("PSU") plan with its indirect parent, SLF. Under the PSU plan, participants are granted units that are the equivalent to one SLF common share and have a fair market value of a SLF common share on the date of grant. PSUs earn dividend equivalents in the form of additional PSUs at the same rate as the dividends on SLF's common shares. No PSUs will vest or become payable unless SLF meets certain threshold targets with respect to specified performance targets. The plan provides for an enhanced payout if SLF achieves superior levels of performance to motivate participants to achieve a higher return for shareholders. Payments to participants are based on the number of PSUs earned multiplied by the market value of SLF's common shares at the end of a three-year performance period. The Company incurred expenses of $0.7 million and $0.3 million relating to PSUs for the years ended December 31, 2005 and 2004, respectively.

In 2005, the Company recorded a tax benefit of $7.0 million through paid-in-capital for stock options issued to employees of the Company during 2001 through 2005. The $7.0 million tax benefit is comprised of a $2.5 million tax benefit on expenses accrued at its indirect parent, SLF, and a $4.5 million adjustment to record the excess tax benefit over the recorded book expense for stock options exercised.

In 2003, the Company sold a $100.0 million note from MFS, an affiliate, to another affiliate, Sun Life (Hungary) Group Financing Limited Liability Company ("Sun Life (Hungary) LLC"), for approximately $109.1 million. The note was sold at a gain of $9.1 million.

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)

(A Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)

For the years ended December 31, 2005, 2004 and 2003

3. SIGNIFICANT TRANSACTIONS WITH AFFILIATES (CONTINUED)

On July 25, 2002, the Company issued a $380.0 million promissory note at 5.76% and an $80 million promissory note at 5.71%, both maturing June 30, 2012 to an affiliate, Sun Life (Hungary) LLC. The Company pays interest semi-annually to Sun Life (Hungary) LLC. The Company expensed $26.5 million for interest on these promissory notes for each of the years ended December 31, 2005, 2004 and 2003, respectively. The proceeds of the notes were used to purchase fixed rate government and corporate bonds.

At December 31, 2005 and 2004, the Company had $565.0 million of surplus notes issued to Sun Life Financial (U.S.) Finance, Inc., an affiliate of the Company. The Company expensed $42.6 million for interest on these surplus notes for each of the years ended December 31, 2005, 2004 and 2003, respectively.

At December 31, 2005 and 2004 the Company, through the Partnership, had $600 million of 8.526% partnership capital securities issued to the Capital Trust. The Company expensed $51.2 million for interest on these partnership capital securities for each of the years ended December 31, 2005, 2004 and 2003, respectively.

At December 31, 2005 and 2004 the Company, through the Partnership, owned $600 million of 8.526% subordinated notes issued by its parent, Sun Life of Canada (U.S.) Holdings, Inc. Interest earned on these notes was $51.2 million for each of the years ended December 31, 2005, 2004 and 2003, respectively.

In 2004 and 2003, the Company purchased a total of $140.0 million in promissory notes from MFS. The interest rates on these notes range from 2.988% to 3.512% and the terms are from 3-5 years. Interest earned for the years ended December 31, 2005, 2004 and 2003 was $4.2 million, $4.0 million and $0.6 million, respectively. As of December 31, 2005, the Company sold and transferred these notes to affiliates. On December 31, 2005, the Company sold notes with a par value of $90.0 million to an affiliate, Sun Life (Hungary) LLC, and recognized a loss of $3.3 million. On September 23, 2005, the Company transferred notes with a par value of $50.0 million to the Company's direct parent, Sun Life of Canada (U.S.) Holdings, Inc. as a dividend. The Company recognized a loss of $0.6 million on the transfer of the notes to Sun Life of Canada (U.S.) Holdings, Inc.

During the years ended December 31, 2005, 2004 and 2003, the Company paid $23.2 million, $35.0 million and $14.6 million, respectively, in commission fees to an affiliate, Sun Life Financial Distributors, Inc., ("SLFD"). In addition, the Company received fee income for administrative services provided to SLFD of $7.1 million, $5.9 million and $3.7 million for the years ended December 31, 2005, 2004 and 2003, respectively.

During the years ended December 31, 2005, 2004 and 2003, the Company paid $25.1 million, $45.1 million and $64.5 million, respectively, in commission fees to Independence Financial Marketing Group, Inc. ("IFMG"), an affiliate.

The Company has an administrative services agreement with SCA under which the Company provides administrative services with respect to certain open-end management investment companies for which SCA serves as the investment adviser, and which are offered to certain of the Company's separate accounts established in connection with the variable contracts issued by the Company. Amounts received under this agreement amounted to approximately $2.4 million for the year ended December 31, 2005. SCA was no longer a consolidated entity in 2005.

The Company paid $16.4 million for the year ended December 31, 2005, in investment management services fees to SCA, an affiliate and registered investment adviser, on a cost-reimbursement basis.

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)

(A Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)

For the years ended December 31, 2005, 2004 and 2003

3. SIGNIFICANT TRANSACTIONS WITH AFFILIATES (CONTINUED)

On June 3, 2005, the Company entered into a Terms Agreement (the "Terms Agreement") with its affiliates Sun Life Financial Global Funding, L.P. (the "Issuer"), Sun Life Financial Global Funding, U.L.C. (the "ULC") and Sun Life Financial Global Funding, L.L.C. (the "LLC"), and with Citigroup Global Markets, Inc. ("Citigroup"), Morgan Stanley & Co. Incorporated ("Morgan Stanley"), Banc of America Securities LLC, Credit Suisse First Boston LLC, J.P. Morgan Securities Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated and RBC Capital Markets Corporation (each, an "Initial Purchaser" and collectively, the "Initial Purchasers"), in connection with the offer and sale by the Issuer of $600.0 million of Series 2005-1 Floating Rate Notes due 2010 (the "First Tranche Notes"). The payment obligations of the Issuer under the First Tranche Notes are unconditionally guaranteed by the LLC pursuant to a guarantee (the "Secured Guarantee") dated as of June 10, 2005, and the obligations of the LLC under the Secured Guarantee are secured by a floating rate funding agreement issued by the Company to the LLC on the same date. In addition, the Company issued a $100.0 million floating rate demand note payable to the LLC on the same date. The Terms Agreement incorporates by reference the provisions of a Purchase Agreement dated as of November 11, 2004 (the "Purchase Agreement") by and among the Issuer, the ULC, the LLC, the Company and all of the Initial Purchasers. Pursuant to these incorporated provisions, the Company has agreed, among other things, to indemnify each Initial Purchaser against certain securities law liabilities related to the offering of the First Tranche Notes. The Company expensed $2.3 million for interest on the demand note for the year ended December 31, 2005.

On June 29, 2005, the Company entered into a Second Terms Agreement (the "Second Terms Agreement") with the Issuer, the ULC, the LLC, Citigroup and Morgan Stanley, in connection with the offer and sale by the Issuer of $300.0 million of Series 2005-1-2 Floating Rate Notes due 2010 (the "Second Tranche Notes"). The payment obligations of the Issuer under the Second Tranche Notes are unconditionally guaranteed by the LLC pursuant to the Secured Guarantee, and the obligations of the LLC under the Secured Guarantee with respect to the Second Tranche Notes are secured by a floating rate funding agreement issued by the Company to the LLC on July 5, 2005. The Second Terms Agreement incorporates by reference the provisions of the Purchase Agreement. Pursuant to these incorporated provisions, the Company has agreed, among other things, to indemnify Citigroup and Morgan Stanley, against certain securities law liabilities related to the offering of the Second Tranche Notes.

The Company has entered into two interest rate swap agreements with the LLC with an aggregate notional amount of $900.0 million that effectively convert the floating rate payment obligations under the funding agreement to fixed rate obligations.

Management believes inter-company revenues and expenses are calculated on a reasonable basis; however, these amounts may not necessarily be indicative of the costs that would be incurred if the Company operated on a stand-alone basis.

The following table lists the details of notes due to affiliates at December 31, 2005 (in 000's):

Payees

Type

Rate

Maturity

Principal

Interest Expense

Sun Life Financial (U.S.) Finance, Inc.

Surplus

8.625%

11/06/27

$ 250,000

$ 21,563

Sun Life Financial (U.S.) Finance, Inc.

Surplus

6.150%

12/15/27

150,000

9,225

Sun Life Financial (U.S.) Finance, Inc.

Surplus

7.250%

12/15/15

150,000

10,875

Sun Life Financial (U.S.) Finance, Inc.

Surplus

6.125%

12/15/15

7,500

459

Sun Life Financial (U.S.) Finance, Inc.

Surplus

6.150%

12/15/27

7,500

461

Sun Life (Hungary) LLC

Promissory

5.760%

06/30/12

380,000

21,888

Sun Life (Hungary) LLC

Promissory

5.710%

06/30/12

80,000

4,568

Sun Life Financial Global Funding, L.L.C.

Demand

LIBOR plus 35

100,000

2,279

$ 1,125,000

$ 71,318

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)

(A Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)

For the years ended December 31, 2005, 2004 and 2003

4. INVESTMENTS
Fixed Maturities

The amortized cost and fair value of fixed maturities at December 31, 2005, was as follows:

Gross

Gross

Estimated

Amortized

Unrealized

Unrealized

Fair

Cost

Gains

Losses

Value

Available-for-sale fixed maturities:

Asset Backed and Mortgage Backed Securities

$ 5,234,792

$ 40,958

$ (74,124)

$ 5,201,626

Foreign Government & Agency Securities

86,360

2,965

(64)

89,261

States & Political Subdivisions

742

24

-

766

U.S. Treasury & Agency Securities

449,877

4,773

(4,286)

450,364

Corporate securities:

Basic Industry

228,782

6,192

(3,384)

231,590

Capital Goods

602,974

20,310

(4,507)

618,777

Communications

1,285,638

32,582

(24,476)

1,293,744

Consumer Cyclical

1,321,417

16,741

(62,470)

1,275,687

Consumer Noncyclical

548,636

16,985

(6,206)

559,415

Energy

445,207

15,281

(2,225)

458,264

Finance

3,167,168

50,719

(28,844)

3,189,043

Industrial Other

246,421

9,913

(1,029)

255,305

Technology

49,288

853

(1,127)

49,014

Transportation

409,812

17,786

(7,739)

419,859

Utilities

1,543,713

54,264

(13,544)

1,584,433

Total Corporate

9,849,056

241,626

(155,551)

9,935,131

Total available-for-sale fixed maturities

$ 15,620,827

$ 290,346

$ (234,025)

$ 15,677,148

Held-to-maturity fixed maturities:

Sun Life of Canada (U.S.) Holdings, Inc.,

8.526% subordinated debt, due 2027

$ 600,000

$ 45,755

$ -

$ 645,755

Total held-to-maturity fixed maturities

$ 600,000

$ 45,755

$ -

$ 645,755

Amortized

Gross

Gross

Estimated

Cost

Gains

Losses

Fair Values

Trading fixed maturities:

Asset Backed and Mortgage Backed Securities

$ 209,548

$ 1,915

$ (3,776)

$ 207,687

Foreign Government & Agency Securities

19,516

-

(136)

19,380

Corporate securities:

Basic Industry

8,649

783

-

9,432

Capital Goods

15,651

751

-

16,402

Communications

343,647

3,607

(8,542)

338,712

Consumer Cyclical

246,522

2,615

(6,160)

242,977

Consumer Noncyclical

84,411

712

(2,370)

82,753

Energy

27,675

3,187

-

30,862

Finance

713,043

13,996

(8,285)

718,754

Industrial Other

47,464

798

(928)

47,334

Technology

3,801

82

-

3,883

Transportation

60,950

2,588

(4,696)

58,842

Utilities

201,885

8,244

(2,299)

207,830

Total Corporate

1,753,698

37,363

(33,280)

1,757,781

Total trading fixed maturities

$ 1,982,762

$ 39,278

$ (37,192)

$ 1,984,848

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)

(A Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)

For the years ended December 31, 2005, 2004 and 2003

4. INVESTMENTS (CONTINUED)

The amortized cost and fair value of fixed maturities at December 31, 2004, was as follows:

Gross

Gross

Estimated

Amortized

Unrealized

Unrealized

Fair

Cost

Gains

Losses

Value

Available-for-sale fixed maturities:

Asset Backed and Mortgage Backed Securities

$ 5,250,374

$ 106,024

$ (33,560)

$ 5,322,838

Foreign Government & Agency Securities

99,771

4,789

(21)

104,539

States & Political Subdivisions

1,212

50

-

1,262

U.S. Treasury & Agency Securities

573,446

12,539

(1,174)

584,811

Subordinated notes from affiliate

140,000

-

-

140,000

Corporate securities:

Basic Industry

298,352

16,577

(1,649)

313,280

Capital Goods

667,459

38,995

(1,429)

705,025

Communications

1,428,598

61,135

(7,811)

1,481,922

Consumer Cyclical

1,341,480

51,605

(2,935)

1,390,150

Consumer Noncyclical

512,153

30,345

(367)

542,131

Energy

527,782

27,370

(711)

554,441

Finance

2,979,627

92,043

(14,145)

3,057,525

Industrial Other

311,829

11,198

(1,522)

321,505

Technology

57,867

2,774

(569)

60,072

Transportation

526,567

25,104

(9,549)

542,122

Utilities

1,490,795

83,231

(2,662)

1,571,364

Total Corporate

10,142,509

440,377

(43,349)

10,539,537

Total available-for-sale fixed maturities

$ 16,207,312

$ 563,779

$ (78,104)

$16,692,987

Held-to-maturity fixed maturities:

Sun Life of Canada (U.S.) Holdings, Inc.,

8.526% subordinated debt, due 2027

$ 600,000

$ 89,132

$ -

$ 689,132

Total held-to-maturity fixed maturities

$ 600,000

$ 89,132

$ -

$ 689,132

Amortized

Gross

Gross

Estimated

Cost

Gains

Losses

Fair Values

Trading fixed maturities:

Asset Backed and Mortgage Backed Securities

$ 121,729

$ 4,427

$ (1,051)

$ 125,105

Foreign Government & Agency Securities

6,313

711

(11)

7,013

Corporate securities:

Basic Industry

31,844

2,363

-

34,207

Capital Goods

48,839

2,939

-

51,778

Communications

177,288

10,753

(300)

187,741

Consumer Cyclical

198,733

10,684

(159)

209,258

Consumer Noncyclical

23,344

1,209

(13)

24,540

Energy

35,714

4,987

-

40,701

Finance

453,387

25,198

(973)

477,612

Industrial Other

46,089

3,034

(189)

48,934

Technology

3,802

302

-

4,104

Transportation

63,291

5,453

(3,107)

65,637

Utilities

198,245

16,154

(1)

214,398

Total Corporate

1,280,576

83,076

(4,742)

1,358,910

Total trading fixed maturities

$ 1,408,618

$ 88,214

$ (5,804)

$ 1,491,028

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)

(A Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)

For the years ended December 31, 2005, 2004 and 2003

4. INVESTMENTS (CONTINUED)

The amortized cost and estimated fair value by maturity periods for fixed maturity investments are shown below. Actual maturities may differ from contractual maturities on asset-backed securities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

December 31, 2005

Amortized
Cost

Estimated
Fair Value

Maturities of available-for-sale fixed securities:

Due in one year or less

$ 453,294

$ 453,070

Due after one year through five years

2,529,687

2,535,451

Due after five years through ten years

4,333,947

4,350,783

Due after ten years

3,069,107

3,136,218

Subtotal - Maturities available-for-sale

10,386,035

10,475,522

Asset-backed securities

5,234,792

5,201,626

Total Available-for-sale

$ 15,620,827

$ 15,667,148

Maturities of trading fixed securities:

Due in one year or less

$ 89,749

$ 90,981

Due after one year through five years

503,839

505,854

Due after five years through ten years

994,999

984,407

Due after ten years

184,627

195,920

Subtotal - Maturities of trading

1,773,214

1,777,162

Asset-backed securities

209,548

207,686

Total Trading

$ 1,982,762

$ 1,984,848

Maturities of held-to-maturity fixed securities:

Due after ten years

$ 600,000

$ 645,755

Gross gains of $61.0 million, $152.5 million and $196.4 million and gross losses of $38.9 million, $45.4 million and $44.9 million were realized on the voluntary sale of fixed maturities for the years ended December 31, 2005, 2004 and 2003, respectively.

Fixed maturities with an amortized cost of approximately $10.9 million and $10.9 million at December 31, 2005 and 2004, respectively, were on deposit with federal and state governmental authorities as required by law.

The Company had unfunded commitments with respect to funding of limited partnerships of approximately $71.3 million and $91.1 million at December 31, 2005 and 2004, respectively.

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)

(A Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)

For the years ended December 31, 2005, 2004 and 2003

4. INVESTMENTS (CONTINUED)

As of December 31, 2005 and 2004, 94.7% and 95.7%, respectively, of the Company's fixed maturities were investment grade. Investment grade securities are those that are rated "BBB" or better by nationally recognized statistical rating organizations. During 2005, 2004 and 2003, the Company incurred realized losses totaling $29.7 million, $32.5 million and $62.8 million, respectively, for other-than-temporary impairment of value of some of its fixed maturities after determining that not all of the unrealized losses were temporary in nature.

The Company has discontinued accruing income on several of its holdings for issuers that are in default. The termination of accrual accounting on these holdings reduced previously accrued income by $1.7 million, $7.0 million and $10.1 million for the years ended December 31, 2005, 2004 and 2003, respectively. The fair market value of these investments was $24.4 million, $29.8 million and $80.8 million for the years ended December 31, 2005, 2004 and 2003, respectively.

The following table provides the fair value and gross unrealized losses of the Company's available-for-sale fixed maturities investments, which were deemed to be temporarily impaired, aggregated by investment category, industry sector and length of time that individual securities have been in an unrealized loss position, at December 31, 2005:

	Less Than Twelve Months			Twelve Months Or More		Total
Corporate Securities
	Fair Value	Gross Unrealized Losses	Fair Value		Gross Unrealized Losses		Fair Value	Gross Unrealized Losses
Basic Industry	$ 62,351	$ (1,334)	$ 47,710		$ (2,050)		$ 110,061	$ (3,384)
Capital Goods	37,622	(476)	172,069		(4,031)		209,691	(4,507)
Communications	207,469	(12,291)	284,749		(12,185)		492,218	(24,476)
Consumer Cyclical	475,628	(31,554)	352,308		(30,916)		827,936	(62,470)
Consumer Noncyclical	82,655	(3,602)	116,271		(2,604)		198,926	(6,206)
Energy	44,087	(739)	56,103		(1,486)		100,190	(2,225)
Finance	754,646	(13,576)	685,785		(15,268)		1,440,431	(28,844)
Industrial Other	12,450	(535)	17,657		(494)		30,107	(1,029)
Technology	18,971	(829)	6,703		(298)		25,674	(1,127)
Transportation	64,664	(2,987)	95,889		(4,752)		160,553	(7,739)
Utilities	138,031	(3,438)	444,299		(10,106)		582,330	(13,544)

Total Corporate	1,898,574	(71,361)	2,279,543		(84,190)		4,178,117	(155,551)

Non-Corporate
Asset Backed and Mortgage Backed Securities	1,965,773	(43,011)	1,240,823		(31,113)		3,206,596	(74,124)
Foreign Government & Agency Securities	1,002	(3)	19,118		(61)		20,120	(64)
U.S. Treasury & Agency Securities	56,051	(633)	216,469		(3,653)		272,520	(4,286)

Total Non-Corporate	2,022,826	(43,647)	1,476,410		(34,827)		3,499,236	(78,474)

Grand Total	$ 3,921,400	$ (115,008)	$ 3,755,953		$ (119,017)		$ 7,677,353	$ (234,025)

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)

(A Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)

For the years ended December 31, 2005, 2004 and 2003

4. INVESTMENTS (CONTINUED)

	Less Than Twelve Months			Twelve Months Or More		Total
Corporate Securities
	Fair Value	Gross Unrealized Losses	Fair Value		Gross Unrealized Losses		Fair Value	Gross Unrealized Losses
Basic Industry	$ 30,787	$ (461)	$ 23,104		$ (1,188)		$ 53,891	$ (1,649)
Capital Goods	119,885	(938)	14,733		(491)		134,618	(1,429)
Communications	196,250	(4,153)	83,702		(3,658)		279,952	(7,811)
Consumer Cyclical	221,428	(2,478)	10,620		(457)		232,048	(2,935)
Consumer Noncyclical	60,192	(367)	-		-		60,192	(367)
Energy	26,575	(372)	7,100		(339)		33,675	(711)
Finance	693,913	(8,606)	146,825		(5,539)		840,738	(14,145)
Industrial Other	95,881	(938)	20,346		(584)		116,227	(1,522)
Technology	25,431	(569)	-		-		25,431	(569)
Transportation	39,596	(367)	95,630		(9,182)		135,226	(9,549)
Utilities	209,995	(1,965)	33,919		(697)		243,914	(2,662)

Total Corporate	1,719,933	(21,214)	435,979		(22,135)		2,155,912	(43,349)

Non-Corporate
Asset Backed and Mortgage Backed Securities	1,358,934	(11,026)	283,699		(22,534)		1,642,633	(33,560)
Foreign Government & Agency Securities	2,459	(21)	-		-		2,459	(21)
U.S. Treasury & Agency Securities	233,308	(1,174)	-		-		233,308	(1,174)

Total Non-Corporate	1,594,701	(12,221)	283,699		(22,534)		1,878,400	(34,755)

Grand Total	$ 3,314,634	$ (33,435)	$ 719,678		$ (44,669)		$ 4,034,312	$ (78,104)

The Company has a comprehensive process in place to identify potential problem securities that could have an impairment that is other-than-temporary. At the end of each quarter, all securities with an unrealized loss for more than six months are reviewed. An analysis is undertaken to determine whether this decline in market value is other-than-temporary. The Company's process focuses on issuer operating performance and overall industry and market conditions. Any deterioration in operating performance is assessed relative to the impact on financial ratios including leverage and coverage measures specific to an industry and relative to any investment covenants.

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)

(A Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)

For the years ended December 31, 2005, 2004 and 2003

4. INVESTMENTS (CONTINUED)

The Company's analysis also assesses each issuer's ability to service its debts in a timely fashion, the length of time the security has been in an unrealized loss position, rating agency actions, and any other key developments as well as the Company's intention, if any, to dispose of its position. The Company has a Credit Committee that includes members from its investment, finance and actuarial functions. The committee meets and reviews the results of the Company's impairment analysis on a quarterly basis.

The following table provides the number of securities with gross unrealized losses, which were deemed to be temporarily impaired, at December 31, 2005 (not in thousands):

	Number of Securities Less Than Twelve Months	Number of Securities Twelve Months Or More	Total Number of Securities
Corporate Securities

Basic Industry	17	7	24
Capital Goods	6	18	24
Communications	46	44	90
Consumer Cyclical	71	40	111
Consumer Noncyclical	23	18	41
Energy	9	14	23
Finance	113	81	194
Industrial Other	1	6	7
Technology	2	1	3
Transportation	17	43	60
Utilities	32	42	74

Total Corporate	337	314	651

Non-Corporate
Asset Backed and Mortgage Backed Securities	696	353	1,049
Foreign Government & Agency Securities	1	2	3
U.S. Treasury & Agency Securities	16	32	48

Total Non-Corporate	713	387	1,100

Grand Total	1,050	701	1,751

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)

(A Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)

For the years ended December 31, 2005, 2004 and 2003

4. INVESTMENTS (CONTINUED)

The following table provides the number of securities with gross unrealized losses, which were deemed to be temporarily impaired, at December 31, 2004 (not in thousands):

	Number of Securities Less Than Twelve Months	Number of Securities Twelve Months Or More	Total Number of Securities
Corporate Securities

Basic Industry	6	2	8
Capital Goods	6	6	12
Communications	18	11	29
Consumer Cyclical	20	1	21
Consumer Noncyclical	8	0	8
Energy	4	2	6
Finance	62	14	76
Industrial Other	5	3	8
Technology	1	0	1
Transportation	36	31	67
Utilities	15	7	22

Total Corporate	181	77	258

Non-Corporate
Asset Backed and Mortgage Backed Securities	278	91	369
Foreign Government & Agency Securities	2	0	2
U.S. Treasury & Agency Securities	27	0	27

Total Non-Corporate	307	91	398

Grand Total	488	168	656

Mortgage Loans and Real Estate

The Company invests in commercial first mortgage loans and real estate throughout the United States. Investments are diversified by property type and geographic area. Mortgage loans are collateralized by the related properties and generally are no more than 75% of the property's value at the time that the original loan is made. Real estate investments classified as held-for-sale have been obtained primarily through foreclosure.

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)

(A Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)

For the years ended December 31, 2005, 2004 and 2003

4. INVESTMENTS (CONTINUED)

Mortgage Loans and Real Estate (continued)

The carrying value of mortgage loans and real estate investments, net of applicable reserves and accumulated depreciation, was as follows:

		December 31,
		2005	2004

Total mortgage loans		$ 1,739,370	$ 1,465,896

Real estate:
	Held-for-sale	-	628
	Held for production of income	170,510	167,511
Total real estate		$ 170,510	$ 168,139

Accumulated depreciation on real estate was $23.0 million and $19.1 million at December 31, 2005 and 2004, respectively.

The Company monitors the condition of the mortgage loans in its portfolio. In those cases where mortgages have been restructured, values are impaired or values are impaired but mortgages are performing, appropriate allowances for losses have been made. The Company has restructured mortgage loans, impaired mortgage loans and impaired-but-performing mortgage loans totaling $12.6 million and $16.5 million at December 31, 2005 and 2004, respectively, against which there are allowances for losses of $6.3 million and $7.6 million, respectively.

Activity for the investment valuation allowances was as follows:

Balance at

Balance at

January 1,

Additions

Subtractions

December 31,

2005

Mortgage loans

$ 7,646

$ 800

$ (2,174)

$ 6,272

2004

Mortgage loans

$ 6,365

$ 1,530

$ (249)

$ 7,646

Mortgage loans and real estate investments comprise the following property types and geographic regions at December 31:

2005

2004

Property Type:

Office building

$ 703,927

$ 620,273

Residential

87,874

89,831

Retail

751,041

619,021

Industrial/warehouse

264,567

237,020

Other

108,743

75,536

Valuation allowances

(6,272)

(7,646)

Total

$ 1,909,880

$ 1,634,035

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)

(A Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)

For the years ended December 31, 2005, 2004 and 2003

4. INVESTMENTS (CONTINUED)

2005

2004

Geographic region:

Alabama

$ 8,070

$ 408

Arizona

48,113

45,753

California

144,829

137,387

Colorado

33,238

33,096

Connecticut

30,026

32,973

Delaware

15,194

15,847

Florida

140,592

116,327

Georgia

80,802

78,360

Illinois

23,118

10,473

Indiana

19,950

16,203

Kentucky

25,623

15,015

Louisiana

32,186

21,531

Maryland

64,724

57,323

Massachusetts

142,421

137,535

Michigan

6,799

8,719

Minnesota

53,157

46,341

Missouri

34,567

32,323

Nebraska

7,948

5,368

Nevada

7,509

8,055

New Jersey

36,042

31,943

New Mexico

7,386

7,633

New York

240,390

232,312

North Carolina

43,111

39,831

Ohio

128,525

93,896

Oregon

11,968

6,391

Pennsylvania

118,709

102,767

Tennessee

32,430

26,714

Texas

211,889

136,237

Utah

29,718

28,528

Virginia

17,386

18,378

Washington

73,326

68,389

Wisconsin

19,494

4,658

All other

26,912

24,967

Valuation allowances

(6,272)

(7,646)

Total

$ 1,909,880

$ 1,634,035

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)

(A Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)

For the years ended December 31, 2005, 2004 and 2003

4. INVESTMENTS (CONTINUED)

At December 31, 2005, scheduled mortgage loan maturities were as follows:

2006

$ 11,745

2007

52,697

2008

45,809

2009

42,455

2010

72,676

Thereafter

1,513,988

Total

$ 1,739,370

Actual maturities could differ from contractual maturities because borrowers may have the right to prepay obligations with or without prepayment penalties and loans may be refinanced.

The Company has made commitments of mortgage loans on real estate and other loans into the future. The outstanding commitments for these mortgages amount to $115.8 million and $54.0 million at December 31, 2005 and 2004, respectively.

During 2004 and 2003, the Company sold commercial mortgage loans in securitization transactions. The mortgages were primarily sold to qualified special purpose entities that were established for the purpose of purchasing the assets and issuing trust certificates. In these transactions, the Company retained investment tranches, which are considered available-for-sale securities, in addition to servicing rights. The securitizations are structured so that investors have no recourse to the Company's other assets for failure of debtors to pay when due. The value of the Company's retained interests are subject to credit and interest rate risk on the transferred financial assets. The Company recognized pre-tax gains of $3.0 million and $24.6 million for its 2004 and 2003 securitization transactions, respectively. The Company did not sell any commercial mortgage loans in securitization transactions in 2005.

The tranches retained through the 2004 securitization, were considered interest only strips ("I/O"). Key economic assumptions used in measuring the retained interests at the date of securitization resulting from securitizations completed during the year ended December 31, 2004 were as follows:

Exeter I/O

Fairfield I/O

Prepayment speed

-

-

Weighted average life in years

5.72-5.92

2.89-8.74

Expected credit losses

-

-

Residual cash flows discount rate

4.80%-4.84%

4.43%-5.28%

Treasury rate interpolated for average life

3.35%-3.39%

3.18%-4.03%

Spread over treasuries

1.45%

1.25%

Duration in years

6.64-10.14

1.45-4.92

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)

(A Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)

For the years ended December 31, 2005, 2004 and 2003

4. INVESTMENTS (CONTINUED)

Key economic assumptions and the sensitivity of the current fair value of cash flows in those assumptions at December 31, 2005 were as follows:

Exeter I/O

Fairfield I/O

Amortized cost of retained

Interests

$ 775

$ 719

Fair value of retained interests

841

674

Weighted average life in years

2.32-2.96

1.00-4.36

Expected Credit Losses

Fair value of retained interest as a result of a .20% of adverse change

785

621

Fair value of retained interest as a result of a .30% of adverse change

757

595

Residual Cash flows Discount Rate

Fair value of retained interest as a result of a 10% of adverse change

839

672

Fair value of retained interest as a result of a 20% of adverse change

837

670

The outstanding principal amount of the securitized commercial mortgage loans was $873.2 million at December 31, 2005, none of which were 60 days or more past due. There were no net credit losses incurred relating to the securitized commercial mortgage loans at the dates of securitization through December 31, 2005.

The tranches retained through the 2003 securitization were subordinated secured notes. Key economic assumptions used in measuring the retained interests at the dates of securitizations completed during the year ended December 31, 2003 were as follows:

Commercial Mortgages

Prepayment speed

-

Weighted average life in years

14.123-14.84

Expected credit losses

-

Residual cash flows discount rate

5.65%-5.92%

Treasury rate interpolated for average life

4.37%-4.40%

Spread over treasuries

1.28%-1.52%

Duration in years

20.46-20.66

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)

(A Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)

For the years ended December 31, 2005, 2004 and 2003

4. INVESTMENTS (CONTINUED)

Key economic assumptions and the sensitivity of the current fair value of cash flows in those assumptions at December 31, 2005 were as follows:

Commercial Mortgages

Amortized cost of retained

Interests

$ 15,511

Fair value of retained interests

17,538

Weighted average life in years

13.69-14.10

Expected Credit Losses

Fair value of retained interest as a result of a .20% of adverse change

17,528

Fair value of retained interest as a result of a .30% of adverse change

17,522

Residual Cash flows Discount Rate

Fair value of retained interest as a result of a 10% of adverse change

16,868

Fair value of retained interest as a result of a 20% of adverse change

16,231

The outstanding principal amount of the securitized commercial mortgage loans was $363.9 million at December 31, 2005, none of which were 60 days or more past due. There were no net credit losses incurred relating to the securitized commercial mortgage loans at the date of securitization through December 31, 2005.

Securities Lending

The Company is engaged in certain securities lending transactions, which require the borrower to provide collateral on a daily basis, in amounts in excess of 102% of the fair value of the applicable securities loaned. The Company maintains effective control over all loaned securities and, therefore, continues to report such loaned securities as fixed maturities in its consolidated balance sheet.

Cash collateral received on securities lending transactions is reflected in other invested assets with an offsetting liability recognized in other liabilities for the obligation to return the collateral. The fair value of collateral held and included in other invested assets was $495.7 million and $735.7 million at December 31, 2005 and 2004, respectively.

Leveraged Leases

The Company is a lessor in a leveraged lease agreement entered into on October 21, 1994, under which equipment having an estimated economic life of 25-40 years was originally leased for a term of 9.78 years. During 2001, the lease term was extended until 2010. The Company's equity investment in this VIE represented 8.33% of the partnership that provided 22.9% of the purchase price of the equipment. The balance of the purchase price was furnished by third-party long-term debt financing, collateralized by the equipment, and is non-recourse to the Company. At the end of the lease term, the master lessee may exercise a fixed price purchase option to purchase the equipment. The leveraged lease is included as a part of other invested assets.

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)

(A Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)

For the years ended December 31, 2005, 2004 and 2003

4. INVESTMENTS (CONTINUED)

The Company's net investment in the leveraged lease is composed of the following elements:

Year ended December 31,

2005

2004

Lease contract receivable

$ 25,914

$ 31,803

Less: non-recourse debt

(1,410)

(1,415)

Net Receivable

24,504

30,388

Estimated value of leased assets

21,420

21,420

Less: unearned and deferred income

(9,178)

(11,928)

Investment in leveraged leases

36,746

39,880

Less: fees

(138)

(138)

Net investment in leveraged leases

$ 36,608

$ 39,742

Derivatives

The Company uses derivative financial instruments for risk management purposes to hedge against specific interest rate risk, to alter investment rate exposures arising from mismatches between assets and liabilities, and to minimize the Company's exposure to fluctuations in interest rates, foreign currency exchange rates and general market conditions. The Company does not hold or issue any derivative instruments for trading purposes.

As a component of its investment strategy and to reduce its exposure to interest rate risk, the Company utilizes interest rate swap agreements. Interest rate swap agreements are agreements to exchange with a counter-party interest rate payments of differing character (e.g., fixed-rate payments exchanged for variable-rate payments) based on an underlying principal balance (notional principal) as an economic hedge against interest rate changes. No cash is exchanged at the outset of the contract and no principal payments are made by either party. A single net payment is usually made by one counter-party at each interest payment date. The net payment is recorded as a component of derivative income (loss). Because the underlying principal is not exchanged, the Company's maximum exposure to counter-party credit risk is the difference in payments exchanged. The fair value of swap agreements is included with derivative instruments - receivable (positive position) or derivative instruments - payable (negative position) in the accompanying balance sheet.

The Company utilizes payer swaptions to hedge exposure to interest rate risk. Swaptions give the buyer the option to enter into an interest rate swap per the terms of the original swaption agreement. A premium is paid on settlement date and no further cash transactions occur until the positions expire. The swaptions have a physical settlement at expiration for which an interest rate swap becomes effective. Swaptions are carried at fair value which is included in derivative instruments - receivable (positive position) in the accompanying balance sheet and the change in value is offset to derivative income.

The Company utilizes over-the-counter ("OTC") put options and exchange traded futures on the Standard & Poor's 500 Composite Stock Price Index ("S&P 500 Index") ("S&P", "S&P 500", and "Standard & Poor's" are trademarks of The McGraw Hill Companies, Inc. and have been licensed for use by the Company) and other indexes to hedge against stock market exposure inherent in the mortality and expense risk charges and GMDB and living benefit features of the Company's variable annuities. The Company also purchases OTC call options on the S&P 500 Index to economically hedge its obligation under certain fixed annuity contracts. Options are carried at fair value and are included with derivative instruments - receivable in the Company's balance sheet.

Standard & Poor's indexed futures contracts are entered into for purposes of hedging equity-indexed products. The interest credited on these 1, 5, 7 and 10 year term products is based on the changes in the S&P 500 Index. On trade date, an initial cash margin is exchanged. Daily cash is exchanged to settle the daily variation margin and the offset is recorded in derivative income.

The Company issued annuity contracts and GICs that contain a derivative instrument that is "embedded" in the contract. Upon issuing the contract, the embedded derivative is separated from the host contract (annuity contract or GIC) and is carried at fair value.

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)

(A Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)

For the years ended December 31, 2005, 2004 and 2003

4. INVESTMENTS (CONTINUED)

From the second quarter in 2000 until the second quarter in 2002, the Company marketed GICs to unrelated third parties. Each transaction is highly-individualized but typically involves the issuance of foreign currency denominated contracts backed by cross currency swaps or equity-linked cross currency swaps. The combination of the currency swaps with interest rate swaps allows the Company to lock in U.S. dollar fixed rate payments for the life of the contract.

Included in derivative gains (losses) are gains on the translation of foreign currency denominated GIC liabilities of $197.1 million for the year ended December 31, 2005, and losses of ($83.3) million and ($158.6) million for the years ended December 31, 2004 and 2003, respectively.

Beginning in the second quarter 2005, the Company marketed GICs to unrelated third parties and entered into funding agreements and interest rate swaps as part of this guaranteed investment program. The interest rate swaps allow the Company to lock in U.S. dollar fixed rate payments for the life of the contracts.

The Company does not employ hedge accounting. The Company believes that its derivatives provide economic hedges and the cost of formally documenting hedge effectiveness in accordance with the provisions of SFAS No.133, "Accounting for Derivative Instruments," is not justified. As a result, all changes in the fair value of derivatives are recorded in the current period operations as a component of derivative income.

Net derivative income (loss) for the years ended December 31 consisted of the following:

	2005	2004	2003
Net expense on swap agreements	$ (64,915)	$ (62,514)	$ (87,721)
Change in fair value of swap agreements (interest rate, currency, and equity)	101,320	(43,977)	197,506
Change in fair value of options, futures and embedded derivatives	(19,931)	8,072	(312,985)
Total derivative income (losses)	$ 16,474	$ (98,419)	$ (203,200)

The Company is required to pledge and receive collateral for open derivative contracts. The amount of collateral required is determined by agreed upon thresholds with the counter-parties. The Company currently pledges cash and U.S. Treasury bonds to satisfy this collateral requirement. At December 31, 2005 and 2004, $35.6 million and $33.6 million, respectively, of fixed maturities were pledged as collateral and are included with fixed maturities.

The Company's underlying notional or principal amounts associated with open derivatives positions were as follows for the years ended December 31:

	2005
	Notional		Fair Value
	Principal		Asset (Liability)
	Amounts

Interest rate swaps		$ 6,764,984		$ (115,333)
Currency swaps		534,916		116,070
Equity swaps		181,334		29,463
Currency forwards		2,571		(2,079)
Credit Default Swaps		10,000		(3)
Futures		745,009		(1,724)
Swaptions		2,500,000		8,979
S&P 500 index call options		3,410,279		225,243
S&P 500 index put options		1,160,202		29,566

Total		$ 15,309,295		$ 290,182

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)

(A Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)

For the years ended December 31, 2005, 2004 and 2003

4. INVESTMENTS (CONTINUED)

	2004
	Notional		Fair Value
	Principal		Asset (Liability)
	Amounts

Interest rate swaps		$ 5,948,576		$ (212,661)
Currency swaps		805,849		290,776
Equity swaps		250,207		28,254
Currency forwards		1,547		(81)
S&P 500 index call options		2,986,757		188,481
S&P 500 index put options		1,217,980		42,858

Total		$ 11,210,916		$ 337,627

5. NET REALIZED INVESTMENT GAINS AND LOSSES

Net realized investment gains (losses) arose from sale of the following security types for the years ended December 31:

		2005		2004	2003

Fixed maturities			$ 21,873	$ 108,603	$ 159,474
Equity securities		(6)		3,375	(1,465)
Mortgage and other loans		614		858	25,528
Real estate		318		-	3,862
Other invested assets			12,741	(1,601)	4,800
Other than temporary declines			(29,707)	(32,494)	(62,834)
Gains on impaired assets			11,092	17,333	4,720

	Total	$ 16,925		$ 96,074	$ 134,085

6. NET INVESTMENT INCOME

Net investment income consisted of the following for the years ended December 31:

		2005	2004	2003

Fixed maturities		$ 921,803	$ 1,030,973	$ 1,114,949
Mortgage and other loans		103,253	83,986	76,259
Real estate		11,047	11,615	6,952
Policy loans		37,595	42,821	43,335
Other		55,245	(19,715)	(20,364)
	Gross investment income	1,128,943	1,149,680	1,221,131
Less: Investment expenses		16,414	15,423	12,381
	Net investment income	$ 1,112,529	$ 1,134,257	$ 1,208,750

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)

(A Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)

For the years ended December 31, 2005, 2004 and 2003

7. FAIR VALUE OF FINANCIAL INSTRUMENTS

SFAS No. 107, "Disclosure about Fair Value of Financial Instruments," excludes certain insurance liabilities and other non-financial instruments from its disclosure requirements. The fair value amounts presented herein do not include the expected interest margin (interest earnings over interest credited) to be earned in the future on investment-type products or other intangible items. Accordingly, the aggregate fair value amounts presented herein do not necessarily represent the underlying value to the Company. Likewise, care should be exercised in deriving conclusions about the Company's business or financial condition based on the fair value information presented herein.

The following table presents the carrying amounts and estimated fair values of the Company's financial instruments at December 31:

2005

2004

Carrying

Estimated

Carrying

Estimated

Amount

Fair Value

Amount

Fair Value

Financial assets:

Cash and cash equivalents

$ 347,654

$ 347,654

$ 552,949

$ 552,949

Fixed maturities

18,261,996

18,307,751

18,784,015

18,873,147

Equity securities

15,427

15,427

1,006

1,006

Short-term investments

-

-

23,957

23,957

Mortgages

1,739,370

1,790,629

1,465,896

1,546,834

Derivatives instruments -receivables

487,947

487,947

566,401

566,401

Policy loans

701,769

701,769

696,305

696,305

Separate accounts

19,095,391

19,095,391

19,120,381

19,120,381

Financial liabilities:

Policy liabilities

18,668,578

17,449,961

18,846,238

17,677,082

Derivative instruments - payables

197,765

197,765

228,774

228,774

Long-term debt

-

-

33,500

33,500

Long-term debt to affiliates

1,125,000

1,178,918

1,025,000

1,100,501

Partnership capital securities

607,826

645,755

607,826

689,132

Separate accounts

19,095,391

19,095,391

19,120,381

19,120,381

The following methods and assumptions were used by the Company in determining the estimated fair value of its financial instruments:

Interest receivable on the above financial instruments is stated at carrying value which approximates fair value.

Cash and cash equivalents: The fair values of cash and cash equivalents are estimated to be cost plus accrued interest.

Fixed maturities, short term investments, and equity securities: The fair values of short-term bonds are estimated to be amortized cost. The fair values of publicly traded fixed maturities are based upon market prices or dealer quotes. For privately placed fixed maturities, fair values are estimated by taking into account prices for publicly traded securities of similar credit risk, maturity, repayment and liquidity characteristics. The fair value of equity securities are based on quoted market prices.

Mortgage loans: The fair values of mortgage and other loans are estimated by discounting future cash flows using current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities.

Derivatives: The fair values of swaps are based on current settlement values. The current settlement values are based on dealer quotes and market prices. Fair values for options and futures are based on dealer quotes and market prices.

Policy loans: Policy loans are stated at unpaid principal balances, which approximate fair value.

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)

(A Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)

For the years ended December 31, 2005, 2004 and 2003

7. FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED)

Separate accounts, assets and liabilities: The estimated fair value of assets held in separate accounts is based on quoted market prices. The fair value of liabilities related to separate accounts is the amount payable on demand, which excludes surrender charges.

Policy liabilities: The fair values of the Company's general account insurance reserves and contractholder deposits under investment-type contracts (insurance, annuity and pension contracts that do not involve mortality or morbidity risks) are estimated using discounted cash flow analyses or surrender values based on interest rates currently being offered for similar contracts with maturities consistent with those remaining for all contracts being valued. Those contracts that are deemed to have short-term guarantees have a carrying amount equal to the estimated market value. The fair values of other deposits with future maturity dates are estimated using discounted cash flows. The fair values of S&P 500 Index and other equity linked embedded derivatives are produced using standard derivative valuation techniques. GMABs or GMWBs are considered to be derivatives under SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities," and are included in contractholder deposit funds. The fair value of the embedded derivatives is calculated stochastically using risk neutral scenarios over a 50 year projection. Policyholder assumptions are based on experience studies and industry standards.

Long term debt: The fair value of notes payable and other borrowings are estimated using discounted cash flow analyses based upon the Company's current incremental borrowing rates for similar types of borrowings.

8. REINSURANCE

Reinsurance ceded contracts do not relieve the Company from its obligations to policyholders. The Company remains liable to its policyholders for the portion reinsured to the extent that any reinsurer does not meet the obligations assumed under the reinsurance agreement. To minimize its exposure to significant losses from reinsurer insolvencies, the Company periodically evaluates the financial condition of its reinsurers and monitors concentrations of credit risk. Management believes that any liability from this contingency is unlikely. A brief discussion of the Company's reinsurance agreements by segment follows.

Wealth Management Segment

The Wealth Management Segment manages a closed block of single premium whole life ("SPWL") insurance policies, a retirement-oriented tax-advantaged life insurance product. The Company discontinued sales of SPWL's in response to certain tax law changes in the 1980s. The Company had SPWL policyholder balances of approximately $1.7 billion and $1.7 billion as of December 31, 2005 and 2004, respectively. On December 31, 2003, this entire block of business was reinsured on a funds withheld basis with SLOC, an affiliated company.

By reinsuring the SPWL policies, the Company reduced net investment income by $82.7 million and $91.2 million for the years ended December 31, 2005 and 2004, respectively. The Company also reduced interest credited by $57.5 million and $79.6 million for the years ended December 31, 2005 and 2004, respectively. In addition, the Company also increased net investment income, relating to an experience rating refund under the reinsurance agreement with SLOC, by $13.1 and $13.6 million for the years ended December 31, 2005 and 2004, respectively. The liability for the SPWL policies is included in contractholder deposit funds and other policy liabilities.

Individual Protection Segment

The Company has agreements with SLOC and several unrelated companies, which provide for reinsurance of portions of the net-amount-at-risk under certain individual variable universal life, individual private placement variable universal life, bank owned life insurance ("BOLI"), and corporate owned life insurance ("COLI") policies. These amounts are reinsured on either a monthly renewable or a yearly renewable term basis. Fee income was reduced by $33.3 million, $28.7 million and $23.4 million for the years ended December 31, 2005, 2004 and 2003, respectively, to account for these agreements.

Effective October 1, 2004, the Company no longer acts as the reinsurer of risk under the lapse protection benefit for certain universal life contracts issued by SLOC.

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)

(A Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)

For the years ended December 31, 2005, 2004 and 2003

8. REINSURANCE (CONTINUED)

Group Protection Segment

The Company, through its affiliate SLNY, had an agreement with SLOC whereby SLOC reinsured the mortality risks of SLNY's group life insurance contracts. Under this agreement, certain death benefits were reinsured on a yearly renewable term basis. The agreement provided that SLOC would reinsure mortality risks in excess of $50,000 per claim for group life contracts ceded by SLNY. The treaty was commuted effective December 31, 2004.

The Company, through its affiliate SLNY, had an agreement with SLOC whereby SLOC reinsured morbidity risks of a block of SLNY's group long-term disability contracts. The treaty was commuted effective December 31, 2004.

The Company, through its affiliate SLNY, has an agreement with an unrelated company whereby the unrelated company reinsures the mortality risks of the Company's group life contracts. Under this agreement, certain group life mortality benefits are reinsured on a yearly renewable term basis. The agreement provides that the unrelated company will reinsure amounts above $700,000 per claim for group life contracts ceded by the Company.

The Company, through its affiliate SLNY, has an agreement with an unrelated company whereby the unrelated company reinsures the morbidity risks of SLNY's group stop loss contracts. Under this agreement, certain stop loss benefits are reinsured on a yearly renewable term basis. The agreement provides that the unrelated company will reinsure specific claims for amounts above $1.0 million per claim for stop loss contracts ceded by SLNY.

The Company, through its affiliate SLNY, has an agreement with an unrelated company whereby the unrelated company reinsures the morbidity risks of SLNY's group long-term disability contracts. Under this agreement, certain long-term disability benefits are reinsured on a yearly renewable term basis. The agreement provides that the unrelated company will reinsure amounts in excess of $4,000 per claim per month for long-term disability contracts ceded by SLNY.

The effects of reinsurance were as follows:

For the Years Ended December 31,

2005

2004

2003

Insurance premiums:

Direct

$ 54,915

$ 62,939

$ 67,959

Ceded

2,933

4,119

7,441

Net premiums

$ 51,982

$ 58,820

$ 60,518

Insurance and other individual policy benefits and
claims:

Direct

$ 225,936

$ 170,381

$ 230,384

Ceded

38,923

29,004

29,136

Net policy benefits and claims

$ 187,013

$ 141,377

$ 201,248

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)

(A Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)

For the years ended December 31, 2005, 2004 and 2003

9. RETIREMENT PLANS

The Company sponsors two non-contributory defined benefit pension plans for its employees and certain affiliated employees. Expenses are allocated to participating companies based in a manner consistent with the allocation of employee compensation expenses. The Company's funding policies for the pension plans are to contribute amounts which at least satisfy the minimum amount required by the Employee Retirement Income Security Act of 1974 ("ERISA"). Most pension plan assets consist of separate accounts of SLOC or other insurance company contracts.

The Company uses a measurement date of September 30 for its pension and other post retirement benefit plans.

On September 21, 2005, the Board of Directors of the Company approved amendments pertaining to the two non-contributory defined benefit pension plans including the following:

(a) To provide that no one shall become a participant in the plan after December 31, 2005;

(b) To freeze accruals under the plan as of December 31, 2005 for all participants except (i) those participants (x) who are at least age 50 and whose age plus service on January 1, 2006 equals or exceeds 60 and (y) who in 2005 choose to continue their participation in the plan (the "Grandfathered Participants"), (ii) those participants who are receiving on December 31, 2005 severance or termination payments and (iii) those participants who are receiving on December 31, 2005 amounts paid under the Long Term Disability plan sponsored by the Company;

Due to the pension plan changes, a $1.9 million curtailment charge was recognized.

Other post retirement benefit plans have been amended as follows:

a) To provide retiree medical coverage where the retiree pays the entire cost of coverage equal to the cost paid by active employees unless the participant is a retiree as of 12/31/05, a "grandfathered employee" or a "Rule 75 employee".

A grandfathered employee shall mean an active employee (i) who retires on or after January 1,2006 and (ii) who as of January 1,2006 is at least age 55 with 15 or more years or service and whose age plus service is at least 75.

A rule 75 employee shall mean active employees (i) who are not Grandfathered employees, ii) who retire on or after January 1, 2006, and (iii) who when they retire are at least age 55 with 15 or more years or service and whose age plus service is at least 75.

For grandfathered and rule of 75 employees retiree medical coverage is provided at reduced cost.

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)

(A Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)

For the years ended December 31, 2005, 2004 and 2003

9. RETIREMENT PLANS (CONTINUED)

The following table sets forth the change in the pension plans' (retirement plan and agent pension plan) projected benefit obligations and assets, as well as the plans' funded status at December 31:

2005

2004

Change in projected benefit obligation:

Projected benefit obligation at beginning of year

$ 215,439

$ 191,689

Service cost

10,948

9,873

Interest cost

13,839

12,118

Actuarial loss (gain)

17,780

7,039

Benefits paid

(6,105)

(5,280)

Plan amendments

2,344

-

Curtailment loss (gain)

(24,700)

-

Projected benefit obligation at end of year

$ 229,545

$ 215,439

Change in fair value of plan assets:

Fair value of plan assets at beginning of year

$ 233,551

$ 205,737

Other

(1,250)

(1,050)

Actual return on plan assets

25,900

34,144

Benefits paid

(6,105)

(5,280)

Fair value of plan assets at end of year

$ 252,096

$ 233,551

Information on the funded status of the plan:

Funded status

$ 22,551

$ 18,112

Unrecognized net actuarial loss

7,802

19,339

Unrecognized transition obligation

(10,392)

(13,443)

Unrecognized prior service cost

3,945

7,421

4th quarter contribution

(1,550)

(1,250)

Prepaid benefit cost

$ 22,356

$ 30,179

The accumulated benefit obligation for the retirement plan and agent pension plan at December 31, 2005 and 2004 was $222.4 million and $188.9 million, respectively.

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)

(A Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)

For the years ended December 31, 2005, 2004 and 2003

9. RETIREMENT PLANS (CONTINUED)

The agent plan is overfunded and the funded status of the employee retirement plan was as follows:

2005

2004

Plan assets

$ 211,612

$ 195,332

Projected benefit obligations

(219,802)

(206,748)

Funded status

$ (8,190)

$ (11,416)

Accumulated benefit obligation

$ 212,630

$ 180,201

The following table sets forth the components of the net periodic benefit cost, and the Company's share of net periodic benefit costs for the years ended December 31:

2005

2004

2003

Components of net periodic benefit cost:

Service cost

$ 10,948

$ 9,873

$ 8,954

Interest cost

13,839

12,118

10,494

Expected return on plan assets

(20,092)

(17,704)

(14,358)

Amortization of transition obligation asset

(3,051)

(3,051)

(3,051)

Amortization of prior service cost

855

855

855

Curtailment loss (gain)

1,856

-

-

Recognized net actuarial loss

1,918

3,140

4,215

Net periodic benefit cost (benefit)

$ 6,273

$ 5,231

$ 7,109

The Company's share of net periodic benefit cost

$ 4,116

$ 4,272

$ 5,522

In addition to its share of net periodic benefit cost, the Company incurred $2.9 million, $1.9 million and $3.5 million for the years ended December 31, 2005, 2004 and 2003, respectively, in expense for an uninsured benefit plan, for which the Company is not the plan sponsor.

Assumptions

Weighted average assumptions used to determine benefit obligations were as follows:

Pension Benefits

2005

2004

2003

Discount rate

5.8%

6.2%

6.1%

Rate of compensation increase

4.0%

4.0%

4.0%

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)

(A Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)

For the years ended December 31, 2005, 2004 and 2003

9. RETIREMENT PLANS (CONTINUED)

Weighted average assumptions used to determine net benefit cost were as follows:

Pension Benefits

2005

2004

2003

Discount rate

6.2%

6.1%

6.75%

Expected long term return on plan assets

8.75%

8.75%

8.75%

Rate of compensation increase

4.0%

4.0%

4.0%

The Company relies on historical market returns from Ibbotson Associates (1926-2002) to determine its overall long term rate of return on asset assumption. Applying Ibbotson's annualized market returns of 12% stock, 5.8% bonds and 3.8% cash to the Company's target allocation results in an expected return consistent with the one used by the Company for purposes of determining the benefit obligation.

Plan Assets

The asset allocation for the Company's pension plan assets for 2005 and 2004 measurement, and the target allocation for 2006, by asset category, are as follows:

	Target Allocation	Percentage of Plan Assets
Asset Category	2006	2005	2004

Equity Securities	60%	61%	61%
Debt Securities	25%	30%	27%
Commercial Mortgages	15%	9%	10%
Other	-%	-%	2%
Total	100%	100%	100%

The target allocations were established to reflect the Company's investment risk posture and to achieve the desired level of return commensurate with the needs of the fund. The target ranges are based upon a three to five year time horizon and may be changed as circumstances warrant.

The portfolio of investments should, over a period of time, earn a gross annualized rate of return that:

1)	exceeds the assumed actuarial rate;
2)	exceeds the return of customized index created by combining benchmark returns in appropriate weightings based on an average asset mix of funds; and
3)	generates a real rate of return of at least 3% after inflation, and sufficient income or liquidity to pay retirement benefits on a timely basis.

Equity securities include SLF common stock in the amount of $4.2 million at December 31, 2004. Equity securities did not include any SLF common stock at December 31, 2005.

Cash Flow

Due to the over funded status of the agent defined benefit plan, the Company will not be making contributions to the plan in 2006.

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)

(A Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)

For the years ended December 31, 2005, 2004 and 2003

9. RETIREMENT PLANS (CONTINUED)

The Company has estimated the following future benefit payments for the years 2006 through 2015:

	Pension Benefits
2006	$ 6,352
2007	6,680
2008	6,949
2009	7,299
2010	7,624
2011 to 2015	45,646

401(k) Savings Plan

The Company sponsors and participates in a 401(k) savings plan (the "401(k) Plan") for which substantially all employees of at least age 21 are eligible to participate at date of hire. Under the 401(k) Plan, the Company matches, up to specified amounts, the employees' contributions to the plan.

On September 21, 2005, the Board of Directors of the Company approved amendments pertaining to the 401(k) Plan including the following.

(a) Beginning January 1, 2006, Eligible Participants shall receive a basic employer contribution which shall be a percentage of the participant's eligible compensation determined under the following chart based on the sum of the participant's age and service on January 1 of the applicable plan year -

Age Plus Service	Employer Contribution
Less than 40	3%
At least 40 but less than 55	5%
At least 55	7%

(b) In addition to the basic employer contribution beginning January 1, 2006, Eligible Participants who did not become participants in the United States Employees' Retirement Income Plan before January 1, 2006 and who remain employed by a participating employer on January 1, 2006 shall be entitled to receive a supplemental basic employer contribution in January 2006 based on their applicable basic employer contribution percentage as of January 1, 2006 and their eligible compensation paid during the period beginning on their hire date and ending on December 31, 2005.

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)

(A Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)

For the years ended December 31, 2005, 2004 and 2003

9. RETIREMENT PLANS (CONTINUED)

(c) To provide for a transition employer contribution effective January 1, 2006 to Eligible Participants who are at least age 40 on January 1, 2006 and whose age plus service on January 1, 2006 equals or exceeds 45 (such Eligible Participants are referred to as "Transition Participants");

(d) For January 1, 2006 through December 31, 2015, Transition Participants shall receive transition employer contributions which shall be a percentage of the Transition Participant's eligible compensation determined under the following chart based on the participant's age and service on January 1, 2006 -

Service

Age

Less than 5 years

5 or more years

At least 40 but less than 43

3.0%

5.0%

At least 43 but less than 45

3.5%

5.5%

At least 45

4.5%

6.5%

The amount of the 2005 employer contributions under 401(k) Plan sponsorship for the Company and its affiliates was $6.1 million. Amounts are allocated to affiliates based on their respective employees' contributions. The Company's portion of the expense was $4.6 million, $2.8 million and $0.9 million for the years ended December 31, 2005, 2004 and 2003, respectively. The Company's contribution includes a $1.6 million accrued retroactive adjustment related to the board approved amendments to the 401(k) Plan. This retroactive adjustment will be funded in 2006.

Other Post-Retirement Benefit Plans

The Company sponsors a post-retirement benefit pension plan for its employees and certain affiliates employees providing certain health, dental and life insurance benefits ("post-retirement benefits") for retired employees and dependents (the "Retirement Plan"). Expenses are allocated to participating companies based on the number of participants. Substantially all employees of the participating companies may become eligible for these benefits if they reach normal retirement age while working for the Company, or retire early upon satisfying an alternate age plus service condition. Life insurance benefits are generally set at a fixed amount.

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)

(A Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)

For the years ended December 31, 2005, 2004 and 2003

9. RETIREMENT PLANS (CONTINUED)

The following table sets forth the change in the Retirement Plan's obligations and assets, as well as the plans' funded status at December 31:

Change in benefit obligation:

2005

2004

Benefit obligation at beginning of year

$ 48,453

$ 51,278

Service cost

1,333

1,233

Interest cost

2,994

2,957

Actuarial (gain) loss

4,596

(4,583)

Benefits paid

(2,884)

(2,432)

Plan Amendments

(3,192)

-

Benefit obligation at end of year

$ 51,300

$ 48,453

Change in fair value of plan assets:

Fair value of plan assets at beginning of year

$ -

$ -

Employer contributions

2,884

2,432

Benefits paid

(2,884)

(2,432)

Fair value of plan assets at end of year

$ -

$ -

Information on the funded status of the plan:

Funded Status

$ (51,301)

$ (48,453)

Unrecognized net actuarial loss

22,741

19,556

4th quarter contribution

686

628

Unrecognized prior service cost

(5,609)

(2,657)

Accrued benefit cost

$ (33,483)

$ (30,926)

The following table sets forth the components of the net periodic post-retirement benefit costs and the Company's allocated share for the year ended December 31:

2005

2004

Components of net periodic benefit cost

Service cost

$ 1,333

$ 1,233

Interest cost

2,994

2,957

Amortization of prior service cost

(241)

(241)

Recognized net actuarial loss

1,273

1,384

Net periodic benefit cost

$ 5,359

$ 5,333

The Company's share of net periodic benefit cost

$ 4,947

$ 4,180

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)

(A Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)

For the years ended December 31, 2005, 2004 and 2003

9. RETIREMENT PLANS (CONTINUED)

Assumptions

Weighted average assumptions used to determine benefit obligations were as follows:

	Other Benefits
	2005	2004	2003
Discount Rate	5.8%	6.2%	6.1%
Rate of Compensation increase	4.0%	4.0%	4.0%

Weighted average assumptions used to determine net cost for the years ended December 31 were as follows:

	Other Benefits
	2005	2004	2003
Discount rate	6.2%	6.1%	6.75%
Rate of compensation increase	4.0%	4.0%	4.0%

In order to measure the post-retirement benefit obligation for 2005, the Company assumed a 10% annual rate of increase in the per capita cost of covered health care benefits. In addition, medical cost inflation is assumed to be 10% in 2006 and assumed to decrease gradually to 5.00% for 2011 and remain at that level thereafter. Assumed healthcare cost trend rates have a significant effect on the amounts reported for the health care plans. A one-percentage point change in assumed health care cost trend rates would have the following effect:

	1- Percentage-Point	1- Percentage-Point
	Increase	Decrease
Effect on Post retirement benefit obligation	$ 5,541	$ (4,571)

Effect on total of service and interest cost	$ 756	$ (596)

The Company has estimated the following future benefit payments for the years 2006 through 2015:

	Other Benefits
2006	$ 3,413
2007	3,546
2008	3,666
2009	3,757
2010	3,807
2011 to 2015	19,859

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)

(A Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)

For the years ended December 31, 2005, 2004 and 2003

10. FEDERAL INCOME TAXES

The Company will file a consolidated return with SLC -U.S. Ops Holdings for the year ended December 31, 2005 as the Company did for the year ended December 31, 2004. The Company filed a consolidated federal income tax return with SLC - U.S. Ops Holdings and Keyport filed a return with its subsidiary, Independence Life, for the year ended December 31, 2003. A summary of the components of federal income tax expense (benefit) in the consolidated statements of income for the years ended December 31 is as follows:

	2005	2004	2003
Federal income tax expense (benefit):
Current	$ 11,239	$ (5,331)	$ (29,240)
Deferred	28,852	76,683	56,606

Total	$ 40,091	$ 71,352	$ 27,366

Federal income taxes attributable to the Company's consolidated operations are different from the amounts determined by multiplying income before federal income taxes by the expected federal income tax rate at 35%. The Company's effective rate differed from the federal income tax rate as follows:

	2005	2004	2003

Expected federal income tax expense (benefit)	$ 60,210	$ 107,446	$ 44,251
Low income housing credit	(5,947)	(6,021)	(6,026)
Separate account dividend received deduction	(10,150)	(10,500)	(5,600)
Prior year settlements	(2,802)	(17,351)	(6,518)
Other items	(1,220)	(2,222)	1,259

Federal income tax expense (benefit)	$ 40,091	$ 71,352	$ 27,366

The deferred income tax asset (liability) represents the tax effects of temporary differences between the carrying amounts of assets and liabilities used for financial reporting purposes and the amounts used for income tax purposes. The components of the Company's deferred tax assets and (liabilities) as of December 31 were as follows:

	2005	2004
Deferred tax assets:
Actuarial liabilities	$ 250,818	$ 391,780
Net operating loss	-	4,444
Other	281	(8,340)
Total deferred tax assets	251,099	387,884

Deferred tax liabilities:
Deferred policy acquisition costs	(287,605)	(185,715)
Investments, net	40,866	(266,779)
Total deferred tax liabilities	(246,739)	(452,494)

Net deferred tax asset (liability)	$ 4,360	$ (64,610)

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)

(A Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)

For the years ended December 31, 2005, 2004 and 2003

10. FEDERAL INCOME TAXES (CONTINUED)

The Company makes payments under certain tax sharing agreements as if it were filing as a separate company. The Company received income tax refunds of $32.0 million in 2005 and $17.1 million in 2003. The Company did not have any net income tax payments for 2004. At December 31, 2005, the Company did not have any operating loss carryforwards remaining.

The Company's federal income tax returns are routinely audited by the Internal Revenue Service ("IRS"), and provisions are made in the consolidated financial statements in anticipation of the results of these audits. The Company is currently under audit by the IRS for the years 2001 and 2002. In the Company's opinion, adequate tax liabilities have been established for all years and any adjustments that might be required for the years under audit will not have a material effect on the Company's financial statements. However, the amounts of these tax liabilities could be revised in the future if estimates of the Company's ultimate liability are revised.

11. LIABILITY FOR UNPAID CLAIMS AND CLAIMS ADJUSTMENT EXPENSES

Activity in the liability for unpaid claims and claims adjustment expenses related to the Company's group life, group disability and stop loss products is summarized below:

2005

2004

Balance at January 1

$ 32,571

$ 31,337

Less reinsurance recoverable

(6,381)

(9,146)

Net balance at January 1

26,190

22,191

Incurred related to:

Current year

23,881

20,889

Prior years

(3,143)

910

Total incurred

20,738

21,799

Paid losses related to:

Current year

(13,860)

(12,009)

Prior years

(5,813)

(5,791)

Total paid

(19,673)

(17,800)

Balance at December 31

33,141

32,571

Less reinsurance recoverable

(5,886)

(6,381)

Net balance at December 31

$ 27,255

$ 26,190

The incurred losses and loss adjustment expenses relating to insured events in prior years changed as a result of reassessment of the estimates of the settlement costs on certain claims outstanding due to factors that emerged in the current year.

The Company regularly updates its estimates of liabilities for unpaid claims and claims adjustment expenses as new information becomes available and further events occur which may impact the resolution of unsettled claims for its group disability lines of business. Changes in prior estimates are recorded in results of operations in the year such changes are determined to be needed.

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)

(A Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)

For the years ended December 31, 2005, 2004 and 2003

12. LIABILITIES FOR CONTRACT GUARANTEES

On January 1, 2004, the Company adopted the American Institute of Certified Public Accountants' (the "AICPA") SOP 03-1. The major provisions of SOP 03-1 that affect the Company require:

The cumulative effect, reported after tax and net of related effects on DAC, upon adoption of SOP 03-1 at January 1, 2004, decreased net income and stockholder's equity by $8.9 million and reduced accumulated other comprehensive income by $2.1 million. The decrease in net income was comprised of an increase in future contract and policy benefits (primarily for variable annuity contracts) of $46.7 million, pretax, an increase in DAC of $29.5 million, pretax, and the recognition of the unrealized gain on investments in separate accounts of $3.5 million, pretax.

The Company offers various guarantees to certain policyholders including a return of no less than (a) total deposits made on the contract less any customer withdrawals, (b) total deposits made on the contract less any customer withdrawals plus a minimum return, or (c) the highest contract value on a specified anniversary date minus any customer withdrawals following the contract anniversary. These guarantees include benefits that are payable in the event of death, upon annuitization, or at specified dates during the accumulation period of an annuity.

The table below represents information regarding the Company's variable annuity contracts with guarantees at December 31, 2005:

Benefit Type	Account Balance	Net Amount at Risk ¹	Average Attained Age
Minimum Death	$ 16,316,183	$ 2,126,214	66.1
Minimum Income	$ 385,378	$ 68,802	59.3
Minimum Accumulation or Withdrawal	$ 1,669,284	$ 182	61.2

The table below represents information regarding the Company's variable annuity contracts with guarantees at December 31, 2004:

Benefit Type	Account Balance	Net Amount at Risk ¹	Average Attained Age
Minimum Death	$ 16,894,237	$ 2,423,320	65.7
Minimum Income	$ 386,407	$ 63,851	59.8
Minimum Accumulation or Withdrawal	$ 884,843	$ -	61.4

1 Net amount at risk represents the difference between guaranteed benefits and account balance.

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)

(A Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)

For the years ended December 31, 2005, 2004 and 2003

12. LIABILITIES FOR CONTRACT GUARANTEES (CONTINUED)

The following summarizes the reserve for the GMDB and GMIB at December 31, 2005:

	Guaranteed Minimum Death Benefit	Guaranteed Minimum Income Benefit	Total
Balance at December 31, 2004	$ 28,313	$ 2,422	$ 30,735

Benefit Ratio Change / Assumption Changes	15,205	(172)	15,033
Incurred guaranteed benefits	35,559	560	36,119
Paid guaranteed benefits	(39,308)	-	(39,308)
Interest	1,980	190	2,170

Balance at December 31, 2005	$ 41,749	$ 3,000	$ 44,749

The following summarizes the reserve for the GMDB and GMIB at December 31, 2004:

	Guaranteed Minimum Death Benefit	Guaranteed Minimum Income Benefit	Total
Balance at January 1, 2004	$ 45,250	$ 1,457	$ 46,707

Incurred guaranteed benefits	32,103	832	32,935
Paid guaranteed benefits	(50,502)	-	(50,502)
Interest	1,462	132	1,594

Balance at December 31, 2004	$ 28,313	$ 2,422	$ 30,735

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)

(A Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)

For the years ended December 31, 2005, 2004 and 2003

12. LIABILITIES FOR CONTRACT GUARANTEES (CONTINUED)

The liability for death and income benefit guarantees is established equal to a benefit ratio multiplied by the cumulative contract charges earned, plus accrued interest and less contract benefit payments. The benefit ratio is calculated as the estimated present value of all expected contract benefits divided by the present value of all expected contract charges. The benefit ratio may be in excess of 100%. For guarantees in the event of death, benefits represent the current guaranteed minimum death payments in excess of the current account balance. For guarantees at annuitization, benefits represent the present value of the minimum guaranteed annuity benefits in excess of the current account balance.

Projected benefits and assessments used in determining the liability for guarantees are developed using models and stochastic scenarios that are also used in the development of estimated expected future gross profits. Underlying assumptions for the liability related to income benefits include assumed future annuitization elections based upon factors such as eligibility conditions and the annuitant's attained age.

The liability for guarantees is re-evaluated regularly and adjustments are made to the liability balance through a charge or credit to policyowner benefits.

GMABs or GMWBs are considered to be derivatives under SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities," and are recorded at fair value through earnings. The fair value of the embedded derivatives is calculated stochastically using risk neutral scenarios over a 50 year projection. Policyholder assumptions are based on experience studies and industry standards. The GMAB or GMWB constituted an asset of $0.2 million and $2.8 million at December 31, 2005 and 2004, respectively.

Interest in Separate Accounts

At December 31, 2003, the Company had $11.7 million representing unconsolidated interests in its own separate accounts. These interests were recorded as separate account assets, with changes in fair value recorded through other comprehensive income. On January 1, 2004, the Company reclassified these interests to investments as a component of other invested assets.

Sales Inducements

The Company currently offers enhanced or bonus crediting rates to policyholders on certain of its annuity products. Through December 31, 2003, the expenses associated with certain of these bonuses were deferred and amortized. Others were expensed as incurred. Effective January 1, 2004, upon adoption of SOP 03-1, the expenses associated with offering a bonus are deferred and amortized over the life of the related contract in a pattern consistent with the amortization of DAC.

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)

(A Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)

For the years ended December 31, 2005, 2004 and 2003

13. DEFERRED POLICY ACQUISITION COSTS (DAC)

The changes in DAC for the years ended December 31 were as follows:

2005

2004

Balance at January 1

$ 1,147,181

$ 889,601

Acquisition costs deferred

261,058

346,764

Amortized to expense during the year

(226,355)

(48,562)

Adjustment for unrealized investment gains (losses) during the year

159,493

(40,622)

Balance at December 31

$ 1,341,377

$ 1,147,181

14. VALUE OF BUSINESS ACQUIRED (VOBA)

The changes in VOBA for the years ended December 31 were as follows:

2005

2004

Balance at January 1

$ 24,130

$ 22,391

Amortized to expense during the year

(17,467)

(4,819)

Adjustment for unrealized investment gains (losses) during the year

47,007

6,558

Balance at December 31

$ 53,670

$ 24,130

15. SEGMENT INFORMATION

The Company offers financial products and services such as fixed and variable annuities, funding agreements, retirement plan services, and life insurance on an individual and group basis, as well as disability and stop-loss insurance on a group basis. As described below, the Company conducts business principally in three operating segments and maintains a Corporate Segment to provide for the capital needs of the three operating segments and to engage in other financing related activities. Each segment is defined consistently with the way results are evaluated by the chief operating decision-maker.

Net investment income is allocated based on segmented assets by line of business. Allocations of operating expenses among segments are made using both standard rates and actual expenses incurred. Management evaluates the results of the operating segments on an after-tax basis. The Company does not depend on one or a few customers, brokers or agents for a significant portion of its operations.

Wealth Management

The Wealth Management Segment markets, sells and administers individual and group variable annuity products, individual and group fixed annuity products and other retirement benefit products. These contracts may contain any of a number of features including variable or fixed interest rates and equity index options and may be denominated in foreign currencies. The Company uses derivative instruments to manage the risks inherent in the contract options.

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)

(A Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)

For the years ended December 31, 2005, 2004 and 2003

15. SEGMENT INFORMATION (CONTINUED)

Individual Protection

The Individual Protection Segment markets, sells and administers a variety of life insurance products sold to individuals and corporate owners of life insurance. The products include whole life, universal life and variable life products.

Group Protection

The Group Protection Segment markets, sells and administers group life, long-term disability, short-term disability and stop loss insurance to small and mid-size employers in the State of New York.

Corporate

The Corporate Segment includes the unallocated capital of the Company, its debt financing, its consolidated investments in VIEs, and items not otherwise attributable to the other segments.

The following amounts pertain to the various business segments:

Year ended December 31, 2005

Wealth

Individual

Group

Management

Protection

Protection

Corporate

Totals

Total Revenues

$ 1,342,509

$ 74,535

$ 32,604

$ 110,537

$ 1,560,185

Total Expenditures

1,220,198

70,991

32,333

64,636

1,388,158

Income before income tax expense, minority interest and cumulative effect of change in accounting principle

122,311

3,544

271

45,901

172,027

Net Income

93,570

2,443

176

36,963

133,152

Total Assets

$ 38,631,963

$ 6,005,424

$ 55,319

$1,314,140

$ 46,006,846

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)

(A Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)

For the years ended December 31, 2005, 2004 and 2003

15. SEGMENT INFORMATION (CONTINUED)

The following amounts pertain to the various business segments:

Year ended December 31, 2004

Wealth

Individual

Group

Management

Protection

Protection

Corporate

Totals

Total Revenues

$ 1,284,873

$ 65,366

$ 34,908

$ 162,596

$ 1,547,743

Total Expenditures

1,054,852

60,785

31,605

93,470

1,240,712

Income before income tax expense, minority interest and cumulative effect of change in accounting principle

230,021

4,581

3,303

69,126

307,031

Net Income

166,309

3,118

2,147

49,702

221,276

Total Assets

$ 40,961,145

$ 4,111,638

$ 53,131

$1,561,629

$ 46,687,543

Year ended December 31, 2003

Wealth

Individual

Group

Management

Protection

Protection

Corporate

Totals

Total Revenues

$ 1,409,642

$ 49,357

$ 26,609

$ 34,141

$ 1,519,749

Total Expenditures

1,247,670

53,848

25,712

61,792

1,389,022

Income (loss) before income tax expense, minority interest and cumulative effect of change in accounting principle

161,972

(4,491)

897

(27,651)

130,727

Net Income (Loss)

106,655

(2,331)

608

(9,941)

94,991

Total Assets

$ 39,814,262

$ 2,973,014

$ 46,535

$ 840,565

$ 43,674,376

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)

(A Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)

For the years ended December 31, 2005, 2004 and 2003

16. REGULATORY FINANCIAL INFORMATION

The Company and its insurance subsidiaries are required to file annual statements with state regulatory authorities prepared on a statutory accounting basis prescribed or permitted by such authorities. Statutory surplus differs from stockholder's equity reported in accordance with GAAP primarily because policy acquisition costs are expensed when incurred, policy liabilities are based on different assumptions, investments are valued differently, post-retirement benefit costs are based on different assumptions, and deferred income taxes are calculated differently. The Company's statutory financials are not prepared on a consolidated basis.

At December 31, the Company and its insurance subsidiaries combined statutory surplus and net income were as follows:

Unaudited for the Years ended December 31,

2005

2004

2003

Statutory surplus and capital

$ 1,778,241

$ 1,822,812

$ 1,685,356

Statutory net income

140,827

249,010

224,284

17. DIVIDEND RESTRICTIONS

The Company's and its insurance company subsidiaries' ability to pay dividends is subject to certain statutory restrictions. Delaware, New York, and Rhode Island have enacted laws governing the payment of dividends to stockholders by domestic insurers.

Pursuant to Delaware's statute, the maximum amount of dividends and other distributions that a domestic insurer may pay in any twelve-month period without prior approval of the Delaware Commissioner of Insurance is limited to the greater of (i) ten percent of its statutory surplus as of the preceding December 31, or (ii) the individual company's statutory net gain from operations for the preceding calendar year. Any dividends to be paid by an insurer from a source other than statutory surplus, whether or not in excess of the aforementioned threshold, would also require the prior approval of the Delaware Commissioner of Insurance. The Company is permitted to pay dividends up to a maximum of $154.3 million in 2006 without prior approval from the Delaware Commissioner of Insurance.

In 2005, the Company's board of directors approved and the Company paid a $200.0 million dividend to its direct parent, Sun Life of Canada (U.S.) Holdings, Inc., consisting of $150.6 million in cash and $49.4 million in notes. In 2004, the Company's board of Directors approved and the Company paid $150.0 million of cash dividends to its direct parent. On December 31, 2004, SCA was distributed in the form of a dividend of $6.6 million to the Company's direct parent and became a consolidated subsidiary of Sun Life of Canada (U.S.) Holdings, Inc. The Company did not pay any dividends in 2003.

New York law permits a domestic stock life insurance company to distribute a dividend to its shareholders without prior notice to the New York Superintendent of Insurance, where the aggregate amount of such dividend in any calendar year does not exceed the lesser of: (i) ten percent of its surplus to policyholders as of the immediately preceding calendar year; or (ii) its net gain from operations for the immediately preceding calendar year, not including realized capital gains. No dividends were paid by SLNY during 2005, 2004 or 2003.

Rhode Island law requires prior regulatory approval for any dividend where the amount of such dividend paid during the preceding twelve-month period would exceed the lesser of (i) ten percent of the insurance company's surplus as of the December 31 next preceding, or (ii) its net gain from operations, not including realized capital gains, for the immediately preceding calendar year, excluding pro rata distributions of any class of the insurance company's own securities. No dividends were paid by Independence Life during 2005, 2004 or 2003.

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)

(A Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)

For the years ended December 31, 2005, 2004 and 2003

18. COMPONENTS OF ACCUMULATED OTHER COMPREHENSIVE INCOME

The components of accumulated other comprehensive income as of December 31 were as follows:

	2005	2004	2003
Unrealized gains on available-for-sale securities	$ 56,493	$ 485,553	$ 520,173
Reserve allocation	(22,039)	-	-
Minimum pension liability adjustment	(2,834)	-	-
DAC allocation	(12,842)	(172,945)	(132,323)
VOBA allocation	(1,201)	(48,208)	(54,766)
Tax effect and other	1,683	(83,762)	(105,403)

Accumulated Other Comprehensive Income	$ 19,260	$ 180,638	$ 227,681

19. COMMITMENTS AND CONTINGENCIES

Regulatory and Industry Developments

Unfavorable economic conditions may contribute to an increase in the number of insurance companies that are under regulatory supervision. This may result in an increase in mandatory assessments by state guaranty funds or voluntary payments by solvent insurance companies to cover losses to policyholders of insolvent or rehabilitated companies. Under insurance guaranty fund laws in each state, the District of Columbia and Puerto Rico, insurers licensed to do business can be assessed by state insurance guaranty associations for certain obligations of insolvent insurance companies to policyholders and claimants. Most of these laws do provide, however, that an assessment may be excused or deferred if it would threaten an insurer's solvency and further provide annual limits on such assessments. Part of the assessments paid by the Company pursuant to these laws may be used as credits for a portion of the associated premium taxes.

Litigation

The Company is not aware of any contingent liabilities arising from litigation, income taxes and other matters that could have a material effect upon the financial condition, results of operations or cash flows of the Company.

SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)

(A Wholly-Owned Subsidiary of Sun Life of Canada (U.S.) Holdings, Inc.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)

For the years ended December 31, 2005, 2004 and 2003

19. COMMITMENTS AND CONTINGENCIES (CONTINUED)
Indemnities

In the normal course of its business, the Company has entered into agreements that include indemnities in favor of third parties, such as engagement letters with advisors and consultants, outsourcing agreements, underwriting and agency agreements, information technology agreements, distribution agreements and service agreements. The Company has also agreed to indemnify its directors and certain of its officers and employees in accordance with the Company's by-laws. The Company believes any potential liability under these agreements is neither probable nor estimatable. Therefore, the Company has not recorded any associated liability.

Lease Commitments

The Company leases various facilities and equipment under operating leases with terms of up to six years. As of December 31, 2005, minimum future lease payments under such leases were as follows:

2006

$ 6,029

2007

4,778

2008

1,477

2009

374

2010

39

Total

$ 12,697

Total rental expense for the years ended December 31, 2005, 2004 and 2003 was $8.5 million, $16.3 million and $23.6 million, respectively.

The Company has four noncancelable sublease agreements that expire on March 31, 2008. As of December 31, 2005, the minimum future lease payments under the sublease agreements were as follows:

2006

$ 1,140

2007

1,174

2008

293

Total

$ 2,607

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholder of
Sun Life Assurance Company of Canada (U.S.)
Wellesley Hills, Massachusetts

We have audited the accompanying consolidated balance sheets of Sun Life Assurance Company of Canada (U.S.) and subsidiaries (the "Company") as of December 31, 2005 and 2004, and the related consolidated statements of income, comprehensive income, stockholder's equity, and cash flows for each of the three years in the period ended December 31, 2005. Our audits also included the financial statement schedules listed in the Index at Item 15. These financial statements and consolidated financial statement schedules are the responsibility of the Company's management. Our responsibility is to express an opinion on the financial statements and financial statement schedules based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (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. The Company is not required to have, nor were we engaged to perform an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Sun Life Assurance Company of Canada (U.S.) and subsidiaries as of December 31, 2005 and 2004, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2005, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, such consolidated financial statement schedules, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly in all material respects the information set forth therein.

As discussed in Note 1 to the consolidated financial statements, effective January 1, 2004, the Company adopted the provisions of the American Institute of Certified Public Accountants' Statement of Position 03-1, "Accounting and Reporting by Insurance Enterprises for Certain Nontraditional Long-Duration Contracts and for Separate Accounts." As discussed in Note 1 to the consolidated financial statements, effective December 31, 2003, the Company adopted the provisions of FASB Interpretation No. 46, "Consolidation of Variable Interest Entities, an Interpretation of Accounting Research Bulletin No. 51" and FASB Interpretation No. 46R, Consolidation of Variable Interest Entities, an Interpretation of Accounting Research Bulletin No. 51" (Revised).

DELOITTE & TOUCHE LLP

Boston, Massachusetts
March 23, 2006

PART C

ITEM 26. EXHIBITS

A. Resolution of the Board of Directors of Sun Life Assurance Company of Canada (U.S.), dated December 3, 1985, authorizing the establishment of Sun Life of Canada (U.S.) Variable Account G (Incorporated herein by reference to the Registration Statement of Sun Life of Canada (U.S.) Variable Account F on Form N-4, File No. 333-37907, filed with the Securities and Exchange Commission on October 14, 1997.)

B. None.

C. Marketing Coordination and Administrative Service Agreement between Sun Life Assurance Company of Canada (U.S.) and Clarendon Insurance Agency, Inc. (Incorporated herein by reference to Post-Effective Amendment No. 4 to the Registration Statement of Sun Life of Canada (U.S.) Variable Account G on Form N-6, File No. 333-65048, filed with the Securities and Exchange Commission on October 1, 2002.)

D. (1) Flexible Premium Variable Universal Life Insurance Policy (Incorporated herein by reference to Pre-Effective Amendment No. 1 to the Registration Statement of Sun Life of Canada (U.S.) Variable Account G on Form S-6, File No. 333-13087, filed with the Securities and Exchange Commission on January 22, 1997.)

(2) Additional Protection Benefit Rider (APB Rider) (Incorporated herein by reference to Pre-Effective Amendment No. 1 to the Registration Statement of Sun Life of Canada (U.S.) Variable Account G on Form S-6, File No. 333-13087, filed with the Securities and Exchange Commission on January 22, 1997.)

(3) Flexible Premium Variable Universal Life Insurance Certificate (Group Life) (Incorporated herein by reference to Post-Effective Amendment No. 7 to the Registration Statement of Sun Life of Canada (U.S.) Variable Account G on Form S-6, File No. 333-13087, filed with the Securities and Exchange Commission on April 30, 2001.)

(4) Flexible Premium Variable Universal Life Insurance Certificate (Incorporated herein by reference to Post-Effective Amendment No. 7 to the Registration Statement of Sun Life of Canada (U.S.) Variable Account G on Form S-6, File No. 333-13087, filed with the Securities and Exchange Commission on April 30, 2001.)

(5) Additional Protection Benefit Rider (APB Rider)(Group Life) (Incorporated herein by reference to Post-Effective Amendment No. 7 to the Registration Statement of Sun Life of Canada (U.S.) Variable Account G on Form S-6, File No. 333-13087, filed with the Securities and Exchange Commission on April 30, 2001.)

(6) Maturity Extension Rider (Incorporated herein by reference to Pre-Effective Amendment No. 1 to the Registration Statement of Sun Life of Canada (U.S.) Variable Account I on Form S-6, File No. 333-68601, filed with the Securities and Exchange Commission on December 9, 1998.)

(7) Enhanced Cash Surrender Value Endorsement (Incorporated herein by reference to Pre-Effective Amendment No. 1 to the Registration Statement of Sun Life of Canada (U.S.) Variable Account I on Form S-6, File No. 333-68601, filed with the Securities and Exchange Commission on December 9, 1998.)

(8) Fixed Account Endorsement (Incorporated herein by reference to Post-Effective Amendment No. 4 to the Registration Statement of Sun Life of Canada (U.S.) Variable Account G on Form N-6, File No. 333-65048, filed with the Securities and Exchange Commission on October 1, 2002.)

(9) Directed Deductions Endorsement (Incorporated herein by reference to Post-Effective Amendment No. 4 to the Registration Statement of Sun Life of Canada (U.S.) Variable Account G on Form N-6, File No. 333-65048, filed with the Securities and Exchange Commission on October 1, 2002.)

E. (1) Application for Flexible Premium Variable Universal Life Insurance Policy (Incorporated herein by reference to Pre-Effective Amendment No. 1 to the Registration Statement of Sun Life of Canada (U.S.) Variable Account G on Form S-6, File No. 333-13087, filed with the Securities and Exchange Commission on January 22, 1997.)

(2) Application for Flexible Premium Variable Universal Life Insurance Policy (Master Application) (Incorporated herein by reference to Post-Effective Amendment No. 7 to the Registration Statement of Sun Life of Canada (U.S.) Variable Account G on Form S-6, File No. 333-13087, filed with the Securities and Exchange Commission on April 30, 2001.)

(3) Application for Flexible Premium Variable Universal Life Insurance Policy (GI Application) (Incorporated herein by reference to Post-Effective Amendment No. 7 to the Registration Statement of Sun Life of Canada (U.S.) Variable Account G on Form S-6, File No. 333-13087, filed with the Securities and Exchange Commission on April 30, 2001.)

(4) Application for Flexible Premium Variable Universal Life Insurance Policy (Medical Application) (Incorporated herein by reference to Post-Effective Amendment No. 7 to the Registration Statement of Sun Life of Canada (U.S.) Variable Account G on Form S-6, File No. 333-13087, filed with the Securities and Exchange Commission on April 30, 2001.)

(5) Consent Form (Incorporated herein by reference to Post-Effective Amendment No. 7 to the Registration Statement of Sun Life of Canada (U.S.) Variable Account G on Form S-6, File No. 333-13087, filed with the Securities and Exchange Commission on April 30, 2001.)

(6) Application for Flexible Premium Variable Universal Life Insurance Policy (Expanded GI Application) (Incorporated herein by reference to Post-Effective Amendment No. 4 to the Registration Statement of Sun Life of Canada (U.S.) Variable Account G on Form N-6, File No. 333-65048, filed with the Securities and Exchange Commission on October 1, 2002.)

F. (1) Certificate of Incorporation of Sun Life Assurance Company of Canada (U.S.) (Incorporated herein by reference to the Depositor's Form 10-K, File No. 333-82824, filed with the Securities and Exchange Commission on March 29, 2004.)

(2) Bylaws of the Depositor, as amended March 19, 2004 (Incorporated herein by reference to the Depositor's Form 10-K, File No. 333-82824, filed with the Securities and Exchange Commission on March 29, 2004.)

G. Specimen Reinsurance Contract. (Incorporated herein by reference to Post-Effective Amendment No. 4 to the Registration Statement on Form N-6, File No. 333-65048, filed with the Securities and Exchange Commission on October 1, 2002.)

H. (1) Participation Agreement, dated February 17, 1998, by and among AIM Variable Insurance Funds, Inc., AIM Distributors, Inc., Sun Life Assurance Company of Canada (U.S.), and Clarendon Insurance Agency, Inc. (Incorporated herein by reference to Post-Effective Amendment No. 1 to the Registration Statement on Form N-4, File No. 333-119151, filed with the Securities and Exchange Commission on February 3, 2000.)

(2) Amended and Restated Participation Agreement, dated December 13, 2004, by and among Sun Capital Advisers Trust, Sun Capital Advisers, Inc., Sun Life Insurance and Annuity Company of New York and Sun Life Assurance Company of Canada (U.S.) (Incorporated herein by reference to Post-Effective Amendment No. 1 to the Registration Statement on Form N-4, File No. 333-119151, filed with the Securities and Exchange Commission on April 28, 2005.)

(3) Amended and Restated Participation Agreement, dated September 1, 2004, by and among Sun Life Assurance Company of Canada (U.S.), Variable Insurance Products Fund and Fidelity Distributors Corporation (Incorporated herein by reference to Post-Effective Amendment No. 1 to the Registration Statement on Form N-4, File No. 333-119151, filed with the Securities and Exchange Commission on April 28, 2005.)

(4) Participation Agreement, dated September 1, 2002, by and among Sun Life Assurance Company of Canada (U.S.), Clarendon Insurance Agency, Inc., Alliance Capital Management L.P. and Alliance Fund Distributors, Inc. (Incorporated herein by reference to Post-Effective Amendment No. 7 to the Registration Statement on Form N-4, File No. 333-82957, filed with the Securities and Exchange Commission on July 27, 2001.)

(5) Participation Agreement, dated September 16, 2002, by and among the Franklin Templeton Variable Insurance Products Trust, Franklin Templeton Distributors, Inc, Sun Life Insurance and Annuity Company of New York and Sun Life Assurance Company of Canada (U.S.) (Incorporated herein by reference to the Registration Statement of KBL Variable Account A on Form N-4, File No. 333-102278, filed with the Securities and Exchange Commission on December 31, 2002.)

(6) Participation Agreement by and among Sun Life Assurance Company of Canada (U.S.) and Lord, Abbett & Co. (Incorporated herein by reference to Post-Effective Amendment No. 8 to the Registration Statement on Form S-6, File No. 333-13087, filed with the Securities and Exchange Commission on April 26, 2002.)

(7) Amended and Restated Participation Agreement, dated November 6, 2002,by and among MFS/Sun Life Series Trust, Sun Life Insurance and Annuity Company of New York, Sun Life Assurance Company of Canada (U.S.), and Massachusetts Financial Services Company (Incorporated herein by reference to ost-Effective Amendment No. 3 to the Registration Statement on Form N-4, File No. 333-107983, filed with the Securities and Exchange Commission on May 28, 2004.)

(8) Participation Agreement, dated April 30, 2001, by and among Sun Life Assurance Company of Canada (U.S.), Rydex Variable Trust and Rydex Distributors, Inc. (Incorporated herein by reference to Post-Effective Amendment No. 8 to the Registration Statement on Form S-6, File No. 333-13087, filed with the Securities and Exchange Commission on April 26, 2002.)

(9) Amended and Restated Participation Agreement, dated May 1, 2004, by and among Sun Life Assurance Company of Canada (U.S.), Sun Life Insurance and Annuity Company of New York, Dreyfus Variable Investment Fund, The Dreyfus Socially Responsible Growth Fund, Inc. and Dreyfus Life and Annuity Index Fund, Inc. (Incorporated herein by reference to Post-Effective Amendment No. 4 to the Registration Statement on Form N-6, File No. 333-100831, filed with the Securities and Exchange Commission on April 29, 2005.)

(10) Participation Agreement, dated July 15, 2002, by and among Sun Life Assurance Company of Canada (U.S.), Deutsche Asset Management VIT Funds and Deutsche Asset Management, Inc. (Incorporated herein by reference to Post-Effective Amendment No. 2 to the Registration Statement on Form S-6, File No. 333-65048, filed with the Securities and Exchange Commission on July 3, 2002.)

(11) Participation Agreement, dated September 12, 2002, by and among Sun Life Assurance Company of Canada (U.S.), Sun Life Insurance and Annuity Company of New York, PIMCO Variable Insurance Trust and PIMCO Funds Distributors LLC. (Incorporated herein by reference to Post-Effective Amendment No. 3 to the Registration Statement on Form N-6, File No. 333-59662, filed with the Securities and Exchange Commission on February 26, 2003.)

(12) Participation Agreement, dated August 6, 2004, by and among Sun Life Assurance Company of Canada (U.S.), Sun Life Insurance and Annuity Company of New York, Delaware VIP Trust, Delaware Management Company and Delaware Distributors, LP. (Incorporated herein by reference to Post-Effective Amendment No. 4 to the Registration Statement on Form N-6, File No. 333-100831, filed with the Securities and Exchange Commission on April 29, 2005.)

(13) Participation Agreement, dated December 31, 2002, by and among Oppenheimer Variable Account Funds, OppenheimerFunds, Inc. and Sun Life Assurance Company of Canada (U.S.) (Incorporated herein by reference to Post-Effective Amendment No. 4 to the Registration Statement on Form N-6, File No. 333-100831, filed with the Securities and Exchange Commission on April 29, 2005).

(14) Participation Agreement by and among Sun Life Assurance Company of Canada (U.S.), Neuberger & Berman Advisers Management Trust, Advisers Managers Trust and Neuberger & Berman Management Incorporated. (Incorporated herein by reference to Pre-Effective Amendment No. 1 to the Registration Statement on Form S-6, File No. 333-13087, filed with the Securities and Exchange Commission on January 22, 1997.)

(15) Amended and Restated Participation Agreement by and among Sun Life Assurance Company of Canada (U.S.), Sun Life Insurance and Annuity Company of New York, T. Rowe Price Equity Series, Inc. and T. Rowe Price Investment Services, Inc. (Incorporated herein by reference to Post-Effective Amendment No. 5 to the Registration Statement on Form S-6, File No. 333-13087, filed with the Securities and Exchange Commission on April 29, 1999.)

I. Third Party Administration Agreement between Andesa TPA, Inc. and Sun Life Assurance Company of Canada. (Incorporated herein by reference to Post-Effective Amendment No. 4 to the Registration Statement of Sun Life of Canada (U.S.) Variable Account G on Form N-6, File No. 333-65048, filed with the Securities and Exchange Commission on October 1, 2002.)

J. (1) <R>Powers of Attorney.</R>

(2) Resolution of the Board of Directors of the Depositor dated July 24, 2003, authorizing the use of Powers of Attorney for Officer signatures. (Incorporated herein by reference to the Registration Statement of Keyport Variable Account A on Form N-4, File No. 333-112506, filed with the Securities and Exchange Commission on February 5, 2004.)

K. Legal Opinion.

L. None.

M. None.

N. Consent of Independent Registered Public Accounting Firm.

O. None.

P. None.

Q. None.

ITEM 27. DIRECTORS AND OFFICERS OF THE DEPOSITOR

Name and Principal
Business Address

Positions and Offices
With Depositor

<R>

C. James Prieur Sun Life Assurance Company of Canada 150 King Street West Toronto, Ontario Canada M5H 1J9	Director & Chairman
Thomas A. Bogart Sun Life Assurance Company of Canada 150 King Street West Toronto, ON M5H 1J9	Director
Gary Corsi Sun Life Assurance Company of Canada (U.S.) One Sun Life Executive Park Wellesley Hills, MA 02481	Director & Vice President & Chief Financial Officer & Treasurer
Scott M. Davis Sun Life Assurance Company of Canada (U.S.) One Sun Life Executive Park Wellesley Hills, MA 02481	Director & Vice President & General Counsel
Paul W. Derksen Sun Life Assurance Company of Canada 150 King Street West Toronto, Ontario Canada M5H 1J9	Director
Mary M. Fay Sun Life Assurance Company of Canada (U.S.) One Sun Life Executive Park Wellesley Hills, MA 02481	Director & Vice President & General Manager, Annuities
Robert C. Salipante Sun Life Assurance Company of Canada (U.S.) One Sun Life Executive Park Wellesley Hills, MA 02481	Director & President
Donald A. Stewart Sun Life Assurance Company of Canada 150 King Street West Toronto, Ontario Canada M5H 1J9	Director
Claude A. Accum Sun Life Assurance Company of Canada (U.S.) One Sun Life Executive Park Wellesley Hills, MA 02481	Vice President & General Manager, Individual Insurance
James M.A. Anderson Sun Life Assurance Company of Canada (U.S.) One Sun Life Executive Park Wellesley Hills, MA 02481	ExecutiveVice President & Chief Investment Officer
Keith Gubbay Sun Life Assurance Company of Canada (U.S.) One Sun Life Executive Park Wellesley Hills, MA 02481	Vice President & Chief Actuary
Ellen B. King Sun Life Assurance Company of Canada (U.S.) One Sun Life Executive Park Wellesley Hills, MA 02481	Assistant Vice President & Senior Counsel & Secretary
Michelle Van Leer Sun Life Assurance Company of Canada (U.S.) One Sun Life Executive Park Wellesley Hills, MA 02481	Vice President & Co-General Manager, Individual Insurance
John R. Wright Sun Life Assurance Company of Canada (U.S.) One Sun Life Executive Park Wellesley Hills, MA 02481	Executive Vice President, Sun Life Financial U.S. Operations

</R>

ITEM 28. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE DEPOSITOR OR THE REGISTRANT

No person is directly or indirectly controlled by the Registrant. The Registrant is a separate account of Sun Life Assurance Company of Canada (U.S.), which is ultimately controlled by Sun Life Financial.

<R>

The organization chart of Sun Life Financial is filed as Exhibit 13 to Post-Effective Amendment No. 16 to the Registration Statement on Form N-4 of Keyport Variable Account A, File Nos. 333-83516, filed April 11, 2006.</R>

None of the companies listed in such Exhibit 13 is a subsidiary of the Registrant; therefore, the only financial statements being filed are those of Sun Life Assurance Company of Canada (U.S.).

ITEM 29. INDEMNIFICATION

Insofar as indemnification for liability arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of Sun Life Assurance Company of Canada (U.S.) pursuant to the certificate of incorporation, by-laws, or otherwise, Sun Life (U.S.) has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by Sun Life (U.S.) of expenses incurred or paid by a director, officer, controlling person of Sun Life (U.S.) in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, Sun Life (U.S.) will submit to a court of appropriate jurisdiction the question whether such indemnification by them is against public policy as expressed in the Act, unless in the opinion of their counsel the matter has been settled by controlling precedent, and will be governed by the final adjudication of such issue.

ITEM 30. PRINCIPAL UNDERWRITERS

Clarendon Insurance Agency, Inc., which is a wholly-owned subsidiary of Sun Life Assurance Company of Canada (U.S.), acts as general distributor for the Registrant, Sun Life of Canada (U.S.) Variable Accounts C, D, E, F and I, Keyport Variable Account A, KMA Variable Account, Keyport Variable Account I, KBL Variable Account A, KBL Variable Annuity Account, Sun Life (N.Y.) Variable Accounts A, B, C and D, and Money Market Variable Account, High Yield Variable Account, Capital Appreciation Variable Account, Government Securities Variable Account, World Governments Variable Account, Total Return Variable Account and Managed Sectors Variable Account.

<R>

Name and Principal	Position and Offices
Business Address*	with Underwriter

Katherine E. Savary	President
Claude A. Accum	Director
Gary Corsi	Director
Mary M. Fay	Director
Ellen B. King	Secretary
Ann B. Teixeira	Assistant Vice President, Compliance
Thomas Horack	Chief Compliance Officer
Michael L. Gentile	Vice President
John E. Coleman	Vice President
Nancy C. Atherton	Assistant Vice President & Tax Officer
Jane F. Jette	Financial/Operations Principal and Treasurer
Amy E. Mercer	Assistant Secretary

</R>

* The principal business address of all directors and officers of the principal underwriter is One Sun Life Executive Park, Wellesley Hills, Massachusetts 02481.

ITEM 31. LOCATION OF ACCOUNTS AND RECORDS

Accounts, books and other documents required to be maintained by Section 31(a) of the Investment Company Act of 1940 and the Rules promulgated thereunder are maintained, in whole or in part, by Sun Life Assurance Company of Canada (U.S.) at its offices at One Sun Life Executive Park, Wellesley Hills, Massachusetts 02481 or at the offices of Clarendon Insurance Agency, Inc., at One Sun Life Executive Park, Wellesley Hills, Massachusetts 02481.

ITEM 32. MANAGEMENT SERVICES

Not applicable.

ITEM 33. FEE REPRESENTATION

Sun Life Assurance Company of Canada (U.S.)("Sun Life of Canada (U.S.)") hereby represents that the aggregate fees and charges under the Policy are reasonable in relation to the services rendered, the expenses expected to be incurred, and the risks assumed by Sun Life (U.S.).

SIGNATURES

<R>As required by the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant certifies that it meets all of the requirements of Securities Act Rule 485(b) for effectiveness of this Post-Effective Amendment to the Registration Statement and has caused this Post-Effective Amendment to the Registration Statement to be signed on its behalf, in the Town of Wellesley Hills, and Commonwealth of Massachusetts on this 1st day of May, 2006.

	SUN LIFE OF CANADA (U.S.) VARIABLE ACCOUNT G
	(Registrant)

	SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
	(Depositor)

	By: /s/ ROBERT C. SALIPANTE*
	Robert C. Salipante
	Director & President

*By:	/s/ SANDRA M. DADALT
	Sandra M. DaDalt
	Assistant Vice President & Senior Counsel

As required by the Securities Act of 1933, this Registration Statement has been signed below by the following persons in the capacities with the Depositor, Sun Life Assurance Company of Canada (U.S.), and on the dates indicated.

SIGNATURE	TITLE	DATE

/s/ Robert C. Salipante*	Director & President	May 1, 2006
Robert C. Salipante	(Principal Executive Officer)

/s/ Gary Corsi*	Director & Vice President & Chief Financial Officer &	May 1, 2006
Gary Corsi	Treasurer
	(Principal Financial & Accounting Officer)

*By: /s/ Sandra M. DaDalt	Attorney-in-Fact for:	May 1, 2006
Sandra M. DaDalt	Donald A. Stewart, Director
	C. James Prieur, Director & Chairman
	Thomas A. Bogart, Director
	Paul W. Derksen, Director
	Scott M. Davis, Director & Vice President & General Counsel
	Mary M. Fay, Director & Vice President & General Manager, Annuities

*Sandra M. DaDalt has signed this document on the indicated date on behalf of the above Directors and Officers for the Depositor pursuant to powers or attorney duly executed by such persons and a resolution of the Board of Directors authorizing use of powers of attorney for Officer signatures. Resolution of the Board of Directors is incorporated herein by reference to the Registration Statement of Keyport Variable Account A on Form N-4, File No. 333-112506, filed on or about February 5, 2004. Powers of attorney are enclosed herein. </R>

EXHIBIT INDEX

<R>

J1	Powers of Attorney

K	Legal Opinion

N	Consent of Independent Registered Public Accounting Firm

	Representation of Counsel Pursuant to Rule 485(b)

</R>

Topic	Page
Alteration	26
Assignments	26
Rights of Owner	26
Rights of Beneficiary	27
Reports to Policyowners	27
Illustrations	27
Conversion	27
Misstatement of Age or Sex	27
Suicide	27
Incontestability	27
Addition, Deletion or Substitution of Investments	27
Nonparticipating	27
Modification	28
Entire Contract	28
Performance Information	28
Voting Rights	29
Distribution of Policy	29
Federal Income Tax Considerations	30
Our Tax Status	30
Taxation of Policy Proceeds	31
Withholding	33
Tax Return Disclosure	33
Other Information	34
State Regulation	34
Legal Proceedings	34
Experts	34
Registration Statements	34
Financial Statements	34
Appendix A - Glossary of Policy Terms	35
Appendix B - Privacy Policy	38

	DRS			DSV		DMC⁽¹⁾			DCA			DSC		DGI
	Sub-			Sub-		Sub-			Sub-			Sub-		Sub-
	Account			Account		Account			Account			Account		Account
Income:
Dividends	$	-		$	-	$	-		$	44		$	-	$	166
Net investment income	$	-		$	-	$	-		$	44		$	-	$	166

Realized and Unrealized Gains (Losses):
Realized gains (losses) on investment transactions:
Realized gain (loss) on sale of fund shares	$	1,647		$	6,751	$	-		$	33,800		$	488,186	$	608
Realized gain distributions		-			-		-			-			-		-
Net realized gains (losses)	$	1,647		$	6,751	$	-		$	33,800		$	488,186	$	608
Net unrealized appreciation (depreciation) on investments:
End of year	$	16,433		$	27,432	$	(62	)	$	986		$	867,750	$	1,414
Beginning of year		-			-		-			30,563			808,839		1,694
Change in unrealized appreciation (depreciation)	$	16,433		$	27,432	$	(62	)	$	(29,577	)	$	58,911	$	(280	)
Realized and unrealized gains (losses)	$	18,080		$	34,183	$	(62	)	$	4,223		$	547,097	$	328
Increase (Decrease) in net assets from operations	$	18,080		$	34,183	$	(62	)	$	4,267		$	547,097	$	494

	DQB			DSI		FEI			FGP			FVG		FHI
	Sub-			Sub-		Sub-			Sub-			Sub-		Sub-
	Account			Account		Account			Account			Account		Account
Income:
Dividends	$	221,771		$	516,314	$	144,563		$	13,030		$	-	$	50,510
Net investment income	$	221,771		$	516,314	$	144,563		$	13,030		$	-	$	50,510

Realized and Unrealized Gains (Losses):
Realized gains (losses) on investment transactions:
Realized gain (loss) on sale of fund shares	$	13,015		$	74,182	$	1,215,896		$	(11,064	)	$	12	$	1,663
Realized gain distributions		-			-		317,683			-			-		-
Net realized gains (losses)	$	13,015		$	74,182	$	1,533,579		$	(11,064	)	$	12	$	1,663
Net unrealized appreciation (depreciation) on investments:
End of year	$	(59,564	)	$	4,598,520	$	1,586,489		$	463,214		$	285	$	(16,388	)
Beginning of year		21,499			3,419,365		2,764,175			292,552			-		26,394
Change in unrealized appreciation (depreciation)	$	(81,063	)	$	1,179,155	$	(1,177,686	)	$	170,662		$	285	$	(42,782	)
Realized and unrealized gains (losses)	$	(68,048	)	$	1,253,337	$	355,893		$	159,598		$	297	$	(41,119	)
Increase (Decrease) in net assets from operations	$	153,723		$	1,769,651	$	500,456		$	172,628		$	297	$	9,391

	FIG		FMM		FL5		FAM			FCN		FL1
	Sub-		Sub-		Sub-		Sub-			Sub-		Sub-
	Account		Account		Account		Account			Account		Account
Income:
Dividends	$	-	$	4,087	$	108,379	$	-		$	5,470	$	3,742
Net investment income	$	-	$	4,087	$	108,379	$	-		$	5,470	$	3,742

Realized and Unrealized Gains (Losses):
Realized gains (losses) on investment transactions:
Realized gain (loss) on sale of fund shares	$	2,012	$	-	$	-	$	23,237		$	67,115	$	65,309
Realized gain distributions		-		-		-		-			342		535
Net realized gains (losses)	$	2,012	$	-	$	-	$	23,237		$	67,457	$	65,844
Net unrealized appreciation (depreciation) on investments:
End of year	$	36,786	$	-	$	-	$	705		$	602,160	$	1,037,014
Beginning of year		-		-		-		25,374			296,558		400,134
Change in unrealized appreciation (depreciation)	$	36,786	$	-	$	-	$	(24,669	)	$	305,602	$	636,880
Realized and unrealized gains (losses)	$	38,798	$	-	$	-	$	(1,432	)	$	373,059	$	702,724
Increase (Decrease) in net assets from operations	$	38,798	$	4,087	$	108,379	$	(1,432	)	$	378,529	$	706,466

	FL3		FIP		FL2		MLV			FRE⁽¹⁾		FSC
	Sub-		Sub-		Sub-		Sub-			Sub-		Sub-
	Account		Account		Account		Account			Account		Account
Income:
Dividends	$	4,137	$	965	$	8,822	$	4,930		$	-	$	-
Net investment income	$	4,137	$	965	$	8,822	$	4,930		$	-	$	-

Realized and Unrealized Gains (Losses):
Realized gains (losses) on investment transactions:
Realized gain (loss) on sale of fund shares	$	9,986	$	360	$	17,357	$	2,862		$	17	$	111
Realized gain distributions		-		-		8,822		219,457			-		-
Net realized gains (losses)	$	9,986	$	360	$	26,179	$	222,319		$	17	$	111
Net unrealized appreciation (depreciation) on investments:
End of year	$	173,889	$	8,919	$	439,107	$	(101,065	)	$	78	$	30,860
Beginning of year		56,022		7,469		163,950		-			-		1,066
Change in unrealized appreciation (depreciation)	$	117,867	$	1,450	$	275,157	$	(101,065	)	$	78	$	29,794
Realized and unrealized gains (losses)	$	127,853	$	1,810	$	301,336	$	121,254		$	95	$	29,905
Increase (Decrease) in net assets from operations	$	131,990	$	2,775	$	310,158	$	126,184		$	95	$	29,905

	TFS		FTI			TSF			FTG			GS3			GS7
	Sub-		Sub-			Sub-			Sub-			Sub-			Sub-
	Account		Account			Account			Account			Account			Account
Income:
Dividends	$	19,1944	$	9,030		$	131,706		$	1,727		$	587		$	125
Net investment income	$	19,194	$	9,030		$	131,706		$	1,727		$	587		$	125

Realized and Unrealized Gains (Losses):
Realized gains (losses) on investment transactions:
Realized gain (loss) on sale of fund shares	$	16,269	$	19,757		$	(29,043	)	$	1,619		$	4,900		$	1,817
Realized gain distributions		-		-			-			-			-			-
Net realized gains (losses)	$	16,269	$	19,757		$	(29,043	)	$	1,619		$	4,900		$	1,817
Net unrealized appreciation (depreciation) on investments:
End of year	$	261,580	$	115,829		$	1,469,254		$	26,638		$	8,649		$	6,197
Beginning of year		1,448		61,357			555,885			6,890			8,146			4,603
Change in unrealized appreciation (depreciation)	$	260,132	$	54,472		$	913,369		$	19,748		$	503		$	1,594
Realized and unrealized gains (losses)	$	276,401	$	74,229		$	884,326		$	21,367		$	5,403		$	3,411
Increase (Decrease) in net assets from operations	$	295,595	$	83,259		$	1,016,032		$	23,094		$	5,990		$	3,536

	IV2		JBP			JSC			JEP			LA1			LA3
	Sub-		Sub-			Sub-			Sub-			Sub-			Sub-
	Account		Account			Account			Account			Account			Account
Income:
Dividends	$	-	$	384,798		$	-		$	1,394		$	71,434		$	-
Net investment income	$	-	$	384,798		$	-		$	1,394		$	71,434		$	-

Realized and Unrealized Gains (Losses):
Realized gains (losses) on investment transactions:
Realized gain (loss) on sale of fund shares	$	1,946	$	461		$	14,503		$	10,925		$	223,193		$	649
Realized gain distributions		-		194,363			80,007			-			436,450			1,475
Net realized gains (losses)	$	1,946	$	194,824		$	94,510		$	10,925		$	659,643		$	2,124
Net unrealized appreciation (depreciation) on investments:
End of year	$	119,291	$	173,899		$	75,473		$	1,996		$	148,781		$	7,573
Beginning of year		65,430		419,326			151,353			16,203			588,512			1,639
Change in unrealized appreciation (depreciation)	$	53,861	$	(245,427	)	$	(75,880	)	$	(14,207	)	$	(439,731	)	$	5,934
Realized and unrealized gains (losses)	$	55,807	$	(50,603	)	$	18,630		$	(3,282	)	$	219,912		$	8,058
Increase (Decrease) in net assets from operations	$	55,807	$	334,195		$	18,630		$	(1,888	)	$	291,346		$	8,058

	SCM			SIG			SC1			SRE			SC5			SC7
	Sub-			Sub-			Sub-			Sub-			Sub-			Sub-
	Account			Account			Account			Account			Account			Account
Income:
Dividends	$	411		$	165,650		$	595,734		$	104,956		$	3,339		$	197
Net investment income	$	411		$	165,650		$	595,734		$	104,956		$	3,339		$	197

Realized and Unrealized Gains (Losses):
Realized gains (losses) on investment transactions:
Realized gain (loss) on sale of fund shares	$	8,687		$	9,072		$	1		$	170,127		$	54,823		$	752
Realized gain distributions		51,506			34,584			-			564,686			93,428			-
Net realized gains (losses)	$	60,193		$	43,656		$	1		$	734,813		$	148,251		$	752
Net unrealized appreciation (depreciation) on investments:
End of year	$	(41,402	)	$	(73,041	)	$	-		$	699,921		$	757,675		$	3,111
Beginning of year		20,401			67,488			-			793,856			301,740			1,206
Change in unrealized appreciation (depreciation)	$	(61,803	)	$	(140,529	)	$	-		$	(93,935	)	$	455,935		$	1,905
Realized and unrealized gains (losses)	$	(1,610	)	$	(96,873	)	$	1		$	640,878		$	604,186		$	2,657
Increase (Decrease) in net assets from operations	$	(1,199	)	$	68,777		$	595,735		$	745,834		$	607,525		$	2,854

	SCB			TBC			REI			RNA			VMG			VCP
	Sub-			Sub-			Sub-			Sub-			Sub-			Sub-
	Account			Account			Account			Account			Account			Account
Income:
Dividends	$	-		$	201		$	211,690		$	-		$	-		$	-
Net investment income	$	-		$	201		$	211,690		$	-		$	-		$	-

Realized and Unrealized Gains (Losses):
Realized gains (losses) on investment transactions:
Realized gain (loss) on sale of fund shares	$	26,456		$	508		$	72,619		$	2,318		$	12		$	(5	)
Realized gain distributions		262,943			-			652,582			-			-			-
Net realized gains (losses)	$	289,399		$	508		$	725,201		$	2,318		$	12		$	(5	)
Net unrealized appreciation (depreciation) on investments:
End of year	$	(30,910	)	$	3,124		$	673,653		$	2,564		$	(722	)	$	55
Beginning of year		163,301			1,288			1,062,450			1,647			-			-
Change in unrealized appreciation (depreciation)	$	(194,211	)	$	1,836		$	(388,797	)	$	917		$	(722	)	$	55
Realized and unrealized gains (losses)	$	95,188		$	2,344		$	336,404		$	3,235		$	(710	)	$	50
Increase (Decrease) in net assets from operations	$	95,188		$	2,545		$	548,094		$	3,235		$	(710	)	$	50

	VGI
	Sub-
	Account
Income:
Dividends	$	-
Net investment income	$	-

Realized and Unrealized Gains (Losses):
Realized gains (losses) on investment transactions:
Realized gain (loss) on sale of fund shares	$	1
Realized gain distributions		-
Net realized gains (losses)	$	1
Net unrealized appreciation (depreciation) on investments:
End of year	$	(67	)
Beginning of year		-
Change in unrealized appreciation (depreciation)	$	(67	)
Realized and unrealized gains (losses)	$	(66	)
Increase (Decrease) in net assets from operations	$	(66	)

l	Establishment of reserves primarily related to death benefit and income benefit guarantees provided under variable annuity contracts;
l	Deferral of sales inducements that meet certain criteria, and amortization using the same method used for DAC; and
l	Reporting and measuring the Company's interest in its separate accounts as investments.

Payees	Type	Rate	Maturity	Principal	Interest Expense

Sun Life Financial (U.S.) Finance, Inc.	Surplus	8.625%	11/06/27	$ 250,000	$ 21,563
Sun Life Financial (U.S.) Finance, Inc.	Surplus	6.150%	12/15/27	150,000	9,225
Sun Life Financial (U.S.) Finance, Inc.	Surplus	7.250%	12/15/15	150,000	10,875
Sun Life Financial (U.S.) Finance, Inc.	Surplus	6.125%	12/15/15	7,500	459
Sun Life Financial (U.S.) Finance, Inc.	Surplus	6.150%	12/15/27	7,500	461
Sun Life (Hungary) LLC	Promissory	5.760%	06/30/12	380,000	21,888
Sun Life (Hungary) LLC	Promissory	5.710%	06/30/12	80,000	4,568
Sun Life Financial Global Funding, L.L.C.	Demand	LIBOR plus 35		100,000	2,279

				$ 1,125,000	$ 71,318

		Gross	Gross	Estimated
	Amortized	Unrealized	Unrealized	Fair
	Cost	Gains	Losses	Value
Available-for-sale fixed maturities:
Asset Backed and Mortgage Backed Securities	$ 5,234,792	$ 40,958	$ (74,124)	$ 5,201,626
Foreign Government & Agency Securities	86,360	2,965	(64)	89,261
States & Political Subdivisions	742	24	-	766
U.S. Treasury & Agency Securities	449,877	4,773	(4,286)	450,364

Corporate securities:
Basic Industry	228,782	6,192	(3,384)	231,590
Capital Goods	602,974	20,310	(4,507)	618,777
Communications	1,285,638	32,582	(24,476)	1,293,744
Consumer Cyclical	1,321,417	16,741	(62,470)	1,275,687
Consumer Noncyclical	548,636	16,985	(6,206)	559,415
Energy	445,207	15,281	(2,225)	458,264
Finance	3,167,168	50,719	(28,844)	3,189,043
Industrial Other	246,421	9,913	(1,029)	255,305
Technology	49,288	853	(1,127)	49,014
Transportation	409,812	17,786	(7,739)	419,859
Utilities	1,543,713	54,264	(13,544)	1,584,433
Total Corporate	9,849,056	241,626	(155,551)	9,935,131

Total available-for-sale fixed maturities	$ 15,620,827	$ 290,346	$ (234,025)	$ 15,677,148

Held-to-maturity fixed maturities:
Sun Life of Canada (U.S.) Holdings, Inc.,
8.526% subordinated debt, due 2027	$ 600,000	$ 45,755	$ -	$ 645,755

Total held-to-maturity fixed maturities	$ 600,000	$ 45,755	$ -	$ 645,755

	Amortized	Gross	Gross	Estimated
	Cost	Gains	Losses	Fair Values
Trading fixed maturities:
Asset Backed and Mortgage Backed Securities	$ 209,548	$ 1,915	$ (3,776)	$ 207,687
Foreign Government & Agency Securities	19,516	-	(136)	19,380

Corporate securities:
Basic Industry	8,649	783	-	9,432
Capital Goods	15,651	751	-	16,402
Communications	343,647	3,607	(8,542)	338,712
Consumer Cyclical	246,522	2,615	(6,160)	242,977
Consumer Noncyclical	84,411	712	(2,370)	82,753
Energy	27,675	3,187	-	30,862
Finance	713,043	13,996	(8,285)	718,754
Industrial Other	47,464	798	(928)	47,334
Technology	3,801	82	-	3,883
Transportation	60,950	2,588	(4,696)	58,842
Utilities	201,885	8,244	(2,299)	207,830
Total Corporate	1,753,698	37,363	(33,280)	1,757,781

Total trading fixed maturities	$ 1,982,762	$ 39,278	$ (37,192)	$ 1,984,848

			December 31, 2005
			Amortized Cost	Estimated Fair Value
Maturities of available-for-sale fixed securities:
	Due in one year or less		$ 453,294	$ 453,070
	Due after one year through five years		2,529,687	2,535,451
	Due after five years through ten years		4,333,947	4,350,783
	Due after ten years		3,069,107	3,136,218
Subtotal - Maturities available-for-sale			10,386,035	10,475,522
Asset-backed securities			5,234,792	5,201,626
Total Available-for-sale			$ 15,620,827	$ 15,667,148

Maturities of trading fixed securities:
	Due in one year or less		$ 89,749	$ 90,981
	Due after one year through five years		503,839	505,854
	Due after five years through ten years		994,999	984,407
	Due after ten years		184,627	195,920
	Subtotal - Maturities of trading		1,773,214	1,777,162
Asset-backed securities			209,548	207,686
	Total Trading		$ 1,982,762	$ 1,984,848

Maturities of held-to-maturity fixed securities:
		Due after ten years	$ 600,000	$ 645,755

	Balance at			Balance at
	January 1,	Additions	Subtractions	December 31,
2005
Mortgage loans	$ 7,646	$ 800	$ (2,174)	$ 6,272

2004
Mortgage loans	$ 6,365	$ 1,530	$ (249)	$ 7,646

	2005	2004
Property Type:
Office building	$ 703,927	$ 620,273
Residential	87,874	89,831
Retail	751,041	619,021
Industrial/warehouse	264,567	237,020
Other	108,743	75,536
Valuation allowances	(6,272)	(7,646)
Total	$ 1,909,880	$ 1,634,035

	2005	2004
Geographic region:

Alabama	$ 8,070	$ 408
Arizona	48,113	45,753
California	144,829	137,387
Colorado	33,238	33,096
Connecticut	30,026	32,973
Delaware	15,194	15,847
Florida	140,592	116,327
Georgia	80,802	78,360
Illinois	23,118	10,473
Indiana	19,950	16,203
Kentucky	25,623	15,015
Louisiana	32,186	21,531
Maryland	64,724	57,323
Massachusetts	142,421	137,535
Michigan	6,799	8,719
Minnesota	53,157	46,341
Missouri	34,567	32,323
Nebraska	7,948	5,368
Nevada	7,509	8,055
New Jersey	36,042	31,943
New Mexico	7,386	7,633
New York	240,390	232,312
North Carolina	43,111	39,831
Ohio	128,525	93,896
Oregon	11,968	6,391
Pennsylvania	118,709	102,767
Tennessee	32,430	26,714
Texas	211,889	136,237
Utah	29,718	28,528
Virginia	17,386	18,378
Washington	73,326	68,389
Wisconsin	19,494	4,658
All other	26,912	24,967
Valuation allowances	(6,272)	(7,646)
Total	$ 1,909,880	$ 1,634,035

2006	$ 11,745
2007	52,697
2008	45,809
2009	42,455
2010	72,676
Thereafter	1,513,988
Total	$ 1,739,370

	Exeter I/O	Fairfield I/O

Prepayment speed	-	-
Weighted average life in years	5.72-5.92	2.89-8.74
Expected credit losses	-	-
Residual cash flows discount rate	4.80%-4.84%	4.43%-5.28%
Treasury rate interpolated for average life	3.35%-3.39%	3.18%-4.03%
Spread over treasuries	1.45%	1.25%
Duration in years	6.64-10.14	1.45-4.92

	Exeter I/O	Fairfield I/O
Amortized cost of retained
Interests	$ 775	$ 719
Fair value of retained interests	841	674
Weighted average life in years	2.32-2.96	1.00-4.36

Expected Credit Losses
Fair value of retained interest as a result of a .20% of adverse change	785	621
Fair value of retained interest as a result of a .30% of adverse change	757	595

Residual Cash flows Discount Rate
Fair value of retained interest as a result of a 10% of adverse change	839	672
Fair value of retained interest as a result of a 20% of adverse change	837	670

	Commercial Mortgages

Prepayment speed	-
Weighted average life in years	14.123-14.84
Expected credit losses	-
Residual cash flows discount rate	5.65%-5.92%
Treasury rate interpolated for average life	4.37%-4.40%
Spread over treasuries	1.28%-1.52%
Duration in years	20.46-20.66

	Year ended December 31,
	2005	2004
Lease contract receivable	$ 25,914	$ 31,803
Less: non-recourse debt	(1,410)	(1,415)
Net Receivable	24,504	30,388
Estimated value of leased assets	21,420	21,420
Less: unearned and deferred income	(9,178)	(11,928)
Investment in leveraged leases	36,746	39,880
Less: fees	(138)	(138)
Net investment in leveraged leases	$ 36,608	$ 39,742

		2005		2004
		Carrying	Estimated	Carrying	Estimated
		Amount	Fair Value	Amount	Fair Value
Financial assets:
	Cash and cash equivalents	$ 347,654	$ 347,654	$ 552,949	$ 552,949
	Fixed maturities	18,261,996	18,307,751	18,784,015	18,873,147
	Equity securities	15,427	15,427	1,006	1,006
	Short-term investments	-	-	23,957	23,957
	Mortgages	1,739,370	1,790,629	1,465,896	1,546,834
	Derivatives instruments -receivables	487,947	487,947	566,401	566,401
	Policy loans	701,769	701,769	696,305	696,305
	Separate accounts	19,095,391	19,095,391	19,120,381	19,120,381

Financial liabilities:
	Policy liabilities	18,668,578	17,449,961	18,846,238	17,677,082
	Derivative instruments - payables	197,765	197,765	228,774	228,774
	Long-term debt	-	-	33,500	33,500
	Long-term debt to affiliates	1,125,000	1,178,918	1,025,000	1,100,501
	Partnership capital securities	607,826	645,755	607,826	689,132
	Separate accounts	19,095,391	19,095,391	19,120,381	19,120,381

		For the Years Ended December 31,
			2005	2004	2003

Insurance premiums:
	Direct		$ 54,915	$ 62,939	$ 67,959
	Ceded		2,933	4,119	7,441
Net premiums			$ 51,982	$ 58,820	$ 60,518

Insurance and other individual policy benefits and claims:
	Direct		$ 225,936	$ 170,381	$ 230,384
	Ceded		38,923	29,004	29,136
Net policy benefits and claims			$ 187,013	$ 141,377	$ 201,248

	2005	2004
Change in projected benefit obligation:
Projected benefit obligation at beginning of year	$ 215,439	$ 191,689
Service cost	10,948	9,873
Interest cost	13,839	12,118
Actuarial loss (gain)	17,780	7,039
Benefits paid	(6,105)	(5,280)
Plan amendments	2,344	-
Curtailment loss (gain)	(24,700)	-
Projected benefit obligation at end of year	$ 229,545	$ 215,439

Change in fair value of plan assets:
Fair value of plan assets at beginning of year	$ 233,551	$ 205,737
Other	(1,250)	(1,050)
Actual return on plan assets	25,900	34,144
Benefits paid	(6,105)	(5,280)
Fair value of plan assets at end of year	$ 252,096	$ 233,551
Information on the funded status of the plan:
Funded status	$ 22,551	$ 18,112
Unrecognized net actuarial loss	7,802	19,339
Unrecognized transition obligation	(10,392)	(13,443)
Unrecognized prior service cost	3,945	7,421
4th quarter contribution	(1,550)	(1,250)
Prepaid benefit cost	$ 22,356	$ 30,179

	2005	2004

Plan assets	$ 211,612	$ 195,332
Projected benefit obligations	(219,802)	(206,748)
Funded status	$ (8,190)	$ (11,416)

Accumulated benefit obligation	$ 212,630	$ 180,201

	Service
Age	Less than 5 years	5 or more years
At least 40 but less than 43	3.0%	5.0%
At least 43 but less than 45	3.5%	5.5%
At least 45	4.5%	6.5%

Change in benefit obligation:	2005	2004

Benefit obligation at beginning of year	$ 48,453	$ 51,278
Service cost	1,333	1,233
Interest cost	2,994	2,957
Actuarial (gain) loss	4,596	(4,583)
Benefits paid	(2,884)	(2,432)
Plan Amendments	(3,192)	-
Benefit obligation at end of year	$ 51,300	$ 48,453

Change in fair value of plan assets:
Fair value of plan assets at beginning of year	$ -	$ -
Employer contributions	2,884	2,432
Benefits paid	(2,884)	(2,432)
Fair value of plan assets at end of year	$ -	$ -

Information on the funded status of the plan:
Funded Status	$ (51,301)	$ (48,453)
Unrecognized net actuarial loss	22,741	19,556
4th quarter contribution	686	628
Unrecognized prior service cost	(5,609)	(2,657)
Accrued benefit cost	$ (33,483)	$ (30,926)

	2005	2004
Components of net periodic benefit cost
Service cost	$ 1,333	$ 1,233
Interest cost	2,994	2,957
Amortization of prior service cost	(241)	(241)
Recognized net actuarial loss	1,273	1,384
Net periodic benefit cost	$ 5,359	$ 5,333

The Company's share of net periodic benefit cost	$ 4,947	$ 4,180

		2005	2004

Balance at January 1		$ 32,571	$ 31,337
Less reinsurance recoverable		(6,381)	(9,146)
Net balance at January 1		26,190	22,191
Incurred related to:
	Current year	23,881	20,889
	Prior years	(3,143)	910
Total incurred		20,738	21,799
Paid losses related to:
	Current year	(13,860)	(12,009)
	Prior years	(5,813)	(5,791)
Total paid		(19,673)	(17,800)

Balance at December 31		33,141	32,571
Less reinsurance recoverable		(5,886)	(6,381)

Net balance at December 31		$ 27,255	$ 26,190

	Year ended December 31, 2005

	Wealth	Individual	Group
	Management	Protection	Protection	Corporate	Totals

Total Revenues	$ 1,342,509	$ 74,535	$ 32,604	$ 110,537	$ 1,560,185
Total Expenditures	1,220,198	70,991	32,333	64,636	1,388,158
Income before income tax expense, minority interest and cumulative effect of change in accounting principle	122,311	3,544	271	45,901	172,027

Net Income	93,570	2,443	176	36,963	133,152

Total Assets	$ 38,631,963	$ 6,005,424	$ 55,319	$1,314,140	$ 46,006,846

	Year ended December 31, 2004

	Wealth	Individual	Group
	Management	Protection	Protection	Corporate	Totals

Total Revenues	$ 1,284,873	$ 65,366	$ 34,908	$ 162,596	$ 1,547,743
Total Expenditures	1,054,852	60,785	31,605	93,470	1,240,712
Income before income tax expense, minority interest and cumulative effect of change in accounting principle	230,021	4,581	3,303	69,126	307,031

Net Income	166,309	3,118	2,147	49,702	221,276

Total Assets	$ 40,961,145	$ 4,111,638	$ 53,131	$1,561,629	$ 46,687,543


	Year ended December 31, 2003

	Wealth	Individual	Group
	Management	Protection	Protection	Corporate	Totals

Total Revenues	$ 1,409,642	$ 49,357	$ 26,609	$ 34,141	$ 1,519,749
Total Expenditures	1,247,670	53,848	25,712	61,792	1,389,022
Income (loss) before income tax expense, minority interest and cumulative effect of change in accounting principle	161,972	(4,491)	897	(27,651)	130,727

Net Income (Loss)	106,655	(2,331)	608	(9,941)	94,991

Total Assets	$ 39,814,262	$ 2,973,014	$ 46,535	$ 840,565	$ 43,674,376