As filed with the Securities and Exchange Commission on April 26, 2007

REGISTRATION NO. 333-100475

811-04440

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM N-4

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

Post-Effective Amendment No. 8

and

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940

Amendment No. 45

SUN LIFE (N.Y.) VARIABLE ACCOUNT C

(Exact Name of Registrant)

SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK

(Name of Depositor)

60 East 42nd Street, Suite 1115

New York, New York 10165

(Address of Depositor’s Principal Executive Offices)

Depositor’s Telephone Number, including Area Code: (212) 983-6352

Bruce A. Teichner, Assistant Vice President and Senior Counsel

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

One Sun Life Executive Park, SC1335

Wellesley Hills, Massachusetts 02481

(Name and Address of Agent for Service)

Copies of Communications to:

Thomas C. Lauerman, Esq.

Jorden Burt LLP

1025 Thomas Jefferson Street, N.W.

Suite 400 East

Washington, D.C. 20007

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

£immediately upon filing pursuant to paragraph (b) of Rule 485

R on May 1, 2007 pursuant to paragraph (b) of Rule 485

£ 60 days after filing pursuant to paragraph (a)(1) of Rule 485

£ on (date) pursuant to paragraph (a)(1) of Rule 485.

If appropriate, check the following box:

£ this post-effective amendment designates a new effective date for previously filed post-effective amendment.

No filing fee is due because an indefinite amount of securities is deemed to have been registered in reliance on Section 24(f) of the Investment Company Act of 1940.

PART A

PROSPECTUS

MAY 1, 2007

SUN LIFE FINANCIAL MASTERS^® ACCESS NY

Sun Life Insurance and Annuity Company of New York and Sun Life (N.Y.) Variable Account C offer the flexible payment deferred annuity contracts described in this Prospectus to individuals.

You may choose among a number of variable investment options and fixed interest options. The variable options are Sub-Accounts in the Variable Account, each of which invests in shares of one of the following funds (the "Funds"):

Large-Cap Equity Funds	Emerging Markets Bond Fund
Columbia Marsico 21st Century Fund, Variable Series -	PIMCO VIT Emerging Markets Bond Portfolio -
B Class	Admin. Class
Columbia Marsico Growth Fund, Variable Series -	International/Global Small/Mid-Cap Equity Funds
B Class	First Eagle Overseas Variable Series
Mutual Shares Securities Fund - Class 2	Mid-Cap Equity Funds
Lord Abbett Series Fund All Value Portfolio - Class VC	Lord Abbett Series Fund Mid-Cap Value Portfolio
Lord Abbett Series Fund Growth & Income Portfolio -	Fidelity® VIP Mid Cap Portfolio - Service Class 2
Class VC	Lord Abbett Series Fund Growth Opportunities
MFS®/ Sun Life Core Equity Series - S Class	Portfolio - Class VC
MFS®/ Sun Life Value Series - S Class	Small-Cap Equity Funds
Oppenheimer Capital Appreciation Fund/VA -	Franklin Small Cap Value Securities Fund - Class 2
Service Shares	SCSM Oppenheimer Main Street Small Cap Fund
Oppenheimer Main Street Fund®/VA - Service Shares	- S Class
SCSM Davis Venture Value Fund - S Class	Multi-Cap Equity Funds
SCSM FI Large Cap Growth Fund - S Class	Sun Capital® All Cap Fund - S Class
Van Kampen LIT Comstock II Fund	Specialty Sector Equity Funds
Asset Allocation Funds	MFS®/ Sun Life Utilities Series - S Class
Fidelity® VIP Balanced Portfolio - Service Class 2	Specialty Sector Commodity Funds
Franklin Income Securities Fund - Class 2	PIMCO VIT CommodityRealReturn Strategy
MFS®/ Sun Life Total Return Series - S Class	Portfolio - Admin. Class
PIMCO VIT All Asset Portfolio - Admin. Class	Real Estate Equity Funds
Oppenheimer Balanced Fund/VA - Service Shares	Sun Capital Real Estate Fund® - S Class
International/Global Equity Funds	Short-Term Bond Funds
Columbia Marsico International Opportunities	PIMCO VIT Low Duration Portfolio - Admin. Class
Fund, Variable Series - B Class	Multi-Sector Bond Funds
Templeton Foreign Securities Fund - Class 2	Franklin Strategic Income Securities Fund - Class 2
Templeton Growth Securities Fund - Class 2	Intermediate-Term Bond Funds
MFS®/ Sun Life International Growth Series - S Class	MFS®/ Sun Life Bond Series - S Class
MFS®/ Sun Life International Value Series - S Class	MFS®/ Sun Life Government Securities Series -
MFS®/ Sun Life Research International Series - S Class	S Class
Oppenheimer Global Securities Fund/VA -	PIMCO VIT Total Return Portfolio - Admin. Class
Service Shares	Sun Capital Investment Grade Bond Fund® -
Target Date Funds	S Class
Fidelity® VIP Freedom 2010 Portfolio - Service Class 2	Inflation-Protected Bond Funds
Fidelity® VIP Freedom 2015 Portfolio - Service Class 2	PIMCO VIT Real Return Portfolio - Admin. Class
Fidelity® VIP Freedom 2020 Portfolio - Service Class 2	High Yield Bond Funds
Emerging Markets Equity Funds	MFS®/ Sun Life High Yield Series - S Class
Templeton Developing Markets Securities Fund -	Money Market Funds
Class 2	MFS®/ Sun Life Money Market Series - S Class

Arnhold and S. Bleichroeder Advisers, LLC advises the First Eagle Variable Funds Trust. Columbia Management Advisors, LLC, advises the Columbia Funds (with Marsico Capital Management, LLC, sub-advising the Columbia Marsico Funds). Fidelity^® Management & Research Company advises Fidelity VIP Balanced Portfolio and Fidelity VIP Mid Cap Portfolio (with Fidelity Research & Analysis Company, Fidelity Management & Research (U.K.) Inc., Fidelity International Investment Advisors, Fidelity International Investment Advisors (U.K.) Limited, and Fidelity Investments Japan Limited serving as sub-advisers). Franklin^® Advisers, Inc. advises Franklin Small Cap Value Securities Fund, Franklin Income Securities Fund and Franklin Strategic Income Securities Fund. Franklin^® Mutual Advisers, LLC advises Mutual Shares Securities Fund. Lord, Abbett & Co. LLC advises the Lord Abbett Series Fund Portfolios. Massachusetts Financial Services Company, our affiliate,advises the MFS^®/Sun Life Funds. Pacific Investment Management Company LLC advises the PIMCO VIT Portfolios. OppenheimerFunds, Inc. advises the Oppenheimer Funds. Strategic Advisers^®, Inc. advises the Fidelity VIP Freedom Portfolios. Sun Capital Advisers LLC, our affiliate, advises the Sun Capital Funds; SC^SM Davis Venture Value Fund (sub-advised by Davis Advisors); SC FI Large Cap Growth Fund (sub-advised by Pyramis Global Advisors, LLC) SC^SM Oppenheimer Main Street Small Cap Fund (sub-advised by OppenheimerFunds, Inc.). Templeton^® Asset Management Ltd. advises the Templeton Developing Markets Securities Fund. Templeton^®Investment Counsel, LLC advises Templeton Foreign Securities Fund and Templeton Growth Securities Fund. Van Kampen Asset Management advises the Van Kampen LIT Fund.

Please refer to the appendix entitled "Previously Available Investment Options" for information about certain Funds that are no longer available in connection with new Contracts being issued, but that are still available under certain Contracts that are already outstanding.

The fixed account options are available for specified time periods, called Guarantee Periods, and pay interest at a guaranteed rate for each period.

Please read this Prospectus and the Fund prospectuses carefully before investing and keep them for future reference. They contain important information about the Contract and the Funds.

We have filed a Statement of Additional Information dated May 1, 2007 (the "SAI") with the Securities and Exchange Commission (the "SEC"), which is incorporated by reference in this Prospectus. The table of contents for the SAI is on page 39 of this Prospectus. You may obtain a copy without charge by writing to us at the address shown below (which we sometimes refer to as our "Annuity Service Address") or by telephoning (800) 447-7569. In addition, the SEC maintains a website (http://www.sec.gov) that contains the SAI, material incorporated by reference, and other information regarding companies that file with the SEC.

The Contracts are not deposits or obligations of, or guaranteed or endorsed by, any bank, and are not federally insured by the Federal Deposit Insurance Corporation, the Federal Reserve Board or any other agency.

The SEC has not approved or disapproved these securities or passed upon the accuracy or adequacy of this Prospectus. Any representation to the contrary is a criminal offense.

Any reference in this Prospectus to receipt by us means receipt at the following service address:

     SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK

     P.O. Box 9133

     Wellesley Hills, Massachusetts 02481

TABLE OF CONTENTS

SPECIAL TERMS

PRODUCT HIGHLIGHTS

FEES AND EXPENSES

EXAMPLE

CONDENSED FINANCIAL INFORMATION

THE ANNUITY CONTRACT

COMMUNICATING TO US ABOUT YOUR CONTRACT

SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK

THE VARIABLE ACCOUNT

VARIABLE ACCOUNT OPTIONS: THE FUNDS

THE FIXED ACCOUNT

THE FIXED ACCOUNT OPTIONS: THE GUARANTEE PERIODS

THE ACCUMULATION PHASE

Issuing Your Contract

Amount and Frequency of Purchase Payments

Allocation of Net Purchase Payments

Your Account

Your Account Value

Variable Account Value

Fixed Account Value

Transfer Privilege

Waivers; Reduced Charges; Special Guaranteed Interest Rates

Other Programs

WITHDRAWALS

Cash Withdrawals

CONTRACT CHARGES

Account Fee

Administrative Expense Charge and Distribution Fee

Mortality and Expense Risk Charge

Charge for the Optional Death Benefit Rider

Premium Taxes

Fund Expenses

DEATH BENEFIT

Amount of Death Benefit

The Basic Death Benefit

Optional Death Benefit Rider

Spousal Continuance

Calculating the Death Benefit

Method of Paying Death Benefit

Non-Qualified Contracts

Selection and Change of Beneficiary

Payment of Death Benefit

THE INCOME PHASE - ANNUITY PROVISIONS

Selection of Annuitant(s)

Selection of the Annuity Commencement Date

Annuity Options

Selection of Annuity Option

Amount of Annuity Payments

Exchange of Variable Annuity Units

Account Fee

Annuity Payment Rates

Annuity Options as Method of Payment for Death Benefit

OTHER CONTRACT PROVISIONS

Exercise of Contract Rights

Change of Ownership

Voting of Fund Shares

Reports to Owners

Substitution of Securities

Change in Operation of Variable Account

Splitting Units

Modification

Reservation of Rights

Right to Return

TAX CONSIDERATIONS

ADMINISTRATION OF THE CONTRACT

DISTRIBUTION OF THE CONTRACT

AVAILABLE INFORMATION

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

STATE REGULATION

LEGAL PROCEEDINGS

FINANCIAL STATEMENTS

TABLE OF CONTENTS OF STATEMENT OF ADDITIONAL INFORMATION

APPENDIX A - GLOSSARY

APPENDIX B - CALCULATION OF BASIC DEATH BENEFIT

APPENDIX C - PREVIOUSLY AVAILABLE INVESTMENT OPTIONS

APPENDIX D - CONDENSED FINANCIAL INFORMATION

SPECIAL TERMS

Your Contract is a legal document that uses a number of specially defined terms. We explain most of the terms that we use in this Prospectus in the context where they arise, and some are self-explanatory. In addition, for convenient reference, we have compiled a list of these terms in the Glossary included at the back of this Prospectus as Appendix A. If, while you are reading this Prospectus, you come across a term that you do not understand, please refer to the Glossary for an explanation.

PRODUCT HIGHLIGHTS

The headings in this section correspond to headings in the Prospectus under which we discuss these topics in more detail.

The Annuity Contract

The Sun Life Financial Masters^® Access NY Variable and Fixed Annuity Contract provides a number of important benefits for your retirement planning. During the Accumulation Phase, you make Payments under the Contract and allocate them to one or more Variable Account or Fixed Account options. During the Income Phase, we make annuity payments to you or someone else based on the amount you have accumulated. The Contract provides tax-deferral so that you do not pay taxes on your earnings until you withdraw them. When purchased in connection with a tax-qualified plan, the Contract provides no additional tax-deferral benefits because tax-qualified plans confer their own tax-deferral. The Contract also provides a basic death benefit if you die during the Accumulation Phase. You may enhance the basic death benefit by purchasing an optional death benefit rider.

The Accumulation Phase

Under most circumstances, you can buy the Contract with an initial Purchase Payment of $20,000 or more, and you can make additional Purchase Payments at any time during the Accumulation Phase. Currently, there is no minimum amount required for additional Purchase Payments. However, we reserve the right to limit additional Purchase Payments to at least $1,000. We will not normally accept a Purchase Payment if your Account Value is over $2 million or, if the Purchase Payment would cause your Account Value to exceed $2 million.

Variable Account Options: The Funds

You can allocate your Purchase Payments among Sub-Accounts investing in a number of Fund options. Each Fund is either a mutual fund registered under the Investment Company Act of 1940 or a separate securities portfolio of shares of such a mutual fund. The investment returns on the Funds are not guaranteed. You can make or lose money. You can make transfers among the Funds and the Fixed Account Options.

The Fixed Account Options: The Guarantee Periods

You can allocate your Purchase Payments to the Fixed Account and elect to invest in one or more of the Guarantee Periods we make available from time to time. Each Guarantee Period earns interest at a Guaranteed Interest Rate that we publish. We may change the Guaranteed Interest Rate from time to time, but no Guaranteed Interest Rate will ever be less than the minimum guaranteed rate permitted by law. Once we have accepted your allocation to a particular Guarantee Period, we promise that the Guaranteed Interest Rate applicable to that allocation will not change for the duration of the Guarantee Period. We may offer Guarantee Periods of different durations or stop offering some Guarantee Periods. Once we stop offering a Guarantee Period of a particular duration, future allocations, transfers or renewals into that Guarantee Period will not be permitted.

Fees and Expenses

The Contract has insurance features and investment features, and there are costs related to each.

If your Account Value is less than $100,000 on your Contract Anniversary, we deduct a $30 Annual Account Fee. We will waive the Account Fee if your Contract was fully invested in the Fixed Account during the entire Contract Year.

During the Accumulation Phase, we deduct a mortality and expense risk charge at an annual rate of 1.35% of the average daily value of the Contract invested in the Variable Account. If you purchased your Contract prior to March 5, 2007 and you were under 76 years of age on the Open Date, we deduct a mortality and expense risk charge at an annual rate of 1.55% of the average daily value of the Contract invested in the Variable Account. We also deduct an administrative charge at an annual rate of 0.15% of the average daily value of the Contract invested in the Variable Account and a distribution fee at an annual rate of 0.20% of the average daily value of the Contract invested in the Variable Account.

Currently, you can make 12 free transfers each year; however, we reserve the right to impose a charge of up to $15 per transfer.

If you elect the optional death benefit rider, we will deduct, during the Accumulation Phase, an additional charge from the assets of the Variable Account equal to an annual rate of 0.20% of the average daily value of your Contract.

In addition to the charges we impose under the Contract, there are also charges (which include management fees and operating expenses) imposed by the Funds, depending upon which Fund(s) you have selected.

The Income Phase: Annuity Provisions

If you want to receive regular income from your annuity after your Annuity Commencement Date, you can select one of several Annuity Options. You can choose to receive annuity payments from either the Fixed Account or from the available Variable Account options. If you choose to have any part of your annuity payments come from the Variable Account, the dollar amount of the payments may fluctuate with the performance of the Funds. Subject to the maximum Annuity Commencement Date, you decide when your Income Phase will begin but, once it begins, you cannot change your choice of annuity payment options.

During the Income Phase, the total insurance charges are deducted on a daily basis at an annual rate of 1.70% of your Account Value invested in the Variable Account.

Death Benefit

If you die before the Contract reaches the Income Phase, the beneficiary will receive a death benefit. The amount of the death benefit depends upon whether you choose the basic death benefit or, for a fee, you enhance the death benefit by electing the optional death benefit rider that is available in your state. The basic death benefit pays the greater of your Account Value, and your total Purchase Payments (adjusted for withdrawals), both calculated as of your Death Benefit Date. The Maximum Anniversary Account Value Rider pays the greater of your basic death benefit or your highest Account Value on any Contract Anniversary before your 81st birthday. You must make your election before the date on which your Contract becomes effective. The rider is only available if you are younger than 80 on the Open Date. The optional death benefit rider election may not be changed after your Contract is issued.

Withdrawals

You can withdraw money from your Contract at any time during the Accumulation Phase without the imposition of a withdrawal charge. Furthermore, no withdrawal charge is imposed upon annuitization. You may, however, have to pay income taxes and tax penalties on money you withdraw.

Right to Return

Your Contract contains a "free look" provision. If you cancel your Contract within 10 days after receiving it, we will send you your Account Value as of the day we receive your cancellation request. (This amount may be more or less than the original Purchase Payment). We will not deduct a withdrawal charge.

Tax Considerations

Your earnings are not taxed until you take them out. If you withdraw money during the Accumulation Phase, earnings come out first and are taxed as income. If your Contract is a Non-Qualified Contract, it is possible that the election of an optional living benefit rider might increase the taxable portion of any withdrawal you make from the Contract. If you are younger than 59½ when you take money out, you may be charged a 10% federal tax penalty.

NOTE ABOUT OTHER ANNUITY CONTRACTS THAT WE OFFER: In addition to the Contracts, we currently offer many other forms of annuity contracts with a wide variety of features, benefits and charges. Depending on your circumstances and needs, some of these other contracts may be at lower cost to you. Not all of the annuity contracts that we offer are available in all jurisdictions or through all of the selling agents who offer the contracts. You should consider with your selling agent what annuity contract or financial product is most consistent with your needs and preferences.

If you have any questions about your Contract or need more information, please contact us at:

          Sun Life Insurance and Annuity Company of New York

          P. O. Box 9133

          Wellesley Hills, Massachusetts 02481

          Toll Free (800) 447-7569

FEES AND EXPENSES

The following tables describe the fees and expenses that you will pay when buying, owning, and surrendering the Contract.

The table below describes the fees and expenses that you will pay at the time that you buy the Contract, surrender the Contract, or transfer cash value between investment options.

Contract Owner Transaction Expenses

Sales Load Imposed on Purchases (as a percentage of purchase payments):	0%
Maximum Withdrawal Charge (as a percentage of purchase payments):	0%
Maximum Fee Per Transfer (currently $0):	$ 15
Premium Taxes (as a percentage of Certificate Value or total purchase payments):	0% - 3.5%1

The tables below describe the fees and expenses that you will pay periodically during the time that you own the Contract, not including Fund fees and expenses.

Annual Account Fee $ 30²

Variable Account Annual Expenses (as a percentage of average daily net Variable Account assets) ³

	Mortality and Expense Risks Charge:	1.35%4
	Administrative Expenses Charge:	0.15%
	Distribution Fee:	0.20%
Total Variable Account Annual Expenses (without optional benefits):		1.70%

Charges for Optional Benefit Features

	Maximum Charge for Optional Death Benefit Rider (MAV):      (as a percentage of Account Value)	0.20%5
Total Variable Account Annual Expenses with Maximum Charge for Optional Death Benefit      Rider (as a percentage of Account Value):		1.90%6

The next table shows the minimum and maximum total operating expenses charged by the Funds that you may pay periodically during the time that you own the Contract. More detail concerning each Fund's fees and expenses is contained in the prospectus for each Fund.

Total Annual Fund Operating Expenses		Minimum	Maximum
	(expenses as a percentage of average daily Fund net assets that are deducted from Fund assets, including management fees, distribution and/or service (12b-1) fees, and other expenses)
Prior to any fee waiver or expense reimbursement7		0.65%	2.62%

1	The premium tax rate and base vary by your state of residence and the type of Certificate you own. Currently, we deduct premium taxes from Certificate Value upon full surrender (including a surrender for the death benefit) or annuitization. (See "Contract Charges -- Premium Taxes.")
2	The Annual Account Fee is waived if 100% of your Account Value has been allocated to the Fixed Account during the entire Account Year or if your Account Value is $100,000 or more on your Account Anniversary.(See "Account Fee.")
3	All of the Variable Account Annual Expenses are assessed as a percentage of average daily net Variable Account assets.
4	For Contracts purchased prior to March 5, 2007, the rate of this charge is 1.55% if you were age 76 or older on the Contract's Open Date. In that case, the rate for "Total Variable Expenses (without optional benefits)" would be 1.90%.
5	The optional death benefit rider is defined under "Death Benefit." This rider is available only if you are younger than age 80 on the Open Date.
6	This chart shows your insurance charges before you annuitize your Contract. As explained in "Amount of Annuity Payments," after you annuitize your Contract, the sum of your insurance charges will never be greater than an annual rate of 1.70% of average daily net Variable Account assets, regardless of your age on the Open Date.
7	The expenses shown are for the year ended December 31, 2006, and do not reflect any fee waiver or expense reimbursement. The advisers and/or other service providers of certain Funds have agreed to reduce their fees and/or reimburse the Funds' expenses in order to keep the Funds' expenses below specified limits. The minimum and maximum Total Annual Fund Operating Expenses for all Funds after all fee reductions and expense reimbursement arrangements are taken into consideration are 0.65% and 1.78%, respectively. Each fee reduction and/or expense reimbursement arrangement is described in the relevant Fund's prospectus.

THE ABOVE EXPENSES FOR THE FUNDS WERE PROVIDED BY THE FUNDS. WE HAVE NOT INDEPENDENTLY VERIFIED THE ACCURACY OF THE INFORMATION.

EXAMPLE

This Example is intended to help you compare the cost of investing in the Contract with the cost of investing in other variable annuity contracts. These costs include contract owner transaction expenses, contract fees, variable account annual expenses, and Fund fees and expenses, and are based on a sample Contract with the maximum possible fees.

The Example assumes that you invest $10,000 in the Contract for the time periods indicated and that your Contract includes the maximum charges for optional benefits. If these optional benefits were not elected or fewer options were elected, the expense figures shown below would be lower. The Example also assumes that your investment has a 5% return each year and assumes the maximum fees and expenses of any of the Funds. For purposes of converting the annual contract fee to a percentage, the Example assumes an average Contract size of $50,000. In addition, this Example assumes no transfers were made and no premium taxes were deducted. If these arrangements were considered, the expenses shown would be higher. This Example also does not take into consideration any fee waiver or expense reimbursement arrangement of the Funds. If these arrangements were taken into consideration, the expenses shown would be lower.

Although your actual costs may be higher or lower, based on these assumptions, your costs would be:

(1) If you surrender your Contract at the end of the applicable time period:

1 year	3 years	5 years	10 years
$463	$1,394	$2,332	$4,709

(2) If you annuitize your Contract at the end of the applicable time period:

1 year	3 years	5 years	10 years
$463	$1,394	$2,332	$4,709

(3) If you donot surrender your Contract:

1 year	3 years	5 years	10 years
$463	$1,394	$2,332	$4,709

The fee table and Example should not be considered a representation of past or future expenses and charges of the Sub-Accounts. Your actual expenses may be greater or less than those shown. The Example does not include the deduction of state premium taxes, which may be assessed upon full surrender, death or annuitization, or any taxes and penalties you may be required to pay if you surrender the Contract. Similarly, the 5% annual rate of return assumed in the Example is not intended to be representative of past or future investment performance. For more information about Fund expenses, including a description of any applicable fee waiver or expense reimbursement arrangement, see the prospectuses for the Funds.

CONDENSED FINANCIAL INFORMATION

Historical information about the value of the units we use to measure the variable portion of your Contract ("Variable Accumulation Units") is included in the back of this Prospectus as Appendix D.

THE ANNUITY CONTRACT

Sun Life Insurance and Annuity Company of New York and Sun Life (N.Y.) Variable Account C (the "Variable Account") offer the Contract on an individual basis in connection with retirement planning. We issue the Contract directly to the individual owner of the Contract.

In this Prospectus, unless we state otherwise, we address Owners of Contracts as "you." For the purpose of determining benefits under the Contracts, we establish an Account for each Owner, which we will refer to as "your" Account.

Your Contract provides a number of important benefits for your retirement planning. It has an Accumulation Phase, during which you make payments under the Contract and allocate them to one or more Variable Account or Fixed Account options, and an Income Phase, during which we make annuity payments based on the amount you have accumulated. Your Contract provides tax deferral, so that you do not pay taxes on your earnings under your Contract until you withdraw them. However, if you purchase your Contract in connection with a tax-qualified plan, your purchase should be made for reasons other than tax-deferral. Tax-qualified plans provide tax-deferral without the need for purchasing an annuity contract.

Your Contract also provides a basic death benefit if you die during the Accumulation Phase. You may enhance the basic death benefit by electing the optional death benefit rider and paying an additional charge for the optional death benefit rider. Finally, if you so elect, during the Income Phase we will make annuity payments to you or someone else for life or for another period that you choose.

You choose these benefits on a variable or fixed basis or a combination of both. When you choose Variable Account investment options or a Variable Annuity option, your Account Value will change in response to changes in the return available from the different types of investments you selected under your Contract. With these variable options, you assume all investment risk under your Contract. When you choose the Fixed Annuity option, we assume the investment risk. You may also bear the risk that the interest rates we will offer in the future and the rates we will use in determining your Fixed Annuity may not exceed our minimum guaranteed rate. Our minimum guaranteed interest rate will never be less than that permitted by law.

The Contract is designed for use in connection with personal retirement and deferred compensation plans, some of which qualify for favorable federal income tax treatment under Sections 401, 403, 408 or 408A of the Internal Revenue Code. The Contract is also designed so that it may be used in connection with certain non-tax-qualified retirement plans, such as payroll savings plans and such other groups (trusteed or nontrusteed) as may be eligible under applicable law. We refer to Contracts used with plans that receive favorable tax treatment as "Qualified Contracts," and all other Contracts as "Non-Qualified Contracts." A qualified retirement plan generally provides tax deferral regardless of whether the plan invests in an annuity contract. A decision to purchase an annuity contract should not be based on the assumption that the purchase of an annuity contract is necessary to obtain tax-deferral benefits under a qualified retirement plan.

Some broker/dealers may limit their clients from purchasing some optional benefits based upon the client's age. Your individual representative will describe any such limitations. You should work with your registered representative to decide whether an optional benefit is appropriate for you based on a thorough analysis of your particular insurance needs, financial objectives, investment goals, time horizons and risk tolerance.

COMMUNICATING TO US ABOUT YOUR CONTRACT

All materials sent to us, including Purchase Payments, must be sent to our Annuity Service Address as set forth on the first page of this Prospectus. For all telephone communications, you must call (800) 447-7569.

Unless this Prospectus states differently, we will consider all materials sent to us and all telephone communications to be received on the date we actually receive them at our Annuity Service Address. However, we will consider all financial transactions, including Purchase Payments, withdrawal requests and transfer instructions, to be received on the next Business Day if we receive them (1) on a day that is not a Business Day or (2) after 4:00 p.m., Eastern Time. In some cases, receipt of financial transactions by the broker-dealer of record will be deemed to be constructive receipt by us.

When we specify that notice to us must be in writing, we reserve the right, at our sole discretion, to accept notice in another form.

SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK

We are a stock life insurance company incorporated under the laws of New York on May 25, 1983. We do business primarily in New York. Our Home Office is located at 60 East 42nd Street, Suite 1115, New York, New York 10165.

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

We established the Variable Account as a separate account on October 18, 1985, pursuant to a resolution of our Board of Directors. The Variable Account funds the Contract and various other variable annuity product contracts which are offered by the Company and unaffiliated offerors. These other products may have features, benefits and charges that are different from those under the Contract.

Under New York insurance law and the Contract, the income, gains or losses of the Variable Account are credited to or charged against the assets of the Variable Account without regard to the other income, gains, or losses of the Company. These assets are held in relation to the Contract and other variable annuity contracts that provide benefits that vary in accordance with the investment performance of the Variable Account. Although the assets maintained in the Variable Account will not be charged with any liabilities arising out of any other business we conduct, all obligations arising under a Contract, including the promise to make annuity payments, are general corporate obligations of the Company.

The assets of the Variable Account are divided into Sub-Accounts. Each Sub-Account invests exclusively in shares of a specific Fund. All amounts allocated by you to a Sub-Account will be used to purchase Fund shares at their net asset value. Any and all distributions made by the Funds with respect to the shares held by the Variable Account will be reinvested to purchase additional Fund shares at their net asset value. Deductions from the Variable Account for cash withdrawals, annuity payments, death benefits, Account Fees, Contract charges against the assets of the Variable Account for the assumption of mortality and expense risks, administrative expenses, optional benefit riders, and any applicable taxes will, in effect, be made by redeeming the number of Fund shares at their net asset value equal in total value to the amount to be deducted. The Variable Account will be fully invested in Fund shares at all times.

VARIABLE ACCOUNT OPTIONS: THE FUNDS

The Contract offers Sub-Accounts that invest in a number of Fund investment options. Each Fund is a mutual fund registered under the Investment Company Act of 1940, or a separate series of shares of such a mutual fund.

More comprehensive information about the Funds, including a discussion of their management, investment objectives, expenses, and potential risks, is found in the current prospectuses for the Funds (the "Fund Prospectuses"). The Fund Prospectuses should be read in conjunction with this Prospectus before you invest. A copy of each Fund Prospectus, as well as a Statement of Additional Information for each Fund, may be obtained without charge from the Company by calling (800) 447-7569 or by writing to Sun Life Insurance and Annuity Company of New York, P.O. Box 9133, Wellesley Hills, Massachusetts 02481.

The Funds may also be available to registered separate accounts offering variable annuity and variable life products of other affiliated and unaffiliated insurance companies, as well as to the Variable Account and other separate accounts of the Company. Although we do not anticipate any disadvantages to this, there is a possibility that a material conflict may arise between the interests of the Variable Account and one or more of the other separate accounts participating in the Funds. A conflict may occur due to a change in law affecting the operations of variable life and variable annuity separate accounts, differences in the voting instructions of the Owners and Payees and those of other companies, or some other reason. In the event of conflict, we will take any steps necessary to protect Owners and Payees, including withdrawal of the Variable Account from participation in the underlying Funds which are involved in the conflict or substitution of shares of other Funds.

Certain of the investment advisers, transfer agents, or underwriters to the Funds may reimburse us for administrative costs in connection with administering the Funds as options under the Contracts. These amounts are not charged to the Funds or Owners, but are paid from assets of the advisers, transfer agents, or underwriters, except for the administrative costs of the Lord Abbett Series Trust Portfolios, which are paid from Fund assets and reflected under "Fees and Expenses."

Certain publicly available mutual funds may have similar investment goals and principal investment policies and risks as one or more of the Funds, and may be managed by a Fund's portfolio manager(s). While a Fund may have many similarities to these other funds, its investment performance will differ from their investment performance. This is due to a number of differences between a Fund and these similar products, including differences in sales charges, expense ratios and cash flows.

THE FIXED ACCOUNT

The Fixed Account is made up of general account assets of the Company. Amounts you allocate to the Fixed Account will be available to fund the claims of all classes of our customers, including claims for benefits under the Contracts. Any obligations of the Fixed Account will be paid first from those assets allocated to the Fixed Account and the excess, if any, will be paid from the general account of the Company.

We will invest the assets of the Fixed Account in those assets we choose that are allowed by New York State insurance laws. In general, these laws permit investments, within specified limits and subject to certain qualifications, in federal, state and municipal obligations, corporate bonds, preferred and common stocks, real estate mortgages, real estate and certain other investments. We intend to invest primarily in investment-grade fixed income securities (i.e., rated by a nationally recognized rating service within the 4 highest grades) or instruments we believe are of comparable quality.

We are not obligated to invest amounts allocated to the Fixed Account according to any particular strategy, except as may be required by New York State insurance laws. You will not have a direct or indirect interest in the Fixed Account investments.

THE FIXED ACCOUNT OPTIONS: THE GUARANTEE PERIODS

You may elect one or more Guarantee Periods from those we make available from time to time. We may offer Guarantee Periods of different durations or stop offering some Guarantee Periods. Once we stop offering a Guarantee Period, allocations, transfers or renewals into that Guarantee Period will not be permitted. In addition, we reserve the right not to make Guarantee Periods available. In such event, renewals will be made into the Money Market Sub-Account. We may choose to exercise this right before the Open Date or at some later time. At any time, we can reverse our decision to exercise this right.

We publish Guaranteed Interest Rates for each Guarantee Period offered. We may change the Guaranteed Interest Rates we offer from time to time, but no Guaranteed Interest Rate will ever be less than the minimum guaranteed rate permitted by state law. Also, once we have accepted your allocation to a particular Guarantee Period, we promise that the Guaranteed Interest Rate applicable to that allocation will not change for the duration of the Guarantee Period.

We determine Guaranteed Interest Rates at our discretion. We do not have a specific formula for establishing the rates for different Guarantee Periods. Our determination will be influenced by the interest rates on fixed income investments in which we may invest amounts allocated to the Guarantee Periods. We will also consider other factors in determining these rates, including regulatory and tax requirements, sales commissions and administrative expenses borne by us, general economic trends and competitive factors. We cannot predict the level of future interest rates.

THE ACCUMULATION PHASE

During the Accumulation Phase of your Contract, you make Payments into your Account, and your earnings accumulate on a tax-deferred basis. The Accumulation Phase begins with our acceptance of your first Purchase Payment and ends the Business Day before your Annuity Commencement Date. The Accumulation Phase will end sooner if you surrender your Contract or if the Owner dies before the Annuity Commencement Date.

Issuing Your Contract

When we accept your Application, we "open" the Contract. We refer to this date as the "Open Date." When we receive your initial Purchase Payment, we "issue" your Contract. We refer to this date as the "Issue Date."

We will credit your initial Purchase Payment to your Account within 2 Business Days of receiving your completed Application. If your Application is not complete, we will notify you. If we do not have the necessary information to complete the Application within 5 Business Days, we will send your money back to you or ask your permission to retain your Purchase Payment until the Application is made complete. Then we will apply the Purchase Payment within 2 Business Days of when the Application is complete.

Amount and Frequency of Purchase Payments

The amount of Purchase Payments may vary; however, we will not accept an initial Purchase Payment of less than $20,000, and, although there is currently no minimum amount for additional Purchase Payments, we reserve the right to limit each additional Purchase Payment to at least $1,000. In addition, we will not accept a Purchase Payment if your Account Value is over $2 million, or if the Purchase Payment would cause your Account Value to exceed $2 million, unless we have approved the Payment in advance. We reserve the right to refuse Purchase Payments received more than 5 years after your Issue Date or after your 70th birthday, whichever is later. Within these limits, you may make Purchase Payments at any time during the Accumulation Phase.

Allocation of Net Purchase Payments

You may allocate your Purchase Payments among the different Sub-Accounts and Guarantee Periods currently available, but we reserve the right to limit any allocation to a Guarantee Period to at least $1,000.

In your Application, you may specify the percentage of each Purchase Payment to be allocated to each Sub-Account or Guarantee Period. These percentages are called your allocation factors. You may change the allocation factors for future Payments by sending us notice of the change as required. We will use your new allocation factors for the first Purchase Payment we receive with or after we have received notice of the change, and for all future Purchase Payments, until we receive another change notice.

Although it is currently not our practice, we may deduct applicable premium taxes or similar taxes from your Purchase Payments (see "Contract Charges -- Premium Taxes"). In that case, we will credit your Net Purchase Payment, which is the Purchase Payment minus the amount of those taxes.

Your Account

When we accept your first Purchase Payment, we establish an Account for you, which we maintain throughout the Accumulation Phase of your Contract.

Your Account Value

Your Account Value is the sum of the value of the 2 components of your Contract: the Variable Account portion of your Contract ("Variable Account Value") and the Fixed Account portion of your Contract ("Fixed Account Value"). These 2 components are calculated separately, as described under "Variable Account Value" and "Fixed Account Value."

Variable Account Value

     Variable Accumulation Units

In order to calculate your Variable Account Value, we use a measure called a Variable Accumulation Unit for each Sub-Account. Your Variable Account Value is the sum of your Account Value in each Sub-Account, which is the number of your Variable Accumulation Units for that Sub-Account times the value of each Unit.

     Variable Accumulation Unit Value

The value of each Variable Accumulation Unit in a Sub-Account reflects the net investment performance of that Sub-Account. We determine that value once on each day that the New York Stock Exchange is open for trading, at the close of trading, which is currently 4:00 p.m., Eastern Time. (The close of trading is determined by the New York Stock Exchange.) We also may determine the value of Variable Accumulation Units of a Sub-Account on days the Exchange is closed if there is enough trading in securities held by that Sub-Account to materially affect the value of the Variable Accumulation Units. Each day we make a valuation is called a "Business Day." The period that begins at the time Variable Accumulation Units are valued on a Business Day and ends at that time on the next Business Day is called a "Valuation Period." On days other than Business Days, the value of a Variable Accumulation Unit does not change.

To measure these values, we use a factor -- which we call the Net Investment Factor -- which represents the net return on the Sub-Account's assets. At the end of any Valuation Period, the value of a Variable Accumulation Unit for a Sub-Account is equal to the value of that Sub-Account's Variable Accumulation Units at the end of the previous Valuation Period, multiplied by the Net Investment Factor. We calculate the Net Investment Factor by dividing (1) the net asset value of a Fund share held in the Sub-Account at the end of that Valuation Period, plus the per share amount of any dividend or capital gains distribution made by that Fund during the Valuation Period, by (2) the net asset value per share of the Fund share at the end of the previous Valuation Period; then, for each day in the valuation period, we deduct a factor representing the asset-based insurance charges (the mortality and expense risk charges, the administrative expense charge and distribution fee) plus the applicable asset-based charge certain optional benefit riders.

For a hypothetical example of how we calculate the value of a Variable Accumulation Unit, see the Statement of Additional Information.

     Crediting and Canceling Variable Accumulation Units

When we receive an allocation to a Sub-Account, either from a Net Purchase Payment or a transfer of Account Value, we credit that amount to your Account in Variable Accumulation Units. Similarly, we cancel Variable Accumulation Units when you transfer or withdraw amounts from a Sub-Account, or when we deduct certain charges under the Contract. We determine the number of Units credited or canceled by dividing the dollar amount by the Variable Accumulation Unit value for that Sub-Account at the end of the Valuation Period during which the transaction or charge is effective.

Fixed Account Value

Your Fixed Account Value is the sum of all amounts allocated to Guarantee Periods, either from Net Purchase Payments, transfers or renewals, plus interest credited on those amounts, and minus withdrawals, transfers out of Guarantee Periods, and any deductions for charges under the Contract taken from your Fixed Account Value.

A Guarantee Period begins the day we apply your allocation and ends when all calendar years (or months if the Guarantee Period is less than one year) in the Guarantee Period (measured from the end of the calendar month in which the amount was allocated to the Guarantee Period) have elapsed. The last day of the Guarantee Period is its Expiration Date.

Each additional Purchase Payment, transfer or renewal credited to your Fixed Account Value will result in a new Guarantee Period with its own Expiration Date. Amounts allocated at different times to Guarantee Periods of the same duration may have different Expiration Dates.

We credit interest on amounts allocated to a Guarantee Period at the applicable Guaranteed Interest Rate for the duration of the Guarantee Period. During the Guarantee Period, we credit interest daily at a rate that yields the Guaranteed Interest Rate on an annual effective basis.

Each separate allocation you make to a Guarantee Period, together with interest credited thereon, is called a Guarantee Amount. We will notify you in writing between 45 and 75 days before the Expiration Date for any Guarantee Amount.

A new Guarantee Period of the same duration will begin automatically for that Guarantee Amount on the first day following the Expiration Date, unless before the Expiration Date we receive instructions to transfer the Guarantee Amount to one or more Sub-Accounts, in accordance with the transfer privilege provision of the Contract described below (see "Transfer Privilege").

If we receive no instructions from you prior to the Expiration Date, we will automatically renew your Fixed Account allocation into a new Guarantee Period of the same duration as the last Guarantee Period. If we are no longer offering a Guarantee Period of the same duration, we will automatically transfer your Fixed Account allocation into the Money Market Sub-Account.

This automatic transfer of Fixed Account Value into the Money Market Sub-Account will not count as a transfer for purposes of the transfer restrictions described under "Transfer Privilege."

Transfer Privilege

     Permitted Transfers

During the Accumulation Phase, you may transfer all or part of your Account Value to one or more Sub-Accounts or Guarantee Periods then available, subject to the following restrictions:

l	you may not make more than 12 transfers in any Contract Year;
l	the amount transferred from a Guarantee Period must be the entire Guarantee Amount, except for transfers of interest credited during the current Contract Year;
l	at least 30 days must elapse between transfers to and from Guarantee Periods;
l	at least 6 days must elapse between transfers to and from the Sub-Accounts;
l	transfers to or from Sub-Accounts are subject to terms and conditions that may be imposed by the Funds; and
l	we impose additional restrictions on market timers, which are further described below.

These restrictions do not apply to transfers made under any Optional Programs. At our discretion, we may waive some or all of these restrictions.

We reserve the right to waive these restrictions and exceptions at any time, as discussed under "Short-Term Trading," or to change them. Any change will be applied uniformly. We will notify you of any change prior to its effectiveness.

There is usually no charge imposed on transfers; however, we reserve the right to impose a transfer charge of $15 for each transfer. Under current law, there is no tax liability for transfers.

     Requests for Transfers

You may request transfers in writing or by telephone. If the request is received before the earlier of (a) 4:00 p.m. Eastern Time on a Business Day, or (b) the close of the New York Stock Exchange on days that the Stock Exchange closes before 4:00 p.m., the transfer will be effective that day. The telephone transfer privilege is available automatically during regular business hours before 4:00 p.m. Eastern Time and does not require your written election. We will require personal identifying information to process a request for a transfer made by telephone. We will not be liable for following instructions communicated by telephone that we reasonably believe are genuine.

Your transfer request will be effective as of the close of the Business Day if we receive your transfer request before the earlier of (a) 4:00 p.m. Eastern Time on a Business Day or (b) the close of the New York Stock Exchange on days that the Stock Exchange closes before 4:00 p.m. Otherwise, your transfer request will be effective on the next Business Day.

     Short-Term Trading

The Contracts are not designed for short-term trading. If you wish to employ such strategies, do not purchase a Contract. Transfer limits and other restrictions, described below, are subject to our ability to monitor transfer activity. Some Contract 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 Contract Owners or intermediaries or curtail their trading. A failure to detect and curtail short-term trading could result in adverse consequences to the Contract Owners. Short-term trading can increase costs for all Contract 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 contract value. As described under "Transfer Privilege," such policies include limiting the number and timing of certain transfers, subject to exceptions described in that section and exceptions designed to protect the interests of individual Contract Owners. The Company also reserves the right to charge a fee for transfers.

Short-term trading activities whether by the Contract Owner or a third party authorized to initiate transfer requests on behalf of Contract 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 (including transfers to and from the Fixed Account) more narrowly than the policies described under "Transfer Privilege," 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 impose additional administrative restrictions on third parties that engage in transfers of Contract Values on behalf of multiple Contract Owners at one time. Specifically, we limit the form of such large group transfers to fax or mail delivery only, require the third party to provide us with advance notice of any possible large group transfer so that we can have additional staff ready to process the request, and require that the amount transferred out of a Sub-Account for each Contract Owner be equal to 100% of that Contract Owner's value in the Sub-Account.

We will provide you written notification of any restrictions imposed.

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

l	when a new broker of record is designated for the Contract;
l	when the Participant changes;
l	when control of the Contract passes to the designated beneficiary upon the death of the Participant or Annuitant;
l	when necessary in our view to avoid hardship to a Participant; or
l	when underlying Funds are dissolved or merged or substituted.

If short-term trading results as a consequence of waiving the restrictions against short-term trading, it could expose Contract Owners to certain risks. The short-term trading could increase costs for all Contract 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 Contract Owners may experience a different application of the policy and therefore may experience some of the risks. We uniformly apply the short-term trading policy and the permitted waivers of that policy to all Contracts. If we did not do so, some Contract Owners could experience a different application of the policy and therefore may be treated unfairly. 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.

     Funds' Shareholder Trading Policies

In addition to the restrictions that we impose (as described under "Permitted Transfers" and "Short-Term Trading"), most of the Funds have adopted restrictions or other policies about transfers or other purchases and sales of the Fund's shares. These policies (the "Funds' Shareholder Trading Policies") are intended to protect the Fund from short-term trading or other trading practices that are potentially harmful to the Fund. The Funds' Shareholder Trading Policies may be more restrictive in some respects than the restrictions that we otherwise would impose, and the Funds may modify their Shareholder Trading Policies from time to time.

We are legally obligated to provide (at the Funds' request) information about each amount you cause to be deposited into a Fund (including by way of Purchase Payments and transfers under your Contract) or removed from the Fund (including by way of withdrawals and transfers under your Contract). If a Fund identifies you as having violated the Fund's Shareholder Trading Policies, we are obligated, if the Fund requests, to restrict or prohibit any further deposits or exchanges by you (or a third party acting on your behalf) in respect of that Fund. Any such restriction or prohibition may remain in place indefinitely.

Accordingly, if you do not comply with any Fund's Shareholder Trading Policies, you (or a third party acting on your behalf) may be prohibited from directing any additional amounts into that Fund or directing any transfers or other exchanges involving that Fund. You should review and comply with each Fund's Shareholder Trading Policies, which are disclosed in the Funds' current prospectuses.

Funds may differ significantly as to such matters as: (a) the amount, format, and frequency of information that the Funds request from us about transactions that our customers make; and (b) the extent and nature of any limits or restrictions that the Funds request us to impose upon such transactions. As a result of these differences, the costs borne by us and (directly or indirectly) by our customers may be significantly increased. Any such additional costs may outweigh any additional protection that would be provided to our customers, particularly in view of the protections already afforded by the trading restrictions that we impose as described under "Permitted Transfers" and under " Short-Term Trading." Also, if a Fund imposes more strict trading restrictions than are reasonably necessary under the circumstances, you could be deprived of potentially valuable flexibility to make transactions with respect to that Fund. For these and other reasons, we may disagree with the timing or substance of a Fund's requests for information from us or with any transaction limits or restrictions that the Fund requests us to impose upon our customers. If any such disagreement with respect to a Fund cannot be satisfactorily resolved, the Fund might be restricted or, subject to obtaining any required regulatory approval, replaced as a variable investment option.

Waivers; Reduced Charges; Special Guaranteed Interest Rates

We may reduce or waive the annual Account Fee, credit additional amounts, grant Special Guaranteed Interest Rates in certain situations, or offer other options or benefits. These situations may include sales of Contracts (1) where selling and/or maintenance costs associated with the Contracts are reduced, such as the sale of several Contracts to the same Owner, sales of large Contracts, and certain group sales, and (2) to officers, directors and employees of the Company or its affiliates, registered representatives and employees of broker-dealers with a current selling agreement with the Company and affiliates of such representatives and broker-dealers, employees of affiliated asset management firms, and persons who have retired from such positions ("Eligible Employees") and immediate family members of Eligible Employees. Eligible Employees and their immediate family members may also purchase a Contract without regard to minimum Purchase Payment requirements.

Other Programs

     Monitoring Service

You may elect, no later than your Issue Date, to participate in the Privacy Guard program offered through Affinion Services Group, Inc. ("Affinion"). This program is designed to help you access and monitor personal information that is recorded by national credit reporting agencies, by supplying you with a credit report and providing periodic monitoring of any new activity on your credit accounts. To participate in this program, you must authorize us to release certain information to Affinion. This will allow Affinion to set up your participation in Privacy Guard. If you elect Privacy Guard, your participation in this program will be free of charge for a period of twelve months from your Issue Date or until you cancel your Contract, if sooner. After the initial twelve-month period, you will be billed directly by Affinion for this service. You may terminate your participation in this program at any time. If you surrender your Contract within the first year, your participation in the program will automatically end

You may participate in any of the following Optional Programs free of charge. Transfers made pursuant to the provisions of the following optional programs will not be charged a transfer fee, nor will such transfers count as one of the 12 free transfers per year allowed under the section entitled "Transfer Privilege."

Dollar-Cost Averaging

Dollar-cost averaging allows you to invest gradually, over time, in up to 12 Sub-Accounts. You may select a dollar-cost averaging program at no extra charge by allocating a minimum amount to a designated Sub-Account or to a Guarantee Period we make available in connection with the program. (We reserve the right to limit minimum investments to at least $1,000.) Amounts allocated to the Fixed Account under the program will earn interest at a rate declared by the Company for the Guarantee Period you select. Previously applied amounts may not be transferred to a Guarantee Period made available in connection with this program. At regular time intervals, we will transfer the same amount automatically to one or more Sub-Accounts that you choose, up to a maximum of 12 Sub-Accounts. The program continues until your Account Value allocated to the program is depleted or you elect to stop the program. The final amount transferred from the Fixed Account will include all interest earned. Any new allocation of a Purchase Payment to the program will be treated as commencing a new dollar-cost averaging program and is subject to the minimum.

The main objective of a dollar-cost averaging program is to minimize the impact of short-term price fluctuations on Account Value. In general, since you transfer the same dollar amount to the variable investment options at set intervals, dollar-cost averaging allows you to purchase more Variable Accumulation Units (and, indirectly, more Fund shares) when prices are low and fewer Variable Accumulation Units (and, indirectly, fewer Fund shares) when prices are high. Therefore, you may achieve a lower average cost per Variable Accumulation Unit over the long term. A dollar-cost averaging program allows you to take advantage of market fluctuations. However, it is important to understand that a dollar-cost averaging program does not insure a profit or protect against loss in a declining market. We do not allow transfers into any of the Guarantee Periods pursuant to the dollar-cost averaging program.

     Asset Allocation

One or more asset allocation programs may be available in connection with the Contract, at no extra charge. Asset allocation is the process of investing in different asset classes -- such as equity funds, fixed income funds, and money market funds -- depending on your personal investment goals, tolerance for risk, and investment time horizon. By spreading your money among a variety of asset classes, you may be able to reduce the risk and volatility of investing, although there are no guarantees, and asset allocation does not insure a profit or protect against loss in a declining market.

Currently, you may select one of the asset allocation models, each of which represents a combination of Sub-Accounts with a different level of risk. These asset allocation models, as well as the terms and conditions of the asset allocation program, are fully described in a separate brochure. We may add or delete such programs in the future.

Our asset allocation programs are "static" programs. That is to say, if you elect an asset allocation program, we automatically rebalance your Account Value among the Sub-Accounts represented in the model you chose, but we do not change your original percentage allocations among the Sub-Accounts in your chosen model, unless you advise us to do so. Nevertheless, we have selected an independent third-party administrator who reviews the existing models annually to determine whether the investment objective of the model is being met in light of changing markets. Based upon this review, the third-party administrator may recommend that new models be substituted for the existing models. If so, the new models will only be offered to Contracts issued on or after the date the new model goes into effect or to Owners who elect an asset allocation program on or after that date. Owners of any existing asset allocation programs may make an independent decision to change their asset allocations at any time. You should consult your financial adviser periodically to consider whether the model you have selected is still appropriate for you.

     Systematic Withdrawal Program

You may select our Systematic Withdrawal Program. Under the Systematic Withdrawal Program, you determine the amount and frequency of regular withdrawals you would like to receive from your Fixed Account Value and/or Variable Account Value and we will effect them automatically. The withdrawals under this program may be included as income and subject to a 10% federal tax penalty. You should consult a qualified tax professional before choosing this option. We reserve the right to limit the election of this program to Contracts with a minimum Account Value of $10,000.

You may change or stop this program at any time, by written notice to us or other means approved by us.

     Portfolio Rebalancing Program

Under the Portfolio Rebalancing Program, we transfer funds among all Sub-Accounts to maintain the percentage allocation you have selected among these Sub-Accounts. At your election, we will make these transfers on a quarterly, semi-annual or annual basis.

WITHDRAWALS

Cash Withdrawals

     Requesting a Withdrawal

At any time during the Accumulation Phase, you may withdraw in cash all or any portion of your Account Value. To make a withdrawal, other then a Systematic Withdrawal, you must send us a written request at our Annuity Service Address. Your request must specify whether you want to withdraw the entire amount of your Account or, if less, the amount you wish to receive.

We do not deduct any sales charge from your Purchase Payments when they are made, nor do we impose a withdrawal charge (known as a "contingent deferred sales charge") on amounts you withdraw. Withdrawals may have adverse income tax consequences, including a 10% penalty tax (see "Tax Considerations"). You should carefully consider these tax consequences before requesting a cash withdrawal.

     Full Withdrawals

If you request a full withdrawal, we calculate the amount we will pay you as follows: We start with the total value of your Account at the end of the Valuation Period during which we receive your withdrawal request; and then we deduct the Account Fee, if applicable, for the Contract Year in which the withdrawal is made.

A full withdrawal results in the surrender of your Contract, and cancellation of all rights and privileges under your Contract.

     Partial Withdrawals

Unless you specify otherwise, when you request a partial withdrawal, we will pay you the actual amount specified in your request and then adjust the value of your Account by the total of the amount paid.

You may specify the amount you want withdrawn from each Sub-Account and/or Guarantee Amount to which your Account is allocated. If you do not so specify, we will deduct the total amount you request pro rata, based on your Account Value at the end of the Valuation Period during which we receive your request.

Partial withdrawals may affect the death benefit amount. In calculating the amount payable under the death benefit, we may reduce the death benefit by an amount that is greater than the amount of the withdrawal, depending on the circumstances. Accordingly, you should refer to the more detailed discussions of the optional death benefit riders that appear elsewhere in this Prospectus for information about the effects that withdrawals will have on those benefits.

If you request a partial withdrawal that would result in your Account Value being reduced to an amount less than the Account Fee for the Contract Year in which you make the withdrawal, we reserve the right to treat it as a request for a full withdrawal.

     Time of Payment

We will pay you the applicable amount of any full or partial withdrawal within 7 days after we receive your withdrawal request, except in cases where we are permitted, and choose, to defer payment under the Investment Company Act of 1940 and New York State insurance law. Currently, we may defer payment of amounts you withdraw from the Variable Account only for the following periods:

l	when the New York Stock Exchange is closed (except weekends and holidays) or when trading on the New York Stock Exchange is restricted;
l	when it is not reasonably practical to dispose of securities held by a Fund or to determine the value of the net assets of a Fund, because an emergency exists; or
l	when a SEC order permits us to defer payment for the protection of Owners.

We also may defer payment of amounts you withdraw from the Fixed Account for up to 6 months from the date we receive your withdrawal request. We do not pay interest on the amount of any payments we defer.

     Withdrawal Restrictions for Qualified Plans

If your Contract is a Qualified Contract, you should carefully check the terms of your retirement plan for limitations and restrictions on cash withdrawals.

Special restrictions apply to withdrawals from Contracts used for Section 403(b) annuities. (See "Tax Considerations -- Tax-Sheltered Annuities.")

CONTRACT CHARGES

Account Fee

During the Accumulation Phase of your Contract, we will deduct from your Account an annual Account Fee of $30 to help cover the administrative expenses we incur related to the issuance of Contracts and the maintenance of Accounts. We deduct the Account Fee on each Contract Anniversary. We deduct the Account Fee pro rata from each Sub-Account and each Guarantee Period, based on the allocation of your Account Value on your Contract Anniversary.

We will not charge the Account Fee if:

l	your Account Value has been allocated only to the Fixed Account during the applicable Contract Year; or
l	your Account Value is $100,000 or more on your Contract Anniversary.

If you make a full withdrawal of your Account, we will deduct the full amount of the Account Fee at the time of the withdrawal. In addition, on the Annuity Commencement Date we will deduct a pro rata portion of the Account Fee to reflect the time elapsed between the last Contract Anniversary and the day before the Annuity Commencement Date.

After the Annuity Commencement Date, we will deduct an annual Account Fee of $30 in the aggregate in equal amounts from each Variable Annuity payment we make during the year. We do not deduct any Account Fee from Fixed Annuity payments.

Administrative Expense Charge and Distribution Fee

We deduct an administrative expense charge from the assets of the Variable Account at an annual effective rate equal to 0.15% of your average daily Variable Account Value during both the Accumulation Phase and the Income Phase. This charge is designed to reimburse us for expenses we incur in administering the Contracts, Owner Accounts and the Variable Account that are not covered by the annual Account Fee.

We also deduct a distribution fee from the assets of the Variable Account at an effective annual rate equal to 0.20% of your average daily Variable Account Value during both the Accumulation Phase and the Income Phase. This charge is designed to reimburse us for the expenses associated with distributing and issuing the Contracts.

Depending on the amount of expenses that we incur, we expect that we may earn a profit from these charges. If so, we may use the profit for any proper corporate purpose, including paying any other expenses in connection with the Contracts or adding to our corporate surplus.

Mortality and Expense Risk Charge

During the Accumulation Phase, we deduct a mortality and expense risk charge from the assets of the Variable Account at an effective annual rate equal to 1.35% of your average daily Variable Account Value. If your Purchase Payments or Account Value exceeds $1 million on your Contract Anniversary, an amount equal to 0.15% of your Account Value will be credited to your Account on that date and on every subsequent Contract Anniversary during the Accumulation Phase. (The credit is paid out of our general account and is the result of cost savings that we expect on larger-sized Contracts.) We assume numerous mortality and expense risks under the Contracts. These risks include, but are not limited to, (1) the risk that arises from our contractual obligation to continue to make annuity payments to each Annuitant, regardless of how long the Annuitant lives and regardless of how long all Annuitants as a group live; (2) the risk that arises from our contractual obligation to pay a death benefit upon the death of the Owner prior to the Annuity Commencement Date, including in cases where the death benefit is greater than a Contract's Account Value; (3) the risk that our cost of providing benefits according to the terms of any optional death benefit riders and any optional living benefit riders will exceed the amount of the charges we deduct for those riders; and (4) the risk that the annual Account Fee, administrative expense charge, and the distribution fee we assess under the Contract may be insufficient to cover the actual total administrative expenses we incur. If the amount of the charge is insufficient to cover our costs resulting from these and other mortality and expense risks, we will bear the loss. If, as we expect, the amount of the charge is more than sufficient to cover such costs, we will make a profit on the charge. We may use this profit for any proper corporate purpose, including the payment of marketing and distribution expenses for the Contract. In setting the rate of this charge, we not only consider our expected mortality and expense risks, but also our objective to earn a profit from the Contracts, after all of the costs, expenses, credits, and benefits we expect to pay in connection with the Contracts.

For Contracts purchased prior to March 5, 2007, the rate of the mortality and expense risk charge is 1.55% (rather than 1.35%), if you were age 76 or older on the Contract's Open Date. Also, during the Income Phase of a Contract, the total insurance charges are at an annual rate of 1.70% of the average daily net value of the Contract invested in the Variable Account, regardless of your age on the Open Date.

Charge for the Optional Death Benefit Rider

If you elect the optional death benefit rider, we will deduct, during the Accumulation Phase, a charge equal to an annual rate of 0.20% of the average daily Variable Account Value.

Premium Taxes

In New York there is no premium tax. However, if an Owner or Payee is not a New York state resident, a premium tax may be imposed depending on where the Owner or Payee resides. We believe that the amounts of applicable premium taxes currently range from 0% to 3.5%. You should consult a qualified tax professional to find out if you could be subject to a premium tax and the amount of any tax.

In order to reimburse us for the premium tax we may pay on Purchase Payments, our policy is to deduct the amount of such taxes from the amount you apply to provide an annuity at the time of annuitization. However, we reserve the right to deduct the amount of any applicable tax from your Account at any time, including at the time you make a Purchase Payment or make a full or partial withdrawal. We do not make any profit on the deductions we make to reimburse premium taxes.

Fund Expenses

There are fees and charges deducted from each Fund. These fees and expenses are described in the Fund prospectuses and related Statements of Additional Information.

DEATH BENEFIT

If the Owner dies during the Accumulation Phase, we may pay a death benefit to the designated Beneficiary(ies), using the payment method elected (a single cash payment or one of our Annuity Options). If the Beneficiary is not living on the date of death of the Owner, we may pay the death benefit to the surviving Owner, if any, or, if there is no Owner, in one sum to your estate. We do not pay a death benefit if the Owner dies during the Income Phase. However, the Beneficiary will receive any annuity payments provided under an Annuity Option that is in effect. If the Contract names more than one Owner, we will pay the death benefit upon the first death of such Owners.

Amount of Death Benefit

To calculate the amount of the death benefit, we use a "Death Benefit Date." The Death Benefit Date is the date we receive proof of the death of the Owner in an acceptable form ("Due Proof of Death") if you have elected a death benefit payment method before the death of the Owner and it remains in effect. Otherwise, the Death Benefit Date is the later of the date we receive Due Proof of Death or the date we receive the Beneficiary's election of either payment method or, if the Beneficiary is your spouse, Contract continuation. If we do not receive the Beneficiary's election within 60 days after we receive Due Proof of Death, we reserve the right to provide a lump sum to your Beneficiary.

The amount of the death benefit is determined as of the Death Benefit Date.

The Basic Death Benefit

In general, the death benefit will be the greater of the following amounts:

(1)	your Account Value for the Valuation Period during which the Death Benefit Date occurs; and
(2)	your total Adjusted Purchase Payments (Purchase Payments x (Account Value after withdrawal ÷ Account Value before withdrawal)) as of the Death Benefit Date. See "Calculating the Death Benefit." Because of the way that Adjusted Purchase Payments are computed, a withdrawal may cause the basic death benefit to decrease by more than the amount of the withdrawal.

For examples of how to calculate this basic death benefit, see Appendix B.

Optional Death Benefit Rider

You may enhance the "basic death benefit" by electing an optional death benefit rider known as the Maximum Anniversary Account Value Rider ("MAV"). You must make your election before the Issue Date. You will pay a charge for the optional death benefit rider. (For a description of the charge, see "Charges for Optional Death Benefit Rider.") The rider is available only if you are younger than 80 on the Open Date. The optional death benefit election may not be changed after the Contract is issued. The death benefit under the optional death benefit rider will be adjusted for all partial withdrawals as described in the Prospectus under the heading "Calculating the Death Benefit."

Under the MAV rider, the death benefit will be the greater of:

l	the amount payable under the basic death benefit above, or
l	your Highest Account Value on any Contract Anniversary before the Owner's 81st birthday, adjusted for any subsequent Purchase Payments and partial withdrawals made between that Contract Anniversary and the Death Benefit Date.

In determining the Highest Account Value, on the second and each subsequent Contract Anniversary, the current Account Value is compared to the previous Highest Account Value, adjusted for any Purchase Payments and partial withdrawals made during the Contract Year ending on that Contract Anniversary. If the current Account Value exceeds the adjusted Highest Account Value, the current Account Value will become the new Highest Anniversary Account Value.

If your Contract is a Qualified Contract, required minimum distributions under the Internal Revenue Code may affect the value of these optional benefits to you. Please refer to "Impact of Optional Death Benefit Riders" under "TAX CONSIDERATIONS" for more information regarding tax issues that you should consider before electing these optional benefits.

Spousal Continuance

If you are the Owner and your spouse is the sole Beneficiary, upon your death your spouse may elect to continue the Contract as the Owner, rather than receive the death benefit amount. In that case, we will not pay a death benefit, but the Contract's Account Value will be equal to your Contract's death benefit amount, as defined under the "Basic Death Benefit" or any optional death benefit rider you have selected. All Contract provisions, including any optional death benefit rider you have selected (subject to the optional death benefit rider age restriction), will continue as if your surviving spouse had purchased the Contract on the Death Benefit Date with a deposit equal to the death benefit amount. For purposes of calculating death benefits and expenses from that date forward, your surviving spouse's age on the original effective date of the Contract will be used. Upon surrender or annuitization, this step-up to the spouse will not be treated as premium, but will be treated as income.

Calculating the Death Benefit

In calculating the death benefit amount payable under option (2) of the "Basic Death Benefit" or under the optional death benefit rider, any partial withdrawals will reduce the death benefit amount to an amount equal to the death benefit amount immediately before the withdrawal multiplied by the ratio of the Account Value immediately after the withdrawal to the Account Value immediately before the withdrawal. Because of the way these adjustments are computed, a withdrawal may cause the basic death benefit to decrease by more than the amount of the withdrawal.

If the death benefit is the amount payable under option (2) of the "Basic Death Benefit" or under the optional death benefit rider, your Account Value may be increased by the excess, if any, of that amount over option (1) of the "Basic Death Benefit." Any such increase will be allocated to the Sub-Accounts in proportion to your Account Value in those Sub-Accounts on the Death Benefit Date. Such increase will be made only if the Beneficiary elects to annuitize, elects to defer annuitization, or elects to continue the Contract. Also, any portion of this new Account Value attributed to the Fixed Account will be transferred to the available Money Market Sub-Account.

Method of Paying Death Benefit

The death benefit may be paid in a single cash payment or as an annuity (either fixed, variable or a combination), under one or more of our Annuity Options. We describe the Annuity Options in this Prospectus under "The Income Phase -- Annuity Provisions."

During the Accumulation Phase, you may elect the method of payment for the death benefit. These elections are made by sending us, at our Annuity Address, a completed election form, which we will provide. If no such election is in effect on the date of your death, the Beneficiary may elect either a single cash payment or an annuity. If the Beneficiary is your spouse, the Beneficiary may elect to continue the Contract. This election is made by sending us a letter of instruction. If we do not receive the Beneficiary's election within 60 days after we receive Due Proof of Death, the Beneficiary shall be deemed to have elected to defer receipt of payment under any death benefit option until a written election is submitted to the Company or a distribution is required by law.

If we pay the death benefit in the form of an Annuity Option, the Beneficiary becomes the Annuitant/Payee under the terms of that Annuity Option.

Non-Qualified Contracts

If your Contract is a Non-Qualified Contract, special distribution rules apply to the payment of the death benefit. The amount of the death benefit must be distributed either (1) as a lump sum within 5 years after your death, or (2) if in the form of an annuity, over a period not greater than the life or expected life of the "designated beneficiary" within the meaning of Section 72(s) of the Internal Revenue Code, with payments beginning no later than one year after your death.

The person you have named as Beneficiary under your Contract, if any, will be the "designated beneficiary." If the named Beneficiary is not living and no contingent beneficiary has been named, the surviving Owner, if any, or the estate of the deceased Owner automatically becomes the designated beneficiary.

If the designated beneficiary is your surviving spouse, your spouse may continue the Contract in his or her own name as Owner. To make this election, your spouse must give us written notification within 60 days after we receive Due Proof of Death. The special distribution rules will then apply on the death of your spouse. To understand what happens when your spouse continues the Contract, see "Spousal Continuance."

During the Income Phase, if the Annuitant dies, the remaining value of the Annuity Option in place must be distributed at least as rapidly as the method of distribution under that option.

If the Owner is not a natural person, these distribution rules apply upon the death or removal of any Annuitant.

Payments made in contravention of these special rules would adversely affect the treatment of the Contracts as annuity contracts under the Internal Revenue Code. Neither you nor the Beneficiary may exercise rights that would have that effect.

Selection and Change of Beneficiary

You select your Beneficiary in your Application. You may change your Beneficiary at any time by sending us written notice on our required form, unless you previously made an irrevocable Beneficiary designation. A new Beneficiary designation is not effective until we record the change.

Payment of Death Benefit

Payment of the death benefit in cash will be made within 7 days of the Death Benefit Date, except if we are permitted to defer payment in accordance with the Investment Company Act of 1940. If an Annuity Option is elected, the Annuity Commencement Date will be the first day of the second calendar month following the Death Benefit Date, and your Account will remain in effect until the Annuity Commencement Date.

THE INCOME PHASE - ANNUITY PROVISIONS

During the Income Phase, we make regular monthly annuity payments to the Annuitant.

The Income Phase of your Contract begins with the Annuity Commencement Date. On that date, we apply your Account Value, adjusted as described under the Annuity Option(s) you have selected, and we make the first annuity payment.

Once the Income Phase begins, no lump sum settlement option or cash withdrawals are permitted, except pursuant to Annuity Option D, Monthly Payments for a Specified Period Certain, as described under "Annuity Options," and you cannot change the Annuity Option selected. (Also, a Beneficiary receiving payments after the Annuitant's death under Option B, Life Annuity with 60, 120, 180 or 240 Monthly Payments Certain, may elect to receive the discounted value of the remaining payments in a single sum, as discussed under "Annuity Options.") You may request a full withdrawal before the Annuity Commencement Date, which will be subject to all charges applicable on withdrawals (see "Withdrawals").

Selection of Annuitant(s)

You select the Annuitant in your Application. The Annuitant is the person who receives annuity payments during the Income Phase and on whose life these payments are based. In your Contract, the Annuity Options refer to the Annuitant as the "Payee." If you name someone other than yourself as Annuitant and the Annuitant dies before the Income Phase, you become the Annuitant.

When an Annuity Option has been selected as the method of paying the death benefit, the Beneficiary is the Payee of the annuity payments.

Selection of the Annuity Commencement Date

You select the Annuity Commencement Date in your Application. The following restrictions apply to the date you may select:

l	The earliest possible Annuity Commencement Date is the first day of the second month following your Issue Date.
l	The latest possible Annuity Commencement Date is the later of (a) 10 years from the Issue Date or (b) the first day of the month following the Annuitant's 90th birthday ("maximum Annuity Commencement Date"). If there is a Co-Annuitant, the Annuity Commencement Date applies to the younger of the Annuitant and Co-Annuitant.
l	The Annuity Commencement Date must always be the first day of a calendar month.

You may change the Annuity Commencement Date by sending us written notice, in a form acceptable to us, with the following additional limitations:

l	We must receive your notice, in good order, at least 30 days before the current Annuity Commencement Date.
l	The new Annuity Commencement Date must be at least 30 days after we receive the notice.

There may be other restrictions on your selection of the Annuity Commencement Date imposed by your retirement plan or applicable law. In most situations, current law requires that for a Qualified Contract, certain minimum distributions must commence no later than April 1 following the year the Annuitant reaches age 70½ (or, for Qualified Contracts other than IRAs, no later than April 1 following the year the Annuitant retires, if later than the year the Annuitant reaches age 70½).

Annuity Options

We offer the following Annuity Options for payments during the Income Phase. Each Annuity Option may be selected for a Variable Annuity, a Fixed Annuity, or a combination of both. We may also agree to other settlement options, at our discretion.

      Annuity Option A - Life Annuity

We provide monthly payments during the lifetime of the Annuitant. Annuity payments stop when the Annuitant dies. There is no provision for continuation of any payments to a Beneficiary.

     Annuity Option B - Life Annuity with 60, 120, 180 or 240 Monthly Payments Certain

We make monthly payments during the lifetime of the Annuitant. In addition, we guarantee that the Beneficiary will receive monthly payments for the remainder of the period certain, if the Annuitant dies during that period. The election of a longer period results in smaller monthly payments. If no Beneficiary is designated, we pay the discounted value of the remaining payments in one sum to the Annuitant's estate. The Beneficiary may also elect to receive the discounted value of the remaining payments in one sum. The discount rate for a Variable Annuity will be the assumed interest rate in effect; the discount rate for a Fixed Annuity will be based on the interest rate we used to determine the amount of each payment.

     Annuity Option C - Joint and Survivor Annuity

We make monthly payments during the lifetime of the Annuitant and another person you designate and during the lifetime of the survivor of the two. We stop making payments when the last survivor dies. There is no provision for continuance of any payments to a Beneficiary.

     Annuity Option D - Monthly Payments for a Specified Period Certain

We make monthly payments for a specified period of time from 5 to 30 years, as you elect. The election of a longer period results in smaller monthly payments. If payments under this option are paid on a variable annuity basis, the Annuitant may elect to receive in one sum, at any time, some or all of the discounted value of the remaining payments, the discount rate for this purpose will be the assumed interest rate in effect. If the Annuitant dies during the period selected, the remaining income payments are made as described above for the payments to a Beneficiary under Annuity Option B. The election of this Annuity Option may result in the imposition of a penalty tax.

Selection of Annuity Option

You select one or more of the Annuity Options, which you may change from time to time during the Accumulation Phase, as long as we receive your selection or change in writing at least 30 days before the Annuity Commencement Date. If we have not received your written selection on the 30th day before the Annuity Commencement Date, you will receive Annuity Option B, for a life annuity with 120 monthly payments certain.

You may specify the proportion of your Adjusted Account Value you wish to provide a Variable Annuity or a Fixed Annuity. Under a Variable Annuity, the dollar amount of payments will vary, while under a Fixed Annuity, the dollar amount of payments will remain the same. If you do not specify a Variable Annuity or a Fixed Annuity, your Adjusted Account Value will be divided between Variable Annuities and Fixed Annuities in the same proportions as your Account Value was divided between the Variable and Fixed Accounts on the Annuity Commencement Date. You may allocate your Adjusted Account Value applied to a Variable Annuity among the Sub-Accounts, or we will use your existing allocations.

There may be additional limitations on the options you may elect under your particular retirement plan or applicable law.

Remember that the Annuity Options may not be changed once annuity payments begin.

Amount of Annuity Payments

     Adjusted Account Value

The Adjusted Account Value is the amount we apply to provide a Variable Annuity and/or a Fixed Annuity. We calculate Adjusted Account Value by taking your Account Value on the Business Day just before the Annuity Commencement Date and making the following adjustments:

l	We deduct a proportional amount of the Account Fee, based on the fraction of the current Contract Year that has elapsed.
l	We deduct any applicable premium tax or similar tax if not previously deducted.

     Variable Annuity Payments

On the Annuity Commencement Date, we will exchange your Account's Variable Annuity Units for Annuitization Units which have annual insurance charges of 1.70% of your average daily net assets, regardless of your age on the Issue Date. Variable Annuity payments may vary each month. We determine the dollar amount of the first payment using the portion of your Adjusted Account Value applied to a Variable Annuity and the Annuity Payment Rates in your Contract, which are based on an assumed interest rate of 3% per year, compounded annually. See "Annuity Payment Rates."

To calculate the remaining payments, we convert the amount of the first payment into Annuity Units for each Sub-Account; we determine the number of those Annuity Units by dividing the portion of the first payment attributable to the Sub-Account by the Annuity Unit Value of that Sub-Account for the Valuation Period ending just before the Annuity Commencement Date. This number of Annuity Units for each Sub-Account will remain constant (unless the Annuitant requests an exchange of Annuity Units). However, the dollar amount of the next Variable Annuity payment -- which is the sum of the number of Annuity Units for each Sub-Account times its Annuity Unit Value for the Valuation Period ending just before the date of the payment -- will increase, decrease, or remain the same, depending on the net investment return of the Sub-Accounts.

If the net investment return of the Sub-Accounts selected is the same as the assumed interest rate of 3%, compounded annually, the payments will remain level. If the net investment return exceeds the assumed interest rate, payments will increase and, conversely, if it is less than the assumed interest rate, payments will decrease.

Please refer to the Statement of Additional Information for more information about calculating Variable Annuity Units and Variable Annuity payments, including examples of these calculations.

     Fixed Annuity Payments

Fixed Annuity payments are the same each month. We determine the dollar amount of each Fixed Annuity payment using the fixed portion of your Adjusted Account Value and the applicable Annuity Payment Rates. These will be either (1) the rates in your Contract, or (2) new rates we have published and are using on the Annuity Commencement Date, if they are more favorable. See "Annuity Payment Rates."

     Minimum Payments

If your Adjusted Account Value is less than $2,000, or the first annuity payment for any Annuity Option is less than $20, we will pay the Adjusted Account Value to the Annuitant in one payment.

Exchange of Variable Annuity Units

During the Income Phase, the Annuitant may exchange Annuity Units in one Sub-Account for Annuity Units in another Sub-Account, up to 12 times each Contract Year. Any such exchanges may be subject to any restrictions or other policies that the Funds have adopted to protect the Funds from short-term trading or other practices that are potentially harmful to the Fund (the "Funds' Shareholder Trading Policies"). The applicability of the Funds' Shareholder Trading Policies is the same during the Income Phase as during the Accumulation Phase, and this is discussed in this prospectus under "Funds' Shareholder Trading Policies." For the reasons discussed there, you should review and comply with each Fund's Shareholder Trading Policies, which are disclosed in the Funds' current prospectuses.

To make an exchange, the Annuitant sends us, at our Annuity Service Address, a written request stating the number of Annuity Units in the Sub-Account he or she wishes to exchange and the new Sub-Account for which Annuity Units are requested. The number of new Annuity Units will be calculated so the dollar amount of an annuity payment on the date of the exchange would not be affected. To calculate this number, we use Annuity Unit values for the Valuation Period during which we receive the exchange request.

Before exchanging Annuity Units in one Sub-Account for those in another, the Annuitant should carefully review the relevant Fund prospectuses for the investment objectives and risk disclosure of the Funds in which the Sub-Accounts invest.

During the Income Phase, we permit only exchanges among Sub-Accounts. No exchanges to or from a Fixed Annuity are permitted.

Account Fee

During the Income Phase, we deduct the annual Account Fee of $30 in equal amounts from each Variable Annuity payment. We do not deduct the annual Account Fee from Fixed Annuity payments.

Annuity Payment Rates

The Contracts contain Annuity Payment Rates for each Annuity Option described in this Prospectus. The rates show, for each $1,000 applied, the dollar amount of: (a) the first monthly Variable Annuity payment based on the assumed interest rate specified in the applicable Contract (3% per year, compounded annually); and (b) the monthly Fixed Annuity payment, when this payment is based on the minimum guaranteed interest rate specified in the Contract.

The Annuity Payment Rates may vary according to the Annuity Option elected and the adjusted age of the Annuitant. The Contracts also describe the method of determining the adjusted age of the Annuitant. The mortality table used in determining the Annuity Payment Rates for Annuity Options A, B and C is the Annuity 2000 Table.

Annuity Options as Method of Payment for Death Benefit

You or your Beneficiary may also select one or more Annuity Options to be used in the event of the Owner's death before the Income Phase, as described under the "Death Benefit" section of this Prospectus. In that case, your Beneficiary will be the Annuitant. The Annuity Commencement Date will be the first day of the second month beginning after the Death Benefit Date.

OTHER CONTRACT PROVISIONS

Exercise of Contract Rights

A Contract belongs to the individual to whom the Contract is issued. All Contract rights and privileges can be exercised without the consent of the Beneficiary (other than an irrevocably designated Beneficiary) or any other person. Such rights and privileges may be exercised only before the Annuity Commencement Date, except as the Contract otherwise provides.

The Annuitant becomes the Payee on and after the Annuity Commencement Date. The Beneficiary becomes the Payee on the death of the Owner prior to the Annuity Commencement Date, or on the death of the Annuitant after the Annuity Commencement Date. Such Payee may thereafter exercise such rights and privileges, if any, of ownership which continue.

Change of Ownership

Ownership of a Qualified Contract may not be transferred except to: (1) the Annuitant; (2) a trustee or successor trustee of a pension or profit sharing trust which is qualified under Section 401 of the Internal Revenue Code; (3) the employer of the Annuitant, provided that the Qualified Contract after transfer is maintained under the terms of a retirement plan qualified under Section 403(a) of the Internal Revenue Code for the benefit of the Annuitant; (4) the trustee or custodian of an individual retirement account plan qualified under Section 408 of the Internal Revenue Code for the benefit of the Owner; or (5) as otherwise permitted from time to time by laws and regulations governing the retirement or deferred compensation plans for which a Qualified Contract may be issued. Subject to the foregoing, a Qualified Contract may not be sold, assigned, transferred, discounted or pledged as collateral for a loan or as security for the performance of an obligation or for any other purpose to any person other than the Company.

The Owner of a Non-Qualified Contract may change the ownership of the Contract prior to the Annuity Commencement Date. A change of ownership will not be binding on us until we receive written notification. When we receive such notification, the change will be effective as of the date on which the request for change was signed by the Owner, but the change will be without prejudice to us on account of any payment we make or any action we take before receiving the change. If you change the Owner of a Non-Qualified Contract, you will become immediately liable for the payment of taxes on any gain realized under the Contract prior to the change of ownership, including possible liability for a 10% federal excise tax.

Change of ownership will not change the Owner named when the Contract is issued. This means that all death benefits and surrender charge waivers will continue to be based on the original Owner and not the new Owner. The amount payable on the death of the new Owner will be the Surrender Value.

Voting of Fund Shares

We will vote Fund shares held by the Sub-Accounts at meetings of shareholders of the Funds or in connection with similar solicitations, according to the voting instructions received from persons having the right to give voting instructions. During the Accumulation Phase, you will have the right to give voting instructions. During the Income Phase, the Payee -(that is the Annuitant or Beneficiary entitled to receive benefits) is the person having such voting rights. We will vote any shares attributable to us and Fund shares for which no timely voting instructions are received in the same proportion as the shares for which we receive instructions from Owners and Payees, as applicable.

Neither the Variable Account nor the Company is under any duty to provide information concerning the voting instruction rights of persons who may have such rights under plans, other than rights afforded under the Investment Company Act of 1940, or any duty to inquire as to the instructions received by Owners or others, or the authority of any such persons, to instruct the voting of Fund shares. Except as the Variable Account or the Company has actual knowledge to the contrary, the instructions given by Owners and Payees will be valid as they affect the Variable Account, the Company and any others having voting instruction rights with respect to the Variable Account.

All Fund proxy material, together with an appropriate form to be used to give voting instructions, will be provided to each person having the right to give voting instructions at least 10 days prior to each meeting of the shareholders of the Fund. We will determine the number of Fund shares as to which each such person is entitled to give instructions as of the record date set by the Funds for such meeting, which is expected to be not more than 90 days prior to each such meeting. Prior to the Annuity Commencement Date, the number of Fund shares as to which voting instructions may be given to the Company is determined by dividing the value of all of the Variable Accumulation Units of the particular Sub-Account credited to the Owner Account by the net asset value of one Fund share as of the same date. On or after the Annuity Commencement Date, the number of Fund shares as to which such instructions may be given by a Payee is determined by dividing the reserve held by the Company in the Sub-Account with respect to the particular Payee by the net asset value of a Fund share as of the same date. After the Annuity Commencement Date, the number of Fund shares as to which a Payee is entitled to give voting instructions will generally decrease due to the decrease in the reserve.

Reports to Owners

We will send you, by regular U.S. mail, confirmation of all Purchase Payments (including any interest credited), withdrawals, (including any withdrawal charges, negative market value adjustments, and federal taxes on withdrawals), minimum distributions, death benefit payments, transfers (excluding dollar-cost averaging transfers) and living benefit credits or refunds. Such confirmations will be sent within two business days after the transaction occurs.

In addition, within 5 business days after each Account Quarter, we will send you a statement showing your current Account Value, death benefit value, and investment allocation by asset class. Each quarterly statement will detail transactions that occurred during the last Account Quarter including Purchase Payments, annuity payments, transfers (including dollar-cost averaging transfers), partial withdrawals, systematic withdrawals, minimum distributions, portfolio rebalancing, asset reallocations, interest credited on fixed accounts, step-ups credited on living benefits, and annual contract fees assessed.

We will also send you annual and semi-annual reports of the funds in which you are invested, including a list of investments held by each portfolio as of the current date of the report.

It is your obligation to review each such statement carefully and to report to us, at the address or telephone number provided on the statement, any errors or discrepancies in the information presented therein within 60 days of the date of such statement. Unless we receive notice of any such error or discrepancy from you within such period, we may not be responsible for correcting the error or discrepancy.

Substitution of Securities

Shares of any or all Funds may not always be available for investment under the Contract. We may add or delete Funds or other investment companies as variable investment options under the Contract. We may also substitute for the shares held in any Sub-Account shares of another Fund or shares of another registered open-end investment company or unit investment trust, provided that the substitution has been approved, if required, by the SEC and the Superintendent of Insurance of the State of New York. In the event of any substitution pursuant to this provision, we may make appropriate endorsement to the Contract to reflect the substitution.

Change in Operation of Variable Account

At our election and subject to any necessary vote by persons having the right to give instructions with respect to the voting of Fund shares held by the Sub-Accounts, the Variable Account may be operated as a management company under the Investment Company Act of 1940 or it may be deregistered under the Investment Company Act of 1940 in the event registration is no longer required. Deregistration of the Variable Account requires an order by the SEC. In the event of any change in the operation of the Variable Account pursuant to this provision, we may make appropriate endorsement to the Contract to reflect the change and take such other action as may be necessary and appropriate to effect the change.

Splitting Units

We reserve the right to split or combine the value of Variable Accumulation Units, Annuity Units or any of them. In effecting any such change of unit values, strict equity will be preserved and no change will have a material effect on the benefits or other provisions of the Contract.

Modification

Upon notice to the Owner (or the Payee(s) during the Income Phase), we may modify the Contract if such modification: (i) is necessary to make the Contract or the Variable Account comply with any law or regulation issued by a governmental agency to which the Company or the Variable Account is subject; (ii) is necessary to assure continued qualification of the Contract under the Internal Revenue Code or other federal or state laws relating to retirement annuities or annuity contracts; (iii) is necessary to reflect a change in the operation of the Variable Account or the Sub-Account(s) (see "Change in Operation of Variable Account"); (iv) provides additional Variable Account and/or fixed accumulation options; or (v) as may otherwise be in the best interests of Owners, or Payees, as applicable. In the event of any such modification, we may make appropriate endorsement in the Contract to reflect such modification.

Reservation of Rights

We reserve the right, to the extent permitted by law, to: (1) combine any 2 or more variable accounts or Sub-Accounts; (2) add or delete Funds, sub-series thereof or other investment companies and corresponding Sub-Accounts; (3) add or remove Guarantee Periods available at any time for election by an Owner; and (4) restrict or eliminate any of the voting rights of Owners or other persons who have voting rights as to the Variable Account. Where required by law, we will obtain approval of changes from Owners or any appropriate regulatory authority. In the event of any change pursuant to this provision, we may make appropriate endorsement to the Contract to reflect the change.

Right to Return

If you are not satisfied with your Contract, you may return it by mailing or delivering it to us at our Annuity Service Address, as shown on the cover of this Prospectus, within 10 days, or longer if allowed by your state, after it was delivered to you. State law may allow you to return the Contract to your sales representative. When we receive the returned Contract, it will be cancelled and we will refund to you your Account Value. If applicable state law requires, we will return the full amount of any Purchase Payment(s) we received.

If you are establishing an Individual Retirement Annuity ("IRA"), the Internal Revenue Code requires that we give you a disclosure statement containing certain information about the Contract and applicable legal requirements. We must give you this statement on or before the date the IRA is established. If we give you the disclosure statement before the seventh day preceding the date the IRA is established, you will not have any right of revocation under the Code. If we give you the disclosure statement at a later date, then you may give us a notice of revocation at any time within 7 days after your Issue Date. Upon such revocation, we will refund your Purchase Payment(s). This right of revocation with respect to an IRA is in addition to the return privilege set forth in the preceding paragraph. We allow an Owner establishing an IRA a "ten day free-look," notwithstanding the provisions of the Internal Revenue Code.

TAX CONSIDERATIONS

This section provides general information on the federal income tax consequences of the ownership of a Contract based upon our understanding of current federal tax laws. Actual federal tax consequences will vary depending on, among other things, the type of retirement plan under which your Contract is issued. Also, legislation altering the current tax treatment of annuity contracts could be enacted in the future and could apply retroactively to Contracts that were purchased before the date of enactment. We make no attempt to consider any applicable federal estate, federal gift, state or other tax laws. We also make no guarantee regarding the federal, state, or local tax status of any Contract or any transaction involving any Contract. You should consult a qualified tax professional for advice before purchasing a Contract or executing any other transaction (such as a rollover, distribution, withdrawal or payment) involving a Contract.

     Deductibility of Purchase Payments

For federal income tax purposes, Purchase Payments made under Non-Qualified Contracts are not deductible. Under certain circumstances, Purchase Payments made under Qualified Contracts may be excludible or deductible from taxable income. Any such amounts will also be excluded from the "investment in the contract" for purposes of determining the taxable portion of any distributions from a Qualified Contract. As a general rule, regardless of whether you own a Qualified or a Non-Qualified Contract, the amount of your tax liability on earnings and distributions will depend upon the specific tax rules applicable to your Contract and your particular circumstances.

     Pre-Distribution Taxation of Contracts

Generally, an increase in the value of a Contract will not give rise to a current income taxliability to the Owner of a Contract or to any payee under the Contract until a distribution is received from the Contract. However, certain assignments or pledges of a Contract or loans under a Contract will be treated as distributions to the Owner of the Contract and will accelerate the taxability of any increases in the value of a Contract.

Also, corporate (or other non-natural person) Owners of a Non-Qualified Contract will generally incur a current tax, liability on Account Value increases. There are certain exceptions to this current taxation rule, including: (i) any Contract that is an "immediate annuity", which the Internal Revenue Code (the "Code") defines as a single premium contract with an annuity commencement date within one year of the date of purchase which provides for a series of substantially equal periodic payments (to be made not less frequently than annually) during the annuity period, and (ii) any Contract that the non-natural person holds as agent for a natural person (such as where a bank or other entity holds a Contract as trustee under a trust agreement).

You should note that a qualified retirement plan generally provides tax deferral regardless of whether the plan invests in an annuity contract. For that reason, no decision to purchase a Qualified Contract should be based on the assumption that the purchase of a Qualified Contract is necessary to obtain tax deferral under a qualified plan.

     Distributions and Withdrawals from Non-Qualified Contracts

The Account Value of a Non-Qualified Contract will generally include both (i) an amount attributable to Purchase Payments, the return of which will not be taxable, and (ii) an amount attributable to investment earnings, the receipt of which will be taxable at ordinary income rates. The relative portions of any particular distribution that derive from nontaxable Purchase Payments and taxable investment earnings depend upon the nature and the timing of that distribution.

Any withdrawal of less than your entire Account Value under a Non-Qualified Contract before the Annuity Commencement Date, must be treated as a receipt of investment earnings. You may not treat such withdrawals as a non-taxable return of Purchase Payments unless you have first withdrawn the entire amount of the Account Value that is attributable to investment earnings. For purposes of determining whether an Owner has withdrawn the entire amount of the investment earnings under a Non-Qualified Contract, the Code provides that all Non-Qualified deferred annuity contracts issued by the same company to the same Owner during any one calendar year must be treated as one annuity contract. If you withdraw your entire Account Value under a Non-Qualified Contract before the Annuity Commencement Date (a "full surrender"), the taxable portion will equal the amount you receive less the "investment in the contract" (i.e., the total Purchase Payments (excluding amounts that were deductible by, or excluded from the gross income of, the Owner of a Contract), less any Purchase Payments that were amounts previously received which were not includable in income).

A Payee who receives annuity payments under a Non-Qualified Contract after the Annuity Commencement Date, will generally be able to treat a portion of each payment as a nontaxable return of Purchase Payments and to treat only the remainder of each such payment as taxable investment earnings. Until the Purchase Payments have been fully recovered in this manner, the nontaxable portion of each payment will be determined by the ratio of (i) the total amount of the Purchase Payments made under the Contract, to (ii) the Payee's expected return under the Contract. Once the Payee has received nontaxable payments in an amount equal to total Purchase Payments, no further exclusion is allowed and all future distributions will constitute fully taxable ordinary income. If payments are terminated upon the death of the Annuitant or other Payee before the Purchase Payments have been fully recovered, the unrecovered Purchase Payments may be deducted on the final return of the Annuitant or other Payee.

A penalty tax of 10% may also apply to taxable cash withdrawals including lump-sum payments from Non-Qualified Contracts. This penalty will generally not apply to distributions made after age 59½, to distributions pursuant to the death or disability of the Owner, to distributions that are a part of a series of substantially equal periodic payments made not less frequently than annually for life or life expectancy, or to distributions under an immediate annuity (as defined above).

Death benefits paid upon the death of a contract owner are not life insurance benefits and will generally be includible in the income of the recipient to the extent they represent investment earnings under the contract. For this purpose, the amount of the investment in the contract is not affected by the owner's or annuitant's death, i.e., the investment in the contract must still be determined by reference to the Owner's investment in the Contract. Special mandatory distribution rules also apply after the death of the Owner when the beneficiary is not the surviving spouse of the Owner.

If death benefits are distributed in a lump sum, the taxable amount of those benefits will be determined in the same manner as upon a full surrender of the contract. If death benefits are distributed under an annuity option, the taxable amount of those benefits will be determined in the same manner as annuity payments, as described above.

Any amounts held under a Non-Qualified Contract that are assigned or pledged as collateral for a loan will also be treated as if withdrawn from the Contract. In addition, upon the transfer of a Non-Qualified Contract by gift (other than to the Owner's spouse), the Owner must treat an amount equal to the Account Value minus the total amount paid for the Contract as income.

     Distributions and Withdrawals from Qualified Contracts

In most cases, all of the distributions you receive from a Qualified Contract will constitute fully taxable ordinary income. Also, a 10% penalty tax will apply to distributions prior to age 59½, except in certain circumstances.

If you receive a distribution for a Qualified Contract used in connection with a qualified pension plan, from a tax-sheltered annuity, a governmental Code Section 457 plan or an individual retirement annuity "IRA" and roll over some or all that distribution to another eligible plan, following the rules set out in the Code and IRS regulations, the portion of such distribution that is rolled over will not be includible in your income. An eligible rollover distribution from a qualified plan, tax-sheltered annuity or governmental Section 457 plan will be subject to 20% mandatory withholding as described below. Because the amount of the cash paid to you as an eligible rollover distribution will be reduced by this withholding, you will not be able to roll over the entire account balance under your Contract, unless you use other funds equal to the tax withholding to complete the rollover. Rollovers of IRA distributions are not subject to the 20% mandatory withholding requirement.

An eligible rollover distribution from a qualified plan, governmental Section 457 plan or tax-sheltered annuity is any distribution of all or any portion of the balance to the credit of an employee, except that the term does not include:

l	a distribution which is one of a series of substantially equal periodic payments made annually under a lifetime annuity or for a specified period of ten years or more;
l	any required minimum distribution, or
l	any hardship distribution.

Only you or your surviving spouse Beneficiary may elect to roll over a distribution to an eligible retirement plan. However, a non-surviving-spouse Beneficiary may able to directly transfer a distribution to a so-called inherited IRA that will be subject to the IRS distribution rules applicable to beneficiaries.

     Withholding

In the case of an eligible rollover distribution (as defined above) from a Qualified Contract (other than from an IRA), we (or the plan administrator) must withhold and remit to the U.S. Government 20% of the distribution, unless the Owner or Payee elects to make a direct rollover of the distribution to another qualified retirement plan that is eligible to receive the rollover; however, only you or your surviving spouse Beneficiary may elect a direct rollover. In the case of a distribution from (i) a Non-Qualified Contract, (ii) an IRA, or (iii) a Qualified Contract where the distribution is not an eligible rollover distribution, 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 or Payee provides us his or her taxpayer identification number and instructs us (in the manner prescribed) not to withhold. The Owner or Payee may credit against his or her federal income tax liability for the year of distribution any amounts that we (or the plan administrator) withhold.

     Investment Diversification and Control

The Treasury Department has issued regulations that prescribe investment diversification requirements for the mutual fund series underlying nonqualified variable contracts. All Non-Qualified Contracts must comply with these regulations to qualify as annuities for federal income tax purposes. The owner of a Non-Qualified Contracts that does not meet these guidelines will be subject to current taxation on annual increases in value of the Contract. We believe that each Fund available as an investment option under the Contract complies with these 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 Revenue Ruling 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.

Revenue Ruling 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 Contract and the contracts described in Revenue Ruling 2003-91 should prevent the holding in Revenue Ruling 2003-91 from applying. Nevertheless, you should consult with a qualified tax professional 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 Contract. In addition, the IRS and/or the Treasury Department may issue new rulings, interpretations or regulations on this subject in the future. Accordingly, we therefore reserve the right to modify the Contracts 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 Contract 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.

     Tax Treatment of the Company and the Variable Account

As a life insurance company under the Code, we will record and report operations of the Variable Account separately from other operations. The Variable Account will not, however, constitute a regulated investment company or any other type of taxable entity distinct from our other operations. Under present law, we will not incur tax on the income of the Variable Account (consisting primarily of interest, dividends, and net capital gains) if we use this income to increase reserves under Contracts participating in the Variable Account.

     Qualified Retirement Plans

"Qualified Contracts" are Contracts used with plans that receive taxdeferral treatment pursuant to specific provisions of the Code. Annuity contracts also receive taxdeferral treatment. It is not necessary that you purchase an annuity contract to receive the taxdeferral treatment available through a Qualified Contract. If you purchase this annuity Contract as a Qualified Contract, you do not receive additional taxdeferral. Therefore, if you purchase this annuity Contract as a Qualified Contract, you should do so for reasons other than obtaining tax deferral.

You may use Qualified Contracts with several types of qualified retirement plans. Because tax consequences will vary with the type of qualified retirement plan and the plan's specific terms and conditions, we provide below only brief, general descriptions of the consequences that follow from using Qualified Contracts in connection with various types of qualified retirement plans. We stress that the rights of any person to any benefits under these plans may be subject to the terms and conditions of the plans themselves, regardless of the terms of the Qualified Contracts that you are using. These terms and conditions may include restrictions on, among other things, ownership, transferability, assignability, contributions and distributions.

     Pension and Profit-Sharing Plans

Sections 401(a), 401(k) and 403(a) of the Code permit business employers and certain associations to establish various types of retirement plans for employees. The Code requirements are similar for qualified retirement plans of corporations and those of self-employed individuals. Self-employed persons, as a general rule, may therefore use Qualified Contracts as a funding vehicle for their retirement plans.

     Tax-Sheltered Annuities

Section 403(b) of the Code permits public school employees and employees of certain types of charitable, educational and scientific organizations specified in Section 501(c)(3) of the Code to purchase annuity contracts and, subject to certain limitations, exclude the amount of purchase payments from gross income for tax purposes. The Code imposes restrictions on cash withdrawals from Section 403(b) annuities.

If the Contracts are to receive tax-deferred treatment, cash withdrawals of amounts attributable to salary reduction contributions (other than withdrawals of accumulation account value as of December 31, 1988) may be made only when the Owner attains age 59½, has a severance from employment with the employer, dies or becomes disabled (within the meaning of Section 72(m)(7) of the Code). These restrictions apply to (i) any post-1988 salary reduction contributions, (ii) any growth or interest on post-1988 salary reduction contributions, (iii) any growth or interest on pre-1989 salary reduction contributions that occurs on or after January 1, 1989, and (iv) any pre-1989 salary reduction contributions since we do not maintain records that separately account for such contributions. It is permissible, however, to withdraw post-1988 salary reduction contributions (but not the earnings attributable to such contributions) in cases of financial hardship. While the Internal Revenue Service has not issued specific rules defining financial hardship, we expect that to qualify for a hardship distribution, the Owner must have an immediate and heavy bona fide financial need and lack other resources reasonably available to satisfy the need. Hardship withdrawals (as well as certain other premature withdrawals) will be subject to a 10% tax penalty, in addition to any withdrawal charge applicable under the Contracts. Under certain circumstances the 10% tax penalty will not apply if the withdrawal is for medical expenses.

Section 403(b) annuities, like IRAs, are subject to required minimum distributions under the Code. Section 403(b) annuities are unique, however, in that any account balance accruing before January 1, 1987 (the "pre-1987 balance") needs to comply with only the minimum distribution incidental benefit (MDIB) rule and not also with the minimum distribution rules set forth in Section 401(a)(9) of the Code. This special treatment for any pre-1987 balance is, however, conditioned upon the issuer identifying the pre-1987 balance and maintaining accurate records of changes to the balance. Since we do not maintain such records, your pre-1987 balance, if any, will not be eligible for special distribution treatment.

Under the terms of a particular Section 403(b) plan, the Owners may be entitled to transfer all or a portion of the Account Value to one or more alternative funding options. Owners should consult the documents governing their plan and the person who administers the plan for information as to such investment alternatives.

     Individual Retirement Arrangements

Sections 219 and 408 of the Code permit eligible individuals to contribute to a so-called "traditional" individual retirement program, including Individual Retirement Accounts and Annuities, Simplified Employee Pension Plans and SIMPLE Retirement Accounts. Such IRAs are subject to limitations on contribution levels, the persons who may be eligible, and on the time when distributions may commence. In addition, certain distributions from some other types of retirement plans may be placed in an IRA on a tax-deferred basis. The Internal Revenue Service imposes special information requirements with respect to IRAs and we will provide purchasers of the Contracts as Individual Retirement Annuities with any necessary information. You will have the right to revoke a Contract issued as an Individual Retirement Annuity under certain circumstances, as described in the section of this Prospectus entitled "Right to Return." If your Contract is issued in connection with an Individual Retirement Account, we have no information about the Account and you should contact the Account's trustee or custodian.

     Roth Individual Retirement Arrangements

Section 408A of the Code permits an individual to contribute to an individual retirement program called a Roth IRA. Unlike contributions to a traditional IRA under Section 408 of the Code, contributions to a Roth IRA are not tax-deductible. Provided certain conditions are satisfied, distributions are generally tax-free. Like traditional IRAs, Roth IRAs are subject to limitations on contribution amounts and the timing of distributions. If you convert a traditional Individual Retirement Annuity Contract into a Roth IRA Contract or your Individual Retirement Account that holds a Contract is converted to a Roth Individual Retirement Account, the fair market value of the Contract is included in taxable income. Under IRS regulations and Revenue Procedure 2006-13, fair market value may exceed the Contract's account balance. Thus, you should consult with a qualified tax professional prior to any conversion.

The Internal Revenue Service imposes special information requirements with respect to Roth IRAs and we will provide the necessary information for Contracts issued as Roth Individual Retirement Annuities. If your Contract is issued in connection with a Roth Individual Retirement Account, we have no information about the Account and you should contact the Account's trustee or custodian.

     Impact of Optional Death Benefit Riders

Qualified Contracts. If your Contract is a traditional IRA annuity or a 403(b) TSA annuity, it is subject to certain required minimum distribution (RMD) requirements imposed by the Internal Revenue Code and IRS regulations. Under the RMD rules, distributions must begin no later than April 1 of the calendar year following the year in which you attain age 70½ or, for non-IRAs, the date of retirement if later. The RMD amount for a distribution calendar year is generally calculated by dividing the Contract's value as of 12/31 of the prior calendar year by the applicable distribution factor set forth in a Uniform Lifetime Table in the IRS regulations. For Contracts issued in connection with traditional Individual Retirement Accounts, you should contact the Account's trustee or custodian about RMD requirements since we only provide the trustee or custodian with the Contract's value (including any actuarial present value of additional benefits discussed below) so that it can be used in the Account's RMD calculations.

Effective with the 2006 distribution calendar year, the actuarial present value as of 12/31 of any additional benefits that are provided under your Contract (such as optional death benefits) will be added to the Contract's Account Value as of 12/31 in order to calculate the RMD amount. There are two exceptions to the requirement that the actuarial present value of an additional benefit must be added to the Account Value for RMD calculation purposes. First, if the only additional benefit provided under a Contract is a return of premium death benefit (i.e., a benefit under which the final payment does not exceed the amount of purchase payments made less prior distributions), then the additional benefit is disregarded and the RMD calculation uses only the 12/31 Account Value. Second, if (1) the Contract provides only for additional benefits that are each reduced on a proportional basis in the event of distributions, with or without a return of premium death benefit that is not reduced in amount proportionately in the event of distributions and (2) the actuarial present value of all the Contract's additional benefits is no more than 20% of the 12/31 Account Value, then the additional benefits are disregarded and the RMD calculation uses only the 12/31 Account Value. When we notify you of the RMD amount for a distribution calendar year, we will inform you if the calculation included the actuarial present value of additional benefits. Because of the above requirements, your initial or renewal election of an optional rider could cause your RMD amount to be higher than it would be without such an election. Prior to electing to participate in (or, if applicable, prior to renewing your participation in) any optional rider, you should consult with a qualified tax professional as to the possible effect of that rider on your yearly RMD amounts.

You may take an RMD amount calculated for a particular IRA annuity from that annuity or from another IRA account or IRA annuity of yours. Similarly, you may take an RMD amount calculated for a particular TSA annuity from that annuity or from another TSA account or TSA annuity of yours. If your Qualified Contract is an asset of a qualified retirement plan, the qualified plan is subject to the RMD requirements and the Contract, as an asset of the qualified plan may need to be used as a source of funds for the RMDs.

If your Contract is a traditional Individual Retirement Annuity or is held by your traditional Individual Retirement Account and you might convert in the future to a Roth IRA (see "Roth Individual Retirement Arrangements"), then your initial or renewal election of an optional rider could cause your taxable income upon conversion to be higher than it would be without such an election. Prior to electing to participate in (or, if applicable, prior to renewing your participation in) any optional death benefit, you should consult with a qualified tax professional as to the possible effect of that benefit on conversion taxable income.

Non-Qualified Contracts. We are required to make a determination as to the taxability of any withdrawal you make in order to be able to annually report to the IRS and you information about your withdrawal. Under the Internal Revenue Code, any withdrawal from a Non-Qualified Contract is taxable to the extent the annuity's cash value (determined without regard to surrender charges) exceeds the investment in the contract. There is no definition of "cash value" in the Code and, for tax reporting purposes, we are currently treating it as the Account Value of the Contract. However, there can be no assurance that the IRS will agree that this is the correct cash value. The IRS could, for example, determine that the cash value is the Account Value plus an additional amount representing the value of an optional rider. If this were to occur, election of an optional rider could cause any withdrawal to have a higher proportion of the withdrawal derived from taxable investment earnings. Prior to electing to participate in an optional rider, you should consult with a qualified tax professional as to the meaning of "cash value."

ADMINISTRATION OF THE CONTRACT

We perform certain administrative functions relating to the Contract, Owner Accounts, and the Variable Account. These functions include, but are not limited to, maintaining the books and records of the Variable Account and the Sub-Accounts; maintaining records of the name, address, taxpayer identification number, Contract number, Owner Account number and type, the status of each Owner Account and other pertinent information necessary to the administration and operation of the Contract; processing Applications, Purchase Payments, transfers and full and partial withdrawals; issuing Contracts; administering annuity payments; furnishing accounting and valuation services; reconciling and depositing cash receipts; providing confirmations; providing toll-free customer service lines; and furnishing telephonic transfer services.

DISTRIBUTION OF THE CONTRACT

We offer the Contract on a continuous basis. Contracts are sold by licensed insurance agents ("the Selling Agents") in those states where the Contract may be lawfully sold. Such Selling Agents will be registered representatives of affiliated and unaffiliated broker-dealer firms ("the Selling Broker-Dealers") registered under the Securities Exchange Act of 1934 who are members of the National Association of Securities Dealers, Inc. and who have entered into selling agreements with the Company and the 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 as a broker-dealer and is a member of the National Association of Securities Dealers, Inc.

The Company (or its affiliates, for purposes of this section only, collectively, "the Company"), pays the Selling Broker-Dealers compensation for the promotion and sale of the Contract. The Selling Agents who solicit sales of the Contract 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 Contract Owner or the separate account. The Company intends to recoup this compensation through fees and charges imposed under the Contract, 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 may vary depending on the selling agreement but is not expected to be more than 2.50% of Purchase Payments, and 1.25% annually of the Participant's Account Value. 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 payments to affiliates of the Company, 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 Purchase Payments and/or a percentage of Contract Value and/or may be a fixed dollar amount.

In addition to the compensation described above, the Company may make additional cash payments, in certain circumstances referred to as "override" compensations, 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 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-Dealers' preferred or recommended list, access to the Selling Broker-Dealers' registered representatives for purposes of promoting sales of the Company's products, assistance in training and education of 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 or expected aggregate sales of our variable contracts (including the Contract) or assets held within those contracts (in most cases not to exceed 0.25% of aggregate sales and 0.10% of assets attributable to the Selling-Broker-Dealer, and/or may be a fixed dollar amount. Broker-dealers receiving these additional payments may pass on some or all of the payments to the Selling Agent.

In addition to selling our variable contracts (including the Contract), some Selling Broker-Dealers or their affiliates may have other business relationships with the Company. Those other business relationships may include, for example, reinsurance agreements pursuant to which an affiliate of the Selling Broker-Dealer provides reinsurance to the Company relative to some or all of the Policies or other variable policies issued by the Company or its affiliates. The potential profits for a Selling Broker-Dealer or its affiliate associated with such reinsurance arrangements could indirectly provide incentives to the Selling Broker-Dealer and its Selling Agents to recommend products for which they provide reinsurance over similar products which do not result in potential reinsurance profits to the Selling Broker-Dealer or its affiliate. The operation of an individual contract is not impacted by whether the policy is subject to a reinsurance arrangement between the Company and an affiliate of the Selling Broker-Dealer.

You should ask your Selling Agent for further information about what commissions or other compensation he or she, or the Selling Broker-Dealer for which he or she works, may receive in connection with your purchase of a Contract.

Commissions may be waived or reduced in connection with certain transactions described in this Prospectus under the heading "Waivers; Reduced Charges; Special Guaranteed Interest Rates." During 2004, 2005, and 2006, approximately $5,896, $40,828, and $22,820, respectively, in commission were paid to but not retained by Clarendon in connection with the distribution of the Contracts.

AVAILABLE INFORMATION

The Company and the Variable Account have filed with the SEC registration statements under the Securities Act of 1933 relating to the Contracts. This Prospectus does not contain all of the information contained in the registration statements and their exhibits. For further information regarding the Variable Account, the Company and the Contracts, please refer to the registration statements and their exhibits.

In addition, the Company is subject to the informational requirements of the Securities Exchange Act of 1934. We file reports and other information with the SEC to meet these requirements.

You can inspect and copy this information and our registration statements at the SEC's public reference facilities at the following locations: Washington, D.C. -- 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549; Chicago, Illinois -- 500 West Madison Street, Chicago, IL 60661. The Washington, D.C. office will also provide copies by mail for a fee. You may also find these materials on the SEC's website (http:// www.sec.gov).

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The Company's Annual Report on Form 10-K/A for the year ended December 31, 2006 filed with the SEC pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act") is incorporated herein by reference. All documents or reports we file pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act, after the date of this prospectus and prior to the termination of the offering, shall be deemed incorporated by reference into the prospectus.

The Company will furnish, without charge, to each person to whom a copy of this Prospectus is delivered, upon the written or oral request of such person, a copy of the documents referred to above which have been incorporated by reference into this Prospectus, other than exhibits to such documents (unless such exhibits are specifically incorporated by reference in this Prospectus). Requests for such documents should be directed to the Secretary, Sun Life Assurance Company of Canada (U.S.), One Sun Life Executive Park, Wellesley Hills, Massachusetts 02481, telephone (800) 225-3950.

STATE REGULATION

The Company is subject to the laws of the State of New York governing life insurance companies and to regulation by the Superintendent of Insurance of New York. An annual statement is filed with the Superintendent of Insurance on or before March lst in each year relating to the operations of the Company for the preceding year and its financial condition on December 31st of such year. Its books and records are subject to review or examination by the Superintendent or his agents at any time and a full examination of its operations is conducted at periodic intervals.

The Superintendent has broad administrative powers with respect to licensing to transact business, overseeing trade practices, licensing agents, approving policy forms, establishing reserve requirements, fixing maximum interest rates on life insurance policy loans and minimum rates for accumulation of surrender values, prescribing the form and content of required financial statements and regulating the type and amounts of investments permitted.

In addition, affiliated groups of insurers, such as the Company, Sun Life (Canada) and its affiliates are regulated under insurance holding company legislation. Under such laws, inter-company transfers of assets and dividend payments from insurance subsidiaries may be subject to prior notice or approval, depending on the size of such transfers and payments in relation to the financial positions of the companies involved. Under insurance guaranty fund laws in most states, insurers doing business therein can be assessed (up to prescribed limits) for policyholder losses incurred by insolvent companies. The amount of any future assessments of the Company under these laws cannot be reasonably estimated. However, most of these laws do provide that an assessment may be excused or deferred if it would threaten an insurer's own financial strength and many permit the deduction of all or a portion of any such assessment from any future premium or similar taxes payable.

Although the federal government generally does not directly regulate the business of insurance, federal initiatives often have an impact on the business in a variety of ways. Current and proposed federal measures which may significantly affect the insurance business include employee benefit regulation, removal of barriers preventing banks from engaging in the insurance business, tax law changes affecting the taxation of insurance companies, the tax treatment of insurance products and its impact on the relative desirability of various personal investment vehicles.

LEGAL PROCEEDINGS

There are no pending legal proceedings affecting the Variable Account. We and our subsidiaries are engaged in various kinds of routine litigation which, in management's judgment, is not of material importance to our respective total assets or material with respect to the Variable Account.

FINANCIAL STATEMENTS

The financial statements of the Company which are included in the SAI should be considered only as bearing on the ability of the Company to meet its obligations with respect to amounts allocated to the Fixed Account and with respect to the death benefit and the Company's assumption of the mortality and expense risks. They should not be considered as bearing on the investment performance of the Fund shares held in the Sub-Accounts of the Variable Account.

The financial statements of the Variable Account for the year ended December 31, 2006 are also included in the SAI.

TABLE OF CONTENTS OF STATEMENT OF ADDITIONAL INFORMATION

Sun Life Insurance and Annuity Company of New York

Advertising and Sales Literature

Tax - Deferred Accumulations

Calculations

  Example of Variable Accumulation Unit Value Calculation

  Example of Variable Annuity Unit Calculation

  Example of Variable Annuity Payment Calculation

Distribution of the Contracts

Designation and Change of Beneficiary

Custodian

Independent Registered Public Accounting Firm

Financial Statements

This Prospectus sets forth information about the Contract and the Variable Account that a prospective purchaser should know before investing. Additional information about the Contract and the Variable Account has been filed with the Securities and Exchange Commission in a Statement of Additional Information dated May 1, 2007 which is incorporated herein by reference. The Statement of Additional Information is available upon request and without charge from Sun Life Insurance and Annuity Company of New York. To receive a copy, return this request form to the address shown below or telephone (800) 447-7569.

To:	Sun Life Insurance and Annuity Company of New York
	P.O. Box 9133
	Wellesley Hills, Massachusetts 02481
	Please send me a Statement of Additional Information for
	Sun Life Financial Masters Access NY Variable and Fixed Annuity
	Sun Life (N.Y.) Variable Account C.

Name         

Address    

City               State     Zip  

Telephone  

APPENDIX A -

GLOSSARY

The following terms as used in this Prospectus have the indicated meanings:

ACCOUNT: An account established for each Owner to which Net Purchase Payments are credited.

ACCOUNT VALUE: The Variable Accumulation Value, if any, plus the Fixed Accumulation Value, if any, of your Account for any Valuation Period.

ACCUMULATION PHASE: The period before the Annuity Commencement Date and during the lifetime of the Annuitant (and while the Owner is still alive) during which you make Purchase Payments under the Contract. This is called the "Accumulation Period" in the Contract.

ADJUSTED PURCHASE PAYMENTS: Purchase Payments adjusted for partial withdrawals as described in "Calculating the Death Benefit."

*ANNUITANT: The person or persons to whom the first annuity payment is made. If either Annuitant dies prior to the Annuity Commencement Date, the surviving Annuitant will become the sole Annuitant.

ANNUITY COMMENCEMENT DATE: The date on which the first annuity payment under each Contract is to be made.

ANNUITY OPTION: The method you choose for making annuity payments.

ANNUITY UNIT: A unit of measure used in the calculation of the amount of the second and each subsequent Variable Annuity payment from the Variable Account.

APPLICATION: The document signed by you or other evidence acceptable to us that serves as your application for participation under a Group Contract or purchase of an Individual Contract.

*BENEFICIARY:The person or entity having the right to receive the death benefit and, for a Certificate issued under a Non-Qualified Contract, who is the "designated beneficiary" for purposes of Section 72(s) of the Code in the event of the Owner's death. Notwithstanding the foregoing, if there are Co- Owners of a Non-Qualified Contract, the surviving Co-Owners will be deemed the beneficiary under the preceding sentence and any other designated beneficiary will be treated as a contingent beneficiary.

BUSINESS DAY: Any day the New York Stock Exchange is open for trading. Also, any day on which we make a determination of the value of a Variable Accumulation Unit.

COMPANY ("WE, " "US," "SUN LIFE (N.Y.)"): Sun Life Insurance and Annuity Company New York.

CONTRACT: A Contract issued by a Company on an individual basis.

CONTRACT YEAR and CONTRACT ANNIVERSARY: Your first Contract Year is the period 365 days (366, if a leap year) from the date on which we issued your Contract. Your Contract Anniversary is the last day of an Contract Year. Each Contract Year after the first is the 365-day period that begins on your Contract Anniversary. For example, if the Issue Date is on March 12, the first Contract Year is determined from the Issue Date and ends on March 12 of the following year. Your Contract Anniversary is March 12 and all Contract Years after the first are measured from March 12. (If the Contract Anniversary Date falls on a non-Business Day, the previous Business Day will be used.)

DEATH BENEFIT DATE: If you have elected a death benefit payment option before the Owner's death that remains in effect, the date on which we receive Due Proof of Death. If your Beneficiary elects the death benefit payment option, the later of (a) the date on which we receive the Beneficiary's election and (b) the date on which we receive Due Proof of Death. If we do not receive the Beneficiary's election within 60 days after we receive Due Proof of Death, the Beneficiary shall be deemed to have elected to defer receipt of payment under any death benefit option until such time as a written election is received by the Company or a distribution is required by law.

DUE PROOF OF DEATH: An original certified copy of an official death certificate, an original certified copy of a decree of a court of competent jurisdiction as to the finding of death, or any other information or documentation required by the Company that is necessary to make payment (e.g. taxpayer identification numbers, beneficiary names and addresses, state inheritance tax waivers, etc.).

EXPIRATION DATE: The last day of a Guarantee Period.

FIXED ACCOUNT: The general account of the Company, consisting of all assets of the Company other than those allocated to a separate account of the Company.

FIXED ACCOUNT VALUE: The value of that portion of your Account allocated to the Fixed Account.

FIXED ANNUITY: An annuity with payments which do not vary as to dollar amount.

FUND: A registered management investment company, or series thereof, in which assets of a Sub-Account may be invested.

GUARANTEE AMOUNT: Each separate allocation of Account Value to a particular Guarantee Period (including interest earned thereon).

GUARANTEE PERIOD: The period for which a Guaranteed Interest Rate is credited.

GUARANTEED INTEREST RATE: The rate of interest we credit on a compound annual basis during any Guarantee Period.

INCOME PHASE: The period on and after the Annuity Commencement Date and during the lifetime of the Annuitant during which we make annuity payments under the Contract.

ISSUE DATE: The date the Contract becomes effective which is the date we apply your initial Net Purchase Payment to your Account and issue your Contract

NET INVESTMENT FACTOR: An index applied to measure the investment performance of a Sub-Account from one Valuation Period to the next.

NET PURCHASE PAYMENT: The portion of a Purchase Payment which remains after the deduction of any applicable premium tax or similar tax.

NON-QUALIFIED CONTRACT: A Contract used in connection with a retirement plan that does not receive favorable federal income tax treatment under Sections 401, 403, 408, or 408A of the Internal Revenue Code. The Owner's interest in the Contract must be owned by a natural person or agent for a natural person for the Contract to receive income tax treatment as an annuity.

OPEN DATE: The date your Application is received by the Company in good order.

*OWNER: The person, persons or entity entitled to the ownership rights stated in a Contract and in whose name or names the Contract is issued. The Owner may designate a trustee or custodian of a retirement plan which meets the requirements of Section 401, Section 408(c), Section 408(k), Section 408(p) or Section 408A of the Internal Revenue Code to serve as legal owner of assets of a retirement plan, but the term "Owner," as used herein, shall refer to the organization entering into the Contract.

PAYEE: A recipient of payments under a Contract. The term includes an Annuitant or a Beneficiary who becomes entitled to benefits upon the death of the Owner, or on the Annuity Commencement Date.

PURCHASE PAYMENT (PAYMENT): An amount paid to the Company as consideration for the benefits provided by a Contract.

QUALIFIED CONTRACT: A Contract used in connection with a retirement plan which may receive favorable federal income tax treatment under Sections 401, 403, 408 or 408A of the Internal Revenue Code of 1986, as amended.

SUB-ACCOUNT: That portion of the Variable Account which invests in shares of a specific Fund or series of a Fund.

SURRENDER VALUE: The amount payable on full surrender of your Contract.

VALUATION PERIOD: The period of time from one determination of Variable Accumulation Unit or Annuity Unit values to the next subsequent determination of these values. Value determinations are made as of the close of the New York Stock Exchange on each day that the Exchange is open for trading and on other Business Days.

VARIABLE ACCOUNT: Variable Account C of the Company, which is a separate account of the Company consisting of assets set aside by the Company, the investment performance of which is kept separate from that of the general assets of the Company.

VARIABLE ACCUMULATION UNIT: A unit of measure used in the calculation of Variable Account Value.

VARIABLE ACCOUNT VALUE: The value of that portion of your Account allocated to the Variable Account.

VARIABLE ANNUITY: An annuity with payments which vary as to dollar amount in relation to the investment performance of the Variable Account.

YOU and YOUR: The terms "you" and "your" refer to "Owner," and/or "Co-Owner" as those terms are identified in the Contract.

* You specify these items on the Application, and may change them, as we describe in this Prospectus.

APPENDIX B -

CALCULATION OF BASIC DEATH BENEFIT

Example 1:

Assume a Purchase Payment of $60,000.00 is made on the Issue Date and an additional Purchase Payment of $40,000.00 is made one year later. Assume that all of the money is invested in the Sub-Accounts, that no Withdrawals are made and that the Account Value on the Death Benefit Date is $80,000.00. The calculation of the Death Benefit to be paid is as follows:

The basic death benefit is the greatest of:
Account Value	=	$   80,000.00
Purchase Payments	=	$ 100,000.00
The basic death benefit would therefore be:		$ 100,000.00

Example 2:

Assume a Purchase Payment of $60,000.00 is made on the Issue Date and an additional Purchase Payment of $40,000.00 is made one year later. Assume that all of the money is invested in the Sub-Accounts and that the Account Value is $80,000.00 just prior to a $20,000.00 withdrawal. The Account Value on the Death Benefit Date is $60,000.00.

The basic death benefit is the greatest of:
Account Value	=	$  60,000.00
Adjusted Purchase Payments*	=	$  75,000.00
The basic death benefit would therefore be:		$  75,000.00

*Adjusted Purchase Payments can be calculated as follows: Payments x (Account Value after withdrawal ÷ Account Value before withdrawal) $100,000.00 x ($60,000.00 ÷ $80,000.00)

APPENDIX C -

PREVIOUSLY AVAILABLE INVESTMENT OPTIONS

The current available variable investment options are those listed on page 1 of the prospectus.

If you purchased your Contract before February 2, 2004, you may also make subsequent payments and transfers to the following investment options that were available prior to that date:

Large-Cap Equity Funds

   MFS® /Sun Life Capital Appreciation - S Class

   MFS® /Sun Life Strategic Value - S Class

International/Global Equity Funds

   MFS® /Sun Life Global Growth - S Class

Mid-Cap Equity Funds

   MFS® /Sun Life Mid Cap Growth - S Class

   MFS® /Sun Life Mid Cap Value - S Class

Real Estate Equity Funds

   Sun Capital Real Estate Fund® - Initial Class

Multi- Sector Bond Funds

   MFS® /Sun Life Strategic Income - S Class

Massachusetts Financial Services Company advises the MFS® /Sun Life Funds. Sun Capital AdvisersLLC advises the Sun Capital Funds.

If you purchased your Contract before March 5, 2007, you may make subsequent Purchase Payments and transfers into the following investment options that were available for investment prior to that date:

Large-Cap Equity Funds

  Columbia Marsico 21^st Century Fund, Variable Series, A Class

  Columbia Marsico Growth Fund, Variable Series, A Class

  MFS® / Sun Life Capital Opportunities - S Class

  MFS® / Sun Life Emerging Growth - S Class

  MFS® / Sun Life Massachusetts Investors Growth Stock - S Class

  MFS® / Sun Life Massachusetts Investors Trust

  MFS® / Sun Life Research - S Class

  MFS® / Sun Life Strategic Growth - S Class

Emerging Markets Equity Funds

  MFS® /Sun Life Emerging Markets Equity - S Class

Small-Cap Equity Funds

  MFS® / Sun Life New Discovery - S Class

  Oppenheimer Main Street Small Cap Fund/VA - Service Shares

Columbia Management Advisors, LLC, advises the Columbia Funds (with Marsico Capital Management, LLC, sub-advising the Columbia Marsico Funds). Massachusetts Financial Services Company advises the MFS® /Sun Life Funds. OppenheimerFunds, Inc. advises the Oppenheimer Funds.

APPENDIX D -

CONDENSED FINANCIAL INFORMATION

The following information for SUN LIFE FINANCIAL MASTERS ACCESS NY should be read in conjunction with the Variable Account’s financial statements appearing in the Statement of Additional Information. The $10 beginning value for each accumulation unit is as of the date the unit commenced, which was generally later than the first day of the year shown.

Fund	Price Level	Year	Accumulation Unit Value Beginning of Year	Accumulation Unit Value End of Year	Number of Accumulation Units End of Year
Fidelity® VIP Freedom 2010 Portfolio Service Class 2	01	2006	10.3124	11.1088	0
Fidelity® VIP Freedom 2010 Portfolio Service Class 2	01	2005	10.0000	10.3124	0
Fidelity® VIP Freedom 2010 Portfolio Service Class 2	02	2006	10.3090	11.0826	0
Fidelity® VIP Freedom 2010 Portfolio Service Class 2	02	2005	10.0000	10.3090	0
Fidelity® VIP Freedom 2010 Portfolio Service Class 2	03	2006	10.3055	11.0563	0
Fidelity® VIP Freedom 2010 Portfolio Service Class 2	03	2005	10.0000	10.3055	0
Fidelity® VIP Freedom 2015 Portfolio Service Class 2	01	2006	10.3876	11.3182	0
Fidelity® VIP Freedom 2015 Portfolio Service Class 2	01	2005	10.0000	10.3876	0
Fidelity ®VIP Freedom 2015 Portfolio Service Class 2	02	2006	10.3841	11.2915	0
Fidelity® VIP Freedom 2015 Portfolio Service Class 2	02	2005	10.0000	10.3841	0
Fidelity® VIP Freedom 2015 Portfolio Service Class 2	03	2006	10.3806	11.2647	0
Fidelity ®VIP Freedom 2015 Portfolio Service Class 2	03	2005	10.0000	10.3806	0
Fidelity ®VIP Freedom 2020 Portfolio Service Class 2	01	2006	10.4285	11.4517	0
Fidelity ®VIP Freedom 2020 Portfolio Service Class 2	01	2005	10.0000	10.4285	0
Fidelity® VIP Freedom 2020 Portfolio Service Class 2	02	2006	10.4250	11.4246	0
Fidelity® VIP Freedom 2020 Portfolio Service Class 2	02	2005	10.0000	10.4250	0
Fidelity ®VIP Freedom 2020 Portfolio Service Class 2	03	2006	10.4215	11.3975	0
Fidelity ®VIP Freedom 2020 Portfolio Service Class 2	03	2005	10.0000	10.4215	0
Franklin Small Cap Value Securities Fund	01	2006	16.4164	18.8786	1,347
Franklin Small Cap Value Securities Fund	01	2005	15.3534	16.4164	569
Franklin Small Cap Value Securities Fund	01	2004	12.6222	15.3534	116
Franklin Small Cap Value Securities Fund	01	2003	10.0000	12.6222	44
Franklin Small Cap Value Securities Fund	02	2006	16.3285	18.7394	0
Franklin Small Cap Value Securities Fund	02	2005	15.3023	16.3285	128
Franklin Small Cap Value Securities Fund	02	2004	12.6059	15.3023	0
Franklin Small Cap Value Securities Fund	02	2003	10.0000	12.6059	0
Franklin Small Cap Value Securities Fund	03	2006	16.2408	18.6008	145
Franklin Small Cap Value Securities Fund	03	2005	15.2511	16.2408	157
Franklin Small Cap Value Securities Fund	03	2004	12.5894	15.2511	169
Franklin Small Cap Value Securities Fund	03	2003	10.0000	12.5894	101
Lord Abbett All Value Portfolio	01	2006	12.4243	14.0019	1,061
Lord Abbett All Value Portfolio	01	2005	11.8171	12.4243	0
Lord Abbett All Value Portfolio	01	2004	10.3896	11.8171	0
Lord Abbett All Value Portfolio	01	2003	10.0000	10.3896	0
Lord Abbett All Value Portfolio	02	2006	12.3722	13.9149	0
Lord Abbett All Value Portfolio	02	2005	11.7915	12.3722	0
Lord Abbett All Value Portfolio	02	2004	10.3883	11.7915	0
Lord Abbett All Value Portfolio	02	2003	10.0000	10.3883	0
Lord Abbett All Value Portfolio	03	2006	12.3202	13.8282	0
Lord Abbett All Value Portfolio	03	2005	11.7658	12.3202	0
Lord Abbett All Value Portfolio	03	2004	10.3870	11.7658	0
Lord Abbett All Value Portfolio	03	2003	10.0000	10.3870	0
Lord Abbett Series Fund Growth and Income	01	2006	13.4633	15.5213	5,181
Lord Abbett Series Fund Growth and Income	01	2005	13.2648	13.4633	4,767
Lord Abbett Series Fund Growth and Income	01	2004	11.9791	13.2648	6,999
Lord Abbett Series Fund Growth and Income	01	2003	10.0000	11.9791	4,037
Lord Abbett Series Fund Growth and Income	02	2006	13.3912	15.4069	5,206
Lord Abbett Series Fund Growth and Income	02	2005	13.2206	13.3912	4,952
Lord Abbett Series Fund Growth and Income	02	2004	11.9635	13.2206	2,095
Lord Abbett Series Fund Growth and Income	02	2003	10.0000	11.9635	1,530
Lord Abbett Series Fund Growth and Income	03	2006	13.3192	15.2928	537
Lord Abbett Series Fund Growth and Income	03	2005	13.1763	13.3192	577
Lord Abbett Series Fund Growth and Income	03	2004	11.9480	13.1763	588
Lord Abbett Series Fund Growth and Income	03	2003	10.0000	11.9480	324
Lord Abbett Series Fund Growth Opportunities	01	2006	11.4827	12.1791	656
Lord Abbett Series Fund Growth Opportunities	01	2005	11.1645	11.4827	85
Lord Abbett Series Fund Growth Opportunities	01	2004	10.2112	11.1645	0
Lord Abbett Series Fund Growth Opportunities	01	2003	10.0000	10.2112	0
Lord Abbett Series Fund Growth Opportunities	02	2006	11.4346	12.1035	649
Lord Abbett Series Fund Growth Opportunities	02	2005	11.1403	11.4346	585
Lord Abbett Series Fund Growth Opportunities	02	2004	10.2098	11.1403	295
Lord Abbett Series Fund Growth Opportunities	02	2003	10.0000	10.2098	0
Lord Abbett Series Fund Growth Opportunities	03	2006	11.3864	12.0280	0
Lord Abbett Series Fund Growth Opportunities	03	2005	11.1160	11.3864	0
Lord Abbett Series Fund Growth Opportunities	03	2004	10.2085	11.1160	0
Lord Abbett Series Fund Growth Opportunities	03	2003	10.0000	10.2085	0
Lord Abbett Series Fund Mid Cap Value	01	2006	15.7568	17.3842	1,243
Lord Abbett Series Fund Mid Cap Value	01	2005	14.8108	15.7568	274
Lord Abbett Series Fund Mid Cap Value	01	2004	12.1470	14.8108	528
Lord Abbett Series Fund Mid Cap Value	01	2003	10.0000	12.1470	47
Lord Abbett Series Fund Mid Cap Value	02	2006	15.6724	17.2561	284
Lord Abbett Series Fund Mid Cap Value	02	2005	14.7614	15.6724	219
Lord Abbett Series Fund Mid Cap Value	02	2004	12.1313	14.7614	469
Lord Abbett Series Fund Mid Cap Value	02	2003	10.0000	12.1313	0
Lord Abbett Series Fund Mid Cap Value	03	2006	15.5882	17.1284	0
Lord Abbett Series Fund Mid Cap Value	03	2005	14.7120	15.5882	0
Lord Abbett Series Fund Mid Cap Value	03	2004	12.1155	14.7120	0
Lord Abbett Series Fund Mid Cap Value	03	2003	10.0000	12.1155	0
MFS®/Sun Life Bond Series S Class	01	2006	10.5754	10.9025	0
MFS®/Sun Life Bond Series S Class	01	2005	10.5891	10.5754	0
MFS®/Sun Life Bond Series S Class	01	2004	10.1716	10.5891	0
MFS®/Sun Life Bond Series S Class	01	2003	10.0000	10.1716	1,016
MFS®/Sun Life Bond Series S Class	02	2006	10.5187	10.8221	0
MFS®/Sun Life Bond Series S Class	02	2005	10.5538	10.5187	0
MFS®/Sun Life Bond Series S Class	02	2004	10.1584	10.5538	0
MFS®/Sun Life Bond Series S Class	02	2003	10.0000	10.1584	0
MFS®/Sun Life Bond Series S Class	03	2006	10.4622	10.7419	0
MFS®/Sun Life Bond Series S Class	03	2005	10.5184	10.4622	0
MFS®/Sun Life Bond Series S Class	03	2004	10.1451	10.5184	0
MFS®/Sun Life Bond Series S Class	03	2003	10.0000	10.1451	0
MFS/Sun Life Capital Appreciation Series S Class	01	2006	12.1809	12.6994	0
MFS/Sun Life Capital Appreciation Series S Class	01	2005	12.3129	12.1809	0
MFS/Sun Life Capital Appreciation Series S Class	01	2004	11.3071	12.3129	0
MFS/Sun Life Capital Appreciation Series S Class	01	2003	10.0000	11.3071	0
MFS/Sun Life Capital Appreciation Series S Class	02	2006	12.1157	12.6057	115
MFS/Sun Life Capital Appreciation Series S Class	02	2005	12.2718	12.1157	116
MFS/Sun Life Capital Appreciation Series S Class	02	2004	11.2925	12.2718	116
MFS/Sun Life Capital Appreciation Series S Class	02	2003	10.0000	11.2925	117
MFS/Sun Life Capital Appreciation Series S Class	03	2006	12.0506	12.5124	0
MFS/Sun Life Capital Appreciation Series S Class	03	2005	12.2308	12.0506	0
MFS/Sun Life Capital Appreciation Series S Class	03	2004	11.2778	12.2308	0
MFS/Sun Life Capital Appreciation Series S Class	03	2003	10.0000	11.2778	0
MFS/Sun Life Capital Opportunities Series S Class	01	2006	12.8680	14.4228	0
MFS/Sun Life Capital Opportunities Series S Class	01	2005	12.9205	12.8680	0
MFS/Sun Life Capital Opportunities Series S Class	01	2004	11.6816	12.9205	0
MFS/Sun Life Capital Opportunities Series S Class	01	2003	10.0000	11.6816	0
MFS/Sun Life Capital Opportunities Series S Class	02	2006	12.7990	14.3164	0
MFS/Sun Life Capital Opportunities Series S Class	02	2005	12.8774	12.7990	0
MFS/Sun Life Capital Opportunities Series S Class	02	2004	11.6665	12.8774	0
MFS/Sun Life Capital Opportunities Series S Class	02	2003	10.0000	11.6665	0
MFS/Sun Life Capital Opportunities Series S Class	03	2006	12.7302	14.2105	0
MFS/Sun Life Capital Opportunities Series S Class	03	2005	12.8343	12.7302	0
MFS/Sun Life Capital Opportunities Series S Class	03	2004	11.6513	12.8343	0
MFS/Sun Life Capital Opportunities Series S Class	03	2003	10.0000	11.6513	0
MFS/Sun Life Emerging Growth Series S Class	01	2006	13.7391	14.5457	0
MFS/Sun Life Emerging Growth Series S Class	01	2005	12.8340	13.7391	179
MFS/Sun Life Emerging Growth Series S Class	01	2004	11.5581	12.8340	179
MFS/Sun Life Emerging Growth Series S Class	01	2003	10.0000	11.5581	0
MFS/Sun Life Emerging Growth Series S Class	02	2006	13.6655	14.4384	0
MFS/Sun Life Emerging Growth Series S Class	02	2005	12.7912	13.6655	0
MFS/Sun Life Emerging Growth Series S Class	02	2004	11.5431	12.7912	0
MFS/Sun Life Emerging Growth Series S Class	02	2003	10.0000	11.5431	0
MFS/Sun Life Emerging Growth Series S Class	03	2006	13.5920	14.3315	0
MFS/Sun Life Emerging Growth Series S Class	03	2005	12.7484	13.5920	0
MFS/Sun Life Emerging Growth Series S Class	03	2004	11.5281	12.7484	0
MFS/Sun Life Emerging Growth Series S Class	03	2003	10.0000	11.5281	0
MFS/Sun Life Emerging Markets Equity Series S Class	01	2006	11.2521	14.3683	0
MFS/Sun Life Emerging Markets Equity Series S Class	01	2005	10.0000	11.2521	0
MFS/Sun Life Emerging Markets Equity Series S Class	02	2006	11.2483	14.3344	0
MFS/Sun Life Emerging Markets Equity Series S Class	02	2005	10.0000	11.2483	0
MFS/Sun Life Emerging Markets Equity Series S Class	03	2006	11.2445	14.3004	0
MFS/Sun Life Emerging Markets Equity Series S Class	03	2005	10.0000	11.2445	0
MFS/Sun Life Global Growth Series S Class	01	2006	15.2239	17.5106	111
MFS/Sun Life Global Growth Series S Class	01	2005	14.1126	15.2239	119
MFS/Sun Life Global Growth Series S Class	01	2004	12.4401	14.1126	128
MFS/Sun Life Global Growth Series S Class	01	2003	10.0000	12.4401	46
MFS/Sun Life Global Growth Series S Class	02	2006	15.1424	17.3815	0
MFS/Sun Life Global Growth Series S Class	02	2005	14.0655	15.1424	0
MFS/Sun Life Global Growth Series S Class	02	2004	12.4240	14.0655	0
MFS/Sun Life Global Growth Series S Class	02	2003	10.0000	12.4240	0
MFS/Sun Life Global Growth Series S Class	03	2006	15.0610	17.2529	0
MFS/Sun Life Global Growth Series S Class	03	2005	14.0185	15.0610	0
MFS/Sun Life Global Growth Series S Class	03	2004	12.4078	14.0185	0
MFS/Sun Life Global Growth Series S Class	03	2003	10.0000	12.4078	0
MFS®/Sun Life Government Securities Series S Class	01	2006	10.0956	10.2692	15,047
MFS®/Sun Life Government Securities Series S Class	01	2005	10.0677	10.0956	18,735
MFS®/Sun Life Government Securities Series S Class	01	2004	9.8911	10.0677	18,639
MFS®/Sun Life Government Securities Series S Class	01	2003	10.0000	9.8911	10,196
MFS®/Sun Life Government Securities Series S Class	02	2006	10.0415	10.1934	4,372
MFS®/Sun Life Government Securities Series S Class	02	2005	10.0341	10.0415	4,139
MFS®/Sun Life Government Securities Series S Class	02	2004	9.8782	10.0341	2,783
MFS®/Sun Life Government Securities Series S Class	02	2003	10.0000	9.8782	3,206
MFS®/Sun Life Government Securities Series S Class	03	2006	9.9875	10.1179	0
MFS®/Sun Life Government Securities Series S Class	03	2005	10.0005	9.9875	0
MFS®/Sun Life Government Securities Series S Class	03	2004	9.8653	10.0005	0
MFS®/Sun Life Government Securities Series S Class	03	2003	10.0000	9.8653	0
MFS®/Sun Life High Yield Series S Class	01	2006	11.7979	12.7627	2,040
MFS®/Sun Life High Yield Series S Class	01	2005	11.7735	11.7979	2,114
MFS®/Sun Life High Yield Series S Class	01	2004	10.9515	11.7735	2,252
MFS®/Sun Life High Yield Series S Class	01	2003	10.0000	10.9515	1,007
MFS®/Sun Life High Yield Series S Class	02	2006	11.7347	12.6686	591
MFS®/Sun Life High Yield Series S Class	02	2005	11.7343	11.7347	635
MFS®/Sun Life High Yield Series S Class	02	2004	10.9373	11.7343	2,461
MFS®/Sun Life High Yield Series S Class	02	2003	10.0000	10.9373	925
MFS®/Sun Life High Yield Series S Class	03	2006	11.6716	12.5748	438
MFS®/Sun Life High Yield Series S Class	03	2005	11.6950	11.6716	443
MFS®/Sun Life High Yield Series S Class	03	2004	10.9230	11.6950	435
MFS®/Sun Life High Yield Series S Class	03	2003	10.0000	10.9230	232
MFS/Sun Life Massachusetts Investors Growth Series S Class	01	2006	12.2474	12.9325	0
MFS/Sun Life Massachusetts Investors Growth Series S Class	01	2005	11.9615	12.2474	0
MFS/Sun Life Massachusetts Investors Growth Series S Class	01	2004	11.1277	11.9615	0
MFS/Sun Life Massachusetts Investors Growth Series S Class	01	2003	10.0000	11.1277	0
MFS/Sun Life Massachusetts Investors Growth Series S Class	02	2006	12.1817	12.8371	622
MFS/Sun Life Massachusetts Investors Growth Series S Class	02	2005	11.9216	12.1817	446
MFS/Sun Life Massachusetts Investors Growth Series S Class	02	2004	11.1132	11.9216	0
MFS/Sun Life Massachusetts Investors Growth Series S Class	02	2003	10.0000	11.1132	0
MFS/Sun Life Massachusetts Investors Growth Series S Class	03	2006	12.1162	12.7420	0
MFS/Sun Life Massachusetts Investors Growth Series S Class	03	2005	11.8817	12.1162	0
MFS/Sun Life Massachusetts Investors Growth Series S Class	03	2004	11.0988	11.8817	0
MFS/Sun Life Massachusetts Investors Growth Series S Class	03	2003	10.0000	11.0988	0
MFS/Sun Life Massachusetts Investors Trust Series S Class	01	2006	13.2280	14.6995	4,333
MFS/Sun Life Massachusetts Investors Trust Series S Class	01	2005	12.5267	13.2280	2,136
MFS/Sun Life Massachusetts Investors Trust Series S Class	01	2004	11.4050	12.5267	480
MFS/Sun Life Massachusetts Investors Trust Series S Class	01	2003	10.0000	11.4050	0
MFS/Sun Life Massachusetts Investors Trust Series S Class	02	2006	13.1572	14.5911	3,273
MFS/Sun Life Massachusetts Investors Trust Series S Class	02	2005	12.4850	13.1572	2,946
MFS/Sun Life Massachusetts Investors Trust Series S Class	02	2004	11.3903	12.4850	0
MFS/Sun Life Massachusetts Investors Trust Series S Class	02	2003	10.0000	11.3903	0
MFS/Sun Life Massachusetts Investors Trust Series S Class	03	2006	13.0864	14.4831	0
MFS/Sun Life Massachusetts Investors Trust Series S Class	03	2005	12.4432	13.0864	0
MFS/Sun Life Massachusetts Investors Trust Series S Class	03	2004	11.3754	12.4432	0
MFS/Sun Life Massachusetts Investors Trust Series S Class	03	2003	10.0000	11.3754	0
MFS/Sun Life Mid Cap Growth Series S Class	01	2006	13.8684	13.9325	0
MFS/Sun Life Mid Cap Growth Series S Class	01	2005	13.7262	13.8684	354
MFS/Sun Life Mid Cap Growth Series S Class	01	2004	12.2187	13.7262	1,149
MFS/Sun Life Mid Cap Growth Series S Class	01	2003	10.0000	12.2187	853
MFS/Sun Life Mid Cap Growth Series S Class	02	2006	13.7941	13.8298	0
MFS/Sun Life Mid Cap Growth Series S Class	02	2005	13.6804	13.7941	0
MFS/Sun Life Mid Cap Growth Series S Class	02	2004	12.2029	13.6804	0
MFS/Sun Life Mid Cap Growth Series S Class	02	2003	10.0000	12.2029	293
MFS/Sun Life Mid Cap Growth Series S Class	03	2006	13.7199	13.7274	0
MFS/Sun Life Mid Cap Growth Series S Class	03	2005	13.6346	13.7199	0
MFS/Sun Life Mid Cap Growth Series S Class	03	2004	12.1870	13.6346	0
MFS/Sun Life Mid Cap Growth Series S Class	03	2003	10.0000	12.1870	0
MFS/Sun Life Mid Cap Value Series S Class	01	2006	15.6042	17.0287	0
MFS/Sun Life Mid Cap Value Series S Class	01	2005	14.7793	15.6042	315
MFS/Sun Life Mid Cap Value Series S Class	01	2004	12.3494	14.7793	1,073
MFS/Sun Life Mid Cap Value Series S Class	01	2003	10.0000	12.3494	882
MFS/Sun Life Mid Cap Value Series S Class	02	2006	15.5206	16.9031	0
MFS/Sun Life Mid Cap Value Series S Class	02	2005	14.7300	15.5206	0
MFS/Sun Life Mid Cap Value Series S Class	02	2004	12.3333	14.7300	0
MFS/Sun Life Mid Cap Value Series S Class	02	2003	10.0000	12.3333	306
MFS/Sun Life Mid Cap Value Series S Class	03	2006	15.4372	16.7780	326
MFS/Sun Life Mid Cap Value Series S Class	03	2005	14.6807	15.4372	332
MFS/Sun Life Mid Cap Value Series S Class	03	2004	12.3173	14.6807	352
MFS/Sun Life Mid Cap Value Series S Class	03	2003	10.0000	12.3173	208
MFS®/Sun Life Money Market Series S Class	01	2006	9.8695	10.1226	31,846
MFS®/Sun Life Money Market Series S Class	01	2005	9.7983	9.8695	31,691
MFS®/Sun Life Money Market Series S Class	01	2004	9.9113	9.7983	45,562
MFS®/Sun Life Money Market Series S Class	01	2003	10.0000	9.9113	52,580
MFS®/Sun Life Money Market Series S Class	02	2006	9.8166	10.0479	2,443
MFS®/Sun Life Money Market Series S Class	02	2005	9.7656	9.8166	2,877
MFS®/Sun Life Money Market Series S Class	02	2004	9.8984	9.7656	1,462
MFS®/Sun Life Money Market Series S Class	02	2003	10.0000	9.8984	12,015
MFS®/Sun Life Money Market Series S Class	03	2006	9.7638	9.9735	0
MFS®/Sun Life Money Market Series S Class	03	2005	9.7329	9.7638	0
MFS®/Sun Life Money Market Series S Class	03	2004	9.8855	9.7329	0
MFS®/Sun Life Money Market Series S Class	03	2003	10.0000	9.8855	0
MFS/Sun Life New Discovery Series S Class	01	2006	13.4419	14.9180	1,358
MFS/Sun Life New Discovery Series S Class	01	2005	13.0279	13.4419	372
MFS/Sun Life New Discovery Series S Class	01	2004	12.3617	13.0279	1
MFS/Sun Life New Discovery Series S Class	01	2003	10.0000	12.3617	0
MFS/Sun Life New Discovery Series S Class	02	2006	13.3699	14.8080	906
MFS/Sun Life New Discovery Series S Class	02	2005	12.9845	13.3699	888
MFS/Sun Life New Discovery Series S Class	02	2004	12.3457	12.9845	386
MFS/Sun Life New Discovery Series S Class	02	2003	10.0000	12.3457	0
MFS/Sun Life New Discovery Series S Class	03	2006	13.2980	14.6984	0
MFS/Sun Life New Discovery Series S Class	03	2005	12.9410	13.2980	0
MFS/Sun Life New Discovery Series S Class	03	2004	12.3296	12.9410	0
MFS/Sun Life New Discovery Series S Class	03	2003	10.0000	12.3296	0
MFS®/Sun Life Research International Series S Class	01	2006	17.1689	21.4777	1,105
MFS®/Sun Life Research International Series S Class	01	2005	15.0310	17.1689	1,179
MFS®/Sun Life Research International Series S Class	01	2004	12.6418	15.0310	414
MFS®/Sun Life Research International Series S Class	01	2003	10.0000	12.6418	252
MFS®/Sun Life Research International Series S Class	02	2006	17.0769	21.3194	610
MFS®/Sun Life Research International Series S Class	02	2005	14.9809	17.0769	833
MFS®/Sun Life Research International Series S Class	02	2004	12.6254	14.9809	709
MFS®/Sun Life Research International Series S Class	02	2003	10.0000	12.6254	0
MFS®/Sun Life Research International Series S Class	03	2006	16.9852	21.1616	0
MFS®/Sun Life Research International Series S Class	03	2005	14.9308	16.9852	0
MFS®/Sun Life Research International Series S Class	03	2004	12.6089	14.9308	0
MFS®/Sun Life Research International Series S Class	03	2003	10.0000	12.6089	0
MFS/Sun Life Research Series S Class	01	2006	13.8919	15.0657	0
MFS/Sun Life Research Series S Class	01	2005	13.1201	13.8919	0
MFS/Sun Life Research Series S Class	01	2004	11.5524	13.1201	0
MFS/Sun Life Research Series S Class	01	2003	10.0000	11.5524	0
MFS/Sun Life Research Series S Class	02	2006	13.8175	14.9546	0
MFS/Sun Life Research Series S Class	02	2005	13.0763	13.8175	109
MFS/Sun Life Research Series S Class	02	2004	11.5374	13.0763	0
MFS/Sun Life Research Series S Class	02	2003	10.0000	11.5374	0
MFS/Sun Life Research Series S Class	03	2006	13.7433	14.8439	0
MFS/Sun Life Research Series S Class	03	2005	13.0326	13.7433	0
MFS/Sun Life Research Series S Class	03	2004	11.5224	13.0326	0
MFS/Sun Life Research Series S Class	03	2003	10.0000	11.5224	0
MFS/Sun Life Strategic Growth Series S Class	01	2006	11.8882	12.4313	583
MFS/Sun Life Strategic Growth Series S Class	01	2005	11.9531	11.8882	1,568
MFS/Sun Life Strategic Growth Series S Class	01	2004	11.4093	11.9531	3,391
MFS/Sun Life Strategic Growth Series S Class	01	2003	10.0000	11.4093	2,288
MFS/Sun Life Strategic Growth Series S Class	02	2006	11.8245	12.3396	213
MFS/Sun Life Strategic Growth Series S Class	02	2005	11.9133	11.8245	224
MFS/Sun Life Strategic Growth Series S Class	02	2004	11.3945	11.9133	205
MFS/Sun Life Strategic Growth Series S Class	02	2003	10.0000	11.3945	832
MFS/Sun Life Strategic Growth Series S Class	03	2006	11.7610	12.2483	221
MFS/Sun Life Strategic Growth Series S Class	03	2005	11.8734	11.7610	216
MFS/Sun Life Strategic Growth Series S Class	03	2004	11.3797	11.8734	217
MFS/Sun Life Strategic Growth Series S Class	03	2003	10.0000	11.3797	112
MFS/Sun Life Strategic Income Series S Class	01	2006	11.0618	11.5758	506
MFS/Sun Life Strategic Income Series S Class	01	2005	11.0745	11.0618	497
MFS/Sun Life Strategic Income Series S Class	01	2004	10.4485	11.0745	480
MFS/Sun Life Strategic Income Series S Class	01	2003	10.0000	10.4485	161
MFS/Sun Life Strategic Income Series S Class	02	2006	11.0026	11.4904	0
MFS/Sun Life Strategic Income Series S Class	02	2005	11.0376	11.0026	0
MFS/Sun Life Strategic Income Series S Class	02	2004	10.4349	11.0376	0
MFS/Sun Life Strategic Income Series S Class	02	2003	10.0000	10.4349	0
MFS/Sun Life Strategic Income Series S Class	03	2006	10.9434	11.4053	240
MFS/Sun Life Strategic Income Series S Class	03	2005	11.0006	10.9434	236
MFS/Sun Life Strategic Income Series S Class	03	2004	10.4213	11.0006	231
MFS/Sun Life Strategic Income Series S Class	03	2003	10.0000	10.4213	121
MFS/Sun Life Strategic Value Series S Class	01	2006	13.2988	14.8937	0
MFS/Sun Life Strategic Value Series S Class	01	2005	13.6262	13.2988	0
MFS/Sun Life Strategic Value Series S Class	01	2004	11.7708	13.6262	0
MFS/Sun Life Strategic Value Series S Class	01	2003	10.0000	11.7708	0
MFS/Sun Life Strategic Value Series S Class	02	2006	13.2275	14.7838	0
MFS/Sun Life Strategic Value Series S Class	02	2005	13.5808	13.2275	0
MFS/Sun Life Strategic Value Series S Class	02	2004	11.7556	13.5808	0
MFS/Sun Life Strategic Value Series S Class	02	2003	10.0000	11.7556	0
MFS/Sun Life Strategic Value Series S Class	03	2006	13.1564	14.6744	0
MFS/Sun Life Strategic Value Series S Class	03	2005	13.5354	13.1564	0
MFS/Sun Life Strategic Value Series S Class	03	2004	11.7403	13.5354	0
MFS/Sun Life Strategic Value Series S Class	03	2003	10.0000	11.7403	0
MFS®/Sun Life Total Return Series S Class	01	2006	12.1790	13.3983	26,991
MFS®/Sun Life Total Return Series S Class	01	2005	12.0502	12.1790	34,154
MFS®/Sun Life Total Return Series S Class	01	2004	11.0299	12.0502	35,706
MFS®/Sun Life Total Return Series S Class	01	2003	10.0000	11.0299	3,288
MFS®/Sun Life Total Return Series S Class	02	2006	12.1137	13.2994	9,639
MFS®/Sun Life Total Return Series S Class	02	2005	12.0100	12.1137	9,633
MFS®/Sun Life Total Return Series S Class	02	2004	11.0156	12.0100	119
MFS®/Sun Life Total Return Series S Class	02	2003	10.0000	11.0156	406
MFS®/Sun Life Total Return Series S Class	03	2006	12.0486	13.2010	0
MFS®/Sun Life Total Return Series S Class	03	2005	11.9698	12.0486	0
MFS®/Sun Life Total Return Series S Class	03	2004	11.0012	11.9698	0
MFS®/Sun Life Total Return Series S Class	03	2003	10.0000	11.0012	0
MFS®/Sun Life Utilities Series S Class	01	2006	17.6694	22.9216	423
MFS®/Sun Life Utilities Series S Class	01	2005	15.3660	17.6694	1,154
MFS®/Sun Life Utilities Series S Class	01	2004	12.0235	15.3660	1,296
MFS®/Sun Life Utilities Series S Class	01	2003	10.0000	12.0235	257
MFS®/Sun Life Utilities Series S Class	02	2006	17.5748	22.7527	2,156
MFS®/Sun Life Utilities Series S Class	02	2005	15.3148	17.5748	1,675
MFS®/Sun Life Utilities Series S Class	02	2004	12.0079	15.3148	113
MFS®/Sun Life Utilities Series S Class	02	2003	10.0000	12.0079	114
MFS®/Sun Life Utilities Series S Class	03	2006	17.4804	22.5844	0
MFS®/Sun Life Utilities Series S Class	03	2005	15.2636	17.4804	0
MFS®/Sun Life Utilities Series S Class	03	2004	11.9922	15.2636	0
MFS®/Sun Life Utilities Series S Class	03	2003	10.0000	11.9922	0
MFS®/Sun Life Value Series S Class	01	2006	14.1488	16.7825	544
MFS®/Sun Life Value Series S Class	01	2005	13.5344	14.1488	727
MFS®/Sun Life Value Series S Class	01	2004	11.9542	13.5344	1,002
MFS®/Sun Life Value Series S Class	01	2003	10.0000	11.9542	306
MFS®/Sun Life Value Series S Class	02	2006	14.0730	16.6588	113
MFS®/Sun Life Value Series S Class	02	2005	13.4892	14.0730	649
MFS®/Sun Life Value Series S Class	02	2004	11.9387	13.4892	114
MFS®/Sun Life Value Series S Class	02	2003	10.0000	11.9387	115
MFS®/Sun Life Value Series S Class	03	2006	13.9974	16.5355	0
MFS®/Sun Life Value Series S Class	03	2005	13.4441	13.9974	0
MFS®/Sun Life Value Series S Class	03	2004	11.9231	13.4441	0
MFS®/Sun Life Value Series S Class	03	2003	10.0000	11.9231	0
Mutual Shares Securities Fund, Class 2	01	2006	14.1415	16.4570	2,512
Mutual Shares Securities Fund, Class 2	01	2005	13.0119	14.1415	1,603
Mutual Shares Securities Fund, Class 2	01	2004	11.7529	13.0119	288
Mutual Shares Securities Fund, Class 2	01	2003	10.0000	11.7529	0
Mutual Shares Securities Fund, Class 2	02	2006	14.0657	16.3356	2,595
Mutual Shares Securities Fund, Class 2	02	2005	12.9685	14.0657	2,138
Mutual Shares Securities Fund, Class 2	02	2004	11.7376	12.9685	0
Mutual Shares Securities Fund, Class 2	02	2003	10.0000	11.7376	0
Mutual Shares Securities Fund, Class 2	03	2006	13.9901	16.2147	847
Mutual Shares Securities Fund, Class 2	03	2005	12.9251	13.9901	921
Mutual Shares Securities Fund, Class 2	03	2004	11.7223	12.9251	1,001
Mutual Shares Securities Fund, Class 2	03	2003	10.0000	11.7223	547
Oppenheimer Capital Appreciation Fund/VA	01	2006	12.8564	13.6093	2,717
Oppenheimer Capital Appreciation Fund/VA	01	2005	12.4717	12.8564	2,759
Oppenheimer Capital Appreciation Fund/VA	01	2004	11.9006	12.4717	4,502
Oppenheimer Capital Appreciation Fund/VA	01	2003	10.0000	11.9006	2,861
Oppenheimer Capital Appreciation Fund/VA	02	2006	12.7876	13.5089	389
Oppenheimer Capital Appreciation Fund/VA	02	2005	12.4301	12.7876	422
Oppenheimer Capital Appreciation Fund/VA	02	2004	11.8852	12.4301	383
Oppenheimer Capital Appreciation Fund/VA	02	2003	10.0000	11.8852	1,010
Oppenheimer Capital Appreciation Fund/VA	03	2006	12.7188	13.4090	403
Oppenheimer Capital Appreciation Fund/VA	03	2005	12.3885	12.7188	398
Oppenheimer Capital Appreciation Fund/VA	03	2004	11.8697	12.3885	417
Oppenheimer Capital Appreciation Fund/VA	03	2003	10.0000	11.8697	216
Oppenheimer Global Securities Fund	01	2006	13.7435	15.8564	1,335
Oppenheimer Global Securities Fund	01	2005	12.2570	13.7435	1,106
Oppenheimer Global Securities Fund	01	2004	10.4893	12.2570	308
Oppenheimer Global Securities Fund	01	2003	10.0000	10.4893	0
Oppenheimer Global Securities Fund	02	2006	13.6859	15.7579	0
Oppenheimer Global Securities Fund	02	2005	12.2305	13.6859	267
Oppenheimer Global Securities Fund	02	2004	10.4879	12.2305	0
Oppenheimer Global Securities Fund	02	2003	10.0000	10.4879	0
Oppenheimer Global Securities Fund	03	2006	13.6283	15.6597	0
Oppenheimer Global Securities Fund	03	2005	12.2039	13.6283	0
Oppenheimer Global Securities Fund	03	2004	10.4866	12.2039	0
Oppenheimer Global Securities Fund	03	2003	10.0000	10.4866	0
Oppenheimer Main St. Fund/VA	01	2006	13.0702	14.7449	8,329
Oppenheimer Main St. Fund/VA	01	2005	12.5737	13.0702	2,941
Oppenheimer Main St. Fund/VA	01	2004	11.7198	12.5737	1,278
Oppenheimer Main St. Fund/VA	01	2003	10.0000	11.7198	48
Oppenheimer Main St. Fund/VA	02	2006	13.0002	14.6361	4,303
Oppenheimer Main St. Fund/VA	02	2005	12.5318	13.0002	4,195
Oppenheimer Main St. Fund/VA	02	2004	11.7046	12.5318	1,643
Oppenheimer Main St. Fund/VA	02	2003	10.0000	11.7046	0
Oppenheimer Main St. Fund/VA	03	2006	12.9303	14.5278	0
Oppenheimer Main St. Fund/VA	03	2005	12.4898	12.9303	0
Oppenheimer Main St. Fund/VA	03	2004	11.6894	12.4898	0
Oppenheimer Main St. Fund/VA	03	2003	10.0000	11.6894	0
Oppenheimer Main St. Small Cap Fund/VA	01	2006	16.5979	18.7082	0
Oppenheimer Main St. Small Cap Fund/VA	01	2005	15.3890	16.5979	0
Oppenheimer Main St. Small Cap Fund/VA	01	2004	13.1362	15.3890	0
Oppenheimer Main St. Small Cap Fund/VA	01	2003	10.0000	13.1362	0
Oppenheimer Main St. Small Cap Fund/VA	02	2006	16.5090	18.5703	0
Oppenheimer Main St. Small Cap Fund/VA	02	2005	15.3377	16.5090	0
Oppenheimer Main St. Small Cap Fund/VA	02	2004	13.1192	15.3377	0
Oppenheimer Main St. Small Cap Fund/VA	02	2003	10.0000	13.1192	0
Oppenheimer Main St. Small Cap Fund/VA	03	2006	16.4204	18.4329	295
Oppenheimer Main St. Small Cap Fund/VA	03	2005	15.2864	16.4204	311
Oppenheimer Main St. Small Cap Fund/VA	03	2004	13.1022	15.2864	338
Oppenheimer Main St. Small Cap Fund/VA	03	2003	10.0000	13.1022	196
PIMCO VIT Emerging Markets Bond Portfolio, Admin. Class	01	2006	18.0546	19.3950	771
PIMCO VIT Emerging Markets Bond Portfolio, Admin. Class	01	2005	16.5782	18.0546	1,055
PIMCO VIT Emerging Markets Bond Portfolio, Admin. Class	01	2004	15.0421	16.5782	0
PIMCO VIT Emerging Markets Bond Portfolio, Admin. Class	01	2003	10.0000	15.0421	0
PIMCO VIT Emerging Markets Bond Portfolio, Admin. Class	02	2006	17.9355	19.2279	0
PIMCO VIT Emerging Markets Bond Portfolio, Admin. Class	02	2005	16.5023	17.9355	204
PIMCO VIT Emerging Markets Bond Portfolio, Admin. Class	02	2004	15.0039	16.5023	0
PIMCO VIT Emerging Markets Bond Portfolio, Admin. Class	02	2003	10.0000	15.0039	0
PIMCO VIT Emerging Markets Bond Portfolio, Admin. Class	03	2006	17.8168	19.0617	0
PIMCO VIT Emerging Markets Bond Portfolio, Admin. Class	03	2005	16.4265	17.8168	0
PIMCO VIT Emerging Markets Bond Portfolio, Admin. Class	03	2004	14.9656	16.4265	0
PIMCO VIT Emerging Markets Bond Portfolio, Admin. Class	03	2003	10.0000	14.9656	0
PIMCO VIT Low Duration Portfolio, Admin. Class	01	2006	9.9483	10.1687	17,911
PIMCO VIT Low Duration Portfolio, Admin. Class	01	2005	10.0184	9.9483	21,107
PIMCO VIT Low Duration Portfolio, Admin. Class	01	2004	10.0070	10.0184	11,007
PIMCO VIT Low Duration Portfolio, Admin. Class	01	2003	10.0000	10.0070	0
PIMCO VIT Low Duration Portfolio, Admin. Class	02	2006	9.9066	10.1055	8,248
PIMCO VIT Low Duration Portfolio, Admin. Class	02	2005	9.9967	9.9066	7,808
PIMCO VIT Low Duration Portfolio, Admin. Class	02	2004	10.0057	9.9967	4,020
PIMCO VIT Low Duration Portfolio, Admin. Class	02	2003	10.0000	10.0057	0
PIMCO VIT Low Duration Portfolio, Admin. Class	03	2006	9.8649	10.0425	0
PIMCO VIT Low Duration Portfolio, Admin. Class	03	2005	9.9749	9.8649	0
PIMCO VIT Low Duration Portfolio, Admin. Class	03	2004	10.0044	9.9749	0
PIMCO VIT Low Duration Portfolio, Admin. Class	03	2003	10.0000	10.0044	0
PIMCO VIT Real Return Portfolio, Admin. Class	01	2006	10.9680	10.8591	15,539
PIMCO VIT Real Return Portfolio, Admin. Class	01	2005	10.9279	10.9680	52,217
PIMCO VIT Real Return Portfolio, Admin. Class	01	2004	10.2070	10.9279	26,147
PIMCO VIT Real Return Portfolio, Admin. Class	01	2003	10.0000	10.2070	1,099
PIMCO VIT Real Return Portfolio, Admin. Class	02	2006	10.9092	10.7790	3,519
PIMCO VIT Real Return Portfolio, Admin. Class	02	2005	10.8914	10.9092	3,407
PIMCO VIT Real Return Portfolio, Admin. Class	02	2004	10.1937	10.8914	0
PIMCO VIT Real Return Portfolio, Admin. Class	02	2003	10.0000	10.1937	1,010
PIMCO VIT Real Return Portfolio, Admin. Class	03	2006	10.8505	10.6992	0
PIMCO VIT Real Return Portfolio, Admin. Class	03	2005	10.8549	10.8505	0
PIMCO VIT Real Return Portfolio, Admin. Class	03	2004	10.1804	10.8549	0
PIMCO VIT Real Return Portfolio, Admin. Class	03	2003	10.0000	10.1804	0
PIMCO VIT Total Return Portfolio, Admin. Class	01	2006	10.3932	10.6105	3,613
PIMCO VIT Total Return Portfolio, Admin. Class	01	2005	10.3192	10.3932	22,503
PIMCO VIT Total Return Portfolio, Admin. Class	01	2004	10.0086	10.3192	5,468
PIMCO VIT Total Return Portfolio, Admin. Class	01	2003	10.0000	10.0086	3,203
PIMCO VIT Total Return Portfolio, Admin. Class	02	2006	10.3374	10.5322	501
PIMCO VIT Total Return Portfolio, Admin. Class	02	2005	10.2848	10.3374	1,460
PIMCO VIT Total Return Portfolio, Admin. Class	02	2004	9.9956	10.2848	1,608
PIMCO VIT Total Return Portfolio, Admin. Class	02	2003	10.0000	9.9956	3,002
PIMCO VIT Total Return Portfolio, Admin. Class	03	2006	10.2818	10.4542	0
PIMCO VIT Total Return Portfolio, Admin. Class	03	2005	10.2503	10.2818	0
PIMCO VIT Total Return Portfolio, Admin. Class	03	2004	9.9825	10.2503	0
PIMCO VIT Total Return Portfolio, Admin. Class	03	2003	10.0000	9.9825	0
PIMCO VIT All Asset Portfolio, Admin. Class	01	2006	10.2176	10.5123	0
PIMCO VIT All Asset Portfolio, Admin. Class	01	2005	10.0000	10.2176	0
PIMCO VIT All Asset Portfolio, Admin. Class	02	2006	10.2141	10.4875	0
PIMCO VIT All Asset Portfolio, Admin. Class	02	2005	10.0000	10.2141	0
PIMCO VIT All Asset Portfolio, Admin. Class	03	2006	10.2107	10.4626	0
PIMCO VIT All Asset Portfolio, Admin. Class	03	2005	10.0000	10.2107	0
PIMCO VIT CommodityRealReturn Strategy Portfolio, Admin. Class	01	2006	10.2959	9.8077	0
PIMCO VIT CommodityRealReturn Strategy Portfolio, Admin. Class	01	2005	10.0000	10.2959	0
PIMCO VIT CommodityRealReturn Strategy Portfolio, Admin. Class	02	2006	10.2924	9.7845	0
PIMCO VIT Commodity RealReturn Strategy Portfolio, Admin. Class	02	2005	10.0000	10.2924	0
PIMCO VIT CommodityRealReturn Strategy Portfolio, Admin. Class	03	2006	10.2890	9.7612	0
PIMCO VIT CommodityRealReturn Strategy Portfolio, Admin. Class	03	2005	10.0000	10.2890	0
SC FI Large Cap Growth Fund	01	2006	10.0000	9.8671	0
SC FI Large Cap Growth Fund	02	2006	10.0000	9.8538	0
SC FI Large Cap Growth Fund	03	2006	10.0000	9.8404	0
Sun Capital® All Cap Fund S Class	01	2006	10.8394	12.7629	4
Sun Capital® All Cap Fund S Class	01	2005	11.1350	10.8394	5
Sun Capital® All Cap Fund S Class	01	2004	10.0000	11.1350	0
Sun Capital® All Cap Fund S Class	01	2003	10.0000	10.0000	0
Sun Capital® All Cap Fund S Class	02	2006	10.7973	12.6875	0
Sun Capital® All Cap Fund S Class	02	2005	11.1143	10.7973	0
Sun Capital® All Cap Fund S Class	02	2004	10.0000	11.1143	0
Sun Capital® All Cap Fund S Class	02	2003	10.0000	10.0000	0
Sun Capital® All Cap Fund S Class	03	2006	10.7552	12.6124	0
Sun Capital® All Cap Fund S Class	03	2005	11.0936	10.7552	0
Sun Capital® All Cap Fund S Class	03	2004	10.0000	11.0936	0
Sun Capital® All Cap Fund S Class	03	2003	10.0000	10.0000	0
Sun Capital Investment Grade Bond Fund® S Class	01	2006	10.3379	10.6853	2
Sun Capital Investment Grade Bond Fund® S Class	01	2005	10.3369	10.3379	787
Sun Capital Investment Grade Bond Fund® S Class	01	2004	10.0000	10.3369	428
Sun Capital Investment Grade Bond Fund® S Class	01	2003	10.0000	10.0000	0
Sun Capital Investment Grade Bond Fund® S Class	02	2006	10.2978	10.6222	0
Sun Capital Investment Grade Bond Fund® S Class	02	2005	10.3177	10.2978	0
Sun Capital Investment Grade Bond Fund® S Class	02	2004	10.0000	10.3177	0
Sun Capital Investment Grade Bond Fund® S Class	02	2003	10.0000	10.0000	0
Sun Capital Investment Grade Bond Fund® S Class	03	2006	10.2576	10.5593	0
Sun Capital Investment Grade Bond Fund® S Class	03	2005	10.2985	10.2576	0
Sun Capital Investment Grade Bond Fund® S Class	03	2004	10.0000	10.2985	0
Sun Capital Investment Grade Bond Fund® S Class	03	2003	10.0000	10.0000	0
Sun Capital Real Estate Fund	01	2006	17.2429	23.5558	663
Sun Capital Real Estate Fund	01	2005	15.9936	17.2429	831
Sun Capital Real Estate Fund	01	2004	12.2044	15.9936	1,597
Sun Capital Real Estate Fund	01	2003	10.0000	12.2044	1,301
Sun Capital Real Estate Fund	02	2006	17.1506	23.3821	408
Sun Capital Real Estate Fund	02	2005	15.9403	17.1506	515
Sun Capital Real Estate Fund	02	2004	12.1886	15.9403	517
Sun Capital Real Estate Fund	02	2003	10.0000	12.1886	493
Sun Capital Real Estate Fund	03	2006	17.0584	23.2092	0
Sun Capital Real Estate Fund	03	2005	15.8870	17.0584	0
Sun Capital Real Estate Fund	03	2004	12.1727	15.8870	0
Sun Capital Real Estate Fund	03	2003	10.0000	12.1727	0
Sun Capital Real Estate Fund® S Class	01	2006	13.3501	18.1956	531
Sun Capital Real Estate Fund® S Class	01	2005	12.4174	13.3501	404
Sun Capital Real Estate Fund® S Class	01	2004	10.0000	12.4174	302
Sun Capital Real Estate Fund® S Class	01	2003	10.0000	10.0000	0
Sun Capital Real Estate Fund® S Class	02	2006	13.2983	18.0883	342
Sun Capital Real Estate Fund® S Class	02	2005	12.3943	13.2983	531
Sun Capital Real Estate Fund® S Class	02	2004	10.0000	12.3943	0
Sun Capital Real Estate Fund® S Class	02	2003	10.0000	10.0000	0
Sun Capital Real Estate Fund® S Class	03	2006	13.2465	17.9812	0
Sun Capital Real Estate Fund® S Class	03	2005	12.3712	13.2465	0
Sun Capital Real Estate Fund® S Class	03	2004	10.0000	12.3712	0
Sun Capital Real Estate Fund® S Class	03	2003	10.0000	10.0000	0
Templeton Developing Markets Securities Fund, Class 2	01	2006	11.2055	14.1098	0
Templeton Developing Markets Securities Fund, Class 2	01	2005	10.0000	11.2055	0
Templeton Developing Markets Securities Fund, Class 2	02	2006	11.2018	14.0765	0
Templeton Developing Markets Securities Fund, Class 2	02	2005	10.0000	11.2018	0
Templeton Developing Markets Securities Fund, Class 2	03	2006	11.1980	14.0432	0
Templeton Developing Markets Securities Fund, Class 2	03	2005	10.0000	11.1980	0
Templeton Foreign Securities Fund	01	2006	16.0415	19.1515	5,485
Templeton Foreign Securities Fund	01	2005	14.8119	16.0415	3,494
Templeton Foreign Securities Fund	01	2004	12.7131	14.8119	3,538
Templeton Foreign Securities Fund	01	2003	10.0000	12.7131	2,101
Templeton Foreign Securities Fund	02	2006	15.9557	19.0103	4,148
Templeton Foreign Securities Fund	02	2005	14.7625	15.9557	3,880
Templeton Foreign Securities Fund	02	2004	12.6966	14.7625	1,295
Templeton Foreign Securities Fund	02	2003	10.0000	12.6966	765
Templeton Foreign Securities Fund	03	2006	15.8699	18.8697	146
Templeton Foreign Securities Fund	03	2005	14.7131	15.8699	162
Templeton Foreign Securities Fund	03	2004	12.6801	14.7131	177
Templeton Foreign Securities Fund	03	2003	10.0000	12.6801	102
Templeton Growth Securities Fund Class 2	01	2006	16.7805	20.0936	1,436
Templeton Growth Securities Fund Class 2	01	2005	15.6800	16.7805	696
Templeton Growth Securities Fund Class 2	01	2004	13.7485	15.6800	723
Templeton Growth Securities Fund Class 2	01	2003	10.0000	13.7485	0
Templeton Growth Securities Fund Class 2	02	2006	16.6698	19.9206	820
Templeton Growth Securities Fund Class 2	02	2005	15.6082	16.6698	748
Templeton Growth Securities Fund Class 2	02	2004	13.7135	15.6082	0
Templeton Growth Securities Fund Class 2	02	2003	10.0000	13.7135	0
Templeton Growth Securities Fund Class 2	03	2006	16.5594	19.7484	0
Templeton Growth Securities Fund Class 2	03	2005	15.5365	16.5594	0
Templeton Growth Securities Fund Class 2	03	2004	13.6785	15.5365	0
Templeton Growth Securities Fund Class 2	03	2003	10.0000	13.6785	0

SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK

P.O. Box 9133

Wellesley Hills, Massachusetts 02481

Telephone:

Toll Free (800) 447-7569

General Distributor

Clarendon Insurance Agency, Inc.

One Sun Life Executive Park

Wellesley Hills, Massachusetts 02481

PART B

MAY 1, 2007

SUN LIFE FINANCIAL MASTERS^® ACCESS NY

VARIABLE AND FIXED ANNUITY

STATEMENT OF ADDITIONAL INFORMATION

SUN LIFE (N.Y.) VARIABLE ACCOUNT C

TABLE OF CONTENTS

Sun Life Insurance and Annuity Company of New York

Advertising and Sales Literature

Tax Deferred Accumulation

Calculations

     Example of Variable Accumulation Unit Value Calculation

     Example of Variable Annuity Unit Calculation

     Example of Variable Annuity Payment Calculation

Distribution of the Contract

Custodian

Independent Registered Public Accounting Firm

Financial Statements

The Statement of Additional Information sets forth information which may be of interest to prospective purchasers of the Sun Life Financial Masters^® Access NY Variable and Fixed Annuity Contracts (the "Contracts") issued by Sun Life Insurance and Annuity Company of New York (the "Company") in connection with Sun Life (N.Y.) Variable Account C (the "Variable Account"). The information contained herein is not included in the Prospectus dated May 1, 2007. This Statement of Additional Information should be read in conjunction with the Prospectus, a copy of which may be obtained without charge from the Company by writing to Sun Life Insurance and Annuity Company of New York, c/o Annuity Division, P.O. Box 9133, Wellesley Hills, Massachusetts 02481, or by telephoning (800) 447-7569.

The terms used in this Statement of Additional Information have the same meanings as in the Prospectus.

------------------------------------------------------------------------------------------------------------------------

THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND IS AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE PURCHASERS ONLY IF PRECEDED OR ACCOMPANIED BY A CURRENT PROSPECTUS.

SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK ("Sun Life (N.Y.)")

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 (N.Y.). Sun Life Financial ultimately controls Sun Life (N.Y.) through the following intervening company subsidiaries: Sun Life Assurance Company of Canada (U.S.), 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.

ADVERTISING AND SALES LITERATURE

As set forth in the Prospectus, the Company may refer to the following organizations (and others) in its marketing materials:

A.M. BEST'S RATING SYSTEM is designed to evaluate the various factors affecting the overall performance of an insurance company in order to provide an opinion as to an insurance company's relative financial strength and ability to meet its contractual obligations. The procedure includes both a quantitative and qualitative review of each company.

FITCH CREDIT RATING Company's Insurance Company Claims Paying Ability Rating is an independent evaluation by a nationally accredited rating organization of an insurance company's ability to meet its future obligations under the contracts and products it sells. The rating takes into account both quantitative and qualitative factors.

LIPPER VARIABLE INSURANCE PRODUCTS PERFORMANCE ANALYSIS SERVICE is a publisher of statistical data covering the investment company industry in the United States and overseas. Lipper is recognized as the leading source of data on open-end and closed-end funds. Lipper currently tracks the performance of over 5,000 investment companies and publishes numerous specialized reports, including reports on performance and portfolio analysis, fee and expense analysis.

STANDARD & POOR'S insurance claims-paying ability rating is an opinion of an operating insurance company's financial capacity to meet obligations of its insurance policies in accordance with their terms.

VARDS (Variable Annuity Research Data Service) provides a comprehensive guide to variable annuity contract features and historical fund performance. The service also provides a readily understandable analysis of the comparative characteristics and market performance of funds inclusive in variable contracts.

MOODY'S Investors Services, Inc.'s insurance claims-paying rating is a system of rating an insurance company's financial strength, market leadership, and ability to meet financial obligations. The purpose of Moody's ratings is to provide investors with a simple system of gradation by which the relative quality of insurance companies may be noted.

STANDARD & POOR'S INDEX - broad-based measurement of changes in stock-market conditions based on the average performance of 500 widely held common stocks; commonly known as the Standard & Poor's 500 (S&P 500). The selection of stocks, their relative weightings to reflect differences in the number of outstanding shares, and publication of the index itself are services of Standard & Poor's Corporation, a financial advisory, securities rating, and publishing firm. The index tracks 400 industrial company stocks, 20 transportation stocks, 40 financial company stocks, and 40 public utilities.

NASDAQ-OTC Price Index - this index is based on the National Association of Securities Dealers Automated Quotations (NASDAQ) and represents all domestic over-the-counter stocks except those traded on exchanges and those having only one market maker, a total of some 3,500 stocks. It is market value-weighted and was introduced with a base of 100.00 on February 5, 1971.

DOW JONES INDUSTRIAL AVERAGE (DJIA) - price-weighted average of 30 actively traded blue chip stocks, primarily industrials, but including American Express Company and American Telephone and Telegraph Company. Prepared and Published by Dow Jones & Company, it is the oldest and most widely quoted of all the market indicators. The average is quoted in points, not dollars.

MORNINGSTAR, Inc. is an independent financial publisher offering comprehensive statistical and analytical coverage of open-end and closed-end funds and variable annuities. This coverage for mutual funds includes, among other information, performance analysis rankings, risk rankings (e.g. aggressive, moderate or conservative), and "style box" matrices. Style box matrices display, for equity funds, the investment philosophy and size of the companies in which the fund invests and, for fixed-income funds, interest rate sensitivity and credit quality of the investment instruments.

IBBOTSON ASSOCIATES, Inc. is a consulting firm that provides a variety of historical data, including total return, capital appreciation and income, on the stock market as well as other investment asset classes, and inflation. This information will be used primarily for comparative purposes and to illustrate general financial planning principles.

In its advertisements and other sales literature for the Variable Account and the Funds, the Company intends to illustrate the advantages of the Contracts in a number of ways:

DOLLAR-COST AVERAGING ILLUSTRATIONS. These illustrations will generally discuss the price-leveling effect of making regular investments in the same Sub-Accounts over a period of time, to take advantage of the trends in market prices of the portfolio securities purchased by those Sub-Accounts.

SYSTEMATIC WITHDRAWAL PROGRAM. A service provided by the Company, through which a Participant may take any distribution allowed by Internal Revenue Code Section 401 (a) (9) in the case of Qualified Contracts, or permitted under Internal Revenue Code Section 72 in the case of Non-Qualified Contracts, by way of a series of partial withdrawals. Withdrawals under this program may be fully or partially includible in income and may be subject to a 10% penalty tax. Consult your tax advisor.

THE COMPANY'S AND THE FUNDS' CUSTOMERS. Sales literature for the Variable Account and the Funds may refer to the number of clients which they serve.

THE COMPANY'S ASSETS, SIZE. The Company may discuss its general financial condition (see, for example, the references to Standard & Poor's, Fitch and A.M. Best Company above); it may refer to its assets; and it may discuss its relative size and/or ranking among companies in the industry or among any sub-classification of those companies, based upon recognized evaluation criteria. For example, at December 31, 1998, the Company was the 36th largest U.S. life insurance company based upon overall assets.

COMPOUND INTEREST ILLUSTRATIONS. These will emphasize several advantages of the variable annuity contract. For example, but not by way of limitation, the literature may emphasize the potential savings through tax deferral; the potential advantage of the Variable Account over the Fixed Account; and the compounding effect when a participant makes regular deposits to his or her account.

The Company may use hypothetical illustrations of the benefits of tax deferral, including but not limited to the following chart:

The chart below assumes an initial investment of $10,000 which remains fully invested for the entire time period, an 8% annual return, and a 33% combined federal and state income tax rate. It compares how 3 different investments might fare over 10, 20, and 30 years. The first example illustrates an investment in a non-tax-deferred account and assumes that taxes are paid annually out of that account. The second example illustrates how the same investment would grow in a tax-deferred investment, such as an annuity. The third example illustrates the net value of the tax-deferred investment after paying taxes on the full account value.

	10 YEARS	20 YEARS	30 YEARS
Non-Tax-Deferred Account	$16,856	$28,413	$ 47,893
Tax-Deferred Account	$21,589	$46,610	$100,627
Tax-Deferred Account After Paying Taxes	$17,765	$34,528	$ 70,720

THIS ILLUSTRATION IS HYPOTHETICAL AND DOES NOT REPRESENT THE PROJECTED PERFORMANCE OF THE CONTRACT OR ANY OF ITS INVESTMENT OPTIONS. THE ILLUSTRATION DOES NOT REFLECT THE DEDUCTION OF ANY CHARGES OR FEES RELATED TO PORTFOLIO MANAGEMENT, MORTALITY AND EXPENSE, OR ACCOUNT ADMINISTRATION. TAXES ON EARNINGS WITHIN AN ANNUITY ARE DUE UPON WITHDRAWAL. WITHDRAWALS MAY ALSO BE SUBJECT TO SURRENDER CHARGES AND, IF MADE PRIOR TO AGE 59½, A 10% FEDERAL PENALTY TAX.

TAX-DEFERRED ACCUMULATION:

In general, individuals who own annuity contracts are not taxed on increases in the value of their annuity contracts until some form of distribution is made under the contract. As a result, the annuity contract would benefit from tax deferral during the contract's accumulation phase; this would have the effect of permitting an investment in an annuity contract to grow more rapidly that a comparable investment under which increases in value are taxed on a current basis.

In reports or other communications to you or in advertising or sales materials, we may also describe the effects of tax-deferred compounding on the Variable Account's investment returns. We may illustrate these effects in charts or graphs and from time to time may include comparisons of returns under the Contract or in general on a tax-deferred basis, with the returns on a taxable basis. Different tax rates may be assumed. Any such illustrative chart or graph would show accumulations on an initial investment or Purchase Payment, assuming a given amount (including the applicable interest credit), hypothetical gross annual returns compounded annually, and a stated rate of return. The values shown for the taxable investment would not include any deduction for management fees or other expenses, but would assume the annual deduction of federal and state taxes from investment returns. The values shown for the Contract in a chart would reflect the deduction of Contract expenses, such as the mortality and expense risk charge, the 0.15% administrative charge, the 0.20% distribution fee, and the $30 annual Account Fee. In addition, the values shown would assume that the Participant has not surrendered his or her Contract or made any partial surrenders until the end of the period shown. The chart would assume a full surrender at the end of the period shown and the payment of federal and state taxes, at a rate of not more than 33%, on the amount in excess of the Purchase Payments.

In developing illustrative tax deferral charts, we will observe these general principles:

l	The assumed rate of earnings will be realistic.
l	The illustrative chart will accurately depict the effect of all fees and charges or provide a narrative that prominently discloses all fees and charges under the Contract.
l	Charts comparing accumulation values for tax-deferred and non-tax-deferred investments will depict the implications of any surrender.
l	A narrative accompanying the chart will prominently disclose that there may be a 10% tax penalty on a surrender by a Participant who has not reached age 59½ at the time of surrender.

The rates of return illustrated in any chart would be hypothetical and are not an estimate or guaranty of performance. Actual tax returns may vary among Participants.

CALCULATIONS

EXAMPLE OF VARIABLE ACCUMULATION UNIT VALUE CALCULATION

Suppose the net asset value of a Fund share at the end of the current valuation period is $18.38; at the end of the immediately preceding valuation period was $18.32; the Valuation Period is one day; and no dividends or distributions caused Fund shares to go "ex-dividend" during the current Valuation Period. $18.38 ÷ $18.32 = 1.00327511. Subtracting the one day risk factor for mortality and expense risks and the administrative expense charge of 0.00005815 (the daily equivalent of the current maximum charge of 2.10% on an annual basis) gives a net investment factor of 1.00321696. If the value of the variable accumulation unit for the immediately preceding valuation period had been 14.5645672, the value for the current valuation period would be 14.6114208 (14.5645672 x 1.00321696).

EXAMPLE OF VARIABLE ANNUITY UNIT CALCULATION

Suppose the circumstances of the first example exist, and the value of an annuity unit for the immediately preceding valuation period had been 12.3456789. If the first variable annuity payment is determined by using an annuity payment based on an assumed interest rate of 3% per year, the value of the annuity unit for the current valuation period would be 12.3845294 (12.3456789 x 1.00322814 (the Net Investment Factor based on the daily equivalent of maximum annuity phase charge of 1.70% on an annual basis) x 0.99991902). 0.99991902 is the factor, for a one day Valuation Period, that neutralizes the assumed interest rate of 3% per year used to establish the Annuity Payment Rates found in certain Contracts.

EXAMPLE OF VARIABLE ANNUITY PAYMENT CALCULATION

Suppose that a Participant Account is credited with 8,765.4321 variable accumulation units of a particular Sub-Account but is not credited with any fixed accumulation units; that the variable accumulation unit value and the annuity unit value for the particular Sub-Account for the valuation period which ends immediately preceding the annuity commencement date are 14.5645672 and 12.3456789 respectively; that the annuity payment rate for the age and option elected is $6.78 per $1,000; and that the annuity unit value on the day prior to the second variable annuity payment date is 12.3845294. The first variable annuity payment would be $865.57 (8,765.4321 x 14.5645672 x 6.78 ÷ 1,000). The number of annuity units credited would be 70.1112 ($865.57 ÷ 12.3456789) and the second variable annuity payment would be $868.29 (70.1112 x 12.3845294).

DISTRIBUTION OF THE CONTRACT

We offer the Contract on a continuous basis. Contracts are sold by licensed insurance agents in those states where the Contract may be lawfully sold. Such agents will be registered representatives of broker-dealers registered under the Securities Exchange Act of 1934 who are members of the National Association of Securities Dealers, Inc. and who have entered into distribution agreements with the Company and the general distributor and principal underwriter of the Contracts, Clarendon Insurance Agency, Inc. ("Clarendon"), One Sun Life Executive Park, Wellesley Hills, Massachusetts 02481. Clarendon is a wholly-owned subsidiary of Sun Life Assurance Company of Canada (U.S.) ("Sun Life (U.S.) "). Clarendon is registered with the SEC under the Securities Exchange Act of 1934 as a broker-dealer and is a member of the National Association of Securities Dealers, Inc. Clarendon also acts as the general distributor of certain other annuity contracts issued by Sun Life (U.S.) and its subsidiary, Sun Life Insurance and Annuity Company of New York ("Sun Life (N.Y.) "), and variable life insurance contracts issued by Sun Life (U.S.).

Commissions and other distribution compensation will be paid by the Company to the selling agents and will not be more than 2.00% of Purchase Payments. In addition, after the first Account Year, broker-dealers who have entered into distribution agreements with the Company may receive an annual renewal commission of no more than 1.00% of the Participant’s Account Value. In addition to commissions, the Company may, from time to time, pay or allow additional promotional incentives, in the form of cash or other compensation. The Company reserves the right to offer these additional incentives only to certain broker-dealers that sell or are expected to sell during specified time periods certain minimum amounts of Contracts or Certificates or other contracts offered by the Company. Promotional incentives may change at any time. Commissions will not be paid with respect to Participant Accounts established for the personal account of employees of the Company or any of its affiliates, or of persons engaged in the distribution of the Contract, or of immediate family members of such employees or persons. In addition, commissions may be waived or reduced in connection with certain transactions described in the Prospectus under the heading åWaivers; Reduced Charges; Credits; Special Guaranteed Interest Rates.æ

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 annuity reserves held in the Variable Account.

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The consolidated financial statements of Sun Life Insurance and Annuity Company of New York included in the Statement of Additional Information have been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report appearing therein (which report, dated March 27, 2007, 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, as described in Note 1), and have been so included in their reliance upon the report of such firm given upon their authority as experts in accounting and auditing. Their office is located at 200 Berkeley St, Boston, Massachusetts.

The financial statements of Sun Life (N.Y.) Variable Account C that are included in the Statement of Additional Information have been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report appearing therein (which report dated April 20, 2007 accompanying the financial statements expresses an unqualified opinion) and are included in reliance upon the report of such firm given upon their authority as experts in accounting and auditing.

FINANCIAL STATEMENTS

The financial statements of the Variable Account and Sun Life Insurance and Annuity Company of New York are included herein. The financial statements of Sun Life Insurance and Annuity Company of New York are provided as relevant to its ability to meet its financial obligations under the Certificates and should not be considered as bearing on the investment performance of the assets held in the Variable Account.

SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK

(A Wholly-Owned Subsidiary of Sun Life Assurance Company of Canada (U.S.))

CONSOLIDATED STATEMENTS OF INCOME

(in thousands)

For the years ended December 31,

	2006		2005		2004
Revenues
Premiums and annuity considerations	$	38,322	$	32,247	$	35,006
Net investment income		97,365		94,264		93,870
Net realized investment (losses) gains		(6,081)		(4,086)		9,301
Fee and other income		21,083		13,578		13,562
Total revenues		150,689		136,003		151,739
Benefits and Expenses
Interest credited		56,379		69,641		78,220
Policyowner benefits		29,257		25,663		26,622
Other operating expenses		22,988		23,489		19,305
Amortization of deferred policy acquisition costs		18,422		9,491		5,763
Total benefits and expenses		127,046		128,284		129,910
Income before income tax expense and cumulative effect of change in accounting principle		23,643		7,719		21,829
Income tax expense
Federal		7,410		2,278		7,229
State		-		-		82
Income tax expense		7,410		2,278		7,311
Income before cumulative effect of change in accounting principle, net of tax		16,233		5,441		14,518
Cumulative effect of change in accounting principle, net of tax benefit of $471		-		-		(874)
Net income	$	16,233	$	5,441	$	13,644

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

SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK

(A Wholly-Owned Subsidiary of Sun Life Assurance Company of Canada (U.S.))

CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

	December 31, 2006		December 31, 2005
ASSETS
Investments:
Available-for-sale fixed maturity securities at fair value (amortized cost of $1,460,077 and $1,684,650 in 2006 and 2005, respectively)	$	1,463,043	$	1,682,864
Mortgage loans		161,292		144,422
Policy loans		139		188
Other invested assets		65,922		53
Cash and cash equivalents		54,231		54,540
Total investments and cash		1,744,627		1,882,067
Accrued investment income		15,125		18,400
Deferred policy acquisition costs		85,021		80,640
Deferred federal income taxes		-		4,273
Goodwill		37,788		37,788
Receivable for investments sold		1,244		1,471
Reinsurance receivable		5,906		5,886
Other assets		15,146		4,795
Separate account assets		796,827		681,218
Total assets	$	2,701,684	$	2,716,538
LIABILITIES
Contractholder deposit funds and other policy liabilities	$	1,437,396	$	1,642,039
Future contract and policy benefits		54,100		50,549
Deferred federal income taxes		6,953		-
Payable for investments purchased		5,735		12,053
Other liabilities and accrued expenses		90,517		38,676
Separate account liabilities		796,827		681,218
Total liabilities		2,391,528		2,424,535
Commitments and contingencies - Note 19
STOCKHOLDER’S EQUITY
Common stock, $350 par value - 6,001 shares authorized;
6,001 shares issued and outstanding		2,100		2,100
Additional paid-in capital		239,963		239,963
Accumulated other comprehensive income (loss)		1,432		(488)
Retained earnings		66,661		50,428
Total stockholder’s equity		310,156		292,003
Total liabilities and stockholder’s equity	$	2,701,684	$	2,716,538

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

SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK

(A Wholly-Owned Subsidiary of Sun Life Assurance Company of Canada (U.S.))

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)

For the years ended December 31,

	2006		2005		2004
Net income	$	16,233	$	5,441	$	13,644
Other comprehensive income (loss)
Net unrealized holding (losses) gains on available-for-sale
securities, net of tax and policyholder amounts (1)		(4,375)		(10,760)		1,383
Reclassification adjustments of realized investment losses (gains)
into net income, net of tax (2)		6,295		(4,211)		(11,646)
Other comprehensive income (loss)		1,920		(14,971)		(10,263)
Comprehensive income (loss)	$	18,153	$	(9,530)	$	3,381

(1)   Net of tax (benefit) expense of $(2.4) million, $(5.8) million and $0.7 million for the years ended December 31, 2006, 2005 and 2004, respectively.

(2)   Net of tax benefit (expense) of $3.4 million, $(2.3) million and $(6.3) million for the years ended December 31, 2006, 2005 and 2004, respectively.

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

SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK

(A Wholly-Owned Subsidiary of Sun Life Assurance Company of Canada (U.S.))

CONSOLIDATED STATEMENTS OF STOCKHOLDER’S EQUITY

(in thousands)

For the years ended December 31,

	Common Stock		Additional Paid-In Capital		Accumulated Other Comprehensive Income (Loss)		Retained Earnings		Total Stockholder’s Equity
Balance at December 31, 2003	$	2,100	$	239,963	$	24,746	$	31,343	$	298,152
Net income		-		-		-		13,644		13,644
Other comprehensive loss		-		-		(10,263)		-		(10,263)
Balance at December 31, 2004		2,100		239,963		14,483		44,987		301,533
Net income		-		-		-		5,441		5,441
Other comprehensive loss		-		-		(14,971)		-		(14,971)
Balance at December 31, 2005		2,100		239,963		(488)		50,428		292,003
Net income		-		-		-		16,233		16,233
Other comprehensive income		-		-		1,920		-		1,920
Balance at December 31, 2006	$	2,100	$	239,963	$	1,432	$	66,661	$	310,156

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

SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK

(A Wholly-Owned Subsidiary of Sun Life Assurance Company of Canada (U.S.))

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

For the years ended December 31,

	2006		2005		2004
Cash Flows From Operating Activities
Net income	$	16,233	$	5,441	$	13,644
Adjustments to reconcile net income to net cash provided by
(used in) operating activities:
Net amortization of premiums on investments		3,956		7,224		11,239
Amortization of deferred policy acquisition costs		18,422		9,491		5,763
Net realized investment losses (gains)		6,081		4,086		(9,301)
Interest credited to contractholder deposit funds		56,379		69,641		78,220
Deferred federal income taxes		10,193		(947)		7,185
Cumulative effect of change in accounting principle, net
of tax		-		-		874
Changes in assets and liabilities:
Deferred policy acquisition cost additions		(23,909)		(9,646)		(15,086)
Accrued investment income		3,275		844		826
Future contract and policy benefits		3,106		736		132
Other, net		(24,875)		29,604		6,549
Net cash provided by operating activities		68,861		116,474		100,045
Cash Flows From Investing Activities
Sales, maturities and repayments of:
Available-for-sale fixed maturities		757,662		673,665		1,531,260
Equity securities				-		766
Mortgage loans		29,415		7,584		19,960
Purchases of:
Available-for-sale fixed maturities		(549,218)		(568,813)		(1,596,830)
Equity securities		-		-		(623)
Mortgage loans		(46,285)		(15,445)		(48,624)
Other invested assets		(65,858)		-		-
Net change in payable/receivable of investments purchased
and sold		-		-		(4,507)
Net change in policy loans		49		(35)		121
Net change in other investing activities		65,845		-		-
Net cash provided by (used in) investing activities		191,610		96,956		(98,477)

Continued on next page

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

SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK

(A Wholly-Owned Subsidiary of Sun Life Assurance Company of Canada (U.S.))

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

(in thousands)

For the years ended December 31,

	2006		2005		2004
Cash Flows From Financing Activities
Additions to contractholder deposit funds	$	121,837	$	53,495	$	147,241
Withdrawals from contractholder deposit funds		(382,617)		(255,647)		(171,504)
Other, net		-		-		1,621
Net cash used in financing activities		(260,780)		(202,152)		(22,642)
(Decrease) increase in cash and cash equivalents		(309)		11,278		(21,074)
Cash and cash equivalents, beginning of year		54,540		43,262		64,336
Cash and cash equivalents, end of year	$	54,231	$	54,540	$	43,262
Supplemental Information
Income taxes refunded	$	-	$	274	$	525

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

SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK

(A Wholly-Owned Subsidiary of Sun Life Assurance Company of Canada (U.S.))

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2006, 2005 and 2004

1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

General

Sun Life Insurance and Annuity Company of New York ("the Company") engages in the sale of fixed and variable annuity contracts, individual life and group life insurance, group stop loss and group disability insurance in the state of New York. These contracts are sold by insurance agents, some of whom are registered representatives of national and regional stock brokerage firms, and brokers.

The Company is a wholly-owned subsidiary of Sun Life Assurance Company of Canada (U.S.) ("Sun Life U.S"). The Company is also 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."

As of December 31, 2004, SLC - U.S. Ops Holdings was a direct wholly-owned subsidiary of Sun Life Assurance Company of Canada ("SLOC"). SLOC is a life insurance company incorporated in 1865 and 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. The Company is now an indirect subsidiary of Sun Life Financial Corp., and continues to be an indirect subsidiary of SLF.

In 2006, the Company established SLNY Private Placement Investment Company I, LLC, a non-insurer investment limited liability corporation.

Basis of Presentation

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

SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK

(A Wholly-Owned Subsidiary of Sun Life Assurance Company of Canada (U.S.))

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2006, 2005 and 2004

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

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. The most significant estimates are those used in determining fair value of financial instruments, goodwill, deferred policy acquisition costs ("DAC"), 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 may enter into transactions involving various types of financial instruments, including cash and cash equivalents, fixed maturity securities, mortgage loans, equity securities, 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 include cash, commercial paper, money market investments, and short term bank participations. All such investments have been purchased with maturities of three months or less and are considered cash equivalents for purposes of reporting cash flows.

Investments

The Company accounts for its investments in accordance with Statement of Financial Accounting Standards ("SFAS") No. 115, "Accounting for Certain Investments in Debt and Equity Securities." At the time of purchase, fixed maturity securities are classified based on the Company’s intent as either held-to-maturity or available-for-sale. In order for the securities 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 do not meet this criteria are classified as available-for-sale. Available-for-sale securities are carried at estimated fair value with changes in unrealized gains or losses reported as a separate component of 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. The Company does not engage in trading activities. All of the Company’s fixed maturity securities are classified as available-for-sale. Included with available-for-sale fixed maturities are mortgage backed securities in To Be Announced ("TBA") form. The Company records these purchases on the 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. All security transactions are recorded on a trade-date basis.

The Company’s accounting policy for impairment requires recognition of an other-than-temporary impairment charge on a security if it is determined that the Company will be unable to recover all amounts due under the contractual obligations 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.

SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK

(A Wholly-Owned Subsidiary of Sun Life Assurance Company of Canada (U.S.))

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2006, 2005 and 2004

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

Investments (continued)

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. Loans include commercial first mortgage loans and 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 each 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 on 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.

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

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, inclusive of changes in the provision for estimated losses on mortgage loans, a realized investment loss is recorded.

Income on investments 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.

Deferred Policy Acquisition Costs

Acquisition costs consist of commissions, underwriting and other costs that vary with and are primarily related to the production of new business. Acquisition costs related to investment-type contracts, primarily deferred annuity, universal life and guaranteed investment contracts, 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 regularly and adjusted, as appropriate, retrospectively when the Company records actual profits and revises its estimate of future gross profits to be realized from this group of products, including realized 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 discussed above are reduced.

DAC is also adjusted for amounts relating to unrealized investment gains and losses. This adjustment, net of tax, is included with unrealized investment gains or losses that are recorded in accumulated other comprehensive income. DAC was (decreased) increased by $(0.5) million and $0.8 million at December 31, 2006 and 2005, respectively, relating to this adjustment.

SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK

(A Wholly-Owned Subsidiary of Sun Life Assurance Company of Canada (U.S.))

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2006, 2005 and 2004

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

Other Assets

Property, equipment, and leasehold improvements, which are included in other assets, are stated at cost, less accumulated depreciation and amortization. Depreciation is provided using the straight-line or accelerated method over the estimated useful lives of the related assets, which generally range from 3 to 10 years. Amortization of leasehold improvements is calculated using the straight-line method over the lesser of the term of the lease or the estimated useful life of the improvements.

Policy liabilities and accruals

Future contract and policy benefit liabilities include amounts reserved for future policy benefits payable upon contingent events as well as liabilities for unpaid claims due as of the statement date. Such liabilities are established in amounts adequate to meet the estimated future obligations of policies in force.

Policy reserves for annuity contracts include liabilities held for group pension and payout annuity payments and liabilities held for product guarantees on variable annuity products, such as guaranteed minimum death benefits ("GMDB"). Reserves for pension and payout annuity contracts are calculated using the best-estimate interest and decrement assumptions that were set at the time that loss recognition testing resulted in additional reserves. Loss recognition testing is done periodically to make sure that these assumptions remain adequate. Reserves for guaranteed minimum death benefits are calculated according to the methodology of 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"), whereby the expected benefits provided by the guarantees are spread over the duration of the contract in proportion to the benefit assessments.

Policy reserves for universal life contracts are held for benefit coverages that are not fully provided for in the policy account value. These include rider coverages, conversions from group policies, and benefits provided under market conduct settlements.

Policy reserves for group life and health contracts are calculated using standard actuarial methods recognized by the American Academy of Actuaries. For the tabular reserves, discount rates are based on the Company’s earned investment yield and the morbidity and mortality tables used are standard industry tables modified to reflect the Company’s actual experience when appropriate. In particular, for the Company’s group known claim reserves, the mortality and morbidity tables for the early durations of claims are based exclusively on the Company’s experience, incorporating factors such as age at disability, sex and elimination period. These reserves are computed at amounts that, with interest compounded annually at assumed rates, are expected to meet the Company’s future obligations.

Liabilities for unpaid claims 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.

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. The liabilities consist of deposits received plus interest credited, less accumulated policyholder charges, assessments, partial withdrawals and surrenders. The liabilities are not reduced by surrender charges.

SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK

(A Wholly-Owned Subsidiary of Sun Life Assurance Company of Canada (U.S.))

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2006, 2005 and 2004

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

Revenue and Expenses

Premiums for traditional individual life and annuity products are considered earned revenue when due. Premiums related to group disability insurance and group stop loss are recognized as earned revenue pro-rata over the contract period. The unexpired portion of these premiums is recorded as unearned premiums. Revenue from investment-related products includes charges for 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.

Operating Expenses

Operating expenses primarily represent allocated compensation and general and administrative expenses. Management believes intercompany 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.

Income Taxes

For the year ended December 31, 2006, the Company will file a stand-alone federal income tax return, as it did for years 2005 and 2004. Taxes are computed under SFAS No. 109, "Accounting for Income Taxes." 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 relate primarily 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 and they are generally not subject to liabilities that arise from any other business of the Company. 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 qualified and non-qualified variable annuity contracts. Assets and liabilities of the separate accounts, representing net deposits and accumulated net investment earnings, less fees, held primarily for the benefit of contractholders, are shown as separate captions in the consolidated financial statements. Assets held in the separate accounts are carried at market value and the investment risk of such securities is retained by the policyholder. The activity of the separate accounts is not reflected in the Company’s consolidated financial statements except for: (1) the fees the Company receives, which are assessed periodically and recognized as revenue when assessed; and, (2) the activity related to the GMDB, guaranteed minimum accumulation benefit ("GMAB") and guaranteed minimum withdrawal benefit ("GMWB") which is reflected in the Company’s consolidated financial statements and accompanying notes.

SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK

(A Wholly-Owned Subsidiary of Sun Life Assurance Company of Canada (U.S.))

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2006, 2005 and 2004

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

New and Adopted Accounting Pronouncements

In September 2006, the Securities and Exchange Commission ("SEC") Staff issued Staff Accounting Bulletin ("SAB") No. 108, "Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements" ("SAB No. 108"), which addresses how the effects of prior year uncorrected financial statement misstatements should be considered in current year financial statements. SAB No. 108 requires registrants to quantify misstatements using both balance sheet and income statement approaches and to evaluate whether either approach results in quantifying an error that is material in light of relative quantitative and qualitative factors. The requirements of SAB No. 108 are effective for annual financial statements covering the first fiscal year ending after November 15, 2006. The Company’s adoption of SAB No. 108 during the year ended December 31, 2006 had no impact on the Company’s consolidated financial statements.

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 did not impact the methodology used by the Company to determine and measure impaired investments. See disclosure in Note 4.

In May of 2005, the FASB issued FASB Statement No. 154, "Accounting Changes and Error Corrections - a replacement of APB Opinion No. 20 and FASB Statement No. 3" ("SFAS No. 154"). SFAS No. 154 is effective for fiscal years beginning after December 15, 2005. SFAS No. 154 changes the requirements for the accounting and reporting of a change in accounting principle and applies to all voluntary changes in accounting principle. SFAS No. 154 eliminates the requirement in Accounting Principles Board Opinion No. 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. SFAS No. 154 applies to changes required by new accounting pronouncements only when the pronouncement does not include specific transition guidance. The adoption of SFAS No. 154 did not have a material impact on the Company’s consolidated financial statements.

On January 1, 2004, the Company adopted SOP 03-1. The major provisions of SOP 03-1 that affect the Company require:

o Establishment of reserves primarily related to death benefit and income benefit guarantees provided under variable annuity contracts;

o Deferral of sales inducements that meet certain criteria, and amortization using the same method used for DAC; and

o Reporting and measuring the Company’s interest in its separate accounts as investments.

See Footnote 13 for additional information regarding the impact of adoption of SOP 03-1.

Accounting Standards Not Yet Adopted

In February 2007, the Financial Accounting Standards Board (the "FASB") issued SFAS No. 159, "The Fair Value Option for Financial Assets and Financial Liabilities" ("SFAS No. 159"), which permits entities to choose to measure many financial instruments and certain other items at fair value. The objective is to improve financial reporting by providing entities with the opportunity to mitigate volatility in reporting earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. SFAS No. 159 is effective for fiscal years beginning after November 15, 2007 and all interim periods within those fiscal years. Early adoption is permitted as of the beginning of a fiscal year that begins on or before November 15, 2007, provided the entity also elects to apply the provisions of SFAS No. 157, "Fair Value Measurements." The Company is currently evaluating the impact, if any, that SFAS No. 159 may have on the Company’s consolidated financial statements.

SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK

(A Wholly-Owned Subsidiary of Sun Life Assurance Company of Canada (U.S.))

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2006, 2005 and 2004

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

Accounting Standards Not Yet Adopted (continued)

In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements" ("SFAS No. 157"), which defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosures about fair value measurements. SFAS No. 157 is effective for fiscal years beginning after November 15, 2007 and all interim periods within those fiscal years. Earlier application is permitted provided that the reporting entity has not yet issued interim or annual financial statements for that fiscal year. The Company is currently evaluating the impact, if any, that SFAS No. 157 may have on the Company’s consolidated financial statements.

In June 2006, the FASB issued Interpretation No. 48, "Accounting for Uncertainty in Income Taxes - an interpretation of FASB Statement No. 109" ("FIN 48"). FIN 48 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return, and provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. FIN 48 is effective for fiscal years beginning after December 15, 2006. The Company is currently assessing the impact, if any, of FIN 48 on its consolidated financial statements.

In March 2006, the FASB issued SFAS No. 156, "Accounting for Servicing of Financial Assets" ("SFAS No. 156"), an amendment to SFAS No. 140. SFAS No. 156 requires all separately recognized servicing assets and liabilities to be initially measured at fair value and permits entities to choose to either subsequently measure servicing rights at fair value and report changes in fair value in earnings, or amortize servicing rights in proportion to, and over the estimated net servicing income or loss and assess the rights for impairment or the need for an increased obligation. The option to subsequently measure servicing rights at fair value will allow entities which utilize derivative instruments to hedge their servicing rights to account for such hedging relationships at fair value and avoid the complications of hedge accounting under SFAS No. 133. SFAS No. 156 is effective for fiscal years beginning after September 15, 2006. Earlier application is permitted provided that the reporting entity has not yet issued interim or annual financial statements for that fiscal year. The adoption of this statement will not have a material impact on the Company’s financial position or results of operations.

In February 2006, the FASB issued SFAS No. 155, "Accounting for Certain Hybrid Instruments" ("SFAS No. 155"), an amendment to SFAS No. 133 and SFAS No. 140. Among other things, SFAS No. 155: (i) permits fair value remeasurement for any hybrid financial instrument that contains an embedded derivative that otherwise would require bifurcation; (ii) clarifies which interest-only strips and principal-only strips are not subject to the requirements of SFAS No. 133; (iii) establishes a requirement to evaluate interests in securitized financial assets to identify interests that are freestanding derivatives or that are hybrid financial instruments that contain an embedded derivative requiring bifurcation; (iv) clarifies that concentrations of credit risk in the form of subordination are not embedded derivatives; and (v) amends SFAS No. 140 to eliminate the prohibition on a qualifying special-purpose entity from holding a derivative financial instrument that pertains to a beneficial interest other than another derivative financial instrument. SFAS No. 155 is effective for all financial instruments acquired, issued, or subject to a remeasurement (new basis) event occurring after the beginning of an entity’s first fiscal year beginning after September 15, 2006. At initial application of SFAS No. 155, the fair value election provided for in paragraph 4(c) may be applied for hybrid financial instruments that were bifurcated under paragraph 12 of SFAS No. 133 prior to the initial application of SFAS No. 155.

In January 2007, the FASB provided a scope exception under SFAS No. 155 for securitized interests that only contain an embedded derivative that is tied to the prepayment risk of the underlying prepayable financial assets, and for which the investor does not control the right to accelerate the settlement. If a securitized interest contains any other embedded derivative (for example, an inverse floater), then it would be subject to the bifurcation tests in SFAS No. 133, as would securities purchased at a significant premium. Following the issuance of the scope exception by the FASB, changes in the market value of the Company’s investment securities would continue to be made through other comprehensive income, a component of stockholders’ equity. The Company does not expect that the January 1, 2007 adoption of SFAS No. 155 will have a material impact on the Company’s financial position, results of operations or cash flows. However, to the extent that certain of the Company’s future investments in securitized financial assets do not meet the scope exception adopted by the FASB, the Company’s future results of operations may exhibit volatility if such investments are required to be bifurcated or marked to market value in their entirety through the income statement, depending on the election made by the Company.

SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK

(A Wholly-Owned Subsidiary of Sun Life Assurance Company of Canada (U.S.))

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2006, 2005 and 2004

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

Accounting Standards Not Yet Adopted (continued)

In September of 2005, the AICPA issued Statement of Position 05-1, "Accounting by Insurance Enterprises for Deferred Acquisition Costs in Connection with Modifications or Exchanges of Insurance Contracts" ("SOP 05-1"). SOP 05-1 provides guidance on accounting by insurance companies for DAC on internal replacements other than those specifically described in FASB Statement No. 97, "Accounting and Reporting by Insurance Enterprises for Certain Long-Duration Contracts and for Realized Gains and Losses from the Sale of Investments." SOP 05-1 is effective for internal replacements occurring in fiscal years beginning after December 15, 2006. The adoption of SOP 05-1 did not have an impact the Company’s consolidated financial statements.

2. GOODWILL

Goodwill represents the difference between the purchase price paid and the fair value of the net assets acquired in connection with the Company’s acquisition of Keyport Benefit Life Insurance Company ("KBL"), which was a wholly-owned subsidiary of Keyport Life Insurance Company. KBL was merged into the Company on December 31, 2002. Goodwill is allocated in total to the Wealth Management Segment. In accordance with SFAS No. 142, "Goodwill and Other Intangible Assets," goodwill and indefinite-lived assets are tested for impairment on an annual basis. The Company completed the required impairment tests during the second quarter of 2006 and concluded that these assets were not impaired.

3. SIGNIFICANT TRANSACTIONS WITH AFFILIATES

The Company has agreements with Sun Life U.S. and certain affiliates, under which the Company receives, as requested, certain investment and administrative services on a cost reimbursement basis. Expenses under these agreements amounted to approximately $14.5 million, $16.0 million and $11.5 million for the years ended December 31, 2006, 2005 and 2004, respectively.

The Company had $1.0 million and $17.9 million due to related parties at December 31, 2006 and 2005, respectively, and $5.6 million and $0.6 million due from related parties at December 31, 2006 and 2005, respectively.

During 2006, 2005 and 2004, the Company paid $1.4 million, $1.0 million and $1.0 million, respectively, in commission fees to an affiliate, Sun Life Financial Distributors, Inc.

During 2006, 2005 and 2004, the Company paid $1.5 million, $2.8 million and $2.5 million, respectively, in commission fees to Independent Financial Marketing Group, Inc., an affiliate.

During 2006, 2005 and 2004, the Company paid $1.3 million, $1.5 million and 1.4 million, respectively, in investment advisory fees to Sun Capital Advisers LLC, a registered investment adviser and affiliate.

As more fully described in Note 8, the Company has been involved in several reinsurance transactions with SLOC.

As more fully described in Note 10, the Company participates in a pension plan and other post-retirement benefits plan sponsored by Sun Life U.S.

Management believes intercompany 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.

SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK

(A Wholly-Owned Subsidiary of Sun Life Assurance Company of Canada (U.S.))

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2006, 2005 and 2004

4. INVESTMENTS

Fixed Maturities

The amortized cost and fair value of the Company’s fixed maturities were as follows (in 000’s):

	December 31, 2006
			Gross		Gross
	Amortized		Unrealized		Unrealized
	Cost		Gains		(Losses)		Fair Value
Available-for-sale fixed maturities:
Non-Corporate Securities
Asset backed and mortgage backed securities	$	135,634	$	421	$	(1,392)	$	134,663
Foreign government and agency securities		5,662		174		(20)		5,816
U.S. treasury and agency securities		5,897		88		(4)		5,981
Total Non-Corporate Securities		147,193		683		(1,416)		146,460
Corporate Securities
Basic industry		8,057		152		(59)		8,150
Capital goods		114,508		1,023		(494)		115,037
Communications		142,346		1,619		(1,573)		142,392
Consumer cyclical		119,327		740		(1,447)		118,620
Consumer noncyclical		39,116		291		(308)		39,099
Energy		43,472		472		(248)		43,696
Finance		691,623		4,892		(2,482)		694,033
Technology		7,000		-		(405)		6,595
Transportation		27,481		331		(53)		27,759
Utilities		97,842		2,202		(1,296)		98,748
Other		22,112		344		(2)		22,454
Total Corporate Securities		1,312,884		12,066		(8,367)		1,316,583
Total available-for-sale fixed maturities	$	1,460,077	$	12,749	$	(9,783)	$	1,463,043

SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK

(A Wholly-Owned Subsidiary of Sun Life Assurance Company of Canada (U.S.))

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2006, 2005 and 2004

4. INVESTMENTS (continued)

	December 31, 2005
			Gross		Gross
	Amortized		Unrealized		Unrealized
	Cost		Gains		(Losses)		Fair Value
Available-for-sale fixed maturities:
Non-Corporate Securities
Asset backed and mortgage backed securities	$	261,006	$	1,114	$	(2,015)	$	260,105
Foreign government and agency securities		6,192		296		(3)		6,485
U.S. treasury and agency securities		55,874		24		(572)		55,326
Total Non-Corporate Securities		323,072		1,434		(2,590)		321,916
Corporate Securities
Basic industry		9,627		226		(129)		9,724
Capital goods		85,693		1,317		(494)		86,516
Communications		144,968		2,416		(3,434)		143,950
Consumer cyclical		175,601		1,549		(8,369)		168,781
Consumer noncyclical		40,352		942		(555)		40,739
Energy		60,174		1,756		(260)		61,670
Finance		615,594		4,611		(2,720)		617,485
Technology		9,380		31		(297)		9,114
Transportation		46,021		664		(691)		45,994
Utilities		143,378		3,876		(1,317)		145,937
Other		30,790		452		(204)		31,038
Total Corporate Securities		1,361,578		17,840		(18,470)		1,360,948
Total available-for-sale fixed maturities	$	1,684,650	$	19,274	$	(21,060)	$	1,682,864

SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK

(A Wholly-Owned Subsidiary of Sun Life Assurance Company of Canada (U.S.))

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2006, 2005 and 2004

4. INVESTMENTS (Continued)

The amortized cost and fair value by maturity periods for fixed maturities are shown below (in 000’s). 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, 2006
		Amortized Cost		Fair Value
Maturities of available-for-sale fixed securities:
	Due in one year or less	$	144,737	$	144,408
	Due after one year through five years		572,492		574,370
	Due after five years through ten years		345,032		345,744
	Due after ten years		262,182		263,858
Subtotal			1,324,443		1,328,380
Asset-backed securities			135,634		134,663
Total		$	1,460,077	$	1,463,043

Gross gains of $3.4 million, $4.6 million and $17.5 million, and gross losses of $10.2 million, $3.2 million and $7.5 million were realized on the sale of fixed maturities for the years ended December 31, 2006, 2005 and 2004, respectively.

Fixed maturities with an amortized cost of approximately $0.5 million and $0.4 million at December 31, 2006 and 2005, respectively, were on deposit with governmental authorities as required by law.

As of December 31, 2006, 96.2% 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. In 2006, $1.5 million of the prior years’ impairment losses were recovered through disposition and are included in net realized losses. In 2005, no prior years’ losses were recovered through disposition. In 2004, $0.1 million of the prior years’ impairment losses were recovered through disposition and are included in net realized gains.

The Company discontinued the accrual of income on all of its holdings for issuers in default. The termination of accrual accounting on these holdings reduced previously accrued income by $0.1 million, $0.3 million and $38,000, for the years ended December 31, 2006, 2005 and 2004, respectively. The fair market value of these investments was $4.2 million and $0.2 million at December 31, 2005 and 2004, respectively. As of December 31, 2006, the Company did not have any holdings for issuers that were in default.

SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK

(A Wholly-Owned Subsidiary of Sun Life Assurance Company of Canada (U.S.))

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2006, 2005 and 2004

4. INVESTMENTS (Continued)

The gross unrealized losses and fair value of investments, which have been deemed to be temporarily impaired, aggregated by investment category, number of securities and length of time that securities have been in an unrealized loss position at December 31, 2006 are as follows (dollar amounts in 000’s):

	Less than 12 months			12 months or more			Total
	#	Fair Value	Unrealized Losses	#	Fair Value	Unrealized Losses	#	Fair Value	Unrealized Losses
Non-Corporate Securities
Asset backed and mortgage backed securities	12	$ 11,721	$ (66)	47	$ 66,792	$ (1,326)	59	$ 78,513	$ (1,392)
Foreign government and agency securities	-	-	-	1	985	(20)	1	985	(20)
U.S. treasury and agency securities	1	315	(3)	1	747	(1)	2	1,062	(4)
Total Non-Corporate Securities	13	12,036	(69)	49	68,524	(1,347)	62	80,560	(1,416)
Corporate Securities
Basic industry	-	-	-	2	1,960	(59)	2	1,960	(59)
Capital goods	4	16,008	(53)	4	15,147	(442)	8	31,155	(495)
Communications	6	16,214	(114)	16	32,831	(1,459)	22	49,045	(1,573)
Consumer cyclical	9	22,117	(223)	15	57,674	(1,224)	24	79,791	(1,447)
Consumer noncyclical	2	3,157	(76)	3	4,567	(231)	5	7,724	(307)
Energy	4	6,636	(116)	3	3,186	(132)	7	9,822	(248)
Finance	27	82,283	(529)	32	66,138	(1,953)	59	148,421	(2,482)
Technology	-	-	-	1	6,595	(405)	1	6,595	(405)
Transportation	2	3,674	(24)	1	793	(29)	3	4,467	(53)
Utilities	9	11,438	(196)	10	27,897	(1,100)	19	39,335	(1,296)
Other	1	2,020	(2)	-	-	-	1	2,020	(2)
Total Corporate Securities	64	163,547	(1,333)	87	216,788	(7,034)	151	380,335	(8,367)
Total available-for-sale fixed maturities	77	$ 175,583	$ (1,402)	136	$ 285,312	$ (8,381)	213	$ 460,895	$ (9,783)

SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK

(A Wholly-Owned Subsidiary of Sun Life Assurance Company of Canada (U.S.))

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2006, 2005 and 2004

4. INVESTMENTS (Continued)

The gross unrealized losses and fair value of investments, which have been deemed to be temporarily impaired, aggregated by investment category, number of securities and length of time that securities have been in an unrealized loss position at December 31, 2005 are as follows (dollar amounts in 000’s):

	Less than 12 months			12 months or more			Total
	#	Fair Value	Unrealized Losses	#	Fair Value	Unrealized Losses	#	Fair Value	Unrealized Losses
Non-Corporate Securities
Asset backed and mortgage backed securities	52	$ 98,302	$ (1,367)	13	$ 28,545	$ (648)	65	$ 126,847	$ (2,015)
Foreign government and agency securities	1	1,002	(3)	-	-	-	1	1,002	(3)
U.S. treasury and agency securities	3	8,933	(52)	3	43,380	(520)	6	52,313	(572)
Total Non-Corporate Securities	56	108,237	(1,422)	16	71,925	(1,168)	72	180,162	(2,590)
Corporate Securities
Basic industry	4	3,353	(111)	1	1,032	(17)	5	4,385	(128)
Capital goods	3	11,914	(289)	3	9,281	(205)	6	21,195	(494)
Communications	16	43,415	(917)	11	27,081	(2,517)	27	70,496	(3,434)
Consumer cyclical	30	71,494	(3,685)	10	44,759	(4,684)	40	116,253	(8,369)
Consumer noncyclical	10	18,724	(555)	-	-	-	10	18,724	(555)
Energy	3	5,663	(108)	4	4,626	(152)	7	10,289	(260)
Finance	40	142,166	(1,346)	13	34,197	(1,374)	53	176,363	(2,720)
Technology	-	-	-	1	6,703	(297)	1	6,703	(297)
Transportation	3	5,596	(108)	3	6,052	(584)	6	11,648	(692)
Utilities	17	48,024	(837)	3	9,902	(480)	20	57,926	(1,317)
Other	-	-	-	2	7,033	(204)	2	7,033	(204)
Total Corporate Securities	126	350,349	(7,956)	51	150,666	(10,514)	177	501,015	(18,470)
Total available-for-sale fixed maturities	182	$ 458,586	$ (9,378)	67	$ 222,591	$ (11,682)	249	$ 681,177	$ (21,060)

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 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 issuer financial ratios, including leverage and coverage measures specific to an industry and relative to any investment covenants. Additionally, the Company’s analysis 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 the Company’s ability and intention, if any, to dispose of its position prior to the fair value increasing so as to allow recovery of the Company’s cost. The Company has a Credit Committee that includes members from its investment, finance and actuarial functions. The Credit Committee meets and reviews the results of the Company’s impairment analysis on a quarterly basis.

Mortgage loans

The Company invests in commercial first mortgage loans throughout the United States. Investments are diversified by property type and geographic area.

SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK

(A Wholly-Owned Subsidiary of Sun Life Assurance Company of Canada (U.S.))

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2006, 2005 and 2004

4. INVESTMENTS (Continued)

Mortgage loans

Mortgage loans are collateralized by the related properties and generally are no more than 75% of each property’s value at the time that the original loan is made.

The Company monitors the condition of the mortgage loans in its portfolio. In those cases where mortgages have been restructured, appropriate allowances for losses have been made. In those cases where, in management’s judgment, the mortgage loan’s value has been impaired, appropriate losses are recorded. The Company had no restructured mortgage loans at December 31, 2006 and 2005, respectively.

Mortgage loans comprised the following property types and geographic regions (in 000’s):

	December 31,
Property Type:	2006		2005
Office building	$	52,777	$	51,396
Residential		1,700		1,514
Retail		66,564		56,359
Industrial/warehouse		31,842		29,501
Other		8,645		5,888
Valuation allowance		(236)		(236)
Total	$	161,292	$	144,422

	December 31,
Geographic region:	2006		2005
Arizona	$	5,485	$	6,854
California		10,481		11,204
Colorado		5,773		5,914
Delaware		11,279		11,612
Florida		22,592		20,112
Georgia		7,206		5,919
Illinois		1,987		2,052
Indiana		6,114		6,434
Kansas		2,729		-
Maryland		10,345		10,680
Minnesota		550		4,876
Missouri		7,297		2,268
Nevada		1,184		1,212
New Jersey		9,305		2,636
New York		15,256		7,296
North Carolina		3,261		3,486
Ohio		9,806		11,486
Pennsylvania		7,360		14,314
Texas		14,535		8,206
Utah		2,492		2,678
Virginia		3,730		3,898
Other		2,761		1,521
Valuation allowance		(236)		(236)
Total	$	161,292	$	144,422

SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK

(A Wholly-Owned Subsidiary of Sun Life Assurance Company of Canada (U.S.))

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2006, 2005 and 2004

4. INVESTMENTS (Continued)

At December 31, 2006, scheduled mortgage loan maturities were as follows (in 000’s):

2007	$	-
2008		4,831
2009		263
2010		1,441
2011		25,943
Thereafter		128,814
Total	$	161,292

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 funding commitments of mortgage loans on real estate and other loans into the future. The outstanding funding commitments for these mortgages amounted to $7.8 million and $2.5 million at December 31, 2006 and 2005, respectively.

5. NET REALIZED INVESTMENT GAINS AND LOSSES

Net realized investment (losses) gains consisted of the following for the years ended December 31 (in 000’s):

	2006		2005		2004
Fixed maturities	$	(6,834)	$	1,462	$	9,916
Mortgage loans		-		-		(155)
Short-term investments		-		(2)		143
Other than temporary declines		(771)		(5,546)		(689)
Sales of previously impaired assets		1,524		-		86
Total	$	(6,081)	$	(4,086)	$	9,301

6. NET INVESTMENT INCOME

Net investment income consisted of the following for the years ended December 31 (in 000’s):

	2006		2005		2004
Fixed maturities	$	88,091	$	87,428	$	86,999
Mortgage loans		10,017		8,500		7,982
Other (including fair value changes of embedded derivatives)		591		(211)		295
Gross investment income		98,699		95,717		95,276
Less: Investment expenses		1,334		1,453		1,406
Net investment income	$	97,365	$	94,264	$	93,870

SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK

(A Wholly-Owned Subsidiary of Sun Life Assurance Company of Canada (U.S.))

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2006, 2005 and 2004

7. FAIR VALUE OF FINANCIAL INSTRUMENTS

The following table presents the carrying amounts and estimated fair values of the Company’s financial instruments at December 31 (in 000’s):

		2006		2005
		Carrying	Estimated	Carrying	Estimated
		Amount	Fair Value	Amount	Fair Value
Financial assets:
	Cash and cash equivalents	$ 54,231	$ 54,231	$ 54,540	$ 54,540
	Fixed maturities	1,463,043	1,463,043	1,682,864	1,682,864
	Equity securities	17	17	-	-
	Mortgages	161,292	162,268	144,422	149,065
	Policy loans	139	139	188	188
	Separate account assets	796,827	796,827	681,218	681,218
Financial liabilities:
	Contractholder deposit funds	1,437,396	1,397,225	1,642,039	1,584,941
	Separate account liabilities	796,827	796,827	681,218	681,218

The following methods were used by the Company in determining the estimated fair value of its financial instruments:

Cash and cash equivalents: The fair values of cash and cash equivalents are estimated to be cost plus accrued interest.

Fixed maturities and equity securities: 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. Equity securities are included within other invested assets within the consolidated balance sheet.

Mortgage: 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.

Policy loans: Policy loans are stated at unpaid principal balances, which approximate fair value.

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.

Contractholder deposit funds: 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. 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 fifty-year projection. Policyholder assumptions are based on experience studies and industry standards.

SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK

(A Wholly-Owned Subsidiary of Sun Life Assurance Company of Canada (U.S.))

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2006, 2005 and 2004

8. REINSURANCE

The Company had an agreement with SLOC whereby SLOC reinsured the mortality risks of the Company’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 the mortality risks in excess of $50,000 per claim for group life contracts ceded by the Company. The treaty was commuted effective December 31, 2004.

The Company had an agreement with SLOC whereby SLOC reinsured morbidity risks of a block of the Company’s group long-term disability contracts. The treaty was commuted effective December 31, 2004.

The Company 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 has an agreement with an unrelated company whereby the unrelated company reinsures the morbidity risks of the Company’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 above $4,000 per claim per month for long-term disability contracts ceded by the Company. The retention limit was raised to $9,000 per claim per month for claims incurred on or after January 1, 2006.

The Company has an agreement with an unrelated company whereby the unrelated company reinsures the morbidity risks of the Company’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 $1,000,000 per claim for medical stop loss contracts ceded by the Company. The retention limit was raised to $1,500,000 for policies sold or renewed on or after January 1, 2006.

The Company has an agreement with an unrelated company whereby the unrelated company reinsures 100% of the risks on a quota share basis for certain specific group life and disability policies.

The effects of reinsurance were as follows (in 000’s):

		For the Years Ended December 31,
		2006		2005		2004
Premiums and annuity considerations
	Direct	$	40,773	$	34,863	$	37,251
	Ceded - Non-affiliated		2,451		2,616		2,245
Net premiums and annuity considerations		$	38,322	$	32,247	$	35,006
Policyowner benefits
	Direct	$	31,579	$	27,388	$	29,412
	Ceded - Affiliated		-		-		1,493
	Ceded - Non-affiliated		2,322		1,725		1,297
Net policyowner benefits		$	29,257	$	25,663	$	26,622

The Company is contingently liable for the portion of the policies reinsured under each of its existing reinsurance agreements in the event the reinsurance companies are unable to pay their portion of any reinsured claim. Management believes that any liability from this contingency is unlikely. However, to limit the possibility of such losses, the Company regularly evaluates the financial condition of its reinsurers and monitors concentration of credit risk.

SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK

(A Wholly-Owned Subsidiary of Sun Life Assurance Company of Canada (U.S.))

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2006, 2005 and 2004

9. SECURITIES LENDING

On May 1, 2006, the Company established a securities lending program which requires 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 $65.8 million at December 31, 2006. Fee income earned on securities lending transactions was $0.1 million for the year ended December 31, 2006.

10. RETIREMENT PLANS

Pension Plan

The Company participates in a non-contributory defined benefit pension plan ("Pension Plan") that is sponsored by Sun Life U.S., which is directly liable for the related obligations. Benefits under the plan are based on years of service and employees’ average compensation. The Company is allocated a portion of the Pension Plan’s expenses, or allocated a credit if expected return on plan assets exceeds the Pension Plan’s expenses. The allocated (credit) expenses were $(38,000), $211,000 and $25,000 for the years ended December 31, 2006, 2005 and 2004, respectively. Included in the 2005 allocation is a curtailment charge of $205,000 related to changes in the Pension Plan.

401(k) Savings Plan

The Company participates in a savings plan that qualifies under Section 401(k) of the Internal Revenue Code ("the 401(k) Plan") sponsored by Sun Life U.S. for which substantially all employees of at least age 21 are eligible to participate at date of hire. Employer contributions are matched up to a specified amount of the employee’s contributions to the 401(k) Plan. The Company’s portion of this employer contribution was $45,000, $16,000 and $19,000 for the years ended December 31, 2006, 2005 and 2004, respectively.

Other Post-Retirement Benefit Plans

The Company participates in a plan sponsored by Sun Life U.S. that provides certain health, dental and life insurance benefits ("post-retirement benefits") for retired employees and dependents. Substantially all employees of the participating companies may become eligible for these benefits if they reach normal retirement age, or retire early upon satisfying an alternate age-plus-service condition. Life insurance benefits are generally set at a fixed amount. The Company is allocated a portion of these post-retirement benefit plan expenses. The allocated expenses were $13,000, $8,000 and $13,000 for the years ended December 31, 2006, 2005 and 2004, respectively.

11. FEDERAL INCOME TAXES

In June 2006, the FASB issued FIN 48. FIN 48 establishes a comprehensive reporting model which addresses how a business entity should recognize, measure, present and disclose uncertain tax positions that the entity has taken or plans to take on a tax return. FIN 48 is effective for fiscal years beginning after December 15, 2006. The Company is currently assessing the impact, if any, of FIN 48 on its consolidated financial statements.

SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK

(A Wholly-Owned Subsidiary of Sun Life Assurance Company of Canada (U.S.))

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2006, 2005 and 2004

11. FEDERAL INCOME TAXES (continued)

The Company files a stand-alone federal income tax return. A summary of the components of federal income tax expense (benefit) in the statements of income for the years ended December 31, is as follows (in 000’s):

	2006		2005		2004
Federal income tax expense (benefit):
Current	$	(2,783)	$	3,225	$	124
Deferred		10,193		(947)		7,105
Total	$	7,410	$	2,278	$	7,229

Federal income taxes attributable to operations are different from the amounts determined by multiplying income before federal income taxes by the statutory federal income tax rate of 35%. The Company’s effective rate differed from the statutory federal income tax rate as follows (in 000’s):

	2006		2005		2004
Federal income tax expense at statutory rate	$	8,275	$	2,702	$	7,640
Prior year items, including settlements		(340)		(424)		(411)
Separate account dividend received deduction		(525)		-		-
Federal income tax expense	$	7,410	$	2,278	$	7,229

Net deferred income tax (liabilities) assets represent 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 (in 000’s):

	2006		2005
Deferred tax assets:
Actuarial liabilities	$	4,555	$	24,480
Net operating loss		7,954		-
Investments, net		762		1,138
Total deferred tax assets		13,271		25,618
Deferred tax liabilities:
Deferred policy acquisition costs		(18,836)		(18,669)
Other		(1,388)		(2,676)
Total deferred tax liabilities		(20,224)		(21,345)
Net deferred tax (liabilities) assets	$	(6,953)	$	4,273

The Company had no net income tax payments for the year ended December 31, 2006. The Company received income tax refunds of approximately $0.3 million and $0.5 million for the years ended December 31, 2005 and 2004, respectively. At December 31, 2006, the Company had $8.0 million of tax benefit on operating loss carryforwards that begin to expire in 2017.

SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK

(A Wholly-Owned Subsidiary of Sun Life Assurance Company of Canada (U.S.))

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2006, 2005 and 2004

11. FEDERAL INCOME TAXES (continued)

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. In August of 2006, the Company was issued an Revenue Agent’s Report for the tax years 2001 through 2002. The IRS is currently conducting a federal income tax audit of the Company for the tax years 2003 and 2004. 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 consolidated financial statements. However, the amounts of these tax liabilities are estimates and could be revised in the future.

Beginning in 2007, the Company is eligible to participate in a consolidated federal income tax return with Sun Life U.S. and other affiliates.

12. LIABILITY FOR UNPAID CLAIMS AND CLAIMS ADJUSTMENT EXPENSES

Activity in the liability for unpaid claims and claims adjustment expenses, included within future contract and policy benefits, related to the Company’s stop loss, group life and group disability insurance products is summarized below (in 000’s):

		2006		2005
Balance at January 1		$	33,141	$	32,571
Less reinsurance recoverable			(5,886)		(6,381)
Net balance at January 1			27,255		26,190
Incurred related to:
	Current year		26,644		23,881
	Prior years		(1,294)		(3,143)
Total incurred			25,350		20,738
Paid losses related to:
	Current year		(14,881)		(13,860)
	Prior years		(6,941)		(5,813)
Total paid			(21,822)		(19,673)
Balance at December 31			36,689		33,141
Less reinsurance recoverable			(5,906)		(5,886)
Net balance at December 31		$	30,783	$	27,255

The Company regularly updates its estimates of liabilities for unpaid claims and claims adjustment expenses as new information becomes available and events occur which may impact the resolution of unsettled claims. Changes in prior estimates are recorded in results of operations in the year such changes are made.

As a result of changes in estimates of insured events in prior years, the liability for unpaid claims and claims adjustment expense decreased by $1,294 and $3,143 in 2006 and 2005, respectively. The favorable development experienced in both years was driven mainly by better than expected loss experience in group life.

SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK

(A Wholly-Owned Subsidiary of Sun Life Assurance Company of Canada (U.S.))

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2006, 2005 and 2004

13. LIABILITIES FOR CONTRACT GUARANTEES

On January 1, 2004, the Company adopted the AICPA’s SOP 03-1. The major provisions of SOP 03-1 that affect the Company require:

o Establishment of reserves primarily related to death benefit and income benefit guarantees provided under variable annuity contracts.

o Deferral of sales inducements that meet certain criteria, and amortization using the same method used for DAC.

o Reporting and measuring the Company’s interest in its separate accounts as investments.

Upon adoption of SOP 03-1 in 2004, the cumulative effect, reported after tax and net of related effects on DAC, decreased net income and stockholder’s equity by $0.9 million. The reduction in net income was comprised of an increase in benefit reserves (primarily for variable annuity contracts) of $0.9 million, pretax, and a decrease in DAC of $0.5 million, pretax.

The Company offers various guarantees to certain policyholders including a return of no less than (a) total deposits made on the contract adjusted for any customer withdrawals, (b) total deposits made on the contract adjusted for 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, 2006 (in 000’s):

Benefit Type	Account balance		Net Amount at Risk (a)		Average Attained Age
Minimum Death	$	895,458	$	31,752	63.8
Minimum Accumulation or Withdrawal	$	232,257	$	6	60.2

(a) Net amount at risk represents the difference between the guaranteed benefit and account balance.

The table below represents information regarding the Company’s variable annuity contracts with guarantees at December 31, 2005 (in 000’s):

Benefit Type	Account balance		Net Amount at Risk (a)		Average Attained Age
Minimum Death	$	824,936	$	52,188	63.6
Minimum Accumulation or Withdrawal	$	111,592	$	22	58.7

(a) Net amount at risk represents the difference between the guaranteed benefit and account balance.

SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK

(A Wholly-Owned Subsidiary of Sun Life Assurance Company of Canada (U.S.))

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2006, 2005 and 2004

13. LIABILITIES FOR CONTRACT GUARANTEES (continued)

The following roll-forward summarizes the reserve for the GMDB for the years ended December 31, (in 000’s):

	2006		2005
Balance at January 1	$	681	$	533
Benefit Ratio Change / Assumption Changes		84		520
Incurred guaranteed benefits		840		499
Paid guaranteed benefits		(972)		(910)
Interest		48		39
Balance at December 31	$	681	$	681

Because the Company has not issued products that contain a guaranteed minimum income benefit ("GMIB"), there is no requirement for a GMIB reserve as of December 31, 2006 or December 31, 2005.

The liability for death 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 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 fifty-year projection. Policyholder assumptions are based on experience studies. The GMAB’s or GMWB’s constituted an asset (a liability) in the amount of $0.4 million and $(0.1) million at December 31, 2006 and December 31, 2005, respectively.

Sales Inducements

The Company currently offers enhanced or bonus crediting rates to policyholders on certain of its annuity products. 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. Previously some bonuses were deferred and amortized while others were expensed.

SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK

(A Wholly-Owned Subsidiary of Sun Life Assurance Company of Canada (U.S.))

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2006, 2005 and 2004

14. DEFERRED POLICY ACQUISITION COSTS

The changes in DAC for the years ended December 31, were as follow (in 000’s):

	2006		2005
Balance at January 1	$	80,640	$	66,690
Acquisition costs deferred		24,163		10,072
Amortized to expense during year		(18,422)		(9,491)
Adjustment related to change in unrealized
investment (gains) losses during year		(1,360)		13,369
Balance at December 31	$	85,021	$	80,640

15. SEGMENT INFORMATION

The Company conducts business principally in three operating segments and maintains a Corporate Segment to provide for the capital needs of the various operating segments and to engage in other financing-related activities. Each segment is defined consistent with the way results are evaluated by the chief operating decision-maker.

Net investment income is allocated based on segmented assets, including allocated capital, by line of business. Allocation of operating expenses 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 materially depend on one or a few customers, brokers or agents for a significant portion of its operations.

Effective January 1, 2006, the Company adopted a new capital allocation methodology for measurement of segment operating results to be more closely aligned with rating agency standards. The changes impact the amount of capital and income on capital that is allocated to Individual Protection, Group Protection and Wealth Management from the Corporate Segment.

Wealth Management

The Wealth Management Segment markets, sells and administers fixed and variable annuity products.

Group Protection

The Group Protection Segment markets, sells and administers group life, stop loss, long-term disability and short-term disability insurance products. These products are sold to employers that provide group benefits for their employees.

Individual Protection

The Individual Protection Segment markets, sells and administers universal life insurance, variable universal life insurance and conversions from the Company’s group life product.

Corporate

The Corporate Segment includes the unallocated capital of the Company and items not otherwise attributable to the other segments.

SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK

(A Wholly-Owned Subsidiary of Sun Life Assurance Company of Canada (U.S.))

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2006, 2005 and 2004

15. SEGMENT INFORMATION (continued)

The following amounts pertained to the various business segments (in 000’s):

Year ended December 31, 2006
	Wealth		Group		Individual
	Management		Protection		Protection		Corporate		Totals
Total Revenues	$	97,296	$	39,833	$	8,226	$	5,334	$	150,689
Total Expenditures		86,956		35,356		7,662		(2,928)		127,046
Pretax Income (Loss)		10,340		4,477		564		8,262		23,643
Net Income (Loss)	$	7,803	$	2,910	$	366	$	5,154	$	16,233
Total Assets	$	2,357,623	$	80,969	$	123,752	$	139,340	$	2,701,684
Year ended December 31, 2005
	Wealth		Group		Individual
	Management		Protection		Protection		Corporate		Totals
Total Revenues	$	101,854	$	32,604	$	1,366	$	179	$	136,003
Total Expenditures		94,084		32,333		1,899		(32)		128,284
Pretax Income (Loss)		7,770		271		(533)		211		7,719
Net Income (Loss)	$	5,475	$	176	$	(347)	$	137	$	5,441
Total Assets	$	2,649,575	$	55,319	$	10,575	$	1,069	$	2,716,538
Year ended December 31, 2004
	Wealth		Group		Individual
	Management		Protection		Protection		Corporate		Totals
Total Revenues	$	116,274	$	34,908	$	836	$	(279)	$	151,739
Total Expenditures		96,973		31,605		1,386		(54)		129,910
Pretax Income (Loss)		19,301		3,303		(550)		(225)		21,829
Net Income (Loss)	$	11,766	$	2,147	$	(357)	$	88	$	13,644
Total Assets	$	2,735,845	$	53,131	$	2,043	$	21,283	$	2,812,302

SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK

(A Wholly-Owned Subsidiary of Sun Life Assurance Company of Canada (U.S.))

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2006, 2005 and 2004

15. SEGMENT INFORMATION (continued)

As described earlier, effective January 1, 2006, the Company adopted a new capital allocation methodology for measurement of segment operating results to be more closely aligned with rating agency standards. The following provides a summary of the amounts allocated from the Corporate Segment to the other segments related to the allocation of income on capital for the years presented (in 000’s):

Year ended December 31, 2006
	Wealth		Group		Individual
	Management		Protection		Protection		Corporate		Totals
Pretax income (loss)	$	4,401	$	775	$	814	$	(5,990)	$	-
Year ended December 31, 2005
Pretax income (loss)	$	12,379	$	362	$	-	$	(12,741)	$	-
Year ended December 31, 2004
Pretax income (loss)	$	9,630	$	277	$		$	(9,907)	$	-

16. REGULATORY FINANCIAL INFORMATION

The Company is required to file quarterly and annual statements with the New York State Insurance Department prepared on a statutory accounting basis prescribed or permitted by the State of New York. Statutory net income and capital stock and surplus differ from net income and stockholder’s equity reported in accordance with GAAP for stock life insurance companies primarily because, under statutory basis accounting, policy acquisition costs are expensed when incurred, reserves are based on different assumptions, investments are valued differently, and income tax expense reflects only taxes paid or currently payable.

The Company’s statutory capital and surplus, and net (loss) income were as follows (in 000’s):

	Unaudited for the Years ended December 31,
	2006	2005	2004
Statutory capital and surplus	$ 132,693	$ 180,009	$ 192,131
Statutory net (loss) income	(51,183)	(11,841)	14,807

17. DIVIDEND RESTRICTIONS

The Company’s ability to pay dividends is subject to certain statutory restrictions. The State of New York has enacted laws governing the payment of dividends to stockholders by domestic insurers. 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 dividends 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 the Company during 2006, 2005 or 2004.

SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK

(A Wholly-Owned Subsidiary of Sun Life Assurance Company of Canada (U.S.))

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended December 31, 2006, 2005 and 2004

18. COMPONENTS OF ACCUMULATED OTHER COMPREHENSIVE INCOME

The components of accumulated other comprehensive income (loss) as of December 31, were as follows (in 000’s):

	2006	2005	2004
Unrealized gains (losses) on available-for-sale securities	$ 2,976	$ (1,785)	$ 35,255
Policyholder amounts	(989)	823	(12,546)
Tax effect and other	(555)	474	(8,226)
Accumulated other comprehensive income (loss)	$ 1,432	$ (488)	$ 14,483

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 the New York state guaranty fund.

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 flow of the Company.

Indemnities

In the normal course of business, the Company has entered into agreements that include indemnities in favor of third parties, such as contracts 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. Due to the nature of these indemnification agreements, it is not possible to estimate the Company’s potential liability.

Lease Commitments

The Company leases various facilities and equipment under non-cancelable operating leases with terms of up to 10 years. As of December 31, 2006, minimum future lease payments under such leases were as follows (in 000’s):

2007	$ 234
2008	239
2009	243
2010	40
Total	$ 756

Total rental expense for the years ended December 31, 2006, 2005 and 2004 was $0.8 million, $1.0 million and $1.0 million, respectively.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholder of

Sun Life Insurance and Annuity Company of New York

Wellesley Hills, Massachusetts

We have audited the accompanying consolidated balance sheets of Sun Life Insurance and Annuity Company of New York and subsidiary (the "Company") as of December 31, 2006 and 2005, 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, 2006.  Our audits also included the financial statement schedules listed in the Index at Item 15. These financial statements and 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 Insurance and Annuity Company of New Yorkand subsidiary as of December 31, 2006 and 2005, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2006, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, such 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."

DELOITTE & TOUCHE LLP

Boston, Massachusetts

March 27, 2007

Regatta NY, Regatta Gold NY, Regatta Extra NY, Sun Life Financial Masters Flex NY, Sun Life Financial Masters Extra NY, Sun Life Financial Masters Access NY, Sun Life Financial Masters Choice NY, Sun Life Financial Masters Reward NY, and Sun Life Financial Masters Select NY Sub-Accounts Included in Sun Life (N.Y.) Variable Account C

Statements of Condition - December 31, 2006

Assets:
Investment in :	Shares	Cost		Value
Columbia Funds Variable Insurance Trust (VIT)
Columbia Marsico 21st Century Portfolio Sub-Account (NMT)	2,864	$	34,077	$	37,121
Columbia Marsico Growth Portfolio Sub-Account (NNG)	1,798		32,916		34,120
Columbia Marsico International Opportunities Portfolio Sub-Account (NMI)	1,731		34,035		37,987
Fidelity Variable Insurance Products Funds
VIP Freedom 2010 Portfolio Sub-Account (F10)	29,873		346,607		345,329
VIP Freedom 2015 Portfolio Sub-Account (F15)	112,870		1,280,146		1,344,283
VIP Freedom 2020 Portfolio Sub-Account (F20)	42,150		478,994		509,174
Franklin Templeton Variable Insurance Products (VIP) Trust
Mutual Shares Securities Fund Sub-Account (FMS)	94,275		1,756,584		1,929,810
Templeton Developing Markets Securities Fund Sub-Account (TDM)	24,523		298,101		338,168
Templeton Growth Securities Fund Class 2 Sub-Account (FTG)	60,211		871,113		959,159
Templeton Foreign Securities Fund Sub-Account (FTI)	1,805,713		28,276,423		33,802,942
Franklin Value Securities Fund Sub-Account (FVS)	82,905		1,443,667		1,557,788
Lord Abbett Series Fund, Inc.
All Value Portfolio Sub-Account (LAV)	127,966		2,055,514		2,108,884
Growth & Income Portfolio Sub-Account (LA1)	791,672		21,692,118		23,227,656
Growth Opportunities Portfolio Sub-Account (LA9)	309,439		4,283,533		4,539,464
Mid Cap Value Portfolio Sub-Account (LA2)	239,914		5,132,654		5,225,336
MFS/Sun Life Series Trust
Bond S Class Sub-Account (MF7)	48,655		570,763		540,557
Bond Series Sub-Account (BDS)	181,854		2,117,524		2,034,948
Capital Appreciation S Class Sub-Account (MFD)	9,969		176,075		202,570
Capital Appreciation Series Sub-Account (CAS)	730,802		13,849,514		14,981,445
Capital Opportunities S Class Sub-Account (CO1)	6,404		84,834		97,083
Capital Opportunities Series Sub-Account (COS)	144,971		1,830,806		2,207,901
Emerging Growth S Class Sub-Account (MFF)	44,142		700,423		802,950
Emerging Growth Series Sub-Account (EGS)	416,951		7,161,968		7,692,738
Emerging Markets Equity S Class Sub-Account (EM1)	25,880		555,212		629,654
Emerging Markets Equity Series Sub-Account (EME)	64,469		1,300,994		1,580,790
Global Governments S Class Sub-Account (GG1)	2,777		28,669		29,430
Global Governments Series Sub-Account (GGS)	99,666		1,117,666		1,066,429
Global Growth S Class Sub-Account (GG2)	6,111		72,508		95,514
Global Growth Series Sub-Account (GGR)	390,676		4,227,843		6,149,241
Global Total Return S Class Sub-Account (GT2)	19,106		289,299		343,718
Global Total Return Series Sub-Account (GTR)	258,847		3,909,582		4,687,724
Government Securities S Class Sub-Account (MFK)	1,255,338		15,920,340		15,792,156
Government Securities Series Sub-Account (GSS)	445,481		5,880,007		5,635,340
High Yield S Class Sub-Account (MFC)	637,376		4,306,589		4,385,147
High Yield Series Sub-Account (HYS)	781,806		5,231,363		5,417,916
International Growth S Class Sub-Account (IG1)	8,152		114,829		145,515
International Growth Series Sub-Account (IGS)	120,315		1,453,073		2,157,251
International Investors Trust S Class Sub-Account (MI1)	13,570		218,362		270,322
International Investors Trust Series Sub-Account (MII)	210,467		2,877,757		4,213,554
Massachusetts Investors Growth Stock S Class Sub-Account (M1B)	83,525		738,775		871,164
Massachusetts Investors Growth Stock Series Sub-Account (MIS)	381,627		3,274,225		4,014,716
Massachusetts Investors Trust S Class Sub-Account (MFL)	514,187		15,516,101		17,302,391
Massachusetts Investors Trust Series Sub-Account (MIT)	711,243		20,619,023		24,104,011
Mid Cap Growth S Class Sub-Account (MC1)	67,901		355,766		410,801
Mid Cap Value S Class Sub-Account (MCV)	50,871		552,634		581,456
Money Market S Class Sub-Account (MM1)	9,594,701		9,594,701		9,594,701

See notes to Financial Statements.

Regatta NY, Regatta Gold NY, Regatta Extra NY, Sun Life Financial Masters Flex NY, Sun Life Financial Masters Extra NY, Sun Life Financial Masters Access NY, Sun Life Financial Masters Choice NY, Sun Life Financial Masters Reward NY, and Sun Life Financial Masters Select NY Sub-Accounts Included in Sun Life (N.Y.) Variable Account C

Statements of Condition - December 31, 2006 - continued

MFS/Sun Life Series Trust - continued	Shares	Cost		Value
Money Market Series Sub-Account (MMS)	4,693,672	$	4,693,672	$	4,693,672
New Discovery S Class Sub-Account (M1A)	525,814		7,434,621		8,423,548
New Discovery Series Sub-Account (NWD)	123,762		1,503,706		2,009,898
Research S Class Sub-Account (RE1)	8,541		139,802		158,872
Research Series Sub-Account (RES)	595,596		10,024,586		11,155,519
Research Growth and Income S Class Sub-Account (RG1)	1,969		27,719		33,570
Research Growth and Income Series Sub-Account (RGS)	119,625		1,494,034		2,049,172
Research International S Class Sub-Account (RI1)	373,243		6,230,485		7,379,017
Research International Series Sub-Account (RIS)	85,717		1,192,494		1,709,195
Strategic Growth S Class Sub-Account (SG1)	114,722		826,942		938,430
Strategic Growth Series Sub-Account (SGS)	36,402		265,209		300,682
Strategic Income S Class Sub-Account (SI1)	19,543		202,429		205,987
Strategic Income Series Sub-Account (SIS)	162,148		1,749,689		1,720,388
Strategic Value S Class Sub-Account (SVS)	9,785		97,233		103,723
Total Return S Class Sub-Account (MFJ)	3,591,057		67,057,203		71,318,399
Total Return Series Sub-Account (TRS)	1,664,763		28,953,747		33,328,564
Utilities S Class Sub-Account (MFE)	76,736		1,442,586		1,771,838
Utilities Series Sub-Account (UTS)	449,089		5,949,417		10,441,329
Value S Class Sub-Account (MV1)	105,659		1,539,920		1,964,208
Value Series Sub-Account (MVS)	354,508		4,685,980		6,629,301
Oppenheimer Variable Account (VA) Funds
Capital Appreciation Fund Sub-Account (OCA)	47,288		1,697,552		1,943,044
Global Securities Fund Sub-Account (OGG)	64,026		2,105,236		2,336,311
Main Street Fund Sub-Account (OMG)	1,545,974		33,508,424		38,000,053
Main Street Small Cap Fund Sub-Account (OMS)	41,735		708,942		792,129
PIMCO Variable Insurance Trust (VIT)
Emerging Markets Bond Portfolio Sub-Account (PMB)	37,685		512,125		526,080
Low Duration Portfolio Sub-Account (PLD)	3,691,796		37,384,397		37,139,469
Real Return Portfolio Sub-Account (PRR)	197,252		2,487,734		2,353,218
Total Return Portfolio Sub-Account (PTR)	342,292		3,523,888		3,463,992
VIT All Asset Portfolio Sub-Account (PRA)	7,595		89,787		88,639
VIT Commodity Real Return Strategy Portfolio Sub-Account (PCR)	31,026		374,118		350,898
Sun Capital Advisers Trust (SCAT)
All Cap S Class Sub-Account (SSA)	9,412		107,098		119,061
FI Large Cap Growth Fund Sub-Account (LGF)	1,933		18,628		19,289
Investment Grade Bond S Class Sub-Account (IGB)	66,693		645,531		646,258
Real Estate Fund S Class Sub-Account (SRE)	282,133		6,252,207		7,400,362
Real Estate Fund Sub-Account (SC3)	23,888		404,493		587,636
Sun Capital Money Market S Class Sub-Account (CMM)	44,249		44,249		44,249
Wanger Advisors Trust
Wanger Select Sub-Account (WTF)	1,045		23,485		27,330
		$	428,063,075	$	476,209,684
Liability:
Payable to Sponsor					(619,993	)
Net Assets				$	475,589,691

See notes to Financial Statements.

Regatta NY, Regatta Gold NY, Regatta Extra NY, Sun Life Financial Masters Flex NY, Sun Life Financial Masters Extra NY, Sun Life Financial Masters Access NY, Sun Life Financial Masters Choice NY, Sun Life Financial Masters Reward NY, and Sun Life Financial Masters Select NY Sub-Accounts Included in Sun Life (N.Y.) Variable Account C

Statements of Condition - December 31, 2006 - continued

	Applicable to Owners of			Reserve for
Net Assets Applicable to Contract Participants:	Deferred Variable Annuity Contracts			Variable
	Units		Value	Annuities		Total
Consolidated Regatta Contracts:
Columbia Funds Variable Insurance Trust (VIT)
NMT	2,805	$	37,121	$	-	$	37,121
NNG	2,995		34,120		-		34,120
NMI	2,635		37,987		-		37,987
Fidelity Variable Insurance Products Funds
F10	31,184		345,329		-		345,329
F15	118,763		1,344,283		-		1,344,283
F20	44,515		509,174		-		509,174
Franklin Templeton Variable Insurance Products Trust
FMS	118,047		1,929,810		-		1,929,810
TDM	23,980		338,168		-		338,168
FTG	48,332		959,159		-		959,159
FTI	1,879,769		33,802,942		-		33,802,942
FVS	83,668		1,557,788		-		1,557,788
Lord Abbett Series Fund, Inc.
LAV	150,701		2,108,884		-		2,108,884
LA1	1,532,748		23,227,656		-		23,227,656
LA9	373,528		4,539,464		-		4,539,464
LA2	310,865		5,225,336		-		5,225,336
MFS/Sun Life Series Trust:
MF7	46,224		540,557		-		540,557
BDS	140,433		2,033,786		-		2,033,786
MFD	18,751		202,570		-		202,570
CAS	909,349		14,870,462		36,051		14,906,513
CO1	6,910		97,083		-		97,083
COS	147,248		2,207,901		-		2,207,901
MFF	60,203		802,950		-		802,950
EGS	473,820		7,633,703		52,037		7,685,740
EM1	38,560		629,654		-		629,654
EME	71,767		1,528,199		52,770		1,580,969
GG1	2,138		29,430		-		29,430
GGS	64,809		1,065,979		-		1,065,979
GG2	5,621		95,514		-		95,514
GGR	249,630		6,047,440		94,729		6,142,169
GT2	20,819		343,718		-		343,718
GTR	199,822		4,557,719		123,532		4,681,251
MFK	1,517,021		15,792,156		-		15,792,156
GSS	348,231		5,561,671		65,949		5,627,620
MFC	339,595		4,385,147		-		4,385,147
HYS	319,944		5,399,290		16,089		5,415,379
IG1	7,161		145,515		-		145,515
IGS	111,077		2,065,275		93,208		2,158,483
MI1	11,832		270,322		-		270,322
MII	153,740		4,144,380		65,192		4,209,572
M1B	70,637		871,164		-		871,164
MIS	449,020		3,947,108		-		4,003,180
MFL	1,209,614		17,302,391		-		17,302,391
MIT	1,155,740		23,595,148		317,889		23,913,037
MC1	30,485		410,801		-		410,801
MCV	34,580		581,456		-		581,456

See notes to Financial Statements.

Regatta NY, Regatta Gold NY, Regatta Extra NY, Sun Life Financial Masters Flex NY, Sun Life Financial Masters Extra NY, Sun Life Financial Masters Access NY, Sun Life Financial Masters Choice NY, Sun Life Financial Masters Reward NY, and Sun Life Financial Masters Select NY Sub-Accounts Included in Sun Life (N.Y.) Variable Account C

Statements of Condition - December 31, 2006 - continued

	Applicable to Owners of			Reserve for
	Deferred Variable Annuity Contracts			Variable
	Units		Value	Annuities			Total
MFS/Sun Life Series Trust - continued
MM1	947,627	$	9,594,701	$	-	$		9,594,701
MMS	364,429		4,612,682		-			4,647,442
M1A	598,957		8,423,548		-			8,423,548
NWD	123,585		1,968,793		37,760			2,006,553
RE1	10,878		158,872		-			158,872
RES	634,293		11,138,684		17,757			11,156,441
RG1	2,530		33,570		-			33,570
RGS	126,961		2,035,947		14,380			2,050,327
RI1	357,917		7,379,017		-			7,379,017
RIS	87,103		1,709,195		-			1,709,195
SG1	72,958		938,430		-			938,430
SGS	40,477		245,489		-			300,899
SI1	16,089		205,987		-			205,987
SIS	123,374		1,720,388		-			1,720,388
SVS	7,004		103,723		-			103,723
MFJ	5,424,953		71,318,399		-			71,318,399
TRS	1,393,409		32,750,913		-			33,083,819
MFE	76,249		1,771,838		-			1,771,838
UTS	287,598		10,324,359		104,196			10,428,555
MV1	122,386		1,964,208		-			1,964,208
MVS	380,215		6,626,533		-			6,626,533
Oppenheimer Variable Account (VA) Funds
OCA	143,656		1,943,044		-			1,943,044
OGG	147,390		2,336,311		-			2,336,311
OMG	2,671,731		38,000,053		-			38,000,053
OMS	45,827		792,129		-			792,129
PIMCO Variable Insurance Trust (VIT)
PMB	27,761		526,080		-			526,080
PLD	3,653,967		37,139,469		-			37,139,469
PRR	214,328		2,353,218		-			2,353,218
PTR	318,132		3,463,992		-			3,463,992
PRA	8,418		88,639		-			88,639
PCR	35,770		350,898		-			350,898
Sun Capital Advisers Trust (SCAT)
SSA	9,318		119,061		-			119,061
LGF	1,957		19,289		-			19,289
IGB	60,421		646,258		-			646,258
SRE	410,253		7,400,362		-			7,400,362
SC3	22,799		587,636		-			587,636
CMM	4,289		44,249		-			44,249
Wanger Advisors Trust
WTF	2,020		27,330		-			27,330
Net Assets		$	474,019,004	$	1,570,687	$		475,589,691

See notes to Financial Statements.

Regatta NY, Regatta Gold NY, Regatta Extra NY, Sun Life Financial Masters Flex NY, Sun Life Financial Masters Extra NY, Sun Life Financial Masters Access NY, Sun Life Financial Masters Choice NY, Sun Life Financial Masters Reward NY, and Sun Life Financial Masters Select NY Sub-Accounts Included in Sun Life (N.Y.) Variable Account C

Statements of Operations - Year Ended December 31, 2006

		NMT		NNG			NMI			F10
	Sub-Account			Sub-Account			Sub-Account			Sub-Account (j)
Income and Expenses:
Dividend income	$	69		$	-		$	109		$	5,301
Mortality and expense risk charges		(565	)		(539	)		(566	)		(962	)
Distribution and administrative expense charges		(68	)		(65	)		(68	)		(115	)
Net investment income (loss)	$	(564	)	$	(604	)	$	(525	)	$	4,224
Realized and Unrealized gains (losses):
Realized gains (losses) on investment transactions:
Realized gains (losses) on sales of fund shares	$	249		$	60		$	205		$	3,464
Realized gain distributions		1,237			-			1,154			1,465
Net realized gains (losses)	$	1,486		$	60		$	1,359		$	4,929
Net unrealized appreciation (depreciation) on investments:
End of year	$	3,044		$	1,204		$	3,952		$	(1,278	)
Beginning of year		-			-			-			-
Change in unrealized appreciation (depreciation)	$	3,044		$	1,204		$	3,952		$	(1,278	)
Realized and unrealized gains (losses)	$	4,530		$	1,264		$	5,311		$	3,651
Increase (Decrease) in net assets from operations	$	3,966		$	660		$	4,786		$	7,875
	F15			F20			FMS			TDM
	Sub-Account (j)			Sub-Account (j)			Sub-Account			Sub-Account (j)
Income and Expenses:
Dividend income	$	13,971		$	6,802		$	11,227		$	1,402
Mortality and expense risk charges		(9,390	)		(4,955	)		(16,289	)		(3,533	)
Distribution and administrative expense charges		(1,127	)		(595	)		(1,955	)		(424	)
Net investment income (loss)	$	3,454		$	1,252		$	(7,017	)	$	(2,555	)
Realized and Unrealized gains (losses):
Realized gains (losses) on investment transactions:
Realized gains (losses) on sale of fund shares	$	478		$	866		$	22,151		$	53,145
Realized gain distributions		9,979			4,535			28,592			-
Net realized gains (losses)	$	10,457		$	5,401		$	50,743		$	53,145
Net unrealized appreciation (depreciation) on investments:
End of year	$	64,137		$	30,180		$	173,226		$	40,067
Beginning of year		-			-			42,970			-
Change in unrealized appreciation (depreciation)	$	64,137		$	30,180		$	130,256		$	40,067
Realized and unrealized gains (losses)	$	74,594		$	35,581		$	180,999		$	93,212
Increase (Decrease) in net assets from operations	$	78,048		$	36,833		$	173,982		$	90,657

(j) fund available as of October 31, 2005 (commencement of operations), first activity in 2006.

See notes to Financial Statements.

Regatta NY, Regatta Gold NY, Regatta Extra NY, Sun Life Financial Masters Flex NY, Sun Life Financial Masters Extra NY, Sun Life Financial Masters Access NY, Sun Life Financial Masters Choice NY, Sun Life Financial Masters Reward NY, and Sun Life Financial Masters Select NY Sub-Accounts Included in Sun Life (N.Y.) Variable Account C

Statements of Operations - Year Ended December 31, 2006 - continued

	FTG			FTI			FVS			LAV
	Sub-Account			Sub-Account			Sub-Account			Sub-Account
Income and Expenses:
Dividend income	$	5,248		$	275,998		$	4,954		$	11,507
Mortality and expense risk charges		(7,127	)		(347,781	)		(13,484	)		(16,572	)
Distribution and administrative expense charges		(855	)		(41,734	)		(1,618	)		(1,989	)
Net investment income (loss)	$	(2,734	)	$	(113,517	)	$	(10,148	)	$	(7,054	)
Realized and Unrealized gains (losses):
Realized gains (losses) on investment transactions:
Realized gains (losses) on sales of fund shares	$	5,359		$	482,053		$	24,535		$	47,564
Realized gain distributions		14,622						27,719			50,649
Net realized gains (losses)	$	19,981		$	482,053		$	52,254		$	98,213
Net unrealized appreciation (depreciation) on investments:
End of year	$	88,046		$	5,526,519		$	114,121		$	53,370
Beginning of year		10,386			1,583,737			45,129			11,044
Change in unrealized appreciation (depreciation)	$	77,660		$	3,942,782		$	68,992		$	42,326
Realized and unrealized gains (losses)	$	97,641		$	4,424,835		$	121,246		$	140,539
Increase (Decrease) in net assets from operations	$	94,907		$	4,311,318		$	111,098		$	133,485
	LA1			LA9			LA2			MF7
	Sub-Account			Sub-Account			Sub-Account			Sub-Account
Income and Expenses:
Dividend income	$	271,149		$	-		$	24,579		$	33,749
Mortality and expense risk charges		(249,323	)		(44,203	)		(50,532	)		(8,692	)
Distribution and administrative expense charges		(29,919	)		(5,304	)		(6,064	)		(1,043	)
Net investment income (loss)	$	(8,093	)	$	(49,507	)	$	(32,017	)	$	24,014
Realized and Unrealized gains (losses):
Realized gains (losses) on investment transactions:
Realized gains (losses) on sale of fund shares	$	154,149		$	55,495		$	44,209		$	(7,061	)
Realized gain distributions		726,597			43,470			382,977			3,329
Net realized gains (losses)	$	880,746		$	98,965		$	427,186		$	(3,732	)
Net unrealized appreciation (depreciation) on investments:
End of year	$	1,535,538		$	255,931		$	92,682		$	(30,206	)
Beginning of year		26,770			110,691			63,060			(23,968	)
Change in unrealized appreciation (depreciation)	$	1,508,768		$	145,240		$	29,622		$	(6,238	)
Realized and unrealized gains (losses)	$	2,389,514		$	244,205		$	456,808		$	(9,970	)
Increase (Decrease) in net assets from operations	$	2,381,421		$	194,698		$	424,791		$	14,044

See notes to Financial Statements.

Regatta NY, Regatta Gold NY, Regatta Extra NY, Sun Life Financial Masters Flex NY, Sun Life Financial Masters Extra NY, Sun Life Financial Masters Access NY, Sun Life Financial Masters Choice NY, Sun Life Financial Masters Reward NY, and Sun Life Financial Masters Select NY Sub-Accounts Included in Sun Life (N.Y.) Variable Account C

Statements of Operations - Year Ended December 31, 2006 - continued

	BDS			MFD			CAS			CO1
	Sub-Account			Sub-Account			Sub-Account			Sub-Account
Income and Expenses:
Dividend income	$	134,647		$	-		$	34,839		$	138
Mortality and expense risk charges		(27,164	)		(2,618	)		(207,811	)		(1,038	)
Distribution and administrative expense charges		(3,260	)		(314	)		(24,937	)		(125	)
Net investment income (loss)	$	104,223		$	(2,932	)	$	(197,909	)	$	(1,025	)
Realized and Unrealized gains (losses):
Realized gains (losses) on investment transactions:
Realized gains (losses) on sales of fund shares	$	(49,875	)	$	8,044		$	(907,657	)	$	301
Realized gain distributions		12,747			-			-			-
Net realized gains (losses)	$	(37,128	)	$	8,044		$	(907,657	)	$	301
Net unrealized appreciation (depreciation) on investments:
End of year	$	(82,576	)	$	26,495		$	1,131,931		$	12,249
Beginning of year		(94,884	)		21,074			(705,997	)		1,919
Change in unrealized appreciation (depreciation)	$	12,308		$	5,421		$	1,837,928		$	10,330
Realized and unrealized gains (losses)	$	(24,820	)	$	13,465		$	930,271		$	10,631
Increase (Decrease) in net assets from operations	$	79,403		$	10,533		$	732,362		$	9,606
	COS			MFF			EGS			EM1
	Sub-Account			Sub-Account			Sub-Account			Sub-Account
Income and Expenses:
Dividend income	$	11,855		$	-		$	-		$	2,899
Mortality and expense risk charges		(28,433	)		(6,459	)		(104,518	)		(6,660	)
Distribution and administrative expense charges		(3,412	)		(775	)		(12,542	)		(799	)
Net investment income (loss)	$	(19,990	)	$	(7,234	)	$	(117,060	)	$	(4,560	)
Realized and Unrealized gains (losses):
Realized gains (losses) on investment transactions:
Realized gains (losses) on sale of fund shares	$	(9,935	)	$	17,407		$	(1,489,575	)	$	85,654
Realized gain distributions		-			-			-			45,040
Net realized gains (losses)	$	(9,935	)	$	17,407		$	(1,489,575	)	$	130,694
Net unrealized appreciation (depreciation) on investments:
End of year	$	377,095		$	102,527		$	530,770		$	74,442
Beginning of year		73,464			40,504			(1,581,481	)		61,707
Change in unrealized appreciation (depreciation)	$	303,631		$	62,023		$	2,112,251		$	12,735
Realized and unrealized gains (losses)	$	293,696		$	79,430		$	622,676		$	143,429
Increase (Decrease) in net assets from operations	$	273,706		$	72,196		$	505,616		$	138,869

See notes to Financial Statements.

Regatta NY, Regatta Gold NY, Regatta Extra NY, Sun Life Financial Masters Flex NY, Sun Life Financial Masters Extra NY, Sun Life Financial Masters Access NY, Sun Life Financial Masters Choice NY, Sun Life Financial Masters Reward NY, and Sun Life Financial Masters Select NY Sub-Accounts Included in Sun Life (N.Y.) Variable Account C

Statements of Operations - Year Ended December 31, 2006 - continued

	EME			GG1			GGS			GG2
	Sub-Account			Sub-Account			Sub-Account			Sub-Account
Income and Expenses:
Dividend income	$	16,533		$	-		$	-		$	290
Mortality and expense risk charges		(17,676	)		(198	)		(13,849	)		(1,342	)
Distribution and administrative expense charges		(2,121	)		(24	)		(1,662	)		(161	)
Net investment income (loss)	$	(3,264	)	$	(222	)	$	(15,511	)	$	(1,213	)
Realized and Unrealized gains (losses):
Realized gains (losses) on investment transactions:
Realized gains (losses) on sales of fund shares	$	189,763		$	(763	)	$	(29,350	)	$	1,978
Realized gain distributions		224,417			-			10,650			-
Net realized gains (losses)	$	414,180		$	(763	)	$	(18,700	)	$	1,978
Net unrealized appreciation (depreciation) on investments:
End of year	$	279,796		$	761		$	(51,237	)	$	23,006
Beginning of year		324,949			(907	)		(124,317	)		11,953
Change in unrealized appreciation (depreciation)	$	(45,153	)	$	1,668		$	73,080		$	11,053
Realized and unrealized gains (losses)	$	369,027		$	905		$	54,380		$	13,031
Increase (Decrease) in net assets from operations	$	365,763		$	683		$	38,869		$	11,818
	GGR			GT2			GTR			MFK
	Sub-Account			Sub-Account			Sub-Account			Sub-Account
Income and Expenses:
Dividend income	$	34,765		$	1,958		$	41,642		$	511,855
Mortality and expense risk charges		(75,909	)		(3,962	)		(55,415	)		(184,953	)
Distribution and administrative expense charges		(9,109	)		(475	)		(6,650	)		(22,194	)
Net investment income (loss)	$	(50,253	)	$	(2,479	)	$	(20,423	)	$	304,708
Realized and Unrealized gains (losses):
Realized gains (losses) on investment transactions:
Realized gains (losses) on sale of fund shares	$	341,269		$	11,801		$	238,612		$	(81,923	)
Realized gain distributions					18,931			300,781
Net realized gains (losses)	$	341,269		$	30,732		$	539,393		$	(81,923	)
Net unrealized appreciation (depreciation) on investments:
End of year	$	1,921,398		$	54,419		$	778,142		$	(128,184	)
Beginning of year		1,305,513			38,920			623,043			(156,586	)
Change in unrealized appreciation (depreciation)	$	615,885		$	15,499		$	155,099		$	28,402
Realized and unrealized gains (losses)	$	957,154		$	46,231		$	694,492		$	(53,521	)
Increase (Decrease) in net assets from operations	$	906,901		$	43,752		$	674,069		$	251,187

See notes to Financial Statements.

Regatta NY, Regatta Gold NY, Regatta Extra NY, Sun Life Financial Masters Flex NY, Sun Life Financial Masters Extra NY, Sun Life Financial Masters Access NY, Sun Life Financial Masters Choice NY, Sun Life Financial Masters Reward NY, and Sun Life Financial Masters Select NY Sub-Accounts Included in Sun Life (N.Y.) Variable Account C

Statements of Operations - Year Ended December 31, 2006 - continued

	GSS			MFC			HYS			IG1
	Sub-Account			Sub-Account			Sub-Account			Sub-Account
Income and Expenses:
Dividend income	$	326,485		$	238,715		$	485,454		$	460
Mortality and expense risk charges		(78,117	)		(50,562	)		(71,209	)		(1,502	)
Distribution and administrative expense charges		(9,374	)		(6,067	)		(8,545	)		(180	)
Net investment income (loss)	$	238,994	)	$	182,086		$	405,700		$	(1,222	)
Realized and Unrealized gains (losses):
Realized gains (losses) on investment transactions:
Realized gains (losses) on sales of fund shares	$	(176,568	)	$	(22,685	)	$	70,026		$	3,305
Realized gain distributions		-			-			-			7,799
Net realized gains (losses)	$	(176,568	)	$	(22,685	)	$	70,026		$	11,104
Net unrealized appreciation (depreciation) on investments:
End of year	$	(244,667	)	$	78,558		$	186,553		$	30,686
Beginning of year		(307,767	)		(41,178	)		177,320			17,270
Change in unrealized appreciation (depreciation)	$	63,100		$	119,736		$	9,233		$	13,416
Realized and unrealized gains (losses)	$	(113,468	)	$	97,051		$	79,259		$	24,520
Increase (Decrease) in net assets from operations	$	125,526		$	279,137		$	484,959		$	23,298
	IGS			MI1			MII			M1B
	Sub-Account			Sub-Account			Sub-Account			Sub-Account
Income and Expenses:
Dividend income	$	12,671		$	1,637		$	44,711		$	-
Mortality and expense risk charges		(22,757	)		(2,781	)		(46,006	)		(12,003	)
Distribution and administrative expense charges		(2,731	)		(334	)		(5,521	)		(1,440	)
Net investment income (loss)	$	(12,817	)	$	(1,478	)	$	(6,816	)	$	(13,443	)
Realized and Unrealized gains (losses):
Realized gains (losses) on investment transactions:
Realized gains (losses) on sale of fund shares	$	126,668		$	13,254		$	202,048		$	18,370
Realized gain distributions		146,565			16,138			381,173			-
Net realized gains (losses)	$	273,233		$	29,392		$	583,221		$	18,370
Net unrealized appreciation (depreciation) on investments:
End of year	$	704,178		$	51,960		$	1,335,797		$	132,389
Beginning of year		538,186			32,997			991,634			92,293
Change in unrealized appreciation (depreciation)	$	165,992		$	18,963		$	344,163		$	40,096
Realized and unrealized gains (losses)	$	439,225		$	48,355		$	927,384		$	58,466
Increase (Decrease) in net assets from operations	$	426,408		$	46,877		$	920,568		$	45,023

See notes to Financial Statements.

Regatta NY, Regatta Gold NY, Regatta Extra NY, Sun Life Financial Masters Flex NY, Sun Life Financial Masters Extra NY, Sun Life Financial Masters Access NY, Sun Life Financial Masters Choice NY, Sun Life Financial Masters Reward NY, and Sun Life Financial Masters Select NY Sub-Accounts Included in Sun Life (N.Y.) Variable Account C

Statements of Operations - Year Ended December 31, 2006 - continued

	MIS			MFL			MIT			MC1
	Sub-Account			Sub-Account			Sub-Account			Sub-Account
Income and Expenses:
Dividend income	$	4,233		$	62,482		$	206,528		$	-
Mortality and expense risk charges		(52,938	)		(173,213	)		(305,553	)		(6,424	)
Distribution and administrative expense charges		(6,353	)		(20,786	)		(36,666	)		(771	)
Net investment income (loss)	$	(55,058	)	$	(131,517	)	$	(135,691	)	$	(7,195	)
Realized and Unrealized gains (losses):
Realized gains (losses) on investment transactions:
Realized gains (losses) on sales of fund shares	$	(57,933	)	$	108,469		$	(806,574	)	$	9,635
Realized gain distributions		-			-			-			-
Net realized gains (losses)	$	(57,933	)	$	108,469		$	(806,574	)	$	9,635
Net unrealized appreciation (depreciation) on investments:
End of year	$	740,491		$	1,786,290		$	3,484,988		$	55,035
Beginning of year		388,077			386,557			(202,938	)		53,880
Change in unrealized appreciation (depreciation)	$	352,414		$	1,399,733		$	3,687,926		$	1,155
Realized and unrealized gains (losses)	$	294,481		$	1,508,202		$	2,881,352		$	10,790
Increase (Decrease) in net assets from operations	$	239,423		$	1,376,685		$	2,745,661		$	3,595
	MCV			MM1			MMS			M1A
	Sub-Account			Sub-Account			Sub-Account			Sub-Account
Income and Expenses:
Dividend income	$	-		$	344,094		$	243,618		$	-
Mortality and expense risk charges		(8,705	)		(124,032	)		(66,218	)		(88,888	)
Distribution and administrative expense charges		(1,044	)		(14,884	)		(7,946	)		(10,666	)
Net investment income (loss)	$	(9,749	)	$	205,178		$	169,454		$	(99,554	)
Realized and Unrealized gains (losses):
Realized gains (losses) on investment transactions:
Realized gains (losses) on sale of fund shares	$	8,808		$	-		$	-		$	259,291
Realized gain distributions		64,554			-			-			-
Net realized gains (losses)	$	73,362		$	-		$	-		$	259,291
Net unrealized appreciation (depreciation) on investments:
End of year	$	28,822		$	-		$	-		$	988,927
Beginning of year		44,668			-			-			389,179
Change in unrealized appreciation (depreciation)	$	(15,846	)	$	-		$	-		$	599,748
Realized and unrealized gains (losses)	$	57,516		$	-		$	-		$	859,039
Increase (Decrease) in net assets from operations	$	47,767		$	205,178		$	169,454		$	759,485

See notes to Financial Statements.

Regatta NY, Regatta Gold NY, Regatta Extra NY, Sun Life Financial Masters Flex NY, Sun Life Financial Masters Extra NY, Sun Life Financial Masters Access NY, Sun Life Financial Masters Choice NY, Sun Life Financial Masters Reward NY, and Sun Life Financial Masters Select NY Sub-Accounts Included in Sun Life (N.Y.) Variable Account C

Statements of Operations - Year Ended December 31, 2006 - continued

	NWD			RE1			RES			RG1
	Sub-Account			Sub-Account			Sub-Account			Sub-Account
Income and Expenses:
Dividend income	$	-		$	534		$	80,822		$	253
Mortality and expense risk charges		(23,706	)		(2,028	)		(149,523	)		(553	)
Distribution and administrative expense charges		(2,845	)		(243	)		(17,943	)		(66	)
Net investment income (loss)	$	(26,551	)	$	(1,737	)	$	(86,644	)	$	(366	)
Realized and Unrealized gains (losses):
Realized gains (losses) on investment transactions:
Realized gains (losses) on sales of fund shares	$	56,044		$	18,960		$	(1,398,993	)	$	7,839
Realized gain distributions		-			-			-			-
Net realized gains (losses)	$	56,044		$	18,960		$	(1,398,993	)	$	7,839
Net unrealized appreciation (depreciation) on investments:
End of year	$	506,192		$	19,070		$	1,130,933		$	5,851
Beginning of year		318,703			26,947			(1,366,201	)		11,783
Change in unrealized appreciation (depreciation)	$	187,489		$	(7,877	)	$	2,497,134		$	(5,932	)
Realized and unrealized gains (losses)	$	243,533		$	11,083		$	1,098,141		$	1,907
Increase (Decrease) in net assets from operations	$	216,982		$	9,346		$	1,011,497		$	1,541
	RGS			RI1			RIS			SG1
	Sub-Account			Sub-Account			Sub-Account			Sub-Account
Income and Expenses:
Dividend income	$	14,573		$	38,149		$	19,978		$	-
Mortality and expense risk charges		(28,028	)		(73,418	)		(20,361	)		(15,319	)
Distribution and administrative expense charges		(3,363	)		(8,810	)		(2,443	)		(1,838	)
Net investment income (loss)	$	(16,818	)	$	(44,079	)	$	(2,826	)	$	(17,157	)
Realized and Unrealized gains (losses):
Realized gains (losses) on investment transactions:
Realized gains (losses) on sale of fund shares	$	90,008		$	249,520		$	217,768		$	44,437
Realized gain distributions		-			232,833			105,292			-
Net realized gains (losses)	$	90,008		$	482,353		$	323,060		$	44,437
Net unrealized appreciation (depreciation) on investments:
End of year	$	555,138		$	1,148,532		$	516,701		$	111,488
Beginning of year		389,824			458,508			475,239			85,613
Change in unrealized appreciation (depreciation)	$	165,314		$	690,024		$	41,462		$	25,875
Realized and unrealized gains (losses)	$	255,322		$	1,172,377		$	364,522		$	70,312
Increase (Decrease) in net assets from operations	$	238,504		$	1,128,298		$	361,696		$	53,155

See notes to Financial Statements.

Regatta NY, Regatta Gold NY, Regatta Extra NY, Sun Life Financial Masters Flex NY, Sun Life Financial Masters Extra NY, Sun Life Financial Masters Access NY, Sun Life Financial Masters Choice NY, Sun Life Financial Masters Reward NY, and Sun Life Financial Masters Select NY Sub-Accounts Included in Sun Life (N.Y.) Variable Account C

Statements of Operations - Year Ended December 31, 2006 - continued

	SGS			SI1			SIS			SVS
	Sub-Account			Sub-Account			Sub-Account			Sub-Account
Income and Expenses:
Dividend income	$	-		$	8,372		$	104,360		$	637
Mortality and expense risk charges		(3,279	)		(2,310	)		(20,658	)		(1,668	)
Distribution and administrative expense charges		(393	)		(277	)		(2,479	)		(200	)
Net investment income (loss)	$	(3,672	)	$	5,785		$	81,223		$	(1,231	)
Realized and Unrealized gains (losses):
Realized gains (losses) on investment transactions:
Realized gains (losses) on sales of fund shares	$	12,056		$	218		$	(1,762	)	$	(2,350	)
Realized gain distributions		-			1,596			19,009			9,817
Net realized gains (losses)	$	12,056		$	1,814		$	17,247		$	7,467
Net unrealized appreciation (depreciation) on investments:
End of year	$	35,473		$	3,558		$	(29,301	)	$	6,490
Beginning of year		27,022			3,500			(17,637	)		2,306
Change in unrealized appreciation (depreciation)	$	8,451		$	58		$	(11,664	)	$	4,184
Realized and unrealized gains (losses)	$	20,507		$	1,872		$	5,583		$	11,651
Increase (Decrease) in net assets from operations	$	16,835		$	7,657		$	86,806		$	10,420
	MFJ			TRS			MFE			UTS
	Sub-Account			Sub-Account			Sub-Account			Sub-Account
Income and Expenses:
Dividend income	$	1,682,458		$	969,750		$	16,602		$	299,804
Mortality and expense risk charges		(986,052	)		(419,612	)		(13,730	)		(119,727	)
Distribution and administrative expense charges		(118,326	)		(50,353	)		(1,648	)		(14,367	)
Net investment income (loss)	$	578,080		$	499,785		$	1,224		$	165,710
Realized and Unrealized gains (losses):
Realized gains (losses) on investment transactions:
Realized gains (losses) on sale of fund shares	$	335,526		$	276,608		$	35,898		$	762,270
Realized gain distributions		2,561,604			1,367,592			-			-
Net realized gains (losses)	$	2,897,130		$	1,644,200		$	35,898		$	762,270
Net unrealized appreciation (depreciation) on investments:
End of year	$	4,261,196		$	4,374,817		$	329,252		$	4,491,912
Beginning of year		1,329,047			3,076,372			84,063			2,808,515
Change in unrealized appreciation (depreciation)	$	2,932,149		$	1,298,445		$	245,189		$	1,683,397
Realized and unrealized gains (losses)	$	5,829,279		$	2,942,645		$	281,087		$	2,445,667
Increase (Decrease) in net assets from operations	$	6,407,359		$	3,442,430		$	282,311		$	2,611,377

See notes to Financial Statements.

Regatta NY, Regatta Gold NY, Regatta Extra NY, Sun Life Financial Masters Flex NY, Sun Life Financial Masters Extra NY, Sun Life Financial Masters Access NY, Sun Life Financial Masters Choice NY, Sun Life Financial Masters Reward NY, and Sun Life Financial Masters Select NY Sub-Accounts Included in Sun Life (N.Y.) Variable Account C

Statements of Operations - Year Ended December 31, 2006 - continued

	MV1			MVS			OCA			OGG
	Sub-Account			Sub-Account			Sub-Account			Sub-Account
Income and Expenses:
Dividend income	$	19,583		$	104,047		$	2,864		$	6,169
Mortality and expense risk charges		(25,410	)		(81,690	)		(28,044	)		(17,847	)
Distribution and administrative expense charges		(3,049	)		(9,803	)		(3,365	)		(2,142	)
Net investment income (loss)	$	(8,876	)	$	12,554		$	(28,545	)	$	(13,820	)
Realized and Unrealized gains (losses):
Realized gains (losses) on investment transactions:
Realized gains (losses) on sales of fund shares	$	60,395		$	397,763		$	50,018		$	20,414
Realized gain distributions		56,748			255,037			-			38,202
Net realized gains (losses)	$	117,143		$	652,800		$	50,018		$	58,616
Net unrealized appreciation (depreciation) on investments:
End of year	$	424,288		$	1,943,321		$	245,492		$	231,075
Beginning of year		242,898			1,462,991			150,677			54,089
Change in unrealized appreciation (depreciation)	$	181,390		$	480,330		$	94,815		$	176,986
Realized and unrealized gains (losses)	$	298,533		$	1,133,130		$	144,833		$	235,602
Increase (Decrease) in net assets from operations	$	289,657		$	1,145,684		$	116,288		$	221,782
	OMG			OMS			PMB			PLD
	Sub-Account			Sub-Account			Sub-Account			Sub-Account
Income and Expenses:
Dividend income	$	192,809		$	86		$	22,836		$	1,118,920
Mortality and expense risk charges		(390,263	)		(7,694	)		(6,795	)		(399,308	)
Distribution and administrative expense charges		(46,831	)		(923	)		(815	)		(47,917	)
Net investment income (loss)	$	(244,285	)	$	(8,531	)	$	15,226		$	671,695
Realized and Unrealized gains (losses):
Realized gains (losses) on investment transactions:
Realized gains (losses) on sale of fund shares	$	259,322		$	21,242		$	1,924		$	(54,684	)
Realized gain distributions		-			10,850			7,412			-
Net realized gains (losses)	$	259,322		$	32,092		$	9,336		$	(54,684	)
Net unrealized appreciation (depreciation) on investments:
End of year	$	4,491,629		$	83,187		$	13,955		$	(244,928	)
Beginning of year		1,099,385			37,835			5,419			(261,552	)
Change in unrealized appreciation (depreciation)	$	3,392,244		$	45,352		$	8,536		$	16,624
Realized and unrealized gains (losses)	$	3,651,566		$	77,444		$	17,872		$	(38,060	)
Increase (Decrease) in net assets from operations	$	3,407,281		$	68,913		$	33,098		$	633,635

See notes to Financial Statements.

Regatta NY, Regatta Gold NY, Regatta Extra NY, Sun Life Financial Masters Flex NY, Sun Life Financial Masters Extra NY, Sun Life Financial Masters Access NY, Sun Life Financial Masters Choice NY, Sun Life Financial Masters Reward NY, and Sun Life Financial Masters Select NY Sub-Accounts Included in Sun Life (N.Y.) Variable Account C

Statements of Operations - Year Ended December 31, 2006 - continued

	PRR			PTR			PRA			PCR
	Sub-Account			Sub-Account			Sub-Account (j)			Sub-Account (j)
Income and Expenses:
Dividend income	$	99,751		$	134,936		$	2,779		$	12,174
Mortality and expense risk charges		(37,713	)		(48,175	)		(376	)		(2,883	)
Distribution and administrative expense charges		(4,526	)		(5,781	)		(45	)		(346	)
Net investment income (loss)	$	57,512		$	80,980		$	2,358		$	8,945
Realized and Unrealized gains (losses):
Realized gains (losses) on investment transactions:
Realized gains (losses) on sales of fund shares	$	(60,022	)	$	(14,563	)	$	7		$	(699	)
Realized gain distributions		65,600			19,883			187			1,376
Net realized gains (losses)	$	5,578		$	5,320		$	194		$	677
Net unrealized appreciation (depreciation) on investments:
End of year	$	(134,516	)	$	(59,896	)	$	(1,148	)	$	(23,220	)
Beginning of year		(36,076	)		(45,965	)		-			-
Change in unrealized appreciation (depreciation)	$	(98,440	)	$	(13,931	)	$	(1,148	)	$	(23,220	)
Realized and unrealized gains (losses)	$	(92,862	)	$	(8,611)		$	(954)		$	(22,543)
Increase (Decrease) in net assets from operations	$	(35,350	)	$	72,369		$	1,404		$	(13,598	)
	SSA			LGF			IGB			SRE
	Sub-Account			Sub-Account (i)			Sub-Account			Sub-Account
Income and Expenses:
Dividend income	$	1,219		$	-		$	15,871		$	67,289
Mortality and expense risk charges		(778	)		(53	)		(4,566	)		(72,296	)
Distribution and administrative expense charges		(93	)		(6	)		(548	)		(8,676	)
Net investment income (loss)	$	348		$	(59	)	$	10,757		$	(13,683	)
Realized and Unrealized gains (losses):
Realized gains (losses) on investment transactions:
Realized gains (losses) on sale of fund shares	$	136		$	2		$	(743	)	$	262,921
Realized gain distributions		333			-			3,178			217,309
Net realized gains (losses)	$	469		$	2		$	2,435		$	480,230
Net unrealized appreciation (depreciation) on investments:
End of year	$	11,963		$	661		$	727		$	1,148,155
Beginning of year		(1,268	)					(1,980	)		118,266
Change in unrealized appreciation (depreciation)	$	13,231		$	661		$	2,707		$	1,029,889
Realized and unrealized gains (losses)	$	13,700		$	663		$	5,142		$	1,510,119
Increase (Decrease) in net assets from operations	$	14,048		$	604		$	15,899		$	1,496,436

(i) for the period May 1, 2006 (commencement of operations) through December 31, 2006.

(j) fund available as of October 31, 2005 (commencement of operations), first activity in 2006.

See notes to Financial Statements.

Regatta NY, Regatta Gold NY, Regatta Extra NY, Sun Life Financial Masters Flex NY, Sun Life Financial Masters Extra NY, Sun Life Financial Masters Access NY, Sun Life Financial Masters Choice NY, Sun Life Financial Masters Reward NY, and Sun Life Financial Masters Select NY Sub-Accounts Included in Sun Life (N.Y.) Variable Account C

Statements of Operations - Year Ended December 31, 2006 - continued

	SC3			CMM			WTF
	Sub-Account			Sub-Account			Sub-Account
Income and Expenses:
Dividend income	$	9,443		$	1,700		$	94
Mortality and expense risk charges		(9,857	)		(605	)		(408	)
Distribution and administrative expense charges		(1,183	)		(73	)		(49	)
Net investment income (loss)	$	(1,597	)	$	1,022		$	(363	)
Realized and Unrealized gains (losses):
Realized gains (losses) on investment transactions:
Realized gains (losses) on sales of fund shares	$	68,824		$	-		$	505
Realized gain distributions		25,566			-			786
Net realized gains (losses)	$	94,390		$	-		$	1,291
Net unrealized appreciation (depreciation) on investments:
End of year	$	183,143		$	-		$	3,845
Beginning of year		90,279			-			735
Change in unrealized appreciation (depreciation)	$	92,864		$	-		$	3,110
Realized and unrealized gains (losses)	$	187,254		$	-		$	4,401
Increase (Decrease) in net assets from operations	$	185,657		$	1,022		$	4,038

See notes to Financial Statements.

Regatta NY, Regatta Gold NY, Regatta Extra NY, Sun Life Financial Masters Flex NY, Sun Life Financial Masters Extra NY, Sun Life Financial Masters Access NY, Sun Life Financial Masters Choice NY, Sun Life Financial Masters Reward NY, and Sun Life Financial Masters Select NY Sub-Accounts Included in Sun Life (N.Y.) Variable Account C

Statements of Changes in Net Assets

		NMT				NNG				NMI				F10				F15
		Sub-Account				Sub-Account				Sub-Account				Sub-Account				Sub-Account
		Year Ended		Year Ended		Year Ended		Year Ended		Year Ended		Year Ended		Year Ended		Year Ended		Year Ended		Year Ended
		December 31,		December 31,		December 31,		December 31,		December 31,		December 31,		December 31,		December 31,		December 31,		December 31,
		2006 (x)		2005		2006 (x)		2005		2006 (x)		2005		2006 (x)		2005		2006 (x)		2005
Operations:
Net investment income (loss)	$	(564)	$	-	$	(604)	$	-	$	(525)	$	-	$	4,224	$	-	$	3,454	$	-
Net realized gains (losses)		1,486		-		60		-		1,359		-		4,929		-		10,457		-
Net unrealized gains (losses)		3,044		-		1,204		-		3,952		-		(1,278)		-		64,137		-
Increase (Decrease) in net assets from
operations	$	3,966	$	-	$	660	$	-	$	4,786	$	-	$	7,875	$	-	$	78,048	$	-
Contract Owner Transactions:
Accumulation Activity:
Purchase payments received	$	37,000	$	-	$	37,000	$	-	$	37,000	$	-	$	121,759	$	-	$	761,300	$	-
Net transfers between Sub-Accounts and
Fixed Account		-		-		-		-		-		-		215,794		-		510,488		-
Withdrawals, surrenders, annuitizations and
contract charges		(3,845)		-		(3,540)		-		(3,799)		-		(99)		-		(5,553)		-
Net accumulation activity	$	33,155	$	-	$	33,460	$		$	33,201	$		$	337,454	$	-	$	1,266,235	$	-
Annuitization Activity:
Annuitizations	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-
Annuity payments and contract charges		-		-		-		-		-		-		-		-		-		-
Net transfers between Sub-Accounts		-		-		-		-		-		-		-		-		-		-
Adjustments to annuity reserves		-		-		-		-		-		-		-		-		-		-
Net annuitization activity	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-
Increase (Decrease) in net assets from contract
owner transactions	$	33,155	$	-	$	33,460	$	-	$	33,201	$	-	$	337,454	$	-	$	1,266,235	$	-
Increase (Decrease) in net assets	$	37,121	$	-	$	34,120	$	-	$	37,987	$	-	$	345,329	$	-	$	1,344,283	$	-
Net Assets:
Beginning of year	$		$	-	$		$	-	$		$	-	$		$	-	$		$	-
End of year	$	37,121	$	-	$	34,120	$	-	$	37,987	$	-	$	345,329	$	-	$	1,344,283	$	-
Unit Transactions:
Beginning of year		-		-		-		-		-		-		-		-		-		-
Purchased		3,101		-		3,311		-		2,912		-		11,367		-		71,074		-
Transferred between Sub-Accounts and Fixed
Accumulation Account		-		-		-		-		-		-		19,826		-		48,201		-
Withdrawn, Surrendered and Annuitized		(296)		-		(316)		-		(277)		-		(9)		-		(512)		-
End of year		2,805		-		2,995		-		2,635		-		31,184		-		118,763		-

(x) fund open in prior year, first activity in current year.

See notes to Financial Statements.

Regatta NY, Regatta Gold NY, Regatta Extra NY, Sun Life Financial Masters Flex NY, Sun Life Financial Masters Extra NY, Sun Life Financial Masters Access NY, Sun Life Financial Masters Choice NY, Sun Life Financial Masters Reward NY, and Sun Life Financial Masters Select NY Sub-Accounts Included in Sun Life (N.Y.) Variable Account C

Statements of Changes in Net Assets - continued

		F20				FMS				TDM				FTG				FTI
		Sub-Account				Sub-Account				Sub-Account				Sub-Account				Sub-Account
		Year Ended		Year Ended		Year Ended		Year Ended		Year Ended		Year Ended		Year Ended		Year Ended		Year Ended		Year Ended
		December 31,		December 31,		December 31,		December 31,		December 31,		December 31,		December 31,		December 31,		December 31,		December 31,
		2006 (x)		2005		2006		2005		2006 (x)		2005		2006		2005		2006		2005
Operations:
Net investment income (loss)	$	1,252	$	-	$	(7,017)	$	(3,089)	$	(2,555)	$	-	$	(2,734)	$	(467)	$	(113,517)	$	(68,735)
Net realized gains (losses)		5,401		-		50,743		9,854		53,145		-		19,981		1,084		482,053		201,585
Net unrealized gains (losses)		30,180		-		130,256		29,176		40,067		-		77,660		8,978		3,942,782		894,565
Increase (Decrease) in net assets from
operations	$	36,833	$	-	$	173,982	$	35,941	$	90,657	$	-	$	94,907	$	9,595	$	4,311,318	$	1,027,415
Contract Owner Transactions:
Accumulation Activity:
Purchase payments received	$	282,979	$	-	$	868,081	$	257,231	$	206,113	$	-	$	503,933	$	119,190	$	13,459,852	$	7,410,537
Net transfers between Sub-Accounts and
Fixed Account		191,263		-		452,589		86,720		42,367		-		209,735		21,063		1,756,893		884,605
Withdrawals, surrenders, annuitizations and
contract charges		(1,901)		-		(77,379)		(7,683)		(969)		-		(10,073)		(9,641)		(797,092)		(331,911)
Net accumulation activity	$	472,341	$	-	$	1,243,291	$	336,268	$	247,511	$	-	$	703,595	$	130,612	$	14,419,653	$	7,963,231
Annuitization Activity:
Annuitizations	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-
Annuity payments and contract charges		-		-		-		-		-		-		-		-		-		-
Net transfers between Sub-Accounts
Adjustments to annuity reserves		-		-		-		-		-		-		-		-		-		-
Net annuitization activity	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-
Increase (Decrease) in net assets from contract
owner transactions	$	472,341	$	-	$	1,243,291	$	336,268	$	247,511	$	-	$	703,595	$	130,612	$	14,419,653	$	7,963,231
Increase (Decrease) in net assets	$	509,174	$	-	$	1,417,273	$	372,209	$	338,168	$	-	$	798,502	$	140,207	$	18,730,971	$	8,990,646
Net Assets:
Beginning of year	$	-	$	-	$	512,537	$	140,328	$	-	$	-	$	160,657	$	20,450	$	15,071,971	$	6,081,325
End of year	$	509,174	$	-	$	1,929,810	$	512,537	$	338,168	$	-	$	959,159	$	160,657	$	33,802,942	$	15,071,971
Unit Transactions:
Beginning of year						36,128		10,733		-		-		9,583		1,307		1,001,875		427,612
Purchased		26,604		-		57,206		19,605		16,428		-		27,808		7,570		824,309		538,335
Transferred between Sub-Accounts and Fixed
Accumulation Account		18,086		-		30,126		6,360		7,627		-		11,492		1,320		108,779		65,064
Withdrawn, Surrendered and Annuitized		(175)		-		(5,413)		(570)		(75)		-		(551)		(614)		(55,194)		(29,136)
End of year		44,515		-		118,047		36,128		23,980		-		48,332		9,583		1,879,769		1,001,875

(x) fund open in prior year, first activity in current year.

See notes to Financial Statements.

Regatta NY, Regatta Gold NY, Regatta Extra NY, Sun Life Financial Masters Flex NY, Sun Life Financial Masters Extra NY, Sun Life Financial Masters Access NY, Sun Life Financial Masters Choice NY, Sun Life Financial Masters Reward NY, and Sun Life Financial Masters Select NY Sub-Accounts Included in Sun Life (N.Y.) Variable Account C

Statements of Changes in Net Assets - continued

		FVS				LAV				LA1				LA9				LA2
		Sub-Account				Sub-Account				Sub-Account				Sub-Account				Sub-Account
		Year Ended		Year Ended		Year Ended		Year Ended		Year Ended		Year Ended		Year Ended		Year Ended		Year Ended		Year Ended
		December 31,		December 31,		December 31,		December 31,		December 31,		December 31,		December 31,		December 31,		December 31,		December 31,
		2006		2005		2006		2005		2006		2005		2006		2005		2006		2005
Operations:
Net investment income (loss)	$	(10,148)	$	(3,323)	$	(7,054)	$	(1,526)	$	(8,093)	$	(40,875)	$	(49,507)	$	(19,801)	$	(32,017)	$	(18,155)
Net realized gains (losses)		52,254		14,958		98,213		1,817		880,746		864,515		98,965		30,575		427,186		214,556
Net unrealized gains (losses)		68,992		11,775		42,326		4,287		1,508,768		(538,393)		145,240		52,756		29,622		(84,001)
Increase (Decrease) in net assets from
operations	$	111,098	$	23,410	$	133,485	$	4,578	$	2,381,421	$	285,247	$	194,698	$	63,530	$	424,791	$	112,400
Contract Owner Transactions:
Accumulation Activity:
Purchase payments received	$	803,615	$	88,887	$	1,289,645	$	11,715	$	8,348,592	$	4,858,635	$	2,210,399	$	911,917	$	2,415,066	$	865,491
Net transfers between Sub-Accounts and
Fixed Account		313,003		45,502		1,085,811		20,135		1,529,556		(18,607)		426,392		262,097		468,114		(375,460)
Withdrawals, surrenders, annuitizations and
contract charges		(42,971)		(18,744)		(500,099)		(46,688)		(630,659)		(376,560)		(122,291)		(20,638)		(103,104)		(50,154)
Net accumulation activity	$	1,073,647	$	115,645	$	1,875,357	$	(14,838)	$	9,247,489	$	4,463,468	$	2,514,500	$	1,153,376	$	2,780,076	$	439,877
Annuitization Activity:
Annuitizations	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-
Annuity payments and contract charges		-		-		-		-		-		-		-		-		-		-
Net transfers between Sub-Accounts		-		-		-		-		-		-		-		-		-		-
Adjustments to annuity reserves		-		-		-		-		-		-		-		-		-		-
Net annuitization activity	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-
Increase (Decrease) in net assets from contract
owner transactions	$	1,073,647	$	115,645	$	1,875,357	$	(14,838)	$	9,247,489	$	4,463,468	$	2,514,500	$	1,153,376	$	2,780,076	$	439,877
Increase (Decrease) in net assets	$	1,184,745	$	139,055	$	2,008,842	$	(10,260)	$	11,628,910	$	4,748,715	$	2,709,198	$	1,216,906	$	3,204,867	$	552,277
Net Assets:
Beginning of year	$	373,043	$	233,988	$	100,042	$	110,302	$	11,598,746	$	6,850,031	$	1,830,266	$	613,360	$	2,020,469	$	1,468,192
End of year	$	1,557,788	$	373,043	$	2,108,884	$	100,042	$	23,227,656	$	11,598,746	$	4,539,464	$	1,830,266	$	5,225,336	$	2,020,469
Unit Transactions:
Beginning of year		22,483		15,053		8,046		9,342		879,242		512,793		159,566		55,012		133,865		101,211
Purchased		44,894		5,625		96,893		1,008		592,746		391,263		188,658		83,404		153,074		60,576
Transferred between Sub-Accounts and Fixed
Accumulation Account		18,637		2,963		82,083		1,729		109,804		8,362		36,822		23,901		30,541		(24,036)
Withdrawn, Surrendered and Annuitized		(2,346)		(1,158)		(36,321)		(4,033)		(49,044)		(33,176)		(11,518)		(2,751)		(6,615)		(3,886)
End of year		83,668		22,483		150,701		8,046		1,532,748		879,242		373,528		159,566		310,865		133,865

See notes to Financial Statements.

Regatta NY, Regatta Gold NY, Regatta Extra NY, Sun Life Financial Masters Flex NY, Sun Life Financial Masters Extra NY, Sun Life Financial Masters Access NY, Sun Life Financial Masters Choice NY, Sun Life Financial Masters Reward NY, and Sun Life Financial Masters Select NY Sub-Accounts Included in Sun Life (N.Y.) Variable Account C

Statements of Changes in Net Assets - continued

	MF7						BDS						MFD						CAS						CO1
	Sub-Account						Sub-Account						Sub-Account						Sub-Account						Sub-Account
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended			Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,			December 31,			December 31,			December 31,			December 31,			December 31,			December 31,			December 31,
	2006			2005			2006			2005			2006			2005			2006			2005			2006			2005
Operations:
Net investment income (loss)	$	24,014		$	21,509		$	104,223		$	116,814		$	(2,932	)	$	(2,163	)	$	(197,909	)	$	(148,028	)	$	(1,025	)	$	(428	)
Net realized gains (losses)		(3,732	)		8,016			(37,128	)		41,016			8,044			6,950			(907,657	)		(2,429,197	)		301			12,809
Net unrealized gains (losses)		(6,238	)		(30,504	)		12,308			(151,317	)		5,421			(6,086	)		1,837,928			2,725,734			10,330			(11,936	)
Increase (Decrease) in net assets from
operations	$	14,044		$	(979	)	$	79,403		$	6,513		$	10,533		$	(1,299	)	$	732,362		$	148,509		$	9,606		$	445
Contract Owner Transactions:
Accumulation Activity:
Purchase payments received	$	255		$	24,595		$	538		$	8,622		$	28		$	(1	)	$	28,009		$	118,259		$	14,999		$	27,453
Net transfers between Sub-Accounts and
Fixed Account		14,248			(16,746	)		140,939			121,267			1,627			14,507			(558,294	)		3,632,146			27,679			(52,200	)
Withdrawals, surrenders, annuitizations and
contract charges		(29,374	)		(2,985	)		(469,756	)		(464,374	)		(1,664	)		(2,309	)		(4,425,357	)		(3,914,590	)		(46	)		(11	)
Net accumulation activity	$	(14,871	)	$	4,864		$	(328,279	)	$	(334,485	)	$	(9	)	$	12,197		$	(4,955,642	)	$	(164,185	)	$	42,632		$	(24,758	)
Annuitization Activity:
Annuitizations	$	-		$	-		$	-		$	-		$	-		$	-		$	4,346		$	18,592		$	-		$	-
Annuity payments and contract charges																				(6,876	)		(4,095	)
Net transfers between Sub-Accounts
Adjustments to annuity reserves		-			-			(57	)		(19	)		-			-			(4,961	)		(480	)		-			-
Net annuitization activity	$	-		$	-		$	(57	)	$	(19	)	$	-		$	-		$	(7,491	)	$	14,017		$	-		$	-
Increase (Decrease) in net assets from contract
owner transactions	$	(14,871	)	$	4,864		$	(328,336	)	$	(334,504	)	$	(9	)	$	12,197		$	(4,963,133	)	$	(150,168	)	$	42,632		$	(24,758	)
Increase (Decrease) in net assets	$	(827	)	$	3,885		$	(248,933	)	$	(327,991	)	$	10,524		$	10,898		$	(4,230,771	)	$	(1,659	)	$	52,238		$	(24,313	)
Net Assets:
Beginning of year	$	541,384		$	537,499		$	2,282,719		$	2,610,710		$	192,046		$	181,148		$	19,137,284		$	19,138,943		$	44,845		$	69,158
End of year	$	540,557		$	541,384		$	2,033,786		$	2,282,719		$	202,570		$	192,046		$	14,906,513		$	19,137,284		$	97,083		$	44,845
Unit Transactions:
Beginning of year		47,319			46,528			163,530			187,739			18,561			17,339			1,225,268			1,218,785			3,422			6,354
Purchased		21			2,305			33			554									1,707			7,324			1,197			2,118
Transferred between Sub-Accounts and Fixed
Accumulation Account		1,367			(1,264	)		10,062			8,700			358			1,444			(38,261	)		250,668			2,295			(5,049	)
Withdrawn, Surrendered and Annuitized		(2,483	)		(250	)		(33,192	)		(33,463	)		(168	)		(222	)		(279,365	)		(251,509	)		(4	)		(1	)
End of year		46,224			47,319			140,433			163,530			18,751			18,561			909,349			1,225,268			6,910			3,422

See notes to Financial Statements.

Regatta NY, Regatta Gold NY, Regatta Extra NY, Sun Life Financial Masters Flex NY, Sun Life Financial Masters Extra NY, Sun Life Financial Masters Access NY, Sun Life Financial Masters Choice NY, Sun Life Financial Masters Reward NY, and Sun Life Financial Masters Select NY Sub-Accounts Included in Sun Life (N.Y.) Variable Account C

Statements of Changes in Net Assets - continued

	COS						MFF						EGS						EM1						EME
	Sub-Account						Sub-Account						Sub-Account						Sub-Account						Sub-Account
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended			Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,			December 31,			December 31,			December 31,			December 31,			December 31,			December 31,			December 31,
	2006			2005			2006			2005			2006			2005			2006			2005			2006			2005
Operations:
Net investment income (loss)	$	(19,990	)	$	(11,990	)	$	(7,234	)	$	(3,091	)	$	(117,060	)	$	(134,313	)	$	(4,560	)	$	(1,033	)	$	(3,264	)	$	(6,469	)
Net realized gains (losses)		(9,935	)		(287,365	)		17,407			3,371			(1,489,575	)		(2,670,559	)		130,694			7,819			414,180			122,810
Net unrealized gains (losses)		303,631			290,738			62,023			18,774			2,112,251			3,466,946			12,735			24,647			(45,153	)		181,524
Increase (Decrease) in net assets from
operations	$	273,706		$	(8,617	)	$	72,196		$	19,054		$	505,616		$	662,074		$	138,869		$	31,433		$	365,763		$	297,865
Contract Owner Transactions:
Accumulation Activity:
Purchase payments received	$	1,162		$	17,814		$	462,750		$	94,566		$	17,890		$	34,415		$	191,061		$	8		$	7,085		$	104,506
Net transfers between Sub-Accounts and
Fixed Account		(115,130	)		(337,959	)		15,801			33,079			(409,858	)		(609,331	)		233,647			17,129			(137,527	)		554,675
Withdrawals, surrenders, annuitizations and
contract charges		(399,395	)		(595,416	)		(10,780	)		(8,478	)		(1,703,318	)		(1,723,972	)		(75,291	)		(7	)		(104,603	)		(193,374	)
Net accumulation activity	$	(513,363	)	$	(915,561	)	$	467,771		$	119,167		$	(2,095,286	)	$	(2,298,888	)	$	349,417		$	17,130		$	(235,045	)	$	465,807
Annuitization Activity:
Annuitizations	$	-		$	-		$	-		$	-		$	5,039		$			$	-		$	-		$	-		$	-
Annuity payments and contract charges														(9,091	)		(8,304	)								(2,405	)		(1,827	)
Net transfers between Sub-Accounts
Adjustments to annuity reserves		-			-			-			-			(1,209	)		(1,149	)		-			-			(470	)		(226	)
Net annuitization activity	$	-		$	-		$	-		$	-		$	(5,261	)	$	(9,453	)	$	-		$	-		$	(2,875	)	$	(2,053	)
Increase (Decrease) in net assets from contract
owner transactions	$	(513,363	)	$	(915,561	)	$	467,771		$	119,167		$	(2,100,547	)	$	(2,308,341	)	$	349,417		$	17,130		$	(237,920	)	$	463,754
Increase (Decrease) in net assets	$	(239,657	)	$	(924,178	)	$	539,967		$	138,221		$	(1,594,931	)	$	(1,646,267	)	$	488,286		$	48,563		$	127,843		$	761,619
Net Assets:
Beginning of year	$	2,447,558		$	3,371,736		$	262,983		$	124,762		$	9,280,671		$	10,926,938		$	141,368		$	92,805		$	1,453,126		$	691,507
End of year	$	2,207,901		$	2,447,558		$	802,950		$	262,983		$	7,685,740		$	9,280,671		$	629,654		$	141,368		$	1,580,969		$	1,453,126
Unit Transactions:
Beginning of year		184,033			254,152			21,068			10,936			610,176			773,079			6,181			5,451			84,999			53,476
Purchased		97			1,314			38,510			8,076			1,156			2,426			14,996						386			6,720
Transferred between Sub-Accounts and Fixed
Accumulation Account		(8,355	)		(25,923	)		1,351			2,732			(26,481	)		(43,640	)		20,664			730			(8,014	)		38,883
Withdrawn, Surrendered and Annuitized		(28,527	)		(45,510	)		(726	)		(676	)		(111,031	)		(121,689	)		(3,281	)		-			(5,604	)		(14,080	)
End of year		147,248			184,033			60,203			21,068			473,820			610,176			38,560			6,181			71,767			84,999

See notes to Financial Statements.

Regatta NY, Regatta Gold NY, Regatta Extra NY, Sun Life Financial Masters Flex NY, Sun Life Financial Masters Extra NY, Sun Life Financial Masters Access NY, Sun Life Financial Masters Choice NY, Sun Life Financial Masters Reward NY, and Sun Life Financial Masters Select NY Sub-Accounts Included in Sun Life (N.Y.) Variable Account C

Statements of Changes in Net Assets - continued

	GG1						GGS						GG2						GGR						GT2
	Sub-Account						Sub-Account						Sub-Account						Sub-Account						Sub-Account
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended			Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,			December 31,			December 31,			December 31,			December 31,			December 31,			December 31,			December 31,
	2006			2005			2006			2005			2006			2005			2006			2005			2006			2005
Operations:
Net investment income (loss)	$	(222	)	$	522		$	(15,511	)	$	137,714		$	(1,213	)	$	(840	)	$	(50,253	)	$	(59,553	)	$	(2,479	)	$	7,035
Net realized gains (losses)		(763	)		144			(18,700	)		17,025			1,978			1,889			341,269			(183,224	)		30,732			27,224
Net unrealized gains (losses)		1,668			(1,302	)		73,080			(292,977	)		11,053			3,936			615,885			756,932			15,499			(27,420	)
Increase (Decrease) in net assets from
operations	$	683		$	(636	)	$	38,869		$	(138,238	)	$	11,818		$	4,985		$	906,901		$	514,155		$	43,752		$	6,839
Contract Owner Transactions:
Accumulation Activity:
Purchase payments received	$	(1	)	$			$	2,962		$	21,487		$	3,600		$	10,800		$	20,549		$	48,043		$			$
Net transfers between Sub-Accounts and
Fixed Account		22,861			(4,759	)		(25,689	)		33,536			17,081			6,265			171,135			(94,105	)		15,628			12,328
Withdrawals, surrenders, annuitizations and
contract charges		(1	)		(4	)		(233,788	)		(354,533	)		(24	)		(3,826	)		(1,424,751	)		(1,273,138	)		(13,658	)		(13,172	)
Net accumulation activity	$	22,859		$	(4,763	)	$	(256,515	)	$	(299,510	)	$	20,657		$	13,239		$	(1,233,067	)	$	(1,319,200	)	$	1,970		$	(844	)
Annuitization Activity:
Annuitizations	$	-		$	-		$	-		$	-		$	-		$	-		$	1,368		$	8,883		$	-		$	-
Annuity payments and contract charges		-			-			-			-			-			-			(7,046	)		(5,656	)		-			-
Net transfers between Sub-Accounts
Adjustments to annuity reserves		-			-			(21	)		33			-			-			(1,946	)		(1,198	)		-			-
Net annuitization activity	$	-		$	-		$	(21	)	$	33		$	-		$	-		$	(7,624	)	$	2,029		$			$
Increase (Decrease) in net assets from contract
owner transactions	$	22,859		$	(4,763	)	$	(256,536	)	$	(299,477	)	$	20,657		$	13,239		$	(1,240,691	)	$	(1,317,171	)	$	1,970		$	(844	)
Increase (Decrease) in net assets	$	23,542		$	(5,399	)	$	(217,667	)	$	(437,715	)	$	32,475		$	18,224		$	(333,790	)	$	(803,016	)	$	45,722		$	5,995
Net Assets:
Beginning of year	$	5,888		$	11,287		$	1,283,646		$	1,721,361		$	63,039		$	44,815		$	6,475,959		$	7,278,975		$	297,996		$	292,001
End of year	$	29,430		$	5,888		$	1,065,979		$	1,283,646		$	95,514		$	63,039		$	6,142,169		$	6,475,959		$	343,718		$	297,996
Unit Transactions:
Beginning of year		441			770			81,491			100,431			4,395			3,372			304,648			374,143			20,792			20,779
Purchased								171			1,366			227			770			833			2,349
Transferred between Sub-Accounts and Fixed
Accumulation Account		1,697			(329	)		(1,804	)		1,968			1,001			527			7,178			(5,946	)		914			953
Withdrawn, Surrendered and Annuitized		-			-			(15,049	)		(22,274	)		(2	)		(274	)		(63,029	)		(65,898	)		(887	)		(940	)
End of year		2,138			441			64,809			81,491			5,621			4,395			249,630			304,648			20,819			20,792

See notes to Financial Statements.

Regatta NY, Regatta Gold NY, Regatta Extra NY, Sun Life Financial Masters Flex NY, Sun Life Financial Masters Extra NY, Sun Life Financial Masters Access NY, Sun Life Financial Masters Choice NY, Sun Life Financial Masters Reward NY, and Sun Life Financial Masters Select NY Sub-Accounts Included in Sun Life (N.Y.) Variable Account C

Statements of Changes in Net Assets - continued

	GTR						MFK						GSS						MFC						HYS
	Sub-Account						Sub-Account						Sub-Account						Sub-Account						Sub-Account
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended			Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,			December 31,			December 31,			December 31,			December 31,			December 31,			December 31,			December 31,
	2006			2005			2006			2005			2006			2005			2006			2005			2006			2005
Operations:
Net investment income (loss)	$	(20,423	)	$	149,738		$	304,708		$	173,262		$	238,994		$	283,606		$	182,086		$	113,528		$	405,700		$	556,552
Net realized gains (losses)		539,393			552,585			(81,923	)		(23,203	)		(176,568	)		(77,768	)		(22,685	)		179			70,026			(33,766	)
Net unrealized gains (losses)		155,099			(584,182	)		28,402			(139,278	)		63,100			(129,105	)		119,736			(103,176	)		9,233			(490,459	)
Increase (Decrease) in net assets from
operations	$	674,069		$	118,141		$	251,187		$	10,781		$	125,526		$	76,733		$	279,137		$	10,531		$	484,959		$	32,327
Contract Owner Transactions:
Accumulation Activity:
Purchase payments received	$	675		$	51,916		$	5,115,430		$	3,265,060		$	1,021		$	45,584		$	1,360,315		$	963,928		$	57,012		$	34,456
Net transfers between Sub-Accounts and
Fixed Account		116,812			290,607			1,740,061			782,763			(181,596	)		(594,865	)		426,622			210,558			63,453			(806,815	)
Withdrawals, surrenders, annuitizations and
contract charges		(896,387	)		(1,081,568	)		(557,578	)		(504,399	)		(1,607,735	)		(1,480,448	)		(148,357	)		(152,679	)		(1,574,918	)		(1,976,848	)
Net accumulation activity	$	(778,900	)	$	(739,045	)	$	6,297,913		$	3,543,424		$	(1,788,310	)	$	(2,029,729	)	$	1,638,580		$	1,021,807		$	(1,454,453	)	$	(2,749,207	)
Annuitization Activity:
Annuitizations	$	3,874		$	-		$	-		$	-		$	-		$	5,516		$	-		$	-		$	-		$	-
Annuity payments and contract charges		(13,449	)		(12,605	)		-			-			(6,514)			(6,494	)		-			-			(1,226	)		(1,211	)
Net transfers between Sub-Accounts
Adjustments to annuity reserves		(2,296	)		(1,630	)		-			-			(679	)		(642	)		-			-			(268	)		(97	)
Net annuitization activity	$	(11,871	)	$	(14,235)		$	-		$	-		$	(7,193	)	$	(1,620	)	$	-		$	-		$	(1,494	)	$	(1,308	)
Increase (Decrease) in net assets from contract
owner transactions	$	(790,771	)	$	(753,280	)	$	6,297,913		$	3,543,424		$	(1,795,503	)	$	(2,031,349	)	$	1,638,580		$	1,021,807		$	(1,455,947	)	$	(2,750,515	)
Increase (Decrease) in net assets	$	(116,702	)	$	(635,139	)	$	6,549,100		$	3,554,205		$	(1,669,977	)	$	(1,954,616	)	$	1,917,717		$	1,032,338		$	(970,988	)	$	(2,718,188	)
Net Assets:
Beginning of year	$	4,797,953		$	5,433,092		$	9,243,056		$	5,688,851		$	7,297,597		$	9,252,213		$	2,467,430		$	1,435,092		$	6,386,367		$	9,104,555
End of year	$	4,681,251		$	4,797,953		$	15,792,156		$	9,243,056		$	5,627,620		$	7,297,597		$	4,385,147		$	2,467,430		$	5,415,379		$	6,386,367
Unit Transactions:
Beginning of year		237,423			275,475			899,358			551,828			462,759			593,930			203,374			115,049			410,540			587,434
Purchased		32			2,645			505,623			322,714			68			2,789			114,253			83,403			3,314			2,144
Transferred between Sub-Accounts and Fixed
Accumulation Account		4,816			15,270			170,618			76,949			(11,817	)		(39,530	)		35,904			18,500			3,498			(53,519	)
Withdrawn, Surrendered and Annuitized		(42,449	)		(55,967	)		(58,578	)		(52,133	)		(102,779	)		(94,430	)		(13,936	)		(13,578	)		(97,408	)		(125,519	)
End of year		199,822			237,423			1,517,021			899,358			348,231			462,759			339,595			203,374			319,944			410,540

See notes to Financial Statements.

Regatta NY, Regatta Gold NY, Regatta Extra NY, Sun Life Financial Masters Flex NY, Sun Life Financial Masters Extra NY, Sun Life Financial Masters Access NY, Sun Life Financial Masters Choice NY, Sun Life Financial Masters Reward NY, and Sun Life Financial Masters Select NY Sub-Accounts Included in Sun Life (N.Y.) Variable Account C

Statements of Changes in Net Assets - continued

	IG1						IGS						MI1						MI1						M1B
	Sub-Account						Sub-Account						Sub-Account						Sub-Account						Sub-Account
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended			Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,			December 31,			December 31,			December 31,			December 31,			December 31,			December 31,			December 31,
	2006			2005			2006			2005			2006			2005			2006			2005			2006			2005
Operations:
Net investment income (loss)	$	(1,222	)	$	(456	)	$	(12,817	)	$	(6,380	)	$	(1,478	)	$	(683	)	$	(6,816	)	$	(8,132	)	$	(13,443	)	$	(10,863	)
Net realized gains (losses)		11,104			1,650			273,233			82,929			29,392			18,313			583,221			161,993			18,370			11,993
Net unrealized gains (losses)		13,416			5,934			165,992			138,079			18,963			(4,566	)		344,163			251,736			40,096			16,071
Increase (Decrease) in net assets from
operations	$	23,298		$	7,128		$	426,408		$	214,628		$	46,877		$	13,064		$	920,568		$	405,597		$	45,023		$	17,201
Contract Owner Transactions:
Accumulation Activity:
Purchase payments received	$	15		$			$	325		$	5,418		$	15		$			$	(22	)	$	450		$	49,885		$	47,172
Net transfers between Sub-Accounts and
Fixed Account		64,311			(2,764	)		317,981			64,938			112,897			(6,258	)		287,046			596,507			48,271			(42,671	)
Withdrawals, surrenders, annuitizations and
contract charges		(3,924	)		(297	)		(350,882	)		(242,332	)		(8,594	)		(2,477	)		(329,635	)		(423,887	)		(16,942	)		(17,827	)
Net accumulation activity	$	60,402		$	(3,061	)	$	(32,576	)	$	(171,976	)	$	104,318		$	(8,735	)	$	(42,611	)	$	173,070		$	81,214		$	(13,326	)
Annuitization Activity:
Annuitizations	$	-		$	-		$	-		$	-		$	-		$	-		$	2,444		$	-		$	-		$	-
Annuity payments and contract charges		-			-			(4,654)			(3,875	)		-			-			(10,942	)		(8,816	)		-			-
Net transfers between Sub-Accounts
Adjustments to annuity reserves		-			-			(576	)		(549	)		-			-			(1,796	)		(1,020	)		-			-
Net annuitization activity	$	-		$	-		$	(5,230	)	$	(4,424	)	$	-		$	-		$	(10,294	)	$	(9,836	)	$	-		$	-
Increase (Decrease) in net assets from contract
owner transactions	$	60,402		$	(3,061	)	$	(37,806	)	$	(176,400	)	$	104,318		$	(8,735	)	$	(52,905	)	$	163,234		$	81,214		$	(13,326	)
Increase (Decrease) in net assets	$	83,700		$	4,067		$	388,602		$	38,228		$	151,195		$	4,329		$	867,663		$	568,831		$	126,237		$	3,875
Net Assets:
Beginning of year	$	61,815		$	57,748		$	1,769,881		$	1,731,653		$	119,127		$	114,798		$	3,341,909		$	2,773,078		$	744,927		$	741,052
End of year	$	145,515		$	61,815		$	2,158,483		$	1,769,881		$	270,322		$	119,127		$	4,209,572		$	3,341,909		$	871,164		$	744,927
Unit Transactions:
Beginning of year		3,758			3,964			113,047			125,684			6,616			7,212			155,225			145,667			64,029			65,643
Purchased		-			-			10			358			-			-			-			24			4,173			3,949
Transferred between Sub-Accounts and Fixed
Accumulation Account		3,623			(186	)		19,560			5,034			5,639			(459	)		11,785			31,046			3,888			(3,966	)
Withdrawn, Surrendered and Annuitized		(220	)		(20	)		(21,540	)		(18,029	)		(423	)		(137	)		(13,270	)		(21,512	)		(1,453	)		(1,597	)
End of year		7,161			3,758			111,077			113,047			11,832			6,616			153,740			155,225			70,637			64,029

See notes to Financial Statements.

Regatta NY, Regatta Gold NY, Regatta Extra NY, Sun Life Financial Masters Flex NY, Sun Life Financial Masters Extra NY, Sun Life Financial Masters Access NY, Sun Life Financial Masters Choice NY, Sun Life Financial Masters Reward NY, and Sun Life Financial Masters Select NY Sub-Accounts Included in Sun Life (N.Y.) Variable Account C

Statements of Changes in Net Assets - continued

	MIS						MFL						MIT						MC1						MCV
	Sub-Account						Sub-Account						Sub-Account						Sub-Account						Sub-Account
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended			Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,			December 31,			December 31,			December 31,			December 31,			December 31,			December 31,			December 31,
	2006			2005			2006			2005			2006			2005			2006			2005			2006			2005
Operations:
Net investment income (loss)	$	(55,058	)	$	(42,973	)	$	(131,517	)	$	(40,765)		$	(135,691	)	$	(116,277	)	$	(7,195	)	$	(7,499	)	$	(9,749	)	$	(8,456	)
Net realized gains (losses)		(57,933	)		(239,329	)		108,469			16,481			(806,574	)		(1,994,760	)		9,635			16,804			73,362			71,433
Net unrealized gains (losses)		352,414			413,182			1,399,733			337,268			3,687,926			3,789,701			1,155			(7,901	)		(15,846	)		(40,119	)
Increase (Decrease) in net assets from
perations	$	239,423		$	130,880		$	1,376,685		$	312,984		$	2,745,661		$	1,678,664		$	3,595		$	1,404		$	47,767		$	22,858
Contract Owner Transactions:
Accumulation Activity:
Purchase payments received	$	9,218		$	30,679		$	7,755,327		$	3,897,969		$	160,053		$	112,016		$	10,797		$	3,075		$	14,393		$	13,870
Net transfers between Sub-Accounts and
Fixed Account		(140,501	)		(262,221	)		1,531,639			2,527,607			(270,465	)		(714,766	)		19,408			(42,621	)		90,862			(44,281	)
Withdrawals, surrenders, annuitizations and
contract charges		(754,365	)		(722,856	)		(371,245	)		(87,348	)		(5,532,397	)		(5,766,231	)		(15,452	)		(39,926	)		(21,837	)		(36,501	)
Net accumulation activity	$	(885,648	)	$	(954,398	)	$	8,915,721		$	6,338,228		$	(5,642,809	)	$	(6,368,981	)	$	14,753		$	(79,472	)	$	83,418		$	(66,912	)
Annuitization Activity:
Annuitizations	$	-		$	-		$	-		$	-		$	1,613		$	18,488		$	-		$	-		$	-		$	-
Annuity payments and contract charges		(10,610	)		(10,337	)								(42,163	)		(38,736	)		-			-			-			-
Net transfers between Sub-Accounts
Adjustments to annuity reserves		(1,586	)		(1,298	)		-			-			(60,356	)		(11,239	)		-			-			-			-
Net annuitization activity	$	(12,196	)	$	(11,635	)	$	-		$	-		$	(100,906	)	$	(31,487	)	$	-		$	-		$	-		$	-
Increase (Decrease) in net assets from contract
owner transactions	$	(897,844	)	$	(966,033	)	$	8,915,721		$	6,338,228		$	(5,743,715	)	$	(6,400,468	)	$	14,753		$	(79,472	)	$	83,418		$	(66,912	)
Increase (Decrease) in net assets	$	(658,421	)	$	(835,153	)	$	10,292,406		$	6,651,212		$	(2,998,054	)	$	(4,721,804	)	$	18,348		$	(78,068	)	$	131,185		$	(44,054	)
Net Assets:
Beginning of year	$	4,661,601		$	5,496,754		$	7,009,985		$	358,773		$	26,911,091		$	31,632,895		$	392,453		$	470,521		$	450,271		$	494,325
End of year	$	4,003,180		$	4,661,601		$	17,302,391		$	7,009,985		$	23,913,037		$	26,911,091		$	410,801		$	392,453		$	581,456		$	450,271
Unit Transactions:
Beginning of year		555,446			674,360			544,820			31,545			1,453,559			1,820,277			28,801			35,363			28,705			33,452
Purchased		1,097			3,900			580,457			320,431			8,987			5,530			775			227			892			937
Transferred between Sub-Accounts and Fixed
Accumulation Account		(17,121	)		(32,832	)		116,017			202,044			(16,982	)		(47,118	)		1,956			(3,848	)		6,370			(3,229	)
Withdrawn, Surrendered and Annuitized		(90,402	)		(89,982	)		(31,680	)		(9,200	)		(289,824	)		(325,130	)		(1,047	)		(2,941	)		(1,387	)		(2,455	)
End of year		449,020			555,446			1,209,614			544,820			1,155,740			1,453,559			30,485			28,801			34,580			28,705

See notes to Financial Statements.

Regatta NY, Regatta Gold NY, Regatta Extra NY, Sun Life Financial Masters Flex NY, Sun Life Financial Masters Extra NY, Sun Life Financial Masters Access NY, Sun Life Financial Masters Choice NY, Sun Life Financial Masters Reward NY, and Sun Life Financial Masters Select NY Sub-Accounts Included in Sun Life (N.Y.) Variable Account C

Statements of Changes in Net Assets - continued

	MM1						MMS						M1A						M10						RE1
	Sub-Account						Sub-Account						Sub-Account						Sub-Account						Sub-Account
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended			Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,			December 31,			December 31,			December 31,			December 31,			December 31,			December 31,			December 31,
	2006			2005			2006			2005			2006			2005			2006			2005			2006			2005
Operations:
Net investment income (loss)	$	205,178		$	37,032		$	169,454		$	82,244		$	(99,554	)	$	(43,227	)	$	(26,551	)	$	(31,803	)	$	(1,737	)	$	(1,364	)
Net realized gains (losses)														259,291			13,734			56,044			14,379			18,960			669
Net unrealized gains (losses)		-			-			-			(4	)		599,748			233,890			187,489			62,731			(7,877	)		6,817
Increase (Decrease) in net assets from
operations	$	205,178		$	37,032		$	169,454		$	82,240		$	759,485		$	204,397		$	216,982		$	45,307		$	9,346		$	6,122
Contract Owner Transactions:
Accumulation Activity:
Purchase payments received	$	4,176,178		$	2,473,139		$	13,077		$	850,688		$	3,499,300		$	1,831,039		$	4,323		$	18,072		$	39,074		$
Net transfers between Sub-Accounts and
Fixed Account		725,988			709,470			2,320,024			1,164,586			495,331			391,318			(1,134	)		(584,511	)		23,160			21,485
Withdrawals, surrenders, annuitizations and
contract charges		(1,545,547	)		(936,152	)		(3,491,557	)		(3,948,123	)		(196,746	)		(58,401	)		(213,818	)		(374,128	)		(40,181	)		(1,158	)
Net accumulation activity	$	3,356,619		$	2,246,457		$	(1,158,456	)	$	(1,932,849	)	$	3,797,885		$	2,163,956		$	(210,629	)	$	(940,567	)	$	22,053		$	20,327
Annuitization Activity:
Annuitizations	$	-		$	-		$	-		$	-		$	-		$	-		$	3,903		$	-		$	-		$	-
Annuity payments and contract charges								(23,619	)		(23,797	)								(1,659	)		(1,523	)
Net transfers between Sub-Accounts
Adjustments to annuity reserves		-			-			(2,640	)		(2,071	)		-			-			(749	)		(515	)		-			-
Net annuitization activity	$	-		$	-		$	(26,259	)	$	(25,868	)	$	-		$	-		$	1,495		$	(2,038	)	$	-		$	-
Increase (Decrease) in net assets from contract
owner transactions	$	3,356,619		$	2,246,457		$	(1,184,715	)	$	(1,958,717	)	$	3,797,885		$	2,163,956		$	(209,134	)	$	(942,605	)	$	22,053		$	20,327
Increase (Decrease) in net assets	$	3,561,797		$	2,283,489		$	(1,015,261	)	$	(1,876,477	)	$	4,557,370		$	2,368,353		$	7,848		$	(897,298	)	$	31,399		$	26,449
Net Assets:
Beginning of year	$	6,032,904		$	3,749,415		$	5,662,703		$	7,539,180		$	3,866,178		$	1,497,825		$	1,998,705		$	2,896,003		$	127,473		$	101,024
End of year	$	9,594,701		$	6,032,904		$	4,647,442		$	5,662,703		$	8,423,548		$	3,866,178		$	2,006,553		$	1,998,705		$	158,872		$	127,473
Unit Transactions:
Beginning of year		612,159			384,369			455,219			611,796			308,542			124,003			137,801			208,136			10,280			8,838
Purchased		420,947			253,894			1,086			33,025			261,590			157,851			287			1,338			2,653
Transferred between Sub-Accounts and Fixed
Accumulation Account		70,768			72,019			142,740			47,914			45,604			33,407			(439	)		(43,812	)		1,283			1,527
Withdrawn, Surrendered and Annuitized		(156,247	)		(98,123	)		(234,616	)		(237,516	)		(16,779	)		(6,719	)		(14,064	)		(27,861	)		(3,338	)		(85	)
End of year		947,627			612,159			364,429			455,219			598,957			308,542			123,585			137,801			10,878			10,280

See notes to Financial Statements.

Regatta NY, Regatta Gold NY, Regatta Extra NY, Sun Life Financial Masters Flex NY, Sun Life Financial Masters Extra NY, Sun Life Financial Masters Access NY, Sun Life Financial Masters Choice NY, Sun Life Financial Masters Reward NY, and Sun Life Financial Masters Select NY Sub-Accounts Included in Sun Life (N.Y.) Variable Account C

Statements of Changes in Net Assets - continued

	RES						RG1						RGS						RI1						RIS
	Sub-Account						Sub-Account						Sub-Account						Sub-Account						Sub-Account
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended			Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,			December 31,			December 31,			December 31,			December 31,			December 31,			December 31,			December 31,
	2006			2005			2006			2005			2006			2005			2006			2005			2006			2005
Operations:
Net investment income (loss)	$	(86,644	)	$	(115,367	)	$	(366	)	$	(426	)	$	(16,818	)	$	(17,876	)	$	(44,079	)	$	(23,547	)	$	(2,826	)	$	(8,884	)
Net realized gains (losses)		(1,398,993	)		(1,923,661	)		7,839			561			90,008			15,989			482,353			77,756			323,060			61,375
Net unrealized gains (losses)		2,497,134			2,904,988			(5,932	)		1,823			165,314			122,500			690,024			263,818			41,462			158,264
Increase (Decrease) in net assets from
operations	$	1,011,497		$	865,960		$	1,541		$	1,958		$	238,504		$	120,613		$	1,128,298		$	318,027		$	361,696		$	210,755
Contract Owner Transactions:
Accumulation Activity:
Purchase payments received	$	19,651		$	49,930		$			$			$	49,012		$	18,724		$	3,255,064		$	1,087,595		$	2,083		$	2,092
Net transfers between Sub-Accounts and
Fixed Account		(393,775	)		(402,080	)		21,598			(130	)		(34,840	)		120,609			830,511			77,027			50,626			266,876
Withdrawals, surrenders, annuitizations and
contract charges		(2,772,840	)		(2,604,053	)		(30,867	)		(1,054	)		(708,627	)		(557,008	)		(658,206	)		(37,224	)		(233,507	)		(244,709	)
Net accumulation activity	$	(3,146,964	)	$	(2,956,203	)	$	(9,269	)	$	(1,184	)	$	(694,455	)	$	(417,675	)	$	3,427,369		$	1,127,398		$	(180,798	)	$	24,259
Annuitization Activity:
Annuitizations	$	4,976		$	-		$	-		$	-		$	-		$			$	-		$	-		$	-		$	-
Annuity payments and contract charges		(1,189	)		(936	)								(1,063	)		(1,011	)
Net transfers between Sub-Accounts
Adjustments to annuity reserves		(43	)		33			-			-			114			23			-			-			-			-
Net annuitization activity	$	3,744		$	(903	)	$	-		$	-		$	(949	)	$	(988	)	$	-		$	-		$	-		$	-
Increase (Decrease) in net assets from contract
owner transactions	$	(3,143,220	)	$	(2,957,106	)	$	(9,269	)	$	(1,184	)	$	(695,404	)	$	(418,663	)	$	3,427,369		$	1,127,398		$	(180,798	)	$	24,259
Increase (Decrease) in net assets	$	(2,131,723	)	$	(2,091,146	)	$	(7,728	)	$	774		$	(456,900	)	$	(298,050	)	$	4,555,667		$	1,445,425		$	180,898		$	235,014
Net Assets:
Beginning of year	$	13,288,164		$	15,379,310		$	41,298		$	40,524		$	2,507,227		$	2,805,277		$	2,823,350		$	1,377,925		$	1,528,297		$	1,293,283
End of year	$	11,156,441		$	13,288,164		$	33,570		$	41,298		$	2,050,327		$	2,507,227		$	7,379,017		$	2,823,350		$	1,709,195		$	1,528,297
Unit Transactions:
Beginning of year		824,261			1,015,710			3,460			3,559			174,420			204,453			171,687			93,242			97,912			95,205
Purchased		1,216			3,177									3,399			1,402			172,483			75,297			124			157
Transferred between Sub-Accounts and Fixed
Accumulation Account		(24,213	)		(26,461	)		1,753			(11	)		(2,739	)		8,756			46,738			5,625			2,276			19,464
Withdrawn, Surrendered and Annuitized		(166,971	)		(168,165	)		(2,683	)		(88)			(48,119	)		(40,191	)		(32,991	)		(2,477	)		(13,209	)		(16,914	)
End of year		634,293			824,261			2,530			3,460			126,961			174,420			357,917			171,687			87,103			97,912

See notes to Financial Statements.

Regatta NY, Regatta Gold NY, Regatta Extra NY, Sun Life Financial Masters Flex NY, Sun Life Financial Masters Extra NY, Sun Life Financial Masters Access NY, Sun Life Financial Masters Choice NY, Sun Life Financial Masters Reward NY, and Sun Life Financial Masters Select NY Sub-Accounts Included in Sun Life (N.Y.) Variable Account C

Statements of Changes in Net Assets - continued

	SG1						SGS						SI1						SIS						SVS
	Sub-Account						Sub-Account						Sub-Account						Sub-Account						Sub-Account
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended			Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,			December 31,			December 31,			December 31,			December 31,			December 31,			December 31,			December 31,
	2006			2005			2006			2005			2006			2005			2006			2005			2006			2005
Operations:
Net investment income (loss)	$	(17,157	)	$	(18,442	)	$	(3,672	)	$	(3,088	)	$	5,785		$	7,491		$	81,223		$	93,995		$	(1,231	)	$	(1,102	)
Net realized gains (losses)		44,437			21,208			12,056			12,749			1,814			1,760			17,247			35,098			7,467			13,297
Net unrealized gains (losses)		25,875			(7,730	)		8,451			(10,819	)		58			(9,232	)		(11,664	)		(121,531	)		4,184			(16,104	)
Increase (Decrease) in net assets from
operations	$	53,155		$	(4,964	)	$	16,835		$	(1,158	)	$	7,657		$	19		$	86,806		$	7,562		$	10,420		$	(3,909	)
Contract Owner Transactions:
Accumulation Activity:
Purchase payments received	$	19,849		$	48,355		$	450		$	14,194		$	-		$	-		$	-		$	7,242		$	-		$	7,789
Net transfers between Sub-Accounts and
Fixed Account		(153,943	)		(19,243	)		24,666			(49,586	)		87,882			18,989			122,697			338,596			(22,638	)		(26,653	)
Withdrawals, surrenders, annuitizations and
contract charges		(55,778	)		(84,155	)		(52,923	)		(80,892	)		(39,869	)		(2,484	)		(173,964	)		(189,447	)		(1,601	)		(525	)
Net accumulation activity	$	(189,872	)	$	(55,043	)	$	(27,807	)	$	(116,284	)	$	48,013		$	16,505		$	(51,267	)	$	156,391		$	(24,239	)	$	(19,389	)
Annuitization Activity:
Annuitizations	$	-		$	-		$	-		$	-		$	-		$	-		$	-		$	-		$	-		$	-
Annuity payments and contract charges		-			-			(2,804	)		(2,788	)		-			-			-			-			-			-
Net transfers between Sub-Accounts
Adjustments to annuity reserves		-			-			(626	)		(669	)		-			-			-			-			-			-
Net annuitization activity	$	-		$	-		$	(3,430	)	$	(3,457	)	$	-		$	-		$	-		$	-		$	-		$	-
Increase (Decrease) in net assets from contract
owner transactions	$	(189,872	)	$	(55,043	)	$	(31,237	)	$	(119,741	)	$	48,013		$	16,505		$	(51,267	)	$	156,391		$	(24,239	)	$	(19,389	)
Increase (Decrease) in net assets	$	(136,717	)	$	(60,007	)	$	(14,402	)	$	(120,899	)	$	55,670		$	16,524		$	35,539		$	163,953		$	(13,819	)	$	(23,298	)
Net Assets:
Beginning of year	$	1,075,147		$	1,135,154		$	315,301		$	436,200		$	150,317		$	133,793		$	1,684,849		$	1,520,896		$	117,542		$	140,840
End of year	$	938,430		$	1,075,147		$	300,899		$	315,301		$	205,987		$	150,317		$	1,720,388		$	1,684,849		$	103,723		$	117,542
Unit Transactions:
Beginning of year		86,895			91,082			45,047			65,477			12,321			10,974			127,158			115,341			8,755			10,727
Purchased		1,606			4,027			73			2,551			-			-			-			548			-			559
Transferred between Sub-Accounts and Fixed
Accumulation Account		(11,177	)		(1,188	)		4,189			(8,760	)		7,003			1,553			9,165			25,706			(1,628	)		(2,485	)
Withdrawn, Surrendered and Annuitized		(4,366	)		(7,026	)		(8,832	)		(14,221	)		(3,235	)		(206	)		(12,949	)		(14,437	)		(123	)		(46	)
End of year		72,958			86,895			40,477			45,047			16,089			12,321			123,374			127,158			7,004			8,755

See notes to Financial Statements.

Regatta NY, Regatta Gold NY, Regatta Extra NY, Sun Life Financial Masters Flex NY, Sun Life Financial Masters Extra NY, Sun Life Financial Masters Access NY, Sun Life Financial Masters Choice NY, Sun Life Financial Masters Reward NY, and Sun Life Financial Masters Select NY Sub-Accounts Included in Sun Life (N.Y.) Variable Account C

Statements of Changes in Net Assets - continued

	MFJ						TRS						MFE						UTS						MV1
	Sub-Account						Sub-Account						Sub-Account						Sub-Account						Sub-Account
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended			Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,			December 31,			December 31,			December 31,			December 31,			December 31,			December 31,			December 31,
	2006			2005			2006			2005			2006			2005			2006			2005			2006			2005
Operations:
Net investment income (loss)	$	578,080		$	202,015		$	499,785		$	523,665		$	1,224		$	(3,584	)	$	165,710		$	(38,359	)	$	(8,876	)	$	(8,279	)
Net realized gains (losses)		2,897,130			1,170,909			1,644,200			1,671,406			35,898			12,141			762,270			(10,686	)		117,143			30,278
Net unrealized gains (losses)		2,932,149			(707,509	)		1,298,445			(1,572,025	)		245,189			39,370			1,683,397			1,470,707			181,390			39,257
Increase (Decrease) in net assets from
operations	$	6,407,359		$	665,415		$	3,442,430		$	623,046		$	282,311		$	47,927		$	2,611,377		$	1,421,662		$	289,657		$	61,256
Contract Owner Transactions:
Accumulation Activity:
Purchase payments received	$	11,092,712		$	26,583,112		$	101,612		$	151,308		$	668,145		$	66,521		$	49,109		$	44,941		$	262,282		$	103,227
Net transfers between Sub-Accounts and
Fixed Account		(1,188,552	)		3,063,046			(55,760	)		613,753			442,142			151,075			91,197			1,063,746			123,119			35,902
Withdrawals, surrenders, annuitizations and
contract charges		(3,017,616	)		(2,164,759	)		(6,941,875	)		(7,693,068	)		(42,336	)		(55,309	)		(2,174,942	)		(1,954,143	)		(147,096	)		(64,917	)
Net accumulation activity	$	6,886,544		$	27,481,399		$	(6,896,023	)	$	(6,928,007	)	$	1,067,951		$	162,287		$	(2,034,636	)	$	(845,456	)	$	238,305		$	74,212
Annuitization Activity:
Annuitizations	$	-		$	-		$	5,604		$	8,343		$	-		$	-		$	5,885		$	-		$	-		$	-
Annuity payments and contract charges		-			-			(143,336	)		(204,532	)		-			-			(11,955	)		(10,515	)		-			-
Net transfers between Sub-Accounts
Adjustments to annuity reserves		-			-			(31,804	)		(41,122	)		-			-			(3,771	)		(1,949	)		-			-
Net annuitization activity	$	-		$	-		$	(169,536	)	$	(237,311	)	$	-		$	-		$	(9,841	)	$	(12,464	)	$	-		$	-
Increase (Decrease) in net assets from contract
owner transactions	$	6,886,544		$	27,481,399		$	(7,065,559	)	$	(7,165,318	)	$	1,067,951		$	162,287		$	(2,044,477	)	$	(857,920	)	$	238,305		$	74,212
Increase (Decrease) in net assets	$	13,293,903		$	28,146,814		$	(3,623,129	)	$	(6,542,272	)	$	1,350,262		$	210,214		$	566,900		$	563,742		$	527,962		$	135,468
Net Assets:
Beginning of year	$	58,024,496		$	29,877,682		$	36,706,948		$	43,249,220		$	421,576		$	211,362		$	9,861,655		$	9,297,913		$	1,436,246		$	1,300,778
End of year	$	71,318,399		$	58,024,496		$	33,083,819		$	36,706,948		$	1,771,838		$	421,576		$	10,428,555		$	9,861,655		$	1,964,208		$	1,436,246
Unit Transactions:
Beginning of year		4,829,607			2,463,547			1,702,854			2,026,951			23,573			13,683			356,174			388,146			106,028			100,522
Purchased		931,445			2,295,650			4,891			6,501			33,129			3,954			1,850			1,408			18,411			7,463
Transferred between Sub-Accounts and Fixed
Accumulation Account		(103,890	)		261,397			(3,946	)		27,997			21,640			9,202			899			41,812			8,465			2,798
Withdrawn, Surrendered and Annuitized		(232,209	)		(190,987	)		(310,390	)		(358,595	)		(2,093	)		(3,266	)		(71,325	)		(75,192	)		(10,518	)		(4,755	)
End of year		5,424,953			4,829,607			1,393,409			1,702,854			76,249			23,573			287,598			356,174			122,386			106,028

See notes to Financial Statements.

Regatta NY, Regatta Gold NY, Regatta Extra NY, Sun Life Financial Masters Flex NY, Sun Life Financial Masters Extra NY, Sun Life Financial Masters Access NY, Sun Life Financial Masters Choice NY, Sun Life Financial Masters Reward NY, and Sun Life Financial Masters Select NY Sub-Accounts Included in Sun Life (N.Y.) Variable Account C

Statements of Changes in Net Assets - continued

	MVS						OCA						OGG						OMG						OMS
	Sub-Account						Sub-Account						Sub-Account						Sub-Account						Sub-Account
	Year Ended		Year Ended			Year Ended			Year Ended			Year Ended			Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	December 31,		December 31,			December 31,			December 31,			December 31,			December 31,			December 31,			December 31,			December 31,			December 31,
	2006		2005			2006			2005			2006			2005			2006			2005			2006			2005
Operations:
Net investment income (loss)	$	12,554		$	503		$	(28,545)		$	(16,821)		$	(13,820)		$	(3,034)		$	(244,285)		$	(99,749)		$	(8,531)		$	(4,095)
Net realized gains (losses)		652,800			327,230			50,018			27,035			58,616			4,101			259,322			49,865			32,092			7,539
Net unrealized gains (losses)		480,330			28,750			94,815			40,674			176,986			38,364			3,392,244			700,257			45,352			22,290
Increase (Decrease) in net assets from
operations	$	1,145,684		$	356,483		$	116,288		$	50,888		$	221,782		$	39,431		$	3,407,281		$	650,373		$	68,913		$	25,734
Contract Owner Transactions:
Accumulation Activity:
Purchase payments received	$	2,427		$	18,546		$	370,404		$	280,156		$	1,235,082		$	303,617		$	15,443,686		$	8,670,855		$	325,919		$	133,684
Net transfers between Sub-Accounts and
Fixed Account		(239,439)			499,079			(8,534)			(14,161)			461,141			8,309			3,059,489			1,800,438			129,460			42,914
Withdrawals, surrenders, annuitizations and
contract charges		(1,024,829)			(1,235,915)			(88,137)			(100,847)			(46,922)			(11,443)			(895,640)			(313,089)			(43,805)			(6,359)
Net accumulation activity	$	(1,261,841)		$	(718,290)		$	273,733		$	165,148		$	1,649,301		$	300,483		$	17,607,535		$	10,158,204		$	411,574		$	170,239
Annuitization Activity:
Annuitizations	$	-		$	-		$	-		$	-		$	-		$	-		$	-		$	-		$	-		$	-
Annuity payments and contract charges
Net transfers between Sub-Accounts
Adjustments to annuity reserves		(480)			(141)			-			-			-			-			-			-			-			-
Net annuitization activity	$	(480)		$	(141)		$	-		$	-		$	-		$	-		$	-		$	-		$	-		$	-
Increase (Decrease) in net assets from contract
owner transactions	$	(1,262,321)		$	(718,431)		$	273,733		$	165,148		$	1,649,301		$	300,483		$	17,607,535		$	10,158,204		$	411,574		$	170,239
Increase (Decrease) in net assets	$	(116,637)		$	(361,948)		$	390,021		$	216,036		$	1,871,083		$	339,914		$	21,014,816		$	10,808,577		$	480,487		$	195,973
Net Assets:
Beginning of year	$	6,743,170		$	7,105,118		$	1,553,023		$	1,336,987		$	465,228		$	125,314		$	16,985,237		$	6,176,660		$	311,642		$	115,669
End of year	$	6,626,533		$	6,743,170		$	1,943,044		$	1,553,023		$	2,336,311		$	465,228		$	38,000,053		$	16,985,237		$	792,129		$	311,642
Unit Transactions:
Beginning of year		461,544			511,261			119,613			105,606			34,077			10,232			1,349,644			504,529			18,961			8,062
Purchased		160			1,304			30,006			22,879			85,066			24,069			1,165,979			728,607			20,537			8,494
Transferred between Sub-Accounts and Fixed
Accumulation Account		(16,408)			35,926			613			(827)			31,454			675			232,915			150,349			8,997			2,823
Withdrawn, Surrendered and Annuitized		(65,081)			(86,947)			(6,576)			(8,045)			(3,207)			(899)			(76,807)			(33,841)			(2,668)			(418)
End of year		380,215			461,544			143,656			119,613			147,390			34,077			2,671,731			1,349,644			45,827			18,961

See notes to Financial Statements.

Regatta NY, Regatta Gold NY, Regatta Extra NY, Sun Life Financial Masters Flex NY, Sun Life Financial Masters Extra NY, Sun Life Financial Masters Access NY, Sun Life Financial Masters Choice NY, Sun Life Financial Masters Reward NY, and Sun Life Financial Masters Select NY Sub-Accounts Included in Sun Life (N.Y.) Variable Account C

Statements of Changes in Net Assets - continued

	PMB				PLD				PRR				PTR				PRA
	Sub-Account				Sub-Account				Sub-Account				Sub-Account				Sub-Account
		Year Ended		Year Ended		Year Ended		Year Ended		Year Ended		Year Ended		Year Ended		Year Ended		Year Ended		Year Ended
		December 31,		December 31,		December 31,		December 31,		December 31,		December 31,		December 31,		December 31,		December 31,		December 31,
		2006		2005		2006		2005		2006		2005		2006		2005		2006 (x)		2005
Operations:
Net investment income (loss)	$	15,226	$	4,381	$	671,695	$	147,193	$	57,512	$	21,431	$	80,980	$	32,429	$	2,358	$	-
Net realized gains (losses)		9,336		4,348		(54,684)		33,019		5,578		26,455		5,320		39,028		194
Net unrealized gains (losses)		8,536		5,308		16,624		(250,194)		(98,440)		(46,248)		(13,931)		(59,857)		(1,148)		-
Increase (Decrease) in net assets from
operations	$	33,098	$	14,037	$	633,635	$	(69,982)	$	(35,350)	$	1,638	$	72,369	$	11,600	$	1,404	$	-
Contract Owner Transactions:
Accumulation Activity:
Purchase payments received	$	222,909	$	154,917	$	14,473,459	$	8,412,763	$	877,863	$	1,623,121	$	1,096,950	$	728,092	$	85,248	$	-
Net transfers between Sub-Accounts and
Fixed Account		87,510		51,945		5,690,870		2,104,477		(164,583)		474,057		623,634		286,922		2,040		-
Withdrawals, surrenders, annuitizations and
contract charges		(67,399)		(3,607)		(1,340,812)		(841,171)		(546,254)		(837,567)		(662,065)		(244,738)		(53)		-
Net accumulation activity	$	243,020	$	203,255	$	18,823,517	$	9,676,069	$	167,026	$	1,259,611	$	1,058,519	$	770,276	$	87,235	$	-
Annuitization Activity:
Annuitizations	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-
Annuity payments and contract charges		-		-		-		-		-		-		-		-		-		-
Net transfers between Sub-Accounts
Adjustments to annuity reserves		-		-		-		-		-		-		-		-		-		-
Net annuitization activity	$		$		$		$		$		$		$		$		$		$	-
Increase (Decrease) in net assets from contract
owner transactions	$	243,020	$	203,255	$	18,823,517	$	9,676,069	$	167,026	$	1,259,611	$	1,058,519	$	770,276	$	87,235	$	-
Increase (Decrease) in net assets	$	276,118	$	217,292	$	19,457,152	$	9,606,087	$	131,676	$	1,261,249	$	1,130,888	$	781,876	$	88,639	$	-
Net Assets:
Beginning of year	$	249,962	$	32,670	$	17,682,317	$	8,076,230	$	2,221,542	$	960,293	$	2,333,104	$	1,551,228	$		$	-
End of year	$	526,080	$	249,962	$	37,139,469	$	17,682,317	$	2,353,218	$	2,221,542	$	3,463,992	$	2,333,104	$	88,639	$	-
Unit Transactions:
Beginning of year		13,934		2,016		1,778,199		807,314		201,615		86,845		217,983		144,404		-		-
Purchased		12,497		9,129		1,455,912		853,709		78,427		151,801		103,189		69,311		8,230		-
Transferred between Sub-Accounts and Fixed
Accumulation Account		4,866		2,998		565,569		211,242		(15,955)		43,410		59,104		27,604		193		-
Withdrawn, Surrendered and Annuitized		(3,536)		(209)		(145,713)		(94,066)		(49,759)		(80,441)		(62,144)		(23,336)		(5)		-
End of year		27,761		13,934		3,653,967		1,778,199		214,328		201,615		318,132		217,983		8,.418		-

See notes to Financial Statements.

Regatta NY, Regatta Gold NY, Regatta Extra NY, Sun Life Financial Masters Flex NY, Sun Life Financial Masters Extra NY, Sun Life Financial Masters Access NY, Sun Life Financial Masters Choice NY, Sun Life Financial Masters Reward NY, and Sun Life Financial Masters Select NY Sub-Accounts Included in Sun Life (N.Y.) Variable Account C

Statements of Changes in Net Assets - continued

	PCR					SSA						LGF					IGB						SRE
	Sub-Account					Sub-Account						Sub-Account					Sub-Account						Sub-Account
	Year Ended			Year Ended		Year Ended			Year Ended			Year Ended			Year Ended		Year Ended			Year Ended			Year Ended			Year Ended
	December 31,			December 31,		December 31,			December 31,			December 31,			December 31,		December 31,			December 31,			December 31,			December 31,
	2006 (x)			2005		2006			2005			2006 (i)			2005		2006			2005			2006			2005
Operations:
Net investment income (loss)	$	8,945		$	-	$	348		$	(26	)	$	(59	)	$	-	$	10,757		$	1,600		$	(13,683	)	$	(4,803	)
Net realized gains (losses)		677			-		469			1,399			2					2,435			822			480,230			210,352
Net unrealized gains (losses)		(23,220	)		-		13,231			(1,268	)		661					2,707			(2,121	)		1,029,889			(10,704	)
Increase (Decrease) in net assets from
operations	$	(13,598	)	$	-	$	14,048		$	105		$	604		$	-	$	15,899		$	301		$	1,496,436		$	194,845
Contract Owner Transactions:
Accumulation Activity:
Purchase payments received	$	251,369		$	-	$	94,347		$	540		$	5,440		$	-	$	298,483		$	92,500		$	3,346,451		$	1,500,529
Net transfers between Sub-Accounts and
Fixed Account		115,886			-		452			9,808			13,255					254,994			3,680			(112,572	)		288,542
Withdrawals, surrenders, annuitizations and
contract charges		(2,759	)		-		(239	)					(10	)				(23,915	)		(5,509	)		(171,984	)		(34,226	)
Net accumulation activity	$	364,496		$	-	$	94,560		$	10,348		$	18,685		$	-	$	529,562		$	90,671		$	3,061,895		$	1,754,845
Annuitization Activity:
Annuitizations	$	-		$	-	$	-		$	-		$	-		$	-	$	-		$	-		$	-		$	-
Annuity payments and contract charges
Net transfers between Sub-Accounts
Adjustments to annuity reserves
Net annuitization activity	$	-		$	-	$	-		$	-		$	-		$	-	$	-		$	-		$	-		$	-
Increase (Decrease) in net assets from contract
owner transactions	$	364,496		$	-	$	94,560		$	10,348		$	18,685		$	-	$	529,562		$	90,671		$	3,061,895		$	1,754,845
Increase (Decrease) in net assets	$	350,898		$	-	$	108,608		$	10,453		$	19,289		$	-	$	545,461		$	90,972		$	4,558,331		$	1,949,690
Net Assets:
Beginning of year	$	-		$	-	$	10,453		$	-		$	-		$	-	$	100,797		$	9,825		$	2,842,031		$	892,341
End of year	$	350,898		$	-	$	119,061		$	10,453		$	19,289		$	-	$	646,258		$	100,797		$	7,400,362		$	2,842,031
Unit Transactions:
Beginning of year		-			-		966			-			-			-		9,809			950			214,281			71,956
Purchased		24,644			-		8,315			51			558			-		28,672			9,032			213,812			122,784
Transferred between Sub-Accounts and Fixed
Accumulation Account		11,403			-		57			915			1,400			-		24,235			356			(5,815	)		23,463
Withdrawn, Surrendered and Annuitized		(277	)		-		(20	)		-			(1	)		-		(2,295	)		(529	)		(12,025	)		(3,922	)
End of year		35,770			-		9,318			966			1,957			-		60,421			9,809			410,253			214,281

(i) for period October 31, 2005 (commencement of operations) through December 31, 2005.

(x) fund open in prior year, first activity in current year.

See notes to Financial Statements.

Regatta NY, Regatta Gold NY, Regatta Extra NY, Sun Life Financial Masters Flex NY, Sun Life Financial Masters Extra NY, Sun Life Financial Masters Access NY, Sun Life Financial Masters Choice NY, Sun Life Financial Masters Reward NY, and Sun Life Financial Masters Select NY Sub-Accounts Included in Sun Life (N.Y.) Variable Account C

Statements of Changes in Net Assets - continued

	SC3						CMM						WTF
	Sub-Account						Sub-Account						Sub-Account
	Year Ended			Year Ended			Year Ended			Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,			December 31,			December 31,			December 31,
	2006			2005			2006			2005 (e)			2006			2005
Operations:
Net investment income (loss)	$	(1,597	)	$	(1,909	)	$	1,022		$	42	)	$	(363	)	$	(70	)
Net realized gains (losses)		94,390			83,845									1,291			173
Net unrealized gains (losses)		92,864			(37,746	)		-			-			3,110			735
Increase (Decrease) in net assets from
operations	$	185,657		$	44,190		$	1,022		$	42		$	4,038		$	838
Contract Owner Transactions:
Accumulation Activity:
Purchase payments received	$	8,877		$	6,579		$	22,913		$	16,420		$	5,743		$	12,482
Net transfers between Sub-Accounts and
Fixed Account		(175,236)			(51,179	)		3,175			2,441			5			4,563
Withdrawals, surrenders, annuitizations and
contract charges		(21,196	)		(47,265	)		(1,758	)		(6	)		(327	)		(12	)
Net accumulation activity	$	(187,555	)	$	(91,865	)	$	24,330		$	18,855		$	5,421		$	17,033
Annuitization Activity:
Annuitizations	$	-		$	-		$	-		$	-		$	-		$	-
Annuity payments and contract charges
Net transfers between Sub-Accounts
Adjustments to annuity reserves
Net annuitization activity	$	-		$	-		$	-		$	-		$	-		$	-
Increase (Decrease) in net assets from contract
owner transactions	$	(187,555	)	$	(91,865	)	$	24,330		$	18,855		$	5,421		$	17,033
Increase (Decrease) in net assets	$	(1,898	)	$	(47,675	)	$	25,352		$	18,897		$	9,459		$	17,871
Net Assets:
Beginning of year	$	589,534		$	637,209		$	18,897		$	-		$	17,871		$	-
End of year	$	587,636		$	589,534		$	44,249		$	18,897		$	27,330		$	17,871
Unit Transactions:
Beginning of year		31,220			36,312			1,879						1,554
Purchased		406			400			2,269			1,636			484			1,137
Transferred between Sub-Accounts and Fixed
Accumulation Account		(7,878	)		(2,790	)		313			244			8			418
Withdrawn, Surrendered and Annuitized		(949	)		(2,702	)		(172	)		(1	)		(26	)		(1	)
End of year		22,799			31,220			4,289			1,879			2,020			1,554

(e) for the period April 25, 2005 (commencement of operations) through December 31, 2005.

See notes to Financial Statements.

Regatta NY, Regatta Gold NY, Regatta Extra NY, Sun Life Financial Masters Flex NY, Sun Life Financial Masters Extra NY, Sun Life Financial Masters Access NY, Sun Life Financial Masters Choice NY, Sun Life Financial Masters Reward NY and Sun Life Financial Masters Select NY Sub-Accounts Included in Sun Life (N.Y.) Variable Account C

Notes to Financial Statements

(1) Organization

Sun Life (N.Y.) Variable Account C (the "Variable Account"), a separate account of Sun Life Insurance and Annuity Company of New York, the ("Sponsor") (a wholly-owned subsidiary of Sun Life Assurance Company of Canada (U.S.)), was established on October 18, 1985 as a funding vehicle for the variable portion of Regatta NY contracts, Regatta Gold NY contracts, Regatta Extra NY contracts, Sun Life Financial Masters Flex NY contracts, Sun Life Financial Masters Extra NY contracts, Sun Life Financial Masters Access NY contracts, Sun Life Financial Masters Choice NY, Sun Life Financial Masters Reward NY, and Sun Life Financial Masters Select NY contracts (collectively, the "Contracts") and certain other fixed and variable annuity contracts issued by the Sponsor. The Variable Account is registered with the Securities and Exchange Commission under the Investment Company Act of 1940 as a unit investment trust and exists in accordance with the regulations of the New York State Insurance Department.

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 certain open-end mutual funds registered under the Investment Company Act of 1940, as amended. With respect to the Regatta NY contracts, Regatta Gold NY contracts, and Regatta Extra NY contracts, the funds include MFS/Sun Life Series Trust (the "Series Trust"). With respect to the Sun Life Financial Masters Flex NY, Sun Life Financial Masters Extra NY contracts, Sun Life Financial Masters Access NY contracts, Sun Life Financial Masters Choice NY, Sun Life Financial Masters Reward NY, and Sun Life Financial Masters Select NY contracts, the funds include Columbia Funds Variable Insurance Trust (VIT), Fidelity Variable Insurance Products Funds, Franklin Templeton Variable Insurance Products (VIP) Trust, Lord Abbett Series Fund, Inc., the "Series Trust", Oppenheimer Variable Account (VA) Funds, PIMCO Variable Insurance Trust (VIT), Sun Capital Advisers Trust, and Wanger Advisor Trust (collectively with the Series Trust, the "Funds").

Under applicable insurance law, the assets and liabilities of the Variable Account are clearly identified and distinguished from the Sponsor’s other assets and liabilities. The portion of the Variable Account's assets applicable to the variable annuity contracts is 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 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 the 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 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.

Recent Accounting Pronouncements

In June 2006, the Financial Accounting Standards Board (FASB) issued FASB Interpretation No. 48, (FIN 48) "Accounting for Uncertainty in Income Taxes -an interpretation of FASB Statement No. 109". FIN 48 clarifies the accounting for uncertainty in income taxes recognized in accordance with FASB Statement No. 109, Accounting for Income Taxes". This interpretation prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or exposed to be taken in a tax return. It also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. FIN 48 is effective during the first required financial reporting period for fiscal years beginning after December 15, 2006. Management of the Sub-Accounts is currently evaluating the impact of applying the various provisions of FIN 48.

Regatta NY, Regatta Gold NY, Regatta Extra NY, Sun Life Financial Masters Flex NY, Sun Life Financial Masters Extra NY, Sun Life Financial Masters Access NY, Sun Life Financial Masters Choice NY, Sun Life Financial Masters Reward NY and Sun Life Financial Masters Select NY Sub-Accounts Included in Sun Life (N.Y.) Variable Account C

Notes to Financial Statements- continued

(2)Significant Accounting Policies- continued

In June 2006, the Financial Accounting Standards Board (FASB) issued FASB Interpretation No. 48, (FIN 48) "Accounting for Uncertainty in Income Taxes -an interpretation of FASB Statement No. 109". FIN 48 clarifies the accounting for uncertainty in income taxes recognized in accordance with FASB Statement No. 109, Accounting for Income Taxes". This interpretation prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or exposed to be taken in a tax return. It also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. FIN 48 is effective during the first required financial reporting period for fiscal years beginning after December 15, 2006. Management of the Sub-Accounts is currently evaluating the impact of applying the various provisions of FIN 48.

In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157, (FAS 157) "Fair Value Measurements". FAS 157 defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles and expands disclosure about fair value measurements. FAS 157 is effective for fiscal years beginning after November 15, 2007. Management of the Sub-Accounts is currently evaluating the impact the adoption of FAS 157 will have on the Sub-Account’s financial statement disclosures.

(3) Contract Charges and Related Party Transactions

Charges for mortality and expense risks, the optional death benefit rider, and the Secured Returns Optional Living Benefit are based on the value of the Sub-Account and are deducted from the Variable Account at the end of each valuation period for the risks assumed by the Sponsor. These deductions are transferred periodically to the Sponsor. Currently, the deduction is at an effective annual rate as follows:

	Level 1		Level 2		Level 3		Level 4		Level 5
Regatta NY contracts	1.25	%
Regatta Gold NY contracts	1.25	%
Regatta Extra NY contracts	1.30	%	1.45	%
Sun Life Financial Masters Flex NY contracts	1.30	%	1.50	%	1.70	%	1.90	%
Sun Life Financial Masters Extra NY contracts	1.40	%	1.60	%	1.80	%	2.00	%
Sun Life Financial Masters Access NY contracts	1.35	%	1.55	%	1.75	%
Sun Life Financial Masters Choice NY contracts	1.05	%	1.25	%	1.30	%	1.45	%	1.65	%
Sun Life Financial Masters Reward NY contracts	1.40	%	1.60	%	1.80	%	2.00	%
Sun Life Financial Masters Select NY contracts	1.05	%	1.25	%	1.30	%	1.45	%	1.65	%

Each year on the contract anniversary, an account administration fee ("Account Fee") of $30 is deducted from each contract’s accumulation account. After the annuity commencement date the Account Fee is deducted pro rata from each variable annuity payment made during the year. In addition, a deduction is made from the Sub-Account at the end of each valuation period (during both the accumulation period and after annuity payments begin) at an effective annual rate of 0.15% of the daily net assets of the Sub-Account. These charges are paid to the Sponsor to reimburse it for administrative expenses which exceed the revenues received from the Account Fee.

A specific quarterly charge, equal to 0.125% of Account Value, is deducted on the last day of the Account Quarter if one of the following optional living benefit riders has been elected: Secured Returns 2, Secured Returns for Life, or Secured Returns for Life Plus. ("Account Quarters" are defined as three-month periods, with the first Account Quarter beginning on the Issue Date.) These three optional living benefit riders are available on Sun Life Financial Masters Choice NY contracts, Sun Life Financial Masters Extra NY contracts, Sun Life Financial Masters Flex NY contracts, Sun Life Financial Masters Reward NY contracts, Sun Life Financial Masters Select NY contracts.

Massachusetts Financial Services Company is the investment adviser to the Series Trust. Sun Capital Advisers LLC is the investment adviser to Sun Capital Advisers Trust. Both are affiliates of the Sponsor and charge management fees at an effective annual rate ranging from .60% to 1.56% and 1.00% to 1.35% of the Funds’ net assets, respectively.

The Sponsor does not deduct a sales charge from the purchase payments. However, a surrender charge (contingent deferred sales charge) of up to 6% of certain amounts withdrawn, when applicable, will be deducted to cover certain expenses relating to the sale of Regatta NY and Regatta Gold NY contracts; 8% for Regatta Extra NY, Sun Life Financial Masters Flex NY, Sun Life Financial Masters Extra NY, Sun Life Financial Masters Access NY and Sun Life Financial Masters Choice NY; and for 7% for Sun Life Financial Masters Reward NY and Sun Life Financial Masters Select NY.

Regatta NY, Regatta Gold NY, Regatta Extra NY, Sun Life Financial Masters Flex NY, Sun Life Financial Masters Extra NY, Sun Life Financial Masters Access NY, Sun Life Financial Masters Choice NY, Sun Life Financial Masters Reward NY and Sun Life Financial Masters Select NY Sub-Accounts Included in Sun Life (N.Y.) Variable Account C

Notes to Financial Statements - continued

(3) Contract Charges and Related Party Transactions - continued

For assuming the risk that surrender charges may be insufficient to compensate it for the costs of distributing the contracts, the Sponsor makes a deduction from the Sub-Account at the end of each valuation period at an effective annual rate of 0.15% of the net assets attributable to Sun Life Financial Masters Extra NY, Sun Life Financial Masters Choice NY, Sun Life Financial Masters Reward NY, and Sun Life Financial Masters Select NY contracts and an effective annual rate of 0.20% of the net assets attributable to Sun Life Financial Masters Flex NY and Sun Life Financial Masters Access NY contracts.

For the year ended December 31, 2006, the Sponsor received the following amounts related to the above mentioned contract and surrender charges. These charges are reflected in the "Withdrawals, surrenders, annuitizations and contract charges" line of the Statements of Changes in Net Assets.

	Contract Charges		Surrender Charges
Columbia Funds Variable Insurance Trust
Columbia Marsico 21st Century Portfolio	$		$
Columbia Marsico Growth Portfolio
Columbia Marsico International Opportunities Portfolio
Fidelity Variable Insurance Products Funds
VIP Freedom 2010 Portfolio
VIP Freedom 2015 Portfolio
VIP Freedom 2020 Portfolio		60
Franklin Templeton Variable Insurance Products Trust
Mutual Shares Securities Fund		136		2,742
Templeton Developing Markets Securities Fund		3
Templeton Growth Securities Fund Class 2		57		207
Templeton Foreign Securities Fund		3,009		15,379
Franklin Value Securities Fund		182		1,575
Lord Abbett Series Fund, Inc.
All Value Portfolio		66		1,123
Growth & Income Portfolio		3,022		6,175
Growth Opportunities Portfolio		1,927		4,720
Mid Cap Value Portfolio		1,198		2,399
MFS/Sun Life Series Trust:
Bond S Class		141
Bond Series		724		331
Capital Appreciation S Class		50
Capital Appreciation Series		10,927		5,487
Capital Opportunities S Class		14
Capital Opportunities Series		1,477		76
Emerging Growth S Class		57		159
Emerging Growth Series		5,518		35
Emerging Markets Equity S Class		35		3,866
Emerging Markets Equity Series		321
Global Governments S Class
Global Governments Series		763		434
Global Growth S Class		25
Global Growth Series		2,564		3,569
Global Total Return S Class		48
Global Total Return Series		1,870		390
Government Securities S Class		2,997		9,571
Government Securities Series		3,274		3,574
High Yield S Class		2,000		2,673
High Yield Series		2,465		2,825

Regatta NY, Regatta Gold NY, Regatta Extra NY, Sun Life Financial Masters Flex NY, Sun Life Financial Masters Extra NY, Sun Life Financial Masters Access NY, Sun Life Financial Masters Choice NY, Sun Life Financial Masters Reward NY and Sun Life Financial Masters Select NY Sub-Accounts Included in Sun Life (N.Y.) Variable Account C

Notes to Financial Statements - continued

(3) Contract Charges and Related Party Transactions - continued

	Contract Charges		Surrender Charges
MFS/Sun Life Series Trust - continued:
International Growth S Class	$	52	$
International Growth Series		565		3
International Investors Trust S Class		17
International Investors Trust Series		1,167
Massachusetts Investors Growth Stock S Class		267		522
Massachusetts Investors Growth Stock Series		1,950		887
Massachusetts Investors Trust S Class		2,208		6,956
Massachusetts Investors Trust Series		10,637		7,067
Mid Cap Growth S Class		270		269
Mid Cap Value S Class		266		359
Money Market S Class		2,247		5,291
Money Market Series		3,487		10,648
New Discovery S Class		2,414		4,999
New Discovery Series		788		27
Research S Class		12		1,801
Research Series		6,716
Research Growth and Income S Class		3
Research Growth and Income Series		737		621
Research International S Class		1,130		3,635
Research International Series		501		913
Strategic Growth S Class		425		885
Strategic Growth Series		205		24
Strategic Income S Class		60		370
Strategic Income Series		383		1,147
Strategic Value S Class		44
Total Return S Class		14,967		81,640
Total Return Series		12,393		16,626
Utilities S Class		224
Utilities Series		2,952		8,719
Value S Class		372		1,965
Value Series		1,578		849
Oppenheimer Variable Account Funds
Capital Appreciation Fund		447		3,198
Global Securities Fund		94		1,132
Main Street Fund		2,700		19,684
Main Street Small Cap Fund		55		2,196
PIMCO Variable Insurance Trust
Emerging Markets Bond Portfolio		38
Low Duration Portfolio		2,626		21,344
Real Return Portfolio		857		920
Total Return Portfolio		825		5,712
VIT All Asset Portfolio
VIT Commodity Real Return Strategy Portfolio

Regatta NY, Regatta Gold NY, Regatta Extra NY, Sun Life Financial Masters Flex NY, Sun Life Financial Masters Extra NY, Sun Life Financial Masters Access NY, Sun Life Financial Masters Choice NY, Sun Life Financial Masters Reward NY and Sun Life Financial Masters Select NY Sub-Accounts Included in Sun Life (N.Y.) Variable Account C

Notes to Financial Statements - continued

(3) Contract Charges and Related Party Transactions - continued

	Contract Charges		Surrender Charges
Sun Capital Advisers Trust
All Cap S Class		90
FI Large Cap Growth Fund		10
Investment Grade Bond S Class		127
Real Estate Fund S Class		2,073		5,361
Real Estate Fund		414		559
Sun Capital Money Market S Class		18
Wanger Advisors Trust
Wanger Select		12

(4) Reserve for Variable Annuities

Reserve for variable annuities represents actuarial present value of future contract benefits for those contract holders who are in the payout phase of their contract and chose the variable payout option. Annuity reserves are calculated using the 1983 Individual Annuitant Mortality Table and an assumed interest rate of 4% for Regatta NY contracts and 3% for Regatta Gold NY contracts with an annuity commencement date prior to January 1, 2000. Annuity reserves are calculated using the 2000 Individual Annuitant Mortality Table and an assumed interest rate of 4% for Regatta NY contracts and 3% for Regatta Gold NY and Regatta Extra NY contracts with an annuity commencement date on or after January 1, 2000. Required adjustments to the reserves are accomplished by transfers to or from the Sponsor.

(5) Investment Purchases and Sales

The following table shows the aggregate cost of shares purchased and proceeds from the sales of investments of the Funds for each Sub-Account for the year ended December 31, 2006:

		Purchases			Sales
Columbia Funds Variable Insurance Trust
Columbia Marsico 21st Century Portfolio	$	38,306		$	4,478
Columbia Marsico Growth Portfolio		37,000			4,144
Columbia Marsico International Opportunities Portfolio		38,263			4,433
Fidelity Variable Insurance Products Funds
VIP Freedom 2010 Portfolio		526,655			183,512
VIP Freedom 2015 Portfolio		1,294,937			15,269
VIP Freedom 2020 Portfolio		522,255			44,127
Franklin Templeton Variable Insurance Products Trust
Mutual Shares Securities Fund		1,463,935			199,069
Templeton Developing Markets Securities Fund		752,591			507,635
Templeton Growth Securities Fund Class 2		783,000			67,517
Templeton Foreign Securities Fund		16,228,074			1,921,938
Franklin Value Securities Fund			1,200,032			108,814
Lord Abbett Series Fund, Inc.
All Value Portfolio		2,471,530			552,578
Growth & Income Portfolio		11,285,463			1,319,470
Growth Opportunities Portfolio		2,824,654			316,191
Mid Cap Value Portfolio		3,412,694			281,658
MFS/Sun Life Series Trust:
Bond S Class		106,291			93,819
Bond Series		371,627			582,936

Regatta NY, Regatta Gold NY, Regatta Extra NY, Sun Life Financial Masters Flex NY, Sun Life Financial Masters Extra NY, Sun Life Financial Masters Access NY, Sun Life Financial Masters Choice NY, Sun Life Financial Masters Reward NY and Sun Life Financial Masters Select NY Sub-Accounts Included in Sun Life (N.Y.) Variable Account C

Notes to Financial Statements - continued

(3) Contract Charges and Related Party Transactions - continued

		Purchases		Sales
MFS/Sun Life Series Trust - continued:
Capital Appreciation S Class	$	51,901	$	54,842
Capital Appreciation Series		184,074		5,340,155
Capital Opportunities S Class		44,725		3,118
Capital Opportunities Series		49,073		582,426
Emerging Growth S Class		546,803		86,266
Emerging Growth Series		44,243		2,260,642
Emerging Markets Equity S Class		1,002,651		612,754
Emerging Markets Equity Series		565,919		582,215
Global Governments S Class		28,885		6,248
Global Governments Series		28,481		289,857
Global Growth S Class		25,777		6,333
Global Growth Series		276,030		1,565,027
Global Total Return S Class		72,469		54,047
Global Total Return Series		546,413		1,054,530
Government Securities S Class		8,028,777		1,426,156
Government Securities Series		539,316		2,095,147
High Yield S Class		2,268,365		447,699
High Yield Series		680,882		1,730,862
International Growth S Class		75,610		8,631
International Growth Series		510,887		414,369
International Investors Trust S Class		145,646		26,668
International Investors Trust Series		900,945		577,697
Massachusetts Investors Growth Stock S Class		178,823		111,052
Massachusetts Investors Growth Stock Series		108,867		1,060,183
Massachusetts Investors Trust S Class		9,688,138		903,934
Massachusetts Investors Trust Series		527,324		6,346,374
Mid Cap Growth S Class		61,924		54,366
Mid Cap Value S Class		216,277		78,054
Money Market S Class		8,724,908		5,163,111
Money Market Series		3,316,912		4,329,537
New Discovery S Class		5,261,752		1,563,421
New Discovery Series		149,338		384,274
Research S Class		105,975		85,659
Research Series		136,978		3,366,799
Research Growth and Income S Class		21,904		31,539
Research Growth and Income Series		144,013		856,348
Research International S Class		4,722,840		1,106,717
Research International Series		479,238		557,570
Strategic Growth S Class		80,038		287,067
Strategic Growth Series		60,010		94,293
Strategic Income S Class		101,941		46,547
Strategic Income Series		365,755		316,790
Strategic Value S Class		10,525		26,178
Total Return S Class		18,753,749		8,727,521
Total Return Series		3,122,402		8,288,780

Regatta NY, Regatta Gold NY, Regatta Extra NY, Sun Life Financial Masters Flex NY, Sun Life Financial Masters Extra NY, Sun Life Financial Masters Access NY, Sun Life Financial Masters Choice NY, Sun Life Financial Masters Reward NY and Sun Life Financial Masters Select NY Sub-Accounts Included in Sun Life (N.Y.) Variable Account C

Notes to Financial Statements - continued

(5) Investment Purchases and Sales - continued

		Purchases		Sales
MFS/Sun Life Series Trust - continued:
Utilities S Class	$	1,206,101	$	136,926
Utilities Series		872,234		2,747,229
Value S Class		536,018		249,841
Value Series		588,686		1,582,936
Oppenheimer Variable Account Funds
Capital Appreciation Fund		948,143		702,955
Global Securities Fund		1,805,522		131,839
Main Street Fund		18,969,696		1,606,446
Main Street Small Cap Fund		507,500		93,607
PIMCO Variable Insurance Trust
Emerging Markets Bond Portfolio		341,598		75,940
Low Duration Portfolio		21,883,629		2,388,417
Real Return Portfolio		1,592,170		1,302,032
Total Return Portfolio		2,078,027		918,645
VIT All Asset Portfolio		90,387		607
VIT Commodity Real Return Strategy Portfolio		388,551		13,734
Sun Capital Advisers Trust
All Cap S Class		98,410		3,169
FI Large Cap Growth Fund		18,688		62
Investment Grade Bond S Class		572,010		28,513
Real Estate Fund S Class		4,311,814		1,046,293
Real Estate Fund		55,895		219,481
Sun Capital Money Market S Class		29,379		4,027
Wanger Advisors Trust
Wanger Select		9,162		3,318

Regatta NY, Regatta Gold NY, Regatta Extra NY, Sun Life Financial Masters Flex NY, Sun Life Financial Masters Extra NY, Sun Life Financial Masters Access NY, Sun Life Financial Masters Choice NY, Sun Life Financial Masters Reward NY, and Sun Life Financial Masters Select NY Sub-Accounts Included in Sun Life (N.Y.) Variable Account C

Notes to Financial Statements - continued

(6) Financial Highlights

The summary of unit values, units outstanding for variable annuity contracts, net assets, investment income ratio, expense ratios', excluding expenses of the underlying funds and the total return, for the years ended December 31, are as follows:

		At December 31							For year ended December 31
									Investment
			Unit Fair Value						Income		Expense Ratio					Total Return
		Units	lowest to highest				Net Assets		Ratio*			lowest to highest**				lowest to highest***
NMT
	December 31, 2006 (x)	2,805	$			13.2356	$	37,121	0.20	%				1.85	%			17.53	%
NNG
	December 31, 2006 (x)	2,995				11.3903		34,120						1.85				4.14
NMI
	December 31, 2006 (x)	2,635				14.4220		37,987	0.32					1.85				20.95
F10
	December 31, 2006 (x)	31,184		11.0629	to	11.0891		345,329	4.86		1.85		to	2.05		7.34	to	7.56
F15
	December 31, 2006 (x)	118,763		11.2915	to	11.3650		1,344,283	1.97		1.35		to	1.90		8.74	to	9.35
F20
	December 31, 2006 (x)	44,515		11.3706	to	11.4991		509,174	2.14		1.35		to	2.30		9.14	to	10.20
FMS
	December 31, 2006	118,047		13.3546	to	17.2983		1,929,810	1.07		1.35		to	2.10		15.90	to	16.79
	December 31, 2005	36,128		11.4756	to	14.8645		512,537	0.94		1.35		to	2.10		8.24	to	9.07
	December 31, 2004	10,733		12.0029	to	13.6772		140,328	0.78		1.35		to	2.10		10.26	to	11.11
	December 31, 2003 (c)	3,938		11.7224	to	12.3538		48,049			1.65		to	2.10		17.22	to	23.02
TDM
	December 31, 2006 (x)	23,980		14.0766	to	14.1682		338,168	0.56		1.35		to	1.90		25.66	to	26.36
FTG
	December 31, 2006	48,332		13.6548	to	20.3990		959,159	1.11		1.35		to	2.05		19.32	to	20.17
	December 31, 2005	9,583		16.6698	to	16.8638		160,657	1.29		1.55		to	1.90		6.80	to	7.18
	December 31, 2004 (g)	1,307		15.6261	to	15.6980		20,450	0.47		1.65		to	1.85		13.87	to	14.11
FTI
	December 31, 2006	1,879,769		13.8036	to	19.5344		33,802,942	1.19		1.35		to	2.30		18.66	to	19.81
	December 31, 2005	1,001,875		11.5856	to	16.3623		15,071,971	1.05		1.35		to	2.30		7.64	to	8.69
	December 31, 2004	427,612		12.5328	to	15.1080		6,081,325	0.84		1.35		to	2.30		15.80	to	16.92
	December 31, 2003 (d)	41,808		10.7884	to	12.9673		535,856	0.10		1.35		to	2.30		7.88	to	29.97
FVS
	December 31, 2006	83,668		13.1634	to	20.0930		1,557,788	0.57		1.35		to	2.10		14.53	to	15.41
	December 31, 2005	22,483		14.4076	to	17.4724		373,043	0.75		1.35		to	2.10		6.49	to	7.30
	December 31, 2004	15,053		13.4815	to	16.3410		233,988	0.17		1.35		to	2.10		21.14	to	22.07
	December 31, 2003 (c)	1,159		12.5895	to	13.4342		15,062	0.15		1.65		to	2.10		25.89	to	29.88
LAV
	December 31, 2006	150,701		12.6227	to	14.1549		2,108,884	1.04		1.35		to	2.05		12.30	to	13.10
	December 31, 2005	8,046		12.3723	to	12.5157		100,042	0.31		1.35		to	1.90		4.93	to	5.51
	December 31, 2004 (g)	9,342		11.7915	to	11.8363		110,302	1.13		1.55		to	1.90		13.51	to	13.91
LA1
	December 31, 2006	1,532,748		12.2289	to	16.7486		23,227,656	1.65		1.35		to	2.30		14.58	to	15.69
	December 31, 2005	879,242		10.6290	to	14.5279		11,598,746	1.26		1.35		to	2.30		0.88	to	1.86
	December 31, 2004	512,793		12.0678	to	14.3137		6,850,031	1.58		1.35		to	2.30		10.06	to	11.13
	December 31, 2003 (c)	74,789		10.9299	to	12.9263		940,155	2.54		1.65		to	2.30		9.30	to	28.79
LA9
	December 31, 2006	373,528		11.8271	to	12.3122		4,539,464			1.35		to	2.30		5.42	to	6.44
	December 31, 2005	159,566		11.1508	to	11.5672		1,830,266			1.35		to	2.30		2.22	to	3.21
	December 31, 2004 (g)	55,012		11.0919	to	11.2069		613,360			1.35		to	2.30		8.67	to	9.73
LA2
	December 31, 2006	310,865		12.6555	to	17.9544		5,225,336	0.73		1.35		to	2.25		9.71	to	10.72
	December 31, 2005	133,865		11.4941	to	16.2736		2,020,469	0.54		1.35		to	2.25		5.79	to	6.76
	December 31, 2004	101,211		13.3052	to	15.2966		1,468,192	0.66		1.35		to	2.30		21.18	to	22.36
	December 31, 2003 (d)	581		12.1352	to	12.5454		7,199	1.43		1.70		to	1.90		21.35	to	22.64

(c) for the period June 1, 2003 (commencement of operations) through December 31, 2003.

(d) for the period July 1, 2003 (commencement of operations) through December 31, 2003.

(g) for the period February 2, 2004 (commencement of operations) through December 31, 2004.

(x) fund opened in prior year, first activity in current year.

Regatta NY, Regatta Gold NY, Regatta Extra NY, Sun Life Financial Masters Flex NY, Sun Life Financial Masters Extra NY, Sun Life Financial Masters Access NY, Sun Life Financial Masters Choice NY, Sun Life Financial Masters Reward NY, and Sun Life Financial Masters Select NY Sub-Accounts Included in Sun Life (N.Y.) Variable Account C

Notes to Financial Statements - continued

(6) Financial Highlights - continued

		At December 31								For year ended December 31
										Investment
			Unit Fair Value							Income		Expense Ratio						Total Return
		Units	lowest to highest					Net Assets		Ratio*			lowest to highest**					lowest to highest***
MF7
	December 31, 2006	46,224	$	10.7620	to	$	12.4442	$	540,557	6.24	%	1.35		%	to	2.10	%	2.67	%	to	3.46	%
	December 31, 2005	47,319		10.4763	to		12.0404		541,384	5.82		1.35			to	2.10		(0.54	)	to	0.22
	December 31, 2004	46,528		10.5273	to		12.0256		537,499	5.96		1.35			to	2.10		3.68		to	4.48
	December 31, 2003	27,268		10.1485	to		11.5220		303,064	3.43		1.45			to	2.10		1.48		to	7.84
	December 31, 2002 (a)	11,203		10.6700	to		10.6840		119,572			1.45			to	1.60		6.70		to	6.84
BDS
	December 31, 2006	140,433					14.4822		2,033,786	6.15						1.40					3.75
	December 31, 2005	163,530					13.9590		2,282,719	6.18						1.40					0.35
	December 31, 2004	187,739					13.9100		2,610,710	6.30		1.35			to	2.10					4.78
	December 31, 2003	214,107					13.2754		2,841,670	4.84						1.40					8.21
	December 31, 2002	189,891					12.2687		2,346,071	3.47						1.40					8.08
MFD
	December 31, 2006	18,751		10.7230	to		13.4621		202,570			1.45			to	1.90		4.04		to	4.52
	December 31, 2005	18,561		10.2749	to		12.9125		192,046	0.39		1.45			to	1.90		(1.27	)	to	(0.82	)
	December 31, 2004	17,339		10.3757	to		13.0524		181,148			1.45			to	1.90		8.67		to	9.17
	December 31, 2003	19,323		9.5185	to		11.9862		185,103			1.45			to	1.90		12.92		to	26.49
	December 31, 2002 (a)	6,547		7.5366	to		7.5465		49,368			1.45			to	1.60		(24.63	)	to	(24.53	)
CAS
	December 31, 2006	909,349		14.0817	to		21.1825		14,906,513	0.21						1.40				4.91
	December 31, 2005	1,225,268		13.4231	to		20.1918		19,137,284	0.64						1.40				(0.47)
	December 31, 2004	1,218,785		13.4868	to		20.2878		19,138,943	0.06		1.60			to	1.95				9.48
	December 31, 2003	2,308,546		12.3185	to		18.5303		21,200,026							1.40				26.93
	December 31, 2002	1,718,560		9.7046	to		14.5983		19,590,383	0.18						1.40				(33.32)
CO1
	December 31, 2006	6,910		11.8112	to		15.4023		97,083	0.21		1.35			to	2.05		11.68		to	12.48
	December 31, 2005	3,422		10.5893	to		13.7698		44,845	1.03		1.35			to	1.90		(0.61	)	to	(0.05	)
	December 31, 2004	6,354		10.5595	to		12.8882		69,158	0.29		1.45			to	1.85		10.44		to	10.89
	December 31, 2003	4,850		9.5373	to		9.5644		46,280	0.14		1.45			to	1.60		25.96		to	26.15
	December 31, 2002 (a)	5,419		7.5719	to		7.5819		41,040	0.05		1.45			to	1.60		(24.28	)	to	(24.18	)
COS
	December 31, 2006	147,248					14.9945		2,207,901	0.51						1.40				12.74
	December 31, 2005	184,033					13.2996		2,447,558	0.98						1.40				0.24
	December 31, 2004	254,152					13.2677		3,371,736	0.49						1.40				11.24
	December 31, 2003	298,753					11.9276		3,563,173	0.35						1.40				26.53
	December 31, 2002	349,823					9.4264		3,297,434	0.09						1.40				(31.36)
MFF
	December 31, 2006	60,203		12.0046	to		15.4885		802,950			1.35			to	1.90		5.66		to	6.25
	December 31, 2005	21,068		11.3274	to		14.6297		262,983			1.35			to	1.90		6.84		to	7.43
	December 31, 2004	10,936		10.5705	to		13.6659		124,762			1.45			to	1.90		10.81		to	11.32
	December 31, 2003	8,001		9.5100	to		12.3073		82,229			1.45			to	1.85		15.47		to	29.24
	December 31, 2002 (a)	3,308		7.3697	to		7.3794		24,395			1.45			to	1.60		(26.30	)	to	(26.21	)
EGS
	December 31, 2006	473,820					16.1111		7,685,740							1.40				6.53
	December 31, 2005	610,176					15.1231		9,280,671							1.40				7.64
	December 31, 2004	773,079					14.0503		10,926,938							1.40				11.67
	December 31, 2003	978,305					12.5815		12,374,317							1.40				29.68
	December 31, 2002	1,179,567					9.7019		11,550,959							1.40				(35.09)
EM1
	December 31, 2006	38,560		14.3089	to		29.3743		629,654	0.61		1.35			to	2.05		27.24		to	28.15
	December 31, 2005	6,181		22.8109	to		22.9454		141,368	0.52		1.45			to	1.60		34.27		to	34.47
	December 31, 2004	5,451		16.9889	to		17.0632		92,805	0.91		1.45			to	1.60		24.85		to	25.04
	December 31, 2003	4,623		13.6074	to		13.6461		62,962	0.47		1.45			to	1.60		49.70		to	49.92
	December 31, 2002 (a)	3,271		9.0901	to		9.1020		29,730			1.45			to	1.60		(9.10	)	to	(8.98	)
EME
	December 31, 2006	71,767					21.2942		1,580,969	1.15						1.40				28.37
	December 31, 2005	84,999					16.5879		1,453,126	0.67						1.40				34.88
	December 31, 2004	53,476					12.2981		691,507	1.01						1.40				25.42
	December 31, 2003	55,648					9.8055		545,836	0.44						1.40				50.50
	December 31, 2002	42,762					6.5154		278,736	0.99						1.40				(3.29)

(a) for the period March 1, 2002 (commencement of operations) through December 31, 2002.

Regatta NY, Regatta Gold NY, Regatta Extra NY, Sun Life Financial Masters Flex NY, Sun Life Financial Masters Extra NY, Sun Life Financial Masters Access NY, Sun Life Financial Masters Choice NY, Sun Life Financial Masters Reward NY, and Sun Life Financial Masters Select NY Sub-Accounts Included in Sun Life (N.Y.) Variable Account C

Notes to Financial Statements - continued

(6) Financial Highlights - continued

		At December 31										For year ended December 31
										Investment
			Unit Fair Value							Income		Expense Ratio					Total Return
		Units	lowest to highest					Net Assets		Ratio*		lowest to highest**					lowest to highest***
GG1
	December 31, 2006	2,138	$	13.7580	to	$	13.8601	$	29,430		%	1.45	%	to	1.60	%	3.03	%	to	3.19	%
	December 31, 2005	441					13.3529		5,888	9.56					1.60				(8.97)
	December 31, 2004	770					14.6689		11,287	9.70					1.60				8.04
	December 31, 2003 (c)	329					13.5776		4,462						1.60				13.46
GGS
	December 31, 2006	64,809		14.3451	to		17.5226		1,065,979					1.40					3.52
	December 31, 2005	81,491		13.8573	to		16.9267		1,283,646	10.46				1.40					(8.48)
	December 31, 2004	100,431		15.1418	to		18.4956		1,721,361	12.70				1.40					8.54
	December 31, 2003	228,740		13.9510	to		17.0411		1,950,149	5.23				1.40					14.00
	December 31, 2002	155,972		12.2376	to		14.9481		2,121,418					1.40					18.96
GG2
	December 31, 2006	5,621		15.8817	to		18.4253		95,514	0.33		1.45		to	1.85		14.85		to	15.31
	December 31, 2005	4,395		13.7937	to		16.0191		63,039	0.23		1.45		to	1.85		7.71		to	8.15
	December 31, 2004	3,372		12.7739	to		14.8498		44,815	0.31		1.45		to	1.85		13.27		to	13.73
	December 31, 2003	1,142		11.2486	to		13.0899		13,101	0.30		1.60		to	1.70		24.40		to	32.97
	December 31, 2002 (a)	1,059					8.4597		8,956						1.60				(15.40)
GGR
	December 31, 2006	249,630		22.7970	to		26.7693		6,142,169	0.56				1.40					15.76
	December 31, 2005	304,648		19.6936	to		23.1251		6,475,959	0.48				1.40					8.52
	December 31, 2004	374,143		18.1476	to		21.3097		7,278,975	0.48				1.40					14.01
	December 31, 2003	424,744		15.9174	to		18.6909		7,217,536	0.49				1.40					33.57
	December 31, 2002	506,440		11.9165	to		13.9928		6,488,943	0.29				1.40					(20.48)
GT2
	December 31, 2006	20,819		16.4169	to		16.5387		343,718	0.65		1.45		to	1.60		15.04		to	15.22
	December 31, 2005	20,792		14.2701	to		14.3542		297,996	3.80		1.45		to	1.60		1.89		to	2.04
	December 31, 2004	20,779		14.0056	to		14.0668		292,001	2.38		1.45		to	1.60		15.00		to	15.18
	December 31, 2003	19,492		12.1786	to		12.2132		237,958	2.28		1.45		to	1.60		20.57		to	20.76
	December 31, 2002 (a)	15,432		10.1005			10.1138		156,077					1.45					1.14
GTR
	December 31, 2006	199,822					22.8092		4,681,251	0.93				1.40					15.66
	December 31, 2005	237,423					19.7207		4,797,953	4.38				1.40					2.33
	December 31, 2004	275,475					19.2709		5,433,092	2.58				1.40					15.50
	December 31, 2003	311,789					16.6854		5,234,115	2.21				1.40					21.28
	December 31, 2002	222,222					13.7581		3,085,612	1.99				1.40					( 0.79)
MFK
	December 31, 2006	1,517,021		10.0430	to		11.1680		15,792,156	4.26		1.35		to	2.30		1.10		to	2.08
	December 31, 2005	899,358		9.9338	to		10.9515		9,243,056	4.10		1.35		to	2.30		(0.33)		to	0.63
	December 31, 2004	551,828		9.9670	to		10.8936		5,688,851	4.60		1.35		to	2.30		1.16		to	2.15
	December 31, 2003	216,545		9.8525	to		10.6753		2,212,594	1.78		1.45		to	2.30		(1.48)		to	0.66
	December 31, 2002 (a)	31,653		10.6196	to		10.6336		336,275	2.07		1.45		to	1.60		6.20		to	6.34
GSS
	December 31, 2006	348,231		15.3527	to		17.4413		5,627,620	5.17				1.40					2.26
	December 31, 2005	462,759		15.0138	to		17.0563		7,297,597	4.83				1.40					0.89
	December 31, 2004	593,930		14.8808	to		16.9051		9,252,213	5.79				1.40					2.32
	December 31, 2003	1,289,650		14.5427	to		16.5211		12,166,611	4.55				1.40					0.74
	December 31, 2002	1,064,704		14.4361	to		16.3999		16,023,249	4.33				1.40					8.29
MFC
	December 31, 2006	339,595		10.9162	to		14.7423		4,385,147	7.18		1.35		to	2.30		7.52		to	8.56
	December 31, 2005	203,374		10.1115	to		13.6278		2,467,430	7.69		1.35		to	2.30		(0.40)		to	0.56
	December 31, 2004	115,049		11.1322	to		13.5996		1,435,092	6.12		1.35		to	2.30		6.85		to	7.89
	December 31, 2003	39,343		10.3852	to		12.6501		466,350	3.45		1.45		to	2.30		3.85		to	19.45
	December 31, 2002 (a)	4,918		10.1246	to		10.1379		49,809	15.55		1.45		to	1.60		1.25		to	1.38

(a) for the period March 1, 2002 (commencement of operations) through December 31, 2002.

(c) for the period June 1, 2003 (commencement of operations) through December 31, 2003.

Regatta NY, Regatta Gold NY, Regatta Extra NY, Sun Life Financial Masters Flex NY, Sun Life Financial Masters Extra NY, Sun Life Financial Masters Access NY, Sun Life Financial Masters Choice NY, Sun Life Financial Masters Reward NY, and Sun Life Financial Masters Select NY Sub-Accounts Included in Sun Life (N.Y.) Variable Account C

Notes to Financial Statements - continued

(6) Financial Highlights - continued

		At December 31								For year ended December 31
										Investment
				Unit Fair Value						Income		Expense Ratio				Total Return
		Units		lowest to highest				Net Assets		Ratio*		lowest to highest**				lowest to highest***
HYS
	December 31, 2006	319,944	$	16.3964	to	$	20.7375	$	5,415,379	8.43	%		1.40		%		8.87		%
	December 31, 2005	410,540		15.0602	to		19.0475		6,386,367	8.70			1.40				0.79
	December 31, 2004	587,434		14.9426	to		18.8988		9,104,555	8.07			1.40				8.03
	December 31, 2003	930,566		13.8321	to		17.4943		10,639,033	9.07			1.40				19.76
	December 31, 2002	800,400		11.5494	to		14.6072		9,711,508	10.18			1.40				1.28
IG1
	December 31, 2006	7,161		20.2653	to		20.4157		145,515	0.42		1.45	to	1.60		23.75	to	23.94
	December 31, 2005	3,758		16.3762	to		16.4727		61,815	0.70		1.45	to	1.60		12.80	to	12.97
	December 31, 2004	3,964		14.5186	to		14.5820		57,748	0.37		1.45	to	1.60		16.68	to	16.86
	December 31, 2003	4,503		12.4432	to		12.4785		56,145	0.64		1.45	to	1.60		36.14	to	36.35
	December 31, 2002 (a)	2,033		9.1398	to		9.1518		18,596			1.45	to	1.60		(8.60)	to	(8.48)
IGS
	December 31, 2006	111,077			18.5935				2,158,483	0.69			1.40				24.31
	December 31, 2005	113,047			14.9579				1,769,881	0.99			1.40				13.33
	December 31, 2004	125,684			13.1987				1,731,653	0.57			1.40				17.29
	December 31, 2003	127,529			11.2527				1,443,243	0.74			1.40				36.75
	December 31, 2002	149,436			8.2285				1,236,050	0.53			1.40				(13.10)
MI1
	December 31, 2006	11,832		22.8449	to		23.0144		270,322	0.85		1.45	to	1.60		26.90	to	27.09
	December 31, 2005	6,616			18.0029				119,127	0.99		1.60	to	1.60			13.10
	December 31, 2004	7,212			15.9177				114,798	0.68			1.60				25.69
	December 31, 2003	5,663			12.6638				71,708	0.78			1.60				31.07
	December 31, 2002	5,003			9.6620				48,342				1.60				(3.88)
MII
	December 31, 2006	153,740			26.9574				4,209,572	1.20			1.40				27.45
	December 31, 2005	155,225			21.1517				3,341,909	1.12			1.40				13.63
	December 31, 2004	145,667			18.6144				2,773,078	0.78			1.40				26.25
	December 31, 2003	158,835			14.7437				2,368,837	1.08			1.40				31.78
	December 31, 2002 (a)	193,097			11.1880				2,185,230	0.82			1.40				(7.24)
M1B
	December 31, 2006	70,637		10.8673	to		13.0852		871,164			1.35	to	2.10		5.16	to	5.97
	December 31, 2005	64,029		10.2812	to		12.3920		744,927	0.29		1.35	to	2.10		1.97	to	2.75
	December 31, 2004	65,643		10.0311	to		12.1028		741,052			1.35	to	2.10		7.05	to	7.88
	December 31, 2003	34,831		9.3224	to		11.2591		344,319			1.45	to	2.10		11.02	to	21.07
	December 31, 2002 (a)	17,191		7.7120	to		7.7222		132,655	0.12		1.45	to	1.60		(22.78)	to	(22.77)
MIS
	December 31, 2006	449,020			8.7906				4,003,180	0.10			1.40				6.18
	December 31, 2005	555,446			8.2787				4,661,601	0.53			1.40				2.94
	December 31, 2004	674,360			8.0426				5,496,754	0.07			1.60				8.09
	December 31, 2003	768,535			7.4405				5,795,930				1.40				21.68
	December 31, 2002	810,817			6.1146				5,047,465	0.15			1.40				(29.05)
MFL
	December 31, 2006	1,209,614		12.2878	to		14.9001		17,302,391	0.54		1.35	to	2.30		10.45	to	11.52
	December 31, 2005	544,820		11.0803	to		13.4086		7,009,985	0.70		1.35	to	2.30		4.96	to	5.97
	December 31, 2004	31,545		10.7944	to		12.6977		358,773	0.75		1.35	to	1.90		9.61	to	10.23
	December 31, 2003	24,551		9.8178	to		11.5607		245,283	0.91		1.45	to	1.90		13.94	to	20.68
	December 31, 2002 (a)	11,990		8.1481	to		8.1588		97,728			1.45	to	1.60		(18.52)	to	(18.41)
MIT
	December 31, 2006	1,155,740		19.0915	to		28.2180		23,913,037	0.84			1.40				11.74
	December 31, 2005	1,453,559		17.0852	to		25.2526		26,911,091	0.98			1.40				6.22
	December 31, 2004	1,820,277		16.0844	to		23.7734		31,632,895	1.06			1.40				10.44
	December 31, 2003	2,266,305		14.5644	to		21.5267		35,815,638	1.15			1.40				21.14
	December 31, 2002	2,710,773		12.0229	to		17.7703		35,510,594	1.04			1.40				(22.32)

(a) for the period March 1, 2002 (commencement of operations) through December 31, 2002.

Regatta NY, Regatta Gold NY, Regatta Extra NY, Sun Life Financial Masters Flex NY, Sun Life Financial Masters Extra NY, Sun Life Financial Masters Access NY, Sun Life Financial Masters Choice NY, Sun Life Financial Masters Reward NY, and Sun Life Financial Masters Select NY Sub-Accounts Included in Sun Life (N.Y.) Variable Account C

Notes to Financial Statements - continued

(6) Financial Highlights - continued

		At December 31								For year ended December 31
										Investment
			Unit Fair Value							Income		Expense Ratio					Total Return
		Units	lowest to highest					Net Assets		Ratio*		lowest to highest**					lowest to highest***
MC1
	December 31, 2006	30,485	$	9.6444	to	$	15.2590	$	410,801		%	1.35	%	to	2.10	%	0.05	%	to	0.82	%
	December 31, 2005	28,801		9.5902	to		15.1887		392,453			1.35		to	2.30		0.42		to	1.39
	December 31, 2004	35,363		9.4823	to		15.0330		470,521			1.35		to	2.30		11.65		to	12.74
	December 31, 2003	22,053		8.4323	to		13.3820		261,590			1.45		to	2.30		5.11		to	35.34
	December 31, 2002 (a)	4,031		6.2399	to		6.2481		25,158			1.45		to	1.60		(37.60	)	to	(37.52	)
MCV
	December 31, 2006	34,580		14.0824	to		18.0015		581,456			1.35		to	2.10		8.69		to	9.52
	December 31, 2005	28,705		12.8913	to		16.4956		450,271			1.35		to	2.30		4.94		to	5.96
	December 31, 2004	33,452		12.1975	to		15.6236		494,325			1.35		to	2.30		18.94		to	20.10
	December 31, 2003	22,736		10.1817	to		13.0549		284,020	0.01		1.45		to	2.30		9.89		to	29.99
	December 31, 2002 (b)	488		7.8444			7.8524		3,829					1.60					(21.56)
MM1
	December 31, 2006	947,627		9.8887	to		10.4025		9,594,701	4.26		1.35		to	2.30		1.94		to	2.93
	December 31, 2005	612,159		9.6807	to		10.1065		6,032,904	2.53		1.35		to	2.30		0.11		to	1.08
	December 31, 2004	384,369		9.6501	to		9.9033		3,749,415			1.35		to	2.30		(1.75	)	to	(0.79	)
	December 31, 2003	107,975		9.8014	to		9.9746		1,067,194	0.28		1.60		to	2.30		(1.73	)	to	(0.25	)
	December 31, 2002 (a)	197			9.9468				1,961	1.33				1.60					(0.53)
MMS
	December 31, 2006	364,429		12.3493	to		13.5512		4,647,442	4.56				1.40					3.15
	December 31, 2005	455,219		11.9717	to		13.1369		5,662,703	2.66				1.40					1.31
	December 31, 2004	611,796		11.8175	to		12.9676		7,539,180	0.79				1.40					(0.57)
	December 31, 2003	1,206,753		11.8852	to		13.0420		11,860,929	0.65				1.40					(0.76)
	December 31, 2002	1,431,492		11.9762	to		13.1419		18,161,198	1.24				1.40					(0.12)
M1A
	December 31, 2006	598,957		11.7184	to		15.4984		8,423,548			1.35		to	2.30		10.31		to	11.38
	December 31, 2005	308,542		10.5482	to		13.9648		3,866,178			1.35		to	2.30		2.55		to	3.54
	December 31, 2004	124,003		10.2130	to		13.5348		1,497,825			1.35		to	2.30		4.74		to	5.77
	December 31, 2003	19,393		9.6809	to		12.8427		193,197			1.45		to	1.90		23.66		to	33.06
	December 31, 2002 (a)	18,776		7.2869	to		7.2965		136,905			1.45		to	1.60		(27.13	)	to	(27.04	)
NWD
	December 31, 2006	123,585			15.9308				2,006,553					1.40					11.61
	December 31, 2005	137,801			14.2734				1,998,705					1.40					3.76
	December 31, 2004	208,136			13.7565				2,896,003					1.40					6.00
	December 31, 2003	223,353			12.9781				2,931,081					1.40					33.42
	December 31, 2002	237,152			9.7270				2,332,257					1.40					(34.38)
RE1
	December 31, 2006	10,878		12.7699	to		15.4435		158,872	0.39		1.55		to	1.90		8.23		to	8.61
	December 31, 2005	10,280		11.7631	to		14.1480		127,473	0.35		1.45		to	1.90		5.32		to	6.15
	December 31, 2004	8,838		11.0982	to		13.3891		101,024			1.45		to	1.90		13.34		to	13.86
	December 31, 2003	6,547		9.7622	to		9.7880		63,947	0.33		1.45		to	1.60		23.01		to	23.20
	December 31, 2002 (a)	1,276		7.9359	to		7.9464		10,124	1.36				1.60					(20.64)
RES
	December 31, 2006	634,293			17.5609				11,156,441	0.67				1.40					9.03
	December 31, 2005	824,261			16.1060				13,288,164	0.57				1.40					6.52
	December 31, 2004	1,015,710			15.1201				15,379,310	0.93				1.40					14.23
	December 31, 2003	1,200,316			13.2370				15,908,316	0.85				1.40					23.59
	December 31, 2002	1,429,972			10.7105				15,332,331	0.42				1.40					(26.18)
RG1
	December 31, 2006	2,530			13.2717				33,570	0.64				1.60					11.63
	December 31, 2005	3,460		11.8893	to		11.9594		41,298	0.44		1.45		to	1.60		4.69		to	4.85
	December 31, 2004	3,559		11.3565	to		11.4062		40,524	0.47		1.45		to	1.60		12.46		to	12.63
	December 31, 2003	3,456		10.0987	to		10.1274		34,963	0.58		1.45		to	1.60		25.46		to	25.65
	December 31, 2002 (a)	3,173		8.0495	to		8.0601		25,565			1.45		to	1.60		(19.50	)	to	(19.40	)
RGS
	December 31, 2006	126,961			16.0362				2,050,327	0.64				1.40					12.17
	December 31, 2005	174,420			14.2962				2,507,227	0.70				1.40					5.09
	December 31, 2004	204,453			13.6039				2,805,277	0.67				1.40					13.04
	December 31, 2003	215,089			12.0342				2,610,268	0.81				1.40					26.10
	December 31, 2002	245,892			9.5433				2,364,543	0.69				1.40					(22.49)

(a) for the period March 1, 2002 (commencement of operations) through December 31, 2002.

(b) for the period May 1, 2002 (commencement of operations) through August 2, 2002.

Regatta NY, Regatta Gold NY, Regatta Extra NY, Sun Life Financial Masters Flex NY, Sun Life Financial Masters Extra NY, Sun Life Financial Masters Access NY, Sun Life Financial Masters Choice NY, Sun Life Financial Masters Reward NY, and Sun Life Financial Masters Select NY Sub-Accounts Included in Sun Life (N.Y.) Variable Account C

Notes to Financial Statements - continued

(6) Financial Highlights - continued

		At December 31								For year ended December 31
										Investment
				Unit Fair Value						Income		Expense Ratio					Total Return
		Units		lowest to highest					Net Assets	Ratio*		lowest to highest**					lowest to highest***
RI1
	December 31, 2006	357,917	$	15.3754	to	$	22.2552	$	7,379,017	0.78	%	1.35	%	to	2.25	%	24.40	%	to	25.54	%
	December 31, 2005	171,687		12.2908	to		17.7904		2,823,350	0.53		1.35		to	2.25		13.59		to	14.63
	December 31, 2004	93,242		13.0284	to		15.5751		1,377,925	0.32		1.35		to	2.25		18.23		to	19.32
	December 31, 2003	20,234		12.0499	to		13.0994		255,695	0.21		1.45		to	2.10		26.13		to	31.47
	December 31, 2002 (a)	3,371		9.1793	to		9.1914		30,944					1.40			(8.21	)	to	(8.09	)
RIS
	December 31, 2006	87,103			19.6230				1,709,195	1.21				1.40					25.72
	December 31, 2005	97,912			15.6089				1,528,297	0.77				1.40					14.96
	December 31, 2004	95,205			13.5781				1,293,283	0.48				1.40					19.52
	December 31, 2003	90,142			11.3603				1,024,519	0.63				1.40					32.01
	December 31, 2002	91,617			8.6056				788,787	0.25				1.40					(12.70)
SG1
	December 31, 2006	72,958		10.5757	to		13.3719		938,430			1.35		to	2.30		3.93		to	4.94
	December 31, 2005	86,895		10.1034	to		12.7877		1,075,147	0.12		1.35		to	2.30		(1.15	)	to	(0.19	)
	December 31, 2004	91,082		10.1483	to		12.8576		1,135,154			1.35		to	2.30		4.12		to	5.14
	December 31, 2003	57,154		9.6768	to		12.2726		684,286			1.60		to	2.30		5.92		to	25.02
	December 31, 2002 (a)	501			7.7404				3,882					1.60					(22.60)
SGS
	December 31, 2006	40,477			6.0650				300,899					1.40					5.11
	December 31, 2005	45,047			5.7700				315,301	0.43				1.40
	December 31, 2004	65,477			5.7697				436,200					1.40					5.35
	December 31, 2003	75,194			5.4770				412,092					1.40					25.77
	December 31, 2002	64,100			4.3547				279,343					1.40					(31.07)
SI1
	December 31, 2006	16,089		11.4054	to		12.9828		205,987	5.31		1.45		to	2.10		4.22		to	4.91
	December 31, 2005	12,321		10.9434	to		12.3750		150,317	6.76		1.45		to	2.10		(0.52	)	to	0.14
	December 31, 2004	10,974		11.0007	to		12.3579		133,793	4.34		1.45		to	2.10		5.56		to	6.26
	December 31, 2003	11,880		10.4214	to		11.6298		137,129	3.74		1.45		to	2.10		4.21		to	10.85
	December 31, 2002 (a)	7,443		10.4780	to		10.4918		78,016			1.45		to	1.60		4.78		to	4.92
SIS
	December 31, 2006	123,374			13.9445				1,720,388	6.26				1.40					5.24
	December 31, 2005	127,158			13.2500				1,684,849	7.04				1.40					0.49
	December 31, 2004	115,341			13.1860				1,520,896	4.65				1.40					6.55
	December 31, 2003	103,290			12.3757				1,278,288	4.36				1.40					11.33
	December 31, 2002	68,782			11.1163				764,611	4.41				1.40					6.00
SVS
	December 31, 2006	7,004		12.4844	to		16.1127		103,723	0.58		1.45		to	1.90		11.77		to	12.28
	December 31, 2005	8,755		11.1193	to		14.3873		117,542	0.81		1.45		to	1.90		(2.60	)	to	(2.16	)
	December 31, 2004	10,727		11.3182	to		14.7416		140,840	0.26		1.45		to	1.90		15.53		to	16.06
	December 31, 2003 (c)	2,637		9.7920	to		12.7343		27,977			1.45		to	1.90		17.75		to	25.17
MFJ
	December 31, 2006	5,424,953		11.4617	to		14.1725		71,318,399	2.57		1.35		to	2.30		9.34		to	10.40
	December 31, 2005	4,829,607		10.4399	to		12.8828		58,024,496	2.20		1.35		to	2.30		0.45		to	1.43
	December 31, 2004	2,463,547		11.4940	to		12.7465		29,877,682	1.94		1.35		to	2.30		8.58		to	9.64
	December 31, 2003	420,181		10.5516	to		11.6673		4,718,337	1.98		1.35		to	2.30		5.52		to	15.14
	December 31, 2002 (a)	106,131		9.4345	to		9.4469		1,002,290	0.69		1.45		to	1.60		(5.66	)	to	(5.53	)
TRS
	December 31, 2006	1,393,409		21.9322	to		29.0896		33,083,819	2.86				1.40					10.68
	December 31, 2005	1,702,854		19.8165	to		26.2834		36,706,948	2.71				1.40					1.60
	December 31, 2004	2,026,951		19.5035	to		25.8684		43,249,220	2.55				1.40					9.93
	December 31, 2003	3,136,523		17.7421	to		23.5321		46,500,860	3.43				1.40					15.53
	December 31, 2002	2,734,379		15.3567	to		20.3682		46,320,941	3.17				1.40					(7.02)
MFE
	December 31, 2006	76,249		16.1374	to		27.8488		1,771,838	1.81		1.35		to	1.90		29.46		to	30.18
	December 31, 2005	23,573		12.4397	to		21.4676		421,576	0.69		1.35		to	1.90		14.76		to	15.46
	December 31, 2004	13,683		14.7396	to		18.6691		211,362	1.61		1.60		to	1.90		27.54		to	27.93
	December 31, 2003	8,106		12.0079	to		14.6081		97,904			1.65		to	1.90		20.08		to	33.85
	December 31, 2002 (a)	566			8.6075				4,873	8.53				1.60					(13.92)

(a) for the period March 1, 2002 (commencement of operations) through December 31, 2002.

(c) for the period June 1, 2003 (commencement of operations) through December 31, 2003.

Regatta NY, Regatta Gold NY, Regatta Extra NY, Sun Life Financial Masters Flex NY, Sun Life Financial Masters Extra NY, Sun Life Financial Masters Access NY, Sun Life Financial Masters Choice NY, Sun Life Financial Masters Reward NY, and Sun Life Financial Masters Select NY Sub-Accounts Included in Sun Life (N.Y.) Variable Account C

Notes to Financial Statements - continued

(6) Financial Highlights - continued

		At December 31								For year ended December 31
										Investment
			Unit Fair Value							Income		Expense Ratio				Total Return
		Units	lowest to highest					Net Assets		Ratio*		lowest to highest**				lowest to highest***
UTS
	December 31, 2006	287,598	$	33.9018	to	$	45.4603	$	10,428,555	3.09	%		1.40		%			30.46		%
	December 31, 2005	356,174		25.9861	to		34.8457		9,861,655	0.99			1.40					15.68
	December 31, 2004	388,146		22.4641	to		30.1230		9,297,913	1.99			1.40					28.57
	December 31, 2003	443,600		17.4725	to		23.4295		8,283,068	3.17			1.40					34.38
	December 31, 2002	478,770		13.0025	to		17.4356		6,618,318	3.82			1.40					(24.90)
MV1
	December 31, 2006	122,386		12.9834	to		16.9891		1,964,208	1.19		1.35	to	2.10		18.13		to	19.04
	December 31, 2005	106,028		10.9459	to		14.3229		1,436,246	1.14		1.35	to	2.10		4.12		to	4.91
	December 31, 2004	100,522		12.2231	to		13.7009		1,300,778	1.11		1.35	to	2.10		12.76		to	13.62
	December 31, 2003	49,505		10.7850	to		12.1013		555,117	1.31		1.45	to	2.10		19.27		to	23.27
	December 31, 2002 (a)	25,856		8.7622	to		8.7737		226,673	0.64		1.45	to	1.60		(12.38	)	to	(12.26	)
MVS
	December 31, 2006	380,215			17.4286				6,626,533	1.57			1.40					19.29
	December 31, 2005	461,544			14.6101				6,743,170	1.40			1.40					5.13
	December 31, 2004	511,261			13.8973				7,105,118	1.31			1.40					13.92
	December 31, 2003	536,813			12.1988				6,548,504	1.63			1.40					23.59
	December 31, 2002	573,552			9.8707				5,694,570	0.77			1.40					(14.77)
OCA
	December 31, 2006	143,656		11.2386	to		14.3557		1,943,044	0.17		1.35	to	2.30		5.21		to	6.23
	December 31, 2005	119,613		10.6384	to		13.5615		1,553,023	0.68		1.35	to	2.30		2.46		to	3.45
	December 31, 2004	105,606		11.2637	to		13.1557		1,336,987	0.19		1.35	to	2.30		4.16		to	5.17
	December 31, 2003 (c)	52,771		10.7535	to		12.5533		648,175			1.35	to	2.30		7.53		to	28.47
OGG
	December 31, 2006	147,390		14.0614	to		16.0296		2,336,311	0.50		1.35	to	2.05		14.96		to	15.78
	December 31, 2005	34,077		12.2124	to		13.8445		465,228	0.48		1.35	to	1.90		11.90		to	12.52
	December 31, 2004 (g)	10,232		12.2305	to		12.3035		125,314	0.50		1.35	to	1.90		16.61		to	17.27
OMG
	December 31, 2006	2,671,731		12.1272	to		14.9576		38,000,053	0.74		1.35	to	2.30		12.13		to	13.21
	December 31, 2005	1,349,644		10.7716	to		13.2587		16,985,237	0.83		1.35	to	2.30		3.32		to	4.32
	December 31, 2004	504,529		11.4234	to		12.7551		6,176,660	0.13		1.35	to	2.30		6.63		to	7.67
	December 31, 2003 (c)	5,592		11.7085	to		11.8889		66,347			1.65	to	1.90		17.08		to	24.29
OMS
	December 31, 2006	45,827		13.1673	to		19.7857		792,129	0.02		1.35	to	2.10		12.26		to	13.11
	December 31, 2005	18,961		13.5865	to		17.5539		311,642	-		1.35	to	2.10		7.42		to	8.24
	December 31, 2004	8,062		12.6034	to		16.2753		115,669	-		1.35	to	2.10		16.67		to	17.57
	December 31, 2003 (f)	898		13.1022	to		13.1405		11,791	-		1.65	to	2.10		31.02		to	31.41
PMB
	December 31, 2006	27,761		12.1326	to		19.6898		526,080	5.39		1.35	to	1.90		7.21		to	7.80
	December 31, 2005	13,934		17.2965	to		18.2643		249,962	5.39		1.35	to	1.90		8.68		to	9.29
	December 31, 2004 (g)	2,016		15.9144	to		16.6352		32,670	3.71		1.55	to	1.90		9.99		to	10.38
PLD
	December 31, 2006	3,653,967		9.9799	to		10.2799		37,139,469	4.25		1.35	to	2.30		1.59		to	2.58
	December 31, 2005	1,778,199		9.8235	to		10.0216		17,682,317	2.92		1.35	to	2.30		(1.30	)	to	(0.35	)
	December 31, 2004 (g)	807,314		9.9532	to		10.0564		8,076,230	1.35		1.35	to	2.30		(0.50	)	to	0.47
PRR
	December 31, 2006	214,328		10.1193	to		11.9027		2,353,218	4.23		1.35	to	2.05		(1.34	)	to	(0.64	)
	December 31, 2005	201,615		10.2208	to		12.0220		2,221,542	2.88		1.35	to	2.05		0.01		to	0.72
	December 31, 2004	86,845		10.7964	to		11.9780		960,293	-		1.35	to	2.05		6.68		to	7.44
	December 31, 2003 (c)	7,757		10.0967	to		11.1879		83,631	0.70		1.35	to	1.90		0.97		to	7.00
PTR
	December 31, 2006	318,132		10.3769	to		11.4062		3,463,992	4.45		1.35	to	2.30		1.47		to	2.45
	December 31, 2005	217,983		10.1738	to		11.1726		2,333,104	3.46		1.35	to	2.30		0.10		to	1.13
	December 31, 2004	144,404		10.2161	to		11.0931		1,551,228	1.91		1.35	to	2.30		2.47		to	3.47
	December 31, 2003 (c)	72,474		9.9695	to		10.7591		756,512	2.29		1.65	to	2.30		(0.30	)	to	3.26
PRA
	December 31, 2006 (x)	8,418		10.4937	to		10.5558		88,639	7.06		1.35	to	1.85		2.73		to	3.25

(a) for the period March 1, 2002 (commencement of operations) through December 31, 2002.

(c) for the period June 1, 2003 (commencement of operations) through December 31, 2003.

(f) for the period October 1, 2003 (commencement of operations) through December 31, 2003.

(g) for the period February 2, 2004 (commencement of operations) through December 31, 2004.

(x) fund opened in prior year, first activity in current year.

Regatta NY, Regatta Gold NY, Regatta Extra NY, Sun Life Financial Masters Flex NY, Sun Life Financial Masters Extra NY, Sun Life Financial Masters Access NY, Sun Life Financial Masters Choice NY, Sun Life Financial Masters Reward NY, and Sun Life Financial Masters Select NY Sub-Accounts Included in Sun Life (N.Y.) Variable Account C

Notes to Financial Statements - continued

(6) Financial Highlights - continued

		At December 31								For year ended December 31
										Investment
			Unit Fair Value							Income		Expense Ratio					Total Return
		Units	lowest to highest					Net Assets		Ratio*		lowest to highest**					lowest to highest***
PCR
	December 31, 2006 (x)	35,770	$	9.7845	to	$	9.8483	$	350,898	6.37	%	1.35	%	to	1.90	%	(4.94	)%	to	(4.40	)%
SSA
	December 31, 2006	9,318		12.5498	to		12.8953		119,061	2.20		1.35		to	1.70		17.75		to	18.16
	December 31, 2005 (x)	966		10.6584	to		10.9132		10,453			1.35		to	1.70		(2.65	)	to	(2.31	)
	December 31, 2004 (g)
LGF
	December 31, 2006 (i)	1,957		9.8538	to		9.8571		19,289			1.85		to	1.90		(1.46	)	to	(1.43	)
IGB
	December 31, 2006	60,421		10.3528	to		10.7963		646,258	5.23		1.35		to	1.90		3.15		to	3.73
	December 31, 2005	9,809		10.0366	to		10.4083		100,797	4.53		1.35		to	1.90		(0.19	)	to	0.36
	December 31, 2004 (g)	950		10.3370	to		10.3514		9,825	3.80		1.55		to	1.70		3.37		to	3.51
SRE
	December 31, 2006	410,253		16.1358	to		18.3844		7,400,362	1.38		1.35		to	2.30		35.47		to	36.78
	December 31, 2005	214,281		11.8388	to		13.4410		2,842,031	1.44		1.35		to	2.30		6.86		to	7.89
	December 31, 2004 (g)	71,956		12.3482	to		12.4577		892,341			1.35		to	2.30		23.48		to	24.58
SC3
	December 31, 2006	22,799		20.9766	to		27.3850		587,636	1.58		1.35		to	2.30		35.78		to	37.09
	December 31, 2005	31,220		15.3628	to		20.0460		589,534	1.53		1.35		to	2.30		7.16		to	8.19
	December 31, 2004	36,312		14.2570	to		18.5935		637,209	1.72		1.35		to	2.30		30.25		to	31.52
	December 31, 2003 (c)	24,813		10.8848	to		14.1883		332,092			1.35		to	2.30		8.85		to	33.64
CMM
	December 31, 2006	4,289		10.2888	to		10.3821		44,249	6.76		1.35		to	1.85		2.41		to	2.93
	December 31, 2005 (e)	1,879		10.0463	to		10.0862		18,897	1.54		1.35		to	1.85		0.46		to	0.86
WTF
	December 31, 2006	2,020		13.5121	to		13.6344		27,330	0.24		1.35		to	1.85		17.49		to	18.09
	December 31, 2005 (e)	1,554		11.5003	to		11.5458		17,871			1.35		to	1.85		15.00		to	15.46

(c) for the period June 1, 2003 (commencement of operations) through December 31, 2003.

(g) for the period February 2, 2004 (commencement of operations) through December 31, 2004.

(i) for the period May 1, 2006 (commencement of operations) through December 31, 2006.

(x) fund opened in prior year, first activity in current year.

* Represents 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 net assets. The ratio excludes those 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.

** Ratio represents the annualized contract expenses of the separate account. The ratio includes only those expenses that result in a direct reduction to unit values. Charges made directly to contract owner accounts through the redemption of units and expense of the underlying fund are excluded.

*** Represents 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 expense 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.

Report of Independent Registered Public Accounting Firm

To the Participants in Regatta NY, Regatta Gold NY, Regatta Extra NY, Sun Life Financial Masters Flex NY, Sun Life Financial Masters Extra NY, Sun Life Financial Masters Access NY, Sun Life Financial Masters Choice NY, Sun Life Financial Masters Reward NY, and Sun Life Financial Masters Select NY Sub-Accounts of Sun Life (N.Y.) Variable Account C and the Board Directors of Sun Life Insurance and Annuity Company of New York:

We have audited the accompanying statements of condition of Columbia Funds VIT Marsico 21^st Century Portfolio Sub-Account, Columbia Funds VIT Marsico Growth Portfolio Sub-Account, Columbia Funds VIT Marsico International Opportunities Portfolio Sub-Account, Fidelity VIP Freedom 2010 Portfolio Sub-Account, Fidelity VIP Freedom 2015 Portfolio Sub-Account, Fidelity VIP Freedom 2020 Portfolio Sub-Account, Franklin Templeton VIP Mutual Shares Securities Fund Sub-Account, Franklin Templeton VIP Developing Markets Securities Fund Sub-Account, Franklin Templeton VIP Growth Securities Fund Class 2 Sub-Account, Franklin Templeton VIP Foreign Securities Fund Sub-Account, Franklin Templeton VIP Value Securities Fund Sub-Account, Lord Abbett Series All Value Portfolio Sub-Account, Lord Abbett Series Growth & Income Portfolio Sub-Account, Lord Abbett Series Growth Opportunities Portfolio Sub-Account, Lord Abbett Series Mid-Cap Value Portfolio Sub-Account, MFS/Sun Life Bond S Class Sub-Account, MFS/Sun Life Bond Series Sub-Account, MFS/Sun Life Capital Appreciation S Class Sub-Account, MFS/Sun Life Capital Appreciation Series Sub-Account, MFS/Sun Life Capital Opportunities S Class Sub-Account, MFS/Sun Life Capital Opportunities Series Sub-Account, MFS/Sun Life Emerging Growth S Class Sub-Account, MFS/Sun Life Emerging Growth Series Sub-Account, MFS/Sun Life Emerging Markets Equity S Class Sub-Account, MFS/Sun Life Emerging Markets Equity Series Sub-Account, MFS/Sun Life Global Governments S Class Sub-Account, MFS/Sun Life Global Governments Series Sub-Account, MFS/Sun Life Global Growth S Class Sub-Account, MFS/Sun Life Global Growth Series Sub-Account, MFS/Sun Life Global Total Return S Class Sub-Account, MFS/Sun Life Global Total Return Series Sub-Account, MFS/Sun Life Government Securities S Class Sub-Account, MFS/Sun Life Government Securities Series Sub-Account, MFS/Sun Life High Yield S Class Sub-Account, MFS/Sun Life High Yield Series Sub-Account, MFS/Sun Life International Growth S Class Sub-Account, MFS/Sun Life International Growth Series Sub-Account, MFS/Sun Life International Investors Trust S Class Sub-Account, MFS/Sun Life International Investors Trust Series Sub-Account, MFS/Sun Life Massachusetts Investors Growth Stock S Class Sub-Account, MFS/Sun Life Massachusetts Investors Growth Stock Series Sub-Account, MFS/Sun Life Massachusetts Investors Trust S Class Sub-Account, MFS/Sun Life Massachusetts Investors Trust Series Sub-Account, MFS/Sun Life Mid Cap Growth S Class Sub-Account, MFS/Sun Life Mid Cap Value S Class Sub-Account, MFS/Sun Life Money Market S Class Sub-Account, MFS/Sun Life Money Market Series Sub-Account, MFS/Sun Life New Discovery S Class Sub-Account, MFS/Sun Life New Discovery Series Sub-Account, MFS/Sun Life Research S Class Sub-Account, MFS/Sun Life Research Series Sub-Account, MFS/Sun Life Research Growth and Income S Class Sub-Account, MFS/Sun Life Research Growth and Income Series Sub-Account, MFS/Sun Life Research International S Class Sub-Account, MFS/Sun Life Research International Series Sub-Account, MFS/Sun Life Strategic Growth S Class Sub-Account, MFS/Sun Life Strategic Growth Series Sub-Account, MFS/Sun Life Strategic Income S Class Sub-Account, MFS/Sun Life Strategic Income Series Sub-Account, MFS/Sun Life Strategic Value S Class Sub-Account , MFS/Sun Life Total Return S Class Sub-Account, MFS/Sun Life Total Return Series Sub-Account, MFS/Sun Life Utilities S Class Sub-Account, MFS/Sun Life Utilities Series Sub-Account, MFS/Sun Life Value S Class Sub-Account, MFS/Sun Life Value Series Sub-Account, Oppenheimer VA Capital Appreciation Fund Sub-Account, Oppenheimer VA Global Securities Fund Sub-Account, Oppenheimer VA Main Street Fund Sub-Account, Oppenheimer VA Main Street Small Cap Fund Sub-Account, PIMCO VIT Emerging Markets Bond Portfolio Sub-Account, PIMCO VIT Low Duration Portfolio Sub-Account, PIMCO VIT Real Return Portfolio Sub-Account, PIMCO VIT Total Return Portfolio Sub-Account, PIMCO VIT All Asset Portfolio Sub-Account, PIMCO VIT Commodity Real Return Strategy Portfolio Sub-Account, Sun Capital All Cap S Class Sub-Account, Sun Capital FI Large Cap Growth Fund Sub-Account, Sun Capital Investment Grade Bond S Class Sub-Account, Sun Capital Real Estate Fund S Class Sub-Account, Sun Capital Real Estate Fund Sub-Account, Sun Capital Money Market S Class Sub-Account, and Wanger Select Sub-Account of Sun Life (N.Y.) Variable Account C (collectively the åSub-Accountsæ), as of December 31, 2006, and the related statements of operations for the year then ended, the statements of changes in net assets for each of the years in the period then ended, and the financial highlights for the periods presented. These financial statements and financial highlights are the responsibility of the Sub-Accounts management. Our responsibility is to express an opinion on these financial statements and financial highlights 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 and financial highlights are free of material misstatement. The Sub-Accounts are not required to have, nor were we engaged to perform, an audit of their 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 Sub-Accounts’ 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. Our procedures included confirmation of securities owned as of December 31, 2006, by correspondence with the custodian. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of each of the Sub-Accounts as of December 31, 2006, the results of their operations for the year then ended, the changes in their net assets for each of the years in the period then ended, and the financial highlights for the periods presented, in conformity with accounting principles generally accepted in the United States of America.

/s/ Deloitte & Touche LLP

April 20, 2007

Boston, Massachusetts

PART C

OTHER INFORMATION

Item 24. FINANCIAL STATEMENTS AND EXHIBITS

(a)	The following Financial Statements are included in the Registration Statement:
	A.	Condensed Financial Information - Accumulation Unit Values (Part A)
	B.	Financial Statements of the Depositor (Part B
		Audited:
		1.	Statements of Income, Years Ended December 31, 2006, 2005 and 2004;
		2.	Consolidated Balance Sheets, December 31, 2006 and 2005;
		3.	Statements of Comprehensive Income, Years Ended December 31, 2006, 2005 and 20043;
		4.	Statements of Stockholder's Equity, Years Ended December 31, 2006, 2005 and 2004;
		5.	Statements of Cash Flows, Years Ended December 31, 2006, 2005 and 2004;
		6.	Notes to Financial Statements; and
		7.	Report of Independent Registered Public Accounting Firm.
	C.	Financial Statements of the Registrant (Part B)
		1.	Statement of Condition, December 31, 2006;
		2.	Statement of Operations, Year Ended December 31, 2006;
		3.	Statements of Changes in Net Assets, Years Ended December 31, 2006 and December 31, 2005;
		4.	Notes to Financial Statements; and
		5.	Report of Independent Registered Public Accounting Firm.

(b) The following Exhibits are incorporated in the Registration Statement by reference unless otherwise indicated:

(1)	Resolution of the Board of Directors of the depositor dated December 3, 1984, authorizing the establishment of the Registrant (Incorporated herein by reference to Post-Effective Amendment No. 4 to the Registration Statement of the Registrant on Form N-4, File No. 333-05037, filed March 29, 2000);
(2)	Not applicable;
(3)(a)	Marketing Coordination Agreement between the Depositor, MFS Fund Distributors, Inc. and Clarendon Insurance Agency, Inc. (Incorporated herein by reference to Post-Effective Amendment No. 4 to the Registration Statement on Form N-4, File No. 333-05037, filed March 29, 2000);
(3)(b)(i)	Specimen Sales Operations and General Agent Agreement (Incorporated herein by reference to Post-Effective Amendment No. 4 to the Registration Statement n Form N-4, File No. 333-05037, filed March 29, 2000);
(3)(b)(ii)	Specimen Broker-Dealer Supervisory and Service Agent Agreement (Incorporated herein by reference to Post-Effective Amendment No. 4 to the Registration Statement on Form N-4, File No. 333-05037, filed March 29, 2000);
(3)(b)(iii)	Specimen Broker-Dealer Supervisory and Service Agent Agreement (Type 4) (Incorporated herein by reference to Post-Effective Amendment No. 4 to the Registration Statement on Form N-4, File No. 333-05037, filed March 29, 2000);
(3)(c)(i)	Administrative Services Agreement by and between Sun Life Assurance Company of Canada, Sun Life Assurance Company of Canada (U.S.) and Sun Life Insurance and Annuity Company of New York, dated November 21, 2000 (Incorporated herein by reference to the Registration Statement of Sun Life (N.Y.) Variable Account D on Form N-6, File No. 333-105437, filed on May 21, 2003);
(3)(c)(ii)	Amendment No. 1, dated January 1, 2002, to the Administrative Services Agreement by and between Sun Life Assurance Company of Canada, Sun Life Assurance Company of Canada (U.S.) and Sun Life Insurance and Annuity Company of New York, dated November 21, 2000 (Incorporated herein by reference to Post-Effective Amendment No. 1 to the Registration Statement on From N-4, File No. 333-119151, filed on May 2, 2005);
(4)	Specimen Flexible Payment Deferred Combination Variable and Fixed Individual Annuity Contract (Incorporated herein by reference to Pre-Effective Amendment No. 1 to the Registration Statement on Form N-4, File No. 333-100475, filed December 31, 2002);
(5)	Specimen Application used with the variable annuity contract filed as Exhibit (4) (Incorporated herein by reference to Pre-Effective Amendment No. 1 to the Registration Statement on Form N-4, File No. 333-100475, filed December 31, 2002);
(6)	Charter and By-Laws of the Depositor (Incorporated herein by reference to the Depositor's Quarterly Report on Form 10-Q, File No. 333-01079, filed on May 14, 2004);
(7)	Not Applicable;
(8)(a)	Participation Agreement by and between The Alger American Fund, Sun Life Assurance Company of Canada (U.S.), and Fred Alger and Company, Incorporated (Incorporated herein by reference to Post-Effective Amendment No. 13 to the Registration Statement on Form N-4, File No. 33-41628, filed April 26, 1999);
(8)(b)	Participation Agreement dated February 17, 1998 by and between Goldman Sachs Variable, Insurance Trust, Goldman Sachs & Co. and Sun Life Assurance Company of Canada (U.S.) (Incorporated herein by reference to Post-Effective Amendment No. 13 to Registration Statement on Form N-4, File No. 33-41628, filed April 26, 1999);
(8)(c)	Amended and Restated Participation Agreement by and among MFS/Sun Life Services Trust, Sun Life Assurance Company of Canada (U.S.), Sun Life Insurance and Annuity Company of New York, and Massachusetts Financial Services Company (Incorporated herein by reference to Post-Effective Amendment No. 3 to the Registration Statement on Form N-4, File No. 333-107983, filed on May 28, 2004);
(8)(d)	Participation Agreement dated April 17, 2000 by and among AIM Variable Insurance Funds, Inc., AIM Distributors, Inc., Sun Life Insurance and Annuity Company of New York on behalf of itself and its separate accounts, and Clarendon Insurance Agency, Inc. (Incorporated herein by reference to Post-Effective Amendment No. 23 to Registration Statement on Form N-4, File No. 333-67864, filed November 6, 2002);
(8)(e)	Amended and Restated Participation Agreement dated December 18, 2004, by and among Sun Capital Advisers Trust, Sun Capital Advisers, Inc., Sun Life Assurance Company of Canada (U.S.) and Sun Life Insurance and Annuity Company of New York (Incorporated herein by reference to Post-Effective Amendment No. 8 to Registration Statement of Sun Life of Canada (U.S.) Variable Account F on Form N-4, File No. 333-83516, filed on April 28, 2005);
(8)(f)	Participation Agreement dated April 30, 2001 by and among Rydex Variable Trust, Rydex Distributors, Inc., and Sun Life Assurance Company of Canada (U.S.) (Incorporated herein by reference to Post-Effective Amendment No. 7 to the Registration Statement on Form N-4, File No. 333-82957, filed July 27, 2001);
(8)(g)	Amended and Restated Participation Agreement dated September 1, 2004 among Variable Insurance Products Funds, Fidelity Distributors Corporation and Sun Life Insurance and Annuity Company of New York (Incorporated herein by reference to Post-Effective Amendment No. 1 to the Registration Statement on Form N-4, File No. 333-119151, filed on May 2, 2005);
(8)(h)	Participation Agreement dated September 1, 2001 by and among Sun Life Insurance and Annuity Company of New York, Clarendon Insurance Agency, Inc., Alliance Capital Management L.P., and Alliance Fund Distributors, Inc. (Incorporated herein by reference to Post-Effective Amendment No. 23 to the Registration Statement on Form N-4, File No. 333-67864, filed November 6, 2002);
(8)(i)(i)	Participation Agreement dated February 17, 1998 by and among Lord Abbett Series Fund Inc., Lord Abbett & Co., and Sun Life Assurance Company of Canada (U.S.) (Incorporated herein by reference to Post-Effective Amendment No. 23 to the Registration Statement on Form N-4, File No. 333-67864, filed November 6, 2002);
(8)(j)	Participation Agreement among Liberty Variable Investment Trust, Liberty Funds Distributor, Inc. and Sun Life Insurance and Annuity Company of New York (Incorporated herein by reference to the Registration Statement of KBL Variable Account A on Form N-4, File No. 333-102274, filed on December 31, 2002);
(8)(k)	Participation Agreement among MFS Variable Insurance Trust, Sun Life Insurance and Annuity Company of New York, on behalf of itself and its Separate Accounts, and Clarendon Insurance Agency, Inc. (Incorporated herein by reference to the Registration Statement of KBL Variable Account A on Form N-4, File No. 333-102274, filed on December 31, 2002);
(8)(l)	Participation Agreement among SteinRoe Variable Investment Trust, Liberty Funds Distributor, Inc. and Sun Life Insurance and Annuity Company of New York (Incorporated herein by reference to the Registration Statement of KBL Variable Account A on Form N-4, File No. 333-102274, filed on December 31, 2002);
(8)(m)	Participation Agreement among Wanger Advisors Funds, Wanger Asset Management LP, and Sun Life Insurance and Annuity Company of New York (Incorporated herein by reference to the Registration Statement of KBL Variable Account A on Form N-4, File No. 333-102274, filed on December 31, 2002);
(9)	Opinion and Consent of Counsel as to legality of securities being registered (Incorporated herein by reference to Registration Statement on Form N-4, File No. 333-100474, filed on October 10, 2002);
(10)(a)	Consent of Independent Registered Public Accounting Firm;*
(10)(b)	Representation of Counsel pursuant to Rule 485(b);*
(11)	None;
(12)	Not Applicable;
(13)	Schedule for Computation of Performance Quotations (Incorporated herein by reference to Post-Effective Amendment No. 2 to the Registration Statement of the Registrant on Form N-4, File No. 333-05037);
(14)	Not Applicable;
(15)(a)	Powers of Attorney);*
(15)(b)	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 Post-Effective Amendment No. 3 to the Registration Statement on Form N-4, File No. 333-100475, filed on April 23, 2004);
(16)	Organizational Chart (Incorporated herein by reference to Post-Effective Amendment No. 4 to the Registration Statement of Keyport Variable Account A on Form N-4, File No. 333-114126, filed on April 25, 2007).

* Filed herewith

Item 25. DIRECTORS AND OFFICERS OF THE DEPOSITOR

Name and Principal Business Address* Positions and Offices With Depositor

Thomas A. Bogart Sun Life Assurance Company of Canada 150 King Street West, SC 114D10 Toronto, Ontario Canada M5H 1J9	Director
Scott M. Davis Sun Life Assurance Company of Canada (U.S.) One Sun Life Executive Park, SC 3358 Wellesley Hills, MA 02481	Senior Vice President and General Counsel and Director
Mary M. Fay Sun Life Assurance Company of Canada (U.S.) One Sun Life Executive Park, SC 4250 Wellesley Hills, MA 02481	Senior Vice President and General Manager, Annuities and Director
Ronald H. Friesen Sun Life Assurance Company of Canada (U.S.) One Sun Life Executive Park, SC 3380 Wellesley Hills, MA 02481	Senior Vice President and Chief Financial Officer and Treasurer and Director
Keith Gubbay Sun Life Assurance Company of Canada (U.S.) One Sun Life Executive Park, SC 3370 Wellesley Hills, MA 02481	Senior Vice President and Chief Actuary and Director
Leila Heckman Bear Stearns Asset Management 383 Madison Avenue New York, NY 10179	Director
Donald B. Henderson, Jr. LeBoeuf, Lamb, Greene & MacRae, LLP 125 West 55th Street New York, NY 10019	Director
Peter R. O'Flinn 344 Cream Hill Road West Cornwall, CT 06796	Director
Robert C. Salipante Sun Life Assurance Company of Canada (U.S.) One Sun Life Executive Park, SC 3376 Wellesley Hills, MA 02481	Director & Chairman and President
Barbara Z. Shattuck Shattuck Hammond Partners LLC 630 Fifth Avenue, Suite 2950 New York, NY 10019	Director
Michael E. Shunney Sun Life Assurance Company of Canada (U.S.) One Sun Life Executive Park, SC 3364 Wellesley Hills, MA 02481	Senior Vice President and General Manager, Group Insurance and Director
David K. Stevenson 47 Village Avenue, Unit 301 Dedham, MA 02026	Director
Michele G. Van Leer Sun Life Assurance Company of Canada (U.S.) One Sun Life Executive Park, SC 1114 Wellesley Hills, MA 02481	Senior Vice President and General Manager, Individual Insurance and Director
James M.A. Anderson Sun Life Assurance Company of Canada 150 King Street West, SC 104A25 Toronto, Ontario Canada M5H 1J9	Executive Vice President and Chief Investment Officer
Michael S. Bloom Sun Life Assurance Company of Canada (U.S.) One Sun Life Executive Park, SC 1335 Wellesley Hills, MA 02481	Assistant Vice President and Senior Counsel and Secretary
Michael K. Moran Sun Life Assurance Company of Canada (U.S.) One Sun Life Executive Park, SC 3305 Wellesley Hills, MA 02481	Vice President and Chief Accounting Officer and Controller
John R. Wright Sun Life Assurance Company of Canada (U.S.) One Sun Life Executive Park , SC 2163 Wellesley Hills, MA 02481	Executive Vice President, Sun Life Financial U.S. Operations

Item 26. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE DEPOSITOR OR REGISTRANT

No person is directly or indirectly controlled by the Registrant. The Registrant is a separate account of Sun Life Insurance and Annuity Company of New York, a wholly-owned subsidiary of Sun Life Assurance Company of Canada (U.S.) which is ultimately controlled by Sun Life Financial Inc.

The organization chart of Sun Life Insurance and Annuity Company of New York is incorporated herein by reference to Post-Effective Amendment No. 4 to the Registration Statement of Keyport Variable Account A on Form N-4, File No. 333-114126, filed April 25, 2007.

None of the companies listed is a subsidiary of the Registrant, therefore the only financial statements being filed are those of Sun Life Insurance and Annuity Company of New York.

Item 27. NUMBER OF CONTRACT OWNERS

As of February 28, 2007 there were 13 qualified and 40 non-qualified Contracts issued and outstanding.

Item 28. INDEMNIFICATION

Article 5, Section 5.6 of the By-laws of Sun Life Insurance and Annuity Company of New York, a copy of which was filed as Exhibit A.(6)(b) to the Registration Statement of the Registrant on Form N-8B-2 (File No. 811-4440), provides for indemnification of directors, officers and employees of Sun Life Insurance and Annuity Company of New York.

Insofar as indemnification for liability arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of Sun Life Insurance and Annuity Company of New York pursuant to the certificate of incorporation, by-laws, or otherwise, Sun Life (N.Y.) 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 (N.Y.) of expenses incurred or paid by a director, officer, or controlling person of Sun Life (N.Y.) 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 (N.Y.) will, unless in the opinion of their counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by them is against public policy as expressed in the Act and will be governed by the final adjudication of suchissue.

Item 29. PRINCIPAL UNDERWRITERS

(a) 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, G, I, and K 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, D, J, and N and Money Market Variable Account, High Yield Variable Account, Capital Appreciation Variable Account, Government Securities Variable Account, World Governments Variable Account, and Total Return Variable Account.

Name and Principal	Position and Offices
Business Address*	with Underwriter
Katherine E. Sarvary	President
Michele G. Van Leer	Director
Scott M. Davis	Director
Mary M. Fay	Director
Michael S. Bloom	Secretary
Ann B. Teixeira	Assistant Vice President, Compliance
Kathleen T. Baron	Chief Compliance Officer
Michael L. Gentile	Vice President
Raymond Scanlon	Vice President
William T. Evers	Assistant Vice President and Senior Counsel
Nancy C. Atherton	Assistant Vice President & Tax Officer
Jane F. Jette	Financial/Operations Principal and Treasurer
Alyssa Gair	Assistant Secretary
Amy E. Mercer	Assistant Secretary

*The principal business address of all directors and officers of the principal underwriter is, One Sun Life Executive Park, Wellesley Hills, Massachusetts 02481.

         (b) Inapplicable.

Item 30. 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 by Sun Life Insurance and Annuity Company of New York, in whole or in part, at its Home Office at 60 East 42^nd Street, Suite 1115, New York, New York 10165, at the offices of Clarendon Insurance Agency, Inc. at One Sun Life Executive Park, Wellesley Hills, Massachusetts 02481, or at the offices of Sun Life Assurance Company of Canada (U.S.) One Sun Life Executive Park, Wellesley Hills, Massachusetts 02481.

Item 31. MANAGEMENT SERVICES

Not Applicable.

Item 32. UNDERTAKINGS

The Registrant hereby undertakes:

(a)	To file a post-effective amendment to this Registration Statement as frequently as is necessary to ensure that the audited financial statements in the Registration Statement are never more than 16 months old for so long as payments under the variable annuity Contracts may be accepted;
(b)	To include either (1) as part of any application to purchase a Contract offered by the prospectus, a space that an Applicant can check to request a Statement of Additional Information, or (2) a post card or similar written communication affixed to or included in the prospectus that the Applicant can remove to send for a Statement of Additional Information;
(c)	To deliver any Statement of Additional Information and any financial statements required to be made available under SEC Form N-4 promptly upon written or oral request.
(d)	Representation with respect to Section 26(f)(2)(A) of the Investment Company Act of 1940: Sun Life (N.Y.) represents that the fees and charges deducted under the Contracts, in the aggregate, are reasonable in relation to the services rendered, the expenses expected to be incurred, and the risks assumed by the insurance company.
	The Registrant is relying on the no-action letter issued by the Division of Investment Management of the Securities and Exchange Commission to American Council of Life Insurance, Ref. No. IP-6-88, dated November 28, 1988, the requirements for which have been complied with by the Registrant.

SIGNATURES

As required by the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant certifies that it meets the requirements of Securities Act Rule 485(b) for effectiveness 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 25th day of April, 2007.

Sun Life (N.Y.) Variable Account C
(Registrant)
Sun Life Insurance and Annuity Company of New York
(Depositor)
By: /s/ Robert C. Salipante*
	Robert C. Salipante
	President

*By:	/s/ Sandra M. DaDalt
	Sandra M. DaDalt
	Assistant Vice President
	and Senior Counsel

As required by the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities with the Depositor, Sun Life Insurance and Annuity Company of New York, and on the dates indicated.

SIGNATURE	TITLE	DATE
/s/ Robert C. Salipante*	President and Director	April 25, 2007
Robert C. Salipante	(Principal Executive Officer)
/s/ Ronald H. Friesen*	Vice President and Chief Financial Officer and	April 25, 2007
Ronald H. Friesen	Treasurer and Director
	(Principal Financial Officer)
/s/ Michael K. Moran*	Vice President and Chief Accounting Officer and Controller	April 25, 2007
Michael K. Moran	(Principal Accounting Officer)
*By:/s/ Sandra M. DaDalt	Attorney-in-Fact for:	April 25, 2007
Sandra M. DaDalt	Donald B. Henderson, Jr., Director
	Peter R. O'Flinn, Director
	David K. Stevenson, Director
	Leila Heckman, Director
	Barbara Z. Shattuck, Director
	Thomas A. Bogart, Director
	Scott M. Davis, Director
	Mary M. Fay, Director
	Keith Gubbay, Director
	Michael E. Shunney, Director
	Michele G. Van Leer, Director

*Sandra M. DaDalt has signed this document on the indicated date on behalf of the above Directors and Officers of the Depositor pursuant to powers of 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 by reference to Post-Effective Amendment No. 3 to the Registration Statement on Form N-4, File No. 333-100475, filed on April 23, 2004. Powers of attorney are included herein as Exhibit (15)(a).

EXHIBIT INDEX

(10)(a)	Consent of Independent Registered Public Accounting Firm
(10)(b)	Representation of Counsel pursuant to Rule 485(b)
(15)(a)	Powers of Attorney